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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 20, 1995 Decided April 21, 1995

No. 94-5043

PPG INDUSTRIES, INC.,

APPELLEE

v.

UNITED STATES OF AMERICA, ET AL.,

APPELLANTS

Appeal from the United States District Court

for the District of Columbia

(89cv0757)

Fred E. Haynes, Assistant United States Attorney, argued the cause for appellants. With him on the

briefs were Eric H. Holder, Jr., United States Attorney, John D. Bates and R. Craig Lawrence,

Assistant United States Attorneys, and James D. Henry, Associate Solicitor, United States

Department of Labor.

Susan S. Sauntry, argued the cause and filed the brief for appellee.

Before: SILBERMAN, BUCKLEY, and GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge: The Department of Labor appeals from the district court's

summary judgment order which declined to remand this case to the Department. We reverse.

I.

In May 1986 the Department of Labor's Office of Federal Contract Compliance Programs

(OFCCP) filed an administrative complaint charging PPG Industries with violating § 503 of the

Rehabilitation Act, 29 U.S.C. § 793 (1988), by failing to hire James Thompson, an epileptic, as a

production laborer at its automobile glass manufacturing plant in Tipton, Pennsylvania. At the time

Thompson applied for work, § 503 required that, "in employing persons to carry out" federal

contracts in excess of $2,500 or more, contractors and subcontractors "take affirmative action to

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*

In 1992, the Rehabilitation Act was amended to delete the language requiring affirmative

action only for persons "employ[ed] to carry out such contract." See 29 U.S.C. § 793(a) (1988 &

1994 Supp.). Thus the jurisdictional problem presented here has been eliminated for cases arising

under the amended section. 

employ and advance in employment qualified handicapped individuals." 29 U.S.C. § 793(a).* The

Department enforced § 503 through implementing regulations, 41 C.F.R. Part 60-741, including a

regulatory presumption that subjected a federal contractor's entire operationsto § 503 requirements

unless the contractor sought and received a waiver for any of its operations found to be "in all

respects separate and distinct from activities ... related to the performance of the contract or

subcontract." 41 C.F.R. § 60-741.3(a)(5) (1994).

In proceedings before an Administrative Law Judge on Thompson's claim, OFCCP relied on

the waiver regulation in asserting jurisdiction over PPG's Tipton plant. Although OFCCP had also

sought limited discovery as to whether any federal contract work was performed at Tipton, none of

this evidence, apart from a plant manager's testimony regarding Tipton's products, was introduced

before the ALJ. PPG challenged the agency's jurisdiction by arguing, inter alia, that the regulation

was overbroad and invalid under the statute. Under PPG's theory, OFCCP could not establish a §

503 violation absent a showing that work on the federal contract was actually done at the Tipton

plant and that Thompson would have been employed to "carry out" such work.

The ALJrejected PPG'sjurisdictional arguments, and determined that OFCCP properlyrelied

on the waiver regulation in proceeding against PPG. Based on medical testimony that Thompson had

been seizure-free for at least two years before applying for work, the ALJ then concluded that

Thompson was a qualified handicapped individualwho was unlawfully excluded fromthe production

laborer position because of his disability, and awarded him retroactive seniority and back pay.

The DeputyAssistant SecretaryforEmployment Standards upheld the ALJ'sfinding that PPG

violated § 503 and its implementing regulations in a Final Decision of January 9, 1989. The Deputy

Assistant Secretaryalso rebuffed PPG's argument concerning the waiver regulation, noting that it had

been rejected in a prior agency adjudication, OFCCP v. Western Elec. Co., 80-OFCCP-29 (April 24,

1985). He remanded the proceeding to the ALJ so that the back pay calculations could be brought

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up to date, and ordered that Thompson be awarded retroactive seniority within sixty days upon

penalty of contract cancellation and debarment.

PPG sought review of the Department's decision in district court under the APA, requesting,

inter alia, a declaration that the waiver regulation upon which OFCCP relied in asserting jurisdiction

wasinvalid. While the parties' cross-motions for summary judgment were pending, PPG advised the

court of the decision of a district judge in another case, Washington Metro. Area Transit Auth. v.

DeArment, 55 Empl. Prac. Dec. ¶ 40,507 (D.D.C. Jan. 3, 1991) (WMATA), holding that the waiver

regulation impermissibly extended the original statute's coverage beyond those employees hired to

"carryout" the federal contract. Id. at 65,560. Some months laterapparently after determining that

it would not appeal the WMATA decisionthe Department of Labor filed a motion for remand in the

PPG case, to allow OFCCP the opportunity to establish proof, following WMATA, that Thompson

would have worked on a covered federal contract or subcontract at Tipton.

