United States District Court, N.D. Illinois
FREDERICK J. KAPALA, District Judge.
Plaintiff's motion for temporary restraining order  is granted. Defendants are prohibited from taking any further action to seize, impound, de-register, or otherwise exercise control over the two C-23 Sherpa aircraft in plaintiff's possession, including invoking any rights the United States may have to recover the planes under 10 U.S.C. § 2790. Absent further order of the court, this temporary restraining order will expire 14 days after entry. Plaintiff shall post a security bond in the amount of $1, 000, 000 pursuant to Fed.R.Civ.P. 65(c).
Plaintiff, Win Win Aviation, Inc., has filed a motion for a temporary restraining order ("TRO") seeking to enjoin defendants, Sheriff's Department of Richland County, South Carolina; Leon Lott, in his capacity as Sheriff of Richland County; Robin L. Holmes, the State of South Carolina 1033 Program Coordinator; the United States of America; and Ashton Carter, in his capacity as the United States Secretary of Defense, from taking "any action in furtherance of seizing, impounding, de-registering or otherwise exercising control over two used C-23 Sherpa aircraft, Serial # SH.3208 (Tail # N789WW) and Serial # SH.3211 (Tail # N567WW)." Plaintiff provided notice of the motion for a TRO, the United States filed a response, and the court held a hearing on the matter. For the reasons stated below, the motion for a TRO is granted.
On June 23, 2013, plaintiff and the Sheriff's Department of Richland County, South Carolina (the "Department"), executed an "Aircraft Exchange and Use Agreement." As part of the agreement, the Department represented that it was the owner of the two Sherpas at issue in this case, and that those Sherpas "were or are to be acquired by the Department under Section 1033 Surplus Property Office Program of the National Defense Authorization Act of 1997 (the "1033 Program"), which authorizes the Department of Defense to transfer excess military property to state and local enforcement agencies." In general, the agreement contemplated that the parties would make an "even exchange" of a Cessna 206 aircraft that plaintiff owned for the two Sherpas that were acquired by the Department. The agreement noted that the exchange could not occur until the Department was permitted, under the terms of the 1033 Program, to dispose of the Sherpas, but the agreement also provided that each party could still use the aircraft that were subject to the exchange agreement prior to the actual exchange of title. As a result of this agreement, plaintiff is currently in possession of the two Sherpas and has been using them, and will continue to use them, in its business, which includes providing the Sherpas for use in training exercises by various United States military organizations.
In its response, the United States indicates that the Department of Defense ("DOD") administers the 1033 Program through the Defense Logistics Agency ("DLA"), which in turn relies on its Law Enforcement Support Office ("LESO") to carefully control access to surplus DOD equipment. According to the government, the LESO transferred possession of the aircraft, but not title, to the Department on June 17, 2013, and that it did not learn of the Department's contract with plaintiff until around January 12, 2015. The government argues that the transfer of the Sherpas to plaintiff was not authorized under the terms of the 1033 Program, and that pursuant to 10 U.S.C. § 2790 it has the right to recover that property from plaintiff.
A. Sovereign Immunity
As an initial matter, the government argues in its response that this court lacks subject matter jurisdiction to grant the requested TRO because there has been no explicit waiver of sovereign immunity in this matter. This argument fails for a couple of reasons. First, the Seventh Circuit has held that "sovereign immunity does not diminish a court's subject-matter jurisdiction." Blagojevich v. Gates , 519 F.3d 370, 371 (7th Cir. 2008). The Court explained that "the [sovereign immunity] doctrine is non-jurisdictional, " and that "[s]overeign immunity concerns the remedy rather than adjudicatory competence." Id .; see also Quinn v. Gates , 575 F.3d 651, 653 (7th Cir. 2009) (explaining that "sovereign immunity is not a jurisdictional issue"). Accordingly, this court has subject matter jurisdiction to hear this case pursuant to 28 U.S.C. § 1331.
Second, even if there are some jurisdictional concerns associated with the sovereign immunity doctrine, "Congress has waived sovereign immunity for most forms of prospective relief." Blagojevich , 519 F.3d at 371. Section 702 of the Administrative Procedure Act ("APA") provides:
An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party.
5 U.S.C. § 702. This waiver of immunity found in § 702 is "generally applicable" and is not limited only to claims reviewable through the APA. Blagojevich , 519 F.3d at 371; see also Mich. v. U.S. Army Corps of Eng'rs , 667 F.3d 765, 775 (7th Cir. 2011) ("[T]he waiver in § 702 is not limited to claims brought pursuant to the review provisions contained in the APA itself."); Trudeau v. Fed. Trade Comm'n , 456 F.3d 178, 186 (D.C. Cir. 2006) ("[T]he APA's waiver of sovereign immunity applies to any suit whether under the APA or not." (quotation marks omitted)). In this case, because plaintiff is "seeking relief other than money damages, " the waiver of sovereign immunity in § 702 is applicable. See U.S. Army Corps of ...