THE DIOCESE OF ROCHESTER and THE DIOCESE OF BUFFALO, N.Y., Plaintiffs, v. U.S. SMALL BUSINESS ADMINISTRATION and JOVITA CORRANZA, solely as the Administrator of the U.S. Small Business Association, Defendants.
Case 6:20-cv-06243-EAW
June 10, 2020
ELIZABETH A. WOLFORD
DECISION AND ORDER
6:20-CV-06243 EAW
INTRODUCTION
Plaintiffs the Diocese of Rochester and the Diocese of Buffalo, N.Y. (collectively “Plaintiffs“) seek a preliminary injunction against defendants U.S. Small Business Administration (“SBA“) and Jovita Corranza (the “Administrator“) (collectively “Defendants“) related to Defendants’ establishment of criteria for participation in the Paycheck Protection Program (the “PPP“). (Dkt. 17). Plaintiffs assert that Defendants violated the Administrative Procedure Act,
Following oral argument on Plaintiffs’ amended motion for a preliminary injunction, the Court issued a Notice pursuant to
FACTUAL BACKGROUND
Plaintiffs are Roman Catholic dioceses and not-for-profit religious corporations under New York law. (Dkt. 10 at ¶¶ 4-5). Both Plaintiffs are chapter 11 bankruptcy debtors, with the Diocese of Buffalo having filed its voluntary petition on February 28, 2020 (Dkt. 2-5 at ¶ 3) and the Diocese of Rochester having filed its voluntary petition on September 12, 2019 (Dkt. 2-7 at ¶ 3).
On March 20, 2020, as a result of the ongoing global COVID-19 pandemic,1 New York State Governor Andrew M. Cuomo signed the “New York State on PAUSE” Executive Order, which, among other things, mandated a 100% closure of non-essential businesses statewide and temporarily banned all non-essential gatherings of individuals of any size for any reason other than the provision of essential services. Executive Order [Cuomo] No. 202.8 (Mar. 20, 2020), https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/EO_202.8.pdf; see New York State on PAUSE, New York State: Novel Coronavirus, https://coronavirus.health.ny.gov/new-york-state-pause (last visited June 10, 2020). Plaintiffs allege that this had a significant impact on their revenue sources. (Dkt. 10 at ¶ 38).
Specifically, a “primary source of revenue” for Plaintiffs is “parish assessments” which are collected from parishes on a monthly basis and are “based primarily on historical parish offertory.” (Dkt. 2-5 at ¶ 5; see also Dkt. 2-7 at ¶ 5). In turn, the parishes “derive a significant portion of their revenue from offertory collection during masses,” particularly “during Holy Week which includes Easter Sunday mass.” (Dkt. 2-5 at ¶ 7). However, because the New York State on PAUSE Order prevented the parishes from holding masses
or services, including on Easter Sunday (which occurred on April 12, 2020), “it is estimated that the parish offertory collections and contributions from parishioners are 90-95% lower than average.” (Id. at ¶ 8). The Diocese of Buffalo employs 108 full-time employees and 48 part-time employees. (Id. at ¶ 10). The Diocese of Rochester employs “60 to 70 full-time equivalent employees. . . .” (Dkt. 2-7 at ¶ 9).
On March 27, 2020, the President signed into law the CARES Act which, among other things, established the PPP. The PPP is “a convertible loan program under § 7(a) of the Small Business Act (
The PPP is a new loan program to be administered by the SBA under Section
7(a) of the Small Business Act (codified at 15 U.S.C. § 636(a) ). Its purpose is to assist small businesses during the COVID-19 crisis by immediately extending them loans on favorable terms. The loans are made by the SBA‘s participating banks and guaranteed by the SBA itself. Section 1106 of the CARES Act provides that a borrower‘s indebtedness under a PPP loan will be forgiven to the extent that the borrower uses the funds to pay expenses relating to payroll, mortgage interest, rent, and utilities during the eight-week period following the loan‘s origination. CARES Act § 1106. If a borrower qualifies for loan forgiveness, the SBA must pay the lender an amount equal to the amount forgiven, plus any interest accrued through the date of payment. Id. § 1106(c)(3).
