KETANJI BROWN JACKSON, United States District Judge.
Congress has authorized the Department of Energy ("the DOE") to offer direct financial support to the manufacturers of clean energy vehicles and related components. See 42 U.S.C. § 17013 (2012). In accordance with this statutory mandate, the DOE administers various loan programs, including the Advanced Technology Vehicle Manufacturing ("ATVM") Loan Program, which is designed to provide direct loans to manufacturers of energy-efficient vehicles. The DOE also administers the Section 1703 Loan Guarantee Program ("LG Program"), pursuant to which the agency guarantees loans for advanced technology projects that result in the avoidance or reduction of air pollutants. Plaintiff XP Vehicles, Inc. ("XPV") is a now-dissolved California-based corporation that applied to the DOE in November of 2008 for an ATVM loan for the manufacture of a light-weight, energy-efficient sport utility vehicle. XPV partnered with Plaintiff Limnia, Inc. ("Limnia"), a Delaware-based corporation that developed an energy storage system to power XPV's proposed vehicle. Limnia, too, applied to the DOE for loan assistance, seeking both an ATVM loan and an LG Program loan guarantee in February of 2009. The DOE denied both Plaintiffs' loan requests, and XPV and Limnia have now filed a seven-count complaint against the DOE, its Secretary Ernest Moniz in his official capacity, former Secretary of Energy Steven Chu in his individual capacity, and former Director of the ATVM Loan Program Lachlan Seward in his individual capacity (collectively, "Defendants"), alleging that the DOE's decisionmaking process with respect to these loan programs was infused with cronyism and political favoritism
Before this Court at present are two motions to dismiss Plaintiffs' complaint: one from the DOE and Moniz ("the Official Capacity Defendants"), and one from Chu and Seward (the "Individual Capacity Defendants"). The Official Capacity Defendants make various threshold jurisdictional arguments, including sovereign immunity, lack of standing, and ripeness; on the merits, they argue both that XPV lacks the capacity to sue because it is a dissolved corporation and that Plaintiffs have failed to state a claim upon which relief can be granted. The Individual Capacity Defendants adopt the Official Capacity Defendants' dismissal arguments, and further argue that XPV's claims are barred by the statute of limitations; that no Bivens action exists for the alleged constitutional violations; and that, even if a remedy did exist, Chu and Seward are protected by qualified immunity.
As explained further below, this Court concludes that, although it does have jurisdiction over the claims Plaintiffs make in their complaint, all of XPV's claims and most of Limnia's claims must be dismissed in their entirety. XPV's claims against the Official Capacity Defendants must be dismissed because, as a dissolved corporation, XPV does not have the capacity to sue for injunctive relief, and XPV's claims against the Individual Capacity Defendants must be dismissed because no Bivens action exists that will permit XPV to recover monetary damages from those defendants. Limnia's constitutional claims fail in a similar fashion, both because there is no Bivens action and also because Limnia has not alleged facts that are sufficient to state a constitutional claim. But Limnia's two APA claims—which arise out of the denial of its ATVM loan application, on the one hand, and the processing of its LG Program application, on the other—survive the pending motions to dismiss because Limnia has adequately alleged that the DOE's denials of Limnia's ATVM Loan Program and LG Program applications were the result of arbitrary and capricious agency action in violation of the APA. Consequently, the Official Capacity Defendants' motion to dismiss will be
In 2007, Congress enacted the Energy Independence and Security Act ("EISA"), Pub.L. 110-140, § 136, 121 Stat. 1492, 1514-16, with the express purpose of
Under the ATVM Loan Program, the DOE provides a total of $25 billion in direct loans to the manufacturers of "advanced technology vehicles" and the "qualifying components" of such vehicles, so long as these manufacturers are engaged in certain eligible activities. 42 U.S.C. § 17013(d)(1).
42 U.S.C. § 17013(d)(3). Furthermore, under the DOE's implementing regulations, an ATVM loan applicant must be "[a]n automobile manufacturer that can demonstrate an improved fuel economy" or "[a] manufacturer of a qualifying component[,]" 10 C.F.R. § 611.100(a) (2015), and the regulations also require such applicants to provide, inter alia, a description of "the nature and scope of the proposed project[,]" which must include "key milestones and [the] location of the project" and a "detailed explanation of how the proposed project qualifies" for loan assistance, id. § 611.101.
The DOE has adopted a two-step procedure for evaluating ATVM loan applications. First, the agency engages in "eligibility screening"—i.e., it determines whether the application contains the required information; whether the applicant satisfies the eligibility criteria; and whether the terms of the requested loan comport with the applicable statutory requirements. Id. § 611.103(a). The regulations state in no uncertain terms that the DOE "can at any time reject an application, in whole or in part, that does not meet these [eligibility] requirements." Id. If the application survives eligibility screening, the DOE will then move on to the second stage of the application process, which consists of a substantive merits review of the
Significantly, the regulations that govern the ATVM Loan Program also state that "[o]nly an Agreement executed by a duly authorized DOE Contracting Officer can contractually obligate the government to make a loan" under the program. Id. § 611.105(a). And the regulations make clear that the "DOE is not bound by oral representations made during the Application stage, or during any negotiation process." Id. § 611.105(b).
The Section 1703 Loan Guarantee Program was established as part of the Energy Policy Act of 2005. See Pub.L. No. 109-58, § 1701-04, 119 Stat. 594, 1117-22 (codified at 42 U.S.C. §§ 16511-14). The statute is aimed at promoting new and improved technologies that "avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases[,]" 42 U.S.C. § 16513(a), and it authorizes the DOE to guarantee loans for certain environmentally-friendly, energy-efficient projects, id. Among the categories of projects that are specified as qualifying for this loan program are "[h]ydrogen fuel cell technology" and "production facilities for the manufacture of fuel efficient vehicles or parts of those vehicles, including electric drive vehicles[.]" Id. § 16513(b).
Like the regulations that govern the ATVM Loan Program, the LG Program regulations set out a comprehensive but non-exhaustive list of "information and materials" that must be submitted as part of an application, including "[a] description of how and to what measurable extent the project avoids, reduces, or sequesters air pollutants and/or anthropogenic emissions of greenhouse gases, . . . [a] description of the nature and scope of the proposed project,. . . [and a] detailed description of the overall financial plan for the proposed project[.]" 10 C.F.R. § 609.6(b). Moreover, similar to the ATVM Loan Program, the regulations specify that "[o]nly a Loan Guarantee Agreement executed by a duly authorized DOE Contracting Officer can contractually obligate DOE to guarantee loans or other debt obligations[,]" id. § 609.10(a), and that the "DOE is not bound by oral representations made" at any stage in the application process, id. § 609.10(b).
However, unlike the ATVM Loan Program application process, the LG Program regulations require "[p]ayment of [an] Application filing fee" as part of an LG Program application, and the regulations specifically state that the "DOE will not consider any Application complete" until the application fee is paid. Id. § 609.6(b)(2), (c). Moreover, LG Program applications that satisfy all of the applicable requirements are ultimately subjected to "a competitive process" in which all applications are evaluated according to a series of factors and compared to each other. Id. § 609.7(a)-(b). To facilitate this process, prior to accepting applications for a loan guarantee, the DOE issues public solicitations for specific types of projects that it is looking to support, and it entertains LG Program applications pursuant to that solicitation. Id. § 609.3(a). For example, Plaintiff Limnia submitted the LG Program application that is at issue in the instant case in response to a DOE solicitation in June of 2008 for loan guarantee applications related to "projects in the United States that employ energy efficiency, renewable energy,
Plaintiffs' complaint makes various assertions of fact regarding the circumstances surrounding the DOE's consideration and processing of XPV's ATVM loan application and Limnia's ATVM Loan Program and LG Program applications. These allegations, many of which are related below, must be accepted as true for the purpose of evaluating Defendants' motions to dismiss.
XPV is a now-dissolved "green technology" company that applied for an ATVM loan in December of 2008, seeking to fund the research and development of "an advanced technology, family-friendly SUV-style vehicle[.]" (Am. Compl., ECF No. 26, ¶¶ 1, 3, 14.) XPV's application asserted that its proposal fulfilled the requirements of the DOE's ATVM Loan Program because XPV planned to used "polymer plastics and skinned expanded foam pressure membranes to replace metal doors, body panels, hoods and roofs on a lightweight alloy frame[,]" and in so doing, XPV would produce an extremely light-weight vehicle that was also safe in operation because it employed "wraparound, pre-deployed `airbag'" technology. (Id. ¶ 17.)
