United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 24, 2007 Decided December 11, 2007
No. 06-5261
JOHN W. MUNSELL, ET AL.,
APPELLANTS/CROSS-APPELLEES
v.
DEPARTMENT OF AGRICULTURE, ET AL.,
APPELLEES/CROSS-APPELLANTS
Consolidated with
06-5262
Appeals from the United States District Court
for the District of Columbia
(No. 04cv01745)
Thad M. Guyer argued the cause and filed the briefs for
appellants/cross-appellees. Joanne Royce entered an
appearance.
Alisa B. Klein, Attorney, U.S. Department of Justice, argued
the cause for appellees/cross-appellants. With her on the briefs
were Peter D. Keisler, Assistant Attorney General, Jeffrey A.
Taylor, U.S. Attorney, Jonathan F. Cohn, Deputy Assistant
Attorney General, and Mark B. Stern, Attorney.
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Before: GINSBURG, Chief Judge, GARLAND, Circuit Judge,
and EDWARDS, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
EDWARDS.
EDWARDS, Senior Circuit Judge: In October 2004,
appellants, Montana Quality Foods and Processing, Inc. and its
president John W. Munsell (“Munsell/MQF”), filed a lawsuit in
District Court against the Department of Agriculture (“USDA”),
the Secretary of Agriculture in his official capacity, and
Nathaniel Clark, who was then the District Office Manager of
USDA’s Food Safety and Inspection Service (“FSIS”) in
Minneapolis, Minnesota, in his personal capacity.
Munsell/MQF claimed that FSIS officials used USDA
enforcement powers to retaliate against Munsell for statements
he made concerning USDA’s handling of an E. coli outbreak in
2002. In August 2005, appellants filed an amended complaint,
adding as a plaintiff the American Association of Meat
Processors (“AAMP”), a trade association representing small
meat processors that are subject to USDA inspection and
oversight. Munsell/MQF, on their own behalf, and AAMP, on
behalf of its association members, each sought declaratory and
injunctive relief, presumably under the Administrative
Procedure Act (“APA”), challenging a USDA enforcement
Directive and seeking protection from future acts of retaliation
by FSIS officials. Munsell/MQF also sought a money damages
remedy under Bivens v. Six Unknown Named Agents of Federal
Bureau of Narcotics, 403 U.S. 388 (1971), on the grounds that
Munsell’s First Amendment rights were violated when agency
officials retaliated against him.
In 2005, during the course of the litigation in the District
Court, Munsell sold all of MQF’s meat processing facilities,
thereby eliminating all of MQF’s business operations that were
subject to USDA regulation and oversight. The Government
filed a motion to dismiss, challenging appellants’ standing,
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claiming that the action by Munsell/MQF was moot, and
asserting that the entire action should be dismissed because
appellants had failed to exhaust their administrative remedies.
The District Court declined to rule on standing and mootness
and instead granted the motion to dismiss on exhaustion
grounds. The District Court first held that the governing
statutory exhaustion requirement under 7 U.S.C. § 6912(e) is
jurisdictional. The District Court then determined that
appellants had failed to exhaust the applicable administrative
appeal procedure prescribed by 9 C.F.R. § 306.5, concluded that
the court lacked subject matter jurisdiction, and dismissed all of
appellants’ APA claims. The District Court also found that
Munsell/MQF’s Bivens action was barred due to their failure to
exhaust administrative remedies. Munsell. v. Sec’y of Agric.,
435 F. Supp. 2d 149 (D.D.C. 2006). Munsell/MQF and AAMP
appealed the District Court’s dismissal, and the Government
parties cross-appealed on standing and mootness. Guided by the
Supreme Court’s decision in Arbaugh v. Y&H Corp., 546 U.S.
500 (2006), and other relevant precedent, we hold that 7 U.S.C.
§ 6912(e) does not impose a jurisdictional exhaustion
requirement. We therefore conclude that the District Court erred
in holding that plaintiffs’ failure to exhaust their administrative
remedies deprived the court of subject matter jurisdiction.
We affirm the judgment in favor of appellees on different
grounds, however. First, we affirm the dismissal of
Munsell/MQF’s claims for injunctive and declaratory relief on
standing and mootness grounds. Second, we affirm the
dismissal of Munsell/MQF’s Bivens action, because, even
assuming that such an action might lie against USDA officials,
Munsell/MQF failed to exhaust their administrative remedies
before seeking judicial relief on their constitutional claims.
Third, we dismiss for want of standing AAMP’s action seeking
protection for its members from future acts of retaliation by
USDA, and dismiss AAMP’s claims on behalf of Munsell/MQF
as moot. Finally, although we find that the action filed by
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AAMP challenging USDA’s enforcement Directive on behalf of
its members is not moot and it does not fail for want of standing
or exhaustion, we affirm the dismissal of AAMP’s action for
injunctive and declaratory relief because it is unripe for judicial
review.
I. BACKGROUND
Congress enacted the Federal Meat Inspection Act in 1907
in response to unsanitary conditions in the nation’s meat packing
industry. The purpose of the Act is to assure that meat and meat
food products are “wholesome, not adulterated, and properly
marked, labeled, and packaged.” 21 U.S.C. § 602. The Act
directs USDA to inspect the sanitary conditions of meat
processing plants and to “prescribe the rules and regulations of
sanitation under which these establishments [are] maintained.”
Id. § 608. The Act grants the Secretary authority to “make such
rules and regulations as are necessary for the efficient
execution” of the Act. Id. § 621.
In 1996, USDA’s FSIS issued a final rule requiring all meat
processing plants to develop and implement controls to address
food safety hazards that are likely to occur in their operation.
See 61 Fed. Reg. 38,806 (July 25, 1996). This regulation is
known as Hazard Analysis and Critical Control Point
(“HACCP”). See 9 C.F.R. pt. 417. Under HACCP, plants are
given considerable flexibility to design plans that achieve the
ends of preventing food safety hazards. See id. § 417.2. FSIS
inspectors evaluate plants’ hazard prevention through direct
observation and testing, and by examining plants’ records. See
id. § 417.8.
There are a range of enforcement actions that FSIS may
take, including withholding the mark of inspection from meat
products or suspending the assignment of inspectors to a plant.
See 9 C.F.R. pt. 500. Without USDA approval, a meat
processing plant is effectively expelled from the marketplace.
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These enforcement actions can be financially ruinous, especially
for smaller firms.
FSIS actions regulating meat processors may be appealed
administratively. Id. §§ 500.5(c)-(e). Enforcement actions that
are not held “in abeyance” can be appealed through a formal
hearing process. Id. § 500.5(d). However, when an enforcement
action is held in abeyance, administrative appeals must be made
to the “immediate supervisor” of the official making the
enforcement determination. Id. §§ 306.5, 500.5(c).
Munsell’s family first started operating a meat processing
plant in Montana in 1946. Am. Compl. ¶ 14, Joint Appendix
(“JA”) 19. During the time frame relevant to this case, the
processing plant was incorporated in the name of MQF, with
Munsell as MQF’s chief executive officer and owner. MQF’s
meat processing business typically bought ten-pound lots of
coarse ground beef (“chubs”) from larger meat suppliers and
further processed the beef for sale to individual consumers. Id.
¶ 15, JA 19. The plant was subject to inspection and regulation
by USDA under the Federal Meat Inspection Act.
For a time preceding the events leading to this litigation,
Munsell had been displeased with USDA’s oversight of MQF’s
meat processing operation. In September 2001, he urged agency
officials to adopt two procedural changes that he believed would
protect small meat processors from economic harm resulting
from contamination at large meat facilities. In particular,
Munsell suggested the segregation of large plant meat products
and the creation of a record of source beef to facilitate the
traceback of adulterated meat to contamination in large plants.