Camelot Banquet Rooms, Inc. v. U.S. Small Bus. Admin., — F. Supp. 3d —, 2020 WL 2088637, at *2 (E.D. Wis. May 1, 2020), appeals filed, Nos. 20-1729, 20-1730 (7th Cir. May 4, 2020).2 Congress initially provided the SBA with $349 billion for PPP loan
guarantees, but those funds were quickly exhausted, and “Congress then appropriated an additional $310 billion for loan guarantees under the PPP.” DV Diamond Club of Flint, LLC v. U.S. Small Bus. Admin., — F. Supp. 3d —, No. 20-CV-10899, 2020 WL 2315880, at *3 (E.D. Mich. May 11, 2020), appeal filed, No. 20-1437 (6th Cir. May 15, 2020).
The CARES Act grants the SBA emergency rulemaking authority to issue regulations necessary to administer the PPP. CARES Act § 1114. On April 2, 2020, the SBA issued an interim final rule (the “First Interim Rule“) that provided guidance on the eligibility requirements for participation in the PPP. (See Dkt. 2-3 at 2-32). The First Interim Rule was subsequently published in the Federal Register on April 15, 2020. Business Loan Program Temporary Changes; Paycheck Protection Program, 85 Fed. Reg. 20811 (Apr. 15, 2020) (to be codified at 13 C.F.R. pt. 120); (see Dkt. 24 at 12-13). The First Interim Rule makes reference to the “Paycheck Protection Application Form” (SBA Form 2484), First Interim Rule, 85 Fed. Reg. at 20816, which in turn requires a potential borrower to certify that it is “not presently involved in a bankruptcy,” (Dkt. 24-1 at 29).
On April 28, 2020, SBA posted a new interim final rule.3 Business Loan Program Temporary Changes; Paycheck Protection Program-Requirements—Promissory Notes, Authorizations, Affiliation, and Eligibility, 85 Fed. Reg. 23450 (Apr. 28, 2020) (to be codified at 13 C.F.R. pts. 120-21) (hereinafter the “Fourth Interim Rule“). The Fourth
Interim Rule expressly excludes debtors in bankruptcy from receiving a PPP loan, stating that “[t]he Administrator. . . determined that providing PPP loans to debtors in bankruptcy would present an unacceptably high risk of an unauthorized use of funds or non-repayment of unforgiven loans.” Id. at 23451.
The Diocese of Buffalo has completed a PPP loan application and, but for the disqualification
PROCEDURAL BACKGROUND
Plaintiffs commenced the instant action on April 15, 2020, and concurrently filed a motion for a preliminary injunction and a motion to expedite. (Dkt. 1; Dkt. 2; Dkt. 3). The Court granted the motion to expedite on April 16, 2020, and ordered Defendants to respond to the motion for a preliminary injunction by April 24, 2020. (Dkt. 6).
Plaintiffs filed an Amended Complaint on April 20, 2020. (Dkt. 10). Then, on April 24, 2020, the parties requested and the Court entered a stipulated motion scheduling order governing the filing of an amended motion for a preliminary injunction. (Dkt. 15; Dkt. 16). Pursuant to the stipulated motion scheduling order, Plaintiffs filed the pending amended motion for a preliminary injunction on April 27, 2020. (Dkt. 17). Defendants filed a response on May 8, 2020 (Dkt. 24), and Plaintiffs filed a reply on May 11, 2020 (Dkt. 26). Oral argument on the amended motion for a preliminary injunction was held on May 15, 2020, and continued on May 19, 2020. (Dkt. 30; Dkt. 32).
At oral argument, the Court informed the parties that it was considering issuing a notice pursuant to
On June 5, 2020, the President signed into law the Paycheck Protection Program Flexibility Act of 2020, Pub. L. 116-142 (2020) (hereinafter the “PPPFA“), which modifies the forgiveness requirements for PPP loans. With leave of Court (Dkt. 39), the parties filed letter briefs addressing the impact of the PPPFA on the instant litigation on June 8, 2020. (Dkt. 40; Dkt. 41).
DISCUSSION
I. Referral to Bankruptcy Court
Although no party raised the issue in their briefing, the Court notes as an initial matter that pursuant to
district.” “An action is considered ‘related to’ a bankruptcy proceeding if the outcome of the litigation ‘might have any “conceivable effect” on the bankrupt estate,’ or has ‘any significant connection with the bankrupt estate.‘” Pennock v. Dean, No. 06-CV-266S F, 2007 WL 542132, at *3 (W.D.N.Y. Feb. 15, 2007) (quoting In re Cuyahoga Equip. Corp., 980 F.2d 110, 114 (2d Cir. 1992)). Here, it is indisputable that this action is, at a minimum, related to the bankruptcy proceeding, particularly because Plaintiffs
The referral having been made, this Court may withdraw it “in whole or in part, . . . on its own motion or on timely motion of any party, for cause shown.”
