United States Court of Appeals For the First Circuit

No. 23-1351

SARA HALSEY and SUSAN KIRALIS-VERNON,

Plaintiffs, Appellants,

v.

FEDCAP REHABILITATION SERVICES, INC.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE

[Hon. Nancy Torresen, U.S. District Judge]

Before

Montecalvo, Lynch, and Rikelman, Circuit Judges.

Oriana Farnham, with whom William C. Herbert, Frank D'Alessandro, Hardy, Wolf & Downing, P.A., and Maine Equal Justice were on brief, for appellants. Sarah K. Grossnickle, with whom Martha C. Gaythwaite, John P. Giffune, and Verrill Dana LLP were on brief, for appellee.

March 4, 2024 LYNCH, Circuit Judge. Sara Halsey and Susan

Kiralis-Vernon, the appellants, were participants in Additional

Support for People in Retraining and Employment - Temporary

Assistance for Needy Families (ASPIRE-TANF), a program promulgated

by the state of Maine. See

-A(2). The

purpose of ASPIRE-TANF is to "provide services and support to

recipients of Temporary Assistance for Needy Families [(TANF), a

federal program that provides grants to participating states,] and

to reduce dependence on public assistance to the extent that

adequate funding is available for that purpose."

§ 3781-A(3).

Maine's Department of Health and Human Services (Department) has

been given the responsibility of administering the ASPIRE-TANF

program. See id. § 3781-A(2). Under the governing statute, the

Department may contract with a private agency to deliver services

to participants in ASPIRE-TANF and is responsible for monitoring

any such contract agency. See id. § 3782-A(2)-(3). ASPIRE-TANF

participants have the right to a fair hearing before the Department

in accordance with the Maine Administrative Procedure Act (MAPA).

See id. §§ 3762(9)(B), 3788(2);

(1).

Halsey and Kiralis-Vernon brought this action in the

U.S. District Court for the District of Maine against Fedcap

Rehabilitation Services, Inc., (Fedcap) for damages, alleging that

Fedcap violated its obligations in its role as a contract agency

hired by the Department to administer ASPIRE-TANF services. Their

- 2 - complaint also alleges that a Fedcap employee verbally assaulted

Kiralis-Vernon at least in part because of her race, color, or

national origin. Despite the Maine legislature's provision for an

administrative review process to resolve disputes under

ASPIRE-TANF, appellants did not seek to notify the Department of

their complaints or to pursue their complaints through

administrative hearings before the Department. The district court

granted Fedcap's motion to dismiss on the ground that the

appellants had not first pursued an administrative remedy before

the Department as required by Maine law. Halsey v. Fedcap

Rehabilitation Services, Inc., No. 1:22-cv-00119,

,

at *10 (D. Me. Mar. 15, 2023).

Halsey and Kiralis-Vernon appeal from the district

court's grant of Fedcap's motion to dismiss. The appellants

brought the case pursuant to diversity jurisdiction, and the

parties agree that the issues presented are issues of Maine law.

Applying Maine law as set forth in Maine statutes, regulations,

and the decisions of the Maine Law Court, we affirm the district

court's ruling as it pertains to the appellants' claims that Fedcap

violated its obligations under the ASPIRE-TANF and other programs.

We have no need to and do not address whether appellants have a

viable claim for monetary damages as to those claims. We vacate

the district court's dismissal of Kiralis-Vernon's claim that a

- 3 - Fedcap employee verbally assaulted her and remand for further

proceedings on that claim.

I.

A.

TANF is a federal program that provides grants to

participating states to fund programs that "provide[] assistance

to needy families with (or expecting) children and provide[]

parents with job preparation, work, and support services to enable

them to leave the program and become self-sufficient."

(a)(1)(A)(i). Maine established the ASPIRE-TANF program to

"provide services and support to recipients of [TANF] and to reduce

dependence on public assistance to the extent that adequate funding

is available for that purpose."

-A(3).

ASPIRE-TANF is administered by Maine's Department of Health and

Human Services.

§§ 1-A(2), 3781-A(2). The Department is

charged with "provid[ing] case management services to individuals

participating in the ASPIRE-TANF program." Id. § 3782-A(1). Under

the governing statute, an ASPIRE-TANF participant may receive

support services depending on the results of a case manager's

"initial assessment to determine that individual's education,

training and employment needs based on available program

resources, the participant's skills and aptitudes, the

participant's need for supportive services, local employment

opportunities," and other factors. Id. § 3788(3). A participant

- 4 - is entitled to receive such services, but only "[t]o the extent

that sufficient funds, training sites and employment opportunities

are reasonably available." Id. § 3788(4-A).

"The [D]epartment may contract with public and private

agencies and individuals to deliver employment, training and other

services for [ASPIRE-TANF] participants consistent with the

purposes of the program." Id. § 3782-A(2). The Department is

required to monitor any such "contract agency at least annually to

ensure compliance with [governing statutory provisions] to ensure

compliance with the contracts entered into by the parties and to

ensure that quality services are provided for program

participants." Id. § 3782-A(3). The Department is further

required to "adopt rules in accordance with [MAPA] by which

satisfactory performance [of a contract agency] is measured." Id.

Rules governing services under ASPIRE-TANF "apply equally to all

participating [TANF] recipients, whether those services are

provided by the [D]epartment or any other agency, organization or

individual providing TANF program services to participants." Id.

§ 3786.

To receive TANF benefits, a participant must enter with

a representative of the Department into a "family contract," which

lists services the participant may receive, as well as the

requirements with which the recipient must comply to avoid

sanctions to their benefits. Id. §§ 3763(1)-(1-A), 3788(4-A).

- 5 - When a participant enters into the ASPIRE-TANF program, the family

contract is amended in accordance with statutory requirements.

Id. § 3763(1). A participant may request an amendment to their

family contract at any time. Id. § 3788(2).

As an alternative, under certain defined circumstances,

ASPIRE-TANF participants may apply to participate in Maine's

Parents as Scholars program instead of receiving TANF benefits.

Id. § 3790(2). Parents as Scholars is a student financial aid

program whose purpose is to "aid needy students who have dependent

children and who are matriculating in postsecondary . . .

education programs." Id. § 3790(1)-(2). Enrollees who are

accepted into the program "must be provided with a package of

student aid that includes aid for living expenses equivalent to

that provided" under TANF. Id. § 3790(1). Similar to ASPIRE-

TANF, an applicant's eligibility for the Parents as Scholars

program depends upon an initial assessment by a Department case

manager. Id. § 3790(2). Eligibility must be granted "[t]o the

extent that program resources and space permit," and only if the

assessment results in particular findings, such as that "the

individual has the aptitude to successfully complete the proposed

postsecondary program." Id. No more than 2,000 individuals may

be enrolled in the Parents as Scholars program at a given time.

