United States v. Menendez ( 1995 )

United States Court of Appeals,
Fifth Circuit.
Nos. 93-3709, 93-3710 and 94-30059.
UNITED STATES of America, Plaintiff-Appellee,
v.
Wade E. MENENDEZ, Defendant-Appellant.
UNITED STATES of America, Plaintiff-Appellee,
v.
Raymond E. PLAISANCE, Defendant-Appellant.
UNITED STATES of America, Plaintiff-Appellee,
v.
Tony Dung VAN NGUYEN, Defendant-Appellant.
April 12, 1995.
Appeals from the United States District Court for the Eastern
District of Louisiana.
Before POLITZ, Chief Judge, GARWOOD and BENAVIDES, Circuit Judges.
GARWOOD, Circuit Judge:
These consolidated appeals arise from suits by the United
States under 16 U.S.C. § 1540 to collect civil penalties assessed
by the National Oceanic and Atmospheric Administration (NOAA)
against Tony Dung Van Nguyen (Nguyen), Wade Menendez (Menendez),
and Raymond Plaisance (Plaisance) for the knowing and unlawful
failure to use a qualified turtle excluder device (TED) while
shrimping in violation of the Endangered Species Act of 1973, 16
U.S.C. § 1531 et seq. (ESA) and the applicable regulations, 50
C.F.R. §§ 227.72(e)(2)(i)(B)(4), 227.72(e)(6)(i). The district
court granted summary judgment in favor of the government in each
1
case. We reverse and remand.
I. Statutory and Regulatory Background
Congress enacted the ESA in 1973 "to provide for the
conservation, protection, restoration, and propagation of species
of fish, wildlife, and plants facing extinction." S.Rep. No. 307,
93th Cong. (1973), U.S.Code Cong. & Admin.News 1973, p. 979. To
achieve this goal, the Secretary of Commerce is charged with
determining the endangered or threatened status of certain species.
Once a species is designated as endangered, the ESA makes it
unlawful for any person to "violate any regulation pertaining to
such species or to any threatened species of fish or wildlife
listed pursuant to section 1533 of this title and promulgated by
... this chapter." 16 U.S.C. § 1538(a)(1).
On June 29, 1987, NOAA, an agency charged with the ESA's
enforcement, promulgated regulations to protect endangered and
threatened sea turtles. Under one such regulation, shrimp trawlers
in excess of twenty-five feet trawling in offshore waters from
North Carolina to Texas must use approved TEDs during certain times
of the year. 50 C.F.R. § 227.72(e). This Court has upheld the
validity of these TED regulations. Louisiana ex rel. Guste v.
Verity, 853 F.2d 322 (5th Cir.1988). The ESA imposes civil and
criminal penalties for violations of these regulations. If a
person is found to have knowingly violated any regulation under the
ESA, he may be assessed a civil penalty of not more than $12,000
for each violation. 16 U.S.C. § 1540. A party charged with
violating the ESA and its regulations may argue that the assessed
2
penalty should be reduced because of his inability to pay. 15
C.F.R. § 904.108. However, the regulations provide that a party
challenging the assessed penalty "has the burden of proving such
inability by providing verifiable, complete, and accurate financial
information to NOAA." Id.
NOAA has also promulgated extensive regulations governing the
administrative proceedings for challenging alleged violations of
the ESA and the assessment of civil penalties under the Act. 15
C.F.R. §§ 904.100 et seq. Under these regulations, NOAA commences
the administrative proceedings for assessing a civil penalty by
serving the charged party a Notice of Violation and Assessment
(NOVA), which includes a concise statement of the facts claimed to
underlie the alleged violation, a reference to the statutory or
regulatory violation alleged, the findings and conclusions on which
NOAA bases the assessment, the amount of the civil penalty
assessed, and the party's rights upon receipt of the NOVA. 15
C.F.R. § 904.101. After receiving the NOVA, a party may accept the
penalty, seek to have it amended, request a hearing, request an
extension of time to respond, or take no action. 15 C.F.R. §
904.102(a). If a party charged takes no action, the NOVA becomes
the final decision of NOAA thirty days after service. 15 C.F.R. §
904.104. If a party requests a hearing, the case is assigned to an
Administrative Law Judge (ALJ), who is to preside over the
proceedings and render a written decision. 15 C.F.R. §§ 904.204,
904.271. The ALJ may "[r]equire a party or witness at any time
during the proceeding to state his or her position concerning any
3
issue or his or her theory in support of such position." 15 C.F.R.
§ 904.204(j). "[I]f the entire record shows" that "there is no
genuine issue as to any material fact ... [and] ... the moving
party is entitled to summary decision as a matter of law," 15
C.F.R. § 904.210, the ALJ has the power to grant summary decision,
either on motion of any party or on his own motion. The ALJ also
has the power to dismiss a case for failure to prosecute or defend.
15 C.F.R. § 904.212.
The NOAA regulations provide two avenues of possible appeal
for a party to challenge an adverse decision rendered by the ALJ.
First, unless the order of the ALJ specifically provides otherwise,
a party may file a petition for reconsideration with the ALJ within
twenty days of service of the decision. 15 C.F.R. § 904.272.
Alternatively, a party may file a petition for discretionary review
with the Administrator of NOAA within thirty days of service of the
challenged ALJ decision (the Administrator may also decide to
review the ALJ decision "upon his or her own initiative"). 15
C.F.R. § 904.273. "Review by the Administrator ... is
discretionary and is not a matter of right" and "[t]he
Administrator need not give reasons for declining review." Id. If
the Administrator "declines to exercise discretionary review," the
decision of the ALJ becomes final. 15 C.F.R. § 904.273(g). If no
petition for discretionary review is filed, and the Administrator
does not "issue[ ] an order to review upon his/her own initiative,"
the decision of the ALJ becomes final thirty days after service.
