United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 21, 2009 Decided June 11, 2010
No. 08-5434
KIRK BENOIT, ET AL.,
APPELLANTS
v.
UNITED STATES DEPARTMENT OF AGRICULTURE, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:03-cv-01917)
Ben Whaley Le Clercq argued the cause and filed the
briefs for appellants. Stephen A. Bogorad entered an
appearance.
Benjamin M. Shultz, Attorney, U.S. Department of
Justice, argued the cause for appellees. With him on the brief
was Marleigh D. Dover, Assistant Director. R. Craig
Lawrence, Assistant U.S. Attorney, entered an appearance.
Before: GINSBURG and GRIFFITH, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge GINSBURG.
2
GINSBURG, Circuit Judge: Fourteen African American
farmers allege the United States Department of Agriculture
discriminated against them on the basis of race (and, in one
case, gender) in administering the agency‘s federally funded
credit and benefit programs. They assert claims under the
Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 et seq.
(ECOA); the Civil Rights Act of 1866, 42 U.S.C. § 1981; the
Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.; the
common law; and the Fifth and Fourteenth Amendments to
the Constitution of the United States. In this appeal we
consider not the merits of the plaintiffs‘ claims but only
whether the district court erred by entering summary
judgment against the plaintiffs on their claims under the
ECOA because they failed to exhaust their administrative
remedy or by dismissing the plaintiffs‘ other claims as barred
by sovereign immunity.
I. Background
The plaintiffs‘ discrimination claims are decades old and
were long ago submitted to the USDA, which never resolved
them. At one time the plaintiffs could have sued the USDA
under the ECOA, but their claims under that statute were
barred by the running of the two-year limitations period. See
15 U.S.C. § 1691e(f).
In 1998 the Congress passed legislation reviving ECOA
claims of discrimination that had been filed with the USDA
from 1981 to 1996 but were barred by the statute of
limitations. Section 741 of the Department‘s 1999
Supplemental Appropriations Act* created a two-year window
*
Omnibus Consolidated and Emergency Supplemental
Appropriations Act, Pub. L. No. 105-277, § 741, 112 Stat. 2681,
3
within which farmers who had filed such complaints could
pursue their claims in court notwithstanding the statute of
limitations. Sections 741(a) and (b) each gave affected
farmers a distinct option: Either file the claim (a) directly in
federal district court or (b) with the USDA and, if the USDA
denies the claim, then seek review of the agency decision in
district court, as provided in § 741(c). Of course, a farmer
who chooses option (a) ―forego[es]‖ option (b), Garcia v.
Vilsack, 563 F.3d 519, 523 (D.C. Cir. 2009), and vice versa,
see § 714(b) (―The complainant may, in lieu of filing a civil
action, seek a determination on the merits [by the USDA]‖).
The plaintiffs in this case chose option (b) and duly filed
their claims, styled ―Section 741 Complaint Requests‖ by the
USDA, which considers such matters in two stages. The first
is an informal settlement process overseen by the Director of
the Office of Civil Rights (OCR). 7 C.F.R. § 15f.9. The
Director may consider documents submitted by the
complainant, review documents in the Department‘s files, and
refer the case for investigation. Id. Ultimately the Director
either negotiates a settlement with the complainant or sends
him a letter stating that the OCR will not settle the complaint
and informing him of his ―options, including [the] right to
request formal proceedings before an ALJ.‖ Id.
Some three to five years after filing their complaint
requests, 12 of the present plaintiffs received letters from the
Director declining to settle their complaints and informing
them of their options. Messrs. Pearson and McDonald, each
having waited several years when this suit was filed, had not
yet received letters from the Director.
2681-30 to -31 (Oct. 21, 1998) (codified at 7 U.S.C. § 2279
Historical and Statutory Notes).
4
The second stage of the USDA‘s review process
begins when a complainant requests a formal on-the-record
hearing pursuant to § 741(b)(1). Any complainant may do so
at any time after filing a ―complaint request‖ and until 30
days after receiving a letter from the Director of the OCR
declining to settle his complaint. 7 C.F.R. §§ 15f.9–.11. The
hearing is conducted by an Administrative Law Judge. The
Director provides to the ALJ and to the complainant a copy of
the complaint file, along with a report stating his position
concerning the complaint. Id. § 15f.15. The judgment of the
ALJ becomes final after 35 days unless either the complainant
requests review by the Assistant Secretary for Civil Rights or
the Assistant Secretary sua sponte decides to review it. Id. §
15f.24(a).
