Opinion ID: 184995
Heading Depth: 2
Heading Rank: 1

Heading: jurisdiction

Text: Before reaching the merits, it is necessary to examine ourjurisdiction to entertain these cross-appeals. Section 1291 ofthe Judicial Code provides that the courts of appeals mayreview all final decisions of the district courts of the UnitedStates. 28 U.S.C. s 1291 (1994). In the proceedings below,the district court, managing this case as it would any gardenvariety civil suit, adjudicated not only the respective legalrights of the parties but also took steps toward decreeing aproper remedy. Thus in its January 20, 1998 order, the courtresolved the merits of the Hospitals' claims, and with its April30, 1998 order, directed the Secretary to calculate the amountof outlier payments due to the Hospitals and to make payment accordingly. This latter order has spawned some confusion about our jurisdiction because of the general rule applicable to civil actions that where assessment of damages orawarding of other relief remains to be resolved, a districtcourt's judgment is not  'final' within the meaning of 28U.S.C. s 1291. Liberty Mut. Ins. Co. v. Wetzel, 424 U.S.737, 744 (1976); see also A & S Council Oil Co. v. Lader, 56F.3d 234, 238 (D.C. Cir. 1995) (holding that an order establishing liability but referring the issue of damages to arbitration is not final). For it is clear that neither of the districtcourt's orders resolved the precise quantum of payments tobe made to the Hospitals. This rule of finality does not apply here, however, becausethis is not an appeal from an ordinary civil judgment rendered by the district court. With both of their claims, theHospitals challenged the Secretary's actions under section10(e) of the Administrative Procedure Act, 5 U.S.C. s 706(2). As we have often observed, [w]hen a final agency action ischallenged under the APA in district court, if the relevantsubstantive statute does not provide for direct review in the court of appeals, the district court does not perform itsnormal role but instead sits as an appellate tribunal. PPGIndus., Inc. v. United States, 52 F.3d 363, 365 (D.C. Cir.1995) (quoting Marshall County Health Care Auth. v. Shalala, 988 F.2d 1221, 1225 (D.C. Cir. 1993)); accord JamesMadison Ltd. v. Ludwig, 82 F.3d 1085, 1096 (D.C. Cir. 1996)(Generally speaking, district courts reviewing agency actionunder the APA's arbitrary and capricious standard do notresolve factual issues, but operate instead as appellate courtsresolving legal questions.), cert. denied, 519 U.S. 1077 (1997). Whether it is a court of appeals or a district court, [u]ndersettled principles of administrative law, when a court reviewing agency action determines that an agency made an error oflaw, the court's inquiry is at an end: the case must beremanded to the agency for further action consistent with thecorrected legal standards. PPG Indus., 52 F.3d at 365; seealso South Prairie Constr. Co. v. Local No. 627, Int'l Unionof Operating Eng'rs, 425 U.S. 800, 806 (1976); SEC v. Chenery Corp., 318 U.S. 80, 94-95 (1943). Once, therefore, thedistrict court held that the Secretary had misinterpreteds 1395ww(d)(5)(A)(iv), it should have remanded to the Secretary for further proceedings consistent with its conception ofthe statute. Not only was it unnecessary for the court toretain jurisdiction to devise a specific remedy for the Secretary to follow, but it was error to do so. See Ommaya v.National Insts. of Health, 726 F.2d 827, 830 (D.C. Cir. 1984)(If MSPB relied on incorrect legal grounds, it would be errorfor this court to enforce without first remanding for agencyexamination of the evidence and proper fact-finding.) (quoting White v. United States Dep't of the Army, 720 F.2d 209,210 (D.C. Cir. 1983)). Accordingly, because that was all thatthe district court had the power to do, we construe itsJanuary 20, 1998 order as a remand to the Secretary, andignore, for jurisdictional purposes, its later order on specificrelief. Of course, properly characterizing the district court's orderas a remand does not, without more, resolve our jurisdictionalquandary, for a remand order usually is not a final decision. NAACP v. United States Sugar Corp., 84 F.3d 1432, 1436 (D.C. Cir. 1996). We have recognized an exception to thisgeneral rule, however, where the agency to which the case isremanded seeks to appeal and it would have no opportunity toappeal after the proceedings on remand. Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 330 (D.C. Cir. 1989). Animating this principle is a pragmatic concern. Because anagency must conduct its proceedings and render its decisionpursuant to the legal standard that the district court articulates in its remand order, [u]nless another party appeals [theagency's subsequent] decision, the correctness of the districtcourt's legal ruling will never be reviewed by the court ofappeals, notwithstanding the agency's conviction that theruling is erroneous. Id. Here, were the Secretary unableto appeal the district court's decision at this point, on remandshe would have to interpret paragraph (5)(A)(iv) as the district court has construed it, and disburse millions of dollars inretroactive outlier payments to various Medicare-providerhospitals. Absent an appeal from that decision by one of theHospitals, the Secretary would have no opportunity to challenge the legal basis for the disbursements. Our jurisdictionis therefore proper because the Secretary's appeal falls withinthe exception recognized in Occidental Petroleum. Additionally, vested with jurisdiction to review the Secretary's appealunder s 1291, we may also consider the Hospitals' crossappeal of the district court's grant of summary judgment tothe Secretary on their arbitrary and capricious agency-actionclaim. See United States Sugar Corp., 84 F.3d at 1436.