15 C.F.R. § 904.271(d). If a timely petition for discretionary
4
review is filed, or the Administrator orders review upon his or her
own motion, "the effectiveness of the initial [the ALJ] decision is
stayed until further order of the Administrator." 15 C.F.R. §
904.273(b). If the Administrator grants review, then the
Administrator's ultimate decision "becomes the final administrative
decision on the date it is served, unless otherwise provided in the
decision." Id. § 904.273(i).
II. Nguyen Procedural History
On January 31, 1990, NOAA issued Nguyen a NOVA assessing an
$8,000 penalty for the knowing and unlawful failure to use a TED
while shrimping aboard the F/V MISS ELIZABETH in the Gulf of Mexico
on September 18, 1989.1 Nguyen's case was assigned to ALJ Hugh
Dolan. Considerable disagreement exists concerning what happened
at the administrative level. Nguyen asserts that he requested a
hearing through his representative, Tee John Mialjevich
(Mialjevich), and that he heard nothing more about his case until
he received notice of NOAA's final decision against him. Nguyen
emphasizes that he is an immigrant struggling with language
problems. By contrast, the government asserts that Nguyen
participated in the administrative proceedings through a
representative.
1
On October 27, 1989, NOAA issued Nguyen a NOVA assessing an
$8,000 penalty. The NOVA informed Nguyen that he must respond to
the allegations within thirty days of receipt and that failure to
respond would constitute a final administrative decision under 15
C.F.R. §§ 904.102, 904.104. Nguyen received the NOVA on November
1, 1989. On January 31, 1990, NOAA issued an amended NOVA in
order to give Nguyen an extension of time in which he could
request a hearing. Nguyen received the amended NOVA on February
2, 1990.
5
The district court recounted the following summary of the
administrative proceedings. After Nguyen requested a hearing
through Mialjevich, NOAA scheduled a telephone conference to
determine whether there were any factual disputes between the
parties. During this March 2, 1990, telephone conference, the ALJ
determined that there were no factual disputes. Nguyen
subsequently confirmed this by filing a Preliminary Position on
Issues and Procedures (PPIP) in which he stated that there were no
factual or legal issues in dispute. The ALJ determined that the
lack of any factual dispute obviated the need for an evidentiary
hearing. On April 16, 1990, the ALJ granted NOAA's motion to hear
the case on the written submissions and directed Nguyen to make
written submissions by May 4, 1990, and NOAA to reply by May 16,
1990. Nguyen submitted affidavits seeking to establish his
inability to pay the assessed penalty.
In his June 19, 1990, decision, the ALJ reiterated that Nguyen
had stipulated to the facts presented by NOAA and thus held that
the only issue to be determined was Nguyen's financial ability to
pay the assessed penalty, an issue on which he bore the burden of
proof. The June 19, 1990, decision listed Nguyen's representative
as Robert J. McManus (McManus), an attorney with Webster &
Sheffield in Washington, D.C.2 The ALJ noted that Nguyen had
2
In his motion opposing the government's motion for summary
judgment filed in the district court below, Nguyen insisted that
he never gave anyone other than Mialjevich authority to represent
him and that he never authorized anybody to enter into a
stipulation that there were no contested issues of material fact.
Moreover, Nguyen asserts that he has never met or spoken with
McManus. Indeed, Nguyen states that the first time he ever heard
6
submitted financial statements and other affidavits and
documentation of the harsh effects of the regulations requiring the
use of TEDs. The ALJ determined that Nguyen's submissions
concerning the burdensome qualities of the TED regulations were
"inapplicable to these proceedings because ... [s]uch debate as to
the legality and effectiveness of the TEDs regulations is not
proper here and has been decided by the appropriate forum." The
ALJ, however, did consider the financial statements submitted by
Nguyen and, after reviewing them, ultimately determined that he had
the financial ability to pay the fine. Accordingly, the ALJ found
Nguyen liable and assessed the penalty recommended by NOAA. In his
decision, the ALJ stated that any petition for review should be
filed within thirty days with the Administrator of NOAA.
Nguyen filed a timely petition seeking discretionary review of
the ALJ's determination. On February 13, 1991, the Deputy
of McManus was when his current counsel showed him a document
signed by McManus stipulating that there were no factual issues
in dispute. This document allegedly signed by McManus is not in
the district court record (presumably, this document is the above
mentioned PPIP).
In the same motion, Nguyen states that McManus conceded
that he never spoke to Nguyen before making an appearance on
behalf of him in the administrative proceedings. Nguyen
also asserts that McManus explained that he was retained by
the Concerned Shrimpers of America (Tee John Mialjevich is
the president of the Concerned Shrimpers of America).
Finally, Nguyen avers that McManus stated that he furnished
Nguyen with copies of all documents that he filed. Nguyen's
current counsel stated that he has been unable to verify
whether Nguyen actually received these documents from
McManus. Although Nguyen raised these factual disputes in
the district court, his brief on appeal simply states that
he requested a hearing through Mialjevich and heard nothing
more until he received notice of the final decision against
him.
7
Undersecretary for Oceans and Atmosphere declined to exercise
discretionary review. In his petition for discretionary review,
Nguyen argued that the ALJ abused his discretion by refusing to
consider the effect of the TED regulations on his ability to pay
the penalty and by failing to consider his financial status in
light of the evidence that he submitted concerning his inability to
pay. However, in his order denying discretionary review, the
Deputy Undersecretary stated that Nguyen failed to establish that
he suffered or would suffer a financial loss from TED usage that
would make him unable to pay the assessed penalty. The Deputy
Undersecretary noted that a review of the financial information
submitted by Nguyen supported the ALJ's determination that Nguyen
had an ability to pay the assessed penalty.3 Finally, the Deputy
Undersecretary concurred in the ALJ's determination that Nguyen's
submitted affidavits attacking the validity of the TED regulations
were irrelevant because the regulations had withstood judicial
scrutiny.4 The order denying discretionary review also listed
McManus as Nguyen's representative and provided for a copy to be
sent to him at his Washington office.
