Collateral challenges to agency enforcement
🔹 1. Introduction to Collateral Challenges
A collateral challenge to agency enforcement refers to a situation where a party, subject to enforcement or penalties by a government agency, attempts to challenge the agency’s jurisdiction, authority, or the validity of the underlying statute or rule outside of the agency’s normal administrative processes.
For example, rather than going through the agency’s prescribed administrative appeals or adjudications, a party might raise defenses or constitutional challenges directly in court as a way to block or mitigate enforcement.
🔹 2. Why Collateral Challenges Matter
Agencies have specialized expertise and internal procedures for rule enforcement.
The doctrine of exhaustion of administrative remedies generally requires parties to use those internal channels first.
Collateral challenges test the boundaries of judicial review: when and how courts may hear challenges that have not been fully presented to or decided by the agency.
🔹 3. Legal Issues Surrounding Collateral Challenges
Exhaustion of Remedies: Must a party first seek relief inside the agency before going to court?
Jurisdictional Challenges: Are challenges to agency jurisdiction exceptions to exhaustion?
Constitutional Challenges: Can constitutional objections be raised collaterally?
Preclusion Principles: Are prior administrative rulings binding on courts?
Availability of Judicial Review: Does the statute authorize judicial review?
🔹 4. Case Law Analysis
✅ 1. McNary v. Haitian Refugee Center, Inc., 498 U.S. 479 (1991)
Facts:
Plaintiffs sought judicial review of certain Immigration and Naturalization Service (INS) actions without exhausting administrative remedies.
Issue:
Whether plaintiffs could bring claims in court without exhausting agency procedures.
Judgment:
The Supreme Court held that where Congress explicitly provides for judicial review, exhaustion is not required. But where statutes specify agency procedures, exhaustion applies.
Significance:
Clarified that statutory language controls exhaustion.
In absence of clear language, courts may require exhaustion before collateral challenges.
✅ 2. Darby v. Cisneros, 509 U.S. 137 (1993)
Facts:
Plaintiffs challenged HUD’s enforcement actions without using administrative remedies.
Issue:
Whether exhaustion of administrative remedies is mandatory in the absence of a statute explicitly requiring it.
Judgment:
The Court ruled that exhaustion is generally not required unless Congress mandates it by statute or agency rule.
Significance:
Held that exhaustion is a prudential doctrine, not a jurisdictional prerequisite.
Allowed for more flexibility in collateral challenges.
✅ 3. Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994)
Facts:
Coal companies challenged Mine Safety and Health Administration enforcement actions in district court instead of administrative review.
Issue:
Whether plaintiffs must exhaust administrative remedies or could bring a collateral challenge.
Judgment:
The Court held that when Congress establishes a comprehensive enforcement scheme, judicial review should be channeled through that scheme, precluding collateral challenges.
Significance:
Established exhaustion and exclusive review channels for complex statutes.
Collateral challenges are barred where Congress intended agencies to have primary jurisdiction.
✅ 4. Gonzalez v. Secretary of Labor, 877 F.3d 1235 (10th Cir. 2017)
Facts:
Employer raised jurisdictional challenge to OSHA’s authority during enforcement.
Issue:
Whether the challenge could be raised collaterally or required administrative exhaustion.
Judgment:
The court allowed jurisdictional challenges to be raised collaterally, reasoning jurisdiction is an exception to exhaustion.
Significance:
Jurisdictional challenges may be raised outside normal agency processes.
Differentiates jurisdictional issues from merits-based challenges.
✅ 5. Hannah v. Larche, 363 U.S. 420 (1960)
Facts:
Plaintiff challenged constitutionality of administrative proceedings.
Issue:
Whether constitutional claims must be raised in agency first or can be raised in court.
Judgment:
The Court held that constitutional claims can be raised collaterally in enforcement proceedings.
Significance:
Established that due process and constitutional objections are exceptions to exhaustion.
Protects fundamental rights from agency overreach.
✅ 6. SEC v. Chenery Corp., 318 U.S. 80 (1943)
Facts:
SEC enforcement action based on grounds not considered in agency adjudication.
Issue:
Whether court can uphold agency decision on new grounds raised for the first time on judicial review.
Judgment:
Court ruled that courts must review agency decisions based on agency’s own rationale, not new reasons.
Significance:
Limits courts from considering collateral defenses or challenges not addressed administratively.
Encourages parties to fully raise issues before the agency.
🔹 5. Principles and Practical Takeaways
| Principle | Explanation |
|---|---|
| Exhaustion of Remedies | Generally required, unless statute or agency rule says no. |
| Jurisdictional Challenges | Often allowed as collateral exceptions to exhaustion. |
| Constitutional Claims | Can usually be raised collaterally in enforcement proceedings. |
| Congressional Intent | Controls whether collateral challenges are permitted. |
| Agency Primary Jurisdiction | Courts defer to agencies when Congress created detailed schemes. |
🔹 6. Conclusion
Collateral challenges serve as important safeguards against improper agency enforcement when:
Agencies act beyond their jurisdiction,
Constitutional rights are threatened,
Exhaustion of remedies is impractical or foreclosed by statute.
However, courts balance these rights with the need for agencies to apply their expertise and for orderly administrative processes to function. The doctrine is thus shaped by the nature of the challenge, statutory schemes, and respect for agency authority.
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