MICHAEL FACCHIANO, JR., ET AL., PETITIONERS V. UNITED STATES
DEPARTMENT OF LABOR, ET AL.

   No. 88-1415

   In The Supreme Court Of The United States

   October Term, 1988

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For the Third Circuit

   Brief For The Respondents In Opposition

            TABLE OF CONTENTS
   Question Presented
   Opinions below
   Jurisdiction
   Statement
   Argument
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 1-19) is reported at
859 F.2d 1163.  The report and recommendation of the United States
Magistrate (Pet. App. 20-28) are reported at 108 Lab. Cas. (CCH)
Paragraph 35,071.  The order of the district court adopting the
magistrate's report and recommendation (App., infra, 1a-2a) is
unreported.  /1/

                             JURISDICTION

   The judgment of the court of appeals was entered on October 21,
1988, and a petition for rehearing was denied on November 22, 1988.
The petition for a writ of certiorari was filed on February 20, 1989.
The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

                          QUESTION PRESENTED

   Whether the court of appeals properly affirmed the denial of
petitioners' request for an injunction to prevent the Department of
Labor from continuing with contract debarment proceedings against
them, because petitioners have not exhausted administrative remedies
by presenting their defense of res judicata in the debarment
proceedings.

                               STATEMENT

   1. Petitioner Facchiano Construction Company is a corporation
engaged in the concrete construction business.  Petitioners Michael
Facchiano, Jr., and John Facchiano are officers of the company.
Between 1982 and 1984, the company performed a series of construction
projects that were partially funded by the United States Department of
Housing and Urban Development (HUD).  Pet. App. 3, 20-21.

   In 1984, the United States Department of Labor (DOL) conducted an
investigation of the company's performance.  The investigation
revealed that the company had been paying its employees on the HUD
projects less than the prevailing wages and overtime compenstion
required by the Davis-Bacon Act (40 U.S.C. 276a et seq. (Supp. V
1987), as made applicable by 42 U.S.C. 5310) and the Contract Work
Hours and Safety Standards Act (40 U.S.C. 327 et seq.), and that it
had been falsely certifying the wages paid to reflect compliance with
those statutes.  Because the false wage certificates were sent through
the mails, criminal charges were brought against Michael Facchiano,
Jr., and the company for mail fraud.  Both defendants pleaded guilty
in February 1985, and they were required to make restitution in the
amount of $126,000 to the affected employees.  The court also
sentenced Michael Facchiano, Jr., to six months' imprisonment, to be
followed by five years' probation, and fined him and the company
$2,000 each.  Pet. App. 3-4, 20-21.

   Shortly thereafter, HUD commenced proceedings to debar the company
and Michael Facchiano, Jr., from HUD-sponsored contracts, because of
their mail fraud convictions.  /2/ On March 5, 1986, a HUD
administrative law judge issued an order debarring the company and
Michael Facchiano, Jr., from participating in any HUD-funded projects
until November 15, 1986.  That order was not appealed, and it became
final on April 5, 1986.  Pet. App. 4-5, 21.

   While the HUD debarment proceedings were pending, DOL's Wage and
Hour Division instituted debarment proceedings against petitioners
pursuant to 29 C.F.R. 5.12(b)(1).  That regulation authorizes DOL to
debar contractors, based on certain violations of the Davis-Bacon Act,
Contract Work Hours and Safety Standards Act, and other statutes
prescribing labor standards for federal or federally assisted
projects, from receiving any contract subject to those statutes for a
period of up to three years.  On October 2, 1986, after petitioners
requested an administrative hearing, the Wage and Hour Division issued
an order referring the matter to a DOL administrative law judge (ALJ).
 Pet. App. 5, 21.

