337 F. Supp. 3d 308
S.D. Ill.2018Background
- Congress appropriated $101 million in 2018 to the Teen Pregnancy Prevention (TPP) Program, allocating 75% to Tier 1 ("replicating programs proven effective through rigorous evaluation") and 25% to Tier 2 ("research and demonstration grants to develop, replicate, refine, and test additional models").
- HHS issued 2018 Funding Opportunity Announcements (FOAs). The Tier 1 FOA required applicants to "replicate" one of two identified "programs": the SMARTool and the TAC. The Tier 2 FOA allowed applicants to use SMARTool/TAC elements and required adherence to HHS "public health priorities."
- PPNYC, a recurring TPP grantee and prospective applicant, declined to apply after concluding it could not compete under the 2018 FOAs and sued, seeking declaratory and injunctive relief under the APA. Defendants moved to dismiss for lack of standing and argued the FOAs were nonreviewable or nonfinal.
- The court found PPNYC had Article III standing (competitive disadvantage theory), that the FOAs were reviewable (not committed to agency discretion), and that the adoption of the FOAs was final agency action.
- On the merits, the court held the 2018 Tier 1 FOA was contrary to statute and arbitrary and capricious because SMARTool and TAC are evaluative tools, not "programs" proven effective through rigorous evaluation as required for Tier 1; the Tier 2 FOA was upheld as consistent with the statutory purpose of testing and developing innovative models.
- Remedy: permanent injunction enjoining defendants from using the 2018 Tier 1 FOA to award or disburse TPP funds; Tier 2 FOA remains in effect.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing | PPNYC alleged a concrete competitive injury: it was ready and likely to bid but cannot compete under the FOAs. | PPNYC lacked injury because it did not submit an application. | Standing: PPNYC has Article III standing (competitive-injury theory). |
| Reviewability (committed to agency discretion) | Statute contains meaningful restrictions ("programs", "rigorous evaluation") so APA review is appropriate. | Appropriations and grant-award allocations are committed to agency discretion and presumptively unreviewable. | FOAs are reviewable; statute provides meaningful standards. |
| Final agency action | Challenge to adoption of FOAs is premature until awards are made. | FOAs are not final because awards and discretionary decisions remain. | Adoption of FOAs is final agency action (FOAs fix eligibility and create legal consequences). |
| Merits: Tier 1 compliance with statute | Tier 1 must require replication of actual programs proven effective by rigorous evaluation; SMARTool/TAC are not programs nor proven by rigorous evaluation. | Agency reasonably relied on SMARTool/TAC given doubts about prior evidence; tools can define elements to replicate. | Tier 1 FOA unlawful and arbitrary/capricious; SMARTool/TAC cannot substitute for proven programs. Tier 2 FOA upheld as consistent with statutory purpose. |
Key Cases Cited
- Lujan v. Defs. of Wildlife, 504 U.S. 555 (standing requirements for Article III) (establishes injury, causation, redressability standards)
- Bennett v. Spear, 520 U.S. 154 (final agency action test) (consummation and legal consequences prongs)
- Chevron U.S.A. Inc. v. Natural Res. Def. Council, 467 U.S. 837 (administrative deference framework) (reject agency constructions contrary to clear congressional intent)
- City of Jacksonville v. Jacksonville Land Co., 508 U.S. 656 (competitive standing) (competitive disadvantage suffices for injury)
- Heckler v. Chaney, 470 U.S. 821 (committed-to-agency-discretion exception) (narrow circumstances where no judicially manageable standards exist)
- Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29 (arbitrary and capricious standard) (agency must provide reasoned explanation for its action)
- Lincoln v. Vigil, 508 U.S. 182 (appropriations and reviewability) (limits of reviewability where statute lacks meaningful standards)