Purpose Built Families Foundation, Inc. v. USA, et al

[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-14057
____________________
PURPOSE BUILT FAMILIES FOUNDATION, INC.,
Plaintiff-Appellant,
versus
UNITED STATES OF AMERICA,
SECRETARY OF VETERANS AFFAIRS,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 0:22-cv-60938-MGC
____________________
Before WILLIAM P RYOR , Chief Judge, and JILL PRYOR and M ARCUS ,
Circuit Judges.
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2 Opinion of the Court 22-14057
WILLIAM P RYOR , Chief Judge:
This appeal requires us to decide whether the withdrawal of al-
legedly unlawful notices to a federal grant recipient rendered moot
the grantee’s claims for relief under the Administrative Procedure
Act. See 5 U.S.C. §§ 701–706. Purpose Built Families Foundation is
a Florida nonprofit and federal grantee that serves veterans and
their families. In 2022, the Department of Veterans Affairs notified
the Foundation that activities and payments under five grants
would be terminated or withheld. The Foundation sued the Secre-
tary of Veterans Affairs under the Act and received a temporary
restraining order. The Department then withdrew the challenged
notices, and the Secretary moved to dismiss the action as moot.
The district court granted the motion. Because the Foundation’s
claims are moot, we affirm.
I. BACKGROUND
Purpose Built Families Foundation is a Florida nonprofit that
serves veterans and their families. The Foundation receives grants
under the Federal Grant and Cooperative Agreement Act. See 31
U.S.C. §§ 6301–6309. The Department of Veterans Affairs provides
these grants to reduce veteran homelessness in South Florida and
provide other vital support services. The Foundation received three
grants under the Department’s Supportive Services for Veteran
Families program and two grants under its Grant and Per Diem
program.
In 2021, the Department conducted an onsite review or finan-
cial audit of the Foundation’s management of the Supportive
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22-14057 Opinion of the Court 3
Services grants. The Department issued a report questioning cer-
tain expenses that the Foundation had incurred. The report identi-
fied “major fiscal mismanagement activities.” The Department
also began reviewing the Foundation’s management of the Per
Diem grants in March 2022. That review was set to continue on
May 17, 2022.
On May 11, 2022, the Department took adverse action in sepa-
rate letters about the five grants that it had awarded the Founda-
tion. One letter addressed the three Supportive Services grants.
The other addressed the two Per Diem grants.
The Supportive Services letter notified the Foundation that the
Department would “terminate” the three grants “upon 7-days re-
ceipt of this notice.” The letter cited the audit results, listed “major
fiscal mismanagement” decisions by the Foundation, stated that
the Foundation was “in violation of ” its grant agreement, and said
that, as a result, the Department would “terminate” the grants.
The Per Diem letter notified the Foundation that, based on the
“preliminary results” of the Per Diem review, the Department was
“immediately withhold[ing]” activities and payments under the
two grants. The withholding would “remain[] in effect pending”
further review of the Foundation’s grant activities. The letter also
“serve[d] as an intent to suspend” all Foundation activity related to
the Per Diem grants. Suspension would take effect 30 days after
May 11 “unless results of the [Department] audit” proved that the
Foundation was complying with its grant obligations. The Depart-
ment enumerated “[p]reliminary findings” that suggested potential
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4 Opinion of the Court 22-14057
noncompliance and raised concerns about the Foundation’s fitness
to execute the Per Diem grants. The letter stated that the prelimi-
nary review proved that the Foundation was “in danger of materi-
ally failing to comply” with its grantee obligations; that as the “re-
view continue[d],” the Department would “engage” the Founda-
tion to “ensure efficient resolution”; and that the Per Diem grants
might be “continued” “[u]pon completion” of the review.
The Foundation sued the Secretary in the district court and
moved for a temporary restraining order and preliminary and per-
manent injunctive relief. The Foundation argued that the May 11
letters were arbitrary and capricious and deprived the Foundation
of due process of law. See 5 U.S.C. § 706(2). The Foundation also
sought declaratory relief.
To “preserv[e] the status quo” for the grants, the district court
entered a temporary restraining order until May 19. The court also
set a hearing for the same day. At that hearing, the parties agreed
to an extension of the temporary restraining order, and the district
court referred the matter to a magistrate judge to decide whether
the order should be “dissolved, extended[,] or converted into a pre-
liminary injunction.” See 28 U.S.C. § 636(b)(1)(A)–(B). The hearing
before the magistrate judge was scheduled for June 2022.
