Opinion
Case No: 05-80183-CIV-SEITZ/McALILEY.
April 24, 2006
ORDER GRANTING UNITED STATES' MOTION FOR PROTECTIVE ORDER
THIS CAUSE comes before the Court on the United States' Motion for Protective Order ("Motion"). [DE 211 and 212, 3/21/06]. Plaintiff filed its memorandum in response, [DE 214], and the United States filed both a reply memorandum, [DE 217], and notice of supplemental authority, [DE 224]. This Court heard oral argument on the Motion on April 21, 2006.
Plaintiff's Motion for Class Certification, [DE 114], is presently fully briefed and pending before this Court. On February 28, 2006, as part of its Reply in Support of its Motion for Class Certification, [DE 202], Plaintiff filed the Declaration of Charles R. Booth, a former employee of the Department of Health and Human Services ("HHS"), who Plaintiff retained as an expert witness in this matter. Plaintiff was thereafter notified by HHS that Mr. Booth's declaration was governed by the agency's Touhy regulations, 45 C.F.R. Part 2. Title 45 C.F.R. 2.3 provides:
The Supreme Court in United States ex rel. Touhy v. Ragen et al., 340 U.S. 462 (1951) upheld the right of government agencies to prescribe regulations that govern the use of their records, papers and property. The present-day legislative grant of authority for the implementation of these regulations (now referred to as Touhy regulations) is 5 U.S.C. § 301.
No employee or former employee of the DHHS may provide testimony or produce documents in any proceedings to which this part applies concerning information acquired in the course of performing official duties or because of the person's official relationship with the Department unless authorized by the Agency head pursuant to this part based on a determination by the Agency head, after consultation with the Office of the General Counsel, that compliance with the request would promote the objectives of the Department.
The government took the position that Mr. Booth's declaration testimony appeared to pertain to matters which occurred, or information he acquired, while employed in his official capacity with HHS. See correspondence from Office of General Counsel of HHS to Plaintiff's counsel. [DE 212, Ex. 1]. Accordingly, HHS asked that Plaintiff withdraw Mr. Booth's declaration until Plaintiff submitted a formal request that HHS authorize Mr. Booth's testimony in this proceeding and HHS issued its approval of such testimony. Although Plaintiff disputes the applicability of the HHS Touhy regulations to Mr. Booth, on March 13, 2006, Plaintiff did submit a request, pursuant to those regulations, for authorization of Mr. Booth's testimony. [ See DE 212]. That request is under review by HHS. At the April 21, 2006 oral argument, counsel for the United States advised that it expects a decision on that request in the near future; possibly within the next couple weeks.
The procedure for making such a request is set forth in 45 C.F.R. § 2.4.
In the meantime, Plaintiff offered to make Mr. Booth available for deposition in this case. Again, the United States advised Plaintiff of its position that Mr. Booth's deposition testimony can not go forward until authorized by HHS in accordance with its Touhy regulations. Accordingly, in its Motion, the United States asks this Court to strike Mr. Booth's declaration, and issue a protective order preventing his deposition, until such time as HHS authorizes Mr. Booth's written and oral testimony or, if it does not grant that authorization, until Plaintiff exhausts its administrative remedies and, if necessary, files an appeal of HHS's determination with this Court.
Plaintiff responds that Mr. Booth is long-since retired from government and that the government should not have the control it claims over Mr. Booth's present activities. Plaintiff makes a number of facial attacks on the lawfulness of HHS's regulations and urges this Court to permit Mr. Booth to testify in this case, regardless of HHS's asserted regulatory authority to first consider the question.
Plaintiff's leading argument appears to be that HHS, when it amended its Touhy regulations in 2003 to include its former employees, did not allow proper notice and comment of that regulatory action, as mandated by the Administrative Procedure Act, 5 U.S.C. section 551-559 ("APA"). Plaintiff also contends that HHS exceeded the Congressional grant of authority in 5 U.S.C. section 301, when it issued Touhy regulations governing former employees; according to Plaintiff, that Congressional grant was limited to the regulation of current government employees. Plaintiff further challenges HHS's Touhy regulations to the extent they suggest that HHS can preclude the testimony of current and former employees where that testimony does not "promote the objectives of the Department." 45 C.F.R. § 2.3. Plaintiff contends this assertion of authority by HHS greatly exceeds the Congressional grant of authority in 5 U.S.C. section 301. Finally, Plaintiff contends the regulations, as applied to Mr. Booth violate the First Amendment, as they impose a content-based prior restraint on speech.
