WASHINGTON (LN) — The U.S. District Court for the District of Columbia dismissed an Administrative Procedure Act suit against the U.S. Department of Agriculture on Thursday, holding that a renewable-energy developer lacked standing to challenge the agency's processing delays and that the farmers and rural businesses who did have standing had bypassed a mandatory administrative-appeals process they had no power to skip.
The case was the second time Ovanova Construction Services LLC and its affiliated entities had sued USDA over the Rural Energy for America Program, which provides grants to agricultural producers and rural small businesses for renewable-energy and efficiency projects. In January 2025, Chief Judge James Boasberg dismissed the companies' first suit after holding that the Ovanova entities lacked standing to contest the denial of roughly 60 grant applications submitted by their clients.
This time, Ovanova returned with the actual REAP applicants in tow and a new theory: rather than challenging outright denials, the plaintiffs alleged USDA had simply failed to act on 81 pending applications, all sitting unprocessed for over 18 months in violation of the agency's own 90-day review requirement. They sought injunctive and declaratory relief compelling the department to move.
Boasberg held that the REAP applicants themselves cleared Article III standing — their allegations that the delay had locked them out of time-sensitive tax incentives and left them unable to plan, contract, or secure financing for energy projects were enough stage. He also rejected USDA's Tucker Act argument, holding that the suit sought quintessential APA relief rather than contract damages, and dispatched the agency's zone-of-interests challenge by noting that REAP's authorizing statute identifies agricultural producers and rural small businesses as the intended beneficiaries.
The Ovanova entities fared no better the second time around. Despite adding allegations of unreimbursed development costs, disrupted solar-deployment schedules, lost business opportunities, and reputational harm, the companies still could not explain how USDA's failure to process their clients' applications actually injured them. Boasberg noted that the same questions left unanswered in the January 2025 opinion remained unanswered complaint: whether Ovanova gets paid only if a client's application is approved, whether it earns contracts to build renewable-energy projects once grants come through, or whether it fears losing business because its clients' applications go undecided at higher rates than those of competitors. The new complaint, he wrote, offered only the conclusion that USDA's inaction caused concrete injury — without a single fact to support it.
The applicants' claims survived every jurisdictional hurdle only to fall on exhaustion. Under 7 U.S.C. § 6912(e), plaintiffs must exhaust all administrative appeals before suing USDA. The applicants argued the requirement did not apply because USDA's appeals process covers only final decisions, not delays. Boasberg disagreed, pointing to agency regulations that define appealable adverse decisions to include the failure of an agency to issue a decision or otherwise act within timeframes specified by program statutes or regulations, or within a reasonable time if no timeframes are specified.
The applicants then argued that any administrative appeal would have been futile — a recognized exception to judge-made exhaustion rules. That argument ran into a wall. The D.C. Circuit held in Fleming v. U.S. Department of Agriculture that § 6912(e) is a statutory exhaustion requirement, and when Congress imposes a mandatory exhaustion rule, a court cannot excuse a party's failure to exhaust for any reason. Boasberg concluded the court had no power to waive the requirement, and dismissed the case without reaching USDA's remaining arguments.
The plaintiffs had conceded they never filed an administrative appeal before coming to court.