Opinion
Case No. 19-cv-62056-SINGHAL Case No. 19-cv-62032-SINGHAL Case No. 19-cv-81140-SINGHAL
2021-01-04
CITY OF PEMBROKE PINES, FLORIDA, Plaintiff, v. FEDERAL EMERGENCY MANAGEMENT AGENCY and Peter T. Gaynor, in his official capacity, Defendants. City of Deerfield Beach, Florida, Plaintiff, v. Federal Emergency Management Agency and Peter T. Gaynor, in his official capacity, Defendants. City of Lake Worth Beach, Florida, Plaintiff, v. Federal Emergency Management Agency and Peter T. Gaynor, in his official capacity, Defendants.
Michelle F. Zaltsberg, Baker Donelson Bearman Caldwell Berkowitz PC, Orlando, FL, Carolyn Stroud Ansay, Torcivia, Donlon, Goddeau & Ansay, P.A., Christy Lyn Goddeau, West Palm Beach, FL, Ernest B. Abbott, Pro Hac Vice, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Washington, DC, Wendy Huff Ellard, Pro Hac Vice, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Jackson, MS, for Plaintiff City of Lake Worth Beach, Florida. Anthony C. Soroka, Weiss Serota Helfman Cole, Bierman P.L., Boca Raton, FL, Ernest B. Abbott, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Washington, DC, Michelle F. Zaltsberg, Baker Donelson Bearman Caldwell Berkowitz PC, Orlando, FL, Wendy Huff Ellard, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Jackson, MS, for Plaintiff City of Deerfield Beach, Florida. Michelle F. Zaltsberg, Baker Donelson Bearman Caldwell Berkowitz PC, Orlando, FL, Samuel Stuart Goren, Goren Cherof Doody & Ezrol P.A., Fort Lauderdale, FL, Ernest B. Abbott, Pro Hac Vice, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Washington, DC, Wendy Huff Ellard, Pro Hac Vice, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Jackson, MS, for Plaintiff City of Pembroke Pines, Florida. Christopher Edward Cheek, U.S. Attorney's Office, Miami, FL, for Defendant Federal Emergency Management Agency, Acting Administrator of the Federal Emergency Management Agency.
Michelle F. Zaltsberg, Baker Donelson Bearman Caldwell Berkowitz PC, Orlando, FL, Carolyn Stroud Ansay, Torcivia, Donlon, Goddeau & Ansay, P.A., Christy Lyn Goddeau, West Palm Beach, FL, Ernest B. Abbott, Pro Hac Vice, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Washington, DC, Wendy Huff Ellard, Pro Hac Vice, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Jackson, MS, for Plaintiff City of Lake Worth Beach, Florida.
Anthony C. Soroka, Weiss Serota Helfman Cole, Bierman P.L., Boca Raton, FL, Ernest B. Abbott, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Washington, DC, Michelle F. Zaltsberg, Baker Donelson Bearman Caldwell Berkowitz PC, Orlando, FL, Wendy Huff Ellard, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Jackson, MS, for Plaintiff City of Deerfield Beach, Florida.
Michelle F. Zaltsberg, Baker Donelson Bearman Caldwell Berkowitz PC, Orlando, FL, Samuel Stuart Goren, Goren Cherof Doody & Ezrol P.A., Fort Lauderdale, FL, Ernest B. Abbott, Pro Hac Vice, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Washington, DC, Wendy Huff Ellard, Pro Hac Vice, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Jackson, MS, for Plaintiff City of Pembroke Pines, Florida.
Christopher Edward Cheek, U.S. Attorney's Office, Miami, FL, for Defendant Federal Emergency Management Agency, Acting Administrator of the Federal Emergency Management Agency.
ORDER GRANTING MOTION TO DISMISS CONSOLIDATED ACTIONS
RAAG SINGHAL, UNITED STATES DISTRICT JUDGE
Hurricane Wilma ravaged South Florida in 2005. Over fifteen years later, three Florida cities remain in a legal battle with the federal government over federal monies from the disaster-relief effort. In these consolidated actions, the Cities of Lake Worth Beach, Deerfield Beach, and Pembroke Pines (collectively, "Cities") seek judicial review of the U.S. Federal Emergency Management Agency's ("FEMA") determination that (1) the Cities’ administrative appeals were untimely and (2) as such, FEMA was without authority to consider the merits of the Cities’ administrative appeals. See generally Consol. Am. Compl. (DE [47]). FEMA moved to dismiss (DE [22]) the initial complaint. The Court referred the motion to Magistrate Judge Bruce E. Reinhart (DE [29]), who issued his Report and Recommendation ("R&R") (DE [39]). Judge Reinhart recommended the complaints be dismissed with leave to amend because, among other things, the Cities might be able to file an amended complaint that showed FEMA's determinations were not discretionary. The Court affirmed and adopted the R&R in full (DE [44]). The Cities have since filed the Consolidated Amended Complaint (DE [47]) and FEMA has again moved to dismiss (DE [50]).
