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Effective: September 27, 2010

United States Code Annotated Currentness

Title 15. Commerce and Trade

Chapter 14A. Aid to Small Business (Refs & Annos)

§ 634. General powers

(a) Seal; appointment and compensation of personnel; use of other services and facilities

The Administration shall have power to adopt,

alter,

and use a seal,

which shall be judicially noticed.

The Ad-

ministrator is authorized,

subject to the civil service and classification laws,

to select,

employ,

appoint,

and fix

the compensation of such officers, employees, attorneys, and agents as shall be necessary to carry out the provi-

sions of this chapter; to define their authority and duties; and to pay the costs of qualification of certain of them

as notaries public.

The Administration,

with the consent of any board,

commission,

independent establishment,

or executive department of the Government,

may avail itself on a reimbursable or nonreimbursable basis of the

use of information,

services,

facilities (including any field service thereof),

officers,

and employees thereof,

in

carrying out the provisions of this chapter.

(b) Powers of Administrator

In the performance of,

and with respect to,

the functions,

powers,

and duties vested in him by this chapter the

Administrator may--

(1) sue and be sued in any court of record of a State having general jurisdiction,

or in any United States dis-

trict

court,

and jurisdiction is conferred upon such district

court

to determine such controversies without

re-

gard to the amount in controversy; but no attachment, injunction, garnishment, or other similar process, mesne

or final, shall be issued against the Administrator or his property;

(2) under regulations prescribed by him,

assign or sell

at

public or private sale,

or otherwise dispose of for

cash or credit, in his discretion and upon such terms and conditions and for such consideration as the Adminis-

trator shall determine to be reasonable, any evidence of debt, contract, claim, personal property, or security as-

signed to or held by him in connection with the payment of loans granted under this chapter, and to collect or

compromise all obligations assigned to or held by him and all legal or equitable rights accruing to him in con-

nection with the payment

of such loans until

such time as such obligations may be referred to the Attorney

General for suit or collection;

(3) deal

with,

complete,

renovate,

improve,

modernize,

insure,

or rent,

or sell

for cash or credit

upon such

terms and conditions and for such consideration as the Administrator shall

determine to be reasonable,

any

15 U.S.C.A. § 634

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real property conveyed to or otherwise acquired by him in connection with the payment of loans granted under

this chapter;

(4) pursue to final collection,

by way of compromise or otherwise,

all claims against third parties assigned to

the Administrator in connection with loans made by him.

This shall

include authority to obtain deficiency

judgments or otherwise in the case of mortgages assigned to the Administrator. Section 6101 of Title 41 shall

not

be construed to apply to any contract

of hazard insurance or to any purchase or contract

for services or

supplies on account of property obtained by the Administrator as a result of loans made under this chapter if

the premium therefor or the amount thereof does not exceed $1,000.

The power to convey and to execute in

the name of the Administrator deeds of conveyance,

deeds of release,

assignments and satisfactions of mort-

gages,

and any other written instrument

relating to real

property or any interest

therein acquired by the Ad-

ministrator pursuant to the provisions of this chapter may be exercised by the Administrator or by any officer

or agent

appointed by him without

the execution of any express delegation of power or power of attorney.

Nothing in this section shall be construed to prevent the Administrator from delegating such power by order or

by power of attorney, in his discretion, to any officer or agent he may appoint;

(5) acquire,

in any lawful

manner,

any property (real,

personal,

or mixed,

tangible or intangible),

whenever

deemed necessary or appropriate to the conduct

of the activities authorized in sections 636(a) and 636(b) of

this title;

(6) make such rules and regulations as he deems necessary to carry out the authority vested in him by or pur-

suant to this chapter;

(7) in addition to any powers,

functions,

privileges and immunities otherwise vested in him,

take any and all

actions (including the procurement of the services of attorneys by contract in any office where an attorney or

attorneys are not or cannot be economically employed full time to render such services) when he determines

such actions are necessary or desirable in making,

servicing,

compromising,

modifying,

liquidating,

or other-

wise dealing with or realizing on loans made under the provisions of this chapter: Provided, That with respect

to deferred participation loans, the Administrator may, in the discretion of and pursuant to regulations promul-

gated by the Administrator,

authorize participating lending institutions to take actions relating to loan servi-

cing on behalf of the Administrator,

including determining eligibility and creditworthiness and loan monitor-

ing, collection, and liquidation;

(8)

pay the transportation expenses

and per

diem in lieu of

subsistence expenses,

in accordance with

subchapter I of chapter 57 of title 5,

for travel of any person employed by the Administration to render tem-

porary services not in excess of six months in connection with any disaster referred to in section 636(b) of this

title from place of appointment to,

and while at,

the disaster area and any other temporary posts of duty and

return upon completion of the assignment: Provided, That the Administrator may extend the six-month limita-

tion for an additional six months if the Administrator determines the extension is necessary to continue effi-

cient disaster loan making activities;

(9) accept the services and facilities of Federal, State, and local agencies and groups, both public and private,

15 U.S.C.A. § 634

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and utilize such gratuitous services and facilities as may,

from time to time,

be necessary,

to further the ob-

jectives of section 636(b) of this title;

(10) upon purchase by the Administration of any deferred participation entered into under section 636 of this

title, continue to charge a rate of interest not to exceed that initially charged by the participating institution on

the amount so purchased for the remaining term of the indebtedness;

(11) make such investigations as he deems necessary to determine whether a recipient of or participant in any

assistance under this chapter or any other person has engaged or is about

to engage in any acts or practices

which constitute or will constitute a violation of any provision of this chapter, or of any rule or regulation un-

der this chapter,

or of any order issued under this chapter.

The Administration shall permit any person to file

with it a statement in writing, under oath or otherwise as the Administration shall determine, as to all the facts

and circumstances concerning the matter to be investigated. For the purpose of any investigation, the Admin-

istration is empowered to administer oaths and affirmations, subpena witnesses, compel their attendance, take

evidence,

and require the production of any books,

papers,

and documents which are relevant to the inquiry.

Such attendance of witnesses and the production of any such records may be required from any place in the

United States. In case of contumacy by, or refusal to obey a subpena issued to, any person, including a recipi-

ent or participant, the Administration may invoke the aid of any court of the United States within the jurisdic-

tion of which such investigation or proceeding is carried on,

or where such person resides or carries on busi-

ness,

in requiring the attendance and testimony of witnesses and the production of books,

papers,

and docu-

ments; and such court may issue an order requiring such person to appear before the Administration,

there to

produce records,

if so ordered,

or to give testimony touching the matter under investigation.

Any failure to

obey such order of the court

may be punished by such court

as a contempt

thereof.

All

process in any such

case may be served in the judicial district whereof such person is an inhabitant or wherever he may be found;

(12) impose, retain, and use only those fees which are specifically authorized by law or which are in effect on

September 30,

1994,

and in the amounts and at the rates in effect on such date,

except that the Administrator

may, subject to approval in appropriations Acts, impose, retain, and utilize, additional fees--

(A) not

to exceed $100 for each loan servicing action (other than a loan assumption) requested after dis-

bursement

of

the loan,

including any substitution of

collateral,

release or

substitution of

a guarantor,

reamortization, or similar action;

(B) not to exceed $300 for loan assumptions;

(C) not to exceed 1 percent of the amount of requested financings under title III of the Small Business In-

vestment Act of 1958 [15 U.S.C.A.

§ 681 et seq.] for which the applicant requests a commitment from the

Administration for funding during the following year; and

(D) to recover the direct,

incremental cost involved in the production and dissemination of compilations of

information produced by the Administration under the authority of this chapter and the Small Business In-

15 U.S.C.A. § 634

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vestment Act of 1958 [15 U.S.C.A. § 661 et seq.];

(13) collect,

retain and utilize,

subject

to approval

in appropriations Acts,

any amounts collected by fiscal

transfer agents and not used by such agent as payment of the cost of loan pooling or debenture servicing oper-

ations, except that amounts collected under this paragraph and paragraph (12) shall be utilized solely to facilit-

ate the administration of the program that generated the excess amounts; and

(14) require any lender authorized to make loans under section 636 of this title to pay examination and review

fees,

which shall

be deposited in the account

for salaries and expenses of the Administration,

and shall

be

available for the costs of examinations, reviews, and other lender oversight activities.

(c) Procurement of experts and consultants; compensation and expenses

To such extent as he finds necessary to carry out the provisions of this chapter,

the Administrator is authorized

to procure the temporary (not in excess of one year) or intermittent services of experts or consultants or organiz-

ations thereof, including stenographic reporting services, by contract or appointment, and in such cases such ser-

vices shall be without regard to the civil-service and classification laws and,

except in the case of stenographic

reporting services by organizations, without regard to section 6101 of Title 41. Any individual so employed may

be compensated at a rate not in excess of the daily equivalent of the highest rate payable under section 5332 of

Title 5, including travel time, and, while such individual is away from his or her home or regular place of busi-

ness, he or she may be allowed travel expenses (including per diem in lieu of subsistence) as authorized by sec-

tion 5703 of Title 5.

(d) Safety deposit box rentals

Section 3324(a) and (b) of Title 31 shall

not

apply to prepayments of rentals made by the Administration on

safety deposit boxes used by the Administration for the safeguarding of instruments held as security for loans or

for the safeguarding of other documents.

(e)

Undertaking or

suspension of

payment

obligation;

period;

extension of

maturity;

repayment

agreement;

“required payments” defined

(1) Subject to the requirements and conditions contained in this subsection, upon application by a small business

concern which is the recipient

of a loan made under this chapter,

the Administration may undertake the small

business concern's obligation to make the required payments under such loan or may suspend such obligation if

the loan was a direct loan made by the Administration. While such payments are being made by the Administra-

tion pursuant to the undertaking of such obligation or while such obligation is suspended, no such payment with

respect to the loan may be required from the small business concern.

(2) The Administration may undertake or suspend for a period of not to exceed 5 years any small business con-

cern's obligation under this subsection only if--

15 U.S.C.A. § 634

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(A) without

such undertaking or suspension of the obligation,

the small

business concern would,

in the sole

discretion of the Administration, become insolvent or remain insolvent;

(B) with the undertaking or suspension of the obligation, the small business concern would, in the sole discre-

tion of the Administration, become or remain a viable small business entity; and

(C)

the small

business

concern executes

an agreement

in writing satisfactory to the Administration as

provided by paragraph (4).

(3) Notwithstanding the provisions of sections 636(a)(4)(C) and 636(i)(1) of this title,

the Administration may

extend the maturity of any loan on which the Administration undertakes or suspends the obligation pursuant to

this subsection for a corresponding period of time.

(4)(A) Prior to the undertaking or suspension by the Administration of any small business concern's obligation

under this subsection,

the Administration,

consistent

with the purposes sought

to be achieved herein,

shall

re-

quire the small business concern to agree in writing to repay to it the aggregate amount of the payments which

were required under the loan during the period for which such obligation was undertaken or suspended, either--

(i) by periodic payments not less in amount or less frequently falling due than those which were due under the

loan during such period, or

(ii) pursuant to a repayment schedule agreed upon by the Administration and the small business concern, or

(iii) by a combination of the payments described in clause (i) and clause (ii).

(B) In addition to requiring the small business concern to execute the agreement described in subparagraph (A),

the Administration shall,

prior to the undertaking or suspension of the obligation,

take such action,

and require

the small business concern to take such action as the Administration deems appropriate in the circumstances, in-

cluding the provision of such security as the Administration deems necessary or appropriate to insure that

the

rights and interests of the lender (Small Business Administration or participant) will be safeguarded adequately

during and after the period in which such obligation is so undertaken or suspended.

(5) The term “required payments” with respect to any loan means payments of principal and interest under the

loan.

(f) Sale of guaranteed portion of loans by lender or subsequent holder; limitations; secondary market

(1) The guaranteed portion of any loan made pursuant to this chapter may be sold by the lender, and by any sub-

sequent holder, consistent with regulations on such sales as the Administration shall establish, subject to the fol-

lowing limitations:

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(A) prior to the Administration's approval of the sale,

or upon any subsequent resale,

of any loan guaranteed

by the Administration,

if the lender certifies that

such loan has been properly closed and that

the lender has

substantially complied with the provisions of the guarantee agreement and the regulations of the Administra-

tion, the Administration shall review and approve only materials not previously approved;

(B) all fees due the Administration on a guaranteed loan shall have been paid in full prior to any sale; and

(C) each loan, except each loan made under section 636(a)(14) of this title, shall have been fully disbursed to

the borrower prior to any sale.

(2) After a loan is sold in the secondary market, the lender shall remain obligated under its guarantee agreement

with the Administration, and shall continue to service the loan in a manner consistent with the terms and condi-

tions of such agreement.

(3) The Administration shall

develop such procedures as are necessary for the facilitation,

administration,

and

promotion of secondary market operations,

and for assessing the increase of small business access to capital at

reasonable rates and terms as a result of secondary market operations. Beginning on March 31, 1997, the sale of

the unguaranteed portion of any loan made under section 636(a) of this title shall not be permitted until a final

regulation that applies uniformly to both depository institutions and other lenders is promulgated by the Admin-

istration setting forth the terms and conditions under which such sales can be permitted,

including maintenance

of appropriate reserve requirements and other safeguards to protect the safety and soundness of the program.

(4) Nothing in this subsection or subsection (g) of this section shall be interpreted to impede or extinguish the

right of the borrower or the successor in interest to such borrower to prepay (in whole or in part) any loan made

pursuant to section 636(a) of this title, the guaranteed portion of which may be included in such trust or pool, or

to impede or extinguish the rights of any party pursuant to section 636(a)(6)(C) of this title or subsection (e) of

this section.

(g)

Trust

certificates;

guarantee of

timely payments of

principal

and interest;

full

faith and credit

of

United

States; collection of fees; subrogation

(1) The Administration is authorized to issue trust certificates representing ownership of all or a fractional part

of the guaranteed portion of one or more loans which have been guaranteed by the Administration under this

chapter, or under section 696 of this title: Provided, That such trust certificates shall be based on and backed by

a trust

or pool

approved by the Administration and composed solely of the entire guaranteed portion of such

loans.

(2) The Administration is authorized,

upon such terms and conditions as are deemed appropriate,

to guarantee

the timely payment of the principal of and interest on trust certificates issued by the Administration or its agent

for purposes of this subsection.

Such guarantee shall

be limited to the extent

of principal

and interest

on the

guaranteed portions of loans which compose the trust or pool. In the event that a loan in such trust or pool is pre-

paid,

either voluntarily or in the event of default,

the guarantee of timely payment of principal and interest on

15 U.S.C.A. § 634

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the trust certificates shall be reduced in proportion to the amount of principal and interest such prepaid loan rep-

resents in the trust or pool. Interest on prepaid or defaulted loans shall accrue and be guaranteed by the Adminis-

tration only through the date of payment

on the guarantee.

During the term of the trust

certificate,

it

may be

called for redemption due to prepayment or default of all loans constituting the pool.

(3) The full faith and credit of the United States is pledged to the payment of all amounts which may be required

to be paid under any guarantee of such trust certificates issued by the Administration or its agent pursuant to this

subsection.

(4)(A) The Administration may collect a fee for any loan guarantee sold into the secondary market under sub-

section (f) of this section in an amount equal to not more than 50 percent of the portion of the sale price that ex-

ceeds 110 percent of the outstanding principal amount of the portion of the loan guaranteed by the Administra-

tion. Any such fee imposed by the Administration shall be collected by the Administration or by the agent which

carries out

on behalf of the Administration the central

registration functions required by subsection (h) of this

section and shall be paid to the Administration and used solely to reduce the subsidy on loans guaranteed under

section 636(a) of this title: Provided,

That such fee shall not be charged to the borrower whose loan is guaran-

teed: and, Provided further, That nothing herein shall preclude any agent of the Administration from collecting a

fee approved by the Administration for the functions described in subsection (h)(2) of this section.

(B) The Administration is authorized to impose and collect, either directly or through a fiscal and transfer agent,

a reasonable penalty on late payments of the fee authorized under subparagraph (A) in an amount not to exceed

5 percent of such fee per month plus interest.

(C) The Administration may contract with an agent to carry out, on behalf of the Administration, the assessment

and collection of the annual

fee established under section 636(a)(23) of this title.

The agent

may receive,

as

compensation for services,

any interest

earned on the fee while in the control

of the agent

before the time at

which the agent is contractually required to remit the fee to the Administration.

(5)(A) In the event the Administration pays a claim under a guarantee issued under this subsection,

it shall be

subrogated fully to the rights satisfied by such payment.

