Bender v. Dept. of Employment Services, 87-614.

• Decision Date: 24 August 1989
• Docket Number: No. 87-614.,87-614.
• Citation: 562 A.2d 1205
• Court: D.C. Court of Appeals
• Parties: Kenneth L. BENDER, d/b/a K & F Welding and Iron Works, and Nationwide Insurance Company, Petitioners, v. DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, Respondent.

562 A.2d 1205

Kenneth L. BENDER, d/b/a K & F Welding and Iron Works, and Nationwide Insurance Company, Petitioners, v. DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, Respondent.

No. 87-614.

District of Columbia Court of Appeals

Submitted in Chambers, March 1988.

Decided August 24, 1989.

Jeffrey W. Ochsman and Charles P. Monroe, Washington, D.C., were on brief, for petitioners.

Mary L. Wilson, Asst. Corp. Counsel, Washington, D.C., for respondent.

Before ROGERS,^* Chief Judge, NEWMAN and BELSON, Associate Judges.

NEWMAN, Associate Judge.

Under D.C.Code § 1-1510(a) (1987), Bender, et al. (Bender) petitions for review of a Department of Employment Services (DOES) decision that the agency has jurisdiction to hear a claim for disability benefits brought by Samuel Calvin, an employee of Bender, under the District of Columbia Workers' Compensation Act of 1979 (the Act), D.C.Code §§ 36-301 to 36-345 (1988). This petition for review comes before Bender has exhausted all of its administrative remedies. We hold that this court lacks jurisdiction to review a challenge to an agency's assertion of jurisdiction under section 1-1510(a) except in the extraordinary situation where the agency has plainly exceeded or clearly contravened its statutory authority. Finding such circumstances absent here, we dismiss the petition.

I

Calvin filed a claim for disability benefits pursuant to the provisions of the Act after sustaining an eye injury while installing steel roller doors at a work site located in the District of Columbia. On January 11, 1985, DOES Hearing Examiner Brownell held an evidentiary hearing to consider whether Calvin's case fell within DOES' jurisdiction and if so, to determine the correct method of computing Calvin's average weekly wage and compensation rate. On March 28, 1985, Brownell issued a Recommended Compensation Order which advised that DOES lacked jurisdiction to adjudicate the claim because Calvin's employment was not "principally localized" in the District of Columbia,¹ as required by D.C.Code § 36-303(a) (1988). ²

In response to the adverse order, Calvin filed exceptions with the Director of DOES challenging Brownell's decision to admit evidence,³ sua sponte and post-hearing, which Brownell relied upon to deny the claim on jurisdictional grounds. The Director concluded that the evidence was improperly admitted and remanded the matter to the chief hearing examiner for reconsideration of the jurisdictional issue, absent the contested evidence.

In a Compensation Order on Remand, Acting Chief Hearing Examiner Baker held that DOES had jurisdiction over the claim because at the time of Calvin's injury his employment was principally localized in the District of Columbia. Baker also concluded that Calvin's benefits should be calculated under the "wage stacking" method, that is, based upon Calvin's earnings from Bender as well as from other concurrent employment held in the thirteen weeks preceding his injury.

Thereafter, Bender filed exceptions with the Director, who, on May 28, 1987, issued a Final Compensation Order that affirmed the jurisdictional ruling, but reversed on the issue of how the benefits should be computed and remanded for a recalculation of Calvin's benefits based solely on the average weekly wage he earned from Bender. Bender petitions for review solely from that portion of the Final Compensation Order affirming DOES jurisdiction in this case.

II

Bender relies on D.C.Code § 1-1510(a) to secure this court's review of the Director's decision affirming DOES jurisdiction over this claim.⁴ Section 1-1510(a) provides, in relevant part:

If the jurisdiction of the Mayor or an agency is challenged at any time in any proceeding and the Mayor or the agency, as the case may be, takes jurisdiction, the person challenging jurisdiction shall be entitled to an immediate judicial review of that action, unless the Court shall otherwise hold. (Emphasis added.)

Bender contends that under a plain reading of section 1-1510(a), this court has the authority to review an interlocutory challenge to an agency's assertion of jurisdiction, and that on the facts presented, we should exercise our review powers to find that DOES is without jurisdiction in this case.

DOES concurs that section 1-1510(a) creates an exception to the traditional prerequisite for judicial review of an agency decision—exhaustion of administrative remedies. DOES argues, however, that the exception arises only in cases where the agency exercises authority that is clearly in excess of its jurisdiction, and not in cases where the assertion of jurisdiction necessarily follows from an interpretation of the substantive law governing the dispute which the agency is statutorily bound to make, for example, a determination that a claimant's employment was principally localized in the District of Columbia at the time of injury. We agree.

