Donaldson v. United States

268 F. Supp. 2d 812, 2003 U.S. Dist. LEXIS 14275, 2003 WL 21468748
CourtDistrict Court, E.D. Michigan
DecidedJune 23, 2003
Docket98-10362-BC
StatusPublished

This text of 268 F. Supp. 2d 812 (Donaldson v. United States) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Donaldson v. United States, 268 F. Supp. 2d 812, 2003 U.S. Dist. LEXIS 14275, 2003 WL 21468748 (E.D. Mich. 2003).

Opinion

OPINION AND ORDER ADOPTING MAGISTRATE JUDGES REPORT AND RECOMMENDATION, GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT, AND DISMISSING CASE

LAWSON, District Judge.

The plaintiff, Mark P. Donaldson, is an unsuccessful applicant for a grant from the federal government under the Rural Business Enterprise (RBE) grant program, now administered through the Farm Services Agency (and previously through the Farmers Home Administration), an agency within the United States Department of Agriculture (USDA). The RBE grant program is intended to “facilitate development of small and emerging private businesses” by providing grants to “public bodies and private non-profit corporations,” see 7 U.S.C. § 1932(c)(1) (1996), that will use the funds to best achieve Congressional objectives, in the judgment of the Secretary of Agriculture. Since the funds available under this program are not limitless, applicants must compete for them by convincing the program administrators of the worthiness and effectiveness of their proposals, and the program administrator, in this case the USDA Regional Rural Development Manager, must exercise his or her judgment, as circumscribed by rules promulgated by the Secretary, in passing on applications. Unsuccessful applicants, after exhausting administrative remedies, may file a civil action in the United States District Court pursuant to the Administrative Procedures Act challenging an adverse decision. See 7 U.S.C. § 6999. The plaintiff here mounts a two-pronged attack against the Secretary challenging the unfavorable treatment of his pre-application for RBE grant funds: first, Donaldson contends that the Rural Development Manager did not properly apply the Secretary’s point scoring system to his pre-application; and second, Donaldson claims that other contestants for the funds were ineligible for them. As part of the second prong of the attack, Donaldson seeks an injunction preventing the Secretary from engaging in certain practices and accepting grant applications from certain categories of applicants in the course of administering the RBE grant program in the future.

The case was referred by this Court’s predecessor, the Honorable Victoria A. Roberts, to Magistrate Judge Charles E. Binder to hear and determine all pretrial matters within his authority. Now before the Court is Magistrate Judge Binder’s Report and Recommendation that the defendant’s motion for summary judgment be granted and the above-entitled case be dismissed with prejudice. The plaintiff filed timely objections to the recommendation, and the Court has conducted a de novo review of the matter in light of the magistrate’s report and the objections filed as required by 28 U.S.C. § 636(b)(1)(B). *814 The Court finds that the Magistrate Judge correctly applied the governing law to the facts as disclosed by the administrative record, and therefore the Court will adopt the magistrate judge’s Report and Recommendation, grant the defendant’s motion for summary judgment, and dismiss the case.

I.

As previously mentioned, the plaintiff sought RBE grant funds from the USDA. Pursuant to USDA regulations, applicants seeking RBE grants must first file a pre-application. See 7 C.F.R. §§ 1942.311(a), 1942.2(a). The USDA then converts the information contained in the pre-application into “points” pursuant to a scoring system set forth in 7 C.F.R. § 1942.305(b)(3) and described in detail in the magistrate judge’s, report. To summarize, the regulations establish that the USDA shall assign points to an application based on certain criteria including the population of the area in which the grant project will be located, the economic conditions in the area, and the experience of the applicant in the type of activity proposed in the grant pre-application. Additionally, an applicant may receive points under two categories labeled “Other” and “Discretionary.” Points are awarded under these categories if the applicant can demonstrate, among other things, that small business development will occur as a result of the grant. The points are added up and a final score is determined. The applicants whose pre-applications receive the most points are invited to file a formal application that will determine who receives the grant funds up to the available limits for that year. See 7 C.F.R. § 1942.2(c). Applicants who do not receive a sufficient number of points are invited to re-apply the next year.

Between 1996 and 1997, the plaintiff submitted three pre-applications to the USDA for RBE grants on behalf of three corporations of which he is the owner and president: Small Web America — Gay-lord/Grayling; Small Web America — Isabella; and Small Web America — Central Michigan. The plaintiff sought the grants to expand the Internet and other like services, including high-speed data and video conferencing, to rural communities in Michigan. The USDA informed the plaintiff that his pre-applications were eligible to receive grants, but did not have the priority necessary for further consideration. The plaintiff was invited to inform the USDA if he wished to have his applications considered for grants in the future. The USDA also sent the plaintiff the point tally sheets indicating how many points he had received in each category for each of his applications. The plaintiff received a total of 90 points on his application for Small Web America — Gaylord/Grayling, 60 points on his application for Small Web America — Isabella, and 70 points for Small Web America — Central Michigan. To qualify for the RBE grants that year, the plaintiff needed a total score of at least 125 points, which was the cut-off point separating unsuccessful applicants and those given further consideration.

The plaintiff filed three administrative appeals of the unfavorable findings on his applications. The appeals were consolidated by the USDA and assigned to Hearing Officer David M. Craun. The plaintiff and the Secretary’s representative each submitted written arguments to the hearing officer. The plaintiff argued, among other things, that his three pre-applications were improperly scored in the population, small business, and discretionary categories. The plaintiff had received zero points for each application under the discretionary category. Hearings were held on April 24, 1998 and June 10, 1998. The plaintiff presented his case and cross-examined the government’s witnesses, including Donald Hehr, a director over the RBE grant program, and Mae Locke, an employee of the *815 USDA who reviewed the plaintiffs application. Mr. Hehr testified that the plaintiffs application was deemed to lack priority in part because the USDA determined that Internet services similar to what the plaintiff would be offering were already present in the areas the plaintiff wanted to establish his business. Ms.

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Bluebook (online)
268 F. Supp. 2d 812, 2003 U.S. Dist. LEXIS 14275, 2003 WL 21468748, Counsel Stack Legal Research, https://law.counselstack.com/opinion/donaldson-v-united-states-mied-2003.