Graham

This case presents the issue whether individuals may sue the Federal Emergency Management Agency (“FEMA”) and its officials for allegedly unlawful withdrawing of disaster relief funds while the individuals’ appeals of their applications for federal “individual and family grants” were still either pending or approved but unpaid. The district court ruled that standing and sovereign immunity doctrines barred such suits. We affirm in part and reverse in part. We hold that applicants who had not established at the time of the withdrawal that their applications were meritorious lack standing to sue. At the same time, we conclude that applicants whose applications had been approved have standing to file suit under § 10(a) of the Administrative Procedure Act. We also hold that these individuals’ claims are not subject to dismissal under Fed.R.Civ.P. 12(b)(6) on the ground of sovereign immunity.

I. BACKGROUND

In November of 1990, Typhoon Owen struck the Federated States of Micronesia (“FSM”), devastating its Chuuk and Yap states. Then-President Bush declared the states major disaster areas, thus invoking the Stafford Disaster Relief and Emergency Assistance Act of 1974 (“Stafford Act”),…