Petition of Whitman Operating Co., LLC d/b/a Camp Walt Whitman & a. ( 2021 )

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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Governor’s Office for Emergency Relief and Recovery
No. 2020-0536
PETITION OF WHITMAN OPERATING CO., LLC
d/b/a CAMP WALT WHITMAN & a.
(Governor’s Office for Emergency Relief and Recovery)
Argued: June 17, 2021
Opinion Issued: September 22, 2021
Bernstein, Shur, Sawyer & Nelson, P.A., of Manchester (Ovide M.
Lamontagne and Matthew J. Saldaña on the brief, and Ovide M. Lamontagne
orally), for the petitioners.
Office of the Attorney General, (Laura E. B. Lombardi, senior assistant
attorney general, on the brief and orally), for the Governor’s Office for
Emergency Relief and Recovery.
HANTZ MARCONI, J. The petitioners, Whitman Operating Co., LLC
d/b/a Camp Walt Whitman, Wicosuta Operating Co., LLC d/b/a Camp
Wicosuta, and Winaukee Operating Co., LLC d/b/a Camp Winaukee
(collectively, the Camps), challenge a decision of the respondent, the Governor’s
Office for Emergency Relief and Recovery (the Office for Emergency Relief), to
deny their applications for money from the New Hampshire General Assistance
and Preservation (GAP) Fund. We affirm.
I. Facts
The relevant facts follow. The Governor established the Office for
Emergency Relief pursuant to an April 2020 executive order related to the
COVID-19 pandemic. The executive order empowers the Office for Emergency
Relief “to assist the Governor and Legislature with and direct State agencies on
the management and expenditure of . . . emergency relief funds received under”
the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the CARES
Act). See Pub. L. No. 116-136, 134 Stat. 281 (2020). The executive order
establishes a “Legislative Advisory Board” and a “Stakeholder Advisory Board”
to work with the Office for Emergency Relief to “develop recommendations for
allocation and expenditure of CARES Act emergency relief funds.” Pursuant to
the executive order, the Governor reviews the Office for Emergency Relief’s
recommendations and makes any changes he deems necessary before giving
his final approval “for allocation and expenditure [of] . . . CARES Act emergency
relief funds.”
In July 2020, the Governor authorized the allocation and expenditure of
$30 million of CARES Act funds for the GAP Fund “to provide emergency
financial relief to New Hampshire businesses and nonprofit organizations
impacted by the COVID-19 pandemic.” The Camps applied for GAP funding at
the end of July 2020. Their applications were denied on September 10, 2020.
The form letters notifying the Camps that their applications had been denied
stated that “having high liquid assets both personal and business” was one of
“[t]he most common reasons” for denying an application.
Shortly thereafter, the Camps submitted a request for rehearing
“pursuant to the requirements set forth in New Hampshire Supreme Court
Rule 10 and RSA 541:4.” On October 5, 2020, the Office for Emergency Relief
declined the request. The Office explained that “[t]he determination of who will
receive awards and the proper amounts from the CARES Act funds are . . .
decisions under the Governor’s emergency powers and are not subject to
rehearing or appeal under RSA 541.” Nonetheless, the Office provided
“additional information regarding the GAP Fund,” which it hoped would
address the Camps’ concerns about why they did not receive awards:
We understand that [the Camps] may have had a financial impact
from COVID. That alone, however, was not the basis for the
awards from the GAP Fund. The State has had to make many
hard decisions about criteria for providing funding. As a result,
the State targeted the limited aid available to those entities that do
not have other resources to more likely enable them to weather
this pandemic crisis. Of note, the financials [the Camps]
submitted . . . indicated that several of the largest percentage
owners have tens of millions in net worth and more significantly,
tens of millions in cash liquid assets.