Id. ¶ 30, JA 24. FSIS officials declined to adopt Munsell’s
recommendations.
Roughly five months later, on January 28, 2002, FSIS
alerted Munsell that a ground beef sample taken from MQF’s
facilities five days prior tested positive for E. coli
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contamination. Id. ¶ 21, JA 21. Munsell voluntarily agreed to
recall 270 pounds of ground beef he had provided to customers.
Id. MQF was also required to reassess its HACCP and submit
to 15 days of sampling of its products. Id. ¶ 22, JA 21-22.
Two days later, Munsell asked FSIS officials to test
unopened chubs of beef that MQF had on hand from the two
firms that had supplied the coarse ground beef that had tested
positive for E. coli on January 28. But FSIS officials declined
to test the unopened chubs of beef. Id. ¶ 25, JA 22. Based on
his fear that a large supplier was distributing contaminated beef,
Munsell began segregating his meat by supplier, to more readily
facilitate traceback to identify the source of any new
contamination. Id. ¶ 26, JA 22-23. Shortly thereafter, Munsell
complained to Nathaniel Clark, the District Office Manager of
the Minneapolis office of the FSIS, about how FSIS was
handling the E. coli outbreak, and reiterated his belief that
procedures needed to be put in place to traceback contaminated
meat found at small processors. An FSIS official continued
taking samples of MQF’s meat between February 19 and 21,
2002, and again found E. coli contamination. Based on his
earlier segregation of meat by supplier, Munsell determined that
the source of the contamination was a large supplier, ConAgra.
Id. ¶ 26, JA 23. The next day Munsell requested FSIS officials
to test an unopened chub – before it passed through MQF’s
facility – to confirm that ConAgra was the source of the
contamination. FSIS officials refused. Id. ¶ 27, JA 23.
During the month of February 2002, Munsell also
communicated with congressional officials concerning his own
plant and his fears of an E. coli threat at a large meat processor.
On February 7 and 8, Munsell contacted the offices of Senator
Max Baucus and Congressman Denny Rehberg of Montana to
express his concerns. Id. ¶ 31, JA 24. On February 8, Senator
Baucus and Congressman Rehberg sent a letter to Nathaniel
Clark, expressing Munsell’s concerns and suggesting that Clark
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hold a meeting with Munsell in order to address them. Letter
from Senator Max Baucus and Congressman Denny Rehberg to
Dr. Nathaniel Clark, District Manager, FSIS (Feb. 8, 2002), JA
201-02. On February 25, Munsell informed congressional staff
that he could verify that the E. coli contamination found at MQF
was brought into his plant from a large supplier. He expressed
concern that large amounts of unprocessed beef could be
distributed across the country, potentially leading to consumer
illness and death. Am. Compl. ¶ 32, JA 25.
Munsell alleges that FSIS inspectors then took retaliatory
action against him. Clark contacted Munsell on February 26,
2002, to notify him that FSIS planned to suspend inspection of
MQF’s facilities. Id. ¶ 40, JA 27. The next day FSIS issued a
formal Notice of Intended Enforcement to Munsell. Id. On
March 5, 2002, an FSIS official notified Munsell that his
proposed corrective action of insisting that large plant suppliers
provide MQF with “certification for pathogen free beef” had
been rejected, and that the FSIS had decided to move forward
with the enforcement action. Id.
On March 8, 2002, facing the prospect of having FSIS
inspection suspended, Munsell proposed a regime of sampling
and laboratory analysis of incoming beef. On March 12, 2002,
with this costly measure in place, Clark informed Munsell that
FSIS would hold MQF’s suspension in abeyance – meaning that
inspections would continue to be carried out. Id. ¶ 41, JA 27-28.
With the suspension in abeyance, however, the formal hearing
appeals process described in 9 C.F.R. § 500.5(d) was foreclosed.
Between February 26 and July 1, 2002, FSIS required MQF
to rewrite its HACCP plan on at least ten separate occasions.
Am. Compl. ¶ 43, JA 28. Munsell alleges that these demands
for revised plans sometimes came from the agency without
explanations, that FSIS rejected revised plans that MQF had
drawn verbatim from the guidance of USDA officials, and that
FSIS rejected plan revisions that had previously been approved.
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Id. Eventually, MQF was forced to hire expert consultants to
usher the HACCP process to conclusion and approval. Id.
Munsell alleges that, from February 26 to July 3, 2002, due to
FSIS’s misconduct, MQF was unable to grind its own beef, i.e.,
beef not purchased as chubs from large plants.
While the HACCP rewrite process was underway, Munsell
continued to complain about FSIS’s actions towards him, as well
as the general way in which E. coli contamination was being
handled. On March 21, 2002, Montana congressional delegation
staff and Munsell held a conference call with FSIS Associate
Deputy Administrator for Field Operations William Smith to
seek resolution of Munsell’s concerns. Decl. of John W.
Munsell ¶ 23, JA 192. At that meeting, Munsell complained to
FSIS about its decisions to initiate enforcement actions against
MQF, reject MQF’s HACCP revisions, and require MQF to
conduct testing and analysis of incoming beef in order to have
the suspension of inspectors held in abeyance. Id. On May 3,
2002, Munsell met with FSIS management in Minneapolis to
complain of the actions taken against MQF. Id. ¶ 24, JA 192-93.
Munsell’s concerns about E. coli contamination at ConAgra
were borne out. On June 30, 2002, ConAgra announced a recall
of 350,000 pounds of contaminated beef. Am. Compl. ¶ 37, JA
26. Munsell’s conflict with USDA was not over, however. The
next day he again communicated to USDA staff his displeasure
with “USDA’s continuing rejection of my HACCP plan
revisions.” Decl. of John W. Munsell ¶ 25, JA 193.
Notwithstanding a letter dated July 22, 2002, in which Smith
stated to members of Congress that “the concerns raised by Mr.
Munsell have been satisfactorily addressed,” id. ¶ 26, JA 193,
Munsell continued to press his complaints, emailing FSIS
officials in October 2002 and lobbying Senator Conrad Burns to
hold congressional hearings on his concerns. Id. ¶ 27-28, JA
194.
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On March 31, 2004, FSIS revised Directive 10,010.1, which
governs how FSIS officials handle E. coli sampling. FSIS
Directive, 10,010.1 Revision 1 (Mar. 31, 2004), JA 156-83. On
October 13, 2004, Munsell and MQF filed suit in the District
Court. AAMP was later added as a plaintiff. All appellants
sought injunctive and declaratory relief against USDA under the
APA. In addition, Munsell and MQF sought damages against an
individual FSIS officer, District Manager Clark, under a Bivens
theory of liability.
After initiation of this suit, Munsell divested MQF of its
meat processing facility, and Munsell/MQF were no longer
subject to USDA regulation and oversight. Decl. of Cheryl A.
Hicks, ¶ 12, JA 42; Application for Federal Meat, Poultry, or
Import Inspection (Aug. 1, 2005) (change of ownership), JA 49-
50; Email from John Munsell to Wendy Wirth (July 15, 2005)
(authorizing reassignment of MQF’s USDA establishment
number to new owners), JA 52; Grant of Inspection (Aug. 1,
2005) (updating FSIS grant of inspection to reflect change of
owner), JA 54.
II. ANALYSIS
A. Standard of Review
This court reviews de novo the District Court’s dismissal of
a complaint for lack of subject matter jurisdiction. Nat’l
Taxpayers Union, Inc. v. United States, 68 F.3d 1428, 1432
(D.C. Cir. 1995). The District Court’s determination that 7
U.S.C. § 6912(e) creates an exhaustion requirement is
indisputably a question of law that will be reviewed de novo.
