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AID Atlanta, Inc. v. United States Department of Health and Human Services

United States District Court, District of Columbia

October 29, 2018

AID ATLANTA, INC., Plaintiff,
v.
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendants.

          MEMORANDUM OPINION

          TREVOR N. MCFADDEN, U.S.D.J.

         AID Atlanta provides HIV testing, education, and prevention services to high-risk populations in Atlanta, Georgia. In 2011, the Department of Health and Human Services' Centers for Disease Control and Prevention (“CDC”) awarded the organization a grant to implement certain HIV prevention programs. When the project period ended in 2016, the CDC announced a new funding opportunity to provide similar services. AID Atlanta and over 130 other non-profits competed for funding. This time, AID Atlanta did not win a grant, and it now challenges the CDC's denial as arbitrary, capricious, and contrary to federal law in violation of the Administrative Procedure Act (“APA”). The Court finds that the agency's decision was reasonable, sufficiently explained, based on a robust evaluation process, and legally permissible. It will thus grant summary judgment for the Defendants.

         I.

         In September 2016, the CDC solicited grant applications through Funding Opportunity Announcement PS17-1704. Defs.' Mem. in Supp. of Mot. for Summ. J. 2, ECF No. 40 (“Defs.' Mem.”). The Announcement noted that the agency planned to allocate $50 million to about 30 community-based organizations over a five-year project period (2017 - 2022). Id. The goal of the program is to help the selected organizations provide HIV prevention services for high-risk populations across the country. Id. Available monies were divided into two service categories; only Category A is relevant here. Id. Any nonprofit or organization with a 501(c)(3) IRS status was eligible to apply, so long as the entity could “demonstrate that they have consistently provided HIV prevention or care services to the selected target population(s) for at least the last 24 months.” Admin. R. without Category A Redactions 30, ECF No. 41-1 (“J.A.”).

         The CDC evaluated applications using a three-phase review process. J.A. 40. In the first phase, all received applications were reviewed for completeness and eligibility. Id. Next, review panels scored eligible applicants based on several criteria, including the proposed project approach, performance measurement plans, and the organization's implementation capacity. J.A. 40-42. Applicants could score a maximum of 100 points in the Phase II review. Id. The total possible score for each evaluative criterion was published in the Announcement. Id. For example, an applicant's proposed approach could receive a maximum of 40 points, including up to ten points for the project overview and three points for outreach and recruitment plans. J.A. 40-41. Each Phase II review panel consisted of CDC volunteers who underwent an Objective Review Panel Reviewer training and certified that they had no conflicts of interest with any of the applicants. Explanatory Declaration to Accompany the Admin. R. Filing 4, ECF. No. 33-1 (“McCray Decl.”).

         In the final review phase, officials conducted a “pre-decisional site visit” for selected applicants. J.A. 43. Organizations could receive a maximum site visit score of 550 points. Id. During the site visit, CDC staff further assessed implementation capacity, met with project management staff and leadership, and conducted a technical review of application components. Id.

         Final funding determinations were based on applicants' total scores and the “CDC's funding preferences.” Id. For example, the agency desired to “ensure [an] equitable balance in terms of targeted racial or ethnic minority groups” and to achieve a “balance of funded applicants based on (1) burden of HIV infection within jurisdictions and (2) disproportionately affected geographic areas, as measured by CDC.” Id.

         The CDC combined the overall application scores and its funding preferences using a “Funding Selection Algorithm.” McCray Decl. at 7. See also J.A. 76-78; 100. To ensure geographically balanced funding, the Algorithm used HIV data from the CDC's “surveillance branch.” J.A. 100. This data suggested that, in 2013, 38.5% of the high-risk target population diagnosed with HIV resided in the South. J.A. 82. The agency thus recommended that no more than 40% of the available funding be allocated to organizations from southern states. Id. The agency's regional balancing meant that only one Category A service provider would be selected from Georgia. J.A. 84. See also J.A. 85 (showing that the CDC decided to select only one service provider per state from Virginia, South Carolina, Mississippi, and Louisiana).

         The Algorithm ranked each applicant's combined Phase II and III scores from highest to lowest, then applied the state and regional caps to determine which organizations CDC would fund. J.A. 100-101. From this analysis, 23 organizations were awarded Category A grant money. J.A. 117.

         AID Atlanta was one of over 130 organizations that submitted applications. Defs.' Mem. at 10. The Atlanta HARM Reduction Coalition, another Georgia-based provider, also applied for Category A funding. Because the Coalition's application scored higher than AID Atlanta's submission, and because the agency decided to fund only one Georgia provider, AID Atlanta was not awarded a grant. See J.A. 117. The Coalition received higher scores during both the Phase II objective review panel and the Phase III site visit. Id.

         AID Atlanta now contends that the CDC awarded funds “in an arbitrary and capricious manner and in bad faith.” Pl.'s Cross-Mot. for Summ. J. 7, ECF No. 42 (“Pl.'s Mem.”). AID Atlanta believes that it is the “most successful agency” that has participated in the CDC's HIV prevention programs, and that “the very fact that the CDC denied funding to its most successful partner calls into question the methodology used by the CDC is [sic] choosing its new partners.” Id. at 2. The organization also states that it has a “Federal assistance relationship” with the CDC and suggests that it was impermissibly defunded in violation of 45 C.F.R. § 75.207. Id. at 11.

         Naturally, the Federal Defendants disagree. They believe the CDC's funding decisions were based on a “thorough and fair evaluation of the applications submitted.” Defs.' Mem. at 10. Both sides have moved for summary judgment based on the administrative record.[1]

         II.

         A court must “hold unlawful and set aside agency action, findings, and conclusions” that it determines are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). The scope of this review is “narrow and a court is not to substitute its judgment for that of the agency.” Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43 (1983). Rather, it must determine whether the agency “examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.'” Id. (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)). An agency's decision is arbitrary and capricious “if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an ...


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