#28538-a-SLZ 

2018 S.D. 77 

IN THE SUPREME COURT 

OF THE 

STATE OF SOUTH DAKOTA 

* * * * 

DOLLAR LOAN CENTER OF 

SOUTH DAKOTA, LLC, Appellant, 

 

v. 

STATE OF SOUTH DAKOTA, 

DEPARTMENT OF LABOR AND 

REGULATION, DIVISION OF 

BANKING, Appellee. 

* * * * 

APPEAL FROM THE CIRCUIT COURT OF 

THE SIXTH JUDICIAL CIRCUIT 

HUGHES COUNTY, SOUTH DAKOTA 

* * * * 

THE HONORABLE PATRICIA J. DEVANEY 

Judge 

* * * * 

ZACHARY W. PETERSON 

JACK H. HIEB 

Richardson, Wyly, Wise, 

 Sauck & Hieb, LLP 

Aberdeen, South Dakota Attorneys for appellant. 

MARTY J. JACKLEY 

Attorney General 

PAUL E. BACHAND 

EDWARD S. HRUSKA, III 

Special Assistant Attorneys General 

Pierre, South Dakota Attorneys for appellee. 

* * * * 

 ARGUED ON 

 OCTOBER 1, 2018 

 OPINION FILED 11/14/18
-1- 

#28538 

ZINTER, Justice1

[¶1.] The South Dakota Department of Labor and Regulation, Division of 

Banking (Division) issued a cease and desist and license revocation order directing 

the immediate revocation of the money lender licenses of Dollar Loan Center of 

South Dakota, LLC. While a hearing before the Office of Hearing Examiners was 

pending on the matter, Dollar Loan appealed the Division’s order to circuit court. 

The circuit court dismissed the appeal, concluding there was no statutory right to 

appeal the order and Dollar Loan had failed to exhaust available administrative 

remedies. We affirm. 

Facts and Procedural History 

[¶2.] In 2017, South Dakota voters approved an initiated measure (Initiated 

Measure 21) making it illegal for money lenders licensed under SDCL chapter 54-4 

to issue loans that impose finance charges exceeding 36% “including all charges for 

any ancillary product or service and any other charge or fee incident to the 

extension of credit.” SDCL 54-4-44. The loans covered by the new law included 

short-term payday loans, which are defined in SDCL 54-4-36(15). 

[¶3.] After the new law went into effect, Dollar Loan informed the Division 

it intended to start using a new loan product that would not exceed the 36% rate. 

Dollar Loan provided the Division a copy of the new loan contract. The contract 

disclosed that the new loans would be unsecured and would require full payment of 

principal and interest upon maturity. The loans would also require late fees if the 

full payment was not received upon the due date, and the failure to pay the full loan 

 

1. This opinion was decided prior to Justice Zinter’s death. 
#28538 

-2- 

amount on the due date would cause the loan to be in default. Every seven days 

after default, Dollar Loan would charge an additional late fee and continue to do so 

until the loan, all accrued interest, and late fees were paid in full. 

[¶4.] Almost immediately after Dollar Loan started making the new loans, 

the Division gave notice of intent to conduct an examination. On July 13, 2017, the 

Division reviewed Sioux Falls and Rapid City loans at Dollar Loan’s Sioux Falls 

office. After the first examination, the Division asked follow-up questions. The 

Division then conducted a more thorough examination at Dollar Loan’s Sioux Falls 

office. 

[¶5.] As a result of the examinations, Division Director Bret Afdahl executed 

a cease and desist and license revocation order on September 13, 2017. The order 

was based on findings of fact and conclusions of law. The order found the new loans 

were unsecured and ranged in principal amounts from $250 to $1,000. It further 

found the new loans matured in seven days and required full payment of principal 

and interest upon maturity. The order indicated Dollar Loan had “neither applied 

for nor received authorization from the Division to originate or service ‘short term 

consumer loans.’” The order also found that the actual interest rate, after 

considering the late fees, ranged between 300% and 487%, which in the Division’s 

view indicated Dollar Loan’s new product was designed to incur late fees. 

[¶6.] Based on these findings, the order concluded Dollar Loan originated 

and serviced “short term consumer loans” for which it was not licensed. It further 

concluded the loans were “a device, subterfuge, or pretense to evade the 
#28538 

-3- 

requirements of SDCL 54-4-44.” Citing SDCL 54-4-49, the Division found “good 

cause to immediately revoke [Dollar Loan’s] money lender licenses[.]” 

[¶7.] Accordingly, the order revoked Dollar Loan’s money lender licenses. 