(B) No State or local law,

and no Federal law,

shall preclude or limit the exercise by the Administration of its

ownership rights in the portions of loans constituting the trust or pool against which the trust certificates are is-

sued.

(6) If the amount of the guaranteed portion of any loan under section 636(a) of this title is more than $500,000,

the Administrator shall, upon request of a pool assembler, divide the loan guarantee into increments of $500,000

and 1 increment

of any remaining amount

less than $500,000,

in order to permit

the maximum amount

of any

loan in a pool to be not more than $500,000.

Only 1 increment of any loan guarantee divided under this para-

graph may be included in the same pool.

Increments of loan guarantees to different borrowers that are divided

under this paragraph may be included in the same pool.

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(h) Central registration of loans and trust certificates; contracts with agent; disclosures by sellers of guaranteed

portions of loans; regulation of brokers and dealers; electronic registration

(1) Upon the adoption of final rules and regulations, the Administration shall--

(A) provide for a central registration of all loans and trust certificates sold pursuant to subsections (f) and (g)

of this section;

(B) contract with an agent to carry out on behalf of the Administration the central registration functions of this

section and the issuance of trust certificates to facilitate pooling.

Such agent shall provide a fidelity bond or

insurance in such amounts as the Administration determines to be necessary to fully protect the interest of the

Government;

(C) prior to any sale,

require the seller to disclose to a purchaser of the guaranteed portion of a loan guaran-

teed under this chapter and to the purchaser of a trust certificate issued pursuant to subsection (g) of this sec-

tion,

information on the terms,

conditions,

and yield of such instrument.

As used in this paragraph,

if the in-

strument being sold is a loan, the term “seller” does not include (A) an entity which made the loan or (B) any

individual or entity which sells three or fewer guaranteed loans per year; and

(D) have the authority to regulate brokers and dealers in guaranteed loans and trust certificates sold pursuant

to subsections (f) and (g) of this section.

(2) The agent

described in paragraph (1)(B) may be compensated through any of the fees assessed under this

section and any interest

earned on any funds collected by the agent

while such funds are in the control

of the

agent and before the time at which the agent is contractually required to transfer such funds to the Administra-

tion or to the holders of the trust certificates, as appropriate.

(3) Nothing in this subsection shall prohibit the utilization of a book-entry or other electronic form of registra-

tion for trust

certificates.

The Administration may,

with the consent

of the Secretary of the Treasury,

use the

book-entry system of the Federal Reserve System.

CREDIT(S)

(Pub.L.

85-536,

§ 2[5],

July 18,

1958,

72 Stat.

385;

Pub.L.

87-305,

§ 4,

Sept.

26,

1961,

75 Stat.

666;

Pub.L.

87-367, Title I, § 103(3), Oct. 4, 1961, 75 Stat. 787; Pub.L. 92-310, Title II, § 224(a), June 6, 1972, 86 Stat. 206;

Pub.L.

93-386,

§§ 3(1),

10,

Aug.

23,

1974,

88 Stat.

745,

749; Pub.L.

94-305,

Title II,

§ 208,

June 4,

1976,

90

Stat.

671;

Pub.L.

95-89,

Title III,

§ 303,

Aug.

4,

1977,

91 Stat.

558;

Pub.L.

95-510,

§ 103,

Oct.

24,

1978,

92

Stat. 1781; Pub.L. 96-302, Title I, § 114, July 2, 1980, 94 Stat. 838; Pub.L. 98-352, § 2, July 10, 1984, 98 Stat.

329; Pub.L.

100-590,

Title I,

§ 113,

Nov.

3,

1988,

102 Stat.

2997; Pub.L.

102-140,

Title VI,

§ 609(a),

Oct.

28,

1991,

105 Stat.

825; Pub.L.

102-564,

Title III,

§ 307(d),

Oct.

28,

1992,

106 Stat.

4264; Pub.L.

103-81,

§ 3(a),

Aug.

13,

1993,

107 Stat.

780; Pub.L.

103-282,

§ 2,

July 22,

1994,

108 Stat.

1422; Pub.L.

103-403,

Title VI,

§

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602, Oct. 22, 1994, 108 Stat. 4202; Pub.L. 104-36, § 4(b), Oct. 12, 1995, 109 Stat. 297; Pub.L. 104-208, Div. D,

Title I,

§ 103(e),

Title II,

§§ 205(a),

208(i)(1),

Sept.

30,

1996,

110 Stat.

3009-727,

3009-738,

3009-747; Pub.L.

106-554,

§ 1(a)(9) [Title II,

§ 209],

Dec.

21,

2000,

114 Stat.

2763,

2763A-683); Pub.L.

108-306,

§ 3,

Sept.

24,

2004, 118 Stat. 1131; Pub.L. 108-447, Div. K, Title I, § 131, Dec. 8, 2004, 118 Stat. 3452; Pub.L. 111-240, Title

I, § 1117, Sept. 27, 2010, 124 Stat. 2509.)

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

1958 Acts.

Senate Report

No.

1714 and Conference Report

No.

2135,

see 1958 U.S.

Code Cong.

and Adm.

News, p. 3071.

1961 Acts.

House Report

No.

1039 and Conference Report

No.

1180,

see 1961 U.S.

Code Cong.

and Adm.

News, p. 2993.

House Report No. 1170 and Conference Report No. 1261, see 1961 U.S. Code Cong. and Adm. News, p. 3221.

1972 Acts. Senate Report No. 92-790, see 1972 U.S. Code Cong. and Adm. News, p. 2364.

1974 Acts. House Report No. 93-1178, see 1974 U.S. Code Cong. and Adm. News, p. 4500.

1976 Acts.

Senate Report Nos.

94-420 and 94-501,

and House Conference Report No.

94-1115,

see 1976 U.S.

Code Cong. and Adm. News, p. 1166.

1977 Acts.

House Report

No.

95-1 and House Conference Report

No.

95-535,

see 1977 U.S.

Code Cong.

and

Adm. News, p. 821.

1978 Acts. House Report No. 95-1375, see 1978 U.S. Code Cong. and Adm. News, p. 3894.

1980 Acts.

Senate Report

No.

96-703 and House Conference Report

No.

96-1087,

see 1980 U.S.

Code Cong.

and Adm. News, p. 2340.

1982 Acts. House Report No. 97-651, see 1982 U.S. Code Cong. and Adm. News, p. 1895.

1984 Acts. Senate Report No. 98-542, see 1984 U.S. Code Cong. and Adm. News, p. 550.

1988 Acts. House Report No. 100-694 and House Conference Report No. 100-1029, see 1988 U.S. Code Cong.

and Adm. News, p. 3999.

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1991 Acts. Statement by President, see 1991 U.S. Code Cong. and Adm. News, p. 507.

1992 Acts. Statement by President, see 1992 U.S. Code Cong. and Adm. News, p. 3610.

1993 Acts. Statement by President, see 1993 U.S. Code Cong. and Adm. News, p. 1709-1.

1994 Acts. House Report No. 103-572, see 1994 U.S. Code Cong. and Adm. News, p. 1487.

Senate Report

No.

103-332 and House Conference Report

No.

103-824,

see 1994 U.S.

Code Cong.

and Adm.

News, p. 3407.

1995 Acts.

Senate Report No.

104-129 and House Conference Report No.

104-269,

see 1995 U.S.

Code Cong.

and Adm. News, p. 318.

2000 Acts. House Report No. 106-645 and Statement by President, see 2000 U.S. Code Cong. and Adm. News,

p. 2459.

2004 Acts. House Conference Report No. 108-792, see 2004 U.S. Code Cong. and Adm. News, p. 2577.

Statement by President, see 2004 U.S. Code Cong. and Adm. News, p. S46.

References in Text

The civil-service laws, referred to in subsecs. (a) and (c), are set forth in Title 5, Government Organization and

Employees. See, particularly, 5 U.S.C.A. § 3301 et seq.

The classification laws,

referred to in subsecs.

(a) and (c),

are classified to chapter 51 and subchapter III of

chapter 53 of Title 5.

The Small Business Investment Act of 1958,

referred to in subsec.

(b)(12)(C),

(D),

is Pub.L.

85-699,

Aug.

21,

1958,

72 Stat.

689,

as amended,

which is classified principally to chapter 14B (§ 661 et seq.) of this title.

Title

III of the Act is classified generally to subchapter III (§ 681 et seq.) of chapter 14B of this title.

For complete

classification of this Act to the Code, see Short Title note set out under section 661 of this title and Tables.

Subsection (h)(2) of this section,

referred to in subsec.

(g)(4)(A),

was redesignated subsec.

(h)(1)(B) by Pub.L.

104-208, Div. D, Title II, § 205(a)(1), (2), Sept. 30, 1996, 110 Stat. 3009-738.

15 U.S.C.A. § 634

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Codifications

In subsecs.

(b)(4) and (c),

“section 6101 of Title 41” substituted for “section 5 of Title 41” on authority of

Pub.L. 111-350, § 6(c), Jan. 4, 2011, 124 Stat. 3854, which Act enacted Title 41, Public Contracts.

In subsec. (b)(8), “subchapter I of chapter 57 of title 5” substituted for “the Travel Expense Act of 1949” on au-

thority of Pub.L.

89-554,

§ 7(b),

Sept.

6,

1966,

80 Stat.

631,

the first section of which enacted Title 5,

Govern-

ment Organization and Employees.

In subsec.

(d),

“Section 3324(a) and (b) of Title 31” was substituted for “Section 3648 of the Revised Statutes

(31 U.S.C. 529)” on authority of Pub.L. 97-258, § 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which

enacted Title 31, Money and Finance.

Amendments

2010 Amendments. Subsec. (g)(6). Pub.L. 111-240, § 1117, added par. (6).

2004 Amendments. Subsec. (b)(12)(D). Pub.L. 108-447, Div. K, Title I § 131(1) struck out “and” at the end.

Subsec. (b)(13). Pub.L. 108-447, Div. K, Title I § 131(2) struck out the period at the end and inserted “; and”.

Subsec. (b)(14). Pub.L. 108-447, Div. K, Title I § 131(3) added par. (14).

Subsec. (g)(4)(C). Pub.L. 108-306, § 3(1), added subpar. (C).

Subsec. (h)(2). Pub.L. 108-306, § 3(2)(A), (B), redesignated par. (2) as par. (3) and inserted a new par. (2).

Subsec. (h)(3). Pub.L. 108-306, § 3(2)(A), redesignated former par. (2) as par. (3).

2000 Amendments.

Subsec.

(f)(1)(C).

Pub.L.

106-554,

§ 1(a)(9) [Title II,

§ 209],

rewrote subpar.

(C),

which

formerly read: “each loan shall have been fully disbursed to the borrower prior to any sale.”

1996 Amendments.

Subsec.

(b)(7).

Pub.L.

104-208,

§ 208(i),

substituted proviso directing that

with respect

to

deferred participation loans, the Administrator may authorize participating lending institutions to take actions re-

lating to loan servicing on behalf of the Administrator,

including determining eligibility and creditworthiness

and loan monitoring,

collection,

and liquidation,

for proviso directing that nothing herein shall be construed as

authorizing the Administrator to contract or delegate his responsibility for loan servicing to other than Adminis-

tration personnel, but with respect to deferred participation loans he may authorize participating lending institu-

tions to take actions on his behalf relating to loan servicing,

including,

but

not

limited to the determination of

15 U.S.C.A. § 634

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eligibility and creditworthiness, and loan monitoring, collection, and liquidation.

Subsec.

(f)(3).

Pub.L.

104-208,

§ 103(e),

added provisions,

effective March 31,

1997,

restricting the sale of the

unguaranteed portion of any loan made under section 636(a) of this title until a final regulation that applies uni-

formly to both depository institutions and other lenders is promulgated by the Administration setting forth the

terms and conditions under which such sales can be permitted, including maintenance of appropriate reserve re-

quirements and other safeguards to protect the safety and soundness of the program.

Subsec. (h)(1)(A) to (D). Pub.L. 104-208, § 205(a)(1) to (3), designated existing provisions as par. (1), redesig-

nated former pars. (1) to (4) as subpars. (A) to (D), respectively, and in subpar. (A), deleted provisions specify-

ing the information to be included in the central

registration of all

loans and trust

certificates sold pursuant

to

subsecs. (f) and (g).

Subsec.

(h)(2).

Pub.L.

104-208,

§ 205(a)(4),

added par.

(2).

Former par.

(2) redesignated subpar.

(B) of subsec.

(h)(1).

Subsec.

(h)(3),

(4).

Pub.L.

104-208,

§ 205(a)(1),

(2),

redesignated former pars.

(3) and (4) as subpars.

(C) and

(D), respectively, of subsec. (h)(1).

1995 Amendments.

Subsec.

(g)(4)(A).

Pub.L.

104-36,

§ 4(b),

amended subpar.

(A) generally.

Prior to amend-

ment subpar. (A) read as follows:

“(4)(A) The Administration may collect

the following fees for loan guarantees sold into the secondary market

pursuant to the provisions of subsection (f) of this section: an amount equal to (A) not more than

4/10 of one

percent per year of the outstanding principal amount of the portion of such loan guaranteed by the Administra-

tion,

and (B) not more than 50 percent of the portion of the sale price which is in excess of 110 percent of the

outstanding principal amount of the portion of such loan guaranteed by the Administration.

Any such fees im-

posed by the Administration shall be collected by the Administration or by the agent which carries out on behalf

of the Administration the central

registration functions required by subsection (h) of this section and shall

be

paid to the Administration and used solely to reduce the subsidy on loans guaranteed under section 636(a) of this

title: Provided, That such fees shall not be charged to the borrower whose loan is guaranteed: and, Provided fur-

ther,

That nothing herein shall preclude any agent of the Administration from collecting a fee approved by the

Administration for the functions described in subsection (h)(2) of this section.”

1994 Amendments. Subsec. (b)(8). Pub.L. 103-282 inserted “: Provided, That the Administrator may extend the

six-month limitation for an additional six months if the Administrator determines the extension is necessary to

continue efficient disaster loan making activities” before semicolon at end.

Subsec. (b)(12), (13). Pub.L. 103-403, § 602, added pars. (12) and (13).

1993 Amendments.

Subsec.

(g)(4).

Pub.L.

103-81,

§§ 3(a),

7,

temporarily added par.

(4) and struck out former

15 U.S.C.A. § 634

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© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

par.

(4) which read as follows: “The Administration shall not collect any fee for any guarantee under this sub-

section: Provided,

That nothing herein shall preclude any agent of the Administration from collecting a fee ap-

proved by the Administration for the functions described in subsection (h)(2) of this section.” See Effective and

Applicability Provisions of 1993 Amendment note below.

1992 Amendments.

Subsec.

(f)(4).

Pub.L.

102-564,

§ 307(d),

substituted “section 636(a)(6)(C) of this title or

subsection (e) of this section” for “subsection (e) of this section or section 636(a)(6), or 636(a)(8) of this title”.

1991 Amendments.

Subsec.

(g)(1).

Pub.L.

102-140 substituted “or under section 696 of this title” for “except

separate trust certificates shall be issued for loans approved under section 636(a)(13) of this title”.

1988 Amendments. Subsec. (g)(1). Pub.L. 100-590, § 113, substituted “except separate trust certificates shall be

issued for loans approved” for “except those”.

1984 Amendments. Subsecs. (f) to (h). Pub. L. 98-352 added subsecs. (f), (g) and (h).

1980 Amendments. Subsec. (b)(7). Pub.L. 96-302 prohibited an interpretation that authorized the Administrator

to contract or otherwise delegate his responsibility for loan servicing to other than Administration personnel, but

sanctioned, with respect to deferred participation loans, authority for participating lending institutions to take ac-

tion on behalf of the Administrator determining eligibility and creditworthiness, loan monitoring, collection, and

liquidation, etc.

1978 Amendments. Subsec. (c). Pub.L. 95-510 substituted “Any individual so employed may be compensated at

a rate not in excess of the daily equivalent of the highest rate payable under section 5332 of Title 5,

including

travel time, and, while such individual is away from his or her home or regular place of business, he or she may

be allowed travel expenses (including per diem in lieu of subsistence) as authorized by section 5703 of Title 5”

for “Any individual so employed may be compensated at a rate not in excess of $50 per diem,

and,

while such

individual is away from his home or regular place of business,

he may be allowed transportation and not to ex-

ceed $15 per diem in lieu of subsistence and other expenses”.