When Nguyen failed to pay the assessed penalty after being
sent several reminder notices by NOAA, the United States, pursuant
3
The Deputy Undersecretary observed that the record revealed
that Nguyen had a net worth of $67,161, that he was able to
afford monthly truck payments of $470, and that he had $4,000
equity in a house.
4
In addition, the Deputy Undersecretary noted that the NOAA
regulations state that the ALJ "has no authority to rule on
challenges to the validity of regulations promulgated by [NOAA]."
15 C.F.R. § 904.200(b).
8
to 16 U.S.C. § 1540, instituted this civil action in the district
court below on May 4, 1992, to collect the penalty. The government
attached certified copies of excerpts of portions of the
administrative record to its complaint.5 The government moved to
limit the district court's review to the administrative record, and
the district court granted the motion. In its motion to limit the
district court's review to the administrative record, the
government stated "[t]he administrative record in this case is
currently being compiled and will be provided to the court no later
than March 22, 1993, at which time plaintiff would file a Motion
for Summary Judgment on all its claims." The government concedes
that it never filed the administrative record with the district
court.6
The government then moved for summary judgment, contending
that the civil penalty was supported by substantial evidence in the
record. Nguyen objected, arguing that the government had failed to
produce the administrative record. The only portions of the
administrative record available to the district court were the
5
These attached exhibits included the following documents:
a January 31, 1990, NOAA letter to Nguyen enclosing a copy of the
amended NOVA; the ALJ's June 19, 1990, decision; the Deputy
Undersecretary's February 13, 1991, order denying discretionary
review; a March 23, 1992, certificate of indebtedness issued by
NOAA; two letters from NOAA to McManus advising that his client
owed the penalty assessed by the ALJ; four letters from NOAA to
Nguyen reminding him that he had failed to pay the penalty
assessed by the ALJ. The first letter addressed to Nguyen stated
that McManus had informed NOAA that he no longer represented
Nguyen but had forwarded NOAA's previous correspondence to him.
6
In its brief on this appeal, the government states that it
has been unable to locate a compiled certified copy of the
record.
9
exhibits attached to the government's complaint. Finding that
"there is substantial evidence to support the decision of the
Secretary of Commerce," the district court entered a judgment
granting the government's motion for summary judgment on November
8, 1993. Nguyen appeals.
III. Menendez and Plaisance Procedural History
On April 6, 1990, NOAA issued Menendez a NOVA assessing a
civil penalty of $12,000 for the knowing and unlawful failure to
use a TED while shrimping aboard the F/V JERYD ALLEN in the Gulf of
Mexico on March 26, 1990. On April 18, 1990, NOAA issued Plaisance
a NOVA assessing a civil penalty of $8,000 for a similar violation
aboard the F/V CAPT. MENUE in the Gulf of Mexico on March 6, 1990.
The NOVAs notified Menendez and Plaisance that they could (1) admit
the charged violation, (2) seek to have the NOVA modified to
conform to actual facts or law, or (3) request a hearing in writing
within thirty days. On June 13, 1990, Menendez and Plaisance
requested a hearing through their representative Tee John
Mialjevich, the president of Concerned Shrimpers of America and a
well-known representative of shrimpers in previous administrative
and lobbying matters. The cases were assigned to ALJ Hugh Dolan.
On June 15, 1990, the ALJ issued an order to show cause
directing the parties to address the issue of whether Mialjevich
should be removed from his representative status. Mialjevich filed
a letter opposing the proposal but did not request a hearing. On
July 27, 1990, the ALJ issued an order barring Mialjevich from
representing Menendez, Plaisance, and others, citing his
10
unsuccessful representation of shrimpers in other administrative
hearings and his history of encouraging shrimpers to flout the
regulations requiring TEDs. The order instructed that "any
submissions or correspondence received [from Tee John Mialjevich]
on or after August 1, 1990 relating to the representation of others
will not be considered as a timely filing and will be returned
without action."
On August 3, 1994, the ALJ issued an order directing Menendez,
Plaisance, and others to show cause why their cases should not be
disposed of in the same manner as the case of In the Matter of
Tommy V. Nguyen et al. A copy of the decision in that case was
attached to the order.7 This August 3, 1990, order to show cause
instructed Menendez, Plaisance, and others to respond by September
4, 1994, and reiterated that "they may represent themselves, retain
Counsel, or appear through a representative other than Mr.
Mialjevich." On September 4, 1990, Margaret Mialjevich, Menendez's
and Plaisance's new representative, responded to the order to show
cause by facsimile, asking the ALJ to "allow[ ] each respondent a
chance to redeem themself [sic] in person, in front of you at a
7
Tommy V. Nguyen is not the same person as our Appellant
Tommy Dung Van Nguyen. In Nguyen, decided on June 14, 1990, the
ALJ (also Dolan) recounted the shrimping industry's unsuccessful
campaign to repeal or suspend the regulations requiring the use
of TEDs. The ALJ also described the hostility of the Concerned
Shrimpers of America to the regulations and the activities of its
president, Mialjevich, in encouraging the shrimpers to ignore the
regulations requiring the use of TEDs. Because he found that the
Nguyen defendants failed to make any showing that they were
unable to pay the fines imposed, the ALJ concluded that the civil
penalties proposed in the NOVAs were appropriate. Mialjevich
served as the representative for the defendants at the
administrative hearing in Nguyen.