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Thereafter, the Camps submitted a “Second Request for Rehearing
Pursuant to RSA 541:4,” asking the Office for Emergency Relief to grant their
applications for GAP funding. The Office for Emergency Relief responded in an
October 21 email that, after carefully considering the Camps’ request, its
October 5 “response to [the Camps’] original request for rehearing is final,” and
the Office would not reopen “that decision.” The Camps filed the instant appeal
on November 20, 2020, under Supreme Court Rule 10 or, alternatively, as a
petition for a writ of certiorari under Supreme Court Rule 11.
II. Analysis
A. Subject Matter Jurisdiction
Before considering the merits of the Camps’ appellate arguments, we
address the Office for Emergency Relief’s assertion that we lack subject matter
jurisdiction. “Subject matter jurisdiction is jurisdiction over the nature of the
case and the type of relief sought: the extent to which a court can rule on the
conduct of persons or the status of things.” Appeal of Cole, 171 N.H. 403, 408
(2018). The Camps contend that we have jurisdiction to decide their case
either as an appeal from an administrative proceeding under RSA chapter 541
or as a petition for a writ of certiorari. We conclude that although we lack
jurisdiction under RSA chapter 541, we have subject matter jurisdiction to
decide this case as a petition for a writ of certiorari.
We first consider whether the Camps’ claims may be brought in this
court under RSA chapter 541. Under RSA 541:2, appeals may be taken under
RSA chapter 541 only “[w]hen so authorized by law.” RSA 541:2 (2021); see
Appeal of Rye Sch. Dist., 173 N.H. 753, 757 (2020). We have interpreted the
phrase “only when so authorized by law” to mean “that the provisions of
chapter 541 do not provide an appeal from the determination of every
administrative agency in the state.” Appeal of Rye Sch. Dist., 173 N.H. at 757
(quotation omitted). “Unless some reference is made to chapter 541 in [a] given
statute, an appeal under the provisions of chapter 541 is not authorized by
law.” Id. (quotation omitted).
The Camps do not identify any statute authorizing an appeal of a
decision of the Office for Emergency Relief under RSA chapter 541. Nor are we
aware of any such statute. Instead, the Camps argue that “in the absence of
an organic statute construing the powers and responsibilities of [the Office for
Emergency Relief], . . . RSA 541 should apply to provide aggrieved parties a
meaningful avenue of appeal from decisions of [the Office for Emergency
Relief].” The Camps assert that “[t]his is particularly true given the constrained
internal appeal process which [the Office for Emergency Relief] applied with
respect to the grant[s] at issue here.” However, as the Office for Emergency
Relief correctly observes, and as we have previously held, we have no authority
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to create equitable exceptions to the jurisdictional requirements of RSA chapter
541. See Appeal of Carreau, 157 N.H. 122, 123-24 (2008) (holding that we
could not waive the requirement in RSA 541:6 that an appeal be brought
within thirty days after an application for rehearing is denied). As no statute
authorizes an appeal under RSA chapter 541 in these circumstances, we have
no jurisdiction to review the Office for Emergency Relief’s denial of the Camps’
applications for GAP funds under that chapter.
We next consider whether we have original jurisdiction to decide this
case as a petition for a writ of certiorari. Relying upon law from other
jurisdictions concerning their common law writs of certiorari, the Office for
Emergency Relief contends that certiorari review is available only when an
administrative body acts in a judicial or quasi-judicial capacity. See St.
Botolph Citizens Committee v. BRA, 705 N.E.2d 617, 621 (Mass. 1999)
(observing, in dicta, that “[c]ertiorari is a limited procedure which may be used
to correct substantial errors of law committed by a judicial or quasi-judicial
tribunal (but not administrative, political, or legislative decisions)”). The Office
for Emergency Relief asserts that we lack jurisdiction here because the Office
was not acting in a judicial or quasi-judicial capacity when it denied the
Camps’ applications for GAP funding. See Appeal of Town of Bethlehem, 154
N.H. 314, 330 (2006) (“An act is judicial in nature if officials are bound to
notify, and hear the parties, and can only decide after weighing and
considering such evidence and arguments as the parties choose to lay before
them.” (quotation omitted)).