Because we hold that Munsell/MQF’s and AAMP’s APA
actions are not properly before this court, and that
Munsell/MQF’s Bivens action lacks an essential element, there
is no need to apply the abuse of discretion standard to the
District Court’s findings regarding appellants’ exhaustion of
administrative remedies. See Avocados Plus Inc. v. Veneman,
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370 F.3d 1243, 1250 (D.C. Cir. 2004) (stating that the court
“review[s] non-jurisdictional exhaustion decisions for abuse of
discretion”).
B. Exhaustion and Subject Matter Jurisdiction
The District Court dismissed appellants’ claims for lack of
subject matter jurisdiction, holding that the exhaustion
requirement of 7 U.S.C. § 6912(e) is jurisdictional, and that
appellants had failed to exhaust their administrative remedies.
We first review de novo the question of whether § 6912(e)
creates a jurisdictional requirement.
FSIS actions are indisputably subject to review under the
APA. 5 U.S.C. §§ 702, 704; see, e.g., Am. Fed’n of Gov’t
Employees, AFL-CIO v. Veneman, 284 F.3d 125 (D.C. Cir.
2002). Although neither Munsell/MQF nor AAMP specifically
invoked the APA in their filings before the District Court or this
court, the Government recognizes that appellants’ actions for
declaratory and injunctive relief rested on the APA. Br. for
Appellees at 7. “When an aggrieved party [seeking judicial
review under the APA] has exhausted all administrative
remedies expressly prescribed by statute or agency rule, the
agency action is final . . . and therefore subject to judicial
review.” Darby v. Cisneros, 509 U.S. 137, 146 (1993) (internal
quotation marks omitted). The question here is whether
Congress’ enactment of 7 U.S.C. § 6912(e) imposes a
jurisdictional or nonjurisdictional prerequisite to
Munsell/MQF’s and AAMP’s actions and, in either event,
whether appellants satisfied the prescribed exhaustion
requirements.
In 1994, Congress enacted the Federal Crop Insurance
Reform and Department of Agriculture Reorganization Act of
1994 (“1994 Reorganization Act”), Pub. L. No. 103-354, 108
Stat. 3178 (1994). Section 212(e) of the 1994 Reorganization
Act – codified at 7 U.S.C. § 6912(e) – states:
11
Notwithstanding any other provision of law, a person shall
exhaust all administrative appeal procedures established by
the Secretary or required by law before the person may
bring an action in a court of competent jurisdiction against–
(1) the Secretary;
(2) the Department; or
(3) an agency, office, officer, or employee of the
Department.
The District Court construed this provision to impose a
jurisdictional prerequisite to judicial review and then ruled that
it lacked subject matter jurisdiction over appellants’ actions
because they had failed to exhaust their administrative appeals
under 9 C.F.R. § 306.5 before filing suit. The District Court
erred in reaching this result.
First, we note that the appeals procedures prescribed by 9
C.F.R. § 306.5 relate solely to disputes over enforcement
actions, not to disputes of the sort emanating from AAMP’s
challenge to USDA regulatory policies. The Government cites
no “appeal procedures established by the Secretary” to address
AAMP’s action for declaratory and injunctive relief on behalf of
its members. Therefore, AAMP is not subject to the strictures
of 7 U.S.C. § 6912(e) and its action should not have been
dismissed on exhaustion grounds.
The actions filed by Munsell/MQF must be viewed through
a different lens, however, because it is clear that many of their
claims relate to USDA enforcement actions taken against the
company. In other words, there is no doubt that Munsell/MQF
were bound by 7 U.S.C. § 6912(e) and therefore subject to the
administrative appeals requirement under 9 C.F.R. § 306.5. The
only question is whether the statute imposes a jurisdictional
requirement which determines subject matter jurisdiction. This
is an important question, because a mandatory exhaustion
12
requirement may be excused in appropriate circumstances,
whereas a jurisdictional exhaustion requirement never may be
excused by a court. See, e.g., Woodford v. Ngo, 126 S. Ct. 2378,
2392 (2006) (holding that the Prison Litigation Reform Act
(“PLRA”) “exhaustion requirement is not jurisdictional”); id. at
2393 (Breyer, J., concurring in the judgment) (explaining that
in nonjurisdictional exhaustion cases, the rules of administrative
law contain “well established exceptions” to mandatory
exhaustion requirements). We need not decide whether the
“well established exemptions” to nonjurisdictional exhaustion
requirements, id., apply to § 6912(e), because we hold that
Munsell/MQF’s claims for declaratory and injunctive relief fail
on other grounds.
The Supreme Court has noted that courts sometimes
“confuse[] or conflate[]” two distinct concepts: “federal-court
‘subject matter’ jurisdiction over a controversy” and the
“essential ingredients of a federal claim for relief.” Arbaugh,
546 U.S. at 503. The jurisdiction of the federal courts is limited
by the Constitution and statutes of Congress. U.S. CONST. art.
III, §§ 1, 2. A federal court must have not only jurisdiction over
a live controversy between parties who are properly before the
court, but the case must concern a “subject matter” with respect
to which a federal court is competent to rule. See Arbaugh, 546
U.S. at 506. While Congress has the power to describe and
circumscribe the jurisdiction of the federal courts, not every
threshold requirement is jurisdictional. In other words, not
every statutorily prescribed “ingredient-of-claim-for-relief”
reflects a requirement of “subject-matter jurisdiction.” Id. at
511. Thus, where congressional statutes create explicit
threshold requirements, courts must determine whether those
requirements are jurisdictional or merely elements of the
underlying claim. “If the Legislature clearly states that a
threshold limitation on a statute’s scope shall count as
jurisdictional, then courts and litigants will be duly instructed
and will not be left to wrestle with the issue.” Id. at 515-16
13
(footnote omitted). “But when Congress does not rank a
statutory limitation on coverage as jurisdictional, courts should
treat the restriction as nonjurisdictional in character.” Id.
In the case of the 1994 Reorganization Act, Congress
created a threshold requirement that plaintiffs exhaust
administrative remedies before bringing an action in court.
There is no doubt that this statutory requirement is mandatory,
but there is also nothing to indicate that Congress meant to make
the requirement jurisdictional. Under established precedent, we
must assume that an exhaustion requirement is nonjurisdictional
unless we find “sweeping and direct statutory language
indicating that there is no federal jurisdiction prior to
exhaustion.” Avocados Plus, 370 F.3d at 1248 (internal
quotation marks and citations omitted). Absent a clear direction
from Congress, “the exhaustion requirement is treated as an
element of the underlying claim.” Id.
For several reasons, we hold that the exhaustion
requirement in the 1994 Reorganization Act is nonjurisdictional.
First, it is noteworthy that the language of 7 U.S.C. § 6912(e)
is very similar to the statutory exhaustion requirement under the
PLRA. The relevant provision of the PLRA provides:
(a) Applicability of administrative remedies
No action shall be brought with respect to prison conditions
under section 1983 of this title, or any other Federal law, by
a prisoner confined in any jail, prison, or other correctional
facility until such administrative remedies as are available
are exhausted.
42 U.S.C. § 1997e(a). As noted above, the Supreme Court
found this provision to be nonjurisdictional. See Ngo, 126 S. Ct.
at 2392. This court did so as well before the Supreme Court
issued its decision in Ngo, noting that the PLRA exhaustion
requirement did “not contain the type of sweeping and direct
language that would indicate a jurisdictional bar rather than a
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mere codification of administrative exhaustion requirements.”
Ali v. District of Columbia, 278 F.3d 1, 5-6 (D.C. Cir. 2002)
(internal quotation marks and citation omitted). We view these
precedents as compelling in our assessment of 7 U.S.C.
§ 6912(e).