   2. In response to DOL's hearing order, petitioners filed this suit
in the United States District Court for the Western District of
Pennsylvania, seeking injunctive or mandamus relief preventing
respondents from continuing with the DOL debarment proceedings.
Petitioners contended that, under principles of res judicata, HUD's
debarment of the company and Michael Facchiano, Jr., from
participation in HUD-sponsored programs for six months precludes
debarment of petitioners by any other federal agency based on the same
underlying investigation.  Pet. App. 5, 22.  Respondents moved for
summary judgment on the ground that the action was barred by
petitioners' failure to exhaust their administrative remedies, and the
district court, adopting a magistrate's report and recommendation,
granted the motion (App., infra, 1a-2a;  Pet. App. 20-28).

   The district court found inapplicable various grounds on which
exhaustion may be excused in certain circumstances.  First, the court
reasoned that "(t)he injuries envisioned by the plaintiffs, litigation
expenses and loss of business(,) are the normal cost of litigation"
and "(have) been held not to be 'irreparable injury'" (Pet. App. 24,
citing Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 51 (1938)).
 Second, the court held that exhaustion would not be futile, because
"(petitioners) could raise any defenses, including that of res
judicata and collateral estoppel(,) in an administrative hearing and
on appeal" (id. at 24).  Finally, the district court determined that
exhaustion could not be excused on the ground that "'the challenged
agency action presents a clear and unambiguous violation of statutory
or constitutional rights'" (ibid., quoting Susquehana Valley Alliance
v. Three Mile Island Nuclear Reactor, 619 F.2d 231, 245 (3d Cir.
1980)).  In this regard, the district court observed that exhaustion
has been excused "when the administrative procedure would subject 'a
party to "vexatious and harassing" prosecution by refusing to apply
collateral estoppel'" to prevent relitigation of an issue that
previously had been resolved in the party's favor.  Pet. App. 24-25,
quoting Babcock & Wilcox Co. v. Marshall, 610 F.2d 1128, 1138 (3d Cir.
1979), and Continental Can Co. v. Marshall, 603 F.2d 590, 596 (7th
Cir. 1979).  Here, however, the court found no such "vexatious and
harassing" prosecution or other violation of statutory or
constitutional rights.  Moreover, it concluded that there was an
insufficient relationship between the HUD and DOL debarment
proceedings to require that DOL give claim-preclusive effect to the
HUD action in the DOL debarment proceedings (Pet. App. 24-28).  The
court relied on two factors:  (i) as required by HUD regulations, the
HUD proceedings were limited to the debarment of petitioners from HUD
programs, while the debarment proposed by DOL would have
government-wide effect, and (ii) the HUD debarment was based on the
fact of a criminal conviction of an offense that indicated lack of
business integrity or that seriously affects the question of present
responsibility, while the DOL action was based directly on the
Davis-Bacon violation (id. at 28).  Accordingly, the court denied
petitioners' request for injunctive relief and granted the
respondents' motion for summary judgment (ibid.).

   3. A divided panel of the court of appeals affirmed the district
court's judgment (Pet. App. 1-19).  The majority concluded that
petitioners must exhaust their administrative remedies by presenting
the res judicata defense in the DOL debarment proceedings before
asking for judicial relief.  Because the court of appeals understood
the district court's opinion to have resolved the merits of the
preclusion issue, it vacated the opinion so that DOL could address
that issue in the first instance (id. at 9, 14).

   a. The court of appeals stated that the principles of finality
underlying the doctrine of res judicata apply to administrative as
well as judicial proceedings, and that because the HUD debarment
proceedings were adjudicatory in nature, DOL "must at least consider"
petitioners' preclusion defense in its debarment proceedings (Pet.
App. 7-9).  In light of this obligation, the court found no occasion
here to dispense with the exhaustion requirement, and thereby to
deprive DOL of the opportunity to consider petitioners' asserted
defense in the first instance (id. at 9-14).

