State of South Dakota, Petitioner, v. Lamar Alexander, Secretary of United States Department Ofeducation, Respondent, 968 F.2d 1 (8th Cir. 1992)

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US Court of Appeals for the Eighth Circuit - 968 F.2d 1 (8th Cir. 1992) Submitted March 11, 1992. Decided June 25, 1992

Michael L. Brustein, Washington, D.C., argued (Mark Barnett, Craig M. Eichstadt, Leigh M. Manasevit and Yolanda R. Gallegos, on brief), for petitioner.

Stephen H. Freid, Washington, D.C., argued (Jeffrey C. Martin, on brief), for respondent.

Before McMILLIAN, JOHN R. GIBSON, and HANSEN, Circuit Judges.


In this petition, the State of South Dakota seeks judicial review of a decision of the Secretary of Education that vacated an administrative law judge's decision and remanded the case to the ALJ for further proceedings. The Assistant Secretary for Vocational and Adult Education of the United States Department of Education had issued a preliminary departmental decision against South Dakota seeking refund of $150,000 of federal money on three grounds, one of which was that South Dakota improperly applied the money to interest payments. South Dakota appealed the Assistant Secretary's decision. The administrative law judge held that the Assistant Secretary's preliminary departmental decision had failed to properly state a prima facie case as to the interest payments issue and, therefore, the ALJ returned the entire preliminary departmental decision to the Assistant Secretary. The Assistant Secretary in turn appealed the ALJ's decision to the Secretary. The Secretary vacated the ALJ's decision, stating that the Assistant Secretary had indeed stated a prima facie case, and that even if she had not, it would not have been appropriate to return the entire preliminary departmental decision because of a defect in one part. The Secretary remanded the case to the ALJ for a determination on the merits. The State of South Dakota then brought this appeal, and the Secretary has moved to dismiss.

Because the issues involved the conflicting claims of the Secretary of the United States Department of Education and the State of South Dakota, we stayed administrative proceedings, Order of Jan. 29, 1992; heard oral argument; and received briefing on the merits.

We conclude that the order from which South Dakota appeals is not a final agency action reviewable under 20 U.S.C. § 1234g(a) (1988). Under 20 U.S.C. § 1234a(g) (1988), " [a] decision of the Office [of Administrative Law Judges] shall become final agency action ... unless the Secretary ... (2) remands the decision to the Office." Of course, remand to the Office of Administrative Law Judges is exactly what happened in this case. Therefore, there is no final agency action, and we must dismiss this premature appeal. When final agency action has been taken, the aggrieved party may then appeal.

Our order staying administrative proceedings pending argument is dissolved, and the appeal is dismissed.