NOBLE PUBLIC ADJUSTING GROUP LLC v. UNITED STATES SMALL BUSINESS ADMINISTRATION (2025)

FINAL ORDER

Plaintiff Noble Public Adjusting Group, LLC, filed this action to challenge the United States Small Business Administration's decision to not fully forgive a PPP loan. Both sides have moved for summary judgment. After careful consideration, I now grant Defendants’ motion and direct entry of judgment in their favor.¹

I.

In response to economic distress associated with Covid-19, Congress passed the CARES Act, which tasked the SBA with quickly facilitating loans. See In re Gateway Radiology Consultants, P.A., 983 F.3d 1239, 1247 (11th Cir. 2020). Under the law's Payment Protection Program (PPP), certain businesses were eligible for government-backed forgivable loans. See 15 U.S.C. § 636(a)(36). Noble, a public adjusting firm, obtained two PPP loans. The first was fully forgiven and is not at issue here. The second was forgiven in part. The question in this case is whether the SBA was obligated to forgive in full.

The loan at issue was for $1,637,029—the amount Noble calculated as the maximum amount it was statutorily permitted. ECF No. 21-2 at 1. The SBA initially approved the loan, apparently convinced the statute permitted that amount. But when Noble applied for forgiveness, the SBA determined the maximum loan amount was actually only $835,002. The SBA then forgave that lesser amount, leaving Noble to repay the rest. ECF No. 21-8 at 1. Noble maintains the SBA got it wrong—that Noble was entitled to borrow the full $1,637,029 and is entitled to full forgiveness.

Helpfully, the parties agree on the pertinent facts. They also agree that the question about the maximum loan amount is dispositive. (The SBA offered no other reason for denying forgiveness, and Noble offered no other reason it was entitled to forgiveness.) And the parties agree that the maximum loan available turns on the proper interpretation of 15 U.S.C. § 636(37)(C)(i).

Under the statute, the maximum loan available was 2.5 times “the average total monthly payment for payroll costs incurred or paid by the eligible entity during ․ the 1-year period before the date on which the loan is made.” 15 U.S.C. § 636(37)(C)(i). In Noble's view, this includes payroll costs incurred but not actually paid. Thus, in figuring its “average total monthly payment for payroll costs,” Noble included amounts it planned to pay employees in the future.²

In SBA's view, Noble should have included only amounts it actually paid during the relevant period. In making its calculations, and in determining the proper amount of forgiveness, the SBA figured only what Noble paid employees in 2020. ECF No. 21-8 at 1-2. Those calculations yielded the $835,002 forgiveness.

After the SBA issued its final decision, Noble appealed to the SBA's Office of Hearings and Appeals. ECF No. 21-9. An Administrative Law Judge denied Noble's appeal. ECF No. 21-10 at 5. Noble then unsuccessfully moved for reconsideration. ECF No. 21-13 at 10. Having exhausted its administrative remedies, Noble sought judicial review here. ECF No. 1 ¶¶ 54, 58. The only question is what the phrase “payment for payroll costs incurred or paid” means as it is used in 15 U.S.C. § 636(a)(37)(C)(i).³

II.

Noble asserts that “incurred” and “paid”—which are separated by an “or”—must have separate meanings. ECF No. 24 at 16. Fair enough. A business can “incur” expenses without paying them. A business can also pay expenses incurred earlier. But the statute here looks to “payment for payroll costs incurred or paid” during the relevant period. There is no “payment” for costs that are incurred but not paid. The statute is clear. Noble cannot show “payment” for amounts it has not paid.

Thus, Noble's argument about the definition of “incur” is unavailing. Noble argues that “the word ‘incurred’ in the Loan Formula must also be read as referring to a mere incurrence of an obligation to pay compensation.” Id. at 15. Noble also argues that the SBA's interpretation “rendered the word ‘incurred’ completely superfluous.” Id. at 17. But the term clarifies that the formula includes payments for payroll obligations incurred earlier—not just for work performed during the relevant period. Regardless, even if the statute would have the same meaning without the term, the fact remains that the statute clearly specifies the formula relies on “the average total monthly payment for payroll costs.” Noble never really grapples with that fact.

Indeed, Noble never explains in any of its briefing how “payment for payroll costs incurred” can sensibly refer to non-payments.⁴ While it argues the SBA would rewrite the statute, it is Noble's interpretation that would do so. Noble would change the statute to include “the average total monthly payment amounts for payroll costs incurred or paid.”

The statute is clear. The SBA properly included in the formula only the amounts Noble actually paid during the relevant period.

Conclusion

Defendants’ motion for summary judgment (ECF No. 25) is GRANTED. Plaintiff's motion for summary judgment (ECF No. 23) is DENIED. The clerk will enter a judgment that says, “This case was resolved on motions for summary judgment. Plaintiff's claims are dismissed on the merits, and Plaintiff shall take nothing.” The clerk will then close the file.

SO ORDERED on January 3, 2025.

FOOTNOTES

1.   Defendants are the United States Small Business Administration, its administrator Isabella Casillas-Guzman in her official capacity, and the United States of America. Initially, Noble also sued Treasury Secretary Janet Yellen in her official capacity, but she was never served and all claims against her were dismissed. ECF No. 9.

2.   Noble employs public adjusters. ECF No. 21-7 ¶ 2. When an adjuster assists with a successful claim, “Noble is paid a percentage of the insurance proceeds paid to the policyholders by their insurance carriers, and the employee, in turn, is paid a percentage of such insurance proceeds as wages by Noble (in addition to any base salary they may earn as applicable).” Id. ¶ 4. Insurance proceeds may be delayed for various reasons, delaying employees’ payment—sometimes for years. Id. ¶¶ 5-7. Here, of the approximately $8.7 million Noble claimed to have incurred or paid in 2020, more than $4.1 million was not paid that year. Id. at 7.

3.   Under the Administrative Procedure Act, the court can set aside agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). Noble's claim is that by misinterpreting the relevant statute, the SBA acted contrary to law. As the parties seem to agree, the SBA's interpretation is not entitled to deference. See Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2273 (2024). This is a purely legal issue, appropriately resolved as a matter of law on a summary-judgment motion.

4.   Noble briefly suggests that the word “payment” “could arguably be an ambiguity in the words of Congress” but then reasserts its previous arguments without any further explanation. ECF No. 27 at 11.

Allen Winsor, United States District Judge