REBUILD NORTHWEST FLORIDA INC v. FEDERAL EMERGENCY MANAGEMENT AGENCY

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF FLORIDA

PENSACOLA DIVISION

REBUILD NORTHWEST FLORIDA,

INC.,

Plaintiff,

v. CASE NO. 3:17cv441-MCR/HTC

FEDERAL EMERGENCY

MANAGEMENT AGENCY,

BROCK LONG, Administrator of

Federal Emergency Management

Agency; FLORIDA DIVISION OF

EMERGENCY MANAGEMENT,

Defendants.

/

ORDER

The Federal Emergency Management Agency (“FEMA”) previously

obligated hazard mitigation grant funds to assist the State of Florida in amounts

initially totaling over $400 million after four major hurricanes impacted the State in

2004 and 2005. Plaintiff Rebuild Northwest Florida, Inc. (“Rebuild”) was a

subgrantee, approved to receive more than $7 million under the various grants for

wind retrofit projects designed to make homes less vulnerable to future storms. The

time for Rebuild to perform under its subgrants expired in 2016, but additional

original grant money ($16,758,60,916) remained available to the State for

distribution to subgrantees until 2017, when FEMA decided to deobligate those

remaining funds.1 As a result, those remaining original grant funds are now

unavailable to the State for distribution to future projects.

Rebuild brings suit, under the Administrative Procedure Act (“APA”), 5

U.S.C. §§ 702-706, and the Robert T. Stafford Disaster Relief and Emergency

Assistance Act (the “Stafford Act”), 42 U.S.C. §§ 5121-5208, asserting in the

Second Amended Complaint that the deobligation decision was improper agency

action. Rebuild seeks declaratory relief to establish that the grant funds in the

amount of $16,758,60,916 remain available to the State for distribution and, in turn,

to Rebuild as a subgrantee. FEMA moves to dismiss, see Fed. R. Civ. P. 12(b)(1),

(6), challenging the Court’s subject matter jurisdiction and alternatively arguing that

the complaint fails to state a claim. ECF No. 47. After careful review, the motion

will be granted and the case dismissed for lack of jurisdiction.

I. Background2

In the span of a little over one year, Florida was hit by four major hurricanes:

Hurricane Charley in August of 2004, Hurricanes Ivan and Jeanne in September of

1 For ease of reference, the Court is collectively referring to the federal Defendants––

FEMA and its administrator, Brock Long––under the term “FEMA.”

2 The facts are taken from the Second Amended Complaint, documents incorporated by

reference that are attached to the original Complaint, and portions of the administrative record

submitted by FEMA in its first motion to dismiss, ECF No. 16, and incorporated by reference in

the pending motion. Documents attached to the pleadings and central to the claims are properly

considered on a motion to dismiss. See SFM Holdings, Ltd. v. Banc of America Securities, LLC,

600 F.3d 1334, 1337 (11th Cir. 2010). It is also proper to consider matters outside the complaint

on a Rule 12(b)(1) motion. See Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990).

2004, and Hurricane Wilma in October of 2005. At the request of Florida’s Governor

and pursuant to the president’s discretionary authority under the Stafford Act, 42

U.S.C. § 5170, then-President George W. Bush declared each hurricane a “major

disaster” and directed FEMA to provide Florida with disaster relief under the Hazard

Mitigation Grant Program (“HMGP”), 42 U.S.C. § 5170c. To carry out this

directive, FEMA and the State of Florida then executed “FEMA-State Agreements”

for each hurricane, by which FEMA agreed to grant the State through the Florida

Division of Emergency Management (“FDEM”) (grantee) “funds in the amount

specified on the obligating document.” ECF No. 1-1 at 7. The FEMA-State

Agreements imposed “binding obligations” on both parties and subgrantees under

the Stafford Act’s implementing regulations.3 ECF Nos. 1-1, 1-2, 1-3, 1-4 (Exhibits

A, B, C, D); see also 44 C.F.R. §§ 206.44(a), 206.430, et seq. Relevant terms in the

agreements included the following: the grant award activities were to be “completed

within the time period prescribed in FEMA regulations and on the obligating

documents;” FEMA was authorized to grant extensions of the performance time;

FEMA was permitted to assert remedies for noncompliance as provided under

federal regulations; and either party could terminate the agreement on seven days’

notice, e.g., ECF No. 1-1 at 9, 15, 16.