The Court has reviewed the pleadings and is fully advised in the premises. The Cities still have not carried their burden in showing that FEMA's determinations were not discretionary—and they cannot do so. Therefore, for the following reasons, the motion to dismiss is GRANTED .
I. BACKGROUND
A. FEMA's Public Assistance Program
FEMA provides financial assistance to communities through its Public Assistance Program to help them recover from natural disasters. See 44 C.F.R. § 206.200 – .208. One of the many ways FEMA does so is through its grant assistance under the Stafford Act. See 42 U.S.C. § 5121 ; 44 C.F.R. § 206.203. The process is as follows: FEMA delivers the federal monies to a state agency (the "recipient"), and the state agency distributes the monies to the municipality (the "subrecipient"). See 44 C.F.R. § 206.202, .203.
In its motion to dismiss, FEMA refers to FDEM as the "grantee" and municipalities as "subgrantees." The Court will refer to them as the "recipient" and "subrecipient," respectively, consistent with the updated DHS regulation. See 44 C.F.R. § 203.201(m).
In Florida, the Florida Division of Emergency Management ("FDEM") is the intermediary—the recipient—between FEMA and the municipalities. Thus, the monies flow from FEMA through FDEM to the municipalities.
FDEM applies for, and receives, the monies from FEMA; FDEM awards the funds to the municipalities as subrecipients. FDEM also serves as grant administrator, including facilitating all communication between FEMA and the subrecipients. Consol. Am. Compl. ¶ 21; see also 44 C.F.R. § 206.202(b).
FEMA uses Project Worksheets ("PW") to document the scope of work and cost estimates for projects seeking public assistance funding. Consol. Am. Compl. ¶ 20. Once a PW is approved, FEMA obligates the federal funding for the work described in the PW. Id. ¶ 22. The obligated funds are deposited into a federal "Smartlink" account to which recipient has access. Id. ¶¶ 23–24. These funds are provided to the subrecipients by the recipient after review of documentation showing that the work performed was within the scope of the approved PW, at a reasonable cost and in compliance with applicable grant requirements, and that the subrecipient actually paid for the work. Id. ¶ 24.
B. Closeouts and Appeals
Section 705 of the Stafford Act governs disaster-relief grant closeout procedures. See 42 U.S.C. § 5205 (as codified). After the work authorized by the PW has been completed, FEMA executes a closeout process to ensure that all applicable administrative actions and required work have been completed, all contracts have been approved, and all costs expended were reasonable. See Consol. Am. Compl. ¶ 25. Based on the closeout findings, FEMA can deobligate funds. Separately, after this closeout process, the U.S. Department of Homeland Security Office of the Inspector General ("OIG") audits the work and recommends whether FEMA should deobligate funds. If funds are deobligated, FEMA electronically transfers those funds out of the Smartlink account, rendering the funds no longer available to the recipient or subrecipients.
Section 423(a) of the Stafford Act governs the appeal process. See 42 U.S.C. § 5189a(a) (as codified). All applicants for federal disaster relief assistance have a statutory right of appeal from "any FEMA decision regarding eligibility for, from, or amount of assistance [which] ... may be appealed within 60 days after the date on which the applicant for such assistance is notified of the award or denial of award of such assistance." Id. DHS regulations create a two-level appeal process: an appeal to the applicable FEMA regional administrator ("First Appeal"), and an appeal to the assistant administrator for the recovery directorate at FEMA headquarters ("Second Appeal"). See 44 C.F.R. § 206.206(b). The recipient must forward the subrecipient's appeal to the FEMA regional administrator within sixty days of receiving notice of the First Appeal. Id. § 206.206(c)(2). The regulations require the subrecipient to submit the appeal through the recipient. Id. § 206.206(a). In sum, the FEMA regional administrator decides the First Appeal and the assistant administrator for the disaster assistance directorate decides any appeal of the regional administrator's determinations. Id. § 206.206(b).
C. The Cities
1. City of Lake Worth Beach
Lake Worth Beach is a municipal corporation located in Palm Beach County. See Consol. Am. Compl. ¶ 13. Unlike the other two cities joining this lawsuit, Lake Worth Beach had the misfortune of suffering extensive damage not just from Hurricane Wilma (2005), but also Hurricanes Frances (2004) and Jeanne (2004). Id. ¶¶ 33–34. Because it was located in a designated disaster area and owned and operated facilities damaged by Hurricanes Frances, Jeanne, and Wilma, the city was eligible for disaster assistance funding under FEMA's Public Assistance Program. Id. ¶ 160. The city requested public funds under the Public Assistance Program, id. ¶ 162, and FEMA approved the request, id. ¶ 163.
