UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


PMD PRODC BRKRG CORP

v.

AGRI


00-1163a

D.C. Cir. 2000


*	*	*


Rogers, Circuit Judge: PMD Produce Brokerage Corpora- tion challenges
the dismissal, as untimely, of its appeal of an  administrative law
judge's decision that it violated the Perish- able Agricultural
Commodities Act, 7 U.S.C.  ss 499a-s ("PACA").1 PMD contends that the
Secretary of  Agriculture's Rules of Practice Governing Formal
Adjudicato- ry Proceedings, see 7 C.F.R. ss 1.142(c), 1.145(a) (2000),
are  ambiguous regarding the time to appeal and, further, that it 
reasonably relied on statements of the Administrative Law  Judge and
the Hearing Clerk regarding the deadline for filing  an administrative
appeal. Because ss 1.142(c) and 1.145(a)  are ambiguous, as confirmed
by contrary interpretations  within the Department of Agriculture, we
hold that the  Secretary did not give fair notice of his
interpretation of  s 1.142(c)(2) as requiring an appeal to be filed
within 30 days  of issuance of an administrative law judge's oral
decision.  Accordingly, because the Secretary was arbitrary and capri-
cious in dismissing PMD's appeal, we grant the petition.


I.


The Secretary, acting through the Associate Deputy Ad- ministrator,
Fruit and Vegetable Programs, Agricultural  Marketing Service, filed
an administrative complaint on No- vember 16, 1998, alleging that PMD
had violated s 2(4) of  PACA, 7 U.S.C. s 499b(4), by willfully failing
repeatedly to  make full payment promptly to 18 sellers of 633 lots of
 perishable agricultural commodities that it had purchased and 
received. On November 12, 1999, the Department filed a  motion for a
bench decision, a proposed findings of fact and  conclusions of law,
and a proposed order, in accordance with  s 1.142(b) of the
Secretary's Rules of Practice, 7 C.F.R.  s 1.142(b).2 After hearing
testimony, the Administrative 




__________

n 1 See In re PMD Brokerage Corp., PACA Docket No.  D-99-0004 (Dep't of
Agric. March 31, 2000); In re PMD Brokerage  Corp., PACA Docket No.
D-99-0004, 2000 WL 202696 (Dep't of  Agric. Feb. 18, 2000).


2 Section 1.142(b) provides, in relevant part:


Law Judge orally announced his decision. The Judge found  that PMD had
violated PACA and recommended revocation  of PMD's license as a dealer
and merchant of perishable  agricultural products under PACA, 7 U.S.C.
ss 499c, 499h(a).  The Judge directed that his decision and order be
published  pursuant to the Rules of Practice and stated: "This
decision  will become final without further proceedings 35 days after 
service of this decision, unless [PMD] appeals this decision, 
pursuant to section 1.145 of the Rules of Practice (7 C.F.R.  s
1.145)." The Judge thereafter excerpted his oral decision  and filed
the written excerpt on November 30, 1999.


By letter dated December 1, 1999 to PMD's counsel, the  Hearing Clerk
enclosed "a copy of the Bench Decision, issued  ... on November 30,
1999." The letter stated that "[e]ach  party has thirty (30) days from
the service of this decision  and order in which to file an appeal to
the Department's  Judicial Officer." The letter also instructed PMD
"to consult  s 1.145 of the Uniform Rules of Practice (7 C.F.R. s
1.145)  for the procedure for filing an appeal."


On January 7, 2000, PMD filed with the Department's  Judicial Officer a
petition seeking reversal of the Judge's  decision, and,
alternatively, a new hearing. Following receipt  of the Department's
response, the Judicial Officer denied  PMD's appeal for lack of
jurisdiction. The Judicial Officer,  relying on ss 1.142(c)(2) & (4)
of the Rules of Practice, found  that the Judge's oral decision was
issued on November 17,  1999 and became effective 35 days thereafter,
on December  22, 1999. Because PMD's appeal was not filed before the 
decision became effective, the Judicial Officer ruled that he  lacked
jurisdiction to hear the appeal, citing Department  precedent under
the Rules of Practice.3 Because he lacked 




__________

n Prior to the Judge's decision, each party shall be afforded a 
reasonable opportunity to submit for consideration proposed  findings
of fact, conclusions, order, and brief in support thereof.


7 C.F.R. s 1.142(b) (2000).


3 The Judicial Officer noted that the Secretary's interpretation  of
his Rules of Practice, treating time limits as jurisdictional, is 
consistent with the judicial construction of Federal Rule of Appel-


jurisdiction to hear PMD's appeal, the Judicial Officer issued  an
order that the Judge's oral decision of November 17, 1999  was the
final administrative order. The Judicial Officer  denied PMD's
petition for reconsideration.


