United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 14, 2000 Decided December 19, 2000
No. 00-1163
PMD Produce Brokerage Corp.,
Petitioner
v.
United States Department of Agriculture and
United States of America,
Respondents
On Petition for Review of an Order of the
Department of Agriculture
Kevin P. Claffey argued the cause and filed the briefs for
petitioner. Paul T. Gentile entered an appearance.
M. Bradley Flynn, Attorney, U.S. Department of Agricul-
ture, argued the cause for respondent. With him on the brief
were James Michael Kelly, Associate General Counsel, and
Margaret M. Breinholt, Acting Assistant General Counsel.
Before: Williams, Rogers and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: PMD Produce Brokerage Corpora-
tion challenges the dismissal, as untimely, of its appeal of an
administrative law judge's decision that it violated the Perish-
able Agricultural Commodities Act, 7 U.S.C.
ss 499a-s ("PACA").1 PMD contends that the Secretary of
Agriculture's Rules of Practice Governing Formal Adjudicato-
ry Proceedings, see 7 C.F.R. ss 1.142(c), 1.145(a) (2000), are
ambiguous regarding the time to appeal and, further, that it
reasonably relied on statements of the Administrative Law
Judge and the Hearing Clerk regarding the deadline for filing
an administrative appeal. Because ss 1.142(c) and 1.145(a)
are ambiguous, as confirmed by contrary interpretations
within the Department of Agriculture, we hold that the
Secretary did not give fair notice of his interpretation of
s 1.142(c)(2) as requiring an appeal to be filed within 30 days
of issuance of an administrative law judge's oral decision.
Accordingly, because the Secretary was arbitrary and capri-
cious in dismissing PMD's appeal, we grant the petition.
I.
The Secretary, acting through the Associate Deputy Ad-
ministrator, Fruit and Vegetable Programs, Agricultural
Marketing Service, filed an administrative complaint on No-
vember 16, 1998, alleging that PMD had violated s 2(4) of
PACA, 7 U.S.C. s 499b(4), by willfully failing repeatedly to
make full payment promptly to 18 sellers of 633 lots of
perishable agricultural commodities that it had purchased and
received. On November 12, 1999, the Department filed a
motion for a bench decision, a proposed findings of fact and
conclusions of law, and a proposed order, in accordance with
s 1.142(b) of the Secretary's Rules of Practice, 7 C.F.R.
s 1.142(b).2 After hearing testimony, the Administrative
__________
1 See In re PMD Brokerage Corp., PACA Docket No.
D-99-0004 (Dep't of Agric. March 31, 2000); In re PMD Brokerage
Corp., PACA Docket No. D-99-0004, 2000 WL 202696 (Dep't of
Agric. Feb. 18, 2000).
2 Section 1.142(b) provides, in relevant part:
Law Judge orally announced his decision. The Judge found
that PMD had violated PACA and recommended revocation
of PMD's license as a dealer and merchant of perishable
agricultural products under PACA, 7 U.S.C. ss 499c, 499h(a).
The Judge directed that his decision and order be published
pursuant to the Rules of Practice and stated: "This decision
will become final without further proceedings 35 days after
service of this decision, unless [PMD] appeals this decision,
pursuant to section 1.145 of the Rules of Practice (7 C.F.R.
s 1.145)." The Judge thereafter excerpted his oral decision
and filed the written excerpt on November 30, 1999.
By letter dated December 1, 1999 to PMD's counsel, the
Hearing Clerk enclosed "a copy of the Bench Decision, issued
... on November 30, 1999." The letter stated that "[e]ach
party has thirty (30) days from the service of this decision
and order in which to file an appeal to the Department's
Judicial Officer." The letter also instructed PMD "to consult
s 1.145 of the Uniform Rules of Practice (7 C.F.R. s 1.145)
for the procedure for filing an appeal."
On January 7, 2000, PMD filed with the Department's
Judicial Officer a petition seeking reversal of the Judge's
decision, and, alternatively, a new hearing. Following receipt
of the Department's response, the Judicial Officer denied
PMD's appeal for lack of jurisdiction. The Judicial Officer,
relying on ss 1.142(c)(2) & (4) of the Rules of Practice, found
that the Judge's oral decision was issued on November 17,
1999 and became effective 35 days thereafter, on December
22, 1999. Because PMD's appeal was not filed before the
decision became effective, the Judicial Officer ruled that he
lacked jurisdiction to hear the appeal, citing Department
precedent under the Rules of Practice.3 Because he lacked
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Prior to the Judge's decision, each party shall be afforded a
reasonable opportunity to submit for consideration proposed
findings of fact, conclusions, order, and brief in support thereof.