We have not previously limited certiorari review to judicial or quasi-
judicial acts and decline to do so in this case. See DHB v. Town of Pembroke,
152 N.H. 314, 317-18 (2005) (holding that review on certiorari was available to
review a planning board’s decision not to accept a subdivision application).
Our certiorari jurisdiction is confirmed by RSA 490:4. Melton v. Personnel
Comm’n, 119 N.H. 272, 277 (1979); see RSA 490:4 (2010) (providing that the
supreme court “may issue writs of certiorari . . . to other courts, to
corporations, and to individuals”). “Review on certiorari is an extraordinary
remedy, usually available only in the absence of a right to appeal, and only at
the discretion of the court.” Petition of Chase Home for Children, 155 N.H.
528, 532 (2007).
Our cases have allowed “some expansion of the conventional scope of the
writ of certiorari.” Sinkevich v. Nashua, 97 N.H. 262, 264 (1952). Thus, in
DHB, for instance, even though the plaintiff had not sought a writ of certiorari,
we concluded that it was available to review the planning board’s decision not
to accept a subdivision application. DHB, 152 N.H. at 317-18. We explained
that “[o]n a sufficient petition, the question is less the form of the petition than
whether there is an error correctable by the court.” Id. at 318. We further
explained that certiorari review was necessary because, otherwise, “a planning
board could exercise an unchallengeable veto over even the most meticulous,
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meritorious and undeniably complete application by simply refusing to accept
it.” Id. We conclude that certiorari review is available in this case because
there is no statutory right of appeal and because, otherwise, the Office for
Emergency Relief’s decision would be unreviewable.
B. Standard of Review
Our review of an administrative body’s decision on a petition for writ of
certiorari entails examining whether the administrative body “acted illegally
with respect to jurisdiction, authority or observance of the law or has
unsustainably exercised its discretion or acted arbitrarily, unreasonably or
capriciously.” Petition of Chase Home for Children, 155 N.H. at 532. “We
exercise our power to grant such writs sparingly and only where to do
otherwise would result in substantial injustice.” Id.
C. Camps’ Arguments
1. Equal Protection
The Camps first argue that denying their applications violated their state
and federal constitutional rights to equal protection. See N.H. CONST. pt. I,
art. 2; U.S. CONST. amend. XIV. We first address their arguments under the
State Constitution and cite federal opinions for guidance only. State v. Ball,
124 N.H. 226, 231-33 (1983).
“The equal protection guarantee is essentially a direction that all persons
similarly situated should be treated alike.” Lennartz v. Oak Point Assocs., 167
N.H. 459, 462 (2015) (quotation omitted). A classification cannot be arbitrary,
but must reasonably promote some proper object of public welfare or interest.
Id. In considering an equal protection challenge under our State Constitution,
we must first determine the standard of review by examining the purpose and
scope of the State-created classification and the individual rights affected. Id.The possible review standards are commonly known as strict scrutiny,
intermediate scrutiny, and the rational basis test. Id.Generally, classifications based upon suspect classes or affecting
fundamental rights are subject to strict scrutiny, and classifications involving
“important substantive rights” are subject to intermediate scrutiny. In re
Sandra H., 150 N.H. 634, 637-38 (2004) (quotation omitted). In all other cases,
we employ the rational basis test. Id. Here, the Camps implicitly agree that
the rational basis test applies.
We will uphold a classification under rational basis review “if there is a
plausible policy reason for [it], the . . . facts on which the classification is
apparently based rationally may have been considered to be true by the
governmental decisionmaker, and the relationship of the classification to its
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goal is not so attenuated as to render the classification arbitrary or irrational.’’
Deere & Co. v. State of N.H., 168 N.H. 460, 482 (2015) (quotation and brackets
omitted). We will not “pronounce a classification unconstitutional unless in the
light of the facts made known or generally assumed it is of such a character as
to preclude the assumption that it rests upon some rational basis.” Id.(quotation and brackets omitted). Because the classification is presumed
constitutional, the Camps have the burden “to negative every conceivable basis
which might support” the classification. Id. (quotation omitted).
