Exportal Ltda. v. U.S.
| Decision Date | 13 April 1990 |
| Docket Number | No. 89-1068,89-1068 |
| Citation | 902 F.2d 45 |
| Parties | EXPORTAL LTDA., Mario Fantuzzi, and Jesus Villasante, Petitioners, v. UNITED STATES of America and Clayton Yeutter, Secretary of Agriculture, Respondents. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Walter H. Lion, New York City, for petitioners.
Raymond W. Fullerton, Asst. Gen. Counsel, Dept. of Agriculture, with whom James Michael Kelly, Associate Gen. Counsel, Margaret M. Breinholt, Deputy Asst. Gen. Counsel, and Ellen R. Hornstein, Dept. of Agriculture, Washington, D.C., were on the brief, for respondents.
Before WALD, Chief Judge, and MIKVA and EDWARDS, Circuit Judges.
Opinion for the Court filed by Circuit Judge EDWARDS.
In this case, petitioner, Exportal Ltda. ("Exportal"), a Chilean fruit producer, challenges a decision of the Secretary of Agriculture ("Secretary") declining to waive a bond requirement in connection with a reparation proceeding sought to be initiated by petitioner. Department of Agriculture ("DOA") regulations provide that the bond requirement "shall be waived" if a foreign complainant can show that its nation does not require a United States complainant to file a bond in a proceeding against a citizen of that nation. 7 C.F.R. Sec. 47.6(b) (1989). Exportal's request for a waiver of the bond requirement was denied because, according to the Secretary, such waivers remain discretionary even when a foreign complainant makes the requisite showing pursuant to agency regulations. We find this decision to be flatly inconsistent with the plain terms of DOA's regulations. Accordingly, we reverse and remand for further proceedings.
As an initial matter, we hold that the Secretary's decision is a "final order" reviewable under the Administrative Orders Review Act, 28 U.S.C. Sec. 2342(2) (1982). Second, we hold that the petitioner's challenge must be upheld because the Secretary's decision is contrary to the plain language of the agency's own regulations. Finally, we remand for further proceedings to allow the Secretary to address whether Exportal has shown that Chilean law satisfies the reciprocity requirement imposed by section 47.6(b).
The Perishable Agricultural Commodities Act, 7 U.S.C. Secs. 499a-499s (1988) ("PACA"), establishes a remedial scheme to protect agricultural producers from fraudulent practices by brokers. See generally Harry Klein Produce v. Department of Agriculture, 831 F.2d 403, 405 (2d Cir.1987). Under PACA, a producer aggrieved by such a practice may initiate a reparation proceeding by filing a formal complaint with the Secretary. See 7 U.S.C. Sec. 499f(a), (c); 7 C.F.R. Sec. 47.6. If the Secretary finds for the producer, an order is entered in favor of the producer awarding compensation for its damages. See 7 U.S.C. Sec. 499g(a). Either party may appeal the Secretary's decision to federal district court, where the producer's claim is tried de novo. See 7 U.S.C. Sec. 499g(c).
The prevailing party in a reparation proceeding under PACA can recover its costs and attorney fees. See 7 C.F.R. Sec. 47.19(d) (1989). To secure these expenses, as well as any damages awardable on a counterclaim, a foreign producer may be obliged to furnish a bond equal to double the amount of its claim. See id. Sec. 499f(e). However, pursuant to authority delegated to the Secretary by PACA, see id., DOA regulations state that the bond requirement is waived in the following circumstance:
[T]he furnishing of a bond shall be waived if the complainant is a resident of a country which permits filing of a complaint by a resident of the United States against a citizen of that country without the furnishing of a bond.
7 C.F.R. Sec. 47.6(b). Under both PACA and DOA regulations, a foreign complainant must either file a bond or obtain a waiver before the DOA can take "any formal action ... on [the producer's] complaint," 7 U.S.C. Sec. 499f(e), including service of the complaint on the broker and docketing of the case for adjudication. See 7 C.F.R. Secs. 47.6(b), (c), 47.10 (1989). The decision whether to grant a waiver request is made by the Secretary or a designated DOA staff member.
In August 1988, Exportal filed a complaint with the Secretary alleging that its United States broker had unlawfully withheld $182,000 due Exportal. Advised of PACA's foreign-producer bond requirement, Exportal petitioned the DOA for a waiver; in support of the petition, Exportal proffered an affidavit from a Chilean attorney attesting that Chile does not require United States citizens to furnish bonds before bringing civil actions against Chileans. In a one-page letter, the Chief of the PACA Branch of the DOA rejected Exportal's request, stating:
the wording of [PACA] gives the Secretary ... discretion over whether to waive the bond requirement, even when the complainant's national court system allows claims by extranationals without supplying a bond.