1977 Amendments. Subsec. (e). Pub.L. 95-89 added subsec. (e).

1976 Amendments. Subsec. (e). Pub.L. 94-305 struck out subsec. (e) which provided for the appointment, by the

Administrator, of the Chief Counsel for Advocacy who would serve as a focal point for complaints and sugges-

tions,

counsel

small

businessmen,

develop proposals for change,

represent

interest

of small

businesses before

federal agencies and enlist the cooperation of public and private agencies. See sections 634a to 634g of this title.

1974 Amendments. Subsec. (b)(10), (11). Pub.L. 93-386, § 3(1), added pars. (10) and (11).

Subsec. (e). Pub.L. 93-386, § 10, added subsec. (e).

15 U.S.C.A. § 634

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1972 Amendments.

Subsec.

(a).

Pub.L.

92-310 struck out

provisions which authorized the Administrator

to

provide bonds for officers, employees, attorneys, and agents.

1961 Amendments. Subsec. (a). Pub.L. 87-367 deleted authorization for fifteen additional positions in grades 16,

17, and 18 of the General Schedule of the Classification Act of 1949.

Subsec. (d). Pub.L. 87-305 added subsec. (d).

Effective and Applicability Provisions

1996 Acts.

Amendment by sections 103 and 205 of Div.

D of Pub.L.

104-208 effective Oct.

1,

1996,

except as

otherwise provided, see section 3 of Div. D of Pub.L. 104-208, set out as a note under section 633 of this title.

Pub.L.

104-208,

Div.

D,

Title II,

§ 208(j),

Sept.

30,

1996,

110 Stat.

3009-747,

provided that: “This section and

the amendments made by this section [amending this section,

sections 80a-18,

634,

662,

681,

682,

683,

687,

687b, 687d, 687k, 687l, 687m, and 697f of this title, and section 1431 of Title 12, Banks and Banking, repealing

sections 687i and 687j of this title,

enacting provisions set out as notes under sections 681 and 683 of this title,

and amending provisions set out as notes under section 631 of this title] shall become effective on the date of en-

actment of this Act [Sept. 30, 1996].”

1995 Acts. Pub.L. 104-36, § 8, Oct. 12, 1995, 109 Stat. 297, provided that:

“(a) In general.--Except as provided in subsection (b), the amendments made by this Act [amending this section

and sections 636, 694b note, and 697 of this title] do not apply with respect to any loan made or guaranteed un-

der the Small Business Act [this chapter] or the Small Business Investment Act of 1958 [chapter 14B (§ 661 et

seq.) of this title] before the date of enactment of this Act [Oct. 12, 1995].

“(b) Exceptions.--The amendments made by this Act [amending this section and sections 636,

694b note,

and

697 of this title] apply to a loan made or guaranteed under the Small

Business Act

[this chapter] or the Small

Business Investment Act of 1958 [chapter 14B (§ 661 et seq.) of this title] before the date of enactment of this

Act [Oct.

12,

1995],

if the loan is refinanced,

extended,

restructured,

or renewed on or after the date of enact-

ment of this Act [Oct. 12, 1995].”

1993 Acts. Section 3(b) of Pub.L. 103-81 provided that: “Any new fees imposed by the Administration pursuant

to the authority conferred by subsection (a) [amending this section] shall

be applicable only to loans initially

sold in the secondary market pursuant to the provisions of section 5(f) of the Small Business Act [subsec. (f) of

this section] after August 31, 1993.”

[Section 3(b) of Pub.L. 103-81, set out above, repealed effective Sept. 30, 1996, see section 7 of Pub.L. 103-81

set out below.]

Section 7 of Pub.L.

103-81,

which provided that sections 3 and 5 of Pub.L.

103-81 [amending this section and

15 U.S.C.A. § 634

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© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

section 636 of this title, and enacting provisions set out as notes under this section and section 636 of this title]

were repealed on Sept. 30, 1996, was itself repealed, effective Sept. 29, 1996, by Pub.L. 104-208, Div. D, Title

I, § 109(a), Sept. 30, 1996, 110 Stat. 3009-733.

1980 Acts.

Amendment by Pub.L.

96-302 effective Oct.

1,

1980,

see section 507 of Pub.L.

96-302,

set out as a

note under section 631 of this title.

1978 Acts. Section 105 of Pub.L. 95-510 provided that: “This Act [which amended this section and sections 636

and 637 of this title and repealed sections 5031, 5032 and 5083 of Title 42, The Public Health and Welfare] shall

be effective October 1, 1979.”

Prior Provisions

Prior similar provisions were contained in § 205 of Act July 30, 1953, c. 282, Title II, 67 Stat. 234, as amended

by Act Aug. 9, 1955, c. 628, § 4, 69 Stat. 547, which was classified to this section. See Codification note under

§ 631 of this title.

Appropriations Not Authorized

Section 6 of Pub.

L.

98-352 provided that:

“This Act

[amending this section and sections 633 and 639 of this

title and enacting provisions set out as notes under this section and section 631 of this title] does not authorize

the appropriation of any funds.”

Asset Sales

Pub.L. 105-135, Title V, § 505, Dec. 2, 1997, 111 Stat. 2624, provided that: “In connection with the Administra-

tion's implementation of a program to sell to the private sector loans and other assets held by the Administration,

the Administration shall provide to the Committees a copy of the draft and final plans describing the sale and the

anticipated benefits resulting from such sale.”

[Pub.L.

105-135 effective Oct.

1,

1997,

see section 3 of Pub.L.

105-135,

set out as a note under section 631 of

this title.]

Preferred Lender Standard Review Program

Pub.L.

104-208,

Div.

D,

Title I,

§ 103(h),

Sept.

30,

1996,

110 Stat.

3009-728,

provided that: “Not later than 90

days after the date of enactment of this Act [Sept.

30,

1996],

the Administrator shall commence a standard re-

view program for the Preferred Lender Program established by section 5(b)(7) of the Small

Business Act

(15

U.S.C. 634(b)(7)) [subsec. (b)(7) of this section], which shall include annual or more frequent assessments of the

participation of the lender in the program, including defaults, loans, and recoveries of loans made by that lender

15 U.S.C.A. § 634

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© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

under the authority of this section [section 103 of Div.

D of Pub.L.

104-208,

which amended this section and

section 636 of this title,

and enacted provisions set out as notes under this section].

The Administrator shall re-

quire such standard review for each new entrant to the Preferred Lender Program.”

[Section 103(h) of Div. D of Pub.L. 104-208 effective Oct. 1, 1996, except as otherwise provided, see section 3

of Div. D of Pub.L. 104-208, set out as a note under section 633 of this title.]

Promulgation of Rules and Regulations

Section 3 of Pub. L. 98-352 provided that:

“(a) Within ninety days after the date of enactment of this Act [July 10, 1984], the Small Business Administra-

tion shall

develop and promulgate final

rules and regulations to implement

the central

registration provisions

provided for in section 5(h)(1) of the Small Business Act, [subsec. (h)(1) of this section] and shall contract with

an agent for an initial period of not to exceed two years to carry out the functions provided for in section 5(h)(2)

of such Act [subsec. (h)(2) of this section].

“(b) Within nine months after the date of enactment of this Act [July 10, 1984], the Small Business Administra-

tion shall consult with representatives of appropriate Federal and State agencies and officials,

the securities in-

dustry,

financial

institutions and lenders,

and small

business persons,

and shall

develop and promulgate final

rules and regulations to implement this Act [amending this section and sections 633 and 639 of this title and en-

acting provisions set out as notes under this section and section 631 of this title] other than as provided for in

subsection (a).”

“(c) The Small

Business Administration shall

not

implement

any of the provisions under section 5(g) of the

Small Business Act, as amended [15 U.S.C. 634(g)], until final rules and regulations become effective.”

Small Business Loan Secondary Market Study

Pub.L. 102-366, Title III, § 311, Sept. 4, 1992, 106 Stat. 1005, directed the Secretary of the Treasury, the Direct-

or of the Congressional Budget Office,

and the Chairman of the Securities and Exchange Commission,

in con-

sultation with the Administrator of the Small Business Administration, to conduct a study of the potential bene-

fits of,

and legal,

regulatory,

and market-based barriers to,

developing a secondary market

for loans to small

businesses,

specified considerations to be included in the study,

and required that,

not

later than 1 year after

Sept.

4,

1992,

a report be submitted to Congress on the results of the study,

including recommendations for le-

gislation to facilitate the development of a secondary market for loans to small businesses.

Small Business Protection

Pub.L.

90-104,

Title III,

§§ 301 to 303,

Oct.

11,

1967,

81 Stat.

272,

authorized the Administrator of the Small

Business Administration to conduct a special study of the impact on small business concerns of robbery,

burg-

lary, shoplifting, vandalism, and other criminal activities, and report to the President and to the Congress the res-

ults of the study, including such recommendations as he may deem appropriate for administrative and legislative

15 U.S.C.A. § 634

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© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

action, within one year after Oct. 11, 1967.

Study and Report Regarding 1993 Amendments to Impose Secondary Market Fees and to Reduce Loan Guaran-

tee Percentages

Section 6 of Pub.L.

103-81 provided that: “The Administration shall study,

monitor and evaluate the impact of

the amendments made by sections 3 and 5 of this Act [amending this section and section 636 of this title] on the

ability of small business concerns and small business concerns owned and controlled by minorities and women,

to obtain financing and the impact of such sections on the effectiveness,

viability and growth of the secondary

market

authorized by section 5(f)

of

the Small

Business Act

[subsec.

(f)

of

this section].

Not

later

than 16

months after the date of enactment [Aug.

13,

1993],

and annually thereafter,

the Administration shall submit to

the Committees on Small Business of the Senate and the House of Representatives a report containing the Ad-

ministration's findings and recommendations on such impact, specifically including changes in the interest rates

on financings provided to small business concerns and small business concerns owned and controlled by minor-

ities and women, through the use of the secondary market. The Administration shall segregate such findings and

recommendations in the study according to the ethnic and gender components in these categories. Solely for the

purposes of the study authorized herein, the term ‘small business concerns owned and controlled by minorities’,

includes businesses owned and controlled by individuals belonging to one of the designated groups listed in sec-

tion 8(d)(3)(C) of the Small Business Act [15 U.S.C.A. § 637(d)(3)(C)].”

Viability of Secondary Markets

Pub.L.

102-366,

Title II,

§ 226,

Sept.

4,

1992,

106 Stat.

1001,

provided that:

“The Administrator of the Small

Business Administration is authorized and directed to take such actions in the awarding of

contracts as is

deemed necessary to assure the continued long-term viability of the secondary markets in loans,

debentures or

other securities guaranteed by the Administration.”

CROSS REFERENCES

Powers of Administration respecting loans, see 15 USCA § 693.

CODE OF FEDERAL REGULATIONS

Business loans, small business administration, see 13 C.F.R. § 120.1 et seq.

Debt collection through offset, see 13 CFR § 140.1 et seq.

Disadvantaged business status protest and appeal procedures, see 13 CFR § 124.601 et seq.

Disaster loan program, small business administration, see 13 CFR § 123.1 et seq.

Group life insurance, federal employees, use of matrix, see 48 CFR § 2152.370.

Lobbying restrictions, see 13 CFR § 146.100 et seq.

15 U.S.C.A. § 634

Page 17

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Minority small business and capital ownership development, see 13 CFR § 124.1 et seq.

Nondiscrimination in financial assistance programs, see 13 CFR § 113.1 et seq.

Office of hearings and appeals, rules of procedure, see 13 CFR § 134.101 et seq.

Program fraud civil remedies act regulations, see 13 CFR § 142.1 et seq.

Representation and indemnification of small business administration employees,

federal torts claims act,

see 13 CFR § 114.100 et seq.

Small business development centers, see 13 CFR § 130.100 et seq.

Small business size regulations, see 13 CFR § 121.101 et seq.

Standards of conduct, see 13 CFR § 105.101 et seq.

Standards for conducting business with the small business administration, see 13 CFR § 103.1 et seq.

Uniform administrative requirements for

grants and cooperative agreements to state and local

govern-

ments, see 13 CFR § 143.1 et seq.

LIBRARY REFERENCES

American Digest System

United States

53(8).

Key Number System Topic No. 393.

Corpus Juris Secundum

CJS United States § 113, Advertising and Proposals or Bids.

RESEARCH REFERENCES

ALR Library

152 ALR,

Fed.

1,

What

Constitutes Reverse or Majority Race or National

Origin Discrimination Violative of

Federal Constitution or Statutes--Nonemployment Cases.

72 ALR, Fed. 191, Pendent Jurisdiction of Federal Court Over State Claim Against Party Not Otherwise Subject

to Federal Jurisdiction Where State Claim is Sought to be Joined With Claim Arising Under Laws,

Treaties,

or

Constitution Of...

73 ALR,

Fed.

338,

When is Claim Properly Presented to Federal

Agency,

Under 28 U.S.C.A.

§ 2675(A),

for

Purposes of Satisfying Prerequisite to Subsequent Suit Under Federal Tort Claims Act.

15 U.S.C.A. § 634

Page 18

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

38 ALR, Fed. 546, United States Postal Service as Subject to Garnishment.

19 ALR,

Fed.

166,

Availability of Interpleader to Insurance Company for Resolving Dispute as to Insurance

Policy Under Federal

Interpleader Acts (Presently 28 U.S.C.A.

§§ 1335,

1397,

2361) and Rule 22 of Federal

Rules of Civil...

174 ALR 549, Interest Necessary to Maintenance of Declaratory Determination of Validity of Statute or Ordin-

ance.

149 ALR 349,

Justiciable Controversy Within Declaratory Judgment Act as Predicable Upon Advice,

Opinion,

or Ruling of Public Administrative Officer.

149 ALR 1103, Actions Under Declaratory Judgment Act as Subject to Limitations or Conditions of Jurisdiction

Imposed by Other Statutes.

53 ALR 1237,

Legal

Rights and Remedies in Respect

of Funds Raised by Voluntary Committee for Public or

Quasi Public Purpose.

Encyclopedias

Am. Jur. 2d Interpleader § 34, Existence of Diversity--Government Parties.

Am. Jur. 2d United States § 67, Sue-And-Be-Sued Clause.

Forms

Federal Procedural Forms § 24:19, Suits Against the Sba.

Federal Procedural Forms § 24:25, Complaint in District Court--For Declaratory Judgment as to Small Business

Size Status [15 U.S.C.A. § 634; 28 U.S.C.A. §§ 1331, 2201; Fed. R. Civ. P. 8(A), 57].

Federal Procedural Forms § 24:35, Complaint--Against Sba--Breach of Contract [15 U.S.C.A. § 634(B)].

Am. Jur. Pl. & Pr. Forms Public Works & Contracts § 22, Complaint in Federal Court--By Unsuccessful Bidder-

-Against

Small

Business Administration--For Declaratory Judgment

as to Small

Business Size Status of Suc-

cessful...

Treatises and Practice Aids

Federal Evidence § 9:39, Presumptions Under Acts of Congress.

15 U.S.C.A. § 634

Page 19

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

Federal Procedure, Lawyers Edition § 63:2, Statutory Bases for Jurisdiction.

Federal Procedure, Lawyers Edition § 19:92, Avoiding Court of Federal Claims Jurisdiction.

Federal Procedure, Lawyers Edition § 27:50, Authority of Inspector General.

Federal Procedure, Lawyers Edition § 27:52, Procedure Upon Refusal to Obey Subpoena.

Federal Procedure, Lawyers Edition § 27:91, Jurisdiction.

Federal Procedure, Lawyers Edition § 27:96, What Actions of Sba May be Reviewed.

Federal Procedure, Lawyers Edition § 27:97, Relief Available.

Federal Procedure, Lawyers Edition § 27:98, How to Serve Process on Sba.

Federal Procedure, Lawyers Edition § 27:131, Loan Moratorium Program.

West's Federal Administrative Practice § 2008, Duties and Powers--Seal; Personnel; Services and Facilities.

West's Federal Administrative Practice § 2009, Duties and Powers--Powers of Administrator.

West's Federal Administrative Practice § 2010, Duties and Powers--Experts and Consultants.

West's Federal Administrative Practice § 2011, Duties and Powers--Undertaking or Suspension of Payment Ob-

ligation.

West's Federal Administrative Practice § 2012, Duties and Powers--Sale of Guaranteed Portion of Loans.

West's Federal Administrative Practice § 2013, Duties and Powers--Issuance of Trust Certificates.

West's Federal Administrative Practice § 2014, Duties and Powers--Central Registration of Loans and Trust Cer-

tificates.

West's Federal Administrative Practice § 2023, Loans to Small Businesses--Interest Rates.

15 U.S.C.A. § 634

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© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

Wright & Miller: Federal Prac. & Proc. § 1710, Subject-Matter Jurisdiction.

