Marine Mammal Conservancy, Inc. v. Department of Agriculture

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 18, 1997 Decided February 3, 1998

No. 96-1495

Marine Mammal Conservancy, Inc.,

Petitioner

v.

Department of Agriculture and

United States of America,

Respondents

On Petition for Review of an Order of the

Department of Agriculture

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

M. Bradley Flynn, Attorney, U.S. Department of Agricul-
ture, 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 dis-
pute ensued. Before it was resolved, the Department of
Agriculture's Animal and Plant Health Inspection Service
instituted a disciplinary proceeding against Sugarloaf--a pro-
ceeding to which Marine Mammal was not a party--for
alleged violations of the Animal Welfare Act, 7 U.S.C.
ss 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 dol-
phins. In re Sugarloaf Dolphin Sanctuary, Inc., AWA Dock-
et No. 96-55 (Aug. 27, 1996). Thereafter, the Service trans-
ferred 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 Sanctu-
ary, 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 proper-
ty 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. s 2149(c)--allows judicial review pursuant to the
Administrative Orders Review Act (28 U.S.C. ss 2341, 2343-

2350). Only those aggrieved by a "final order of the Secre-
tary" 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. s 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 s 1.142(c)(4) of the regulations
because Marine Mammal did not file an administrative ap-
peal.

Before the Supreme Court's decision in Darby v. Cisneros,
509 U.S. 137 (1993), most federal courts followed the general
rule that a party must exhaust available administrative reme-
dies 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
(1938). After passage of the Administrative Procedure Act in
1946, continued insistence on exhaustion potentially imposed a
condition on judicial review not found in s 10(c) of the APA, 5
U.S.C. s 704. The APA granted persons "suffering legal
wrong because of agency action" a right to judicial review (5
U.S.C. s 702). Section 10(c) described when they could
exercise this right: when the agency action is "final." For
the purpose of judicial review, s 10(c) treats an "otherwise
final" action as final unless the agency requires an appeal "to
superior agency authority" and renders the action "inopera-
tive" while the appeal is pending. Darby held that in cases in
which the APA applies, requiring a party to exhaust adminis-
trative remedies is not a matter of judicial discretion. Rath-
er, "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 re-
view." 509 U.S. at 154.

The agency regulation before us--7 C.F.R. s 1.142(c)(4)--
satisfies s 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. s 2149(c))
permits judicial review only of "final" decisions of the Secre-
tary, 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 "fun-
damental 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 perti-
nent after Darby. If courts are forbidden from requiring
exhaustion when s 10(c) of the APA does not, why should
courts be free to excuse exhaustion when the next to last
clause of s 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 (1988). Nei-
ther 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 Mam-
mal 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 ad-
dress, 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 objec-
tion 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 pre-
sented 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 Washing-
ton 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.
s 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. s 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 distin-
guished, 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 requir-
ing--in the words of s 10(c) of the APA--appeals to "superi-
or agency authority." Administrative appeals permit agen-
cies to correct mistakes by "inferior" officers. Judicial review
may thereby be entirely avoided. If the decision of an
"inferior" officer is so seriously in error that one might
justifiably call it a fundamental abuse of the administrative
process, this is all the more reason for insisting that the
aggrieved party appeal and give the agency a chance to
rectify the error. We therefore reject Marine Mammal's
contention that it can petition for judicial review, without
bothering to prosecute an administrative appeal, simply be-
cause it believes the ALJ made a fundamental error in ruling
against it. Whether some other sort of administrative mis-
conduct would warrant judicial intervention before agency
proceedings have run their course is a question we do not
address here. See Gulf Oil Corp. v. United States Dept. of
Energy, 663 F.2d 296, 306-09 (D.C. Cir. 1981).

