Court Opinion

ID: 8974039
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:46:19.976853+00
Date Added: 2024-06-11T17:10:30.604700
License: Public Domain

K.K. HALL, Circuit Judge,
dissenting:
The majority believes that this is a First Amendment case. It is not. The majority believes that “we must determine” the constitutionality of several provisions of Virginia’s charitable solicitation laws. Op. p. 1227. We do not. As a matter of comity, we must not. This is an abstention case. It is about federal-state relations in our system of government and a proper respect for the important role of informal procedures in the administrative process. Because the majority fails to recognize that we must abstain, I respectfully dissent.
I.
As the majority points out, the doctrine of Younger abstention stands as an exception to the rule that federal courts must decide cases within their jurisdiction. Op. at 1228; see also New Orleans Public Ser*1236vice, Inc. v. Council of City of New Orleans, — U.S. -, 109 S.Ct. 2506, 2512-13, 105 L.Ed.2d 298 (1989). However, this doctrine also stands in recognition of the important considerations of comity and respect for state government that are so fundamental to our federal system. Younger v. Harris, 401 U.S. 37, 43-45, 91 S.Ct. 746, 750-51, 27 L.Ed.2d 669 (1971) (known as “Our Federalism”). Thus, Younger abstention serves as a mechanism to reconcile two competing policy considerations — the federal courts duty to respect ongoing state proceedings and their mission to ensure that federal rights are vindicated. Op. p. 1229. When these two considerations come into conflict, as they do in this case, Younger routinely requires that federal courts must abstain:
Because of our concerns for comity and federalism, we thought that it was “perfectly natural for our cases to repeat time and time again that the normal thing to do when federal courts are asked to enjoin pending proceedings in state courts is not to issue such injunctions.
Ohio Civ. Rights Comm. v. Dayton Christian Schools, Inc., 477 U.S. 619, 627, 106 S.Ct. 2718, 2722, 91 L.Ed.2d 512 (1986) (emphasis in original, citation omitted). As Dayton itself held, the same considerations are controlling for requests to enjoin ongoing administrative proceedings. As long as administrative litigants are given an opportunity to raise their constitutional concerns, the respect accorded to state administrative proceedings must be similar to that given to state court proceedings. It is easy to see why this is so. States must be left free to enforce their laws either administratively or judicially as they see fit. Any other result would undermine the very foundations of Younger:
a proper respect for state functions, a recognition of the fact that the entire country is made up of a Union of separate state governments, and a continuance of the belief that the National Government will fare best if the States and their institutions are left free to perform their separate functions in their separate ways.
Younger, 401 U.S. at 44, 91 S.Ct. at 750, cited in City of New Orleans, 109 S.Ct. at 2516. Thus, although abstention is an exception to the general rule that federal courts must exercise their jurisdiction, Younger and its progeny require that ongoing state administrative proceedings be given deference by the federal courts.
II.
In Middlesex Co. Ethics Committee v. Garden State Bar Ass’n, 457 U.S. 423, 432, 102 S.Ct. 2515, 2521, 73 L.Ed.2d 116 (1982), the Supreme Court fashioned a threefold inquiry to determine when abstention is necessary:
first, do [the state proceedings] constitute an ongoing state judicial proceeding; second, do the proceedings implicate important state interests; and third, is there an adequate opportunity in the state proceedings to raise constitutional challenges.
(emphasis in original). As applied to this case, I believe that the majority would agree with me that the last two prongs of the inquiry have been met. Virginia’s interest in protecting its citizenry from fraud through administratively enforced charitable solicitation laws is certainly important. Op. p. 1231. Likewise, Telco’s opportunity to raise its constitutional concerns both before OCA and on direct appeal in the Virginia Commonwealth courts (pursuant to Va. Code Ann. §§ 9-6.14:16, 57-67) clearly satisfies the third prong. See Middlesex, 457 U.S. at 436, 102 S.Ct. at 2523; Dayton, 477 U.S. at 629, 106 S.Ct. at 2723. Thus, we are in disagreement only as to whether there is an ongoing state proceeding to which we should defer and whether that proceeding is sufficiently “judicial” in nature to merit abstention.1 I address these issues in turn.
*1237A.
“Ongoing” means “being actually in process” or “continuously moving forward.” Webster’s New Collegiate Dictionary, 802 (5th Ed.1977). Here, there can be no question that OCA enforcement proceeding was actually in process prior to Telco’s filing in district court. The facts surrounding this proceeding conclusively prove this point.
After receiving a complaint about Telco’s operation, OCA began an investigation in late March, 1988. On June 3, at the request of Telco, OCA sent a four-page letter to Telco’s counsel which detailed the nature of the alleged violations under investigation, as well as the dates and particular solicitation campaigns during which they supposedly occurred. The letter concluded by proposing that an informal fact-finding conference be held to resolve the allegations. A separate cover letter advised Tel-co of the purpose of the proposed conference. On July 6, an unsuccessful conference was held. Afterwards, OCA continued its enforcement activities by requesting, through counsel, certain Telco records. As it became clear that OCA was about to instigate formal revocation proceedings, Telco filed this action in federal court on July 21. At that time, OCA ceased its enforcement efforts pending its request to the district court to abstain. This request was denied.
