Anversa v. Partners Healthcare System, Inc. , 835 F.3d 167 ( 2016 )

United States Court of Appeals
For the First Circuit
No. 15-1897
PIERO ANVERSA and ANNAROSA LERI,
Plaintiffs, Appellants,
v.
PARTNERS HEALTHCARE SYSTEM, INC., ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Denise J. Casper, U.S. District Judge]
Before
Thompson, Selya and Kayatta,
Circuit Judges.
Tracy A. Miner, with whom Megan A. Siddall and Demeo LLP were
on brief, for appellants.
Roberto M. Braceras, with whom Jennifer L. Chunias and Goodwin
Procter LLP were on brief, for appellees Harvard Medical School
and Gretchen Brodnicki.
Geoffrey M. Raux, with whom Michael J. Tuteur and Foley &
Lardner LLP were on brief, for remaining appellees.
August 30, 2016
SELYA, Circuit Judge. There is a time for every action,
cf. Ecclesiastes 3:1 ("To every thing there is a season, and a
time to every purpose . . . ."), including the bringing of suit.
This case breathes life into that axiom.
The context is the high-stakes world of academic medical
research. The questions before us have their genesis in
allegations that the plaintiffs (prominent medical researchers)
used manipulated research data in articles reporting on studies
supported by government funds. Responding to those allegations,
the institutional defendants (including a medical school and a
teaching hospital) triggered a unique federal statutory and
regulatory scheme. Things did not go smoothly and, after some
time elapsed, the plaintiffs repaired to the federal courts in
search of relief (without awaiting the outcome of the
administrative proceedings).
Concluding that the suit was premature because the
plaintiffs had not exhausted their administrative remedies, the
district court dismissed the action. See Anversa v. Partners
Healthcare Sys., Inc., 116 F. Supp. 3d 22, 34-35 (D. Mass. 2015).
The plaintiffs appeal. Their appeal raises novel questions at the
federal appellate level concerning the interrelationship between
the statutory and regulatory scheme and state-law causes of action
touching upon its implementation. Answering those questions, we
affirm the district court's application of the doctrine of
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administrative exhaustion but modify the judgment to ensure that
the suit receives a full airing at the appropriate time.
I. STATUTORY AND REGULATORY FRAMEWORK
We begin with a description of the unique and highly
detailed statutory and regulatory scheme that underlies this
appeal. The federal government provides substantial funding for
path breaking medical research. Fearful that these funds could be
misused by researchers who might fabricate, falsify, or otherwise
doctor research outcomes, Congress envisioned a need to establish
procedures to address complaints of research misconduct. To this
end, Congress created the Office of Research Integrity (ORI) within
the Department of Health and Human Services (HHS), see 42 U.S.C.
§ 289b(a)(1), and tasked ORI with responsibility for carrying out
regulations to be promulgated by the Secretary of HHS (the
Secretary) for the investigation of research misconduct
allegations, see id. § 289b(a)(2), (b)-(e).
Among other things, the statute obligates the Secretary
to promulgate regulations that define "research misconduct," id.
§ 289b(a)(3)(A); to ensure that institutions receiving funds have
a compliant "administrative process to review reports of research
misconduct," id. § 289b(b)(1); and to create a process for ORI
itself to receive allegations of and reports about research
misconduct, to carry out its own investigations as needed, and to
take necessary remedial action, see id. § 289b(c). Relatedly,
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Congress tasked the Secretary with fashioning regulations that
would facilitate ORI's oversight of institutional compliance with
the research misconduct regulations. See id. § 289b(d). Congress
also authorized the Secretary to appoint ORI's director, who must
"be experienced and specially trained in the conduct of research,
and have experience in the conduct of investigations of research
misconduct." Id. § 289b(a)(2).
The Secretary has responded to this statutory mandate by
promulgating an elaborate regulatory mosaic. In that mosaic,
"research misconduct" is defined as "fabrication, falsification,
or plagiarism in proposing, performing, or reviewing research, or
in reporting research results." 42 C.F.R. § 93.103. Establishing
research misconduct requires a showing, by a preponderance of the
evidence, of "a significant departure from accepted practices of
the relevant research community" that is "committed intentionally,
knowingly, or recklessly." Id. § 93.104.