On FEMA's closeout process, more than seven years after Hurricane Frances and six years after Hurricane Wilma, FEMA deobligated $3,119,435.94 based on a variety of alleged eligibility issues. Id. ¶ 171. The city received notice of FEMA's closeout and OIG audit deobligations by letters dated December 21, 2011 and May 16 and 17, 2013, respectively. Id. ¶¶ 177, 182. The city submitted its notice of First Appeal of the FEMA closeout deobligations to FDEM on February 7, 2012. Id. ¶ 179. FDEM forwarded the notice of First Appeal of the FEMA closeout deobligations on March 7, 2012. Id. ¶ 180. The city submitted its notice of First Appeal of the OIG audit deobligations on July 12, 2013. Id. ¶ 184. FDEM forwarded the notice of First Appeal of the OIG audit deobligations on July 19, 2013. Id. ¶ 185. According to the Amended Complaint, FDEM resubmitted the city's First Appeals on some date in 2014 "after FEMA had taken no action" on the appeals ... to ensure they were received." Id. ¶ 188.
From January 2015 through April 2018, FEMA began a process of sending the city three requests for information ("RFI"), seeking additional documentation, raising issues of the First Appeals’ timeliness, and informing the city that the record may not have contained sufficient information documenting that FDEM's compliance with the sixty-day statutory requirement. Id. ¶¶ 189–197.
2. City of Deerfield Beach
Deerfield Beach is a municipal corporation located in Broward County. See Consol. Am. Compl. ¶ 12. Wilma's damage was extensive in Deerfield Beach. See id. ¶¶ 79–82. Its public beaches suffered erosion between two and three feet, requiring about 32,000 cubic yards of material to rebuild. Id. ¶ 82. The city prepared four PWs totaling approximately $11 million. Id. ¶¶ 92, 97, 109.
In April 2011, the OIG issued an audit report recommending that FEMA deobligate almost $4 million—what OIG asserted was "ineligible" costs by Deerfield Beach. Id. ¶ 112. After numerous back-and-forth revisions of the PWs and the deobligation process, FEMA deobligated $1,936,131. Id. ¶ 122. Deerfield Beach received notice of the deobligations by letter from FDEM dated November 23, 2011. Id. ¶ 123. The city did not receive the letter "until sometime after November 23, 2011." Id. ¶ 124.
3. City of Pembroke Pines
Pembroke Pines is a municipal corporation located in Broward County. See Consol. Am. Compl. ¶ 11. Wilma left an estimated 900,000 cubic yards of debris strewn throughout the city. Id. ¶ 41. The city needed FEMA disaster monies for work in removing hazardous debris and stumps that posed immediate threats to life, public health, and safety. Id. ¶ 44.
On March 13, 2006, FEMA obligated $2,231,213.32, id. ¶ 47, and followed that with $1,361,600 on May 13, 2006, id. ¶ 50. The city completed the scope of work under its PWs and, within the applicable timeframes, requested reimbursement from FDEM for the costs it incurred in performing the work. Id. ¶ 51. After review of the city's documentation, FDEM drew down from FEMA's Smartlink account and reimbursed Pembroke Pines for the costs expended in accordance with the approved grant. Id. By 2012, the OIG recommended FEMA deobligate a total of $3,290,276.32 for the city's project costs related to its debris removal contracts, finding them excessive and ineligible for federal monies. Id. ¶¶ 53–56.
Pembroke Pines received notice of FEMA's deobligations on April 17, 2012, and June 1, 2012. Id. ¶ 57. The city submitted its first notices of First Appeal of the FEMA closeout deobligations to FDEM on June 11 and June 30, 2012. Id. ¶ 59. FDEM forwarded both First Appeals on September 5, 2012—sixty-eight and eighty-seven days later, respectively. Id. ¶¶ 60–63. From April 2015 through September 2017, FEMA sent the city two RFIs, to which the city timely responded. Id. ¶¶ 67–71. On March 2, 2018, FEMA denied the city's First Appeals due to FDEM's failure to submit them within sixty days of receipt in accordance with 44 C.F.R. § 206.206(c)(2). See Am. Compl. ¶ 72. Pembroke Pines submitted its Second Appeal on April 30, 2018. Id. ¶ 74. In its Second Appeal, the city argued primarily that FEMA's decision denied it its statutory right of appeal, and the decision was contrary to the law under the Stafford Act. Id. ¶ 75. FDEM forwarded the city's Second Appeal to the assistant administrator for the recovery directorate at FEMA headquarters on June 22, 2018. Id. ¶ 76. On August 14, 2018, FEMA denied the city's Second Appeal. Id. ¶ 77.