Id. § 3790(1). "When there are fewer than 2,000 enrollees in the

[program]," the Department is required to "inform all persons

- 6 - applying for ASPIRE-TANF and all ASPIRE-TANF participants

reviewing or requesting to amend their education, training or

employment program under ASPIRE-TANF of the Parents as Scholars

Program and shall offer them the opportunity to apply for the

program." Id. § 3788(1-A).

Notice must be given of an ASPIRE-TANF participant's

"right to request . . . a fair hearing." See id. § 3788(2); see

also 10-144 Me. Code R. ch. 1, § 1 (providing that Department

adjudicatory hearings "include proceedings whereby dissatisfied

applicants, recipients, institutions, or other persons whose legal

rights, duties, or privileges are at issue can obtain review of

certain actions or inactions of the [Department] where such legal

rights, duties or privileges are required by constitutional law or

statute to be determined after an opportunity for hearing"). Such

hearings are governed by MAPA.

(9)(B);

(1).

B.

Because this appeal follows a motion to dismiss, we

recite the facts as alleged in the complaint. See Medina-Velázquez

v. Hernández-Gregorat,

(1st Cir. 2014).

In 2016, the Department contracted with Fedcap to

deliver employment, training, and other services to ASPIRE-TANF

program participants. In its capacity as a contract agency, Fedcap

had the authority to make final determinations as to the content

- 7 - of program participants' family contract amendments, to request

support service benefits from the Department on participants'

behalf, and to request sanctions from the Department to reduce or

terminate TANF benefits.

Subject to the Department's monitoring and other

obligations, Fedcap also assumed responsibility for services which

ASPIRE-TANF participants were to receive under Maine statutory

law, agency rules, common law, and contract provisions. The

appellants' complaint, which omits material references to certain

limiting language as to the existence of Fedcap's and the

Department's obligations, allege that Fedcap was required to:

• inform program participants of available education,

employment, and training opportunities and support

services, and how to request and receive them;

• assess program participants' education and training

needs for attaining sustainable employment and provide

necessary and available support services;

• inform program participants about their education,

training, study, and work requirements under the

ASPIRE-TANF program;

• provide program participants with an opportunity to

apply for any education, employment, and training

opportunity and/or support services available under the

ASPIRE-TANF program;

- 8 - • inform all program participants of Maine's Parents as

Scholars program, and if there were fewer than 2,000

people enrolled in the program, offer program

participants the opportunity to apply;

• assess and document program participants' barriers to

participation, and offer participants with barriers to

participation an opportunity for comprehensive

assessment which could result in referral for

alternative services, supports, and income benefits;

• engage in the interactive process as necessary for

evaluating and responding to a request for reasonable

accommodation;

• offer reasonable alternative participation

requirements to program participants with disabilities

or other good cause, and ensure that program

participants with disabilities were given the right to

request and receive a reasonable accommodation in order

to receive substantially the same program benefits as

persons without disabilities;

• ensure that program participants were not discriminated

against on the basis of race, sex, or disabling

condition;

- 9 - • coordinate and authorize support services for program

participants; and

• use commercially reasonable efforts to secure support

services from the Department, notify the Department

daily about support services to be issued on behalf of

participants, request support services in a timely

manner, and assist participants with collection of any

required documentation needed for the Department to

issue the support.

C.

The complaint alleges that appellant Sara Halsey began

participating in the ASPIRE-TANF program in 2016, at which time

she was in substance use recovery and had a newborn daughter. In

2017, Halsey requested accommodation from Fedcap in recognition of

her medical providers' recommendation that she delay seeking

employment through ASPIRE-TANF because of health barriers related

to her disabilities, including the need for stability in her

recovery. The complaint alleges that Fedcap failed to engage in

the interactive process necessary for evaluating and responding to

Halsey's request and instead notified Halsey that within one week

she would have to find a childcare provider for her daughter and

begin applying daily for jobs at the Fedcap office or else receive

sanctions as to her TANF benefits.

- 10 - The complaint alleges Halsey informed Fedcap in 2019

that she had enrolled in a full-time graduate certificate program

with the goal of obtaining a bachelor's degree, but that Fedcap

did not in response inform her about, or give her an opportunity

to apply to, the Parents as Scholars program or other support

services. The complaint does not allege any facts as to whether

at the time she informed Fedcap of the enrollment the Parents as

Scholars program had fewer than 2,000 participants or any fact as

to whether she would have been accepted had she been given an

opportunity to apply. The complaint also does not allege any facts

as to whether Halsey met the eligibility requirements for either

the Parents as Scholars program or other support services at the

time.

The complaint alleges that Fedcap at some unspecified

later time informed Halsey about available support services, but

it erroneously told her that she would have to work a part-time

job to obtain support services for childcare while she was in

school. As a result, Halsey worked a night shift while attending

school full-time in order to receive childcare services. Halsey

alleges that this prevented her from getting adequate sleep, caused

her to spend long periods of time away from her daughter, and

resulted in severe emotional distress.

Halsey alleges that, when Fedcap did provide her such

support services for childcare, Fedcap failed to timely submit

- 11 - requests to the Department so that her childcare costs could

promptly be paid. She alleges that this caused her to fear for

her daughter's wellbeing and her own ability to continue her

education without reliable childcare. She further alleges that,

as a result of Fedcap's failure to properly deliver services, she

still has not completed her bachelor's degree.

The complaint alleges that appellant Susan

Kiralis-Vernon began participating in the ASPIRE-TANF program in

2016, at which time she had a one-year-old daughter with special

health needs and an eight-year-old son. In 2016, when

Kiralis-Vernon informed Fedcap that she had enrolled in a

bachelor's degree program, Fedcap allegedly did not inform her

about, or give her an opportunity to apply to, the Parents as

Scholars program or other support services for which she was

eligible. As a result, the complaint alleges, Kiralis-Vernon

struggled to afford school supplies and often could not access

materials she needed from home. The complaint does not allege any

facts as to whether the Parents as Scholars program had fewer than

2,000 participants at the relevant time, or any facts as to whether

Kiralis-Vernon met the eligibility requirements for either the

Parents as Scholars program or other support services at the time.

The complaint alleges that, when Fedcap did provide

Kiralis-Vernon with support services for childcare, Fedcap failed

to timely submit requests to the Department so that her childcare

- 12 - costs could promptly be paid. This caused her to fear for her

daughter's wellbeing and her own ability to continue her education

without reliable childcare. The complaint further alleges that

Fedcap informed Kiralis-Vernon of the Parents as Scholars program

one year after she had enrolled in her bachelor's degree program.

Kiralis-Vernon completed an application for the Parents as

Scholars program, but Fedcap allegedly failed to submit the

application to the Department. It is alleged that, as a result of

Fedcap's failure to deliver services, Kiralis-Vernon still has not

completed her bachelor's degree.