Second, we also find it noteworthy that every other circuit
that has directly considered whether the 1994 Reorganization
Act creates a jurisdictional exhaustion provision has found that
7 U.S.C. § 6912(e) is nonjurisdictional. See Dawson Farms,
LLC v. Farm Serv. Agency, __ F.3d __, 2007 WL 2998636 (5th
Cir. Oct. 16, 2007); Ace Prop. & Cas. Ins. Co. v. Fed. Crop Ins.
Corp., 440 F.3d 992 (8th Cir. 2006); McBride Cotton & Cattle
Corp. v. Veneman, 290 F.3d 973 (9th Cir. 2002). We see no
reason to part ways with our sister circuits.
The District Court relied primarily on a Second Circuit
decision in Bastek v. Federal Crop Insurance Corp., 145 F.3d
90 (2d Cir. 1998), for authority that § 6912(e) creates a
jurisdictional requirement. Bastek, however, did not hold that
§ 6912(e) is jurisdictional. Rather, that decision merely held
that § 6912(e) was sufficiently explicit to make the exhaustion
requirement mandatory. Bastek, 145 F.3d at 94-95; see also Ace
Prop., 440 F.3d at 999. This is not the same as holding that the
provision is jurisdictional, because an exhaustion requirement
can be both mandatory and nonjurisdictional. See Ngo, 126
S. Ct. at 2392-93.
In sum, we find that the 1994 Reorganization Act did not
create a jurisdictional bar to judicial review of USDA actions.
Rather, § 6912(e) establishes a mandatory, but nonjurisdictional,
exhaustion requirement. There is no clear, sweeping, or direct
language within the 1994 Reorganization Act that would
indicate a congressional intent to create a jurisdictional limit on
the courts. Under Arbaugh and Avocados Plus, absent a clear
statement from Congress, exhaustion requirements will be found
to be nonjurisdictional. Accordingly, we reverse the decision of
15
the District Court and hold that there is subject matter
jurisdiction over this case under 28 U.S.C. § 1331.
There still remains a question as to whether Munsell/MQF
exhausted their administrative appeals under 9 C.F.R. § 306.5
and thus satisfied the mandatory, nonjurisdictional requirement
of 7 U.S.C. § 6912(e). We need not tarry over this question,
however. Munsell/MQF had no standing to seek declaratory and
injunctive relief to ensure that FSIS officials would not use
USDA enforcement powers to retaliate against them in the
future. In other words, even if Munsell could establish that
agency officials violated his First Amendment rights by
retaliating against him in the past, neither he nor MQF
demonstrated a real and immediate threat that they would be
subject to the same conduct in the future. See City of Los
Angeles v. Lyons, 461 U.S. 95 (1983). And, as we explain
below, Munsell/MQF’s remaining actions for declaratory and
injunctive relief are moot.
C. Mootness Resulting From MQF’s Divestment of its Meat
Processing Facility
“Simply stated, a case is moot when the issues presented are
no longer ‘live’ or the parties lack a legally cognizable interest
in the outcome.” County of Los Angeles v. Davis, 440 U.S. 625,
631 (1979) (quoting Powell v. McCormack, 395 U.S. 486, 496
(1969)). “[F]ederal courts are without power to decide questions
that cannot affect the rights of litigants in the case before them.
The inability of the federal judiciary to review moot cases
derives from the requirement of Art. III of the Constitution
under which the exercise of judicial power depends upon the
existence of a case or controversy.” DeFunis v. Odegaard, 416
U.S. 312, 316 (1974) (internal quotation marks and citations
omitted). This means that a controversy may become moot if a
regulated business challenges a government regulatory policy or
action and then terminates its operation during the pendency of
the litigation. Normally, once a regulated business has
16
voluntarily removed itself from the ambit of government
oversight, it no longer has a legally cognizable interest in the
outcome of litigation that seeks to challenge a government
regulatory policy or action. This point was made clear by the
Supreme Court in City News & Novelty, Inc. v. City of
Waukesha, 531 U.S. 278 (2001).
In City of Waukesha, the owner of an adult-oriented
establishment sought judicial review when the city denied its
license renewal application. During the pendency of the
litigation, the owner gave notice that it intended to withdraw its
licence renewal application and close its business. Citing City
of Erie v. Pap’s A. M., 529 U.S. 277 (2000), the owner argued
that the case should not be dismissed as moot, because the
terminated City News business might apply for a license in the
future. The Supreme Court ruled that the case was moot,
holding that a live controversy is not maintained by speculation
that claimant might reenter a business that it has left. In
reaching this result, the Court carefully limited the holding of
City of Erie:
In our view, Erie differs critically from this case. In Erie,
we similarly granted a petition to review a state-court
judgment addressing an adult business’ First Amendment
challenge to a city ordinance. We concluded that the
controversy persisted, even though the adult business had
shut down. We reached that conclusion, it is true, in part
because the business could again decide to operate. That
speculation standing alone, however, did not shield the case
from a mootness determination. Another factor figured
prominently. The nude dancing entrepreneur in Erie sought
to have the case declared moot after the business had
prevailed below, obtaining a judgment that invalidated
Erie’s ordinance. Had we accepted the entrepreneur’s plea,
then consistent with our practice when a case becomes moot
on review from a state court, we would have dismissed the
17
petition, leaving intact the judgment below. Thus, had we
declared Erie moot, the defendant municipality would have
been saddled with an ongoing injury, i.e., the judgment
striking its law. And the plaintiff arguably would have
prevailed in an attempt to manipulate the Court’s
jurisdiction to insulate a favorable decision from review.
531 U.S. at 283-84 (internal citations and quotation marks
omitted). The decision in City of Waukesha strongly supports
the principle that a case on appeal normally is rendered moot
when the appellant closes its business and, as a result, no longer
has a cognizable interest in the outcome of the dispute. The City
of Erie exception applies only when the party who prevailed
below attempts to “manipulate the Court’s jurisdiction” to avoid
having its favorable judgment overturned on appeal. Id. at 284.
City of Waukesha guides the disposition of this case. In
August of 2005, while this case was still pending before the
District Court, Munsell divested MQF of its meat processing
operation. Decl. of John W. Munsell ¶ 2, JA 185. As a result,
Munsell/MQF are no longer subject to USDA oversight.
Munsell claims that he anticipates “re-enter[ing] a role in meat
processing subject directly to agency regulation.” Id. But
Munsell has offered no clear plans to reopen MQF as a regulated
entity. Rather, Munsell essentially claims that the retaliatory
actions taken by FSIS officials resulted in his exit from the meat
processing business and that a favorable ruling by this court
would allow him to return to the industry, and again become
subject to USDA oversight. He points out that he has
maintained MQF as a corporate entity in good standing, which,
he suggests, gives evidence of his desire to return to the meat
processing business. Id. These claims are insufficient to avoid
mootness.
A matter is moot if “events have so transpired that the
decision will neither presently affect the parties’ rights nor have
a more-than-speculative chance of affecting them in the future.”
18
21st Century Telesis Joint Venture v. FCC, 318 F.3d 192, 198
(D.C. Cir. 2003) (internal quotation marks omitted). As the
Court noted in City of Waukesha, speculation that a business
could again decide to operate, without more, “does not shield
the case from a mootness determination.” 531 U.S. at 283.
Because Munsell/MQF are not subject to USDA oversight, a
favorable ruling by this court on their APA claims will not affect
their rights. No order from this court is assured more than a
speculative chance of giving any relief to these appellants,
because Munsell has no definite plans to reopen MQF as a
regulated entity.
Munsell/MQF point to the decision in Supreme Beef
Processors, Inc. v. USDA, 275 F.3d 432 (5th Cir. 2001), in
support of their argument that their action for declaratory and
injunctive relief is not moot. In Supreme Beef, the court held
that a meat processor’s action against USDA was not rendered
moot by its subsequent bankruptcy filing, because the business
retained a sufficient stake in the case to meet the case or
controversy threshold. Id. at 436-37. Appellants draw on the
obvious parallel to the facts of this case – in both instances, a
meat processing business failed, allegedly due to regulatory
misconduct. Nonetheless, Supreme Beef is easily distinguished
from the facts presented here.