According to the complaint, on December 2, 2008, Defendant Seward—the director of the ATVM Loan Program at that point in time—"acknowledged receipt" of XPV's application and "requested additional information[,]" which XPV provided. (Id. ¶ 22.) Then, on December 31, 2008, Seward allegedly sent a letter to XPV indicating that XPV's application was "substantially complete" (id. ¶ 22; Ex. 2 to Am. Compl., ECF No. 26-1, at 11), which led XPV to believe that the DOE had deemed XPV a "qualified applicant" such that the agency "would begin processing XPV's ATVM Loan Program application . . . no later than the end of December 2008, and that the review would take a matter of weeks, consistent with normal commercial lending practices" (Am.Compl. ¶¶ 23-24). Instead, XPV alleges that its application was "`set-aside' in favor of applications from politically-connected government cronies [because] Defendants had `fixed' the ATVM Loan Program process to benefit political donors" (id. ¶ 26), as explained further below.
The complaint asserts that, beginning in the spring of 2009—approximately four months after XPV submitted its ATVM
Notwithstanding the reassurances that members of the DOE staff allegedly provided to XPV during the application process, the DOE denied XPV's ATVM loan request on August 21, 2009. (Id. ¶ 37.) The rejection letter, which Defendant Seward signed (and which XPV has filed as an exhibit to the complaint) asserted that the DOE was "not in a position to [make an] award [to] every eligible application[,]" and suggested that the XPV's application did not pass the DOE's merit review. (Ex. 3 to Am. Compl., ECF No. 26-1, at 13; see also Am. Compl. ¶ 38.)
XPV alleges that it immediately requested both a statement regarding the specific grounds for the agency's denial of its application and a copy of the DOE's merit review documents. (Am.Compl. ¶¶ 39, 40.) XPV also allegedly placed a phone call to the DOE within five days of the denial (id. ¶ 42); according to the complaint, the DOE staff person with whom the XPV representative spoke pulled the company's application file and orally provided myriad reasons for the denial, none of which XPV believed was valid (id. ¶¶ 43-45).
The complaint alleges that no such letter was forthcoming. (Id. ¶ 53.) Thus, on September 21, 2009—approximately one month after the denial letter issued—XPV
Approximately one month later, on October 23, 2009, Seward responded in writing to XPV's reconsideration request, providing a more detailed explanation for the denial of XPV's application. (See Am. Compl. ¶¶ 55-63; Ex. 5 to Am. Compl., ECF No. 26-1, at 21.) The Seward letter did not claim that XPV had failed to meet any of the eligibility requirements set forth in the ATVM Loan Program's regulations (Am. Compl. ¶ 64), and it thus seemingly addressed the merits of XPV's proposal. Seward explained that XPV's proposed technology "appeared from the application to be at a development stage and not yet ready for commercialization[,]" which was a "significant weakness[.]" (Ex. 5 to Am. Compl. at 21.) Moreover, the project's "impact on fuel economy . . . was determined to be weak"; the storage system for hydrogen was "unproven and potentially impractical for a consumer vehicle"; and the company's "claims for reductions in petroleum use . . . were deemed to be unrealistic[.]" (Id.)
Limnia is a green technology company that, unlike XPV, is still in operation. (Id. ¶¶ 2-3.) Limnia filed a loan application through the ATVM Loan Program in February of 2009 to produce an "advanced technology vehicle energy storage system"—i.e., a vehicle battery. (Id. ¶ 68.) Limnia and XPV are sister companies, and Limnia's proposed energy storage system was the power source for XPV's proposed lightweight SUV. (Id. ¶¶ 3, 12, 68.)
The DOE rejected Limnia's ATVM application on April 10, 2009, on the ground that Limnia's energy storage system was a stand-alone charging station, not equipment to be installed in a vehicle, and thus was not a "qualifying component" under 42 U.S.C. § 17013(d)(1). (Id. ¶ 69; Ex. 6 to Am. Compl., ECF No. 26-1, at 24.) Limnia requested reconsideration of this determination, noting that its energy storage system did, in fact, have to be installed inside a vehicle in order to be used, and that it actually was designed for this purpose. (Id. ¶ 70.) On May 13, 2009, the DOE rejected Limnia's ATVM loan application for a second time, giving Limnia the same reason that it had proffered in the first denial. (Id. ¶ 71.) The DOE did, however, request further information from Limnia that would allow it to reevaluate Limnia's application. (Id.; Ex. 8 to Am. Compl., ECF No. 26-1, at 30-31.) According to the complaint, Limnia responded to this letter on June 3, 2009, by providing the requested information and seeking reconsideration of its application once again. (Am. Compl. ¶ 72.) Plaintiffs allege that, as of the time the instant complaint was filed, the DOE had not responded to Limnia's request for another review. (Id. ¶¶ 71-73.)
Around the same time that Limnia applied for an ATVM loan, it also applied for an LG Program loan guarantee, pursuant to the aforementioned solicitation that the DOE published in June of 2008. (Id. ¶ 77.) Plaintiffs allege that, prior to Limnia's submission of its application in February of 2009, then-Secretary Chu had stated in a conference call that the graduated LG Program fees "were unduly onerous and
According to the complaint, on February 26, 2009—the day of the application deadline—a DOE official called Limnia to warn that the DOE would not consider Limnia's application without the fee. (Id. ¶ 78.) Limnia was unable to remit the fee by the midnight deadline (id. ¶ 79), and according to the complaint, the following day, another DOE official told Limnia that there were "a few days of flexibility" to send in the fee, and promised to send written instructions for sending the fee (id. ¶¶ 80-81). That official allegedly never got back to Limnia, despite Limnia's best efforts to follow up. (Id.) Then, on April 9, 2009, the DOE sent Limnia an email informing Limnia that its LG Program application would not be considered because Limnia failed to pay the required application fee. (Id. ¶ 82; Ex. 10 to Am. Compl., ECF No. 26-1, at 39.)
At the heart of the complaint is Plaintiffs' contention that the various reasons the DOE provided for denying XPV's and Limnia's loan applications were "baseless pretexts" for political cronyism. (Am. Compl. ¶ 118(i).) In a nutshell, Plaintiffs assert that "[p]olitics and political pressure infected [the ATVM and LG] programs, shaping, in whole or in part, the judgment of the agency's ultimate decision makers, including Defendants Chu and Seward, their staffs, advisors and consultants." (Id. ¶ 84.)
Plaintiffs maintain that they became aware of the inequitable manner in which the agency was operating these loan programs in a variety of ways—and even prior to the denials at issue. For example, according to the complaint, Plaintiffs first got wind of possible unfair dealing during a June 2009 conversation with an unnamed corporate executive, who allegedly said his company had "been `screwed over' by DOE" and asserted that DOE employees were "playing favorites with government money." (Id. ¶¶ 32-33.) Plaintiffs also allegedly watched as the DOE appeared to provide XPV's competitors Tesla Motors, Inc. and Fisker Motors, Inc. "special assistance" with the application process—e.g., giving Fisker "extraordinary access to DOE staff time" and providing "offices and conference rooms in DOE's headquarters at no charge"—while denying XPV these same resources. (Id. ¶¶ 30-31.) Additionally, Plaintiffs claim that a member of Tesla's board, who was also a "major campaign contributions `bundler' for the White House[,]" was on "a key DOE advisory board" (id. ¶ 91), and another "accomplished campaign contribution `bundler'" was a "Tesla investor and advisor" who had a "primary role" in the DOE's Loan Program Office (id. ¶ 92). According to the complaint, the political contributions of these two "patrons" purportedly resulted in Tesla's "favorable treatment" by the DOE with respect to the loan application process (id. ¶ 93); therefore, Plaintiffs suggest that it was no wonder that the DOE ultimately "gave Tesla $465 million of taxpayer funds at an interest rate of 1.6% and on extremely favorable, below-market terms[.]" (Id. ¶ 34.) Plaintiffs also allege that similar preferential treatment was afforded to Fisker, a company whose "patrons" allegedly had made large donations to the Obama campaign and other Democratic causes. (Id. ¶ 100.) The complaint suggests that these donations effectively purchased political influence, which was allegedly a "material factor[]" in the
Plaintiffs also point to a number of emails from DOE officials, and assert that this correspondence indicates that the DOE was under political pressure to approve particular loan applications. (See id. ¶¶ 112-13.) For example, one email suggests that the DOE's review of a loan applicant was sped up as a result of pressure from then-House Majority Leader Steny Hoyer. (See Ex. 19 to Am. Compl., ECF No. 26-1, at 200.) Another email indicates that the White House made an effort to encourage the DOE to hasten review of another loan application. (See Ex. 14 to Am. Compl., ECF No. 26-1, at 189.) Plaintiffs claim that these and other emails demonstrate that "Defendants bent the rules for political favorites[.]" (Am. Compl. ¶ 113.)
Finally, Plaintiffs insist that this anecdotal evidence of political favoritism regarding the DOE's loan practices was confirmed in February of 2011 and March of 2012, when the Government Accountability Office ("GAO") issued two reports regarding the DOE's implementation of the ATVM Loan Program and LG Programs. (See U.S. Gov't Accountability Office, Department of Energy: Advanced Technology Vehicle Loan Program Implementation Is Under Way, But Enhanced Technical Oversight And Performance Measures Are Needed ("GAO ATVM Report"), Ex. 11 to Am. Compl., ECF No. 26-1, at 42-80; U.S. Gov't Accountability Office, DOE Loan Guarantees: Further Actions Are Needed to Improve Tracking and Review of Applications ("GAO LG Program Report"), Ex. 13 to Am. Compl., ECF No. 26-1, at 130-187.)