Wright & Miller: Federal Prac. & Proc. § 3655, Actions Against Federal Agencies and Officers.

Wright & Miller: Federal Prac. & Proc. § 3657, Statutory Exceptions to Sovereign Immunity--Actions Under the

Tucker Act.

Wright & Miller: Federal Prac. & Proc. § 7144, Subdivision (10)--Presumptions Under Acts of Congress.

NOTES OF DECISIONS

Acceleration 18

Acquisition of property 11

Agency 22

Attorney fees 35

Attorneys 21

Award of contract 8

Breach of contract 10

Compromise of claims 36

Constitutionality 1

Construction with other laws 2

Damages liability 34

Declaratory relief 31

Deferral of repayment 17

Deficiency judgments 20

Discretion of Administration 4

Estoppel 39

Evidence 38

Exhaustion of administrative remedies 25

Extension of contracts 9

Foreclosure 14

Guarantor's liability 5

Immunity 28, 29

Immunity - Generally 28

Immunity - Waiver 29

Injunctions 30

Insurance of security 6

Jurisdiction 24

Laches 41

Law governing 3

Leases 15

Mandamus 32

Moot questions 42

15 U.S.C.A. § 634

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Mortgage foreclosure 14

Parties 26

Performance bonds 7

Personal property 16

Recordation 13

Representations by other parties 23

Rescission 19

Review 43

Standing to sue 27

Subpoenas 33

Summary judgment 37

Taxation 12

Waiver 40

Waiver, immunity 29

1. Constitutionality

This section is constitutionally valid.

Vincent v.

Small Business Administration,

C.A.4 (W.Va.) 1968,

402 F.2d

769.

2. Construction with other laws

“Sue and be sued” clause of Small

Business Act

does not

trump provisions of Contract

Disputes Act

granting

Claims Court

exclusive jurisdiction over all

disputes arising from government

contracts covered by Contract

Disputes Act. A & S Council Oil Co., Inc. v. Lader, C.A.D.C.1995, 56 F.3d 234, 312 U.S.App.D.C. 270. Federal

Courts

1139

Express statutory authority for Small Business Administration (SBA) to sue and be sued permits award of dam-

ages against

SBA,

but

does not

supplant

status of

Federal

Tort

Claims Act

as sole avenue of

relief

for

tort

claimants against

government

and its agencies.

J.C.

Driskill,

Inc.

v.

Abdnor,

C.A.4 (Va.) 1990,

901 F.2d 383.

United States

53(14)

This section with its specific grant of district court jurisdiction without regard to amount in controversy, was not

limited by $10,000 maximum of section 1346 of Title 28,

and thus federal

district

court

had jurisdiction over

plaintiff's nontort

claims against

the United States,

the Small

Business Administration,

and its administrator.

Robinson v. U.S., Through Small Business Admin., M.D.La.1982, 551 F.Supp. 1120. Federal Courts

979

This section which provides that the Administrator may sue or be sued in district court without regard to amount

in controversy speaks to all

jurisdictional

amount

requirements,

including requirement

that

action against

the

United States in district court not exceed $10,000 in amount, and does not speak only to the requirements of the

general diversity and federal question jurisdictional statutes, sections 1331 and 1332 of Title 28, that the amount

in controversy exceed $10,000.

Selected Risks Ins.

Co.

v.

Kobelinski,

E.D.Pa.1976,

421 F.Supp.

431.

Federal

Courts

979

15 U.S.C.A. § 634

Page 22

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Counterclaim based upon Small Business Administration's alleged failure to properly dispose of chattels which

came into its possession pursuant to chattel mortgage and to properly dispose of patents and note which it had as

additional collateral fell within “discretionary acts” exclusion from liability under Federal Tort Claims Act,

§§

1346(b) and 2671 et

seq.

of Title 28.

U.S.

v.

Delta Industries,

Inc.,

N.D.Ohio 1966,

275 F.Supp.

934.

United

States

78(12)

Although Administrative Procedure Act, §§ 551 et seq. and 701 et seq. of Title 5, provides for review of govern-

mental agency actions,

§ 559 of Title 5 providing that no subsequent legislation could supersede or modify its

provision except to extent that such legislation did so expressly did not render ineffective this section prohibit-

ing issuance of injunction against

Administrator of Small

Business Administration.

vonLusch v.

Hoffmaster,

D.C.Md.1966, 253 F.Supp. 633. Administrative Law And Procedure

661; Statutes

149

Waiver of Small

Business Administration's (SBA's) sovereign immunity effected by “sue and be sued” statute

was not impliedly restricted by absence of provision waiving sovereign immunity from environmental liability

in CERCLA,

Resource Conversation and Recovery Act (RCRA),

and Clean Water Act (CWA).

Aces & Eights

Realty, LLC. v. Hartman, W.D.N.Y.2002, 2002 WL 31663515, Unreported. United States

53(14)

3. Law governing

Illinois law governed dispute between United States and bank arising from Small

Business Administration

(SBA) loan guaranty executed in Illinois. U.S. v. First National Bank of Cicero, C.A.7 (Ill.) 1992, 957 F.2d 1362

. Federal Courts

433

In action brought

against

guarantors by United States on behalf of Small

Business Administration,

which was

assignee of payee of promissory note,

Michigan law of coverture did not apply and did not preclude execution

upon separately held property of

guarantor

who was a married woman at

the time guaranty agreement

was

signed. U.S. v. Lowell, C.A.6 (Mich.) 1977, 557 F.2d 70. Federal Courts

413

In action brought

against

guarantors by United States on behalf of Small

Business Administration,

which was

assignee of payee of promissory note,

federal

law to be applied with respect

to execution of separately held

property of guarantor who was married woman at

time guaranty agreement

was signed mandated that

peculiar

and obsolete Michigan law of coverture not

be allowed to stifle federal

government

programs in Michigan,

in

view of fact that such law would not be applicable in any other state in the union. U.S. v. Lowell, C.A.6 (Mich.)

1977, 557 F.2d 70. Federal Courts

413

Federal law defines rights of parties to a Small Business Administration loan and guaranty transaction.

U.S.

v.

Olsen, C.A.1 (Mass.) 1975, 515 F.2d 1269. Federal Courts

413

Regulation providing that guaranty agreement held by Small Business Administration (SBA) shall be construed

and enforced in accordance with applicable federal law embraces existing decisional law that provides for dis-

cretionary application of state law in fashioning appropriate federal law,

and the language “federal law” in the

regulation necessarily contemplates application of state law under applicable circumstances. U.S. v. Schoenhard,

15 U.S.C.A. § 634

Page 23

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

N.D.Ill.1993, 819 F.Supp. 751. United States

53(8)

In action brought by United States seeking to recover on certain guarantees on loan made by Small Business Ad-

ministration,

federal

law would apply in that

this was not

a Small

Business Administration loan negotiated or

hand tailored with reference to Oklahoma law but was a routine nationwide act of the Small Business Adminis-

tration. U.S. v. Glover, W.D.Okla.1977, 453 F.Supp. 659. Federal Courts

413

Indebtedness represented by notes and real estate mortgages executed by plaintiff to Small Business Administra-

tion was discharged once Small Business Administration availed itself of procedural and substantive advantages

of foreclosure by advertisement under Minnesota law and thereby waived rights otherwise available under feder-

al

common law,

Small

Business Administration regulations,

and mortgages to collection of a deficiency judg-

ment. Dalton Motors, Inc. v. Weaver, D.C.Minn.1978, 446 F.Supp. 711. United States

53(8)

Where Small Business Administration was not attempting to collect a deficiency judgment but rather was pro-

ceeding against guarantor of corporate debt on her direct and primary obligation to pay the debt of the defaulting

corporate debtor,

federal

law,

rather than Georgia law,

governed,

and fact

that

the Administration had not

ob-

tained confirmation of sale of corporate property within 30 days did not preclude Administration from maintain-

ing action against

the guarantor.

Ricks v.

U.S.,

S.D.Ga.1976,

434 F.Supp.

1262.

Federal

Courts

407.1;

United States

53(8)

In determining whether,

in action by the United States to foreclose mortgages executed as security for a Small

Business Administration loan, the court should adopt Illinois redemption law as the federal rule, the test was to

weigh all the relevant factors, viz., the intent of the parties, interest of the federal government, and interest of the

state,

but

the most

important

criterion was whether state law could be given effect

without

either conflicting

with federal policy or destroying needed uniformity in the pertinent federal law in its operation within the vari-

ous states. U.S. v. Marshall, N.D.Ill.1977, 431 F.Supp. 888. Mortgages

591(1)

The Small

Business Administration is subject

to local

filing laws designed to protect

general

creditors.

In re

Fried Furniture Corp., E.D.N.Y.1968, 293 F.Supp. 92, affirmed 407 F.2d 360. United States

53(8)

4. Discretion of Administration

Administration's interpretation of forgiveness provision of the Southeast Hurricane Disaster Relief Act of 1965,

even if included in the fine print of disaster loan agreements, could not prevent loan recipients from the full re-

covery which Congress intended. Dore v. Kleppe, C.A.5 (La.) 1976, 526 F.2d 697. United States

77

Though application for disaster loan was initially approved by the Small Business Administration, it was within

the discretion of the Administrator to withhold funds when it

was thereafter ascertained that

applicant

was in-

volved to some extent in gambling, though applicant contended that gambling activities were limited to particu-

lar club and that

he intended to utilize and Administration funds to reconstruct

a different

club at

which no

gambling was to be carried on.

Romeo v.

U.S.,

C.A.5 (Miss.) 1972,

462 F.2d 1036,

certiorari

denied 93 S.Ct.

1361, 410 U.S. 928, 35 L.Ed.2d 589. United States

53(8)

15 U.S.C.A. § 634

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Decision of Small Business Administration (SBA) to sell or assign loan was not abuse of discretion,

since such

conduct

was authorized by federal

statute and regulations;

SBA's policies precisely stated that

administrator's

powers and duties included capacity to assign or sell,

or otherwise dispose of loans for cash or credit any evid-

ence of debt,

in his discretion and upon such terms and conditions and for such consideration as administrator

determined to be reasonable.

Pramco,

LLC v.

Torres,

D.Puerto Rico 2003,

286 F.Supp.2d 164.

United States

53(8)

This chapter clearly grants the Administrator wide discretion to effectuate the purposes of this chapter.

Duke

City Lumber Co. v. Butz, D.C.D.C.1974, 382 F.Supp. 362, adopted in part 539 F.2d 220, 176 U.S.App.D.C. 218,

certiorari denied 97 S.Ct. 737, 429 U.S. 1039, 50 L.Ed.2d 751. United States

53(8)

5. Guarantor's liability

Guarantors of Small Business Administration loan were not misled by SBA after default occurred concerning its

intentions to bid at

foreclosure to preclude enforcement

of guaranty on theory that

security had not

been dealt

with “as permitted by law” since conditional, tentative statements did not rise to a level of promise or assertion

of future conduct and statement of administrative officer could not be relied upon as he was not authorized by

statute to compromise claims. U.S. v. Mallett, C.A.1 (N.H.) 1986, 782 F.2d 302. Guaranty

72

Where guarantor of Small Business Administration loan expressly agreed in guaranty agreement that releases of

other collateral would not affect her liability, release of other guarantors by settlement did not release first guar-

antor,

even if judgment of dismissal of government's suit against released guarantors did not contain any reser-

vation of rights against other guarantors.

U.S.

v.

Southern Cycle Accessories,

Inc.,

C.A.5 (La.) 1978,

567 F.2d

296. Guaranty

72

Although guaranty agreements indicated signers were acting as guarantors of principal

debt,

that

alone would

not

preclude them from being held principally liable on promissory notes.

U.S.

v.

Beardslee,

C.A.6 (Mich.)

1977, 562 F.2d 1016, certiorari denied 99 S.Ct. 113, 439 U.S. 833, 58 L.Ed.2d 128. Guaranty

35

Despite fact that certain guarantors did not sign guaranty agreement until after bank officials closed loan, where

closing of

loan was made by bank officials on erroneous belief

that

only two guarantors were necessary on

Small Business Administration loan and where guaranty agreement,

which expressly stated that guarantors ex-

ecuted agreement in order to induce bank to make loan and provide security for loan, was then signed in order to

comply with Small

Business Administration requirements,

guarantors were liable under

guaranty agreement.

U.S. v. Lowell, C.A.6 (Mich.) 1977, 557 F.2d 70. Guaranty

16(3)

Terms of loan guaranty by which defendant guarantor and others unconditionally guaranteed to lender the pay-

ment of loan when due in accordance with terms thereof in amounts which did not exceed the sums set opposite

their

respective signatures was not

ambiguous,

and defendant

guarantor

was liable for

the full

limit

of

his

$116,000 guaranty,

as set

forth in agreement,

when sum due on note in default

plus interest

exceeded that

amount. McNatt v. U.S., C.A.5 (Tex.) 1968, 400 F.2d 846. Guaranty

36(3)

15 U.S.C.A. § 634

Page 25

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To extent

that

conditions placed upon guarantors of loan made by Small

Business Administration to their cor-

poration were more broadly stated in guaranty agreement

than those contracted by debtor,

guarantors waived

Louisiana codal sections, LSA-C.C. art. 3037, providing that suretyship cannot exceed what may be due by debt-

or,

nor be contracted under more onerous conditions.

Vince v.

U.S.,

C.A.5 (La.) 1968,

394 F.2d 462,

certiorari

denied 89 S.Ct. 92, 393 U.S. 827, 21 L.Ed.2d 99. Guaranty

36(2)

Obligations of guarantors on Small Business Administration loan were absolute and unconditional. U.S. v. New-

ton Livestock Auction Market, Inc., C.A.10 (Kan.) 1964, 336 F.2d 673. Guaranty

34

By proceeding with foreclosure action against collateral securing loan made by Small Business Administration,

government was not precluded from obtaining judgment against guarantors.

U.S.

v.

Newton Livestock Auction

Market, Inc., C.A.10 (Kan.) 1964, 336 F.2d 673. Election Of Remedies

3(1)

Although guaranty of Small Business Administration (SBA) loan referred to a note dated March 27, 1986, guar-

antor was liable with respect to default on note dated April 1, 1986, where the guaranty specifically stated that it

was made to induce bank to loan money to particular company, parties to the April 1 note were the bank and that

company,

guaranty referred to a note in the principal amount of $360,000 with interest at 12.25%,

and note set

forth principal sum of $360,000 at rate of 12.25%.

U.S.

v.

Schoenhard,

N.D.Ill.1993,

819 F.Supp.

751.

United

States

53(8)

Although there was in fact no reorganization of corporate debtor within contemplation of loan papers to effect

that

indebtedness would immediately become due and payable without

notice or demand upon reorganization

without prior written consent of holder,

and although Small Business Administration did not forbear on calling

note because of corporate debtor's reorganization or erroneous belief on part of Administration that there was a

reorganization,

where guaranty was supported by valid consideration present in stock sale transactions between

stockholders, guaranty was enforceable by the United States. U.S. v. Glover, W.D.Okla.1977, 453 F.Supp. 659.

Guaranty

16(1)

6. Insurance of security

Where by terms of guaranty contracts Small Business Administration could have made an entire release of se-

curity for loan and still have recovered from guarantors and guarantors expressly waived notice of any default

by mortgagor, guarantors had no right to credit against judgment amount of storm damage to collateral on theory

of increased risk resulting when United States after foreclosure permitted insurance to lapse on collateral.

U.S.

v. Newton Livestock Auction Market, Inc., C.A.10 (Kan.) 1964, 336 F.2d 673. Guaranty

78(2)

Statutory power of Small Business Administration to insure security for loan and contractual right of Adminis-

tration to insure and charge cost to mortgagor did not require Administration to insure for benefit of mortgagor

and when policies lapsed for failure of mortgagor to pay premiums,

Administration was under no obligation to

insure.

U.S.

v.

Newton Livestock Auction Market,

Inc.,

C.A.10 (Kan.) 1964,

336 F.2d 673.

United States

53(8)

15 U.S.C.A. § 634

Page 26

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When Small Business Administration was notified that borrower could not pay premium due on realty securing

loan after foreclosure action had been brought, government's letter stating that policy should lapse and that gov-

ernment was its own insurer was an election by government to bear risk of possible loss of part of its security

but

did not

entitle borrower to credit

on judgment

resulting when property was bid in by Administration for

amount of loss occurring to property when it was thereafter damaged by storm. U.S. v. Newton Livestock Auc-

tion Market, Inc., C.A.10 (Kan.) 1964, 336 F.2d 673. United States

53(8)

7. Performance bonds

Administrator of Small Business Administration was justified in requiring a 100% performance bond and a labor

and materials payment

bond where borrower intended to be his own building contractor and the uncompleted

building would be doubtful

security.

vonLusch v.