7 C.F.R. s 1.142(b) (2000).
3 The Judicial Officer noted that the Secretary's interpretation
of his Rules of Practice, treating time limits as jurisdictional, is
consistent with the judicial construction of Federal Rule of Appel-
jurisdiction to hear PMD's appeal, the Judicial Officer issued
an order that the Judge's oral decision of November 17, 1999
was the final administrative order. The Judicial Officer
denied PMD's petition for reconsideration.
II.
On appeal, PMD contends that the Secretary's Rules of
Practice, specifically ss 1.142(c)(4) and 1.145(a), are internally
inconsistent.4 The ambiguity arises, PMD maintains, because
the Rules of Practice do not indicate that "issuance" of an
oral decision under ss 1.142(c)(2) and (4) is to be considered
"receiving service" under s 1.145(a). PMD points out that
s 1.142(c)(4) provides that an oral decision becomes effective
35 days after issuance, while s 1.145(a) provides that a party
has 30 days after "receiving service" of the Judge's decision
to appeal. "Clearly," PMD contends, "receiving service of
the Judge's decision is a form of notice of entry requirement,
that requires serving a copy of the written decision on the
parties before the time to appeal begins to run." In addition,
PMD contends that it reasonably relied on the statements by
the Judge and the Hearing Clerk that the Judge's opinion did
not become effective until 35 days after service because they
would not intentionally misinform a party about the time to
appeal. The court reviews the Secretary's decision dismiss-
ing PMD's appeal to determine whether it was arbitrary,
capricious, an abuse of discretion, or otherwise not in accor-
dance with law. See 5 U.S.C. s 706(2)(A).
__________
late Procedure 4(a)(1) and 4(a)(5)(A) and the Administrative Orders
Review Act, see 28 U.S.C. s 2344, as interpreted in Illinois Central
Gulf Railroad Co. v. ICC, 720 F.2d 958, 960 (7th Cir. 1983). See
Kidd v. District of Columbia, 206 F.3d 35, 38 (D.C. Cir. 2000);
Energy Probe v. United States Nuclear Regulatory Comm'n, 872
F.2d 436, 437 (D.C. Cir. 1989); see also Marine Mammal Conser-
vancy, Inc. v. USDA, 134 F.3d 409, 410-11 (D.C. Cir. 1998).
4 Although PMD's brief refers to s 1.142(a)(4), there is no such
subsection and it is obvious that PMD intends to refer to
s 1.142(c)(4).
The Secretary states that he has consistently interpreted
the Rules of Practice to divest the Judicial Officer of jurisdic-
tion to hear an appeal of an administrative law judge's
decision that has become effective. See, e.g., In re Toscony
Provision Co., 43 Agric. Dec. 1106, 1108-09 (Dep't of Agric.
1984) (order denying late appeal) and Department orders
cited. Further, he states that PMD had actual notice from
the Judge's oral ruling on November 17, 1999 that his deci-
sion would be final in 35 days unless an appeal was filed
pursuant to s 1.145. Having failed to file an appeal before
December 22, 1999, the Secretary maintains that PMD's
contention that the court should disregard the jurisdictional
nature of s 1.142(c)(4) is meritless. In other words, although
not expressly stated in his Rules of Practice, the Secretary
has interpreted "issuance" of an oral decision under
s 1.142(c)(4) to mean "receiving service" for purposes of
s 1.145(a).
The Secretary explains, in his brief on appeal, that the
bench decision procedures of s 1.142 are designed to allow
expedited proceedings in disciplinary cases where the viola-
tion is so patent that "the usual opportunity for the parties to
submit written findings of fact and conclusions of law is
unnecessary." Under these circumstances, the Secretary
contends, "[n]o good reasons exist for delaying the imposition
of the order of the [J]udge." Perhaps not. Indeed, on the
basis of this rationale, the court could readily view the
Secretary's interpretation of s 1.142(c)(4) as reasonable. Cf.
Veg-Mix, Inc. v. USDA, 832 F.2d 601, 608-09 (D.C. Cir.
1987). The question before the court, however, is not wheth-
er the Secretary's interpretation of the Rules of Practice is
reasonable, but whether the Secretary has given fair notice of
his interpretation that "issuance" of an oral opinion pursuant
to s 1.142(c)(2) is "receiving service" for purposes of taking
an appeal under s 1.145(a). See United States v. Chrysler
Corp., 158 F.3d 1350 (D.C. Cir. 1998); Rollins Envtl. Servs.
(NJ) Inc. v. EPA, 937 F.2d 649 (D.C. Cir. 1991); Gates & Fox
Co. v. Occupational Safety & Health Review Comm'n, 790
F.2d 154 (D.C. Cir. 1986).