Supreme Beef Processors filed for Chapter 11 bankruptcy
during the pendency of its action against USDA. The agency
then moved to have the case dismissed on mootness grounds. In
response, the company “argued that it intended to resume
operations after reorganization and that the injunction [it sought]
. . . was critical to that reorganization.” Id. at 436. The Fifth
Circuit denied USDA’s motion to remand the case with
instructions to dismiss. Subsequently, the Bankruptcy Court
converted the case into a Chapter 7 liquidation. The company
asserted that it had “substantial assets and could emerge solvent
from the Chapter 7 liquidation proceedings.” Id. The Supreme
19
Beef court held that “[t]he possibility that [appellant] may
continue to function as a meat processor even after its Chapter
7 proceeding satisfies Article III.” Id. at 436-37 (footnote
omitted).
The most salient distinction between Supreme Beef and the
current case is that the appellant in that case had not divested
itself of its meat processing facility. While it was possible – as
the court recognized – that “Supreme will not . . . emerge from
bankruptcy and [will] be dissolved, perhaps during the pendency
of any petition for panel rehearing, rehearing en banc, or writ of
certiorari before the U.S. Supreme Court,” id. at 437, that had
not happened when the court’s decision was rendered. As a
consequence, Supreme continued to have a legally cognizable
interest throughout the litigation. Here, Munsell/MQF are fully
divested of their meat processing facility and are no longer
subject to USDA oversight. The possibility of dissolution was
not sufficient to moot the case in Supreme Beef, but the reality
of divestment is sufficient here. Munsell/MQF’s actions for
declaratory and injunctive relief are thus moot.
D. AAMP’s Claims for Relief – Mootness, Standing, and
Ripeness
Although the actions filed by Munsell/MQF and AAMP
overlap in some respects, they raise different considerations for
the court. AAMP appears to press three distinct claims. First,
AAMP joins MQF in challenging the enforcement action taken
by USDA against MQF. Second, AAMP seeks protection from
future acts of retaliation by FSIS officials against its members.
Finally, AAMP seeks declaratory and injunctive relief in its
challenge to USDA’s regulations governing FSIS inspections of
small meat processors. The first claim is moot. The second
claim fails for want of standing. And the third claim is unripe
for judicial review.
20
Because MQF’s challenge to USDA’s enforcement actions
is moot, AAMP has no basis upon which to pursue this
challenge on behalf of MQF. An association has standing “only
if . . . at least one of its members would have standing to sue in
his own right.” GrassRoots Recycling Network, Inc. v. EPA, 429
F.3d 1109, 1111 (D.C. Cir. 2005) (internal quotation marks
omitted); see also Hunt v. Wash. State Apple Adver. Comm’n,
432 U.S. 333, 342-43 (1977). MQF is the only AAMP member
that has challenged specific USDA enforcement actions.
Therefore, it follows that if AAMP seeks to appear on behalf of
MQF to challenge the disputed agency enforcement actions and
MQF’s claims are moot, then AAMP’s claims are moot as well.
AAMP also seeks injunctive relief to ensure that FSIS
officials will not use USDA enforcement powers to retaliate
against its members in the future. AAMP complains that its
members are “concern[ed] that public criticism of the agency
can result in” adverse regulatory action. Decl. of Steve Krut,
Executive Director, AAMP ¶ 3, JA 209. AAMP offers nothing
more than sheer speculation to support the suggestion that its
members will be retaliated against by agency officials in the
future. In sum, appellants’ complaint and accompanying
affidavits do not come close to demonstrating that AAMP
members face “real and immediate threat[s]” of harm, sufficient
to establish the association’s standing to pursue this claim.
Lyons, 461 U.S. at 105.
Finally, AAMP challenges USDA’s enforcement policies
under FSIS Directive 10,010.1, Revision 1 (Mar. 21, 2004). In
particular, the Amended Complaint seeks, inter alia, to enjoin
any USDA enforcement action based on a determination that a
meat processor’s HACCP plan is inadequate if “said finding is
based in whole or in part on the small plant’s failure to sample
or test for E. coli at its expense incoming beef products already
bearing USDA approval, or to otherwise obtain certification of
non-adulteration from the supplying large plant beyond USDA’s
21
approval mark on the beef products supplied,” Am. Compl.
¶ 60.1, JA 33; to enjoin USDA “from placing any prohibition on
USDA inspectors against sampling for E. coli in beef product
supplied by a large plant to a small plant,” id. ¶ 60.2, JA 33; and
to require USDA “to immediately perform a traceback to the
supplying large plant, and to implement appropriate and
effective corrective action against said large plant,” when it
obtains information “indicating that E. coli adulterated beef
product has been shipped by a large plant to [a small plant],” id.
¶ 60.3, JA 33.
AAMP clearly has standing to pursue claims of this sort on
behalf of its members, many of whom are subject to USDA
oversight and governed by FSIS Directive 10,010.1. The
problem here is that AAMP has not raised a facial challenge to
any USDA regulation; nor has AAMP petitioned USDA to
engage in rulemaking, as allowed by USDA regulations, either
to promulgate new rules or to modify FSIS Directive 10,010.1.
See 7 C.F.R. § 1.28 (making it clear that any interested persons
may petition pursuant to 5 U.S.C. § 553(e) for the issuance,
amendment, or repeal of USDA rules). When asked about this
during oral argument, appellants’ counsel advised the court that
AAMP’s action seeks only to advance an “as applied” challenge
to the Directive. Recording of Oral Argument at 13:50-14:12.
This is hard to fathom, because AAMP points to no USDA
enforcement action against any of its members, except MQF,
and MQF’s challenge is moot. On this record, we are
constrained to find that AAMP’s claims are not ripe for judicial
review.
The Revised FSIS Directive 10,010.1 appears to reflect
USDA’s final statement of rules governing FSIS’s
“Microbiological Testing Program and Other Verifications
Activities for Escherichia coli 0157:H7 in Raw Ground Beef
Products and Raw Ground Beef Components and Beef Patty
Components.” See FSIS Directive, 10,010.1 Revision 1 (Mar.
22
31, 2004), JA 156-83. The Directive provides FSIS inspection
personnel and program investigators with instructions for
selecting, collecting, and submitting raw ground beef samples to
be tested. It also outlines actions FSIS will take when a raw
ground beef product sample is found to be positive for E. coli,
and it answers questions relating to the reporting of results and
actions taken by the agency. Id. There is no doubt that the
Directive purports to set standards for enforcement actions by
FSIS officials. And there is also no doubt that these
enforcement actions have a direct effect on AAMP members
who are engaged in the processing of ground beef.
It is not altogether clear whether Revised FSIS Directive
10,010.1 reflects a final agency rule that is subject to judicial
review, see Bennett v. Spear, 520 U.S. 154, 177-78 (1997), or a
nonreviewable policy statement, see Ctr. for Auto Safety v. Nat’l
Highway Traffic Safety Admin., 452 F.3d 798, 800 (D.C. Cir.
2006). See generally, EDWARDS & ELLIOTT, FEDERAL
STANDARDS OF REVIEW – REVIEW OF DISTRICT COURT
DECISIONS AND AGENCY ACTIONS 130-35 (2007) (“STANDARDS
OF REVIEW”). We need not address this question, for it is clear
here that, in either event, AAMP’s claims are not ripe for
review.
