United States v. General Dynamics Corp.

828 F.2d 1356, 34 Cont. Cas. Fed. 75,252, 1987 U.S. App. LEXIS 4272

• Court: Court of Appeals for the Ninth Circuit
• Decided: April 2, 1987
• Docket: No. 86-5292
• Status: Published

Opinions

ORDER

The Amended Opinion, amending Opinion filed April 2, 1987, and Amended Dissent, amending Dissent filed April 29, 1987, submitted with this order, are ordered filed.

AMENDED OPINION

*

The United States appeals from a district court order staying a criminal action involving allegations of conspiracy and fraud, 18 U.S.C. §§ 371, 1001, against General Dynamics Corporation and several of that corporation’s officers. The stay was entered pending the district court’s referral to the Armed Services Board of Contract Appeals (ASBCA or Board) of questions relating to the interpretation of the contract upon which the criminal charges hinge. The government contends that, because the primary jurisdiction doctrine is not applicable, the district court exceeded its jurisdiction in making the referral and in halting criminal proceedings pending agency action. We agree.

BACKGROUND

In 1978, General Dynamics was awarded an Army contract to develop two prototypes of the Division Air Defense (DIVAD) gun system. In 1985, General Dynamics and several General Dynamics officers (General Dynamics) were indicted on charges of conspiring to make and of making false and fraudulent cost statements to the Department of Defense. In essence, the indictment alleged that General Dynamics illegally attempted to offset losses on the DIVAD project by allocating DIVAD costs to Bid and Proposal (B & P) and Independent Research arid Development (IR & D) accounts. In defense, General Dynamics contends that the DIVAD contract, which was stated to be a “firm fixed-price (best efforts) contract,” either permitted the charges to the B & P and IR & D accounts or was ambiguous as to the propriety of such charges. If either were the case, it is claimed, General Dynamics would not be guilty of criminal wrongdoing.

On January 14, 1986, General Dynamics filed a notice of appeal from the indictment with the ASBCA. Citing two grounds, the ASBCA dismissed the appeal for lack of jurisdiction. General Dynamics, Pomona Division, ASBCA No. 32297, 86-2 B.C.A. (CCH) ¶ 18,903. First the Board determined that the filing of an indictment did not meet the statutory prerequisite to an appeal — the existence of a final decision from a contracting officer. Id. at 95,348; see 41 U.S.C. § 605(a).¹ Second, the Board found its jurisdiction precluded by the action pending in the district court because the fraud allegations, over which the court had exclusive jurisdiction, were inseparable from the issues General Dynamics was attempting to submit to the Board. General Dynamics, 86-2 B.C.A. at 95,348-49.

Despite the ASBCA’s refusal to entertain General Dynamics’ appeal, the district court, on September 15, 1986, entered an order in which it invoked the doctrine of primary jurisdiction to stay the litigation and refer issues of contract interpretation to the Board. The court’s reasoning and the questions referred are set out in a written opinion issued October 1, 1986. United States v. General Dynamics Corp., 644 F.Supp. 1497 (C.D.Cal.1986) (amended October 28, 1986). The district court found that

[t]his case touches upon important issues in the area of defense procurement. Those issues involve nice questions about the proper construction of contracts and regulations. Those questions, in turn, call for expert consideration and uniform answers. Since the ASBCA is uniquely qualified to supply the needed answers, certain issues will be referred to it.[²]

Id. at 1507. The government timely noticed its appeal from the stay and referral. General Dynamics moved to dismiss the appeal for lack of a final, appealable order. The government then filed a protective petition for a writ of mandamus.

Following the commencement of proceedings in this court, the ASBCA, on February 3, 1987, dismissed General Dynamics’ appeal that had been based on the district court’s referral. ASBCA No. 33633. Again the Board determined that it had no jurisdiction over issues relating to the DIVAD contract because “there was neither a contracting officer’s decision nor a claim submitted to the contracting officer under the DIVAD contract regarding the alleged ‘mischarging’ of costs.” Id. at 5. The district court’s order was held to be without jurisdictional significance: “The ‘referral’ by the district court does not constitute such a decision any more than the Grand Jury indictment which the Board considered in the prior appeal.” Id. at 6.

The Board noted that related proceedings, ASBCA No. 34051, were pending before it. No. 34051 is based on claims submitted by General Dynamics in February 1986 to a contracting officer involving the B & P and IR & D accounts to which General Dynamics had shifted DIYAD costs. The contracting officer, in a letter dated April 16, 1986, stated that he would not issue a final decision on these claims until the fraud allegations pending before the district court were resolved. General Dynamics docketed an appeal from the contracting officer’s refusal to issue a final decision on December 11, 1986.³ The Board found that because the claims made in No. 34051 did not arise under the DIVAD contract, they could not serve to create jurisdiction in No. 33633, the appeal then before it.