Hoffmaster,

D.C.Md.1966,

253 F.Supp.

633.

United States

53(8)

8. Award of contract

Small Business Administrator was acting within the scope of his authority in awarding contract, which was sub-

sequently withdrawn,

for interment flags for the Veterans Administration to a concern owned by disadvantaged

persons and thus could not be enjoined from issuing to the Veterans Administration a certificate of competency

with respect

to the

concern.

Valley Forge

Flag Co.,

Inc.

v.

Kleppe,

C.A.D.C.1974,

506 F.2d 243,

165

U.S.App.D.C. 182. United States

53(8)

After plaintiff corporation had submitted low bid in response to government invitation with total small business

set-aside and after protest had been filed on ground that plaintiff was not qualified “small business”, contracting

officer

was authorized,

upon passage of

ten-day period in which Small

Business Administration might

have

ruled on protest and upon officer's determining that any delay would be disadvantageous to government, to make

final award of road construction contract to plaintiff,

even though the plaintiff was in fact not a small business.

Mid-West Const., Limited v. U.S., Ct.Cl.1967, 387 F.2d 957, 181 Ct.Cl. 774. United States

64.15

Where Small Business Administration has failed to pass within 10 working days, upon protest that low bidder on

contract with small business set-aside is not qualified “small business” and where contracting officer makes de-

termination that further delay would be disadvantageous to government and makes award, it is irrelevant wheth-

er contracting officer personally knew that his finding would result in a binding award despite Administration's

subsequent

determination that

low bidder

was

not

a

small

business.

Mid-West

Const.,

Limited v.

U.S.,

Ct.Cl.1967, 387 F.2d 957, 181 Ct.Cl. 774. United States

64.15

9. Extension of contracts

Purported extension of real estate sales contract for possession by liquidation loan specialist for Small Business

Administration (SBA) was not binding upon SBA where extension was accomplished without knowledge or ap-

proval

of liquidation loan specialist's supervisor and purported extension would have rendered alleged agree-

ment invalid by failing to reflect agreement concerning dates for payment of earnest money. Mueller v. Abdnor,

E.D.Mo.1991, 765 F.Supp. 551, affirmed in part , reversed in part 972 F.2d 931, rehearing denied. United States

15 U.S.C.A. § 634

Page 27

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53(8)

10. Breach of contract

Bank materially breached loan guaranty agreement with Small Business Administration (SBA) by neglecting to

disclose status of bank director as principal

shareholder of corporation whose assets were purchased through

guaranteed loan;

conflict

of interest

regulations were incorporated into guaranty agreement

by reference,

and

failure to comply with conflict of interest regulations that were essential to sound operation of SBA loan guar-

anty program constituted material breach of guaranty agreement that justified SBA in invoking its right to be re-

leased from obligation to purchase its share of defaulted, guaranteed loan. Heritage Bank & Trust Co. v. Abdnor,

C.A.7 (Ill.) 1990, 906 F.2d 292. United States

53(8)

Under subsec. (b) of this section, landlord could maintain breach of contract action against Administrator based

upon his alleged wrongful failure to issue lease guarantees of which landlord was to be third-party beneficiary,

where there was Administration fund separate and apart

from Treasury from which any judgment

against

Ad-

ministrator could be paid. Taylor v. Administrator of Small Business Admin., C.A.5 (Tex.) 1983, 722 F.2d 105.

Administration employee, who allegedly failed to execute oral agreement to sell certain instruments of indebted-

ness owned by Administration in connection with guaranteed loan,

could not be found to have induced another

creditor to breach its part of alleged contract calling for sale of the notes, security agreements and collateral in-

terests since although allegation was that

the employee induced the other creditor to refuse to perform,

such

creditor could have declined performance for a number of reasons, not the least of which was that in view of the

government's position its asserted contract was invalid.

Duncan v.

Peninger,

C.A.4 (N.C.) 1980,

624 F.2d 486,

certiorari denied 101 S.Ct. 857, 449 U.S. 1078, 66 L.Ed.2d 800. Torts

242

Violation of agreement between Small Business Administration and lender which occurred when lender charged

side loans to borrowers,

in effect allowing lender to charge borrowers higher interest rate than guaranty agree-

ments permitted,

was not so material breach of agreement as to release SBA from obligation to honor its guar-

anties or require lender to disgorge guaranty funds already received,

where side loans did not

diminish initial

flow of funds to borrower and did not negatively impact on borrowers'

ability to repay loans,

lender's collateral

position on secondary loans was in all cases subordinate to SBA and its position on any primary loan, and risk of

loan denial

if improper fees were charged was not

clearly within contemplations of parties at

time agreement

was entered.

Eastern Illinois Trust & Sav.

Bank v.

Sanders,

N.D.Ill.1986,

631 F.Supp.

1393,

affirmed 826 F.2d

615. United States

53(8)

Purchaser's claim for monetary damages stemming from Small Business Administration's alleged breach of con-

tract for sale of certain land to purchaser following public auction of land was actionable under subsec. (b) (1) of

this section.

Claxton v.

Small

Business Administration of

U.S.

Government,

S.D.Ga.1981,

525 F.Supp.

777.

United States

53(14)

11. Acquisition of property

15 U.S.C.A. § 634

Page 28

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Deed executed to Small

Business Administration in lieu of foreclosure on mortgages did not,

with regard to

McKinney's N.Y.

Lien Law § 13,

providing that

no instrument

of

conveyance recorded subsequent

to com-

mencement

of improvement,

and within four months after completion thereof,

shall

be valid as against

liens

filed within four months from recording of conveyance,

unless instrument contains covenant by grantor that he

will

receive consideration for such conveyance and will

hold right

to receive consideration as trust

fund to be

applied first for purpose of paying cost of improvement,

create trust fund out of which contractor's mechanic's

lien could subsequently be discharged.

U.S.

v.

Joe Murray's Point

Lookout,

Inc.,

S.D.N.Y.1973,

359 F.Supp.

335. Mechanics'

Liens

115(1)

12. Taxation

Property held by Small Business Administration in lieu of foreclosure is not subject to state and local taxation.

U.S. v. Joe Murray's Point Lookout, Inc., S.D.N.Y.1973, 359 F.Supp. 335. Municipal Corporations

966(1);

Taxation

2064

13. Recordation

Small

Business Administration (SBA) was entitled under Missouri

law to recover damages for slander of title

based on prospective purchaser's filing of real estate contract with recorder of deeds knowing that contract had

expired and was therefore false;

prospective purchaser acted maliciously when he presented contract

for filing

and SBA demonstrated by a preponderance of the evidence that filing placed a cloud upon its title and that sale

failed to close as a result

of filing.

Mueller v.

Abdnor,

E.D.Mo.1991,

765 F.Supp.

551,

affirmed in part

,

re-

versed in part 972 F.2d 931, rehearing denied. Libel And Slander

132

14. Mortgage foreclosure

Administrator of Small

Business Administration was not

required to accept

offer by owners of 80 percent

of

capital stock in corporation to pay an indebtedness secured by a chattel mortgage or deed of trust rather than to

proceed with foreclosure sales of the corporation's property. Duncan v. Furrow Auction Co., C.A.4 (N.C.) 1977,

564 F.2d 1107, certiorari denied 98 S.Ct. 2232, 436 U.S. 904, 56 L.Ed.2d 401. United States

53(8)

Where Small

Business Administration held both first

and second mortgages on property to secure payment

of

notes which were in default,

it acted properly in foreclosing on second mortgage and applying proceeds of sale

to discharge first mortgage. U.S. v. Olsen, C.A.1 (Mass.) 1975, 515 F.2d 1269. United States

53(8)

15. Leases

Small Business Administration may enter into leases of real property owned by it while it seeks purchaser. U.S.

v. Schwartz, S.D.N.Y.1968, 278 F.Supp. 328. United States

53(8)

Where Small

Business Administration acquired fee title to hotel

property in foreclosure sale and proceeds of

sale were insufficient to meet unpaid balance due on loan to hotel owner in which Administration had participat-

ing interest,

administration,

in effort

to recoup part

of its loss,

had right

to lease property for one-third of net

15 U.S.C.A. § 634

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profits earned in operation of hotel during lease period and lease did not effect forfeiture of Administration's ex-

emption from state and local taxes on theory that lease arrangement constituted joint venture and that lease was

ultra vires. U.S. v. Schwartz, S.D.N.Y.1968, 278 F.Supp. 328. Taxation

2358

16. Personal property

Trustee who offered personal property for sale at door of county courthouse and then invited all present to go to

site of theater at

which the heavy personalty,

subject

to deed of trust

securing Small

Business Administration

loan in default,

was located and who sold the personalty at the theater properly exercised his discretion by not

adjourning sale at

courthouse although courthouse was place of

sale under

deed of

trust.

U.S.

v.

Gaskins,

E.D.N.C.1964, 232 F.Supp. 667, affirmed 335 F.2d 835. United States

53(8)

17. Deferral of repayment

Decision to defer borrowers'

obligations under Small

Business Administration loans was not

left

to “unguided

discretion” of individual loan officers,

for purpose of borrowers'

challenge to statute permitting such deferrals,

where loan officers could grant such deferrals only where borrowers would otherwise become or remain insolv-

ent,

only where deferrals would permit them to become or remain viable businesses,

and only if borrowers ex-

ecuted repayment agreements. U.S. v. Don B. Hart Equity Pure Trust, C.A.5 (Tex.) 1987, 818 F.2d 1246. United

States

53(8)

18. Acceleration

Small Business Administration did not act in ad hoc manner, in denying borrowers any further deferrals and ac-

celerating loan, where evidence showed that SBA had granted borrowers repeated deferrals in past and had taken

action to accelerate loan only after borrowers'

continuing default and failure to make payment for period in ex-

cess of two years. U.S. v. Don B. Hart Equity Pure Trust, C.A.5 (Tex.) 1987, 818 F.2d 1246. United States

53(17)

Parties who had borrowed money from Small Business Administration, and who had repeatedly been granted de-

ferrals on payment obligations,

did not have due process right to actual written notice of SBA deferral program

and opportunity to be heard on issue before SBA could accelerate loan.

U.S.

v.

Don B.

Hart Equity Pure Trust,

C.A.5 (Tex.) 1987, 818 F.2d 1246. Constitutional Law

4108

19. Rescission

Where Administrator acted within the scope of his legitimate authority in rescinding approval of disaster loan,

there could be no recovery of damages against him in his personal capacity. Romeo v. U.S., C.A.5 (Miss.) 1972,

462 F.2d 1036, certiorari denied 93 S.Ct. 1361, 410 U.S. 928, 35 L.Ed.2d 589. United States

50.10(1)

Even if valid real estate sales contract existed between prospective purchaser and Small Business Administration

(SBA) as vendor,

SBA did not waive its right to rescind contract by failing to immediately inform prospective

purchaser of expiration of contract;

waiver and estoppel

could not

arise from unauthorized representations of

15 U.S.C.A. § 634

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© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

SBA liquidation loan specialist handling property to prospective purchaser that contract was still in force since

his representation was not authorized. Mueller v. Abdnor, E.D.Mo.1991, 765 F.Supp. 551, affirmed in part , re-

versed in part 972 F.2d 931, rehearing denied. Vendor And Purchaser

95(1)

When Small Business Administration, which had agreed with lending bank to guarantee 90 percent of loan made

by bank to borrowing manufacturer, discovered that bank official who handled borrower's loan account had neg-

ligently failed to obtain agreed upon security documents,

which nonperformance by bank went

to very root

of

guarantee contract and gave Small Business Administration right to rescind its contract,

it was confronted with

election of

remedies;

it

could elect

to rescind its agreement

with bank or

to stand on it.

First

Nat.

Bank of

McMinnville, Tennessee v. Kleppe, E.D.Tenn.1975, 409 F.Supp. 110. Guaranty

62; Guaranty

72

If Small Business Administration wished to rescind its agreement guaranteeing 90 percent of bank's loan to bor-

rowing manufacturer after discovery of material breach by bank of agreement though bank's negligent failure to

obtain agreed upon security documents from borrower,

Administration had reasonable time in which to do so,

but

Administration's right

to rescind was not

suspended while it

and bank experimented with other remedies,

i.e.,

second loan,

as

alternatives

to rescission.

First

Nat.

Bank of

McMinnville,

Tennessee

v.

Kleppe,

E.D.Tenn.1975, 409 F.Supp. 110. United States

53(8)

20. Deficiency judgments

A private sale, without appraisement, of secured property by debtors and payment of proceeds to Administration

did not

preclude under LSA-R.S.

13:4106 the Administration's suit

for deficiency judgment.

U.S.

v.

Harvey,

C.A.5 (La.) 1979, 602 F.2d 740. Mortgages

559(3)

With respect

to Small

Business Administration loan transactions,

a consistent

application of this section in all

jurisdictions is necessary to effectuate underlying congressional goals and the Administration must be allowed

to recover deficiencies whenever federal law applies and there has been default on loans secured by real prop-

erty. U.S. v. Gish, C.A.9 (Alaska) 1977, 559 F.2d 572, certiorari denied 98 S.Ct. 1648, 435 U.S. 996, 56 L.Ed.2d

85. Federal Courts

433

Where owners of rental

property receiving disaster relief loan from Small

Business Administration secured by

deeds of trust agreed to pay any deficiency, to permit instrument to be construed in accordance with federal law

and waived any local immunity from performance of any obligation,

in view of contract promises and this sec-

tion and regulation, borrowers were bound to pay deficiency notwithstanding Alaska statute prohibiting recovery

of

deficiency after

summary foreclose pursuant

to power

of

sale under

deed of

trust.

U.S.

v.

Gish,

C.A.9

(Alaska) 1977,

559 F.2d 572,

certiorari denied 98 S.Ct.

1648,

435 U.S.

996,

56 L.Ed.2d 85.

United States

53(8)

Sale of mortgaged property without appraisal did not preclude United States, which brought suit after borrowers

defaulted in payments on notes assigned to Small Business Administration, from obtaining deficiency judgment,

although state law,

if

it

had applied might

have required different

result.

U.S.

v.

McIntyre Veneer,

Inc.,

M.D.La.1972, 343 F.Supp. 1095. Mortgages

559(3)

15 U.S.C.A. § 634

Page 31

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21. Attorneys

Use of original

lender's counsel

in liquidation of Small

Business Administration loan after SBA purchased its

guaranteed share of the loan did not violate statute requiring conduct of litigation by the government to be re-

served to United States attorneys in light of statute expressly authorizing Administrator to utilize services of par-

ticipating bank to liquidate such loans.

Gideon v.

Administrator,

U.S.

Small Business Admin.,

D.Me.1986,

630

F.Supp. 822. Attorney General

6

22. Agency

Since Administration employee who managed liquidation of

guaranteed loan was a fully disclosed agent

he

could not

be held liable on alleged contract

to sell

instruments of indebtedness owned by Administration and

could not be held personally liable on theory of breach of warranty of authority that he had capacity to act for

the agency;

since plaintiff

shareholders were charged with knowledge that

he had no authority to bind the

agency to a contract for sale of such assets it could not be said that employee implicitly warranted his authority.

Duncan v.

Peninger,

C.A.4 (N.C.)

1980,

624 F.2d 486,

certiorari

denied 101 S.Ct.

857,

449 U.S.

1078,

66

L.Ed.2d 800. United States

53(5)

Since resort

to Federal

Register would reveal

that

Administration loan specialist

who managed liquidation of

guaranteed loan did not have authority to make alleged contract calling for sale of instruments of indebtedness

owned by the agency,

the government

could not

be held liable on a theory of

unreasonableness because of

agent's refusal to execute the contract,

and even if cause of action for damages against

the agency and an em-

ployee in his official capacity may be inferred if terms,

conditions and considerations of sale are unreasonable,

there is no language permitting inference of cause of action against the employee individually.

Duncan v.

Pen-

inger, C.A.4 (N.C.) 1980, 624 F.2d 486, certiorari denied 101 S.Ct. 857, 449 U.S. 1078, 66 L.Ed.2d 800. United

States

53(5); United States

53(8)

Even if bank or Small

Business Administration officials had told guarantors that

they would not

be liable on

their guaranties,

guarantors were obligated to ascertain whether such officials were acting within scope of their

authority and United States was neither bound nor estopped by acts of its officers or agents in entering into ar-

rangement or agreement to do or cause to be done what law did not sanction or permit.