The plaintiffs in this case had not requested a formal
hearing when they filed this suit in 2003. The Government
moved to dismiss their claims under the ECOA for failure to
exhaust their administrative remedies and to dismiss their
claims for damages under the Civil Rights Act, the APA, the
common law, and the Constitution as barred by sovereign
immunity. With respect to the claims under the ECOA,
because the parties submitted and relied upon materials
outside the pleadings, the district court converted the
Government‘s motion to dismiss into a motion for summary
judgment, Benoit v. United States Dep’t of Agriculture, 577 F.
Supp. 2d 12, 22–23 (2008), which it granted. Id. at 23–26.
The court dismissed the other claims for lack of subject matter
jurisdiction, holding that the plaintiffs could not invoke the
waiver of sovereign immunity for common law tort claims in
the Federal Tort Claims Act (FTCA) because they had not
satisfied the exhaustion requirement in that statute and that
the United States had not waived its sovereign immunity to
claims for damages under the Civil Rights Act, the APA, or
the Constitution. Id. at 26–27.
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II. Analysis
We review de novo an order of the district court
dismissing a claim for lack of subject matter jurisdiction and a
grant of summary judgment. See Cope v. Scott, 45 F.3d 445,
450 (D.C. Cir. 1995). Because we come independently to the
same conclusions as did the district court, we affirm the order
and judgment in all respects.
A. Sovereign Immunity
The plaintiffs wisely take no issue with the district
court‘s holding that suits for damages against the United
States under the Civil Rights Act, the APA, and the
Constitution are barred by sovereign immunity and that suits
for damages against the United States under the common law
must be brought pursuant to the limited waiver of sovereign
immunity in the FTCA, which requires that the claimant have
exhausted his administrative remedy before filing suit.
Brookens v. Solis, 2009 WL 2414420, at *1 (D.C. Cir. 2009);
United States v. Timmons, 672 F.2d 1373, 1380 (11th Cir.
1982) (―the United States has not waived its immunity to suit
under [§ 1981]‖); Hubbard v. Administrator, EPA, 982 F.2d
531 (D.C. Cir. 1992) (en banc) (suit for money damages not
within limited waiver of sovereign immunity in APA); Clark
v. Library of Cong., 750 F.2d 89, 103–05 (D.C. Cir. 1984)
(constitutional claims solely for monetary damages against
federal official in his official capacity are barred by sovereign
immunity); McNeil v. United States, 508 U.S. 106, 113 (1993)
(―The FTCA bars claimants from bringing suit in federal
court until they have exhausted their administrative
remedies‖).
The plaintiffs make two attempts to sidestep sovereign
immunity by reframing their case on appeal. First, they
6
contend the exhaustion requirement in the FTCA does
not apply to claims challenging agency procedures and, in any
event, their failure to exhaust was caused by their counsel‘s
excusable neglect. These arguments are forfeit, however,
because the plaintiffs did not raise them in the district court.
See, e.g., Bryant v. Gates, 532 F.3d 888, 898 (D.C. Cir. 2008).
Second, the plaintiffs argue the district court should have
granted them leave to amend their complaint to include a
prayer for equitable relief because they suggested, in
opposing the Government‘s motion to dismiss, that ―if the
Court is otherwise inclined to dismiss [the non-ECOA]
counts, Plaintiffs should be granted leave to amend these
counts.‖ The district court noted their suggestion but declined
to grant leave to amend ―in the absence of a formal motion.‖
577 F. Supp. 2d at 27. We review the district court‘s decision
denying the plaintiffs‘ request for leave to amend for abuse of
discretion. See Belizan v. Hershon, 434 F.3d 579, 582 (D.C.
Cir. 2006).
We can hardly say the district court abused its discretion
when we have previously held ―a request for leave [to amend]
must be submitted in the form of a written motion,‖ Belizan,
434 F.3d at 582, and Federal Rule of Civil Procedure 7(b)
provides the motion must ―state with particularity the grounds
for seeking the order [and] state the relief sought.‖ The
plaintiffs‘ unwritten, one-sentence, conditional suggestion
does neither. See Calderon v. Kansas Dep’t of Soc. & Rehab.
Servs., 181 F.3d 1180, 1186–87 (10th Cir. 1999) (affirming
district court‘s refusal to consider similar one-sentence
request, made in opposition to motion to dismiss, for want of
―notice to the district court and the opposing party of the basis
of the proposed amendment‖).