In response to the Board’s February 3 decision, the district court, on February 5, 1987, issued a scheduling order continuing the stay pending action by this court or by the Board in ASBCA No. 34051.

DISCUSSION

I.

As a threshold matter, we must determine whether this court has jurisdiction to pass on the propriety of the district court’s stay and referral. The government contends that appellate jurisdiction lies under 28 U.S.C. § 1291 and alternatively asserts that it is entitled to a writ of mandamus under the All Writs Act, 28 U.S.C. § 1651.

Ordinarily, a stay is not considered a final decision for purposes of section 1291. Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 10 n. 11, 103 S.Ct. 927, 934, 74 L.Ed.2d 765 (1983); Silberkleit v. Kantrowitz, 713 F.2d 433, 434 (9th Cir.1983). However, “the general rule is inapplicable in situations ... where the impact of the stay is such that the plaintiff is ‘effectively out of court.’ ” Id. (quoting Moses H. Cone Memorial Hosp., 460 U.S. at 9, 103 S.Ct. at 933 (quoting Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 715 n. 1, 82 S.Ct. 1294, 1296, 8 L.Ed.2d 794 (1962))).

Although we were initially skeptical that the district court’s order was appealable at this time, upon further study and reflection upon the rather convoluted course that this litigation could take if it is stayed until the ASBCA acts on General Dynamics’s appeal, we conclude that it is entirely possible that the Government could lose the opportunity to have the merits of its case decided by a court having jurisdiction over the criminal matters alleged in the indictment. In short, this stay could effectively put the government out of court.

Only the Court of Appeals for the Federal Circuit may review any decision that the ASBCA might enter. The Contracts Disputes Act (CDA or Act), 41 U.S.C. §§ 601-613, provides that Board decisions are final, except that appeals may be taken to the Federal Circuit. 41 U.S.C. § 607(g)(1); see also 28 U.S.C. § 1295(a)(1) (granting to the Federal Circuit exclusive jurisdiction over appeals brought under section 607(g)(1)). Where, as here, a district court refers a case to an agency under the primary jurisdiction doctrine, and exclusive authority to review the agency’s determination is granted to a court other than the referring district court, the district court is bound by determinations made in the collateral administrative proceedings and may not itself review the merits of the agency’s decision. Port of Boston Marine Terminal Ass’n v. Rederiaktiebolaget Translantic (Port of Boston), 400 U.S. 62, 64, 69-71, 91 S.Ct. 203, 206, 208-09, 27 L.Ed.2d 203 (1970). The district court is “under a duty to stay its proceedings pending ... review” of the agency’s findings. Pennsylvania R.R. v. United States, 363 U.S. 202, 206, 80 S.Ct. 1131, 1133, 4 L.Ed.2d 1165 (1960). Thus, if the primary jurisdiction doctrine applies in this case, the district court must both await the outcome of any appeal that may be taken from the ASBCA and accept the contract construction arrived at in the collateral proceedings.⁴

Even if Port of Boston did not require the district court to accept the ASBCA’s or the Federal Circuit’s interpretation of the disputed agreements, traditional collateral estoppel doctrine very well could. See United States v. Stauffer Chemical Co., 464 U.S. 165, 104 S.Ct. 575, 78 L.Ed.2d 388 (1984) (holding that the doctrine of mutual defensive collateral estoppel is applicable against the government to preclude relitigation of the same issue already litigated against the same party in another case involving the same facts).⁵ The Supreme Court has held that “the doctrine of collateral estoppel is not made inapplicable by the fact that this is a criminal case, whereas the prior proceedings were civil in character.” Yates v. United States, 354 U.S. 298, 335, 77 S.Ct. 1064, 1085, 1 L.Ed.2d 1356 (1957); see also People v. Sims, 32 Cal.3d 468, 651 P.2d 321, 186 Cal.Rptr. 77 (1982). In the instant case, we need not and should not determine whether, in fact, the collateral estoppel doctrine would preclude the government from relitigating issues determined in the collateral contract-dispute proceedings. The Port of Boston decision alone requires that preclusive effect be given to determinations rendered in those proceedings. We simply note that traditional collateral estoppel rules may lead to the same result.