These standards inform a protocol which, mirroring
congressional intent, creates a two-level process for review of
research misconduct allegations. The first level occurs at the
funded institution. An inquiry "is warranted" when the institution
is made aware of "sufficiently credible and specific" allegations
of research misconduct. Id. § 93.307(a)(3). Such an inquiry
comprises "an initial review of the evidence to determine whether
to conduct an investigation." Id. § 93.307(c). The institution
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generally "must complete the inquiry within 60 calendar days of
its initiation unless circumstances clearly warrant a longer
period," and it must document the reasons for any delays in
completing the inquiry. Id. § 93.307(g). The inquiry culminates
in a written report — a report on which the target of the inquiry
(the respondent) has the opportunity to comment. See id.
§ 93.307(e)-(f).
If the inquiry finds a "reasonable basis for concluding"
that some research misconduct involving federal funds has taken
place, id. § 93.307(d)(1), and that particularized allegations of
research misconduct "may have substance," id. § 93.307(d)(2), the
institution must notify ORI of the inquiry results within 30 days,
sending along a copy of the inquiry report, see id. § 93.309(a).
It must also give the respondent notice of the allegations that
the investigation will explore. See id. § 93.310(c).
From that point forward, the institution is obliged to
conduct a "thorough and sufficiently documented" investigation,
which "includes examination of all research records and evidence
relevant to reaching a decision on the merits of the allegations."
Id. § 93.310(e). The institution is expected to interview all
relevant witnesses, see id. § 93.310(g), and to "[p]ursue
diligently all significant issues and leads discovered that are
determined relevant to the investigation . . . and continue the
investigation to completion," id. § 93.310(h). As with the earlier
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inquiry, the investigation culminates in a written report, on which
the respondent has the opportunity to comment. See id.
§§ 93.312(a), 93.313(g). This phase of the regulatory framework
has its own temporal limitation: it provides that "[a]n institution
must complete all aspects of an investigation within 120 days,"
id. § 93.311(a), unless it requests and receives an extension from
ORI, see id. § 93.311(b). Regardless of whether the investigation
concludes that research misconduct occurred, the report, its
findings and conclusions, all the relevant evidence, and any
information about actions taken or pending by the institution must
be forwarded to ORI. See id. § 93.315.
Once ORI receives the investigation report and the
related materials, it conducts its own assessment of the
allegations. ORI has the authority to obtain additional input
from virtually any source, supplement the evidence, and develop
its own analysis. See id. § 93.403(d)-(e). Moreover, ORI may
make independent findings as to whether research misconduct was
committed and if so, by whom. See id. § 93.403(f). It also may
recommend appropriate administrative action, which can range from
the relatively mild (say, a letter of reprimand) to the relatively
severe (say, debarment from eligibility to receive federal
research funding). See id. § 93.407(a).
Even beyond the notice requirements, opportunities for
comment, and time limits described above, the regulatory framework
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contains protections for researchers facing investigation. For
example, the regulations offer assurances of confidentiality,
limiting disclosure of information about an ongoing proceeding "to
the extent possible, to those who need to know." Id. § 93.108(a).
So, too, the regulations require institutions to "[t]ake
reasonable steps to ensure an impartial and unbiased investigation
to the maximum extent practicable." Id. § 93.310(f). In this
regard, institutions must ensure that those participating in the
investigation have the "appropriate scientific expertise" and are
not affected by "personal, professional, or financial conflicts of
interest." Id.
Should ORI find research misconduct, a respondent has
access to an additional safety valve: a right to appeal that
finding and any resulting administrative action to an
administrative law judge (ALJ). See id. § 93.500(b). The ALJ's
review of both ORI's finding and its proposed administrative action
is de novo. See id. § 93.517(b). Withal, the ALJ "does not review
the institution's procedures or misconduct findings." Id. When
issued, the ALJ's decision serves as a recommendation to the
Assistant Secretary for Health in HHS, who may affirm, modify, or
reject it entirely. See id. § 93.523(b). In making those
determinations, the Assistant Secretary uses familiar standards of
review, such as whether particular findings are clearly erroneous
or whether the decision (or any part of it) is arbitrary or
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capricious. See id. The Assistant Secretary's decision
constitutes final agency action for most purposes,1 subject to
review in the federal courts under the Administrative Procedure
Act (APA). See 5 U.S.C. § 701-706.
