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1965

The Doctrine of Exhaustion of AdministrativeRemedies in MichiganRoger C. CramtonCornell Law School, rcc10@cornell.edu

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Recommended CitationCramton, Roger C., "The Doctrine of Exhaustion of Administrative Remedies in Michigan" (1965). Cornell Law Faculty Publications.Paper 933.http://scholarship.law.cornell.edu/facpub/933

Doct

Exhaus

A. IN GENERAL

THE doctrine that a litigant mustexhaust his administrative remedies

The prior to seeking judicial relief performsmuch the same function as the com-parable rule in trial courts that an ap-

1rine peal can be taken only from a finalorder. The exhaustion doctrine, like theof rule of finality, is concerned with the

Of" timing of judicial review of administra-tive action. Where the exhaustion doc-

tion trine is applicable, it requires that theadministrative proceeding reach its com-pletion before judicial review may be

of obtained.

Although federal and state courts

Administrative have often repeated the statement thatjudicial relief must be denied until ad-

e ministrative remedies have been ex-Remedies hausted, the case law does not supportthis extreme position. State and federal

in courts have often provided judicial re-lief in the absence of exhaustion of ad-ministrative remedies. Professor Kenueth

Micigan C. Davis reaches the following coiclu-sions:

The law embodied in the holdingsclearly is that sometimes exhaustion isrequired and sometimes not. No courtrequires exhaustion when exhaustion willinvolve irreparable injury and when theagency is palpably witkout jurisdiction;probably every court reqdi s exhaustionwhen the question i31tsented is one

By

ROGER C. CRAMTON

Roger Cramfon is a professor of law at theUniversity of Michigan. His areas of special in-terest are administrative law, conflict of laws,and public utility regulation.

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within the agency's specialization andwhen the administrative remedy is aslikely as the judicial remedy to providethe wanted relief. In between these ex-tremes is a vast array of problems onwhich judicial action is variable anddifficult or impossible to predict.1

The most common type of exhaustionproblem involves attempts to challengethe jurisdiction of an agency in ad-vance of completion of an administra-tive proceeding. Myers v. BethlehemShipbuilding Corp.2 is the leading fed-eral case requiring exhaustion of ad-ministrative remedies. The NLRB is-sued a complaint against the companycharging unfair labor practices. Afterthe case had been set for hearing, thecompany filed a bill in equity in a fed-eral district court to enjoin the holdingof the hearing, alleging that the Boardwas exceeding its constitutional powersbecause the company's products werenot sold in interstate or foreign com-merce, and that the hearing wouldcause irreparable damage not only byreason of direct cost and loss of timebut also because of serious impairmentof good will and harmonious relationsexisting between the corporation andits employees. The Supreme Court heldthat "no one is entitled to judicial re-lief for a supposed or threatened injurymtil the prescribed administrative rem-edly has been exhausted."- But thecourt's broad language is contradictedby the holdings of many cases in whichthe court has passed upon questions ofadministrative jurisdiction without re-quiring exhaustion of administrativeremedies.

4

1. 3 Davis, Administrative Law Treatise§20.01 (1958).

2. 303 U.S. 41, 58 S. Ct. 459 (1938).3. 303 U.S. at 51. 58 S. Ct. at 463.4. MeCulloch v. Sociedad Nacional de

Marineros, 372 U.S. 10, 83 S. Ct. 671(1963); Leedom v. Kyne, 358 U.S. 184,79 S. Ct. 180 (1958); Allen v. GrandCentral Aircraft Co., 347 U.S. 535, 74 S. Ct.745 (1954); Bethlehem Steel Co. v. NewYork State Labor Relations Board, 330 U.S.767, 67 S. Ct. 1026 (1947) (state courtshad first decided jurisdiction without im-posing exhaustion requirement); Order ofRailway Conductors of America v. Swan,329 U.S. 520, 67 S. Ct. 405 (1947)

The McCulloch case" is illustrative ofthe cases allowing injunctive relief de-spite the failure to exhaust administra-tive remedies. A foreign shipownersought to enjoin the Regional Directorof the NLRB from holding a representa-tion election. The court said nothing ofthe "long-settled rule of judicial admin-istration" which it had stated in abso-lute terms in the Myers case. It justifieddistrict court jurisdiction to enjoin bysaying:

• . . While here the Board has violatedno specific prohibition in the Act, theoverriding consideration is that theBoard's assertion of power to determinethe representation of foreign seamenaboard vessels under foreign flags hasaroused vigorous protests from foreigngovernments and created internationalproblems for our Government. Impor-tant interests of the immediate partiesare of course at stake. But the presenceof public questions particularly high inthe scale of our national interest be-cause of their international complexionis a uniquely compelling justificationfor prompt judicial resolution of the con-troversy over the Board's power.

