Regional Management v. Legal Serv. Corp., No. 98-2165

CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)
Citation186 F.3d 457
Decision Date28 July 1999
PartiesPage 457 186 F.3d 457 (4th Cir. 1999) REGIONAL MANAGEMENT CORPORATION, INCORPORATED; REGIONAL FINANCE CORPORATION OF SOUTH CAROLINA, INCORPORATED, and REGIONAL FINANCE CORPORATION OF GEORGIA, INCORPORATED, Plaintiffs-Appellees, v. LEGAL SERVICES CORPORATION, Defendant-Appellant. REGIONAL MANAGEMENT CORPORATION, INCORPORATED; REGIONAL FINANCE CORPORATION OF SOUTH CAROLINA, INCORPORATED, and REGIONAL FINANCE CORPORATION OF GEORGIA, INCORPORATED, Plaintiffs-Appellants, v. LEGAL SERVICES CORPORATION, Defendant-Appellee. (
Docket NumberCA-97-13,No. 98-2165,No. 98-2166

Page 457

186 F.3d 457 (4th Cir. 1999)
REGIONAL MANAGEMENT CORPORATION, INCORPORATED; REGIONAL FINANCE CORPORATION OF SOUTH CAROLINA, INCORPORATED, and REGIONAL FINANCE CORPORATION OF GEORGIA, INCORPORATED, Plaintiffs-Appellees,
v.
LEGAL SERVICES CORPORATION, Defendant-Appellant. REGIONAL MANAGEMENT CORPORATION, INCORPORATED; REGIONAL FINANCE CORPORATION OF SOUTH CAROLINA, INCORPORATED, and REGIONAL FINANCE CORPORATION OF GEORGIA, INCORPORATED, Plaintiffs-Appellants,
v.
LEGAL SERVICES CORPORATION, Defendant-Appellee.
No. 98-2165 No. 98-2166 (CA-97-1311-6-20)
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
Argued: May 5, 1999
Decided: July 28, 1999
Filed: August 3, 1999

Appeals from the United States District Court for the District of South Carolina, at Greenville. Henry M. Herlong, Jr., District Judge.

Page 458

COUNSEL ARGUED: Susan Macdonald Glenn, NELSON, MULLINS, RILEY & SCARBOROUGH, L.L.P., Columbia, South Carolina, for Appellant. Gregory J. English, WYCHE,

Page 459

BURGESS, FREEMAN & PARHAM, P.A., Greenville, South Carolina, for Appellees. ON BRIEF: Joel H. Smith, NELSON, MULLINS, RILEY & SCARBOROUGH, L.L.P., Columbia, South Carolina, for Appellant. Wallace K. Lightsey, Benjamin T. Zeigler, WYCHE, BURGESS, FREEMAN & PARHAM, P.A., Greenville, South Carolina, for Appellees.

Before MURNAGHAN, LUTTIG, and WILLIAMS, Circuit Judges.

Vacated and remanded in part and affirmed in part by published opinion. Judge Luttig wrote the opinion, in which Judge Williams joined. Judge Murnaghan wrote a separate concurring opinion.

OPINION

LUTTIG, Circuit Judge:

Appellees Regional Management Corp. and its affiliates (collectively "Regional") filed a complaint with the Legal Services Corporation alleging that certain recipients of Legal Services' funds violated the Legal Services Corporation Act ("LSC Act") when they lobbied against Regional before the South Carolina General Assembly and the Georgia Commissioner of Insurance. Legal Services concluded that neither instance of lobbying violated the LSC Act, and Regional sought judicial review in federal district court of the Corporation's resolution of its complaint. The district court ruled in favor of Regional with regard to the lobbying in South Carolina, but in favor of Legal Services with regard to the lobbying in Georgia.

For the reasons that follow, we conclude that there is no basis for judicial review of Legal Services' decision on Regional's complaint. We therefore vacate the district court's judgment and opinion and dismiss Regional's claim. We also affirm the district court's dismissal of Regional's suit against Legal Services under the Freedom of Information Act, because that suit is not yet ripe.

I.

Appellant Legal Services, which Congress established by the LSC Act, 42 U.S.C. §§ 2996-2996l, disburses federal money to local legal services programs, known as "recipients," to support legal assistance to the poor in civil matters. The LSC Act, however, imposes numerous restrictions on recipients' use of Legal Services' funds, id. § 2996f(a)&(b), and charges Legal Services with enforcing those restrictions, id. § 2996e(b).

