Mid-Atlantic Business Finance Co., No. DEV-643 (February 4, 2000) Docket No. DEV-99-10-13-08 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. ) Mid-Atlantic Business Finance ) Co. ) ) Docket No. DEV-99-10-13-08 Petitioner ) ) Decided: February 4, 2000 v. ) ) Small Business Administration ) ) Agency ORDER DISMISSING APPEAL I. BACKGROUND This case involves an appeal to the Office of Hearings and Appeals (this Office or OHA) by the Mid-Atlantic Business Finance Co. (Petitioner), a Certified Development Company (CDC) in the Small Business Administration's (SBA or Agency) 504 loan program. Petitioner delivers financing to small businesses (15 U.S.C. Sections 695-97f), and was the sole statewide CDC for Maryland, [1] Appeal Petition (AP) at 2. In about November 1998, Chesapeake Business Finance Corporation (Chesapeake) applied for CDC certification, to serve all Maryland counties except Somerset County. AP at 2. On December 15, 1998, [2] in response to SBA's request for comment, Petitioner opposed Chesapeake's application on several grounds. AP at 2-3. On August 31, 1999, the District Director, Baltimore District Office, informed Petitioner that SBA had certified Chesapeake as a CDC for ten counties and Baltimore City. AP at 3. On October 13, 1999, Petitioner filed a Petition with this Office, challenging SBA's partial approval of Chesapeake's application. [3] On October 18, 1999, the Administrative Judge ordered Petitioner to brief the issue of OHA's subject-matter jurisdiction and Petitioner's standing. [4] On October 29, 1999, Petitioner filed a Motion for Discovery. On November 5, 1999, Petitioner timely filed a Brief on Jurisdiction and Standing. As to jurisdiction, Petitioner asserts: (1) 13 C.F.R. Section 134.102(f) broadly grants jurisdiction to this Office over proceedings concerning "the rights, privileges, or obligations of development companies,"; (2) the regulations specify neither particular appealable determinations nor particular parties with standing; and (3) determinations to certify or expand the service area of CDCs clearly affect CDCs' "rights, privileges, or obligations." On November 16, 1999, SBA timely filed a Motion to Dismiss and an Opposition to Petitioner's Motion for Discovery. In its Motion to Dismiss, SBA asserts this Office lacks jurisdiction to hear the Petition. First, the regulations compel a finding of no jurisdiction because this Office's jurisdiction over proceedings concerning "the rights, privileges, or obligations of development companies under section 504 of the Investment Act and part 120, subpart H" (13 C.F.R. Section 134.102(f) (emphasis added)), must be read consistently with 13 C.F.R. Section 120.810(b). Because Section 120.810(b) does not contain appeal provisions similar to those in Sections 120.840(d), 120.852, 120.956, and 120.984(c), OHA clearly lacks jurisdiction over CDC certification decisions. Second, this Office's decision in Texas Certified Development Co. v. Small Business Administration, No. DEV-636 (1999), which holds that OHA lacks jurisdiction over appeals from CDC certification decisions, is controlling precedent in this case. On November 23, 1999, Petitioner filed an Opposition to the Motion to Dismiss. Petitioner asserts, first, that part 120 does not limit appeals only to the listed types of determinations. To construe it as doing so renders meaningless the plain language of Section 134.102(f), which governs OHA's jurisdiction; and confuses that jurisdiction with the "absolute right to appeal," granted in part 120. Second, Texas CDC, supra, is not binding precedent or distinguishable; and, in any event, is wrongly decided. II. DISCUSSION The Administrative Judge concludes he must dismiss the instant Petition because this Office lacks subject-matter jurisdiction. The Administrative Judge rejects Petitioner's first argument, that part 120 does not limit appeals only to the types of determinations for which the regulations explicitly authorize appeal. Although the regulation generally grants OHA jurisdiction over cases involving the "rights, privileges or obligations" of development companies (13 C.F.R. Section 134.102(f)), it also explicitly refers to the CDC program regulations (13 C.F.R. part 120, subpart H), to define this Office's jurisdiction. In construing parts 120 and 134 together, the Administrative Judge concludes this Office's CDC jurisdiction is limited to appeals under 13 C.F.R. Sections 120.840(d), 120.845(e), 120.852, 120.956, 120.980, and 120.984(c). Texas CDC, supra at 3; Texas Certified Development