IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI

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Plaintiff        )

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V.        )

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SMALL BUSINESS        )

ADMINISTRATION;        )

ISABEL GUZMAN, in her official        ) capacity as Administrator of the Small                ) Business Administration;        )

JANET YELLEN, in her official        ) capacity as Secretary of the Treasury; and ) THE UNITED STATES OF AMERICA,  )

Defendants.        )

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Plaintiff         submit this Complaint for Declaratory Judgment and request for Temporary, Preliminary, and Permanent Injunctive Relief to invalid the SBA, decision to deny Plaintiff an EIDL Loan as described in the CARES Act, for 'unverifiable information' based upon a finding and conclusion the SBA had no authority to find or conclude. The challenged portion of SBA’s Final Decision purport to make Plaintiff ineligible for the CARES Act, EIDL Loan. EIDL Loans under the CARES Act in contravention of the unambiguous statutory text and limited authority that Congress delegated to SBA. In support of this request, Plaintiff claim and states as follows:

INTRODUCTORY STATEMENT

  1. The outbreak of COVID-19 and the government’s response to that virus have decimated the American economy. To help mitigate the economic damage and keep small businesses afloat during these unprecedented times, the United States Congress passed the Coronavirus Aid, Relief 

and Economic Security Act (“CARES Act”) and the EIDL Program. Congress tasked the Small Business Administration (“SBA”) with promulgating regulations to administer EIDL loans to any business concern based in the United States, so long as the small business was in operation by February 15, 2020.

  1. Plaintiff owns such business:                 of which is principally located         . But SBA has refused to uphold its statutory duty to make EIDL loans available to Plaintiff. With no delegation of authority to do so, SBA took it upon itself to exclude Plaintiff. Nevertheless, SBA has applied its facially invalid reason to indiscriminately exclude Plaintiff from EIDL loans that Congress made available to all small businesses

JURISDICTION AND VENUE

  1. The Court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 1346, 1361, and 2201. Additionally, this Court has jurisdiction to review agency action under 5 U.S.C. § 702, which provides, in part: “A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.” And pursuant to 15 U.S.C. § 634(b), jurisdiction is conferred upon any United States District Court to determine controversies against the Administrator of SBA. This Court has jurisdiction to grant injunctive relief pursuant to 28 U.S.C. § 2202 and Rule 65 of the Federal Rules of Civil Procedure. Venue is proper in the District of Saint Louis, Missouri, pursuant to 28 U.S.C. § 1391, as the events giving rise to the Plaintiff causes of action arose or exist in this District.

PARTIES

  1. Plaintiff  is a resident and business owner  located in         . Plaintiff has a consulting business.
  2. Defendant SBA is a federal agency created and authorized pursuant to 15 U.S.C. § 633 et seq. SBA maintains a local office in         .
  3. Defendant Isabell Guzman is the Administrator of SBA (the “Administrator”), a Cabinet- level position. She is sued in her official capacity. The Administrator may be sued pursuant to 15

U.S.C. § 634(b) (“In the performance of, and with respect to, the functions, powers, and duties vested in [her] by this chapter the Administrator may … sue and be sued … in any United States district court[.]”).

  1. Defendant Janet Yallen (the “Secretary”) is the Secretary of the United States Department of the Treasury (“Treasury”). She is sued in his official capacity.
  2. Defendant the United States of America is a sovereign nation dedicated to protecting life, liberty, and property, as provided for in the U.S. Constitution.

STATEMENT OF FACT

  1. Section 7(b)(2) of the Small Business Act authorizes SBA to make EIDL loans to eligible small businesses and nonprofit organizations located in a disaster area. 15 U.S.C. 636(b)(2). On March 6, 2020, Congress deemed COVID-19 to be a disaster in Title II of the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020, Public Law 116-123, 134 Stat. 146, 147, allowing SBA to declare disasters and make EIDL loans available to small businesses and nonprofit organizations suffering substantial economic injury as a result of the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Public Law 116-136, expanded eligibility and waived certain rules and requirements for COVID EIDL loans. Section 1110 of the CARES Act permitted SBA to waive rules related to personal guaranties on COVID EIDL loans of not more than $200,000 and the requirement that an applicant be unable to obtain credit elsewhere. Section 1110 also provided SBA with the

authority to approve an applicant based solely on the credit score of the applicant or use alternative appropriate methods to determine an applicant's ability to repay.