II.


On appeal, PMD contends that the Secretary's Rules of  Practice,
specifically ss 1.142(c)(4) and 1.145(a), are internally 
inconsistent.4 The ambiguity arises, PMD maintains, because  the Rules
of Practice do not indicate that "issuance" of an  oral decision under
ss 1.142(c)(2) and (4) is to be considered  "receiving service" under
s 1.145(a). PMD points out that  s 1.142(c)(4) provides that an oral
decision becomes effective  35 days after issuance, while s 1.145(a)
provides that a party  has 30 days after "receiving service" of the
Judge's decision  to appeal. "Clearly," PMD contends, "receiving
service of  the Judge's decision is a form of notice of entry
requirement,  that requires serving a copy of the written decision on
the  parties before the time to appeal begins to run." In addition, 
PMD contends that it reasonably relied on the statements by  the Judge
and the Hearing Clerk that the Judge's opinion did  not become
effective until 35 days after service because they  would not
intentionally misinform a party about the time to  appeal. The court
reviews the Secretary's decision dismiss- ing PMD's appeal to
determine whether it was arbitrary,  capricious, an abuse of
discretion, or otherwise not in accor- dance with law. See 5 U.S.C. s




__________

n late Procedure 4(a)(1) and 4(a)(5)(A) and the Administrative Orders 
Review Act, see 28 U.S.C. s 2344, as interpreted in Illinois Central 
Gulf Railroad Co. v. ICC, 720 F.2d 958, 960 (7th Cir. 1983). See  Kidd
v. District of Columbia, 206 F.3d 35, 38 (D.C. Cir. 2000);  Energy
Probe v. United States Nuclear Regulatory Comm'n, 872  F.2d 436, 437
(D.C. Cir. 1989); see also Marine Mammal Conser- vancy, Inc. v. USDA,
134 F.3d 409, 410-11 (D.C. Cir. 1998).


4 Although PMD's brief refers to s 1.142(a)(4), there is no such 
subsection and it is obvious that PMD intends to refer to  s


The Secretary states that he has consistently interpreted  the Rules of
Practice to divest the Judicial Officer of jurisdic- tion to hear an
appeal of an administrative law judge's  decision that has become
effective. See, e.g., In re Toscony  Provision Co., 43 Agric. Dec.
1106, 1108-09 (Dep't of Agric.  1984) (order denying late appeal) and
Department orders  cited. Further, he states that PMD had actual
notice from  the Judge's oral ruling on November 17, 1999 that his
deci- sion would be final in 35 days unless an appeal was filed 
pursuant to s 1.145. Having failed to file an appeal before  December
22, 1999, the Secretary maintains that PMD's  contention that the
court should disregard the jurisdictional  nature of s 1.142(c)(4) is
meritless. In other words, although  not expressly stated in his Rules
of Practice, the Secretary  has interpreted "issuance" of an oral
decision under  s 1.142(c)(4) to mean "receiving service" for purposes


The Secretary explains, in his brief on appeal, that the  bench
decision procedures of s 1.142 are designed to allow  expedited
proceedings in disciplinary cases where the viola- tion is so patent
that "the usual opportunity for the parties to  submit written
findings of fact and conclusions of law is  unnecessary." Under these
circumstances, the Secretary  contends, "[n]o good reasons exist for
delaying the imposition  of the order of the [J]udge." Perhaps not.
Indeed, on the  basis of this rationale, the court could readily view
the  Secretary's interpretation of s 1.142(c)(4) as reasonable. Cf. 
Veg-Mix, Inc. v. USDA, 832 F.2d 601, 608-09 (D.C. Cir.  1987). The
question before the court, however, is not wheth- er the Secretary's
interpretation of the Rules of Practice is  reasonable, but whether
the Secretary has given fair notice of  his interpretation that
"issuance" of an oral opinion pursuant  to s 1.142(c)(2) is "receiving
service" for purposes of taking  an appeal under s 1.145(a). See
United States v. Chrysler  Corp., 158 F.3d 1350 (D.C. Cir. 1998);
Rollins Envtl. Servs.  (NJ) Inc. v. EPA, 937 F.2d 649 (D.C. Cir.
1991); Gates & Fox  Co. v. Occupational Safety & Health Review Comm'n,


The dismissal of PMD's appeal implicates the Secretary's  obligation to
give fair notice because the sanction of dismissal  of its appeal
petition as untimely forecloses relief from revo- cation of its
license under PACA. In Satellite Broadcasting  Co. v. FCC, 824 F.2d 1
(D.C. Cir. 1987), the court explained:


