Instituto De Edu. v. U.S. Dep't of Edu.

• Decision Date: 09 March 2000
• Docket Number: No. 99-1628,99-1628
• Citation: 209 F.3d 18
• Parties: (1st Cir. 2000) INSTITUTO DE EDUCACION UNIVERSAL CORP., Plaintiff, Appellant, v. UNITED STATES DEPARTMENT OF EDUCATION, ET AL., Defendants, Appellees. Heard
• Court: U.S. Court of Appeals — First Circuit

Page 18

209 F.3d 18 (1st Cir. 2000)

INSTITUTO DE EDUCACION UNIVERSAL CORP., Plaintiff, Appellant, v. UNITED STATES DEPARTMENT OF EDUCATION, ET AL., Defendants, Appellees.

No. 99-1628

United States Court of Appeals for the First Circuit

Heard March 9, 2000

Decided April 12, 2000

[Copyrighted Material Omitted] Roger Juan Maldonado, with whom Balber Pickard Battistoni Maldonado & Van Der Tuin, PC and Frank D. Inserni were on brief, for appellant.

Anthony A. Yang, Attorney, Appellate Staff, Civil Division, United States Department of Justice, with whom David W. Ogden, Acting Assistant Attorney General, Guillermo Gil, United States Attorney, and Barbara C. Biddle, Attorney, Appellate Staff, were on brief, for appellees.

Before Torruella, Chief Judge, Coffin, Senior Circuit Judge, and Selya, Circuit Judge.

SELYA, Circuit Judge.

This procedural motley stems from the admittedly awkward efforts of plaintiff-appellant Instituto de Educacion Universal Corp. (the Institute) to secure judicial review of a final determination of the United States Department of Education (DOE) pursuant to the Administrative Procedure Act (the APA), 5 U.S.C. 702-706. In the pages that follow, we summarize the strange series of events that led to the district court's dismissal of the action and explain why, in the interests of justice, we deem it appropriate to vacate the order of dismissal in part and remand for further proceedings.

I. BACKGROUND

The Institute is a private, not-for-profit educational institution based in Puerto Rico. At the times pertinent hereto, it offered an array of post-secondary courses. Since 1984, its recruitment efforts have depended heavily on the availability of federal student financial assistance programs established under the aegis of Title IV of the Higher Education Act of 1965, 20 U.S.C. 1070-1099c-2, and administered by DOE.

In 1994, DOE's Inspector General undertook an audit that resulted in three findings adverse to the Institute. The auditors concluded that the Institute had (1) overstated its "clock hours" of instruction; (2) requisitioned excessive student aid payments (and compounded the problem by using the ill-gotten funds for unauthorized purposes); and (3) failed to refund grants received for pupils who never completed the programs to which the grants related. In due course, DOE took a series of steps, some corrective and some punitive. Among other things, it declared the Institute ineligible to participate in federal student aid programs, imposed a substantial fine, and, after the final audit determination and program review report were issued, instituted collection proceedings to recover $1,284,900 in "clock hours" overcharges, $756,864 in "excess" cash receipts, and $655,554 in unpaid refunds.

Asserting that DOE had acted arbitrarily, the Institute pursued its administrative remedies. On January 24, 1997, an administrative law judge (ALJ) reversed the "clock hours" finding but affirmed several other agency determinations (e.g., the "excess cash" and "unpaid refunds" findings, and the decision to debar the Institute from participation in federal student aid programs). Both sides appealed to the Secretary of Education. On October 28, 1997, the Secretary affirmed the ALJ's decision in part but reinstated the "clock hours" finding and vacated the debarment decision.

At this point in time, the Institute was without counsel. Accordingly, Angel Ruiz Rivera (Ruiz), the Institute's founder and president, purporting to act both on the Institute's behalf and to his own behoof, filed a notice of appeal in this court, asking that we review the Secretary's determination. The notice of appeal was docketed on March 6, 1998, well within the six-year period allowed for seeking judicial review of the Secretary's final orders. See 28 U.S.C. 2401(a); see also Sierra Club v. Slater, 120 F.3d 623, 631 (6th Cir. 1997) (holding that six-year limitation period contained in section 2401(a) applies in respect to actions seeking judicial review of final agency determinations); Wind River Mining Corp. v. United States, 946 F.2d 710, 713 (9th Cir. 1991) (same). Unfortunately, Ruiz chose the wrong forum; the district courts, rather than the courts of appeals, have original jurisdiction over actions for judicial review of the Secretary's final determinations. See 5 U.S.C. 703. At any rate, the matter lay fallow until July 24, 1998, when we issued an order that interpreted the notice of appeal as an attempt to "seek review . . . of a final decision of the Department of Education," and transferred it to the district court. See 28 U.S.C. 1631 (authorizing inter-court transfer of misfiled pleadings).