U.S.

v.

Lowell,

C.A.6

(Mich.) 1977, 557 F.2d 70. United States

53(8)

Small Business Administration (SBA),

as vendor,

could not be bound by its employee's acceptance of payment

on real estate sales contract in the absence of evidence that his acceptance of check was authorized.

Mueller v.

Abdnor,

E.D.Mo.1991,

765 F.Supp.

551,

affirmed in part

,

reversed in part

972 F.2d 931,

rehearing denied.

United States

53(8)

23. Representations by other parties

Small Business Administration was not bound by representations allegedly made by lender's officer to borrowers

indicating that the Administration never foreclosed on second deeds of trust securing Administration-guaranteed

loans,

in absence of evidence that Administration consented to lender's officer's representations; therefore,

Ad-

15 U.S.C.A. § 634

Page 32

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

ministration was entitled to recover amount due as established by the uncontradicted accounting provided by the

Administration. Benson v. U.S. Small Business Administration, C.A.9 (Cal.) 1981, 644 F.2d 1366. United States

53(8)

Under this chapter and rules and regulations promulgated thereunder, no intent may be implied therefrom giving

a civil remedy to the second lowest bidder for loss of profits or for damages suffered because of an untrue state-

ment made by successful bidder in his certification respecting his status as a small business concern. Royal Ser-

vices, Inc. v. Maintenance, Inc., C.A.5 (Fla.) 1966, 361 F.2d 86. United States

64.60(1)

24. Jurisdiction

Statute permitting Administrator

of

Small

Business Administration (SBA)

to sue and be sued in the United

States district

court

conferred subject

matter

jurisdiction on district

court

over

minority owned contractor's

claims that

SBA breached fiduciary,

statutory,

and regulatory duties by awarding contract

with knowledge of

contractor's inability to perform at profit and by failing to provide contractor with technical and managerial as-

sistance. In re Liberty Const., C.A.9 (Cal.) 1993, 9 F.3d 800, on remand 1995 WL 930131. Federal Courts

974.1

Statute which allows the Small Business Administration (SBA) to be sued in any federal district court does not

create federal

question sufficient

to confer subject

matter jurisdiction over private parties joined as the SBA's

codefendants,

absent

some other jurisdictional

basis.

Victor Foods,

Inc.

v.

Crossroads Economic Development

of St. Charles County, Inc., C.A.8 (Mo.) 1992, 977 F.2d 1224. Federal Courts

232

Federal

question jurisdiction existed over interpleader action naming as defendant

Administrator of the Small

Business Administration (SBA); statute authorizing Administrator of the SBA to sue and be sued in any United

States district

court

would be construed to create federal

question jurisdiction over contract

claims against

the

SBA and to extend federal

jurisdiction over contract

actions against

the SBA for money damages in excess of

$10,000. General Ry. Signal Co. v. Corcoran, C.A.7 (Ill.) 1991, 921 F.2d 700. Federal Courts

232

Under “sue and be sued” clause of the Small Business Act,

Texas court had subject matter jurisdiction of con-

tract claim against SBA by buyer of collateral from SBA. A.L.T. Corp. v. Small Business Admin., C.A.5 (Tex.)

1986, 801 F.2d 1451. United States

53(13.1)

Dismissal due to lack of subject-matter jurisdiction was not warranted on ground that presence of Small Busi-

ness Administration, the reason for federal jurisdiction, was merely “proper” and not “necessary” where the bor-

rowers made the Administration a party to their action against

the lender bank and asserted a claim against

it.

Johnston v. Citizens Bank & Trust Co. of Flippin, Ark., C.A.8 (Ark.) 1981, 659 F.2d 865. Federal Civil Proced-

ure

1750

Where individual plaintiffs were citizens of Washington and defendant contractor was incorporated in Washing-

ton and also had its principal place of business there, diversity jurisdiction was lacking, notwithstanding that de-

fendant equipment supplier was incorporated in California and had its principal place of business there and that

15 U.S.C.A. § 634

Page 33

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

issuer

of

fidelity bond was incorporated in Maryland;

also,

district

court,

which had jurisdiction over

claim

against

Small

Business Administration,

was not

required to exercise pendent

party jurisdiction over the non-

Administration defendants. Munoz v. Small Business Administration, C.A.9 (Wash.) 1981, 644 F.2d 1361. Fed-

eral Courts

15; Federal Courts

287

Provision of this section allowing the Administrator of the Small

Business Administration to sue or be sued

gives district

courts jurisdiction of suits against

the Administrator.

Expedient

Services,

Inc.

v.

Weaver,

C.A.5

(Fla.) 1980, 614 F.2d 56. Federal Courts

232

Where suit against Administrator of the Small Business Administration originally sought to enjoin the Adminis-

tration from including a particular contract in its program for disadvantaged persons and was amended to seek to

set aside the agency's decision,

district court lacked authority to grant the relief requested.

Expedient Services,

Inc. v. Weaver, C.A.5 (Fla.) 1980, 614 F.2d 56. Federal Courts

243

District

court

did not

have jurisdiction to grant

mandatory injunction against

Administrator of Small

Business

Administration in suit against him by individual guarantors of lease guaranteed by Small Business Administra-

tion. Mar v. Kleppe, C.A.10 (Kan.) 1975, 520 F.2d 867. United States

53(18)

Federal district court had jurisdiction over suit by individual guarantors of lease guaranteed by Small Business

Administration,

brought

against

Administrator in his official

capacity,

despite fact

that

more than $10,000 in

damages were prayed, and suit was not required to be brought in Court of Claims. Mar v. Kleppe, C.A.10 (Kan.)

1975, 520 F.2d 867. Federal Courts

1141

Takings clause of

Fifth Amendment

to Federal

Constitution,

Small

Business Act,

and federal

common law

provided grants of federal question subject matter jurisdiction for suit by minority business owners against Small

Business Administration (SBA) challenging SBA's agreement with defense logistics agency (DLA) establishing

pricing scheme for delivery of petroleum products to government installations under minority set-aside program.

A & S Council Oil Co.,

Inc.

v.

Saiki,

D.D.C.1992,

799 F.Supp.

1221,

reversed 56 F.3d 234,

312 U.S.App.D.C.

270. Federal Courts

232

Business owner's claims that Small Business Administration (SBA) acted arbitrarily, capriciously, and unreason-

ably towards him,

abused its discretion,

and violated his rights to due process as a result of SBA's cancellation

of his disaster loan sounded in tort and could therefore only be brought under Federal Tort Claims Act; as a res-

ult,

because of his failure to comply with Act,

court

lacked jurisdiction over claims.

Lewis v.

First

Bank of

Shinnston, N.D.W.Va.1991, 756 F.Supp. 259, affirmed 4 F.3d 985. United States

53(8)

Jurisdiction over action alleging breach of contract

against

Small

Business Administration for failure to pay

money due under guaranty agreement

properly lay in district

court,

without

regard to amount

in controversy.

United Penn Bank v. U.S.A. Small Business Admin., M.D.Pa.1984, 603 F.Supp. 531. Federal Courts

332

District

Court

had subject-matter jurisdiction of contractor's claim against

the Administration for money judg-

15 U.S.C.A. § 634

Page 34

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

ment based on alleged third-party beneficiary contract under which the Administration owed a duty directly to

contractor.

Professional

Const.

Consultants,

Inc.

v.

Grimes,

W.D.Okla.1982,

552 F.Supp.

539.

Federal

Courts

230

While “injunctive relief,” which has been extended to specific performance, against Small Business Administra-

tion was unavailable under “sue and be sued” immunity waiver of subsec.

(b) (1) of this section,

this was not

jurisdictionally fatal

to purchaser's action against

Administration where other relief,

including damages for al-

leged breach of contract, was sought in addition to specific performance. Claxton v. Small Business Administra-

tion of U.S. Government, S.D.Ga.1981, 525 F.Supp. 777. United States

53(14)

Under this section governing powers of Administrator to sue and be sued, district court had subject-matter juris-

diction of action brought

by corporation against

Administrator seeking recovery of business and development

funds allegedly wrongfully withheld by Administration,

but did not have jurisdiction to issue injunction or writ

of mandamus ordering Administration to disburse funds.

Bayco,

Inc.

v.

Weaver,

D.C.Puerto Rico 1981,

520

F.Supp. 461. Federal Courts

10.1; Federal Courts

11; Federal Courts

976

No subject-matter jurisdiction in the court exists under this chapter for action seeking to compel the Small Busi-

ness Administration to grant a loan where that decision is a discretionary act vested in the Administration.

Co-

pake Lake Development Corp. v. U.S. Government, E.D.N.Y.1980, 490 F.Supp. 386. United States

82(7)

Where construction lender brought suit against surety on performance and payment bonds and, after removal to

United States district court, surety joined the Administration as third-party defendant on basis of its guarantee of

90% of all losses on the bonds,

and where the Administrator secured dismissal of the third-party complaint on

ground, inter alia, that the court lacked subject matter jurisdiction since the claim was in excess of $10,000, and

where the surety thereafter commenced action on the same claim in state court, the Administrator was judicially

estopped from asserting jurisdiction in a federal district court in support of its removal of the case to that court.

Selected Risks Ins. Co. v. Kobelinski, E.D.Pa.1976, 421 F.Supp. 431. Estoppel

68(2)

Federal district court had original jurisdiction, and thus also removal jurisdiction, of action by performance and

payment bond surety against Administration on its guarantee of 90 percent of all losses on the bonds, though the

claim was in excess of $10,000.

Selected Risks Ins.

Co.

v.

Kobelinski,

E.D.Pa.1976,

421 F.Supp.

431.

Federal

Courts

979; Removal Of Cases

11

Where complaint

against

Small

Business Administration and others alleged an amount

in controversy over

$10,000 and questioned legality of loans made pursuant to this chapter,

federal district court had federal ques-

tion jurisdiction. Southern Christian Leadership Conference, Inc. v. Connolly, E.D.Mich.1971, 331 F.Supp. 940.

Federal Courts

243; Federal Courts

356

United States district

court

had jurisdiction to entertain action for

judgment

declaring disappointed bidder,

which had submitted lowest

bid but

did not

receive contract

because Small

Business Administration and Size

Appeals Board determined that

it

was not

a small

business concern,

was actually a small

business concern as

15 U.S.C.A. § 634

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defined by this chapter. American Elec. Co. v. U.S., D.C.Hawai'i 1967, 270 F.Supp. 689. Declaratory Judgment

274.1; United States

131

Court of Federal Claims does not have jurisdiction under the Tucker Act to review a decision of an administrat-

ive judge of the Small Business Administration Office Of Hearings And Appeals; proper forum for further adju-

dication of SBA administrative decisions lies with a United States District

Court.

Red River Service Corp.

v.

U.S., Fed.Cl.2004, 60 Fed.Cl. 532, dismissed 110 Fed.Appx. 887, 2004 WL 2287753. Federal Courts

1139;

United States

53(13.1)

Statute providing that no injunction or other similar process shall be issued against administrator of small busi-

ness administration or his property did not deprive Claims Court of jurisdiction to enjoin,

on preliminary basis,

Department

of Defense from awarding procurement

contract

to anyone other than apparent

low bidder,

even

though proposed debarment of contractor resulted in SBA decision to discontinue its efforts to award bidder cer-

tificate of competency;

declining to follow Speco Corp.

v.

U.S.,

2 Cl.Ct.

335.

Sterlingwear of Boston,

Inc.

v.

U.S., Cl.Ct.1986, 10 Cl.Ct. 644. Federal Courts

1080

Under this section authorizing Small Business Administrator, an agency of the United States government, to sue

in a court of record of state having general jurisdiction, Civil Court of the City of New York had no jurisdiction

over suit

by auctioneer for deficiency against

defaulting bidder as agent

for and on behalf of Administrator,

since court was not a court of general jurisdiction. Martin Fein & Co. v. Sealomatic Electronics Corp., N.Y.City

Civ.Ct.1967, 290 N.Y.S.2d 808, 57 Misc.2d 187. United States

53(13.1)

This section waives sovereign immunity and confers jurisdiction over Administration and its officials in monet-

ary and declaratory relief actions.

Carter v.

Small

Business Administration,

Colo.App.1977,

573 P.2d 564,

40

Colo.App. 271, certiorari denied 104 S.Ct. 711, 464 U.S. 1043, 79 L.Ed.2d 174. United States

53(14)

Where plaintiff asserting claim against Small Business Administration designated defendant as “Small Business

Administration,

of Richmond,

Virginia”,

and plaintiff did not,

in compliance with provisions of this section al-

lowing Administrator to be sued, attempt service of process on Administrator or on Deputy Administrator or on

any person designated as process agent,

nor did plaintiff make service of process as authorized by applicable

rules,

court acquired no jurisdiction over Small Business Administration and action was properly dismissed for

want of jurisdiction. Finch v. Small Business Administration of Richmond, Va., N.C.1960, 112 S.E.2d 737, 252

N.C. 50. United States

53(16)

25. Exhaustion of administrative remedies

Mere existence of jurisdiction to sue Administration, without more, does not obviate need to pursue administrat-

ive scheme for which parties have contracted. Kyle Engineering Co. v. Kleppe, C.A.9 (Cal.) 1979, 600 F.2d 226.

United States

53(8)

15 U.S.C.A. § 634

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26. Parties

Administrator could be sued in his official capacity by individual guarantors of lease guaranteed by Administra-

tion who contended that

Administration breached its agreement

to release them from their obligation if they

found other tenants to take over defaulted lease.

Mar v.

Kleppe,

C.A.10 (Kan.) 1975,

520 F.2d 867.

United

States

135

Where when lumber company defaulted on loan obtained from bank and the Small Business Administration, the

bank assigned to the Administration a confession of judgment

which defendant

had executed in favor of bank

and its assigns as security for loan,

and where there was deficiency when judgment was entered against lumber

company, the United States could as real party in interest use the confession to cause judgment to be entered in

its favor against defendant despite power of the Administrator to sue in connection with the type of assignment

involved. U.S. v. Stuart, C.A.3 (Pa.) 1968, 392 F.2d 60. Federal Civil Procedure

2396

National director of Small Business Administration and Administrator could not be personally liable for alleged

discriminatory actions of Administration, where they had no personal involvement in such actions. Little v. U.S.,

C.D.Ill.1980, 489 F.Supp. 1012, affirmed 645 F.2d 77. Civil Rights

1364

Class action against Small Business Administration was not an uncontested suit against the United States where

complaint was amended to seek both declaratory and monetary relief, and where Congress had granted authority

for Administrator to sue and be sued.

Pottharst

v.

Small

Business Administration,

E.D.La.1971,

329 F.Supp.

1142. United States

125(31)

United States is real party in interest to bring suit arising out of official acts of the Small Business Administra-

tion. U.S. v. Techno Fund, Inc., S.D.Ohio 1967, 270 F.Supp. 83. United States

135

Small Business Administration was not an indispensable party to suit by the United States arising out of official

acts of the agency. U.S. v. Techno Fund, Inc., S.D.Ohio 1967, 270 F.Supp. 83. United States

135

27. Standing to sue

Since shareholders of corporation which had received Administration guaranteed loans alleged no contract

ac-

cording them any right in property auction by agency on default but elected to stand on assertion that order of

auction,

i.e.,

bidding for all

security in a lump sum,

constituted a taking without

adequate compensation they

lacked standing to assert such claim, especially since it was clear that borrower corporation to which security in-

terests were allegedly to be transferred were the owners. Duncan v. Peninger, C.A.4 (N.C.) 1980, 624 F.2d 486,

certiorari denied 101 S.Ct. 857, 449 U.S. 1078, 66 L.Ed.2d 800. Eminent Domain

2.5

Where invitation for bid for construction of 300-unit

family housing project

at

Air Force base specified that

project

had been set

aside for

bidding and construction by small

business concern in accordance with this

chapter, a small business concern which was unsuccessful bidder had standing to sue Administrator, Secretary of

Air Force,

contracting officer and the United States for declaratory and injunctive relief against award of con-

15 U.S.C.A. § 634

Page 37

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

tract

to bidder who allegedly did not

qualify as small

business concern.

Lloyd Wood Const.

Co.

v.

