Administrative procedure plays an essential role in federal appellate practice, particularly in the Ninth Circuit Court of Appeals. According to the Ninth Circuit's most recent published statistics, appeals from administrative agency decisions accounted for 6,040 of 14,636 total appeals filed in 2006, or more than 40 percent.1 This represents a significant increase from 2001, when appeals from administrative agencies represented approximately 10 percent of all appeals (1,150 out of 10,342). Of the 6,387 cases decided on the merits in 2006, the greatest number by far, 1,974, were agency appeals.
Judicial review of an agency decision is available only if it is not precluded by statute and a "meaningful basis for review" exists. For those seeking this type of review, the most important procedure with which they must comply is the exhaustion of administrative remedies. Counsel should be aware of the basic constitutional underpinnings of the exhaustion doctrine, including the leading U.S. Supreme Court precedents, and devise careful strategies based on how the exhaustion doctrine works in practice.
Federal courts are courts of limited jurisdiction.2 The doctrine of exhaustion of administrative remedies,3 like the related timing doctrine of primary jurisdiction,4 is a threshold issue that protects federal jurisdiction. Just as the related doctrines of standing, ripeness, and mootness serve as barriers to entry in federal court for cases and controversies not ready for adjudication, the exhaustion doctrine ensures the integrity of administrative agency review and "assure[s] that [agencies have] an opportunity to resolve issues over which they have primary responsibility."5
Although case law has established a presumption in favor of the right to judicial review of administrative agency decisions,6 review is nonetheless quite limited. Consistent with Article III of the U.S. Constitution, the Ninth Circuit has jurisdiction to review agency decisions only to the extent provided by various statutes; and since there is no general statute empowering the Ninth Circuit to review agency decisions, the scope of review is delineated by those individual statutes.7 In circumstances not governed by a specific judicial review statute, a party may seek review under the Administrative Procedure Act, but the scope of review under the APA is largely the same as provided by other statutes.8 The APA is clear that only final agency action is subject to judicial review. Thus exhaustion may be seen as the flip side of the finality coin. An agency decision is not "final" regarding the issues raised on appeal until a party challenging the decision has exhausted all of his or her available remedies at the agency level.9
The basic rule of exhaustion is that failure to raise an issue with the tribunal below results in waiver of that issue on appeal.10 The rule applies not just in direct appeals from federal district court decisions11 and administrative agency decisions12 but also in other substantive arenas. Bankruptcy appeals require exhaustion,13 although the rule is applied much more flexibly given the responsibility of trustees and debtors in possession to raise certain issues and the bankruptcy court's duty to adjudicate those issues "whether or not they are specifically put in dispute."14 Tax court decisions also mandate exhaustion before appeal. Appellate courts review these decisions "in the same manner and to the same extent as decisions of the district courts in civil actions tried without a jury...."15 Under the Immigration and Nationality Act, the U.S. Court of Appeals may review a final order of removal only if "the alien has exhausted all administrative remedies available to the alien as of right."16
Most attorneys know that they cannot challenge nonfinal agency actions. Nevertheless, determining whether a petitioner has pursued the agency review process to its final conclusion requires careful analysis. Moreover, counsel must craft strategies depending on whether the petitioner has raised the legal and factual issues during the agency review process that are most likely to obtain the relief sought on appeal, such as obtaining a hearing before the relevant government agency, restoration of essential benefits, or cancellation of deportation.
Exhaustion is simple in theory but complicated in practice. Early precedents underline that the doctrine resists strict mechanical application. Many exhaustion precedents involve balancing the harm to the agency if exhaustion is not found versus the harm to the petitioner if exhaustion is strictly enforced. Litigators devising an effective strategy in a given case must understand how strict enforcement of the doctrine will either further or undermine the policy goals underlying the doctrine.