Because the transfer process was plagued by lost documents and similar glitches (attributable to the courts involved, not to the parties), the case was not docketed in the district court until October 29, 1998. Following yet another procedural contretemps (the facts of which need not concern us), the Institute, still unrepresented, filed a document over Ruiz's signature entitled "Motion for Temporary Restraining Order." The title was misleading; although not a model of clarity, this submission, fairly read, sought not only an injunction but also judicial review of the final decision of the Secretary.¹ Indeed, the request for relief included a prayer that DOE be commanded to produce "its entire administrative record [vis--vis the Institute] in order for this appeal of the final agency decision to be able to commence." (Emphasis supplied).

The response to this motion served further to confound an already muddled situation. DOE complained that the Institute had failed to file a complaint, and then shifted the focus to one of the Institute's requests for injunctive relief. This request stemmed from an assertion that DOE had refused to furnish another educational institution that wished to lease a building from the Institute with an assurance that, if it consummated the lease, it would not inherit the Institute's Title IV liabilities. DOE self-servingly characterized the lease controversy as the "real issue" in the case and contended that, because it recently had provided suitable assurances to the prospective lessee, the issue was moot. DOE then pounced upon an isolated use of the phrase "in the alternative" in the Institute's papers -- to be precise, the Institute had used the phrase once in a thirty-six page submission -- and argued that the court could ignore the remainder of the Institute's claims (including the request for judicial review of the Secretary's final decision) because those claims had been proffered only "in the alternative."

Eschewing oral argument, the district court issued a terse, three-page order in which it dismissed the action, rather than merely denying the request for a temporary restraining order, on the ground that the relief sought by the Institute already had been obtained. See Instituto de Educacion Universal v. United States Dep't of Educ., No. 98-2225 (RLA), order at 2 (D.P.R. Feb. 19, 1998). In a footnote, the court explained that "[s]ince the relief sought in the motion for injunctive relief has been provided by defendants, the other claims, pled in the alternative by plaintiffs in their motion, are also rendered MOOT by the dismissal of this action for lack of controversy." Id. at 3 n.4.

Apparently unaware that judgment had entered, the Institute filed a "Motion Urging Jurisdiction" on February 26, 1999. The contents of this filing clarified any lingering uncertainty and made it patent that the Institute's primary goal was to obtain judicial review of the Secretary's final determination.² The district court treated this motion as a motion for reconsideration and denied it summarily.

This appeal ensued. For argument purposes, we consolidated it with a second appeal (No. 99-1398) involving essentially the same cast of characters. We have elected, however, to decide the two appeals separately. This is the first of the two opinions.

II. ANALYSIS

As a threshold matter, we confront a jurisdictional barrier. Because the appellants' previous counsel had withdrawn from the case, only Ruiz (a non-lawyer) signed the notice of appeal. DOE argues that this circumstance deprives us of appellate jurisdiction.

It is a close question as to whether a notice of appeal signed by a corporate officer has force with respect to the corporation. On reflection, however, we answer that question affirmatively. Corporations, unlike natural persons, can act only through agents. Moreover, appeal periods are notoriously brief and, if we were to adopt the Secretary's view, a corporate litigant whose counsel dies, becomes disabled, or withdraws at an inopportune time would be powerless to perfect an appeal. While it is true that a non-lawyer may not represent a corporation in ongoing proceedings, see In re Las Colinas Dev. Corp., 585 F.2d 7, 13 (1st Cir. 1978), we believe that a valid distinction can be drawn between ongoing legal representation and the essentially ministerial action involved in the filing of a notice of appeal. Thus, we hold that a corporate officer may sign and file a notice of appeal on behalf of the corporation, as long as the corporation then promptly retains counsel to take up the cudgels and prosecute the appeal. Accord Bigelow v. Brady, 179 F.3d 1164, 1165-66 (9th Cir. 1999) ("We fail to see any compelling reason to refuse to recognize a corporation's notice of appeal, signed and filed by a corporate officer, so long as a lawyer promptly thereafter enters a formal appearance on behalf of the corporation and undertakes the representation."); K.M.A., Inc. v. GMAC, 652 F.2d 398, 399 (5th Cir. 1981) (similar). That condition is satisfied here.

Having cleared this jurisdictional hurdle, we review the order of dismissal de novo. See Viqueira v. First Bank, 140 F.3d 12, 16 (1st Cir. 1998). The district court was, of course, correct in holding that the lease controversy had become moot. But w...