West v. Bergland

• Decision Date: 14 January 1980
• Docket Number: No. 79-1711,79-1711
• Citation: 611 F.2d 710
• Parties: Frank R. WEST, Appellant, v. Bob BERGLAND, Secretary of the Department of Agriculture, and Donald Houston, Acting Administrator of the Food Safety and Quality Service of the Department of Agriculture, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 710

611 F.2d 710

Frank R. WEST, Appellant, v. Bob BERGLAND, Secretary of the Department of Agriculture, and Donald Houston, Acting Administrator of the

Food Safety and Quality Service of the

Department of Agriculture, Appellees.

No. 79-1711.

United States Court of Appeals,

Eighth Circuit.

Submitted Oct. 11, 1979.

Decided Dec. 19, 1979.

Rehearing and Rehearing En Banc Denied Jan. 14, 1980.

B. J. Rothbaum, Jr., Linn, Helms, Kirk & Burkett, Oklahoma City, Okl., for appellant; James P. Linn, Oklahoma City, Okl., David S. Lathrop, Lathrop, Albracht & Swenson, Omaha, Neb., on brief.

Linda M. Cole, Dept. of Justice, Civ. Div., Washington, D. C., for appellees; Alice Daniel, Acting Asst. Atty. Gen., Robert S. Greenspan, Atty., Washington, D. C., and James Michael Kelly, Asst. Gen. Counsel, Raymond W. Fullerton, Director, Litigation Div. and Marshall M. Marcus, Atty., Office of the General Counsel, U. S. Dept. of Agri., Washington, D. C., on brief.

Before BRIGHT, ROSS and STEPHENSON, Circuit Judges.

STEPHENSON, Circuit Judge.

The appellant, Frank R. West, sought to have the district court ¹ enjoin the Secretary of Agriculture from holding an administrative hearing to determine whether the Secretary's meat grading and acceptance services should be withdrawn for misconduct. West challenged the regulation under which the Secretary was proceeding as invalid. This appeal is from the district court's denial of injunctive relief. The issues are (1) whether West must exhaust his administrative remedies before bringing judicial challenge to the regulation, and (2) if not, whether the regulation is authorized by statute. We affirm the district court's decision to reach the question of the regulation's validity and to uphold it as impliedly authorized by statute.

I. Factual Background.

Appellant West is engaged in the business of buying and selling livestock. In this capacity he receives meat grading and acceptance services from the Department of Agriculture pursuant to section 203(h) of the Agricultural Marketing Act of 1946. ² On January 14, 1977, West was convicted, after his plea of guilty, of conspiring to violate 21 U.S.C. §§ 610(c) and 676 in causing meat to be misbranded, in violation of 18 U.S.C. § 371. A charge relating to West's plea was that he had caused employees to make gifts to a federal meat grader.

On August 9, 1977, the Administrator of the Food Safety and Quality Service filed an administrative complaint against West in a proceeding before the Secretary of Agriculture. ³ The complaint alleged that West had knowingly authorized the bribing of a federal meat grader. The complaint proposed, under the authority of 7 C.F.R. § 53.13(a) (1977), ⁴ to withdraw grading and acceptance services from West "for a period of time necessary to insure the integrity of the Meat Grading and Acceptance Service, and such additional time as may be required until (West) can prove to the Service that necessary safeguards have been provided to assure (he) will not in the future violate the (Agricultural Marketing Act of 1946 or the regulations issued under it)." Withdrawal will not become effective in this case, however, until a final agency order adverse to West. In the meantime West may continue to receive grading and acceptance services.

On February 13, 1979, West filed a complaint in federal district court to prevent the initiation of the administrative hearing and secured a temporary order that restrained the Secretary from proceeding any further. ⁵ After briefs and oral arguments, however, the district court dissolved the temporary restraining order and denied West's application for permanent injunctive relief.

II. Whether Administrative Remedies Must be Exhausted.

West makes no claim that regulation 53.13(a) runs counter to any express statutory limit to the Secretary's authority. Rather, he argues that the nature of the regulation is such that it must be expressly authorized, and that it is not. Alternatively, he argues that any implied authorization is negated by legislative history, the tone of the statute, and congressional practice with respect to related statutes. The Secretary responds that a court should not even consider West's contentions except upon appeal from a final agency decision. West rejoins that because the regulation is void there are no valid administrative remedies to exhaust. The district court did not expressly address these contentions but implicitly held that exhaustion was not required. ⁶ We agree.

