Summary
The court denies the Government’s motion for reconsideration of an earlier decision remanding the United States Olympic and Paralympic Museum’s Shuttered Venue Operators Grant application to the Small Business Administration. The court holds that the motion improperly raised a new mootness argument and that the SBA’s denial was not self-explanatory or supported by an adequate statement of reasons under the Administrative Procedure Act and 5 U.S.C. § 555(e).
Topics
Practice areas
Questions Presented
- Whether the Government could use a Rule 59(e) motion to raise for the first time the argument that a subsequent SBA decision mooted the Museum's claims and deprived the court of subject-matter jurisdiction.
- Whether the SBA's denial was self-explanatory under 5 U.S.C. § 555(e) and therefore satisfied the requirement to provide the grounds for denial.
- Whether the SBA's failure to explain the reasoning underlying its denial violated the minimum requirements of reasoned decision-making under the Administrative Procedure Act.
Holdings
- A Rule 59(e) motion is not a vehicle for presenting theories or arguments that could have been advanced earlier in the litigation; in any event, the Museum's challenge was not mooted because it alleged a continuing procedural violation that was repeated in the subsequent agency action.
- The SBA's denial was not self-explanatory because determining the agency's rationale required multiple inferential steps concerning the Museum's 2019 and 2020 revenues and the alternative eligibility pathway.
- Because the SBA failed to provide a reasoned explanation making clear the path it took, its denial failed the minimum requirements of reasoned decision-making under the Administrative Procedure Act and was arbitrary and capricious.
Key quotations
“One of the basic procedural requirements of administrative rulemaking is that an agency must give adequate reasons for its decisions.” (at 3)
“Because the denial was not self-explanatory and the agency failed to provide a reasoned explanation that made clear the path it took, its decision failed to satisfy the minimum requirements of reasoned decision making under the Administrative Procedure Act.” (at 5)
Factual background
The Museum applied for a Shuttered Venue Operators Grant in August 2021. It reported no earned revenue in 2019 or the first quarter of 2020 and answered no to whether it had experienced a 25 percent revenue reduction between 2019 and 2020. The SBA initially provided only a generic explanation for the denial, later stated that the application was at least in part incomplete, and ultimately issued a new denial based on the Museum's inability to demonstrate the required revenue loss or first-quarter 2020 revenue. The Museum alleged that the deficient explanation deprived it of a meaningful opportunity to address the agency's eligibility determination and present evidence concerning sponsorship earnings.
Procedural history
The Museum applied for a Shuttered Venue Operators Grant and was denied by the SBA. After the Museum challenged the denial under the Administrative Procedure Act, the SBA issued a further denial during the litigation. The court previously granted the Museum's motions in part, denied the Government's cross-motion for summary judgment, and remanded to the agency. The Government then sought reconsideration, arguing that the subsequent agency decision mooted the claims and that the original denial was self-explanatory; the court denied reconsideration.