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U.S. Court of Appeals for Veteran Claims Considers Nonprofit Grantee Case


A novel case before the United States Court of Appeals for Veteran Claims considers a nonprofit grantee’s request for judicial protection.

Washington, D.C. – The United States Court of Appeals for Veterans Claims is deliberating on an extraordinary and unprecedented case brought by a nonprofit grantee petitioning for judicial protection from the government. This case has received attention both within and outside of legal circles, as its outcome could have implications for nonprofit organizations across the country.

At issue is whether the government has violated federal law by terminating multi-million dollar, multi-year grants to a nationally-accredited nonprofit with seven days’ notice. The dispute centers around the grantee’s allegations that the grants were unlawfully terminated in violation of statutory requirements in accordance with the terms of the agreements. If the Court finds in favor of the grantee, this would represent a victory for nonprofits and serve as an important reminder of the importance of the federal government honoring contractual obligations.

The proceedings are being closely watched by those within the nonprofit sector, who are hoping that this case will set a precedent for similar disputes in the future. The present case marks the first time this federal appeals court has taken up such a challenge brought against the government by a nonprofit grantee.

The Court heard oral arguments on Tuesday, June 13, 2023, and its decision is expected. Depending on the outcome, this ruling could have implications for nonprofit organizations across the nation that depend on federal grant funding.

Tuesday’s hearing before the United States Court of Appeals for Veteran Claims considers a federal grantee’s request for judicial intervention in the face of alleged arbitrary, capricious, illegal actions by government officials. The grantee’s attorney argued that without Court action, the nonprofit will be unable to continue providing critical homelessness and suicide prevention services to hundreds of South Florida military veterans and their family members.

The three judge Court of Appeals for Veteran Claims panel considering the case includes the Honorable Justice William S. Greenberg, Justice Michael Allen, and Justice Scott Laurer. Attorneys Ronen Morris and Melissa Timbers appeared on behalf of VA Secretary Denis McDonough. Attorneys Alan Grayson and Brittany Rosen represented the Appellant, Purpose Built Families Foundation, the nationally-accredited nonprofit based in Fort Lauderdale, Florida.

Purpose Built Families Foundation, Inc. v. Denis McDonough 23-2114
United States Court of Appeals for Veteran Claims
June 13, 2023

Purpose Built Families Foundation petitions the Court for relief to prevent irreparable harm to the Florida nonprofit and disruption in homelessness and suicide prevention help to hundreds of Veteran families.

Unique circumstances and procedures

During the hearing, Justice Allen sought to understand the Secretary’s position on Purpose Built Families Foundation’s request for relief and the authority of the Court to act to protect Veteran benefits.

“I’m not sure that I can give you a clear answer,” replied attorney Ronen Morris for the government.

“The circumstances of this case are very unique. Additionally, the procedural actions are very unique,” Morris said.

“We’re here to make sure veterans are served. We’re here to think about the law, but the higher purpose as well,”

~ Attorney Alan Grayson

Nevertheless, Morris argued: “The Court does not have the authority to grant the extraordinary relief that the petitioner is seeking.”

Former U.S. Representative Alan Grayson is representing Appellant Purpose Built Families Foundation.

“There are no benefits from the Secretary that are being unlawfully withheld,” Morris told the panel.

Why are we here?

The Plaintiff’s attorney disagreed.

“Why are we here, all of us?,” Attorney Alan Grayson, a former U.S. Congressman, asked rhetorically. “We’re here to make sure veterans are served. We’re here to think about the law, but the higher purpose as well,” the former Congressmen representing Orlando said.

“We have an overwhelming case for success on the merits,” Grayson said.

Veteran benefits at risk

In the novel case, a federally funded program supported by a U.S. Department of Veterans Affairs Supportive Services for Veteran Families (SSVF) grant, is arguing that a federal official’s actions threaten irreparable injury to the foundation and will immediately disrupt homelessness and suicide prevention benefits provided to hundreds of Veterans and their family members.

Seth Eisenberg, Purpose Built Families Foundation‘s Chairman and CEO, said, “These services delivered through Operation Sacred Trust have become a critical component of the continuum of care for the most vulnerable Florida veterans over more than a decade.”

“There’s no magic wand,” attorney Grayson said as he explained to the panel that it wasn’t viable to transition responsibility for providing those Veteran benefits to other grantees under the conditions sought by VA.

Holding VA officials accountable

“While today’s Veterans are much better served by VA and its partners than their peers from prior generations,” Eisenberg said, “holding VA officials accountable for following the law, adhering to the rules governing federal grants and contracts, should be an avenue available to every nonprofit that believes a misguided or bad act by a federal official threatens Veterans receiving the benefits they’ve earned.”

“The answer isn’t to terminate a grant. You can’t do that,” attorney Grayson argued. “That’s simply not permitted under the regulations,” Grayson said in response to a question from Justice Allen regarding costs “questioned” by VA auditors related to the foundation’s delivery of services to South Florida homeless Veterans during the COVID-19 pandemic.

Pandemic related audit

Those costs included a VA auditor “questioning” the use of a personal credit card to pay for hotel rooms for homeless Veterans during the pandemic, when the foundation didn’t have resources to book required rooms on its own and Veterans would have been left on the streets without an individual being willing to advance and guarantee the required credit until VA later reimbursed the expenses.

Purpose Built Families Foundation v. Denis McDonough. From Right, Ana Rubirosa, Dr. Paul R. Lawrence, Attorney Alan Grayson, Seth Eisenberg, Stephanie Berman-Eisenberg, Attorney Brittany Rosen, Robert Henthorn, Angel Evans at Courthouse, Washington, D.C., June 13, 2023.

Court action was nonprofit’s last choice

“Pursuing relief through the Court was our last choice,” Eisenberg said. “Sadly, VA’s Homeless Program Office’s actions left us no alternative to protect benefits Veterans need, deserve, and have come to rely upon,” he added.

The CAVC is an Article I tribunal created by Congress in 1988 to provide judicial review of decisions by the Board of Veterans’ Appeals, part of the Department of Veterans Affairs (VA). Decisions of the court may be appealed to the U.S. Court of Appeals for the Federal Circuit, whose jurisdiction is limited to review of constitutional questions, statutory and regulatory interpretation, and rules of law.

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