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Rebuild Northwest Florida, Inc. v. Federal Emergency Management Agency

United States District Court, N.D. Florida, Pensacola Division

September 30, 2019

REBUILD NORTHWEST FLORIDA, INC., Plaintiff,
v.
FEDERAL EMERGENCY MANAGEMENT AGENCY, BROCK LONG, Administrator of Federal Emergency Management Agency; FLORIDA DIVISION OF EMERGENCY MANAGEMENT, Defendants.

          ORDER

          M. CASEY RODGERS UNITED STATES DISTRICT JUDGE

         The Federal Emergency Management Agency (“FEMA”) previously obligated hazard mitigation grant funds to assist the State of Florida in amounts initially totaling over $400 million after four major hurricanes impacted the State in 2004 and 2005. Plaintiff Rebuild Northwest Florida, Inc. (“Rebuild”) was a subgrantee, approved to receive more than $7 million under the various grants for wind retrofit projects designed to make homes less vulnerable to future storms. The time for Rebuild to perform under its subgrants expired in 2016, but additional original grant money ($16, 758, 60, 916) remained available to the State for distribution to subgrantees until 2017, when FEMA decided to deobligate those remaining funds.[1] As a result, those remaining original grant funds are now unavailable to the State for distribution to future projects.

         Rebuild brings suit, under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 702-706, and the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the “Stafford Act”), 42 U.S.C. §§ 5121-5208, asserting in the Second Amended Complaint that the deobligation decision was improper agency action. Rebuild seeks declaratory relief to establish that the grant funds in the amount of $16, 758, 60, 916 remain available to the State for distribution and, in turn, to Rebuild as a subgrantee. FEMA moves to dismiss, see Fed. R. Civ. P. 12(b)(1), (6), challenging the Court's subject matter jurisdiction and alternatively arguing that the complaint fails to state a claim. ECF No. 47. After careful review, the motion will be granted and the case dismissed for lack of jurisdiction.

         I. Background[2]

         In the span of a little over one year, Florida was hit by four major hurricanes: Hurricane Charley in August of 2004, Hurricanes Ivan and Jeanne in September of 2004, and Hurricane Wilma in October of 2005. At the request of Florida's Governor and pursuant to the president's discretionary authority under the Stafford Act, 42 U.S.C. § 5170, then-President George W. Bush declared each hurricane a “major disaster” and directed FEMA to provide Florida with disaster relief under the Hazard Mitigation Grant Program (“HMGP”), 42 U.S.C. § 5170c. To carry out this directive, FEMA and the State of Florida then executed “FEMA-State Agreements” for each hurricane, by which FEMA agreed to grant the State through the Florida Division of Emergency Management (“FDEM”) (grantee) “funds in the amount specified on the obligating document.” ECF No. 1-1 at 7. The FEMA-State Agreements imposed “binding obligations” on both parties and subgrantees under the Stafford Act's implementing regulations.[3] ECF Nos. 1-1, 1-2, 1-3, 1-4 (Exhibits A, B, C, D); see also 44 C.F.R. §§ 206.44(a), 206.430, et seq. Relevant terms in the agreements included the following: the grant award activities were to be “completed within the time period prescribed in FEMA regulations and on the obligating documents;” FEMA was authorized to grant extensions of the performance time; FEMA was permitted to assert remedies for noncompliance as provided under federal regulations; and either party could terminate the agreement on seven days' notice, e.g., ECF No. 1-1 at 9, 15, 16.

         The HMGP implementing regulations required FDEM to develop plans for administering and managing the grant funds. See 44 C.F.R. § 206.437. The relevant FDEM “State Administrative Plans” included terms and procedures by which eligible subgrantees could apply to the State for funds to be used in approved mitigation work, subject to final approval by FEMA.[4] The State Administrative Plans (and also subsequent subgrants) were subject to a Period of Performance (“POP”) limitation that required all HMGP funds to “be disbursed, and all activities completed, not later than three years from the date of the grant award (obligations) to the State.” ECF Nos. 1-5 at 10-11; 1-6 at 11 (emphasis added). FDEM could request extensions, provided “[t]he total POP should not exceed five years.” ECF Nos. 1-5 at 10-11; 1-6 at 11. Under these terms, which were consistent with the pertinent federal regulations, any “funds not disbursed by [FDEM] within the approved POP [would] be deobligated and returned to FEMA.”[5] ECF Nos. 1-5 at 11; 1-6 at 11. FEMA approved the State Administrative Plans in 2005 and 2006. FDEM subsequently entered into Subgrant Agreements (cost-reimbursement agreements) with Rebuild, based on its qualifying HMGP proposals. Under the Subgrant Agreements, Rebuild's performance deadlines, with authorized extensions, expired in 2016, and those subgrants are not at issue.[6]

         In 2017, more than ten years after the major disaster hurricane declarations at issue in 2004 and 2005, FEMA decided to “deobligate” the remaining original unused HMGP funds previously obligated to the State under the FEMA-State Agreements but which were never disbursed. According to Rebuild, this totaled $16, 758, 609, as of June 27, 2017.[7] See ECF No. 1-7. Rebuild then filed this suit, challenging FEMA's deobligation decision.

