The Department of Housing and Urban Development (HUD) provides mortgage insurance as a means of facilitating the construction of housing in poor areas. Mr. Darby (plaintiff) obtained such insurance on several occasions. HUD officials determined that Darby had violated the eligibility regulations for this financing, and notified him that it proposed to bar him from future participation in HUD procurement contracts. Darby sought a hearing, and the administrative law judge (ALJ) imposed an eighteen-month disbarment. Under HUD regulations, a hearing officer’s determination is final unless a party requests review and, within 30 days of receiving the request, the Secretary of Housing and Urban Development (Secretary) (defendant) decides to review the determination. Neither Darby nor HUD sought administrative review of the ALJ’s decision. Darby filed a suit in federal district court, seeking a declaration that the imposition of the penalty was “not in accordance with law,” as required by the Administrative Procedure Act (APA). HUD moved to dismiss on the ground that Darby failed to exhaust his administrative remedies. The court denied HUD’s motion, but the court of appeals reversed. The United States Supreme Court granted certiorari.