Craig D. KROSKOB, and Lisa D. Kroskob, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF AGRICULTURE; Tom Vilsack, Secretary of the United States Department of Agriculture; Farm Service Agency, an agency of the United States Department of Agriculture; Teresa Lasseter, Administrator of the Farm Service Agency; Lewis Frank, State Executive Director for the Colorado Farm Service Agency; Scott A. Miller, Farm Manager for the Farm Service Agency; Bryan Cook, Farm Loan Manager for the Farm Service Agency, all in their official capacity, Defendants-Appellees.
No. 09-1209.
United States Court of Appeals, Tenth Circuit.
May 19, 2010.
828
* Pursuant to Federal Rule of Appellate Procedure 43(c)(2), in this case Defendant-Appellee Tom Vilsack, sworn in January 21, 2009, is substituted for Ed Schafer as the Secretary of the United States Department of Agriculture.
Michael Conrad Johnson, Stephen D. Taylor, Assistant U.S. Attorney, Office of the United States Attorney, Denver, CO, for Defendants-Appellees.
Before TYMKOVICH, EBEL, and ALARCÓN**, Circuit Judges.
ORDER AND JUDGMENT***
TIMOTHY M. TYMKOVICH, Circuit Judge.
Craig and Lisa Kroskob appeal the dismissal of their suit against the U.S. Department of Agriculture‘s Farm Service Agency (FSA). The appeal arises from the FSA‘s decision that the Kroskobs’ family farm loan does not qualify for restructuring. The Kroskobs administratively appealed that decision to an internal FSA review board pursuant to
On appeal, the Kroskobs argue the FSA‘s new decision contains a number of errors. We hold the Kroskobs’ case is not moot, but also conclude they have not exhausted their administrative remedies. Exercising jurisdiction under
Between 2001 and 2006, the Kroskobs and the FSA entered into a number of loan agreements to support the operation of the Kroskobs’ farm in Fort Morgan, Colorado. The first loan in 2001 was an emergency loan secured by title to the Kroskobs’ land and farm equipment. Over the next five years, the Kroskobs continued to have financial difficulties, which resulted in their bankruptcy, restructuring of debt, including the FSA loans, and eventual default on the restructured loans. Beginning in 2006, the FSA garnished federal payments to the Kroskobs to compensate for their default.
The Kroskobs sought another loan from the FSA in 2006. To determine loan eligibility, the agency entered the Kroskobs’ current financial information into its computerized Debt and Loan Restructuring System (DALR$). The DALR$ analysis showed no feasible restructuring plan was available to the Kroskobs, and they were informed that the FSA could not provide additional lending. In March 2007, the Kroskobs provided updated information to the FSA, but once again the DALR$ analysis showed the agency was unable to provide the family with a restructured loan.
Dissatisfied with the FSA‘s decision, in December 2007 the Kroskobs challenged the FSA‘s failure to restructure their loans before the National Appeals Division (NAD). The NAD is an appeals body within the Department of Agriculture charged with reviewing certain decisions made by the Department, including lending decisions under the Agricultural Credit Act of 1987,
Following the NAD‘s decision, representatives of the FSA and the Kroskobs met in early February 2008 to discuss the matter. The agency then sent the Kroskobs a request for updated financial information. It is unclear from the record when the FSA received updated information from the Kroskobs, but in any event no new decision was forthcoming from the FSA.
Relying on a statutory command that requires Department of Agriculture agencies to “implement the [NAD‘s] final determination not later than 30 days after the effective date of the notice of the final determination,”
In February 2009, while the case was pending in district court, the FSA issued a new decision. The new decision concluded that the Kroskobs did not qualify for debt restructuring. Among other things, the FSA decision found the Kroskobs had acted in bad faith by failing to provide the FSA with records concerning the farm‘s crops, and the Kroskobs had no permissible reason for their loan payment delinquency. The decision also outlined the Kroskobs’ right to administratively appeal the decision pursuant to agency regulations and statutory law. Within the 30-
II. Discussion
The Kroskobs argue their case still presents a justiciable controversy because the FSA‘s latest restructuring decision did not properly implement the NAD‘s determination. Concluding that the Kroskobs have yet to exhaust their administrative remedies before the NAD, we agree with the district court‘s dismissal.
