1 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

MEMORANDUM OPINION AND ORDER 

I. Introduction 

Plaintiff Calabazas Creek Research, Inc. (“Plaintiff” or 

“CCR”) brings this action under the Administrative Procedure Act 

(“APA”) against Defendants Jennifer M. Granholm, in her official 

capacity as Secretary of the United States Department of Energy, 

and the United States Department of Energy (collectively, 

“DOE”). See Compl., ECF No. 1 ¶¶ 46-50.1 CCR alleges that DOE’s 

failure to negotiate in good faith and its failure to direct 

their contractor to negotiate in good faith constitute agency 

action that is arbitrary capricious, and not in accordance with 

1 When citing electronic filings throughout this Opinion, the 

Court refers to the ECF header page numbers, not the page 

numbers of the filed documents. 

CALABAZAS CREEK RESEARCH, 

INC., 

Plaintiff, 

 

v. 

JENNIFER M. GRANHOLM, in her 

official capacity as Secretary 

of the United States 

Department of Energy, et al., 

Defendants. 

Civ. Action No. 21-2617 

(EGS) 
2 

law in violation of Section 706(2)(A) of the APA. See id. ¶ 47. 

CCR further alleges that DOE unlawfully withheld action in 

violation of section 706(1) of the APA. See id.

Pending before the Court is Defendants’ Motion to Dismiss. 

See Defs.’ Mot. Dismiss & Mem. Supp. Thereof (“Defs.’ Mot.”), 

ECF No. 14. Upon careful consideration of the motion, 

opposition, and reply thereto, the applicable law, and for the 

reasons explained below, the Court GRANTS Defendants’ motion. 

II. Background 

A. Regulatory Framework 

The Small Business Innovation Research (“SBIR”) program 

requires federal agencies to make research and development 

awards to small businesses and to purchase technology developed 

from these awards. Compl., ECF No. 1 ¶ 6. 

The SBIR program involves three phases. In Phases I and II, 

small businesses must demonstrate the feasibility of the 

proposed technology and build prototypes. Id. ¶ 9. Then, in 

Phase III, federal agencies purchase the technologies that were 

developed in Phases I and II. Id. Specifically, Phase III 

consists of “‘work that derives from, extends, or completes 

efforts made under prior funding agreements under the SBIR 

program.’” Id. (quoting 15 § 638(e)(4)(C); SBIR Policy Directive 

Section 4(c)). 
3 

Congress directed the Small Business Administration (“SBA”) 

to issue a Policy Directive regulating the administration of the 

SBIR program. 15 U.S.C. § 638(j). The Policy Directive provides 

that “Agencies or their Government-owned, contractor-operated 

(GOCO) facilities . . . shall issue Phase III awards relating to 

the technology, including sole source awards, to the Awardee 

that developed the technology under an [SBIR] award, to the 

greatest extent practicable.” Policy Directive § 4(c)(7). To 

implement this requirement, “Agencies must make a good faith 

effort to negotiate with such Awardees regarding the performance 

of the new, related, work, and to issue Phase III awards for the 

work.” Id. § 4(c)(7)(i). “If pursuing the Phase III work with 

the Awardee is found to be practicable, the agency must award a 

non-competitive contract to the firm.” Id. § 4(c)(7)(ii). 

The Policy Directive further provides that “[i]f pursuing 

Phase III work with the Awardee on a sole source/non-competitive 

basis does not meet the requirements . . . [regarding] 

availability, practicality and capability, the Agency must 

document the file and provide a copy of the decision, including 

the rationale, to the SBA." Id. § 4(c)(7)(iii). “An agency or 

its GOCO [facility] . . . that intends to pursue Phase III work 

. . . . with an entity other than the Phase I or Phase III SBIR 

. . . Awardee must notify SBA in writing prior to such award." 

Id. § 4(c)(7)(iv). The notification must include, at a minimum, 
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the “steps the agency has taken to fulfill the special 

acquisition requirement,” the “reasons why a follow-on Funding 

Agreement with the [SBIR] Awardee is not practicable,” and the 

“identity of the entity with which the agency intends to make 

award . . . ." Id. § 4(c)(7)(iii). SBA may then appeal the 

agency's decision. Id. § 4(c)(7)(v). 