The dismissal of PMD's appeal implicates the Secretary's
obligation to give fair notice because the sanction of dismissal
of its appeal petition as untimely forecloses relief from revo-
cation of its license under PACA. In Satellite Broadcasting
Co. v. FCC, 824 F.2d 1 (D.C. Cir. 1987), the court explained:
Traditional concepts of due process incorporated into
administrative law preclude an agency from penalizing a
private party for violating a rule without first providing
adequate notice of the substance of the rule. The dis-
missal of an application, we have held, is a sufficiently
grave sanction to trigger this duty to provide clear
notice.
Id. at 3 (citations omitted). In that case, an applicant for
FCC licenses had failed to file its application in the proper
location. See id. at 2-3. The court observed that the rules,
taken as a whole, were conflicting. Id. at 2. Thus, while an
"agency's interpretation [of its own rule] is entitled to defer-
ence, [ ] if it wishes to use that interpretation to cut off a
party's right, it must give full notice of its interpretation."
Id. at 4. Because the FCC had not provided fair notice of its
interpretation of the relevant rules, the court held that it had
acted arbitrarily and capriciously in dismissing the license
applications, and that the applicant was entitled to reinstate-
ment of the applications nunc pro tunc. See id.
Similarly, in General Electric Co. v. EPA, 53 F.3d 1324
(D.C. Cir. 1995), the court deferred to the agency's reasonable
interpretation of its rules but held that the agency could not
fine a private party for failure to comply with a rule interpre-
tation that was "so far from a reasonable person's under-
standing of the regulations that [the regulations] could not
have fairly informed GE of the agency's perspective." Id. at
1330. Most recently, in Trinity Broadcasting of Florida, Inc.
v. FCC, 211 F.3d 618 (D.C. Cir. 2000), the court rejected the
agency's contention that its regulation requiring an entity to
be "minority-controlled," id. at 628, provided fair notice of its
interpretation of the regulation as mandating that non-profit
organizations demonstrate de facto minority control and not
simply a majority-minority board. See id. at 625, 628-30.
The court likewise rejected the agency's contentions that
agency statements and other agency action provided fair
notice of its interpretation. See id. at 628-31. Therefore, the
court reversed the denial of an application for renewal of a
broadcast license. See Trinity Broad., 211 F.3d at 632.
Here, the question is whether the Secretary's rules gave
PMD fair notice of the time within which it had to appeal the
Judge's decision.5 Two sections of the Secretary's Rules of
Practice are implicated. Section 1.142, addressing when an
Administrative Law Judge's decision becomes effective, pro-
vides in relevant part:
The Judge's decision shall become effective without fur-
ther proceedings 35 days after the issuance of the deci-
sion, if announced orally at the hearing, or if the decision
is in writing, 35 days after the date of service thereof
upon the respondent, unless there is an appeal to the
Judicial Officer by a party to the proceeding pursuant to
s 1.145; Provided, however, that no decision shall be
final for purposes of judicial review except a final deci-
sion of the Judicial Officer upon appeal.
7 C.F.R. s 1.142(c)(4) (2000) (emphasis added).6 Section
1.145, addressing appeals, provides in relevant part:
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5 On appeal, the Secretary has abandoned the Judicial Officer's
alternative position, in denying reconsideration, that PMD's appeal
was untimely because it was filed 31 days after PMD was furnished
a copy of the Bench Decision by the Hearing Clerk. PMD claims
first, that it did not receive the Bench Decision until December 7,
1999, and second, that under agency precedent, the Judicial Officer
can grant an extension of time "if an appeal [i]s inadvertently filed
up to 4 days late, e.g., because of a delay in the mail system...."
In re Scamcorp, Inc., 55 Agric. Dec. 1395, 1996 WL 678862, at *6
(Dep't of Agric. Nov. 7, 1996); see also id. at *7.
6 Section 1.142 also provides:
If the [Administrative Law Judge's] decision is announced
orally, a copy thereof, excerpted from the transcript or record-
ing, shall be furnished to the parties by the Hearing Clerk.
Irrespective of the date such copy is mailed, the issuance date
of the decision shall be the date the oral decision was an-
nounced.
7 C.F.R. s 1.142(c)(2) (2000).
Within 30 days after receiving service of the Judge's
decision, a party who disagrees with the decision, or any
part thereof, or any ruling by the Judge or any alleged
deprivation of rights, may appeal such decision to the
Judicial Officer by filing an appeal petition with the
Hearing Clerk.
