Opinion ID: 148399
Heading Depth: 3
Heading Rank: 2

Heading: Is the plaintiffs' failure to exhaust excusable?

Text: The plaintiffs argue it is because, quoting McCarthy v. Madigan, 503 U.S. 140, 146, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992), their interests in immediate judicial review outweigh the government's interests in the efficiency and administrative autonomy that the exhaustion requirement is designed to further. According to the Government, however, we lack the power to excuse exhaustion and, in any event, doing so is not warranted in this case. The parties agree both that § 741(c) implicitly requires exhaustion [] and that the plaintiffs' failure to exhaust did not deprive the district court of jurisdiction. What they dispute is whether exhaustion in this case is mandatoryeither by virtue of § 741 or by virtue of 7 U.S.C. § 6912(e), [] which requires exhaustion in suits against the USDA generally, Munsell v. Dep't of Agriculture, 509 F.3d 572, 579 (D.C.Cir.2007)and, if so, whether the court can excuse these plaintiffs' failure to exhaust. See id. (even a mandatory exhaustion requirement may be excused in appropriate circumstances, whereas a jurisdictional exhaustion requirement never may be excused by a court) (dictum). Furthermore, if exhaustion is mandatory in this case, then the court's power to excuse the plaintiffs' failure to exhaust may be more limited, as the Government suggests, than is our power to excuse compliance with a non-mandatory exhaustion requirement. See McCarthy, 503 U.S. at 144, 112 S.Ct. 1081 (Of paramount importance to any exhaustion inquiry is congressional intent (internal quotation marks omitted)). Interesting as these issues are, we can decide this case without resolving them. For even if we have discretion to excuse a plaintiff's failure to exhaust their administrative remedy, a balancing of interests pursuant to McCarthy v. Madigan does not support our doing so in this case. First, as the district court pointed out, the Government has a significant interest in having the plaintiffs exhaust their administrative remedy. 577 F.Supp.2d at 23 n. 16. The process of review within the USDA gives the Department the opportunity `to correct its own errors,' Boivin v. U.S. Airways, Inc., 446 F.3d 148, 155 (D.C.Cir.2006) (quoting McCarthy, 503 U.S. at 145, 112 S.Ct. 1081), and thereby to avoid unnecessary litigation. Even if litigation is not avoided, the formal hearing before an ALJ may produce a useful record for subsequent judicial consideration. McCarthy, 503 U.S. at 145-46, 112 S.Ct. 1081. There are, to be sure, limited circumstances in which the interests of the individual [plaintiff] weigh heavily against requiring administrative exhaustion and in favor of immediate judicial review. Id. at 146-47, 112 S.Ct. 1081. The Supreme Court has identified at least three such circumstanceswhere requiring resort to the administrative remedy may occasion undue prejudice to subsequent assertion of a court action, or there is some doubt as to whether the agency was empowered to grant effective relief, or the administrative body is shown to be biased or has otherwise predetermined the issue before it. Id. at 146-149, 112 S.Ct. 1081. The present plaintiffs allege none of these circumstances; instead they stress the importance of their cause, involving as it does allegations of unlawful racial discrimination in violation of their constitutional, statutory, and common law rights, Br. of Appellants at 28, and the history of undue delay in the USDA's handling of their Complaint Requests. That the plaintiffs' interest in redressing the harm allegedly done them by racial discrimination is weighty and comes squarely within the zone of interests protected by the ECOA is undoubtedly true. Those features of the case, however, do not evidence the litigant's interests in immediate judicial review of the sort considered in McCarthy. 503 U.S. at 147, 112 S.Ct. 1081, citing Bowen v. City of New York, 476 U.S. 467, 483, 106 S.Ct. 2022, 90 L.Ed.2d 462 (1986) (disability benefit claimants would be irreparably injured were the exhaustion requirement now enforced against them). The weight or intensity of a plaintiff's interest in his cause might in some circumstances indicate that exhaustion would prejudice the plaintiff or be unproductive, but in this case the plaintiffs' failure to request a formal hearing at any point during the administrative settlement process indicates the opposite. Furthermore, there is neither logical nor empirical support for the plaintiffs' suggestion a formal hearing, had they elected to have one, would not have proceeded expeditiously. Logically, the Director of the OCR's delay of several years before responding to the plaintiffs' complaints is irrelevant; the plaintiffs could have opted for a formal hearing before an ALJ at any time while their claims were pending before the Director but, except Messrs. Pearson and McDonald, who requested review by an ALJ since filing this suit, they chose instead to wait. They suggest no other reason to think a formal hearing would not have proceeded expeditiously. Empirically, the agency's response when Messrs. Pearson and McDonald filed their requests for review by an ALJ belies the plaintiffs' claim. According to a post-argument letter the Government submitted pursuant to Federal Rule of Appellate Procedure 28(j), the accuracy of which plaintiffs have given us no reason to doubt, within a few months of Pearson's and McDonald's requests for a hearing an ALJ was assigned to their cases and pre-hearing conferences were scheduled. We conclude the district court properly granted summary judgment in favor of the Government on the plaintiffs' claims under the ECOA because they failed to exhaust their administrative remedy. Applying the criteria prescribed by the Supreme Court in McCarthy, that failure is not excusable.