Three other features of this statutory/regulatory scheme
deserve mention. First, although ORI examines the institution's
handiwork in determining whether to carry out its own
investigation, see 42 C.F.R. § 93.403(c), there is no formal
process for a respondent to prefer charges that an institution has
violated the regulations in the course of either the inquiry or
the first-tier investigation. The regulations do, however,
provide a process by which ORI may, on its own initiative, probe
an institution's compliance with the regulations and take
appropriate enforcement action. See id. §§ 93.412-.413.
Second, it is manifest that neither the statute nor the
regulations contemplate enforcement by private parties. Instead,
enforcement is left to the Secretary, acting through ORI and the
Assistant Secretary for Health.
Finally, the statute itself contains no explicit
exhaustion requirement. While the district court found an
1
We say "for most purposes" because a recommendation for
debarment or suspension from receiving federal research funds only
becomes final after ratification by a different official. See 42
C.F.R. § 93.523(c).
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exhaustion requirement to be implicit in the statutory scheme, see
Anversa, 116 F. Supp. 3d at 31-32, it is unnecessary (for reasons
to which we shortly shall return) for us to pass upon this aspect
of the district court's decision — and we do not do so. Instead,
we resolve this appeal on the basis of the district court's
alternate holding (its administrative exhaustion ruling).
II. FACTUAL OVERVIEW
The raw facts, outlined in the complaint, are
essentially undisputed for present purposes. The plaintiffs are
two high-profile medical researchers, Dr. Piero Anversa and Dr.
Annarosa Leri. At the time of the underlying events, both of them
held faculty appointments at Harvard Medical School (Harvard).2
In addition to their teaching roles, both plaintiffs were
intimately involved with a cardiac stem cell research laboratory
at Brigham and Women's Hospital (the Brigham): Dr. Anversa led the
lab, and Dr. Leri toiled as a principal investigator there. The
Brigham, it should be noted, is not only a Harvard teaching
hospital but also a founding member of the Partners HealthCare
System (Partners).
In 2012, questions arose about the authenticity of data
that appeared in an article co-authored by the plaintiffs and other
2
At oral argument in this court, plaintiffs' counsel reported
that both of her clients have left Harvard and are now working in
Switzerland.
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scientists, including a researcher at Lawrence Livermore National
Laboratory (LLNL). Shortly after the publication of this paper in
the journal "Circulation," the LLNL researcher reported to the
plaintiffs that discrepancies existed between the data LLNL had
provided and the data presented in the paper. Dr. Anversa asserts
that he repeatedly asked the Brigham lab member who received the
LLNL data if the presentation in the paper was accurate and
received assurances that everything was in order. But LLNL
persisted; it reported the discrepancies to Gretchen Brodnicki,
Harvard's Dean for Faculty and Research Integrity.
On January 10, 2013, Dean Brodnicki informed the
plaintiffs that Harvard and the Brigham were going to begin a joint
inquiry into allegations of research misconduct. These
allegations related not only to the "Circulation" paper but also
to an article co-authored by the plaintiffs and other collaborators
that had appeared in another journal, "The Lancet," in 2011.
The inquiry took substantially longer than the 60 days
allotted in the regulations. One reason was that (as Dean
Brodnicki told the plaintiffs in March of 2013) the inquiry was
expanded to encompass yet another allegation relating to an
unpublished manuscript submitted in 2013 to "The Lancet" and the
journal "Science." The inquiry panel did not submit a draft report
to the plaintiffs for their comments until January 8, 2014. The
final panel inquiry report was issued on February 28, 2014. The
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plaintiffs allege that the report recommended retraction of the
2011 "Lancet" and 2012 "Circulation" papers, that the lab be
evaluated for its appropriateness as a training ground for budding
researchers, and that the inquiry proceed to a full-blown
investigation. The plaintiffs further allege that "[t]he inquiry
panel found no evidence that [the plaintiffs] ever participated in
falsifying or fabricating research data or results, or that they
even knew of any research misconduct at the time it occurred," but
nonetheless recommended proceeding to an investigation "on the
theory that Dr. Anversa should be held responsible for arguably
negligent failure to investigate" research misconduct.
