### IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 20

- 40368

In re: HIDALGO COUNTY EMERGENCY SERVICE FOUNDATION , Debtor.

HIDALGO COUNTY EMERGENCY SERVICE FOUNDATION , Appellee,

versus JOVITA CARRANZA, U.S. Small Business Administration , Appellant

.

Appeal from the United States District Court for the Southern District of Texas

Before SMITH , HIGGINSON , and ENGELHARDT , Circuit Judges

. JERRY E. SMITH, Circuit Judge :

As the reality of the coronavirus global pandemic took hold, markets plummeted and unemployment soared. Congress responded with the Corona

virus Aid, Relief, and Economic Security Act, Pub. L. No. 116

- 136, 134 Stat. United States Court of Appeals Fifth Circuit 

### FILED June 22, 2020 Lyle W. Cayce Clerk Case: 20-40368 Document: 00515461681 Page: 1 Date Filed: 06/22/2020No. 20

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2 281 (2020) (“CARES Act”). The CARES A ct , inter alia , made $659 billion of government

- guaranteed loans available to qualified small businesses through the Pa ycheck Protection Program (“PPP”). 1 The PPP is implemented under section 7(a) of the Small Business Act, 15 U.S.C. § 636, which is administered by the Small Business Administration (“SBA”). The SBA quickly promulgated several regulations concerning PPP eligibility. At issue here is its determination that “ [i]f [an] applicant . . . is the debtor in a bankruptcy proceeding,

. . . th [at ] applicant is ineligible to receive a PPP loan.” Business Loan Program Temporary Changes; Paycheck Pro tec

tion Program

— Requirements

— Promissory Notes, Authorizations, Affiliation, and Eligibility, 85 Fed. Reg. 23,450, 23,451 (Apr. 28, 2020)

. Hidalgo Coun ty Emergency Service Foundation (“Hidalgo”)

— which is in Chapter 11 bankruptcy

— alleges that it was denied a PPP loan based on its
status as a bankruptcy debtor

. It filed an adversary proceeding against the SBA in bankruptcy court, contending that the SBA ’s decision t o preclude bankrupt parties from obtaining PPP loans (1) violat es 11 U.S.C. § 525(a), which prohibits discriminati on based on bankruptcy status under certain circumstances , (2) is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” 5 U.S.C. § 706(2)( A

), and (3) is “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right,” id. § 706(2)(C).
The bankruptcy court sided with Hidalgo and issued a preliminary injun ction mandating that the SBA handle Hidalgo ’ s PPP application without consideration of its ongoing bankruptcy

. The district court stayed the

1 Congress initially funded the PPP with $349 billion , CARES Act § 1102 (b)(1) , 134 Stat. at 293 , then increased that to $659 billion , Paycheck Protection Program and Health Care Enhancement Act , Pub. L. No. 116

- 139 , § 101(a)(1) , 134 Stat. 620 , 620 (2020). Case: 20-40368 Document: 00515461681 Page: 2 Date Filed: 06/22/2020No. 20

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3 preliminary injunction and certified the case for direct appeal to the Fifth Circuit

. We granted permission to ta ke the direct appeal under 28 U.S.C. § 158(d).
As a threshold matter, the SBA Administrator contends that the Small Business Act forecloses injunctive relief by providing that “no . . . injunction

. . . shall be issued against the Administrator or his property.” 15 U.S.C. § 634(b)(1 )

. Additionally

— and as Hidalgo concedes

— “t his [c]ircuit has con

cluded that all injunctive relief directed at the SBA is absolutely prohibited

. ” 2 Hidalgo requests that we create “an exception ” to that absolute prohibition

“ under the extreme facts and highly compressed time frame presented in this

case ” or that the doctrine “should be revisited entirely.” Under our well

recognized rule of orderliness, however, a panel o f this court is bound by circuit precedent

. See Teague v. City of Fl ower Mound , 179 F.3d 377, 383 (5th Cir. 1999).
The issue at hand is not the validity or wisdom of the PPP regulations and related statutes, but the ability of a court to enjoin the Administrator, whether in regard to the PPP or any other circumstance. Because , under well

established Fifth Circuit law, the bankruptcy court exceeded its authority when it issued an injunction against the SBA Administrat or , we VACATE its preliminary injunction.

2 Enplanar, Inc. v. Marsh , 11 F.3d 1284, 1290 n.6 (5th Cir. 1994) (emphasis added ) (quotation marks omitted ); see also Valley Const r . Co. v. Marsh , 714 F.2d 26, 29 (5th Cir. 1983) (“The Small Business Act, 15 U.S.C. § 634(b)(1), precludes injunctive relief against the SBA.”); Expedient Servs., Inc. v. Weaver , 614 F.2d 56, 58 (5th Cir. 1980) (“Section 634(b)(1) provides, inter alia , that no ‘injuncti on . . . or other similar process . . . shall be issued against the Administrator.’ . . . [A] suit praying solely for injunctive relief against the Administrator is barred by the language of § 634(b)(1). Since we have determined that the sole relief praye d for in the instant case was injunctive in nature, the suit should have been dismissed.”). Case: 20-40368 Document: 00515461681 Page: 3 Date Filed: 06/22/2020