Mactown Inc. v. Acting Secretary of the U.S. Department of Health and Human Services
1:25-cv-20315
| S.D. Fla. | Jun 30, 2025Background
- MACTown Inc., a nonprofit provider of residential services for individuals with intellectual disabilities, received over $400,000 in Provider Relief Fund (PRF) payments through the COVID-era CARES Act, administered by HHS/HRSA.
- The PRF program required recipients to submit formal reports documenting their use of funds via an HRSA online portal by set deadlines.
- MACTown alleges it completed its “Phase 4” report before the deadline but was prevented from submitting due to the portal closing. Later attempts to clarify or cure the submission were unsuccessful.
- HRSA demanded repayment, claimed non-compliance, and ultimately referred MACTown to debt collection without taking the multi-step communication process the agency states is typical.
- MACTown unsuccessfully sought review through the Departmental Appeals Board (DAB), which concluded it lacked jurisdiction. MACTown then filed an APA suit challenging HRSA’s decision and the DAB’s refusal to hear its appeal.
- Defendant moved to dismiss, arguing the repayment decision is unreviewable and fails to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is HRSA's repayment demand judicially reviewable under the APA? | Agency action is reviewable; HRSA enforced a statutory reporting requirement. | Demand is committed to agency discretion; not justiciable. | Yes; presumption of reviewability applies. |
| Did the complaint plausibly allege arbitrary and capricious action by HRSA? | HRSA ignored substantial compliance and past practice, denying due process. | Plaintiff insufficiently pled arbitrary/capricious action. | Yes; plausible claim stated. |
| Was it arbitrary or contrary to law for the DAB to refuse jurisdiction over appeal? | DAB had authority under relevant regulations to review the repayment decision. | DAB lacked jurisdiction; not a grant award determination under regs. | Plausible claim stated; survives dismissal. |
| Is dismissal appropriate at the pleading stage? | More facts needed; administrative record not before the court. | Complaint fails on its face; should be dismissed. | No; case proceeds; record required. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (requirement for factual allegations in complaint)
- Heckler v. Chaney, 470 U.S. 821 (meaningful standard for judicial review of agency discretion)
- Lincoln v. Vigil, 508 U.S. 182 (agency discretion in appropriation)
- Bennett v. Spear, 520 U.S. 154 (mandatory duties reviewable under APA)
- Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (arbitrary and capricious agency action)