Limnia, Inc. v. U.S. Dep't of Energy
Limnia, Inc. v. U.S. Dep't of Energy
Opinion of the Court
In 2009, Plaintiff Limnia, Inc. ("Limnia" or "Plaintiff"), a manufacturer of battery *28systems for electric vehicles, applied for a loan from the Department of Energy ("DOE") through a congressionally-authorized clean energy program known as the Loan Guarantee Program ("LG Program"). Limnia submitted its program application to DOE, but it did not transmit the application fee that DOE's regulations prescribed. See
As of July 21, 2016, this Court had (1) dismissed the other plaintiff and many of the complaint's claims; (2) voluntarily remanded Limnia's remaining APA claims back to the agency (over Limnia's objection) for reconsideration of Limnia's loan application; and (3) closed Limina's case due to its failure to resubmit its application materials to the agency pursuant to the voluntary remand. Limnia then appealed, and the D.C. Circuit determined that this Court's voluntary remand order was improper, and as relevant here, ordered this Court to "resolve Limnia's APA challenge to the apparently denied 2009 loan applications." Limnia, Inc. v. U.S. Dep't of Energy ,
Before this Court at present are the parties' cross-motions for summary judgment on this issue. (See Mem. in Supp. of Defs.' Mot. for Partial Summ. J. ("Defs.'
*29Mem."), ECF No. 72-1; Pl.'s Mot.) In its motion, DOE argues that the agency "reasonably decided to deny [Limnia's] LG Program application" because "Limnia did not pay the application fee" (Defs.' Mem. at 16), and it further maintains that the agency provided Limnia with an adequate explanation as to that decision, given that "[n]othing in the administrative record" suggests that DOE "agreed to specifically waive the application fee" with respect to Limnia's LG application (id. at 19). For its part, Limnia acknowledges that it "did not submit an application fee" (Pl.'s Mot. at 5), but it contends that DOE acted arbitrarily and capriciously in rejecting its application on this basis, because the agency had "failed" to "provide[ ] a reasoned explanation for its refusal to waive the application fee" ( id. at 6), given that "[e]vidence in the record indicates that DOE consented to this waiver" (id. at 5). Limnia has also moved, in the alternative, "for limited discovery to supplement the record" if this Court finds "the administrative record insufficient to allow for judicial review." ( Id. at 13.)
For the reasons explained below, Defendants' motion for partial summary judgment must be GRANTED , and Plaintiff's cross-motion for partial summary judgment must be DENIED .
I. BACKGROUND
A. The Applicable LG Program Regulations
In 2005, Congress passed the Energy Policy Act of 2005, Pub. L. No. 109-58, § 1701-04,
As relevant here, the then-existing LG Program regulations laid out a framework for how DOE would accept, process, and approve applications for loan guarantees under the LG Program. This application process would begin with DOE's decision to issue a "solicitation" that informed the public that it was "invit[ing] the submission of Pre-Applications or Applications for loan guarantees for Eligible Projects."
Importantly, the regulatory scheme that DOE devised for applications to the LG Program also contained a provision that permitted deviations from the listed requirements under certain specified circumstances. See
B. Limnia's LG Program Application
In 2008, DOE issued a solicitation for applications to the LG Program related to "projects that employ innovative energy efficiency, renewable energy, and advanced transmission and distribution technologies[.]" (Joint Appendix ("J.A."), ECF No. 78-1, at 1.) This solicitation described the application process for any interested applicants, and with respect to the required application fee, it specified that "[a]ll applicants must remit twenty-five percent (25%) of the application fee ... upon submission of their applications to DOE." (Id. at 3; see
*31In early February 2009, Limnia learned of the LG Program, but in its view, "the application fees were prohibitive." (Id. at 12.)
