Nevada Partners, Inc. v. Workforce Connections

          ORDER

         Presently before the court is plaintiff Nevada Partners, Inc.'s (“Nevada Partners”) motion for temporary restraining order. (ECF No. 24).

         Also before the court is Nevada Partners' motion for preliminary injunction. (ECF No. 25). Defendants Workforce Connections and Jaime Cruz filed a response (ECF No. 30), to which Nevada Partners replied (ECF No. 31).

         I. Facts

         This action arises from a dispute regarding Workforce Connections' award of federal grants in the amount of $10, 000, 000 to ResCare Workforce Services (“ResCare”), which is an organization that matches job applicants with employers. (ECF Nos. 1, 24-9).

         Workforce Connections is Southern Nevada's local workforce development board. (ECF No. 24). Among its various duties, Workforce Connections distributes federal grants for the improvement of employment services pursuant to the Workforce Innovation and Opportunity Act (“WIOA”), 29 U.S.C. § 3102 et seq. Id. Local boards award WIOA grants on a competitive basis, in which the applicants with the best performance are more likely to receive funds. See (ECF Nos. 24, 30); 29 U.S.C. § 1322(d)(10)(B)(i); NRS 232.935(4)(d)(1).

         From 2015 to 2019, Workforce Connections distributed over $13, 000, 000 to Nevada Partners. (ECF No. 24-1). Nevada Partners used those funds to assist thousands of residents with job readiness services and provide federal tax return assistance. Id. Workforce Connections also awarded ResCare millions of dollars in grants during this time period. (ECF No. 24-9).^[1] The record before the court does not indicate to the total amount of those grants.

         In 2018, Workforce Connections began a new round of requests for proposals to fund WIOA programs from July 2019 to June 2022. (ECF Nos. 24, 30). The new application process had two substantial changes: (1) past performance evaluations were moved from the initial technical review stage to the ad hoc selection panel's ranking of programs and (2) the precondition that grantees cover their rent costs was replaced with a “cash match” requirement. (ECF Nos. 24-13, 30, 30-1, 30-2, 30-3). The “cash match” provision required applicants to match two percent of their requested grant amount in cash resources. (ECF Nos. 24-13, 24-45).

         On March 13, 2019, Workforce Connections convened a meeting in which it planned to award $10, 000, 000 to ResCare and no WIOA funding to Nevada Partners, consistent with the ad hoc selection panel's recommendation. (ECF Nos. 24-21, 24-27). Various individuals at the meeting raised concerns regarding Workforce Connections' plan. (ECF No. 24-27). The primary points of contention were that the programs committee relied on inaccurate materials and that ResCare allegedly performed worse than other applicants that the ad hoc selection panel did not recommend for funding. (ECF Nos. 24-22, 24-27). In response, Workforce Connections continued the meeting to May 9, 2019. (ECF No. 24-27).

         On the same day that Workforce Connections reconvened, Governor Steve Sisolak sent a letter to the board stating that the executive director of the Governor's Office of Workforce Innovation found that the new grant distribution process “does not appear to violate any rules, policies, or laws.” (ECF No. 24-25). The governor also expressed concern that awarding “the bulk of the available funds to one entity may have created a perception of favoritism . . .” Id. At the meeting, Workforce Connections considered the letter and awarded $10, 000, 000 to ResCare. (ECF No. 24-30). The WIOA grants begin disbursing on July 1, 2019. (ECF No. 24-22).

         On May 3, 2019, Nevada Partners initiated this action, asserting eight causes of action: (1) violation of procedural due process; (2) violation of substantive due process; (3) violation of equal protection; (4) violation of Nevada's open meeting law, NRS 241.020; (5) violation of WIOA's competitive process requirement, 29 U.S.C. § 3122 et seq.; (6) violation of WIOA's performance accountability measures requirement, 29 U.S.C. § 3141 et seq.; (7) violation of WIOA's conflict of interest provision, 29 U.S.C. § 3122(h) et seq.; and (8) injunctive relief. (ECF No. 1).

         Now, Nevada Partners has filed a motion for preliminary injunction requesting that the court enjoin the disbursement of $10, 000, 000 in WIOA grants to ResCare and require Workforce Connections to continue disbursing funds consistent with its 2015-2019 grant allocation scheme until the resolution of this litigation. (ECF No. 25).

         II. Legal Standard

         Federal Rule of Civil Procedure 65 provides that the court may issue a preliminary injunction on notice to the adverse party. Fed.R.Civ.P. 65(a)(1). A preliminary injunction seeks to preserve the status quo and prevent irreparable harm from occurring before a judgment is issued. Textile Unlimited Inc. v. BMH & Co., 240 F.3d 781, 786 (9th Cir. 2001).

         The Supreme Court held that courts must consider the following elements in determining whether to issue a preliminary injunction: (1) likelihood of success on the merits; (2) likelihood of irreparable injury if preliminary relief is not granted; (3) balance of hardships; and (4) advancement of the public interest. Winter v. N.R.D.C., 555 U.S. 7, 20 (2008). The test is conjunctive, meaning the party seeking the injunction must satisfy each element.

         Additionally, post-Winter, the Ninth Circuit has maintained its serious question and sliding scale tests. See Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). “Under this approach, the elements of the preliminary injunction test are balanced, so that a stronger showing of one element may offset a weaker showing of another.” Id.

         “Serious questions going to the merits and a balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest.” Id. at 1135.

         III. Discussion

         Litigants seeking a preliminary injunction have a burden to satisfy the four elements above. See Winter, 555 U.S. at 20. The court will address each element to determine whether Nevada Partners' request for a preliminary injunction has merit.

         A. Likelihood of ...