In short, the question whether judi-cial relief is available prior to the con-pletion of the administrative proceedingrests upon a balancing of the reasons forand against requiring exhaustion in theparticular situation.

1. Principal reasons for requiring ex-haustion. A number of cases rely ontechnical legal grounds in requiring ex-haustion of administrative remedies -inparticular situations: (a) a court ofequity will not grant equitable reliefif an adequate remedy at law, i.e., theadministrative remedy and judicial re-view thereof, is available;7 (b) an im-

(stalemate between two divisions of Na-tional Railroad Adjustment Board); PublieUtilities Commission of Ohio v. UnitedFuel Gas Co., 317 U.S. 456, 63 S. Ct. 369(1943); Skinner & Eddy Corp. v. UnitedStates, 249 U.S. 557, 39 S. Ct. 375 (1919).

5. 372 U.S. 10, 83 S. Ct. 671 (1963).6. 373 U.S., at 16-17, 83 S. Ct. at 675.7. E.g., School District of Royal Oak v.

State Tenure Comm'n, 367 Mich. 689, 117N.W.2d 181, 183 (1962): ". .. Equityshould not be used to obtain iriiiinctivwrelief where there is no proof that corn-plainant would suffer irreparable injury."

11

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plicatioll or express statement in theparticular statute that a "final" orderis necessary for judicial review;8 and(c) the statement that the review pro-cedure prescribed by statute is the "ex-clusive" method of judicial review.0 Al-though these formal arguments arestated in a number of cases, the prac-tical considerations that underlie the ex-haustion doctrine are more important indetermining actual results. The practicalconsiderations favoring the exhaustiondoctrine have to do with furthering or-derly procedure, preserving the efficien-cy of the administrative process, con-serving judicial energies, and properlyallocating responsibilities between agen-cies and courts. Among the most impor-tant considerations are the following:(a) precipitate resort to a court involvesthe same problems of delay, disruptionand expense that may result from inter-locutory appeals from trial courts; (b)in some instances, application and in-terpretation of law by a court is greatlyassisted by the full development of thefactual context by a prior administrativehearing: (c) the complainant may winbefore the agency, making resolution ofthe question posed to the court unnec-essary; and (d) there are some issueswhich fall within administrative discre-tion (i.e., the agency has greater rela-tive competence on the particular issuethan a reviewing court).2. Reasons for not requiring exhaustion.The usual blanket statement of the doc-trine of exhaustion of administrativeremedies rests upon several premises re-lating to the nature of the administra-tive remedy that is involved: (a) theadministrative remedy must be avail-

8. E.g., Eastern Utilities Associates v.SEC, 162 F.2d 385 (1st Cir. 1947), inwhich a Boston company sought judicialreview of an administrative order settinga case for hearing in Philadelphia. Thecourt held that "administrative orders of amerely preliminary or procedural charac-ter are not directly and immediately re-viewable." 162F.2d, at 386.

9. Cf. Laffness v. Yaeger, 352 Mich. 468,90 N.W.2d 487 (1958) (where statute pro-vided for review of pension determinationby certiorari, declaratory judgment actionwas unavailable).

able on his own initiative to the personseeking judicial review; (b) it must notinvolve unreasonable delay or expense;and (c) the administrative remedy mustsubstantially protect the individual'sclaim of right. It is clear that no ex-haustion is required if these precondi-tions do not exist. Moreover, the ex-haustion doctrine is a discretionary door-closing doctrine which need not be ap-plied even when these basic conditionsare satisfied. Other circumstances mayoutweigh the reasons supporting the ex-haustion rule. Among the most impor-tant circumstances justifying nonapplica-tion of the exhaustion rule are the fol-lowing: (a) the extent of injury frompursuit of the administrative remedy;(b) the relative importance of the issueraised to the integrity of the adminis-trative process or to the competency ofthe administrative tribunal; (c) the de-gree of clarity or doubt about the ques-tion at issue; and (d) the extent towhich the issues involve, on the onehand, the specialized understanding ofthe agency or, on the other hand, theinterpretive abilities of courts in dealingwith statutory and constitutional ques-tions.1)

B. THE EXHAUSTION DOCTRINEIN MICHIGAN

The attitude of the Michigan courtswith respect to exhaustion of adminis-trative remedies reflects an understand-ing of the general considerations dis-cussed above. The doctrine that admin-istrative remedies must normally be ex-hausted is viewed as a rule of orderlyprocedure which embodies due and de-ferential regard for the legislative judg-ment and policy in providing expert ad-ministrative tribunals to deal with spe-cialized fields. Yet the doctrine is notviewed as an absolute jurisdictionalrule, but as a discretionary rule ofthumb to be departed from when theinterests of justice so require.