Simultaneous with their receipt of the final panel
inquiry report, the plaintiffs were notified that Harvard and the
Brigham intended to commence an investigation. The three
scientists who composed the inquiry panel were appointed to serve
on the investigation panel, and a fourth member was added a few
weeks later. On three separate occasions — twice in 2014 and once
in 2015 (after suit had been commenced) — the investigation was
expanded to include additional research papers beyond those
identified in the panel inquiry report. Betimes, Harvard and the
Brigham have sought — and ORI has granted — multiple extensions to
the 120-day investigatory period.3
3 At oral argument in this court, counsel for Harvard reported
that the deadline for completing the investigation authorized by
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III. TRAVEL OF THE CASE
In December of 2014 — while the investigation was still
in progress — the plaintiffs sued Partners, the Brigham, Harvard,
Dean Brodnicki, and Dr. Elizabeth Nabel (the Brigham's president).
Their complaint limned claims under Massachusetts law for tortious
interference with business relations, invasion of privacy, and
unfair and deceptive business practices. The complaint also
charged Partners, the Brigham, and Harvard with breach of contract
based on a claim that the ORI regulations are incorporated into
their employment contracts with those institutions.
The plaintiffs alleged that both the completed inquiry
and the ongoing investigation failed to comply with pertinent
regulations. Specifically, they alleged that the inquiry panel
applied the wrong standard in recommending an investigation and
that its report was riddled with other errors. See id.
§ 93.104(b). They also ascribed a host of failings to the
investigation panel, claiming (for example) that some of its
members lacked the requisite scientific expertise and that some
were either biased due to their participation in the flawed inquiry
or labored under conflicts of interest. See id. § 93.310(f). The
plaintiffs further lamented that both the inquiry and the
the most recent ORI extension is November 1, 2016. The
investigation panel, we were told, is in the process of drafting
its report.
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investigation have been subject to egregious and unwarranted
delays. See id. §§ 93.307(g), .311(b). Finally, the plaintiffs
alleged that Dr. Steven Gygi (a member of both the inquiry and
investigation panels), Dean Brodnicki, and Dr. Nabel separately
transgressed confidentiality obligations imposed by the
regulations.4 See id. § 93.108.
The plaintiffs seek money damages and unspecified
declaratory relief. With respect to damages, they say that the
manifold failures that occurred during the inquiry and the
investigation caused them harm. They claim, for instance, that
they missed out on a number of promising employment and other
professional opportunities, and lost a lucrative offer for the
purchase of Dr. Anversa's company. They also claim that Dr. Leri's
promotion to a full professorship at Harvard was delayed and that
they have suffered reputational injury.
The defendants moved to dismiss. See Fed. R. Civ. P.
12(b)(1), (6). They contended, inter alia, that the plaintiffs
should be required to exhaust administrative remedies before
bringing suit. The district court agreed and dismissed the
complaint without prejudice. See Anversa, 116 F. Supp. 3d at 35.
The court held that the statutory scheme governing research
4The plaintiffs allege that Dr. Gygi resigned from the
investigation panel in September of 2014, acknowledging that he
had discussed the investigation with a colleague.
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misconduct investigations mandated exhaustion. See id. at 32.
Alternatively, the court held that common-law principles of
administrative exhaustion militated in favor of dismissal. See
id. at 34. This timely appeal followed.
IV. ANALYSIS
Given the structure of the district court's disposition,
an issue of jurisdictional priority looms. Even though the
doctrines of statutory and administrative exhaustion have a common
objective — delaying a plaintiff's day in court while
administrative proceedings run their course — the two doctrines
rest on different foundations. The question whether a statutory
scheme requires the channeling of claims through the
administrative process implicates the jurisdiction of the district
court. See, e.g., Free Enter. Fund v. Pub. Co. Accounting
Oversight Bd., 561 U.S. 477, 489-91 (2010); Thunder Basin Coal Co.
v. Reich, 510 U.S. 200, 207-09 (1994). By contrast, administrative
exhaustion applies "where Congress has not clearly required
exhaustion," and cedes discretion to a district court to decline
the exercise of jurisdiction and await the conclusion of
administrative proceedings. See McCarthy v. Madigan, 503 U.S.
140, 144 (1992).
Here, the district court's ruling consists of two
alternative holdings. Taken together, these holdings amount to a
double-barreled conclusion that the statutory structure forbade
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the district court's exercise of jurisdiction over the action and
— even if it had jurisdiction — it would decline to exercise that
jurisdiction for prudential reasons.
