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BEVERLY ENTERPRISES, INC. v. HERMAN

March 26, 1999

BEVERLY ENTERPRISES, INC. AND BEVERLY HEALTH AND REHABILITATION SERVICES, INC., PLAINTIFFS,
v.
ALEXIS M. HERMAN, SECRETARY OF THE UNITED STATES DEPARTMENT OF LABOR, AND THE UNITED STATES DEPARTMENT OF LABOR, DEFENDANTS.



The opinion of the court was delivered by: Stanley S. Harris, District Judge.

  OPINION

This matter is before the Court on defendants' motion to dismiss, plaintiffs' response, defendants' reply, and both parties' supplemental memoranda. Upon consideration of plaintiffs' amended complaint and the relevant pleadings, the Court grants defendants' motion in part and denies it in part. "Findings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 . . ." Fed.R.Civ.P. 52(a); see also Summers v. Department of Justice, 140 F.3d 1077, 1079-80 (D.C.Cir. 1998). Nonetheless, the Court sets forth its reasoning.

BACKGROUND*fn1

Although Congress generally delineated the attestation requirements in the INRA itself, the statute further provided that the DoL "shall . . . publish final regulations to carry out section 212(m) [8 U.S.C. § 1182(m)] of the Immigration and Nationality Act." Pub.L. No. 101-238, 103 Stat. 2099, 2102 (1989). In accordance with this provision, the DoL published interim final regulations effective December 6, 1990, see 55 Fed.Reg. 50,500 (1990), and final regulations in January 1994. See 59 Fed.Reg. 882, 897 (1994).

Beverly Enterprises, Inc., and Beverly Health and Rehabilitation Services, Inc., (collectively "Beverly") own and operate a large number of health care facilities that provide long-term nursing care and rehabilitation services. In April 1995, the DoL began an investigation to determine whether Beverly's employment practices were in violation of the INRA. When Beverly asked what motivated the investigation, investigators allegedly responded that it was a "routine audit," and specifically denied that it was in response to any complaint. DoL investigators repeatedly required more information, which Beverly provided, based on the belief that it was under a legal obligation to do so. In February 1996, Beverly sought to confirm that the investigation was not in response to a complaint, but the investigators refused to confirm their earlier statement. In May 1996, Beverly informed the DoL that unless and until the agency stated whether there was a complaint, Beverly would not provide the information requested. The DoL allegedly responded that it did not need a complaint to conduct an investigation. However, it stated that the DoL had received a complaint about Beverly from the Department of State. The DoL allegedly refused to confirm or deny the receipt of any complaint from a private party.

After another attempt to ascertain whether the investigation was undertaken in response to a complaint, Beverly refused to participate further in the investigation. The DoL, however, allegedly continued its investigation in secret, and in August of 1997 it contacted Beverly to present the results. The parties were unable to agree on a date to meet, and Beverly did not hear anything further from the DoL.

On October 22, 1997, Beverly filed a complaint in this Court. On January 6, 1998, Beverly representatives met with DoL officials. At that meeting, the DoL presented the information it obtained as a result of its investigation and asked Beverly to pay over $3.4 million in back wages covering the investigation period, allegedly based on a failure to pay the appropriate "prevailing wage" to either its H1A nurses or its citizen nurses. Beverly then filed an amended complaint on January 21, 1998, in fight of the new factual posture of the case. The amended complaint alleges that the DoL violated the Administrative Procedure Act ("APA") by: (1) promulgating various regulations that are "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right," 5 U.S.C. § 706(2)(C);*fn2 (2) investigating Beverly without a complaint from an "aggrieved party" within the meaning of 8 U.S.C. § 1182(m)(2)(E)(ii); (3) interpreting "aggrieved party" to include a government agency, namely, the Department of State; (4) initiating an invalid investigation against Beverly; and (5) conducting an investigation beyond the time limit specified in the INRA.

STANDARD OF REVIEW

A motion to dismiss should not be granted "unless plaintiffs can prove no set of facts in support of their claim which would entitle them to relief." Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276 (D.C.Cir. 1994); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). To that end, the complaint is construed liberally in the plaintiffs' favor, and plaintiffs are given the benefit of all favorable inferences that can be drawn from the facts alleged. EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C.Cir. 1997); Tele-Communications of Key West, Inc. v. United States, 757 F.2d 1330, 1334-35 (D.C.Cir. 1985).

DISCUSSION

Defendants challenge Beverly's claims on several grounds. They contend that all the claims should be dismissed because there has been no final agency action, that they are not ripe for judicial review, and that Beverly has failed to exhaust administrative remedies. Furthermore, defendants contend that, to the extent that Beverly brings a pre-enforcement challenge to DoL regulations, that claim violates the statute of limitations and is barred by laches.

I. Whether Beverly's Claims Implicate "Final Agency Action"

Under the APA, "[a]gency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review." 5 U.S.C. § 704; see also FTC v. Standard Oil Co., 449 U.S. 232, 238, 101 S.Ct. 488, 66 L.Ed.2d 416 (1980). "Final agency action" is a jurisdictional prerequisite to judicial review.*fn3 See Hindes v. FDIC, 137 F.3d 148, 161 (3d Cir. 1998); Ukiah Valley Med. Ctr. v. FTC, 911 F.2d 261, 266 (9th Cir. 1990); Ticor Title Ins. Co. v. FTC, 814 F.2d 731, 745 (D.C.Cir. 1987) (Williams, J., concurring); Independent Petroleum Ass'n of America v. Babbitt, 971 F. Supp. 19, 29 n. 5 (D.D.C. 1997). Defendants contend that there is no final agency action in this case because Beverly filed its complaint while the case was still in an investigative posture. Moreover, although on March 13, 1998, the Wage and Hour Administrator ("the Administrator") issued a written determination that Beverly violated R4RA and DoL regulations, defendants contend that, because Beverly appealed that decision to an Administrative Law Judge ("ALJ") on March 28, 1998, that cannot be final agency action.

The Supreme Court has made it clear that the "finality" element of the APA should be interpreted "in a pragmatic way." Standard Oil, 449 U.S. at 239, 101 S.Ct. 488; Abbott Laboratories v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). Factors relevant to the finality inquiry include: (1) whether the action was a "definitive" statement of the agency's position; (2) whether it had a direct and immediate effect on the day-to-day business of the party affected; and (3) whether analysis of the action is legal or factual in nature. See Standard Oil, 449 U.S. at 239, 101 S.Ct. 488 (citing Abbott Laboratories, 387 U.S. at 151-54, 87 S.Ct. 1507); Baker Hughes Inc. v. Kirk, 921 F. Supp. 801, 806 (D.D.C. 1995); see also Her Majesty the Queen in Right of Ontario v. EPA, 912 F.2d 1525, 1531 (D.C.Cir. 1990) ("The [finality] inquiry seeks to distinguish a tentative agency position from the situation where `the agency views its deliberative process as sufficiently final to demand compliance with its announced position.'") (quoting Ciba-Geigy Corp. v. EPA, 801 F.2d 430, 436 (D.C.Cir. 1986)).

Count I of Beverly's complaint, which consists of a pre-enforcement challenge to various DoL regulations, clearly implicates final agency action. It is well-settled that the promulgation and publication of a final regulation after formal notice and comment is "final" agency action.*fn4 See Toilet Goods Ass'n v. Gardner, 387 U.S. 158, 162, 87 S.Ct. 1520, 18 L.Ed.2d 697 (1967) [hereinafter Toilet Goods I]; Abbott Laboratories, ...


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