Carl v. United States Secretary of Agriculture

Slip Op. 12-66
UNITED STATES COURT OF INTERNATIONAL TRADE
STEVE M. CARL,
Plaintiff,
Before: Leo M. Gordon, Judge
v.
Court No. 11-00271
UNITED STATES SECRETARY
OF AGRICULTURE,
Defendant.
MEMORANDUM and ORDER
[Motion to dismiss for lack of subject matter jurisdiction denied; motion to dismiss for
failure to state a claim upon which relief may be granted converted to motion for
judgment on the agency record.]
Dated: May 24, 2012
Steve M. Carl, Pro Se, of Georgetown, SC. With him on the brief was Steve D.
Schwinn, The John Marshall Law School, of Chicago, Illinois.
Antonia R. Soares, Trial Attorney, International Trade Field Office, Commercial
Litigation Branch, Civil Division, of Washington, DC. With her on the brief were Tony
West, Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke,
Assistant Director. Of counsel on the brief was Jeffrey Kahn, Office of the General
Counsel, U.S. Department of Agriculture, of Washington, D.C.
Gordon, Judge: Plaintiff commenced this action on July 18, 2011, to contest the
United States Department of Agriculture’s (“USDA”) denial of Plaintiff’s application for
Fiscal Year 2010 benefits under the Trade Adjustment Assistance (“TAA”) for Farmers
Program, Section 296 of the Trade Act of 1974, as amended, 19 U.S.C. § 2401e
Court No. 11-00271 Page 2
(2006).1 Jurisdiction is predicated on 28 U.S.C. § 1581(d)(4) (2006). Defendant moves
to dismiss pursuant to USCIT Rule 12(b)(1) for lack of subject matter jurisdiction,
contending that Plaintiff failed to timely commence its action “within sixty days after
notice” of the denial. 19 U.S.C. § 2395; see also Kelley v. Dept. of Labor, 812 F.2d
1378, 1380 (Fed. Cir. 1987) (holding sixty-day period is jurisdictional); Conlin
Greenhouses v. U.S. Secretary of Agriculture, 32 CIT 467 (2008) (dismissing TAA
action not filed within sixty days for lack of jurisdiction). Defendant has also moved
pursuant to USCIT Rule 12(b)(5) to dismiss Plaintiff’s complaint for failure to state a
claim upon which relief may be granted. For the reasons set forth below, Defendant’s
motions are denied.
I. Discussion
Plaintiff carries “the burden of demonstrating that jurisdiction exists.”
Techsnabexport, Ltd. v. United States, 16 CIT 420, 422, 795 F. Supp. 428, 432 (1992)
(citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936)). In deciding
a USCIT Rule 12(b)(1) motion to dismiss that does not challenge the factual basis for
the complainant's allegations, and when deciding a USCIT Rule 12(b)(5) motion to
dismiss for failure to state a claim upon which relief may be granted, the court assumes
all factual allegations to be true and draws all reasonable inferences in plaintiff's favor.
See Cedars–Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583–84 & n.13 (Fed. Cir. 1993);
Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995) (subject matter jurisdiction);
1
Further citations to the Trade Act of 1974, as amended, are to the relevant provision of
Title 19 of the U.S. Code, 2006 edition.
Court No. 11-00271 Page 3
Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991) (failure to state a
claim).
A. Subject Matter Jurisdiction
The statute provides that an action challenging the denial of TAA benefits must
be commenced “within sixty days after notice” of the denial. 19 U.S.C. § 2395. The
sixty-day period is jurisdictional. Kelley, 812 F.2d at 1380. As such, the court’s 5-day
service-by-mail extension, USCIT R. 6(d), does not apply. See generally, 4B Charles
Alan Wright, Arthur R. Miller, Mary Kay Kane & Richard L. Marcus, Federal Prac. &
Proc. § 1171 (3d ed. 2012) (“the [service-by-mail extension] has been held not to extend
the time permitted for obtaining review of administrative decisions when the decision
has been mailed, on the theory that the statutory time elements for review are
mandatory and jurisdictional.”).
USDA notified Plaintiff of the denial of benefits in a letter dated May 13, 2011,
which also informed Plaintiff of his right to request judicial review:
You may request judicial review of this determination within sixty
(60) days of this letter by submitting a request for judicial review via
certified mail (return receipt requested) to Clerk’s Office, U.S. Court of
International Trade, One Federal Plaza, New York, New York 10278-0001.
The Office of the Clerk can provide instructions for requesting a judicial
review and may be reached at (212) 264-2800. You can also visit the
Court’s website . . . for more information.