   The court of appeals identified three circumstances in which it had
declined to require exhaustion in other cases:  (1) when the
challenged agency action represents a "clear and unambiguous violation
of statutory or constitutional rights";  (2) when resorting to
administrative remedies would be clearly inadequate to prevent
irreparable injury;  and (3) when exhaustion would be futile (Pet.
App. 9).  The court found none of these exceptions applicable here.
First, the court concluded that DOL's pursuit of a debarment remedy
that is different in length and scope from the HUD debarment and is
imposed under a different set of regulations did not, on its face,
suggest an "aggravated" disregard for preclusion principles that would
constitute the sort of vexatious prosecution or harassment for which
exhaustion would not be required (id. at 11-13).  That was especially
so, the court reasoned, since petitioners lost in the HUD debarment
proceedings, whereas in Continental Can Co. v. Marshall, 603 F.2d 590
(7th Cir. 1979), upon which petitioners principally relied, the
private party was forced to relitigate an issue on which it had
prevailed in prior administrative proceedings (id. at 13).  Second,
the court of appeals noted that petitioners had failed to demonstrate
how they would be harmed by litigating their preclusion defense before
DOL (ibid.);  in fact, the majority thought it likely that
administrative litigation "could have been more efficient and
economical than (petitioners') pursuit of an injunction" (ibid.).
Third, finding that "there (wa)s no claim of futility," the court
declined to address that possible exception to the exhaustion rule
(id. at 10).

   The court of appeals further noted that its prior decisions
appeared to recognize a fourth exception to the exhaustion
requirement, applicable "'where a dispute centers on legal questions
such as constitutional or statutory interpretation'" (Pet. App. 10
n.4, quoting Bethlehem Steel Corp. v. EPA, 669 F.2d 903, 907 (3d Cir.
1982)).  However, it considered the issue of whether the HUD and DOL
debarment claims are similar enough to warrant preclusion to be a
mixed question of law and fact, rather than a "strictly legal"
question (id. at 10 n.4).  The court also deemed it appropriate to
allow DOL to decide the preclusion issue in the first instance because
it is most familiar with the prerequisites for debarment under the
Davis-Bacon Act and other federal contract labor statutes, and
therefore is most conversant with what constitutes the relevant cause
of action for purposes of applying preclusion principles (ibid.).

   b. Judge Rosenn dissented (Pet. App. 14-19).  He did not dispute
the majority's holding that DOL's debarment proceedings were neither
vexatious nor inconsistent with the requirements of due process.
Contrary to the majority, however, Judge Rosenn believed that
application of the doctrine of claim preclusion presents a purely
legal question requiring no factfinding and no exercise of expertise
by DOL, and that resorting to administrative remedies in this case
would only delay judicial resolution and pose an unnecessary hardship
for petitioners (id. at 16-18).

                               ARGUMENT

   The court of appeals correctly held that petitioners must exhaust
available administrative remedies in pursuing their claim-preclusion
defense to the Department of Labor's debarment proceedings.  It is
undisputed that the applicable statutes and regulations confer on DOL
the responsibility to investigate and debar federal contractors who
fail to maintain the requisite labor standards for their employees.
See 40 U.S.C. 276a-2;  Reorg. Plan No. 14 of 1950, 3 C.F.R. 1007
(1949-1953 comp.);  29 C.F.R. 5.6(b), 5.12.  That responsibility
includes the authority to conduct administrative hearing and review
proceedings, and to rule on whatever factual and legal defenses may be
raised by a particular contractor, including res judicata.  See 29
C.F.R. 5.12(b), 6.30-6.34, 7.1(b), 7.9.  Petitioners have attempted to
circumvent DOL's authority in this case by refusing to present their
preclusion defense to the ALJ and instead seeking to have the district
court block the debarment proceedings altogether.  The court of
appeals' holding that petitioners may not disrupt orderly
administrative processes in this manner does not conflict with any
decision of this Court or of another court of appeals.  Review by this
Court therefore is not warranted.

   1. Before addressing the exhaustion issue, petitioners seek to
persuade the Court that their claim-preclusion defense is meritorious.
 See Pet. 7-11.  The court of appeals declined to reach that issue,
because it held that DOL should have an opportunity to consider the
defense in the administrative proceedings (Pet. App. 14).  There
accordingly is no occasion for this Court to address the merits of the
claim-preclusion defense.  See Patrick v. Burget, No. 86-1145 (May 16,
1988), slip op. 4-5 n.5;  Youakim v. Miller, 425 U.S. 231, 234 (1976).