D. Procedural Posture
1. The Initial Complaints
The Cities initially brought separate actions, alleging various claims against FEMA under §§ 325, 423, 705(c) of the Stafford Act, 42 U.S.C. §§ 5165c(a)(1), 5189a, 5205(c). See, e.g. , Compl. (DE [1]). Particularly relevant here, in Count I, they alleged a "direct action" against FEMA under § 705(c) of the Stafford Act. The theory behind this count was that FEMA's deobligations of their funds ran contrary to the Stafford Act because a state or local government "shall not be liable for reimbursement or any other penalty" for Stafford Act grant payments if "(1) the payment was authorized by an approved agreement specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished." 42 U.S.C. § 5205(c). The Cities contended that the OIG audit report—those on which FEMA based its deobligations—did not question the reasonableness of the costs in each of the PWs; they merely found errors FEMA made in determining whether certain costs were eligible or that the Cities had failed to comply with aspects of federal grant procurement regulations.
2. The R&R
Judge Reinhart heard oral argument on the initial complaints and motions to dismiss. Following oral argument and briefing, the R&R recommended the Court dismiss the initial complaint with leave to amend. The R&R determined the following: First, the Cities’ complaints were shotgun pleadings that did not conform to Federal Rules of Civil Procedure 8(a)(2) and 10(b) because they alleged multiple causes of action in the same count. For instance, in Count I, the complaint alleged both a cause of action arising directly from the Stafford Act, 42 U.S.C. § 5205(c), and an action seeking judicial review of FEMA's violation of that statute.
Second, the R&R determined the complaints were due to be dismissed for lack of subject-matter jurisdiction for the following reasons: (1) There had not been final agency action on Lake Worth Beach's administrative appeal; (2) Congress has not waived sovereign immunity to allow a direct cause of action under § 5205(c) ; and (3) the remaining claims allege discretionary acts by FEMA for which sovereign immunity has not been waived. See R&R 9, 12–17.
The R&R recommended the complaints be dismissed with leave to amend because, among other things, the Cities "might" be able to file an amended complaint that showed FEMA's determinations were not discretionary. The Court affirmed and adopted the R&R in full.
3. The Consolidated Amended Complaint
The Cities have since filed the Consolidated Amended Complaint. Now, as FEMA points out in the motion to dismiss, the Cities abandoned their "direct action" theory. The Consolidated Amended Complaint now states fifteen causes of action—five by each of the three Cities:
Counts I, VI, and XI allege FEMA applied an illegal adopted policy contrary to § 325(a)(1) of the Stafford Act, 42 U.S.C. § 5165c(a)(1) ; Counts II, VII, and XII allege FEMA illegally applied a new or modified policy retroactively contrary to § 325(a)(2) of the Stafford Act, id. § 5165c(a)(2) ; Counts III, VIII, and XIII allege FEMA denied the Cities the right of appeal by illegally applying the provisions of 44 C.F.R. § 206.206(c)(2) ; Counts IV, IX, and XIV allege FEMA illegally recouped funds contrary to § 705(c) of the Stafford Act, 42 U.S.C. § 5205(c) ; and Counts V, X, and XV allege that an administrative appeal is not required under § 705(c) of the Stafford Act; thus, FEMA did not have the discretion to decline to abide by its provisions.
FEMA moves to dismiss, arguing that, despite being "cloaked" as a Stafford Act and an Administrative Procedure Act ("APA") claim, the Consolidated Amended Complaint runs into two propositions "too straightforward to ignore": (1) There is nothing wrong with the executive branch exercising power delegated by the legislature to develop an administrative apparatus around a statutory structure; and (2) There is nothing wrong with enforcing a "plainly written time limit." This is so, FEMA insists, even if past enforcement has been lax; even if there is discretion in enforcement; and even if there is discretion in enforcement of that time limit. In sum, FEMA argues the following: All counts should be dismissed for lack of subject-matter jurisdiction because if FEMA had the authority to adjudicate untimely appeals, it was exercising judgment grounded in policy, when it declined or chose to adjudicate untimely forwarded appeals.
Each side has briefed the issues presented below. The Court has thoroughly reviewed the arguments raised and authority cited therein. This order follows.
II. DISCUSSION
Neither party disputes the Cities’ compliance with the statutory and regulatory deadlines in their appeals; that is, there is no factual issue as to whether the Cities timely submitted their appeals to the state agency , FDEM. It is further undisputed that FEMA denied the appeals because FDEM failed to submit the appeals to FEMA in a timely fashion. For this, FEMA's position is that the Cities’ grievance is with FDEM—not FEMA. FEMA says it acted well within its discretion in denying the Cities’ appeals, despite the Cities’ insistence that FDEM was untimely.
Consequently, despite other tangential issues raised by both sides, the real issue here can be distilled down to one question: Were FEMA's decisions to deny the Cities’ appeals discretionary in nature? This issue is jurisdictional, thus dispositive. FEMA argues this Court lacks subject-matter jurisdiction because of the so-called discretionary-function exception to the APA's waiver of sovereign immunity. FEMA is correct.