After submitting its application, Limnia eventually received a phone call from one of DOE's employees, informing the company that it "did need to pay the" application fee, and that "[it] needed to wire money" to the Treasury Department by February 26, 2009 (id. at 12 (emphasis added) ), which was the deadline specified in the solicitation for project proposals (id. at 3). However, according to Limnia, other DOE employees had orally represented that there was "some flexibility on the time to wire the money." (Id. at 12.) Ultimately, the fee-related communications between Limnia and DOE broke down, and Limnia never submitted any part of the LG Program application fee to DOE or the Treasury Department. (See
C. Procedural History
DOE's rejection of Limnia's LG Program application gave rise, in part, to the instant litigation. In 2013, Limnia, alongside another plaintiff named XP Vehicles, filed a complaint in this Court against DOE and its Secretary. (See Compl., ECF No. 1.) Plaintiffs then amended the complaint to allege that both Limnia and XP Vehicles' applications for financial support under the LG Program and another program DOE administers (the Advanced Technology Vehicle Manufacturing ("ATVM") Program) were "improperly denied[.]" (Am. Compl. ¶ 119.) Both plaintiffs claimed "due process[,]" "equal protection[,]" and APA violations (id. ¶¶ 121-71), maintaining that DOE's denials were "impermissibly infected with political pressure" (e.g.,
DOE then filed a motion for voluntary remand, which this Court granted. See XP Vehicles, Inc. v. U.S. Dep't of Energy ,
With the case once again before this Court, DOE represented that it was genuinely willing to reconsider on voluntary remand the 2009 version of Limnia's application with respect to the ATVM Program, and as a result, this Court remanded that portion of this case to DOE and stayed any consideration of Limnia's claims regarding that application while DOE reconsidered its prior decision. (See Minute Order of August 7, 2017.) As to the dispute surrounding DOE's rejection of Limnia's application to the LG Program-the merits of which relate simply and solely to whether or not DOE acted arbitrarily and capriciously when it insisted that Limnia pay the application fee under the circumstances alleged-the parties agreed to move ahead with summary judgment briefing and proceeded to file cross-motions for summary judgment. (See Defs.' Mem.; Pl.'s Mot.)
In its motion for summary judgment, DOE argues that it made the rational decision to reject Limnia's LG Program application in light of Limnia's undisputed failure to pay the required application fee, and it maintains further that the agency provided an adequate explanation to Limnia regarding the denial of Limnia's application. (See Defs.' Mem. at 6-8 (referencing DOE's email to Limnia dated April 9, 2009).) For its part, Limnia vigorously contends that, by virtue of Secretary Chu's oral comments, DOE did, in fact, grant Limnia a fee waiver, and because DOE did not explain why it rescinded that fee waiver in the April 9, 2009 email, DOE did not provide a sufficiently thorough and reasoned explanation for rejecting Limnia's application for support under the LG Program. (See Pl.'s Mot. at 5.) In the alternative, Limnia has requested that this Court provide it with the chance to supplement the administrative record by engaging in discovery to allow Limnia "to determine the Department of Energy's reason for refusing to honor the fee waiver." ( Id. at 15.)
The parties' cross-motions are now fully briefed (see Reply in Supp. of Defs.' Mot. for Partial Summ. J. & Opp'n to Pl.'s Cross-Mot. for Partial Summ. J. or for Discovery ("Defs.' Reply"), ECF No. 75; Limnia's Reply in Supp. of its Cross-Mot. for Partial Summ. J. or for Disc. ("Pl.'s *33Reply"), ECF No. 77), and this Court heard oral arguments from both parties at a motion hearing on July 12, 2018.
II. LEGAL STANDARDS
A. Summary Judgment In APA Cases
The Federal Rules of Civil Procedure require a court to grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). However, in an APA case, that summary judgment standard "does not apply because of the limited role of a court in reviewing the administrative record." Standing Rock Sioux Tribe v. U.S. Army Corps of Eng'rs ,
B. Arbitrary And Capricious Review
Under the APA, any person "adversely affected or aggrieved by agency action" has the right to seek "judicial review" of that agency action,
Boiled to bare essence, the arbitrary and capricious review standard "requires that an agency's decision be reasonable and reasonably explained." Nw. Corp. v. Fed. Energy Regulatory Comm'n ,
III. ANALYSIS
It is indisputable that the regulations governing DOE's LG Program required applicants to remit an application fee before the agency would review the merits of a given application, see
For the reasons explained below, it is clear to this Court that DOE acted entirely rationally when it refused to process Limnia's LG Program application, because DOE had not, in fact, granted Limnia any fee waiver, and having not approved any deviation from the mandatory fee requirement, DOE had no obligation to provide reasons why the agency had refused to honor the nonexistent waiver. Put another way, Limnia has conjured up a purported obligation of the agency ( to waive the fee) that has not been established, and its motion strangely contends that DOE's refusal to comply with this unestablished duty, as well as DOE's failure to explain this refusal, is irrational agency action in violation of the APA. Limnia's contentions are meritless.