1. Cases requiring exhaustion. The typ-ical case for the application of the ex-

10. See 3 Davis, Administrative Law Trea-tise §§20.01-20.10 (1958); Jaffe, Tlw Ex-haustion of Administrative Remedies, 12Buffalo L. Rev. 327-57 (1963).

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haustion doctrine is one in which aparty seeks judicial relief without hav-ing taken an available and expeditiousappeal to higher administrative author-ities. Two recent Michigan cases are il-hlstrative. In School District of BentonHarbor v. State Tenure Comm'n," ateacher left his classroom and stayedaway two (lays; when he sought to re-turn he was told that his actions hadbeen taken as a resignation. He filed apetition with the tenure commission,which scheduled a hearing on the ques-tion whether the teacher had been dis-charged in violation of the tenure act.At this point the school district broughtan injunction suit in the circuit court,seeking to enjoin the commission fromholding the hearing. The circuit courtdismissed the suit on the ground thatthe school district had not exhausted itsadministrative remedies, and the Su-preme Court affirmed the dismissal. Theonly issue in the case was whether theteacher had voluntarily quit or had beendischarged, and this was precisely thefactual issue that the commission hadbeen authorized to determine. The ad-ministrative process would be short-circuited if the trial of this issue of factcould be shifted to the circuit court byfiling an injunction suit. judicial reviewof the commission's determination wasfu]lb adequate to protect all of therights of the school district; in fact, aproceeding for judicial review of thecommission's final order in the case,conclhding that the teacher had beenunlawfully discharged) was pending incircuit court when the Supreme Courtdecided the appeal in the injunctionsuit.

Norman v. Barber Examiners Board1"is similar. The board notified a barberto appear at a hearing to show causewhy his license should not be suspendedor revoked. Instead of responding tothis notice, the barber sought an in-junction restraining the board from hold-ing the hearing. He charged that the

11. 372 Mich. 270, 126 N.W.2d 102(1964).

12. 364 Micb. 360, 111 NAV.2d 48(]961).

board was "out to get" him and that hisopportunity to present witnesses wouldbe unduly restricted. The court heldthat fear and apprehension concerningwhat may happen at a proposed hearingdoes not state a claim for injunctive re-lief, a result that seems clearly correct.

The board was the duly constitutedauthority to hear factual issues involvingthe revocation of barber license. Thestatutory procedure would be disruptedand the authority of the board abridgedif a litigant could get a court to heartestimony that the board was biasedagainst him and would not conduct theproposed hearing fairly. The barber'sallegations did not go to the compe-tencv of the board to entertain the case,but only to the possibility that it mightabuse its power in conducting ti~' hear-ing. If procedural errors in fact didoccur during a subsequent hearing, theycould be considered in an appeal fromthe board's determination.

In cases such as Benion HarborSchool District and Norman. supra, allthe reasons favoring the exhaustion doc-'trine (utilizing the experience andjiudgment of the agency, avoiding piece-meal appeals, recognizing the primacyof the agency in the field committed toit by the legislature) are applicable.There are no countervailing considera-tions which justify a departure from thegeneral rule.

Other Michigan cases are to the sameeffect in closely analogous situations.One important line of cases holds thatactions for injunctive or declaratory re-lief cannot be used as a substitute forstatutory review procedures. Thus inSlezenger v. Liquor Control Comm'n,1 3an administrative decision revoking aliquor license could not be reviewed inan injunction suit when the legislaturehad prescribed a fully adequate methodof review by certiorari. Similarly. it washeld in Laiiness v. Yaegerm 4 that a de-claratory judgment action could not be

13. 314 Mich. 644, 23 N.W.2d 243(1946).

14. 352 Mich. 468, 90 NAV.2d 487(1958).

13

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used as a substitute (apparently un-timely) for the method of reviewingemployee pension claims prescribed bystatute. Another line of cases holds thata member of a union must exhaust hisintra-union remedies before seeking ju-dicial relief against the union for analleged failure of its fiduciary responsi-bilities. 15 In the Holman case," ' whichinvolved the seniority claims of employ-ees who had been placed in a newbargaining unit along with persons em-ployed at a newly purchased plant, thecourt also held that the plaintiffs, byabandoning charges filed with theNLRB when the regional director de-clined to issue a complaint, had failedto exhaust remedies available underfederal law, which preempted the field;the injunction suit in the state court,therefore, was dismissed.

2. Cases excusing failure to exhaustadministrative remedies. As has alreadybeen indicated, the exhaustion doctrineis inapplicable unless an adequate andexpeditious administrative remedy, whichwill substantially protect his claim ofright, is available to an individual. Anumber of Michigan cases explore themeaning of these prerequisites for theapplication of the exhaustion doctrine.