It is beyond cavil that exhaustion of administrative remedies is a prerequisite to judicial review of agency action absent extraordinary circumstances. Barnett v. District of Columbia Department of Employment Services, 491 A.2d 1156, 1160 (1985); Malcolm Price, Inc. v. District Unemployment Compensation Board, 350 A.2d 730, 733 (D.C. 1976); see McKart v United States, 395 U.S. 185, 193, 89 S.Ct. 1657, 1662, 23 L.Ed.2d 194 (1969); Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 463-64, 82 L.Ed. 638 (1938). See generally K. DAVIS, ADMINISTRATIVE LAW TREATISE § 20.01 (1958 & Supp. 1970). The exhaustion rule was founded upon the practical interests of maximizing judicial and administrative efficiency, and preserving administrative autonomy. See McKart, supra, 395 U.S. at 193-95, 89 S.Ct. at 1662-63; Barnett, supra, 491 A.2d at 1160. These interests are deemed best served where courts are prevented from prematurely interrupting the administrative process; a process which, if left to run its natural course—to wit, development of a complete factual record, application, in the first instance, of agency expertise and discretion, and perhaps, intra-agency correction—may foreclose the necessity of judicial review. See McKart, supra, 395 U.S. at 193-95, 89 S.Ct. at 1662-63; Barnett, supra, 491 A.2d at 1160-61. These concerns remain paramount in determining whether section 1-1510(a) was designed to permit waiver of the exhaustion requirement in the context here presented.

We note at the outset that the use of the exception created in section 1-1510(a) is expressly circumscribed by this court's discretion: "the person challenging jurisdiction shall be entitled to an immediate judicial review . . . unless the Court shall otherwise hold." Neither the statute nor its legislative history offers explicit guidance on how that discretion should be exercised with respect to the exception. Nevertheless, the legislative history of section 1-1510(a) reveals a clear congressional intent that we apply the same "standards of judicial review" as those found in the Federal Administrative Procedure Act and "as developed by controlling decisions of the Supreme Court of the United States and of the lower Federal courts." H.R. Rep. No. 646, 89th Cong., 1st Sess. 7 (1965); see S.Rep. No. 1581, 90th Cong., 2d Sess. 5, 8 (1968); see also Wallace v. District Unemployment Compensation Board, 294 A.2d 177, 178-79 (D.C. 1972).

In our view, section 1-1510(a) merely codifies "[t]he most widely recognized exception to the general rule against judicial consideration of interlocutory agency rulings . . . [that] class of cases where an agency has exercised authority in excess of its jurisdiction or otherwise acted in a manner that is clearly at odds with the specific language of a statute." Coca-Cola Company v. Federal Trade Commission, 475 F.2d 299, 303 (5th Cir. 1973), cert. denied, 414 U.S. 877, 94 S.Ct. 121, 38 L.Ed.2d 122 (1973); accord Office of People's Counsel v. Public Service Commission, 477 A.2d 1079, 1082 (D.C. 1984); American Cyanamid Co. v. Roudebush, 411 F.Supp. 1220, 1222 (S.D.N.Y. 1976) ("Unless the administrative agency has grossly exceeded its powers, a claim that the agency lacked jurisdiction, . . . will not permit plaintiff to avoid the exhaustion requirement.") (citations omitted).

The lead Supreme Court case in this class of exceptions is Leedom v. Kyne, where the Court permitted interlocutory review of the National Labor Relations Board's [NLRB] designation of a bargaining unit composed of both professional and nonprofessional employees in clear defiance of express statutory language. 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958). Characterizing the NLRB's actions as "unlawful," the Court found that

[t]his suit is not one to "review," in the sense of that term as used in the Act, a decision of the Board made within its jurisdiction. Rather it is one to strike down an order of the Board made in excess of its delegated powers and contrary to a specific prohibition in the Act.

Id. at 188, 79 S.Ct. at 184.

Courts have narrowly construed the Kyne exception, holding that the error must be of a "summa or magna quality as contraposed to decisions which are simply cum error." United States v. Feaster, 410 F.2d 1354, 1368 (5th Cir.) (emphasis in original), cert. denied, 396 U.S. 962, 90 S.Ct. 427, 24 L.Ed.2d 426 (1969); see Boire v. Greyhound Corp., 376 U.S. 473, 481, 84 S.Ct. 894, 899, 11 L.Ed.2d 849 (1964) (reexplaining the "narrow," "painstakingly de-lineated procedural boundaries" of Kyne); Physicians National House Staff Association v. Fanning, 206 U.S. App. D.C. 87, 91, 642 F.2d 492, 496 (D.C.Cir.) (en banc) ("The federal courts have consistently recognized the limits imposed by the Kyne decision."), cert. denied, 450 U.S. 917, 101 S.Ct. 1360, 67 L.Ed.2d 342 (1980); Rockford Redi-Mix Co. v. Zipp, 632 F.2d 30, 31 (7th Cir. 1980) (agency decision reviewable "only if it exceeds the [agency's] jurisdiction and is contrary to a specific and unambiguous provision of the [statute]."), cert....