A. Legal Standard on a Motion to Dismiss for Lack of Subject-Matter Jurisdiction
"A defendant may move to dismiss under Rule 12(b)(1) through either a facial or factual attack on subject matter jurisdiction." Jensen v. 1979 EGG HARBOR , 2017 WL 3773675, at *1 (S.D. Fla. Jan. 4, 2017). "[A] factual attack on a complaint challenges the existence of subject matter jurisdiction using material extrinsic from the pleadings, such as affidavits or testimony." Eldridge v. Pet Supermarket Inc. , 446 F.Supp.3d 1063, 1067 (S.D. Fla. 2020) (quotation omitted). The Court seems to enjoy greater discretion on a factual attack to subject-matter jurisdiction. See Lawrence v. Dunbar , 919 F.2d 1525, 1529 (11th Cir. 1990) ("[T]he trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case."). Facial attacks, on the other hand, afford a plaintiff "the similar safeguards as those present under Rule 12(b)(6)." Lady of Am. Franchise Corp. v. Cunningham , 2008 WL 11333325, at *2 (S.D. Fla. Nov. 26, 2008). "Generally, courts are confined to the four-corners of the complaint and any documents attached thereto." Id. Either way, whether the defendant raises a facial attack or a factual attack, a complaint must contain sufficient non-conclusory allegations to create a plausible inference that subject matter jurisdiction exists. Storms v. Haugland Energy Grp., LLC , 2018 WL 4347603, at *2 (S.D. Fla. Aug. 17, 2018).
The United States has sovereign immunity from lawsuits unless Congress expressly waives that immunity. Lehman v. Nakshian , 453 U.S. 156, 160–61, 101 S.Ct. 2698, 69 L.Ed.2d 548 (1981) ; Lane v. Pena , 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996) ("A waiver of the Federal Government's sovereign immunity must be unequivocally expressed in statutory text."). "It is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction." United States v. Mitchell , 463 U.S. 206, 212, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983). "Federal courts have jurisdiction over suits against the United States and its agencies only to the extent that sovereign immunity has been waived." Thompson v. McHugh , 388 F. App'x. 870, 872 (11th Cir. 2010). Where subject matter jurisdiction is challenged on the basis of sovereign immunity, the "[p]laintiff bears the burden of showing Congress's unequivocal waiver of sovereign immunity." St. Tammany Par., ex rel. Davis v. Fed. Emergency Mgmt. Agency , 556 F.3d 307, 315 (5th Cir. 2009).
B. Final-Agency Action as to City of Lake Worth Beach's Claims
First, a quick detour to discuss specifically Lake Worth Beach's claims. The R&R recommended dismissing Lake Worth Beach's claims because there was no final agency action, which is a prerequisite for judicial review. Holistic Candlers & Consumers Ass'n v. Food & Drug Admin. , 664 F.3d 940, 943 (D.C. Cir. 2012) ("If there was no final agency action ..., there is no doubt that appellant would lack a cause of action under the APA."). Congress has waived sovereign immunity to allow for limited judicial review under the APA. See 5 U.S.C. § 701. However, the APA limits the scope of judicial review to agency actions "reviewable by statute and final agency action for which there is no other adequate remedy in a court ...." 5 U.S.C. § 704. With exceptions not applicable here, judicial review is limited to final agency action. Holistic Candlers & Consumers Ass'n v. Food & Drug Admin. , 664 F.3d 940, 943 (D.C. Cir. 2012) ("If there was no final agency action ..., there is no doubt that appellant would lack a cause of action under the APA."). "To be considered ‘final,’ an agency's action: (1) ‘must mark the consummation of the agency's decision making process—it must not be of a merely tentative or interlocutory nature;’ and (2) ‘must be one by which rights or obligations have been determined, or from which legal consequences will flow.’ " U.S. Steel Corp. v. Astrue , 495 F.3d 1272, 1280 (11th Cir. 2007). Agency action becomes final and subject to judicial review "[w]hen an aggrieved party has exhausted all administrative remedies expressly prescribed by statute or agency rule." Darby v. Cisneros , 509 U.S. 137, 146, 113 S.Ct. 2539, 125 L.Ed.2d 113 (1993).
The R&R reasoned that when FEMA proposes to deobligate funds, the applicable regulations allow for two levels of appeal. 44 C.F.R § 206.206(c). Final agency action occurs only after those appeals are completed. Id. § 206.206(e)(3). Lake Worth Beach's initial complaint did not allege that FEMA has adjudicated its second appeal. Upon reviewing the Consolidated Amended Complaint, the city has remedied this deficiency. See Consol. Am. Compl. ¶¶ 210–211 ("On October 18, 2019, FEMA issued its Second Appeal Determination denying Lake Worth Beach's Second Appeal ...."). Thus, at least for purposes of this sub-issue, Lake Worth Beach has now pled sufficient facts to show final-agency action under the APA.