Among the funding restrictions that the LSC Act imposes is a ban on lobbying federal, state, or local officials, whether executive or legislative. Id. § 2996f(a)(5). There are some exceptions to this ban, however, such as for lobbying that is "necessary to the provision of legal advice and representation" of an "eligible client . . . with respect to such client's legal rights and responsibilities," or for testimony or similar activity that has been requested by an agency or legislative body. Id. Regulations promulgated by Legal Services pursuant to the LSC Act implement the lobbying ban and the exceptions. See 45 C.F.R. pt. 1612.1

Appellee Regional is a lender, apparently concentrating on providing credit to those who have poor credit histories or are otherwise high credit risks. In 1994-95, the time of the underlying events in this case, Legal Services' recipients included Palmetto Legal Services, Inc. ("PLS"), South Carolina Legal Services Association ("SCLSA"), and the Neighborhood Legal Assistance Program ("NLAP"). SCLSA received its funding via PLS. During this time, Susan Berkowitz, an attorney, registered lobbyist, and the director of SCLSA, successfully lobbied the South Carolina General Assembly to pass Act 135 of 1995, which imposed severe restrictions upon companies such as Regional, costing it, Regional contends, millions of dollars in

Page 460

lost revenue. Soon thereafter, Berkowitz, joined by employees of PLS and NLAP, journeyed to Georgia at the request of the Georgia Commissioner of Insurance, where they successfully opposed Regional's application for a license to do business in that State.

In February 1996, Regional filed a complaint with Legal Services pursuant to the complaint procedure of 45 C.F.R. § 1618.3, claiming that both the South Carolina and the Georgia lobbying violated the LSC Act and the then-applicable regulations. Soon thereafter, Regional, concerned that Legal Services might be receiving inaccurate information from the recipients, Berkowitz, and others, filed several requests under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, which applies to Legal Services pursuant to 42 U.S.C. § 2996d(g), for all documents that Legal Services had created or received as part of the investigation. Legal Services denied these requests, invoking its policy of not releasing documents relating to an ongoing investigation to a target of that investigation and concluding that the policy should extend to Regional's request. In December 1996, Legal Services issued its decision, concluding that there was no violation of the LSC Act or regulations in either lobbying incident and, thus, that no disciplinary action was needed. It thereupon produced the documents that Regional had requested under FOIA.

Regional filed the present action in the federal district court in May 1997, seeking "judicial review" of Legal Services' "final agency action." Regional requested a declaratory judgment that the lobbying violated the LSC Act; restitution of funds to Legal Services; termination of funding to PLS, SCLSA, and NLAP;2 and termination of the offending employees of those recipients. In a second cause of action, Regional alleged violations of FOIA.

The district court, in a thorough opinion, 10 F. Supp. 2d 565 (D. S.C. 1998), first concluded that it had jurisdiction to hear Regional's challenge to Legal Services' decision. Although the court agreed with the numerous courts that have held that the LSC Act creates no private right of action, and also concluded that the judicial review provisions of the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq., do not provide a basis for reviewing Legal Services' decision, see 42 U.S.C. § 2996d(e)(1), it followed the lead of several courts that have nonetheless found authority to review certain Legal Services actions under a pre-APA standard of review, which requires a court to consider only whether an agency action has a rational basis. The district court viewed this standard of review, however, as functionally identical to the APA's "arbitrary and capricious" standard of review, see 5 U.S.C. § 706(2)(A).

On the merits, the district court first held that there was no rational basis for Legal Services' conclusion that Berkowitz's lobbying in South Carolina was in the service of a client. That conclusion by Legal Services, the court explained, was devoid of factual support, and the lobbying was thus a blatant violation of the LSC Act and regulations. The court held that Legal Services had a rational basis for concluding that the Georgia lobbying fell under the exception for testimony requested by a governmental official. Finally, the court dismissed Regional's FOIA claim as moot because Regional had received the requested documents.

Legal Services appeals from the district court's ruling with regard to the South Carolina lobbying and chiefly argues that the district court should not have reached the merits of the dispute regarding that lobbying incident (or the one in Georgia), because there is no basis for judicial review of Legal Services' decision on Regional's complaint. Regional cross-appeals

Page 461

from the district court's ruling on the Georgia lobbying and also from the dismissal of its FOIA claim.

II.

The chief, and ultimately dispositive, issue before us is whether Legal Services' decision that Legal Services' recipients did not illegally lobby against Regional in either South Carolina or Georgia is subject to judicial review. Because Congress has exempted such a decision by Legal Services from review under the APA, and because nothing in the LSC Act itself provides Regional a private right of action against Legal Services, we conclude that Regional has no basis for obtaining judicial review of Legal Services' resolution of its complaint.

