Huang v. Small Business Administration

Background

Jingli Huang sued the Small Business Administration (SBA) over the denial of his business’s application for an Economic Injury Disaster Loan under the CARES Act. The court had previously screened Huang’s original complaint and dismissed it with leave to amend in part. Among other things, the court ruled that the business seeking the loan had not been named as the plaintiff and that Huang had not stated a claim under the Administrative Procedure Act’s provision concerning agency action that was allegedly unlawfully withheld.

Huang filed an amended complaint on July 20, 2022, but the court had not yet screened it when he filed his second motion for a temporary restraining order on July 28, 2022. His requested emergency relief sought to prevent the SBA from enforcing policies he said caused the loan denial and to require the SBA to reinstate and process the application.

Reasons for Denial

The court applied the same standard used for a preliminary injunction. That standard requires a showing of likely success on the merits, likely irreparable harm without emergency relief, a favorable balance of hardships, and consistency with the public interest. The court did not need to address all of those factors because it found that Huang had not established the required points concerning notice and likely success.

First, Huang had not met the procedural requirements for a temporary restraining order issued without notice to the opposing party. Although he submitted an affidavit describing the pandemic’s effects on his business’s financial stability, he did not describe his own efforts to notify the defendants. The certificates of service showed only that he had filed materials through the court’s electronic filing system, which did not notify the defendants because they had not been served or appeared.

Second, the court found that Huang had not shown a likely chance of success. The EIDL application was filed by Huang’s business, but Huang remained the only named plaintiff. The amended complaint did not name the business or plead facts explaining why the business did not need to assert the claim itself. The court stated that the governing statute authorizes loans to eligible businesses and other listed entities, not generally to individual business owners. Based on the allegations, the court found that Huang had not shown that he personally had suffered the direct and independent injury needed to bring claims based on the business’s denied application.

Third, the court found that Huang had delayed in seeking emergency relief. The SBA had denied the business’s final appeal on May 3, 2022. Huang filed the lawsuit on June 8 and his first temporary-restraining-order motion on July 1. The court treated the delay as an additional reason to deny the second motion, while acknowledging Huang’s statements that he had sought assistance from members of Congress and the Federal Pro Se Program.

Disposition

The court denied the second motion for a temporary restraining order without prejudice to filing a noticed motion for a preliminary injunction. The court stated that no further motions for a temporary restraining order would be permitted. It also stated that the amended complaint remained subject to screening under 28 U.S.C. § 1915 before the court would consider any noticed motion for a preliminary injunction. Judge Beth Labson Freeman signed the order.