In the ordinary course, questions about the existence of
subject matter jurisdiction take precedence in our analysis of a
case.5 See Acosta-Ramírez v. Banco Popular de P.R., 712 F.3d 14,
18 (1st Cir. 2013). This approach is consistent with the Supreme
Court's admonition that a court "may not rule on the merits of a
case without first determining that it has jurisdiction over the
category of claim in suit." Sinochem Int'l Co. v. Malaysia Int'l
Shipping Corp., 549 U.S. 422, 430-31 (2007). But the two
exhaustion doctrines at issue here do not implicate this principle:
they are simply alternative "threshold grounds for denying
5
The parties have not contested the existence of Article III
jurisdiction, and the district court did not consider that
question. Nevertheless, we have an obligation to assure ourselves
of our own jurisdiction. See Watchtower Bible & Tract Soc'y of
N.Y., Inc. v. Colombani, 712 F.3d 6, 10 (1st Cir. 2013). In
keeping with that obligation, we note that Article III jurisdiction
exists in this case notwithstanding that the controversy is between
non-diverse parties and asserts exclusively state-law claims.
Federal question jurisdiction under 28 U.S.C. § 1331 encompasses
a narrow swath of cases in which "a state-law claim necessarily
raise[s] a stated federal issue, actually disputed and
substantial, which a federal forum may entertain without
disturbing any congressionally approved balance of federal and
state judicial responsibilities." Grable & Sons Metal Prods.,
Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314 (2005). Given that
all of the plaintiffs' claims turn on the interpretation of the
federal regulations governing research misconduct investigations
and the importance of those regulations to the Congressional
scheme, this case plainly falls within the narrow swath of cases
described in Grable.
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audience to a case on the merits." Ruhrgas AG v. Marathon Oil
Co., 526 U.S. 574, 585 (1999). In comparable situations, the
Supreme Court has made pellucid that a nonjurisdictional threshold
reason for pretermitting a merits determination — such as a
decision not to exercise pendent jurisdiction over state-law
claims, dismissal on the basis of forum non conveniens, or Younger
abstention — may be applied without first resolving a difficult
jurisdictional question. See Sinochem Int'l, 549 U.S. at 431-32.
Such an approach — bypassing the jurisdictional inquiry
— is preferable here. The statutory exhaustion analysis is complex
and uncertain, and its outcome would have no bearing on the
ultimate result: as we explain below, the district court acted
well within its discretion in insisting upon administrative
exhaustion. Thus, we proceed directly to the merits of the
district court's administrative exhaustion ruling.
Administrative exhaustion is governed by "sound judicial
discretion." McCarthy, 503 U.S. at 144. Consequently, the
customary practice among the circuits has been to review a district
court's decision to compel the exhaustion of administrative
remedies, in the absence of a statute directing exhaustion, for
abuse of discretion. See, e.g., Koch v. White, 744 F.3d 162, 164-
65 (D.C. Cir. 2014); Thermal Sci., Inc. v. U.S. Nuclear Regulatory
Comm'n, 184 F.3d 803, 805 n.3 (8th Cir. 1999) (per curiam).
Although we have never explicitly stated the standard in this
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manner, we have recognized that application of the administrative
exhaustion doctrine is a matter of discretion, guided by the
factors identified in McCarthy. See Portela-Gonzalez v. Sec'y of
the Navy, 109 F.3d 74, 77 (1st Cir. 1997). We hold, therefore,
that appellate review of a district court's decision to require
administrative exhaustion should be for abuse of discretion.
Generally, aggrieved parties are required to exhaust
available federal administrative remedies before bringing suit in
federal court. See Myers v. Bethlehem Shipbuilding Corp., 303
U.S. 41, 50-51, 51 n.9 (1938); Portela-Gonzalez, 109 F.3d at 77.
This principle rests on solid foundations: exhaustion normally
"serves the twin purposes of protecting administrative agency
authority and promoting judicial efficiency." McCarthy, 503 U.S.
at 145. Preserving agency authority is particularly important
insofar as "the action under review involves exercise of the
agency's discretionary power or when the agency proceedings in
question allow the agency to apply its special expertise." Id.
Insisting upon exhaustion not only gives an agency the first
opportunity to apply that expertise and correct possible errors,
but also respects congressional prerogative by "prevent[ing]
litigants from bypassing Congress' carefully crafted remedial
scheme." Irizarry v. United States, 427 F.3d 76, 79 (1st Cir.
