Monbo v. Small Business Administration

• Court: District Court, District of Columbia
• Decided: December 10, 2024
• Docket: Civil Action No. 2024-1872
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA _________________________________________ ) DEE MONBO, ) ) Plaintiff, ) ) v. ) Case No. 24-cv-1872 (APM) ) SMALL BUSINESS ADMINISTRATION, et al., ) ) Defendants. ) _________________________________________ )

MEMORANDUM OPINION

Plaintiff Dee Monbo filed this action under the Administrative Procedure Act and the

Mandamus Act to compel Defendant Small Business Administration (“SBA”) 1 to adjudicate an

application for renewed participation in the Hardship Accommodation Plan, an SBA program that

temporarily reduces the monthly loan payment for COVID-19 Disaster Loan recipients. Compl.,

ECF No. 1 [hereinafter Compl.]. Plaintiff now seeks an injunction directing the SBA to act on the

application. Pl.’s Mem. in Supp. of Pl.’s Emergency Mot. for TRO and Prelim. Inj., ECF No. 17

[hereinafter Pl.’s Mot.]. Defendants simultaneously oppose injunctive relief and move to dismiss

Plaintiff’s complaint, both for lack of subject matter jurisdiction and for failure to state a claim.

Defs.’ Mem. in Supp. of Defs.’ Mot. to Dismiss Pl.’s Compl. and Opp’n to Pl.’s Mot., ECF No. 19-

1 [hereinafter Defs.’ Mot.]. The court grants Defendants’ Motion to Dismiss and denies Plaintiff’s

Motion for Temporary Restraining Order and Preliminary Injunction because Plaintiff has not

carried her burden of establishing jurisdiction. Food & Water Watch, Inc. v. Vilsack, 808 F.3d 905,

1 Plaintiff also named as Defendants Isabel Casillas Guzman, the SBA Administrator, and Carla Schwille, an SBA employee. Compl. ¶¶ 9, 11. 913 (D.C. Cir. 2015) (motion for preliminary injunction); Knapp Med. Ctr. v. Hargan, 875 F.3d

1125, 1128 (D.C. Cir. 2017) (motion to dismiss).

The jurisdictional defect here is obvious: It is Plaintiff’s company, not Plaintiff herself, that

received a COVID-19 Disaster Loan, enrolled in the Hardship Accommodation Plan, and seeks to

renew its participation in that program. Defs.’ Mot., Ex. 1, ECF No. 19-3, ¶¶ 6–8; Pl.’s Resp. to

Defs.’ Mot., ECF No. 24 [hereinafter Pl.’s Resp.], at 1; see also United States v. Emor, 785 F.3d

671, 677 (D.C. Cir. 2015) (“A district court deciding a motion to dismiss on jurisdictional grounds,

such as standing, may consider evidence outside the complaint.”). But Plaintiff’s company is not

a party to this case. And it is well-established that, subject to limited exceptions, a shareholder

may not bring suit in her individual capacity on a claim that belongs to the company. Am. Airways

Charters, Inc. v. Regan, 746 F.2d 865, 873 n.14 (D.C. Cir. 1984); Kay v. FCC, 621 F. App’x 5

(D.C. Cir. 2015).

Plaintiff therefore lacks standing unless she asserts a claim that is “separate and distinct”

from the company’s. Gilardi v. U.S. Dep’t of Health & Hum. Servs., 733 F.3d 1208, 1216 (D.C.

Cir. 2013), vacated and remanded on other grounds, 573 U.S. 956 (2014); accord Schum v. FCC,

617 F. App’x 5, 6 (D.C. Cir. 2015) (applying the shareholder-standing rule where the petitioner’s

alleged injuries were “not personal, but merely derivative of harm suffered by the company”). 2

She has not done so. All of the claims raised in her complaint arise from the SBA’s failure to

process the company’s Hardship Accommodation Plan application. See Compl. at 8–13. And

although Plaintiff states she “is liable for all loan and non-loan agreements entered into by [the

2 There is some debate over whether the shareholder-standing rule should be analyzed as a matter of prudential standing or Article III standing. See Cherry v. FCC, 641 F.3d 494, 497 (D.C. Cir. 2011); Heyer v. Schwartz & Assocs. PLLC, 319 F. Supp. 3d 299, 304–05 (D.D.C. 2018). This distinction, however, is functionally irrelevant in this case, for the D.C. Circuit treats prudential standing as a jurisdictional issue. Ass’n of Battery Recyclers, Inc. v. EPA, 716 F.3d 667, 674 (D.C. Cir. 2013).

2 company],” Pl.’s Resp. at 1, personally guaranteeing a company’s debt obligations does not

overcome the shareholder-standing rule, see Labovitz v. Washington Times Corp., 172 F.3d 897,

901–04 (D.C. Cir. 1999).

Accordingly, the court denies Plaintiff’s Motion for Temporary Restraining Order and

Preliminary Injunction, ECF No. 17, and grants Defendants’ Motion to Dismiss, ECF No. 19, for

want of subject matter jurisdiction. A final, appealable order accompanies this Memorandum

Opinion.

Dated: December 10, 2024 Amit P. Mehta United States District Judge