The district court denied the motion for remand and granted PPG's motion for summary

judgment on the jurisdictional issue. Relying on the reasoning in WMATA, the court concluded that

the Department lacked jurisdiction over PPG in the Thompson case and enjoined the agency from

enforcing its Final Decision. The court declared that remand would be "inappropriate,"

"counterproductive," and "unfair to PPG," as "the evidence indicates that OFCCP did try to develop

the issue of jurisdiction" in the agency proceeding. The Department of Labor appealed.

II.

The sole issue raised by the Department on appeal is whether the district court erred in

denying the Department's motion for remand after concluding that the Department's decision rested

on an incorrect legal standard. When a final agency action is challenged under the APA in district

court, if the relevant substantive statute does not provide for direct review in the court of appeals,

the district court does not perform its normal role. Instead, it "sits as an appellate tribunal, not as a

court authorized to determine in a trial-type proceeding whether the [agency's decision] wasfactually

flawed." Marshall County Health Care Auth. v. Shalala, 988 F.2d 1221, 1225 (D.C. Cir. 1993).

For the district court in this case, just as for us, "[t]he entire case on review is a question of law, and

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only a question of law." Id. at 1226.

Under settled principles of administrative law, when a court reviewing agency action

determines that an agency made an error of law, the court's inquiry is at an end: the case must be

remanded to the agency for further action consistent with the corrected legal standards. SEC v.

Chenery Corp., 318 U.S. 80, 94-95 (1943); see South Prairie Constr. Co. v. Int'l Union of

Operating Eng'rs, 425 U.S. 800, 806 (1976); Federal Power Comm'n v. Idaho Power Co., 344 U.S.

17, 20 (1952); Global Van Lines, Inc. v. ICC, 804 F.2d 1293, 1305 n.95 (D.C. Cir. 1986) ("We

agree with the Commission that when an agency committing an error of law has discretion to

determine in the first instance how it should be rectified, the proper course is to remand the case for

further agency consideration in harmony with the court's holding.") (citing cases ); Ommaya v.

National Institutes of Health, 726 F.2d 827, 830 (D.C. Cir. 1984) (remanding after determining that

the MSPB applied erroneous evidentiary standard: "[i]f MSPB relied on incorrect legal grounds, it

would be error for this court to enforce without first remanding for agency examination of the

evidence and proper fact-finding." (quoting White v. United States Dept. of Army, 720 F.2d 209, 210

(D.C. Cir. 1983))).

PPG argues, however, that the Solicitor ofLabor (representing OFCCP before the Secretary)

"waived" his opportunity to establish jurisdiction over the Tipton plant through introduction of

evidence as to the actual work performed there. Having relied on the regulation to establish

jurisdiction, the Solicitor cannot seek to make out jurisdiction through new evidence. To permit him

to do so would be "unfair" to PPG.

But there is no principle of administrative law that restricts an agency from reopening

proceedings to take new evidence after the grounds upon which it relied are determined by a

reviewing court to be invalid. Indeed, the Supreme Court has specifically indicated that a reopening

is one of the courses an agency may follow after a reviewing court has determined that the agency's

initial determination included an error of law. In NLRB v. Food Store Employees Union, 417 U.S.

1, 10-11 (1974), the Court reversed (this court) with instructions to remand to the Board so as to

permit the Board to take "additional evidence ... to reframe its order." 417 U.S. at 10. Similarly, in

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Fly v. Heitmeyer, 309 U.S. 146, 148 (1940), the Court dissolved a writ of mandamus issued by this

court directing the FCC to restrict consideration of a license application on remand to the record

originally before it. The Court noted that "the Commission's duty was to apply the statutory standard

in deciding which of the applicants was to receive a permit after it fell into legal error as well as

before," and concluded that "[i]f, in the Commission's judgment, new evidence was necessary to

discharge its duty, the fact of a previously erroneous denial should not ... bar it from access to the

necessary evidence for correct judgment." See also Havas v. Bowen, 804 F.2d 783, 785, 787 (2d Cir.

1986) (remanding where agency'slegal error had foreclosed development of the record on secondary

issue); Tackett v. Benefits Review Bd., 806 F.2d 640, 642 (6th Cir. 1986) (same).

Whether it is "unfair" in this case to permit OFCCP (or the Solicitor's lawyers) to reopen

proceedings against PPG after all this time has passed is an issue to be decided first by the

Secretaryand to be brought to the district court, if at all, only on review under the APA. Cf. FCC

v. Pottsville Broadcasting Co., 309 U.S. 134, 146 (1940) ("It is ... urged upon us that if all matters

of administrative discretion remain open for determination on remand after reversal, a succession of

single determinations upon single legal issues is possible with resulting delay and hardship to the

applicant ... But courts are not charged with general guardianship against all potential mischiefin the

complicated tasks of government."). Thus, the district court had no warrant to decide the "fairness"

question before it had even been presented to the Secretary.

* * * *

Accordingly, we reverse the decision of the district court and remand with instructions to

remand to the Department of Labor for further proceedings.

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