The inadequacy of the administrativeremedy was involved in Trojan v. Tay-lor Township.17 A property owner re-quested township officials to issue abuilding permit for the construction ofa trailer park. They refused to do so,and, without exhausting his administra-tive remedy before the board of zoningappeals, the property owner brought amandamus suit to compel issuance ofthe permit. He alleged that the admin-istrative remedy was "vain and useless"because the officials had made up theirminds in advance. The court held that

15. Duff y v. Kelly, 353 Mich. 682, 91N.W.2d 916 (1958): Cortez v. Ford MotorCo., 349 Mich. 108, 126-27, 84 N.W.2d523, 532 (1957); Holman v. Industrial S.& Mfg. Co., 344 Mich. 235, 260-61, 74N.W.2d 322, 333 (1955).

16. Holman v. Industrial S. & Mfg. Co.,344 Mich. 235, 74 N.W.2d 322 (1955).

17. 352 Mich. 636, 91 N.W.2d 9(1958).

mandamus jurisdiction could be exer-cised under such circumstances. Thecourt quoted with apparent approvalfrom the opinion of Judge Baum in thecircuit court:

. . . There is a general rule that per-sons seeking authority from a govern-mental unit must exhaust their remedieswithin such governmental unit beforeseeking relief in court. To this rule re-quiring the plaintiff to exhaust his ad-ministrative remedies, there are a num-ber of exceptions, one clear exceptionis that the law will not require a citizento undertake a vain and useless act. Thelaw does not require useless expendi-tures of effort. Where it is clear thatresort to the administrative body is buta formal step on the way to the court-house, the law will not require such astep to be taken.

In other cases the exhaustion doctrineis inapplicable because the administra-tive agency does not have authority tovindicate the claim of right asserte, bythe person invoking the jurisdiction ofthe court. Thus, many cases allow con-stitutional questions to be raised in ajudicial proceeding in advance of anyadministrative determination. In Dationv. Ford Motor Co.,19 the court statedthe usual rule that constitutional ques-tions are for judicial rather, than agencydetermination: "Generally speaking, anadministrative board, commission or de-partment possessing powers of [quasi-judicial] character does not undertake todetermine constitutional questions."'

If the claim asserted does not involvefactual issues but rests upon constitu-tional interpretation, administrative rem-edies need not be exhausted because theagency is not competent to resolve theconstitutional questions. It has beenrepeatedly held, for example, that anequity court may consider the constitu-tionality of regulatory or tax statutesprior to an attempt to enforce themagainst the complainant. In Diggs v.

18. 352 Mich., at 638-39, 91 N.W.2d,at 10.

19. 314 Mich. 152, 22 N.W.2d 252(1946).

20. 314 Mich., at 159, 22 N.W.2d, at255.

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State Board of Embalmers,2'1 a funerallirector, instead of taking an appealfrom an administrative proceeding inwhich his license had been revoked,brought a suit in equity in the circuitcourt alleging that the licensing statutewas unconstitutional. It was held thatinjunctive relief was available. The fu-neral director was not required to util-ize a statutory procedure which heclaimed was part of the unconstitution-al scheme; the remedy provided in thelicense revocation proceeding, since itcould result in loss of livelihood to theindividual, is one that exposes him toirreparable harm.

Thus it is well established in Michi-gan that where a licensing or other reg-ulatory statute is attacked as unconsti-tutional, the court may grant injunctiverelief on a claim of irreparable injurywithout requiring exhaustion of admin-istrative remedies.

22

Other cases in which failure to ex-haust administrative remedies has beenexcused involve nonconstitutional claimsof right which for one reason or an-other need not be asserted before theadministrative agency. In London v.City of Detroit."Y a property owner whodesired to continue to use land zoned

21. 321 Mich. 508, 32 N.W.2d 728(1948), cert. denied 355 U.S. 885, 69 S.Ct. 234, (1948).

22. Fitzpatrick v. Liquor ControlCammn, 316 Mich. 83, 25 N.W.2d 118(1946) (female bartenders could bring asuit to enjoin the liquor control commissionfrom enforcing a statutory provision ex-cluding women, with some exceptions,from bartending); General Motors Corp. v.Attorney General, 294 Mich. 558, 293N.W. 751 (1940) (allegation that threat-ened criminal prosecutions will result inirreparable harm must be taken as true onmotion to dismiss an injunction suit);Lewis v. State Board of Dentistry, 277Mich. 334, 269 N.W. 194 (1936) (den-tists who were not in compliance withstatutory requirement that they practiceunder the name stated on their licensescould invoke equity jurisdiction, prior tothe institution of any administrative pro-ceeding against them, to determine the con-stitutionality of the statutory requirement).