Thus, if General Dynamics were to appeal successfully an adverse ASBCA ruling, the district court would be required to accept the Federal Circuit’s construction of the DIVAD contract. Similarly, if General Dynamics’s version of the contract were affirmed by the ASBCA, that determination would be binding if the government were to forego its appeal⁶ or if its appeal to the Federal Circuit were unsuccessful.⁷

The district court has expressed the opinion that if the DIVAD contract means what General Dynamics claims it means, that interpretation of the contract could dispose of the case.⁸ Indeed, a comparison of the indictment with the questions referred to the ASBCA by the district court reveal that the issues are identical. The entire theory of the indictment is that General Dynamics submitted false, fictitious, and fraudulent statements to the government because its reports relating to B & P and IR & D accounts listed expenses that should have been charged to the DIVAD contract rather than B & P and IR & D accounts. The propriety of this cost shifting was squarely presented in the questions referred to the ASBCA.⁹ If the cost shifting was permissible, the statements submitted to the government would not have been fraudulent or false. Thus, a decision adverse to the government in the collateral proceedings before the ASBCA, under the Port of Boston rule and quite possibly under the collateral estoppel doctrine, would require dismissal of the government’s criminal prosecution. In short, the stay entered in this case could result in the government being “effectively out of court.”¹⁰ Accordingly, this court has jurisdiction over this appeal under 28 U.S.C. § 1291.¹¹

II.

The question before us is whether the district court exceeded its authority in staying, on primary jurisdiction grounds, a criminal fraud prosecution pending action by the ASBCA on a related contract dispute. We appreciate the district court’s concern that the complexities of military contracts and regulations are beyond conventional experience, and agree that ASBCA has expertise in such matters. We nevertheless are convinced that deferral to the ASBCA was an impermissible delegation of an article III judge’s decision-making function and an unwarranted interference with prosecutorial discretion.

The doctrine of primary jurisdiction operates as follows: “When there is a basis for judicial action, independent of agency proceedings, courts may route the threshold decision as to certain issues to the agency charged with primary responsibility for governmental supervision or control of the particular industry or activity involved.” Port of Boston, 400 U.S. at 68, 91 S.Ct. at 208. The doctrine applies when “protection of the integrity of a regulatory scheme dictates preliminary resort to the agency which administers the scheme.” United States v. Philadelphia Nat’l Bank, 374 U.S. 321, 353, 83 S.Ct. 1715, 1736, 10 L.Ed.2d 915 (1963). Thus, it is the extent to which Congress, in enacting a regulatory scheme, intends an administrative body to have the first word on issues arising in judicial proceedings that determines the scope of the primary jurisdiction doctrine. See United States v. RCA, 358 U.S. 334, 339, 79 S.Ct. 457, 461, 3 L.Ed.2d 354 (1959).

There are four factors uniformly present in cases where the doctrine properly is invoked: (1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory scheme that (4) requires expertise or uniformity in administration.¹² For example, in United States v. Western Pacific Railroad, 352 U.S. 59, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956), the parties disagreed as to whether shipments of steel casings filled with napalm gel could, in the absence of burster and fuse devices, be charged under a tariff established for incendiary bombs. The regulation of railroad tariffs had been turned over to the ICC under specific legislation regulating commerce. Furthermore, resolution of the issue required an appreciation of complex and intricate facets of transportation policy that “ought to be considered by the Commission in the interests of a uniform and expert administration of the regulatory scheme laid down by the [Interstate Commerce] Act.” Id. at 65, 77 S.Ct. at 166. Thus, the primary jurisdiction doctrine required that the agency created to regulate the activity in question, and which had initially determined why incendiaries warranted stiff tariffs, be afforded the opportunity to construe the tariff. Id. at 68, 77 S.Ct. at 167.

In the instant case, based on its findings that the defense industry is subject to governmental control “through webs of laws, regulations and directives,” General Dynamics, 644 F.Supp. at 1504, which the ASBCA is uniquely qualified to untangle, the district court determined that referral of contract interpretation issues was necessary to ensure expert and uniform construction of government contracts and regulations. The court found the primary jurisdiction doctrine “to include virtually any case whose consideration lies within the competence of an administrative body.” Id. While it is certainly true that the competence of an agency to pass on an issue is a necessary condition to the application of the doctrine, competence alone is not sufficient. The particular agency deferred to must be one that Congress has vested with the authority to regulate an industry or activity such that it would be inconsistent with the statutory scheme to deny the agency’s power to resolve the issues in question.¹³

The district court recognized that “the ASBCA does not necessarily operate in the same fashion as the more traditional administrative agencies,” but it identified several factors that it took as evidence that the ASBCA was an appropriate body for referral:

[The ASBCA] is certainly embedded in and even rather central to the operation of defense procurement. It performs traditional agency functions. It brings a highly honed and respected expertise to bear on this technical area, and makes authoritative determinations which have the effect of explaining and setting [Department of Defense] policy for the defense industry.