“Section 157 does not define the term ‘cause.‘” In re Bernard L. Madoff Inv. Sec. LLC, 612 B.R. 257, 262 (S.D.N.Y. 2020). However: “[i]n deciding whether there is ‘cause’ to withdraw a bankruptcy reference, the Second Circuit has outlined several factors a district court should consider,” which include “whether the claim or proceeding is core or non-core, whether it is legal or equitable, and considerations of efficiency, prevention of
forum shopping, and uniformity in the administration of bankruptcy law.” Id. (quoting In re Orion Pictures Corp., 4 F.3d 1095, 1101 (2d Cir. 1993)). “[T]he Court has broad discretion to withdraw the reference for cause.” Id.
Turning first to the issue of whether the claims are core or non-core, the Court notes that “[w]hile most courts continue to follow some version of the Orion framework, the Supreme Court‘s subsequent decision in Stern v. Marshall, 564 U.S. 462 (2011) has called into question the usefulness of asking whether a claim is ‘core’ or ‘non-core’ in evaluating a motion to withdraw.” In re Jacoby & Meyers-Bankr. LLP, No. 14-10641 (SCC), 2017 WL 4838388, at *3 (S.D.N.Y. Oct. 25, 2017). In Stern, the Supreme Court held that “the mere characterization of a claim as ‘core’ or ‘non-core’ . . . does not suffice to determine whether a bankruptcy court has the constitutional authority to adjudicate it.” Id.; see Stern, 564 U.S. at 469. As such, following Stern, courts in this Circuit have “updated the first factor in the Orion analysis, asking not whether the claim is core or non-core, but rather whether the bankruptcy court has authority to finally adjudicate the matter.” Id.
Here, it is not clear whether the Bankruptcy Court would have the authority to finally adjudicate Plaintiffs’ claims under the APA. Compare In re Skefos, No. 19-29718-L, 2020 WL 2893413, at *3 (Bankr. W.D. Tenn. June 2, 2020) (concluding that the bankruptcy court did have such authority), with Schuessler v. U.S. Small Bus. Admin., No. AP 20-02065-BHL, 2020 WL 2621186, at *2 (Bankr. E.D. Wis. May 22, 2020) (concluding with respect to the plaintiffs’ APA claims that “the bankruptcy court may hear them, but cannot issue final orders or judgments without the parties’ consent“). This lack
of clarity supports withdrawing the referral, to avoid a potential scenario in which arguments over the scope of the Bankruptcy Court‘s jurisdiction consume time and resources.
Withdrawing the referral in this case will also promote judicial efficiency, ensure uniformity in the treatment of both Plaintiffs’ claims, and avoid unnecessary delay. Further, when the Court raised the issue
II. Summary Judgment
Pursuant to
“Questions of statutory construction and legislative history present legal issues that may be resolved by summary judgment.” Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir. 1993); see also In re Asher, 488 B.R. 58, 64 (Bankr. E.D.N.Y. 2013) (“Because the Defendants and the Plaintiff have themselves defined the relevant issue as a question of statutory construction, this dispute is particularly well-suited for resolution by summary judgment.“). Here, with respect to the two issues set forth in the Court‘s Rule 56(f)(3) Notice, the parties and the Court are in agreement that there are no material factual disputes and that the questions of statutory construction are dispositive. The Court accordingly resolves those questions below.
A. Statutory Authority Under the CARES Act
The APA empowers courts to “hold unlawful and set aside agency action, findings, and conclusions found to be . . . in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.”
During the covered period, in addition to small business concerns, any business concern, nonprofit organization, veterans organization, or Tribal business concern described in section 657a(b)(2)(C) of this title shall be eligible to receive a covered loan if the business concern, nonprofit organization, veterans organization, or Tribal business concern employs not more than the greater of--
(I) 500 employees; or
(II) if applicable, the size standard in number of employees established by the Administration for the industry in which the business concern, nonprofit organization, veterans organization, or Tribal business concern operates.