Marine Mammal's next excuse for not appealing is that
doing so would have been "futile." Here the idea is that
nothing would have been gained by attempting to appeal the
ALJ's order to the judicial officer because the agency does
not permit non-parties to appeal. In denying the motion to
intervene and the petition for review of the consent decree,
the ALJ said that 7 C.F.R. s 1.145(a) (1997) prohibits anyone
other than "a party" to a decision "to appeal or otherwise
seek the review or modification" of the decision. In re
Sugarloaf Dolphin Sanctuary, Inc., AWA Docket No. 96-55
(Nov. 25, 1996). Marine Mammal takes this to mean that it
"was prohibited from seeking review ... by the express
terms of Rule 1.145." Reply Brief at 6 (emphasis omitted).
Whether the judicial officer would have agreed is far from
clear. Marine Mammal was not a party to the proceeding
against Sugarloaf. But before the ALJ, it surely was "a
party" to its own motion to intervene and its petition for
review. Federal appellate courts facing analogous situations
under the Federal Rules of Appellate Procedure routinely
hear appeals from denials of motions to intervene as of right,

even though "Federal Rules of Appellate Procedure 3 and 4
clearly contemplate that only parties may file a notice of
appeal." United States v. City of Oakland, 958 F.2d 300, 301
(9th Cir. 1992); see Fed. R. App. P. 3, 4. Non-parties may
move to intervene for the purposes of appeal; "denials of
such motions are, of course, appealable." Marino v. Ortiz,
484 U.S. 301, 304 (1988) (per curiam); see 15A Charles Alan
Wright et al., Federal Practice and Procedure s 3902.1, at
112-18 (2d ed. 1992). There is reason to believe that the
Department treats s 1.145(a) as consistent with the Federal
Rules of Appellate Procedure, and specifically Rule 4. See In
re Velasam Veal Connection, 55 Agric. Dec. 300, 303-06
(1996); In re Toscony Provision Co., 43 Agric. Dec. 1106,
1108-09 (1984). We therefore do not view s 1.145(a) as a
clear bar to Marine Mammal's appeal of the ALJ's refusal to
allow it to intervene and contest the consent decree. We do
not believe, in other words, that the provision rendered an
appeal futile.

Marine Mammal offers another version of futility: if it had
appealed, the judicial officer would have ruled against it. It
cites two cases in which the judicial officer denied motions to
intervene in disciplinary proceedings; both cases stated that
the Department's rules of practice "make no provision for
intervention in [such a] proceeding." In re Syracuse Sales
Co., P&S Docket No. D-92-52, 1993 WL 459887, at *2 (Nov.
5, 1993); In re Bananas, Inc., 42 Agric. Dec. 426 (1983).
While these adverse precedents increased the likelihood that
Marine Mammal would lose, that cannot be enough. It must
appear that pursuing available administrative remedies would
have been "clearly useless," that the ultimate denial of relief
was a "certainty." UDC Chairs Chapter, Am. Ass'n of Univ.
Professors v. Board of Trustees, 56 F.3d 1469, 1476 (D.C. Cir.
1995) (citation and internal quotation marks omitted); Com-
munications Workers of Am. v. AT&T Co., 40 F.3d 426, 433
(D.C. Cir. 1994); see also Randolph-Sheppard Vendors of
Am. v. Weinberger, 795 F.2d 90, 105-07 (D.C. Cir. 1986).
There is no such certainty here. In neither of the cases
Marine Mammal cites was there any significant analysis of
the Department's rules of practice; both decisions offered an

alternative rationale for sustaining the denial of intervention,
a rationale not resting on the rules of practice; neither dealt
with a proceeding conducted under the Animal Welfare Act;
and in neither case did the decisionmaker face a would-be
intervenor claiming that a refusal to allow it into the case
would amount to a constitutional violation. An agency, like a
court, may alter or modify its position in response to persua-
sive arguments and to avoid serious constitutional questions.
See, e.g., United States v. L.A. Tucker Truck Lines, 344 U.S.
33, 37 (1952); Continental Air Lines, Inc. v. Department of
Transp., 843 F.2d 1444, 1456 (D.C. Cir. 1988). Given the
posture of this case, it is not outside the realm of possibility
that the judicial officer would have allowed Marine Mammal
to intervene and challenge the consent decree. Doubt about
the success of prosecuting an administrative appeal is no
reason to excuse a litigant's failure to make the attempt. See,
e.g., UDC Chairs, 56 F.3d at 1476; Communications Workers
of Am., 40 F.3d at 433; see also Smith v. Blue Cross & Blue
Shield United, 959 F.2d 655, 659 (7th Cir. 1992).

