Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-06-05262/USCOURTS-caDC-06-05262-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 24, 2007 Decided December 11, 2007

No. 06-5261

JOHN W. MUNSELL, ET AL.,

APPELLANTS/CROSS-APPELLEES

v.

DEPARTMENT OF AGRICULTURE, ET AL.,

APPELLEES/CROSS-APPELLANTS

Consolidated with

06-5262

Appeals from the United States District Court

for the District of Columbia

(No. 04cv01745)

Thad M. Guyer argued the cause and filed the briefs for

appellants/cross-appellees. Joanne Royce entered an

appearance.

Alisa B. Klein, Attorney, U.S. Department of Justice, argued

the cause for appellees/cross-appellants. With her on the briefs

were Peter D. Keisler, Assistant Attorney General, Jeffrey A.

Taylor, U.S. Attorney, Jonathan F. Cohn, Deputy Assistant

Attorney General, and Mark B. Stern, Attorney.

USCA Case #06-5262 Document #1085554 Filed: 12/11/2007 Page 1 of 36
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Before: GINSBURG, Chief Judge, GARLAND, Circuit Judge,

and EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

EDWARDS.

EDWARDS, Senior Circuit Judge: In October 2004,

appellants, Montana Quality Foods and Processing, Inc. and its

president John W. Munsell (“Munsell/MQF”), filed a lawsuit in

District Court against the Department of Agriculture (“USDA”),

the Secretary of Agriculture in his official capacity, and

Nathaniel Clark, who was then the District Office Manager of

USDA’s Food Safety and Inspection Service (“FSIS”) in

Minneapolis, Minnesota, in his personal capacity.

Munsell/MQF claimed that FSIS officials used USDA

enforcement powers to retaliate against Munsell for statements

he made concerning USDA’s handling of an E. coli outbreak in

2002. In August 2005, appellants filed an amended complaint,

adding as a plaintiff the American Association of Meat

Processors (“AAMP”), a trade association representing small

meat processors that are subject to USDA inspection and

oversight. Munsell/MQF, on their own behalf, and AAMP, on

behalf of its association members, each sought declaratory and

injunctive relief, presumably under the Administrative

Procedure Act (“APA”), challenging a USDA enforcement

Directive and seeking protection from future acts of retaliation

by FSIS officials. Munsell/MQF also sought a money damages

remedy under Bivens v. Six Unknown Named Agents of Federal

Bureau of Narcotics, 403 U.S. 388 (1971), on the grounds that

Munsell’s First Amendment rights were violated when agency

officials retaliated against him. 

In 2005, during the course of the litigation in the District

Court, Munsell sold all of MQF’s meat processing facilities,

thereby eliminating all of MQF’s business operations that were

subject to USDA regulation and oversight. The Government

filed a motion to dismiss, challenging appellants’ standing,

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claiming that the action by Munsell/MQF was moot, and

asserting that the entire action should be dismissed because

appellants had failed to exhaust their administrative remedies.

The District Court declined to rule on standing and mootness

and instead granted the motion to dismiss on exhaustion

grounds. The District Court first held that the governing

statutory exhaustion requirement under 7 U.S.C. § 6912(e) is

jurisdictional. The District Court then determined that

appellants had failed to exhaust the applicable administrative

appeal procedure prescribed by 9 C.F.R. § 306.5, concluded that

the court lacked subject matter jurisdiction, and dismissed all of

appellants’ APA claims. The District Court also found that

Munsell/MQF’s Bivens action was barred due to their failure to

exhaust administrative remedies. Munsell. v. Sec’y of Agric.,

435 F. Supp. 2d 149 (D.D.C. 2006). Munsell/MQF and AAMP

appealed the District Court’s dismissal, and the Government

parties cross-appealed on standing and mootness. Guided by the

Supreme Court’s decision in Arbaugh v. Y&H Corp., 546 U.S.

500 (2006), and other relevant precedent, we hold that 7 U.S.C.

§ 6912(e) does not impose a jurisdictional exhaustion

requirement. We therefore conclude that the District Court erred

in holding that plaintiffs’ failure to exhaust their administrative

remedies deprived the court of subject matter jurisdiction. 

We affirm the judgment in favor of appellees on different

grounds, however. First, we affirm the dismissal of

Munsell/MQF’s claims for injunctive and declaratory relief on

standing and mootness grounds. Second, we affirm the

dismissal of Munsell/MQF’s Bivens action, because, even

assuming that such an action might lie against USDA officials,

Munsell/MQF failed to exhaust their administrative remedies

before seeking judicial relief on their constitutional claims.

Third, we dismiss for want of standing AAMP’s action seeking

protection for its members from future acts of retaliation by

USDA, and dismiss AAMP’s claims on behalf of Munsell/MQF

as moot. Finally, although we find that the action filed by

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AAMP challenging USDA’s enforcement Directive on behalf of

its members is not moot and it does not fail for want of standing

or exhaustion, we affirm the dismissal of AAMP’s action for

injunctive and declaratory relief because it is unripe for judicial

review. 

I. BACKGROUND

Congress enacted the Federal Meat Inspection Act in 1907

in response to unsanitary conditions in the nation’s meat packing

industry. The purpose of the Act is to assure that meat and meat

food products are “wholesome, not adulterated, and properly

marked, labeled, and packaged.” 21 U.S.C. § 602. The Act

directs USDA to inspect the sanitary conditions of meat

processing plants and to “prescribe the rules and regulations of

sanitation under which these establishments [are] maintained.”

Id. § 608. The Act grants the Secretary authority to “make such

rules and regulations as are necessary for the efficient

execution” of the Act. Id. § 621.

In 1996, USDA’s FSIS issued a final rule requiring all meat

processing plants to develop and implement controls to address

food safety hazards that are likely to occur in their operation.

See 61 Fed. Reg. 38,806 (July 25, 1996). This regulation is

known as Hazard Analysis and Critical Control Point

(“HACCP”). See 9 C.F.R. pt. 417. Under HACCP, plants are

given considerable flexibility to design plans that achieve the

ends of preventing food safety hazards. See id. § 417.2. FSIS

inspectors evaluate plants’ hazard prevention through direct

observation and testing, and by examining plants’ records. See

id. § 417.8. 

There are a range of enforcement actions that FSIS may

take, including withholding the mark of inspection from meat

products or suspending the assignment of inspectors to a plant.

See 9 C.F.R. pt. 500. Without USDA approval, a meat

processing plant is effectively expelled from the marketplace.

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These enforcement actions can be financially ruinous, especially

for smaller firms. 

FSIS actions regulating meat processors may be appealed

administratively. Id. §§ 500.5(c)-(e). Enforcement actions that

are not held “in abeyance” can be appealed through a formal

hearing process. Id. § 500.5(d). However, when an enforcement

action is held in abeyance, administrative appeals must be made

to the “immediate supervisor” of the official making the

enforcement determination. Id. §§ 306.5, 500.5(c).

Munsell’s family first started operating a meat processing

plant in Montana in 1946. Am. Compl. ¶ 14, Joint Appendix

(“JA”) 19. During the time frame relevant to this case, the

processing plant was incorporated in the name of MQF, with

Munsell as MQF’s chief executive officer and owner. MQF’s

meat processing business typically bought ten-pound lots of

coarse ground beef (“chubs”) from larger meat suppliers and

further processed the beef for sale to individual consumers. Id.

¶ 15, JA 19. The plant was subject to inspection and regulation

by USDA under the Federal Meat Inspection Act. 

For a time preceding the events leading to this litigation,

Munsell had been displeased with USDA’s oversight of MQF’s

meat processing operation. In September 2001, he urged agency

officials to adopt two procedural changes that he believed would

protect small meat processors from economic harm resulting

from contamination at large meat facilities. In particular,

Munsell suggested the segregation of large plant meat products

and the creation of a record of source beef to facilitate the

traceback of adulterated meat to contamination in large plants.