The reasoning employed by the DV Diamond court, among others, is not unpersuasive on its face. As the DV Diamond court noted, the Supreme Court has held that, “the word ‘any’ naturally carries an expansive meaning” and “[w]hen used (as here) with a singular noun in affirmative contexts, the word ‘any’ ordinarily refers to a member of a particular group or class without distinction or limitation and in this way implies every member of the class or group.” SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1354 (2018); see DV Diamond, 2020 WL 2315880, at *10. In other words, the argument goes, when Congress says “any business concern, nonprofit organization, veterans organization, or Tribal business concern,” it means any.
However, “[i]n making the threshold determination under Chevron, a reviewing court should not confine itself to examining a particular statutory provision in isolation.” Nat‘l Ass‘n of Home Builders v. Defs. of Wildlife, 551 U.S. 644, 666 (2007). To the contrary, “[i]t is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” Id. And in this case, when examined in the context of the statutory scheme as a whole, it becomes clear that
The PPP is “administered by the SBA under Section 7(a) of the Small Business Act.” Camelot Banquet Rooms, 2020 WL 2088637, at *2. Under normal circumstances,
Other provisions of the CARES Act clearly anticipate the existence of additional eligibility criteria. For example, § 1102(a)(36)(D)(ii)(I) of the CARES Act provides that “[d]uring the covered period, individuals who operate under a sole proprietorship or as an independent contractor and eligible self-employed individuals shall be eligible to receive a covered loan.”
Moreover, as Defendants correctly point out, in interpreting statutes the Court must be mindful that “Congress . . . does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes.” Whitman v. Am. Trucking Ass‘ns, 531 U.S. 457, 468 (2001). In this case, in issuing loans under Section 7(a), the SBA is statutorily required to ensure such loans “shall be of such sound value or so secured as reasonably to assure repayment.”
BORROWER REQUIREMENTS.--
(i) CERTIFICATION.--An eligible recipient applying for a covered loan shall make a good faith certification--
(I) that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient;
(II) acknowledging that funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments;
(III) that the eligible recipient does not have an application pending for a loan under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan; and
(IV) during the period beginning on February 15, 2020 and ending on December 31, 2020, that the eligible recipient has not received amounts under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan.
For all these reasons, the Court concludes at step one of the Chevron analysis that the CARES Act is silent regarding the eligibility of debtors in bankruptcy to participate in the PPP. Put differently, nothing in the CARES Act requires that a bankrupt debtor be eligible for participation in the PPP—this detail was left by Congress for determination by the SBA. See Penobscot Valley Hosp. v. Carranza, No. 19-10034, 2020 WL 3032939, at *8 (Bankr. D. Me. June 3, 2020) (“Congress did not explicitly say whether debtors in bankruptcy are categorically excluded from the PPP. . . . Congress intended the SBA to fill a statutory gap and determine whether debtors in bankruptcy would be eligible for the PPP. As a result, in evaluating the APA claim, the Court proceeds to the second step of the Chevron framework.“).
The Court thus turns to step two of the Chevron analysis and asks whether the SBA‘s adoption of the bankruptcy exclusion was “arbitrary, capricious, or manifestly contrary to the statute. . . .” Catskill Mountains, 846 F.3d at 520. As a threshold issue, the Court notes that the inquiry into arbitrariness at Chevron step two is distinct from the inquiry into arbitrariness under
While Plaintiffs have brought a challenge to the SBA‘s adoption of the bankruptcy exclusion pursuant to
The SBA has offered a reasoned explanation for the bankruptcy exclusion. As set forth in its papers, under normal circumstances, the SBA fulfills its statutory mandate to ensure that Section 7(a) loans are of sound value by performing individual credit reviews. (Dkt. 24 at 27). However, in order to ensure that PPP loans are processed expeditiously, as the CARES Act clearly intended, the SBA decided to streamline processing by imposing a bright line exclusion of debtors in bankruptcy. (Id.). The SBA explained in the Fourth Interim Rule that it had adopted this bright line rule because it had determined that “providing PPP loans to debtors in bankruptcy would present an unacceptably high risk of an unauthorized use of funds or non-repayment of unforgiven loans.” 85 Fed. Reg. at 23451. Regardless of the Court‘s view of the soundness of this determination as a matter of policy, it is sufficiently reasoned that the Court must defer thereto. See Penobscot Valley Hosp., 2020 WL 3032939, at *9 (“The SBA‘s bankruptcy exclusion was a reasonable effort to accommodate the conflicting policies committed to the SBA‘s care, and one that Congress might reasonably have sanctioned.“).