Sandoval,

N.D.Ala.1970, 318 F.Supp. 1167. Declaratory Judgment

292

28. Immunity--Generally

Small

Business Administration (SBA)

official

was clothed with qualified immunity from suit

arising out

of

SBA's denial of application for certification as contractor under program pursuant to which contracts are awar-

ded to small businesses owned and controlled by socially and economically disadvantaged individuals, as he did

not violate any of applicant's clearly established rights; he did not make any decisions based on applicant's race

or handicap, as applicant alleged. Vaughn v. U.S. Small Business Admin., C.A.6 (Tenn.) 1995, 65 F.3d 1322, re-

hearing denied 82 F.3d 684. United States

50.10(1)

Statute granting administrator of Small Business Administration authority to sue and be sued,

but which stated

that no attachment,

injunction,

garnishment,

or “other similar process,” shall be issued against administrator or

his property,

precluded imposition of equitable lien on any funds belonging to SBA or its administrator.

J.C.

Driskill, Inc. v. Abdnor, C.A.4 (Va.) 1990, 901 F.2d 383. United States

53(14)

Statute,

which states that

no injunction may be issued against

Small

Business Administration,

protects agency

from interference with internal

workings by judicial

orders attaching agency funds,

etc.,

but

does not

provide

blanket immunity from every type of injunction and does not bar judicial review of agency actions that exceed

agency authority, where remedies would not interfere with internal agency operations. Ulstein Maritime, Ltd. v.

U.S., C.A.1 (R.I.) 1987, 833 F.2d 1052. Administrative Law And Procedure

651; United States

53(8)

Suit against the United States, the Small Business Administration and its Administrator, brought by disaster loan

applicant

whose loan approval

had been rescinded,

was barred by sovereign immunity insofar

as applicant

sought injunctive relief in the nature of specific performance,

but claim for monetary damages could be main-

tained under this section.

Romeo v.

U.S.,

C.A.5 (Miss.) 1972,

462 F.2d 1036,

certiorari

denied 93 S.Ct.

1361,

410 U.S. 928, 35 L.Ed.2d 589. United States

125(9); United States

125(18)

Small Business Administration agents were absolutely immune from liability in action based on allegation that

SBA failed

to

conduct

sale

of

collateral

in

commercially

reasonable

manner.

Shapex

Corp.

v.

U.S.,

M.D.Ala.1985, 629 F.Supp. 751. United States

50.5(5)

Small Business Administration was not immune from action brought against it for injunctive relief with respect

to foreclosure sale. Ricks v. U.S., S.D.Ga.1976, 434 F.Supp. 1262. United States

53(14)

This section does not allow suit against the Administration seeking injunctive or mandamus type relief. Murray

v. Kleppe, M.D.Pa.1977, 424 F.Supp. 108. United States

53(14)

The United States must give its consent in order to be sued, even though the suit is nominally against an officer,

where

relief

sought

would

actually

be

against

the

government.

Lloyd

Wood

Const.

Co.

v.

Sandoval,

15 U.S.C.A. § 634

Page 38

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N.D.Ala.1970, 318 F.Supp. 1167. United States

125(24)

The Small Business Administration,

unlike the Reconstruction Finance Corporation,

is not a separate “sue and

be sued” agency.

U.S.

v.

Skipper

Smith's Marina,

Inc.,

S.D.Fla.1968,

283 F.Supp.

408.

United States

53(14)

Small Business Administration (SBA),

which was subject to sue-and-be-sued clause,

could not escape liability

that

private

enterprise

would

face

in

similar

circumstances.

Aces

& Eights

Realty,

LLC.

v.

Hartman,

W.D.N.Y.2002, 2002 WL 31663515, Unreported. United States

53(14)

29. ---- Waiver, immunity

“Sue and be sued” provision applicable to the Small Business Administration does not establish a broad waiver

of sovereign immunity for assertion on breach of contract claim by applicant for SBA loan guaranty. Ascot Din-

ner Theatre, Ltd. v. Small Business Admin., C.A.10 (Colo.) 1989, 887 F.2d 1024. United States

53(14)

Consent for the administrator of the Small Business Administration to sue and be sued did not establish a waiver

of immunity so as to permit

tort

action against

administrator by business which was denied a SBA loan guar-

anty. Ascot Dinner Theatre, Ltd. v. Small Business Admin., C.A.10 (Colo.) 1989, 887 F.2d 1024. United States

53(14)

On counterclaim against

the

Administration,

among others,

for

alleged conspiracy to destroy third-party

plaintiff's business,

waiver of immunity from tort

liability as defined in the Federal

Tort

Claims Act,

sections

1346(b) and 2671 et

seq.

of Title 28,

rather than a specific waiver of sovereign immunity for suits against

the

Administration, was controlling as to jurisdiction. Northridge Bank v. Community Eye Care Center, Inc., C.A.7

(Wis.) 1981, 655 F.2d 832. United States

127(1)

By providing that

the Administrator of the Small

Business Administration can sue and be sued but

that

no at-

tachment,

injunction or garnishment shall be issued against him,

Congress made a limited waiver of sovereign

immunity with respect to the functions,

powers and duties of the Administrator.

Romeo v.

U.S.,

C.A.5 (Miss.)

1972, 462 F.2d 1036, certiorari denied 93 S.Ct. 1361, 410 U.S. 928, 35 L.Ed.2d 589. United States

125(8)

Section 714 of Title 11, giving court power to enjoin until the final decree the commencement or continuation of

suits against

debtor,

did not

constitute a statutory waiver

of

Small

Business Administration's sovereign im-

munity from injunction restraining its continuation of foreclosure proceedings which had been instituted after

debtor's default. U.S. v. Mel's Lockers, Inc., C.A.10 (Utah) 1965, 346 F.2d 168. United States

53(14)

There was no basis to invoke limited waiver of sovereign immunity in Small Business Act so as to entitle sub-

contractor on federally funded construction project

to sue Small

Business Administration (SBA) for breach of

contract after general contractor failed to pay subcontractor for its services, even though Department of Interior

awarded contract

for project

to SBA under § 8(a) of Small

Business Act,

where subcontractor failed to assert

15 U.S.C.A. § 634

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any facts which would establish privity of contract

between it

and SBA.

U.S.

for Use and Benefit

of Fred's

Plumbing and Heating,

Inc.

v.

Small

Business Admin.,

D.Colo.1992,

807 F.Supp.

675.

United States

53(14)

Minority business owner's claims against Small Business Administration (SBA) challenging agreement between

SBA and defense logistics agency (DLA) establishing pricing mechanism for delivery of petroleum products un-

der minority set-aside program were not devoid of contractual basis so as to be subject to Federal Tort Claims

Act with respect to waiver of sovereign immunity; although it appeared that SBA and its administrator breached

statutory and regulatory duties by their actions,

most of the SBA's responsibilities to the plaintiffs grew out of

the interagency agreement itself. A & S Council Oil Co., Inc. v. Saiki, D.D.C.1992, 799 F.Supp. 1221, reversed

56 F.3d 234, 312 U.S.App.D.C. 270. United States

53(14); United States

78(5.1)

Sovereign immunity was waived by Small Business Administration (SBA) and its administrator by “sue and be

sued” clause in Small Business Act with respect to suit challenging legality of agreement entered into between

SBA and defense logistics agency (DLA) establishing pricing mechanism for delivery of petroleum products to

various government

installations under minority set-aside program of Small

Business Act.

A & S Council

Oil

Co.,

Inc.

v.

Saiki,

D.D.C.1992,

799 F.Supp.

1221,

reversed 56 F.3d 234,

312 U.S.App.D.C.

270.

United States

53(14)

Sovereign immunity has been waived to allow Administrator of the Small

Business Administration to be sued

and to confer jurisdiction over federal

courts to hear such suits.

Palmer v.

Weaver,

E.D.Pa.1981,

512 F.Supp.

281. United States

53(14)

Officers of agency of United States Government

acting within outer perimeters of their authority are cloaked

with sovereign immunity except

to extent

by which it

has

been explicitly waived.

Murray v.

Kleppe,

M.D.Pa.1977, 424 F.Supp. 108. United States

47

Action to foreclose mechanic's lien, which was obtained after Small Business Administration acquired title, was

a “similar process” within decisional rule that statutory waiver of sovereign immunity of Administration is lim-

ited one in that no attachment,

injunction,

garnishment or other similar process,

mesne or final,

shall be issued

against the Administrator or his property. U.S. v. Joe Murray's Point Lookout, Inc., S.D.N.Y.1973, 359 F.Supp.

335. United States

53(14)

The Small

Business Administration,

a nonincorporated federal

agency,

is an integral

part

of the United States

government and has the full sovereign immunity of the United States unless such immunity has been waived by

congressional

action.

vonLusch v.

Hoffmaster,

D.C.Md.1966,

253 F.Supp.

633.

See,

also,

Romeo v.

U.S.,

C.A.Miss.1972,

462 F.2d 1036,

certiorari

denied 93 S.Ct.

1361,

410 U.S.

928,

35 L.Ed.2d 589;

U.S.

v.

Mel's

Lockers, Inc., C.A.Utah 1965, 346 F.2d 168. United States

125(31)

30. Injunctions

Contractors were barred from receiving injunctive relief against the Army Corps of Engineers concerning its ad-

15 U.S.C.A. § 634

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ministration of minority set-aside program, as Small Business Act precludes injunctive relief against Small Busi-

ness Administration (SBA), and contractors could not obtain indirectly against Army what they could not obtain

directly against SBA. Enplanar, Inc. v. Marsh, C.A.5 (La.) 1994, 11 F.3d 1284, rehearing and suggestion for re-

hearing en banc denied 19 F.3d 17,

certiorari

denied 115 S.Ct.

312,

513 U.S.

926,

130 L.Ed.2d 275.

United

States

53(8)

Statutory section providing that no injunction or other similar process be issued against Small Business Admin-

istrator or his property is not

intended to grant

Small

Business Administration any greater immunity from in-

junctive relief than that possessed by other governmental agencies, against whom injunctive relief may be gran-

ted on preaward contract claims under Federal Courts Improvement Act of 1982. Cavalier Clothes, Inc. v. U.S.,

C.A.Fed.1987, 810 F.2d 1108. Injunction

75

Under provision of this section which states in pertinent part that no attachment, injunction, garnishment or oth-

er similar process shall be issued against the administrator or his property,

state court was barred from issuing

order temporarily restraining foreclosure of the Administration's chattel

mortgage or deed of trust.

Duncan v.

Furrow Auction Co.,

C.A.4 (N.C.)

1977,

564 F.2d 1107,

certiorari

denied 98 S.Ct.

2232,

436 U.S.

904,

56

L.Ed.2d 401. United States

53(8)

Where complaint of individual guarantors of Administration loan,

brought against Administrator in his official

capacity,

prayed that

order be issued directing Administrator to execute release freeing that

from liability for

personal endorsements action would be construed as one seeking mandatory injunction.

Mar v.

Kleppe,

C.A.10

(Kan.) 1975, 520 F.2d 867. United States

53(16)

State court was barred by this section from granting injunction restraining trustee from foreclosing deed of trust

securing amounts owing United States.

Vincent

v.

Small

Business Administration,

C.A.4 (W.Va.) 1968,

402

F.2d 769. Courts

507

Section of the Small Business Act requiring contracting agency to accept certification of responsibility of a bid-

der by the Small

Business Administration,

and section of the Act

prohibiting courts from issuing injunctions

against the SBA administrator, did not preclude declaratory and injunctive relief requested by disappointed bid-

ders on navy contract,

notwithstanding claim that any injunction which would issue against contracting agency

was in actuality against the SBA which certified successful bidder.

Ulstein Maritime,

Ltd.

v.

U.S.,

D.R.I.1986,

646 F.Supp. 720, affirmed 833 F.2d 1052. Injunction

86

Injunction may not be issued against the Administrator of the Small Business Administration because the court

has no subject-matter jurisdiction over such an order. Palmer v. Weaver, E.D.Pa.1981, 512 F.Supp. 281. Injunc-

tion

75

Suit against Small Business Administration and the Secretary of the Department of Defense, brought by brewing

company and black minority businessmen for violation of the Civil Rights Act of 1964,

§ 1983 et seq.

of Title

42, was barred by sovereign immunity insofar as the action sought injunctive relief to compel the Administrator

15 U.S.C.A. § 634

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in the exercise of his discretion. Peoples Brewing Co. v. Kleppe, E.D.Wis.1973, 360 F.Supp. 729. United States

125(28.1)

This section barred injunctive relief against

Administrator of Small

Business Administration.

Analytical

Sys-

tems Corp. v. Small Business Administration, D.C.Mass.1972, 346 F.Supp. 1149.

Plaintiffs seeking to enjoin Small

Business Administration from awarding contract

to a corporation without

competitive bids failed to show reasonable probability of proving their contention that the award would violate

the Administration's own regulations so as to justify granting of preliminary injunctive relief.

Analytical

Sys-

tems Corp. v. Small Business Administration, D.C.Mass.1972, 346 F.Supp. 1149. Injunction

147

When Small Business Administration Administrator acts beyond scope of his authority,

he is subject to injunc-

tion. Dubrow v. Small Business Administration, C.D.Cal.1972, 345 F.Supp. 4. Injunction

75

Provision of Administrative Procedure Act, §§ 551 et seq., and 701 et seq. of Title 5, for issuance of process to

postpone effective date of agency action or to preserve status or rights pending conclusion of review proceed-

ings in order to prevent irreparable injury did not override express language in this chapter that no injunction, or

other similar process,

shall be issued against the Administrator or his property.

Lloyd Wood Const.

Co.

v.

San-

doval, N.D.Ala.1970, 318 F.Supp. 1167. Administrative Law And Procedure

675; United States

53(8)

Plaintiffs were precluded by sovereign immunity from obtaining injunction against Small Business Administra-

tion and its Administrator to require that they rescind their requirement that plaintiffs secure a 100% perform-

ance bond and a labor and materials payment bond as a condition of grant of loan to plaintiffs where terms and

conditions under which Administration made loans were agency actions committed by law to agency discretion

and as such were excepted from statute providing for judicial review of agency actions. vonLusch v. Hoffmaster,

D.C.Md.1966, 253 F.Supp. 633. United States

125(31)

Injunction sought against Small Business Administrator by small business contractor whose low bid was rejec-

ted as nonresponsible,

and who sought to restrain various officials of procuring agency,

the contracting officer,

and subordinates from awarding the contract to any other bidder was not in violation of this section,

providing

that no attachment, injunction, garnishment, or other similar process be issued against Administrator or his prop-

erty. Related Industries, Inc. v. U.S., Cl.Ct.1983, 2 Cl.Ct. 517. Injunction

86

31. Declaratory relief

Although part of purchaser's complaint seeking damages for alleged breach of contract in sale of certain parcel

by Small Business Administration through its agent at public auction sought relief in form of injunction, district

court

could nevertheless construe request

as one for declaratory relief,

thereby bringing claim within ambit

of

“sue and be sued” immunity waiver provision.

Claxton v.

Small Business Administration of U.S.

Government,

S.D.Ga.1981, 525 F.Supp. 777. United States

53(14)

15 U.S.C.A. § 634

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Where action framed as one for declaratory relief against the Administrator of the Small Business Administra-

tion is equivalent to the injunctive relief barred by this section, the declaratory relief is also unavailable. Palmer

v. Weaver, E.D.Pa.1981, 512 F.Supp. 281. Declaratory Judgment

203

Request for declaration that Small Business Administration had failed to give loan application request the con-

sideration required by law was a true request for declaratory relief and not a disguised prayer for injunctive re-

lief, so that court had jurisdiction over the complaint. Palmer v. Weaver, E.D.Pa.1981, 512 F.Supp. 281. Declar-

atory Judgment

203

Under this chapter, plaintiff could assert his claims for declaratory relief as respects allegedly improper adminis-

trative decision of Small Business Administration.

Little v.

U.S.,

C.D.Ill.1980,

489 F.Supp.

1012,

affirmed 645

F.2d 77. Declaratory Judgment

203

32. Mandamus

The acquiring of contracts with other federal agencies to supply goods and services of small businesses was act

committed by this section to the discretion of the Small Business Administrator and federal court could not com-

pel

the Administrator to take action with respect

to obtaining contracts for brewing company owned by black

minority businessmen for

the

sale

of

beer

to governmental

agencies.

Peoples

Brewing Co.

v.

Kleppe,

E.D.Wis.1973, 360 F.Supp. 729. United States

53(18)

Obtaining of contracts for small businesses with governmental agencies was discretionary matter for Adminis-

trators of Small Business Administration and the exercise of that discretion could not be compelled by manda-

mus nor could black businessmen and their brewing company recover damages under the Federal

Tort

Claims

Act, §§ 1346(b) and 2671 et seq. of Title 28, for alleged discrimination in obtaining contract for the sale of beer

to governmental

agencies.

Peoples Brewing Co.

v.

Kleppe,

E.D.Wis.1973,

360 F.Supp.

729.