23. 354 Mich. 571, 93 N.W.2d 262(1958).

for residential purposes as a parking lotsought to enjoin the city from inter-fering with his plans. The failure to seeka special permit, and the pendency ofan enforcement proceeding brought bythe city under the zoning ordinance,did not prevent the court from grantinginjunctive relief. The result turned onthe fact that the landowner's claim rest-ed upon his assertion of preexisting use.Since his rights stemmed from the zon-ing ordinance itself, which recognizedpreexisting uses, he was not required toapply for a permit to continue a validnonconforming use. In short, the rightshe *was asserting could not be vindicat-ed in the administrative proceeding:hence a resort to that procedure was un-necessary.

Other zoning cases seem to recognizebroader departures from the exhaustiondoctrine. In Long v. Township of Nor-ton,24 it was held that the court mightinterpret a zoning ordinance in a declar-atory judgment proceeding even thoughthe property owner had not exhaustedhis administrative remedies before thetownship building inspector and thezoning board of appeals. The court em-phasized that only a legal question wasinvolved, "which does not turn upon anydisputed issue of fact...."25 In Longv. City of Highland Park,-"' declaratoryand injunctive relief was obtained by aproperty owner who alleged that thezoning ordinance was unreasonable andconfiscatory as applied to his property.The court stated that relief need notfirst be sought from the zoning author-ities because they "do not have thepower to declare the ordinance uncon-stitutional and void as applied to plain-tiffs' property and they could not grantthe relief here sought. An attempt bythem to do so, which in effect wouldresult in a violation of the ordinance,would have been ineffective."27

24. 327 Mich. 627, 42 N.W.2d 764(1950).

25. 327 Mich., at 633, 42 N.W.2d, at767.

26. 329 Mich. 146, 45 N.W.2d 10(1951).

27. 329 Mich., at 149, 45 N.W.2d, at 11.

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3. Asserted lack of administrative juris-diction. The most common situation in-volving the applicability of the ex-haustion doctrine arises when attemptsare made to challenge the jurisdictionof an agency in advance of completionof an administrative proceeding. Thedecisions - in Michigan and elsewhere- appear on the surface to go bothways; but when the cases are examinedin the light of the policy considerationsdiscussed at the outset of this paper,an underlying consistency emerges.

The grounds on which administrativejurisdiction is challenged make a differ-ence. The easiest situation is that inwhich the basic statute authorizing theagency to act is alleged to be unconsti-tutional. Since agencies normally lackpower to hold their enabling legislationunconstitutional, it is apparent that anadministrative proceeding cannot resolvethe claim of right which has been as-serted. Exhaustion of administrativeremedies will not be required in this sit-nation unless a factual hearing beforethe administrative agency is necessar-to develop a record on which the courtcan better determine the constitutionalissues. In Michigan exhaustion has notbeen required in this situation.8

Where the judicial challenge to agen-cy jurisdiction is based on the groundthat the agency's exercise of jurisdictionis unauthorized by its governing charter,whether statute or constitution, failureto exhaust administrative remedies iscommonly excused. In Ward v. Kee-nan,29 the leading case, Chief JusticeVanderbilt stated that administrativeremedies need not be exhausted "...first, when the jurisdiction of the sta-tutory tribunal [is] questioned on per-suasive grounds... ; second, when ... thecharges asserted before it [are] so pal-pably defective that its jurisdiction [is]

28. Long v. City of Highland Park, 329Mich. 146. 45 N.W.2d 10 (1950); and seethe other cases cited in notes 19 and 22.s1npra.

29. 3 N.J. 298, 70 A.2d 77 (1949).

merely colorable.. .."30 Similarly, otherstate courts have declared that there isan exception to the normal requirementof exhaustion where the agency lacksjurisdiction in the matter.31

Only two Michigan cases seem to dealwith advance challenges to administra-tive jurisdiction, and they appear on theface to go in opposite directions. InHighland Park v. Fair EmploymentPractices Conm'n,82 the city brought aninjunction proceeding in a circuit courtafter the FEPC had initiated a pro-ceeding involving charges that the citywas discriminating against Negroes inemployment. The city contended thatthe FEPC was without authority tohold the hearing because the fair em-ployment practices act invaded munici-pal authority and was unduly vague. Inan appeal by the city from the dismissalof the suit, the court held that the au-thority of the commission to entertainthe case should be considered and de-cided in this injunction suit prior tothe completion of the administrativeproceeding.