Traditional concepts of due process incorporated into  administrative
law preclude an agency from penalizing a  private party for violating
a rule without first providing  adequate notice of the substance of
the rule. The dis- missal of an application, we have held, is a
sufficiently  grave sanction to trigger this duty to provide clear 


Id. at 3 (citations omitted). In that case, an applicant for  FCC
licenses had failed to file its application in the proper  location.
See id. at 2-3. The court observed that the rules,  taken as a whole,
were conflicting. Id. at 2. Thus, while an  "agency's interpretation
[of its own rule] is entitled to defer- ence, [ ] if it wishes to use
that interpretation to cut off a  party's right, it must give full
notice of its interpretation."  Id. at 4. Because the FCC had not
provided fair notice of its  interpretation of the relevant rules, the
court held that it had  acted arbitrarily and capriciously in
dismissing the license  applications, and that the applicant was
entitled to reinstate- ment of the applications nunc pro tunc. See


Similarly, in General Electric Co. v. EPA, 53 F.3d 1324  (D.C. Cir.
1995), the court deferred to the agency's reasonable  interpretation
of its rules but held that the agency could not  fine a private party
for failure to comply with a rule interpre- tation that was "so far
from a reasonable person's under- standing of the regulations that
[the regulations] could not  have fairly informed GE of the agency's
perspective." Id. at  1330. Most recently, in Trinity Broadcasting of
Florida, Inc.  v. FCC, 211 F.3d 618 (D.C. Cir. 2000), the court
rejected the  agency's contention that its regulation requiring an
entity to  be "minority-controlled," id. at 628, provided fair notice
of its  interpretation of the regulation as mandating that non-profit 
organizations demonstrate de facto minority control and not  simply a
majority-minority board. See id. at 625, 628-30.  The court likewise
rejected the agency's contentions that  agency statements and other
agency action provided fair  notice of its interpretation. See id. at
628-31. Therefore, the 


court reversed the denial of an application for renewal of a  broadcast
license. See Trinity Broad., 211 F.3d at 632.


Here, the question is whether the Secretary's rules gave  PMD fair
notice of the time within which it had to appeal the  Judge's
decision.5 Two sections of the Secretary's Rules of  Practice are
implicated. Section 1.142, addressing when an  Administrative Law
Judge's decision becomes effective, pro- vides in relevant part:


The Judge's decision shall become effective without fur- ther
proceedings 35 days after the issuance of the deci- sion, if announced
orally at the hearing, or if the decision  is in writing, 35 days
after the date of service thereof  upon the respondent, unless there
is an appeal to the  Judicial Officer by a party to the proceeding
pursuant to  s 1.145; Provided, however, that no decision shall be 
final for purposes of judicial review except a final deci- sion of the
Judicial Officer upon appeal.


7 C.F.R. s 1.142(c)(4) (2000) (emphasis added).6 Section  1.145,
addressing appeals, provides in relevant part:




__________

n 5 On appeal, the Secretary has abandoned the Judicial Officer's 
alternative position, in denying reconsideration, that PMD's appeal 
was untimely because it was filed 31 days after PMD was furnished  a
copy of the Bench Decision by the Hearing Clerk. PMD claims  first,
that it did not receive the Bench Decision until December 7,  1999,
and second, that under agency precedent, the Judicial Officer  can
grant an extension of time "if an appeal [i]s inadvertently filed  up
to 4 days late, e.g., because of a delay in the mail system...."  In
re Scamcorp, Inc., 55 Agric. Dec. 1395, 1996 WL 678862, at *6  (Dep't
of Agric. Nov. 7, 1996); see also id. at *7.


6 Section 1.142 also provides:


If the [Administrative Law Judge's] decision is announced  orally, a
copy thereof, excerpted from the transcript or record- ing, shall be
furnished to the parties by the Hearing Clerk.  Irrespective of the
date such copy is mailed, the issuance date  of the decision shall be
the date the oral decision was an- nounced.


7 C.F.R. s 1.142(c)(2) (2000).


Within 30 days after receiving service of the Judge's  decision, a
party who disagrees with the decision, or any  part thereof, or any
ruling by the Judge or any alleged  deprivation of rights, may appeal
such decision to the  Judicial Officer by filing an appeal petition
with the  Hearing Clerk.


