Gibson v. Berryhill

OCTOBER TERM, 1972 Syllabus 411 U. S. GIBSON ET AL. v. BERRYHILL ET AL. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF ALABAMA No. 71-653. Argued January 9-10, 1973--Decided May' 7, 1973 Appellees, licensed optometrists employed by Lee Optical Co., who were not members of the Alabama Optometric Association (Asso- ciation), were charged by the Association with unprofessional conduct within the meaning of the state optometry statute because of their employment with the company. The complaint was filed with the Alabama Board of Optometry (Board), all members of which were Association members. ,The Board deferred proceed- ings while a suit it had brought against. Lee Optical and optome- trists employed by it to enjoin the company from practicing optometry was litigated in the state triar court. The charges against the individual defendants were dismissed but the court enjoined Lee Optical from engaging in the practice" of optometry. The company appealed. When the Board revived the Asso- ciation's charges against appellees, they sought an injunction in the Federal District Court under the Civil Rights Act claiming that the Board was biased. The court concluded that it was not barred from acting -by the federal anti-injunction statute since only administrative proceedings were involved and that exhaustion of administrative remedies was not mandated where the admin- istrative process was biased in that the Board by its litigation in the state courts had prejudged the case against appellees and the Board members had an indirect pecuniary interest in the out- come. The District Court enjoined the Board proceedings but thereafter and before this appeal was taken, the State's highest

court reversed the judgment against Lee Optical and held that the optometry law did not prohibit a licensed optometrist from work-

1. The anti-injunction statute did not bar the District Court

from issuing the injunction since appellees brought suit under the Civil Rights Act, 42 U. S. C. § 1983. Pp. 572-575.

2. Nor did the rule of Younger v. Harris, 401 U. S. 37, or

principles of comity require the District Court to dismiss appellees' suit in view of the pending Board proceeding since the appellees

564

Opinion of the Court

alleged and the District Court concluded that the Board's bias rendered it incompetent to adjudicate the issues. Pp. 575-577.

3. Since the Board was composed solely of private practitioners

and the corporate employees it sought to bar from practice con- stituted half the optometrists in the State, the District Court was warranted in concluding that the Board members' pecuniary inter- est disqualified them from passing on the issues. Pp. 578-579.

4. Though the District Court did not abuse its discretion in not

abstaining until the Lee Optical decision was rendered by the Alabama Supreme Court, the principles of equity, comity, fnd federalism warrant reconsideration of this case in the light of that decision. Pp. 579-581.

331 F. Supp. 122, vacated and remanded.

WHITE, J., delivered the opinion for a unanimous Court. BURC.ER,

concurring opinion, in which BRENNAN, J., joined, post,. p. 581.

Richard A. Billups, Jr., argued the cause for appellants.

With him on the brief were William Baxley, Attorney General of Alabama, and J. G. L. Marston III and Don- aid George Valeska II, Assistant Attorneys General.

Harry Cole argued the cause for appellees. With him on the brief were James J. Carter and Douglas E.

Bergman.

MR. JUSTICE WHITE delivered the opinion of the Court.

Prior to 1965, the laws of Alabama relating to the practice of optometry permitted any person, including a business firm or corporation, to maintain a department in which "eyes are examined or glasses fitted," provided that such department was in the charge of a duly licensed optometrist. This permission was expressly conferred by § 210 of Title 46 of the Alabama Code of 1940, and also inferentially by § 211 of the Code which regulates the

Opinion of the Court

advertising practices of of optometrists, and which, until 1965, appeared to contemplate the existence of commer- cial stores with optical departments.1 In 1965, § 210 was repealed in its entirety by the Alabama Legislature, and § 211 was amended so as to eliminate any direct reference

' Sections 210 and 211 of c. 11, Tit. 46, of the Code of Alabama,

"§ 210. ,tore where glasses are sold; hoiy department conducted.- Nothing in this chapter shall be so construed as to prevent any person, firm, or corporation from owning or operating a store or business establishment wherein eyes are examined or glasses fitted; provided, that such store, establishment, or optometric department shall be in charge of a duly licensed optometrist, whose name must appear on and in all optometry advertising of whatsoever nature done by said person, firm or corporation."