3 The FEMA-State Agreement “imposes binding obligations on FEMA, States, their local

governments, and private nonprofit organizations within the States in the form of conditions for

assistance which are legally enforceable.” 44 C.F.R. § 206.44(a).

The HMGP implementing regulations required FDEM to develop plans for

administering and managing the grant funds. See 44 C.F.R. § 206.437. The relevant

FDEM “State Administrative Plans” included terms and procedures by which

eligible subgrantees could apply to the State for funds to be used in approved

mitigation work, subject to final approval by FEMA.4 The State Administrative

Plans (and also subsequent subgrants) were subject to a Period of Performance

(“POP”) limitation that required all HMGP funds to “be disbursed, and all activities

completed, not later than three years from the date of the grant award (obligations)

to the State.” ECF Nos. 1-5 at 10-11; 1-6 at 11 (emphasis added). FDEM could

request extensions, provided “[t]he total POP should not exceed five years.” ECF

Nos. 1-5 at 10-11; 1-6 at 11. Under these terms, which were consistent with the

pertinent federal regulations, any “funds not disbursed by [FDEM] within the

approved POP [would] be deobligated and returned to FEMA.”5 ECF Nos. 1-5 at

11; 1-6 at 11. FEMA approved the State Administrative Plans in 2005 and 2006.

FDEM subsequently entered into Subgrant Agreements (cost-reimbursement

4 Prior to the award of HMGP funds, a state is required to develop a State Administrative

Plan, which is a “brief but substantive plan documenting the State’s process for the administration

of the Hazard Mitigation Grant Program.” 44 C.F.R. § 206.437(c), (d). FEMA approved FDEM’s

plans for Hurricanes Charley, Ivan, and Jeanne on January 4, 2005, and for Hurricane Wilma on

May 31, 2006. ECF Nos. 1-5, 1-6 (Exhibits E, F).

5 The cited regulation, 44 C.F.R. § 13.50, which required the grantee to “immediately

refund to the Federal agency any balance of unobligated (unencumbered) cash advanced that is

not authorized to be retained for use on other grants,” was “removed and reserved” as of December

19, 2014. See 79 FR 75871-01, 2014 WL 7235775.

agreements) with Rebuild, based on its qualifying HMGP proposals. Under the

Subgrant Agreements, Rebuild’s performance deadlines, with authorized

extensions, expired in 2016, and those subgrants are not at issue.6

In 2017, more than ten years after the major disaster hurricane declarations at

issue in 2004 and 2005, FEMA decided to “deobligate” the remaining original

unused HMGP funds previously obligated to the State under the FEMA-State

Agreements but which were never disbursed. According to Rebuild, this totaled

$16,758,609, as of June 27, 2017.7 See ECF No. 1-7. Rebuild then filed this suit,

challenging FEMA’s deobligation decision.

In the Second Amended Compliant, Rebuild references the Stafford Act as the

authorization for the binding agreements and the HMGP funds and cites the APA as

6 The agreements between FEMA and FDEM, which incorporated federal regulations,

provided an administrative appeal procedure, allowing applicants and subgrantees to appeal

decisions made regarding their proposals or the provision of funds. E.g., ECF No. 1-5 at 25-26

(allowing subgrantees to dispute material facts on which a grantee made a decision on a proposal);

see also 44 C.F.R. § 206.440 (stating “[a]n eligible applicant, subgrantee, or grantee may appeal

any determination previously made related to an application for or the provision of Federal

assistance” within 60 days after receipt of notice of the action being appealed). Rebuild’s

mitigation project POPs were set to expire on June 6, 2009 (Hurricane Ivan); May 31, 2010

(Hurricane Wilma); and October 13, 2012 (Hurricanes Charley and Jeanne). ECF Nos. 1-12, 1-13,

1-14, 1-15 (Exhibits L, M, N, O). Rebuild received extensions that ended in June 2016. Rebuild’s

requests for additional extensions after that date were denied by FEMA through two levels of

administrative appeal. However, Rebuild concedes that these subgrants and related POP deadlines

and extensions are not at issue in this case.

7 As to Hurricane Wilma, Rebuild is challenging a decision to “constructively deobligate”

funds.

the basis for jurisdiction and the waiver of sovereign immunity.8 Rebuild alleges

that FDEM filed administrative appeals challenging FEMA’s deobligation

decisions, which were denied, and that, although the deobligated funds were not yet

disbursed to any subgrantee, Rebuild is the only subgrantee eligible to perform work

on approved HMGP projects. Rebuild further alleges, and FDEM admits in its

Answer, that FDEM intends to subgrant all remaining available HMGP funds to

Rebuild to complete eligible projects. Thus, Rebuild seeks a declaratory judgment

stating that FEMA’s deobligation decision was improper, and that grant money in

the amount of $16,758,609 remains available to FDEM for use in eligible projects

“as it sees fit, consistent with the applicable State Administrative Plan and the

applicable FEMA-State Agreements.” ECF No. 43. Rebuild further seeks a

declaration that it is the only eligible subgrantee and requiring FEMA’s

administrator, Brock Long, to make the funds available to the State. FEMA argues

that the Court lacks jurisdiction over the claims.9

8 The Court previously dismissed the Complaint with leave to amend to include a more

definite statement because Rebuild’s claims and the basis for jurisdiction were unclear.

9 FEMA attached the declaration of Jacky Bell, FEMA’s Region IV Deputy Director of

Mitigation, to the motion to dismiss, who states that the amounts FEMA deobligated were in fact

much smaller than the over $16 million alleged in the Second Amended Complaint and that most

of the grants designated to Rebuild’s projects have been closed out. In response, Rebuild argues

that the declaration is misleading, because it refers to funds already awarded to Rebuild, whereas

the Second Amended Complaint challenges the deobligation of funds that FEMA has not yet

disbursed to Rebuild. Rebuild argues that Bell’s statement is irrelevant because “it may be that

the figures provided in her declaration refer to the amount of funds already awarded to Rebuild,

not the amount of obligated funds remaining under the FEMA-State Agreements.” ECF No. 50 at

8. The Court agrees and has not considered the declaration in ruling on the motion.

II. Legal Standard

The limitations placed on a federal court’s subject-matter jurisdiction serve

the important institutional interest of keeping federal courts within the bounds

prescribed by the Constitution and Congress. Allapattah Servs., Inc. v. Exxon Corp.,

362 F.3d 739, 753 (11th Cir. 2004) (quoting Ruhrgas AG v. Marathon Oil Co., 526

U.S. 574, 583 (1999)). Thus, “[i]t 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 (1983).

When a party challenges the court’s subject-matter jurisdiction pursuant to

Rule 12(b)(1), the challenge may be either facial or factual. McElmurray v. Consol.

Gov’t of Augusta – Richmond Cnty, 501 F.3d 1244, 1251 (11th Cir. 2007) (citing

Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir. 1981)10). A “facial attack”

requires the court to take the allegations of the complaint as true for purposes of the

motion and consider whether the “plaintiff has sufficiently alleged a basis for

subject-matter jurisdiction.” Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir.

1990) (citing Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir.

1980)); see also Fed. R. Civ. P. 8(a) (requiring only a short and plain statement of

the grounds for the court’s jurisdiction and a short and plain statement of the claim

10 See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc) (adopting

the case law of the former Fifth Circuit before October 1, 1981, as precedent in this Circuit).

and relief sought). A “factual attack,” on the other hand, challenges “the existence

of subject-matter jurisdiction in fact, irrespective of the pleadings, and matters

outside the pleadings, such as testimony and affidavits are considered.”11 Lawrence,

919 F.2d at 1529 (citing Menchaca, 613 F.2d at 511). FEMA brings a factual attack,

relying on parts of the administrative record. Therefore, the Court is not required to

accept the allegations of the complaint as true.

III. Discussion

FEMA is a federal agency, mandated to provide federal relief to victims of

natural disasters when a disaster is declared by the president. Sovereign immunity

shields the federal government and its agencies from suit in the absence of an express

waiver. FDIC v. Meyer, 510 U.S. 471, 475 (1994). The Stafford Act does not

include its own waiver of sovereign immunity. To the contrary, the Stafford Act

expressly precludes a challenge to discretionary functions of the agency, stating:

“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 . . . in carrying out the provisions of this chapter.” 42 U.S.C. § 5148; see

Burgos-Montes v. Municipality of Yauco, 294 F. Supp. 2d 141, 142 (D.P.R. 2003)

(stating, Congress has “passed legislation expressly immunizing the agency from

11 The federal Defendants also move to dismiss for failure to state a claim, but because the

Court dismisses on jurisdictional grounds, there is no need to address Rule 12(b)(6).

suit”). Notably, the Eleventh Circuit has stated that, “[b]y enacting [§] 5148,

Congress indicated its intent to preclude judicial review of all disaster relief claims

based upon the discretionary actions of federal employees.” Rosas v. Brock, 826

F.2d 1004, 1008 (11th Cir. 1987). The Eleventh Circuit in Rosas acknowledged that

not every claim under the Stafford Act involves discretionary agency action, and so,

not every claim is barred; that said, the court made clear that an agency’s eligibility

decision or similar act for which the “Act does not contain any guidelines” involves

“the sort of exercise of discretion that Congress intended to insulate from judicial

review.”12 Id. at 1008-09.

Rebuild argues that Rosas does not apply because it is not challenging a

discretionary decision of FEMA but, rather, agency action contrary to the FEMA-

State Agreements and State Administrative Plans, which are considered to have

created binding obligations under the Stafford Act. Rebuild argues that by these

agreements, FEMA created a binding obligation to provide all of the grant money to

the State, which is enforceable under the APA. In the circumstances presented, the

Court disagrees. While these agreements undoubtedly contain binding obligations

between the parties (FEMA and the State), they are legally binding on terms that do

12 The Eleventh Circuit in Rosas also found, in the context of disaster unemployment

assistance that, under § 5148, Congress did not preclude judicial review of allegedly

unconstitutional agency action but did preclude judicial review of an eligibility claim, which was

discretionary. Consequently, the district court in Rosas lacked subject matter jurisdiction over the

eligibility claim. 826 F.2d at 1008-09.

not apply here. Rebuild does not identify any provision in the Stafford Act or the

applicable agreements that precludes FEMA from deobligating grant funds after

more than ten years have passed, as in this case. The agreements themselves were

terminable on seven days’ notice by either party, and were also subject to POP limits,

which should only total five years from the date of the original grant.13 Moreover,

the State Administrative Plans expressly acknowledged that funds not disbursed by

the State within the POP would be deobligated, ECF Nos. 1-5 at 11; 1-6 at 11, and

no administrative or judicial review is provided in the agreements for challenging

such a decision.14 In fact, nothing in the Stafford Act HMGP program, the applicable

federal regulations, or the agreements prohibits a discretionary decision by FEMA

to deobligate federal grant funds after more than ten years from the date of the

13 Rebuild states it is not suing on the contracts or to appeal the POP extension denials, but

rather to enforce regulatory funding obligations implemented by the agreements. If it were suing

for damages or specific performance on a breach of contract claim, the Court would lack

jurisdiction because under the Tucker Act, the Federal Court of Claims has exclusive jurisdiction

over contractual disputes with the United States for claims of damages of $10,000 or more. See

Alabama Rural Fire Ins. Co. v. Naylor, 530 F.2d 1221, 1229–30 (5th Cir. 1976) (holding the Court

of Claims had exclusive jurisdiction over contract claims against the United States) (binding in

this Circuit under Bonner).