Id. ¶ 30, JA 24. FSIS officials declined to adopt Munsell’s

recommendations.

Roughly five months later, on January 28, 2002, FSIS

alerted Munsell that a ground beef sample taken from MQF’s

facilities five days prior tested positive for E. coli

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contamination. Id. ¶ 21, JA 21. Munsell voluntarily agreed to

recall 270 pounds of ground beef he had provided to customers.

Id. MQF was also required to reassess its HACCP and submit

to 15 days of sampling of its products. Id. ¶ 22, JA 21-22.

Two days later, Munsell asked FSIS officials to test

unopened chubs of beef that MQF had on hand from the two

firms that had supplied the coarse ground beef that had tested

positive for E. coli on January 28. But FSIS officials declined

to test the unopened chubs of beef. Id. ¶ 25, JA 22. Based on

his fear that a large supplier was distributing contaminated beef,

Munsell began segregating his meat by supplier, to more readily

facilitate traceback to identify the source of any new

contamination. Id. ¶ 26, JA 22-23. Shortly thereafter, Munsell

complained to Nathaniel Clark, the District Office Manager of

the Minneapolis office of the FSIS, about how FSIS was

handling the E. coli outbreak, and reiterated his belief that

procedures needed to be put in place to traceback contaminated

meat found at small processors. An FSIS official continued

taking samples of MQF’s meat between February 19 and 21,

2002, and again found E. coli contamination. Based on his

earlier segregation of meat by supplier, Munsell determined that

the source of the contamination was a large supplier, ConAgra.

Id. ¶ 26, JA 23. The next day Munsell requested FSIS officials

to test an unopened chub – before it passed through MQF’s

facility – to confirm that ConAgra was the source of the

contamination. FSIS officials refused. Id. ¶ 27, JA 23. 

During the month of February 2002, Munsell also

communicated with congressional officials concerning his own

plant and his fears of an E. coli threat at a large meat processor.

On February 7 and 8, Munsell contacted the offices of Senator

Max Baucus and Congressman Denny Rehberg of Montana to

express his concerns. Id. ¶ 31, JA 24. On February 8, Senator

Baucus and Congressman Rehberg sent a letter to Nathaniel

Clark, expressing Munsell’s concerns and suggesting that Clark

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hold a meeting with Munsell in order to address them. Letter

from Senator Max Baucus and Congressman Denny Rehberg to

Dr. Nathaniel Clark, District Manager, FSIS (Feb. 8, 2002), JA

201-02. On February 25, Munsell informed congressional staff

that he could verify that the E. coli contamination found at MQF

was brought into his plant from a large supplier. He expressed

concern that large amounts of unprocessed beef could be

distributed across the country, potentially leading to consumer

illness and death. Am. Compl. ¶ 32, JA 25. 

Munsell alleges that FSIS inspectors then took retaliatory

action against him. Clark contacted Munsell on February 26,

2002, to notify him that FSIS planned to suspend inspection of

MQF’s facilities. Id. ¶ 40, JA 27. The next day FSIS issued a

formal Notice of Intended Enforcement to Munsell. Id. On

March 5, 2002, an FSIS official notified Munsell that his

proposed corrective action of insisting that large plant suppliers

provide MQF with “certification for pathogen free beef” had

been rejected, and that the FSIS had decided to move forward

with the enforcement action. Id.

On March 8, 2002, facing the prospect of having FSIS

inspection suspended, Munsell proposed a regime of sampling

and laboratory analysis of incoming beef. On March 12, 2002,

with this costly measure in place, Clark informed Munsell that

FSIS would hold MQF’s suspension in abeyance – meaning that

inspections would continue to be carried out. Id. ¶ 41, JA 27-28.

With the suspension in abeyance, however, the formal hearing

appeals process described in 9 C.F.R. § 500.5(d) was foreclosed.

Between February 26 and July 1, 2002, FSIS required MQF

to rewrite its HACCP plan on at least ten separate occasions.

Am. Compl. ¶ 43, JA 28. Munsell alleges that these demands

for revised plans sometimes came from the agency without

explanations, that FSIS rejected revised plans that MQF had

drawn verbatim from the guidance of USDA officials, and that

FSIS rejected plan revisions that had previously been approved.

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Id. Eventually, MQF was forced to hire expert consultants to

usher the HACCP process to conclusion and approval. Id.

Munsell alleges that, from February 26 to July 3, 2002, due to

FSIS’s misconduct, MQF was unable to grind its own beef, i.e.,

beef not purchased as chubs from large plants.

While the HACCP rewrite process was underway, Munsell

continued to complain about FSIS’s actions towards him, as well

as the general way in which E. coli contamination was being

handled. On March 21, 2002, Montana congressional delegation

staff and Munsell held a conference call with FSIS Associate

Deputy Administrator for Field Operations William Smith to

seek resolution of Munsell’s concerns. Decl. of John W.

Munsell ¶ 23, JA 192. At that meeting, Munsell complained to

FSIS about its decisions to initiate enforcement actions against

MQF, reject MQF’s HACCP revisions, and require MQF to

conduct testing and analysis of incoming beef in order to have

the suspension of inspectors held in abeyance. Id. On May 3,

2002, Munsell met with FSIS management in Minneapolis to

complain of the actions taken against MQF. Id. ¶ 24, JA 192-93.

Munsell’s concerns about E. coli contamination at ConAgra

were borne out. On June 30, 2002, ConAgra announced a recall

of 350,000 pounds of contaminated beef. Am. Compl. ¶ 37, JA

26. Munsell’s conflict with USDA was not over, however. The

next day he again communicated to USDA staff his displeasure

with “USDA’s continuing rejection of my HACCP plan

revisions.” Decl. of John W. Munsell ¶ 25, JA 193.

Notwithstanding a letter dated July 22, 2002, in which Smith

stated to members of Congress that “the concerns raised by Mr.

Munsell have been satisfactorily addressed,” id. ¶ 26, JA 193,

Munsell continued to press his complaints, emailing FSIS

officials in October 2002 and lobbying Senator Conrad Burns to

hold congressional hearings on his concerns. Id. ¶ 27-28, JA

194.

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On March 31, 2004, FSIS revised Directive 10,010.1, which

governs how FSIS officials handle E. coli sampling. FSIS

Directive, 10,010.1 Revision 1 (Mar. 31, 2004), JA 156-83. On

October 13, 2004, Munsell and MQF filed suit in the District

Court. AAMP was later added as a plaintiff. All appellants

sought injunctive and declaratory relief against USDA under the

APA. In addition, Munsell and MQF sought damages against an

individual FSIS officer, District Manager Clark, under a Bivens

theory of liability. 

After initiation of this suit, Munsell divested MQF of its

meat processing facility, and Munsell/MQF were no longer

subject to USDA regulation and oversight. Decl. of Cheryl A.

Hicks, ¶ 12, JA 42; Application for Federal Meat, Poultry, or

Import Inspection (Aug. 1, 2005) (change of ownership), JA 49-

50; Email from John Munsell to Wendy Wirth (July 15, 2005)

(authorizing reassignment of MQF’s USDA establishment

number to new owners), JA 52; Grant of Inspection (Aug. 1,

2005) (updating FSIS grant of inspection to reflect change of

owner), JA 54.

II. ANALYSIS

A. Standard of Review

This court reviews de novo the District Court’s dismissal of

a complaint for lack of subject matter jurisdiction. Nat’l

Taxpayers Union, Inc. v. United States, 68 F.3d 1428, 1432

(D.C. Cir. 1995). The District Court’s determination that 7

U.S.C. § 6912(e) creates an exhaustion requirement is

indisputably a question of law that will be reviewed de novo.