Mandamus

73(1); United States

78(12)

This section did not

give district

court

jurisdiction to compel

officials to grant

a loan.

Simpkins v.

Davidson,

S.D.N.Y.1969, 302 F.Supp. 456.

33. Subpoenas

Where Small Business Administration and its officials were not parties to antitrust suit in which disclosure was

sought and Assistant Administrator withheld authorization for local officials to disclose, the local officials were

privileged to refuse to respond to subpoenas duces tecum issued by the district court. Saunders v. Great Western

Sugar Co., C.A.10 (Colo.) 1968, 396 F.2d 794. Witnesses

16

34. Damages liability

Federal

officers cannot

be held personally liable in damages for an act

committed within the general

scope of

their official authority and in performance of their official duties. Romeo v. U.S., C.A.5 (Miss.) 1972, 462 F.2d

15 U.S.C.A. § 634

Page 43

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1036, certiorari denied 93 S.Ct. 1361, 410 U.S. 928, 35 L.Ed.2d 589. United States

50.1

Prospective purchaser was entitled to recover from Small Business Administration (SBA) as vendor $16,000 in

damages corresponding to funds he expended in reliance on representations of SBA employee that

real

estate

contract was valid; prospective purchaser expended $1,000 to maintain property and made $15,000 in payments

to the SBA in reliance on representations of employee.

Mueller v.

Abdnor,

E.D.Mo.1991,

765 F.Supp.

551,

af-

firmed in part , reversed in part 972 F.2d 931, rehearing denied. United States

53(18)

Money damages are available in suit

against

Small

Business Administration.

Gilford v.

U.S.,

D.C.Colo.1983,

573 F.Supp. 96. United States

142

As long as Administrator acts within the outer limits of his line of duty,

he is immune from damage liability.

Capital Refrigeration, Inc. v. U.S., M.D.Pa.1973, 375 F.Supp. 462. United States

50.5(5)

35. Attorney fees

Defense contractor that

successfully challenged its termination from Small

Business Administration's (SBA's)

procurement assistance program was not entitled to recover interest on award of attorney fees, made pursuant to

the Equal Access to Justice Act (EAJA), from date contractor incurred fees until date of award, despite delay of

several

years

and SBA's

statutory authority to “sue

and be

sued.”

Oklahoma

Aerotronics,

Inc.

v.

U.S.,

C.A.D.C.1991, 943 F.2d 1344, 291 U.S.App.D.C. 401. United States

147(12)

In action in which Small Business Administration was joined as a third-party defendant, awarding attorney fees

against Small Business Administration was not statutorily authorized. Zimmerman v. Cook, Colo.App.1982, 651

P.2d 910. United States

53(19)

36. Compromise of claims

Only Small Business Administration Administrator has authority to compromise agency claims and an adminis-

trative contracting officer has no authority to compromise claims of any governmental agency other than Depart-

ment of Defense. U.S. v. Gilmore, C.A.10 (Kan.) 1983, 698 F.2d 1095. United States

53(8)

37. Summary judgment

Evidence that bank accepted,

in satisfaction of previous loans,

payments of $86,500 from borrower which were

not reflected in settlement sheet bank had filed with Small Business Administration (SBA) raised genuine issue

of material fact as to whether bank materially breached guaranty agreement's provision requiring bank to close

and disburse each loan in accordance with terms and conditions of approved loan authorization, precluding sum-

mary judgment

in Government's action against

bank to recover allegedly improperly paid SBA loan guaranty.

U.S. v. First National Bank of Cicero, C.A.7 (Ill.) 1992, 957 F.2d 1362. Federal Civil Procedure

2487

Genuine issues of material fact existed, precluding summary judgment against guarantors under Indiana law, on

15 U.S.C.A. § 634

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whether Small Business Administration (SBA) should have been equitably estopped from seeking to hold guar-

antors liable after guarantors stopped forwarding rental payments directly to SBA for premises that were leased

from borrower and SBA's only immediate response was to inform guarantors that they were no longer under any

obligation to SBA; it could not be said as matter of law that commercial loan specialist's statements to guarantor,

if unauthorized, could not have risen above level of mere negligence. U.S. v. Fitzgerald, C.A.7 (Ind.) 1991, 938

F.2d 792. Federal Civil Procedure

2492

Issue as to whether

officials of

Small

Business Administration had given consideration required by law to

plaintiff's application for a loan was presented,

precluding summary judgment for officials.

Simpkins v.

David-

son, S.D.N.Y.1969, 302 F.Supp. 456. Federal Civil Procedure

2481

38. Evidence

Evidence supported contracting officer's finding,

made when Small

Business Administration had not

made

timely ruling on protest that lowest bidder was not a qualified small business, that any further delay in procure-

ment action on the invitation for bids on Alaska road building contract would be disadvantageous to the govern-

ment. Mid-West Const., Limited v. U.S., Ct.Cl.1967, 387 F.2d 957, 181 Ct.Cl. 774. United States

64.15

Where United States sued guarantor for amount allegedly due, amount was denied under oath, and United States

did not prove the net amount,

it could not shift to guarantor the responsibility for government's offering a part

only of record in Louisiana default

judgment

proceeding,

which part,

to extent

it

had any evidentiary effect

against guarantor, showed only the gross amount of principal's debt and nothing as to net unpaid balance. Fred-

erick v. U.S., C.A.5 (Tex.) 1967, 386 F.2d 481. Guaranty

89

Evidence established that trustee received fair market price for personal property sold at trust deed foreclosure

sale, validity of which was not attacked by small business loan borrowers until about a year after sale took place

and about two years after borrowers stopped operating theater in which the personal property was used.

U.S.

v.

Gaskins, E.D.N.C.1964, 232 F.Supp. 667, affirmed 335 F.2d 835. United States

53(17)

39. Estoppel

As successor to lending bank's interest in loan transaction with small business corporation,

Small Business Ad-

ministration was entitled to benefit

of terms which bank had negotiated,

even though Administration officer

might have indicated that the Administration might have consented to other terms in some hypothetical transac-

tion where no future advances clause already created a lien on the property,

and where language of instruments

unambiguously established that property secured line of credit,

Administration was as much entitled to that se-

curity as the bank was, and was not subject to “estoppel defense.” U.S. v. Vahlco Corp., C.A.5 (Tex.) 1983, 720

F.2d 885. Estoppel

62.2(4); United States

53(8)

Small

Business Administration was not

estopped from recovering on note signed by borrowers in connection

with Administration-guaranteed loan as a result of representations allegedly made by lender's officer to the ef-

fect that the Administration never foreclosed on second deeds of trust,

since security agreement signed by bor-

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rowers specifically warned them that security would be in jeopardy in the event of default. Benson v. U.S. Small

Business Administration, C.A.9 (Cal.) 1981, 644 F.2d 1366. United States

53(8)

Waiver of sovereign immunity for contractual

actions against

Small

Business Administration (SBA) does not

apply to action founded upon promissory estoppel, as promissory estoppel is equitable remedy rather than legal

remedy;

as a result,

business owner's action founded upon promissory estoppel

failed to state claim.

Lewis v.

First Bank of Shinnston, N.D.W.Va.1991, 756 F.Supp. 259, affirmed 4 F.3d 985. United States

53(8)

40. Waiver

Small Business Administration lacked authority to waive without adequate consideration requirement that made

its obligation to purchase certain loan conditional upon bank lender's payment of guaranty fee to it prior to de-

fault

or likelihood thereof,

and thus Small

Business Administration did not

waive requirement

of timely pay-

ment,

even though it

did not

terminate guaranty when bank failed to make payment

within five days of initial

loan disbursement as provided in loan guaranty agreement and it accepted bank's ultimate payment of fee after

loan went into default but it was only equitable that government be ordered to refund guaranty fee paid by bank.

Union Nat. Bank of Chicago v. Weaver, C.A.7 (Ill.) 1979, 604 F.2d 543. Guaranty

42(1)

If guaranty fee payment

was made by bank lender to Small

Business Administration prior to default

or likeli-

hood thereof, the Small Business Administration had authority to waive requirement in loan guaranty agreement

which made its obligation to purchase certain loan conditional upon bank's payment of guaranty fee within five

days of initial loan disbursement, because waiver did not alter contract to government's detriment, nor did it af-

fect

any material

rights that

had accrued to government.

Union Nat.

Bank of Chicago v.

Weaver,

C.A.7 (Ill.)

1979, 604 F.2d 543. Guaranty

42(1)

Corporation and unconditional

guarantors of promissory note executed by corporation pursuant

to loan agree-

ment

with Small

Business Administration did not

waive right

to bring claim against

SBA based upon alleged

commercially unreasonable sale of collateral.

Shapex Corp.

v.

U.S.,

M.D.Ala.1985,

629 F.Supp.

751.

Estoppel

62.2(4)

41. Laches

Fact that plaintiffs'

loan documents had been destroyed was not enough to justify dismissal for laches of action

against Small Business Administration,

particularly where delay in bringing suit was due to near financial ruin

brought

about

by Administration's failure to grant

loan,

leaving plaintiffs unable to afford attorney.

Gilford v.

U.S., D.C.Colo.1983, 573 F.Supp. 96. United States

133

Execution satisfying judgment entered in favor of United States on loan issued by the Small Business Adminis-

tration would not be stayed on theory that disbursements at time of loan in 1971 which left borrowers with only

$1,700 instead of $74,000 for operating expenses was breach of contract

and that

allocation of $10,000 was

wrongfully made in 1974 to bank loan instead of a Small Business Administration loan, in light of laches of bor-

rowers in failing to protest until attempted execution in 1977.

U.S.

v.

Gibbs,

W.D.Pa.1977,

432 F.Supp.

1043.

15 U.S.C.A. § 634

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United States

145

Even if trust deed foreclosure sale had been invalid,

small business loan borrowers who did not elect to attend

sale or have someone else represent

them there and who waited until

about

a year after the sale to attack its

validity were guilty of laches and were estopped from attacking its validity. U.S. v. Gaskins, E.D.N.C.1964, 232

F.Supp. 667, affirmed 335 F.2d 835. United States

53(8)

42. Moot questions

Where,

although government

construction project

was well

underway following award of

contract

to second

lowest bidder,

there remained question whether trial court had erred in setting aside initial award of contract to

lowest

bidder,

and lowest

bidder's suit

for bid preparation costs was pending in Court

of Claims and there re-

mained hypothetical though unlikely possibility that Air Force might terminate contract and reaward it, appeal in

lowest bidder's action for injunctive and declaratory relief was not moot.

Allen M.

Campbell Co.

General Con-

tractors, Inc. v. Lloyd Wood Construction Co., C.A.5 (Ala.) 1971, 446 F.2d 261. Federal Courts

724

43. Review

Where guaranty agreements were placed in evidence and interpreting language of

them was integral

part

of

court's task in rendering decision, court's interpretation of agreements in manner and on basis not urged by either

party was not reversible error,

but rather was within court's discretion.

U.S.

v.

Beardslee,

C.A.6 (Mich.) 1977,

562 F.2d 1016, certiorari denied 99 S.Ct. 113, 439 U.S. 833, 58 L.Ed.2d 128. Federal Courts

755

On appeal from judgment dismissing complaint by government for a deficiency judgment against all defendants

for the unpaid balance of four loans secured by a mortgage obligation obtained from Small Business Administra-

tion, evidence was to be viewed in light most favorable to defendants as prevailing parties. U.S. v. Hastings Mo-

tor Truck Co., C.A.8 (Neb.) 1972, 460 F.2d 1159. Federal Courts

797

Where administrative agency's interpretation of its rule obviously incorporates quasi technical administrative ex-

pertise and familiarity with situation acquired by law and experience with intricacies inherent in comprehensive

regulatory scheme, judges should be particularly reluctant to substitute their personal assessment of meaning of

regulation for considered judgment of agency,

and if agency interpretation is merely one of several reasonable

alternatives,

it must stand even though it may not appear as reasonable as some other.

Allen M.

Campbell Co.

General

Contractors,

Inc.

v.

Lloyd Wood Construction Co.,

C.A.5 (Ala.) 1971,

446 F.2d 261.

Administrative

Law And Procedure

413

Substantial basis in record upheld action of Small Business Administration, applying its own rules and following

long-established practice,

in twice finding government

contractor to have satisfied size requirement

of Small

Business Administration based upon “completed contracts” accounting method, and district court erred in hold-

ing that the “completed contracts” method was unacceptable for size computation. Allen M. Campbell Co. Gen-

eral

Contractors,

Inc.

v.

Lloyd Wood Construction Co.,

C.A.5 (Ala.) 1971,

446 F.2d 261.

United States

64.15

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Where United States sued to foreclose its mortgages securing loan by Small Business Administration and bid in

for $43,000 but court had held fair value to be $108,000 and gave government option of moving for second sale

with upset

price of that

amount

or having judgment

credited therewith,

even if being permitted to credit

upset

price was benefit to government,

government was not precluded from appealing other portions of judgment re-

lating to $30,000 credit for storm loss to property and to offsetting of interest.

U.S.

v.

Newton Livestock Auc-

tion Market, Inc., C.A.10 (Kan.) 1964, 336 F.2d 673. Federal Courts

544

Applicable standard of review of a loan denial by the Small Business Administration is whether the agency ac-

tion was arbitrary,

capricious,

an abuse of

discretion,

or

otherwise not

in accordance with law.

Palmer

v.

Weaver, E.D.Pa.1981, 512 F.Supp. 281. United States

53(8)

Judicial review of decision of the Small Business Administration with respect to amount of disaster loan to be

allowed plaintiff after severe storms had caused extensive flash flood in area of plaintiff's real property was not

reviewable under the Administrative Procedure Act,

sections 551 et seq.

and 701 et seq.

of Title 5,

and,

though

Congress expressly waived the sovereign immunity of the Administration under this chapter and consented to

sue, injunctive or any similar relief was precluded by this chapter, and relief sought by plaintiff, namely, substi-

tution of his estimate of flood damage incurred for that of the Administration, was in nature of an injunction, so

that

district

court

was without

subject

matter jurisdiction to grant

relief.

Copake Lake Development

Corp.

v.

U.S. Government, E.D.N.Y.1980, 490 F.Supp. 386. United States

82(7)

This chapter does not contain any clear or convincing provision indicating that the Administrator's discretionary

actions are precluded from judicial review. Duke City Lumber Co. v. Butz, D.C.D.C.1974, 382 F.Supp. 362, ad-

opted in part 539 F.2d 220,

176 U.S.App.D.C.

218,

certiorari denied 97 S.Ct.

737,

429 U.S.

1039,

50 L.Ed.2d

751. United States

53(8)

Court can review a decision of the Small Business Administration only if decision is arbitrary, capricious or er-

roneous as matter of law; it is not enough that court might reach contrary decision.

Raitport v.

Small Business

Administration U.S. Government, E.D.Pa.1974, 380 F.Supp. 1059. United States

53(8)

It was intent of Administrative Procedure Act, §§ 551 et seq. and 701 et seq. of Title 5, to accord review to such

aggrieved persons as those aggrieved by agency action taken under this chapter.

Southern Christian Leadership

Conference,

Inc.

v.

Connolly,

E.D.Mich.1971,

331 F.Supp.

940.

Administrative Law And Procedure

668;

United States

53(8)

Administrator

has power

to make determinations as to whether

business qualifies as small

business concern

within this chapter and the determination must be upheld by the courts unless determination is arbitrary,

capri-

cious, in excess of statutory authority, erroneous as matter of law, or not supported by substantial evidence, and

it is not enough that the reviewing court might reach a different result in making original determination.

Lloyd

Wood Const.

Co.

v.

Sandoval,

N.D.Ala.1970,

318 F.Supp.

1167.

United States

53(8); United States

53(18)

15 U.S.C.A. § 634

Page 48

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

Small

Business Administration's determination that

bidder on electrical

construction contract

available only to

small

business concerns was not

a small

business concern was to be upheld unless Administration's findings

were erroneous or arbitrary and contrary to law; that district court might reach different result if making an ori-

ginal

determination was not

enough.

American Elec.

Co.

v.

U.S.,

D.C.Hawai'i

1967,

270 F.Supp.

689.

United

States

64.60(3.1)

15 U.S.C.A. § 634, 15 USCA § 634

Current through P.L. 112-89 (excluding P.L. 112-55, 112-74, 112-78, and 112-81) approved 1-3-12

Westlaw. (C) 2012 Thomson Reuters. No Claim to Orig. U.S. Govt. Works.

END OF DOCUMENT

15 U.S.C.A. § 634

Page 49

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.