For all these reasons, the Court finds as a matter of law that the SBA did not exceed its statutory authority in adopting the bankruptcy exclusion and grants summary judgment to Defendants as to Plaintiffs’ request for a declaratory judgment to the contrary.
B. Compliance with 11 U.S.C. § 525(a)
The Court turns next to Plaintiffs’ claim that the SBA‘s adoption of the bankruptcy exclusion violated
The Second Circuit has held § 525(a) “does not promise protection against consideration of the prior bankruptcy in post-discharge credit arrangements” and that Congress did not intend to extend its protections “to cover loans or other forms of credit.” In re Goldrich, 771 F.2d 28, 30 (2d Cir. 1985) (holding that
Plaintiffs argue that a PPP loan is not a true loan, but should instead be understood as a grant. The Court disagrees. While it is true that a loan issued as part of the PPP is eligible for forgiveness if certain criteria are met, “[t]he existence of favorable terms and a unique feature (namely, forgiveness under specified circumstances) does not change the character of what the [Plaintiffs] want[] to obtain: a loan that might be forgiven by the lender.” Penobscot Valley Hosp., 2020 WL 3032939, at *11; see also Schuessler, 2020 WL 2621186, at *9 (“The record is clear that Congress created the PPP as an amendment to the SBA‘s pre-existing loan program and both the statute and agency regulations refer to the funds distributed as ‘loans.’ The PPP loans are made through private lenders and participants sign promissory notes, subject to SBA guarantees. While it is certainly true that Congress created the program to make the funds readily available, even where market
loans would not be, and the SBA has adopted regulations allowing the loans to be made with little-to-no underwriting, these attributes do not alter the fact that the program results in an actual loan. It is also true that Congress provided for loan forgiveness if the funds are used in certain ways, but the loan forgiveness is just that—it is a loan forgiveness. Moreover, forgiveness is conditioned on future events; if a recipient fails to use the funds in one of the delineated ways, the recipient must pay back the loan.“).
The Court further finds that even if PPP loans were properly characterized as “grants,” they are not grants that are similar to a license, permit, charter, or franchise. The Second Circuit has held that the “common qualities of the property interests protected under section 525(a) . . . are that these property interests are unobtainable from the private sector and essential to a debtor‘s fresh start.” In re Stoltz, 315 F.3d at 90 (finding public housing lease falls within the ambit of § 525(a)). “The exclusion of persons involved in bankruptcy from the PPP does not conflict with the fresh start or otherwise frustrate the operation of the Bankruptcy Code” and is “not similar to denying a debtor a license to operate in his chosen field and thereby denying the debtor the opportunity to pursue economic betterment.” Penobscot Valley Hosp., 2020 WL 30302939, at *14; see also Henry Anesthesia Assocs., 2020 WL 3002124, at *7 (“Through the PPP, the government agrees to guarantee loans for eligible borrowers, and agrees to forgive those loans if certain conditions are met. However, no legislative authority is required to contract for a loan, a loan guarantee,
For the reasons set forth above, the Court finds that the SBA did not run afoul of § 525(a) in adopting the bankruptcy exclusion. Accordingly, the Court grants summary judgment to Defendants as to Plaintiffs’ request for a declaratory judgment to that effect.
III. Motion for Preliminary Injunction
The Court turns next to Plaintiffs’ amended motion for a preliminary injunction. As a result of the Court‘s conclusions as to Plaintiffs’ claims that the SBA exceeded its statutory authority under the CARES Act and violated § 525(a) in adopting the bankruptcy exclusion, the only claim that could potentially warrant entry of a preliminary injunction is Plaintiffs’ claim that the SBA‘s actions were arbitrary and capricious pursuant to
A. Legal Standard
The standard for a preliminary injunction in the Second Circuit is as follows:
In general, district courts may grant a preliminary injunction where a plaintiff demonstrates irreparable harm and meets one of two related standards: either (a) a likelihood of success on the merits, or (b) sufficiently serious questions going to the merits of its claims to make them fair ground for litigation, plus a balance of the hardships tipping decidedly in favor of the moving party.