11
hearing, where they can each dispute the facts of their case (as
seen by themself [sic] ), explain certain circunstances [sic]
beyond their control, and their financial status." The ALJ refused
to act on Margaret Mialjevich's facsimile, and, without prior
notice, by means of a sua sponte letter dated September 10, 1990,
he returned the facsimile to her with instructions that any future
submissions from her, Tee John Mialjevich, or the Concerned
Shrimpers of America would be returned without answer. Unlike Tee
John Mialjevich, Margaret Mialjevich was summarily disbarred
without notice and opportunity to respond.8 On September 19, 1990,
the ALJ dismissed Plaisance's and Menendez's cases for failure to
file a timely response to the August 3, 1990, Order to Show Cause.
Menendez and Plaisance argue that Margaret Mialjevich's September
4, 1990, facsimile was their timely response to the Order to Show
Cause.
Menendez and Plaisance did not file petitions for
reconsideration with the ALJ, nor did they file petitions for
discretionary review with the Administrator of NOAA.9 Thus, the
8
The ALJ's September 10, 1990, letter refers to Margaret
Mialjevich as Tee John Mialjevich's wife, but there is nothing in
the record to support this. The only submittal by Margaret
Mialjevich is signed simply "Margaret Mialjevich" without any
indication of marital status. The submittals by Margaret
Mialjevich and Tee John Mialjevich do show the same post office
box, which is also shown to be that of Concerned Shrimpers of
America. Apart from this post office box, the last name in
common of "Mialjevich," and their successive representation of
Menendez and Plaisance, the record shows nothing at all as to any
connection or relationship between Margaret Mialjevich and Tee
John Mialjevich.
9
The ALJ's September 19, 1990, order specifically informed
Plaisance and Menendez that if petitions for discretionary review
12
decision of the ALJ in the Menendez and Plaisance cases became
final on October 19, 1990. 15 C.F.R. § 904.271(d). No suits were
filed on behalf of Menendez, Plaisance, or others in federal court.
On November 26, 1990, NOAA issued a written demand for payment to
Plaisance and Menendez. NOAA sent several additional letters to
Menendez and Plaisance demanding payment. Menendez and Plaisance
did not respond to these demand letters. On May 7, 1992, the
government filed suits under 16 U.S.C. § 1540 against Menendez and
Plaisance in the district court below to collect the civil penalty
assessed by the ALJ, plus interest. The government moved to limit
review to the administrative records and for summary judgment in
its favor. Menendez and Plaisance did not oppose the government's
motion to limit review to the administrative record and moved for
summary judgment in their favor, arguing that the ALJ's rejection
of their two requests for a hearing constituted a denial of due
process.
In a judgment entered on August 23, 1993, the district court
granted the government's motions for summary judgment against
Menendez and Plaisance. In granting summary judgment in favor of
the government, the district court did not reach Menendez's and
Plaisance's due process arguments because it held that they had
waived their right to appeal "all procedural issues relating to the
conduct of the administrative hearing." The district court,
however, did comment that "[i]t certainly does not appear to this
were to be filed with the Administrator of NOAA, they had to be
filed within thirty days.
13
Court that the ALJ had the discretion to deny a hearing once one
had been timely requested simply because the ALJ did not approve of
the defendant's representatives." Menendez and Plaisance filed
timely notices of appeal.
Discussion
I. Nguyen
A. Timeliness of Nguyen's Notice of Appeal
The government first argues that Nguyen's appeal should be
dismissed because his notice of appeal was untimely. When the
United States is a party to an action, Fed.R.App.P. 4(a)(1)
requires a party to file a notice of appeal within sixty days of
the entry of the judgment of the district court. Fed.R.App.P.
4(a)(4)(F), however, stays the time to file a notice of appeal if
any party files a motion under, inter alia, Fed.R.Civ.P. 60 within
ten days after the entry of the judgment. In the instant case, the
district court entered a judgment granting summary judgment in
favor of the government on November 8, 1993. This judgment did not
recite the amount of the penalties owed by Nguyen. Therefore, on
December 6, 1993, the government moved to amend the judgment to
reflect the amount of relief sought in the complaint. Because this
motion was filed more than ten days after the entry of the November
8, 1993, judgment, the tolling provision of Fed.R.App.P. 4(a)(4)(F)
was not triggered. The district court entered its amended judgment
on January 12, 1994, and Nguyen filed his notice of appeal on
January 28, 1994. If the November 8, 1993, judgment constitutes
the final judgment, Nguyen's notice of appeal is untimely. If the
14
January 12, 1994, judgment is the final judgment, Nguyen's notice
of appeal is timely.
A judgment is final when it "ends the litigation on the merits
and leaves nothing for the court to do but execute the judgment."
Budinich v. Becton Dickinson and Co., 486 U.S. 196, 199, 108 S. Ct.
1717, 1720, 100 L. Ed. 2d 178 (1988) (citation and internal quotation
marks omitted). This Court has held that a final judgment for
money must at least specify the amount awarded so that it may be
properly enforced. Zink v. United States, 929 F.2d 1015, 1020 (5th
Cir.1991) (holding that two judgments that did not specify the
amount of damages were not final judgments in tax refund suit
notwithstanding the fact that the amount of damages was readily
determinable from the complaint and other pleadings).10 Because the
district court's November 8, 1993, judgment did not specify the
amount of the damages, it does not constitute a final judgment.
Thus, Nguyen's notice of appeal was timely, and the panel has
jurisdiction to hear this appeal.