Because we hold that Munsell/MQF’s and AAMP’s APA

actions are not properly before this court, and that

Munsell/MQF’s Bivens action lacks an essential element, there

is no need to apply the abuse of discretion standard to the

District Court’s findings regarding appellants’ exhaustion of

administrative remedies. See Avocados Plus Inc. v. Veneman,

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370 F.3d 1243, 1250 (D.C. Cir. 2004) (stating that the court

“review[s] non-jurisdictional exhaustion decisions for abuse of

discretion”). 

B. Exhaustion and Subject Matter Jurisdiction

The District Court dismissed appellants’ claims for lack of

subject matter jurisdiction, holding that the exhaustion

requirement of 7 U.S.C. § 6912(e) is jurisdictional, and that

appellants had failed to exhaust their administrative remedies.

We first review de novo the question of whether § 6912(e)

creates a jurisdictional requirement.

FSIS actions are indisputably subject to review under the

APA. 5 U.S.C. §§ 702, 704; see, e.g., Am. Fed’n of Gov’t

Employees, AFL-CIO v. Veneman, 284 F.3d 125 (D.C. Cir.

2002). Although neither Munsell/MQF nor AAMP specifically

invoked the APA in their filings before the District Court or this

court, the Government recognizes that appellants’ actions for

declaratory and injunctive relief rested on the APA. Br. for

Appellees at 7. “When an aggrieved party [seeking judicial

review under the APA] has exhausted all administrative

remedies expressly prescribed by statute or agency rule, the

agency action is final . . . and therefore subject to judicial

review.” Darby v. Cisneros, 509 U.S. 137, 146 (1993) (internal

quotation marks omitted). The question here is whether

Congress’ enactment of 7 U.S.C. § 6912(e) imposes a

jurisdictional or nonjurisdictional prerequisite to

Munsell/MQF’s and AAMP’s actions and, in either event,

whether appellants satisfied the prescribed exhaustion

requirements.

In 1994, Congress enacted the Federal Crop Insurance

Reform and Department of Agriculture Reorganization Act of

1994 (“1994 Reorganization Act”), Pub. L. No. 103-354, 108

Stat. 3178 (1994). Section 212(e) of the 1994 Reorganization

Act – codified at 7 U.S.C. § 6912(e) – states:

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Notwithstanding any other provision of law, a person shall

exhaust all administrative appeal procedures established by

the Secretary or required by law before the person may

bring an action in a court of competent jurisdiction against–

(1) the Secretary;

(2) the Department; or

(3) an agency, office, officer, or employee of the

Department.

The District Court construed this provision to impose a

jurisdictional prerequisite to judicial review and then ruled that

it lacked subject matter jurisdiction over appellants’ actions

because they had failed to exhaust their administrative appeals

under 9 C.F.R. § 306.5 before filing suit. The District Court

erred in reaching this result.

First, we note that the appeals procedures prescribed by 9

C.F.R. § 306.5 relate solely to disputes over enforcement

actions, not to disputes of the sort emanating from AAMP’s

challenge to USDA regulatory policies. The Government cites

no “appeal procedures established by the Secretary” to address

AAMP’s action for declaratory and injunctive relief on behalf of

its members. Therefore, AAMP is not subject to the strictures

of 7 U.S.C. § 6912(e) and its action should not have been

dismissed on exhaustion grounds. 

The actions filed by Munsell/MQF must be viewed through

a different lens, however, because it is clear that many of their

claims relate to USDA enforcement actions taken against the

company. In other words, there is no doubt that Munsell/MQF

were bound by 7 U.S.C. § 6912(e) and therefore subject to the

administrative appeals requirement under 9 C.F.R. § 306.5. The

only question is whether the statute imposes a jurisdictional

requirement which determines subject matter jurisdiction. This

is an important question, because a mandatory exhaustion

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requirement may be excused in appropriate circumstances,

whereas a jurisdictional exhaustion requirement never may be

excused by a court. See, e.g., Woodford v. Ngo, 126 S. Ct. 2378,

2392 (2006) (holding that the Prison Litigation Reform Act

(“PLRA”) “exhaustion requirement is not jurisdictional”); id. at

2393 (Breyer, J., concurring in the judgment) (explaining that

in nonjurisdictional exhaustion cases, the rules of administrative

law contain “well established exceptions” to mandatory

exhaustion requirements). We need not decide whether the

“well established exemptions” to nonjurisdictional exhaustion

requirements, id., apply to § 6912(e), because we hold that

Munsell/MQF’s claims for declaratory and injunctive relief fail

on other grounds. 

The Supreme Court has noted that courts sometimes

“confuse[] or conflate[]” two distinct concepts: “federal-court

‘subject matter’ jurisdiction over a controversy” and the

“essential ingredients of a federal claim for relief.” Arbaugh,

546 U.S. at 503. The jurisdiction of the federal courts is limited

by the Constitution and statutes of Congress. U.S. CONST. art.

III, §§ 1, 2. A federal court must have not only jurisdiction over

a live controversy between parties who are properly before the

court, but the case must concern a “subject matter” with respect

to which a federal court is competent to rule. See Arbaugh, 546

U.S. at 506. While Congress has the power to describe and

circumscribe the jurisdiction of the federal courts, not every

threshold requirement is jurisdictional. In other words, not

every statutorily prescribed “ingredient-of-claim-for-relief”

reflects a requirement of “subject-matter jurisdiction.” Id. at

511. Thus, where congressional statutes create explicit

threshold requirements, courts must determine whether those

requirements are jurisdictional or merely elements of the

underlying claim. “If the Legislature clearly states that a

threshold limitation on a statute’s scope shall count as

jurisdictional, then courts and litigants will be duly instructed

and will not be left to wrestle with the issue.” Id. at 515-16

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(footnote omitted). “But when Congress does not rank a

statutory limitation on coverage as jurisdictional, courts should

treat the restriction as nonjurisdictional in character.” Id.

In the case of the 1994 Reorganization Act, Congress

created a threshold requirement that plaintiffs exhaust

administrative remedies before bringing an action in court.

There is no doubt that this statutory requirement is mandatory,

but there is also nothing to indicate that Congress meant to make

the requirement jurisdictional. Under established precedent, we

must assume that an exhaustion requirement is nonjurisdictional

unless we find “sweeping and direct statutory language

indicating that there is no federal jurisdiction prior to

exhaustion.” Avocados Plus, 370 F.3d at 1248 (internal

quotation marks and citations omitted). Absent a clear direction

from Congress, “the exhaustion requirement is treated as an

element of the underlying claim.” Id.

For several reasons, we hold that the exhaustion

requirement in the 1994 Reorganization Act is nonjurisdictional.

First, it is noteworthy that the language of 7 U.S.C. § 6912(e)

is very similar to the statutory exhaustion requirement under the

PLRA. The relevant provision of the PLRA provides:

(a) Applicability of administrative remedies

No action shall be brought with respect to prison conditions

under section 1983 of this title, or any other Federal law, by

a prisoner confined in any jail, prison, or other correctional

facility until such administrative remedies as are available

are exhausted. 

42 U.S.C. § 1997e(a). As noted above, the Supreme Court

found this provision to be nonjurisdictional. See Ngo, 126 S. Ct.

at 2392. This court did so as well before the Supreme Court

issued its decision in Ngo, noting that the PLRA exhaustion

requirement did “not contain the type of sweeping and direct

language that would indicate a jurisdictional bar rather than a

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mere codification of administrative exhaustion requirements.”

Ali v. District of Columbia, 278 F.3d 1, 5-6 (D.C. Cir. 2002)

(internal quotation marks and citation omitted). We view these

precedents as compelling in our assessment of 7 U.S.C.

§ 6912(e). 

Second, we also find it noteworthy that every other circuit

that has directly considered whether the 1994 Reorganization

Act creates a jurisdictional exhaustion provision has found that

7 U.S.C. § 6912(e) is nonjurisdictional. See Dawson Farms,

LLC v. Farm Serv. Agency, __ F.3d __, 2007 WL 2998636 (5th

Cir. Oct. 16, 2007); Ace Prop. & Cas. Ins. Co. v. Fed. Crop Ins.