General Dynamics, 644 F.Supp. at 1505. What the court failed to note is (1) that the ASBCA is intended to be independent of the Department of Defense, see Report to the Chairman, Committee on Governmental Affairs United States Senate: The Armed Services Board of Contract Appeals Has Operated Independently, GAO/NSIAD85-102 (Sept. 23, 1985); (2) that the traditional administrative function performed by the Board is strictly quasi-judicial, see 41 U.S.C. § 607(d); and, most important, (3) that the Board is bereft of any statutory authority to act as a regulatory body.

The ASBCA was created pursuant to the Contract Disputes Act of 1978 (CDA or Act), 41 U.S.C. §§ 601-613. The Act provides for the establishment of boards of contract appeals within executive agencies generally. 41 U.S.C. § 607. For several reasons we are convinced that the Act itself forecloses any argument that Congress, in drafting the CDA, created a statute that grants regulatory authority to the boards of contracts appeals or requires them to have primary jurisdiction over issues of contract interpretation arising in criminal litigation.

First, there is no requirement that the ASBCA exist at all. Rather, the Act provides that “an agency board of contract appeals may be established when the agency head ... determines ... that the volume of contract claims justifies the establishment of a full-time agency board____” 41 U.S.C. § 607(a)(1) (emphasis added). If an agency’s volume of contract claims is insufficient to justify establishing its own board, the agency head is to “arrange for appeals from his agency to be decided by a board of contract appeals of another executive agency.” 41 U.S.C. § 607(c). Thus, the Act would seem to permit defense contract claims to be heard, for example, by the Agriculture Board of Contract Appeals. This statutory scheme belies a finding that Congress’ intent in creating boards of contract appeals was to create bodies to administer specific statutes or even to create specialists in particular administrative areas. The fact that a board does become expert in a particular genre of contract disputes does not imply any particular intent on the part of Congress.

Second, the CDA does not require contractors to resolve their disputes with the government before boards of contract appeals: “in lieu of appealing ... to an agency board, a contractor may bring an action directly on the claim in the United States Claims Court____” 41 U.S.C. § 609(a)(1). In direct-action cases, the relevant board of contract appeals does not have primary jurisdiction, although the cases and issues are identical to those it was statutorily designed to entertain.¹⁴ If there need be no resort to the ASBCA in run-of-the-mill contract disputes, certainly there can be no justification for staying a criminal proceeding pending ASBCA action.¹⁵

Finally, the overall scheme of the CDA reveals that boards of contracts appeals are simply not the type of administrative bodies that call the doctrine of primary jurisdiction into play. The purpose of the primary jurisdiction doctrine is not to secure expert advice for courts, but rather to secure a place for administrative power within our legal system: “Typically, the creation of a new agency means the addition to the legal system of a new lawmaking and law applying authority, with no explicit subtraction from the previously-existing power of the courts.” 4 K. Davis, Administrative Law Treatise § 22:1 at 81 (1983). The doctrine serves to avoid

the destructive effect upon the system of regulation devised by a [regulatory statute that] must be the result of construing the statute as giving authority to the courts without preliminary action by the [agency] to consider and pass on the administrative questions which the statute has primarily confided to that body____

Baltimore & O.R.R. v. United States, 215 U.S. 481, 496, 30 S.Ct. 164, 170, 54 L.Ed. 292 (1910). The primary jurisdiction doctrine is thus essentially concerned with ensuring that administrative bodies possessed of both expertise and authority delegated by Congress pass on issues within their regulatory authority before consideration by the courts.

Although the ASBCA may make determinations that “have the effect of explaining and setting DOD policy,” General Dynamics, 644 F.Supp. at 1505, its statutory authority is limited to adjudicating contracts disputes.¹⁶ The Board is not involved in the creation of regulations or in the drafting of military contracts and nothing in the CDA implies congressional intent to delegate policy-making or policy-implementing power to the Board. Thus, it has little in common with such bodies as the Interstate Commerce Commission or the Securities and Exchange Commission, which have quasi-legislative powers and are actively involved in the administration of regulatory statutes. Where, as here, the administrative body has not been “charged with primary responsibility for governmental supervision or control of the particular industry or activity involved,” Port of Boston, 400 U.S. at 68, 91 S.Ct. at 208, the doctrine of primary jurisdiction has no application.