         In the Second Amended Compliant, Rebuild references the Stafford Act as the authorization for the binding agreements and the HMGP funds and cites the APA as the basis for jurisdiction and the waiver of sovereign immunity.[8] Rebuild alleges that FDEM filed administrative appeals challenging FEMA's deobligation decisions, which were denied, and that, although the deobligated funds were not yet disbursed to any subgrantee, Rebuild is the only subgrantee eligible to perform work on approved HMGP projects. Rebuild further alleges, and FDEM admits in its Answer, that FDEM intends to subgrant all remaining available HMGP funds to Rebuild to complete eligible projects. Thus, Rebuild seeks a declaratory judgment stating that FEMA's deobligation decision was improper, and that grant money in the amount of $16, 758, 609 remains available to FDEM for use in eligible projects “as it sees fit, consistent with the applicable State Administrative Plan and the applicable FEMA-State Agreements.” ECF No. 43. Rebuild further seeks a declaration that it is the only eligible subgrantee and requiring FEMA's administrator, Brock Long, to make the funds available to the State. FEMA argues that the Court lacks jurisdiction over the claims.[9]

         II. Legal Standard

         The limitations placed on a federal court's subject-matter jurisdiction serve the important institutional interest of keeping federal courts within the bounds prescribed by the Constitution and Congress. Allapattah Servs., Inc. v. Exxon Corp., 362 F.3d 739, 753 (11th Cir. 2004) (quoting Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999)). Thus, “[i]t is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S. 206, 212 (1983).

         When a party challenges the court's subject-matter jurisdiction pursuant to Rule 12(b)(1), the challenge may be either facial or factual. McElmurray v. Consol. Gov't of Augusta - Richmond Cnty, 501 F.3d 1244, 1251 (11th Cir. 2007) (citing Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir. 1981)[10]). A “facial attack” requires the court to take the allegations of the complaint as true for purposes of the motion and consider whether the “plaintiff has sufficiently alleged a basis for subject-matter jurisdiction.” Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (citing Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980)); see also Fed. R. Civ. P. 8(a) (requiring only a short and plain statement of the grounds for the court's jurisdiction and a short and plain statement of the claim and relief sought). A “factual attack, ” on the other hand, challenges “the existence of subject-matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits are considered.”[11] Lawrence, 919 F.2d at 1529 (citing Menchaca, 613 F.2d at 511). FEMA brings a factual attack, relying on parts of the administrative record. Therefore, the Court is not required to accept the allegations of the complaint as true.

         III. Discussion

         FEMA is a federal agency, mandated to provide federal relief to victims of natural disasters when a disaster is declared by the president. Sovereign immunity shields the federal government and its agencies from suit in the absence of an express waiver. FDIC v. Meyer, 510 U.S. 471, 475 (1994). The Stafford Act does not include its own waiver of sovereign immunity. To the contrary, the Stafford Act expressly precludes a challenge to discretionary functions of the agency, stating: “The Federal Government shall not be liable for any claim based upon the exercise or performance of or the failure to exercise or perform a discretionary function or duty . . . in carrying out the provisions of this chapter.” 42 U.S.C. § 5148; see Burgos-Montes v. Municipality of Yauco, 294 F.Supp.2d 141, 142 (D.P.R. 2003) (stating, Congress has “passed legislation expressly immunizing the agency from suit”). Notably, the Eleventh Circuit has stated that, “[b]y enacting [§] 5148, Congress indicated its intent to preclude judicial review of all disaster relief claims based upon the discretionary actions of federal employees.” Rosas v. Brock, 826 F.2d 1004, 1008 (11th Cir. 1987). The Eleventh Circuit in Rosas acknowledged that not every claim under the Stafford Act involves discretionary agency action, and so, not every claim is barred; that said, the court made clear that an agency's eligibility decision or similar act for which the “Act does not contain any guidelines” involves “the sort of exercise of discretion that Congress intended to insulate from judicial review.”[12] Id. at 1008-09.

         Rebuild argues that Rosas does not apply because it is not challenging a discretionary decision of FEMA but, rather, agency action contrary to the FEMA-State Agreements and State Administrative Plans, which are considered to have created binding obligations under the Stafford Act. Rebuild argues that by these agreements, FEMA created a binding obligation to provide all of the grant money to the State, which is enforceable under the APA. In the circumstances presented, the Court disagrees. While these agreements undoubtedly contain binding obligations between the parties (FEMA and the State), they are legally binding on terms that do not apply here. Rebuild does not identify any provision in the Stafford Act or the applicable agreements that precludes FEMA from deobligating grant funds after more than ten years have passed, as in this case. The agreements themselves were terminable on seven days' notice by either party, and were also subject to POP limits, which should only total five years from the date of the original grant.[13] Moreover, the State Administrative Plans expressly acknowledged that funds not disbursed by the State within the POP would be deobligated, ECF Nos. 1-5 at 11; 1-6 at 11, and no administrative or judicial review is provided in the agreements for challenging such a decision.[14] In fact, nothing in the Stafford Act HMGP program, the applicable federal ...


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