On May 19, 2022, the Department withdrew its May 11 notice
of intent to terminate the Supportive Services grants. In a letter to
the Foundation, the Department granted the Foundation’s “re-
quest for additional time” to contest the findings conveyed in the
May 11 notice. The Department “withdr[ew]” the notice, gave the
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22-14057 Opinion of the Court 5
Foundation 30 days to submit a response to the audit, and promised
to “issue a final decision,” and to notify the Foundation of that de-
cision, upon “receipt and review” of any submitted materials.
On May 25, 2022, the Department also withdrew its May 11 no-
tice of withholding and intent to suspend the Per Diem grants. In
a letter to the Foundation, the Department granted the Founda-
tion’s “request for an opportunity to review the final [a]udit report”
and to “respond to any issues” that the Foundation wished to con-
test. So the Department “withdr[ew]” its notice and promised to
send the Foundation a copy of the final audit report and to “advise
as to corrective action, if any, that may be required.”
The Secretary then moved to dismiss the complaint on two
grounds. First, the Secretary argued that the district court lacked
subject-matter jurisdiction under the Administrative Procedure Act
because the challenged letters were not “‘final’ within the meaning
of 5 U.S.C. § 704.” See Nat’l Parks Conservation Ass’n v. Norton, 324
F.3d 1229, 1236 (11th Cir. 2003). The Secretary stated that the De-
partment had “reversed” the challenged actions—the May 11 let-
ters—and that the reversal deprived the district court of jurisdic-
tion. Second, the Secretary argued that the Foundation’s claims
were moot because they challenged decisions that “no longer ex-
ist[ed].”
Before the district court ruled on the motion to dismiss, the
magistrate judge recommended that the Foundation’s motion for
a preliminary injunction be denied. The magistrate judge con-
cluded that because the Foundation was, after the Department
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6 Opinion of the Court 22-14057
withdrew the notices, only “under the threat of losing its funding,”
any injury was not irreparable. The magistrate judge declined to
address whether the Foundation’s claims were moot.
The district court granted the Secretary’s motion to dismiss and
denied as moot the report and recommendation. Focusing on the
text of the May 11 letters and applying the two-part test for finality
of agency action, see Bennett v. Spear, 520 U.S. 154, 177–78 (1997),
the district court ruled that the May 11 notice of intent to termi-
nate the Supportive Services grants was a final agency action but
that the May 11 notice of withholding of the Per Diem grants was
not. The district court then ruled that the withdrawal of the May
11 notice of intent to terminate “render[ed] [that notice] a nonfinal
agency action, and this case moot.” Last, the district court rejected
the Foundation’s argument that the Act allows district courts to en-
join nonfinal agency action. See 5 U.S.C. § 705.
The Secretary moved to supplement the record on appeal with
three letters that the Department sent the Foundation in early
2023, after the district court’s decision. See FED . R. A PP. P. 10(e)(3).
The first letter notified the Foundation of the Department’s intent
to terminate the Per Diem grants in 30 days. The second letter ter-
minated the Per Diem grants after considering and rejecting the
Foundation’s objections to the prior notice. And the final letter no-
tified the Foundation of the Department’s intent to terminate the
Supportive Services grants in seven days. The Secretary argues that
the “existence and content” of these letters support his mootness
argument. The Foundation responds that the new letters have “no
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22-14057 Opinion of the Court 7
bearing” on the decision under review or, alternatively, that they
are “fatal” to the Department’s mootness argument. We carried the
motion with the case.
II. STANDARD OF REVIEW
We review de novo a dismissal for lack of subject-matter jurisdic-
tion. Myrick v. Fulton County, 69 F.4th 1277, 1294 (11th Cir. 2023).
III. DISCUSSION
The Foundation argues that the Department’s withdrawal of
the May 11 notices could not and did not divest the district court
of jurisdiction. The Secretary responds that the withdrawal of the
letters “rendered them nonfinal and the case moot.” We agree that
the case is moot. Because we may address jurisdictional issues in
any order, Acheson Hotels, LLC v. Laufer, 144 S. Ct. 18, 21 (2023), we
resolve the appeal on this ground alone, and we do not address
whether the May 11 notice of intent to withhold payments under
the Per Diem grants was a final agency action. See 5 U.S.C. § 704.
We begin by granting the Secretary’s motion to supplement.
We may supplement our record “in the interests of justice” when
the new material will aid our review, Schwartz v. Millon Air, Inc., 341
F.3d 1220, 1225 n.4 (11th Cir. 2003), especially of jurisdictional is-
sues, see Cabalceta v. Standard Fruit Co., 883 F.2d 1553, 1555 (11th Cir.