Balancing Act from the Vietnam Era
One of the leading cases in the area of exhaustion is McKart v. United States,17 a 1969 decision. The U.S. Supreme Court reversed the indictment of a draftee during the Vietnam War for willfully and knowingly failing to report for induction into the Army. After his 18th birthday, McKart dutifully reported to his local Selective Service Board (commonly referred to as a draft board), and the board initially classified him as fit for service, or I-A, in February 1963. While McKart took no official steps to change this classification, he insisted that he was eligible for a "sole surviving son" exemption on his written classification questionnaire. The draft board granted the exemption after receiving further information from McKart and reclassified him as IV-A. However, after the death of McKart's mother, who had been his sole remaining parent, the military returned him to I-A status. McKart did not challenge his reclassification; he merely refused to report for duty and was charged as a result.
On appeal, the Army moved to bar McKart's exemption defense on the ground
of exhaustion. According to the Army, McKart had failed to exhaust his administrative remedies because he did not challenge his classification to the local board--a prerequisite under the Code of Federal Regulations to further appeals.
In a majority opinion by Justice Thurgood Marshall, the Supreme Court held that McKart was not required to exhaust the administrative appeals process. The Court stated its aim to balance the competing interests of the agency and the petitioner. In doing so, according to the opinion, the Court found that judicial review of McKart's claim would not impair the administrative process applicable to the draft, but McKart would suffer irreparable harm if the exemption defense were disallowed.18 The majority reasoned that "such a result should not be tolerated unless the interests underlying the exhaustion rule clearly outweigh the severe burden imposed upon the registrant if he is denied judicial review."19
For exhaustion to apply, the Court held that administrative discretion or expertise must actually contribute to the decision-making process. In McKart, however, the issue was simply whether the sole surviving son exemption to the draft applied once the son was the last surviving member of the family. The majority deemed the issue one of pure statutory interpretation and concluded that the Court was just as competent to resolve it as the Selective Service Boards that composed the Selective Service System--the agency charged by Congress with administering the U.S. program for military conscription and preparedness. The Court rejected the government's argument that failure to strictly enforce the exhaustion requirement would encourage draftees to flout the induction system and emphasized that the strict criminal penalties for draft dodging--up to five years in prison--should be more than enough of a deterrent to most individuals contemplating draft evasion.
Nevertheless, the Court20 reached the exact opposite conclusion just two years later in another significant exhaustion case addressing facts almost identical to those in McKart. McGee v. United States21 also involved a Vietnam draftee's failure to exhaust administrative remedies in the Selective Service System's induction process. This time, however, the majority held that the draftee waived his defense of incorrect classification because he had failed to renew his conscientious objector (CO) status after his student deferment lapsed.
In February 1966, while attending the University of Rochester, McGee applied to the Selective Service for CO status. The draft board continued his existing classification--a student deferment--and advised him that his CO claim would be decided when his student status was no longer applicable. In April 1967, McGee wrote to President Lyndon Johnson, sending him the charred remnants of his draft cards and declaring he must "sever every link with violence and war."22 The letter stated that he had already been accepted for graduate study in a program in which he would qualify for theological deferment. A copy of the letter was forwarded to the local draft board, which continued classifying McGee's status with a student deferment.
