Appeal from the United States District Court for the Western District of Washington. D.C. No. CV-94-1078-TSZ. Thomas S. Zilly, District Judge, Presiding. Original Opinion Previously Reported at:,.
Before: James R. Browning and Thomas G. Nelson, Circuit Judges, and Fern M. Smith, District Judge.*fn* Opinion by Judge Smith.
Plaintiffs/appellants appeal the district court's dismissal of their action for lack of subject matter jurisdiction. Appellants brought this action under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-705, against the Secretary and other personnel of the Department of Labor (collectively, "Department") challenging both a Department Administrator's finding that appellants violated child labor laws and the consequential assessment of monetary penalties. We affirm.
Plaintiffs/appellants are forty-nine car dealers in western Washington state ("dealers"). Each dealer employed sixteen and seventeen year old minors as lot attendants. According to the dealers, the lot attendants' primary duties were to clean cars and the dealership premises. Other duties, however, included moving cars on the dealers' premises, moving cars to different lots, driving to get gas, and transporting customers.
On March 18, 1994, after an investigation by the Wage and Hour Division of the Department of Labor, a Department Administrator issued a Notice of Assessments and Civil Money Penalty to each of the dealers ("the Administrator's decision"). The notices stated that the dealers had employed minors in a manner contrary to the child labor provisions of the Fair Labor Standards Act of 1938, 29 U.S.C. § 201-219 ("FLSA"). The dealers were found to have violated Hazardous Occupation Order No. 2, which prohibits minor employees from operating motor vehicles on public roads except when "such operation is only occasional and incidental to the minor's employment." 29 C.F.R. § 570.52. The notices identified the names of minors employed in violation of FLSA and assessed a civil monetary penalty of one thousand dollars for each seventeen year old and twelve hundred dollars for each sixteen year old employed in violation.
The notices also advised each dealer of its option to file an "exception" to the Administrator's decision, which would initiate a referral to an Administrative Law Judge ("ALJ") for hearing. The dealers timely filed exceptions on April 1, 1994. On April 7, 1994, the Department notified the dealers that their exceptions had been received and that they would be notified of a hearing date.
On July 20, 1994, before the Department had assigned the cases to an ALJ, the dealers filed the action below in federal district court against the Secretary of the Department of Labor and other agency personnel. The complaint sought judicial review under the APA and requested declaratory and injunctive relief from the Administrator's decision and the assessment of civil penalties. The complaint alleged that the decision was based on an arbitrary and capricious interpretation of the "occasional and incidental" language of Hazardous Occupation Order No. 2.
In September 1994, the Department referred the dealers' exceptions to an ALJ for administrative hearings. On September 20, 1994, the Department moved to dismiss the district court action for failure to exhaust administrative remedies, lack of finality in agency action, and lack of ripeness. Although initially ruling in favor of the dealers, the district court granted the Department's motion upon reconsideration. The district court rejected the Department's argument that the resolution of administrative appeals was a prerequisite to judicial review, but found, nonetheless, that the dealers' claims were not properly before it: "Plaintiffs' filing of exceptions of the Administrator's decision rendered that decision nonfinal for purposes of judicial review, and thus the Court lacks jurisdiction over plaintiffs' claims." The dealers filed a Notice of Appeal on May 18, 1995, seeking review of the district court's dismissal.
A district court's dismissal for lack of subject matter jurisdiction is reviewed de novo. Dietary Supplemental Coalition, Inc. v. Sullivan, 978 F.2d 560, 562 (9th Cir. 1992), cert. denied, 508 U.S. 906, 124 L. Ed. 2d 245, 113 S. Ct. 2333 (1993).
II. Statutory and Regulatory Framework: Oppressive Child Labor
A. Fair Labor Standards Act
The Fair Labor Standards Act prohibits commerce involving oppressive child labor. 29 U.S.C. § 212. The FLSA defines "oppressive child labor" as hiring employees between the ages of sixteen and eighteen in any occupation that the Department of Labor "shall find and by order declare to be particularly hazardous." 29 U.S.C. § 203(l)(2). In Hazardous Occupation Order No. 2, the Secretary found and declared that "the occupation[ ] of motor-vehicle driver . . . on any public road [or] highway . . . [is] particularly hazardous for the employment of minors between 16 and 18 years of age." 29 C. F. R. § 570.52(a). The regulation provides an exemption if the driving is restricted to daylight hours and is only "occasional and incidental to the minor's employment." ...