The complaint alleges that in 2019, Kiralis-Vernon was

in the waiting room of a Fedcap office, and her children in the

bathroom of said office, when a Fedcap employee verbally assaulted

her for allegedly missing an appointment. Without provocation,

the employee requested security and threatened to have the police

remove Kiralis-Vernon, who is Black, from the premises while her

children were still in the bathroom. The complaint alleges that

the circumstantial evidence surrounding this incident demonstrates

that the Fedcap employee's conduct was motivated at least in part

by Kiralis-Vernon's race, color, or national origin.

II.

In April 2022, Halsey and Kiralis-Vernon filed a

complaint against Fedcap in the U.S. District Court for the

District of Maine, asserting diversity jurisdiction. The

- 13 - complaint was amended in July 2022. The complaint asserts Maine

law claims of negligence, breach of contract, breach of fiduciary

duty, negligent infliction of emotional distress, and intentional

infliction of emotional distress. The bases of these claims are

the allegations that Fedcap failed to provide the appellants with

services it was obligated to supply. Specifically, they include

allegations that Fedcap failed to engage in the interactive

process, failed to properly process childcare payment requests,

failed to submit a program application, and failed to inform or

misinformed the appellants about the Parents as Scholars program

and other services. The complaint also includes Kiralis-Vernon's

allegation of discrimination based on race, color, or national

origin. Accordingly, the complaint requests actual and punitive

damages alleged to have arisen from lost earnings, lost earning

capacity, lost earning opportunities, severe emotional distress,

and lost enjoyment of life. The complaint further alleges that

Fedcap engaged in discrimination based on race, sex, and/or

disability in ways that affected delivery of services, and which

resulted in the appellants' suffering foreseeable damages arising

from severe emotional distress.

In August 2022, Fedcap filed a motion to dismiss for

failure to state a claim pursuant to Federal Rule of Civil

Procedure 12(b)(6). On March 15, 2023, the district court granted

Fedcap's motion on the ground that "court review is not available

- 14 - unless and until the Plaintiffs have tried to pursue a[n

administrative] remedy before [the Department]." Halsey,

, at *10.

The appellants timely appealed.

III.

A.

We review the district court's ruling in favor of the

motion to dismiss de novo, "applying the same criteria that

obtained in the court below." Garita Hotel Ltd. P'ship v. Ponce

Fed. Bank, F.S.B.,

(1st Cir. 1992). In our review,

we assume the veracity of the complaint's alleged facts, and make

all reasonable inferences of fact in favor of the plaintiffs,

Muratore v. Darr,

(1st Cir. 2004) (citing Doran

v. Mass. Tpk. Auth.,

(1st Cir. 2003)), but "[w]e

do not credit . . . legal labels or conclusions, or statements

that merely rehash elements of the cause of action," Lemelson v.

Bloomberg L.P.,

(1st Cir. 2018) (citing Schatz v.

Republican State Leadership Comm.,

(1st Cir.

2012)). We further are "not bound by the district court's

reasoning but, rather, may affirm an order of dismissal on any

ground evident from the record." MacDonald v. Town of Eastham,

(1st Cir. 2014).

The appellants' complaint is exclusively grounded in the

law of Maine, so we look to Maine law for the substantive rules of

- 15 - decision. See N. Am. Specialty Ins. Co. v. Lapalme,

(1st Cir. 2001). A federal court considering state law claims

does "not create new rules or significantly expand existing rules.

We leave those tasks to the state courts." Phoung Luc v. Wyndham

Mgmt. Corp.,

, 88 (1st Cir. 2007). We are "bound by

the teachings of [Maine's] highest court," N. Am. Specialty Ins.

Co.,

, and "take care not to extend state law beyond

its well-marked boundaries," CVS Pharmacy, Inc. v. Lavin,

, 58 (1st Cir. 2020) (quoting Markham v. Fay,

(1st Cir. 1996)). We presume that the appellants, in choosing a

federal rather than a state forum, were cognizant that it is not

the role of a federal court under diversity jurisdiction to blaze

new trails in state law. See Jordan v. Hawker Dayton Corp.,

(1st Cir. 1995).

B.

The appellants contend that the district court's

dismissal of their complaint was in error because, they assert,

they are not required first to utilize the Department's

administrative review process before bringing suit.

The district court's holding as articulated appears to

have been grounded in Maine's exclusivity principle. See Halsey,

, at *6, *9-10. But that principle applies only

where there has been a final agency action which can be reviewed

on appeal in accordance with statutory provisions whose procedures

- 16 - have been deemed exclusive. See Fitanides v. Perry,

(Me. 1988); see also Paul v. Town of Liberty,

, 929 n.4 (Me. 2016). Because the appellants' claims do not

yet involve a final agency action, reliance on the principle of

exclusivity was misplaced.1

Nonetheless, "we are free to affirm an order of dismissal

on any basis made apparent from the record." See Freeman v. Town

of Hudson,

(1st Cir. 2013). To address the

appellants' argument that the dismissal was in error, we turn to

two separate but overlapping Maine doctrines: the principle of

exhaustion of administrative remedies and the doctrine of primary

jurisdiction. Both doctrines involve courts "impos[ing] upon

themselves" limitations on the exercise of jurisdiction. Cushing

v. Smith,

(Me. 1983); see State ex rel. Brennan

v. R.D. Realty Corp.,

(Me. 1975) (explaining

that the doctrine of primary jurisdiction is "a matter of judicial

policy"). Maine's exhaustion principle "requires a party to

proceed in the administrative . . . arena until all possible

administrative remedies are exhausted before initiating action in

the courts." Cushing,

(quoting Levesque v.

Inhabitants of Eliot,

(Me. 1982)). Maine's

1 The district court found that there has been no final agency action by the Department at this time, and the appellee does not dispute this.

- 17 - doctrine of primary jurisdiction "holds that as a general rule,

the courts will not decide an issue which an administrative agency

with jurisdiction over the matter has not yet considered."

Levesque,

. These doctrines "are both closely

allied in basic function and concept." Brennan,

.

They each "rest[] on the premise that an agency has the primary

authority to make certain decisions deemed relevant to the

determination of the controversy." Bryant v. Town of Camden,

(Me. 2016) (quoting Brennan,

).

Maine courts in enforcing these doctrines "recognize the

advantages of leaving some preliminary determinations to the

agencies which are particularly competent to handle them."

Cushing,

. By allowing "administrative agencies to

correct their own errors, clarify their policies, and reconcile

conflicts before resorting to judicial relief," Bryant,

(quoting Ne. Occupational Exch., Inc. v. Bureau of Rehab.,

(Me. 1984)), courts "avoid interference with the

functions of an administrative agency," Cushing,

.