Compl. Ex. USDA denial letter (May 13, 2011) (“TAA Denial”). There is nothing in the
record indicating when USDA mailed the denial letter to Plaintiff. Plaintiff avers in its
amended complaint that it received the letter sometime after May 19, 2011. To
commence this action Plaintiff mailed a letter to the court dated July 12, 2012, but not
Court No. 11-00271 Page 4
via certified mail (return receipt requested). That omission caused Plaintiff’s letter to be
deemed filed when received on July 18, 2011. See USCIT R. 5(d)(4). Had it been sent
via certified mail (return receipt requested) on July 12, 2011, Plaintiff’s letter would have
been deemed filed when mailed. Id.
Event Date 60-Day Deadline
Letter May 13, 2011 July 12, 2011
Mailing ? ?
Receipt May 19, 2012 July 18, 2011
As the table indicates, Plaintiff’s July 18th filing is untimely if measured from the
date of the letter, but timely if measured from date of receipt. To identify the appropriate
trigger for the 60-day period, the court begins with the Federal Circuit’s decision in
Kelley. In Kelley the Federal Circuit addressed the notice requirement of 19 U.S.C. §
2395 when reviewing a TAA decision by the U.S. Department of Labor (“Labor”). Labor
had promulgated a regulation that triggered the 60-day period with publication of its TAA
determination in the Federal Register. See 29 C.F.R. § 90.19. That regulation
authorizes Labor to provide constructive notice of its decisions via the Federal Register
to the group of workers (three or more) that had applied for TAA. The trial court
determined that the constructive notice provision was reasonable, but invalidated the
regulation as applied to pro se TAA applicants because the court was concerned about
the unfairness of requiring them to comb through the Federal Register when the agency
had demonstrated that it was not honoring the deadlines for decision-making. Kelley v.
U.S. Dept. of Labor, 9 CIT 646, 648, 626 F. Supp. 398, 400 (1986) (“Congress could not
have intended a pro se party to constantly search the Federal Register for the final
Court No. 11-00271 Page 5
determination of the Secretary of Labor for months beyond the sixty days within which
such determination is due under the statute.”).
The Federal Circuit reversed:
There is no hint in the Trade Act that actual notice is necessary to
start the sixty-day limitation period, and utilization of notice in the Federal
Register as the triggering event is consistent with the language and
structure of the Act. . . .
Here, the trial court acknowledged that the Secretary's
interpretation of section 2395(a) is reasonable, but made an exception for
pro se litigants. . . . [T]he lack of specificity in the statute with respect to
the notice requirement does not evidence that Congress intended the
result the court reached. Nor does it open the way for the court to
overturn the Secretary's regulation as unreasonable. The pro se status of
appellants does not remove them from the general rule on constructive
notice, 29 C.F.R. § 90.19(a).
Kelley, 812 F. 2d at 1380. A couple of important lessons emerge from this decision:
First, the TAA notice provision lacks specificity about the type and manner of notice
required, meaning that Congress left gaps for the agencies to fill, and second, Labor’s
gap-filling regulation establishing constructive notice via the Federal Register was
reasonable. In this case the first is instructive (although USDA has never rendered a
thorough interpretation of the notice provision); the second is irrelevant, at least for
USDA, which does not have procedures for providing constructive notice to applicants.
Without a constructive notice mechanism, USDA must provide actual notice to
the applicant. USDA, however, seems unsure of its own processes, suggesting that
Kelley relieves USDA of the burden of providing actual notice. See Def.’s Reply in Supp.
of Mot. to Dismiss at 4, ECF No. 24 (Mar. 22, 2012). This suggestion is puzzling,
however, because USDA has no alternative to actual notice (as Labor does with its
Court No. 11-00271 Page 6
publication in the Federal Register). At present there is no means for USDA to provide,
or TAA applicants to receive, constructive notice of a denial of benefits. Therefore,
actual notice it is.
The critical issue here does not turn on constructive vs. actual notice, but instead
on what triggers the 60-day period. When does it begin to run for USDA TAA
applicants? Unlike Labor’s regulation, which has a clear trigger for the 60-day period—
the notice publication date in the Federal Register—USDA’s regulation says nothing
about the 60-day period, simply referencing the Court’s Rules: “Any producer aggrieved
by a final agency determination under this part may appeal to the U.S. Court of
International Trade for a review of such determination in accordance with its rules and
procedures.” 7 C.F.R. § 1580.506.
