DEL MONTE FRESH PRODUCE COMPANY and Del Monte Foods U.A.E. FZE, Appellants v. UNITED STATES OF AMERICA, et al., Appellees.
No. 08-5398.
United States Court of Appeals, District of Columbia Circuit.
Argued April 9, 2009. Decided June 26, 2009.
570 F.3d 316
Anisha S. Dasgupta, Attorney, U.S. Department of Justice, argued the cause for appellees. With her on the brief were Michael F. Hertz, Acting Assistant Attorney General, and Douglas N. Letter, Litigation Counsel. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.
Before SENTELLE, Chief Judge, ROGERS and GRIFFITH, Circuit Judges.
Opinion for the Court by Circuit Judge ROGERS.
Dissenting opinion by Chief Judge SENTELLE.
ROGERS, Circuit Judge.
The only question on appeal is whether the district court erred in dismissing as moot a complaint seeking a declaratory judgment. We hold that it did.
I.
The Trade Sanctions Reform and Export Enhancement Act of 2000 (the “TSRA“),
Such exports require a one-year license, which will authorize exports pursuant to contracts entered into during the license period so long as the products are shipped within one year of the signing of the covered contract. The licensing requirements “shall be no more restrictive than license exceptions administered by the Department of Commerce or general licenses administered by the Department of the Treasury,”3 except for procedures involving export licenses to an entity in such country, or in the Taliban-controlled area of Afghanistan, “promoting international terrorism.”
The Treasury Department, through the Office of Foreign Assets Control (“OFAC“), published an interim rule on July 12, 2001 to carry out TSRA § 906 with regard to exports to Iran and other countries, stating in the preamble it was adopting an expedited licensing process, with deadlines for agency action that in material respects are the same as those of the Commerce Department.4 Under this expedited process, OFAC would refer the application to other agencies, and, provided the license application met the requirements set forth in the regulations, OFAC would issue the license so long as no objection was received within nine business days.
Del Monte Fresh Produce Company is a vertically integrated producer, marketer, and distributor of fresh fruits and vegetables, and facilitates sales abroad by its foreign affiliates, such as Del Monte Foods (U.A.E.) FZE (together “Del Monte“). On August 8, 2007, Del Monte submitted an application to OFAC for a one-year license (the “August 2007 license“) to export agricultural commodities to ten entities in Iran, none of which were listed on either of the two terrorists lists identified in Commerce Department regulations. Del Monte alleges that because the August 2007 license application contained all of the information specified in OFAC regulations, OFAC referred the application to the State Department on August 17, 2007, and that the State Department responded on September 13, 2007 without raising an objection to issuance of the license. Still, OFAC did not issue the license. Del Monte‘s repeated inquiries to OFAC about the status of the license revealed only that its application was pending. On November 27, 2007 Del Monte was advised by OFAC‘s “help desk” that its August 2007 license application was still pending.
On November 28, 2007 Del Monte filed suit. It had been more than 110 days since OFAC had received the August 2007 license application, more than 100 days since OFAC referred the application to the State Department, and more than 75 days since the State Department‘s response. On November 29 Del Monte filed a motion for a preliminary injunction, the district court scheduled a status conference on that motion, and OFAC issued the August 2007 license to Del Monte.
Del Monte filed an amended complaint on January 10, 2008 seeking a declaratory judgment that OFAC‘s failure to issue the August 2007 license until November 29, 2007 constituted agency action that was both unlawfully withheld and unreasonably delayed under the Administrative Procedure Act (“APA“),
The district court granted the government‘s motion to dismiss the complaint for lack of subject matter jurisdiction on grounds of mootness pursuant to
II.
Del Monte appeals the dismissal of its amended complaint on the principal ground that the claim for relief falls within the capable of repetition but evading review exception to the mootness doctrine. Our review is de novo. See Munsell v. Dep‘t of Agric., 509 F.3d 572, 578 (D.C. Cir. 2007).
“A case is moot when ‘the challenged conduct ceases such that there is no reasonable expectation that the wrong will be repeated’ in circumstances where ‘it becomes impossible for the court to grant any effectual relief whatever to the prevailing party.‘” United States v. Philip Morris USA, Inc., 566 F.3d 1095, 1135 (D.C. Cir. 2009) (quoting City of Erie v. Pap‘s A.M., 529 U.S. 277, 287 (2000)). In at least two kinds of cases the fact that the specific conduct that gave rise to the case has ceased does not mean that the challenge to the legality of that conduct is moot. City of Houston v. Dep‘t of Hous. & Urban Dev., 24 F.3d 1421, 1429-30 (D.C. Cir. 1994).
First, a plaintiff‘s challenge will not be moot where it seeks declaratory relief as to an ongoing policy.
Second, even though the specific action that the plaintiff challenges has ceased, a claim for declaratory relief will not be moot even if the “plaintiff has made no challenge to [an] ongoing underlying policy, but merely attacks an isolated agency action,” so long as “the specific claim fits the exception for cases that are capable of repetition, yet evading review, or falls within the voluntary cessation doctrine.”
