Del Monte Fresh Produce Co. v. U.S.

• Decision Date: 26 June 2009
• Docket Number: No. 08-5398.,08-5398.
• Citation: 570 F.3d 316
• Parties: DEL MONTE FRESH PRODUCE COMPANY and Del Monte Foods U.A.E. FZE, Appellants v. UNITED STATES OF America, et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

570 F.3d 316

DEL MONTE FRESH PRODUCE COMPANY and Del Monte Foods U.A.E. FZE, Appellants v. UNITED STATES OF America, et al., Appellees.

No. 08-5398.

United States Court of Appeals, District of Columbia Circuit.

Argued April 9, 2009.

Decided June 26, 2009.

Appeal from the United States District Court for the District of Columbia (No. 1:07-cv-02143).

Daniel G. Jarcho argued the cause and filed the briefs for appellants.

Anisha S. Dasgupta, Attorney, U.S. Department of Justice, argued the cause for appellees. With her on the brief were Michael F. Hertz, Acting Assistant Attorney General, and Douglas N. Letter, Litigation Counsel. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.

Before SENTELLE, Chief Judge, ROGERS and GRIFFITH, Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

Dissenting opinion by Chief Judge SENTELLE.

ROGERS, Circuit Judge.

The only question on appeal is whether the district court erred in dismissing as moot a complaint seeking a declaratory judgment. We hold that it did.

I.

The Trade Sanctions Reform and Export Enhancement Act of 2000 (the "TSRA"), 22 U.S.C. §§ 7201-7211, limits restrictions imposed unilaterally by the President on exports of food, medicine, and other agricultural products to Iran, Libya, North Korea, Sudan, and Cuba. Aimed at lifting embargoes to expand export opportunities particularly for agricultural products, see 146 Cong. Rec. 23,110-11 (2000) (drafters' statement of Sens. Hagel and Ashcroft), the TSRA provides that "the President may not impose a unilateral agricultural sanction or unilateral medical sanction against a foreign country or foreign entity" without the prior approval of Congress. 22 U.S.C. § 7202(a).¹ As relevant here, § 906 of the TSRA authorizes limited restrictions on exports of agricultural products to countries that the State Department has determined "to have repeatedly provided support for acts of international terrorism." Id. § 7205(a)(1).² Such exports require a one-year license, which will authorize exports pursuant to contracts entered into during the license period so long as the products are shipped within one year of the signing of the covered contract. The licensing requirements "shall be no more restrictive than license exceptions administered by the Department of Commerce or general licenses administered by the Department of the Treasury,"³ except for procedures involving export licenses to an entity in such country, or in the Taliban-controlled area of Afghanistan, "promoting international terrorism." Id.

The Treasury Department, through the Office of Foreign Assets Control ("OFAC"), published an interim rule on July 12, 2001 to carry out TSRA § 906 with regard to exports to Iran and other countries, stating in the preamble it was adopting an expedited licensing process, with deadlines for agency action that in material respects are the same as those of the Commerce Department.⁴ Under this expedited process, OFAC would refer the application to other agencies, and, provided the license application met the requirements set forth in the regulations, OFAC would issue the license so long as no objection was received within nine business days. However, on March 20, 2007, OFAC announced that the events of September 11, 2001 had "magnified concerns about international terrorism," that "the volume of license requests has increased substantially since the inception of the TSRA program, and [that] applications are now much more complicated than the earlier ones." Sudanese Sanctions Regulations; Iranian Sanctions Regulations, 72 Fed. Reg. 12,980, 12,981 (Mar. 20, 2007) ("OFAC March 2007 Regulations"). Although confirming it would continue to conduct a review of license applications "consistent with the requirements of section 906 of TSRA," OFAC stated, however, that "OFAC's processing ... may take longer than the time periods suggested at the inception of the TSRA program." Id.

Del Monte Fresh Produce Company is a vertically integrated producer, marketer, and distributor of fresh fruits and vegetables, and facilitates sales abroad by its foreign affiliates, such as Del Monte Foods (U.A.E.) FZE (together "Del Monte"). On August 8, 2007, Del Monte submitted an application to OFAC for a one-year license (the "August 2007 license") to export agricultural commodities to ten entities in Iran, none of which were listed on either of the two terrorists lists identified in Commerce Department regulations. Del Monte alleges that because the August 2007 license application contained all of the information specified in OFAC regulations, OFAC referred the application to the State Department on August 17, 2007, and that the State Department responded on September 13, 2007 without raising an objection to issuance of the license. Still, OFAC did not issue the license. Del Monte's repeated inquiries to OFAC about the status of the license revealed only that its application was pending. On November 27, 2007 Del Monte was advised by OFAC's "help desk" that its August 2007 license application was still pending.