Even when an agency has taken final action, a court may
refrain from reviewing a challenge to the action if the case
is unripe for review. Toilet Goods Ass’n v. Gardner, 387
U.S. 158 (1967). The ripeness inquiry springs from the
Article III case or controversy requirement that prohibits
courts from issuing advisory opinions on speculative
claims. See Reg’l Rail Reorganization Act Cases, 419 U.S.
102, 138 (1974). In other words, if a claim challenging
final agency action is not concrete, it may be unfit for
judicial review without regard to whether the complaining
party has standing to pursue the claim. Normally, no such
issue arises in cases in which an agency has taken direct
23
enforcement action against a party. Rather, the ripeness
issue normally arises in cases in which a regulated party
faces the threat of future agency enforcement action.
STANDARDS OF REVIEW at 119.
In applying the ripeness doctrine, the courts look to “both
the fitness of the issues for judicial decision and the hardship to
the parties of withholding court consideration.” Abbott Labs. v.
Gardner, 387 U.S. 136, 149 (1967). In this case, AAMP’s
action challenging Revised FSIS Directive 10,010.1 is neither fit
for review, nor will the association face any hardship if the court
withholds review.
In Toilet Goods Ass’n v. Gardner, 387 U.S. 158 (1967), an
association of cosmetics manufacturers sought declaratory and
injunctive relief from an agency regulation that allowed agency
officials to immediately suspend a company’s government
certification if the agency determined that the manufacturer had
refused to permit duly authorized inspectors of the Food and
Drug Administration free access to all manufacturing facilities.
The Court found that there was “no question” that the disputed
regulation was final agency action under § 10 of the APA, 5
U.S.C. § 704. 387 U.S. at 162. It also found that the issue
presented “a purely legal question” of the type “that courts have
occasionally dealt with without requiring a specific attempt at
enforcement.” Id. at 163 (citations omitted). However, the
Court concluded that these facts were “outweighed by other
considerations,” including the fact that the regulation did no
more than “serve[] notice . . . that the [agency] may under
certain circumstances order inspection of certain facilities and
data and that further certification . . . may be refused to those
who decline to permit a duly authorized inspection.” Id. The
Court said that it had “no idea whether or when such an
inspection [would] be ordered and what reasons the [agency
might] give to justify [any such] order.” Id. The Court thus
dismissed the action as unripe for judicial review. The same
24
considerations that caused the Court to find the disputed
regulation unfit for review in Toilet Goods apply as well in this
case.
Likewise, we find that AAMP will suffer no “hardship” if
judicial review is delayed. In explaining the hardship prong of
the ripeness doctrine, the Supreme Court has held that hardship
will not be found when a complaining party “is not required to
engage in, or to refrain from, any conduct.” Texas v. United
States, 523 U.S. 296, 301 (1998). The Court has also stated
“that mere uncertainty as to the validity of a legal rule [does not]
constitute[] a hardship for purposes of the ripeness analysis.”
Nat’l Park Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803,
811 (2003). There are no obvious adverse consequences that
will flow from requiring AAMP and its members to pursue
challenges to the Directive in the context of concrete
enforcement actions. In Toilet Goods, the Court noted that a
regulated party’s “refusal to admit an inspector [pursuant to the
disputed regulation] would at most lead only to a suspension of
certification services to the particular party, a determination that
can then be promptly challenged through an administrative
procedure, which in turn is reviewable by a court.” 387 U.S. at
165 (footnotes omitted). The same reasoning controls here. If
USDA seeks to take enforcement actions against any of
AAMP’s members in the future, those actions will be subject to
administrative appeals and judicial review.
The simple point here is that “[w]e have no means to
evaluate in the abstract the myriad circumstances that” will arise
in connection with USDA enforcement actions taken pursuant
to Revised FSIS Directive 10,010.1. City of Houston v. HUD,
24 F.3d 1421, 1431 (D.C. Cir. 1994). Indeed, were this court to
assess the Directive now, “it would be required to conduct a
pseudo-rulemaking proceeding” by examining and weighing all
of the considerations that might lead USDA to pursue
enforcement actions in the future. Webb v. Dep’t of Health &
25
Human Servs., 696 F.2d 101, 107 (D.C. Cir. 1982). Many of the
enforcement actions under the Directive are discretionary, so “it
is unclear if, when or how the agency will employ it.” Action
Alliance of Senior Citizens v. Heckler, 789 F.2d 931, 940 (D.C.
Cir. 1986), vacated on other grounds, 494 U.S. 1001 (1990).
Judicial review of the Directive “is likely to stand on a much
surer footing in the context of a specific application of this
regulation than could be the case in the framework of the
generalized challenge made here.” Toilet Goods, 387 U.S. at
164. We therefore dismiss AAMP’s APA action for declaratory
and injunctive relief as unripe.
E. The Bivens Claim
In addition to their action seeking injunctive and declaratory
relief under the APA, Munsell/MQF also seek damages from
Nathaniel Clark, a USDA official who oversaw the disputed
enforcement actions against MQF. Appellants invite this court
to allow a Bivens cause of action in a case such as this, in which
it has been alleged that USDA officials pursued retaliatory
enforcement actions in order to chill constitutionally protected
speech. Appellants’ Br. at 26-30.
In Bivens v. Six Unknown Named Agents of Federal Bureau
of Narcotics, 403 U.S. 388 (1971), the Supreme Court held that
a violation of the Fourth Amendment “by a federal agent acting
under color of his authority gives rise to a cause of action for
damages consequent upon his unconstitutional conduct.” Id. at
389. In that case, agents of the Federal Bureau of Narcotics
entered into the petitioner’s home and arrested him without a
warrant or probable cause. The Bivens Court rejected the view
that state law causes of action – primarily based on privacy
rights – provided a sufficient remedy to protect petitioner’s
Fourth Amendment interests. Reasoning that Fourth
Amendment protections were not limited by state law, that
interests protected by state trespass and invasion of privacy laws
may be “inconsistent or even hostile” to those protected by the
26
Fourth Amendment, and that “damages have been regarded as
the ordinary remedy for an invasion of personal interests in
liberty,” the Court held that “petitioner is entitled to recover
money damages for any injuries he has suffered as a result of the
agents’ violation of the Amendment.” Id. at 390-97.
The Court subsequently applied Bivens in other contexts.
In Davis v. Passman, 442 U.S. 228 (1979), the Court found that
the Due Process Clause of the Fifth Amendment created a right
of action for damages where a woman had been dismissed from
her employment in the offices of a Congressman on the basis of
her sex. The Court reasoned that the Civil Rights Act, by
excluding legislative employees, did not evidence a
congressional intent to foreclose a constitutional damages
remedy. 442 U.S. at 247. And in Carlson v. Green, 446 U.S. 14
(1980), the Court found that the Eighth Amendment created a
cause of action against federal prison officials, complementary
to the remedy under the Federal Tort Claims Act against the
federal government. 446 U.S. at 19-23. And in Hartman v.
Moore, 547 U.S. 250 (2006), the Court found that federal
prosecutors and postal inspectors who use their powers to
retaliate against individuals for engaging in protected speech are
“subject to an action for damages on the authority of Bivens.”
547 U.S. at 256.
In Carlson, the Court established two exceptions to the
Bivens doctrine, stating
Bivens established that the victims of a constitutional
violation by a federal agent have a right to recover damages
against the official in federal court despite the absence of
any statute conferring such a right. Such a cause of action
may be defeated in a particular case, however, in two
situations. The first is when defendants demonstrate special
factors counselling hesitation in the absence of affirmative
action by Congress. The second is when defendants show
that Congress has provided an alternative remedy which it
27
explicitly declared to be a substitute for recovery directly
under the Constitution and viewed as equally effective.