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B. Failure to Exhaust Administrative Remedy
As noted, the district court entered summary judgment
for the Government on the plaintiffs‘ claims under the ECOA
because the plaintiffs did not exhaust their administrative
remedy under § 741 by requesting a formal hearing before an
ALJ. 577 F. Supp. 2d at 23. On appeal the plaintiffs argue
they did not fail to exhaust their administrative remedy or, if
they did, then the court should have excused their failure.
1. Did the plaintiffs exhaust?
The plaintiffs say yes because each had filed a § 741
Complaint Request and, with the exception of Messrs.
Pearson and McDonald, received a letter from the Director
before suing. On this view, the letter was a determination
subject to judicial review pursuant to § 741(c).* As the
district court stated, the plaintiffs‘ argument ―cannot be
squared with the language and structure of the regulations‖
implementing § 741. 577 F. Supp. 2d at 24.
The Director‘s letter is not judicially reviewable because
§ 741(c) provides for judicial review only insofar as a claim is
*
The plaintiffs also suggest a hearing before an ALJ was merely an
optional appeal they were free to take or to leave under Darby v.
Cisneros, 509 U.S. 137, 147 (1993). In that case the Court
explained that § 704 of the APA ―by its very terms‖ prevents a
court from requiring a party to exhaust his optional administrative
appeal in order to bring an APA challenge to final agency action
unless exhaustion is mandated by a statute or a rule. Id. at 146.
That case is doubly inapplicable here: the plaintiffs‘ suit is under §
741(c), not under the APA, see Darby, 509 U.S. at 153 (―the
exhaustion doctrine continues to apply as a matter of sound judicial
discretion in cases not governed by the APA‖), and as the plaintiffs
concede, § 741 requires exhaustion, Oral arg. at 8:45.
8
―denied administratively.‖ The letter does not do that; it
merely informs the complainant of the Director‘s decision not
to negotiate a settlement. 7 C.F.R. § 15f.9. A decision to
deny a complaint can be issued only to a claimant who
requested a formal hearing. 7 C.F.R. §§ 15f.9–.16.
Therefore, in order to exhaust their administrative remedy the
plaintiffs would have had to request a formal hearing before
an ALJ. Although they could have done so at any time after
they filed their complaints with the OCR and for 30 days after
receiving notice of the Director‘s decision, the plaintiffs filed
this suit without first having requested a formal hearing.
Their failure to exhaust that administrative remedy bars
judicial review of their claims under the ECOA unless, as
they argue, the court has, and it is appropriate in this case to
exercise, discretion to excuse that omission.
2. Is the plaintiffs‘ failure to exhaust excusable?
The plaintiffs argue it is because, quoting McCarthy v.
Madigan, 503 U.S. 140, 146 (1992), their ―interests in
immediate judicial review outweigh the government‘s
interests in the efficiency and administrative autonomy that
the exhaustion requirement is designed to further.‖
According to the Government, however, we lack the power to
excuse exhaustion and, in any event, doing so is not warranted
in this case.
The parties agree both that § 741(c) implicitly requires
exhaustion* and that the plaintiffs‘ failure to exhaust did not
deprive the district court of jurisdiction. What they dispute is
whether exhaustion in this case is ―mandatory‖ — either by
*
Section 741(c) provides: ―if an eligible claim is denied
administratively, the claimant shall have at least 180 days to
commence a cause of action in a Federal court of competent
jurisdiction seeking review of such denial.‖
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virtue of § 741 or by virtue of 7 U.S.C. § 6912(e),** which
requires exhaustion in suits against the USDA generally,
Munsell v. Dep’t of Agriculture, 509 F.3d 572, 579 (D.C. Cir.
2007) — and, if so, whether the court can excuse these
plaintiffs‘ failure to exhaust. See id. (even ―a mandatory
exhaustion requirement may be excused in appropriate
circumstances, whereas a jurisdictional exhaustion
requirement never may be excused by a court‖) (dictum).
Furthermore, if exhaustion is mandatory in this case, then the
court‘s power to excuse the plaintiffs‘ failure to exhaust may
be more limited, as the Government suggests, than is our
power to excuse compliance with a non-mandatory
exhaustion requirement. See McCarthy, 503 U.S. at 144 (―Of
paramount importance to any exhaustion inquiry is
congressional intent‖ (internal quotation marks omitted)).
