Farrell-Cooper Mining Co. v. United States Department of the InteriorFarrell-Cooper Mining Co. v. United States Department of the Interior
John Emad Arbab, Attorney, United States Department of Justice, Washington, D.C. (John Austin, of Counsel, United States Department of Interior, Knoxville, Tennessee, John C. Cruden, Assistant Attorney General, and Katherine J. Barton, Attorney, United States Department of Justice, Washington D.C., with him on the brief), for Defendants-Appellees.
Before KELLY, LUCERO, and McHUGH, Circuit Judges.
LUCERO, Circuit Judge.
Under the Administrative Procedure Act (“APA“), agencies may require regulated parties to pursue administrative appeals before seeking review in federal court. But as the Supreme Court explainеd in Darby v. Cisneros, 509 U.S. 137, 113 S.Ct. 2539, 125 L.Ed.2d 113 (1993), intra-agency review “is a prerequisite to judicial review only when expressly required by statute or when an agency rule requires appeal before review and the administrative action is made inoperative pending that review.” Id. at 154, 113 S.Ct. 2539. This rule prevents agencies from enforcing initial decisions while a mandatory administrative appeal is pending, which would effectively insulate such decisions from judicial scrutiny.
The Department of the Interior (“DOI“) has adopted an administrative appeal requirement for agency actions under the Surface Mining Control and Reclamation Act (“SMCRA“),
We must decide whether the IBLA‘s denial of a stay renders an ALJ‘s decision final for purposes of judicial review, notwithstanding a pending IBLA appeal. This question is controlled by Darby: “Agencies may avoid the finality of an initial decision” only “by providing that the initial decision would be inoperative pending appeal. Otherwise, the initial decision becomes final and the aggrieved party is entitled to judicial review.” 509 U.S. at 152, 113 S.Ct. 2539 (quotation omitted). Because the ALJ‘s decision in this case was not rendered inoperative pending appeal to the IBLA, it constitutes final agency action. Exercising jurisdiction under
Under SMCRA, states may submit proposed regulatory programs to DOI and, if approved, obtain regulatory jurisdiction over surface coal mining and reclamation operations. See Farrell-Cooper Mining Co. v. U.S. DOI, 728 F.3d 1229, 1232 (10th Cir. 2013) (citing
Although ODM is primarily responsible for enforcing SMCRA in Oklahoma, DOI retains oversight through its Office of Surface Mining Reclamation and Enforcement (“OSM“). Whenever OSM “has reason to believe that any person is in violation of any requirement of [SMCRA] or any permit condition required by [SMCRA],” it may issue notice to a state regulatory authority.
Farrell-Cooper Mining Co. (“Farrell-Cooper“) operates the Rock Island Mine in Leflore County, Oklahoma, pursuant to a permit issued by ODM. In July 2012, OSM issued a ten-day notice for the Rock Island Mine, alleging a violation of SMCRA‘s requirement that mine operators “restore the аpproximate original contour of the land.”
Following a federal inspection, OSM issued an NOV to Farrell-Cooper on August 19, 2013. The notice required Farrell-Cooper to abate reclamation activities, submit a new reclamation plan, diligently pursue OSM approval, and then implement the new plan. Farrell-Cooper alleges that complying with the NOV would require it to transfer millions of yards of earth, imposing an “untenable financial burden.”
On August 28, 2013, Farrell-Cooper filed a “Conditional Application for Review and Conditional Request for Temporary Relief and Stay” with DOI‘s Office of Hearings and Appeals (“OHA“). Following lengthy proceedings, an ALJ upheld the NOV on September 30, 2015. On October 19, 2015, Farrell-Cooper filed a notice of appeal and a petition for stay pending appeal with the IBLA. After the ALJ issued an amended decision clarifying his prior order, the IBLA denied a stay, conсluding that Farrell-Cooper had not demonstrated a likelihood of success on the merits. That denial—issued December 14, 2015—rendered the ALJ‘s decision immediately effective. See
On January 12, 2016, Farrell-Cooper submitted its “Statement of Reasons” and Appellate Brief to the IBLA in the still-pending administrative appeal. The next day, it filed suit in federal court seeking review of the ALJ‘s decision under
DOI then moved to dismiss the federal complaint. The district court granted the motion, concluding it lacked subject matter jurisdiсtion because the ALJ‘s decision did not constitute final agency action. Farrell-Cooper moved for reconsideration pursuant to
II
We review de novo a district court‘s dismissal for lack of jurisdiction. Grynberg v. Kinder Morgan Energy Partners, L.P., 805 F.3d 901, 905 (10th Cir. 2015). “Pursuant to the APA, we have jurisdiction to review only final agency actions.” McKeen v. U.S. Forest Serv., 615 F.3d 1244, 1253 (10th Cir. 2010) (quotation omitted). “Whether fеderal conduct constitutes final agency action within the meaning of the APA is a legal question.” Colo. Farm Bureau Fed‘n v. U.S. Forest Serv., 220 F.3d 1171, 1173 (10th Cir. 2000).