  1. As a direct and proximate cause of COVID-19 and economic downturn, Plaintiff business was negatively impacted and suffered substantial economic injury. In order to mitigate the negative impact and stabilize Plaintiff business, On April 8th, 2020 Plaintiff applied for a EIDL that was offered to businesses at a 3.75% interest rate fixed for 30 years with the first payment starting 2 years after the date received.
  2. April 17th, 2020 Plaintiff was denied due to his credit score being too low. Shortly after the denial of Plaintiff application multiple members of the Plaintiff immediate family members broke out with covid19. With quarantining with family members, Plaintiff was not able to prepare and mail off his federal tax return until December 15th 2020, 5 month lates from the due date July 15, 2020.
  3. Plaintiff reapplied Janurary of 2021.

  1. Defendant, SBA ordered copies of Plaintiff tax transcripts from 2018 and 2019, the IRS could only provide 2018, because 2019 was not processed.
  2. June 07th 2021, Plaintiff was denied again, because the IRS was backlogged with processing tax returns and Plaintiff 2019 taxes, 2020 return was not processed on file for the SBA to review. "Not eligible due to unverifiable information"
  3. June 13th 2021, Plaintiff called SBA Customer Service, Customer Service Rep, told Plaintiff to take a copy of his 2020 return to his local IRS office and file a copy and get it stamped showing that it was filed. On July 15th 2021, Plaintiff took a copy of his return to the IRS, filed another copy and got a stamped copy showing the return was filed again, then sent that to the SBA asking for reconsideration of the previous denial.
  4. Around June of 2021, Plaintiff sent to the SBA documents which included: the Plaintiff Business LLC Incorporation, incorporating May the 23rd 2018, (see exhibit "F" pg 1-3) copies of 2018 and 2019 tax returns, (see exhibit "N" pg 1-8 and "M" pg 1-8) bank statement from November 2019, (see exhibit "J" pg 1) , a copy of Plaintiff current drivers license (see exhibit "E" pg 1-2) and a voided check from Plaintiff business account. (see exhibit "H" pg 1) all to show Plaintiff business was in operation prior to the disaster.
  5. February 2022, Plaintiff was then denied again because the SBA wouldn't accept the filed stamped copy of the return and that; the SBA now said they can only go off the official transcripts received directly from the IRS. Not eligible due to unverifiable information.
  6. Plaintiff then contacted U.S. Congress Member Honorable Cori Bush for help, requesting reconsideration, explaining that it was not Plaintiff's fault Plaintiff tax return was not processed as of date. Plaintiff also contacted an IRS Tax Advocate, April 19th 2022, for help in getting the return processed. April 28, 2022 the return was finally processed.
  7. May the 12th, 2022, Plaintiff was denied again by the SBA:

"The 2019 transcript indicated "The most recent transcript indicates your 2019 Federal tax return (Form 1040) was filed on June 15, 2021, which was after your initial decline on April 17, 2020, and reconsideration decline on June 7, 2021. To be eligible for SBA disaster loan assistance, the applicant must be a qualified business. All disaster business applicants must provide documentation, such as Federal Tax Returns to establish operations as a qualified business. Based on this information, we cannot document that you were an active revenue reporting entity prior to the disaster. We cannot document that you were an active revenue reporting entity prior to the disaster. Therefore, we have declined your appeal request for unveritiable information." (see exhibit "K" pg 1-2)