By contrast, the GAO's LG Program report focused on implementation problems related to the application stage. The GAO noted that the DOE did not have access to consolidated data about past and present LG Program applications, which made it difficult for the DOE to review and identify problems within the application process. (GAO LG Program Report at 152-54.) Additionally, the GAO found that although the DOE had established a comprehensive process for reviewing and granting LG Program applications, that process had been applied inconsistently in practice. (Id. at 155.) For example, the GAO had reviewed the application process for a number of successful applicants, and it found that the agency's actual application review practices differed in at least one respect from the process outlined in the DOE's LG Program guidance manuals in almost every case. (See id. at 156-60.) The GAO acknowledged the DOE's contention
The instant complaint seizes on the GAO's critiques, repeatedly referencing the two reports and asserting that the GAO's conclusions support Plaintiffs' cronyism accusations. (See Am. Compl. ¶¶ 85-88, 110-11.) According to Plaintiffs, the problems that the GAO identified in the ATVM report in particular—e.g., the DOE's lack of technical expertise and its use of inadequate performance measures in evaluating the performance of successful ATVM applicants—"facilitated the politicization of DOE's loan programs." (Id. ¶ 88.) And, in Plaintiffs' view, the GAO's LG Program report establishes that the DOE treated applicants inconsistently, by "favoring some [applicants] and disadvantaging others[.]" (Id. ¶ 111.)
Plaintiffs filed the initial complaint in the instant case on January 10, 2013; an amended complaint followed, on August 20, 2013.
With respect to the four constitutional claims, Plaintiffs contend that the DOE's failure to engage in a fair merits review of Plaintiffs' applications and its improper consideration of political contributions and influence resulted in the deprivation of a constitutionally-protected property interest—the requested ATVM loans—and subjected Plaintiffs to discriminatory treatment, in violation of their Fifth Amendment rights to due process and equal protection. (See id. ¶¶ 130-32, 145, 148; see also Am. Compl. ¶¶ 121-36 (Claim 1); id. ¶¶ 137-141 (Claim 2); id. ¶¶ 142-48 (Claim 3); id. ¶¶ 149-154 (Claim 4).) As noted, Plaintiffs make
As for the APA claims, Plaintiffs argue that the Official Capacity Defendants acted arbitrarily and capriciously when the DOE denied XPV's ATVM loan application (id. ¶¶ 155-60 (Claim 5)), Limnia's ATVM loan application (id. ¶¶ 161-66 (Claim 6)), and Limnia's LG Program application (id. ¶¶ 167-71 (Claim 7)). Plaintiffs allege that the DOE's rejection of each application constituted "final agency action" for the purposes of the APA (id. ¶¶ 156, 162, 168), and that its decision making process was "impermissibly infected with political pressure, which shaped, in whole or in part," the ultimate agency decision (id. ¶¶ 157, 163, 169). Plaintiffs seek an order declaring that their loan applications were wrongfully denied and directing the DOE to reconsider their applications. (Id. at 33.)
On September 18, 2013, Defendants filed two separate motions to dismiss—one on behalf of the Official Capacity Defendants and the other on behalf of the Individual Capacity Defendants. (See Official Capacity Defs.' Mot. to Dismiss ("Off. Defs.' Mot."), ECF No. 28; Individual Fed. Defs.' Mot. to Dismiss & Inc. Mem. of Law ("Indiv. Defs.' Mot."), ECF No. 27.) These motions seek dismissal under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defendants' first line of attack challenges this Court's jurisdiction to reach the merits of a number of Plaintiffs' claims. First, Defendants argue that, to the extent that Plaintiffs are attempting to recover monetary damages against a government agency or government officials in their official capacity, such damages are barred by sovereign immunity. (See Official Capacity Defs.' Mem. in Supp. of Off. Defs.' Mot. ("Off. Defs.' Mem."), ECF No. 28, at 19-20.) Defendants also argue that Limnia's ATVM Loan Program claims (both the constitutional and the APA variety) are unripe (see id. at 23-27), and that both Plaintiffs lack standing to bring certain claims (see id. at 20-23, 27-28). With respect to the merits of Plaintiffs' four constitutional claims, Defendants maintain that Plaintiffs have failed to state a claim for a violation of their Fifth Amendment rights to due process or equal protection. (Off. Defs.' Mem. at 30-33; Indiv. Defs.' Mot. at 43-47.) Defendants also argue that XPV lacks the capacity to sue for injunctive relief. (See Off. Defs.' Mem. at 28-29; Indiv. Defs.' Mot. at 25 n.16.) And the Individual Capacity Defendants argue that Plaintiffs constitutional claims against them are barred by the statute of limitations (see Indiv. Defs.' Mot. at 25-29); that a Bivens action (permitting the recovery of damages from public officials for constitutional violations) has not yet been established in this context and should not be extended to encompass Plaintiffs' constitutional claims (see id. at 29-31); and that, in any event, the Individual Capacity Defendants are protected from liability by qualified immunity (id. at 41-43). Finally, with respect to Plaintiffs' APA claims in particular, the Official Capacity Defendants assert that there has been no final agency action with respect to Limnia's ATVM loan application (see Off. Defs.' Mem. at 29-30), and that Plaintiffs have not adequately alleged a violation of the APA with respect to Limnia's LG Program application (see id. at 33-35).
This Court held oral argument on Defendants' motions to dismiss on April 3, 2014, and it took the motions under advisement at that time.
The defense of sovereign immunity relates to a federal court's jurisdiction, see Tri-State Hosp. Supply Corp. v. United States, 341 F.3d 571, 575 (D.C.Cir. 2003); thus, a request for dismissal on sovereign immunity grounds is properly evaluated under Rule 12(b)(1), see Mullen v. Bureau of Prisons, 843 F.Supp.2d 112, 116 (D.D.C.2012). Similarly, when a plaintiff lacks standing, or when the plaintiff's claims are not ripe, dismissal under Rule 12(b)(1) for lack of subject matter jurisdiction is the proper course. See Haase v. Sessions, 835 F.2d 902, 906 (D.C.Cir.1987) ("[T]he defect of standing is a defect in subject matter jurisdiction."); Sierra Club v. U.S. Dep't of Energy, 825 F.Supp.2d 142, 154 (D.D.C.2011) ("The issue of ripeness falls under Rule 12(b)(1).").
In response to a Rule 12(b)(1) motion to dismiss, "the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence." Moran v. U.S. Capitol Police Bd., 820 F.Supp.2d 48, 53 (D.D.C.2011) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)); Halcomb v. Office of the Senate Sergeant-at-Arms of the U.S. Senate, 209 F.Supp.2d 175, 176 (D.D.C.2002). The court "may consider such materials outside the pleadings as it deems appropriate to resolve the question whether it has jurisdiction to hear the case." Scolaro v. D.C. Bd. of Elections & Ethics, 104 F.Supp.2d 18, 22 (D.D.C.2000); see also Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C.Cir.2005). Moreover, the court must accept as true all of the factual allegations in the complaint and draw all reasonable inferences in favor of the plaintiff, see Brown v. District of Columbia, 514 F.3d 1279, 1283 (D.C.Cir.2008), but it need not "accept inferences unsupported by the facts alleged or legal conclusions that are cast as factual allegations[,]" Rann v. Chao, 154 F.Supp.2d 61, 64 (D.D.C.2001). Furthermore, "[t]he court must scrutinize the plaintiff's allegations more closely when considering a motion to dismiss pursuant to Rule 12(b)(1) than it would under a motion to dismiss pursuant to Rule 12(b)(6)." Schmidt v. U.S. Capitol Police Bd., 826 F.Supp.2d 59, 65 (D.D.C.2011).
"A Rule 12(b)(6) motion tests the legal sufficiency of a complaint[.]" Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Plausibility "is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. The plausibility standard is satisfied "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "[W]hile `detailed factual allegations' are not necessary, the plaintiff must provide `more than an unadorned, the-defendant-unlawfully-harmed-me accusation.'" Schmidt, 826 F.Supp.2d at 65 (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937).
In deciding whether to dismiss a complaint for failure to state a claim under Rule 12(b)(6), the court generally does not consider matters beyond the pleadings, which differs from the court's treatment of
As explained above, XPV and Limnia allege that impermissible political favoritism and cronyism infected the DOE's implementation of the ATVM Loan Program and the LG Program, and resulted in the unwarranted and arbitrary denial or rejection of their respective loan applications in a manner that violated Plaintiffs' Fifth Amendment rights to due process and equal protection and that also transgressed the APA. Defendants' first line of attack against the advancement of these claims is a series of jurisdictional arguments. (See, e.g., Off. Defs.' Mem. at 23-27 (asserting that Limnia's ATVM Loan Program claims are unripe); id. at 27-28 (asserting that Limnia lacks standing to bring its ATVM Loan Program claims); id. at 20-23 (asserting that XPV lacks standing to sue for injunctive relief because it is a dissolved corporation).) For the reasons explained below, however, this Court concludes that none of the asserted jurisdictional roadblocks prevents the Court from reaching the merits of Plaintiffs' claims.