As explained above, USDA notified Plaintiff of the denial of benefits in a letter
dated May 13, 2011, which also notified Plaintiff that he may request judicial review
“within sixty (60) days of this letter . . . .” Compl. Ex. USDA denial letter (May 13, 2011)
(“TAA Denial”). The phrase—“of this letter”—represents a slight change for USDA,
which previously advised applicants of their right to seek judicial review within 60 days
“‘from the date of this letter.’” Conlin, 32 CIT at 467, n.2 (quoting TAA denial letter)
(emphasis added); Alaniz v. U.S. Secretary of Agriculture, 30 CIT 1782, 1785 (2006)
(quoting TAA denial letter) (emphasis added). More important than USDA’s change of
language is its somewhat jarring change in litigating position from Conlin to the present
case. In Conlin, USDA specifically argued, and the court acknowledged, that the 60-
day trigger is applicant’s receipt of notice. Conlin, 32 CIT at 467, n.2. Plaintiff in Conlin
Court No. 11-00271 Page 7
proffered the denial letter, dated September 7, 2006, as well as its envelope, which was
postmarked October 2, 2006. Plaintiff also alleged it was received on October 3, 2006.
Despite clear language in its denial letter, USDA did not argue that September 7, 2006,
triggered the 60-day period in which to seek judicial review. Avoiding that difficult
position (with the agency’s delay in mailing effectively cutting applicant’s 60-day period
in half), USDA instead argued that applicant’s receipt of the notice on October 3, 2006,
triggered the 60-day period:
[A]ny challenge to the USDA’s determination must be brought within 60
days of receiving notice of that determination. 19 U.S.C. § 2395(a). In this
case, Conlin admits it received notice of USDA’s denial of its petition on
October 3, 2006. Pl. Br. 6.
Br. in Supp. of Def.’s Mot. to Dismiss and Resp. to Pls.’ Mot. for J. upon the Agency R.
at 5, Conlin, Court No. 06-00441 (CIT Feb. 14, 2008), ECF No. 27 (emphasis added).
The Conlin court noted, consistent with what USDA argued, that October 3rd, not
September 7th, triggered the sixty-day period. Conlin 32 CIT at 467, n.2 (quoting TAA
denial letter and 19 U.S.C. § 2395(a)).
Plaintiff wishes to take Conlin one step further, arguing that “The plain language
[of the statute] means that a denied applicant has sixty days from the date the applicant
receives actual notice of the denial from the [USDA], usually in the form of a letter.”
Pl.’s Resp. to Def.’s Mot. to Dismiss at 4, ECF No. 17. This goes too far. As Kelley
held, Congress was not that specific about the manner and type of notice the agencies
must provide. See Kelley, 812 F. 2d at 1380; cf. 42 U.S.C. § 2000e-16(c) (“Within
ninety days of receipt of notice of final action . . . an employee or applicant . . . may file
Court No. 11-00271 Page 8
a civil action as provided in section 2000e-5 of this title . . . .") (emphasis added); 26
U.S.C. § 6320(a)(2)(C) (requiring notice to be “sent by certified or registered mail”).
As explained above, Kelley clarifies that the agencies administering the TAA
program have a measure of gap-filling discretion to define the type and manner of
notice provided to applicants. Along with that discretion comes the flexibility to change
position. In this action USDA has changed its litigating position, now asserting that the
date of the letter triggers an applicant’s 60-day period to seek judicial review. Counsel
for USDA explains a number of advantages to using the letter date as the trigger, albeit
through post hoc rationalizations not provided in USDA’s otherwise unadorned
application of 19 U.S.C. § 2395. According to counsel, the date of the letter is fixed by
objective and visible standards, is easy to determine, is ascertainable by both parties,
and is easily applied. Def.’s Reply in Supp. of Mot. to Dismiss at 5-6. Most of this is
true, but ease of application depends on whether the notice was mailed
contemporaneously with the date of the letter, as well as when the applicant received
the letter. As the facts of Conlin demonstrate, the letter date may prove arbitrary (as
applied) by significantly truncating an applicant’s 60-day period, an occurrence in Conlin
that prompted even USDA to acknowledge that receipt date was proper, at least in that
instance.
The date of the letter is a suitable starting point for analyzing the sixty-day
deadline, but it does not establish, as USDA envisions, a conclusive trigger for the sixty-
day period. In most cases it may resolve the issue of whether suit was timely
commenced, but an applicant may nevertheless allege that the date of the letter (as
Court No. 11-00271 Page 9
applied) arbitrarily truncates the applicant’s sixty-day period, either because the notice
was not mailed contemporaneously with the date of the letter (Conlin), or the applicant
received the notice on a date beyond what would otherwise be a reasonable time for
mailing. The onus, however, is on the applicant to make the allegation, and if
necessary (e.g., defendant challenges the allegation), proffer and prove the date of
mailing (via the envelope’s postmark), receipt (via affidavit or testimony), or both, like
the applicant in Conlin.
USDA, of course, enjoys a general presumption of regularity that official duty has
been performed. See Butler v. Principi, 244 F.3d 1337, 1340 (Fed. Cir. 2001) (“the
doctrine presumes that public officers have properly discharged their official duties.”).
This “assumption” allocates to plaintiff the burden of proof on the issue of whether
USDA performed its official duty by mailing the notice contemporaneously with its date.
