Huang v. Small Business Administration

Background

Since April 1, 2020, Huang had been seeking an Economic Injury Disaster Loan under the Coronavirus Aid, Relief, and Economic Security Act. Huang said the Small Business Administration denied his application based on what it considered an unsatisfactory credit history. After the agency changed its loan criteria, Huang submitted reconsideration requests and contacted the agency and the Internal Revenue Service. The agency denied his final appeal on May 3, 2022.

Huang moved for a temporary restraining order. He asked the court to prevent the Small Business Administration from enforcing policies that he said caused the denial of his application and to require the agency to reinstate and process it.

Legal standard

A temporary restraining order uses the same standard as a preliminary injunction. The requesting party must generally show a likely win on the merits, likely irreparable harm without the order, that the balance of hardships favors the requested relief, and that the relief would serve the public interest. A temporary restraining order without notice to the opposing party also requires specific facts showing immediate and irreparable harm before the opposing party can respond, along with a written certification concerning notice efforts.

Court’s reasoning

The court identified several problems with Huang’s motion. First, the docket did not show that Huang notified the defendants. He also did not submit an affidavit describing immediate and irreparable harm or state what efforts he had made to notify the defendants.

Second, the court found that Huang had not shown a likelihood of success. Shortly before this order, the court had screened his original complaint under 28 U.S.C. § 1915 and found that it failed to state a claim for relief. The court had dismissed all claims in that complaint, and there was no operative complaint on file. The court stated that Huang could not rely only on arguments in his motion papers; he needed to file an amended complaint and submit supporting evidence.

Third, the court found that Huang had not shown irreparable harm. He had not submitted an affidavit describing serious consequences from the loan denial and could not rely on bare assertions in his motion. The court also found that the loan process had lasted two years and that Huang waited nearly two months after the denial of his final appeal before seeking emergency relief. The court said this delay weighed against finding irreparable harm.

Disposition

Judge Beth Labson Freeman denied Huang’s motion for a temporary restraining order without prejudice to filing a noticed motion for a preliminary injunction. The court required Huang to file an amended complaint first. The amended complaint would be served on the defendants and screened under 28 U.S.C. § 1915 before the court considered further motions. The court stated that Huang’s deadline to file the amended complaint remained July 28, 2022.