446 U.S. at 18-19 (internal quotation marks and citations
omitted). Applying the criteria announced in Carlson, the Court
has found that Bivens actions are barred against federal officers
in several contexts. In each of these cases, the Court has found
that constitutional damages actions were inappropriate where a
sufficient alternative remedial structure already existed.
In Bush v. Lucas, 462 U.S. 367 (1983), the Court
determined that there was no Bivens remedy for a federal
employee seeking recovery for First Amendment violations
alleged to have occurred in his workplace. The Court summed
up the Bivens inquiry as follows:
The federal courts’ statutory jurisdiction to decide federal
questions confers adequate power to award damages to the
victim of a constitutional violation. When Congress
provides an alternative remedy, it may, of course, indicate
its intent, by statutory language, by clear legislative history,
or perhaps even by the statutory remedy itself, that the
courts’ power should not be exercised. In the absence of
such a congressional directive, the federal courts must make
the kind of remedial determination that is appropriate for a
common-law tribunal, paying particular heed, however, to
any special factors counselling hesitation before authorizing
a new kind of federal litigation.
462 U.S. at 378. After reviewing the “elaborate remedial system
that has been constructed step by step, with careful attention to
conflicting policy considerations,” id. at 388, designed to redress
complaints from federal employees, and weighing “the
respective costs and benefits that would result from the addition
of another remedy for violations of employees’ First
Amendment rights,” id., the Court declined “to create a new
substantive legal liability without legislative aid . . . because we
28
are convinced that Congress is in a better position to decide
whether or not the public interest would be served by creating
it.” Id. at 390 (internal quotation marks omitted).
Applying the standards announced in Passman and Bush v.
Lucas, the Court has found other administrative schemes
sufficient to obviate the need for a Bivens remedy. In
Schweiker v. Chilicky, 487 U.S. 412 (1988), the Supreme Court
held that the Social Security Act’s scheme of administrative and
judicial remedies was sufficient to eliminate the need for a
Bivens remedy. Considering Bivens claims on behalf of
members of the armed services, the Court has also held that “the
unique disciplinary structure of the Military Establishment”
constituted a special factor making a Bivens action
“inappropriate.” United States v. Stanley, 483 U.S. 669, 679
(1987).
Most recently, in Wilkie v. Robbins, 127 S. Ct. 2588 (2007),
the Supreme Court affirmed the “familiar sequence” for
determining whether to extend a Bivens remedy. 127 S. Ct. at
2598. First, the Court analyzed whether an “alternative, existing
process for protecting the interest amounts to a convincing
reason for the Judicial Branch to refrain from providing” a
Bivens remedy. Second, the Court made a “remedial
determination that is appropriate for a common-law tribunal,
paying particular heed . . . to any special factors counselling
hesitation.” Id. (internal quotation marks and citations omitted).
In Wilkie, petitioner claimed to have been the subject of a
multiyear campaign of harassment by government officials –
including trespass, unfavorable regulatory actions, and
interference in his business operations – carried out to force him
to grant an easement to his property. The Court found that
petitioner had “an administrative, and ultimately a judicial,
process for vindicating virtually all of his complaints.” Id. at
2600. The Court found, however, that this “patchwork” of state
and federal remedies – which included review under the APA –
29
did not lead to an inference that “Congress expected the
Judiciary to stay its Bivens hand,” and, therefore, the Court
engaged in the common-law balancing inquiry. Id.
In conducting this inquiry, the Court in Wilkie distinguished
the case in which a petitioner “describes the wrong . . . as
retaliation for standing on his right as a property owner to keep
the Government out,” from a case in which a petitioner claims
that “the Government may not retaliate [against him] for
exercising First Amendment speech rights.” Id. at 2601. The
decision notes that in a typical First Amendment retaliation case,
the “purpose and motivation” behind the Government’s conduct
is to chill speech – which is always impermissible. Id. On the
other hand, in a property rights case of the sort under review in
Wilkie, the Government was merely “trying to induce someone
to grant an easement for public use” which was “a perfectly
legitimate purpose.” Id. The petitioner did not challenge “the
object the Government [sought] to achieve.” Id. And, “for the
most part,” the petitioner did not claim that the “means the
Government used were necessarily illegitimate.” Id. Rather, the
Wilkie petitioner simply claimed that Government officials
“demanded too much and went too far.” Id. The Court
concluded that “the line-drawing difficulties [created by the
petitioner’s claims] are immediately apparent,” id., and
ultimately declined to allow an action under Bivens.
It is not entirely clear what the result should be in a case of
this sort, involving a claim that FSIS officials used USDA
enforcement powers to retaliate against Munsell for statements
he made concerning USDA’s handling of an E. coli outbreak in
2002. The Government argues that the APA provides a
sufficient remedy for Munsell, and therefore no Bivens action is
needed. Br. for Appellees at 25-29. The APA does indeed
create a mechanism for persons subject to USDA enforcement
actions to pursue challenges based on alleged constitutional
violations. See 5 U.S.C. § 706(2)(B). In Nebraska Beef, Ltd. v.
30
Greening, 398 F.3d 1080 (8th Cir. 2005), the court held that
APA review is thus a viable alternative sufficient to bar a Bivens
remedy against USDA enforcement officials. Observing that
“[t]he Supreme Court has been wary of extending Bivens
remedies into new contexts,” 398 F.3d at 1084, the Nebraska
Beef court held that, “[w]hen Congress has created a
comprehensive regulatory regime, the existence of a right to
judicial review under the APA is sufficient to preclude a Bivens
action.” Id.
The Eighth Circuit decision in Nebraska Beef leaves some
weighty issues unanswered. The decision was rendered before
the Supreme Court issued Wilkie. This is noteworthy, because,
rather than apply the traditional common-law balancing inquiry
endorsed by Wilkie, Nebraska Beef applies the Eighth Circuit’s
“presumption against judicial recognition of direct actions for
violations of the Constitution by federal officials or employees.”
Id. (quoting McIntosh v. Turner, 861 F.2d 524, 526 (8th Cir.
1988)). In addition, the constitutional wrong that the plaintiff
sought to remedy in Nebraska Beef is unclear. We do not know
whether the alleged misconduct in Nebraska Beef was motivated
by a “legitimate purpose” as in Wilkie or involved a First
Amendment retaliation claim of the sort at issue in this case. Cf.
Hartman, 547 U.S. at 256. Finally, we are unaware of any
Supreme Court decision holding that APA review alone is
sufficient to eliminate the need for a Bivens remedy.
The Government argues that, “[e]ven apart from the
mechanism that Congress has provided for reviewing
constitutional challenges to FSIS action, special factors would
preclude the creation of a damages remedy against the officials
charged with protecting the nation’s meat supply.” Br. for
Appellees at 29. The Government’s “special factors” argument
is not without force:
[T]he Federal Meat Inspection Act was passed after Upton
Sinclair’s book, THE JUNGLE, exposed the unsanitary
31
conditions in the meat packing industry. A system of
federal inspection was created and the inspectors subjected
to strict regulation lest their corruption – or the appearance
of it – undermine the quality of meat or the public’s trust in
their supervision of meat quality. The Federal Meat
Inspection Act [“FMIA”] provided that the federal
inspectors shall have access to all parts of a plant at all
times, and included a broad anti-gratuity provision
forbidding officers or employees authorized to perform
duties under the FMIA from accepting gratuities.
Congress was thus at pains to shield the decisions of
federal food safety officials from improper influence by the
meat processing plants they regulate. The threat of a
damages action can influence an official’s conduct as much,
if not more, than the temptation of a gratuity, since such a
threat can be used by an unscrupulous plant to inhibit
aggressive regulation.