1989); Corbett v. TSA, 930 F.3d 1225, 1231 & n.1 (11th Cir. 2019). As
we will explain, the new termination notices help establish that the
Foundation’s claims are moot and that we lack jurisdiction to assess
their merits. The Foundation argues that the Administrative Proce-
dure Act confines our review to the agency record, see 5 U.S.C.
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8 Opinion of the Court 22-14057
§ 706, but the Act does not bar federal courts from considering de-
velopments outside the agency record when policing the exercise
of judicial power. Nor could it; we never may exercise jurisdiction
over a moot case. United States v. Al-Arian, 514 F.3d 1184, 1189 (11th
Cir. 2008).
The Foundation argues that subject-matter jurisdiction “at-
taches” when a suit is filed and that agencies can “do nothing” to
divest a court of jurisdiction. The Foundation acknowledges that
the Department withdrew and “vacated” its May 11 notices. But, it
says, the “basic rule of federal subject-matter jurisdiction”—that ju-
risdiction must exist when suit is filed—makes no exception for the
Administrative Procedure Act, and the rule bars the Department
from rendering the Foundation’s claims moot. The Secretary re-
sponds that agencies can render claims moot and so “deprive”
courts of the “ability” to adjudicate them. See Djadju v. Vega, 32
F.4th 1102, 1108 (11th Cir. 2022). We agree with the Secretary.
A case is moot when later events “deprive the court” of the
power to grant “meaningful relief.” Id. (citation and internal quo-
tation marks omitted). Because “mootness is jurisdictional,” a
moot case “must be dismissed.” Id. at 1106 (citation and internal
quotation marks omitted). Any decision on the merits of a moot
case would be advisory, and Article III grants federal courts no au-
thority to issue advisory decisions. We may not declare right or
wrong an act that has no “continuing effect.” Spencer v. Kemna, 523
U.S. 1, 18 (1998).
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22-14057 Opinion of the Court 9
Mootness arises only after “the case has been brought.” Friends
of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167, 191
(2000). The mootness doctrine ref lects that parties must continue to
have a personal stake in the resolution of a case. See Chafin v. Chafin,
568 U.S. 165, 172 (2013). So mootness is necessarily gauged “at the
present time.” Djadju, 32 F.4th at 1106.
Complaints against agencies are no exception. “[W]ithout
doubt,” agency action can render moot “what was once a viable
case.” Sannon v. United States, 631 F.2d 1247, 1250–51 (5th Cir. 1980).
Agencies can render moot a complaint that challenges agency ad-
judication, see, e.g., City of Houston v. HUD, 24 F.3d 1421, 1429 (D.C.
Cir. 1994), or a complaint that challenges rulemaking, see, e.g., Akia-
chak Native Cmty. v. U.S. Dep’t of Interior, 827 F.3d 100, 103, 106 (D.C.
Cir. 2016).
To be sure, subject-matter jurisdiction must exist when suit is
filed. See Cook v. Bennett, 792 F.3d 1294, 1298 (11th Cir. 2015). It does
not follow that a defendant’s “later acts” cannot erase that jurisdic-
tion. Parties may not fabricate jurisdiction during suit. But they
may destroy it by rendering a case moot.
A Seventh Circuit decision that the Foundation discusses at
length does not suggest otherwise. In Doctors Nursing & Rehabilita-
tion Center v. Sebelius, our sister circuit held that the Secretary of
Health and Human Services could not divest the court of jurisdic-
tion by unilaterally reopening administrative proceedings. 613 F.3d
672, 677 (7th Cir. 2010). The decision mentioned mootness only to
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10 Opinion of the Court 22-14057
stress that it was not at issue. Id. at 678–79 (dismissing mootness
precedents as “inapposite”).
The Foundation argues that the Department has not rendered
the Foundation’s complaint moot. It argues that an agency’s com-
pliance with an order awarding interlocutory relief cannot render
moot the complaint on which relief was granted. The Secretary
responds that the withdrawal of the May 11 notices was more than
compliance with the temporary restraining order. The Secretary is
correct.
The withdrawal of the May 11 letters was not mere compliance
with the temporary restraining order. That order “preserv[ed] the
status quo regarding [the Foundation’s] government grants.” The
Department would have complied with that order by declining to
execute its intended terminations and suspensions until the order
was lifted. But the Department “went,” as the Secretary explains,
“a step further.” In response to the Foundation’s May 13 request to
challenge the May 11 notices, the Department withdrew—that is,
reversed—the notices. The Foundation does not dispute the effect
of those withdrawals.
The Foundation also argues that the voluntary-cessation and ca-
pable-of-repetition-yet-evading-review exceptions to mootness ap-
ply. The Secretary responds that neither exception applies. The Sec-
retary is again correct.