Corp., 440 F.3d 992 (8th Cir. 2006); McBride Cotton & Cattle

Corp. v. Veneman, 290 F.3d 973 (9th Cir. 2002). We see no

reason to part ways with our sister circuits.

The District Court relied primarily on a Second Circuit

decision in Bastek v. Federal Crop Insurance Corp., 145 F.3d

90 (2d Cir. 1998), for authority that § 6912(e) creates a

jurisdictional requirement. Bastek, however, did not hold that

§ 6912(e) is jurisdictional. Rather, that decision merely held

that § 6912(e) was sufficiently explicit to make the exhaustion

requirement mandatory. Bastek, 145 F.3d at 94-95; see also Ace

Prop., 440 F.3d at 999. This is not the same as holding that the

provision is jurisdictional, because an exhaustion requirement

can be both mandatory and nonjurisdictional. See Ngo, 126

S. Ct. at 2392-93.

In sum, we find that the 1994 Reorganization Act did not

create a jurisdictional bar to judicial review of USDA actions.

Rather, § 6912(e) establishes a mandatory, but nonjurisdictional,

exhaustion requirement. There is no clear, sweeping, or direct

language within the 1994 Reorganization Act that would

indicate a congressional intent to create a jurisdictional limit on

the courts. Under Arbaugh and Avocados Plus, absent a clear

statement from Congress, exhaustion requirements will be found

to be nonjurisdictional. Accordingly, we reverse the decision of

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the District Court and hold that there is subject matter

jurisdiction over this case under 28 U.S.C. § 1331.

There still remains a question as to whether Munsell/MQF

exhausted their administrative appeals under 9 C.F.R. § 306.5

and thus satisfied the mandatory, nonjurisdictional requirement

of 7 U.S.C. § 6912(e). We need not tarry over this question,

however. Munsell/MQF had no standing to seek declaratory and

injunctive relief to ensure that FSIS officials would not use

USDA enforcement powers to retaliate against them in the

future. In other words, even if Munsell could establish that

agency officials violated his First Amendment rights by

retaliating against him in the past, neither he nor MQF

demonstrated a real and immediate threat that they would be

subject to the same conduct in the future. See City of Los

Angeles v. Lyons, 461 U.S. 95 (1983). And, as we explain

below, Munsell/MQF’s remaining actions for declaratory and

injunctive relief are moot. 

C. Mootness Resulting From MQF’s Divestment of its Meat

Processing Facility

“Simply stated, a case is moot when the issues presented are

no longer ‘live’ or the parties lack a legally cognizable interest

in the outcome.” County of Los Angeles v. Davis, 440 U.S. 625,

631 (1979) (quoting Powell v. McCormack, 395 U.S. 486, 496

(1969)). “[F]ederal courts are without power to decide questions

that cannot affect the rights of litigants in the case before them.

The inability of the federal judiciary to review moot cases

derives from the requirement of Art. III of the Constitution

under which the exercise of judicial power depends upon the

existence of a case or controversy.” DeFunis v. Odegaard, 416

U.S. 312, 316 (1974) (internal quotation marks and citations

omitted). This means that a controversy may become moot if a

regulated business challenges a government regulatory policy or

action and then terminates its operation during the pendency of

the litigation. Normally, once a regulated business has

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voluntarily removed itself from the ambit of government

oversight, it no longer has a legally cognizable interest in the

outcome of litigation that seeks to challenge a government

regulatory policy or action. This point was made clear by the

Supreme Court in City News & Novelty, Inc. v. City of

Waukesha, 531 U.S. 278 (2001). 

In City of Waukesha, the owner of an adult-oriented

establishment sought judicial review when the city denied its

license renewal application. During the pendency of the

litigation, the owner gave notice that it intended to withdraw its

licence renewal application and close its business. Citing City

of Erie v. Pap’s A. M., 529 U.S. 277 (2000), the owner argued

that the case should not be dismissed as moot, because the

terminated City News business might apply for a license in the

future. The Supreme Court ruled that the case was moot,

holding that a live controversy is not maintained by speculation

that claimant might reenter a business that it has left. In

reaching this result, the Court carefully limited the holding of

City of Erie:

In our view, Erie differs critically from this case. In Erie,

we similarly granted a petition to review a state-court

judgment addressing an adult business’ First Amendment

challenge to a city ordinance. We concluded that the

controversy persisted, even though the adult business had

shut down. We reached that conclusion, it is true, in part

because the business could again decide to operate. That

speculation standing alone, however, did not shield the case

from a mootness determination. Another factor figured

prominently. The nude dancing entrepreneur in Erie sought

to have the case declared moot after the business had

prevailed below, obtaining a judgment that invalidated

Erie’s ordinance. Had we accepted the entrepreneur’s plea,

then consistent with our practice when a case becomes moot

on review from a state court, we would have dismissed the

USCA Case #06-5262 Document #1085554 Filed: 12/11/2007 Page 16 of 36
17

petition, leaving intact the judgment below. Thus, had we

declared Erie moot, the defendant municipality would have

been saddled with an ongoing injury, i.e., the judgment

striking its law. And the plaintiff arguably would have

prevailed in an attempt to manipulate the Court’s

jurisdiction to insulate a favorable decision from review.

531 U.S. at 283-84 (internal citations and quotation marks

omitted). The decision in City of Waukesha strongly supports

the principle that a case on appeal normally is rendered moot

when the appellant closes its business and, as a result, no longer

has a cognizable interest in the outcome of the dispute. The City

of Erie exception applies only when the party who prevailed

below attempts to “manipulate the Court’s jurisdiction” to avoid

having its favorable judgment overturned on appeal. Id. at 284.

City of Waukesha guides the disposition of this case. In

August of 2005, while this case was still pending before the

District Court, Munsell divested MQF of its meat processing

operation. Decl. of John W. Munsell ¶ 2, JA 185. As a result,

Munsell/MQF are no longer subject to USDA oversight.

Munsell claims that he anticipates “re-enter[ing] a role in meat

processing subject directly to agency regulation.” Id. But

Munsell has offered no clear plans to reopen MQF as a regulated

entity. Rather, Munsell essentially claims that the retaliatory

actions taken by FSIS officials resulted in his exit from the meat

processing business and that a favorable ruling by this court

would allow him to return to the industry, and again become

subject to USDA oversight. He points out that he has

maintained MQF as a corporate entity in good standing, which,

he suggests, gives evidence of his desire to return to the meat

processing business. Id. These claims are insufficient to avoid

mootness.

A matter is moot if “events have so transpired that the

decision will neither presently affect the parties’ rights nor have

a more-than-speculative chance of affecting them in the future.”

USCA Case #06-5262 Document #1085554 Filed: 12/11/2007 Page 17 of 36
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21st Century Telesis Joint Venture v. FCC, 318 F.3d 192, 198

(D.C. Cir. 2003) (internal quotation marks omitted). As the

Court noted in City of Waukesha, speculation that a business

could again decide to operate, without more, “does not shield

the case from a mootness determination.” 531 U.S. at 283.

Because Munsell/MQF are not subject to USDA oversight, a

favorable ruling by this court on their APA claims will not affect

their rights. No order from this court is assured more than a

speculative chance of giving any relief to these appellants,

because Munsell has no definite plans to reopen MQF as a

regulated entity. 

Munsell/MQF point to the decision in Supreme Beef

Processors, Inc. v. USDA, 275 F.3d 432 (5th Cir. 2001), in

support of their argument that their action for declaratory and

injunctive relief is not moot. In Supreme Beef, the court held

that a meat processor’s action against USDA was not rendered

moot by its subsequent bankruptcy filing, because the business

retained a sufficient stake in the case to meet the case or

controversy threshold. Id. at 436-37. Appellants draw on the

obvious parallel to the facts of this case – in both instances, a

meat processing business failed, allegedly due to regulatory

misconduct. Nonetheless, Supreme Beef is easily distinguished

from the facts presented here. 

