Opinion ID: 1993916
Heading Depth: 2
Heading Rank: 1

Heading: The Statutory Exhaustion Requirements and Appellate Jurisdiction

Text: On its face, D.C.Code § 34-604(b) is a requirement to exhaust administrative remedies by filing an application for reconsideration. It also requires the application to include, and thereby exhaust, every issue the party wishes to appeal. But as the D.C. Circuit has explained, [6] and as we have recognized, [7] there are several distinct legal concepts that go by the name of exhaustion. Which of those concepts § 604(b) embodies is a question requiring close analysis. The first type of exhaustion requirement is a common-law doctrine applicable whenever administrative remedies are available. [8] The doctrine serves several important policy functions: it prevents litigants from evading the agency's authority, thereby safeguarding the intent of the legislature in creating the agency; it protects agency authority by ensuring that the agency has the opportunity to apply its expertise and exercise its discretion; it aids judicial review by creating a record and promotes judicial economy by channeling claims to the decision maker of the legislature's choice. [9] However, because the doctrine is a discretionary rule derived from equity, it allows for some flexibility. [10] In certain exceptional circumstances, the court will waive the exhaustion requirement. [11] And while the doctrine is generally applied where no statute requires the litigant to exhaust its remedies, federal courts sometimes have interpreted statutes as merely codifying the common-law doctrine. [12] Second, some statutory exhaustion requirements require[ ] resort to the administrative process as a predicate to judicial review. [13] In those cases, it is not the court's own prudential doctrine that requires exhaustion. Rather, Congress has exercised its power to control the jurisdiction of the court and has precluded from its review those cases in which the appellant failed to exhaust. [14] Courts are reluctant to find such jurisdictional bars, however. Even a statute expressly requiring exhaustion is considered non-jurisdictional unless Congress states in clear, unequivocal terms that the judiciary is barred from hearing an action until the administrative agency has come to a decision. [15] But if the statute does create such a jurisdictional bar, the court cannot excuse a failure to exhaust; it has no jurisdiction to do so. [16] Finally, at least one federal statute adopts an intermediate position: while the exhaustion requirement is not jurisdictional, as a matter of statutory interpretation it does not admit of any (or at least not the full range of) exceptions. [17] Still, because the requirement is not jurisdictional, it can be waived by the agency. [18] Where in this spectrum § 604(b)'s issue-exhaustion requirement falls is a matter of first impression. To be sure, we repeatedly have stated in dicta that we would lack jurisdiction if a party petitioned for review of a Commission order without first having filed an application for reconsideration. [19] While we also (at least twice) have applied the issue-exhaustion requirement in declining to reach an issue raised for the first time on appeal from the Commission, we have never expressly held the requirement to be jurisdictional. [20] The present case therefore requires us to examine afresh the nature of the issue-exhaustion bar § 604(b) imposes. In doing so, we will take care to label as jurisdictional only a requirement that actually is. [21] Our analysis is a matter of statutory interpretation, [22] so we first look to the plain language and ordinary meaning of the statute. [23] Ordinarily, that will control. We look to secondary sources, such as legislative history, only when the provision at issue defies straightforward interpretation. [24] And while we will defer to an agency's reasonable interpretation of an ambiguous statute the legislature has charged the agency with administering, [25] that principle does not apply here. The Commission may have the power to require particular procedures for filing an application for reconsideration under § 604(b), but insofar as the statute implicates this Court's power to review the Commission's decision, this Court and not the Commission administers the statute. [26] We consider first § 604(b)'s instruction to file an application for reconsideration before taking an appeal. It provides: No appeal shall lie from any order of the Commission unless an application for reconsideration shall have been first made and determined. Similarly, D.C.Code § 34-605(a) states that a petition for appeal may be filed within 60 days after final action by the Commission upon the petition for reconsideration, implying that an appeal can only be taken once a petition for reconsideration has been made and decided. The ordinary