Under the capable of repetition yet evading review exception to mootness, the plaintiff must demonstrate that “(1) the challenged action is in its duration too short to be fully litigated prior to its cessation or expiration, and (2) there [is] a reasonable expectation that the same complaining party would be subjected to the same action again.” Clarke v. United States, 915 F.2d 699, 704 (D.C. Cir. 1990) (en banc) (quoting Murphy v. Hunt, 455 U.S. 478, 482 (1982)) (alteration in original); see also Honig v. Doe, 484 U.S. 305, 318-20 & n.6 (1988). When these “two circumstances [are] simultaneously present,” Spencer v. Kemna, 523 U.S. 1, 17 (1998), the plaintiff has demonstrated an “exceptional circumstance[],”
First, a challenge to the timeliness of OFAC‘s response to applications for a one-year license cannot be fully litigated before the expiration, let alone the granting, of the requested license. By “evading review” “the Supreme Court has meant evading Supreme Court review.”
Second, in order to decide whether the same type of inaction or unreasonable delay is sufficiently likely to recur, the court must first determine “exactly what must be repeatable in order to save [the] case from mootness.” People for the Ethical Treatment of Animals, Inc. v. Gittens (“PETA“), 396 F.3d 416, 422 (D.C. Cir. 2005); see also Clarke, 915 F.2d at 703. Three circuit precedents provide instruction:
In PETA the court adopted a functional approach, explaining that “[t]he ‘wrong’ that is, or is not, ‘capable of repetition,’ must be defined in terms of the precise controversy it spawns,” that is, the wrong must be “put in terms of the legal questions it presents for decision.” 396 F.3d at 422-23 (emphasis added). In that case the issue presented by PETA‘s First Amendment challenge to the government‘s allegedly pretextual rejection of PETA‘s submission to a city-wide display of privately-designed, government-selected statues was highly fact-dependent. As such, the court concluded that the wrong suffered by PETA was unlikely to recur, and that the claim was therefore moot. - In Clarke, the en banc court explained that the wrong at issue for mootness purposes is defined by the plaintiffs’ theory set forth in the complaint. Clarke, 915 F.2d at 703-04. There, Members of the D.C. Council challenged a federal statute as a violation of their First Amendment rights because it conditioned appropriations for the District of Columbia on the D.C. Council‘s amendment of the D.C. Human Rights Act.
Id. The United States had suggested the injury be defined as “congressional use of funding to induce appellees to enact specific language allowing religiously affiliated institutions to discriminate against homosexuals;” the D.C. Council Members had suggested the issue was “whether Congress can coerce [their] votes by withholding appropriated funds.”Id. at 703. This court rejected both suggestions: the United States’ position because it included “facts completely irrelevant to any intelligible formulation of plaintiffs’ claim,” and the D.C. Council Members’ suggestion because it attempted to press “a broader notion of their injury than the one on which they originally sought relief.”Id. Instead, the court focused on identifying the factors that were “essential to plaintiffs’ original theory of their claim,” concluding that even “broadly conceived” the “injurious act” of which the Council Members complained—Congress‘s conditioning of funding on the Council‘s “enactment of legislation in specific language“—was not reasonably likely to recur.Id. at 704. - In KKK, 972 F.2d at 369-70, although the Klan challenged no regulations on their face, and its complaint concerned only its requests for an October 28, 1990 parade permit, the court held the controversy was capable of repetition because there was a reasonable likelihood that in the future the Klan would seek parade permits, raising the same concerns of violence. The Klan had requested a permit to march along Constitution Avenue from 14th to 3rd Streets on October 28, 1990; citing the risk of violence incited by the Klan‘s presence, the District government granted a parade permit for only four blocks. As this court subsequently explained, the wrong in the KKK case was not limited to the treatment of the Klan‘s application for the October 28, 1990 parade, but rather “consisted of the District [government]‘s refusal, in alleged violation of the First Amendment, to grant a parade permit because the march would provoke violence.” PETA, 396 F.3d at 423.
The district court‘s approach in identifying the wrong alleged in Del Monte‘s amended complaint failed to adhere to this precedent. In agreeing with this approach, our dissenting colleague does likewise. Dis. Op. at 326. The district court concluded, and the government maintains on appeal, that Del Monte‘s claims are not capable of repetition because the alleged wrong was the delay in acting on Del Monte‘s August 2007 license application.