Nevertheless, the Court has determined that all of XPV's claims and most of Limnia's claims must be dismissed pursuant to Rule 12(b)(6), for a variety of reasons. XPV's due process, equal protection, and APA claims against the Official Capacity Defendants must be dismissed because XPV is a dissolved corporation that lacks the capacity to sue for injunctive relief. In addition, XPV's due process and equal protection claims against the Individual Capacity Defendants fail as a matter of law because no Bivens action is available for these alleged civil rights violations under the circumstances presented here, and as a result, claims for monetary damages cannot be brought against these defendants. Limnia's constitutional claims suffer a similar fate: the lack of a Bivens action requires dismissal of Limnia's constitutional claims against the Individual Capacity Defendants, and the constitutional claims against the Official Capacity Defendants must be dismissed because Limnia fails to state facts that adequately support any such claim. However, this Court concludes that Limnia may proceed with its APA claims regarding the denial of both its ATVM loan application and its LG Program application because the complaint contains allegations that, if true, are sufficient to establish that the Official Capacity Defendants acted arbitrarily and capriciously in handling those applications.
When a defendant challenges a federal court's jurisdiction, the court is obligated to consider the jurisdictional objections before reaching the merits of any
The reasons that Defendants give for challenging on ripeness grounds the constitutional and APA claims that Limnia brings with respect to its ATVM loan application are easy to summarize: Defendants maintain, first, that because the DOE rejected Limnia's application at the initial screening stage of the review process and did not consider the merits of Limnia's ATVM application, Limnia's claims regarding the DOE's treatment of its application are not yet ripe—in other words, that any legal claims challenging the agency's determination regarding an applicant's ATVM loan application ripen only when the agency addresses the application's merits (see id. at 25-27)—and second, that Limnia has requested that the DOE reconsider its denial of Limnia's LG Program application, and that request is still pending before the DOE, so any attempt to challenge the DOE's actions at this point is "incurably premature" (id. at 23-25). These arguments invite this Court to examine Limnia's claims through the lens of the "ripeness" doctrine, which is a jurisdictional principle "designed `to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.'" Nat'l Park Hospitality Ass'n v. Dep't of Interior, 538 U.S. 803, 807-08, 123 S.Ct. 2026, 155 L.Ed.2d 1017 (2003) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 148-49, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967)).
It is well established that, to determine whether or not a claim is ripe, a court must "evaluate (1) the fitness of the issues for judicial decision[,] and (2) the hardship to the parties of withholding court consideration." Nat'l Park Hospitality Ass'n, 538 U.S. at 808, 123 S.Ct. 2026. The "fitness" prong is often the heart of the matter, and whether or not a claim is fit for judicial determination turns on three factors: "whether [the issue] is purely legal, whether consideration of the issue would benefit from a more concrete
Specifically, as mentioned, Defendants maintain that the "final agency action" factor of the ripeness inquiry is a hurdle that has not been cleared with respect to the agency's treatment of Limnia's ATVM application because the DOE has not made a decision on the merits of Limnia's application and also because there is a pending motion for reconsideration of the DOE's initial denial. (See id. at 23-27.) Thus, in essence, Defendants' argument requires this Court to address two related aspects of the DOE's determination, each of which implicates the ultimate "final agency action" inquiry—first, has there really been cognizable agency "action" for ripeness purposes, if the DOE's determination relates only to the initial (screening) stage of the loan application review process and not the merits?; and if so, second, can the DOE's action with respect to Limnia's application properly be characterized as "final" given the fact that Limnia has requested further consideration by the agency? For the reasons that follow, this Court finds that the answer to both of these questions is yes, and it therefore concludes that Limnia has satisfied the final agency action factor of the ripeness test.
Defendants argue that the DOE's decision to reject Limnia's ATVM loan application is not "sufficiently final" because the DOE has not yet "conducted a substantive review of Limnia's application." (Off. Defs.' Mem. at 26.) But ripeness doctrine does not require that an agency reach and determine the underlying merits of an application or petition—as distinguished from making a determination regarding initial eligibility criteria—so long as the agency has made a final and unequivocal decision with respect to what it does review, such that its determination
The DOE's denial of Limnia's ATVM loan application plainly satisfies these requirements, notwithstanding the fact that, according to the complaint, the denial occurred at the initial stage of the DOE's application review process. Plaintiffs allege that the DOE first rejected Limnia's application for an ATVM loan on April 10, 2009 (see Am. Compl. ¶ 69), based on the agency's allegedly mistaken determination that Limnia's "proposed project cannot, as a matter of law, be funded under the Program" because it is a component that "do[es] not appear to be designed for installation in an advanced technology vehicle" (Ex. 6 to Am. Compl. at 24-25). After Limnia requested reconsideration and provided additional documentation, the DOE sent Limnia a letter dated May 13, 2009, in which the agency stated that "the additional information has not changed our determination that your proposed project cannot, as a matter of law, be funded under the Advanced Technology Vehicles Manufacturing Incentive Program[.]" (Ex. 8 to Am. Compl. at 30.) In this same correspondence, the agency asked Liminia for more information (id. at 31; Am. Compl. ¶ 71), which Limnia apparently provided, but the additional material apparently failed to satisfy the DOE's staff—more than two years later, in October of 2011, the agency "sent Limnia a letter . . . stating that Limnia's application was [nevertheless] not substantially complete[,]" (Ex. 5 to Pls.' Off. Opp'n, ECF No. 30-6, at 2).
This Court finds that all of these letters and statements plainly constitute a final decision of the DOE rejecting Limnia's ATVM loan application for the purpose of the ripeness doctrine. The DOE stated in no uncertain terms in its letter of April 10, 2009, that it had "carefully reviewed" Limnia's application and had "determined" that the proposed project was not eligible to receive an ATVM loan "as a matter of law." (Ex. 6 to Am. Compl. at 24.) Furthermore, the agency also apparently determined that Limnia's application was not substantially complete, and it stated that the DOE would "take no further action with respect to your application until such time as you have submitted an application that is substantially complete." (Ex. 5 to Pls.' Off. Opp'n at 2.) The series of letters from the DOE to Limnia provide no indication that the DOE's determination regarding the status of Limnia's application is at all tentative or open to any further reconsideration; indeed, the most recent correspondence unmistakably pushes the ball into Limnia's court, suggesting steps that Limnia might take "[t]o aid in completing" its application, and thereby clearly indicating that the agency would not proceed to continue to evaluate its submission otherwise. (Ex. C to Off. Defs.' Mem. at 8.)
To the extent that Defendants here are suggesting that the DOE's determination that Limnia's submission was "not substantially complete" is not tantamount to a final, substantive denial of Limnia's loan request (Off. Defs.' Mem. at 26), they have two problems—first, the mandate that this Court must construe the facts alleged in the complaint in the light most favorable to the Plaintiffs to the extent those allegations are consistent with evidence presented means that, at least for the purpose of the instant motion to dismiss, it must be presumed that the DOE did, in fact, "carefully review[]" Limnia's application as it expressly stated it had done (Ex. 6 to Am. Compl. at 24), and that the agency "denied" that application for the substantive reasons expressed in its letters. (See Am. Compl. ¶ 69; Ex. 6 to Am. Compl. at 24-25; Ex. 8 to Am. Compl. at 30-31.) Second, and perhaps even more important, Defendants have not provided this Court with any reason to draw any distinction between an initial completeness determination, on the one hand, and a substantive decision to deny an ATVM loan application (e.g., for lack of eligibility or on the merits), on the other—and no reason is apparent, given that a rejection for lack of completeness and a substantive denial of an ATVM loan application are both the end of the road from the applicant's standpoint and have the same practical effect on the applicant's rights. To find otherwise, as Defendants would have this Court do, would be to presume that there is some jurisdictional significance to the agency's decision to deny a loan application on the merits, as opposed to rejecting the application on some other ground that is antecedent
In short, Defendants fail to identify a single case that supports distinguishing between the DOE's decision regarding the completeness of Limnia's application and a substantive decision on the merits as far as final agency action is concerned, and this Court sees no good reason to draw any such line, especially when the evidence indicates that the DOE considered Limnia's application numerous times and repeatedly expressed its determination that (for whatever reason) the proposed project would not be funded. Thus, the mere fact that the DOE apparently did not base its rejection on the merits of Limnia's application is not determinative of the ripeness issue; regardless, in light of the allegations and evidence presented, the DOE's unequivocal rejection of Limnia's ATVM loan application was a "final" action on the part of the agency.
