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Terry v. U.S. Small Business Administration

March 29, 2010

GARY IVAN TERRY, PLAINTIFF,
v.
U.S. SMALL BUSINESS ADMINISTRATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge

MEMORANDUM OPINION

The Court has before it the motion by defendants U.S. Small Business Administration ("SBA") and SBA Administrator Karen Mills to dismiss the pro se complaint filed by Gary Ivan Terry.*fn1 In this action, plaintiff seeks to (1) hold unlawful and set aside agency action under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-706, by requiring defendants to reverse their 2000 decision declaring plaintiffs' two SBA-guaranteed small business loans to be in default, and (2) obtain declaratory and injunctive relief "to prevent further infringement of [plaintiff's] property rights and violations of 605(a) of the Contract Disputes Act" ("CDA"), 41 U.S.C. §§ 601-613. (Compl. ¶ 9; see also id. at 107.) For the reasons discussed herein, defendants' motion to dismiss will be granted for lack of subject matter jurisdiction,*fn2 and plaintiff's other outstanding motions will be denied as moot.*fn3

BACKGROUND

Plaintiff, a resident of North Carolina, is the president and chief executive officer of Scat, Inc. ("Scat"), a North Carolina corporation that plaintiff formed in 1994. (Compl. ¶¶ 3-4, 33.) Scat manufactures above-ground storage systems for petroleum substances. (Id. ¶ 4.) Less than a year later, plaintiff incorporated 1103 Norwalk Street, L.L.C. under North Carolina law. (Id. ¶ 35.) Plaintiff financed both of these enterprises through small business loans obtained from, respectively, North Carolina-based secured creditors Branch, Bank & Trust, Co. ("BB&T") and RBC Bank ("RBC"). (Id. ¶¶ 33, 35.) The SBA guaranteed 85% of both loans, which were also secured by plaintiff's personal guarantees. (Id.)

In July 1995, the U.S. General Services Administration ("GSA") awarded a procurement contract to plaintiff and Scat. (Compl. ¶ 36.) On September 8, 1997, a GSA contracting officer "issue[d] a final decision establishing a claim [against plaintiff and Scat] for a contract debt of $545,161.20" for overpayment on duplicate orders ("the overpayment claim").*fn4 (Id. ¶ 45.) This claim determination allegedly failed to inform plaintiff "of [his] due process rights to appeals under § 605(a)" of the CDA. (Id.) In October 1999, the United States sued plaintiff and Scat in the U.S. District Court for the Western District of Missouri in a civil action arising from the purported overpayments. (Id. ¶¶ 67-68.) See Complaint, United States v. Scat, Inc., No. 99-CV-1053 (W.D. Mo. Oct. 29, 1999). Plaintiff, who was then represented by counsel, raised the affirmative defense that the government's dispute was subject to the CDA and, consequently, subject to the exclusive jurisdiction of the Court of Federal Claims. (Compl.¶ 80.)*fn5 On June 21, 2000, GSA notified plaintiff that it was canceling his contract. (See id. ¶ 108.) On June 27, plaintiff, the SBA, and BB&T agreed to a six-month deferment on plaintiff's loans at his request. (Id. ¶ 191.)

In July 2000, federal grand jury proceedings were instituted in the Western District of Missouri. (Compl. ¶¶ 120-133; see also Pl.'s Mem. of P. & A. in Supp. of Mot. for Leave to File Am. Compl. ("Pl.'s Mem. for Leave to File") at 2.) Plaintiff alleges that federal prosecutors engaged in a variety of misconduct to procure the indictment, including the concealment of "critical 'exculpatory' material evidence," such as the fact that the GSA contracting officer failed to notify plaintiff of his administrative appellate rights, which in turn, according to plaintiff, rendered the overpayment determination invalid and therefore "not a proper basis" upon which to prosecute plaintiff. (Compl. ¶¶ 128-133.) On August 3, 2000, plaintiff and Scat were indicted on 19 counts of false claims, theft of government property, false statements, and obstruction of justice. (Id. ¶ 134.) See United States v. Terry, No. 00-CR-308 (W.D. Mo. filed Aug. 3, 2000). According to plaintiff, the indictment was also "based on the merits of the determinations made within the [GSA] contracting officer's final administrative decision or order" related to the overpayment claim, and thus the prosecutors indicted him without probable cause. (Id. ¶¶ 135-136.) Plaintiff also alleges that his privately retained defense attorney colluded with the prosecutor to "devise[] a scheme to conceal[]" the contracting officer's supposed failure to apprise plaintiff of his right to administratively appeal the overpayment determination. (Id. ¶ 155; see also id. ¶ 153.)