In particular, these doctrines allow an agency which has

jurisdiction an opportunity to make findings of fact. See Ne.

Occupational Exch., Inc.,

. Such findings of fact

by the agency "facilitate judicial review, avoid judicial

usurpation of administrative functions, assure more careful

administrative consideration, help parties plan their cases for

- 18 - rehearings and judicial review, and keep agencies within their

jurisdiction." Gashgai v. Bd. of Registration in Med.,

(Me. 1978); see Frazier v. Fairhaven Sch. Comm.,

(1st Cir. 2002) ("[T]he administrative process, at the

very least, should facilitate the development of a useful record

(and, thus, assist in the informed disposition of any subsequent

litigation).").

The requirement to resort first to the administrative

review process also allows the agency to "first decide issues

peculiarly within its expertise before a court may review the

agency's action." Annable v. Bd. of Env't Prot.,

(Me. 1986). This recognizes that an agency "has developed an

expertise in resolving the special problems with which it is, by

law, required to become concerned." Churchill v. S.A.D. No. 49

Teachers Ass'n,

(Me. 1977) (quoting Brennan,

). "[T]he '[m]erest prudence suggests that the courts

ought to have the benefit of the . . . [Agency's] prior expert

evaluation of controverted facts, before it intervenes in a

controversy over which the . . . [Agency] has jurisdiction.'"

(alterations in original) (quoting Brennan,

).

In addition, the doctrines promote judicial economy by

allowing the agency, once it has found a violation, the opportunity

to correct its own errors or to reverse any harms caused by its

actions. See Ne. Occupational Exch., Inc.,

. This

- 19 - potentially "avoid[s] the necessity of any judicial involvement at

all if the parties successfully vindicate their claims before the

agency." Andrade v. Lauer,

(D.C. Cir. 1984).2

Maine law recognizes limited exceptions that may relax

the principle of exhaustion under special circumstances. See Lakes

Env't Ass'n v. Naples,

(Me. 1984) (citing Ne.

Occupational Exch., Inc., 473 A.3d at 410-11).

[S]pecial circumstances may require a relaxation of the [exhaustion] rule . . . when "(1) 'the reviewing body has no power to grant the requested relief,' (2) the 'complaint alleges persuasive grounds for relief which are beyond the jurisdiction of the administrative agency to determine,' such that completing the process would be futile, or (3) 'only questions of law are involved' in the ultimate determination.

Bryant,

n.1 (emphasis added) (citations omitted)

(first quoting Stanton v. Trs. of St. Joseph's Coll.,

(Me. 1967); then quoting Lakes Env't Ass'n,

; then quoting Stanton,

; and then quoting Lakes

Env't Ass'n,

); see Gross v. Sec'y of State,

(Me. 1989) (holding that plaintiffs' failure to

2 This court has recognized the same benefits. See Barros v. Garland,

, 59 (1st Cir. 2022) (holding that allowing an agency "to take first crack at legal issues . . . afford[s] the parties the full benefit of the agency's expertise and allow[s] the agency the first opportunity to correct its own bevues" (second alteration in original) (quoting Mazariegos-Paiz v. Holder,

(1st Cir. 2013))).

- 20 - pursue administrative review process does not preclude judicial

relief in part because there "is no provision within the

administrative review process" that allows plaintiffs to bring

their claims before the agency). The Maine Law Court has suggested

that these exceptions may also apply to the doctrine of primary

jurisdiction in certain circumstances. See Churchill,

("There are exceptions to the doctrine of primary jurisdiction

excusing the non-exhaustion of administrative remedies . . . .").

C.

The appellants' claims -- excepting Kiralis-Vernon's

race discrimination claim, which we address independently --

involve many disputed issues of fact and law that the Maine

legislature has given the Department the responsibility to decide

in the first instance and which require the Department's discretion

and expertise to resolve. We conclude that, under Maine's primary

jurisdiction and exhaustion doctrines, these claims must be heard

in the first instance by the Department.

The Maine legislature has vested in the Department

express authority to ensure that contract agencies comply with

their contractual and statutory obligations, and the

responsibility to determine whether contract agencies meet said

obligations satisfactorily. See

-A(3).

The Maine legislature moreover has mandated that disputes as to a

contract agency's actions shall first be heard and resolved in

- 21 - administrative hearings before the Department. See

§ 3788(2);

(1). Such disputes are "clearly committed

by statute to agency decision-making." Johnston v. Me. Energy

Recovery Co., Ltd. P'ship,

(Me. 2010).

Premature judicial review of Fedcap's actions would

disrupt the Department's ability to carry out these statutory

duties and would usurp the Department's authority to make factual

and legal determinations necessary for the resolution of this case.

See Johnson v. City of Augusta,

, 857 n.2 (Me. 2006)

(stating that the primary jurisdiction doctrine "is applied to

allow an agency charged with making a decision the opportunity to

do so before a court disrupts the agency process"); McKart v.

United States,

(1969) ("A primary purpose [of

the exhaustion doctrine] is . . . the avoidance of premature

interruption of the administrative process."); Kristin E. Hickman

& Richard J. Pierce, Jr., Administrative Law Treatise § 17.2 (6th

ed. 2019 & Supp. 2023) [hereinafter Hickman & Pierce] ("[A]llowing

some parties to obtain court review without first exhausting

administrative remedies may reduce the agency's effectiveness by

encouraging others to circumvent its procedures and by rendering

the agency's enforcement efforts more complicated and more

expensive.").

The Department has been charged with administering the

ASPIRE-TANF and Parents as Scholars programs, and it is accordingly

- 22 - within the Department's authority to make findings about what

actions Fedcap took with respect to the appellants' participation

in both programs. See

-A(3) (providing

that the Department "shall monitor each contract agency at least

annually to ensure compliance" with relevant statutory and

regulatory provisions). This includes findings as to whether and

at what times Fedcap informed the appellants of the Parents as

Scholars program and other services, whether such information

provided was accurate, at what times Fedcap submitted applications

and payment requests for the appellants to receive services under

ASPIRE-TANF and Parents as Scholars, and whether Fedcap engaged in

the interactive process for evaluating and responding to a request

for reasonable accommodation. See Frazier,

("[T]he

administrative process, at the very least, should facilitate the

development of a useful record . . . .").