Undaunted, Defendants raise another finality objection as part of their ripeness challenge: they maintain that there is no final agency action because Limnia has requested reconsideration of the agency's decision and, according to the complaint, that request is still pending; therefore, the claims that Limnia has brought here are "incurably premature[.]" (See Off. Defs.' Mem. at 23; see also Am. Compl. ¶¶ 70-73 (alleging that Limnia repeatedly requested reconsideration of the DOE's initial determination that its project was ineligible for funding, and that "Defendants never responded" to Limnia's second reconsideration request).) A line of D.C. Circuit case law does stand for the proposition that a request for reconsideration requires a litigant to wait for the agency to act before that litigant is permitted to file suit, see Clifton Power Corp. v. FERC, 294 F.3d 108, 110 (D.C.Cir.2002), and this doctrine holds that, even if the agency completes its reconsideration before the litigant's lawsuit is heard on the merits, the premature lawsuit cannot proceed—hence, the "incurable" part of the incurably premature doctrine, see TeleSTAR, Inc. v. FCC, 888 F.2d 132, 134 (D.C.Cir.1989) ("We hold therefore that when a petition for review is filed before the challenged action is final and thus ripe for review, subsequent action by the agency on a motion for reconsideration does not ripen the petition for review or secure appellate jurisdiction."); see also Pen Peninsula Commc'ns, Inc. v. FCC, No. 00-1079, 2000 WL 1225776, at *1 (D.C.Cir. July 11, 2000) (expressly referring to "[t]he incurably premature doctrine"). However, it is far from clear that this doctrine applies to the sort of agency decision making at issue in this case.
Specifically, as noted above, the DOE first rejected Limnia's ATVM loan application on April 10, 2009. (Am. Compl. ¶ 69; Ex. 6 to Am. Compl. at 24-25.) Limnia responded by asking for an explanation and reconsideration. (Am.Compl. ¶ 70.) In response to this, the DOE affirmed its decision but gave Limnia the opportunity to submit additional information and to request reconsideration (Ex. 8 to Am. Compl. at 31), which Limnia subsequently did on June 3, 2009 (Am.Compl. ¶¶ 71-72). Plaintiffs claim that the DOE failed to respond at all to this second request for reconsideration. (Id. ¶ 73.) And although the complaint ends the story there, the documentation that the parties have submitted establishes that the DOE did, in fact, respond to Limnia's 2009 reconsideration request; thereafter, it sent multiple letters, stating repeatedly that it had "thoroughly reviewed all information that was provided" to the agency, and that Limnia's application was still "not substantially complete." (Ex. 5 to Pls.' Off. Opp'n at 2.) Nothing in the record indicates that Limnia sought a further round of reconsideration, despite the DOE's repeated characterization of its application as incomplete and its suggestion to Limnia that the company research the program requirements and try again. (See Ex. C to Off. Defs.' Mem. at 8.) Thus, there is no factual basis for concluding that the agency was still engaged in any reconsideration process at the time that the complaint in this case was filed. See TeleSTAR, Inc., 888 F.2d at 134. In other words, even if the Official Capacity Defendants are correct that Limnia's request for reconsideration in 2009 rendered the DOE's decision non-final at that time, the DOE's subsequent rejection of Limnia's ATVM application again—in 2012—constituted a new final agency decision with respect to which no reconsideration request apparently was made, such that Plaintiffs' filing of the instant complaint in January of 2013 was not at all premature, much less "incurably" so.
In sum, this Court concludes that Limnia's claims are fit for review because they present purely legal questions that would not benefit from resolution in a more concrete setting, and based on the evidence submitted, the DOE unequivocally rejected Limnia's ATVM loan application in a manner that constitutes final agency action despite Limnia's prior requests for reconsideration of that decision. As a result, Limnia's ATVM Loan Program claims are sufficiently ripe.
Defendants have also questioned whether the Plaintiffs have Article III standing to file a lawsuit challenging the manner in which the DOE handled their ATVM loan applications. Lack of standing is a jurisdictional issue because Article III of the Constitution authorizes the federal courts to consider only "Cases" and "Controversies[,]" U.S. Const. art. 3, § 2, and to demonstrate a case qualifies as such, a plaintiff must allege an "injury in fact" that is "fairly traceable to the challenged action of the defendant" and that is capable of being "redressed" by the Court. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (internal quotation marks, alterations, and citations omitted). Defendants maintain that Limnia lacks standing because the complaint alleges that the DOE provided Limnia with specific reasons for its rejection of Limnia's ATVM loan application and thus establishes that Limnia has not been injured. (See Off. Defs.' Mem. at 28.) Defendants also assert that XPV's alleged injury is not redressible by a decision of this Court because, as a dissolved corporation, XPV lacks the capacity to sue for injunctive relief. (See Off. Defs.' Mem. at 20-23.)
Defendants' standing arguments are not persuasive. First of all, the denial of Limnia's ATVM loan application clearly qualifies as a concrete injury-in-fact, see Care Net Pregnancy Ctr. of Windham Cnty. v. U.S. Dep't of Agric., 896 F.Supp.2d 98, 108 (D.D.C.2012), and Plaintiffs' complaint adequately alleges that this denial was caused by Defendants (see Am. Compl. ¶¶ 68-71). Moreover, this injury is capable of being redressed by court order, if the Court orders either reconsideration or reversal of the DOE's decision, as Limnia requests. See Am. Petroleum Tankers Parent, LLC v. United States, 943 F.Supp.2d 59, 66 (D.D.C.2013) (finding "vacatur of the Administrator's denial and remand for further consideration" would adequately redress improper denial of a loan guarantee application). The Official Capacity Defendants' argument that Limnia has already received the remedy it requests because the DOE reconsidered its rejection of Limnia's application and provided "an explanation of the information needed to submit a substantially complete application[,]" and thus Limnia has not been injured (Off. Defs.' Mem. at 28), misunderstands Limnia's complaint, and is also belied by the very record documents that the Official Capacity Defendants rely so heavily upon in making their jurisdictional arguments. That is, Limnia maintains that the DOE's reasons for rejecting its application are, in essence, a pretext for improper political cronyism (see Pls.' Mem. in Opp'n to Off. Defs.' Mot. ("Pls.' Off. Opp'n"), ECF No 30, at 34); consequently, the DOE's "explanation" is arguably a part of Limnia's alleged rejection injury, and it is certainly not the cure for that alleged harm, as Defendants suggest. Moreover, even if one could say that Limnia's initial rejection was remedied (and thus redressed) when the DOE reconsidered its ATVM application upon request, to the extent that recent correspondence between the parties demonstrates that the DOE has now refused to continue to process Limnia's current ATVM Loan application (see Ex. 5 to Pls.' Off. Opp'n at 2), the challenged agency action is ongoing, and the alleged injury to Limnia persists.
Nevertheless, as mentioned, when the Court considers the merits of XPV's claims in light of the allegations in Plaintiffs' complaint, the Court concludes that XPV's claims must be dismissed in their entirety. As explained below, in the instant action XPV makes five claims against two different groups of defendants: it argues that it is due injunctive relief from the Official Capacity Defendants because their actions violated XPV's Fifth Amendment right to due process (Claim 1) and equal protection (Claim 3) and because the Official Capacity Defendants' denial of XPV's ATVM loan application was arbitrary and capricious in violation of the APA (Claim 5). XPV also argues that it is entitled to monetary damages from the Individual Capacity Defendants for these due process (Claim 2) and equal protection (Claim 4) violations. This Court has determined, however, that XPV does not have the capacity to sue the Official Capacity Defendants for injunctive
The Official Capacity Defendants argue that XPV cannot obtain the injunctive relief it seeks from them because, as a dissolved corporation, XPV can only sue for purposes of "winding up" its business operations, and it is not in a position to receive the relief of reconsideration or approval of its ATVM loan application as if it were operating as a going concern. (See Off. Defs.' Mem. at 28.) This Court agrees with Defendants.
Federal Rule of Civil Procedure 17 governs a party's capacity to sue or be sued, and applies to dissolved corporations. See Ripalda v. Am. Operations Corp., 977 F.2d 1464, 1468 (D.C.Cir.1992). Rule 17(b)(2) dictates that a corporation's capacity to sue is determined "by the law under which it was organized[,]" Fed.R.Civ.P. 17(b)(2); thus, because XPV was incorporated in California (see Am. Compl. ¶ 1), its capacity to sue as a dissolved corporation is controlled by California law. Notably, under California law, "the effect of dissolution is not so much a change in the corporation's status as a change in its permitted scope of activity." Penasquitos, Inc. v. Superior Court, 53 Cal.3d 1180, 283 Cal.Rptr. 135, 812 P.2d 154, 160 (1991). California Corporations Code section 2010 states that a dissolved corporation "continues to exist for the purpose of winding up its affairs, [and] prosecuting and defending actions by or against it . . . but not for the purpose of continuing business except so far as necessary for the winding up thereof." Cal. Corp.Code § 2010(a) (emphasis added). "Winding up" involves paying or making provision for the payment of debts; distributing remaining assets to shareholders; and filing a certificate of dissolution. See Trahan v. Trahan, 99 Cal.App.4th 62, 120 Cal.Rptr.2d 814, 821 (2002). Consequently, the key question here is whether or not the injunctive relief that XPV has requested in the instant action is "necessary for the winding up" of its operations. See Cal. Corp.Code § 2010(a). (See also Pls.' Off. Opp'n at 16-17 (citing the California code law).)