   Petitioners' submission that DOL is required as a matter of law to
dismiss its debarment proceedings on preclusion grounds does, however,
warrant a brief response.  Petitioners point to no statutory provision
or regulation that precludes DOL from debarring a contractor on a
government-wide basis, as expressly contemplated by the Davis-Bacon
Act (see 40 U.S.C. 276a-2), simply because another federal agency has
imposed a more limited debarment on the same contractor under separate
authority and legal rationale.  Petitioners instead invoke general
principles of res judicata -- largely drawn from precedents applicable
to judicial proceedings -- in seeking that extraordinary result.
Although judicially fashioned preclusion principles have been applied
to administrative proceedings in appropriate circumstances (see United
States v. Utah Construction & Mining Co., 384 U.S. 394, 419 (1966)),
such principles should not be imposed by the courts in the quite
different setting of administrative adjudication without a due regard
for the statutory and administrative schemes at issue.  Cf. University
of Tennessee v. Elliott, 478 U.S. 788, 793, 795-796 (1986).  /3/

   The HUD regulations that were in effect at the time of the HUD
debarment at issue in this case authorized it to debar a person only
from participation in HUD programs.  24 C.F.R. 24.4(a) (1985).  /4/
The question involved in the DOL proceedings that petitioners seek to
enjoin -- whether petitioners should be barred from participating in
all government contracts covered by the Davis-Bacon Act and related
statutes -- was beyond the jurisdiction of HUD to decide.  It is
indisputably within the power of Congress (and of the Executive
agencies in the absence of a controlling statute) to provide for the
question of debarment before each Executive agency to be independently
determined by that agency, rather than in a single proceeding of
government-wide scope.  In those circumstances, to treat the entire
Executive Branch as a single entity for res judicata purposes, and
thereby to preclude debarment by any other agency as a matter of law
once a single agency has acted, would be inconsistent with the
statutory and administrative scheme.  In the present case, the HUD
proceedings had only a limited scope, whereas the DOL proceedings may
culminate in a debarment order applicable to all covered government
contracts.

   Contrary to petitioners' contention, the absolute rule of
preclusion for which they argue is not required by general principles
of res judicata.  Even in successive judicial proceedings, a claim is
not extinguished by the doctrine of claim preclusion where "(t)he
plaintiff was unable to rely on a certain theory of the case or to
seek a certain remedy or form of relief in the first action because of
the limitations on the subject matter of the courts or restrictions on
their authority to entertain multiple theories or demands for multiple
remedies or forms of relief in a single action" (Restatement (Second)
of Judgments Section 26(c) (1982)).  Nor is a subsequent judicial
proceeding barred where "it is the sense of the scheme that the
plaintiff should be permitted to split his claim" (id. Section 26(d)).
 The same principles apply with special force in administrative
proceedings, where there frequently are limitations on the
jurisdiction or authority of the agency concerned.  See id. Section
83(3) ("An adjudicative determination of a claim by an administrative
tribunal does not preclude relitigation in another tribunal of the
same or a related claim based on the same transaction if the scheme of
remedies permits assertion of the second claim notwithstanding the
adjudication of the first claim.");  see also id. Section 83 comment
g;  Utah Construction & Mining Co., 384 U.S. at 419 n.15 ("if the
findings made by the Board are not relevant to a dispute over which it
has jurisdiction, such findings would have no finality whatsoever").

   For the foregoing reasons, there is no merit to petitioners' broad
contention that general principles of claim preclusion would require
DOL to dismiss its debarment proceedings against petitioners because
of the prior HUD debarment.  We do not suggest, of course, that DOL is
without authority to fashion its own rules or principles that would
give some preclusive effect to a prior adjudication by another agency
on the same or related issues.  That, however, is a matter committed
to DOL, at least in the first instance, in the exercise of its
statutory responsibilities and administrative expertise.