Otoe-Missouria Tribe of Indians v. N.Y. State Dep‘t of Fin. Servs., 769 F.3d 105, 110 (2d Cir. 2014). However, “[a] plaintiff cannot rely on the fair-ground-for-litigation alternative to challenge governmental action taken in the public interest pursuant to a statutory or regulatory scheme.” Id. In this context, the phrase “in the public interest” does not call upon the Court to make a value judgment, see Able v. United States, 44 F.3d 128, 131 (2d Cir. 1995) (applying higher standard in lawsuit challenging the military‘s “Don‘t Ask, Don‘t Tell” policy after finding “it is inappropriate for this court to substitute its own determination of the public interest for that arrived at by the political branches, whether or not there may be doubt regarding the wisdom of their conclusion“), and the higher standard applies even if the party requesting a preliminary injunction or temporary restraining order “seeks to vindicate a sovereign or public interest,” Oneida Nation of N.Y. v. Cuomo, 645 F.3d 154, 164 (2d Cir. 2011). The relevant inquiry is whether the governmental policy at issue was “implemented through legislation or regulations developed through presumptively reasoned democratic processes.” Able, 44 F.3d at 131. Here, Plaintiffs do not contest that they must satisfy the higher likelihood-of-success-on-the-merits standard. (See Dkt. 18 at 22-23).
B. Sovereign Immunity
Defendants contend that this Court lacks the authority to issue a preliminary injunction against the SBA, because the sovereign immunity waiver in the Small Business Act provides that “no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued against the agency or its property.” (Dkt. 24 at 16 (quoting
C. Likelihood of Success on the Merits
In order to succeed on their claim that the SBA acted arbitrarily and capriciously as defined in
[T]he agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.
State Farm, 463 U.S. at 43. The record before the Court is devoid of evidence sufficient to find that Plaintiffs are likely to succeed on such a claim. While Plaintiffs have identified purported internal inconsistencies in the SBA‘s interim rules (see Dkt. 18 at 11-12), they have not persuasively argued that these claimed inconsistencies are so significant as to warrant setting aside the agency‘s actions, particularly in light of the necessarily expedited manner in which SBA was operating. On the scant factual record regarding SBA‘s adoption of the bankruptcy exclusion, the Court cannot conclude that Plaintiffs are likely to be able to demonstrate that the SBA acted arbitrarily and capriciously.
D. Irreparable Harm
The Court further finds that Plaintiffs have not demonstrated that they will suffer irreparable harm in the absence of a preliminary injunction. “A showing of irreparable harm is the single most important prerequisite for the issuance of a preliminary injunction.” Faiveley Transp. Malmo AB v. Wabtec Corp., 559 F.3d 110, 118 (2d Cir. 2009) omitted). “Thus, if a party fails to show irreparable harm, a court need not even address the remaining elements of the test.” Monowise Ltd. Corp. v. Ozy Media, Inc., No. 17-CV-8028 (JMF), 2018 WL 2089342, at *1 (S.D.N.Y. May 3, 2018). “To establish irreparable harm, a party seeking preliminary injunctive relief must show that there is a continuing harm which cannot be adequately redressed by final relief on the merits and for which money damages cannot provide adequate compensation.” Kamerling v. Massanari, 295 F.3d 206, 214 (2d Cir. 2002). Additionally, “irreparable harm must be shown to be actual and imminent, not remote or speculative.” Id.
Here, Plaintiffs’ submissions regarding the financial impact of the COVID-19 pandemic and concomitant ban on church gatherings are vague. Plaintiffs point out that offerings have dropped off precipitously, but they do not state what percentage of their funding comes from parish assessments versus other sources. Plaintiffs further have not claimed that they need PPP funds in order to make payroll—indeed, there is no indication in Plaintiffs’ papers that they have not paid their employees’ salaries or that failure to obtain PPP funds would somehow cause Plaintiffs to cease to operate. Instead, Plaintiffs argue that being excluded from the PPP is in and of itself irreparable harm, based on their assertions that “the demand for PPP funds greatly exceeds the
CONCLUSION
For the reasons set forth above, the Court withdraws referral of this case from the Bankruptcy Court, grants summary judgment to Defendants on Plaintiffs’ claims that the SBA exceeded its statutory authority under the CARES Act by excluding debtors in bankruptcy from participation in the PPP and that the SBA violated
SO ORDERED.
ELIZABETH A. WOLFORD
United States District Judge
Dated: June 10, 2020
Rochester, New York