From the allegations of the complaint, it appears that, quite to the contrary, XPV has brought the claims for injunctive relief in the instant action for the purpose of restarting—in effect, revitalizing—its business operations, rather than winding them up. Specifically, XPV seeks an injunction to require the DOE to reconsider and/or grant XPV's loan application (Am. Compl. at 33) and, as noted at the outset, the ATVM Loan Program grants loans to businesses for a very specific purpose: for the future development and manufacture of advanced technology vehicles and certain components of those vehicles, see 42 U.S.C. § 17013(d)(1). Thus, if this Court orders the DOE to reconsider XPV's loan application, or orders the DOE to grant the application as XPV requests, XPV would have to restart its operations to comply with the terms of any resulting ATVM loan. This means that the relief XPV seeks here would necessarily support the continuation of its operations, and is thus plainly contrary to section 2010's express limitation on a dissolved corporation's right to sue. See Boyle v. Lakeview Creamery Co., 9 Cal.2d 16, 68 P.2d 968, 970 (1937) (noting that this provision's "only purpose . . . is to stop further doing of business as a going concern, and limit corporate activities to winding up").
XPV's argument that the relief it seeks is not really about restarting its business because XPV could immediately assign to a third party any potential ATVM loan it receives pursuant to the Court's injunction, and thus accepting the loan would not necessarily violate section 2010 (see Pls.' Off. Opp'n at 17), is doubly flawed. First, given the nature of ATVM loans and the fact that any assignment would require prior written approval of both the DOE and the (non-party) Federal Financing Bank, see 10 C.F.R. § 611.110, an ATVM loan provided to XPV by the DOE pursuant to an order of the Court may not, in fact, be assignable. Moreover, and in any event, in the absence of any allegations of fact regarding how the dissolved company would utilize the assignment proceeds, the possibility of assignment does not in itself satisfy the requirement that the dissolved company's lawsuit be "necessary for the winding up" of its operations, Cal. Corp. Code § 2010(a), and Plaintiffs have made no such allegations in this case; indeed, Plaintiffs have failed to identify any connection whatsoever between the relief it seeks in this lawsuit and XPV's process of winding up.
Accordingly, this Court concludes that, under California law, XPV lacks the capacity to sue the Official Capacity Defendants to obtain the reconsideration and granting of its ATVM loan application (i.e., the injunctive relief it seeks). Consequently, XPV's interest in Claims 1 and 3 of Plaintiff's complaint (i.e., XPV's due process and equal protection claims against the Official Capacity Defendants) and also Claim 5 of the complaint (XPV's APA claim) must be dismissed.
XPV's constitutional claims against the Individual Capacity Defendants fare no better than its claims for injunctive relief brought against the Official Capacity Defendants because, as the Individual Capacity Defendants point out and as explained fully below, no cause of action exists that would permit the recovery of monetary damages from the Individual Capacity Defendants due to the constitutional violations that Plaintiffs allege. (Indiv. Defs.' Mot. at 29-31.)
Although Plaintiffs do not say so expressly in their complaint, by filing
In making this determination, the Court must be cognizant of two circumstances in which Bivens liability is ordinarily not extended: (1) if "any alternative, existing process" provides good reason "to refrain from providing a new and freestanding remedy in damages" (for example, if there is an alternative scheme for relief that makes a Bivens action unnecessary), and (2) if there are "special factors counseling hesitation" against extending a Bivens action to the new context. Wilkie v. Robbins, 551 U.S. 537,
Be that as it may, in this Court's view, Plaintiffs' bid to extend Bivens to the constitutional claims they seek to bring against the Individual Capacity Defendants clearly falters on the second of the established grounds—because there are at least two "special factors" that convince this Court that a Bivens action should not be made available under the circumstances presented here. See Munsell v. Dep't of Agric., 509 F.3d 572, 591 (D.C.Cir.2007) (stating that the second step in determining whether a Bivens action should be permitted involves engaging in a "`familiar' common-law balancing test, paying special heed to `special factors counseling hesitation.'" (quoting Wilkie, 551 U.S. at 550, 127 S.Ct. 2588)). First, a Bivens action is considered inappropriate "where Congress has adopted a comprehensive remedial scheme." Davis v. Billington, 681 F.3d 377, 381 (D.C.Cir.2012) (internal quotation marks and citation omitted).
Second, courts should be reluctant to allow a Bivens action to proceed where the precise scope of that action remains uncertain. See Wilkie, 551 U.S. at 560-61, 127 S.Ct. 2588. In extending Bivens, a court must be mindful that it is essentially "fashion[ing] a new, judicially crafted cause of action[,]" Malesko, 534 U.S. at 68, 122 S.Ct. 515, and such a responsibility must be undertaken with caution because, otherwise, "the[re is a] reasonable fear that a general Bivens cure would be worse than the disease," Wilkie, 551 U.S. at 561 & n. 11, 127 S.Ct. 2588; see also id. at 561 n. 11, 127 S.Ct. 2588 (warning of dangers associated with Bivens actions where "the elements of a claim are so unclear that no one can tell in advance what claim might qualify or what might not"). In the Supreme Court's Wilkie case, for example, a plaintiff who was the owner and operator of a ranch in Wyoming alleged that federal employees of the Bureau of Land Management violated his Fifth Amendment rights by harassing him until he gave the government an easement. 551 U.S. at 543-47, 127 S.Ct. 2588. In attempting to clarify the scope of the requested Bivens action, the Court was concerned about "the difficulty of devising a `too much' standard that could guide an [agency] employee's conduct
The Bivens claims here, too, present "difficulty in defining a workable cause of action[,]" id. at 555, 127 S.Ct. 2588, because they are grounded in amorphous allegations of political "cronyism" in the context of the administration of government loan programs. (See Am. Compl. ¶¶ 137-41; 149-54.) The precise contours of the proposed Bivens action are unclear—the requested Fifth Amendment action might relate only to a denial of a government loan on the alleged basis of impermissible political considerations, or it could cover a wide range of interactions between the government and private citizens in the context of government benefits and contracting—and Plaintiffs do not suggest a clear limiting principle. In addition, there appears to be no obvious way to draw a line between official action that reflects legitimate and acceptable preferences in the political sphere and impermissible favoritism. Consequently, the fact that this Court would have difficulty determining the precise scope of the implied cause of action that Plaintiffs seek to rely upon weighs heavily against recognizing a Bivens action under these circumstances.
The Court is not persuaded by Plaintiffs' arguments to the contrary—i.e., Plaintiffs' contentions that the APA and EISA do not provide a comprehensive remedial scheme and that permitting a Bivens action would not overly expand the availability of such actions. To the extent that Plaintiffs seek to rely on Navab-Safavi v. Broadcasting Board of Governors, 650 F.Supp.2d at 69-73, for the proposition that the APA is not the sort of comprehensive scheme that can preclude a Bivens action (see Pls.' Indiv. Opp'n at 25-26), that case does not compel this conclusion; at most, the Navab-Safavi court held that the APA on its own was not the sort of comprehensive remedial scheme that would constitute a special factor under the second step of the Bivens analysis, see Navab-Safavi, 650 F.Supp.2d at 71-73. Moreover, although Plaintiffs struggle mightily to persuade the Court that permitting a Bivens action "would not willy-nilly trigger a flood of lawsuits for damages against any and all individual agency officials for mere loan denials" (id. at 32), they have not provided any meaningful or practical guidance regarding how to formulate a suitably narrow cause of action that could effectively avoid this result.
This Court also concludes that the out-come of the "special factors" analysis above outweighs Plaintiffs' concern that a Bivens action might be the only avenue of relief for XPV due to its dissolution. (See Pls.' Indiv. Opp'n at 27-28.) See also Munsell, 509 F.3d at 591 (noting that the "special factors" part of the Bivens analysis involves a "common-law balancing test"). The Supreme Court and the D.C. Circuit have evaluated similar concerns, see, e.g., Bivens, 403 U.S. at 410, 91 S.Ct. 1999 (Harlan, J., concurring) (noting that, for plaintiffs, "it [wa]s damages or nothing"), and have consistently determined that, even when a remedial scheme provides no or only limited relief to a plaintiff, if the scheme is comprehensive or if it would be difficult to craft a workable Bivens action, such remedy should not be recognized, see Davis, 681 F.3d at 387-88 (finding that a comprehensive scheme can
In the final analysis, then, this Court is not willing to find that a Bivens action is available to permit the recovery of monetary damages against the Individual Capacity Defendants on the grounds that those officials were motivated by political favoritism with respect to their administration of government loan programs in a manner that violated the Plaintiffs' constitutional rights. Therefore, the constitutional claims against the Individual Capacity Defendants must be dismissed as a matter of law.