A
The APA provides that “[e]xcept as otherwise expressly required by statute, agency action otherwise final is final for the purposes of this section whether or not there has been presented or determined an application ... for an appeal to superior agency authority[,]” “unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative.”
In no case may appeal to “superior agency authority” be required by rule unless the administrative decision meanwhile is inoperative, because otherwise the effect of such a requirement would be to subject the party to the agency action and to repetitious administrative process without recourse. There is a fundamental inconsistency in requiring a person to continue “exhausting” administrative processes after administrative action hаs become, and while it remains, effective.
Id. at 147-48, 113 S.Ct. 2539 (quoting S. Rep. No. 752, 79th Cong., 1st Sess., 27 (1945)). Accordingly, “an appeal to ‘superior agency authority’ is a prerequisite to judicial review only when expressly required by statute or when an agency rule requires appeal before review and the administrative action is made inoperative pending that review.” Id. at 154, 113 S.Ct. 2539.
SMCRA provides that a permittee may seek administrative review of an NOV.
Under DOI‘s general regulations for the IBLA, an ALJ decision “will become effective on the day after the expiration of the time during which a person adversely affected may file a notice of appeal unless a petition for a stay pending appeal is filed together with a timely notice of appeal.”
Few circuit court decisions have applied the rule of Darby to
A subsequent unpublished Ninth Circuit decision appears to reach the opposite conclusion. In Backcountry Against Dumps v. Abbott, 491 Fed.Appx. 789 (9th Cir. 2012) (unpublished), the court held that
But National Parks & Conservation Ass‘n supports Farrell-Cooper‘s position. There, the court held that plaintiffs could challenge an IBLA decision affirming an ROD, but not the ROD itself. It held the ROD was non-final because the IBLA “granted a stay,” which prevented it from ever becoming effective. Id. at 1065 (emphasis omitted). The court recognized that if the IBLA “denies a petition for a stay, a[n ROD] will become effective and final in accordanсe with
Finally, the D.C. Circuit concluded in WildEarth Guardians v. Jewell, 738 F.3d 298 (D.C. Cir. 2013), that the IBLA‘s denial of a stay makes a decision final and subject to review. Although the court did not discuss Darby or engage in extended analysis, it stated that “WildEarth sought a stay of the ROD pending appeal but the IBLA did not act on WildEarth‘s motion within 45 days, thus making the ROD the
Although circuit court authority is sparse, numerous district court decisions have considered whether
Further, DOI itself has previously stated that the denial of a stay by the IBLA makes an ALJ‘s decision final agency action. In David M. Burton, 11 OHA 117 (1995), the Director of OHA ruled that the IBLA possesses authority to stay a BLM decision after the 45-day time limit set forth in
The IBLA reaffirmed that conclusion in M.L. Johnson Family Properties, LLC v. OSM, IBLA 2015-91 (Feb. 19, 2016). There, M.L. Johnson Family Properties, LLC (“Johnson“), appealed an ALJ decision to the IBLA and filed a petition for stay. Id. at 4. After the IBLA failed to rule on the stay petition within 45 days, Johnson filed suit in federal district court and moved to dismiss its IBLA appeal for lack of jurisdiction. Id. at 5. The IBLA rejected Johnson‘s assertion that the agency lost jurisdiction over the appeal after commencement of the federal court action. Id. However, relying on David M. Burton, the IBLA acknowledged that, because the stay petition was not decided within 45 days, the ALJ‘s decision “becamе effective and subject to judicial review” pursuant to
We agree with the majority view, which has also been adopted by DOI outside of this lawsuit. The regulations at issue plainly do not provide that the ALJ‘s initial decision will be ‘inoperative’ pending appeal” to the IBLA. Darby, 509 U.S. at 152, 113 S.Ct. 2539 (quoting
B
In resisting this conclusion, DOI raises two main arguments: (1) Darby concerned exhaustion rather than finality; and (2) Farrell-Cooper‘s pending IBLA appeal renders the ALJ‘s decision non-final even if review would otherwise be permissible. We reject both contentions.
