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February 29, 1996


The opinion of the court was delivered by: RICHEY


 Before the Court in the above-captioned case are the parties cross Motions for Summary Judgment, and replies and oppositions thereto. Upon careful consideration of the parties' pleadings, the entire record herein, and the law applicable thereto, the Court shall grant the defendants' Motion for Summary Judgment.

 The plaintiff, Joan Blocker, owns and operates a for-profit day care center that provides a sectarian curriculum. On or about March 15, 1995, she submitted a loan application to the Glenville Bank & Trust Company (the "Bank") in order to refinance existing loans and to refurbish the day care center. Because she had insufficient collateral to guaranty the loan, the Bank submitted to the Small Business Administration ("SBA") a Lender's Application for Guaranty seeking an SBA guaranty for the plaintiff's loan under the SBA's pilot Low Documentation Loan Program, pursuant to which the SBA provides loan guarantees to certain businesses which would not otherwise qualify for financing, provided that they meet specific criteria.

 Notwithstanding that the Bank characterized her as a "good risk" and a qualified candidate for an SBA backed guaranty, the SBA denied the plaintiff's application. On the basis of the plaintiff's loan application materials and a description therein of the day care's curriculum as "Christian-based," the SBA determined the child care center was an "Organization[] promoting religious objectives." Under 13 C.F.R. § 120.101-2 (a), such organizations are ineligible to receive government assistance.

 However, two days after the SBA denied the plaintiff's guaranty application, the Bank reevaluated its position and, noting the child care center would go bankrupt without the loan, approved the plaintiff's loan application without the SBA guaranty. The plaintiff therefore received essentially the same loan that she applied for pursuant to the Low Documentation Program. The plaintiff alleges, however, that the delay in processing her loan guaranty application and its ultimate denial caused her to incur overdraft charges.

 The plaintiff claims that the denial of the guaranty violated her rights under the Free Speech, Free Exercise and Establishment Clauses of the First Amendment, the Due Process Clause and Equal Protection guarantee of the Fifth Amendment, the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb-1, and the Administrative Procedures Act. As relief therefor, the plaintiff seeks an injunction and a declaratory judgment that 13 C.F.R. § 120.101-2(a) is unconstitutional.

 The SBA argues that, because the plaintiff ultimately received the loan for which the SBA guaranty was to act as security, the plaintiff was not injured and thus lacks standing to challenge the regulation. In a related argument, the defendants maintain that the plaintiff's overdraft charges are not fairly traceable to the denial of the guaranty and therefore cannot be grounds for standing to bring suit. The SBA argues in the alternative that the plaintiff's claims are moot because she received the same loan that the SBA would have guaranteed.


 "No principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases and controversies." Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 37, 48 L. Ed. 2d 450, 96 S. Ct. 1917 (1976). "The 'case or controversy' requirement defines with respect to the Judicial Branch the idea of separation of powers on which the Federal Government is founded." Allen v. Wright, 468 U.S. 737, 750, 82 L. Ed. 2d 556, 104 S. Ct. 3315 (1984). The doctrines of standing, mootness, ripeness and political question "that have grown up to elaborate that requirement are founded in concern about the proper--and properly limited--role of the courts in a democratic society." Id. (citing Warth v. Seldin, 422 U.S. 490, 498, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975)). These are threshold inquiries that "must be answered by reference to the . . . Article III notion that federal courts may exercise power only in the last resort and as a necessity." 104 S. Ct. at 3325 (quoting Chicago & Grand Trunk R. Co. v. Wellman, 143 U.S. 339, 345, 36 L. Ed. 176, 12 S. Ct. 400 (1892)).

 As grounds for her standing to bring suit, the plaintiff alleges that she incurred overdraft charges and thus incurred financial loss as a result of the SBA's delay and ultimate denial of the loan guaranty. The Court concludes that this simply does not present a case or controversy within the meaning of Article III. Even assuming that the plaintiff in the case at bar had some legal right to the loan guaranty, the Article III courts are directed in the first regard to determine whether a justiciable controversy exists. Pursuant to that doctrine, the defendants assert that the plaintiff's claims are subject to dismissal or summary judgment on the grounds that her claims are moot and that she lacks standing to sue. Because the Court concludes that the plaintiff's claims no longer present a live controversy and the plaintiff's injury is not fairly traceable to the action of the defendants the Court shall grant the defendants' Motion for Summary Judgment.


 The mootness doctrine constitutes part of the "case or controvery" limitation on a federal court's jurisdiction. In general, a case is moot "when the issues presented are no longer 'live' or the parties lack a cognizable interest in the outcome." United States Parole Comm'n v. Geraghty, 445 U.S. 388, 396, 63 L. Ed. 2d 479, 100 S. Ct. 1202 (1980) (quoting Powell v. McCormack, 395 U.S. 486, 496, 23 L. Ed. 2d 491, 89 S. Ct. 1944 (1969)). A case may become moot in one of two ways. First, the wrongful conduct may pass without the possibility of repetition. United States v. Alaska S.S. Co., 253 U.S. 113, 64 L. Ed. 808, 40 S. Ct. 448 (1920). Second, the ...

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