What remains of the complaint at this point are the constitutional claims against the Official Capacity Defendants with respect to Limnia's ATVM loan application (Claims 1 and 3 regarding Limnia) and the contention that the DOE acted arbitrarily and capriciously in violation of the APA when it processed Limnia's ATVM and LG Program applications.
A due process challenge such as the one Plaintiffs seek to advance here must be based on an allegation that the defendant "wrongfully deprive[d] a person of life, liberty, or property[.]" Moses v. District of Columbia, 741 F.Supp.2d 123, 126 (D.D.C.2010); see also Ralls Corp. v. Comm. on Foreign Inv. in U.S., 758 F.3d 296, 315 (D.C.Cir.2014). Plaintiffs' complaint asserts that the DOE denied Limnia's ATVM loan application in a manner that violated Limnia's right to due process; therefore, Plaintiffs' due process claim is premised on the assumption that Limnia has a constitutionally protected "property" interest in an ATVM loan. However, a
It is clear on the facts as Plaintiffs have alleged them that an ATVM loan is not a protected property interest for due process purposes. Under the statute that establishes the ATVM Loan program and its operative regulations, no applicant has a "legitimate claim of entitlement" to such a loan, and in fact, the DOE plainly has considerable discretion with respect to both what selection criteria are to be applied and also which particular applicants will be funded. To be specific, the applicable statute plainly states that the DOE "shall select" successful applicants, 42 U.S.C. § 17013(d)(3); see also New Oxford Am. Dictionary 1536 (2nd ed.2005) (defining "select" as "carefully choose as being the best or most suitable"), and it expressly provides that a loan application must be submitted "in such manner, and containing such information as the Secretary [of Energy] may require," 42 U.S.C. § 17013(d)(2). Moreover, other than mandating that successful applicants be financially viable and be able to ensure that the funds will be spent appropriately, Congress has left the selection criteria almost entirely up to the DOE, specifying that applicants must satisfy "such other criteria as may be established and published by the Secretary [of Energy]." Id. § 17013(d)(3).
The applicable regulations similarly indicate that the DOE has the discretion to choose who has met the selection criteria and who ultimately will be awarded a loan. See 10 C.F.R. §§ 611.100-611.112. For example, during the eligibility screening stage of the loan process, the DOE evaluates whether an applicant meets all of the program requirements, including the requirement of financial viability, see id. § 611.100(a)(2), and although the regulations provide a list of considerations for the DOE in making the financial viability determination, they also state that the list is non-exhaustive, suggesting that the DOE may, in its discretion, consider other factors relevant to this determination, see id. § 611.100(c). Similarly, the regulations provide a list of what must be included in the loan application itself, but they also make clear that an applicant must provide any "[o]ther information, as determined necessary by DOE." Id. § 611.101(o). It is clear, then, that in addition to setting the eligibility requirements, the DOE also has the authority to make case-by-case determinations as to whether the initial criteria have been satisfied.
The DOE exercises discretion with respect to the consideration of ATVM loan applications at the merits review stage as well. The relevant provision of the application regulations lists a number of considerations that are taken into account as part of the merits review, but also states clearly that the merits review is "not limited to" those factors. Id. § 611.103(b). Moreover, many of the merits factors that are listed in the regulations require the DOE to exercise judgment and consider how an application fits within the broader purpose of the ATVM Loan Program. For example, with respect to the ultimate award, the DOE may consider "diversity in
The bottom line is this: the relevant statutory and regulatory provisions establish that the DOE has the authority to make discretionary judgment calls and to move beyond strict technical requirements when assessing ATVM Loan applications at various stages in the application process. Thus, the DOE has been granted the sort of discretion that prevents an ATVM loan from becoming the type of government entitlement that creates a property interest in an applicant. See Ferrone v. Onorato, 298 Fed.Appx. 138, 139-40 (3d Cir.2008) (holding that no property interest arises from application for an economic development loan because the local government "had the discretion to grant or deny disbursement of funds"); Snow Pallet, Inc. v. Clinton Cnty. Indus. Dev. Auth., 46 Fed.Appx. 787, 791-92 (6th Cir.2002) (affirming dismissal of a due process claim because no property interest arose out of the defendant's decision to reduce the amount received as a loan).
Plaintiffs appear to accept that the DOE has some discretion in administering the ATVM Loan Program, but they argue nevertheless that this discretion is "substantially limit[ed,]" such that a property interest still exist. (Pls.' Indiv. Opp'n at 37-38.) The "substantially limited" standard is derived from George Washington University v. District of Columbia, 318 F.3d 203 (D.C.Cir.2003), in which the D.C. Circuit noted that, "in the land use arena[,]" most due process cases involved either "virtually unlimited discretion" or "rather absolute entitlement[,]" id. at 207, and concluded that the exception to the zoning regulation at issue in that case fell closer to the absolute entitlement side (i.e., government discretion was substantially limited) because, under the governing law, the exception plaintiff sought "must be issued as a matter of right if the qualifying criteria are met[,]" id. at 208 (emphasis added). To the extent that George Washington University even applies outside of the land use context, the law at issue in that case clearly placed a far more severe restriction on government discretion than exists in the context of the ATVM Loan Program. Here, the key statutory and regulatory provisions reveal that the DOE can refuse to grant a loan to an applicant who satisfies the enumerated requirements, and in fact, the DOE even has the ability to create additional eligibility requirements of its own. Consequently, unlike the land use plaintiffs, Limnia did not have a protected property interest in receiving a loan from the DOE within the meaning of a proper due process claim, and as a result, Limnia's due process claim against the Official Capacity Defendants (Claim 1) must be dismissed. See, e.g., Edwards v. Aurora Loan Servs., LLC, 791 F.Supp.2d 144, 155 (D.D.C.2011) (rejecting applicability of George Washington University where the existence of multiple "discretionary points. . . render[ed] any borrower's expectation and entitlement to a [loan] modification too
Plaintiffs also fail to allege adequately that the denial of Limnia's ATVM loan application violated its Fifth Amendment right to equal protection (Claim 3).
The Fifth Amendment's guarantee of equal protection "requires state actors to treat similarly situated persons alike." Grissom v. District of Columbia, 853 F.Supp.2d 118, 126 (D.D.C.2012). Although a typical equal protection claim involves a claim that the government is impermissibly discriminating against a particular group, see Bell v. Duperrault, 367 F.3d 703, 709 (7th Cir.2004) (Posner, J., concurring) (describing the "usual equal protection case"), there is another type of equal protection claim that is known as a "class of one" claim, see Kelley v. District of Columbia, 893 F.Supp.2d 115, 122 (D.D.C.2012), which is the kind of equal protection claim that Plaintiffs seek to advance here (Pls.' Indiv. Opp'n at 42). A "class of one" equal protection claim may be maintained "where the plaintiff alleges that she has been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment." Vill. of Willowbrook v. Olech, 528 U.S. 562, 564, 120 S.Ct. 1073, 145 L.Ed.2d 1060 (2000) (per curiam); see also 3883 Connecticut LLC v. District of Columbia, 336 F.3d 1068, 1075 (D.C.Cir.2003) (holding that there are "two essential elements of [a] `class of one' equal protection claim: (1) disparate treatment of similarly situated parties (2) on no rational basis."). The first requirement—that there be another party that is similarly situated to the plaintiff—"is not a mere formality[; r]ather, it serves to distinguish claims to [obtain] the treatment that was afforded others, which can be cognizable under principles of equal protection, from bare complaints of governmental unfairness, which cannot." Quezada v. Marshall, 915 F.Supp.2d 129, 135 (D.D.C.2013). Moreover, there is a "presumption of rationality" that applies whenever rational basis review is the operative standard, id. and in order to overcome it, a plaintiff must "negative any reasonably conceivable state of facts that could provide a rational basis for the classification[,]" Bd. of Trs. of Univ. of Ala. v. Garrett, 531 U.S. 356, 367, 121 S.Ct. 955, 148 L.Ed.2d 866 (2001) (internal quotation marks and citation omitted). In effect, this means that the rational basis inquiry is "highly deferential" to the government, Dixon v. Dist. of Columbia, 666 F.3d 1337, 1342 (D.C.Cir.2011), and that an equal protection claim fails under Rule 12(b)(6) if the complaint itself suggests a rational basis for the government action, see Miller v. City of Monona, 784 F.3d 1113, 1121 (7th Cir.2015) ("[I]t is possible for plaintiffs to plead themselves out of court if their complaint reveals a potential rational basis for the actions of local officials."); see also Jackson v. Vill. of W. Springs, No. 14-3641, 612 Fed.Appx. 842, 847, 2015 WL 2262703, at *4 (7th Cir. May 15, 2015) ("[E]ven at the pleading stage a class-of-one plaintiff must negate any reasonably conceivable state of facts that could provide a rational basis." (internal quotation marks and citation omitted)); cf. Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1116 (D.C.Cir.2000) ("In some cases, it is possible for a plaintiff to plead too much: that is, to plead himself out of court by alleging facts that render success on the merits impossible.").