1
DOI claims that Darby does not control because that case concerned exhaustion rather than finality. See 509 U.S. at 144, 113 S.Ct. 2539. The agency argues that in considering finality, we must look to the principles set forth in Bennett v. Spear, 520 U.S. 154, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997). In that case, the Court held:
As a general matter, two conditions must be satisfied for agency action to be final: First, the аction must mark the consummation of the agency‘s decisionmaking process[ ]—it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow.
Id. at 177-78, 117 S.Ct. 1154 (citations and quotations omitted).
The ALJ decision that Farrell-Cooper seeks to challenge quite clearly occasioned legal consequences. Following the IBLA‘s denial of a stay, the NOV became effective as a result of the ALJ ruling.
But DOI argues that the ALJ decision did not “mark the consummation of the
The Bennett opinion states that decisions are not final “[a]s a general matter” unless they mark the consummation of agency proceedings. Id. at 177-78, 117 S.Ct. 1154. But it does not cоnsider the issue presented in this case: whether an ALJ‘s decision that has become effective is nevertheless non-final if regulations require an intra-agency appeal. That contingency is addressed directly in Darby, which explains that an appeal to “superior agency authority” is a prerequisite to judicial review only when an administrative action is made inoperative pending intra-agency review. 509 U.S. at 154, 113 S.Ct. 2539. Nothing in Bennett suggests that the Court intended to impliedly overrule this more specific rule announced in Darby just a few years earlier.
Further, although the Darby decision primarily dealt with exhaustion, it also explicitly considered finality. It stated that “[t]he finality requirement is concerned with whether the initial decisionmaker has arrivеd at a definitive position on the issue that inflicts an actual, concrete injury.” Id. at 144, 113 S.Ct. 2539 (quotation omitted) (emphasis added). The ALJ‘s decision clearly qualifies under that standard: It definitively upheld the NOV and, as described above, subjected Farrell-Cooper to real-world consequences following denial of a stay by the IBLA. The Darby Court also explained that “[a]gencies may avoid the finality of an initial decision” only by making it inoperative pending appeal. Id. at 152, 113 S.Ct. 2539. If an agency does not do so, the “initial decision becomes final and the aggrieved party is entitled to judicial review.” Id. at 152, 113 S.Ct. 2539. Although these statements may have constituted dicta, “this court considers itself bound by Supremе Court dicta almost as firmly as by the Court‘s outright holdings.” Gaylor v. United States, 74 F.3d 214, 217 (10th Cir. 1996).
In describing the general rule that an agency action is not final until the agency has completed its decision-making process, the Bennett opinion essentially presumed compliance with
2
DOI also contends that even if the ALJ‘s decision were otherwise final, Farrell-Cooper‘s pending IBLA appeal makes it non-final. In ICC v. Brotherhood of Locomotive Engineers, 482 U.S. 270, 107 S.Ct. 2360, 96 L.Ed.2d 222 (1987), the Court stated that
But in contrast to this case, both Stone and Locomotive Engineers involved non-mandatory administrative appeal proceedings. Seе 514 U.S. at 390, 115 S.Ct. 1537 (citing
In this case, we are not confronted with optional agency review. Under
Our circuit precedent is in accord. In Silverton Snowmobile Club v. United States Forest Service, 433 F.3d 772 (10th Cir. 2006), plaintiffs filed suit after submitting an appeal to the IBLA but before that appeal was decided. Id. at 787. We concluded that “plaintiffs plainly had not exhausted their administrative rеmedies when they filed their complaint in the district court.” Id. (citing
We are thus presented with a very different scenario than those at issue in Stone and Locomotive Engineers. In those cases, plaintiffs who could have immediately challenged agency action in federal court instead elected to pursue additional administrative remedies. Farrell-Cooper had no such option. It would have faced dismissal for failure to exhaust had it filed suit in federal court immediately after the ALJ issued his decision. But in DOI‘s view, Farrell-Cooper also faces dismissal under Stone and Locomotive Engineers so long as its mandatory appeal to the IBLA is pending. Yet the agency maintains its authority to enforce the ALJ decision in the interim. Thus, DOI‘s view is that the regulatory scheme makes immediate challenge of an effective initial decision impossible—a result that is plainly inconsistent with Darby. To avoid such inconsistency, we conсlude that the doctrine set forth in Stone and Locomotive Engineers is limited to circumstances in which a plaintiff pursues optional administrative review. See Bangura, 434 F.3d at 501; Acura of Bellevue, 90 F.3d at 1407.