Del Monte has shown there is a reasonable likelihood it will be subjected to the same challenged action in the future. It alleged that OFAC was required to, but did not, grant Del Monte‘s properly-prepared license, Am. Compl. ¶¶ 22-23, 30, “nine business days after [OFAC] refer[red] the application for review by other agencies, [when] the other agencies lodge[d] no objection within that nine business-day period,”
When Del Monte filed suit on November 28, 2007, OFAC had not granted the August 2007 license; because standing is assessed as of the time a suit commences, Del Monte has standing to seek declaratory relief. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 190-91 (2000). With regard to mootness, Del Monte proffered the unchallenged declaration of its associate general counsel that “[s]elling food products to Iran is, and has been, a part of [Del Monte‘s] business plan” and that Del Monte “will definitely apply for OFAC licenses in the future, on a continuing basis.” Decl. of Jeffrey S. Bailey, ¶ 4, Feb. 7, 2008. Del Monte also proffered unchallenged evidence tending to show that OFAC will not act on Del Monte‘s future licenses within the mandated time limits and indeed that the delays may be substantial. Addressing past conduct, an international trade specialist at Del Monte‘s law firm described how OFAC had failed to act on Del Monte‘s license applications within the nine-day deadline on five separate occasions in the past. Decl. of Katia Gousset, ¶¶ 2-8, Feb. 7, 2008. In that regard, the specialist noted that at least one of OFAC‘s past delays in acting was substantial—100 days from when Del Monte submitted the application and nearly two months after OFAC learned that the State Department did not object to issuance of the license. Addressing OFAC‘s intent in addressing future applications, Del Monte pointed to OFAC‘s announcement on March 20, 2007 that its “processing of one-year license requests may take longer than the time periods suggested at the inception of the TSRA program.” OFAC March 2007 Regulations, 72 Fed. Reg. at 12,981.
With the allegations in the amended complaint and these uncontested decla-
The government presents two responses: First, because Del Monte‘s amended complaint did not seek relief from OFAC‘s general policy of handling license applications, the wrong is limited to OFAC‘s delay on the August 2007 application. Second, the amended complaint should not be construed as a challenge to OFAC‘s general policy because such a challenge is not authorized under
Del Monte‘s amended complaint presents a classic example of a legal injury that is capable of repetition yet evading review. It engages in an ongoing commercial enterprise—exporting food products to clients located in Iran—that requires one-year licenses. It has proffered unrebutted evidence that it is reasonably likely that the licensing agency will not conform to the expedited procedures that Del Monte contends are mandated by Congress. Moreover, as of March 20, 2007 the agency itself confirmed that such delays were likely to recur in the future. Del Monte has encountered a series of substantially similar injuries from delays of substantially
Accordingly, we reverse the dismissal of the amended complaint pursuant to
SENTELLE, Chief Judge, dissenting:
Briefly put, I would affirm the decision of the district court because I believe the district court‘s decision is exactly correct. I will not belabor the facts, as they are set out by the majority above and are readily available in the district court‘s opinion. See Del Monte Fresh Produce Co. v. United States, 565 F. Supp. 2d 106, 108-09 (D.D.C. 2008). In summary, appellants filed this action seeking a judgment declaring that the Office of Foreign Assets Control (OFAC) unlawfully withheld or unreasonably delayed issuance of a single license for food shipments to Iran in violation of the Administrative Procedure Act (APA),
As the district court stated, “[i]f events outrun the controversy such that the court can grant no meaningful relief, the case must be dismissed as moot.” Del Monte, 565 F. Supp. 2d at 110 (quoting McBryde v. Comm. to Review Circuit Council Conduct & Disability Orders of the Judicial Conference of the U.S., 264 F.3d 52, 55 (D.C. Cir. 2001)). Since it is apparent that this case falls within that description, the district court rightly entered a judgment of dismissal for lack of jurisdiction, by reason of mootness.
Granted, appellants argue that this case falls within one or both of two discrete exceptions to the mootness doctrine—“capable of repetition yet evading review” and “voluntary cessation.” To allow this case to go forward based on either of those exceptions is to allow the exception to swallow the mootness doctrine.
As the district court reminded us, “[t]he ‘capable of repetition yet evading review’ exception ‘applies only in exceptional situations, where the following two circumstances [are] simultaneously present: (1) the [alleged wrong is] in its duration too short to be fully litigated prior to cessation or expiration, and (2) there [is] a reasonable expectation that the same complaining party [will] be subjected to the same [alleged wrong] again.‘” Id. at 112 (quoting Spencer v. Kemna, 523 U.S. 1, 17 (1998)). The action sought relief as to delay on one license. That license has been issued. The Trade Sanctions Reform and Export Enhancement Act cannot delay the issuance of that license any more. The case is moot. Any possible future licenses may or may not be delayed; indeed, may or may not be sought, and may or may not be issued. In some sense, any action is capable of repetition. Certainly, the grant or delay of grant of any license can recur. There is nothing exceptional about the current circumstances to differentiate it from the grant or delay of grant of any other license. Such a case can become moot. It does not automatically fall within the capable of repetition yet evading review exception.
Appellants also rely on the “voluntary cessation” exception to the mootness rule. Such an exception, perhaps even rarer than the capable of repetition exception, applies when a defendant has voluntarily stopped the transaction, but may “return to [its] old ways.” United States v. W.T. Grant Co., 345 U.S. 629, 632 (1953). It does not apply where “‘there is no reasonable expectation ... that the alleged violation will recur’ and ... ‘interim relief or events have completely and irrevocably eradicated the effects of the alleged violation.‘” Del Monte, 565 F. Supp. 2d at 113 (quoting Doe v. Harris, 696 F.2d 109, 111 (D.C. Cir. 1982)).
The district court correctly ruled that this exception is unavailable for multiple reasons. First, the exception is designed to prevent a defendant from “rendering a case moot through manipulative unilateral action after the case is filed.”
In short, I would affirm the decision of the district court. I therefore respectfully dissent.