Company v. Small Business Administration, No. DEV-634, at 3 (1998). The Administrative Judge relies on the explicit language in these sections authorizing appeals, and the absence of such explicit language in 13 C.F.R. Section 120.810(d). [5] The Administrative Judge also rejects Petitioner's assertion that 13 C.F.R. Section 134.102(f) allows an appeal distinct from the "absolute right of appeal" explicitly granted by the appeal sections of part 120. Nothing in the regulation supports the interpretation that the regulations authorize two types of appeals from CDC program decisions. [6] Petitioner next argues that Texas CDC is not binding precedent, absent an explicit rule requiring administrative stare decisis. Petitioner relies on Toyota Motor Sales, U.S.A. v. United States, 585 F. Supp. 649, 661 (Ct. Int'l Trade 1984) for its proposition that the Agency has the discretion to alter its legal interpretations. The Administrative Judge rejects this argument, noting the court stated in the same case: "[A]n agency cannot change its established and uniform practices at whim." Id. at 661, n. 4. The same court later stated, "[I]f an interpretation of a statute by an agency charged with its execution is reasonable, it should be followed unless there are compelling indications the interpretation is wrong." Chrysler Motors Corp. v. United States, 755 F. Supp. 388, 396 (Ct. Int'l Trade 1990) (citing Chevron U.S.A., Inc. v. National Resources Def. Council, Inc., 467 U.S. 837, 843-44 (1984)). Thus, the precedent of Texas CDC is binding on this Office, unless it is factually or legally distinguishable. [7] Finally, as discussed above in the context of Petitioner's regulatory arguments, Petitioner has failed to show this Office decided Texas CDC incorrectly. Therefore, the Administrative Judge concludes it is valid precedent, applicable to this case. Thus, he must find this Office has no jurisdiction over the instant Appeal Petition. [8] III. CONCLUSION The Administrative Judge DISMISSES the instant appeal, because this Office lacks jurisdiction over the subject matter. This Initial Decision will become the Agency's final decision 30 days after its issuance unless a Request for Review is filed. 13 C.F.R. Sections 134.227(b) and 134.228. _________________________________ CHRISTOPHER HOLLEMAN Administrative Judge _________________________ [1] In ruling on SBA's Motion to Dismiss, the Administrative Judge will consider as true all facts in the Appeal Petition which SBA has not denied explicitly. See 13 C.F.R. Section 134.206(c). [2] Although the AP refers to "December 15, 1999" (AP at 2), this clearly is a typographical error. [3] The Administrative Judge takes judicial notice that Maryland has 23 counties. Maryland State Archives, Maryland Electronic Capital (visited January 20, 2000) . Therefore, SBA's certification of Chesapeake as a CDC in ten counties apparently denied in part Chesapeake's request to serve all Maryland counties, except Somerset County. AP at 2. [4] The Administrative Judge accorded the SBA and Chesapeake the right to reply to Petitioner's Brief. Chesapeake did not do so. [5] The rule that this Office must read Section 134.102 in conjunction with the applicable program regulations is not limited to CDC cases. For example, it also is applicable in debt collection cases. Shahrooz v. Small Business Administration, No. DBT-611 (1998). [6] Further, the Administrative Judge rejects Petitioner's argument that the regulation's "plain language" supports OHA's jurisdiction. To read Section 134.102(f) as broadly granting OHA jurisdiction over all CDC determinations renders redundant and meaningless the specific appeal provisions in Part 120. See Texas CDC, No. DEV-636 supra at 3. Such an interpretation violates basic principles of statutory and regulatory construction. Gustafson v. Allroyd Co., Inc., 513 U.S. 561, 574- 75 (1995); United States v. Alaska, 521 U.S. 1, 59-60 (1997). [7] Although Petitioner correctly notes Texas CDC, involving an application for the Premier Certified Lenders Program (PCLP), is factually distinguishable from this case, the distinction is not legally significant. The same legal principle is involved in both cases: absent a specific appeal provision in part 120, similar to those authorizing other types of CDC appeals, this Office has no subject-matter jurisdiction over the appeal. [8] Because he is dismissing this appeal for lack of jurisdiction, the Administrative Judge need not reach Petitioner's standing or its Motion for Discovery. Posted: February, 2000