A defendant’s voluntary cessation of challenged conduct ordi-
narily does not render a complaint moot. Djadju, 32 F.4th at 1108.
It does so only if it is “absolutely clear” that the challenged conduct
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22-14057 Opinion of the Court 11
“could not reasonably be expected to recur.” West Virginia v. EPA,
142 S. Ct. 2587, 2607 (2022) (citation and internal quotation marks
omitted). We consider three factors to determine whether it is rea-
sonable to think that the agency will reverse course: whether the
agency’s change in conduct “resulted from substantial delibera-
tion” or was instead “merely an attempt to manipulate jurisdic-
tion”; whether the decision to terminate the challenged conduct is
“permanent” and “complete”; and whether the agency has “con-
sistently maintained its commitment to the new policy.” Djadju, 32
F.4th at 1109. These factors support the conclusion that it is unrea-
sonable to expect the Department to reverse course and reinstate
the May 11 notices.
There is no evidence that withdrawal was merely an attempt to
manipulate the district court’s jurisdiction. The Department af-
forded the Foundation more process, invited a response, and then
reconsidered and revised its findings in part. For instance, the De-
partment extended the deadline to respond to the May 11 notice of
intent to terminate the Supportive Services grants; received and re-
viewed over 250 new documents from the Foundation relevant to
those grants; revised its audit report; and “cleared” the Foundation
of over 30 questioned actions. And the Department specified at
length the audit findings on which it based its ultimate decision to
terminate the Supportive Services grants. The Department also
gave the Foundation an “opportunity to object [to] and provide in-
formation or documentation challenging” the termination of the
Per Diem grants; reviewed a letter and new material from the
Foundation; “evaluated” anew any potential noncompliance; and
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12 Opinion of the Court 22-14057
“considered” appropriate remedies. The Department has engaged
in a different process and issued new termination letters that it
“stands by” now.
The additional review and new termination notices establish
that the decisions to withdraw the May 11 notices were “perma-
nent” and are now “complete.” See id. It has been nearly two years
since the Department withdrew the original notices. It would be
unreasonable to expect the Department to backpedal now. The De-
partment continues to stand behind its new notices, the most re-
cent of which was issued in March 2023. Although the Foundation
pegs the withdrawal as a “momentary ‘reversal’” and a “cynical ma-
neuver,” the record scuttles those contentions.
The capable-of-repetition-yet-evading-review exception does
not apply either. That “narrow” exception triggers only when the
“challenged action” is too brief to be litigated before cessation and
it is reasonable to expect that the plaintiff will again suffer that
“same action.” Health Freedom Def. Fund v. President of U.S., 71 F.4th
888, 892–93 (11th Cir. 2023) (citation and internal quotation marks
omitted). Two actions are the “same controversy,” id. at 893 (cita-
tion and internal quotation marks omitted), when they are at least
“materially similar,” Hall v. Sec’y, Ala., 902 F.3d 1294, 1298 (11th Cir.
2018) (citation and internal quotation marks omitted). The Foun-
dation alleges that the Secretary violated the Foundation’s right to
due process. To assess that challenge, we would compare the pro-
cess given to the process that was due. Yet the process given on May
11, 2022, differs appreciably from the process that the Department
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22-14057 Opinion of the Court 13
has afforded the Foundation since the original notices were with-
drawn. The two actions—the May 11 notices and the 2023 termi-
nation notices—are not materially similar, let alone “identical,” as
the Foundation describes them. That the Department ultimately
decided to terminate the grants is irrelevant.
The Foundation protests that this conclusion “elevates form
over substance” because the new termination notices, like the May
11 notices, allegedly infringe the same legal protections: due pro-
cess and the Department’s regulations. We reject this argument.
The process that the Department has afforded the Foundation since
suit was filed is much more robust than—and so is materially dif-
ferent from—the process about which the Foundation first com-
plained. If the Foundation were to challenge the new termination
notices today, the allegations in its complaint and the Secretary’s
answer would be materially different. The Foundation’s definition
of the allegedly recurrent agency action as “grant termination[]” is
too broad. And even a “likely recurrence” of the same action does
not defeat mootness under the capable-of-repetition-yet-evading-
review exception when the plaintiff will have “ample opportunity”
for judicial review in due course. Al Najjar v. Ashcroft, 273 F.3d 1330,
1336 (11th Cir. 2001). Nothing in the record suggests that the Foun-
dation, when it completes the administrative process, will lack am-
ple opportunity for judicial review of the legality of the new termi-
nations.
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14 Opinion of the Court 22-14057
IV. CONCLUSION
We GRANT the Secretary’s motion to supplement and
AFFIRM the dismissal of the complaint for lack of jurisdiction.
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