C. The Stafford Act's Discretionary-Function Exception as to the Cities’ Claims
As stated above, the real issue here can be distilled down to one question: Were FEMA's decisions to deny the Cities’ appeals discretionary in nature? If the answer to this question is "yes," then this Court lacks jurisdiction. This is so because Congress has not waived sovereign immunity to hear an APA claim that arises out of administration of the Stafford Act when the action in question is committed to agency discretion. In fact, to the contrary, Congress expressly reaffirmed sovereign immunity in such instances. 5 U.S.C. § 701(a)(2) ; see also 42 U.S.C. § 5148 ("The Federal Government shall not be liable for any claim based upon the exercise or performance of or the failure to exercise or perform a discretionary function or duty on the part of a Federal agency or an employee of the Federal Government in carrying out the provisions of this chapter."). And the Eleventh Circuit has long recognized the broad sweep of this so-called discretionary-function exception embodied in § 5148. See Rosas v. Brock , 826 F.2d 1004, 1010 (11th Cir. 1987) (dismissing statutory and regulatory claims against agency administering disaster unemployment benefits based on the Stafford Act's discretionary function exception).
Consistent with this, the R&R recognized that, in amending their complaints, in order to establish subject-matter jurisdiction, the Cities would somehow have to show that FEMA's decisions were not discretionary. Indeed, the Court adopted the R&R and dismissed the initial complaints because the Cities’ claims were all based on the incorrect premise that this Court has subject-matter jurisdiction to review FEMA's handling of untimely appeals. However, again, the Court granted leave to amend because it was at least conceivable that the Cities could re-file a complaint that showed FEMA's decisions were, as a matter of fact, not discretionary.
So, once again, to be clear: What is not at issue is whether the Court has subject-matter jurisdiction to review FEMA's decisions that "arise from a purely discretionary act" for which the federal government has not waived sovereign immunity. Rather, the issue here is whether the Cities have alleged—or can allege—facts that show FEMA did not act in a discretionary manner.
"In evaluating whether the discretionary-function exception applies, [the Court] first must determine exactly what conduct is at issue." Swafford v. United States , 839 F.3d 1365, 1370 (11th Cir. 2016). According to FEMA, because the appellate deadlines can be extended to permit the consideration of untimely appeals, then the decision not to consider an untimely appeal (implicitly declining to grant an extension) falls within its discretion. For support, FEMA cites to an out-of-circuit opinion that is relatively persuasive. See Graham v. Fed. Emergency Mgmt. Agency , 149 F.3d 997, 1002 n.4 (9th Cir. 1998) ("The decision whether to grant such an extension rests within the unreviewable discretion of FEMA.").
However, the more exacting approach is to apply the two-prong test established by the Supreme Court in Berkovitz v. United States , 486 U.S. 531, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988). While the R&R discusses and analyzes Berkovitz in a rather thorough manner, it is prudent to do so again here. For the first prong, the action must have been "a matter of choice for the acting employee." Id. at 536, 108 S.Ct. 1954. "Thus, the discretionary function exception will not apply when a federal statute, regulation, or policy specifically prescribes the course of action for an employee to follow. In this event, the employee has no rightful option but to adhere to the directive." Id. ; see also Rosas , 826 F.2d at 1008 (holding the discretionary-function exception did not apply to constitutional claim because complying with the Constitution is not discretionary).
The R&R reasoned that FEMA's decision whether to consider an untimely appeal appeared to be its prerogative—a choice. Further, according to the R&R, the Cities had not identified any legal authority to challenge this interpretation—that is, legal authority that required FEMA to consider the Cities’ untimely appeals. They still have not done so. In fact, the Court agrees with FEMA that the Consolidated Amended Complaint presents the same disputes as those in the initial complaints, just framed differently, and already dismissed. There is no meaningful difference between the initial complaints and the Consolidated Amended Complaint with regards to whether the Cities can meet their burden of proving that FEMA's decision whether to adjudicate an untimely appeal on the merits is not a discretionary function. The Cities still have failed to carry this burden.
Rather, the Cities argue, the analysis must end here at this first prong of Berkovitz because they actually "timely" filed their appeals. In their view, they timely submitted their appeals to FDEM, and the inquiry ends there. There is no "judgment or choice" to comply with their "right" to an appeal and to the appeals on their merits when appeals are timely pled.
The Court cannot accept this argument because it is based on the unfounded premise that the appeals were timely filed. The Stafford Act and its implementing regulations set forth a deadline by which appeals must be submitted to FEMA . If they are not submitted to FEMA by this deadline, they are untimely and can be properly denied on that procedural ground. Upon even a thorough review of the facts as alleged in in the Consolidated Amended Complaint, the Cities admit and acknowledge that the appeals were not timely submitted to FEMA . Consol. Am. Compl. ¶¶ 62–63, 125–27, 129. The Cities’ grievance may lie with FDEM, but there is no action against FEMA.