B. Factual 

The Court assumes the following facts alleged in the 

Complaint to be true for the purposes of deciding this motion. 

See Baird v. Gotbaum, 792 F.3d 166, 169 n.2 (D.C. Cir. 2015). 

CCR develops high power radiofrequency (“RF”) generation 

and transmission technologies, including “the first 1 megawatt 

(MW) load for testing RF sources for fusion heating and the 

quasi-optical launcher technology used worldwide in these 

sources.” Id. ¶ 16. DOE awarded CCR a series of SBIR Phase I and 

Phase II awards. Id. ¶ 17. DOE funded these SBIR awards to CCR 

to “meet an anticipated need for innovative, higher-performing 

RF loads to be installed and used at a thermonuclear 

experimental reactor called ITER.” Id. “The ITER facility is 

being constructed in France, and the United States is one of 

several countries that are contributing to its construction.” 

Id. “DOE’s contributions to the project are made through a DOE 

program called US-ITER, which is managed by DOE’s Oak Ridge 

National Laboratory (‘ORNL’)”. Id. 
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In spring 2020, DOE announced that it would procure 

prototype RF loads for evaluation and installation at ITER. Id.

¶ 26. “DOE’s procurement of RF loads was conducted through the 

US-ITER organization at ORNL.” Id. ¶ 27. ORNL is a GOCO that is 

owned by DOE but operated by UT-Battelle, LLC (“UTB”), a private 

entity. Id. ¶ 27. On July 22, 2020, CCR emailed ORNL to ask that 

DOE consider a Phase III award to procure the prototype RF 

loads, stating that “a Phase III award would be consistent with 

the law ‘based on the multiple SBIR awards [CCR had] received 

for this product.’” Id. ¶ 28 (quoting Ex. 4, ECF No. 4-3 at 4). 

However, on July 23, 2020, Lisa Cobb, the procurement manager at 

ORNL, informed CCR that the procurement team “will not be 

considering a Phase III sole-sourced award.” Id. ¶ 29. ORNL 

stated that the reason was that “CCR ‘has yet to be awarded a 

Phase II award, and even if awarded, completion of such work 

isn’t expected until 18-months following August 24th program 

start.” Id. ¶ 29 (quoting Ex. 4, ECF No. 4-3 at 3). However, at 

that time, CCR had already received two Phase II awards. Id. 

The next day, CCR emailed ORNL to clarify that CCR 

previously completed two Phase II programs for the product, 

identifying the award numbers and the power capacities of the 

SBIR-developed RF loads. Id. ¶ 30. The email was addressed to 

ORNL employees, the Director of DOE’s SBIR program and a Program 

Manager for DOE’s Fusion Energy Science Program. Id. ¶ 31. DOE 
6 

did not respond to CCR’s email or negotiate with CCR for a Phase 

III award. Id. ¶ 32. Instead, on July 28, 2020, ORNL posted an 

open solicitation for the prototype RF load. Id. ¶ 32. CCR 

submitted a proposal in response and also participated in a 

teleconference with ORNL. Id. ¶ 33. 

On February 19, 2021, ORNL announced that CCR would not 

receive the procurement award. Id. ¶ 35. It awarded the 

procurement contract to CURTI Costruzioni Meccaniche SpA and 

Dymenso LLC—neither of which had previously won SBIR awards for 

RF loads or had developed an RF load capable of safely absorbing 

1 MW of power with the required performance. Id. 

Later that month, CCR contacted the SBA to request an 

investigation to determine whether DOE complied with 15 U.S.C. § 

638(r)(4) and Section 4(c)(7) of the SBIR Policy Directive. Id.