"§ 211. False or misleading statements in advertisements or stores having optometry department.--It shall be unlawful for any person, firm or corporation, engaged in the practice of optometry in this state, to print or cause to be printed, or circulate or cause to be circulated, or publish, by any means whatsoever, any advertisement or circular in which appears any untruthful, impossible, or improb- able or misleading statement or statements, or anything calculated or intended to mislead or deceive the public. And it shall be un- lawful for any individual, firm or corporation, engaged in the sale of goods, wares or merchandise who maintains or operates, or who allows to be maintained and operated in connection with said mer- cantile business an optometry department; or who rents or sub- leases to, any person or persons for the purpose of engaging in the practice of optometry therein, any portion of or space in said store, premises or establishment in which such person, firm or cor- poration is engaged in said mercantile business, to publish, or cir- culate, or print or cause to be printed, by' any means whatsoever, any advertisement or notice of the optometry department main- tained, operated, or conducted in said establishment or place of business, in which said advertisement or notice appear any un- truthful, improbable, impossible, or misleading statement or state- ments, or anything calculated to mislead or deceive the public."

Sections 190-213, regulating the practice of optometry in Alabama, were originally adopted in 1919.

564

Opinion of the Court

to optical departments maintained by .corporations or other business establishments under the direction of employee optometrists.

2

Soon after these statutory changes, the Alabama Opto- metric Association, a professional organization whose membership is limited to independent practitioners of optometry not employed by others, filed charges against various named optometrists, all of whom were duly li- censed under Alabama law but were the salaried em- ployees of Lee Optical Co. The charges were filed with the Alabama Board of Optometry, the statutory body with authority to issue, suspend, and revoke licenses for the practice of optometry. The gravamen of these charges was that the named optometrists, by accepting emplbyment from Lee Optical, a corporation, had engaged in "unprofessional conduct" within the meaning of § 206 of the Alabama optometry statute, and hence were prac- ticing their profession unlawfully.3 More particularly,

"§ 211. False or misleading statements in advertisements or cir- culars.-It shall be unlawful for any person engaged in the practice of optometry in this state to print or cause to be printed, or cir- culate or cause to be circulated, or published, by any means what- soever, any advertisement or circular in which appears any un- truthful, impossible, or improbable or misleading statement or statements, or anything calculated or intended to mislead or deceive the public."

"§ 206. License may be suspended or revoked.-A license issued to any person may be suspended for a definite period of time, or revoked by the state board of optometry for any of the following reasons; to-wit: . .

'Unprofessional conduct' shall be defined to mean any conduct of a character likely to deceive or defraud the public, lending his license by any licensed optometrist to any person, the employment of 'cappers,' or 'steerers' to obtain business, 'splitting' or dividing a fee with any person or persons, the obtaining of any fee or compensation by fraud or mis-

. For unprofessional conduct.

Opinion of the Court

the named individuals with, the Association charged among other things, aiding and abetting a corporation in the illegal practice of optometry; practicing optometry under a false name, that is, Lee Optical Co.; unlawfully soliciting the sale of glasses; lending their licenses to Lee Optical Co.; and splitting or dividing fees with It was apparently the Association's posi- Lee Optical.' tion that, following the repeal of § 210 and the amend- ment of § 211, the practice of optometry by individ- uals as employees of business corporations was no longer permissible in Alabama, and that, by accepting such employment, the named optometrists had violated the It was prayed that the Board ethics of their profession. revoke the licenses of the individuals charged following due notice and a proper hearing.

