Salazar v. King
822 F.3d 61
2d Cir.2016Background
- Seven named plaintiffs (former Wilfred beauty‑school students) sued the Secretary of Education on behalf of a proposed class of Wilfred borrowers, alleging Wilfred fraudulently certified their "ability‑to‑benefit" (ATB) and the DOE continued collection without notifying borrowers of potential discharge eligibility.
- Congress and DOE regulations require discharge of loans "shall" be granted where a student's eligibility was falsely certified; regulations also direct suspension of collection and notice when the agency has "reliable information" that a borrower "may be eligible."
- DOE had long investigated Wilfred and obtained evidence of systemic ATB fraud; DOE policy granted facially valid Wilfred discharge claims but declined to broadly suspend collection or notify all Wilfred borrowers.
- Plaintiffs sought (under the APA) an order compelling DOE to suspend collection and notify potentially eligible Wilfred borrowers; district court dismissed for lack of a reviewable final agency action.
- The Second Circuit held the case not moot (inherently transitory class exception), found a presumption for judicial review applied, concluded there was sufficient law to apply (statute, regulations, Dear Colleague Letters), and that DOE's refusal to suspend/notify was a final agency action. The dismissal was vacated and the case remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mootness / standing for appeal | Named plaintiffs had standing when filed; case fits inherently‑transitory class exception because DOE grants Wilfred discharges quickly | Named plaintiffs' subsequent discharges render appeal moot; exception doesn't apply | Inherently‑transitory exception applies; court retains jurisdiction |
| Presumption of judicial review | APA presumption applies because plaintiffs challenge agency action coercively imposed on them (collection) | Chaney presumption against review of enforcement‑discretion decisions applies | Presumption in favor of review controls; Chaney does not bar review here |
| "Law to apply" / reviewability under 5 U.S.C. § 701(a)(2) | Statute uses mandatory "shall"; regs and DCLs set standards ("reliable" info; factors to consider), so courts can review arbitrariness of DOE's refusal to suspend/notify | Triggering determinations ("determines"/"believes to be reliable") are discretionary and insulate DOE from review | Sufficient legal standards exist in statute, regulations, and DCLs to permit judicial review of DOE's decision |
| Final agency action (5 U.S.C. § 704) | DOE's refusal to suspend collection and to send notice consummated decisionmaking and has immediate legal consequences (garnishment, offsets) | DOE argued actions are nonfinal/committed to discretion | DOE's refusal was final under Bennett: consummation + legal consequences; therefore reviewable |
Key Cases Cited
- Mach Mining, LLC v. EEOC, 135 S. Ct. 1645 (2015) (presumption favoring judicial review of agency action)
- Heckler v. Chaney, 470 U.S. 821 (1985) (agency refusal to enforce is presumptively unreviewable)
- Bowen v. Michigan Acad. of Family Physicians, 476 U.S. 667 (1986) (judicial review of final agency actions unless Congress clearly precluded it)
- Bennett v. Spear, 520 U.S. 154 (1997) (two‑part test for final agency action)
- I.N.S. v. Yueh‑Shaio Yang, 519 U.S. 26 (1996) (agency departures from announced policies subject to review)
- Robidoux v. Celani, 987 F.2d 931 (2d Cir. 1993) (inherently transitory class‑action mootness doctrine application)
- Sackett v. EPA, 566 U.S. 120 (2012) (agency action can be final even if further administrative steps remain)