¶ 37. In March 2021, Jennifer Shieh, the Chief Scientist and 

Program Manager for SBA’s Office of Investment and Innovation, 

contacted DOE and ORNL regarding the absence of a Phase III 

award. Id. ¶ 38. Ms. Shieh reported that DOE told her: that it 

“determined that [the RF load] procurement was not an SBIR Phase 

III opportunity”; and that “[p]rior to release of the [RF load] 

solicitation in 2020, ORNL’s technical team performed an 

assessment of CCR SBIR projects for three awarded projects . . . 

and determined that the proposed [RF load] requirement would not 

derive from, extend, or complete the work performed by CCR on 
7 

these SBIR projects.” Id. ¶ 39 (quoting Ex. 6, ECF No. 4-5 at 

2). She further stated that “ORNL determined this was not a 

Phase III opportunity, with concurrence by DOE, permitting the 

procurement to be released as an open solicitation.” Id.

(quoting Ex. 6, ECF No. 4-5 at 2). DOE did not provide any 

records to SBA to support this evaluation, and SBA did not 

attempt to verify DOE’s evaluation. Id. ¶ 40. 

B. Procedural 

CCR filed this lawsuit on October 6, 2021. See Compl., ECF 

No. 1. On February 22, 2022, Defendants moved to dismiss the 

Complaint. See Defs.’ Mot., ECF No. 14. CCR filed its opposition 

brief on March 8, 2022, see Pl.’s Mem. Opp’n Defs.’ Mot. Dismiss 

(“Opp’n”), ECF No. 15; and Defendants filed their reply brief on 

March 15, 2022, see Reply Supp. Defs.’ Mot. Dismiss (“Reply”), 

ECF No. 16. The motion is now ripe and ready for adjudication. 

III. Legal Standard 

A motion to dismiss pursuant to Federal Rule of Civil 

Procedure 12(b)(6) tests the legal sufficiency of a complaint. 

Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). A 

complaint must contain “a short and plain statement of the claim 

showing that the pleader is entitled to relief, in order to give 

the defendant fair notice of what the . . . claim is and the 

grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 
8 

U.S. 544, 555 (2007) (citation and internal quotation marks 

omitted). 

Despite this liberal pleading standard, to survive a motion 

to dismiss, a complaint “must contain sufficient factual matter, 

accepted as true, to state a claim to relief that is plausible 

on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 

(citation and internal quotation marks omitted). “In determining 

whether a complaint fails to state a claim, [the court] may 

consider only the facts alleged in the complaint, any documents 

either attached to or incorporated in the complaint and matters 

of which [the court] may take judicial notice.” EEOC v. St. 

Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 

1997). A claim is facially plausible when the facts pled in the 

complaint allow the court to “draw the reasonable inference that 

the defendant is liable for the misconduct alleged.” Iqbal, 556 

U.S. at 678. The standard does not amount to a “probability 

requirement,” but it does require more than a “sheer possibility 

that a defendant has acted unlawfully.” Id.

“[W]hen ruling on a defendant’s motion to dismiss [pursuant 

to Rule 12(b)(6)], a judge must accept as true all of the 

factual allegations contained in the complaint.” Atherton v. 

D.C. Off. of the Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009) 

(citation and internal quotation marks omitted). In addition, 

the court must give the plaintiff the “benefit of all inferences 
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that can be derived from the facts alleged.” Kowal v. MCI 

Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). 

IV. Analysis 

Section 706 of the APA directs courts to: “(1) compel 

agency action unlawfully withheld or unreasonably delayed; and 

(2) hold unlawful and set aside agency action, findings, and 

conclusions found to be—(A) arbitrary, capricious, an abuse of 

discretion, or otherwise not in accordance with law.” 5 U.S.C. § 

706. 

Defendants argue that, in the Complaint, CCR “fails to 

allege any final agency action performed by DOE” and “has failed 

to plead any agency action unlawfully withheld.” Defs.’ Reply, 

ECF No. 16 at 5, 9 (capitalization omitted). 

A. CCR Has Failed to Allege Final Agency Action 

“The APA limits judicial review to ‘final agency action for 

which there is no other adequate remedy in a court.’” Soundboard 

Association v. Federal Trade Comm’n, 888 F.3d 1261, 1267 (D.C. 

Cir. 2018)(quoting 5 U.S.C. § 704). “While the requirement of 

finality is not jurisdictional, without final agency action, 

‘there is no doubt that [plaintiff] would lack a cause of action 

under the APA.’” Id. (quoting Reliable Automatic Sprinkler Co. 

v. Consumer Prod. Safety Comm’n, 324 F.3d 726, 731 (D.C. cir. 

