Harrington Trucking, Inc. v. Iowa Dept. of Transp., Highway Div., 93-1739

• Decision Date: 18 January 1995
• Docket Number: No. 93-1739,93-1739
• Parties: HARRINGTON TRUCKING, INC., Appellant, v. IOWA DEPARTMENT OF TRANSPORTATION, HIGHWAY DIVISION, Appellee.
• Court: Iowa Supreme Court

Page 528

526 N.W.2d 528

HARRINGTON TRUCKING, INC., Appellant, v. IOWA DEPARTMENT OF TRANSPORTATION, HIGHWAY DIVISION, Appellee.

No. 93-1739.

Supreme Court of Iowa.

Jan. 18, 1995.

Edward W. Bjornstad of Bjornstad Law Office, Spirit Lake, for appellant.

Bonnie J. Campbell, Atty. Gen., David A. Ferree, Sp. Asst. Atty. Gen., and John W. Baty, Asst. Atty. Gen., for appellee.

Considered by McGIVERIN, C.J., and HARRIS, LARSON, CARTER, and ANDREASEN, JJ.

ANDREASEN, Justice.

In this appeal we must determine if a petition for judicial review should be dismissed for lack of jurisdiction. The district court granted the agency's motion to dismiss. Upon our review we affirm the court's ruling.

I. Background.

On July 12, 1991 Harrington Trucking, Inc. (Harrington) filed an application with the Iowa Department of Transportation (IDOT) requesting it be certified as a Disadvantaged Business Enterprise (DBE). The application stated Kathryn Harrington was the majority owner of the small business corporation and that she controlled the management and operations of the corporation's trucking business. The application was denied on June 17, 1992, and Harrington was advised that an appeal could be taken to the IDOT appeal committee by giving notice to the committee chairman. Harrington appealed.

Following hearing, Harrington was notified by letter dated September 1, 1992, that it did not meet the requirements of federal regulations to be certified as a DBE. Harrington was advised it could appeal the decision to the United States Department of Transportation (Department). Harrington appealed.

On July 26, 1993, the Department notified Harrington that it did not meet the criteria for DBE certification and was ineligible to participate as a DBE on Department financially-assisted projects. The denial was based upon a determination that the ownership and control by Kathryn is not real, substantial, and continuing; and that she does not possess the power to direct the management and policies of the firm and to make day-to-day as well as major decisions on matters of management, policy, and operations.

On August 19, 1993, Harrington filed its petition for judicial review in the Iowa district court. The petition challenged the September 1, 1992 decision of the IDOT. A motion to dismiss was filed by IDOT. The motion was resisted by Harrington. Following hearing on the motion, the district court dismissed the petition on jurisdictional grounds. Harrington appeals from the court's decision.

II. Scope of Review.

The district court exercises appellate jurisdiction when reviewing the final administrative decision of a state agency. Iowa Code § 17A.19. Our function, like that of the district court, is to correct any errors of law. Everett v. Department of Revenue & Fin., 470 N.W.2d 13, 14 (Iowa 1991). Want of jurisdiction may be raised by motion. Iowa R.Civ.P. 104(a). The court shall dismiss an action at any time it finds the court lacks jurisdiction of the subject matter. Tigges v. City of Ames, 356 N.W.2d 503, 510-12 (Iowa 1984).

III. Certification of DBE.

Harrington made application for certification as a DBE. A DBE is defined in Iowa Code section 314.14 (1993) and in federal regulations, 49 C.F.R. section 23.62 (1983). Under federal law at least ten percent of funds authorized for certain Department programs, including federal-aid highway construction funds, are to be expended with DBEs. Surface Transportation Assistance Act of 1982, Pub.L. No. 97-424, 96 Stat. 2097. See generally Michigan Road Builders Ass'n Inc. v. Blanchard, 761 F.Supp. 1303, 1306-08 (W.D.Mich.1991) (discussion of the development of the DBE program). To qualify as a DBE the ownership, management, and daily business operations must be owned and controlled by one or more socially and economically disadvantaged individuals. 49 C.F.R. § 23.62. Women are included within this definition. Id.

Under the DBE program a minimum percentage of the dollar amount of federal highway construction contracts is set aside for bidding by certified DBEs. It is a part of the federal program to support the fullest possible participation of firms owned and controlled by minority and women in Department programs. See id. § 23.1. The definition of a minority business enterprise (MBE) means a small business concern which is owned and controlled by one or more minorities or women. Id. § 23.5. The definition of a DBE is almost the same as that of a MBE. Under the regulations, applicants and recipients who let DOT-assisted contracts are required to implement MBE programs and to secure Department approval of the program. Id. § 23.41.

Because IDOT is a public entity to whom federal DOT financial assistance is extended, the IDOT is a "recipient." The recipients, state or local agencies, use the standards in the federal regulations to determine whether the firm is eligible to be certified. In order to be an eligible DBE, the firm must meet the criteria of section 23.53 and be certified as provided in 49 C.F.R. § 23.

Here, the IDOT notified Harrington it did not meet the requirements of the federal regulations to be certified as a DBE. On administrative appeal the Department concluded the IDOT denial of certification under the federal regulations was justified. In its July 26, 1993 decision the Department stated both the findings and the specific reasons for denial of the appeal. Harrington was specifically advised that "this determination is administratively final."

IV. Jurisdiction.

After receiving the federal agency decision, Harrington filed its petition for judicial review in state court. The IDOT filed a motion to dismiss for lack of jurisdiction. It urged the IDOT decision was intermediate agency action, not final agency action, and that final administrative action was provided by the Department, a federal agency. In its ruling on the motion to dismiss, the court found the provisions of Iowa Code section 17A.19 are jurisdictional and the IDOT decision of September 1, 1992 was intermediate agency action. An intermediate agency action is immediately reviewable if all adequate administrative remedies have been exhausted and review of the final agency action would not provide an adequate remedy. Iowa Code § 17A.19(1). The court concluded Harrington had failed to establish that final agency action would not provide an adequate remedy and granted the motion to dismiss for lack of jurisdiction. We affirm the...