B. Merits of Nguyen's Appeal
10
Dicta in Pemberton v. State Farm Mut. Auto. Ins. Co., 996
F.2d 789, 791 (5th Cir.1993), suggests that a judgment that fails
to specify the amount of damages may still constitute a final
judgment if the amount of damages is determinable from the
complaint or other pleadings, when the judgment incorporates one
or more such documents (or part thereof) by reference. The
November 8 judgment here makes no incorporation by reference
other than to say that the government's motion for summary
judgment is granted for the reasons stated in the court's
memorandum of even date. The memorandum does not address
damages. In any event, because "[t]he first of conflicting panel
decisions is to be followed," Paura v. U.S. Parole Comm'n, 18
F.3d 1188, 1189 (5th Cir.1994) (citation omitted), the holding of
Zink governs over any contrary implications of the Pemberton
dicta.
15
Nguyen argues that the district court erred in granting
summary judgment in favor of the United States because the
government failed to file the certified administrative record with
the district court. Section 11(a)(1) of the ESA authorizes the
Attorney General to institute civil proceedings in the district
court to collect penalties assessed at the administrative level and
states that "[t]he court shall hear such action on the record made
before the Secretary and shall sustain his action if it is
supported by substantial evidence on the record considered as a
whole." 16 U.S.C. § 1540(a)(1) (emphasis added). Because the
government never filed a certified copy of the administrative
record with the district court, Nguyen argues that the district
court could not determine whether the NOAA's decision was
"supported by substantial evidence on the record considered as a
whole." In his opposition to the government's motion for summary
judgment filed in the district court, Nguyen raised this same
argument.
The government concedes that it did not file a certified copy
of the administrative record with the district court, but argues
that the certified portions of the record that it attached to its
complaint as exhibits provide a sufficient basis to sustain NOAA's
determination. In support of this argument, the government cites
Section 10(e) of the Administrative Procedures Act (APA), relating
to judicial review of agency action: "... the court shall review
the whole record or those parts of it cited by a party...." 5
U.S.C. § 706 (emphasis added). Section 12 of the APA, however,
16
states that none of its provisions "limit or repeal additional
requirements imposed by statute or otherwise recognized by law."
5 U.S.C. § 559. Thus, while we agree with the government that the
APA is generally applicable to ESA,11 nevertheless the ESA's
provision that judicial review be "on the record made before the
Secretary ... considered as a whole," without anything comparable
to the "or those parts of it" language of section 10(e) of the APA,
precludes our reliance on that portion of section 10(e).
Accordingly, the district court erred in granting summary judgment
for the government without considering the record as a whole.
Alternatively, the government argues that any error committed
by the district court was harmless. The government asserts that
Nguyen has failed to allege that he suffered any harm as a result
of the district court's failure to review the record as a whole.
Given the substantial portions of the administrative record that
the government attached to its complaint as exhibits, this argument
is not without some arguable merit. Moreover, the excerpts of the
record attached to the government's complaint as exhibits appear
generally to bear out the government's account of what transpired
at the administrative level.12 However, crucial parts of the
11
The government also calls attention to the provision of
section 11(a)(2) of the ESA, 16 U.S.C. § 1540(a)(2), that
"[h]earings held during the proceedings for the assessment of
civil penalties authorized by paragraph (1) of this subsection
shall be conducted in accordance with section 554 of Title 5."
12
In his opposition to the government's motion for summary
judgment filed in the district court below, Nguyen arguably
admitted the existence of the document in which McManus,
purportedly acting as Nguyen's representative, stipulated to the
factual basis of the charges. In the same motion, however,
17
administrative record, such as Nguyen's purported stipulation to
the factual basis of the charges, were never filed with the
district court. Because the ESA expressly requires judicial review
based on the entire administrative record, and because the district
court did not have crucial portions of the administrative record
before it, we reject the government's harmless error argument.
Nguyen asks this Court to dismiss the government's complaint.
The government counters that if we decide that the district court
erred in granting summary judgment without the complete certified
record, the appropriate remedy is to remand the case for the
limited purpose of allowing the government to file the
administrative record. This request apparently indicates that the
administrative record may exist despite earlier statements by the
government that it has not been able to locate a complete copy of
the administrative record. Accordingly, we reverse and remand in
order to provide the government with the opportunity to file a
certified copy of the administrative record with the district
court, and for that court then to proceed with appropriate review.13
II. Menendez and Plaisance
Menendez and Plaisance argue that the district court erred in
granting summary judgment in favor of the government, asserting
that the ALJ's refusal to grant them a hearing constituted a denial
Nguyen denies that McManus was his representative.
13
The district court may well also need to determine (in the
first instance) if it is necessary to ascertain whether McManus
was Nguyen's representative and whether it is necessary or
appropriate to go beyond the administrative record for that
purpose.
18
of their due process rights and violated the APA, the ESA, and the
NOAA regulations. In response, the government proffers three
reasons for affirming the judgment of the district court: that
Menendez and Plaisance failed to exhaust their administrative
remedies, that they waived their due process arguments, and that
the ALJ properly denied their requests for a hearing.
A. Exhaustion of Administrative Remedies
Section 10(c) of the APA bears the caption "Actions
reviewable" and contains the APA's exhaustion requirement:
"Except as otherwise expressly required by statute, agency
action otherwise final is final for the purposes of this
section whether or not there has been presented or determined
an application for a declaratory order, for any form of
reconsideration, or, unless the agency otherwise requires by
rule and provides that the action meanwhile is inoperative,
for an appeal to superior agency authority." 5 U.S.C. § 704.