The Department also must determine whether Fedcap in

fact had the various obligations to appellants as claimed and

whether Fedcap violated those obligations. Any such obligations

are subject to statutory and discretionary determinations, which

in turn involve disputed questions of fact and law that are the

responsibility of the Department to resolve. See McGee v. United

States,

(1971) ("When a claim . . . depends

ultimately on the careful gathering and analysis of relevant facts,

the interest in full airing of the facts within the administrative

- 23 - system is prominent . . . ."). Such questions include whether

Fedcap had obligations to inform Halsey and Kiralis-Vernon of the

Parents as Scholars program and other services, whether Fedcap had

obligations to provide them with opportunities to apply for said

services, whether Fedcap was required to submit program

applications and payment requests to the Department, whether any

such applications or requests would have been accepted at the time,

what benefits the appellants would have been eligible to receive

had their applications been successful, whether Fedcap was

required to engage in the interactive process, and what information

Fedcap was required to provide to the appellants about the services

for which they were eligible.

In particular, the extent of Fedcap's obligations under

the Parents as Scholars program depends upon numerous

determinations that require the Department to engage both in fact

finding and legal and discretionary determinations. See Bar Harbor

Banking & Tr. Co. v. Alexander,

(Me. 1980)

(recognizing that the primary jurisdiction doctrine "express[es]

a judicial policy of 'not [deciding] an issue concerning which an

administrative agency has decision capacity until after the agency

has considered the issue'" (second alteration in original)

(quoting Brennan,

)); see also Weinberger v. Bentex

Pharms., Inc.,

(1973) ("[I]n cases . . .

requiring the exercise of administrative discretion, agencies

- 24 - created by Congress for regulating the subject matter should not

be passed over." (first alteration in original) (quoting Far E.

Conf. v. United States,

(1952))). As the

appellants admit, Fedcap's obligations under the Parents as

Scholars program could be initially triggered only on a finding as

to whether there were at the relevant time 2,000 people enrolled

in that program. See

(12), 3790(1).

Indeed, under the facts alleged in the complaint, it is possible

that Fedcap promptly informed the appellants of the Parents as

Scholars program once there were fewer than 2,000 enrollees.3 The

Department is responsible in the first instance for determining

whether the timing of Fedcap's actions to inform the appellants of

the program violated statutory and regulatory requirements.

Even if the Parents as Scholars program could accept

applications during the relevant time, the eligibility of the

appellants for the program, and hence whether the appellants could

have received services under the program, depends on further

factual determinations that require the Department's expertise to

resolve. The Department must resolve these factual determinations

in the first instance before a court can review the appellants'

3 The complaint alleges that Fedcap informed Kiralis-Vernon of the Parents as Scholars program a year into her bachelor's degree program. The complaint also alleges that Halsey "was eventually informed about available support services," but does not make clear whether this included information about the Parents as Scholars program.

- 25 - claims that Fedcap failed to inform them of the Parents as Scholars

program and that Fedcap failed to submit Kiralis-Vernon's Parents

as Scholars application to the Department. These factual questions

extend well beyond whether 2,000 individuals were enrolled in the

Parents as Scholars program. An ASPIRE-TANF participant is not

inherently eligible to be enrolled in the Parents as Scholars

program, but instead must satisfy statutory criteria that are

within the discretion of the Department to determine. For example,

the statute governing the program mandates that applications for

the program be granted only "[t]o the extent that program resources

and space permit."

(2). The statute

additionally mandates that an individual may be enrolled in the

program only after the Department has made various findings on the

basis of an assessment of that individual, including:

A. That the individual does not possess the necessary skills to obtain employment that will enable that individual to support a family at 85% of the median family income in the State for a family of the same size; B. That, considering potential employment opportunities and local labor market conditions, the postsecondary education sought by the individual will significantly improve the ability of the family to be self-supporting; C. That the individual has the aptitude to successfully complete the proposed postsecondary program; and D. That enrollment is for the pursuit of any degree or certification if the occupation has at least an average job outlook as identified by the Center for Workforce Research and Information within the Department of Labor.

- 26 - For occupations with a lower than average job outlook, educational plans require approval of the commissioner or the commissioner's designee.

Maine law tasks the Department with carrying out the

assessment necessary for resolving these factual questions. See

id.; see also

§ 3788(3) (providing that the initial assessment

shall be conducted by a Department case manager).

The appellants' claims related to ASPIRE-TANF services -

- including that Fedcap misinformed them about requirements to

receive services, failed to submit applications or payment

requests, and failed to engage in the interactive process -- also

depend upon determinations that the Maine legislature has vested

the Department with making. The statute governing the ASPIRE-TANF

program stipulates that the Department shall provide support

services to a participant based on "available program resources,

the participant's skills and aptitudes, the participant's need for

supportive services, local employment opportunities," and other

factors. See

(3), (4-A). The statute

also assigns the Department the responsibility to first conduct

the statutorily prescribed comprehensive assessments to determine

whether the appellants were to be provided with "alternative

services, supports and income benefits" on account of Halsey's

disabilities and the health needs of Kiralis-Vernon's child. See

§ 3788(3-A).

- 27 - The appellants' claims -- excepting the race

discrimination claim -- cannot be adjudicated without determining

first whether the appellants were eligible for services under

ASPIRE-TANF and Parents as Scholars during the relevant time, and

if so, for which services the appellants were eligible. Assessment

of the applicants' eligibility falls squarely within the

Department's regulatory authority, and so must be addressed by the

Department in the first instance, and the case should not proceed

in court without the Department first exercising its discretion

over this matter. See Town of Shapleigh v. Shikles,

, 466 n.3 (Me. 1981) (holding that superior court did not

abuse its discretion in denying plaintiff injunctive relief

because, given "experience and expertise of zoning board

officials," "where zoning problems involve matters of fact, their

initial determination should be made at the administrative level,

rather than by the judiciary"); see also McKart,

("[S]ince agency decisions are frequently of a discretionary

nature or frequently require expertise, the agency should be given

the first chance to exercise that discretion or to apply that

expertise."); Hickman & Pierce § 17.2 ("[J]udicial review of

agency action can be hindered by failure to exhaust administrative

remedies because the agency may not have an adequate opportunity

to assemble and to analyze relevant facts and to explain the basis

for its action.").

- 28 - That the Department first hear these matters would serve

judicial economy by narrowing the issues available for review.

The Department has been assigned the responsibility to determine

whether Fedcap engaged in any violation of its obligations to

either appellant. See Munsell v. Dep't of Agric.,

(D.C. Cir. 2007) ("Bringing such claims to the agency in the

first instance allows the agency to clarify its position about the

conduct of the accused official."). If Fedcap violated its duties,

the Department is given the first responsibility to correct any

errors in its oversight of Fedcap and to determine what remedies

are available through the administrative review process, if any.

See Ne. Occupational Exch., Inc.,

. The Department

first "must be given an opportunity to act in its regulatory role"

before the appellants may seek redress in the courts. Marshall v.

Town of Dexter,

(Me. 2015); see Anversa v.

Partners Healthcare Sys., Inc.,

(1st Cir. 2016)

(holding that requiring administrative review in first instance is

beneficial for judicial review in part because outcome of

administrative review process "may reconfigure the contours of the

controversy by the time it is ripe for district court

consideration").