For the second prong of Berkovitz , if the decision involves an element of judgment, it must be the kind of judgment "that the discretionary function exception was designed to shield." Berkovitz , 486 U.S. at 536–37, 108 S.Ct. 1954. While this sounds self-evident and may appear tautological, it is grounded in logic. "The basis for the discretionary function exception was Congress’ desire to prevent judicial second-guessing of legislative and administrative decisions grounded in social, economic, and political policy." Id.
The Cities insist that FEMA's decision to deny their appeals was not based on any legitimate public-policy consideration. Thus, even with the deference that courts are to afford executive agencies, Berkovitz would not apply because FEMA's decision was not grounded in any bona fide policy, according to the Cities. The Court disagrees. Actually, in the Court's view, much like an Article III court of law has wide discretion to maintain and control its own docket, determining whether to extend an appellate deadline is precisely a judgment of the kind that the discretionary-function exception was designed to shield. It is for the agency, not this Court, to decide whether agency rules are to be toothless. FEMA in fact cites to several cases where courts found that determinations regarding the consideration of untimely appeals implicating things like the allocation of limited funds, systemic fairness, administrative regularity, finality, among other decisions regarding the funding of eligible projects, were exactly the types of policy decisions that are best left to the agencies without court intervention. Lazenberry v. Fed. Emergency Mgmt. Agency , 2014 WL 3053232, at *5 (M.D. Fla. July 7, 2014) (observing that "decisions relating to allocation of resources are discretionary"); see also Sunrise Vill. Mobile Home Park v. Phillips & Jordan, Inc. , 960 F. Supp. 283, 286 (S.D. Fla. 1996) ; People's Workshop, Inc. v. Fed. Emergency Mgmt. Agency , 2018 WL 1532196, at *7 (M.D. La. Mar. 28, 2018).
D. FEMA's Authority to Establish Regulatory Deadlines
The Cities’ claims also seem to assert that 44 C.F.R. § 206.206(c)(2) runs contrary to 42 U.S.C. § 5189a, because it interferes with an applicant's statutory right to an appeal. They seem to take issue with FEMA's promulgation of 44 C.F.R. § 206.206, framing it as FEMA having "inserted the state grantee into the appeals process" and requiring that appeals be timely submitted both to and by the recipient. But, as FEMA points out, the Cities have not presented any evidence that they challenged the regulation when it underwent notice and comment. Nor, years later, when FEMA deobligated certain funds, did the Cities sue FEMA under the APA for acting contrary to protections they now assert under § 705(c).
The Cities use the term "state grantee" in the Consolidated Amended Complaint. See Consol. Am. Compl. ¶ 30. As stated above, see supra , note 1, the Court will use the updated term "recipient" consistent with updated regulations.
FEMA responds by pointing to the fact that the deadlines in 44 C.F.R. § 206.206(c)(2) have "long been in place," and constitute an appropriate exercise of administrative authority. The Stafford Act does not describe the specific manner in which FEMA must implement its administrative appeal process, but rather authorizes FEMA to promulgate rules for such appeals. See 42 U.S.C. § 5189a(c) ("The President shall issue rules which provide for the fair and impartial consideration of appeals under this section."). Consistent with this, FEMA promulgated such rules at 44 C.F.R. § 206.206 specifying the manner in which administrative appeals are to be carried out in furtherance of the Stafford Act. FEMA's administrative appeal regulations set forth requirements for appeals processing and time limits for the parties to take certain actions, including the recipient's responsibility to forward to FEMA the municipality's appeal with its recommendation within sixty days of receipt. 44 C.F.R. § 206.206(c)(2).
Here, FDEM's failure to comply with FEMA's regulations by forwarding the Cities’ appeals to FEMA does not mean that FEMA violated the Cities’ right to an appeal. Indeed, FEMA followed its administrative appeal regulations as set forth in 44 C.F.R. § 206.206.
E. The Court Cannot Determine the Stafford Act Claims on their Merits
Finally, the parties disagree on whether the Court can—and should—determine the merits of the Cities’ Stafford Act claims. Section 705(c) of the Stafford Act bars FEMA from deobligating funding from a state or local government if: (1) the payment was authorized in an approved agreement specifying the costs, (2) the costs were reasonable, and (3) the purpose of the grant was accomplished. 42 U.S.C. § 5205(c).
FEMA argues this Court cannot determine the merits of the claims because the Cities present "neither a timely APA action challenging the deobligation nor a timely forwarded administrative appeal adjudicating the merits under § 705(c)." FEMA argues that the Cities could have challenged its deobligation decisions within six years of the initial deobligation or by a timely forwarded administrative appeal. On the other hand, the Cities argue that, under the APA, "final agency action for which there is no other adequate remedy in a court [is] subject to judicial review." 5 U.S.C.A. § 704. The regulations plainly state that FEMA's second appeal determination is the "final administrative decision of FEMA." 44 C.F.R. § 206.206(e)(3). The Cities insist that, accepting FEMA's argument, an applicant that seeks administrative review of a prohibited deobligation by timely filing an appeal can lose the opportunity for judicial review of that deobligation, as long as FEMA never decides the appeal on the merits.