On September 26, 2000, plaintiff appeared with his attorney before a magistrate judge and pled guilty to one count of false statements and one count of obstruction of justice. (See Compl. ¶¶ 158, 177, 182.) He alleges that as with the indictment, "[t]he evidence in support of said pleas of guilty was based upon the merits of" the GSA contracting officer's overpayment determination. (Id. ¶ 183.) In October, the SBA informed BB&T and RBC that plaintiff had been indicted. (Id. ¶¶ 192, 199.) Following plaintiff's plea, BB&T requested the SBA's concurrence to issue a demand letter to Scat "[d]ue to the indictment, and the past due status of SCAT's September 27, 2000 payment...." (See Pl.'s Opp'n to Mot. to Dismiss ("Pl.'s Opp'n"), Ex. 1.) Shortly thereafter, the loans were declared to be in default. (See Compl. ¶ 201.) BB&T and RBC, "with the knowledge and concurrences of SBA, foreclosed on all of their assets," leading plaintiff to file for bankruptcy protection. (Id. ¶ 203.)

On September 26, 2001, plaintiff appeared with his attorney before the district judge for sentencing. (Compl. ¶ 235.) He was sentenced to 15 months' incarceration followed by three years of supervised release and ordered to pay restitution. See Judgment, Terry, No. 00-CR-308 (W.D. Mo. Oct. 5, 2001). (See also Compl. ¶¶ 256, 259.) On June 20, 2002, the district court denied plaintiff's motion under 28 U.S.C. § 2255 to vacate or correct his sentence and to withdraw his plea, and the U.S. Court of Appeals for the Eighth Circuit denied his request for a certificate of appealability. See Order at 1, Terry, No. 02-CV-64 (W.D. Mo. May 29, 2002), appeal dismissed, No. 02-2637 (8th Cir. Oct. 4, 2002).*fn6 (See also Compl. ¶¶ 260-271 (discussing "post-conviction petition").) From 2001 through 2009, plaintiff also contacted his elected officials to seek redress for his alleged grievances. (Compl. ¶¶ 272-317.)

On March 5, 2010, plaintiff filed the instant 375-paragraph pro se complaint, a motion for appointment of counsel, and a motion for an emergency temporary restraining order, declaratory judgment and preliminary or permanent injunction ("TRO motion"). Counts I through VI allege unlawful agency action under 5 U.S.C. § 706(1) and (2) and seek the invalidation of the SBA's determination in 2000 that plaintiff's two SBA-guaranteed small business loans were in default, as well as the reinstatement of those loans to active status. (See id. ¶¶ 330, 337, 345, 352, 359, 366.) Count VII "seek[s] declaratory judgment and injunctive relief that Defendants['] decisions to declare [plaintiff's] two (2) SBA's guaranteed small business loans to be in default [were] ultra vires and therefore void ab initio." (Id. ¶ 375.)

On March 9, defendants moved to dismiss the complaint and opposed the TRO motion. On March 10, the Court issued an order in accordance with Fox v. Strickland, 836 F.2d 507 (D.C. Cir. 1988),advising plaintiff to respond to defendants' motion to dismiss by March 26, 2010.*fn7 On March 12, the Court issued an order denying the TRO motion and the motion for appointment of counsel because plaintiff had not shown a likelihood of success on the merits or irreparable injury. (See Mar. 12, 2010 Order on TRO Mot.) On March 17, plaintiff moved to recuse the United States Attorney's Office for the District of Columbia. On March 22, plaintiff moved to vacate the order denying his TRO motion. On March 24, plaintiff moved for leave to file an amended complaint.

(denying all pending motions for lack of jurisdiction), aff'd, No. 03-3223 (8th Cir. Dec. 8, 2003), pet. for reh'g denied, No. 03-3223 (8th Cir. Jan. 15, 2004), cert. denied, 542 U.S. 929 (2004) (mem.).

ANALYSIS

I. STANDARD OF REVIEW

Under Fed. R. Civ. P. 12(b)(1), which governs motions to dismiss for lack of subject matter jurisdiction, "a plaintiff bears the burden of establishing by a preponderance of the evidence that the Court possesses jurisdiction." Martens v. United States, No. 05-CV-1805, 2007 WL 2007580, at *1 (D.D.C. July 6, 2007). "[I]n passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject matter or for failure to state a cause of action, the allegations of the complaint should be construed favorably ...


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