   2. Putting the merits of petitioners' broad and absolute position
to one side, the court of appeals correctly held that petitioners'
preclusion defense should first be presented to DOL in the course of
the administrative debarment proceedings.

   a. As this Court has observed, "(e)xhaustion is generally required
as a matter of preventing premature interference with agency
processes, so that the agency may function efficiently and so that it
may have an opportunity to correct its own errors, to afford the
parties and the courts the benefits of its experience and expertise,
and to compile a record which is adequate for judicial review."
Weinberger v. Salfi, 422 U.S. 749, 765 (1975).  See also Bowen v. City
of New York, 476 U.S. 467, 484 (1986);  Heckler v. Ringer, 466 U.S.
602, 619 n.12 (1984);  McKart v. United States, 395 U.S. 185, 193-194
(1969).  Where an agency has been granted authority to adjudicate
certain matters, it is crucial to the integrity of that administrative
scheme -- and usually more efficient -- for the agency to exercise its
discretion and apply its expertise without the interruption that is
necessarily occasioned by judicial review at intermediate stages.
McKart, 395 U.S. at 194.  This practice not only preserves the
agency's operational autonomy but also conserves judicial resources:
since the agency may resolve the issue in favor of the complaining
party or may grant that party relief on other grounds, "the courts may
never have to intervene." Id. at 195.  See also FTC v. Standard Oil
Co., 449 U.S. 232, 242 (1980) ("(j)udicial intervention into the
agency process * * * leads to piecemeal review which at the least is
inefficient and upon completion of the agency process might prove to
have been unnecessary").  /5/ In addition, by waiting for a final
agency decision, the reviewing court "exemplifies deference within the
constitutional framework to Congress's decision as to the proper forum
for the initial resolution of disputes under its statutes." Babcock &
Wilcox Co. v. Marshall, 610 F.2d 1128, 1137 (3d Cir. 1979).  /6/

   While it is possible to discern certain general principles
governing the application of the exhaustion doctrine, the Court has
made clear that the doctrine "should be applied with a regard for the
particular administrative scheme at issue." Weinberger v. Salfi, 422
U.S. at 765.  See also McKart v. United States, 395 U.S. at 193
("(a)pplication of the doctrine to specific cases requires an
understanding of its purposes and of the particular administrative
scheme involved").  With that basic principle in mind, the courts have
often addressed the question of exhaustion on a case-by-case basis,
with the results typically limited to the particular statutory and
regulatory framework and factual context presented.  See 5 J. Stein,
G. Mitchell & B. Mezines, Administrative Law Section 49.02 (1988 &
Supp. 1989) (discussing cases).  The court of appeals followed that
course here.

   b. Given the purposes underlying the exhaustion doctrine and the
principles governing its application, the court of appeals had ample
reason to require petitioners to litigate their preclusion defense
before DOL.  The question whether HUD's debarment of petitioners
precludes DOL from pursuing its own debarment remedy is a matter of
great significance to DOL that it should resolve in the first
instance.  Petitioners would refuse DOL the opportunity to determine
for itself the extent to which its power and responsibility to debar
petitioners from any federal contract for violation of prevailing wage
and overtime requirements has been preempted by HUD's separate
authority to deny them participation in HUD programs based on a
criminal conviction for mail fraud.  Such evasion of DOL's
administrative forum, if permitted, would seriously impinge on its
statutory and regulatory authority to adjudicate violations of
contractor labor standards.  It also might impose an unnecessary
burden on the judiciary, because administrative resolution of the
preclusion issue (or other issues) in the contractor's favor could
eliminate the need for judicial intervention, or at least narrow its
scope.

   Moreover, even if DOL ultimately should reject petitioners'
preclusion defense and enter a debarment order, and if petitioners
then should seek judicial review of the order, a court reviewing the
matter at that time would have the benefit of the expertise of DOL
adjudicators in construing the pertinent statutes and regulations, as
well as the agency's development of the facts relevant to the
preclusion issue (e.g., the identity of the parties, the nature of the
cause of action, and the similarity of the facts and evidence
supporting the respective debarment actions).  Indeed, as the court
below aptly observed (Pet. App. 10 n.4), "the body most conversant
with the matter of what constitutes a debarment cause of action for
DOL is DOL." Cf. W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757,
764-765 (1983).