meaning of both provisions is that unless the application for reconsideration has been filed and decided, we cannot hear or decide the case. [27] By restricting when an appeal lies and when the petition for appeal may be filed, §§ 604(b) and 605(a) affect when an appeal validly exists. The clauses are sweeping and direct; [28] they implicate the power of the court; [29] they are clear and unequivocal. [30] Unless a party before the Commission files an application for reconsideration, we lack jurisdiction to hear the appeal. [31] In this case, WGLC did file an application for reconsideration, which the Commission denied; the jurisdictional clauses discussed above appear to be satisfied. But WGLC's application did not include the issues raised by this court in our supplemental briefing order, so we also must examine whether § 604(b)'s issue-exhaustion bar is jurisdictional. It states, [n]o public utility or other person or corporation shall in any court urge or rely on any ground not so set forth in said application. At first glance, this sentence also appears to contain sweeping and direct language, and it is certainly a plain command that litigants who wish to appeal must exhaust every issue before the Commission. Its syntax is similarthough not identicalto that of several federal statutes that do create a jurisdictional bar. The statute governing judicial review of orders by the National Labor Relations Board, for example, states that [n]o objection that has not been urged before the Board ..., shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances. [32] The Supreme Court has stated tersely that the petitioner's failure to object[ ] to [an aspect of] the Board's decision in a petition for reconsideration or rehearing ... prevents consideration of the question by the courts. [33] Several other statutes with nearly identical language likewise have been interpreted to create jurisdictional bars. [34] Of those, the closest linguistically to § 604(b) is 15 U.S.C. § 77i(a). That statute provides, No objection to [an] order of the [Securities and Exchange] Commission shall be considered by the court unless such objection shall have been urged before the [SEC]. Like § 604(b), but unlike the other federal statutes, § 77i(a) does not allow exceptions in certain circumstances. [35] In a recent decision, Zacharias v. SEC, the D.C. Circuit held that § 77i(a) creates a jurisdictional bar. [36] There is, however, one key difference between those federal statutes and D.C.Code § 34-604(b). The federal statutes each dictate that an objection not raised to the agency shall [not] be considered by the court. [37] Section 604(b) instead provides that [n]o ... person ... shall urge a ground before a court that was not raised before the Commission. (Emphasis added.) This is not merely a semantic distinction. In deciding that 5 U.S.C. § 7123(c) creates a jurisdictional bar, the Supreme Court found it significant that the statute speaks to courts, not parties. [38] And taking the plain meaning of the words, a limitation on a party's ability to plead an error is not the same as a limitation on this Court's power to consider the same error. To illustrate, one might consider a hypothetical case in which a party raises an issue for the first time on appeal to us, but the Commission does not argue that we should not decide the new issue. Nothing in § 604(b) appears to prevent us from deciding that matterwe would simply apply our general rule that a party can waive a waiver argument. [39] Under this reading, though, § 604(b) creates both a jurisdictional requirement to exhaust remedies and a non-jurisdictional requirement to exhaust issues an arguably anomalous dichotomy, since Congress placed the two requirements nearly side-by-side and obviously intended them to dovetail. To some extent, the legislative history may be read to suggest that the issue-exhaustion rule should be read as jurisdictional, resolving that inconsistency. Before Congress amended the law to create the current § 604(b), utilities had the right to bring a suit in equity to retry the Commission's conclusions. [40] Fed up with the delay and expense of the retrials, Congress aimed to narrow the scope of judicial review. [41] As originally drafted, the bill merely required that an application for reconsideration be filed before the appeal was taken. The District's corporation counsel at the time, E. Barrett Prettyman, whom the D.C. Public Utilities Act made the Commission's legal counsel, [42] argued to the Committee on the District of Columbia: [The draft bill] provide[s] for an application for reconsideration as a preliminary request to an appeal from an order of the Commission. In the draft, as printed, however, there is no requirement that the grounds of the appeal must be the same as the grounds in the motion for reconsideration. In other words, under