2005). So, too, insisting upon exhaustion promotes judicial
efficiency both by obviating the need for review in cases in which
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the agency provides appropriate redress, see Portela-Gonzalez, 109
F.3d at 79, and by creating "a useful record for subsequent
judicial consideration, especially in a complex or technical
factual context," McCarthy, 503 U.S. at 145.
Where, as here, Congress has not mandated exhaustion,
federal courts have some leeway to relax this requirement. See
Swirsky v. Nat'l Ass'n of Sec. Dealers, 124 F.3d 59, 63 (1st Cir.
1997). That leeway is built into the common-law doctrine of
administrative exhaustion. In considering whether to exercise it,
"courts must balance the interest of the individual in retaining
prompt access to a federal judicial forum against countervailing
institutional interests favoring exhaustion." McCarthy, 503 U.S.
at 146. This analysis is "'intensely practical,' because attention
is directed to both the nature of the claim presented and the
characteristics of the particular administrative procedure
provided." Id. (internal citations omitted) (quoting Bowen v.
City of New York, 476 U.S. 467, 484 (1986)).
In discussing how to construct this balance, the Supreme
Court described three "sets of circumstances in which the interests
of the individual weigh heavily against requiring administrative
exhaustion." Id. These situations arise when "requiring resort
to the administrative remedy may occasion undue prejudice to
subsequent assertion of a court action," id. at 146-47; when an
administrative remedy may be insufficient because the agency is
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powerless to grant effective relief or incompetent to adjudicate
the claims at issue, see id. at 147-48; or when the administrative
body is clearly biased, see id. at 148-49.
The plaintiffs asseverate that their case falls within
two of these categories. In their view, the administrative process
cannot grant them appropriate relief and, moreover, they face an
indefinite (and, therefore, unreasonable) timeline. These
drawbacks, they say, more than outweigh whatever may be gained by
exhaustion because — in this instance — exhaustion will neither
preserve agency authority nor promote judicial economy.
We start our inquiry into the district court's
application of administrative exhaustion with the plaintiffs'
suggestion that completion of the administrative process in this
case will not advance the interests that exhaustion exists to
protect. We do not agree. To begin, the plaintiffs vastly
understate the ongoing importance of ORI's expertise to the
administrative proceedings. They similarly understate the degree
to which ORI's expertise already has played a valuable role in the
institutional investigation. The issues raised by the plaintiffs'
suit are in many respects the very kind of issues that call for
the exercise of ORI's special insights. We explain briefly.
The enabling statute requires that ORI be led by a
professional experienced in research misconduct investigations,
and the regulations envision that ORI's oversight of the
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institutional investigation process will allow it to apply that
expertise. This know-how is reflected, for example, in ORI's
ability to grant extensions to an institution to complete an
investigation and to conduct a review of the institution's
investigation before issuing findings of research misconduct.
What is more, ORI — in the course of its review — may well comment
on the interpretation of key components of the regulations
undergirding the plaintiffs' claims, such as the appropriate
standard for initiating an investigation, the scope of
confidentiality obligations, and the qualifications needed for
panel members.
Permitting the agency to apply its expertise in the first
instance is especially important because it protects ORI's
authority even if the plaintiffs' state-law claims are not
themselves adjudicated in the agency-supervised proceeding. The
statutory structure contemplates that the first tier of review in
research misconduct cases will take place at the institutional
level with ORI oversight. Respect for Congress's judgment in this
area counsels in favor of allowing the agency to exercise that
oversight authority before a federal court intervenes. ORI's
authority would be severely undermined if, for example, we were to
permit a jury to decide whether an ongoing investigation, with
extension requests reviewed and approved by ORI, had dragged on so
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long as to amount to a breach of contract based on the very rules
that ORI is tasked with administering.
The plaintiffs' countervailing interests in immediate
review do not outweigh these substantial advantages to exhaustion.
Arguing to the contrary, they assert that the administrative
process cannot provide them with appropriate relief. In support,
they note that ORI lacks any mechanism to review state-law claims
and has no authority to award money damages (the primary form of
relief demanded in their suit). Although they acknowledge ORI's
oversight role, they observe that they will not be parties to any
enforcement action taken by ORI against the institutions.