   Finally, the application of the exhaustion doctrine when a party
raises a preclusion claim is not a question of first impression for
this Court.  In Heckler v. Ringer, the Court enforced the statutory
exhaustion requirement in 42 U.S.C. 405(g) despite the plaintiffs'
contention that administrative adjudicators had awarded benefits under
the Medicare program for a particular medical procedure and that,
under principles of issue preclusion, those administrative decisions
were binding upon the Secretary in ruling on the plaintiffs' claims
for benefits for the same medical procedure.  See 466 U.S. at 610-611,
614-615, 618-619 & n.12.  There is no reason why exhaustion should be
any less required under DOL's contract debarment program than it was
under the Medicare program in Ringer.

   c. Petitioners no longer insist that exhaustion should be excused
on grounds of vexatious prosecution or irreparable harm, /7/ but they
now contend, erroneously, that they should not be required to exhaust
their administrative remedies because the issue of whether the HUD
debarment precludes the DOL debarment proceedings is "a 'strictly
legal one,' involving neither the agency's particular expertise nor
its fact-finding abilities" (Pet. 13, quoting Board of Education v.
Harris, 622 F.2d 599, 607 (2d Cir. 1979), cert. denied, 449 U.S. 1124
(1981)).  Even assuming that the broad exception petitioners
apparently urge for all "strictly legal" issues would be consistent
with the principles underlying the exhaustion doctrine, /8/ the court
of appeals correctly found that exception inapplicable in this case
(Pet. App. 10 n.4).  As we have noted, there are factual questions
remaining that bear on whether the two debarment actions are identical
for purposes of claim preclusion.  For this reason, the court below
correctly found that application of claim-preclusion principles in
this instance presents a mixed question of law and fact.  This
determination by the court of appeals does not warrant further review.

   Moreover, as the court of appeals observed, the exception on which
petitioners rely pertains only to "'legal questions such as
constitutional or statutory interpretation'" (Pet. App. 10 n.4
(emphasis added), quoting Bethlehem Steel Corp. v. EPA, 669 F.2d at
907).  /9/ Here, petitioners do not contend that any statutory
provision requires dismissal of the DOL debarment proceedings on res
judicata grounds.  Accordingly, although any court that addresses
petitioners' claim-preclusion defense will necessarily examine the
statutes and regulations governing the two agencies' proceedings, the
court's task will primarily involve the elaboration and application of
preclusion principles that are not derived from any constitutional or
statutory text.  The extent and manner in which such general
principles should be applied in DOL's adjudicatory proceedings must
take account of DOL's understanding of and experience with those
proceedings.  Thus, the preclusion defense petitioners raise does not
present a pure "question of law" and does not fall within the narrow
exception that some courts, including the court below, have recognized
in certain circumstances.

   In any event, courts have often found agency review "desirable even
when pure questions of law are concerned, in order to provide the
court with the benefit of the agency's considered interpretation of
its enabling authority." St. Regis Paper Co. v. Marshall, 591 F.2d
612, 614 (10th Cir.), cert. denied, 444 U.S. 828 (1979).  See also
Uniroyal, Inc. v. Marshall, 579 F.2d 1060, 1064-1066 (7th Cir. 1978)
(exhaustion doctrine applies to questions of law when the agency's
construction ordinarily would be entitled to judicial deference).
/10/ Accordingly, because the court below reasonably concluded that
DOL's expertise in handling debarment cases would be helpful in
determining whether the HUD debarment has preclusive effect in this
instance, it properly deferred consideration of that issue pending
completion of the administrative proceedings.  /11/

                              CONCLUSION

   The petition for a writ of certiorari should be denied.

   Respectfully submitted.

   WILLIAM C. BRYSON

      Acting Solicitor General

   JERRY G. THORN

      Acting Solicitor of Labor

   ALLEN H. FELDMAN

      Associate Solicitor

   MARY-HELEN MAUTNER

      Counsel for Appellate Litigation

   JEFFREY A. HENNEMUTH

      Attorney Department of Labor

   MAY 1989

   /1/ The appendix to the petition for a writ of certiorari does not
contain the district court's order in this case, and we have therefore
reproduced that order as an appendix to this brief.