A. DOE Never Waived The Application Fee For Limnia's LG Program Application
Both parties recognize that the issue of whether DOE acted arbitrarily and capriciously by rejecting Limnia's LG Program application turns entirely upon whether DOE ever granted Limnia a fee waiver for its application. (See, e.g. , Defs.' Reply at 11 ("Plaintiff must first point to evidence suggesting that the agency in fact agreed to waive the fee in the first place[.]"); Pl.'s Mot. at 8 (beginning with the contention that "[t]he administrative record provides evidence ... that the application fee had been waived").) That is, if DOE granted Limnia a valid fee waiver, then the agency's sudden change of course without providing "a well-reasoned explanation for its decision" to do so would constitute arbitrary and capricious action for APA purposes. Policy & Research ,
Even the most cursory review of the applicable regulations and undisputed facts in the administrative record clearly reveals that DOE never authorized the fee waiver that Limnia says it was entitled to with respect to the LG Program application at issue in this case. As explained above, the regulations that were in force at the time that Limnia submitted its application to participate in the LG Program mandated that applicants pay any "filing fee" that an open solicitation required when their application to the LG Program was submitted,
None of the mandated steps for deviating from the fee requirement occurred in the instant case. Limnia never provided "[a] recommendation ... in writing to DOE" regarding a deviation, nor did it submit to DOE any "supporting statement" that described the "nature of the deviation requested and the reasons in support thereof[.]"
Limnia adamantly asserts that DOE should be deemed to have waived the fee with respect to its LG Program application nevertheless. In this regard, Limnia points to various record documents that it says establish that the agency had deviated from the application fee requirement, but none of those documents demonstrates that the steps that are indisputably necessary to secure a waiver under DOE regulations were taken. For example, Limnia maintains that it participated in a conference call during which Secretary Chu "stated his intention to waive the application fees" (J.A. at 12; see also Pl.'s Mot. at 9), which Limnia says is confirmed by the *36typed statement in Limnia's own application cover letter to the effect that "Secretary Chu has changed the submission fee to be payable upon award" ( Pl.'s Mot. at 9 (quoting J.A. at 6) ). At most, this evidence represents Limnia's own (potentially mistaken) understanding of the status of the fee requirement; it neither amounts to an applicant "recommendation" that the fee be waived,
The purported fee waiver also cannot rest upon the e-mail from one of Limnia's associates to staff members at DOE, stating that DOE's denial of Limnia's application for non-remittance of the required fee was "not in keeping with the discussion that was held ... regarding the DOE's review of Limnia's submission prior to its requirement for fee submission." (Pl.'s Mot. at 9 (quoting J.A. at 17).) Again, while it appears quite clear from this email that Limnia believed that it had been excused from the application-fee requirement, such a belief does not make it so. And a statement from a Limnia associate articulating Limnia's understanding of a discussion that Limnia allegedly had with the agency about its mistaken belief that there was an authorized deviation from the fee requirement does not satisfy the regulations' clear deviation "prescription."
Limnia's other alleged smoking gun regarding DOE's grant of a fee waiver-the handwritten notation on Limnia's application cover letter stating "Appli. [sic] Fee waived by Secretary DOE" (id. (quoting J.A. at 6) )-is similarly unavailing. To begin with, it is entirely unclear who made this notation. Limnia speculates that "someone at DOE read the typewritten statement that [the] Secretary [ ] had waived the application fee, circled Limnia's telephone number, called Limnia, and during that call[,] made the handwritten notation that Secretary Chu had waived the fee." (Id. ) The notation itself does not plainly establish that this chain of events actually occurred in the manner than Limnia articulates, but even so, this handwritten note merely reflects that someone somehow said the fee had been waived, and is not reasonably construed to be a "finding" regarding the fee waiver, much less the required finding that such a waiver would prove "essential" to the LG Program's objectives or that it is in the best interests of the federal government under the deviation rules. (See J.A. at 6, 12, 17.)
