Summary of a Recent
Judicial Development in
Administrative Law

Exhaustion of Administrative Remedies as
Jurisdictional Requirement Not Mandated

Harrison M. Pittman
Staff Attorney

Summary of Decision

In Avocados Plus Incorporated v. Veneman, 370 F.3d 1243 (D.C. Cir. 2004), the United States Court of Appeals for the District of Columbia Circuit held that provisions of the Hass Avocado Promotion, Research, and Information Act (Avocado Act), 7 U.S.C. §§ 7801-7813, did not require exhaustion of administrative remedies as a jurisdictional requirement.

Background

The Avocado Act authorizes the Department of Agriculture to collect mandatory assessments from avocado growers and importers so that the assessments can be used to promote the domestic consumption of Hass avocados. Avocados Plus, 370 F.3d at 1245. Several importers of avocados and avocado products challenged the Avocado Act, arguing that it violated their First Amendment right to be free of compelled speech. See id. The Secretary of Agriculture filed a motion to dismiss, arguing that the plaintiff importers failed to exhaust their administrative remedies. See id. at 1247. The district court held that the plaintiffs were required to exhaust their administrative remedies and dismissed the action for lack of subject matter jurisdiction. See id. The plaintiffs appealed the district court's decision to the D.C. Circuit. See id.

Analysis and Holdings

The D.C. Circuit explained that under § 7806 of the Avocado Act "any 'person subject to an order' may file a petition with the Secretary 'stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with the law; and . . . requesting a modification of the order or an exemption from the order'" and that the Secretary must rule on the petition after a hearing. Id. at 1246 (citations omitted). It also explained that under the Avocado Act "the 'district courts of the United States . . . shall have jurisdiction to review the ruling of the Secretary on the petition[,]' . . . and must remand it if it 'is not in accordance with the law[.]'" Id. (citations omitted).

The court explained that there are two types of exhaustion: "non-jurisdictional exhaustion" and "jurisdictional exhaustion." Id. The former is a judicially created doctrine that requires "parties who seek to challenge agency action to exhaust available administrative remedies before bringing their case to court"; the latter "arises when Congress requires resort to the administrative process as a predicate to judicial review." Id. at 1247 (citations omitted). See also id. (stating that "[w]hether a statute requires exhaustion is purely a question of statutory interpretation. If the statute does not mandate exhaustion, a court cannot excuse it.") (citations omitted). The court also explained that for a statute to mandate exhaustion, it must contain "''[s]weeping and direct' statutory language indicating that there is no federal jurisdiction prior to exhaustion, or the exhaustion requirement is treated as an element of the underlying claim.'" Id. at 1248 (citations omitted). It further explained that "[w]e presume exhaustion is non-jurisdictional unless 'Congress states in clear, unequivocal terms that the judiciary is barred from hearing an action until the administrative agency has come to a decision . . . .'" Id. (citation omitted).

The court stated that the Avocado Act "contains no . . . 'sweeping and direct' language. It neither mentions exhaustion nor explicitly limits the jurisdiction of the courts. It merely creates an administrative procedure for challenging the Secretary's orders." Id. It added that

Congress' failure to include in § 7806 of the Avocado Act the sort of 'sweeping and direct' language mandating exhaustion and thereby depriving the courts of jurisdiction tends to indicate that we are dealing here with non-jurisdictional exhaustion. . . . While the matter is not free from doubt, we therefore hold . . . that the language of the Avocado Act does not make exhaustion jurisdictional.

Id. at 1249-50.

The court therefore reversed the district court's decision and remanded the matter for further consideration.

The case was decided on June 18, 2004; this summary was posted Aug. 3, 2004.