NEW LIFE EVANGELISTIC CENTER, INC. v. Sebelius, 2010 U.S. Dist. LEXIS 126551

New Life seeks to use the Broadway Street federal property in Cape Girardeau, MO for a homeless program under Title V of the McKinney-Vento Act; HHS denied the application in May 2009 for four of five criteria.
The court vacated HHS's denial on December 8, 2009 and remanded for further proceedings due to defects in the decision—notably lack of a proper health services proposal, reliance on a point-in-time need survey, and inadequate capital‑cost planning.
On remand, HHS again denied New Life’s application in the May 14, 2010 Second Denial Letter; New Life moved for vacatur and remand on July 19, 2010.
New Life proposed supplementing its application on remand; HHS rejected supplementation but later supplemented the record with additional materials on remand.
The court reviews under the APA’s arbitrary or capricious standard with deference to agency decisions; it recognizes Vermont Yankee and Pension Benefit as controlling for procedural rights in informal adjudications.
The court denies New Life’s motion, finds no procedural defect in remand proceedings, and dismisses the action in its entirety.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether remand procedures were procedurally defective	New Life argues remand was unfairly one-sided and record was supplemented to New Life’s detriment.	HHS acted within discretionary remand authority; supplementation was permissible and not prejudicial.	Remand procedures were not procedurally defective.
Whether HHS could supplement the record and deny supplementation by New Life	APA/McKinney Act rights entitled New Life to supplement the record and respond to new evidence.	APA does not grant a right to supplemental evidence in informal adjudication; McKinney Act/regulations do not require supplementation.	HHS could supplement the record and New Life had no right to supplement its application.
Whether the timing/delay of the Second Denial Letter was prejudicial	HHS delayed beyond 25 days after remand, prejudicing New Life by stale information.	Timing on remand is not obligated to be within 25 days; delay did not prejudice as a matter of law.	No prejudicial error; delay was not reversible under the APA.
Whether the permanent injunction in NLCHP affects New Life’s financial analysis	NLCHP injunction required deference to intent to seek Title IV funds in evaluating financial ability.	NLCHP injunction is narrow and does not require granting financial ability where New Life relies on other funding or fails other thresholds.	Inapplicable to New Life; injunction does not compel the outcome New Life seeks.

Vermont Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519 (U.S. 1978) (courts may not impose procedural requirements beyond the APA in informal adjudication)
Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633 (U.S. 1990) (informal adjudication must provide explanation enabling review; avoid extra procedural requirements)
Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (arbitrary or capricious review requires rational connection between facts and choice)
Envtl. Def. Fund, Inc. v. Costle, 657 F.2d 275 (D.C. Cir. 1981) (deferential review; consider whether the agency examined relevant data and explained its action)
Process Gas Consumers Grp. v. Fed. Energy Regulatory Comm'n, 930 F.2d 926 (D.C. Cir. 1991) (agency on remand has broad discretion to determine procedures)
Nat'l Law Ctr. on Homelessness & Poverty v. U.S. Veterans Admin., 964 F.2d 1210 (D.C. Cir. 1992) (limits of injunctions affecting federal funding considerations under Title IV)
Nat'l Law Ctr. on Homelessness & Poverty v. U.S. Dep't of Veterans Affairs, 964 F.2d 1212 (D.C. Cir. 1992) (Court of Appeals' interpretation of enforcement order narrowing scope)
Nat'l Coal. for the Homeless v. U.S. Veterans Admin., 1988 WL 136958 (D.D.C. 1988) (permanent injunction history related to Title IV funding considerations)