Furthermore, even if they were to challenge a hypothetical future
finding of research misconduct before an ALJ, the ALJ would not
have the authority to consider the institution's conduct of either
the inquiry or the investigation. There is some truth in what the
plaintiffs say — but we conclude that neither the unavailability
of a monetary remedy in agency proceedings nor the agency's lack
of capacity to adjudicate the state-law claims at issue is
dispositive.
With respect to the unavailability of money damages, the
plaintiffs rely on the McCarthy Court's statement that "the
uncertainty of the administrative agency's authority to award
[monetary] relief counsels against requiring exhaustion." Id. at
155. But the McCarthy Court mentioned the unavailability of a
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specific form of relief merely as one factor in the exhaustion
calculus. Other circumstances (such as the agency's lack of
interest in exhaustion, the fact that the claim at issue did not
call for the application of agency expertise, and the fact that
record development before the agency would provide only minimal
assistance to future judicial review) combined to make exhaustion
unnecessary. See id. at 155-56. Because no comparable mix of
factors is present here, the unavailability of monetary relief
through ORI does not relieve us of the duty to carry out the
intensely practical analysis required by McCarthy. See Munsell v.
Dep't of Agric., 509 F.3d 572, 592 (D.C. Cir. 2007) ("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 . . . the administrative process
can serve its proper function.").
We add, moreover, that there are significant
institutional advantages in compelling exhaustion here.
Addressing a similar claim in an analogous context, we recognized
that "[e]xhaustion is beneficial regardless of whether the
administrative process offers the specific form of remediation
sought by a particular plaintiff" because "the administrative
process facilitates the compilation of a fully developed record,"
which "is an invaluable resource for a state or federal court
required to adjudicate a subsequent civil action covering the same
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terrain." Frazier v. Fairhaven Sch. Comm., 276 F.3d 52, 61 (1st
Cir. 2002).
So it is here. Although ORI will not adjudicate the
plaintiffs' state-law claims as such, the district court's
eventual disposition of those claims would benefit greatly from
any legal interpretations or factual findings made by ORI in the
course of its review.6 Indeed, the shape of the plaintiffs' claims
may well change based on the outcome of the institutional
investigation. The regulations specifically require institutions
to make "[a]ll reasonable and practical efforts, if requested and
as appropriate, to protect or restore the reputation of persons
alleged to have engaged in research misconduct but against whom no
finding of research misconduct is made." 42 C.F.R. § 93.304(k).
Insofar as the complaint seeks to remedy "[l]ong-term injury to
[the plaintiffs'] professional reputations and careers," the
outcome of the institutional investigation and any subsequent
action under this provision may reconfigure the contours of the
6
It is worth noting that this is not a case in which self-
sufficient state-law claims merely run parallel to administrative
regulations. Rather, the plaintiffs invoke the federal court's
subject matter jurisdiction only by advancing claims that turn on
the answers to embedded federal questions concerning the meaning
and application of the very federal regulations that ORI exists to
enforce. To allow the case to proceed to judgment and run the
risk of having ORI's ongoing oversight thereafter arrive at
conclusions that conflict with that judgment makes little
practical sense.
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controversy by the time it is ripe for district court
consideration.
Our review of the record persuades us that the district
court made the "intensely practical" assessment that the McCarthy
Court required. We think that the totality of the circumstances
— particularly the unique characteristics of this two-tiered
investigatory system, Congress's manifest desire to ensure that
ORI is able to use its expertise to guide and evaluate an initial
round of investigation at the institutional level, and the
significant advantages that exhaustion could bring — warrants a
finding that the district court did not abuse its discretion in
applying the doctrine of administrative exhaustion. In the
circumstances at hand, neither the unavailability of a monetary
remedy in the administrative proceeding nor the agency's inability
to adjudicate state-law claims demands a different result.
The plaintiffs have a fallback position. They press the
notion that forcing them to delay their suit will cause undue
prejudice to its subsequent prosecution because they face an
indefinite timeframe for administrative action. They emphasize
the length of the inquiry to date and the several extensions to
the investigation (which has entered its third year). This problem
is exacerbated, they say, by the institutions' lackadaisical
approach to the matter and by the repeated widening of the scope
of the investigation. In their view, these developments show that
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the time limits in the regulations are effectively meaningless and
that ORI has abdicated its responsibility to superintend the
investigation.