Our concern with the district court’s stay and referral is heightened by the fact that this action is a criminal prosecution. While it is true that the primary jurisdiction doctrine has been applied in criminal cases, see United States v. Pacific & A. Ry. & Navigation Co., 228 U.S. 87, 106-08, 33 S.Ct. 443, 448-49, 57 L.Ed. 742 (1913); United States v. Yellow Freight Sys., 762 F.2d 737, 742 (9th Cir.1985), its use clearly interferes with the government’s authority to prosecute criminal cases.¹⁷ We said in a related context:

We approach the interpretation of the statute with a presumption against a congressional intention to limit the power of the Attorney General to prosecute offenses under the criminal laws of the United States. In general, the “conduct [of] federal criminal litigation ... is ‘an executive function within the exclusive prerogative of the Attorney General,’ ” In re Subpoena of Persico, 522 F.2d 41, 54 (2d Cir.1975), quoting United States v. Cox, 342 F.2d 167 (5th Cir.1965) (Wisdom, J., concurring). Congress may limit or reassign the prosecutorial responsibility. See Case v. Bowles, 327 U.S. 92, 96-97, 66 S.Ct. 438 [440-41] 90 L.Ed. 552 (946); Nader v. Saxbe, 162 U.S.App.D.C. 89, 92-93, 497 F.2d 676, 679-80 n. 19 (D.C.Cir.1974); FTC v. Guignon, 390 F.2d 323, 324 (8th Cir. 1968). But “[t]o graft such an exception upon the criminal law would require a clear and unambiguous expression of the legislative will.” United States v. Morgan, 222 U.S. 274, 282, 32 S.Ct. 81, 82, 56 L.Ed. 198 (1911).

United States v. International Union of Operating Engineers, Local 701, 638 F.2d 1161, 1162 (9th Cir.1979), cert. denied, 444 U.S. 1077, 100 S.Ct. 1026, 62 L.Ed.2d 760 (1980).¹⁸ As was the case in Operating Engineers, “[n]othing in [the CDA] suggests, much less clearly and [unambiguously states, that action by the Department of Justice to prosecute [this case] is conditioned upon prior consideration of the alleged violation by the [agency]. Indeed it would strain the language to imply such a condition.” Id. at 1163.

Requiring the government to litigate issues central to a criminal prosecution in collateral agency proceedings is at odds with the general rule of prosecutorial discretion over the bringing of criminal indictments. See, e.g., United States v. Carrasco, 786 F.2d 1452, 1455 (9th Cir.1986) (“[C]harging decisions are generally within the prosecutor’s exclusive domain____ [T]he separation of powers mandates judicial respect for the prosecutor’s independence____”) (citations omitted); United States v. Lee, 786 F.2d 951, 956-57 (9th Cir.1986) (same); United States v. Cox, 342 F.2d 167, 171 (5th Cir.) (describing the discretionary powers of the attorney general and finding that “as an incident of the constitutional separation of powers, ... the courts are not to interfere with the free exercise of the discretionary powers of the attorneys of the United States in their control over criminal prosecutions”), cert. denied, 381 U.S. 935, 85 S.Ct. 1767, 14 L.Ed.2d 700 (1965). Only where an issue unambiguously requires initial agency determination under the primary jurisdiction doctrine, see, e.g., Yellow Freight Sys., 762 F.2d at 462, and the referring court has the authority to review the agency’s order, can the agency’s regulatory interests be required or allowed to subordinate the government’s authority to prosecute criminal offenses. Accordingly, the district court’s order is reversed and it is directed to lift its stay of the criminal action.

AMENDED DISSENT

The opinion is amended in order to respond to Judge Brunetti’s dissent.

1 . § 605(a) provides in pertinent part:

All claims by a contractor against the government relating to a contract shall be in writing and shall be submitted to the contracting officer for a decision. All claims by the government against a contractor relating to a contract shall be the subject of a decision by the contracting officer. The contracting officer shall issue his decision in writing, and shall mail or otherwise furnish a copy of the decision to the contractor.

41 U.S.C. § 606 provides:

Within ninety days from the date of receipt of a contracting officer’s decision under section 605 of this title, the contractor may appeal such decision to an agency board of contract appeals, as provided in section 607 of this title.

2 . The district court submitted the following questions to the ASBCA:

(1) Is the nature of the Contract, which is designated as a firm fixed-price (best efforts) contract, ambiguous in the sense that it can reasonably be construed in more than one way? What are the possible ways?

(2) Is the nature of the Contract clearly a firm fixed-price contract, or clearly a best efforts contract, or clearly another type of contract — a hybrid of some kind? What type of contract is it?

