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April 16, 1981

Harold H. PALMER
Honorable A. Vernon WEAVER, In His Capacity as Administrator, U.S. Small Business Administration et al.

The opinion of the court was delivered by: SHAPIRO


Plaintiff, Harold H. Palmer, brings this action against A. Vernon Weaver in his capacity as Administrator of the Small Business Administration ("SBA") and against various SBA officials *fn1" in their official capacities and alleges that the SBA's denial of his requests for a small business loan was unlawful. Plaintiff invokes the court's jurisdiction pursuant to Section 2(5) (b)(1) of the Small Business Act, 15 U.S.C. § 634(b)(1) (1976) and seeks injunctive and declaratory relief, money damages, costs and attorney's fees.

 Defendants, moving for dismissal or, in the alternative, for summary judgment, assert that the standard of review by district courts of SBA decisions is circumscribed and that judicial intervention is inappropriate here. Because affidavits and counter-affidavits as well as the motion papers have been submitted to and reviewed by the court, defendants' motion will be considered a motion for summary judgment under Fed.R.Civ.P. 56. See, Fed.R.Civ.P. 12. Defendants' motion is granted.

 Plaintiff, a thirty-six year old black male, filed three loan applications with SBA between April, 1978 and November, 1979 to secure capital to open and operate a card and gift shop. All three applications were refused.

 Palmer requested a SBA loan in the amount of $ 36,500 on April 14, 1978. The parties differ as to what next occurred. Defendants assert that Palmer's original application *fn2" contained several deficiencies which, unless corrected, would preclude the offer of a SBA loan, that he was so informed by letter of May 11, 1978, *fn3" and that the deficiencies were not cured by Palmer's May 14th letter in response which was received May 16; Palmer avers that he never received that or any other "deficiency notice." *fn4" Palmer asserts that his loan application was denied by letter dated May 6, 1978 *fn5" and that the defendants could not have given his request the consideration required by law in the time between the application of April 14 and the denial on May 6. Defendants aver that the letter of denial was actually sent on June 6, 1978 and that the May 6 date was a typographical error. *fn6" Regardless of the actual date, the reasons for refusal given were:

a. Lack of reasonable assurance that the business can be operated at a rate of profit sufficient to repay the loan and other obligations from earnings.
b. Disproportion of loan requested and of debts to tangible net worth before and after the loan.
c. Gross disproportion between owner's actual investment and loan requested. *fn7"

 Palmer applied for reconsideration of the initial loan request in June, 1978. Upon reconsideration, his loan request was again declined. *fn8" Thereafter, upon Palmer's oral request the SBA entertained his letter of July 14, 1978 as an appeal to the District Director. Again, the situation was reviewed but SBA continued to find management deficiencies in his proposal. Robert B. Silikovitz, Assistant District Director for the Finance and Investment Division of SBA in Philadelphia, states by affidavit that he and the District Director, William T. Gennetti, met with Mr. Palmer on September 25, 1979 to explain the reasons for the loan denial and to suggest that Mr. Palmer obtain help in preparing his application from a business development organization. Mr. Silikovitz avers that he called such an organization on Mr. Palmer's behalf, that assistance was available but that Palmer did not utilize this service.

 Countering, Palmer attests that, "(a)t no time did any person from Small Business Administration attempt to assist me in the establishment of this business venture or otherwise. When I went to the Service Core of Retired Executives (SCORE), as suggested by SBA, I received no help from anyone." *fn9"

 Mr. Palmer filed a second loan request, in July, 1979. This application, requesting a $ 22,500 loan, was reviewed by Daniel M. Sossaman who noted several deficiencies. *fn10" Minority Small Business Representative Henry P. Murphy also reviewed this application and agreed with the decision to decline. *fn11" This request was declined on August 6, 1979 by Carole A. Scheck, Chief of the Financing Division; her reasons were supplied by affidavit submitted to the court. *fn12"

 In October, 1979, Mr. Palmer filed a third loan application which requested $ 26,500. Again this request was reviewed by Scheck and Murphy who determined that there were the same credit deficiencies as in previous applications; *fn13" this request was denied by letter of November 20, 1979. *fn14"

 Plaintiff brings this action under § 2(5)(b) of the Small Business Act, 15 U.S.C. § 634(b)(1) which, in relevant part, provides:

(b) In the performance of, and with respect to, the functions, powers, and duties vested in him by this ...

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