The Timing of Judicial Review

1. The Timing of Judicial Review Courts may consider a party’s lawsuit against an agency to be premature. If so, they may rely on any number of doctrines to dismiss the suit: • Ripeness • Finality • Exhaustion of Administrative Remedies

2. Ripeness • Defined: Do D’s actions have a sufficiently immediate and direct adverse impact on P to justify bringing the case to court at this time. • Ripeness doctrine has its roots in Article III’s requirement of “concrete” cases & controversies. • But Abbott Labs also treated ripeness as a discretionary aspect of the Court’s equitable jurisdiction. • Thus, even if a case is “ripe” under Article III, a court can find it “unripe” for prudential reasons. • This prudential “ripeness” is usually an issue with pre-enforcement challenges to rulemakings. • Prior to Abbott Labs, parties generally couldn’t challenge agency regs until they were applied to them – Abbott Labs changed all this

3. Abbott Laboratories v. Gardner – the facts • Federal law required drug manufacturers to print generic name on drug labels and advertisements • FDA issued regulation requiring generic name to be put on “each appearance” of the brand name • Drug manufacturing industry wanted to challenge validity of the regulation before complying with it/refusing to comply with it, claiming that the FDA had exceeded its authority under the statute • Why would the gov’t fight so hard to claim pre-enforcement challenge was unripe? Wouldn’t it want to resolve this issue so that it could proceed to enforcement proceedings against companies? • Typically the answer would be “yes.” BUT non-mutual collateral estoppel principles do not apply to the government. Gov’t can re-litigate identical issues it has previously lost against new parties so has incentive to litigate issues through enforcement proceedings in hope that it wins one eventually.

4. Abbott Lab’s 2-part test (and application): • Are the issues fit for judicial decision? (Yes) • Purely a question of law (easy to resolve pre-enforcement) • Agency’s action is final (final rule after formal process – authoritative interpretation of the statute) • No benefit in reviewing multiple claims by manufacturers • Does withholding court consideration impose hardship on the parties? (Yes) • Ps must incur immediate cost to print new labels & ads to comply with new rules OR risk criminal/civil penalties by continuing as is • Requiring drug industry to challenge rules in an enforcement action could hurt consumer confidence, which is particularly important in this area • There is little harm to gov’t by delaying enforcement while resolving this issue. Resolution of the issue first will eventually speed enforcement and compliance

5. Toilet Goods Ass’n v. Gardner – an unripe pre-enforcement challenge Abbott Labs Toilet Goods Statute:FDA must certify as safe all color additives to food, drugs and cosmetics – otherwise product is deemed adulterated. FDA reg:If person appears to refuse access to facilities … related to additive process, inspector may immediately suspend certification service Applying Abbott Labs: Why is this legal issue involving final agency action unfit for judicial decision? Why does withholding court review not work the same hardship as in Abbott Labs? • Statute: required drug manufactures to print established name of drug half as large as proprietary name on labels • FDA reg: established name of drug must accompany each appearance of proprietary name on the label • SCT found that the purely legal issue was appropriate for a pre-enforcement challenged and that withholding review would hurt mfrs.

6. Finality – what is this requirement? The doctrine of finalityensures that an agency has completed an action prior to court review. An agency action is considered “final” if it is: • the consummation of the agency’s decision-making process & and not interlocutory or tentative • an agency action by which the rights and obligations of parties will be determined – i.e., from which legal consequences will flow. • SeeBennett v. Spear (p. 360 n.9)

7. When is finality required? • APA §704 requires (mostly) that agency actions be final before they can be appealed. • Special review statutes also often contain finality requirements (and sometimes define when agency action is final). • Abbott Labs incorporated the finality req’mt into its ripeness inquiry because the challenge involved pre-enforcement review of rules. • Not all finality issues come up in this context though. • Finality issues outside of the pre-enforcement context are essentially just ripeness issues by a different name. Critical question is: • Has the agency reached a natural resting place in its decision-making so that we can say the impact of the agency’s action on P’s rights or obligations is sufficiently real and adverse to be challengeable?

8. Finality – when is agency action the consummation of the agency’s decision process and when does it have an affect on the rights or legal obligations of others? • Some agency actions are clear: • Final rules or orders after binding adjudications are final (assuming that there are no exhaustion issues – more below). • What about actions short of these? • Biological Opinion, Opinion Letter, Interpretive Rule, Letter Rulings ... • SCT has determined whether agency actions are final “pragmatically.” Look to: • formality of action, (2) source of interpretation, (3) authoritative vs. tentative interpretation, (4) impact on P • Depending on how these factors coalesce, an action short of a rule or adjudication may or may not be final. • The more informal, tentative and subordinate in source, the more unlikely the action is to be the consummation of the agency’s decision process and less likely it is to affect the legal obligations of persons/entities.

