WASHINGTON (LN) — The U.S. District Court for the District of Columbia dismissed the suit, finding that the plaintiffs did not use the USDA’s administrative appeal process for agency delay as required by federal statute.
The plaintiffs, including Ovanova Construction Services LLC and numerous REAP applicants, alleged the USDA violated the Administrative Procedure Act by leaving their grant applications unprocessed for over a year. They sought a court order compelling the agency to act on the pending submissions.
The companies had previously sued the USDA over grant denials, but Boasberg dismissed that case earlier this year, finding the developers lacked standing because they were not the grant applicants themselves.
In this second suit, the applicants joined the case to establish standing, alleging the delay kept them in "procedural limbo" and prevented them from securing time-sensitive tax incentives.
Boasberg agreed the applicants had Article III standing, noting their financial injuries were traceable to the agency’s inaction and redressable by a court order.
However, the judge ruled the plaintiffs could not proceed because they did not use the USDA’s administrative appeal process for agency delay, as required by 7 U.S.C. § 6912(e).
The statute mandates that persons bring actions against the agency only after exhausting all administrative appeal procedures.
Boasberg rejected the plaintiffs’ argument that exhaustion was futile, citing D.C. Circuit precedent that courts cannot excuse failure to exhaust when a statute imposes a mandatory rule with no judicial exceptions.
The court also rejected the government’s argument that the Tucker Act gave the Court of Federal Claims exclusive jurisdiction, finding the plaintiffs sought declaratory and injunctive relief based on statutory obligations, not contractual damages.
The case is dismissed.