Marine Mammal Conservancy, Inc. v. Department of Agriculture

• Decision Date: 03 February 1998
• Docket Number: No. 96-1495,96-1495
• Citation: 134 F.3d 409
• Parties: , 28 Envtl. L. Rep. 20,538 MARINE MAMMAL CONSERVANCY, INC., Petitioner, v. DEPARTMENT OF AGRICULTURE and United States of America, Respondents.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 409

134 F.3d 409

328 U.S.App.D.C. 253, 28 Envtl. L. Rep. 20,538

MARINE MAMMAL CONSERVANCY, INC., Petitioner, v. DEPARTMENT OF AGRICULTURE and United States of America, Respondents.

No. 96-1495.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 18, 1997.

Decided Feb. 3, 1998.

On Petition for Review of an Order of the Department of Agriculture.

Arthur G. House, Bethesda, MD, argued the cause and filed the briefs for petitioner. Fredric D. Firestone, Bethesda, MD, entered an appearance.

M. Bradley Flynn, Attorney, U.S. Department of Agriculture, Washington, DC, argued the cause for respondents. With him on the brief was James M. Kelly, Associate General Counsel.

Before: EDWARDS, Chief Judge, WALD and RANDOLPH, Circuit Judges.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge:

Marine Mammal Conservancy, Inc. is a nonprofit organization operating in the Florida Keys. For several years it has been trying to establish its ownership of four dolphins--"Molly," "Luther," "Buck," and "Jake." In 1995, the board of directors of Sugarloaf Dolphin Sanctuary, Inc., which then owned and held the dolphins at Sugarloaf Key, agreed to transfer their ownership and possession to Marine Mammal. When Sugarloaf failed to perform, a dispute ensued. Before it was resolved, the Department of Agriculture's Animal and Plant Health Inspection Service instituted a disciplinary proceeding against Sugarloaf--a proceeding to which Marine Mammal was not a party--for alleged violations of the Animal Welfare Act, 7 U.S.C. §§ 2131 et seq. As part of a consent decree in August 1996 terminating the proceeding, Sugarloaf relinquished to the Service "any and all ownership interest" it had in the dolphins. In re Sugarloaf Dolphin Sanctuary, Inc., AWA Docket No. 96-55 (Aug. 27, 1996). Thereafter, the Service transferred possession of the dolphins, as well as "any and all rights" it had in them, to two other organizations.

Upon learning of the administrative proceeding, Marine Mammal moved to intervene and petitioned for review of the consent decree "insofar as it affected the ownership and disposition" of the dolphins. An administrative law judge denied both requests. See In re Sugarloaf Dolphin Sanctuary, Inc., AWA Docket No. 96-55 (Nov. 25, 1996). Rather than appeal to the Department's judicial officer, Marine Mammal brought this petition for judicial review, contending that the Department unconstitutionally deprived it of property without due process of law. The Department's first line of defense is that we have no jurisdiction in light of Marine Mammal's failure to exhaust its administrative remedies.

The provision on which Marine Mammal rests its petition--7 U.S.C. § 2149(c)--allows judicial review pursuant to the Administrative Orders Review Act (28 U.S.C. §§ 2341, 2343-2350). Only those aggrieved by a "final order of the Secretary" may seek judicial review, and they must do so within sixty days of the Secretary's order. The Department's rules provide that an ALJ's decision does not become final while an appeal of the decision is pending in the agency, and that the only final orders of the Secretary "for purposes of judicial review" are those "of the Judicial Officer upon appeal." 7 C.F.R. § 1.142(c)(4) (1997); see also Ferguson v. United States Dep't of Agric., 911 F.2d 1273, 1275 n. 1 (8th Cir.1990). Marine Mammal never appealed to the judicial officer and thus never secured what the regulations define as a "final" decision. On the other hand, there is no doubt that the ALJ's decision denying Marine Mammal leave to intervene is now "final"; it became such under § 1.142(c)(4) of the regulations because Marine Mammal did not file an administrative appeal.

Before the Supreme Court's decision in Darby v. Cisneros, 509 U.S. 137, 113 S.Ct. 2539, 125 L.Ed.2d 113 (1993), most federal courts followed the general rule that a party must exhaust available administrative remedies before challenging an administrative action in court. The rule was, for the most part, judicially-created. See Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 463-64, 82 L.Ed. 638 (1938). After passage of the Administrative Procedure Act in 1946, continued insistence on exhaustion potentially imposed a condition on judicial review not found in § 10(c) of the APA, 5 U.S.C. § 704. The APA granted persons "suffering legal wrong because of agency action" a right to judicial review (5 U.S.C. § 702). Section 10(c) described when they could exercise this right: when the agency action is "final." For the purpose of judicial review, § 10(c) treats an "otherwise final" action as final unless the agency requires an appeal "to superior agency authority" and renders the action "inoperative" while the appeal is pending. Darby held that in cases in which the APA applies, requiring a party to exhaust administrative remedies is not a matter of judicial discretion. Rather, "an appeal to 'superior agency authority' is a prerequisite to judicial review only when expressly required by statute or when an agency rule requires appeal before review and the administrative action is made inoperative pending that review." 509 U.S. at 154, 113 S.Ct. at 2548.