Supreme Beef Processors filed for Chapter 11 bankruptcy

during the pendency of its action against USDA. The agency

then moved to have the case dismissed on mootness grounds. In

response, the company “argued that it intended to resume

operations after reorganization and that the injunction [it sought]

. . . was critical to that reorganization.” Id. at 436. The Fifth

Circuit denied USDA’s motion to remand the case with

instructions to dismiss. Subsequently, the Bankruptcy Court

converted the case into a Chapter 7 liquidation. The company

asserted that it had “substantial assets and could emerge solvent

from the Chapter 7 liquidation proceedings.” Id. The Supreme

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Beef court held that “[t]he possibility that [appellant] may

continue to function as a meat processor even after its Chapter

7 proceeding satisfies Article III.” Id. at 436-37 (footnote

omitted).

The most salient distinction between Supreme Beef and the

current case is that the appellant in that case had not divested

itself of its meat processing facility. While it was possible – as

the court recognized – that “Supreme will not . . . emerge from

bankruptcy and [will] be dissolved, perhaps during the pendency

of any petition for panel rehearing, rehearing en banc, or writ of

certiorari before the U.S. Supreme Court,” id. at 437, that had

not happened when the court’s decision was rendered. As a

consequence, Supreme continued to have a legally cognizable

interest throughout the litigation. Here, Munsell/MQF are fully

divested of their meat processing facility and are no longer

subject to USDA oversight. The possibility of dissolution was

not sufficient to moot the case in Supreme Beef, but the reality

of divestment is sufficient here. Munsell/MQF’s actions for

declaratory and injunctive relief are thus moot.

D. AAMP’s Claims for Relief – Mootness, Standing, and

Ripeness

Although the actions filed by Munsell/MQF and AAMP

overlap in some respects, they raise different considerations for

the court. AAMP appears to press three distinct claims. First,

AAMP joins MQF in challenging the enforcement action taken

by USDA against MQF. Second, AAMP seeks protection from

future acts of retaliation by FSIS officials against its members.

Finally, AAMP seeks declaratory and injunctive relief in its

challenge to USDA’s regulations governing FSIS inspections of

small meat processors. The first claim is moot. The second

claim fails for want of standing. And the third claim is unripe

for judicial review.

USCA Case #06-5262 Document #1085554 Filed: 12/11/2007 Page 19 of 36
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Because MQF’s challenge to USDA’s enforcement actions

is moot, AAMP has no basis upon which to pursue this

challenge on behalf of MQF. An association has standing “only

if . . . at least one of its members would have standing to sue in

his own right.” GrassRoots Recycling Network, Inc. v. EPA, 429

F.3d 1109, 1111 (D.C. Cir. 2005) (internal quotation marks

omitted); see also Hunt v. Wash. State Apple Adver. Comm’n,

432 U.S. 333, 342-43 (1977). MQF is the only AAMP member

that has challenged specific USDA enforcement actions.

Therefore, it follows that if AAMP seeks to appear on behalf of

MQF to challenge the disputed agency enforcement actions and

MQF’s claims are moot, then AAMP’s claims are moot as well.

AAMP also seeks injunctive relief to ensure that FSIS

officials will not use USDA enforcement powers to retaliate

against its members in the future. AAMP complains that its

members are “concern[ed] that public criticism of the agency

can result in” adverse regulatory action. Decl. of Steve Krut,

Executive Director, AAMP ¶ 3, JA 209. AAMP offers nothing

more than sheer speculation to support the suggestion that its

members will be retaliated against by agency officials in the

future. In sum, appellants’ complaint and accompanying

affidavits do not come close to demonstrating that AAMP

members face “real and immediate threat[s]” of harm, sufficient

to establish the association’s standing to pursue this claim.

Lyons, 461 U.S. at 105. 

Finally, AAMP challenges USDA’s enforcement policies

under FSIS Directive 10,010.1, Revision 1 (Mar. 21, 2004). In

particular, the Amended Complaint seeks, inter alia, to enjoin

any USDA enforcement action based on a determination that a

meat processor’s HACCP plan is inadequate if “said finding is

based in whole or in part on the small plant’s failure to sample

or test for E. coli at its expense incoming beef products already

bearing USDA approval, or to otherwise obtain certification of

non-adulteration from the supplying large plant beyond USDA’s

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21

approval mark on the beef products supplied,” Am. Compl.

¶ 60.1, JA 33; to enjoin USDA “from placing any prohibition on

USDA inspectors against sampling for E. coli in beef product

supplied by a large plant to a small plant,” id. ¶ 60.2, JA 33; and

to require USDA “to immediately perform a traceback to the

supplying large plant, and to implement appropriate and

effective corrective action against said large plant,” when it

obtains information “indicating that E. coli adulterated beef

product has been shipped by a large plant to [a small plant],” id.

¶ 60.3, JA 33. 

AAMP clearly has standing to pursue claims of this sort on

behalf of its members, many of whom are subject to USDA

oversight and governed by FSIS Directive 10,010.1. The

problem here is that AAMP has not raised a facial challenge to

any USDA regulation; nor has AAMP petitioned USDA to

engage in rulemaking, as allowed by USDA regulations, either

to promulgate new rules or to modify FSIS Directive 10,010.1.

See 7 C.F.R. § 1.28 (making it clear that any interested persons

may petition pursuant to 5 U.S.C. § 553(e) for the issuance,

amendment, or repeal of USDA rules). When asked about this

during oral argument, appellants’ counsel advised the court that

AAMP’s action seeks only to advance an “as applied” challenge

to the Directive. Recording of Oral Argument at 13:50-14:12.

This is hard to fathom, because AAMP points to no USDA

enforcement action against any of its members, except MQF,

and MQF’s challenge is moot. On this record, we are

constrained to find that AAMP’s claims are not ripe for judicial

review.

 The Revised FSIS Directive 10,010.1 appears to reflect

USDA’s final statement of rules governing FSIS’s

“Microbiological Testing Program and Other Verifications

Activities for Escherichia coli 0157:H7 in Raw Ground Beef

Products and Raw Ground Beef Components and Beef Patty

Components.” See FSIS Directive, 10,010.1 Revision 1 (Mar.

USCA Case #06-5262 Document #1085554 Filed: 12/11/2007 Page 21 of 36
22

31, 2004), JA 156-83. The Directive provides FSIS inspection

personnel and program investigators with instructions for

selecting, collecting, and submitting raw ground beef samples to

be tested. It also outlines actions FSIS will take when a raw

ground beef product sample is found to be positive for E. coli,

and it answers questions relating to the reporting of results and

actions taken by the agency. Id. There is no doubt that the

Directive purports to set standards for enforcement actions by

FSIS officials. And there is also no doubt that these

enforcement actions have a direct effect on AAMP members

who are engaged in the processing of ground beef. 

It is not altogether clear whether Revised FSIS Directive

10,010.1 reflects a final agency rule that is subject to judicial

review, see Bennett v. Spear, 520 U.S. 154, 177-78 (1997), or a

nonreviewable policy statement, see Ctr. for Auto Safety v. Nat’l

Highway Traffic Safety Admin., 452 F.3d 798, 800 (D.C. Cir.

2006). See generally, EDWARDS & ELLIOTT, FEDERAL

STANDARDS OF REVIEW – REVIEW OF DISTRICT COURT

DECISIONS AND AGENCY ACTIONS 130-35 (2007) (“STANDARDS

OF REVIEW”). We need not address this question, for it is clear

here that, in either event, AAMP’s claims are not ripe for

review. 