Appendix 3. As a basis for the exercise of the Secretary's discretion in this case, the letter cited the need to secure a potential counterclaim by Exportal's broker. See id.
Rather than file a $364,000 bond, Exportal petitioned this court for review. 1 Exportal maintains that under 7 C.F.R. Sec. 47.6(b) the Secretary has no discretion to deny a waiver if the foreign producer shows that its nation's legal system does not require United States citizens to furnish bonds. In addition to disputing this reading of the DOA's regulations, the Secretary argues that we are without jurisdiction to entertain Exportal's petition.
By its terms, the Administrative Orders Review Act plainly extends to a decision denying a waiver pursuant to 7 U.S.C. Sec. 499f(e):
the court of appeals ... has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of--
. . . . .
(2) all final orders of the Secretary of Agriculture made under chapters 9 and 20A of title 7, except orders issued under sections 210(e), 217a, and 499g(a) of title 7....
28 U.S.C. Sec. 2342 (emphasis added). 2 The Secretary nonetheless contests jurisdiction on the ground that a decision to deny a waiver is not a "final order." Alternatively, the Secretary maintains that Exportal should have directed its petition to the district court, because that is the court with jurisdiction over appeals from the Secretary's reparation orders. See 7 U.S.C. Sec. 499g(c). We disagree.
We engage in a "pragmatic" inquiry to determine whether an agency decision is a "final order" for purposes of the Administrative Orders Review Act. See New York Shipping Ass'n v. FMC, 854 F.2d 1338, 1351 (D.C.Cir.1988), cert. denied, --- U.S. ----, 109 S.Ct. 866, 102 L.Ed.2d 990 (1989). The relevant questions are, first, "whether the process of administrative decisionmaking has reached a stage where judicial review will not disrupt the orderly process of adjudication"; and, second, "whether rights or obligations have been determined or legal consequences will flow from the agency decision." Port of Boston Marine Terminal Ass'n v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71, 91 S.Ct. 203, 210, 27 L.Ed.2d 203 (1970); accord New York Shipping Ass'n, 854 F.2d at 1351.
There is no doubt that the process of administrative decisionmaking in this case has reached a stage where judicial review will not disrupt any adjudication under PACA. The Secretary contends that his waiver denial is not a final order because it is interlocutory in nature. However, this characterization ignores the special procedural mechanism by which the DOA decides a waiver request. Consistent with PACA, see 7 U.S.C. Sec. 499f(e), DOA regulations provide that a foreign producer must obtain a waiver before the agency invokes any component of the adjudicatory procedures--from service of the complaint, to discovery, to a formal hearing--designed to resolve PACA claims on the merits. See 7 C.F.R. Sec. 47.6(b). Whether a foreign producer is entitled to a waiver is determined not by an administrative law judge, but by the Secretary or designated DOA staff. In effect, DOA regulations establish a wholly independent proceeding to decide whether a foreign producer may prosecute a PACA reparation claim without filing a bond. Because DOA procedures make no provision for the re-examination of this decision, and because the waiver determination occurs completely outside the context of any PACA adjudication, judicial review of the Secretary's decision "will not disrupt the orderly process of [any] adjudication" before the agency. Port of Boston Marine Terminal Ass'n, 400 U.S. at 71, 91 S.Ct. at 209.
The denial of a waiver also has clear legal consequences for Exportal. If Exportal is unable or unwilling to pay the bond, it must forego its right to avail itself of the administrative remedy contemplated by PACA. If it does furnish the bond, it must forego its qualified right, recognized by PACA and DOA regulations, not to lose the use of $364,000 during the pendency of the reparation proceeding--a deprivation that cannot be meaningfully remedied on appeal from a reparations order. We therefore have no difficulty concluding that the Secretary's decision to deny a waiver is a "final" order for purposes of judicial review. 3
We also reject the Secretary's contention that the district court has initial appellate jurisdiction over the Secretary's decision. The Secretary bases this argument on Florida Light & Power Co. v. Lorion, 470 U.S. 729, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985). The issue in that case was whether an agency decision not to initiate a license revocation proceeding came within the scope of a statute providing for court of appeals jurisdiction, under the Administrative Orders Review Act, over final orders in "licensing proceedings." The Court answered this question affirmatively, noting that, "[i]n the absence of specific evidence of contrary...
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