Normally, a litigant is not entitled to a judicial hearing on the merits of his claim until he has exhausted available administrative remedies. E. g., Myers v. Bethlehem Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 82 L.Ed. 638 (1938). This is not a rule to be applied woodenly, however. Except in those cases where exhaustion of administrative remedies is specifically required by statute, See, e. g., Weinberger v. Salfi, 422 U.S. 749, 766, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975), administrative remedies need not be pursued if the litigant's interests in immediate judicial review outweigh the government's interests in the efficiency or administrative autonomy that the exhaustion doctrine is designed to further. This is the general test our court adopted in United States v. Newmann, 478 F.2d 829, 831 (8th Cir. 1973).

A. Governmental Interests in Requiring Exhaustion.

We begin by considering the governmental interests in requiring West to exhaust his remedies on the question of agency jurisdiction, mindful whether "allowing all similarly situated (individuals) to bypass (the administrative avenue in question) would seriously impair the (agency's) ability to perform its functions." McGee v. United States, 402 U.S. 479, 484, 91 S.Ct. 1565, 1569, 29 L.Ed.2d 47 (1971). First among these governmental interests is that of allowing the agency to "perform functions within its special competence." Parisi v. Davidson, 405 U.S. 34, 37, 92 S.Ct. 815, 818, 31 L.Ed.2d 17 (1972). These functions include specialized fact-finding, E. g., Lone Star Cement Co. v. FTC, 339 F.2d 505, 512 (9th Cir. 1964), interpretation of disputed technical subject matter, E. g., Weinberger v. Bentex Pharmaceuticals, 412 U.S. 645, 653-54, 93 S.Ct. 2488, 37 L.Ed.2d 235 (1973), and resolving disputes concerning the meaning of the agency's regulations, E. g., City of New York v. New York Telephone Co., 468 F.2d 1401, 1403 (Temp.Emer.Ct.App.1972). Despite the Secretary's contentions to the contrary, we do not think the judicial policy of deferring decision until an administrative agency has exercised one or more of these functions is strongly implicated in this case. First, the relevant facts appear on the face of the pleadings, and they are not of such a nature that the agency is best equipped to interpret them. ⁷ Second, there is no question that the regulation, if valid, authorizes the Secretary to withdraw the services provided under the Act. The only question on which West seeks to avoid exhaustion is not one requiring application of specialized agency understanding, then. It is one well within judicial competence: whether the regulation is authorized by the statute.

A second governmental interest in requiring exhaustion is discouraging "frequent and deliberate flouting of the administrative process." United States v. Newmann, supra. This interest is strongest where a grant of judicial review would induce individuals to frustrate agency process by challenging agency action only after the opportunity for agency decision has passed. E. g., McGee v. United States, supra, 402 U.S. at 491, 91 S.Ct. 1565 (selective service registrant convicted of failing to submit to induction twice sidestepped administrative review of his draft classification in order to "take a chance" in court on his defense of erroneous classification). This interest is not particularly prominent here, for a grant of judicial review under the present circumstances would not encourage individuals in West's general situation to sidestep agency process. This is not a case where remedies lie unused in the past. West brings this challenge ahead of agency action, not after the opportunity for application of agency expertise is gone. Nor would a grant of immediate judicial review in this case encourage individuals in West's position to seek early review on insubstantial questions in order to gain delay. We recognize that an exhaustion decision requires attention to the particular administrative scheme involved, and that the Secretary's ability to administer grading services for a large variety of products may be at stake. ⁸ But West's claim is out of the ordinary. It requires no application of special agency competence and, while not manifestly compelling on its merits, is not frivolous, either. It presents a question of first impression and is not easily rejected. We doubt, then, that early review of questions of this sort will induce litigious interruption of the agency's enforcement program. Courts are well equipped to deal with such tactics should they arise. "Insubstantial claims can usually be weeded out with dispatch." Oestereich v. Selective Service System, 393 U.S. 233, 242, 89 S.Ct. 414, 21 L.Ed.2d 402 (Harlan, J., concurring). See also Abbott Laboratories v. Gardner, 387 U.S. 136, 154-55, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967).

Although these first two interests in administrative autonomy and efficiency thus do not loom large in this case, the exhaustion doctrine requires us to consider two other interests. The first is that in allowing the agency to have the first opportunity to develop the facts and apply the law it was designed to administer. As the Supreme Court explained in McKart v. United States :

The agency, like a trial court, is created for the purpose of applying a statute in the first instance. Accordingly, it is normally desirable to let the agency develop the necessary factual background upon which decisions should be based. * * * And of course it...