There are generally only two possible bases for judicial review of federal agency action. First, and most often applicable, is the APA, which "provides the generally applicable means for obtaining judicial review of actions taken by federal agencies." Clouser v. Espy, 42 F.3d 1522, 1528 n.5 (9th Cir. 1994). Second, a substantive statute may provide a private right of action for judicial review of an agency action. See Lujan v. National Wildlife Fed'n, 497 U.S. 871, 882 (1990) (suggesting that only a "specific authorization in the substantive statute" or "the general review provisions of the APA" would permit judicial review of the agency action that respondent challenged); id. (noting that respondent "does not contend that either[of the substantive statutes that the agency allegedly violated] provides a private right of action for violations of its provisions. Rather, respondent claims a right to judicial review under . . . the APA."); Worthington Compressors, Inc. v. Costle, 662 F.2d 45, 49-50 (D.C....

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27 practice notes
  • Kemler v. Poston, No. Civ.A. 3:00CV146.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • August 11, 2000
    ...in avoiding unnecessary adjudication and in deciding issues in a concrete setting." Regional Management Corp., Inc. v. Legal Serv's Corp., 186 F.3d 457, 465 (4th Cir. 1999) (citing City of Houston v. Department of Housing and Urban Dev., 24 F.3d 1421, 1430-31 (D.C.Cir.1994) (internal quotat......
  • Peters v. Jenney, No. 01-2413
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • April 22, 2003
    ...not automatically give rise to a private cause of action in favor of that person"); see also Regional Mgmt. Corp v. Legal Servs. Corp., 186 F.3d 457, 463 (4th Cir.1999). Thus, not only must plaintiff prove that section 601 prohibits retaliation, but she must also show that she is "one of th......
  • Taylor v. United States, No. 7:11–CV–268–FL.
    • United States
    • United States District Courts. 4th Circuit. Eastern District of North Carolina
    • March 19, 2014
    ...merit because the TRICARE regulations do not create a private cause of action. See Regional Management Corp. v. Legal Services Corp., 186 F.3d 457, 461–62 (4th Cir.1999). Plaintiff's second amended complaint and opposition to Health Net's motion to dismiss provides no basis to reconsider th......
  • Milwaukee Police Ass'n v. Bd. of Fire & Police Comm'rs of Milwaukee, No. 11–2314.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • February 26, 2013
    ...the policy was officially adopted and to what extent the policy would be enforced in the future); Reg'l Mgmt. Corp. v. Legal Servs. Corp., 186 F.3d 457, 465–66 (4th Cir.1999) (analyzing a challenge to an ongoing policy against disclosing certain documents under FOIA using ripeness doctrine,......
  • Request a trial to view additional results
27 cases
  • Kemler v. Poston, No. Civ.A. 3:00CV146.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • August 11, 2000
    ...in avoiding unnecessary adjudication and in deciding issues in a concrete setting." Regional Management Corp., Inc. v. Legal Serv's Corp., 186 F.3d 457, 465 (4th Cir. 1999) (citing City of Houston v. Department of Housing and Urban Dev., 24 F.3d 1421, 1430-31 (D.C.Cir.1994) (internal quotat......
  • Peters v. Jenney, No. 01-2413
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • April 22, 2003
    ...not automatically give rise to a private cause of action in favor of that person"); see also Regional Mgmt. Corp v. Legal Servs. Corp., 186 F.3d 457, 463 (4th Cir.1999). Thus, not only must plaintiff prove that section 601 prohibits retaliation, but she must also show that she is "one of th......
  • Taylor v. United States, No. 7:11–CV–268–FL.
    • United States
    • United States District Courts. 4th Circuit. Eastern District of North Carolina
    • March 19, 2014
    ...merit because the TRICARE regulations do not create a private cause of action. See Regional Management Corp. v. Legal Services Corp., 186 F.3d 457, 461–62 (4th Cir.1999). Plaintiff's second amended complaint and opposition to Health Net's motion to dismiss provides no basis to reconsider th......
  • Milwaukee Police Ass'n v. Bd. of Fire & Police Comm'rs of Milwaukee, No. 11–2314.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • February 26, 2013
    ...the policy was officially adopted and to what extent the policy would be enforced in the future); Reg'l Mgmt. Corp. v. Legal Servs. Corp., 186 F.3d 457, 465–66 (4th Cir.1999) (analyzing a challenge to an ongoing policy against disclosing certain documents under FOIA using ripeness doctrine,......
  • Request a trial to view additional results

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