  1. Congress Required SBA to Administer EIDL Loans based on: that business was in operation prior to January 31st, 2020. CARES Act, Pub. L. No. 116-136, § 1110 (b)(2)

https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf and all you had to do was prove that you were in operation prior to January 31st, 2020. (See Exhibit "J" pg 1-3) https://www.sba.gov/sites/default/files/2021-09/COVID-EIDL-FAQs-090821-508.pdf  (see Exhibit "L", pg 1-17)

COUNT I: SBA PROMULGATED AN INTERIM CONCLUSION AND FINDINGS THAT EXCEEDED ITS AUTHORITY

  1. Plaintiff reallege and incorporate by reference the allegations contained in the Introductory Statement and paragraphs 1 through 20, as if fully set forth herein
  2. Although Plaintiff was an active revenue reporting entity prior to the disaster, Congress did not give the SBA authority  to make such  a conclusion or finding, "if  a business was or    not an active revenue reporting entity prior to the disaster.'' For the SBA To deny a person because they was" not an active revenue reporting entity prior to the disaster" is in contrary to CARES Act, Pub. L. No. 116-136, § 1110, "that long as you was in "operation prior to January 31st, 2020" No person that started operations after January 01st, 2020 could have been an active revenue reporting business prior to the disaster.
  3. Congress did not delegate any discretion to SBA to deem classes of small businesses ineligible for reasons not contained in the CARES Act.
  4. SBA’s Unlawfully Denied EIDL Loan to the Plaintiff

  1. Plaintiff is fully qualified under the text of the CARES Act to receive a EIDL loan.

  1. Plaintiff intended and still intends to use the funds from an EIDL Loan in accordance with the provisions of the CARES Act.

COUNT II: UNLAWFULLY WITHHELD AGENCY ACTION DEFENDANTS FAILED TO CARRY OUT A MINISTERIAL DUTY

  1. Plaintiff reallege and incorporate by reference the allegations contained in the Introductory Statement and paragraphs 1 through 26, as if fully set forth herein.
  2. The Administrative Procedure Act requires that a reviewing court “compel agency action unlawfully withheld or unreasonably delayed[.]” 5 U.S.C. § 706(1).
  3. Relief under § 706(1) “is like the mandamus remedy, ‘empowering a court only to compel an agency to perform a ministerial or non-discretionary act or to take action upon a matter, without directing how it shall act.’” Vill. of Bald Head Island v. U.S. Army Corps of Engineers, 714 F.3d 186, 195 (4th Cir. 2013) (quoting Norton v. S. Utah Wilderness All., 542

U.S. 55, 64 (2004) (cleaned up)).

  1. The CARES Act directed SBA to administer EIDL Loans based on the considerations that Congress set out in the law.
  2. SBA’s failure to administer EIDL Loan to Plaintiff when Plaintiff is eligibile under the dictates of the CARES Act —is an unlawfully withheld agency action.
  3. Plaintiff is entitled to relief under 5 U.S.C. § 706(1) by way of ordering the Defendants  to perform the nondiscretionary act of administering EIDL Loans according to the text of the CARES Act.

COUNT III: INVALID AGENCY ACTION CONTRAVENES THE PLAIN TEXT OF THE CARES ACT

  1. Plaintiff reallege and incorporate by reference the allegations contained in their Introductory Statement and paragraphs 1 through 32, as if fully set forth herein.
  2. A court reviewing an agency action “shall hold unlawful and set aside” any action “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.” 5 U.S.C. § 706(2)(C).
  3. The text of the CARES Act is clear and unambiguous as to which businesses are eligible for EIDL loans.
  4. Because the CARES Act was clear and unambiguous, SBA lacked authority to promulgate regulations that restricted or otherwise “clarified” which businesses are eligible for EIDL loans. The Act’s specification that so long as the business was in "operation; prior to Janaurary 31st, 2020, is a reasonable interpretation that Plaintiff is eligible. CARES Act, Pub. L. No. 116-136, § 1110.
  5. Finally, by specifying ‘any business,’ (“[O]ne can find nothing in either the CARES Act or the Small Business Act to suggest that Congress wanted to exclude the Plaintiff from EIDL.