9. Finality in action – compare these 2 situations • Letter ruling in 1st Nat’l Bank (p. 361)– letter from Comptroller of Currency (has regulatory authority over banks) denied bank permission to engage in action (distribution of property in real estate fund). • Letter was considered final action that could be challenged. • Letter was from senior official w/ regulatory authority; • official made clear his position; • possible severe consequences to the bank if it acted in face of a negative letter ruling (agency likely to institute enforcement proceeding) • Opinion Letter in Air Brake Systems (p. 361)– opinion letter posted on NHTSA’s website that P’s braking system didn’t meet agency’s standards. P sued to have letter removed. • Letter was not final and could not be challenged. • Letter was tentative and seemed advisory – no sense agency would pursue the recipient if system unchanged; • letter was based on incomplete information so P couldn’t claim was final; • letter also was non-reviewable because it lacked legal consequences (nothing happened to people who installed the brake systems other than recall notice).

10. Exhaustion of remedies Exhaustion: The requirement that parties challenging agency action pursue all available remedies within the administrative structure before they purse a lawsuit in court.

11. When is exhaustion required? Special Review Statutes • If a special review statute pertaining to a particular agency REQUIRES exhaustion of administrative remedies, then a party must exhaust those remedies. • Example: 15 USC§3416(a)(2): Any person aggrieved by any order issued by the Commission in a proceeding under this chapter to which such person is a party may apply for a rehearing within 30 days after the issuance of such order. . . . • No person may bring an action under this section to obtain judicial review of any order of the Commission unless - (A) such person shall have made application to the Commission for rehearing under this subsection; and (B) the Commission shall have finally acted with respect to such application.

12. When is exhaustion required absent a special review statute? When the basis for lawsuit is violation of federal statutes & there is no special review statute REQUIRING exhaustion of administrative remedies: APA§704 serves as the default exhaustion requirement. APA§704: Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review.... Except as otherwise expressly required by statute, agency action otherwise final is final for purposes of this section, whether or not there has been presented or determined an application for a declaratory order, for any form of reconsideration, or unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority.

13. Exhaustion under the APA after Darby v. Cisneros • SCT held that APA§704 means what it says, which translated is: • An agency action is final & appealable to a court once the party has exhausted all administrative remedies expressly required by a statute or regulation. • Litigants need not exhaust permissive administrative remedies. • In Darby, HUD regulations provided that a hearing was to be held before an ALJ and that ALJ’s determination was to be finalunless the Sec’y of HUD reviewed the determination as a matter of discretion. • Parties were NOT required to petition the Sec’y for review prior to filing lawsuits. • Secy’s review was permissive and APA§704 requires exhaustion only of expressly required remedies.

14. Exhaustion when the claim against the agency is not statutory in nature • Before Darby, as a matter of common law, courts routinely implied exhaustion requirements for all sorts of claims even if exhaustion was not mandated in a statute. • That can no longer happen for claims governed by APA §704 due to Darby’s interpretation of APA§704 as precluding exhaustion of permissive remedies • BUT common law exhaustion principles still may apply in certain instances, especially when actions arise under the Constitution rather than statutes.

15. Common law exhaustion principles in a nutshell • When the claim involved is based on the common law (including the Constitution), courts generally insist that litigants exhaust anyinternal review or rehearing procedures – even if they are or seem discretionary/permissive in nature • Exceptions • If exhaustion of administrative remedies will cause undue prejudice to subsequent court action • Where administrative remedies are inadequate due to doubt that the agency has the power to grant appropriate relief • Where the agency has been shown to be biased or has otherwise predetermined the issue

16. EXAM INFO • Final Exam – May 12, 8:30-11:30 am • Closed book – statutes will be provided • Office Hours: • Friday, May 9, 8:30-3:30 • Sunday, May 11, 11:00-2:30 • Any other time during finals week you can catch me in my office is fine too. • You can email me with questions at any time. • Be patient – it could take me a few hours to get back to you. • A tip – it’s easier for me to answer emails if you are specific about what you don’t understand – otherwise you may just get a request for clarification back in response. • Any emails sent after 6pm on Sunday, May 11 may go unanswered (just beware).