The order also declared void and uncollectable any loan originated by Dollar Loan 

after June 21, 2017. Dollar Loan was directed to immediately cease engaging in the 

business of lending money in South Dakota and to immediately surrender all South 

Dakota money lending licenses to the Division. However, the order indicated it 

would “remain in effect unless set aside, limited, or suspended by the Division or 

upon court order after review under South Dakota law.” It also expressly provided 

that any person aggrieved could request a hearing before the South Dakota 

Banking Commission. Dollar Loan did not request a hearing on the matter. 

[¶8.] On September 21, 2017, Dollar Loan filed suit in federal court against 

Afdahl in his individual capacity under 42 U.S.C. § 1983. Dollar Loan alleged 

Afdahl violated its right to due process when he revoked its money lender licenses 

without a hearing. Afdahl was served on September 25. 

[¶9.] On September 28, the Division issued a limited stay of its 

September 13 order.2 Shortly thereafter, it served Dollar Loan with notice of an 

administrative hearing to be held on October 17 before the South Dakota Office of 

Hearing Examiners. The purpose of the hearing was to “determine whether Dollar 

Loan Center ha[d] violated the provisions of SDCL Chapter 54-4, and whether or 

 

2. The limited stay provided in part that Dollar Loan “may service any loans 

originated . . . prior to November 16, 2016 so long as the servicing of those 

loans does not violate SDCL Chapter 54-4[.]” 
#28538 

-4- 

not its money lending license should be revoked and the terms and conditions in the 

[order] should be enforced.” 

[¶10.] On October 5, Dollar Loan requested a continuance of the scheduled 

administrative hearing. It indicated it needed more time to prepare. An 

administrative law judge granted the request and set a new hearing for 

April 12, 2018. 

[¶11.] Although the administrative hearing was pending, on October 12, 

Dollar Loan appealed the Division’s order to circuit court. It claimed the order was 

immediately appealable because it was either a “final agency action” or was an 

“intermediate agency action or ruling” and review of the final agency decision would 

not provide an adequate remedy. See SDCL 1-26-30. The Division disagreed and 

moved to dismiss. It asserted that its order was not of the type described in 

SDCL 1-26-30 and that the dispute was not reviewable until the administrative 

proceedings concluded. 

[¶12.] The court concluded it had no jurisdiction to consider the appeal under 

SDCL 1-26-30 because the Division’s order was neither a final decision nor an 

intermediate ruling from which adequate appellate relief could not be obtained. 

The court also concluded Dollar Loan had failed to exhaust available administrative 

remedies and that it did not qualify for any exception to the exhaustion 

requirement. Accordingly, the court dismissed the appeal. 

[¶13.] Dollar Loan appeals the dismissal, and we restate its issues as follows: 

1. Whether the Division’s order was a final agency 

decision that was appealable within the meaning of 

SDCL 1-26-30. 
#28538 

-5- 

2. Whether the Division’s order was an intermediate 

agency decision that was immediately reviewable 

under SDCL 1-26-30. 

We also address the Division’s appellate assertion that this Court lacks jurisdiction 

to entertain Dollar Loan’s appeal of the circuit court’s order of dismissal. 

Decision 

Supreme Court Appellate Jurisdiction 

[¶14.] An appeal to this Court may not be taken from a circuit court order 

“unless it is authorized under SDCL 15-26A-3.”3 Smith v. Tobin, 311 N.W.2d 209, 

210 (S.D. 1981); accord Action Carrier, Inc. v. United Nat’l Ins. Co., 2005 S.D. 57, 

¶ 24, 697 N.W.2d 387, 393. When a party attempts an “appeal from an order from 

which no appeal lies[,]” this Court only has jurisdiction to dismiss the appeal. 

Smith, 311 N.W.2d at 210. Dollar Loan cites SDCL 15-26A-3(2) as its jurisdictional 

authority to appeal the circuit court’s dismissal. Under that provision, an appeal to 

this Court may be taken from a circuit court “order affecting a substantial right, 

made in any action, when such order in effect determines the action and prevents a 

judgment from which an appeal might be taken[.]” SDCL 15-26A-3(2).

[¶15.] The Division responds that its order is not the type described in 

SDCL 15-26A-3(2). More specifically, it contends: (1) Dollar Loan’s money lender 

licenses are not “rights” because lending money is a privilege; (2) dismissal of the 

appeal did not “determine the action” because a determination has yet to occur at 

 

3. Orders are distinguishable from judgments. A judgment is a “final 

determination of the rights of the parties in an action or proceeding.” SDCL 

15-6-54(a). An order is “[e]very direction of a court or judge, made or entered 

in writing and not included in a judgment[.]” Id.
#28538 

-6- 

the administrative level; and (3) the proceedings to date would not “prevent a 

judgment from which an appeal might be taken” because Dollar Loan will have a 

right to appeal after the administrative proceedings conclude. See id. 