The Court questions whether the Cities’ actions are timely. Any challenge to the substantive deobligation decisions was untimely as of the filing of the complaints. See 28 U.S.C. § 2401 ("[E]very civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues"). FEMA argues that any Stafford Act claims by the Cities accrued when the Cities received notice of FEMA's deobligation decisions. According to the allegations pled by the Cities, they were to bring claims by mid-2019, at the latest. See Resp. to Cities’ Not. 2–3 (DE [36]).
Nevertheless, the Court accepts the Cities’ argument that, in this case, the statute-of-limitation argument is inappropriate on a motion to dismiss. United States v. Tech Refrigeration , 143 F. Supp. 2d 1006, 1007 (N.D. Ill. 2001) ("A contention that the statute of limitations bars an action is an affirmative defense, meaning that the plaintiff is not required to negate it in its complaint."); Alexander Hamilton Corp. v. Leeson , 508 So. 2d 513 (Fla. 4th DCA 1987) (defendants should have raised their affirmative defense of statute of limitations in their answer and not via motion to dismiss, where complaint did not affirmatively and clearly show conclusive applicability of limitations defense as bar to action). Thus, timeliness of their claims aside, the Cities’ claims are not properly before the Court because the APA does not provide jurisdiction for a court of law to take up—in the first instance—a substantive issue that the agency declined to reach based on procedural grounds. See 5 U.S.C. § 704 ; see also, e.g. , Fla. Keys Citizens Coal., Inc. v. U.S. Army Corps of Eng'rs , 374 F. Supp. 2d 1116, 1126 (S.D. Fla. 2005) ("[T]he function of the court is to determine whether as a matter of law the evidence in the administrative record permitted the agency to make the decision it did, not to conduct its own investigation and substitute its own judgment for the administrative agency's decision."). In the words of the Eleventh Circuit, to do would be to "substitute our own judgment for that of the agency." Mendoza v. Sec'y, Dep't of Homeland Sec. , 851 F.3d 1348, 1353 (11th Cir. 2017).
The Cities also offer an alternate theory in their fifteen counts, asserting that FEMA has unlawfully withheld or unreasonably delayed a decision on the merits. However, the Court sees this merely as a repackaging of their merits claims. Again, the APA permits challenges "to compel agency action ... unreasonably delayed." 5 U.S.C. § 706(1). But "a claim under § 706(1) can proceed only where a plaintiff asserts that an agency failed to take a discrete agency action that it is required to take." Norton v. S. Utah Wilderness All. , 542 U.S. 55, 64, 124 S.Ct. 2373, 159 L.Ed.2d 137 (2004). What the Cities misapprehend is that "[a] ‘failure to act’ is not the same thing as a ‘denial.’ The latter is the agency's act of saying no to a request; the former is simply the omission of an action without formally rejecting a request." Id. at 63, 124 S.Ct. 2373.
Here, FEMA did not fail to act, and it did not withhold a decision. FEMA said "no" because the appeals at issue were not timely forwarded under the applicable regulation. As a result, there is no merits decision pending before the Court to consider under the APA and none has been unlawfully withheld.
Finally, even if this Court were to entertain the merits of the Cities’ Stafford Act claims, as an action filed under the APA, the Court would be required to give great deference to FEMA's already-adjudicated decision. Final agency decisions must be affirmed unless they are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, or if the action failed to meet statutory, procedural, or constitutional requirements. 5 U.S.C. § 706(2) ; Citizens to Preserve Overton Park v. Volpe , 401 U.S. 402, 415, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). The decision is entitled to a presumption of regularity and must be upheld as long as there is a rational basis for it. Overton Park , 401 U.S. at 415, 91 S.Ct. 814.
III. CONCLUSION
For the foregoing reasons, the Consolidated Amended Complaint must be dismissed. Because FDEM did not timely submit the Cities’ appeals, the Court lacks subject-matter jurisdiction. Neither the APA nor the Stafford Act waive sovereign immunity for the fifteen claims arising out of FEMA's discretionary judgment in declining to consider the substance of untimely appeals. The Cities have failed to state a claim on which relief may be granted and the Consolidated Amended Complaint must be dismissed. It is therefore
ORDERED AND ADJUDGED that Motion to Dismiss (DE [50]) is GRANTED . The Consolidated Amended Complaint (DE [47]) is DISMISSED WITH PREJUDICE . The Clerk of Court is directed to CLOSE this file and DENY any pending motions as moot.
DONE AND ORDERED in Chambers, Fort Lauderdale, Florida this 4th day of January 2021.