Opinion ID: 187055
Heading Depth: 2
Heading Rank: 2

Heading: Exhaustion and Subject Matter Jurisdiction

Text: 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, 113 S.Ct. 2539, 125 L.Ed.2d 113 (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: 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 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, ___ U.S. ___, 126 S.Ct. 2378, 2392, 165 L.Ed.2d 368 (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, 126 S.Ct. 1235. 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, 126 S.Ct. 1235. 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, 126 S.Ct. 1235. 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, 126 S.Ct. 1235 (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 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, 504 F.3d 592 (5th Cir.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 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, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983). And, as we explain below, Munsell/MQF's remaining actions for declaratory and injunctive relief are moot.