As a general rule, "exhaustion of available administrative remedies is a prerequisite to obtaining judicial relief for an actual or threatened injury." Ticor Title Insur. Co., et al., v. Federal Trade Commission, et al., 814 F.2d 731, 739 (D.C. Cir. 1987) (citations omitted). Courts have identified two exceptions to this general rule. The first
The appellants in Ticor, while in the midst of a FTC administrative prosecution for engaging in alleged unfair methods of competition, brought a federal court action challenging section 5(b) of the Federal Trade Commission Act (the "Act") which authorized the FTC to engage in such proceedings. Appellants argued that the Act, by permitting the FTC, an independent federal agency outside the direct control and supervision of the President, to exercise law enforcement powers, violated Article II of the Constitution. The appellants petitioned the District Court to declare the Act unconstitutional and enjoin the FTC from the ongoing and any future prosecutions. The three judges of the Court of Appeals agreed the appellants' claim must be dismissed, but reached this conclusion differently: on grounds of ripeness, exhaustion of administrative remedies or lack of subject matter jurisdiction. It is the doctrine of exhaustion of available administrative remedies, addressed in the opinion of Judge Harry T. Edwards, that is applicable to the issues raised in this Motion. Counsel agreed to this much at oral argument.
permits immediate judicial review of a challenge to agency authority where the agency's assertion of jurisdiction `would violate a clear right of a petitioner by disregarding a specific and unambiguous statutory, regulatory or constitutional directive.' The second exception permits immediate judicial review where postponement of review would cause the plaintiff irreparable injury.Id. at 740 (internal citations omitted) (emphasis in original). At oral argument Plaintiff focused on the first of its arguments listed above. Specifically, Plaintiff asserts that the 2003 amendment of 45 C.F.R. section 2.3 to include former employees, violated the clear right of Mr. Booth, pursuant to the specific and unambiguous statutory directive of the APA, that this regulation be promulgated after requisite notice and comment. In this fashion, Plaintiff seeks to invoke the first exception to the general doctrine of exhaustion of administrative remedies.
Plaintiff is unsuccessful in this effort. Whether HHS should have amended its Touhy regulation pursuant to the notice and comment provisions of the APA appears to be the subject of a good-faith debate between the parties. Without exploring the four corners of that debate, the Court notes that 5 U.S.C. section 553(b), exempts "rules of agency organization, procedure, or practice" from the notice and rule-making provisions of the APA. In its reply memorandum, the United States argues that the 2003 amendment fits within this exception and cites authority in support of its position. Plaintiff responds that this exception does not apply, as the 2003 amendment affected the substantial rights of Mr. Booth, and was not merely procedural in nature. In any event, the issues raised have sufficient depth such that it cannot be said that Mr. Booth had the " clear right" to have HHS follow the notice and comment provisions of the APA when it extended its regulation to former employees. Thus, having failed to invoke an exception to the general rule requiring exhaustion of administrative remedies, the Plaintiff's request for relief from this Court is premature.
Plaintiff is not the only party to raise these issues in the litigation of this case. Tenet also filed with this Court the declaration of a former HHS employee, Thomas Scully. When the government took the position that Mr. Scully's declaration must first be reviewed and authorized by HHS under its Touhy procedures, Tenet withdrew the declaration. [DE 156]. Tenet thereafter noticed the deposition of Mr. Scully, and Tenet and the United States litigated in the District Court for the District of Columbia cross-motions to compel and to quash. See In the Matter of A Subpoena Issued to Thomas A. Scully, Case No. 06-0077 (GK). On April 10, 2006, District Judge Gladys Kessler issued an order quashing the subpoena of Scully, and denying Tenet's motion to compel. Relying upon Judge Edwards' decision in Ticor, Judge Kessler directed that Tenet exhaust its administrative remedies as provided in HHS's Touhy regulations, before the Court addresses the substantive issue raised by Tenet i.e., whether HHS's regulations are valid as applied to former employees.
Mr. Scully's declaration was offered in support of Defendant's Cross-Motion for Partial Summary Judgment. [DE 138].
This Court agrees completely with the reasoning expressed in Judge Kessler's order. Further, in reaching the conclusion stated herein, this Court acknowledges the important reasons that support the doctrine of exhaustion of administrative remedies, as expressed in Ticor. "First, the plaintiff may prevail before the agency on independent grounds, thereby mooting the plaintiff['s] challenge and rendering it unnecessary for the court to intervene." Ticor, 814 F.2d at 741.
Second, . . . [the Court should not] embrace an exception to the exhaustion doctrine that would permit interruption of ongoing agency proceedings whenever a litigant raises a non-frivolous challenge to the legitimacy of those proceedings. Such an exception would encourage litigants to bypass the orderly process of administrative agencies and would intolerably interfere with the ability of those agencies to perform the tasks assigned to them by Congress.Ticor, 814 F.2d at 742. This Court simply can not put aside these significant reasons for deference to HHS's administrative review on the record presented by Plaintiff. Accordingly, for the reasons stated herein, this Court does hereby
ORDER AND ADJUDGE
that the United States' Motion for Protective Order, [DE 211], is GRANTED. The parties to this litigation shall not take the deposition of Mr. Booth, nor shall they use his declaration, until either 1) HHS authorizes Mr. Booth's oral and written testimony pursuant to its Touhy regulations, or 2) HHS objects to that testimony, plaintiff exhausts its administrative remedies and if need be files a proper appeal, and this Court has an opportunity to rule on that appeal. Accordingly, it is further ordered that the Declaration of Charles R. Booth, [DE 202, Ex. A] is hereby STRICKEN.
DONE AND ORDERED in Chambers at Miami, Florida.