On the merits the court then up-held the authority of the commission toentertain the complaint and to conductthe hearing. The strength of the holdingon the jurisdictional question is en-

30. 3 N.J., at 308, 70 A.2d. at 8.31. E.g., County of Los Angeles v. De-

partment of Social Welfare. 41 Cal.2d 455,260 P.2d 41 (1953); St. Luke's Hospitalv. Labor Relations Conum'n. :320 Mass. 467.70 N.E.2d 10 (1946) (jurisdiction to con-duct certification proceeding may be chal-lenged without exhausting remedies): West-ern Pennsylvania Hospital N. Lichliter 340Pa. 382, 17 A.2d 206, 132 A.L.R. 1146(1941) (jurisdiction of state labor boardmay be challenged in injunction proceed-ing before board has completed its pro-ceeding), cf. the recent case of WillametteValleJ Lumber Co. v. State Tax Comm'n,226 Or. 543, 359 P.2d 98 (1961), in whichthe court weighed factors of (1) irrepar-able injury, (2) doubt on the jurisdictionalquestion, and (3) relative competence ofagency and court to decide the questionin holding that the jurisdiction of state taxcommissioners to increase personal propertyassessments could not be challenged untilafter the taxes had been assessed and paid,

32. 364 Mich. 508, 11 \.XV.2d 797(1961).

16

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hanced by the fact that the court didiot entertain questions relating to thevalidity of provisions governing themanner of appeal from final commission)rders. The appeal provisions, whichwere separable from the remainder ofthe act, could not be attacked untilafter the administrative remedy hadbeen exhausted. The city was not in-voking the appeal procedure, and itwas problematical whether it ever woulddo so. But the exhaustion doctrine wasnot applied to the basic question of thecommission's authority. In refusing toaccept the commission's contention thatthe entire case should be dismissed be-cause of the city's failure to exhaust ad-ininistrative remedies. the court notedthat the portions of the bill relating tothe authority of the commission did notpresent any factual issues for determin-ation. "The claims of unconstitutionalitycontained therein could properly havebeen determined in this chancery pro-ceeding on a motion to dismiss thebill.":m

In School District of Royal Oak v.State Tenure Comm'n,34 on the otherhand, the court applied the exhaustiondoctrine in holding that a school dis-trict could not obtain injunctive reliefagainst a tenure hearing before thestate commission prior to the completionof the administrative proceeding. Theschool district's attack on the adminis-trative proceeding purported to rest onthe connission's lack of jurisdiction. Oncloser examination, however, it is ap-parent that the consideration favoringthe exhaustion doctrine outweighed theopposing considerations. For the casedid not really present a legal questioninvolving the jurisdiction or authority ofthe commission, but a factual disputeon a matter within the competence andspecialized jurisdiction of the tenurecommission.

The facts of the Royal Oak case aresimple: a school district refused to re-

33. 364 Mich., at 519, 111 N.W.2d,34. 367 Mich. 689, 117 N.W.2d 181

(1962 ).

new the contract of a teacher, claimingthat it was applying an established "re-tirement" policy. The teacher initiateda proceeding before the tenure com-mission, seeking a hearing on the rea-sons for discharge. At this point theschool district, alleging that the com-mission had authority only of dischargesand not of "retirement," sought injunc-tive relief in the courts. The SupremeCourt held that in the absence of ashowing of hardship or irreparable harm,judicial relief is not available unless ad-ministrative remedies have been exhaust-ed. Although the language of the opin-ion, as is true of many of these cases,is overly broad, the result is sound.

The jurisdiction of the commissionover teacher dismissals was clear andunquestioned. Its authority ovei etire-ments as distinct from dismissals couldbest be determined after a factual hear-ing by the agency. The court could notpass intelligently upon the legal questionwithout exploring a number of factualissues which had been delegated to thetenure commission: What was the schooldistrict's "retirement" policy? How hadit been administered in the past? Wasthe practice of year-to-year renewals forteachers over 60 years of age merely adevice to circumvent the statutory ten-ure requirements? Etc.

A current issue of concern is whetheruncertainties involving the constitutionalauthority of Michigan's new Civil RightsCommission can now be considered bycourts in advance of final disposition ofa case by the commission. There isserious question, for example, whetherthe Civil Rights Commission has anyauthority to entertain proceedings in-volving racial discrimination in the fieldof private housing. I have elsewhereexamined the materials which relate tothis question of constitutional interpre-tation and ventured certain conclu-sions.3 5 Suppose, for example, that aproperty owner refuses to sell his home

35. See Cramton, The Powers of theAlichigan Civil Rights Commission, 63Mich. L. Rev. 5-58 (1964).

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to a Negro because of the latter's race.No common or statutory law in Michi-gan provides any protection against thisform of private discrimination.- Thejurisdiction of the Civil Rights Commis-sion, tinder article V, §29, of the 1963constitution, extends only to "civil rightsguaranteed by law and by this constitu-tion." Whether the new constitutioncreated enforceable guarantees againstracial discrimination in the field of pri-vate housing is clearly a matter of greatpublic importance. May that issue beimmediately taken to the courts by aproperty owner who has been chargedwith such discrimination in a proceed-ing brought before the commission? Ordoes the doctrine that administrativeremedies must be exhausted precludean immediate judicial determination ofthe constitutional question?