The agency regulation before us--7 C.F.R. § 1.142(c)(4)--satisfies § 10(c) of the APA, as Darby interpreted it. The regulation suspends the finality of ALJ decisions pending appeal to the judicial officer. The regulation also requires exhaustion of administrative remedies. It deems "final" for the purposes of judicial review only decisions of the judicial officer on appeal. Since the statute (7 U.S.C. § 2149(c)) permits judicial review only of "final" decisions of the Secretary, the regulation is the equivalent of an agency rule stating, as a condition to judicial review, that an aggrieved party must first appeal to the judicial officer. See Atlantic Tele-Network, Inc. v. FCC, 59 F.3d 1384, 1388 (D.C.Cir.1995).

Marine Mammal's failure to prosecute an administrative appeal would thus appear to doom its petition. Nevertheless, it insists the case is properly before us because it falls within three "well established and recognized exceptions" to the exhaustion doctrine: (1) the ALJ's ruling constituted a "fundamental abuse of the administrative process"; (2) exhaustion would have been futile; (3) the petition for review challenges the ALJ's ruling on constitutional grounds.

One may wonder whether judicially-recognized exceptions to a judicially-created exhaustion requirement are still pertinent after Darby. If courts are forbidden from requiring exhaustion when § 10(c) of the APA does not, why should courts be free to excuse exhaustion when the next to last clause of § 10(c) demands it? If an agency rule requires, without exception, that a party must take an administrative appeal before petitioning for judicial review, on what basis may a court excuse non-compliance? See, e.g., Ayuda, Inc. v. Thornburgh, 948 F.2d 742, 759 (D.C.Cir.1991). But cf. Bowen v. Massachusetts, 487 U.S. 879, 901-02, 108 S.Ct. 2722, 2735-36, 101 L.Ed.2d 749 (1988). Neither party discusses these questions and our disposition of the case does not compel us to decide them. The three supposed exceptions to the exhaustion doctrine Marine Mammal relies upon do not relieve it of the consequences of its failure to appeal to the judicial officer.

We will begin with what Marine Mammal describes as the exception for a "fundamental abuse of the administrative process." The quoted language appears, without elaboration, in a footnote in Central Television, Inc. v. FCC, 834 F.2d 186, 191 n. 11 (D.C.Cir.1987), which in turn cited Washington Association for Television & Children v. FCC, 712 F.2d 677, 682 (D.C.Cir.1983). Washington Association did not address, as we do here, the consequences of a petitioner's failure to comply with agency rules requiring an appeal before it seeks judicial review. The issue in Washington Association was whether a litigant's failure to raise an objection in its administrative appeal precluded it from raising the objection on judicial review. That is a very different matter. The requirement that objections must first be presented to the agency, although sometimes treated as part of the judicially-created exhaustion doctrine, is largely derived from statute. Many of the statutes are cited in the Washington Association opinion. 712 F.2d at 682 n. 6. Some of these statutes contain exceptions, framed in varying terms, but expressing the general idea that an objection may be raised for the first time in court if the petitioner has good grounds for not raising it before the agency. See, e.g., 15 U.S.C. § 78y(c)(1) ("No objection ... may be considered by the court unless it was urged before the [agency] or there was reasonable ground for failure to do so."); 29 U.S.C. § 160(e) ("No objection that has not been urged before the [agency] ... shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances."). A safety-valve of this sort makes sense when, for instance, the allegedly erroneous ground for the agency's decision was neither argued nor reasonably anticipated during the administrative proceedings. But it makes no sense to hold, as Marine Mammal asks us to do, that one may bypass an administrative appeal whenever an ALJ's decision is so wrongheaded that it amounts to a "fundamental abuse." For one thing, deciding whether the ALJ's decision amounted to a "fundamental abuse" (as distinguished, we suppose, from just plain "abuse") would thrust the court into the merits. Yet the purpose of the exercise would be to determine if the court could decide the merits despite the litigant's failure to exhaust. For another thing, this sort of exception would defeat the aim of rules requiring--in the words of § 10(c) of the APA--appeals to "superior agency authority." Administrative appeals permit agencies...