This leaves only the possible exception for constitutional
claims. Marine Mammal argues that the Department's en-
forcement of the Animal Welfare Act offends the Fifth
Amendment to the Constitution because nonpossessory own-
ers of animals covered by the Act are excluded from partici-
pating in proceedings that could affect the animals' fate. The
constitutional nature of this argument, Marine Mammal
thinks, excuses it from having to present the challenge to the
judicial officer on appeal. There are several problems with
this line of reasoning.

Marine Mammal is very much mistaken in believing that
there is some bright-line rule allowing litigants to bypass
administrative appeals simply because one or all of their
claims are constitutional in nature. See, e.g., Thetford Prop-
erties v. United States Dep't of Hous. & Urban Dev., 907 F.2d
445, 448 (4th Cir. 1990). Exhaustion even of constitutional
claims may promote many of the policies underlying the
exhaustion doctrine. See, e.g., Weinberger v. Salfi, 422 U.S.
749, 765 (1975); Rafeedie v. INS, 880 F.2d 506, 513-17 (D.C.
Cir. 1989); Ticor Title Ins. Co. v. FTC, 814 F.2d 731, 733-40

(D.C. Cir. 1987) (Edwards, J.) (separate opinion); see general-
ly 2 Kenneth Culp Davis & Richard J. Pierce, Jr., Administra-
tive Law Treatise s 15.5 (3d ed. 1994). Here those policies--
giving agencies the opportunity to correct their own errors,
affording parties and courts the benefits of agencies' exper-
tise, compiling a record adequate for judicial review, promot-
ing judicial efficiency, see, e.g., McCarthy v. Madigan, 503
U.S. 140, 145-46 (1992); Salfi, 422 U.S. at 765; McKart v.
United States, 395 U.S. 185, 193-95 (1969)--weigh decidedly
against Marine Mammal's position.

Marine Mammal asks us to pass on the constitutionality of
certain rules and regulations in the context of the Animal
Welfare Act. Exactly how those rules and regulations apply
to nonpossessory owners of animals in that context is a
matter of some complexity and, so far as we can tell, one of
first impression before the agency. All we have to go on is a
summary ALJ decision, containing four sentences of analysis.
We have no idea whether the Secretary, acting through the
Department's judicial officer, would have agreed with the
ALJ's view if given a chance to consider the matter. The
judicial officer might well have decided the case differently,
eliminating entirely the need for us to rule on the constitu-
tional questions. Or the judicial officer might have affirmed
the ALJ's decision. Even then, we might have had the
benefit of a more thorough explanation for the result and a
better understanding of the Department's position regarding
the regulatory scheme Marine Mammal wants to challenge.
See, e.g., New York State Opthalmological Soc'y v. Bowen,
854 F.2d 1379, 1387 (D.C. Cir. 1988); Ticor Title Ins. Co., 814
F.2d at 743 (Edwards, J.) (separate opinion). These circum-
stances provide compelling reasons for holding Marine Mam-
mal to 7 C.F.R. s 1.142(c)(4)'s exhaustion requirement, even
if we were free to create an exception to it (which we do not
decide). See W.E.B. DuBois Clubs of Am. v. Clark, 389 U.S.
309, 312 (1967) (per curiam); Public Utils. Comm'n v. United
States, 355 U.S. 534, 539-40 (1958).

The petition for review is dismissed on the ground that
Marine Mammal failed to appeal to the judicial officer.

So ordered.