[¶16.] The Division’s contentions incorrectly look to what is yet to occur at the 

administrative level versus what has occurred in the circuit court. Notwithstanding 

the right at issue or the nature of the action to be taken at the administrative level, 

the circuit court’s dismissal here “in effect determine[d]” Dollar Loan’s claimed right 

to appeal the Division’s order to circuit court without participating in an 

administrative hearing. See id. Further, regardless of what is yet to occur at the 

administrative level, the dismissal of the appeal means there will be no succeeding 

judgment of the circuit court from which an appeal “might be taken” to determine 

whether Dollar Loan had the right to a pre-hearing appeal. See id. Finally, the 

circuit court’s dismissal “affect[ed]” Dollar Loan’s claimed statutory right to appeal. 

See id. We conclude this Court has jurisdiction to review the appeal from the circuit 

court’s determination that Dollar Loan had no right to appeal before the pending 

administrative hearing concluded. 

Circuit Court Appellate Jurisdiction 

 a) Final Decision in a Contested Case 

[¶17.] The circuit court’s jurisdiction to entertain an administrative appeal is 

governed by SDCL 1-26-30. Under that statute, a party who is “aggrieved by a final 

decision in a contested case is entitled to judicial review[.]” Id. Dollar Loan points 

out that a contested case is defined to include “licensing.” See SDCL 1-26-1(2). 
#28538 

-7- 

Dollar Loan contends the Division’s order determined Dollar Loan’s right to its 

lending licenses with finality. 

[¶18.] We recognize that the Division’s order contains language expressing 

finality, but that order was not issued in a contested case, i.e. a proceeding in which 

Dollar Loan “had an opportunity for a hearing[.]” See id. Further, the Division 

partially stayed its order and commenced a contested case proceeding before the 

Office of Hearing Examiners to determine whether Dollar Loan had violated the 

provisions of SDCL chapter 54-4, whether its money lending license should be 

revoked, and whether the terms and conditions in the order should be enforced. 

Under the Administrative Procedures Act, it is only after this administrative 

hearing that the Division will issue a final decision in this matter. We conclude 

Dollar Loan’s appeal was not taken from a final decision in a contested case. 

[¶19.] Dollar Loan’s appeal was also taken before it had exhausted its 

administrative remedies. “The doctrine of exhaustion of administrative remedies is 

one of the fundamental principles of administrative law and jurisprudence.” 

Johnson v. Kolman, a Div. of Athey Products Corp., 412 N.W.2d 109, 111 

(S.D. 1987). In Read v. McKennan Hospital, 2000 S.D. 66, ¶ 12, 610 N.W.2d 782, 

785, we pointed out that the purpose of the doctrine is to “permit the administrative 

agency to exercise its discretion, apply its expertise, and make a factual record upon 

which to base subsequent judicial review.” Therefore, until the administrative 

process has run its course, judicial relief is withheld. Johnson, 412 N.W.2d at 111. 

[¶20.] Here, the administrative process must run its course. At this point the 

Division has conducted its own investigation, but there is no evidentiary record of 
#28538 

-8- 

Dollar Loan’s use of its new loan product. Because judicial review is confined to the 

administrative record, see SDCL 1-26-35, such a record must be developed. In fact, 

without an administrative record of the Division’s examinations and Dollar Loan’s 

use of its new loan product, the judicial review contemplated under SDCL chapter 

1-26 could not be had. See, e.g., Delzer Const. Co. v. United States, 487 F.2d 908, 

909–10 (8th Cir. 1973) (ordering dismissal of action to allow for an administrative 

hearing because to conclude otherwise would mean “issues would be decided devoid 

of factual content” (quoting DuBois Clubs v. Clark, 389 U.S. 309, 88 S. Ct. 450, 

19 L. Ed. 2d 546 (1967))). Further, considering the nature of the dispute, we believe 

“involvement of [the banking Division’s] specialized administrative understanding” 

is necessary. See Mordhorst v. Egert, 88 S.D. 527, 533, 223 N.W.2d 501, 504 (1974). 

To conclude otherwise and allow Dollar Loan to appeal before the hearing would 

subvert these essential purposes of the exhaustion doctrine. 

[¶21.] Dollar Loan, however, argues it is entitled to the exhaustion exception 

recognized in South Dakota Board of Regents v. Heege, 428 N.W.2d 535, 539 (S.D. 

1988): “Exhaustion is not required where the board having appropriate jurisdiction 

has improperly made a decision prior to a hearing or is so biased that a fair and 

impartial hearing cannot be had.” Dollar Loan contends the exception applies here 

because exhaustion “at this point would be an exercise in futility.” It points out that 

the Division revoked its licenses prior to a hearing, and it claims that it would be 

meaningless to now require Dollar Loan to go through that administrative hearing. 