7 C.F.R. s 1.145(a) (2000) (emphasis added).
As the Secretary points out, ss 1.142(c)(2) & (4) clearly
describe when a Judge's opinion, whether oral or written,
becomes effective. Similarly, s 1.145(a) clearly states there
is a 30-day period within which to appeal the Judge's deci-
sion. But the triggering event under s 1.145(a) is "receiving
service," and the Rules of Practice at no point state that
"issuance" of an oral opinion under s 1.142(c)(2) is deemed
"receiving service" for purposes of s 1.145(a). In other
words, the Secretary's Rules of Practice are silent regarding
whether "issuance" of an oral decision under s 1.142(c)(2) is
"receiving service" for purposes of noting an appeal under
s 1.145(a). Thus, PMD could not simply read the Rules of
Practice and know that this was so. Nor would the purpose
of expedition, which the Secretary asserts is the underlying
rationale for the procedures in s 1.142(c), compel an interpre-
tation of the regulations, much less give fair notice, that
"issuance" is to be equated with "receiving service" under
s 1.145(a). Cf. Trinity Broad., 211 F.3d at 629-30. At oral
argument, the Secretary agreed that the period after which
an opinion becomes effective is different from the period in
which a party may note an appeal.
Of course, the Secretary may utilize means other than the
language of his Rules of Practice to give adequate notice of
his interpretation. See, e.g., General Elec., 53 F.3d at 1329.
However, the Secretary points to no action, such as public
statements or pre-enforcement efforts, that would have in-
formed PMD of the Secretary's interpretation. Instead, the
statements by the Judge and the Hearing Clerk demonstrate
that the Rules of Practice were ambiguous regarding the time
period for appealing an oral bench decision. See id. at 1330-
32. Each statement erroneously referred to "service" as the
event triggering the 30-day appeal period and, consequently,
neither statement informed PMD that the appeal period had
been triggered by the Judge's oral issuance of his opinion on
November 17, 1999. Such statements, it could be argued,
justify application of a "unique circumstances" exception.
Prudential-Bache Sec., Inc. v. Fitch, 966 F.2d 981, 984-86
(5th Cir. 1992) (construing Fed. R. App. P. 4(a)); cf. Moore v.
South Carolina Labor Bd., 100 F.3d 162, 164 (D.C. Cir. 1996).
Under the unique circumstances doctrine, "appellate courts
will excuse an untimely notice of appeal where the appellant
could have filed a timely notice but was mislead to delay filing
by a court order or ruling which purportedly extended or
tolled the appeal deadline." Id. at 163.
In denying PMD's petition for reconsideration, the Judicial
Officer made three principal points. First, he noted that
PMD had been furnished with a copy of the Secretary's Rules
of Practice, which are also published in the Federal Register,
and that PMD's reliance on the statement of the Hearing
Clerk was "misplaced." Yet the Rules themselves were, at
best, unclear on the critical point for PMD. The lack of
clarity was exacerbated by the Judge's statement, which
appeared to be consistent with the statement of the Hearing
Clerk.
Second, the Judicial Officer emphasized that the only deci-
sion issued by the Judge was announced at the November 17,
1999 hearing. The written Bench Decision later received by
PMD was merely an excerpt from the transcript of the earlier
hearing. Hence, the Judicial Officer concluded that the refer-
ence to "this decision" in the Judge's Bench Decision fur-
nished to PMD, as well as the references in the Hearing
Clerk's December 1, 1999 letter, were all references to the
oral decision issued on November 17, 1999. The Judicial
Officer also recognized, however, that the references to the
Judge's decision were "not without ambiguity." Further, the
fact that the only decision in the case was the Judge's oral
decision begs the question. The question is whether the
Rules of Practice, or other action by the Secretary, provided
fair notice of which event--"issuance" or "receiving ser-
vice"--triggered the appeal time under s 1.145(a).
Third, the Judicial Officer found that the statements by the
Judge and the Hearing Clerk that the decision would become
effective 35 days after service, rather than after issuance,
were "error" because the only decision in the case was the
oral decision issued on November 17, 1999. Acknowledging
further that there was an ambiguity in the statements made
to PMD by the Judge and the Hearing Clerk because both
failed to distinguish between the November 17, 1999 oral
decision and the written Bench Decision when informing
PMD of the period to appeal, the Judicial Officer nevertheless
appeared to conclude that a simple reading of the Rules of
Practice sufficed to give fair notice to PMD. In that regard,
for reasons already discussed, he erred. Moreover, any
similarity between the Secretary's interpretation of s 1.145(a)
as a jurisdictional bar and judicial construction of Federal
Rule of Appellate Procedure 4 and the Administrative Orders
Review Act, 28 U.S.C. s 2344, as presenting jurisdictional
bars to untimely appeals, see supra n.3, does not address
whether the Secretary provided fair notice of his interpreta-
tion of s 1.142(c).
Accordingly, because neither the Secretary's Rules of Prac-
tice nor any other action by the Secretary provided fair notice
to PMD that "issuance" of the Judge's oral decision under
s 1.142(c) was "receiving service" for purposes of noting an
appeal under s 1.145(a), we grant the petition.