A. Standard of Review
We review de novo the district court‘s legal conclusion that a case is moot, see Wilderness Soc‘y v. Kane County, 581 F.3d 1198, 1214 (10th Cir.2009), reh‘g en banc granted, 595 F.3d 1119 (10th Cir.2010), and we review for clear error the district court‘s findings of jurisdictional facts, see Butler v. Kempthorne, 532 F.3d 1108, 1110 (10th Cir.2008). “Because the jurisdiction of federal courts is limited, there is a presumption against our jurisdiction, and the party invoking federal jurisdiction bears the burden of proof.” Marcus v. Kan. Dep‘t of Revenue, 170 F.3d 1305, 1309 (10th Cir.1999) (internal punctuation omitted).
B. Mootness and Exhaustion
The Kroskobs argued before the district court that the FSA harmed them by failing to reissue a DALR$ analysis after the NAD directed it to do so. They contend that from the time they filed their suit in 2008 until February 2009, the FSA did not update their DALR$ information, and thus did not meet the 30-day statutory deadline for implementing the NAD‘s determination—although the reasons for the delay are in dispute.
“Article III mootness is the doctrine of standing set in a time frame: The requisite personal interest that must exist at the commencement of the litigation (standing) must continue throughout its existence (mootness).” S. Utah Wilderness Alliance v. Smith, 110 F.3d 724, 727 (10th Cir.1997) (internal punctuation omitted). “If an event occurs while a case is pending that heals the injury and only prospective relief has been sought, the case must be dismissed.” Id.; see also City of Herriman v. Bell, 590 F.3d 1176, 1181 (10th Cir.2010) (“Our Article III case-or-controversy requirement continues through all stages of federal judicial proceedings.“).
As the Kroskobs framed their case in district court, when the FSA issued its new decision in February 2009 they obtained their desired relief—the FSA implemented the NAD‘s final determination of their appeal. But they contend on appeal the district court misapprehended the relief they sought. They contend the FSA‘s February 2009 decision does not moot their claims since the NAD‘s determination did not allow the FSA discretion to reject their application a second time, but instead required the FSA to grant the requested loan restructuring. In other words, their complaint of agency inaction may well be moot, but they still contend the agency erred in implementing the NAD‘s remand order.
The problem with this argument is that it challenges ongoing agency action for which no final determination has been made. The agency has not finally resolved their claim. Because the Kroskobs have failed to exhaust their administrative remedies, their federal claim is premature.
As a matter of basic administrative law principles, “[o]ne challenging an agency decision must exhaust all administrative remedies before seeking judicial review.” 33 CHARLES ALAN WRIGHT & CHARLES H.
The exhaustion requirement serves four primary purposes. First, it carries out the congressional purpose in granting authority to the agency by discouraging the “frequent and deliberate flouting of administrative processes [that] could ... encourag[e] people to ignore its procedures.” Second, it protects agency autonomy by allowing the agency the opportunity in the first instance to apply its expertise, exercise whatever discretion it may have been granted, and correct its own errors. Third, it aids judicial review by allowing the parties and the agency to develop the facts of the case in the administrative proceeding. Fourth, it promotes judicial economy by avoiding needless repetition of administrative and judicial factfinding, and by perhaps avoiding the necessity of any judicial involvement at all if the parties successfully vindicate their claims before the agency.
Andrade v. Lauer, 729 F.2d 1475, 1484 (D.C.Cir.1984) (internal citation omitted).
These principles apply here. Under federal law pertaining to the farm loan program, a challenge to FSA final decisions requires litigants to “exhaust all administrative appeal procedures established by the Secretary [of Agriculture] or required by law before the person may bring an action in a court of competent jurisdiction against” the Department of Agriculture.
The Kroskobs have not completed the “administrative appeal procedures” set forth in the statutory scheme. Following the FSA‘s February 2009 decision, the Kroskobs’ attorney wrote the FSA‘s Acting State Executive Director “to request reconsideration” of the agency‘s decision. Aplt.App., Vol. 2 at 492. Pursuant to this request, the Kroskobs were entitled to an informal hearing with the FSA. See
The informal hearing process does not satisfy the Kroskobs’ administrative exhaustion requirement. The statute makes clear that only an NAD determination—not an informal hearing—serves as a precursor to federal court action. See
Pursuant to these statutes, the Kroskobs have yet to exhaust their administrative
In sum, until final agency review occurs, we do not have jurisdiction to review the Kroskobs’ claims.
III. Conclusion
For the foregoing reasons, we AFFIRM the district court‘s dismissal of the Kroskobs’ case.