(3) Considering the type of contract involved here, was the contractor required to spend any more than the contract price itself toward the accomplishment of the objectives of the Contract?

(4) If the contractor was not required to spend amounts above the contract price toward accomplishment of the objectives of the Contract, do the regulations governing charges to B & P and IR & D permit the charging of additional amounts expended to accomplish the objectives of the Contract to those accounts?

(5) If considering the type of contract this was, no expenditures over the Contract price to accomplish the objectives of the Contract were "required," would it have been improper to expend B & P or IR & D funds to accomplish some or all of those objectives?

(6) If the Contract is ambiguous (see first question) would it have been proper to charge any of the expenses which would accomplish the objectives of the Contract to B & P or IR & D under any of the reasonable constructions of its terms? Which ones?

(7) Do the regulations regarding the proper charging of expenses clearly require the above answers, or is further construction of the regulations required?

(8) Considering the type of contract this was, would it have been proper to charge expenses "related to" the work performed under the Contract, although not necessarily "required by it,” to the B & P and IR & D accounts?

(9) Considering the type of contract this was: What was the contractor required to do under the Contract? Was performance of work in excess of the contract price required? Could the Contract reasonably be construed to limit the obligation to the contract price?

(10) If any of the questions are overlapping the Court would be pleased to have cross-references rather than repetitive answers. In addition, the Court does not intend to unduly limit this referral, so if other questions can and should be posed and answered, the Court would be pleased to receive that information from the Board. Furthermore, if the Board is unable to answer certain questions, it should simply so state.

United States v. General Dynamics, 644 F.Supp. 1497, 1508 (C.D.Cal.1986).

3 . Under 41 U.S.C. § 605(c)(5), if the contracting officer fails to issue a decision within the required time period, that failure may be "deemed” a decision so as to permit an appeal to the ASBCA under section 606. A section 606 appeal must be filed within ninety days of the contracting officer's decision; failure to do so deprives the ASBCA of jurisdiction over the appeal. Cosmic Constr. Co. v. United States, 697 (Fed.Cir.1982). Because more than ninety days had elapsed between the time of the contracting officer’s letter and the time of the appeal in No. 34051, it appeared to us that the ASBCA might be unable to render a decision on the B & P and IR & D contracts involved in No. 34051 for lack of jurisdiction. After reviewing the supplemental briefing submitted on this issue, however, we are convinced that it is neither necessary nor appropriate at this point for this court to determine the scope of ASBCA jurisdiction over appeals based on section 605(c)(5).

4 . The dissent argues that this case differs from Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), in that the district court here stated that it might lift the stay if the delay became excessive. See post at 1367; General Dynamics, 644 F.Supp. at 1507. If, however, the primary jurisdiction doctrine was properly invoked, the district court would not be at liberty to "disinvoke” it by lifting the stay. See infra at 1364-65 n. 15. In short, a true primary jurisdiction stay cannot be "temporary." Furthermore, even if the district court could lift such a stay, that fact would not distinguish this case from Moses H. Cone Memorial Hospital. In the latter case, the stay was “tentative” because "it was subject to change on a showing that the state proceedings were being delayed, ... or that some other reason for a change had arisen." Moses H. Cone Memorial Hosp., 460 U.S. at 30, 103 S.Ct. at 944 (Rehnquist, J., dissenting). Where a district court enters a stay that can effectively end the litigation in that court, the court's ability to lift the stay if it chooses would seem to be irrelevant. If the district court does not lift the stay, the litigation before it may be terminated just as conclusively as would be the case if the court stated its intent not to proceed until the collateral proceedings were completed.

5 . General Dynamics would, on the other hand, not be estopped from relitigating issues determined against it in the collateral proceedings because the government would be held to a higher standard of proof in the criminal prosecution. See United States v. Beery, 678 F.2d 856, 862 n. 10 (10th Cir.1982).

6 . Administrative determinations may be afforded preclusive effect if an agency, acting in a judicial capacity, resolves issues properly before it so long as the parties are afforded an adequate opportunity to litigate. University of Tennessee v. Elliott, — U.S. -, 106 S.Ct. 3220, 3227, 92 L.Ed.2d 635 (1986). In People v. Sims, 32 Cal.3d 468, 651 P.2d 321, 186 Cal.Rptr. 77 (1982), the California Supreme Court held that the state, in a criminal fraud prosecution, was precluded from relitigating issues previously determined in an administrative proceeding.

7 . Neither the government nor the district court realized that they could be bound by findings made in the collateral proceedings. See General Dynamics, 644 F.Supp. at 1506. Apparently, neither considered the particular workings of a primary jurisdiction referral in this case or the possible issue preclusive effects of halting the proceedings pending determination of central issues in another forum.