Two days after these charges were filed by the Associa- tion in October 1965, the Board filed a suit of its own in state court against Lee Optical, seeking to enjoin the company from engaging in the "unlawful practice of optometry." The Board's complaint also named 13 op- tometrists employed by Lee Optical as parties defendant,

representation, employing directly or indirectly any suspended or unlicensed optometrist to do any optometrical work, by use of any advertising, carrying the advertising of articles not connected with the profession, the employment of any drugs or medicines in his practice unless authorized to do so by the laws covering the practice of medicine of this state, or the doing or performing of any acts in his profession declared by the Alabama Optometric Association to be unethical or contrary to good practice."

The section also provides for a hearing before the Board upon due notice 'of an accused license holder. At such a hearing the accused is entitled to be represented by counsel, to cross-examine the witnesses against him, and to have all testimony taken down by a stenographer.

4 Some of the charges leveled against the named optometrists are covered by sections of the Alabama optometry statute other than § 206, e. g., "practicing optometry under a false name" (§ 191), "unlawfully soliciting the sale of glasses" (§ 203), etc.

564

Opinion of the Court -

charging them with aiding and abetting the company in its illegal activities, as well as with other improper con- duct very similar to that charged by the Association in its complaint to the Board.

Proceedings on the Association's charges were held in abeyance by the Board while its own state court suit progressed. The individual defendants in that suit were dismissed on grounds that do not adequately appear in the record before us; and, eventually, on March 17, 1971, the state trial court rendered judgment for the Board, and enjoined Lee Optical both from practicing optometry without a license and from employing licensed optome- trists.5 The company appealed this judgment.

Meanwhile, following its victory in the trial court, the Board reactivated the proceedings pending before it since 1965 against the individual optometrists employed by Lee, noticing them for hearings to be held on May 26 and 27, 1971. Those individuals countered on May 14, 1971, by filing a complaint in the United States District Court naming as defendants the Board of Optometry and its individual members, as well as the Alabama Optometric Association and other individuals. The suit, brought under the Civil Rights Act of 1871, 42" U. S. C. § 1983, sought an injunction against the scheduled hearings on the grounds that the statutory scheme regulating the practice of optometry in Alabama I was unconstitutional

A period of nearly five and one-half years passed between the filing of the Board's complaint against Lee Optical, and the decision of the state trial court. Much of this delay appears to be attribut- able to certain, procedural wranglings in the court concerning whether the Board had the power to bring an injunctive action against those it believed to be practicing optometry unlawfully.

During the pendency of the litigation, th9 Alabama Legislature passed a statute expressly conferring such power, both prospectively and retroactively, on state licensing boards,'and the suit appears to have proceeded expeditiously thereafter.

§§ 190-213 of c. 11, Tit. 46, of the Alabama Code of 1940.

Opinion of the Court

insofar as it permitted the Board to hear the pending charges against the individual plaintiffs in the federal suit.7 The thrust of the complaint was that the Board was biased and could not provide the plaintiffs with a fair and impartial hearing in conformity with due proceis of law.

A three-judge court was conyened in August 1971, and shortly thereafter entered judgment for plaintiffs, en- joining members of the State Boaid and their successors "from conducting a hearing on the charges heretofore preferred against the Plaintiffs" and from revoking their licenses to practice optometry in the State of Alabama.

In its supporting opinion, 331 F. Supp. 122, the Dis- trict Court first considered whether it should stay its hand and defer to the then-pending state proceedings-- that is, whether the situation presented was one which would permit of immediate federal intervention to re- strain the actions of a state administrative body. That question was answered in the affirmative, the court hold- ing that 28 U. S. C. § 2283, the federal anti-injunction statute, was not applicable to state administrative pro- ceedings even where those proceedings were adjudicatory in character. Moreover, the District Court also held that neither Younger v. Harris, 401 U. S. 37 (1971), nor the doctrine normally requiring exhaustion of administrative remedies forbade a federal injunction where, as the court .found to be true here, the administrative process was so defective and inadequate as to deprive the plaintiffs of due process of law.

