United States Court of Appeals
For the First Circuit
No. 99-1628
INSTITUTO DE EDUCACION UNIVERSAL CORP.,
Plaintiff, Appellant,
v.
UNITED STATES DEPARTMENT OF EDUCATION, ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Raymond L. Acosta, Senior U.S. District Judge]
Before
Torruella, Chief Judge,
Coffin, Senior Circuit Judge,
and Selya, Circuit Judge.
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.
April 12, 2000
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
-3-
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
-4-
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
-5-
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-à-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
1 By way of illustration, the submission stated in relevant
part that "[the Institute] is the appellant in this appeal of
the U.S.D.E. Secretary's final decision in the administrative
case of that agency against [the Institute]." It then discussed
the "clock hours" finding and complained that the DOE was
"openly violating" those provisions of the Administrative
Procedure Act that afforded the Institute "a right of review."
-6-
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.
-7-
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
2
The motion stated, inter alia, that "[i]t is our humble
understanding that . . . this is the forum where the final
agency decision . . . ought to be judicially reviewed," and
"begg[ed]" the court to hold a conference "for the coordination
of this judicial review of the final agency decision." The
Institute then inquired rhetorically: "If this case is not the
appeal of judicial review of the [Secretary's] final decision,
. . . then what is it?" It also asked: "What do we have to do
in order to have this honorable court perform its judicial
review of the final agency decision?"
-8-
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
-9-
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 we think that the record adequately (though inartfully)
raised the separate issue of judicial review of the Secretary's
final decision. See 5 U.S.C. § 702 ("A person suffering legal
wrong because of agency action, or adversely affected or
aggrieved by agency action within the meaning of a relevant
statute, is entitled to judicial review thereof.") That issue
is live and unresolved. Thus, unless the order of dismissal can
be justified on some other ground, it cannot stand.
DOE proclaims that the Institute's failure to file a
complaint qua complaint sounded the death knell for its suit.
A civil action customarily is instituted by the filing of a
complaint, see Fed. R. Civ. P. 3, and DOE asseverates that the
motion for temporary restraining order is the only document of
record here that could have been construed as a complaint. That
being so, its thesis runs, the district court had a perfect
right to treat the motion as the Institute's complaint and to
-10-
construe the phrase "in the alternative" as erasing any need to
consider other redress (including judicial review of
administrative action) once the Institute had achieved the
relief requested in regard to the lease controversy.
We are troubled by this rigid approach to the
construction of pleadings. The rule that every civil action is
initiated by the filing of a complaint historically has been
relaxed in actions that originate elsewhere and are then
transferred to a federal district court (e.g., by removal from
a state court). See Fed. R. Civ. P. 81(c) (eliminating the need
for repleading unless the transferee court so orders). In such
a situation, the district court need not try to fashion a silk
purse from a sow's ear by treating a paper that obviously was
intended to serve a different purpose as a complaint, but
instead may direct the filing of a complaint. We believe that,
given the peculiar circumstances of this case, the district
court should have charted such a course before terminating the
entire action (say, by issuing a show-cause order or otherwise
advising the Institute that its case was at risk). Its failure
to do so constituted an abuse of discretion. This is especially
true because the principal purpose of the proceeding — judicial
review of the final administrative determination — was clearly
stated both in the Institute's original notice of appeal and in
-11-
our transfer order. These statements, combined with the
repeated references to judicial review that popped up like a
rampant case of impetigo throughout the motion papers, should
have put the lower court on notice that the Institute's main
goal was to seek judicial review of the adverse administrative
decision.3
We add, moreover, that even assuming, contrary to our
impression, that the district court's decision to construe the
motion for temporary restraining order as the complaint was
within its discretion, its decision to dismiss the entire action
based on a non-lawyer's isolated use of the phrase "in the
alternative" was not. The Supreme Court has long held that
complaints drafted by non-lawyers are to be construed with some
liberality. See Hughes v. Rowe, 449 U.S. 5, 9 (1980) (per
curiam); Haines v. Kerner, 404 U.S. 519, 520 (1972) (per
curiam); see also Lema v. United States, 987 F.2d 48, 54 n.5
(1st Cir. 1993) ("Given [plaintiff's] pro se status, the
reference by attachment, though perhaps technically deficient,
was sufficient to alert the court and the government to the
3
An additional reason for circumspection is that the
district court accepted (and ruled on) papers filed by Ruiz, a
non-lawyer, on behalf of the Institute. Had the district court
followed standard practice and required the Institute to secure
counsel at that point, the interpretative difficulties that
ensued might well have been avoided.
-12-
specific basis of [plaintiff's] claims."). This tenet rests on
the sober reality that, "[p]resumably unskilled in the law, the
pro se litigant is far more prone to making errors in pleading
than the person who benefits from the representation of
counsel." Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000)
(en banc) (citation and internal quotation marks omitted).
Accordingly, the lower court should not have dismissed this
action, on essentially technical grounds, without affording the
Institute some opportunity to replead.4 See 5 Charles Alan
Wright & Arthur R. Miller, Federal Practice and Procedure §
1217, at 176-77 (2d ed. 1990).
If more were needed — and we doubt that it is — the
aforementioned motion for reconsideration demonstrated with
unmistakable clarity the Institute's desire to secure judicial
review of the Secretary's final determination, regardless of
whether the lease controversy was resolved. See supra note 2.
Although trial courts have substantial discretion in dealing
4
We add two caveats. First, we note that 28 U.S.C. §
1915(e)(2)(B) does not apply here. Second, we do not mean to
intimate that pro se parties are excused from compliance with
procedural rules (they are not, see Eagle Eye Fishing Corp. v.
United States Dep't of Commerce, 20 F.3d 503, 506 (1st Cir.
1994)), nor to require district courts invariably to notify pro
se parties that their cases are open to dismissal. We hold only
that when, as now, a pleading drafted by a pro se party appears
non-frivolous on its face, the court ought not automatically to
resolve material ambiguities against the pleader.
-13-
with motions for reconsideration, that discretion is not
unbounded. See Weinberger v. Great Northern Nekoosa Corp., 925
F.2d 518, 528 (1st Cir. 1991). Thus, a refusal to reconsider
may be overturned if the record makes manifest "that the court
below committed a clear error of judgment in the conclusion it
reached upon a weighing of the relevant factors." Id. at 528-
29.
So it is here. The district court, apparently
influenced both by the ambiguity contained in the motion for a
temporary restraining order and by DOE's self-serving argument,
erroneously concluded that the abatement of the lease
controversy accorded the Institute all the relief that it
sought. The motion for reconsideration, however, made it clear
that the court had misinterpreted an admittedly prolix, hard-to-
read pro se pleading. Under those circumstances, the interests
of justice required that the court reconsider and modify its
earlier order. Cf. id. at 529 (holding that, when fee-seekers'
submission on motion for reconsideration corrected deficiencies
in original fee application, "[t]here was insufficient reason to
deny reconsideration merely because the movants had erred the
first time around").
-14-
III. CONCLUSION
We need go no further. For the reasons stated, we
affirm the district court's order with respect to the denial of
the motion for a temporary restraining order, but vacate it
insofar as it purposes to dismiss the entire action. The matter
is remanded to the district court with instructions that the
Institute be given an opportunity to file a complaint seeking
judicial review of the Secretary's final administrative
determination.
Affirmed in part and vacated in part. No costs.
-15-