In the complaint at issue here, Plaintiffs assert that Limnia was treated differently from "similarly[-]situated . . . crony companies like Tesla and Fisker"
However, with respect to the rational basis prong of the equal protection inquiry, this Court concludes that Plaintiffs' contentions regarding the pretextual nature of the DOE's reasons for denying Limnia's application are not sufficient to support an inference that the DOE's decision was irrational. Specifically, as alleged in the complaint, the DOE's purported reason for rejecting Limnia's ATVM loan application in 2009 was that the energy storage system Limnia was developing did not constitute a "qualifying component" under the terms of the EISA. (See Ex. 6 to Am. Compl. at 24-25.)
This would normally be the end of the analysis—the DOE articulated a rational explanation for its action ergo there can be no equal protection claim. See Hettinga v. United States, 677 F.3d 471, 479 (D.C.Cir. 2012) (dismissing equal protection claim upon finding that there was a rational basis). Plaintiffs allege, however, that the reason the DOE provided for the agency's rejection of the Limnia's application is not the real reason, and instead, is a mere pretext. (See Am. Compl. ¶ 69; see also Pls.' Indiv. Opp'n at 43 ("Defendants' explanations
This Court finds that the Third, Seventh, and Tenth Circuits have the better of the argument in light of existing law, and thus that a pretext allegation alone is not sufficient to undermine an otherwise rational basis for government conduct in the context of a "class of one" equal protection claim. The Court's conclusion in this regard is based primarily on the fact that there is no indication that the Supreme Court intended a "class of one" equal protection claim to be a departure from more typical equal protection claims, and in fact, it appears to be merely another "application" of "the principle that the Equal Protection Clause is concerned with arbitrary government classification[.]" Engquist v. Oregon Dep't of Agr., 553 U.S. 591, 602, 128 S.Ct. 2146, 170 L.Ed.2d 975 (2008). In traditional equal protection contexts, the subjective motivations of the government actor are not considered. See FCC v. Beach Commc'ns, Inc., 508 U.S. 307, 315, 113 S.Ct. 2096, 124 L.Ed.2d 211 (1993) ("[B]ecause we never require a legislature to articulate its reasons for enacting a statute, it is entirely irrelevant for constitutional purposes whether the conceived reason for the challenged distinction actually motivated the legislature."); Women Involved in Farm Econ. v. U.S. Dep't of Agric., 876 F.2d 994, 1005 (D.C.Cir.1989) ("Ordinarily, there is no necessity in rational-basis scrutiny for a separate inquiry into the legislature's actual motivation, for the legislature's subjective motivation does not undermine a classification's validity provided legitimate motivations are conceivable." (emphasis in original)). And refusing to credit allegations that the government's actual motivation was something other than the articulated basis when conducting rational basis review of "class of one" claims is also consistent with the principle that even unstated bases for government distinctions—and/or bases that the government did not actually rely upon—satisfy the Equal Protection Clause if they are rational. See Waters v. Rumsfeld, 320 F.3d 265, 269 (D.C.Cir. 2003); Mitchell v. Yates, 402 F.Supp.2d 222,
Applying these principles here, this Court concludes that Plaintiffs' pretext contention does not negate the otherwise rational basis that exists for the denial of Limnia's ATVM application. That is, even if Plaintiffs are correct that the real impetus behind the DOE's decision to reject Limnia's ATVM loan application was the Defendants' desire to "preserve ATVM Loan Program funds for government-favored companies and/or to protect those companies from competition" (Am. Compl. ¶ 69), this motivation does not implicate a suspect classification or demonstrate intentional discriminatory animus towards ATVM applicants that lacked political connections, and therefore it does not overcome the rationality of the explanation the government has provided for the purpose of the Court's equal protection analysis.
Accordingly, the complaint in this case does not contain sufficient allegations to make plausible Plaintiffs' contention that, with respect to the DOE's administration of the ATVM Loan Program, Limnia was similarly situated to another party who was treated differently, and that there was no rational basis for this differential treatment. See 3883 Connecticut LLC, 336 F.3d at 1075. Thus, Limnia's equal protection claim against the Official Capacity Defendants (Claim 3) must be dismissed.
Finally, this Court concludes that the two remaining claims—the APA claims against the Official Capacity Defendants arising out of the DOE's denial of Limnia's ATVM loan application (Claim 6) and LG Program application (Claim 7)—can proceed because Plaintiffs' complaint adequately alleges the sort of arbitrary and capricious agency action that potentially justifies judicial review under the APA. The APA authorizes judicial review of final agency action that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law[.]" 5 U.S.C. §§ 704, 706. To state a claim for arbitrary and capricious agency action under the APA, a plaintiff must allege that an 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." Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). An agency also acts arbitrarily and capriciously if it
Here, Plaintiffs claim that the DOE did not evaluate Limnia's ATVM loan application "in good faith and in accordance with [the] DOE's regulations, policies and promises." (Am.Compl. ¶ 114.) Instead, according to Plaintiffs, Limnia's application was sidelined in favor of those submitted by competitor companies with political connections. (See id. ¶ 115.) Moreover, Plaintiffs allege that when the DOE articulated its reasons for rejecting Limnia's ATVM loan application, the agency's explanation was a "mere pretext to preserve ATVM Loan Program funds for government-favored companies and/or to protect those companies from competition." (Am. Compl. ¶ 69.) Taken as true, these allegations are sufficient to support Plaintiffs' contention that the DOE's decision with respect to Limnia's ATVM application was arbitrary and capricious because the DOE relied on impermissible considerations that ran counter to the evidence before it and the applicable regulations, and because Limnia was treated differently from other applicants without any legitimate justification.
The Official Capacity Defendants do not directly challenge the conclusion that the complaint sufficiently alleges arbitrary and capricious action on the part of the agency; rather, they contend that the complaint nevertheless fails to state and APA claim because that there has been no final agency action with respect to Limnia's ATVM loan application. (See Off. Defs.' Mem. at 29-30.) This Court has already addressed—and rejected—this argument in the context of the Official Capacity Defendants' objections to ripeness. See supra Part III.A.1. Therefore, the final agency action requirement imposes no impediment to the Court's conclusion that Plaintiffs' complaint states a claim under the APA regarding the DOE's treatment of Limnia's application for the ATVM Loan Program, and thus that Claim 6 can proceed.
A similar analysis pertains to Plaintiffs' APA claims regarding Limnia's LG Program application. Plaintiffs allege that the DOE twice reneged on promises made to Limnia related to the submission of its LG Program application—first, by promising to waive an application fee and then demanding payment of that fee, and second by promising to give Limnia information about how to rectify this deficiency but then not providing that information—and that these failed promises resulted in the rejection of Limnia's LG Program application. (See Am. Compl. ¶ 118(j).) Although Plaintiffs refer in passing to political favoritism in the context of the LG Program (see, e.g., Am.Compl. ¶¶ 116, 119), the real focus appears to be on the alleged inconsistency of the LG Program application process (see Pls.' Off. Opp'n at 36). Plaintiffs' fact-based contention that the LG Program was run in an ad hoc manner is sufficient to state a claim under the APA for arbitrary and capricious agency action. See Indep. Petroleum Ass'n of Am., 92 F.3d at 1258.
The Official Capacity Defendants rail against the conclusion that the complaint adequately alleges a violation of the APA because, in Defendants' view, the allegations in the complaint make clear that the DOE denied Limnia's LG Program application for a legitimate reason: Limnia had failed to pay the required application fee. (See Pls.' Off. Opp'n at 33-35.) Defendants argue that, even if Secretary Chu made an oral statement waiving the LG Program's application fee, DOE's regulations make clear that the DOE is not bound by oral representations in connection
Thus, even if the DOE's enforcement of the fee requirement (and thus its failure to abide by Secretary Chu's promise to waive the application fee) cannot be considered "arbitrary" in light of applicable regulations, that allegation alone does not capture the full thrust of Limnia's APA claim—the real gravamen of the Plaintiffs' allegations with respect to the DOE's administration of the LG Program is that Secretary Chu "operated [the LG] program on the fly, and the [DOE] made up the rules as it moved through the loan award process." (Pls.' Off. Opp'n at 36; see also Am. Compl. ¶ 111 (claiming that the GAO LG Program Report "found that DOE treated LGP applicants inconsistently, favoring some and disadvantaging others; lacked systematic mechanisms for LGP applicants to administratively appeal adverse decisions; often ignored its own underwriting standards and skipped review steps; and re-reviewed rejected applications on an ad hoc basis").) And, as noted above, allegations of this kind are sufficient to state a claim for a violation of the APA.
As set forth in the accompanying order, the Official Capacity Defendants' motion to dismiss is