8 . "[T]he decision of the ASBCA on the proper construction of the regulations and the proper meaning of the language of the Contract, may well resolve issues that will allow this court to dispose of all or a major portion of the case before it.” General Dynamics Corp., 644 F.Supp. at 1506.

9 . See supra at 1359 n. 2, questions 4, 5, 6 & 8.

10 . It is possible, of course, that a determination by the ASBCA would not terminate the criminal proceedings. Determinations favorable to the government could occur, or the agency could fail to address adequately all issues of contract or regulatory interpretation. The dissent seems to assume that there must be no doubt that a party is effectively out of court before an order may be deemed final. See post at 1369. However, cases decided subsequent to Moses H. Cone Memorial Hospital do not require absolute certainty as to the loss of the desired forum. See National R.R. Passenger Corp. v. Providence & W.R.R. Co., 798 F.2d 8, 12 (1st Cir.1986) (stating, in case where stay was found to be an appeal-able final order, "[i]f after the state condemnation proceeding is completed, there are any issues in [plaintiff's] complaint remaining to be resolved ..., [the district court] may take them up at that time); Silberkleit v. Kantrowitz, 713 F.2d 433, 434 (9th Cir.1983) (finding stay appealable where state court action involved "similar issues” and collateral estoppel would "resolve or limit the issues to be decided in federal court”) (emphasis added).

11 . Because this court has appellate jurisdiction, we need not pass on the Government's alternate request for a writ of mandamus. See Silberkleit v. Kantrowitz, 713 F.2d 433, 434 n. 1 (9th Cir. 1983).

12 . See, e.g., Ricci v. Chicago Mercantile Exch., 409 U.S. 289, 93 S.Ct. 573, 34 L.Ed.2d 525 (1973); United States v. Western Pac. R.R., 352 U.S. 59, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956); United States v. Pacific & A. Ry. & Navigation Co., 228 U.S. 87, 33 S.Ct. 443, 57 L.Ed. 742 (1913); United States v. Yellow Freight Sys., 762 F.2d 737 (9th Cir. 1985).

13 . The importance of ensuring Congressional intent to place the initial consideration of an issue with an agency before finding that judicial deferral is warranted is made clear by the fact that

[t]he doctrine of primary jurisdiction ... does "more than prescribe the mere procedural time table of the lawsuit. It is a doctrine allocating the lawmaking power over certain aspects” of commercial relations. "It transfers from court to agency the power to determine” some of the incidents of such relationships.

Western Pac. R.R., 352 U.S. at 65, 77 S.Ct. at 166 (quoting Jaffe, Primary Jurisdiction Doctrine Reconsidered, 102 U.Pa.L.Rev. 577, 583-84 (1954)). In some cases, as here, see supra at 1360, the referring court has no authority to review the agency’s determination. See Port of Boston Marine Terminal Ass'n v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 69-71, 91 S.Ct. 203, 208-09, 27 L.Ed.2d 203 (1970). Thus, given that the primary jurisdiction doctrine is in effect, a power-allocating mechanism, a court must not employ the doctrine unless the particular division of power was intended by Congress.

A comparison of the district court’s formulation of the scope of the primary jurisdiction doctrine in this case with the Supreme Court’s formulation is revealing. The district court would require only that the administrative body have competence "to consider an issue” while the Supreme Court would have the primary jurisdiction doctrine come "into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body.” Western Pac. R.R., 352 U.S. at 64, 77 S.Ct. at 165 (emphasis added). The distinction can be illustrated with a homely example: If a canner sued a grower for delivering undersized asparagus and there existed an agency empowered to establish size guidelines for asparagus, the issue of undersized asparagus would be one placed within the competence of the agency. If, on the other hand, Congress merely provided a forum for canner/grower disputes without giving the decisionmaker the authority to implement a scheme for regulating growers, only the adjudication of the issue would be vested in that body.

14 . Compare this to the situation described in ICC v. Atlantic Coast Line Railroad, 383 U.S. 576, 579-80, 86 S.Ct. 1000, 1003-04, 16 L.Ed.2d 109 (1966): Under the Interstate Commerce Act, a reparation claim could be brought by complaint to the ICC or by suit in federal district court. However, if a claim brought in district court raised issues of transportation policy, the doctrine of primary jurisdiction required the parties to litigate the claim first before the ICC. The legislative history of the CDA indicates that Congress thought about, and rejected, a requirement of routing cases through the boards of contract appeals before allowing judicial proceedings. S.Rep. No. 1118, 95th Cong., 2d Sess. 5-6, reprinted in 1978 U.S.Code Cong. & Ad. News 5239-40.