Where, as here, federal officials administer a
comprehensive federal regulatory regime in which
relationships between the regulator and the regulated are
frequently hostile and adversarial, it is for Congress to
decide whether the public interest would be furthered by a
cause of action requiring regulators to pay damages
personally unless they can convince a jury that their
conduct in aggressively regulating was not the product of an
unconstitutional motive. Congress’s failure to expose
federal food safety officials to personal liability cannot be
deemed inadvertent. Accordingly, a court may not imply
such a remedy . . . .
Br. for Appellees at 29-31 (internal citations and quotation
marks omitted).
Even assuming, arguendo, that the existence of APA review
might factor into a determination as to whether a Bivens remedy
32
is available, its relevance would be minimal in a case involving
claimants who are ineligible for relief under the APA. Because
appellants such as Munsell/MQF are no longer subject to USDA
oversight, their claims under the APA are moot. The only viable
relief for appellants like Munsell/MQF, who allegedly have been
driven from business by the retaliatory actions of agency
officials, would be backward-looking damages claims.
Munsell/MQF allege that USDA officials engaged in a series of
enforcement actions with the purpose of harassing Munsell for
his constitutionally protected speech. Appellants argue that
these officials, animated by retributive animus, ultimately
succeeded in driving Munsell/MQF out of the meat processing
business. Thus, in a case of this sort, were the possibility of
APA review deemed sufficient to foreclose a Bivens remedy, the
very success of the unconstitutional conduct in removing
Munsell/MQF from the regulated arena would make APA
review unavailable and insulate the conduct entirely from
judicial review. That would make little sense.
While appellees seem to imply that the Supreme Court has
abandoned Bivens, and that no situation merits its extension, this
is not a view that the majority of the Supreme Court has
accepted. While some Justices have expressed the view that
Bivens is a “relic,” Wilkie, 127 S. Ct. at 2608 (Thomas, J., joined
by Scalia, J., concurring) (internal quotation marks omitted), the
Court continues to use the “familiar” common-law balancing
test, paying special heed to “special factors counselling
hesitation.” Wilkie, 127 S. Ct. at 2598. Under that analysis,
while there are considerations here militating against a Bivens
action – including the § 6912(e) exhaustion requirement, and
the “special factors” cited by the Government – the fact that
companies may be driven from a regulated arena and then have
no recourse for alleged unconstitutional conduct of federal
officials weighs heavily as well.
33
We need not now decide whether to extend the Bivens
remedy to the current case. Even assuming, arguendo, that
appellants might have a Bivens action, they have failed to
exhaust their administrative remedies on their constitutional
claims. Just as the PLRA exhaustion requirement applies to
Bivens actions against prison officials, see Porter v. Nussle, 534
U.S. 516, 524 (2002) (under PLRA, “federal prisoners suing
under [Bivens] must first exhaust inmate grievance procedures”),
7 U.S.C. § 6912(e)’s express language makes it clear that
judicial review is only available to appellants like Munsell/MQF
after all administrative remedies have been exhausted.
There is a strong rationale for requiring constitutional
claims against USDA to be raised first in the administrative
process, as mandated by § 6912(e). In Bivens actions, plaintiffs
typically claim that government officials have exceeded the
scope of their authority and, in doing so, violated rights
protected by the Constitution. Bringing such claims to the
agency in the first instance allows the agency to clarify its
position about the conduct of the accused official. Cf. Wilkie,
127 S. Ct. at 2601. In these fact intensive cases, an
administrative process will also create a record on which a
Bivens claim can be evaluated. Bringing the complaint directly
to the agency also may allow the agency to remedy the alleged
offending conduct and, at the least, avoid continuing
constitutional harm.
The administrative process in this case is not burdensome.
9 C.F.R. § 306.5 establishes an extremely straightforward
process for appealing the decisions of FSIS officials: “Any
appeal from a decision of any Program employee shall be made
to his/her immediate supervisor having jurisdiction over the
subject matter of the appeal . . . .” Munsell took advantage of
that process for his claims that the agency was acting
unreasonably by failing to require the traceback of contaminated
meat and placing an unjustified burden on small meat
34
processors. He did not, however, raise his constitutional claims
while pursuing challenges to the enforcement action. It would
have been a simple matter for Munsell to do this, and it would
have given the agency an opportunity to “nip in the bud” any
unconstitutional conduct on the part of one of its officers.
The fact that USDA’s administrative appeals process does
not allow for money damages does not create an exception to the
exhaustion requirement. See Booth v. Churner, 532 U.S. 731,
734 (2001). The rationale for requiring exhaustion does not
depend on the existence of money damages as a remedy. So
long as the administrative process offers the possibility of some
redress for the alleged unconstitutional conduct – including
reprimanding the responsible official and barring similar future
conduct – the administrative process can serve its proper
function.
Appellants did not submit – either in their complaint or in
the affidavits and arguments presented to the District Court, or
in their submissions to this court – that Munsell/MQF pressed
any constitutional challenge within the administrative appeals
process. Nor can the complaint and affidavits reasonably be
construed to indicate that it would have been futile for
Munsell/MQF to pursue their administrative appeals on their
constitutional claims. Therefore, even assuming that there might
be a cognizable Bivens action in a case of this sort – a matter
that we do not decide – appellants’ failure to exhaust their
administrative remedies is dispositive.
We recognize that appellants were not required to specially
plead or demonstrate exhaustion in their complaint. See Jones
v. Bock, 127 S. Ct. 910, 921 (2007) (holding that failure to
exhaust is an affirmative defense under the PLRA). In this case,
however, the matter of exhaustion under § 6912(e) was raised in
the Government’s motion to dismiss before the District Court
and then fully addressed by the parties in arguments and
affidavits submitted to the trial court. The District Court then
35
granted the motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(1), finding that exhaustion was jurisdictional
and that appellants’ failure to exhaust stripped the court of
subject matter jurisdiction. The trial court ruled in the
alternative that, even if § 6912(e) did not impose a jurisdictional
requirement, there was no basis upon which to exempt
appellants from the exhaustion requirement with respect to their
Bivens claim. 435 F. Supp. 2d at 155. This alternative ruling
effectively dismissed appellants’ claim pursuant to Federal Rule
of Civil Procedure 12(b)(6) (“failure to state a claim upon which
relief can be granted”). Although, as noted above, the District
Court erred in holding that § 6912(e) imposes a jurisdictional
prerequisite to judicial review, we still grant judgment to the
Government.
Rule 12(b) states that, if, on a motion to dismiss, “matters
outside the pleading are presented to and not excluded by the
court, the motion shall be treated as one for summary judgment
and disposed of as provided in Rule 56, and all parties shall be
given reasonable opportunity to present all material made
pertinent to such a motion by Rule 56.” FED. R. CIV. P. 12(b).
In disposing of the Bivens claim on the alternative ground that
there was no basis upon which to excuse appellants’ failure to
exhaust, the District Court considered “matters outside the
pleading” and both parties had a “reasonable opportunity to
present all material made pertinent” to the motion. The District
Court, however, did not convert what was effectively a Rule
12(b)(6) motion to one for summary judgment. This court may,
however, characterize the District Court’s Rule 12(b)(6)
dismissal as a grant of summary judgment under Rule 56 and
affirm, so long as we are assured that both sides had a
reasonable opportunity to present evidence and that there are no
genuine issues of material fact. See, e.g., Ctr. for Auto Safety,
452 F.3d at 805. Finding no merit in appellant’s claim, we will
grant summary judgment to appellee.
36
In viewing the parties’ submissions to the District Court, it
is undisputed that Munsell/MQF never exhausted their
administrative remedies as required by § 6912(e). Pursuant to
our holding that exhaustion under § 6912(e) is an essential
element of any Bivens action against a USDA official (if such an
action exists), we are constrained to dismiss because appellants
have failed to state a claim upon which relief can be granted.
III. CONCLUSION
For the foregoing reasons, appellants’ actions are hereby
dismissed.
So ordered.