DOI also argues that even if Farrell-Cooper was required to file a notice of appeal with the IBLA, it could have moved to dismiss that proceeding prior to filing this lawsuit. See
In support of its claim that dismissal of an IBLA appeal is required, DOI argues that such dismissals occurred in some of the above-cited cases permitting judicial review. But it does not appear that the plaintiffs in any of those cases dismissed their IBLA appeals prior to filing suit. In Idaho Watersheds Project, the IBLA appeal was pending when suit was filed, and the plaintiff dismissed it only after BLM argued failure to exhaust. See Idaho Watersheds Project v. Hahn, No. CV-97-0519-S-BLW, slip op. at 8 (D. Idaho Feb. 11, 1998) (Docket No. 65). Similarly, in M.L. Johnson Family Properties, LLC, the plaintiff filed suit before moving to dismiss the agency proceedings. See 237 F.Supp.3d at 531-33; see also M.L. Johnson Family Props., LLC, IBLA 2015-91, at 5. Because finality and exhaustion must be considered as of the time a complaint is filed, see Silverton Snowmobile Club, 433 F.3d at 787, these cases do not support DOI‘s position. Moreover, other decisions have held that agency action was subject to judicial review even though an appeal remained pending before the IBLA and plaintiffs had not moved to dismiss. Ctr. for Biological Diversity, 255 F.Supp.2d at 1033, 1034-35; Or. Nat. Desert Ass‘n, 953 F.Supp. at 1141.9
We acknowledge that an IBLA appeal and a federal lawsuit proceeding on parallel tracks is not ideal and may undermine judicial and administrative efficiency, which the exhaustion doctrine is intended to protect. See Woodford v. Ngo, 548 U.S. 81, 89, 126 S.Ct. 2378, 165 L.Ed.2d 368 (2006). Despite the practical difficulties, however, this scenario is not novel. As the Supreme Court has explained, “[i]n multi-party proceedings ... some may seek judicial review and others may seek administrative recоnsideration. That both tribunals have jurisdiction does not mean, of course, that they will act at cross purposes.” Am. Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 541, 90 S.Ct. 1288, 25 L.Ed.2d 547 (1970) (quotation omitted).
At least one district court has stayed a case pending resolution of an IBLA appeal. See Ctr. for Biological Diversity, 255 F.Supp.2d at 1036-38. And in light of our present decision, Farrell-Cooper may elect to dismiss its IBLA appeal. We do not suggest that such steps are required. Because the IBLA has suspended consideration of the administrative appeal pending a final decision in federal court, there is little reason to think that agency resources will be wasted while the federal case advances or that the IBLA will issue a decision while this case is pending. See Backcountry Against Dumps, 491 Fed.Appx. at 792.
III
For the foregoing reasons, we conclude that the ALJ‘s decision became final and subject to judicial review following the IBLA‘s denial of a stay. We REVERSE the district court‘s dismissal of Farrell-Cooper‘s complaint аnd REMAND for further proceedings consistent with this opinion.
Jeffrey M. Byers, Assistant Federal Public Defender, Office of the Federal Public Defender, Oklahoma City, Oklahoma, appearing for Appellant.
Nicholas J. Patterson, Assistant United States Attorney (Mark A. Yancey, United States Attorney, with him on the brief), Office of the United States Attorney, Oklahoma City, Oklahoma, appearing for Appellee.