Even when an agency has taken final action, a court may

refrain from reviewing a challenge to the action if the case

is unripe for review. Toilet Goods Ass’n v. Gardner, 387

U.S. 158 (1967). The ripeness inquiry springs from the

Article III case or controversy requirement that prohibits

courts from issuing advisory opinions on speculative

claims. See Reg’l Rail Reorganization Act Cases, 419 U.S.

102, 138 (1974). In other words, if a claim challenging

final agency action is not concrete, it may be unfit for

judicial review without regard to whether the complaining

party has standing to pursue the claim. Normally, no such

issue arises in cases in which an agency has taken direct

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23

enforcement action against a party. Rather, the ripeness

issue normally arises in cases in which a regulated party

faces the threat of future agency enforcement action. 

STANDARDS OF REVIEW at 119. 

In applying the ripeness doctrine, the courts look to “both

the fitness of the issues for judicial decision and the hardship to

the parties of withholding court consideration.” Abbott Labs. v.

Gardner, 387 U.S. 136, 149 (1967). In this case, AAMP’s

action challenging Revised FSIS Directive 10,010.1 is neither fit

for review, nor will the association face any hardship if the court

withholds review.

In Toilet Goods Ass’n v. Gardner, 387 U.S. 158 (1967), an

association of cosmetics manufacturers sought declaratory and

injunctive relief from an agency regulation that allowed agency

officials to immediately suspend a company’s government

certification if the agency determined that the manufacturer had

refused to permit duly authorized inspectors of the Food and

Drug Administration free access to all manufacturing facilities.

The Court found that there was “no question” that the disputed

regulation was final agency action under § 10 of the APA, 5

U.S.C. § 704. 387 U.S. at 162. It also found that the issue

presented “a purely legal question” of the type “that courts have

occasionally dealt with without requiring a specific attempt at

enforcement.” Id. at 163 (citations omitted). However, the

Court concluded that these facts were “outweighed by other

considerations,” including the fact that the regulation did no

more than “serve[] notice . . . that the [agency] may under

certain circumstances order inspection of certain facilities and

data and that further certification . . . may be refused to those

who decline to permit a duly authorized inspection.” Id. The

Court said that it had “no idea whether or when such an

inspection [would] be ordered and what reasons the [agency

might] give to justify [any such] order.” Id. The Court thus

dismissed the action as unripe for judicial review. The same

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24

considerations that caused the Court to find the disputed

regulation unfit for review in Toilet Goods apply as well in this

case.

Likewise, we find that AAMP will suffer no “hardship” if

judicial review is delayed. In explaining the hardship prong of

the ripeness doctrine, the Supreme Court has held that hardship

will not be found when a complaining party “is not required to

engage in, or to refrain from, any conduct.” Texas v. United

States, 523 U.S. 296, 301 (1998). The Court has also stated

“that mere uncertainty as to the validity of a legal rule [does not]

constitute[] a hardship for purposes of the ripeness analysis.”

Nat’l Park Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803,

811 (2003). There are no obvious adverse consequences that

will flow from requiring AAMP and its members to pursue

challenges to the Directive in the context of concrete

enforcement actions. In Toilet Goods, the Court noted that a

regulated party’s “refusal to admit an inspector [pursuant to the

disputed regulation] would at most lead only to a suspension of

certification services to the particular party, a determination that

can then be promptly challenged through an administrative

procedure, which in turn is reviewable by a court.” 387 U.S. at

165 (footnotes omitted). The same reasoning controls here. If

USDA seeks to take enforcement actions against any of

AAMP’s members in the future, those actions will be subject to

administrative appeals and judicial review. 

The simple point here is that “[w]e have no means to

evaluate in the abstract the myriad circumstances that” will arise

in connection with USDA enforcement actions taken pursuant

to Revised FSIS Directive 10,010.1. City of Houston v. HUD,

24 F.3d 1421, 1431 (D.C. Cir. 1994). Indeed, were this court to

assess the Directive now, “it would be required to conduct a

pseudo-rulemaking proceeding” by examining and weighing all

of the considerations that might lead USDA to pursue

enforcement actions in the future. Webb v. Dep’t of Health &

USCA Case #06-5262 Document #1085554 Filed: 12/11/2007 Page 24 of 36
25

Human Servs., 696 F.2d 101, 107 (D.C. Cir. 1982). Many of the

enforcement actions under the Directive are discretionary, so “it

is unclear if, when or how the agency will employ it.” Action

Alliance of Senior Citizens v. Heckler, 789 F.2d 931, 940 (D.C.

Cir. 1986), vacated on other grounds, 494 U.S. 1001 (1990).

Judicial review of the Directive “is likely to stand on a much

surer footing in the context of a specific application of this

regulation than could be the case in the framework of the

generalized challenge made here.” Toilet Goods, 387 U.S. at

164. We therefore dismiss AAMP’s APA action for declaratory

and injunctive relief as unripe. 

E. The Bivens Claim

In addition to their action seeking injunctive and declaratory

relief under the APA, Munsell/MQF also seek damages from

Nathaniel Clark, a USDA official who oversaw the disputed

enforcement actions against MQF. Appellants invite this court

to allow a Bivens cause of action in a case such as this, in which

it has been alleged that USDA officials pursued retaliatory

enforcement actions in order to chill constitutionally protected

speech. Appellants’ Br. at 26-30.

In Bivens v. Six Unknown Named Agents of Federal Bureau

of Narcotics, 403 U.S. 388 (1971), the Supreme Court held that

a violation of the Fourth Amendment “by a federal agent acting

under color of his authority gives rise to a cause of action for

damages consequent upon his unconstitutional conduct.” Id. at

389. In that case, agents of the Federal Bureau of Narcotics

entered into the petitioner’s home and arrested him without a

warrant or probable cause. The Bivens Court rejected the view

that state law causes of action – primarily based on privacy

rights – provided a sufficient remedy to protect petitioner’s

Fourth Amendment interests. Reasoning that Fourth

Amendment protections were not limited by state law, that

interests protected by state trespass and invasion of privacy laws

may be “inconsistent or even hostile” to those protected by the

USCA Case #06-5262 Document #1085554 Filed: 12/11/2007 Page 25 of 36
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Fourth Amendment, and that “damages have been regarded as

the ordinary remedy for an invasion of personal interests in

liberty,” the Court held that “petitioner is entitled to recover

money damages for any injuries he has suffered as a result of the

agents’ violation of the Amendment.” Id. at 390-97.

The Court subsequently applied Bivens in other contexts.

In Davis v. Passman, 442 U.S. 228 (1979), the Court found that

the Due Process Clause of the Fifth Amendment created a right

of action for damages where a woman had been dismissed from

her employment in the offices of a Congressman on the basis of

her sex. The Court reasoned that the Civil Rights Act, by

excluding legislative employees, did not evidence a

congressional intent to foreclose a constitutional damages

remedy. 442 U.S. at 247. And in Carlson v. Green, 446 U.S. 14

(1980), the Court found that the Eighth Amendment created a

cause of action against federal prison officials, complementary

to the remedy under the Federal Tort Claims Act against the

federal government. 446 U.S. at 19-23. And in Hartman v.

Moore, 547 U.S. 250 (2006), the Court found that federal

prosecutors and postal inspectors who use their powers to

retaliate against individuals for engaging in protected speech are

“subject to an action for damages on the authority of Bivens.”

547 U.S. at 256.

In Carlson, the Court established two exceptions to the

Bivens doctrine, stating

Bivens established that the victims of a constitutional

violation by a federal agent have a right to recover damages

against the official in federal court despite the absence of

any statute conferring such a right. Such a cause of action

may be defeated in a particular case, however, in two

situations. The first is when defendants demonstrate special

factors counselling hesitation in the absence of affirmative

action by Congress. The second is when defendants show

that Congress has provided an alternative remedy which it

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27

explicitly declared to be a substitute for recovery directly

under the Constitution and viewed as equally effective. 