D.

Under both the governing statute and Department

regulations, it is clear that the appellants' claims -- excepting

- 29 - again Kiralis-Vernon's race discrimination claim -- may be

addressed in administrative hearings before the Department. The

appellants argue otherwise and maintain that an ASPIRE-TANF

participant may request a hearing only to appeal an agency

decision. The appellants contend that, because Fedcap's various

alleged unlawful actions cannot be characterized as agency

decisions, the administrative review process does not provide an

opportunity for the Department to address any of their claims, and

so exhaustion requirements do not apply.

This argument is refuted by the governing statute and

Department regulations. The Maine statute does not impose any

express limitation on a program participant's right to request a

fair hearing before the Department. See

(2) (stating that a participant in the ASPIRE-TANF program

must be informed of their "right to request a conciliation meeting

and a fair hearing" when they receive written copies of family

contract amendments).

Likewise, Department regulations provide for

administrative review of the appellants' claims. Under the

regulations governing TANF benefits and the Parents as Scholars

program, an individual who is signed onto a family contract with

the Department "has an opportunity for a fair hearing when [he or

she] disagrees with actions affecting their benefits." 10-144 Me.

Code R. ch. 331, Ch. VI. This same regulatory chapter includes

- 30 - language indicating that "benefits" refers broadly to TANF

payments, Parents as Scholars support, and ASPIRE-TANF support

services. See id.; see also Morales v. Sociedad Española de

Auxilio Mutuo y Beneficencia,

(1st Cir. 2008)

("Determining a regulation's meaning requires application of the

same principles that imbue exercises in statutory construction.");

State v. Dubois Livestock, Inc.,

, 311 (Me. 2017)

(holding that, when interpreting statutory language, "we examine

the entirety of the statute, giving due weight to design,

structure, and purpose as well as to aggregate language" (quoting

Dickau v. Vt. Mut. Ins. Co.,

(Me. 2014))). The

language of this regulatory provision plainly encompasses Fedcap's

alleged misstatements to the appellants about the requirements

governing ASPIRE-TANF participation, as such misstatements would

affect appellants' receipt of benefits.

The administrative review process established by

Department regulations additionally covers Fedcap's various

alleged failures to comply with its obligations, including its

failure to inform the appellants about the Parents as Scholars

program and ASPIRE-TANF services, its failure to respond to the

appellants' requests for reasonable accommodations, and its

failure to timely submit applications to the Department.4

4 The regulations also would allow the appellants to request a hearing before the Department on the Department's failure

- 31 - Regulations governing the Emergency Assistance program, which are

found in the same regulatory manual as the regulations governing

TANF and Parents as Scholars, state that any "person aggrieved by

a decision, act, failure to act or delay in action concerning [an

emergency assistance application] shall have the right to a

[hearing]." 10-144 Me. Code R. ch. 331, Ch. VIII (emphasis added).

The regulations go on to state that "[t]he same policy and

procedure used in the TANF and [Parents as Scholars] programs

applies to Emergency Assistance with regard to hearings."

As

we interpret the regulations to make them harmonious, the

opportunity for a fair hearing extends, were there any question

about it, to failures to act.5 See McCuin v. Sec'y of Health &

Hum. Servs.,

(1st Cir. 1987) ("In interpreting

. . . regulations, courts must try to give them a harmonious,

comprehensive meaning, giving effect, when possible, to all

provisions.").6

to ensure that Fedcap complied with its obligations. See

-A(3).

5 In this, Maine law parallels federal law. See Goethel v. United States Dep't of Com.,

(1st Cir. 2017) ("Agency 'action' for purposes of administrative law generally 'includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act.'" (quoting

(13))). 6 As the district court properly concluded, the Department may waive the thirty-day time limit on requesting a hearing. See Halsey,

, at *8, *8 n.7; 10-144 Me. Code R. ch. 331, Ch. VI. Given that the complaint as read most favorably to the appellants indicates that Halsey and Kiralis-

- 32 - E.

We reject the appellants' argument that, even if these

claims first could be addressed by the Department, exhaustion and

primary jurisdiction requirements do not apply because the

Department is unable to grant monetary damages as to these claims.7

Even assuming arguendo in the appellants' favor that the alleged

violations would as a statutory matter give rise to monetary

relief, and that the appellants fall within the category of those

eligible for such relief, their claims are still subject to

Vernon could not have known about any action or inaction by Fedcap as to its failure to inform them about the Parents as Scholars program, it is far from clear that this time limit applies. If, however, the Department nonetheless applies this time limit and finds their claims as to Fedcap's failure to inform about the Parents as Scholars program to be untimely, then we note that nothing in this opinion would prevent the appellants from arguing their claims are timely. See Maine Rule of Civil Procedure 15(c) (providing when "[a]n amendment of a pleading relates back to the date of the original pleading"); Frame v. Millinocket Reg'l Hosp.,

(Me. 2013) (describing that Maine Rule of Civil Procedure 15(c) allows for "[a]n amended pleading [to] relate[] back to the date of the original pleading where the claim asserted in the amended pleading 'arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading'"); AFSCME Council 93 v. Me. Labor Rels. Bd.,

(Me. 1996) (holding that "an amended complaint may . . . relate back to the filing date of the original complaint" even when "the original complaint must be dismissed"); Fed. R. Civ. P. 15(c) ("Relation Back of Amendments").

7 The district court found that the Department could compensate the appellants through the provision of services retroactive to the time when the appellants first became eligible for benefits. Halsey,

, at *8. The appellants contest this. We do not address this issue.

- 33 - exhaustion requirements. While an agency's inability to grant the

precise relief sought is one factor that weighs in favor of

judicial review in the first instance, see Churchill,

, we conclude that this factor alone is not sufficient in this

case to establish that exhaustion and primary jurisdiction

requirements do not apply.8

We first address the appellants' argument as it pertains

to their claims that Fedcap failed to engage in the interactive

process necessary to evaluate Halsey's request for accommodation,

failed to timely submit Halsey's and Kiralis-Vernon's requests for

childcare payments to the Department, and failed to submit

Kiralis-Vernon's Parents as Scholars application to the

Department. The Maine Law Court's decision in Marshall requires

us to hold that, even assuming the Department's inability to

provide monetary relief, that does not excuse the appellants from

exhaustion and primary jurisdiction requirements on these claims.