Except as otherwise provided by law, the APA judicial review
provisions apply to all federal agency actions unless a statute
precludes judicial review or agency action is committed by law to
agency discretion. APA § 10; 5 U.S.C. § 701(a). Neither
condition applies here. Because NOAA is an agency of the United
States government, and because the ESA does not specifically
address the exhaustion of administrative remedies, section 10(c) of
the APA applies. 5 U.S.C. §§ 551(1), 559. The government does not
question this, and indeed argues that the APA is applicable. The
fact that this suit is one brought by the government for judicial
enforcement rather than one brought by a citizen to challenge
agency action, does not mean that judicial review of the agency's
action in this suit is not pursuant to the APA. The ESA contains
19
no provision for judicial review of penalties assessed under
section 1540(a) other than in an enforcement action under that
section. Section 10(b) of the APA, 5 U.S.C. § 703, provides that
"[e]xcept to the extent that prior, adequate, and exclusive
opportunity for judicial review is provided by law, agency action
is subject to judicial review in civil or criminal proceedings for
judicial enforcement."
In Darby v. Cisneros, --- U.S. ----, 113 S. Ct. 2539, 125
L. Ed. 2d 113 (1993), the Supreme Court discussed the statutory
exhaustion requirement codified in section 10(c) of the APA. Darby
involved proceedings before a Department of Housing and Urban
Development (HUD) ALJ. In those proceedings, the ALJ rendered a
decision debarring a real estate developer, Darby, from
participating in federal programs for eighteen months. Under the
applicable HUD regulations, the ALJ's decision became final unless
the Secretary decided as a matter of discretion to review the ALJ's
decision within thirty days. Any party could request such a review
within fifteen days of the ALJ's decision. Neither party pursued
discretionary review within the agency. Thereafter, Darby filed
suit in federal district court seeking injunctive and declaratory
relief from the ALJ's decision. Reversing the Fourth Circuit's
holding that Darby had failed to exhaust his administrative
remedies, the Court relied on the plain language of section 10(c):
"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 [of section 10(c) ].... If courts were able to
impose additional exhaustion requirements beyond those
20
provided by Congress or the agency, the last sentence of §
10(c) would make no sense.... Section 10(c) explicitly
requires exhaustion of all intra-agency appeals mandated
either by statute or by agency rule; it would be inconsistent
with the plain language of § 10(c) for courts to require
litigants to exhaust optional appeals as well." Id. --- U.S.
at ---- - ----, 113 S. Ct. at 2544-45.
The facts of Darby are similar to the facts of Menendez's and
Plaisance's cases. Like the HUD regulations involved in Darby, the
NOAA regulations permit parties to seek wholly discretionary review
within the agency, but do not require this as a prerequisite to
judicial review. Moreover, the NOAA regulations provide that the
ALJ's decision becomes final unless discretionary review is
undertaken. There is, however, one factual distinction between the
instant cases and Darby. In Darby, the individual affected by the
agency action filed suit under the APA in district court to set
aside the agency action. Here, the government filed suit in
district court against Menendez and Plaisance under section 1540 to
collect civil penalties assessed by the agency. This distinction
affords no apparent basis to deviate from the holding of Darby and
its interpretation of the plain language of section 10(c), as
(subject to exceptions not applicable here) the same APA judicial
review is equally available in both instances. See 5 U.S.C. §
703.14
The government's argument that Darby has no bearing on this
14
Section 703, APA § 10(b), provides in part: "The form of
proceeding for judicial review is the special statutory review
proceeding relevant to the subject matter in a court specified by
statute.... Except to the extent that prior, adequate, and
exclusive opportunity for judicial review is provided by law,
agency action is subject to judicial review in civil or criminal
proceedings for judicial enforcement."
21
case is unavailing. In support of its argument, the government
relies on the following language in Darby: "[F]ederal courts may
be free to apply, where appropriate, other prudential doctrines of
judicial administration to limit the scope and timing of judicial
review." Id. --- U.S. at ----, 113 S. Ct. at 2544. Based on this
phrase, the government asserts that Menendez and Plaisance should
be required to exhaust their administrative remedies. This
argument ignores the remainder of the very sentence on which it is
based: "§ 10(c), by its very terms, has limited the availability
of the doctrine of exhaustion of administrative remedies to that
which the statute or rule clearly mandates." Id. Because Menendez
and Plaisance have exhausted all administrative remedies required
by statute or agency rule, and neither the ESA nor its regulations
require further exhaustion as a condition to judicial review, the
government's argument must fail. As the Court in Darby stated,
"[c]ourts are not free to impose an exhaustion requirement as a
rule of judicial administration where the agency action has already
become "final' under § 10(c)." Id. --- U.S. at ----, 113 S. Ct. at
2548.15
15
See also Ciba-Geigy Corp. v. E.P.A., 46 F.3d 1208, 1210 &
n. 2 (D.C.Cir.1995) (summarizing the holding of Darby as "courts
cannot require exhaustion of administrative remedies where, as
here, it is not expressly required by statute or agency rule").
We also note that Darby only addresses situations
"where neither the statute nor agency rules specifically
mandate exhaustion as a prerequisite to judicial review."
Darby, --- U.S. at ----, 113 S. Ct. at 2540. See also id. --
- U.S. at ----, 113 S. Ct. at 2543 ("neither the National
Housing Act nor applicable HUD regulations require that a
litigant pursue further administrative appeals prior to
seeking judicial review"), --- U.S. at ----, 113 S. Ct. at
22
B. Waiver
Alternatively, the government argues that the district court
correctly held that Menendez and Plaisance waived their right to
appeal all procedural issues related to the conduct of the
administrative proceedings by not pursuing the two avenues of
discretionary appeal provided by the NOAA regulations. See United
States v. L.A. Tucker Truck Lines, 344 U.S. 33, 37-38, 73 S. Ct. 67,
69, 97 L. Ed. 54 (1952) ("Simple fairness to the those who are
engaged in the tasks of administration, and to litigants, requires
2547 ("Agencies may avoid the finality of an initial
decision, first, by adopting a rule that an agency appeal be
taken before judicial review is available, and, second, by
providing that the initial decision would be "inoperative'
pending appeal"), --- U.S. at ----, 113 S. Ct. at 2548 ("the
exhaustion doctrine continues to exist under the APA to the
extent that it is required by statute or by agency rule as a
prerequisite to judicial review").