Interesting as these issues are, we can decide this case
without resolving them. For even if we have discretion to
excuse a plaintiff‘s failure to exhaust their administrative
remedy, a balancing of interests pursuant to McCarthy v.
Madigan does not support our doing so in this case.
First, as the district court pointed out, the Government
has a significant interest in having the plaintiffs exhaust their
administrative remedy. 577 F. Supp. 2d at 23 n.16. The
process of review within the USDA gives the Department
―the opportunity ‗to correct its own errors,‘‖ Boivin v. U.S.
Airways, Inc., 446 F.3d 148, 155 (D.C. Cir. 2006) (quoting
McCarthy, 503 U.S. at 145), and thereby to avoid unnecessary
litigation. Even if litigation is not avoided, the formal hearing
**
Section 6912(e) of 7 U.S.C. provides ―a person shall exhaust all
administrative appeal procedures . . . before the person may bring
an action . . . against (1) the Secretary; (2) the Department; or (3) an
agency, office, officer, or employee of the Department.‖
10
before an ALJ ―may produce a useful record for
subsequent judicial consideration.‖ McCarthy, 503 U.S. at
145–46.
There are, to be sure, limited circumstances ―in which the
interests of the individual [plaintiff] weigh heavily against
requiring administrative exhaustion‖ and in favor of
immediate judicial review. Id. at 146–47. The Supreme
Court has identified at least three such circumstances —
where ―requiring resort to the administrative remedy may
occasion undue prejudice to subsequent assertion of a court
action,‖ or there is ―some doubt as to whether the agency was
empowered to grant effective relief,‖ or ―the administrative
body is shown to be biased or has otherwise predetermined
the issue before it.‖ Id. at 146–149.
The present plaintiffs allege none of these circumstances;
instead they stress the importance of their cause, involving as
it does allegations of ―unlawful racial discrimination in
violation of their constitutional, statutory, and common law
rights,‖ Br. of Appellants at 28, and the history of ―undue
delay‖ in the USDA‘s handling of their Complaint Requests.
That the plaintiffs‘ interest in redressing the harm
allegedly done them by racial discrimination is weighty and
comes squarely within the zone of interests protected by the
ECOA is undoubtedly true. Those features of the case,
however, do not evidence ―the litigant‘s interests in
immediate judicial review‖ of the sort considered in
McCarthy. 503 U.S. at 147, citing Bowen v. City of New
York, 476 U.S. 467, 483 (1986) (disability benefit claimants
―would be irreparably injured were the exhaustion
requirement now enforced against them‖). The weight or
intensity of a plaintiff‘s interest in his cause might in some
circumstances indicate that exhaustion would prejudice the
plaintiff or be unproductive, but in this case the plaintiffs‘
11
failure to request a formal hearing at any point during
the administrative settlement process indicates the opposite.
Furthermore, there is neither logical nor empirical
support for the plaintiffs‘ suggestion a formal hearing, had
they elected to have one, would not have proceeded
expeditiously. Logically, the Director of the OCR‘s delay of
several years before responding to the plaintiffs‘ complaints is
irrelevant; the plaintiffs could have opted for a formal hearing
before an ALJ at any time while their claims were pending
before the Director but, except Messrs. Pearson and
McDonald, who requested review by an ALJ since filing this
suit, they chose instead to wait. They suggest no other reason
to think a formal hearing would not have proceeded
expeditiously.
Empirically, the agency‘s response when Messrs. Pearson
and McDonald filed their requests for review by an ALJ
belies the plaintiffs‘ claim. According to a post-argument
letter the Government submitted pursuant to Federal Rule of
Appellate Procedure 28(j), the accuracy of which plaintiffs
have given us no reason to doubt, within a few months of
Pearson‘s and McDonald‘s requests for a hearing an ALJ was
assigned to their cases and pre-hearing conferences were
scheduled.
We conclude the district court properly granted summary
judgment in favor of the Government on the plaintiffs‘ claims
under the ECOA because they failed to exhaust their
administrative remedy. Applying the criteria prescribed by
the Supreme Court in McCarthy, that failure is not excusable.
III. Conclusion
The district court properly dismissed for lack of subject
matter jurisdiction the plaintiffs‘ claims arising under the
12
Civil Rights Act, the APA, the common law, and the
Constitution. The district court also properly granted
summary judgment for the Government with respect to their
claims under the ECOA, because the plaintiffs failed to
exhaust the administrative remedy provided in § 741. The
judgment of the district court is in all respects, therefore,
Affirmed.