… “[G]iven Congress’s clear intent to extend EIDL loans to all small businesses affected by the pandemic that was in operation prior to January 31st, 2020 … it seems highly unlikely that Congress intended the SBA to apply its exclusion to EIDL.”).

  1. Administrative agencies are not entitled to deference. Article III of the Constitution vests “the judicial power of the United States” in the courts and creates the judicial office held by “[t]he judges, both of the Supreme Court and inferior courts.” U.S. CONST. art. III, § 1. The judicial power includes the authority to decide cases and controversies; a judge’s office includes a duty to exercise independent judgment in the interpretation and application of law in each case. See Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803) (“It is emphatically the duty of the Judicial Department to say what the law is. Those who apply the rule to particular cases must, of necessity, expound and interpret that rule.”).
  2. The judicial office requires judges to “exercise independent judgment in accord with the law.” PHILIP HAMBURGER, IS ADMINISTRATIVE LAW UNLAWFUL? 173 (2014).
  3. Judicial deference to the agency’s interpretation would display bias toward SBA, the government litigant in this case. See Marshall v. Jerrico, Inc., 446 U.S. 238, 242 (1980) (explaining that a neutral judiciary “safeguards the two central concerns of procedural due

process, the prevention of unjustified or mistaken deprivations and the promotion of participation and dialogue by affected individuals in the decision making process”).

  1. The Plaintiff reading of the CARES Act is more consistent with Congress’s purpose in providing for EIDL loans in that Congress made EIDL loans available to all business concerns that meet the considerations set out in the CARES Act, Pub. L. No. 116-136, § 1110.
  2. As a direct and proximate result the Defendants and their have caused Plaintiff and irreparable harm including.
  3. The Plaintiff has been damaged and will continue to be damaged by Defendants’ conduct.
  4. No adequate remedy at law is available that could compensate Plaintiff for their damages.

  1. The Plaintiff is entitled to declaratory and injunctive relief.

COUNT IV: AGENCY ACTIONS AND DECISION IS ARBITRARY AND CAPRICIOUS

  1. Plaintiff reallege and incorporate by reference the allegations contained in their Introductory Statement and paragraphs 1 through 45, as if fully set forth herein.
  2. A court reviewing must “hold unlawful and set aside agency action” that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law[.]” Mayor & City Council of Baltimore v. Azar, No. CV RDB-19-1103, 2020 WL 1873947, at *3 (D. Md. Apr. 15, 2020) (quoting 5 U.S.C. § 706(2)(A)).
  3. An agency’s action “is arbitrary and capricious if ‘the agency has relied on factors

which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.’” J.O.P. v. U.S. Dep’t of Homeland Sec., No. GJH-19-1944, 2020 WL

2932922, at *18 (D. Md. June 3, 2020) (quoting Sierra Club v. U.S. Dep’t of the Interior, 899 F.3d 260, 293 (4th Cir. 2018)).

  1. “[A] court must “conduct a ‘searching and careful’ review to determine whether the agency’s decision ‘was based on a consideration of the relevant factors and whether there has been a clear error of judgment.’” Friends of Capital Crescent Trail v. U.S. Army Corps of Engineers, No. CV JKB 19-106, 2020 WL 1849704, at *5 (D. Md. Apr. 13, 2020) (quoting Sierra Club, 899 F.3d at 270).
  2. A facial review of CARES Act, Pub. L. No. 116-136, § 1110 proves that the SBA acted arbitrary and capricious. Congress did not intend for SBA “to exclude Plaintiff because the purpose of the EIDL Loan was to provide relief to all small businesses owners negatively impacted by the pandemic. The SBA failed to rely on the factors that Congress established. In doing so, SBA excluded Plaintiff businesses.
  3. The SBA completly disregard the important problem that Congress tried to solve: making favorable loans available to all small businesses owners expeditiously in a time of national economic turmoil.
  4. Congress did not call on SBA’s expertise; instead, Congress instructed SBA to administer EIDL loans based on the considerations enumerated in the CARES Act. SBA departed from the text of the law and, in doing so, failed entirely to consider the problem Congress sought to.
  5. As a direct and proximate result the Defendants have caused Plaintiff irreparable harm including but not limited to financial ruin and business ruination.
  6. The Plaintiff have been damaged and will continue to be damaged by Defendants’ conduct.
  7. No adequate remedy at law is available that could compensate Plaintiff for his damages.
  8. The Plaintiff is entitled to declaratory and injunctive relief invalidating the SBA actions.