   /2/ HUD regulations in effect at the time authorized HUD to debar
contractors and grantees from participation in its programs on various
grounds, including conviction of any criminal offense occurring in the
performance of a public or private contract or subcontract, and
conviction of mail fraud or "any other offense indicating a lack of
business integrity or honesty, which seriously and directly affects
the question of present responsibility." 24 C.F.R. 24.6(a)(1) and (9)
(1985).  The HUD debarment regulations have since been revised (52
Fed. Reg. 37,116 (1987)), but the foregoing grounds for debarment have
been retained.  See 24 C.F.R. 24.6.

   /3/ In Utah Construction & Mining Co., upon which petitioners rely
(Pet. 7-8), the Court noted that the contract-disputes clause and the
governing statute accorded finality to administrative findings on
factual issues.  384 U.S. at 419.

   /4/ Since the time of HUD's debarment of Michael Facchino, Jr., and
the company, common rules have been adopted by HUD and other Executive
Branch agencies providing that one agency's debarment of a person from
nonprocurement programs will result in government-wide debarment from
all such programs.  53 Fed. Reg. 19,161 (1988);  see id. at 19,179
(HUD regulations).  See also 48 C.F.R. 9.406-1(c) (federal acquisition
regulation section providing for government-wide debarment from
procurement contracts).  These regulatory provisions indicate that the
claim-preclusion issue petitioners raise may be of little continuing
importance in the debarment setting.

   /5/ Indeed, the need for a final agency decision as a predicate for
judicial action of the kind sought here is supported not only by the
exhaustion doctrine but by the judicial review provisions of the
Administrative Procedure Act (APA).  Section 10(c) of the APA, as now
codified at 5 U.S.C. 704, authorizes judicial review of "(a)gency
action made reviewable by statute and final agency action for which
there is no other adequate remedy in a court" (emphasis added).  See
FTC v. Standard Oil Co., 449 U.S. at 238-246.

   /6/ Petitioners erroneously contend (Pet. 11-15) that this case
involves the doctrine of primary jurisdiction, not exhaustion of
administrative remedies, and that, in any event, the two doctrines are
essentially indistinguishable for present purposes.  There is,
however, a clear difference between the two doctrines.  Whereas the
exhaustion doctrine serves to restrain judicial interference whenever
a claim is cognizable in the first instance by an administrative
agency, the primary jurisdiction doctrine applies only when a claim
that is originally cognizable by the courts requires the resolution of
issues that fall within the special competence of an administrative
body.  United States v. Western Pacific R.R., 352 U.S. 59, 63-64
(1956).  That difference is critical here, because the question
whether petitioners should be debarred -- and therefore whether they
have a valid defense to debarment -- is committed to DOL in the first
instance.  The doctrine of primary jurisdiction, which focuses solely
on deferring to administrative expertise on one or more issues in an
existing judicial proceeding, does not address the further concerns
for administrative autonomy, judicial economy, and the comprehensive
administrative resolution of disputes that also underlie the
exhaustion doctrine.

   Petitioners nevertheless argue (Pet. 11-12 n.5) that this case
involves the doctrine of primary jurisdiction because the district
court in which they filed suit possessed "original" jurisdiction to
review agency action and issue injunctions and writs of mandamus.
They overlook the fact that the issue of claim preclusion arises here
solely as a defense to a "claim" -- i.e., the debarment of a
government contractor for violation of federally mandated labor
standards -- that is originally cognizable only by DOL.  Plainly, this
is not a situation in which an issue within the competence of an
administrative agency arises only in the course of an independent
judicial proceeding.  If petitioners' theory were adopted, it would
all but eliminate the exhaustion doctrine, because district court
review of agency action is often based on general grants of
federal-question and mandamus jurisdiction.