15 . The district court apparently thought that there is an element of discretion in the use of the primary jurisdiction doctrine. Recognizing that "this is a criminal prosecution and care must be taken to see that it is not delayed excessively,” the court stated that it would "retain authority to terminate the referral if that becomes necessary." General Dynamics, 644 F.Supp. at 1507. As we read the cases, however, an issue either is within an agency’s primary jurisdiction or it is not, and, if it is, a court may not act until the agency has made the initial determination. Failure to defer when the doctrine so mandates is reversible error, see, e.g., Yellow Freight Sys., 762 F.2d at 741, as is deferral in inappropriate situations, see Nader v. Allegheny Airlines, 426 U.S. 290, 307, 96 S.Ct. 1978, 1988, 48 L.Ed.2d 643 (1976).

The dissent asserts that application of the primary jurisdiction doctrine is discretionary. See post at 1369. In discussing the doctrine, the Supreme Court frequently has used language at odds with the notion of discretionary application. See, e.g., United States v. Philadelphia Nat'l Bank, 374 U.S. 321, 353, 83 S.Ct. 1715, 1736, 10 L.Ed.2d 915 (1963) (primary jurisdiction doctrine “requires judicial abstention in cases where protection of the integrity of a regulatory scheme dictates preliminary resort to the agency which administers the scheme”) (emphasis added); United States v. RCA, 358 U.S. 334, 346, 79 S.Ct. 457, 464, 3 L.Ed.2d 354 (1959) (reaching "the question whether ... the over-all regulatory scheme of the Act requires invocation of the primary jurisdiction doctrine”) (emphasis added): Great N. Ry. v. Merchants Elevator Co., 259 U.S. 285, 291, 42 S.Ct. 477, 479, 66 L.Ed. 943 (1922) ("Whenever a rate rule or practice is attacked as unreasonable or unjustly discriminatory, there must be preliminary resort to the commission”) (emphasis added).

The cases from this court on which the dissent relies, although admittedly containing some ambiguous language, essentially do not support the assertion that the matter is one of discretion. In Northern California District Council of Hod Carriers v. Opinski, 673 F.2d 1074, 1075 (9th Cir.1982), the court did state that "the district court must exercise its discretion to determine whether proceedings should be stayed,” but it also declared that "[ajppropriate deference to the jurisdiction and expertise of the agency will often require a stay of judicial proceedings.” Id. (emphasis added). It is unclear how a primary jurisdiction stay could be both required and discretionary. Farley Transportation Co. v. Santa Fe Trail Transportation Co., 778 F.2d 1365, 1370 (9th Cir.1985) (citing Yellow Freight Sys., 762 F.2d at 739) states unequivocally that application of the primary jurisdiction doctrine is a question of law, reviewed de novo. The dissent mischaracterizes ICC v. Big Sky Farmers & Ranchers Marketing Cooperative, 451 F.2d 511, 515 (9th Cir.1971), as holding that the “district court did not abuse its discretion by refusing to apply primary jurisdiction.” See post at 1369. In fact, the Big Sky court did not apply an abuse of discretion standard to the primary jurisdiction issue in that case; it simply found the doctrine inapplicable. Id. What this court did review for an abuse of discretion in Big Sky was the district court’s grant of injunctive relief.

16 . A policy-implementing agency can, of course, choose to carry out its work by case-by-case adjudication rather than through general rule-making. This is the method used by the National Labor Relations Board. What distinguishes the ASBCA from the NLRB is the fact that the NLRB is vested with the power to administer the regulatory scheme laid out in the federal labor laws, while no similar authority has been given to the ASBCA.

17 . Obviously, the most serious interference is the possibility that issues central to the criminal prosecution will be determined in another forum. It is also worth noting that at least one court has described the use of ASBCA referrals as "tactics used by defendants to delay resolution of this and related cases for ... years." United States v. Titan Pacific Constr. Corp., 637 F.Supp. 1556, 1562 (W.D.Wash.1986) (footnote omitted). The Titan Pacific court found that waiting for an ASBCA determination was not unlike "waiting for Godot.” Id. at 1563.

18 . In Operating Engineers, the issue was whether the government had to exhaust an administrative remedy before the Federal Election Commission prior to bringing an indictment under the Federal Election Campaign Act, 2 U.S.C. §§ 431-56. For all practical purposes, there is no difference between requiring exhaustion of and requiring deferral to an administrative remedy. In either case there can be no litigation before the agency has acted.