COUNT V: MANDAMUS THE INDIVIDUAL DEFENDANTS FAILED TO CARRY OUT A MINISTERIAL DUTY

  1. Plaintiff reallege and incorporate by reference the allegations contained in their Introductory Statement and paragraphs 1 through 63, as if fully set forth herein.

.        The “ancient remedy” of mandamus will apply in extraordinary circumstances “to compel the fulfillment of a duty which is ministerial, plainly and positively ascertained, and free of doubt.” Grice v. Colvin, 97 F. Supp. 3d 684, 705 (D. Md. 2015) (citations omitted).

  1. A writ of mandamus is proper when three elements are present: “(1) a clear right in the plaintiff to the relief sought; (2) a clear duty on the part of the defendant to do the act in question; and (3) no other adequate remedy available.” Grice, 97 F. Supp. 3d at 705 (citation omitted).
  2. The second element is satisfied when the defendant’s official action is ministerial or nondiscretionary. “A ministerial duty, the performance of which may, in proper cases, be required of the head of a department, by judicial process, is one in respect to which nothing is left to discretion. It is a simple, definite duty, arising under the conditions admitted or proved to exist, and imposed by City of Columbus v. Trump, No. CV-18-2364-DKC, 2020 WL 1820074, at *22 (D. Md. Apr. 10, 2020) (quoting Mississippi v. Johnson, 71 U.S. 475, 498 (1866)).
  3. One such ministerial duty is dispensing sums of money as directed by Congress. City of Columbus, 2020 WL 1820074, at *22 (citing Kendall v. U.S. ex rel. Stokes, 37 U.S. (12 Pet.) 524 (1838); Marbury, 5 U.S. (1 Cranch) 137).
  4. The equitable writ of mandamus is appropriate in this extraordinary circumstance because Congress directed SBA to administer EIDL Loans based on the criteria set forth in the CARES Act. The Plaintiff meet that criteria and are entitled to have his loan applications processed like all other applicants who meet the criteria that Congress set. There is no adequate

remedy at law by which the Plaintiff can compel the Defendants to carry out their statutorily imposed ministerial duty.

  1. The Plaintiff is entitled to mandamus relief ordering the Defendants to administer and process Plaintiff EIDL Loan applications as required by the plain terms of the CARES Act.

PRAYER FOR RELIEF

Wherefore, Plaintiff pray for the following relief against Defendants:

  1. Declaratory judgment that the SBA actions is contrary to the CARES Act.

  1. Declaratory judgment that the SBA actions, conclusions and decision is arbitrary and capricious.
  2. Writs of mandamus ordering the individual Defendants to fulfill their duties to administer EIDL Loans to Plaintiff that are eligible under the criteria set out in the CARES Act.
  3. Temporary Restraining Order and Preliminary and Permanent Injunction that would

save the Plaintiff place in line for the first-come, first-served funds that Congress allotted for EIDL loans by enjoining the Defendants from dispensing $473,000 of the funds that the SBA qualified Plaintiff for (ex pg 'G' 1) and Congress allotted under the CARES Act on April 24, 2020, Pub. L. No. 116-139.

  1. Order the Defendants to restore Plaintiff to its place in queue as of the time Plaintiff application denied for the EIDL Loan.
  2. For such other relief as the Court deems just and proper.

The forgoing is true to the best of my knowledge

Respectfully submitted,

Sworn before me this         day of         , 2022

Notary        My Commission expires: