Commercial – Government agency fails to dismiss suit over reimbursement demand

Where a company challenged a government agency’s demand for reimbursement of grant monies, the agency motion to dismiss the suit was denied. The suit did not seek monies from the federal government; instead it sought declaratory relief to be released from the need to reimburse the agency of its grant disbursements.

Background

Recast Energy LLC sued the U.S. Trade and Development Agency, or USTDA, to challenge the agency’s demand for $400,619 in reimbursements in connection with a grant Recast received. The complaint raises claims pursuant to the Administrative Procedure Act, or APA, and the Due Process Clause of the Fifth Amendment. Defendant now seeks to dismiss the suit for lack of jurisdiction.

Tucker Act

The Tucker Act does not divest this court of jurisdiction over plaintiff’s claims. At its core, the complaint does not seek money damages from the USTDA. Instead, it seeks forward-facing, declaratory relief to be released from the need to reimburse the agency of its grant disbursements. Courts interpreting the Tucker Act have repeatedly held that a claim does not arise under the Act where “Plaintiff is seeking to be released from an obligation to pay money to the United States,” as opposed to “seeking any money from the United States.”

On defendant’s theory, the relevant sources of law for this suit are contractual, and “a contract is afforded a well-
established presumption that monetary damages are available.” The court disagrees. Plaintiff’s claims do not assert any purported failure to comply with contractual terms under the grant agreements and plaintiff does not seek money from the United States.

Instead, plaintiff’s claims arise under the APA and the Fifth Amendment’s Due Process Clause, neither of which obligate the federal government to pay money damages. Nor does the fact that plaintiff’s claims relate to its financial benefits under the grant agreement render them contractual actions.

Plaintiff’s claim seeks to be released from its obligation to pay money to the United States; and, if it prevails, no monies will be due from the United States. Accordingly, the Tucker Act does not apply.

APA

Defendant argues that even if the APA governs, the court lacks subject matter jurisdiction because plaintiff does not challenge a final agency action. The relevant agency action here is USTDA’s determination that plaintiff must reimburse part of its grant payment. Defendant does not contest that the USTDA’s determination was the “consummation of the agency’s decisionmaking process.”

Instead, defendant avers that the action lacks legal consequences because despite its final determination on the pending debt, “USTDA, on its own, cannot compel Plaintiff to pay the debt” and must certify the debt to the Treasury Department. Accordingly, per defendant, “no rights or obligations of Plaintiff have been determined” until it certifies the debt to Treasury.

The court, however, concurs with plaintiff that the agency’s “decision to decertify the alleged debt-which occurred during the pendency of this lawsuit and a mere three days before the Motion was filed-should not be deemed to defeat finality.” As a practical matter, the USTDA’s conclusions in the audit report alone impose a financial obligation onto plaintiff from which legal consequences flow.

Further the finality of an agency action is determined at the time the action was filed. At the time the complaint was filed, defendant had certified the debt to Treasury. Defendant’s voluntary decision to decertify the debt says nothing about the ongoing dispute for declaratory relief on the USTDA’s conclusions in the audit report. Therefore the court finds that it has subject matter jurisdiction under the APA.

Defendant’s motion to dismiss denied.

Recast Energy LLC v. U.S. Trade and Development Agency, Case No. 1:25-cv-216, March 26, 2026. EDVA at Alexandria (Giles). VLW 026-3-151. 8 pp.

Full-Text Opinion

VLW 026-3-151
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