This conclusion with respect to the deficiencies in the pending proceedings against plaintiffs, although an amal- gam of several elements, amounted basically to a sustain-

7 More specifically, the plaintiffs attacked §§ 206 and 192 of the statute which provide, respectively, that the Board shall have the power to entertain delicensing proceedings and that its membership shall be limited to members of the Alabama Optometric Association.

564

Opinion of the Court

ing of the plaintiffs' allegation of bias. For the District Court, the inquiry was not whether the Board members were "actually biased but whether, in the natural course of events, there is an indication of a possible temptation to ari average man sitting as a judge to try the case with bias for or against any issue presented to him." 331 F. Supp., at 125. Such a possibility of bias was found to arise in the present case from a number of factors. First, was the fact that the Board, which acts as both prosecutor and judge in delicensing proceedings, had previously brought suit against the plaintiffs on virtually identical charges in the state courts. This the District Court took to indicate that members of the Board might have "pre- conceived opinions" with regard to the cases pending be- fore them. Second, the court found as a fact that Lee Optical Co. did a large business in Alabama, and that if it were forced to suspend operations the individual members of the Board, along with other private practitioners of optometry, would fall heir to this business. Thus, a seri- ous question of a personal financial stake in the matter in controversy was raised. Finally, the District Court appeared to regard the Board as a suspect adjudicative body in the cases then pending before it, because only members of the Alabama Optometric Association could be members of the Board, and because the, Association excluded from membership optometrists such as the plain-, tiffs who were employed by other persons or entities.

The result was that 92 of the 192 practicing optometrists in Alabama were denied participation in the governance of their own profession.

The court's ultimate conclusion was "that to require the Plaintiffs to resort to the protection offered by state law in these cases would effectively deprive them of their property, that is, their right to practice their professions, without due process of law and that irreparable injury

Opinion of the Court

would follow in the normal course of events." 8 331 F. Supp., at 126.

Appeal-was taken to this Court and probable jurisdic- tion noted on June 26, 1972. 408 U. S. 920. Mean- while, on March 30, 1972, the Supreme Court. of Ala- bama reversed the judgment of the state trial court in the Lee Optical Co. case,' holding that nothing in the Alabama statutes pertaining to optometry evidenced "a legislative policy that an optometrist duly qualified and licensed under the laws of this state, may not be em- ployed by another to examine eyes for the purpose of prescribing eyeglasses." 1o 288 Ala. 338, 346, 261 So. 2d 17, 24.

It is against this procedural background that we turn to a consideration of the issues presented by this appeal.

We agree with the District Court that neither statute nor case law precluded it from adjudicating the issues before it and from issuing the injunction if its decision on the merits was correct.

Title 28 U. S. C. § 2283, the anti-injunction statute, prohibits federal courts from enjoining state court pro- ceedings, but the statute excepts from its prohibition in-

s The District Court also dismissed, without prejudice, the Board's counterclaim in the present suit which sought a judgment bariing the plaintiffs from practicing optometry in Alabama.

9 See Lee Optical Co. of Alabama v. State Board of Optometry, 288 Ala. 338, 261 So. 2d 17, rehearing denied Apr. 27, 1972.

10 In a companion case, House of $8.60 Eyeglasses v. State Board of Optometry, 288 Ala. 349, 261 So. 2d 27 (1972), the Alabama Supreme Court reversed the judgment of another lower state court which had enjoined a corporation from unlawfully practicing optom- etry through its optometrist* employees.

In that case, the individual optometrists involved were also enjoined from unlawfully practicing their profession. Both injunctions were dissolved by the Alabama Supreme Court.

* 564 Opinion of the Court

junctions which are "expressly authorized"; by aniother Act of Congress. 11 Last Term, aftef the District Court's decision here, this Court determined that actions brought under the Civil Rights Act of 1871, 42 U. S. C. § 1983, *ere within the "expressly authorized'? exception t6 the ban on federal injunctions. 2 Mitchum y. Foster, 407 U. S. 225 (1972).

