Solar Grant Applicants Lose Twice: D.C. Judge Axes REAP Delay Suit Over Exhaustion Failure

WASHINGTON (LN) — A federal judge in Washington on Thursday threw out a lawsuit by solar-grid developer Ovanova Construction Services and 81 rural energy grant applicants who accused the U.S. Department of Agriculture of sitting on their REAP funding requests for over 18 months, ruling that the applicants never pursued the administrative appeals process Congress made mandatory before any courthouse door could open.

Chief Judge James Boasberg of the U.S. District Court for the District of Columbia dismissed the suit on two separate grounds: the Ovanova entities again failed to show how USDA's inaction injured them specifically, and the farmer-applicants who did have standing ran into a statutory exhaustion requirement they claimed did not apply to delay claims.

The case was Ovanova's second swing at USDA in less than two years. In January 2025, Boasberg dismissed the company's first lawsuit — which challenged the outright denial of roughly 60 REAP applications submitted by Ovanova clients — after finding the solar developer lacked standing because it was not itself a grant applicant. Ovanova returned half a year later with the actual applicants in tow and a new theory: rather than contesting denials, the group now alleged USDA had simply refused to act on 81 pending applications, leaving rural businesses unable to qualify for time-sensitive tax incentives and stuck in what the complaint called a "procedural limbo."

Boasberg held that the REAP applicants had cleared Article III standing — their financial injuries from the delay were concrete enough at the pleading stage — but the Ovanova entities stumbled again. The complaint alleged the developer suffered unreimbursed development costs, disruption of contracted solar deployment schedules, lost business opportunities, and reputational damage in both the energy and agricultural sectors, but offered no facts explaining how USDA's failure to process others' applications caused those harms. The same questions Boasberg posed in the first case went unanswered: whether Ovanova gets paid only if a client's grant is approved, or only once construction begins, or loses business when applications stall.

"the Complaint does not supply a single fact to explain how USDA's treatment of others' applications ultimately affects the Ovanova Plaintiffs," Boasberg wrote.

The applicants' standing victory proved short-lived. Under 7 U.S.C. § 6912(e), any person suing USDA must exhaust all administrative appeal procedures before filing in federal court. Plaintiffs argued that exhaustion applied only to final denials, not to agency inaction — but Boasberg rejected that reading, pointing to USDA's own regulations, which define appealable adverse decisions to include the failure of an agency to issue a decision or otherwise act on the request or right of the participant within timeframes specified by agency program statutes or regulations.

Plaintiffs conceded they had not filed any administrative appeal, but argued the effort would have been futile. That argument, Boasberg held, is foreclosed by D.C. Circuit precedent: when Congress imposes a mandatory exhaustion rule, a court cannot excuse a party's failure to exhaust, no matter the reason. The D.C. Circuit has specifically held that § 6912(e) leaves no latitude for judges to excuse non-exhaustion.

"Plaintiffs cannot reap what they did not sow," Boasberg wrote, borrowing the program's own acronym for the punchline.

The 81 pending REAP applications — filed before October 2024 and still unprocessed as of the date of the ruling — remain in the same administrative limbo the lawsuit was meant to end.