2003). To state a claim, CCR “must first identify the final 

agency action being challenged.” Elk Run Coal Co. v. U.S. Dep’t 
10 

of Lab., 804 F. Supp. 2d 8, 30 (D.D.C. 2011) (citing 5 U.S.C. § 

704 (limiting judicial review to “[a]gency action made 

reviewable by statute and final agency action for which there is 

no other adequate remedy in court”)). 

“Agency actions are final if two independent conditions are 

met: (1) the action ‘mark[s] the consummation of the agency’s 

decisionmaking process’ and is not ‘of a merely tentative or 

interlocutory nature;’ and (2) it is an action ‘by which rights 

or obligations have been determined, or from which legal 

consequences will flow.’” Soundboard Association, 888 F.3d at 

1267 (quoting Bennett v. Spear, 520 U.S. 154, 177-78 

(1997)(internal quotation marks omitted). “An order must satisfy 

both prongs of the Bennett test to be considered final.” Sw. 

Airlines Co. v. U.S. Dep’t of Transp., 832 F.3d 270, 275 (D.C. 

Cir. 2016). 

CCR argues that it has alleged agency action because the 

Complaint alleges “that DOE made the central determination that 

is challenged in this action—the determination that no Phase III 

opportunity existed.” Opp’n, ECF No. 15 at 13 (emphasis 

omitted); see also Compl., ECF No. 1 ¶ 39 (alleging that DOE 

“determined that [the RF load] procurement was not an SBIR Phase 

III opportunity”). CCR also argues that it has alleged agency 

action because the Complaint alleges that “DOE responded to 

SBA’s inquiry and provided false or misleading information as to 
11 

the rigor and timing of its determination.” Id. at 13 (emphasis 

omitted). 

 Defendants’ Motion to Dismiss and Reply memorandum focus on 

the contractual relationship between DOE and UTB to argue that 

the procurement at issue was not conducted by DOE, but rather by 

UTB. See Mot. to Dismiss, ECF No. 14 at 6-7; Reply, ECF No. 16 

at 6-9. In so doing, Defendants fail to address both the actual 

allegations in the Complaint and the reasonable inferences that 

can be made from them. 

The Complaint fails to allege, however, that either of the 

actions attributed to DOE constitute final agency action. See 

generally Compl., ECF No. 1. Furthermore, in its opposition 

memorandum, CCR fails to argue that the actions attributed to 

DOE constitute final agency action. See Opp’n, ECF No. 15 at 11-

13. In so doing, CCR fails to provide any argument or legal 

support whatsoever for the proposition that the agency action it 

has alleged is final agency action. Because CCR has neither 

alleged final agency action in the Complaint, nor provided any 

argument or legal authority whatsoever for why the two agency 

actions it has alleged constitute final agency action, CCR has 

failed to state a claim. Accordingly, the Court DISMISSES this 

claim WITHOUT PREJUDICE. 
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B. CCR Has Failed to State a Claim for Unlawfully 

Withheld Action 

“[A] claim [concerning agency inaction] under § 706(1) can 

proceed only where a plaintiff asserts that an agency failed to 

take a discrete agency action that it is required to take.” 

Norton v. S. Utah Wilderness All. (SUWA), 542 U.S. 55, 64 

(2004). “SUWA teaches that the only action a court may compel an 

agency to take under § 706(1) is a discrete action that the 

agency has a legal duty to perform.” Western Organization of 

Resource Councils v. Zinke, 892 F.3d 1234, 1241 (D.C. Cir. 2018) 

(citing SUWA, 542 U.S. at 62-63). “The legal duty must be 

‘ministerial or nondiscretionary’ and must amount to ‘a 

specific, unequivocal command.’” Id. (quoting SUWA 542 U.S. at 

63-64). 