Our decision in Mitchuni, however, held only that a

district court was mot absolutely barred by statute froi enjoining a state court proceeding when called upon to do so in a § 1983 suit. As we expressly stated in Mitchum, nothing in that decision purported to call into question the established principles of equity, coray, and federalism which must, under appropriate circumstances, restrain a federal court from issuing such injunctions.

Id., at 243. These principles have been emphasized" by this Court many times in the past; albeit under a variety of* different rubrics. First of all,, there is the doctrine, usually applicable when an injunction is sought, that a party must exhaust his available administrative remedies before invoking the equitable jurisdiction of a court.

See, e. g., Prentis v. Atlantic Coast Line'Co., 211 U. S. 210 (1908); Illinois Commerce Corhm'n v. Thomson, 318

U. S. 675 (1943). Secondly, there is the basic principle

of federalism, restated as recently as 1971 in Younger

v. Harris, 401 U. S. 37, that a federal court may not

"A court of the United States may not grant an injunction to stay proceedings in a State edurt except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction,, or to protect or effectuate its judgments."

1 2 The District Court held § 2283 inapplicable in the present case because the plaintiffs. sought an injunction against a state adminis- trative body and not a state court. Whether this distinction is tenable in all circumstances-even where the administrative proceed- ing is adjudicatory or quasi-judicial in character-we need not decide -here since:the present action was brought under 42 U. S. C. § 1983.

.Opinion of the Court

enjoin a pending state criminal proceeding in the ab- sence of special circumstances suggesting bad faith, har- assment or irreparable injury that is both serious and immediate. And finally, there is the doctrine, developed in our cases at least since Railroad Comm'n v. Pullman.

Co., 312 U. S. 496 (1941), that whefi confronted with issues of constitutional dimension which implicate or depend. upon unsettled questions of state law, a federal court ought to abstain and stay its proceedings until those state law questions are definitively resolved.

In the instant case the matter of exhaustion of ad- ministrative remedies need not detain us long. Normally when a State has instituted administrative proceedings against an individual who then seeks an injunction in federal court, the exhaustion doctrine would require the court to delay action until the administrative phase of the state proceedings is terminated,' at least where cover- age or liability is contested and administrative expertise, discretion, or factfinding is involved.13 But this Court has expressly held in recent years that state 'administrative remedies need not be exhausted where- the federal court plaintiff states an otherwise good dause of, action under 42 U. S. C. § 1983. McNeese v. Board of Education, 373

U. S. 668 (1963); Damico v. Calif rnia, 389 U. S. 416

(1967). Whether ihis is invariably the case even where, as here, a license revocation proceeding has been brought by the'State and is pending before one of its own agencies and where the individual charged is to be deprived of

'UThis exhaustion requirement does not apply generally to state "judicial," as opposed'to "administrative," remedies. See Bacon v.

Rutland R. Co., 232 U. S. 134 (1914); City Bank Farmers Trust Co. v. S&hnader, 291 U. S. 24 (1934). The doctrine of exhaustion of administrative remedies should, however, be kept distinct from other equitable doctrines such. as those exemplified in Younger v.

Harris, 401 U. S. 37 (1971), and Railroad Comm'n v. Pullman Co., 312 U. S. 496 (1941), which do require a federal court to defer in appropriate circumstances to state judicial proceedings.

564

Opinion of the Court

nothing until the completion of that proceeding, is a question we need not now decide; for the clear purport .of appellees' complaint was that the State Board of Op-, tometry was unconstitutionally constituted and so did .not *provide them with an adequate administrAtive rem- edy requiring exhaustion. Thus, the question of the adequacy of the administrative remedy, an issue which under federal law the District Court was required to decide, was for all practical purposes identical. with the merits of appellees' lawsuit.14

This brings us to the question of whether Younger v.