this printed draft, so long as there is an application for reconsideration, there can then be an appeal but there is no mandatory hook-up on the grounds between the appeal and the application for reconsideration. We want an amendment ... to insert a new sentence, which would read: No public utility or other person or corporation shall in any court urge or rely on any ground not set forth in said application. [43] Prettyman's request was granted. That evidence for a jurisdictional reading is weaker on closer examination. While the corporation counsel expressly recognized that the possibility of an appeal was predicated on the party's having filed an application for reconsideration, [44] his proposed addition does not similarly implicate our jurisdiction. One explanation, perhaps, is the state of the doctrine of exhaustion of remedies in 1935. At that time, exhaustion was still a doctrine governing courts' exercise of equity jurisdiction. [45] Until a few years later, in 1938, it may not have been clear that the exhaustion doctrine extended to legal claims as well. [46] Prettyman's request three years earlier may have been no more than a push to ensure that the exhaustion doctrine would apply to every issuea codification and extension of the doctrine, but not a jurisdictional limitation. Moreover, there is nothing inherently implausible or self-contradictory about an exhaustion law that rests jurisdiction on exhaustion of remedies, but only imposes an ordinary exhaustion requirement for issues. Indeed, that is how the Second Circuit has interpreted 8 U.S.C. § 1252(d)(1). That statute provides that a court may review a final order of removal only if the alien has exhausted all administrative remedies available to the alien as of right. (Dash and subparagraph number omitted.) In Lin Zhong v. United States Department of Justice, the Second Circuit explained that the statute bars a circuit court from considering any claims unless the alien has pursued all administrative avenues of relief. [47] However, the court noted that unlike other jurisdictional statutes (including 29 U.S.C. § 160(e), discussed above), 8 U.S.C. § 1252(d)(1) does not require that every issue have been presented to the immigration authorities. [48] Given the absence of an express issue-exhaustion requirement, the Lin Zhong court concluded: 8 U.S.C. § 1252(d)(1) does not requireas a statutory matterthat a petitioner for relief from removal raise to the [agency] each issue presented in his or her petition for judicial review. Therefore ... the failure to exhaust individual issues before the BIA does not deprive this court of subject matter jurisdiction to consider those issues. [49] Of course, unlike 8 U.S.C. § 1252(d)(1), D.C.Code § 34-604(b) does contain an express issue-exhaustion requirement. It prevents any person from urg[ing] or rely[ing] on any ground not raised to the Commission. But unlike 29 U.S.C. § 160(e), to which the Lin Zhong court compared 8 U.S.C. § 1252(d)(1), D.C.Code § 34-604(b)'s issue-exhaustion requirement is not intertwined with the jurisdictional command. It is found in a separate, though complementary, sentence. In speaking to parties rather than courts, the text of the issue-exhaustion requirement in § 604(b) is perhaps closer to a third federal statute than it is to either 8 U.S.C. § 1252(d)(1) or 29 U.S.C. § 160(e). According to 7 U.S.C. § 6912(e), a person shall exhaust all administrative appeal procedures established by the Secretary [of Agriculture] or required by law before the person may bring an action in a court of competent jurisdiction. That language, the Ninth Circuit held, does not mention[ ], define[ ], or limit[ ] federal jurisdiction. [50] Instead, the court suggested that the statute was merely a codification of the [judicially created] exhaustion requirement. [51] Although the question is undeniably a close one, we think the same is true here. The sentence in 604(b) with which we are concerned is not a clear [and] unequivocal statement of the legislature's intent to divest us of appellate jurisdiction. [52] Nor does the legislative history reveal an unequivocal intent to limit the appellate court's power; it merely shows that Congress intended to require litigants before the Commission to exhaust their administrative remediesthat is why it speaks to the parties, not to the court. Furthermore, unlike the Prison Litigation Reform Act, [53] the history and text of the issue-exhaustion provision manifest no congressional intent to eliminate judicially-recognized exceptions to the exhaustion requirement. We therefore find persuasive the federal circuit court decisions interpreting the roughly similar 7 U.S.C. § 6912(e), and conclude that the best reading of the issue-exhaustion bar in D.C.Code § 34-604(b) is that it codifies the judicially-created doctrine of exhaustion of remedies. [54]