The proper answer is not entirelyclear, but the manner in which it shouldbe resolved is. A deliberate weighing ofthe considerations for and against theapplication of the exhaustion doctrineis called for. The following considera-tions might well enter into the balance:

(1) The extent to which Michigan'snew constitution created enforceablerights in private citizens against thediscriminatory acts of other privatecitizens is purely a question of law.No factual materials will help to settlethat issue. It is a matter of constitu-tional interpretation which must bedecided upon the basis of the consti-tuitional language and its legislativehistory. The only materials that needto be consulted are those which arethe proper subject of judicial notice(the Journal of the ConstitutionalConvention, the Address to the Peo-ple, and, to a lesser extent, newspaperand circular material explaining thework of the constitutional convention).

Moreover, the Civil Rights Com-mission, even though it is a consti-

36. See McKibbin v. Corporatkni & Sec.Comrn'n, 369 Mich. 69, 119 N.WV.2d 557(1963).

tutionally-created entity, remains anadministrative agency. The languageof article V, §29, which subjects thecommission to general laws govern-ing "administrative agencies" and tode novo review by the courts, clearlyindicates that the commission is an"inferior tribunal." It is not empow-ered to determine the scope of theconstitutional rights which fall withinits jurisdiction. That is a legal ques-tion for the Michigan courts; no prioradministrative hearing will clarify themeaning of the constitutional lan-guage. In short, the question involvedis not only without the expertise ofthe agency but is beyond the agency'scompetence in the sense that it canbe finally determined only by thecourts.

(2) The administrative proceedingbefore the commission does not pro-vide an adequate and expeditiousremedy for the claim of right raisedby the hypothetical property ownerwho has been accused of discriminat-ing in the sale of his home. His claimof right goes to the commission'stotal lack of any authoritv in thisarea. Since the commission's view onthis question is well-kii0wn and pre-determined, an administrative hearingon the factual issue of whether dis-criminatory conduct did take placeserves no useful purpose. The com-mission, speaking through its co-chair-men and its executive director, hasrepeatedly made it clear that it ac-cepts the position advanced by At-torney General Frank J. Kelley, whohas declared that the 1963 constitu-tion vested exclusive jurisdiction inthe commission to vindicate broadnew civil rights protecting individ-uals from private racial discrimina-tion in the housing field.-7 There iseven some question whether the com-mission, even if it so desired, coulddepart from the view expressed by

37. Ops. Mich. Att'y Gen. No. 4161(July 22, 1963); id., No. 4195 (Oct. 3,1963); id., No. 4211 (Nov. 18, 1963).

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the chief law enforcement officer ofthe state, prior to the expression ofdiffering views in an authoritativejudicial decision. As in Trojan v. Tay-lor Township,3 S the administrativeremedy would be "vain and useless,"since it cannot result in a promptresolution of the question of constitu-tional interpretation.

(3) It cannot be disputed that thequestion of constitutional interpreta-tion casts a large shadow upon anyassertion of power by the Civil RightsCommission in the field of privatehousing. There is no question but thatthe issue is a serious and debatableone. however it may be finally re-solved. If the 1963 constitution didnot create enforceable new rightsagainst private discrimination, thenthe commission is entirely withoutjurisdiction in that important area,since the commission's jurisdiction ex-tends only to "the civil rights guaran-teed by law and by this constitution."The existing uncertainty prevents thecommission from taking the forcefulaction in the housing field that itmight take if its authority were not sodoubtful. It prevents local govern-ments, even those such as Ann Arborand Grand Rapids which have enact-ed fair housing ordinances, from seek-ing to remedy the evils of housingdiscrimination by local action. Andit strengthens the hand of those in thelegislative branch of government whowould frustrate the protest movementby stalling and temporizing. A promptand authoritative judicial resolutionof the legal issues would end thisperiod of paralysis.

(4) A consideration which relatesonly to the situation under discussion,and not to the general problem ofexhaustion of administrative remedies,arises from the language of the consti-tutional provision creating the CivilRights Commission. Article V, §29,of the 1963 constitution, which creates

the counmission and governs its pow-ers, is qualified b\ the following sen-tence:

• . . Nothing contained in this sec-tion shall be construed to diminishthe right of any party to direct andimmediate legal or equitable remediesin the courts of this state.