On November 28, 2007 Del Monte filed suit. It had been more than 110 days since OFAC had received the August 2007 license application, more than 100 days since OFAC referred the application to the State Department, and more than 75 days since the State Department's response. On November 29 Del Monte filed a motion for a preliminary injunction, the district court scheduled a status conference on that motion, and OFAC issued the August 2007 license to Del Monte.

Del Monte filed an amended complaint on January 10, 2008 seeking a declaratory judgment that OFAC's failure to issue the August 2007 license until November 29, 2007 constituted agency action that was both unlawfully withheld and unreasonably delayed under the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(1). In addition to alleging facts relating to OFAC's unlawful delay in issuing the August 2007 license, Del Monte alleged that OFAC's "licensing inaction and/or action at issue in this case is in its duration too short to be fully litigated prior to its cessation or expiration," because the time required to litigate the case was longer than the mandatory deadlines and the time necessary for the government to review the application. Am. Compl. ¶ 32. Further it alleged, "[b]ecause facilitating sales of, and selling, food products to Iran is, and has been, a part of Del Monte's ongoing business plan, Del Monte will continue to apply for OFAC licenses in the future on a continuing basis," id. ¶ 33, and "[t]here is a reasonable expectation that Del Monte will be subject to the same inaction and/or action by OFAC again in the future with respect to future license applications," id.

The district court granted the government's motion to dismiss the complaint for lack of subject matter jurisdiction on grounds of mootness pursuant to Federal Rule of Civil Procedure 12(b)(1). Del Monte Fresh Produce Co. v. United States, 565 F.Supp.2d 106 (D.D.C.2008). The district court observed that where a plaintiff seeks only declaratory relief as a remedy for a defendant's past conduct, the action will be moot unless one of two exceptions to mootness applies. With regard to the capable of repetition yet evading review exception, the district court concluded that because Del Monte's amended complaint only sought relief for the handling of the August 2007 license application, and OFAC had already issued that license, "it is impossible for delay of that application to reoccur." Id. at 113. With regard to the voluntary cessation exception, the district court credited the representations of OFAC and concluded that its issuance of the August 2007 license on November 29, 2007 was independent of Del Monte's lawsuit.

II.

Del Monte appeals the dismissal of its amended complaint on the principal ground that the claim for relief falls within the capable of repetition but evading review exception to the mootness doctrine. Our review is de novo. See Munsell v. Dep't of Agric., 509 F.3d 572, 578 (D.C.Cir. 2007).

"A case is moot when `the challenged conduct ceases such that there is no reasonable expectation that the wrong will be repeated' in circumstances where `it becomes impossible for the court to grant any effectual relief whatever to the prevailing party.'" United States v. Philip Morris USA, Inc., 566 F.3d 1095, 1135 (D.C.Cir.2009) (quoting City of Erie v. Pap's A.M., 529 U.S. 277, 287, 120 S.Ct. 1382, 146 L.Ed.2d 265 (2000)). In at least two kinds of cases the fact that the specific conduct that gave rise to the case has ceased does not mean that the challenge to the legality of that conduct is moot. City of Houston, Tex. v. Dep't of Housing & Urban Dev., 24 F.3d 1421, 1429-30 (D.C.Cir.1994).

First, a plaintiff's challenge will not be moot where it seeks declaratory relief as to an ongoing policy. Id. at 1429. In Super Tire Engineering v. McCorkle, 416 U.S. 115, 125, 94 S.Ct. 1694, 40 L.Ed.2d 1 (1974), the Supreme Court held that although a claim for injunctive relief preventing payment of welfare benefits during a strike was moot because the strike had ended, the employers' request for declaratory relief was not moot because the state's ongoing policy of paying strike benefits was, on the employers' theory of the case, "immediately and directly injurious to the [employers'] economic positions." Of course, plaintiffs challenging an ongoing policy must demonstrate "standing to bring such a forward-looking challenge and [that] the request for declaratory relief is ripe." City of Houston, 24 F.3d at 1429.

Second, even though the specific action that the plaintiff challenges has ceased, a claim for declaratory relief will not be moot even if the "plaintiff has made no challenge to [an] ongoing underlying policy, but merely attacks an isolated agency action," so long as "the specific claim fits the exception for cases that are capable of repetition, yet evading review, or falls...