Darby v. Cisneros - 509 U.S. 137, 113 S. Ct. 2539 (1993)

Rule:

Although § 10(a) of the Administrative Procedure Act (APA), 5 U.S.C.S. § 702, provides the general right to judicial review of agency actions under the APA, § 10(c), 5 U.S.C.S. § 704, establishes when such review is available. When an aggrieved party has exhausted all administrative remedies expressly prescribed by statute or agency rule, the agency action is final for the purposes of this section and therefore subject to judicial review under the first sentence. While federal courts may be free to apply, where appropriate, other prudential doctrines of judicial administration to limit the scope and timing of judicial review, § 10(c), by its very terms, limits the availability of the doctrine of exhaustion of administrative remedies to that which the statute or rule clearly mandates.

Facts:

In June 1989, the United States Department of Housing and Urban Development (HUD) issued a limited denial of participation (LDP) which prohibited a real estate developer from participating in any program in South Carolina administered by HUD for 1 year. Two months later, the developer was notified that HUD also proposed to debar him from further participation in all HUD procurement contracts and in any nonprocurement transaction with any federal agency. On consolidated appeal of the LDP and the proposed debarment, an administrative law judge (ALJ) issued an order on April 13, 1990, which (1) upheld the LDP; but (2) reduced the indefinite debarment to 18 months. No party sought further administrative review of the ALJ's order. Under a HUD regulation, a hearing officer's determination is final unless (1) a party requests review by the Secretary of HUD or a designee within 15 days of receipt of such determination; and (2) the Secretary or designee, within 30 days of receipt of a review request, decides as a matter of discretion to review the finding of the hearing officer. On May 31, 1990, the developer filed an action in the United States District Court for the District of South Carolina, in which action the developer sought an injunction and a declaration that the sanctions imposed upon him by HUD violated the Administrative Procedure Act (APA). The Secretary of HUD moved to dismiss the action on the ground that the developer had failed to exhaust administrative remedies by forgoing the option to seek review by the Secretary. The District Court denied the motion to dismiss and subsequently granted the developer's motion for summary judgment. On appeal, the United States Court of Appeals for the Fourth Circuit, reversing, expressed the view that there was no evidence to suggest that (1) further administrative review would have been futile, or (2) the Secretary would have abused his discretion by indefinitely extending the time limitations for administrative review.

Issue:

Were courts free to impose an exhaustion requirement as a rule of judicial administration where agency actions had already become "final" under § 10(c) of the APA, 5 U.S.C.S. § 704?

Answer:

No

Conclusion:

The Court held that courts were not free to impose an exhaustion requirement as a rule of judicial administration where agency actions had already become "final" under § 10(c) of the APA, 5 U.S.C.S. § 704. The Court held that the exhaustion doctrine continued to apply as a matter of judicial discretion in cases not governed by the APA. However, where the APA was applicable, an appeal to superior agency authority was a prerequisite to judicial review only when expressly required by statute, or when an agency rule required appeal before review and the administrative action was made inoperative pending that review.