Examples of the kind of statutes or agency rules under
which administrative exhaustion would be required might
include: 8 U.S.C. § 1105(a)(c) ("[a]n order of deportation
... shall not be reviewed by any court if the alien has not
exhausted the administrative remedies available to him as of
right under the immigration laws and regulations") (see also
8 C.F.R. §§ 3.39, 242.21; Townsend v. INS, 799 F.2d 179,
182 (5th Cir.1986)); and, 20 C.F.R. § 404.900(b) (providing
in social security cases that if a party fails to pursue all
available steps in the agency review process, "you will lose
your right to further administrative review and your right
to judicial review, unless you can show us that there was
good cause for your failure to make a timely request for
review") (see also Paul v. Shalala, 29 F.3d 208, 210 (5th
Cir.1994)).
Further, Darby does not address non-APA cases. See
Darby, --- U.S. at ----, 113 S. Ct. at 2548 ("the exhaustion
doctrine continues to apply as a matter of judicial
discretion in cases not governed by the APA"). Our examples
given in the immediately preceding paragraph are not
intended to imply that judicial review in immigration cases
or social security cases is (or is not) governed by the APA
(in whole or in part).
23
as a general rule that courts should not topple over administrative
decisions unless the administrative body has ... erred against
objection made at the time appropriate under its practice."); see
also Massachusetts Dep't of Pub. Welfare v. Secretary of Agric.,
984 F.2d 514, 523 (1st Cir.), cert. denied, --- U.S. ----, 114
S. Ct. 81, 126 L. Ed. 2d 49 (1993) (discussing waiver doctrine in
administrative law under the label of the procedural default
doctrine).
In L.A. Tucker Truck Lines, a trucker applied to the
Interstate Commerce Commission (ICC) for a certificate of public
convenience and necessity to authorize an extension of his existing
truck route. 344 U.S. at 34-38, 73 S.Ct. at 67-68. Several
trucking companies and railroads, including L.A. Tucker Truck
Lines, intervened in the agency proceedings to oppose the trucker's
application, but an examiner appointed by the ICC ultimately
granted the extension. After exhausting all discretionary appeals
within the ICC without avail, L.A. Tucker Truck Lines filed suit in
the district court to set aside the order of the ICC, arguing for
the first time that the ICC had no jurisdiction because the
examiner had not been appointed in accordance with the procedures
set forth in the APA. The district court agreed and invalidated
the agency's order. Reversing, the Supreme Court held that L.A.
Tucker Truck Lines had waived its jurisdictional argument by
failing to raise it before the agency. Id. 344 U.S. at 34-36, 73
S. Ct. at 68.
The First Circuit has applied this administrative law doctrine
24
of waiver in several recent cases. In Massachusetts Dep't of Pub.
Welfare, the state of Massachusetts sought judicial review of
punitive sanctions imposed by the Food and Nutrition Service,
arguing for the first time that the agency had violated its own
regulations by considering an oversampling of food stamp cases.
981 F.2d at 518. Analogizing the administrative law doctrine of
waiver to the rule that an appellate court will not consider
arguments not raised in the trial court, the First Circuit held
that the state had waived any oversampling argument by failing to
raise it before the ALJ. Id. at 522-23. In Eagle Eye Fishing
Corp. v. United States Dep't of Commerce, 20 F.3d 503, 504 (1st
Cir.1994), NOAA charged a fishing company with violating the
Magnuson Fishery Conservation and Management Act of 1976 and
regulations prohibiting the capture or possession of blue marlin
shoreward of this country's Exclusive Economic Zone. The fishing
company denied the charges at the proceeding before the ALJ, but
the ALJ rendered a decision in favor of NOAA. Thereafter, the
fishing company sought discretionary review pursuant to 15 C.F.R.
§ 904.273, raising for the first time the argument that NOAA had
violated its own confidentiality regulations by publicly disclosing
information from the fishing company's logbook. After the NOAA
Administrator refused to consider this contention because the
fishing company never raised it before the ALJ, the company sought
judicial review, again arguing that NOAA violated its
confidentiality regulations. Affirming the district court's
dismissal of the suit, the First Circuit held that the fishing
25
company's failure to raise the argument before the ALJ constituted
a waiver. Id. at 505.
In holding that Menendez and Plaisance waived their due
process arguments by failing to pursue discretionary review within
NOAA, the district court misapplied the waiver doctrine. The
district court based its waiver holding on Menendez's and
Plaisance's failure to pursue their due process arguments within
NOAA through the available avenues of discretionary appeal. It is,
however, clear that Menendez and Plaisance raised their due process
arguments before the ALJ by twice requesting hearings. Indeed, the
district court stated that Menendez and Plaisance requested
hearings on two separate occasions.16 Nevertheless, the district
court held that they waived their due process arguments by failing
to pursue these arguments by taking discretionary appeals.
Although the Court in Darby expressly stated that federal courts
remain free to apply other prudential doctrines of judicial
administration, the district court's holding contradicts the import
of Darby. Because Menendez's and Plaisance's requests for a
hearing before the ALJ constituted sufficient objections to
preserve their due process arguments, the district court erred in
holding that their failure to pursue these arguments by taking
discretionary appeal channels amounted to a waiver. The instant
case is easily distinguishable from L.A. Tucker Truck Lines.