Harris, 401 U. S. 37 (1971); Smuels v. Mackell, 401

U. S. 66 (1971), or the principles of equity, comity, and

federalism for which those cases stand, precluded the District Court from acting, in view of the fact that pro- ceedings against appellees were pending before the Ala- 'bama Board of Optometry. Those cases and principles would, under ordinary circumstances, forbid either a de- claratory judgment or injunction with respect to the validity or enforcement of a state statute when a crim- inal proceeding under the statute has been commenced.

Whether a like rule obtains where state civil proceedings are pending was left open in Younger and its companion cases.

14State administrative remedies have been deemed inadequate by federal courts, and hence not subject to the exhaustion requirement,- on a variety of grounds. Most often this has been because of delay by the agency, Smith v. Illinois Bell Tel. Co., 270 U. S. 587 (1926), or because of some doubt as to whether the agency was empowered to grant effective relief, Union Pac. R. Co. v. Board of Comm'rs of Weld County, 247 U. S. 282 (1918); McNeese v. Board of Education, 373 U. S. 668 (1963). State administrative remedies have also been held inadequate, however, where the state administrative body was found to be biased or to have predetermined the issue before it.

Kelly v. Board of Education, 159 F. Supp. 272 (AD Tenn. 1958).

.Opinion of the Court

Appellants now insist, not only that the issue is posed here by the pendency of prqceedings before the state board, but also that the issue was actually decided fol- lowing Younger by our summary affirmance in the case of Geiger v. Jenkins, 401 U. S. 985 (1971).

In that case, the State Medical Board of Georgia noticed hearings on charges filed against a medical practitioner who im- mediately brought suit in federal court 'under § 1983 seeking an injunction on the ground that the underlying statute the Medical Board sought to enforce was un- constitutional. The District Court dismissed the action .without reaching the merits, holding that the state pro- ceedings were "in the nature of criminal proceedings," sufficiently so in any event to trigger the 28 U. S. C. § 2.283 bar to federal intervention. 316 F. Supp. 370, 372 (ND Ga. 1970). The decision was appealed to this Court and summarily affirmed without opinion but with citation to Younger and Mackel.

IAs frequently occurs in the case of summary affirmance, the decision in Geiger is somewhat opaque. We doubt, however, that it is controlling here.

'First of all, it ap- pears from the jurisdictional' statement and motion to affirm in Geiger that state criminal proceedings were pending at the time of the challenged dismissal of the federal case. Moreover, it also appears that subsequent to that' dismissal the State Medical Board completed its proceedings and revoked Geiger's license, and that ju- dicial proceedings to re'View that order were already under way in the state courts. Secondly, there is no judicial finding here as there was in Geiger that under applicable state law license revocation proceedings are quasi-criminal in natir.e; nor is the Alabama case law now cited for this proposition persuasive. See State v. Keel, 33 Ala.

App. 609, 35 So. 2d 625 (1948). Finally, although it is apparent from Geiger that administrati-,e proceedings looking toward the revocation of a license to practice

564

Opinion of the Court

medicine may in proper circumstances cominahd the're- spect due court proceedings, there remains the claim here, not present in Geiger, that the administrative body itself was unconstitutionally constitutd, .and so not entitled to hear the charges filed against the appellees.

Unlike -those situations .where a federal court mer6ly abstains from decision on federal questions until the resolution of underlying or related state law issues l--a subject we shall consider shortly in the context of the present "case-Younger v. Harris contemplates the Qut- right dismissal of the federal suit, and the presentation of all claims, both state and federal, to thb state courts.

Such -a course naturally presupposes the .pportpnity to raise and have timely decided by a competent state-tri- bunal the federal issues involved. Here the predicate for a Younger v. Harris dismissal was lackin g, for the -ap- pellees alleged, and the District Court concluded, that the State Board of Optometry was incompetent by rea- son of bias to .adjudicate the issues pending before it.

