Ticor, 814 F.2d at 740 (opinion of Edwards, J.); Ticor, 814 F.2d at 746-47 (opinion of Williams, J.). Furthermore, the fact that civil or criminal penalties may be assessed as a result of the administrative procedures, which could be avoided if plaintiffs' pre-emptive challenge were successful, does not alter this analysis. See Floersheim v. Engman, 161 U.S. App. D.C. 30, 494 F.2d 949, 952 (D.C. Cir. 1973) (possible penalties do not require expeditious review of FTC advisement that conduct violated cease and desist order, because criminal contempt is not appropriate where there is good faith disagreement and civil penalties allow room for leniency if violator's view is plausible). Because the letters constitute only preliminary determinations with no legal force, but rather subject plaintiffs only to the burden of contesting their claims in the administrative process should they choose to advertise, the letters cannot be viewed as having a sufficient effect on plaintiffs to qualify as final agency action.
Furthermore, the agency's "rejection" of the letters is not an issue that is amenable to judicial review at this time. In order to determine whether the studies are sufficient to satisfy the consent order, the Court would need to receive evidence concerning the studies themselves along with any other applicable studies and expert testimony. In doing so, the Court would have to begin with a clean slate, without the benefit of a full administrative record. This is a task which Congress has assigned to an agency which has a special expertise in this area. If the agency is not allowed to develop a record based on that expertise, the issues are not presented to the Court in a form sufficient for the proper exercise of its judicial function.
For similar reasons, exercise of judicial review at this stage would interfere with the proper relationship between the judiciary and the agency. The agency has not had an opportunity to perform the adversary administrative proceedings contemplated by the APA and the agency's governing statute. It has not had a full opportunity to apply the expertise which it has in the area of trade practices. Judicial review at this stage would bypass the entire agency process envisioned by Congress. See Standard Oil, supra, 449 U.S. at 242, 101 S. Ct. at 494.
There are certain exceptions to the normal finality requirement, although courts rarely find these exceptions to apply. One commonly identified exception is where the agency has "violated a clear and specific statutory directive." Chicago Truck Drivers, 670 F.2d at 669-70. See also Ticor, 814 F.2d at 749 (opinion of Williams, J.). Plaintiffs have alleged no such violation in this case.
A special category of agency action arises where the challenge is unrelated to the merits of the dispute, but rather concerns the very assertion of agency jurisdiction or authority or the procedures utilized by the agency. Whether this type of action is viewed as final in itself or as an exception to the finality requirement, it is often considered judicially reviewable before the culmination of administrative proceedings. See, e.g., Ciba-Geigy Corp. v. U.S. Environmental Protection Agency, 255 U.S. App. D.C. 216, 801 F.2d 430 (D.C. Cir. 1986); Atlantic Richfield Co. v. U.S. Dept. of Energy, 248 U.S. App. D.C. 82, 769 F.2d 771 (D.C. Cir. 1984); Athlone Industries v. Consumer Product Safety Comm'n, 228 U.S. App. D.C. 80, 707 F.2d 1485, 1489-90 n. 30 (D.C. Cir. 1983). The Ciba-Geigy case, which plaintiffs contend supports their position, is instructive. The plaintiff challenged a letter from an EPA official which stated the agency's position with respect to the labelling of certain products, stated that labels which did not conform would be subject to enforcement actions, and stated that the agency disagreed with the plaintiff's position that notice and hearing procedures were required. The Court found that the agency action was final, emphasizing that the plaintiff's complaint raised only the issue of what procedures were proper and did not challenge the merits of the EPA's labelling requirements. 801 F.2d at 435. In this case, in contrast to Ciba-Geigy and similar cases, the review sought by plaintiffs directly concerns the merits of the trade practices at issue.
Plaintiffs also submit that this case is governed by Natural Resources Defense Council, Inc. v. Thomas, 269 U.S. App. D.C. 343, 845 F.2d 1088, 1094 (D.C. Cir. 1988). In that case, the EPA had previously promulgated rules concerning the appropriate method for determining average concentrations of air pollutants. Those rules had been invalidated by the court. The EPA did not promulgate new rules, but the Director of the EPA's Office of Air Quality Planning and Standards did issue a memorandum declaring that the EPA had concluded that block averages were proper. Although the court found that this memorandum was unreviewable for other reasons, it found that the memorandum constituted final agency action. The court stated that the memorandum "establishes block averages as the only officially proper method." 845 F.2d at 1094. The court noted the general rule that action by subordinate agency officials is not final agency action, but it found the case before it to be an exception:
In this case where the subordinate is the director of the relevant component unit of the administration, where no further action by the administrator is directly implicated, and where no further proceedings are noticed, it would appear that subordinate employees of the agency and, more importantly, cooperating state components of the compliance effort would be justified in construing the memorandum to be their marching orders.
Id. The case before this Court is different for many of the precise reasons identified by the court in Natural Resources. Here, unlike that case, further action by the agency is contemplated, and the agency's action is not a broad policy statement which will be immediately enforced in an industry.
On the other hand, this case is very similar to Floersheim, supra, in which the FTC had previously ordered the plaintiff to cease and desist from practices concerning the use of certain forms and to file a compliance report. The plaintiff subsequently filed a compliance report, including revised forms, which was rejected by the FTC. The plaintiff then brought a lawsuit in federal district court, seeking a declaratory judgment that the revised forms satisfied the cease and desist order and an injunction restraining the FTC from seeking civil non-compliance penalties. The court of appeals concluded that the FTC's action was not reviewable through such a lawsuit. See also Biotics Research Corp. v. Heckler, 710 F.2d 1375 (9th Cir. 1983) (agency letter advising plaintiffs that they were violating federal law and threatening enforcement action was not final agency action); General Finance Corp. v. FTC, 700 F.2d 366 (7th Cir. 1983) (subjects of FTC investigation could not bring suit to end investigation, but must wait for agency to bring compliance proceedings and then exercise judicial review procedures provided by statute).
The Court finds that in view of all of the applicable precedents and the relevant factors, the FTC's letters advising plaintiff that the studies do not satisfy the consent order are not subject to judicial review before the completion of FTC enforcement proceedings.
The Court finds that the letters sent by the Commission and the Commission's staff did not constitute final agency action. Accordingly, the Court does not have jurisdiction, and the case is dismissed. Because of this conclusion, the Court does not reach the Commission's alternative argument that the issue is not ripe for review, although many of the factors considered in this opinion would also countenance against a finding that the agency's action is ripe.
DATED: March 12, 1990