The majority seems to base its conclusion that there was not an ongoing proceeding on the fact that OCA had not yet commenced a formal revocation hearing. Such a freeze-frame perspective of OCA enforcement, however, ignores the reality of administrative process.
Suspension or revocation of a solicitor’s registration under Va. Code Ann. § 57-61.1 is accomplished through the procedures of the Virginia Administrative Process Act (“APA”) Va.Code Ann. § 9-6.14:1 et seq. After a complaint is filed with and investigated by OCA, an informal fact-finding conference is held between the agency and the suspect registrant. Va.Code Ann. § 9-6.14:11. If this conference does not produce a consensual resolution of the problem, a formal, trial-like proceeding is convened to decide the dispute. § 9-6.14:12. Thus, APA contemplates a two-step decision-making procedure in which the informal conference plays an integral role. The conference serves as a mechanism through which an agency can use its persuasive power to resolve a dispute quickly and inexpensively, obviating the need for a formal hearing. The Virginia General Assembly clearly intended as much.
The Revisor’s Notes to § 9-6.14:11 sketch the fact-finding conference’s place in the administrative process:
They [informal conferences] account for by far the greater bulk of administrative operations of a regulatory nature. To exclude them would be to ignore the larger part of the subject. To prevent or seem to prevent them would radically alter, if not disastrously impair, an important tool of today’s governance....
But, while this section is designed as the primary provision respecting case decisions where basic laws do not require an agency hearing, it may also serve, in the discretion of agencies concerned and upon consent of the private parties, as a preliminary or pretrial method of settling or simplifying cases in which there is a statutory right to a trial-like agency hearing.
Thus, it is evident that these conferences are an important step in APA process as well as in OCA’s scheme of enforcement. Consequently, to hold that no state enforcement proceeding is ongoing after one of these pretrial conferences has been held, makes no sense. Under the majority’s rea*1238soning, only if a formal hearing were scheduled would there be an ongoing proceeding. This view completely ignores the continuous nature of administrative proceedings and disregards this “important tool” of Virginia governance. While in some situations it may be difficult to determine when a case is “ongoing” before a state administrative agency, I have no trouble in concluding that after this enforcement proceeding progressed past the informal conference stage, it was ongoing for Younger abstention purposes. The case law on point supports this conclusion.
The majority’s contention that Dayton and Middlesex support its determination that there was no ongoing state proceeding has been soundly rejected by another circuit. In University Club v. City of New York, 842 F.2d 37 (2d Cir.1988), the New York City Human Rights Commission was sued by two of the City’s private clubs. The Commission had begun an investigation into alleged discriminatory practices at several private clubs. In January, 1986, the Commission filed a complaint against two of the clubs which initiated a formal investigatory period. This investigation culminated in a probable cause determination in July, 1986, at which time the Commission sought to schedule a conciliation meeting. In the meantime, several months earlier in March, the federal plaintiffs filed suit to enjoin the pending administrative proceedings. Id. at 39. In finding abstention the only appropriate course, the Second Circuit saw no conflict with Middlesex and found its case and Dayton indistinguishable:
In both cases the administrative posture was the same: the commissions were proceeding with conciliation efforts and adjudication of the charges, when the targets of the investigations brought suit in federal district court to halt the administrative actions because of alleged infringement of constitutional rights.
Id. at 40. The court had little trouble in concluding that a state proceeding was ongoing. It reasoned that “the administrative agency in this case has not yet conducted its formal hearing or imposed any sanctions; hence, an ongoing state proceeding exists.” Id. at 40 (citation omitted). This is the exact, common sense reasoning that should control this case.
Not only has the majority's decision brought us in conflict with the Second Circuit, but it is clearly at odds with one of our own prior decisions. In American Civil Liberties Union v. Bozardt, 539 F.2d 340 (4th Cir.), cert. denied, 429 U.S. 1022, 97 S.Ct. 639, 50 L.Ed.2d 623 (1976), we upheld a district court's decision to abstain from enjoining the Board of Commissioners on Grievances and Discipline of the South Carolina Bar from investigating a complaint filed against one of the state’s attorneys. There, the federal plaintiff filed her suit at the investigation stage of the proceedings, long before any formal hearing was held. Id. at 342. We held then, as I would hold now, that “principles of comity and federalism require that the federal courts not be permitted to interfere in the ongoing state proceedings.” Id. We emphasized that the plaintiff’s opportunity to have her constitutional challenges addressed in state court (and eventually in the United States Supreme Court) justified the decision to abstain. Id.