McGee graduated from college in June 1967, and the board requested updated information, including any information regarding McGee's future educational plans and any other facts that he thought relevant to his classification. McGee returned his Selective Service questionnaire unanswered with a cover letter stating that he would adhere to a policy of noncooperation with the draft system. In September 1967, the board reviewed McGee's file and rejected the CO claim that had been pending since prior to McGee's graduation from college. The majority noted that in response to his reclassification, McGee sought neither a personal appearance nor review by an appeal board (just like McKart). Instead, McGee returned unopened the letter from the Selective Service notifying him of his reclassification and of his right to appeal. McGee did respond to an order to appear for induction in January 1968, but he refused to submit for induction and was convicted under the Military Service Act. McGee was sentenced to two years in prison.23
The Supreme Court majority, led once again by Justice Marshall, sought to distinguish its decision in McKart by emphasizing that McGee's claim to exemption depended upon careful factual analysis, which the Selective Service was uniquely qualified to perform.24 The Court claimed that unlike McKart, McGee's case did not simply involve statutory interpretation--for example, McGee's eligibility for CO status was more complex than McKart's eligibility for a sole surviving son exemption.25 By contrast, McKart's failure to exhaust did not impair the record on appeal, according to the Court, because all the relevant facts regarding McKart's eligibility for sole surviving son status had been available.26 The majority in McGee observed that "McGee's claims to exempt status, as a ministerial student or a conscientious objector, depended upon the application of expertise by administrative bodies resolving underlying issues of fact." In addition, McGee made "no effort to invoke administrative processes for factfinding," and he neither requested classification as a ministerial student "nor submitted the information that would have been pertinent to such a claim."27
Finally, Justice Marshall's majority opinion asserted that the failure to strictly apply exhaustion under these facts would have had a harmful effect on the Selective Service. This was because McGee, unlike McKart, did not simply fail to reapply for CO status but adopted a policy of noncooperation against all military personnel.28
Justice William O. Douglas wrote a searing dissent to Justice Marshall's majority opinion, arguing that McGee could not have been found to have exhausted his administrative remedies when the Selective Service Board in fact never considered his CO claim on the merits. He noted that there was no factual dispute that McGee was a conscientious objector--he was enrolled as a student at Union Theological Seminary and was studying to be a priest.29
The central issue in the case, according to Justice Douglas, was whether the Selective Service Board in 1966 actually "consider[ed]" and rejected McGee's CO claim. The district court and court of appeal both found that the board acted on the claim. The majority refused to consider McGee's assertion that the board did not actually resolve the CO claim, but Justice Douglas wrote that anyone who read the factual record would necessarily find that the conclusion that the board took action on the CO claim in 1966 was clearly erroneous. In March 1966, the board wrote to McGee: "We wish to advise that your claim as conscientious objector will be considered when you no longer qualify for student classification." Justice Douglas emphasized that the letter expressly said that a decision on the "claim as conscientious objector" would be decided later. Then, in 1967, the board reclassified McGee as 1A not merely because McGee had finished college, as the chairman of the board testified, but because the board specifically [and erroneously] claimed that CO status had been previously denied.30
Justice Douglas noted that it was the draft board that had defaulted, not McGee, because federal regulations explicitly required the board to "receive and consider all information, pertinent to the classification of a registrant, presented to it."31 Douglas concluded that since the board did not "consider" the claim of CO status and then reject it but rather deferred decision until 1966 and then in 1967 said that the 1966 deferment was in fact a decision "on the merits," there was no way McGee could have timely appealed to the board.
Douglas wrote that the McGee Court should have reached exactly the same result as the McKart Court:
[W]e should conclude that cases where the local board does not "consider" the conscientious objector claim must be few and far between. Moreover, the term "consider" is a key part of a Regulation and just as much a question of law as the phrase in issue in McKart. Men should not go to prison because boards are either derelict or vindictive.32
Considered together, McKart and McGee illustrate how unpredictable courts can be when facing exhaustion issues. Outcomes are driven not just by whether an issue was broached in the tribunal below but rather the judges' own inherent sense of fairness, the balance of equities, and whether the administrative agency in question acted with appropriate diligence and competence.
How Exhaustion Works in the Ninth Circuit
Whether an issue has been exhausted at the agency level may prove dispositive in a district court action and on appeal. For trial and appellate counsel, this analysis is crucial. Resolving the issue of exhaustion is frequently more complicated than whether the petitioner--often an unsophisticated party acting in pro per--has squarely presented his or her claim to the agency.