8 The district court noted that procedures provided in Maine Rule of Civil Procedure 80C would allow the appellants to join an independent claim seeking damages to a claim seeking review of Department actions. See Halsey,

, at *9; see also Fleming v. Comm'r, Dep't of Corr.,

(Me. 2002) ("[Me. R. Civ. P.] 80C anticipates that a plaintiff (or petitioner) may add an independent claim for damages . . . ."). We note that these Rule 80C procedures, which govern judicial review of final agency actions, are not relevant to the exhaustion analysis. Under the principle of exhaustion, the court inquires whether "a remedy before an administrative agency" is available, and not whether an adequate remedy would be made available upon judicial review of agency action. See Stanton,

.

- 34 - Among other reasons, the Department could have prevented or limited

damages associated with these claims had the appellants brought

these claims to the Department's attention at an earlier time.

In Marshall, the plaintiff filed a complaint in superior

court against a town and its code enforcement officer, alleging

constitutional violations and seeking relief in the form of a

permanent injunction and damages. See

. The

plaintiff alleged in particular that the town's code enforcement

officer had improperly issued a notice of violation that prohibited

repair and maintenance work on his property, which had "potentially

expos[ed] [the plaintiff's property] to accelerated deterioration

due to exposure to the elements." See

(first

alteration in original). The superior court granted the town's

motion to dismiss on the ground that the plaintiff had failed to

first seek review of the officer's actions through the town's Board

of Appeals. See

. The Law Court affirmed,

holding that resort in the first instance to the administrative

process was required because the Board of Appeals was vested with

the authority to address each of the plaintiff's claims. See

. The court rejected the plaintiff's argument that,

because the Board could not grant the monetary relief sought, he

did not have to pursue an administrative remedy. See

.

Although the Board could not provide the precise relief sought by

the plaintiff, the court reasoned that, had the plaintiff used the

- 35 - available administrative process when he had received the notice

of violation, that "process could have resulted in a prompt

decision on the [officer's actions] and could have limited or

prevented any monetary damages while also eliminating the need for

a judicially created injunction."

.

In light of Marshall, the unavailability of monetary

relief does not excuse exhaustion requirements where the alleged

damages resulted at least in part from the appellants' "cho[ice]

to bypass [the administrative] process and proceed directly to

court." See

. Here, the Department could have

prevented or limited any monetary damages had the appellants

requested an administrative hearing following Fedcap's failure to

engage in the interactive process, request childcare payments, or

submit Kiralis-Vernon's Parents as Scholars application.9 Such

hearings would have afforded the Department an opportunity to

determine whether Fedcap was providing "quality services . . . for

program participants" in accordance with its legal obligations.

See

-A(3). Moreover, the appellants at

these hearings could have requested that the Department order

Fedcap to comply with any unfulfilled obligations. See 10-

Indeed, while the appellants argue that, "as a practical matter, [they] could not have requested an administrative hearing to address Fedcap's failure to provide necessary information about the ASPIRE program, because [they] did not learn about that information," they do not make an analogous argument about these other claims.

- 36 - Code R. ch. 331, Ch. VI (stating that following a hearing request

the Department must provide the ASPIRE-TANF recipient with

adequate opportunity to "advance any arguments without undue

interference").

The appellants argue they could not have been aware, and

so could not have requested a hearing before the Department to

address, that Fedcap had failed to inform them of the Parents as

Scholars program and other support services or that Fedcap had

misinformed Halsey about the requirements to remain eligible for

such services, assuming they were eligible. It is true that the

Maine Law Court has indicated that, at least in some circumstances,

an agency's inability to "grant the requested relief" may warrant

an exception to the exhaustion principle. See Lakes Env't Ass'n,

; Gross,

(holding that exhaustion

principle does not apply in part because "the remedy provided by

the review procedure" is not what is "requested by the plaintiffs

in their amended complaint").

Nonetheless, we conclude that the doctrine of primary

jurisdiction, apart from the exhaustion principle, requires that

the appellants seek administrative review of these

failure-to-inform claims in the first instance. The Law Court has

made clear that the exhaustion principle is not coterminous with

the primary jurisdiction doctrine. See Brennan,

("We recognize that the 'doctrine of primary jurisdiction' is

- 37 - somewhat different from the 'doctrine of exhaustion of

administrative remedies' . . . ."); Town of Levant v. Seymour,

(Me. 2004) (addressing the plaintiff's arguments

under the doctrine of primary jurisdiction after determining that

the plaintiff's arguments under the principle of exhaustion are

waived). If the primary jurisdiction doctrine were to apply only

when an adequate administrative remedy is available, that doctrine

would be rendered redundant with the exhaustion principle.

Further, while one of the underlying purposes of the exhaustion

principle -- to protect judicial economy by "avoiding the necessity

of any judicial involvement," Andrade,

-- is

potentially undermined when the administrative review process

cannot provide the relief the plaintiff seeks, this is less so for

the primary jurisdiction doctrine, which is primarily motivated by

a need for the agency's expertise to resolve the issues involved,

see Brennan,

. Moreover, the Law Court has used

language indicating that application of exceptions under the

primary jurisdiction doctrine is discretionary, and so is not

subject to a rigid formula. See Town of Levant,

(holding that, because the administrative board does not have

exclusive jurisdiction over the matter and because the board,

unlike the district court, "does not have . . . the ability to

issue an injunction and impose a penalty[,] . . . . the district

court was not required, on the grounds of primary jurisdiction, to

- 38 - wait until the administrative appeal was finally concluded before

it could proceed with the enforcement action" (emphasis added)).

There is no Maine caselaw stating that the

unavailability of sought-after monetary relief, in the absence of

other circumstances, is a sufficient reason to exempt a plaintiff

from primary jurisdiction requirements. The Law Court has stated,

in the context of a discussion about the primary jurisdiction

doctrine, that "where the administrative agency is not empowered

to grant the relief sought and it would be futile to complete the

administrative appeal process, such are special circumstances

dispensing with the exhaustion of the administrative remedy prior

to turning to the courts for relief." Churchill,

(emphasis added). The court has not held that the unavailability

of the sought-after relief alone can constitute such a special

circumstance. See id.; cf. Stanton,

(noting

that the relevant law was beyond the agency's power and any relief

the agency could provide would have been insufficient); Ne.

Occupational Exch., Inc.,

("Judicial review may be

undertaken despite a failure to exhaust all administrative

remedies where the questions involved are ones only of law, or

where the administrative agency is not empowered to grant the

relief requested and, therefore, completion of the appeal process

would be futile." (internal citations omitted)).

- 39 - The facts here counsel against allowing the appellants'

failure-to-inform claims to move forward in federal court. As we

have discussed, these claims depend upon many determinations

committed by law to the Department and that require the

Department's expertise to resolve. See Brennan,

(holding that agency "expertise [is] the controlling

consideration" in "rationaliz[ing] the application of" the primary

jurisdiction doctrine). The appellants allege that Fedcap not

only failed to inform the appellants of the Parents as Scholars

program, but also of "all other support services for which [they

were] eligible while pursuing education." Determination of such

eligibility requires that the Department conduct assessments of

the appellants and their particular circumstances. See

(3). Further, even if the Department were to make

a determination that Fedcap had violated its obligations to inform

the appellants of the Parents as Scholars program or any other

services, that would then lead to other questions of fact and law.