The reasoning of these cases squarely controls this case, especially in regard to the majority’s assertion that these proceedings have not advanced far enough to merit federal deference. Here, a complaint was filed with OCA months before this federal action was filed and the agency had investigated the complaint and had held an informal fact-finding conference. The proceedings in University Club and Bozardt had not progressed nearly as far and both courts found abstention necessary. I would do the same.
Most importantly, and most unfortunately, the majority’s decision has the practical effect of eviscerating OCA’s ability to efficiently enforce Virginia’s charitable solicitation laws. Now, if the agency wants to retain jurisdiction to investigate and enforce the Commonwealth’s laws, to avoid the potential of federal interference it will likely skip the cost-effective informal conference stage of the state’s administrative process and go straight to a formal hear*1239ing. This unfortunate result seems to flow from the district court’s and the majority’s misconception that Telco was a party caught in limbo awaiting an arbitrary state agency’s decision whether or not to prosecute. Nothing could have been further from the truth. The decision to prosecute had been made and this was an ongoing enforcement action which was proceeding at a respectable pace.2 But for Telco’s request to enjoin that prosecution, it is undisputed that the second stage of the APA enforcement process, formal proceedings, would have been held. Telco has attempted to, and has apparently succeeded in, making an end-run around the state administrative process and into the federal courts. This is just the type of disruption of ongoing state administrative proceedings that a developed sense of comity cannot allow.
B.
The majority’s failure to recognize the continuous nature of administrative process leads it to a second erroneous conclusion, that OCA’s proceeding was not “judicial” in character. By focusing on the procedures of the informal fact-finding conference alone, it ignores the fact that the conference is only the first step of a two-part enforcement scheme which culminates in a formal trial-like hearing that even the majority would find “judicial.”3 However, the majority’s conclusion is flawed in another, equally fundamental, respect. By requiring the presence of formal, trial-like procedures before a proceeding can be considered “judicial,” the majority again fails to recognize administrative reality.
As Middlesex and Dayton made clear, state administrative proceedings can be sufficiently “judicial” in nature to warrant Younger abstention. Middlesex, 457 U.S. at 432-34, 102 S.Ct. at 2521-22; Dayton, 477 U.S. at 627, 106 S.Ct. at 2722. In neither case did the Supreme Court make its conclusion dependant on the presence or absence of formal procedural trappings.4 In Middlesex, the court did not scrutinize the procedures used by the local bar District Ethics Committees. The fact that the agency had or had not gotten to the formal hearing stage was irrelevant because “[f]rom the very beginning a disciplinary proceeding is judicial in nature, initiated by filing a complaint.” Id., 457 U.S. at 433, 102 S.Ct. at 2522 (citation omitted). Thus, filing of the complaint was the controlling factor for abstention purposes in Middle-sex; an act which occurred months before Telco filed this suit. In Dayton, the court stressed the fact of eventual state court review in concluding that the Ohio Civil Rights Commission proceedings were judicial. Id., 477 U.S. at 619-20, 106 S.Ct. at 2718-19. In the case at bar, Telco unquestionably has the opportunity for the Virginia Commonwealth courts to review its claims.
Thus, although I think that it is wrong to analyze it as such, even the informal fact-finding conference standing alone, divorced from the second step of the APA process, is a judicial proceeding worthy of our abstention. Unquestionably, the entire APA process of which this conference is only a part is a judicial undertaking. In sum, I think that the OCA’s enforcement proceedings were ongoing at the time Telco filed *1240this suit and were “judicial” in nature for purposes of Younger abstention.5
III.
Having determined that OCA’s enforcement effort was an ongoing judicial proceeding for purposes of Younger, I believe that both the district court and the panel erred in not abstaining from the case. I would reverse on this point and would not reach the merits of this appeal. Consequently, I do not express any opinion on the majority’s First Amendment analysis other than to make one observation.
It seems to me that the mootness and ripeness problems encountered by the majority are a direct consequence of taking this case before judicial review was appropriate. If the majority would have abstained, the Virginia courts would not face the problem of determining whether the challenge to § 57-55.1 is actually moot and which of the suspension and revocation provisions of 57-61.1 B are constitutionally suspect. This is so because the Virginia courts would have had before them a fully-developed administrative record that would reveal exactly how the revocation provisions were applied and whether or not OCA relied upon § 57-55.1. Thus, the best argument for Younger abstention is the most obvious. This case is simply not ready for judicial review.
A sense of respect for Virginia’s right to administratively enforce its laws, and a sense of awareness of the importance of informal procedures in the administrative process demand that we abstain in this case. Accordingly, I would reverse the district court and remand with instructions to abstain until the culmination of the administrative process and any subsequent Commonwealth court appellate review. Because the majority has not chosen this course, I respectfully dissent.