   /7/ Although the court of appeals "intimate(d) no view" on the
preclusion issue, it correctly observed (Pet. App. 12) that a case
"involv(ing) two different agencies pursuing two debarments differing
in length and scope under two different sets of regulations" does not
exhibit the sort of aggravated disregard for principles of claim
preclusion that might exempt a party from the exhaustion requirement.
Cf. Continental Can Co. v. Marshall, 603 F.2d 590 (7th Cir. 1979)
(agency precluded from repeatedly litigating against the same employer
an interpretation of OSHA noise-reduction standards that had
previously been ruled invalid).  The court below was likewise correct
in finding that litigation of the preclusion defense before DOL would
not cause petitioners irreparable harm.  As this Court has observed,
"(m)ere litigation expense * * * does not constitute irreparable
injury." Renegotiation Board v. Bannercraft Clothing Co., 415 U.S. 1,
24 (1974).  See also Myers v. Bethlehem Shipbuilding Corp., 303 U.S.
41, 51 (1938) ("(o)bviously, the rule requiring exhaustion of the
administrative remedy cannot be circumvented by asserting that the
charge on which the complaint rests is groundless and that the mere
holding of the prescribed administrative hearing would result in
irreparable damage").

   /8/ Petitioners rely (Pet. 14-15) on McKart v. United States for
the proposition that the exhaustion doctrine is inapplicable where a
"strictly legal" issue is presented.  However, McKart did not involve
a premature resort to the courts by a person who was a party to an
ongoing administrative proceeding, but rather a criminal prosecution
in which the defendant invoked a legal defense that previously had
been rejected in an agency decision that the criminal defendant had
declined to appeal through the administrative process.  395 U.S. at
196-197.  The Court held that the district court in the criminal
prosecution could consider the defense when it was too late for the
defendant to take an administrative appeal;  the Court relied in part
on the fact that the defense raised solely a question of statutory
interpretation.  McKart does not support petitioners' apparent view
that, outside the special context of criminal prosecutions, the courts
should freely entertain suits raising statutory challenges to agency
action where, as here, the administrative process remains available
and the party seeking relief has not exhausted that process.

   /9/ See also McKart, 395 U.S. at 197-198 (failure to exhaust will
be excused in subsequent criminal prosecution where, inter alia, issue
presented is "solely one of statutory interpretation");  Columbia Gas
Transmission Corp. v. Allied chem. Corp., 652 F.2d 503, 519-520 n.15
(5th Cir. 1981) (court will not refer matter to agency under doctrine
of primary jurisdiction where question concerns application of
statutory terms to specific events);  Board of Education v. Harris,
622 F.2d at 606 (no reference for agency consideration under doctrine
of primary jurisdiction if question is solely one "of the
interpretation of the statute").

   /10/ Compare Flying Tiger Line v. Teamsters Pension Trust Fund, 830
F.2d 1241, 1253-1255 (3d Cir. 1987), where the court held that, even
though the issue was one of statutory interpretation (under the
Multiemployer Pension Plan Amendments Act of 1980), it was appropriate
to require the parties to exhaust the administrative remedy of
arbitration before seeking judicial review.

   /11/ Because the court of appeals did not address the issue (Pet.
App. 10), this Court is not obligated to consider petitioners' further
contention (Pet. 16-17) that they should not be required to exhaust
their administrative remedies because DOL has exhibited "hostility and
manifest opposition to" their claim-preclusion argument.  See page 8,
supra.  Petitioners' argument, moreover, is groundless:  there is
nothing in the record to demonstrate that DOL's adjudicators have
prejudged the preclusion defense or that they would deny petitioners a
full and fair hearing on that defense if the matter were presented in
the debarment proceedings.  To the extent petitioners' suggestion of
"hostility" is based on the fact that respondents took a position in
these judicial proceedings on petitioners' broad and absolute argument
that DOL is required as a matter of law to dismiss its debarment
proceedings, that rationale for avoiding the exhaustion requirement is
pure bootstrap.  If adopted by this Court, it would unjustly reward a
party for attempting an unwarranted circumvention of the
administrative process and effectively forcing the agency to take a
position on certain legal issues in judicial proceedings that were
without merit to begin with.

   APPENDIX