7 C.F.R. s 1.145(a) (2000) (emphasis added).


As the Secretary points out, ss 1.142(c)(2) & (4) clearly  describe
when a Judge's opinion, whether oral or written,  becomes effective.
Similarly, s 1.145(a) clearly states there  is a 30-day period within
which to appeal the Judge's deci- sion. But the triggering event under
s 1.145(a) is "receiving  service," and the Rules of Practice at no
point state that  "issuance" of an oral opinion under s 1.142(c)(2) is
deemed  "receiving service" for purposes of s 1.145(a). In other 
words, the Secretary's Rules of Practice are silent regarding  whether
"issuance" of an oral decision under s 1.142(c)(2) is  "receiving
service" for purposes of noting an appeal under  s 1.145(a). Thus, PMD
could not simply read the Rules of  Practice and know that this was
so. Nor would the purpose  of expedition, which the Secretary asserts
is the underlying  rationale for the procedures in s 1.142(c), compel
an interpre- tation of the regulations, much less give fair notice,
that  "issuance" is to be equated with "receiving service" under  s
1.145(a). Cf. Trinity Broad., 211 F.3d at 629-30. At oral  argument,
the Secretary agreed that the period after which  an opinion becomes
effective is different from the period in  which a party may note an


Of course, the Secretary may utilize means other than the  language of
his Rules of Practice to give adequate notice of  his interpretation.
See, e.g., General Elec., 53 F.3d at 1329.  However, the Secretary
points to no action, such as public  statements or pre-enforcement
efforts, that would have in- formed PMD of the Secretary's
interpretation. Instead, the  statements by the Judge and the Hearing
Clerk demonstrate  that the Rules of Practice were ambiguous regarding


period for appealing an oral bench decision. See id. at 1330- 32. Each
statement erroneously referred to "service" as the  event triggering
the 30-day appeal period and, consequently,  neither statement
informed PMD that the appeal period had  been triggered by the Judge's
oral issuance of his opinion on  November 17, 1999. Such statements,
it could be argued,  justify application of a "unique circumstances"
exception.  Prudential-Bache Sec. , Inc. v. Fitch, 966 F.2d 981,
984-86  (5th Cir. 1992) (construing Fed. R. App. P. 4(a)); cf. Moore
v.  South Carolina Labor Bd., 100 F.3d 162, 164 (D.C. Cir. 1996). 
Under the unique circumstances doctrine, "appellate courts  will
excuse an untimely notice of appeal where the appellant  could have
filed a timely notice but was mislead to delay filing  by a court
order or ruling which purportedly extended or  tolled the appeal


In denying PMD's petition for reconsideration, the Judicial  Officer
made three principal points. First, he noted that  PMD had been
furnished with a copy of the Secretary's Rules  of Practice, which are
also published in the Federal Register,  and that PMD's reliance on
the statement of the Hearing  Clerk was "misplaced." Yet the Rules
themselves were, at  best, unclear on the critical point for PMD. The
lack of  clarity was exacerbated by the Judge's statement, which 
appeared to be consistent with the statement of the Hearing  Clerk.


Second, the Judicial Officer emphasized that the only deci- sion issued
by the Judge was announced at the November 17,  1999 hearing. The
written Bench Decision later received by  PMD was merely an excerpt
from the transcript of the earlier  hearing. Hence, the Judicial
Officer concluded that the refer- ence to "this decision" in the
Judge's Bench Decision fur- nished to PMD, as well as the references
in the Hearing  Clerk's December 1, 1999 letter, were all references
to the  oral decision issued on November 17, 1999. The Judicial 
Officer also recognized, however, that the references to the  Judge's
decision were "not without ambiguity." Further, the  fact that the
only decision in the case was the Judge's oral  decision begs the
question. The question is whether the  Rules of Practice, or other
action by the Secretary, provided 


fair notice of which event--"issuance" or "receiving ser-
vice"--triggered the appeal time under s 1.145(a).


Third, the Judicial Officer found that the statements by the  Judge and
the Hearing Clerk that the decision would become  effective 35 days
after service, rather than after issuance,  were "error" because the
only decision in the case was the  oral decision issued on November
17, 1999. Acknowledging  further that there was an ambiguity in the
statements made  to PMD by the Judge and the Hearing Clerk because
both  failed to distinguish between the November 17, 1999 oral 
decision and the written Bench Decision when informing  PMD of the
period to appeal, the Judicial Officer nevertheless  appeared to
conclude that a simple reading of the Rules of  Practice sufficed to
give fair notice to PMD. In that regard,  for reasons already
discussed, he erred. Moreover, any  similarity between the Secretary's
interpretation of s 1.145(a)  as a jurisdictional bar and judicial
construction of Federal  Rule of Appellate Procedure 4 and the
Administrative Orders  Review Act, 28 U.S.C. s 2344, as presenting
jurisdictional  bars to untimely appeals, see supra n.3, does not
address  whether the Secretary provided fair notice of his interpreta-


Accordingly, because neither the Secretary's Rules of Prac- tice nor
any other action by the Secretary provided fair notice  to PMD that
"issuance" of the Judge's oral decision under  s 1.142(c) was
"receiving service" for purposes of noting an  appeal under s
1.145(a), we grant the petition.