. Telco has not argued and the record does not show the presence of any of the exceptions to Younger abstention, such as bad faith or harassment on the part of OCA. Further, contrary to the majority’s protestations, these statutes are not plainly unconstitutional so that abstention is unnecessary. The Younger court itself carved *1237such an exception to its rule of abstention, but it did so very narrowly:
It is of course conceivable that a statute might be flagrantly and patently violative of express constitutional prohibitions in every clause, sentence and paragraph, and in whatever manner and against whomever an effort might be made to apply it. Id. 401 U.S. at 54-55, 91 S.Ct. at 755, quoting Watson v. Buck, 313 U.S. 387, 402, 61 S.Ct. 962, 967, 85 L.Ed. 1416 (1941) (emphasis added).
One need look no further than the majority’s holding on the merits to see that the Younger doctrine does apply in this case.

. This is also why there was no “chilling effect” to Telco's First Amendment rights. Regardless, even if Telco’s First Amendment rights were slightly chilled, this is certainly not enough to justify federal intervention. Younger, 401 U.S. at 50-51, 91 S.Ct. at 753-54.

. The majority also ignores the many procedural safeguards that informal fact-finding conferences have — notice of the conference, right to appear in person or by counsel, notice of all adverse information in possession of the agency, and a prompt decision made in writing if adverse to the litigant. Va.Code Ann. § 9-6.14:12.

.This lack of emphasis on procedure is no accident. The Supreme Court has not employed such an analysis for very obvious and very persuasive reasons. In the interest of efficiency and economy, administrative agencies frequently make “judicial decisions,” without employing formal legal procedures. The majority’s opinion would undermine the benefits of administrative efficiency and lead to increased formalism by not according informal agency actions the deference they are due. It will also lead to an erosion of the deference due to the administrative workings of Virginia’s sovereign Commonwealth government.

. The Dayton court did allude to two situations where abstention in favor of state administrative proceedings might not be appropriate; neither is applicable here. The first is if state law expressly indicates that the proceedings are not “judicial in nature.” A variant of this exception was recently found controlling in City of New Orleans, where the Supreme Court found abstention inappropriate when a plaintiff sought to enjoin an agency's rate-making proceedings — a clearly legislative (rule-making) act. Id., 109 S.Ct. at 2519-2520. Here, the Revisor’s Note to § 9-6.14:11 plainly states that the provision is concerned with the "judicial” operations of agencies. The second exception is if the proceedings are remedial rather than coercive in nature. Of course, these enforcement proceedings, which were intended to revoke or suspend Telco’s registration if violations were proven, were coercive. See University Club, 842 F.2d at 42 (potential of civil penalties makes proceeding coercive).