The best that Limnia can do to support its fee-waiver position is to note that "[t]he cover letter of its application states that Limnia 'understands that Secretary Chu has changed the submission fee to be payable upon award[,]' " (Pl.'s Mot. at 12 (quoting J.A. 6) ), and to insist that Limnia thereby successfully submitted to DOE "a determination by the Secretary in his discretion to undertake a deviation" (
*37"a determination by the Secretary in his discretion to undertake a deviation[,]"
B. DOE's Rejection Of Limnia's LG Program Application Was Reasonable And Sufficiently Explained
Because DOE did not waive the fee for Limnia's application to the LG Program, there can be no question that DOE's treatment of Limnia's application was entirely appropriate under the APA. Consistent with the regulations' statement that "DOE will not consider any Application complete unless the Applicant has paid the [application fee],"
Thus, by stating simply that Limnia's application was rejected "due to non-remittance of the required application fee" (J.A. at 8), DOE unquestionably "articulate[d] a satisfactory explanation for its action[,]" State Farm ,
C. Limnia's Discovery Request Is Baseless
Apparently sensing the meritless nature of its current fee-waiver contentions, Limnia has requested that, as an alternative to granting it summary judgment, this Court should authorize "limited discovery to determine the Department of Energy's reason for refusing to honor the fee waiver[.]" (Pl.'s Mot. at 15.) Unfortunately *38for Limnia, this request fares no better than its underlying claim.
It is well established that, to seek discovery in the context of an APA case, the plaintiff must make "a significant showing ... that [the plaintiff] will find material in the agency's possession indicative of bad faith or an incomplete record[.]" Air Transp. Ass'n of Am., Inc. v. Nat'l Mediation Bd. , 663 F.3d at 487-88 (D.C. Cir. 2011). But, here, Limnia has offered nothing more than rank speculation about DOE's motives based on Limnia's own (unproven) assumption that the agency actually conferred a fee waiver through Secretary's Chu's comments and then inexplicably rescinded it. (See Pl.'s Mot. at 16 ("Defendants are the only party with access to the information regarding DOE's true reason for refusing to honor its fee waiver; the administrative record contains no contemporaneous evidence on this point.").) Limnia's mistaken belief that the agency had granted it a fee waiver, however earnest, is an insufficient basis upon which to conclude that Limnia should be allowed to explore why the administrative record makes no mention of the agency's fee-waiver obligation, and this is especially so when the most obvious reason for the lack of record evidence regarding any fee waiver is that no such waiver exists. What is more, if there is any bad faith to be found, this Court concludes that it is most likely manifest in Limnia's own decision to pursue its frivolous contention that DOE somehow arbitrarily abandoned a commitment to process Limnia's LG application sans the mandatory fee.
Thus, far from demonstrating that discovery is warranted, Limnia's request for further factfinding merely exposes the extremely thin reed upon which Limnia's claim of arbitrary and capricious action rests.
IV. CONCLUSION
DOE's regulations plainly required Limnia to submit an application fee alongside its application for an LG Program loan, and neither Limnia nor DOE undertook any of the steps that the regulations require in order to effect a waiver of that application-fee mandate. This Court finds that DOE never granted Limnia a fee waiver, and thus, the agency did not act arbitrarily and capriciously when it refused to process Limnia's application for failing to remit the required fee or when it explained that it was rejecting Limnia's application "due to non-remittance of the required application fee[.]" (J.A. at 8.) As a result, and as set forth in the accompanying Order, DOE's motion for partial summary judgment must be GRANTED , and Limnia's cross-motion for partial summary judgment must be DENIED . And with the exception of DOE's pending review of Limnia's ATVM application on voluntarily remand, this matter is now over; no discovery is warranted or authorized.
Page-number citations to the documents that the parties have filed refer to the page numbers that the Court's electronic filing system automatically assigns.
The parties have styled their summary judgment motions as "partial" cross-motions because Limnia's complaint contains claims regarding another loan application that DOE denied on its merits, and that portion of this case has been successfully voluntarily remanded to the agency. (See Minute Order of August 7, 2017.).
This first iteration of the LG Program's regulations applies to the instant dispute. Thus, subsequent citations to Part 609 of Title 10 of the Code of Federal Regulations within this Memorandum Opinion reference the version of these regulations that was in force prior to December 4, 2009, unless otherwise noted.
The instant record does not reveal exactly what fee Limnia was expected to submit alongside its application to the LG Program. This uncertainty is primarily due to the fact that the amount of the LG Program application fee depended on the size of the loan guarantee that an applicant sought from DOE (see J.A. at 5), and the record does not specify the magnitude of the loan guarantee that Limnia sought. In general, it appears that the fee that was to accompany applications in response to the solicitation at issue here was between $18,750 and $31,250. (Id. )
The administrative record in this case is mainly comprised of a series of emails between Limnia's management and DOE officials. (See id. at 6-25.) This Court has necessarily relied chiefly upon these emails in discussing the factual circumstances related to DOE's rejection of Limnia's LG Program application.
Reference
- Full Case Name
- LIMNIA, INC. v. U.S. DEPARTMENT OF ENERGY
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