These would include the extent to which those violations caused

the appellants to miss out on benefits and services under the

ASPIRE-TANF and Parents as Scholars programs. These

determinations necessarily depend upon factual and legal findings

yet to be made which are assigned to the Department, including

whether the appellants would have been eligible for enrollment in

the Parents as Scholars program had they successfully submitted

- 40 - applications. See

§ 3790(2); Bryant,

(holding

that the doctrine of primary jurisdiction requires courts to "avoid

ruling, on appeal, on matters committed by law to the

decision-making authority of an administrative agency before the

administrative agency has first had an opportunity to review and

decide the facts on the merits of the matter at issue." (quoting

Christian Fellowship & Renewal Ctr. v. Town of Limington,

(Me. 2006))).

We conclude that the appellants are not excused from the

requirement to first seek administrative review of their claims

that Fedcap failed to properly inform them about the Parents as

Scholars program and other services, failed to engage in the

interactive process, failed to submit Kiralis-Vernon's Parents as

Scholars application, and failed to process childcare payment

requests.

F.

This leaves the allegation that Kiralis-Vernon was

verbally assaulted by a Fedcap employee on the basis of her race,

color, or national origin. Kiralis-Vernon alleges that she

experienced severe emotional distress as a result of the alleged

verbal assault and seeks compensatory and punitive damages for

negligent and intentional infliction of emotional distress.

We conclude that neither Maine's principle of exhaustion

nor its doctrine of primary jurisdiction applies to this

- 41 - independent race discrimination claim. Neither the statutes nor

the regulations grant the Department jurisdiction or authority

over such claim, nor does the Department have special expertise.

The law governing the race discrimination claim is outside of the

Department's expertise and knowledge, and this claim does not

involve the same subordinate statutory legal questions as the other

claims included in the amended complaint the dismissal of which we

have affirmed. Unlike the other claims, the race discrimination

claim differs in kind from the issues of whether the appellants

were eligible for ASPIRE-TANF or other services, the extent to

which the appellants received such services from Fedcap, and

Fedcap's obligations under the ASPIRE-TANF program.10

10 Our conclusion is consonant with application of the primary jurisdiction doctrine in a federal context. In Tassy v. Brunswick Hosp. Ctr., Inc., a medical doctor's privileges were revoked by a hospital following sexual harassment allegations. See

, 65-66 (2d Cir. 2002). The doctor "denie[d] the sexual harassment allegations and assert[ed] that [he was] discriminated against . . . on the basis of his race and national origin." Id. at 66. The court held that the doctor was not required under the primary jurisdiction doctrine to first bring his claim before the New York Public Health Council, an administrative body whose "primary function . . . is to determine whether there is a medical justification for the withdrawal of [a] doctor's privileges." See id. at 66, 69 (alteration in original) (quoting Johnson v. Nyack Hosp.,

, 121 (2d Cir. 1992)). The court reasoned that "[t]he primary factual issue is whether [the doctor] committed the alleged sexual harassment, the resolution of which does not require the [Public Health Council's] expertise." Id. at 70. The court noted that the Council "has no expertise in determining whether a doctor committed sexual harassment or other acts of non-medical misconduct." Id. The court further noted that Tassy could be distinguished from a previous decision in which the court had held that the Council did

- 42 - We reject the appellee's several arguments to the

contrary. The appellee contends that the race discrimination claim

falls under the Department's authority to hear an appeal of any

action which deprived program participants of services. However,

although the amended complaint includes language alleging that the

Fedcap employee's verbal assault affected the delivery of

services, the brunt of the claim is that it was an act of

discrimination, forbidden under the law, which resulted in severe

emotional distress. The appellee does not explain under what

authority the Department could determine whether the Fedcap

employee's alleged conduct, if true, was motivated by race and

caused the infliction of compensable emotional distress. See Nader

v. Allegheny Airlines, Inc.,

(1976) (holding

that primary jurisdiction doctrine does not apply because "[t]he

standards to be applied in [the] action . . . are within the

conventional competence of the courts, and the judgment of a

technically expert body is not likely to be helpful in the

application of these standards to the facts of the case").

The appellee also argues that it has a defense which

could fall within the Department's expertise: that the alleged

have primary jurisdiction over a claim involving the revocation of medical privileges. See

Revocation in that case had been on the basis of unsatisfactory surgical performance, and so "[t]he medical expertise of the [Council]" was required to determine whether "defendants had a proper medical reason to terminate [the doctor's] privileges."

(quoting Johnson, 964 F.2d at 122).

- 43 - verbal assault involved an accusation that Kiralis-Vernon missed

an appointment, which is a sanctionable act. See 10-144 Me. Code

R. ch. 607, § 4(V)(B)(2) (stating that "[f]ailure or refusal to

keep additional appointments required by ASPIRE-TANF" constitutes

a "sanctionable act"). But even if Kiralis-Vernon missed an

appointment, that would not address the issue of whether racial

bias motivated how she was treated. If the appellee means by its

argument that it could engage in racial discrimination in

sanctioning a recipient late for a meeting, we see no basis for

that, nor does the appellee cite any law in support.

We also reject the appellee's argument that, even if the

Department could not address the race discrimination claim in a

hearing, an informal process was available through which the

appellants "might have resolved their issues without resort to a

full hearing, and thus avoided the emotional distress and monetary

damages they allege here." The appellee refers in particular to

a regulatory provision stating that

[ASPIRE-TANF] [r]ecipients who are dissatisfied with any action will upon request be given the opportunity to discuss their case with the immediate supervisor. The assistance group will be advised that this meeting with the supervisor is optional and will not delay or replace the fair hearing. The basis for this meeting will be a review of the case situation to determine any available resolution of the problem.

- 44 - 10-144 Me. Code R. ch. 331, Ch. VI. The district court held that

"[t]his informal procedure would allow [the Department] to hear

and address claims of abusive and discriminatory treatment, such

as those made by . . . Kiralis-Vernon." Halsey,

,

at *8 n.6. Under Maine law, even were this accurate, we do not

think the Law Court would require the claim of racial

discrimination, different in kind, to fall within the authority

and jurisdiction of the Department.11

IV.

We vacate the dismissal of the appellants' verbal

assault claim and remand for further proceedings consistent with

this opinion. We affirm the dismissal of the appellants' other

claims. No costs are awarded.

11 We do not address the appellee's alternative arguments that the appellants' claims should be dismissed under Rule 12(b)(6). These arguments were not addressed by the district court, and so they may be addressed on remand.

- 45 -