We disagree. 
#28538 

-9- 

[¶22.] Heege did not apply or interpret the exception relied upon by Dollar 

Loan—Heege identified the exception and cited Mordhorst, 223 N.W.2d at 504. See 

Heege, 428 N.W.2d at 539. We therefore look to Mordhorst for context. 

[¶23.] The plaintiff in Mordhorst brought an original action in circuit court to 

enjoin the South Dakota State Board of Examiners in Optometry from conducting 

administrative proceedings on complaints filed against certain optometrists. 

88 S.D. at 531, 223 N.W.2d at 503. The plaintiff claimed the Board was 

unconstitutionally constituted and, more specifically, bias and inaction rendered the 

Board incompetent to act. Following a trial on the merits of those constitutional 

claims, the court enjoined the Board from further administrative action. On appeal, 

we affirmed the injunction. We concluded exhaustion was not required because of 

the “constitutional questions” and the “showing of the inadequacy of administrative 

relief and impending irreparable harm flowing from delay incident to following the 

prescribed administrative procedures[.]” Id. at 532, 223 N.W.2d at 504. 

[¶24.] Dollar Loan’s case does not qualify for the exhaustion exception 

applied in Mordhorst. In contrast to the suit to prevent administrative proceedings 

in Mordhorst, Dollar Loan attempts to appeal during ongoing administrative 

proceedings. Additionally, although Dollar Loan raises a constitutional question 

regarding the need for a pre-revocation hearing, the Division’s commencement of an 

administrative hearing before an independent hearing examiner ensures that the 

administrative adjudication will be conducted in accordance with notions of due 

process including a fair and unbiased tribunal. Further, Dollar Loan does not claim 

irreparable harm will flow from any delay in finishing the administrative process 
#28538 

-10- 

that was already underway. Finally, as pointed out above, it is necessary (not 

futile) to develop an evidentiary record in a formal contested case hearing. Without 

the development of a factual record that includes the Division’s examinations, 

meaningful judicial review of the legality of Dollar Loan’s lending practices and new 

loan product would not be possible.4

b) Immediately Reviewable Intermediate Agency Decision 

[¶25.] Dollar Loan alternatively argues the order is immediately reviewable 

as an intermediate agency decision because “review of the final agency decision 

would not provide an adequate remedy.” See SDCL 1-26-30. It contends that 

requiring it to go through an administrative hearing “hardly serves as an adequate 

remedy” because Afdahl, as the agency’s director, would make the final agency 

decision and he has already revoked Dollar Loan’s money lender licenses. 

[¶26.] The Division, however, argues the Secretary of the Department of 

Labor and Regulation, not the Division director, will review the independent 

hearing examiner’s findings and conclusions and ultimately render the final agency 

decision.5 The Division acknowledges it is statutorily responsible for licensing, but 

it points out that under SDCL 51A-2-1, “[t]he Division of Banking . . . shall be 

administered under the direction and supervision of the Department of Labor and 

 

4. Dollar Loan contends a record is not needed to determine the legality of the 

pre-hearing revocation portion of the order. But that contention fails to 

recognize that Dollar Loan also asserted a substantive claim in its appeal of 

the order. Dollar Loan argued it did not violate SDCL chapter 54-4 and that 

the order was clearly erroneous and an abuse of discretion in light of the 

entire record. We conclude an evidentiary record will be necessary to 

judicially review the substantive validity of the order. 

5. See SDCL 1-26D-6. 
#28538 

-11- 

Regulation.” Dollar Loan acknowledges the Secretary’s administrative 

responsibility but points to a companion statute, SDCL 51A-2-2, which clarifies that 

the Division of Banking retains its “quasi-judicial” functions and that it “shall 

exercise those functions independently of the secretary [of the Department of Labor 

and Regulation].” 

[¶27.] We need not decide which official within the Department of Labor and 

Regulation will accept, reject, or modify the independent hearing examiner’s 

decision following the administrative hearing. On this record, even if the Division 

of Banking makes the final decision, it cannot be considered unconstitutionally 

biased. The Division’s order was based on its statutory duty to investigate lenders 

and take action on their licenses, and Dollar Loan makes no due process claim with 

respect to the Division’s investigation. Moreover, although the Division initially 

failed to offer Dollar Loan a pre-revocation hearing, it quickly reversed course and 

initiated such a hearing before an independent hearing examiner. Finally, we 

believe the hearing examiner’s and circuit court’s respective reviews of the 

Division’s order (based on the evidence developed at the independent hearing) will 

provide Dollar Loan an adequate remedy within the meaning of SDCL 1-26-30. The 

Division’s order was not an intermediate agency ruling that was immediately 

reviewable. 

[¶28.] Affirmed. 

[¶29.] GILBERTSON, Chief Justice, and KERN, JENSEN, and SALTER, 

Justices, concur.