14 Again, under the agreements, “[t]he total POP should not exceed five (5) years[.]” ECF

No. 1-6 at 11. Rebuild maintains that this suit does not involve any challenge to the denial of a

POP extension and asserts that FEMA mischaracterizes its claims by arguing that the case involves

such denials. Rebuild argues that its period of performance for the funds challenged could not

have expired given that it has never commenced activities with regard to the disputed funds,

because the funds have never been disbursed or otherwise made available to Rebuild. This

argument, however, ignores the fact that the agreements include grant award limits, capping the

time period for a grant award to five years from the date of the initial grant award to the State. See

ECF No. 1-6 at 11 ¶F.1. The fact that FEMA extended deadlines beyond this time, which are not

challenged, illustrates its discretionary authority.

original grant. Because the deobligation decision is a discretionary function,15 the

Stafford Act does not provide a waiver of sovereign immunity or a basis for subject

matter jurisdiction. See 42 U.S.C. § 5148.

Rebuild argues nonetheless that the Court has jurisdiction under the APA to

enforce FEMA’s Stafford Act contractual funding obligations, relying on Bowen v.

Massachusetts, 487 U.S. 879 (1988), for support. The Court finds this reliance

misplaced. In Bowen, the Supreme Court found APA jurisdiction to review a final

agency order refusing reimbursement to a state for expenses under a Medicaid

program. While it is accurate to say that here, similar to Bowen, the plaintiff seeks

to enforce a funding obligation rather than to obtain money damages, Bowen is easily

distinguishable. The decision in Bowen was premised on the existence of a federal

statute that mandated reimbursement of the costs at issue––the state had incurred

costs and was seeking to enforce its right to reimbursement under the statute. See

487 U.S. at 885-86, 893-94, 900-01. That is a far cry from this case, where the

15 An agency decision is discretionary, and thus precluded under the Stafford Act, where

(1) a choice or judgment is involved in the performance of the function and no statute mandates a

particular course of action, and (2) the activity is grounded in social, economic, or political activity.

Berkovitz v. United States, 486 U.S. 531, 536-37 (1998). Rebuild argues that a decision as to

whether deobligation is a discretionary agency action under these factors goes beyond the pleading

stage. The Court disagrees and notes that it has considered each of the Berkovitz factors and

concludes that they are satisfied, especially in this situation where it is clear that all performance

terms of the agreements related to the original grant funds had expired. See generally Freeman v.

United States, 556 F.3d 326, 340 (5th Cir. 2009) (stating “decisions about when, where, and how

to allocate limited resources within the exigencies of an emergency are the types of decisions that

the discretionary function exception [of the Stafford Act] was designed to shelter from suit”).

disputed grant funds had never been disbursed to Rebuild or disallowed, and nothing

in the Stafford Act mandated payment of the funds after expiration of the period of

performance. Rebuild’s argument assumes that FEMA’s funding obligations

continued in perpetuity and were not subject to a discretionary deobligation. As

noted above, however, deobligation in the circumstances alleged was expressly

authorized under the FEMA-approved State Administrative Plans, in which FDEM

agreed that, “in keeping with the program regulations . . . any funds not disbursed

by the grantee within the approved POP will be deobligated and returned to

FEMA.”16 ECF Nos. 1-5 & 1-6 at 11. Consequently, the APA similarly provides

no grounds for jurisdiction or waiver of sovereign immunity for the discretionary

action challenged.17 See 5 U.S.C. § 701(a), 702; see also McClendon v. Ga. Dep’t.