16
The government argues that the September 4, 1990,
facsimile from Margaret Mialjevich did not constitute a second
request for a hearing. The district court, however, interpreted
this facsimile as a second request for a hearing. We agree.
26
There, the trucking company raised an argument about the illegal
appointment of the examiner for the first time in the district
court. By contrast, Menendez and Plaisance asked the ALJ for a
hearing twice. Thus, this case does not involve a party waiting to
raise an argument for the first time in the district court.
In Massachusetts Dep't of Pub. Welfare, the court noted the
overlap between the doctrines of waiver and exhaustion in
administrative law, but stressed that the two doctrines are not
synonymous. 981 F.2d at 523 & n. 8. By focussing on the parties'
failure to reassert their requests for a hearing through the
discretionary appeals systems established by the NOAA regulations,
the district court confused the waiver and exhaustion doctrines and
created an end run around Darby. Although the Court in Darby held
that parties are not required to exhaust discretionary appeals
within an agency, the district court below essentially required
Menendez and Plaisance to do so by making a failure to exhaust
discretionary appeals a waiver. As the First Circuit reasoned in
Massachusetts Dep't of Pub. Welfare and Eagle Eye Fishing Corp.,
the doctrine of waiver in administrative law parallels the
well-established rule that appellate courts will not consider
arguments not raised before the trial court. See Eagle Eye Fishing
Corp., 20 F.3d at 504-05 (finding waiver where party failed to
assert argument before the ALJ notwithstanding fact that party
raised the argument in NOAA discretionary review). Because
Menendez and Plaisance raised their right-to-a-hearing claims
before the ALJ, the district court erred in holding that their
27
failure to pursue discretionary review was a waiver.17
C. Summary Judgment
Menendez and Plaisance argue that the district court erred in
granting summary judgment in favor of the government because the
ALJ improperly granted summary judgment in favor of NOAA. Section
7(c) of the APA provides that, "[e]xcept as otherwise provided by
statute, the proponent of a rule or order has the burden of proof."
5 U.S.C. § 556(d). Because the ESA and the NOAA regulations do not
shift the burden of proof for establishing the violation,18 NOAA
bears the burden of proof to establish a violation of the ESA
before the ALJ. Under the NOAA regulation addressing summary
decision, the ALJ has the authority to grant summary decision on
his own motion when "the entire record shows ... [t]hat there is no
genuine issue as to any material fact" and "the moving party is
entitled to summary decision as a matter of law." 15 C.F.R. §
904.210. Here, the ALJ disbarred the parties' first representative
after he requested a hearing for his clients and then issued an
order directing the parties to show cause why their cases should
not be dismissed in the same manner as the Tommy V. Nguyen case.
17
We do not address the situation where a discretionary (or
other) appeal is taken or attempted, but the contention claimed
to be waived is not raised in the appeal or attempted appeal.
Nor do we address the consequences of failure to take an appeal
where review by the higher agency authority is mandatory, rather
than discretionary, if the appeal is timely taken in proper form.
Similarly, we do not deal with a situation where the applicable
statute or regulations provide for a waiver.
18
The NOAA regulations, however, do shift the burden of
proof to the charged party to show financial inability to pay the
assessed penalty. 15 C.F.R. § 904.108.
28
Thereafter, the ALJ refused to consider the parties' response to
his show cause order because it came from Margaret Mialjevich and
directed that any future communications from her would be returned
without action. Nothing in the record justifies this action by the
ALJ. Because the parties never responded to his order to show
cause, the ALJ then entered an order dismissing their request for
a hearing and assessing the penalties proposed in the NOVAs.
It is undisputed that NOAA bears the burden of establishing
a violation by Menendez and Plaisance. "[T]he plain language of
Rule 56(c) mandates the entry of summary judgment ... against a
party who fails to make a showing sufficient to establish the
existence of an essential element to that party's case, and on
which that party will bear the burden of proof at trial." Celotex
Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552, 91
L. Ed. 2d 265 (1986). Thus, in order to grant summary decision for
the government, the ALJ must have summary judgment evidence before
him that would sustain a finding in favor of the government at
trial. This summary judgment evidence must consist of more than
the mere allegations contained in the NOVA; rather, the ALJ must
have summary judgment evidence before him in the form of
affidavits, depositions, answers to interrogatories, and/or
admissions. Id. 477 U.S. at 323-25, at 2553, Fed.R.Civ.P. 56(e).
When he entered summary decision in favor of the agency, the
only evidence before the ALJ was the NOVAs. The government never
moved for summary judgment before the ALJ. At oral argument,
counsel for the government argued that the NOVA constituted
29
sufficient summary judgment evidence to sustain the ALJ's summary
decision. The NOVA, however, is an unsworn document signed by a
NOAA staff attorney not claiming to have personal knowledge of the
matters alleged and contains only the factual allegations of the
charged violation. Thus it does not constitute any summary
judgment evidence. See Topalian v. Ehrman, 954 F.2d 1125, 1131
(5th Cir.), cert. denied, --- U.S. ----, 113 S. Ct. 82, 121 L. Ed. 2d
46 (1992) ("Mere conclusory allegations are not competent summary
judgment evidence, and they are therefore insufficient to defeat or
support a motion for summary judgment."); see also 10A Charles
Alan Wright et al., Federal Practice and Procedure § 2738 (1983).
Accepting the government's argument would shift the burden of proof
to the party charged with the violation; thus, the government
would prevail even when it produces no evidence as long as the
charged party did not produce any evidence. Because the ALJ
improperly shifted the burden of proof to the parties charged with
the violations, we reverse the district court's judgment granting
summary judgment in favor of the government.
Conclusion
In each of the three cases before us, we reverse the summary
judgment for the government and remand the cause to the district
court for further proceedings not inconsistent herewith.
REVERSED and REMANDED.
30