The Camps argue that the Office for Emergency Relief treated them
differently from similarly situated for-profit organizations based upon the
Camps’ corporate structure. The Camps describe themselves as limited
liability companies “falling under a single[, closely-held] corporate parent.”
They assert that if they had a different corporate structure, they “presumably
would have been approved for GAP funding.” They further contend that
“similarly situated competitors, including camps with ‘wealthy’ owners and/or
multiple camps, received emergency grants in the hundreds of thousands of
dollars, while [the Camps] did not.” (Citation omitted.) Although the record
before us includes a list of GAP Fund for-profit recipients, the only information
about the recipients in the record are their names, addresses, and the amount
of GAP funding received.
The Camps’ assumption that, if they had a different corporate structure,
they would have received GAP funding and their conclusory assertion that
certain allegedly similarly situated competitors received GAP funding are
insufficient, as a matter of law, to overcome the presumption that the Office for
Emergency Relief administered the GAP Fund constitutionally. See Wroblewski
v. City of Washburn, 965 F.2d 452, 460 (7th Cir. 1992) (“To survive a motion to
dismiss for failure to state a claim, a plaintiff must allege facts sufficient to
overcome the presumption of rationality that applies to government
classifications.”). Because the Federal Constitution affords the Camps no
greater protection than the State Constitution does under these circumstances,
see id., Deere & Co., 168 N.H. at 482, we necessarily reach the same decision
under the Federal Constitution as we reach under the State Constitution.
2. Due Process
The Camps next argue that the Office for Emergency Relief’s decision
deprived them of their state and federal rights to procedural and substantive
due process. We first address their arguments under the State Constitution
and cite federal opinions for guidance only. Ball, 124 N.H. at 231-33.
a. Procedural Due Process
We engage in a two-part analysis in addressing procedural due process
claims: first, we determine whether the individual has an interest that entitles
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him or her to due process protection; and second, if such an interest exists, we
determine what process is due. Appeal of Nguyen, 170 N.H. 238, 243 (2017).
The Camps contend that they have a constitutionally-protected property
interest in receiving GAP funds. We disagree.
To have a constitutionally-protected property interest in a government
benefit, “a person clearly must have more than an abstract need or desire for
it” and “more than a unilateral expectation of it.” Board of Regents v. Roth,
408 U.S. 564, 577 (1972); see Short v. School Admin. Unit 16, 136 N.H. 76, 81
(1992). Rather, the person must “have a legitimate claim of entitlement to it.”
Roth, 408 U.S. at 577. “[A] benefit is not a protected entitlement if government
officials may grant or deny it in their discretion.” Castle Rock v. Gonzales, 545
U.S. 748, 756 (2005). “Rather, the more circumscribed is the government’s
discretion (under substantive state or federal law) to withhold a benefit, the
more likely that benefit constitutes ‘property.’” Clukey v. Town of Camden, 717
F.3d 52, 56 (1st Cir. 2013) (quotation omitted). “Two factors indicating limited
discretion are the repeated use of explicitly mandatory language and specific
substantive predicates creating guidelines for the official’s decision.” Connor
B. ex rel. Vigurs v. Patrick, 771 F. Supp. 2d 142, 165 (D. Mass. 2011)
(quotations omitted).
The Camps do not identify any mandatory language or specific
substantive predicates creating guidelines for the Office for Emergency Relief’s
discretion. Instead, they fault the Office for failing to point to “‘permissive
language.’” In addition, they concede that the guidance issued by the United
States Department of Treasury instructs states to use their “reasonable
judgment” in disbursing CARES Act funds. U.S. Dep’t of the Treasury,
Coronavirus Relief Fund Guidance for State, Territorial, Local, and Tribal
Governments, 86 Fed. Reg. 4182, 4183 (Jan. 15, 2021). We note that the same
guidance explains that state and local “[g]overnments have discretion to
determine what payments are necessary” when creating a grant program to
reimburse small businesses “the costs of business interruption caused by
required closures.” Id. at 4189. Under these circumstances, we conclude that
the Camps have failed to establish that they have a constitutionally-protected
property right or entitlement to GAP funding. Because the Federal
Constitution offers the Camps no greater protection than the State
Constitution under these circumstances, see Roth, 408 U.S. at 577; Duffley v.