Cf. 21 B Charles A. Wright & Kenneth W. Graham, Jr., Federal Prac. & Proc. Evid. §
5124 (2d ed. 2008) (“Rule 301 does not apply to ‘assumptions’—rules for allocating the
burden of proof that are often mislabeled as ‘presumptions.’ ... the best known
include: ... the ‘assumption’ that official duty has been regularly performed.”). Nothing
on the record in this case indicates when USDA mailed the denial letter to Plaintiff,
although Plaintiff has averred that it received the letter sometime after May 19, 2011.
This is uncontroverted. Defendant’s 12(b)(1) motion assumes that the date of the letter
conclusively triggers the 60-day period, making the date of receipt irrelevant. As
explained above, however, the letter’s date only presumptively triggers the 60-day
period.
Court No. 11-00271 Page 10
Given that Defendant’s 12(b)(1) motion to dismiss does not controvert Plaintiff’s
allegation of receipt, the court must assume that factual allegation to be true. See
Cedars-Sinai Medical Center v. Watkins, 11 F.3d 1573, 1583-84 (Fed. Cir. 1993) (“If a
Rule 12(b)(1) motion simply challenges the court's subject matter jurisdiction based on
the sufficiency of the pleading's allegations—that is, the movant presents a ‘facial’
attack on the pleading—then those allegations are taken as true and construed in a light
most favorable to the complainant.”). Plaintiff received the May 13th denial letter
sometime after May 19th, which is at least a six-day lag. Is a six-day lag an
unreasonable time for mailing? The court believes that it is. The Rules of the Court of
International Trade assume mailing takes five days. USCIT Rule 6(d).2 That five-day
period is a helpful benchmark to determine how long is too long for the agency’s
mailings, at least as far as evaluating an appropriate trigger for the 60-day period.
Recall that the court’s five-day extension-by-mail rule does not apply to the 60-day
jurisdictional time period. The net effect is that the letter date will always shortchange
an applicant some period of time while USDA’s denial letter is in the mail. This is
permissible, up to a point. The facts of this case identify that point. The six-day lag
between the date of the letter and Plaintiff’s receipt represents ten percent of Plaintiff’s
60-day period in which to seek judicial review. The court believes this is too much
erosion for the letter date to be an appropriate trigger in this case. With the date of
mailing unknown, the other option is Plaintiff’s date of receipt of the notice, which stands
2
This five-day period is generous when compared with the 3-day rule that applies to
litigation in Federal District Courts. See Fed. R. Civ. P. 6(d).
Court No. 11-00271 Page 11
uncontroverted as May 19, 2011. Using that measure, Plaintiff timely filed its suit within
60 days. The court will therefore deny Defendant’s Rule 12(b)(1) motion to dismiss.
The letter date may well resolve most issues involving the timely commencement
of suit, especially when USDA mails the notice contemporaneously with its date, and
the notice is received within five days. The hope though is that as USDA eventually
moves toward electronic notice, the issues of mailing, delay, and receipt will prove to be,
with this opinion, quaint relics of a simpler time.
B. Motion to Dismiss Pursuant to USCIT R. 12(b)(5)
Together with its USCIT Rule 12(b)(1) motion, Defendant also filed a motion to
dismiss Plaintiff’s complaint pursuant to USCIT Rule 12(b)(5) for failure to state a claim
upon which relief may be granted. Defendant’s memorandum in support of its Rule
12(b)(5) motion, Plaintiff’s response, and Defendant’s reply each focus heavily on the
merits of Plaintiff’s TAA application. Plaintiff, though, has only had one brief to the
government’s two. The court would like to hear further from Plaintiff on the merits of its
claim and accordingly, will convert Defendant’s motion to dismiss pursuant to USCIT
Rule 12(b)(5) to a motion for judgment on the agency record pursuant to USCIT Rule
56.1. See, e.g., Nguyen v. U.S. Secretary of Agriculture, 31 CIT 187, 187, 471 F. Supp.
2d 1350, 1350-51 (2007) (“Pursuant to its discretion under USCIT R. 12(b), the court
has converted Defendant’s motion to dismiss for failure to state a claim upon which
relief can be granted to a motion for judgment on the agency record pursuant to USCIT
R. 56.1”).
Court No. 11-00271 Page 12
II. Conclusion
For the foregoing reasons, it is hereby
ORDERED that Defendant’s motion to dismiss pursuant to USCIT Rule 12(b)(1)
is denied; it is further
ORDERED that Defendant’s motion to dismiss pursuant to USCIT Rule 12(b)(5)
is converted to a motion for judgment on the agency record pursuant to USCIT Rule
56.1; and it is further
ORDERED that the court will schedule a conference with the parties to discuss
the further disposition of this action.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: May 24, 2012
New York, New York