If the District Court's conclusion was correct in this re- gard, it was also correct that it need not defer to the Board. Nor, in these circumstances, would a different result-be required simply because judicial.review, de novo - or otherwise, would be forthcoming at the conclisioan of the administrative proceedings." Cf. Ward v. Village of Monroeville, 409 U. S. 57 (1972)

25See, e. g., -Railroad Comm'n v. Puimnan Co.; supra; England

v. Louisiana State Bd. of Medical:Exam'rs, 375 U. S. 411 (1964)-

' .

Lake Carriers' Assn. v. MacMullan, 406 U. S. 498 (1972).

10 This Court jwas assured at oral argument by counsel for both parties that Alabama law provides for de novo court review of de- licensing orders issued by the Board. Ti. of Oral Arg. 5, 19. None- theless, the District Court expres~ly found that the revocation by the Board of appellees' licenses to practice their profession, "together with the attendant publicity which Would inevitably be associated therewith, would cause irreparable damage" to the appellees for which no adequate remedy is afforded by state law. 331 F. Supp.

122, 126.

.Opinion of the Court

It is appropriate, therefore, that we consider the Dis- trict Court's conclusions that the State Board of Op- tometry was so biased by prejudgment and pecuniary in- terest that it could not constitutionally conduct hearings looking toward the revocation of appellees' licenses to practice optometry. We affirm the District Court in this respect.

The District Court thought the Board to be impdr- missibly biased for two reasons. First, the Board had filed a complaint in state court alleging that appellees had aided and abetted Lee Optical Co. in the un- lawful practice of optometry and also that they had engaged in other forms of "unprofessional conduct" which, if proved, would justify revocation of their licenses.

These charges were substantially similar to those pending against appellees before the Board and concerning which the Board had noticed hearings following its successful prosecution of Lee Optical in the state trial court.

Secondly, the District Court determined that the aim of the Board was to revoke the licenses of all optometrists in the State who were employed by business corporations such as Lee Optical, and that these optometrists accounted for nearly half of all the optometrists practicing in Ala- bama. Because the Board of Optometry was composed solely of optometrists in private practice for their own account, the District Court concluded that success in the Board's efforts would possibly redound to the personal benefit of members of the Board, sufficiently so that in the opinion of the District Court the Board was constitu- tionally disqualified from hearing the charges filed against the appellees.

The District Court apparently considered either source of possible bias-prejudgment of the facts or personal in- terest-sufficient to disqualify the members of the Board.

564

Opinion of the Court

Arguably, the District Court was right on both scores, but we need reach, and we affirm, only the latter ground of possible personal interest. 7

It is sufficiently clear from our cases that those vith substantial pecuniary interest in legal proceedings should not adjudicate these disputes. Tumey v. Ohio, 273 U. S. 510 (1927). And Ward v. Village of Monroeville, 409

U. S. 57 (1972), indicates that the -financial stake need

not be as direct or positive as it appeared to be in Tumey.

It has also come to be the prevailing view that "[m] ost of the law concerning disqualification because of interest applies with equal force to . . . administrative adjudica- tors." K. Davis, Administrative Law Text § 12.04, p. 250 (1972), and cases cited. The District Court proceeded on this basis and, applying the standards taken from our cases, concluded that the pecuniary interest of the mem- bers of the Board of Optometry had sufficient substance to disqualify them, given the context in which this case arose. As remote as we are from the local realities under- lying this case and it being very likely that the District Court has a firmer grasp of the facts and of their signif- icance to the issues presented, we have no good reason on this record to overturn its conclusion and we affirm it. iv Finally, we do not think that the doctrine of absten- tion, as developed in our cases from Railroad Comm'n v.

17 The extent to which an administrative agency may investigate and act upon the material facts of a case and then, consistent with due process, sit 'as an adjudicative body to determine those facts finally has occasioned some divergence of views among federal courts.