N.H. Interschol. Ath. Assoc., Inc., 122 N.H. 484, 491-92 (1982), we reach the
same result under both constitutions.
b. Substantive Due Process
“The Due Process Clause guarantees more than fair process, and the
‘liberty’ it protects includes more than the absence of physical restraint.” State
v. Hollenbeck, 164 N.H. 154, 159 (2012) (quotation omitted). “The substantive
component of due process provides heightened protection against government
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interference with certain fundamental rights and liberty interests.” Id.(quotation omitted). When, as in this case, “there is no fundamental right or
protected liberty interest at stake, we review the infringement of a right or
interest under our rational basis standard of review.” Id. at 160.
Under the rational basis test, the party challenging the governmental
action at issue has the burden of proof. Id. at 163. To meet the test, the
governmental action at issue need only be rationally related to a legitimate
governmental interest. Id.Here, the Office for Emergency Relief asserts that it had a legitimate
governmental interest in targeting “the limited aid available to the businesses
most in need of the assistance in order to survive the pandemic crisis.” We
agree that this is a legitimate governmental interest. As the Treasury
Department’s guidance explains, “A program that is aimed at assisting small
businesses with the costs of business interruption caused by required closures
should be tailored to assist those businesses in need of such assistance.”
Coronavirus Relief Fund Guidance, 86 Fed. Reg. at 4189.
The Camps have failed to persuade us that denying their applications
was not rationally related to this legitimate governmental interest. Rather, we
conclude that the Office for Emergency Relief could have rationally determined
that, as it argues, “businesses owned by extremely wealthy individuals with
high levels of liquid assets and/or the ability to obtain private financing [would]
have the ability to survive the pandemic without the assistance of tax-payer-
funded grants from the government.” Accordingly, on this record, we conclude
that the Camps have failed to prove that the Office for Emergency Relief
violated their rights to substantive due process when it denied their
applications for GAP funding. We reach the same result under the Federal
Constitution as we do under the State Constitution because the Federal
Constitution offers the Camps no greater protection than does the State
Constitution under these circumstances. See Hollenbeck, 164 N.H. at 164.
3. Arbitrary, Unreasonable, and Capricious Action
Finally, the Camps contend that the Office for Emergency Relief acted
arbitrarily, unreasonably, and capriciously “when it disregarded the corporate
identity and personhood of [the Camps] and instead applied the personal
finances of its individual owners to exclude [the Camps] from GAP funding for
which they were clearly eligible.” The Camps argue that by so doing, the Office
for Emergency Relief impermissibly “pierc[ed] the corporate veil” and violated
Citizens United v. Federal Election Commission, 558 U.S. 310 (2010). We
disagree.
Here, the Office for Emergency Relief was bestowing a government
benefit. It did not “pierce the corporate veil” so as to hold individual owners
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personally liable for a corporate action or debt. See Terren v. Butler, 134 N.H.
635, 639-40 (1991) (explaining the piercing the corporate veil doctrine). Nor
did it deprive a corporation, on the basis of its corporate identity, a legal
entitlement or constitutional right. See Citizens United, 558 U.S. at 365(holding that “the Government may not suppress political speech on the basis
of the speaker’s corporate identity”). In light of the limited CARES Act funds
available and the Treasury Department’s guidance, we cannot conclude, based
upon the record submitted, that the Office for Emergency Relief acted
“arbitrarily, unreasonably, or capriciously” when it denied the Camps’
applications for GAP funds. Petition of Chase Home for Children, 155 N.H. at
532. Accordingly, we uphold that decision.
Affirmed.
BASSETT and DONOVAN, JJ., concurred.
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