This sentence might be taken as ob-viating any consideration of the gen-eral principles relating to the ex-haustion problem, since it refers tothe "right" of any "party" before thecommission "to direct and immediate""equitable" remedies in the courts ofthe state. I believe such a view wouldbe mistaken. The sentence does notcreate any new judicial remedies; itmerely preserves those which existedat the time. If equitable relief againstadministrative action could be obtain-ed under prior law, the same reme-dies may be obtained against theCivil Rights Commission today. Theframers were apparently concernedlest the constitutional status of thecommission lead the courts to the er-roneous conclusion that it should notbe treated in the same manner asother administrative agencies. But theframers did not intend to abolish thedoctrine of exhaustion of administra-tive remedies insofar as the CivilRights Commission was concerned.

(5) The only consideration weighingin the other direction is the modestshowing of irreparable harm that canbe advanced by the property owner.Forcing him to postpone judicial reso-lution of the questions of constitution-al interpretation until after a factualhearing by the commission will causehim expense, inconvenience and em-barrassment. His business practicesmay be affected in the meantime. Butthe degree of hardship and injury isnot very great.

The willingness of the SupremeCourt in Highland Park v. Fair Em-ployment Practices Comm'n,39 to con-

39. 364 Mich. 508, 111 N.W.2d 79738. 352 Mich. 636, 91 N.W.2d 9 (1958). (1961).

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sider the constitutionality of the fairemployment practices act prior to thecompletion of the administrative hear-ing suggests that the same approachis likely to be taken in the analogoussituation under discussion. Supportmight also be drawn from cases in-volving the same questions whichhave arisen in other jurisdictions. Le-vitt & Sons v. State Division AgainstDiscrimination,40 is squarely in point.A housing-project developer wascharged in complaints filed with thedivision with discriminating againstindividual Negroes in the sale ofhouses. When conciliation failed, thecomplaints were set for administra-tive hearing. The developer thenbrought suit in a trial court of gener-al jurisdiction, challenging the juris-diction of the division to hear thecomplaints and attacking the consti-tutionality of the underlying statute.The trial court dismissed the suit onground that the developer had failedto exhaust its administrative remedies.The New Jersey Supreme Court heldthat the exhaustion doctrine was in-applicable:

Since the questions involved in thisappeal relate to the jurisdiction of theadministrative agency and the consti-tutionality of the statute on which theadministrative action in question isbased, it is apparent that plaintiffsshould not be made to exhaust theiradministrative remedies before pur.suing the present action. Fischer v.Bedminister Tp., 5 N.J. 534, 76 A.2d673 (1950); Ward v. Keenan, 3 N.J.298, 302-309, 70 A.2d 77 (1949). Thequestions are purely legal, an areawhere the administrative expertisewould be of no real value. Under suchcircumstances, we have consistentlyheld that exhaustion of administrativeremedies will not be required. Honig-feld v. Byrnes, 14 N.J. 600, 604, 103A.2d 598 (1954); Nolan v. Fitzpa-trick, 9 N.J. 477, 89 A.2d 13(1952).41

40. 31 N.J. 514, 158 A.2d 177 (1960),appeal dismissed 363 U.S. 418, 80 S. Ct.1215 (1960).

41. 31 N.J., at 523; 158 A.2d, at 181.

Similarly, a New York court con-sidered and upheld the constitution-ality of a New York City fair hous-ing ordinance even though the plain-tiff had not exhausted his adminis-trative remedies.

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CONCLUSION

In Michigan and elsewhere, cases in-volving the doctrine of exhaustion ofadministrative remedies contain overlybroad language indicating that exhaus-tion is always required or never re-quired. Upon closer analysis, however,the decisions appear to reflect a care-ful balancing of relevant considerations.Exhaustion of administrative remediesis required when early resort to a courtwill endanger the objectives of the ex-haustion doctrine: furthering orderlyprocedure, preserving the efficiency ofthe administrative process, conservingjudicial energies, and propertly allocat-ing responsibilities between agenciesand courts. On the other hand, the ex-haustion doctrine is not applied - me-chanically or unthinkingly - when otherconsiderations outweigh the objectivesof the exhaustion rule. Thus, the Michi-gan cases do not require exhaustionwhen (1) the plaintiff would sufferserious injury if he were required to ex-haust his administrative remedy; or(2) the issue which he raises is adoubtful question of law which is notwithin the competence or the expertiseof the administrative agency. A viablejurisprudence emerges when one con-sults, not the broad language of isolatedcases, the holdings of the decisions.However, a greater degree of articula-tion of the controlling factors in theopinions would be desirable, since itwould make the law easier to under-stand and to administer.

42. Martin v. City of New York, 22 Misc.2d 389, 201 N.Y.S.2d 111 (Supreme Court1960). The recent case of Marshall v. Kan-sas City, 355 S.W.2d 877, 93 A.L.R.2d1012 (Mo. 1962), allowed a restaurantowner to use a declaratory judgment actionto attack an ordinance prohibiting racialdiscrimination in places of public accommo-dation.

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