of Community Health, 261 F.3d 1252, 1256 (11th Cir. 2001) (“Because the Eleventh

Amendment represents a constitutional limitation on the federal judicial power

16 To the extent the agreements can be construed as requiring deobligation after that time,

the decision would not be discretionary. But if that were the case, the Second Amended Complaint

would fail to state a claim because on its face, FEMA’s action would not be contrary to the

documents containing the binding obligation but instead would be in accordance with them.

17 Although sovereign immunity is waived under the APA for claims in which a plaintiff

seeks non-monetary relief based on final agency action, nothing in the APA “confers authority to

grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief

which is sought.” 42 U.S.C. § 702. The Court has found that the Stafford Act forbids the

declaratory relief Rebuild seeks, and thus relief under the APA is likewise precluded under its

terms. The Declaratory Judgment Act does not provide an independent basis for subject matter

jurisdiction either, nor does it waive sovereign immunity. Rebuild does not argue otherwise.

established in Article III . . . federal courts lack jurisdiction to entertain suits that are

barred by the Eleventh Amendment.”).

As an alternative ground for dismissal, the Court notes a concern with

Rebuild’s standing to bring suit. Rebuild has made only a conclusory allegation that

it is aggrieved by the challenged agency action. Rebuild does not allege that it

applied for these remaining HMGP funds or that it incurred any costs for which the

statute or the governing documents require reimbursement.18 To the contrary,

Rebuild’s argument that it was never given a POP deadline for these remaining funds

because the funds were not yet disbursed tellingly illustrates its lack of a concrete

injury. On Rebuild’s allegations, it has lost only the opportunity to apply for these

funds, which is a speculative injury at best. A speculative, as opposed to concrete,

injury is not grounds for standing. See Salcedo v. Hanna, No. 17-14077, 2019 WL

4050424, at *2 (11th Cir. Aug. 28, 2019) (“A concrete injury must be de facto; that

is, it must actually exist, as opposed to being hypothetical or speculative.”) (internal

marks omitted). As the Eleventh Circuit has recently reiterated, “the requirement of

18 FDEM admitted in its Answer that Rebuild is eligible and if the funds were available, it

would approve further funding to Rebuild. However, Rebuild has no enforceable right to more

funds. And in any event, any application would need approval not only from FDEM but also

FEMA before Rebuild had any claim to the remaining HMGP funds. “Eligibility determinations,

the distribution of limited funds, and other decisions regarding the funding of eligible projects are

inherently discretionary.” St. Tammany Parish ex rel. Davis v. FEMA, 556 F.3d 307, 325 (5th Cir.

2009).

injury in fact is a hard floor of Article III jurisdiction.” Id. at *3 (quoting Summers

v. Earth Island Inst., 555 U.S. 488, 497 (2009)).

Accordingly, the Federal Emergency Management Agency and Brock Long’s

Motion to Dismiss, ECF No. 47, is GRANTED. Rebuild’s claims against the

federal Defendants are DISMISSED WITHOUT PREJUDICE19 for lack of

subject-matter jurisdiction and any claim against FDEM is DISMISSED as MOOT.

Rebuild’s request for oral argument is DENIED. The Clerk is directed to tax costs

against the Plaintiff and close the file.

DONE AND ORDERED this 30th day of September 2019.

M. Casey Rodgers

M. CASEY RODGERS

UNITED STATES DISTRICT JUDGE

19 “[A] jurisdictional dismissal is entered without prejudice.” Salcedo, 2019 WL 4050424,

at *8, n.12 (citing Stalley ex rel. United States v. Orlando Reg’l Healthcare Sys., Inc., 524 F.3d

1229, 1232 (11th Cir. 2008)).