446 U.S. at 18-19 (internal quotation marks and citations

omitted). Applying the criteria announced in Carlson, the Court

has found that Bivens actions are barred against federal officers

in several contexts. In each of these cases, the Court has found

that constitutional damages actions were inappropriate where a

sufficient alternative remedial structure already existed. 

In Bush v. Lucas, 462 U.S. 367 (1983), the Court

determined that there was no Bivens remedy for a federal

employee seeking recovery for First Amendment violations

alleged to have occurred in his workplace. The Court summed

up the Bivens inquiry as follows:

The federal courts’ statutory jurisdiction to decide federal

questions confers adequate power to award damages to the

victim of a constitutional violation. When Congress

provides an alternative remedy, it may, of course, indicate

its intent, by statutory language, by clear legislative history,

or perhaps even by the statutory remedy itself, that the

courts’ power should not be exercised. In the absence of

such a congressional directive, the federal courts must make

the kind of remedial determination that is appropriate for a

common-law tribunal, paying particular heed, however, to

any special factors counselling hesitation before authorizing

a new kind of federal litigation. 

462 U.S. at 378. After reviewing the “elaborate remedial system

that has been constructed step by step, with careful attention to

conflicting policy considerations,” id. at 388, designed to redress

complaints from federal employees, and weighing “the

respective costs and benefits that would result from the addition

of another remedy for violations of employees’ First

Amendment rights,” id., the Court declined “to create a new

substantive legal liability without legislative aid . . . because we

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28

are convinced that Congress is in a better position to decide

whether or not the public interest would be served by creating

it.” Id. at 390 (internal quotation marks omitted). 

Applying the standards announced in Passman and Bush v.

Lucas, the Court has found other administrative schemes

sufficient to obviate the need for a Bivens remedy. In

Schweiker v. Chilicky, 487 U.S. 412 (1988), the Supreme Court

held that the Social Security Act’s scheme of administrative and

judicial remedies was sufficient to eliminate the need for a

Bivens remedy. Considering Bivens claims on behalf of

members of the armed services, the Court has also held that “the

unique disciplinary structure of the Military Establishment”

constituted a special factor making a Bivens action

“inappropriate.” United States v. Stanley, 483 U.S. 669, 679

(1987).

Most recently, in Wilkie v. Robbins, 127 S. Ct. 2588 (2007),

the Supreme Court affirmed the “familiar sequence” for

determining whether to extend a Bivens remedy. 127 S. Ct. at

2598. First, the Court analyzed whether an “alternative, existing

process for protecting the interest amounts to a convincing

reason for the Judicial Branch to refrain from providing” a

Bivens remedy. Second, the Court made a “remedial

determination that is appropriate for a common-law tribunal,

paying particular heed . . . to any special factors counselling

hesitation.” Id. (internal quotation marks and citations omitted).

In Wilkie, petitioner claimed to have been the subject of a

multiyear campaign of harassment by government officials –

including trespass, unfavorable regulatory actions, and

interference in his business operations – carried out to force him

to grant an easement to his property. The Court found that

petitioner had “an administrative, and ultimately a judicial,

process for vindicating virtually all of his complaints.” Id. at

2600. The Court found, however, that this “patchwork” of state

and federal remedies – which included review under the APA –

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29

did not lead to an inference that “Congress expected the

Judiciary to stay its Bivens hand,” and, therefore, the Court

engaged in the common-law balancing inquiry. Id. 

In conducting this inquiry, the Court in Wilkie distinguished

the case in which a petitioner “describes the wrong . . . as

retaliation for standing on his right as a property owner to keep

the Government out,” from a case in which a petitioner claims

that “the Government may not retaliate [against him] for

exercising First Amendment speech rights.” Id. at 2601. The

decision notes that in a typical First Amendment retaliation case,

the “purpose and motivation” behind the Government’s conduct

is to chill speech – which is always impermissible. Id. On the

other hand, in a property rights case of the sort under review in

Wilkie, the Government was merely “trying to induce someone

to grant an easement for public use” which was “a perfectly

legitimate purpose.” Id. The petitioner did not challenge “the

object the Government [sought] to achieve.” Id. And, “for the

most part,” the petitioner did not claim that the “means the

Government used were necessarily illegitimate.” Id. Rather, the

Wilkie petitioner simply claimed that Government officials

“demanded too much and went too far.” Id. The Court

concluded that “the line-drawing difficulties [created by the

petitioner’s claims] are immediately apparent,” id., and

ultimately declined to allow an action under Bivens.

 It is not entirely clear what the result should be in a case of

this sort, involving a claim that FSIS officials used USDA

enforcement powers to retaliate against Munsell for statements

he made concerning USDA’s handling of an E. coli outbreak in

2002. The Government argues that the APA provides a

sufficient remedy for Munsell, and therefore no Bivens action is

needed. Br. for Appellees at 25-29. The APA does indeed

create a mechanism for persons subject to USDA enforcement

actions to pursue challenges based on alleged constitutional

violations. See 5 U.S.C. § 706(2)(B). In Nebraska Beef, Ltd. v.

USCA Case #06-5262 Document #1085554 Filed: 12/11/2007 Page 29 of 36
30

Greening, 398 F.3d 1080 (8th Cir. 2005), the court held that

APA review is thus a viable alternative sufficient to bar a Bivens

remedy against USDA enforcement officials. Observing that

“[t]he Supreme Court has been wary of extending Bivens

remedies into new contexts,” 398 F.3d at 1084, the Nebraska

Beef court held that, “[w]hen Congress has created a

comprehensive regulatory regime, the existence of a right to

judicial review under the APA is sufficient to preclude a Bivens

action.” Id. 

The Eighth Circuit decision in Nebraska Beef leaves some

weighty issues unanswered. The decision was rendered before

the Supreme Court issued Wilkie. This is noteworthy, because,

rather than apply the traditional common-law balancing inquiry

endorsed by Wilkie, Nebraska Beef applies the Eighth Circuit’s

“presumption against judicial recognition of direct actions for

violations of the Constitution by federal officials or employees.”

Id. (quoting McIntosh v. Turner, 861 F.2d 524, 526 (8th Cir.

1988)). In addition, the constitutional wrong that the plaintiff

sought to remedy in Nebraska Beef is unclear. We do not know

whether the alleged misconduct in Nebraska Beef was motivated

by a “legitimate purpose” as in Wilkie or involved a First

Amendment retaliation claim of the sort at issue in this case. Cf.

Hartman, 547 U.S. at 256. Finally, we are unaware of any

Supreme Court decision holding that APA review alone is

sufficient to eliminate the need for a Bivens remedy. 

The Government argues that, “[e]ven apart from the

mechanism that Congress has provided for reviewing

constitutional challenges to FSIS action, special factors would

preclude the creation of a damages remedy against the officials

charged with protecting the nation’s meat supply.” Br. for

Appellees at 29. The Government’s “special factors” argument

is not without force:

[T]he Federal Meat Inspection Act was passed after Upton

Sinclair’s book, THE JUNGLE, exposed the unsanitary

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conditions in the meat packing industry. A system of

federal inspection was created and the inspectors subjected

to strict regulation lest their corruption – or the appearance

of it – undermine the quality of meat or the public’s trust in

their supervision of meat quality. The Federal Meat

Inspection Act [“FMIA”] provided that the federal

inspectors shall have access to all parts of a plant at all

times, and included a broad anti-gratuity provision

forbidding officers or employees authorized to perform

duties under the FMIA from accepting gratuities.

Congress was thus at pains to shield the decisions of

federal food safety officials from improper influence by the

meat processing plants they regulate. The threat of a

damages action can influence an official’s conduct as much,

if not more, than the temptation of a gratuity, since such a

threat can be used by an unscrupulous plant to inhibit

aggressive regulation.

