David Pakula, a Florida attorney, wrote the Federal Litigation guide for the PERM Book II. David was asked to opine on the subject of exhaustion of administrative remedies. The issue is whether an employer has to go to BALCA for review and then to federal court, or whether the employer can bipass BALCA and go directly to federal court. David Pakula hasa written a memorandum on this issue:
Memorandum on exhaustion of administration remedies
First on the Darby v. Cisneros issue, I agree with Michael Pistonís analysis that a BALCA appeal is not a prerequisite to judicial review. During the recent teleconference, some panel members suggested that even if exhaustion by a BALCA appeal is not jurisdictional, a federal court still has discretion to deny judicial review under prudential, or non-jurisdictional exhaustion principles. Such a position could be taken by the government based on dicta found in some federal court cases. However, the position appears to be without merit, as it appears to be well settled that in actions under the APA a federal court does not have prudential discretion to require exhaustion by an optional administrative appeal in view of Darby v. Cisneros. See e.g., Dixie Fuel Co. v. Commír of Social Svc., 171 F. 3d 1052, 1059 (6th Cir. 1999); Young v. Reno, 114 F. 3d 879 (9th Cir. 1997); Town of Smirna v. U.S. Army Corp. of Engineers, 517 F. Supp. 2d 1026, 1040 (M.D. Tenn. 2007); Hafeez v. Dorochoff, 2007 U.S. Dist. LEXIS 89009 (N.D. Ill. 2007).
The question then, is whether and under what circumstances you should seek federal court review in lieu of BALCA review? I think BALCA review should generally be the first choice. Federal court review is deferential, whereas BALCA review is not deferential and may even be de novo in many instances. Therefore, in most cases you would want to go to BALCA first.
On the other hand, an advantage of direct federal court review is that you can re-file the PERM application if you are still within the 180-day period, while you are at the same time seeking federal court review of the denied application. You cannot re-file if you are seeking BALCA review. Re-filing while seeking federal court review would give you a second bite at the PERM apple, if the reason for denial may be correctable, while also allowing you to address non-correctable issues in federal court. If you succeed after re-filing, I suppose you would then need to either dismiss the federal court case or deal with a mootness objection to continuing. There may be situations in which the issue may not be moot even if the second PERM application succeeded. For example, an exception to mootness exists when the agency error is capable of repetition.
Another consideration that would militate in favor of direct federal court review is if your main issue is the invalidity of the regulations. BALCA cannot invalidate PERM regulations, so a BALCA appeal of such issues would be futile. BALCA can consider other constitutional issues, as evidenced by the Health America decision. Hence, the mere fact that you are raising constitutional issues does not dictate that you should proceed immediately to federal court.
Of course, these decisions must be made on a case-by-case basis. I agree with Pistonís overall point that Darby v. Cisneros opens the door to immediate federal court review, which should be considered as a viable option in appropriate cases.
by David Pakula