In a perfect world, a petitioner appealing from an administrative agency decision will have clearly raised the issues that form the basis for his or her appeal, or petition for review,33 in the proceedings below. Precision is important, as the Ninth Circuit has clarified regarding immigration proceedings that "[a] petitioner cannot satisfy the exhaustion requirement by making a general challenge to the [immigration judge's] decision, but, rather, must specify which issues form the basis for the appeal."34
Exhaustion is primarily a statutory issue. Courts consider exhaustion because statutes require it, not because prudence dictates doing so.35
The Ninth Circuit has held that exhaustion must not be mechanically applied. In the immigration context, for example, the court looks to "whether the issue was before the BIA [Board of Immigration Appeals] such that it had the opportunity to correct its error."36 As the Ninth Circuit clarified in its 2009 en banc decision in Abebe v. Mukasey, if the notice of appeal mentions the grounds for relief and the petitioner does not file a brief, as is permitted before the BIA under 8 Code of Federal Regulations Section 1003.38(f), the issues raised in the notice will be deemed exhausted.37 However, if the petitioner does elect to file a brief, Abebe holds that only those issues actually raised and argued in the brief will be deemed exhausted.38
Petitioners are not required to employ precise legal language to exhaust an issue, but they must identify the problem on appeal with sufficient clarity. Thus in Socop-Gonzales v. INS, the Ninth Circuit held that an immigration petitioner sufficiently exhausted the issue of equitable tolling in his briefs before the BIA even though he never actually invoked the phrase.39
The amount of administrative or judicial attention necessary for an issue to be deemed exhausted by the lower tribunal in a given case depends first upon the statute or regulation in question and then its judicial interpretation.40 The statute at issue may include one or more exceptions to exhaustion. Indeed, numerous exceptions have evolved over the years, although their successful application is rare in light of the strong presumption in favor of the exhaustion requirement.41
Settled exceptions include the statutory exceptions42 as well as assertions of:
• Irreparable injury.43
• Inadequacy of administrative remedies.45
• Constitutional challenges.46
• Voidness regarding the administrative proceedings.47
• Purely legal issues.48
• Challenges of bias.49
• Unreasonable delay.50
• Express or implied waiver.51
• Judicial discretion.52
Practitioners should be leery of the exception for constitutional challenges which, as in other appellate circumstances, is actually quite narrow. The Ninth Circuit made clear in Liu v. Waters that review is limited to procedural errors that are not correctable by the agency itself: "The key is to distinguish the procedural errors, constitutional or otherwise, that are correctable by the administrative tribunal, from those that lie outside the [agency's] ken."53
The Ninth Circuit's 2009 decision in the case of Marella v. Terhune54 provides a good example of how the exceptions are applied in practice. In Marella, the Ninth Circuit reversed and remanded a district court decision dismissing a state prison inmate's Section 1983 claim on the ground that he had failed to exhaust his administrative remedies before the California Department of Corrections.55 The inmate brought a lawsuit against prison officials under 42 USC Section 1983 alleging violations of his constitutional rights during a knife attack by fellow inmates at Calipatria State Prison. Prior to filing his complaint in federal court, Marella had filed a grievance within the prison system. The grievance was rejected as untimely because it was filed outside the 15-day period mandated by the California Code of Regulations.56
The Ninth Circuit agreed that Marella was unable to file his grievance on time because he did not have access to the necessary forms and did not have the ability to complete them in the 15-day period. Following the knife attack, Marella spent two days in the hospital, was subsequently moved to an infirmary, and then was placed in administrative segregation.57 When he was released, 33 days after the attack, Marella immediately filed his grievance, even though he did so after the administratively prescribed timetable.
The Ninth Circuit overruled the magistrate judge who had found Marella failed to exhaust his remedies and the district court that adopted the magistrate judge's recommendation. According to the Ninth Circuit, both the magistrate judge and district court erred as a matter of law by concluding that no exceptions to the timely filing requirement existed. As a practical matter, without a finding of appropriate exceptions, the inmate would have had no administrative remedy.