Compare Amos Treat & Co. v. SE.C, 113 U. S. App..D. C. 100, 306 F. 2d'260 (1962), and Trans World Airlines v. CAB, 102 U. S. App.

D. C. 391, 254 F. 2d 90 (1958), with Pangburn v. CAB, 311 F. 2d 349

(CAI 1962), See also Mack v. Florida State Board of Dentistry, 296 F. Supp. 1259 (SD Fla. 1969). We have no occasion to pass upon this issue here in view of our disposition of the present case.

.Opinion of the Court

Pullman Co., 312 U. S. 496 (1941), to Lake Carriers' Assn.

v. MacMullan, 406 U. S. 498 (1972), required the District

Court to stay its proceedings until the appellees had pre- sented unsettled questions of state law to the state courts.

Those questions went to the reach and effect of the state- optometry law and concerned the merits of the charges pending against the appellees, at the heart of which was the issue whether Alabama law permitted licensed op- tometrists to b6 employed by business corporations and others: That central question was pending in the Ala- bama Supreme Court in the Lee Optical Co. case at the time the District Court entered its order. As was. noted earlierhowever, appellees here had been dismissed ffbm that case by the state trial court, and it was only after this dismissal, and after the Board had reactivated its charges against them,' that appellees sought relief in federal court.

Arguably, the District Court should have awaited the outcome of the Lee Optical Co. appeal, a decision which might have obviated the need for an injunction in this case. 8- But the Board was pressing its charges against appellees without awaiting that outcome and, in any event, it appears that at least some of the charges pend- ing against appellees might have survived areversal of the state trial court's'judgment by the Alabama Supreme Court.

'Under these circumstances, it was not an abuse of discretion'for the District Court to proceed as it did.

Nevertheless, the Alabama Supreme Court has since rendered its decision, not only in the Lee Optical Co. case, but also in a companion case, House of $8.50 Eyeglasses

v. State Board of Optometry, 288 Ala. 349, 261 So. 2d 27

(1972). See n. 10, supra. Individual optometrists were parties to that latter case, and the Alabama Supreme .Court entered judgment in their behalf, holding that noth-

18 See Askew v. Hargrave, 401 U. S. 476 (1971).

GIBSON v. BERiYYILL . 581 . 564 MARSHALL, J., concurring

ing in the State's optometry law prohibited a licensed optometrist from accepting employment from a business corporation. Whether this judgment substantially de- vitalizes the position of the Board with respect to the ap- peltes here, or in any way makes unnecessary or removes the "equity" from the injunction entered by the District Court, we are unable to determine. But we do think that considerations of equity, comity, and federalism warrant vacating the judgment of the District Court and remand- ing the case to that court *for reconsideration in light of -the Alabama Supreme .Court's judgments in" the Lee Optical Co. and House of $8.50.Eyeglasses cases. We in. no way intimate whether or not the injunction should be reinstated by the District Court.

It is so ordered.

MR. CH3IEF JUSTICE "BuRGER, concurring:. I concur, although in my view the three-judge District Court would have been bett6r advised, as a matter of sound judiciail discretion, to have refrained from acting until the outcome of the Lee Optical" appeal. See my dissenting opinion in Wisc6nsin v. Constantineau, 400

MR. JUsTIcE MARsHALL, with whom MR. JUSTICE BRENNAN joins, concurring.

In my opinion, the inapplicability of

I join the opipibn of the Court oxcept insofar as it suggests that the question remains open whether plain- tiffs in some suits brought under 42 U. S..C. § 1983 imy have td exhaust administrative remedies. See ante, at .he ex- 574-575. haustion requirem*eit to any suit brought under § 1983 has been firmly settled by this Court's prior-decisions, McNeese v. Board .of Education, 373 U. S. 668, 671-672 See also Houghton v. Shafer, 392 U. S. 639 (1963).

(1968); King v.. Smith, 392 U. S. 309,,312 n. 4 (1968); Damico v. California, 389 U. S. 416 (1967) .

-