Where, as here, federal officials administer a

comprehensive federal regulatory regime in which

relationships between the regulator and the regulated are

frequently hostile and adversarial, it is for Congress to

decide whether the public interest would be furthered by a

cause of action requiring regulators to pay damages

personally unless they can convince a jury that their

conduct in aggressively regulating was not the product of an

unconstitutional motive. Congress’s failure to expose

federal food safety officials to personal liability cannot be

deemed inadvertent. Accordingly, a court may not imply

such a remedy . . . .

Br. for Appellees at 29-31 (internal citations and quotation

marks omitted).

Even assuming, arguendo, that the existence of APA review

might factor into a determination as to whether a Bivens remedy

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32

is available, its relevance would be minimal in a case involving

claimants who are ineligible for relief under the APA. Because

appellants such as Munsell/MQF are no longer subject to USDA

oversight, their claims under the APA are moot. The only viable

relief for appellants like Munsell/MQF, who allegedly have been

driven from business by the retaliatory actions of agency

officials, would be backward-looking damages claims.

Munsell/MQF allege that USDA officials engaged in a series of

enforcement actions with the purpose of harassing Munsell for

his constitutionally protected speech. Appellants argue that

these officials, animated by retributive animus, ultimately

succeeded in driving Munsell/MQF out of the meat processing

business. Thus, in a case of this sort, were the possibility of

APA review deemed sufficient to foreclose a Bivens remedy, the

very success of the unconstitutional conduct in removing

Munsell/MQF from the regulated arena would make APA

review unavailable and insulate the conduct entirely from

judicial review. That would make little sense. 

While appellees seem to imply that the Supreme Court has

abandoned Bivens, and that no situation merits its extension, this

is not a view that the majority of the Supreme Court has

accepted. While some Justices have expressed the view that

Bivens is a “relic,” Wilkie, 127 S. Ct. at 2608 (Thomas, J., joined

by Scalia, J., concurring) (internal quotation marks omitted), the

Court continues to use the “familiar” common-law balancing

test, paying special heed to “special factors counselling

hesitation.” Wilkie, 127 S. Ct. at 2598. Under that analysis,

while there are considerations here militating against a Bivens

action – including the § 6912(e) exhaustion requirement, and

the “special factors” cited by the Government – the fact that

companies may be driven from a regulated arena and then have

no recourse for alleged unconstitutional conduct of federal

officials weighs heavily as well.

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We need not now decide whether to extend the Bivens

remedy to the current case. Even assuming, arguendo, that

appellants might have a Bivens action, they have failed to

exhaust their administrative remedies on their constitutional

claims. Just as the PLRA exhaustion requirement applies to

Bivens actions against prison officials, see Porter v. Nussle, 534

U.S. 516, 524 (2002) (under PLRA, “federal prisoners suing

under [Bivens] must first exhaust inmate grievance procedures”),

7 U.S.C. § 6912(e)’s express language makes it clear that

judicial review is only available to appellants like Munsell/MQF

after all administrative remedies have been exhausted.

There is a strong rationale for requiring constitutional

claims against USDA to be raised first in the administrative

process, as mandated by § 6912(e). In Bivens actions, plaintiffs

typically claim that government officials have exceeded the

scope of their authority and, in doing so, violated rights

protected by the Constitution. Bringing such claims to the

agency in the first instance allows the agency to clarify its

position about the conduct of the accused official. Cf. Wilkie,

127 S. Ct. at 2601. In these fact intensive cases, an

administrative process will also create a record on which a

Bivens claim can be evaluated. Bringing the complaint directly

to the agency also may allow the agency to remedy the alleged

offending conduct and, at the least, avoid continuing

constitutional harm.

The administrative process in this case is not burdensome.

9 C.F.R. § 306.5 establishes an extremely straightforward

process for appealing the decisions of FSIS officials: “Any

appeal from a decision of any Program employee shall be made

to his/her immediate supervisor having jurisdiction over the

subject matter of the appeal . . . .” Munsell took advantage of

that process for his claims that the agency was acting

unreasonably by failing to require the traceback of contaminated

meat and placing an unjustified burden on small meat

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34

processors. He did not, however, raise his constitutional claims

while pursuing challenges to the enforcement action. It would

have been a simple matter for Munsell to do this, and it would

have given the agency an opportunity to “nip in the bud” any

unconstitutional conduct on the part of one of its officers. 

The fact that USDA’s administrative appeals process does

not allow for money damages does not create an exception to the

exhaustion requirement. See Booth v. Churner, 532 U.S. 731,

734 (2001). 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 for the alleged unconstitutional conduct – including

reprimanding the responsible official and barring similar future

conduct – the administrative process can serve its proper

function. 

Appellants did not submit – either in their complaint or in

the affidavits and arguments presented to the District Court, or

in their submissions to this court – that Munsell/MQF pressed

any constitutional challenge within the administrative appeals

process. Nor can the complaint and affidavits reasonably be

construed to indicate that it would have been futile for

Munsell/MQF to pursue their administrative appeals on their

constitutional claims. Therefore, even assuming that there might

be a cognizable Bivens action in a case of this sort – a matter

that we do not decide – appellants’ failure to exhaust their

administrative remedies is dispositive.

We recognize that appellants were not required to specially

plead or demonstrate exhaustion in their complaint. See Jones

v. Bock, 127 S. Ct. 910, 921 (2007) (holding that failure to

exhaust is an affirmative defense under the PLRA). In this case,

however, the matter of exhaustion under § 6912(e) was raised in

the Government’s motion to dismiss before the District Court

and then fully addressed by the parties in arguments and

affidavits submitted to the trial court. The District Court then

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35

granted the motion to dismiss pursuant to Federal Rule of Civil

Procedure 12(b)(1), finding that exhaustion was jurisdictional

and that appellants’ failure to exhaust stripped the court of

subject matter jurisdiction. The trial court ruled in the

alternative that, even if § 6912(e) did not impose a jurisdictional

requirement, there was no basis upon which to exempt

appellants from the exhaustion requirement with respect to their

Bivens claim. 435 F. Supp. 2d at 155. This alternative ruling

effectively dismissed appellants’ claim pursuant to Federal Rule

of Civil Procedure 12(b)(6) (“failure to state a claim upon which

relief can be granted”). Although, as noted above, the District

Court erred in holding that § 6912(e) imposes a jurisdictional

prerequisite to judicial review, we still grant judgment to the

Government.

Rule 12(b) states that, if, on a motion to dismiss, “matters

outside the pleading are presented to and not excluded by the

court, the motion shall be treated as one for summary judgment

and disposed of as provided in Rule 56, and all parties shall be

given reasonable opportunity to present all material made

pertinent to such a motion by Rule 56.” FED. R. CIV. P. 12(b).

In disposing of the Bivens claim on the alternative ground that

there was no basis upon which to excuse appellants’ failure to

exhaust, the District Court considered “matters outside the

pleading” and both parties had a “reasonable opportunity to

present all material made pertinent” to the motion. The District

Court, however, did not convert what was effectively a Rule

12(b)(6) motion to one for summary judgment. This court may,

however, characterize the District Court’s Rule 12(b)(6)

dismissal as a grant of summary judgment under Rule 56 and

affirm, so long as we are assured that both sides had a

reasonable opportunity to present evidence and that there are no

genuine issues of material fact. See, e.g., Ctr. for Auto Safety,

452 F.3d at 805. Finding no merit in appellant’s claim, we will

grant summary judgment to appellee.

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36

 In viewing the parties’ submissions to the District Court, it

is undisputed that Munsell/MQF never exhausted their

administrative remedies as required by § 6912(e). Pursuant to

our holding that exhaustion under § 6912(e) is an essential

element of any Bivens action against a USDA official (if such an

action exists), we are constrained to dismiss because appellants

have failed to state a claim upon which relief can be granted.

III. CONCLUSION

For the foregoing reasons, appellants’ actions are hereby

dismissed.

So ordered.

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