Exhaustion Arguments in a Removal Challenge
A recent immigration case is illustrative of how the doctrine of exhaustion of administrative remedies works for parties and the interplay of administrative and appellate law. A Bangladeshi alien, Manik Ahmed, was challenging his removal on the ground that he had been arbitrarily denied a continuance of removal proceedings.58
The facts, and the need for appellate relief, seemed relatively straightforward. Ahmed was in the process of seeking to adjust his status to that of permanent resident on the basis of his employment. He had already completed the first step of obtaining a labor certification from the Department of Labor (Form ETA 750). Although his request for an alien worker visa (I-140) had been denied by the Department of Homeland Security at the threshold of the appeal, Ahmed had filed an internal agency appeal to the Administrative Appeals Office as he was required to do to preserve his right to challenge the denial later on.
After Ahmed received an initial continuance of removal proceedings from the immigration judge (IJ) in Los Angeles, Ahmed requested a second six-month continuance at a removal hearing on February 1, 2005, which the IJ summarily denied. The IJ stated, "I'm not keeping this on my calendar for his appeal pending on the I-140."
Ahmed's Opening Brief argued that 1) the IJ abused her discretion by failing to consider certain factors required by the Ninth Circuit concerning whether a continuance should be granted, 2) the IJ abused her discretion by failing to provide a rational explanation for her decision, 3) the BIA's holding that a visa was not "immediately available" to Ahmed was clear legal error, and 4) the IJ's decision violated Ahmed's due process right to a full and fair hearing.59
From Ahmed's perspective, exhaustion of these issues was noncontroversial. The IJ's failure to consider the so-called Baires factors60 was manifest in the hearing transcript and her final written order of removal. The IJ simply did not mention any of them. The lack of a reasoned explanation for the denial of the continuance was likewise manifest in the text of the transcript and final order, as the IJ said nothing more than "I'm not keeping this on my calendar." The BIA's decision affirming the IJ clearly stated that the denial of the continuance was not an abuse of discretion. According to the BIA, Ahmed was ineligible for adjustment of status in any event because no visa was "immediately available" as required by the INA.61 Also, deprivation of the constitutional right to a full and fair hearing is exempt from the exhaustion requirement.
Nevertheless, exhaustion of remedies was the thrust of the government's Opposition Brief. The first, and main, argument by the Department of Justice was that Ahmed failed to exhaust any of the four issues in his Opening Brief before the BIA.62 The DOJ stated, "In his brief to the BIA, Ahmed argued only that a further continuance should not have been denied 'solely because [an I-140] petition had not been approved.'"63 Further, the DOJ asserted that "Ahmed did not argue to the BIA that the immigration judge had failed to consider factors set forth by this court, or that the immigration judge's decision had failed to set forth adequate grounds, or that he had a visa petition 'immediately available,' or that he had been denied due process."64 The DOJ even cited to Liu for the proposition that "procedural due process issues must be exhausted before the BIA because the BIA has jurisdiction to address such issues."65
In Ahmed v. Holder, a unanimous published decision in Ahmed's favor on June 24, 2009, the Ninth Circuit rejected the government's arguments.66 The court held that the claims addressed on the merits by the BIA are deemed exhausted and may be raised on appeal even though the petitioner did not specifically raise the issue in his briefs before the BIA.
While the BIA's decision neither mentioned the Baires factors per se, nor discussed the adequacy of the IJ's explanation for her denial of the continuance, the BIA decision had generally acknowledged that "[Ahmed] argues that the [IJ] erred in denying his request for a continuance pending approval of an [I-140]."67 The Ninth Circuit found this was sufficient for exhaustion, stating, "Here, the BIA specifically addressed the question whether the IJ abused her discretion by denying Ahmed's request for a continuance."68 As to the due process violation, the Ninth Circuit held, "The BIA also determined that Ahmed was not deprived of a full and fair hearing,"69 and therefore the issue was exhausted.
Ahmed confirms the vitality of exhaustion issues in immigration and other agency appeals and underscores that whether a given issue is exhausted may be more complicated than the record itself reflects. It also stands for the important proposition that, in immigration matters, an issue is exhausted if addressed by the BIA, even if absent from the petitioner's notice of appeal and his or her briefing below.