CCR argues that it has stated a claim for agency action 

unlawfully withheld because the Complaint alleges that DOE: (1) 

failed to negotiate with CCR, Opp’n, ECF No. 15 at 13, see also

Compl., ECF No. 1 ¶ 32; (2) failed to direct UTB employees to 

negotiate with CCR for a Phase III contract, Opp’n, ECF No. 15 

at 13; see also Compl., ECF No. 1 ¶ 44; and (3) failed to 

provide advance notification to SBA of its decision to award the 

procurement of RF loads to companies other than CCR, Opp’n, ECF 

No. 15 at 13; see also Compl., ECF No. 1 ¶ 44. CCR fails, 

however, to provide any argument or legal support whatsoever for 
13 

why the three withheld actions alleged constitute “discrete 

action that [DOE] is required to take” within the meaning of the 

relevant authority. See Opp’n, ECF No. 15 at 13-15. Rather, CCR 

argues that whether or not the procurement of RF loads was a 

Phase III opportunity is a factual question that the Court must 

assume to be true at the Motion to Dismiss stage and therefore 

the action it alleges was withheld was required. See id. 

Defendants argue that UTB, not DOE, made decision as to 

whether the procurement was a Phase III opportunity, Mot. to 

Dismiss, ECF No. 14 at 10, Reply, ECF No. 16 at 9-10; and 

disagree that the Court should assume that the procurement was a 

Phase III opportunity at this stage of the proceedings, id. at 

10-11. 

Whether the agency action was potentially unlawfully 

withheld is entirely contingent on whether the procurement was a 

Phase III opportunity. CCR has alleged that DOE made the 

decision that the procurement was not a Phase III opportunity, 

and challenges that decision in its first claim here. With this 

second claim, CCR seeks to bootstrap a claim for unlawfully 

withheld agency action to the very agency action it challenges. 

CCR has provided no authority to support the proposition that 

the Court should assume to be true for the purpose of its second 

claim the very decision that it challenges in its first claim. 
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Assuming that the action CCR alleges was unlawfully 

withheld would have been required if DOE had determined that the 

procurement was a Phase III opportunity, DOE had no “legal duty 

to perform” the action based on its determination that the 

procurement was not a Phase III opportunity. Western 

Organization of Resource Councils, 892 F.3d at 1241. 

Furthermore, Section 706(1) authorizes courts to “compel agency 

action unlawfully withheld or unreasonably delayed.” 5 U.S.C. § 

706(1). “[A] delay cannot be unreasonable with respect to action 

that is not required.” SUWA, 542 U.S. at 63 n.1. Similarly, an 

action that is withheld cannot be unlawful with respect to 

action that is not required. See id. When DOE allegedly withheld 

action, the action was not required because the determination 

had been made that the procurement was not a Phase III 

opportunity. And pursuant to that determination, a procurement—

in which CCR unsuccessfully participated—was conducted. Because 

the allegedly withheld action was not a legal duty and was not 

required based on the determination that the procurement was not 

a Phase III opportunity, it was not unlawfully withheld. 

Therefore CCR has failed to state a claim. Accordingly, the 

Court DISMISSES this claim WITH PREJUDICE. 
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V. Conclusion and Order 

For the foregoing reasons, it is hereby 

ORDERED that Defendants’ Motion to Dismiss, see ECF No. 14; 

is GRANTED. Plaintiff’s claim pursuant to 5 U.S.C. § 706(2)(A) 

for agency action that is arbitrary, capricious, and not in 

accordance with law is DISMISSED WITHOUT PREJUDICE. Plaintiff’s 

claim pursuant to 5 U.S.C. § 706(1) for agency action unlawfully 

withheld is DISMISSED WITH PREJUDICE. Plaintiff shall have leave 

to file an Amended Complaint, if any, within 14 days of the date 

of this Memorandum Opinion and Order. Any such filing shall 

consider the effect of this Memorandum Opinion and Order on 

Plaintiff’s claims. If Plaintiff does not timely file an Amended 

Complaint, the Court will enter a final, appealable order 

dismissing this case. See Ciralsky v. CIA 355 F.3d 661, 666-67 

(D.C. Cir. 2004)(explaining the distinction between dismissing a 

complaint and dismissing the action or case). 

SO ORDERED. 

Signed: Emmet G. Sullivan 

 United States District Judge 

 August 7, 2023