Although we understand the plaintiffs' frustration with
the pace of the proceedings, we do not believe that matters have
reached the tipping point. The duration of administrative
proceedings, without more, cannot suffice to demonstrate that an
agency's actions are unreasonable. Rather, determining whether a
timeframe for agency action is unreasonable involves more than a
matter of simple arithmetic. Cf. Telecomms. Research & Action
Ctr. v. FCC, 750 F.2d 70, 80 (D.C. Cir. 1984) (limning range of
factors for evaluating the reasonableness of agency delay). An
inquiring court must pay close attention to the specific regulatory
framework and its relationship to the claims presented. See
McCarthy, 503 U.S. at 146.
Here, the district court fulfilled that responsibility.
The features of the ongoing process are every bit as consistent
with a conclusion that the investigation is proceeding apace
through a complex area of medical research as with an inference of
indefiniteness. Virtually by definition, research misconduct is
a complicated area; and the regulations specifically envision that
research misconduct inquiries and investigations may take longer
than the time limits spelled out in the regulations. Both the
inquiry process and (with ORI's consent) the investigatory process
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can be extended when circumstances warrant. See 42 C.F.R.
§§ 93.307(g), 93.311(b). Such flexibility is crucial, given the
regulatory imperative that institutions must "[p]ursue diligently
all significant issues and leads discovered that are determined
relevant to the investigation." Id. § 93.310(h).
In the case at hand, all indications are that the
investigation is being actively pursued, and the repeated
expansions of its scope suggest compliance with the mandate to
explore "any evidence of additional instances of possible research
misconduct" that comes to light during the investigation. Id.
Against this backdrop, we discern no principled basis for viewing
this timeframe, at present, as unreasonable.
The plaintiffs advance one other strain of this
argument. They submit that the duration of the investigation and
subsequent ORI review could cause the statute of limitations to
expire on some or all of their state-law claims. See, e.g., Mass.
Gen. Laws ch. 260, § 2A (establishing three-year statute of
limitations for tort claims). This is a legitimate concern: the
running of the statute of limitations could well "occasion undue
prejudice to subsequent assertion" of the plaintiffs' claims.
McCarthy, 503 U.S. at 146. At least some of the plaintiffs' claims
already may have accrued, and the district court's order of
dismissal without prejudice will be of little consolation should
those claims become time-barred.
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This concern, however, does not demand the solution that
the plaintiffs urge. In light of the strong interests in
exhaustion that are extant here, permitting this action to go
forward in parallel to the administrative proceedings is not the
most salutary way to guard against a potential limitations problem.
In the context of state habeas proceedings (which present similar
temporal snares), federal appellate courts have acknowledged that
district courts may stay a petition filed within the statute of
limitations until state remedies have been exhausted. See, e.g.,
Pace v. DiGuglielmo, 544 U.S. 408, 416 (2005); Rhines v. Weber,
544 U.S. 269, 274-78 (2005); Neverson v. Bissonnette, 261 F.3d
120, 126 n.3 (1st Cir. 2001); see also Dolis v. Chambers, 454 F.3d
721, 725 (7th Cir. 2006) (collecting cases). Such a prophylactic
approach is well-suited to administrative exhaustion cases because
it protects agency authority while administrative proceedings are
ongoing yet ensures that limitations concerns will not bar the
ultimate consideration of the plaintiffs' claims.
For these reasons, we hold that, as a matter of practice,
a district court ordinarily should stay, rather than dismiss, an
action when it finds that principles of administrative exhaustion
require it to act. We apply that prescription here: though
upholding the district court's determination that administrative
exhaustion is warranted, we think it appropriate to direct that
its order of dismissal be converted to a stay of judicial
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proceedings pending the timely resolution of the administrative
proceedings.
V. CONCLUSION
The defendants have raised a gallimaufry of other
grounds for dismissing this action, but we need go no further.
Thus, we take no view of these other grounds. Suffice it to say
that we affirm the district court's decision, based on the common-
law doctrine of administrative exhaustion, and the plaintiffs must
exhaust their administrative remedies before proceeding with their
suit. However, we direct that the district court, on remand,
convert its order of dismissal to an order staying the case pending
the timely resolution of administrative proceedings.
Affirmed as modified. All parties shall bear their own costs.
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