Exhaustion of Remedies
An often overlooked defense or bar to many claims or causes of action in administrative law, employment law, or just litigation is the failure to exhaust remedies.
What is Exhaustion of Remedies?
The concept of the defense is that a plaintiff or claimant must first present and exhaust any internal review of their potential claim, as well as the appropriate external review of that internal claim process, before independently pursuing their claim in court through a lawsuit.
This can be raised as a complete defense to the underlying cause of action (see next sections) or merely as a means to mitigate or reduce potential damages. A common example of this defense of mitigation would be when an employer has an internal complaint process that the claimant or plaintiff elected not to timely use or bypassed completely in filing their lawsuit. The argument would be that any damages suffered by the claimant or plaintiff should be reduced to account for their failure to give the employer an opportunity to investigate or confront.
Exhaustion of Administrative Remedies
Successful exhaustion of remedies defenses is most common in cases in which a state or federal agency specifically administers an underlying statute or regulation. “Exhaustion of administrative remedies” requires a person to first go to the agency which administers the statute; this process usually involves filing a petition, then going to a hearing, and finally using the agency’s internal appeal process.
Exhaustion of administrative remedies comes up in the employment and litigation context, too. For example, failing to meet one's claim presentation requirement for lawsuits charging discrimination, harassment, or retaliation with the U.S. Equal Employment Opportunity Commission or State of California Department of Fair Employment and Housing, could result in a claim that the plaintiff failed to exhaust administrative remedies before filing a lawsuit. Or, another example, would be meeting a Government Tort Claim presentation requirement to state or local governmental agencies before filing a lawsuit.
Exhaustion of Judicial Remedies
Once the agency’s own procedures are finished, then the person may need to file a writ of mandate in court to review the internal process. This is called the “exhaustion of judicial remedies”.
In cases involving the judicial review of an administrative agency’s decision, a party is required to exhaust its administrative remedies prior to seeking judicial review. This ensures that when a petitions for mandate, that the petition is ripe. And this then permits the petitioner to challenge a quasi-judicial decision of the agency, or seek an order compelling an agency to perform a ministerial duty or legal obligation.
Why Provide Extra Hoops?
Many think that exhaustion of remedies is just another layer of bureaucracy that is designed to impede their ability to seek relief in the courts. And, in part, they are not necessarily wrong!
That stated, adding this requirement promotes administrative autonomy and judicial efficiency. We have decided that we do not want the courts to interfere with an agency's determination until the agency has reached a final decision. This permits the agency to resolve factual issues, to apply its own specialized expertise, to achieve statutorily delegated remedies, and to help mitigate damages.
And part of that reason is because the courts are busy as it is. The courts do not always have the resources to decide every dispute, and overworking them can degrade the level of involvement they can provide to justiciable issues. Thus, we do not want court's to intervene in some types of disputes unless absolutely necessary.
While there are exceptions to the requirement of exhausting administrative remedies, the burden of proving the exceptions would be on the moving party and failure to exhaust could lead to dismissal of any action. Thus, it is risky to not know all of your available remedies and then get a large investment--like a lawsuit--dismissed for failing to exhaust your remedies.