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Island Creek Coal Co. v. Bryan

United States Court of Appeals, Sixth Circuit

September 11, 2019

Island Creek Coal Company, Petitioner,
v.
Melyndia Bryan, Survivor of Bert F. Bryan; Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents. Dorris E. Cunningham, Petitioner,
v.
Island Creek Coal Company; Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents.

          Argued: June 18, 2019

          On Petitions for Review of Orders of the Benefits Review Board, United States Department of Labor; Nos. 17-0277 BLA; 17-0457 BLA.

         ARGUED:

          Jeffrey R. Soukup, JACKSON KELLY, PLLC, Lexington, Kentucky, for Petitioner.

          Brent Yonts, LAW OFFICE OF YONTS, SHERMAN & DRISKILL, PSC, Greenville, Kentucky, for Respondent Bryan. Edward Waldman, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Federal Respondent.

          Austin P. Vowels, VOWELS LAW PLC, Henderson, Kentucky, for Petitioner.

          Joseph D. Halbert, SHELTON, BRANHAM & HALBERT, PLLC, Lexington, Kentucky for Respondent Island Creek. Edward Waldman, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Federal Respondent.

         ON BRIEF:

          Jeffrey R. Soukup, William S. Mattingly, JACKSON KELLY, PLLC, Lexington, Kentucky, for Petitioner.

          Brent Yonts, LAW OFFICE OF YONTS, SHERMAN & DRISKILL, PSC, Greenville, Kentucky, for Respondent Bryan. Edward Waldman, Rita A. Roppolo, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Federal Respondent.

          Austin P. Vowels, VOWELS LAW PLC, Henderson, Kentucky, for Petitioner.

          Joseph D. Halbert, SHELTON, BRANHAM & HALBERT, PLLC, Lexington, Kentucky for Respondent Island Creek. Edward Waldman, Sean G. Bajkowski, Sarah M. Hurley, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Federal Respondent.

          Before: McKEAGUE, THAPAR, and MURPHY, Circuit Judges.

          OPINION

          MURPHY, CIRCUIT JUDGE.

         It has long been said that the doctrine of administrative exhaustion "is as old as federal administrative law." Raoul Berger, Exhaustion of Administrative Remedies, 48 Yale L.J. 981, 981 (1939). But what is the doctrine's source? A federal statute? Federal common law? A brooding omnipresence in the bureaucratic sky? This question confronts us in these petitions for review, which assert claims based on Lucia v. SEC, 138 S.Ct. 2044 (2018). There, the Court held that the SEC's appointment of an administrative law judge violated the Constitution's Appointments Clause. Id. at 2049. Here, the petitioners argue that Lucia renders unconstitutional the appointments of the administrative law judges who adjudicated their black-lung-benefits disputes. But there is a catch: The petitioners raised this issue for the first time in motions for reconsideration with the Benefits Review Board, the body within the Department of Labor that hears appeals from decisions of administrative law judges. The Board held that their constitutional claims came too late, so the Department of Labor asserts that they forfeited this issue in court by failing to properly exhaust it with the agency. We must consider, among other questions, whether the Black Lung Benefits Act contains a requirement to exhaust issues with the Board and, if so, whether that requirement bars the petitioners' constitutional claims.

         I.

         The Black Lung Benefits Act, 30 U.S.C. §§ 901-44, "provides federal funds to those who have been totally disabled by pneumoconiosis, a respiratory disease commonly caused by coal mine employment, and to their eligible survivors." U.S. Dep't of Labor v. Triplett, 494 U.S. 715, 717 (1990). The Act grants broad authority to the Secretary of Labor to implement its provisions. E.g., 30 U.S.C. § 902(f)(1); id. § 932(h). Regulations authorize benefits if miners prove that they have "pneumoconiosis"; that the disease "arose out of coal mine employment"; that they are "totally disabled"; and that their "pneumoconiosis contributes to the total disability." 20 C.F.R. § 725.202(d)(2). Regulations also establish a framework for identifying the coal-mine "operator" who should be on the hook for paying the benefits. Id. §§ 725.494-.95; see 30 U.S.C. § 932(b).

         To resolve benefits disputes between miners and operators, the Act incorporates many claims-processing rules from the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-50. 30 U.S.C. § 932(a). When a miner applies for benefits, a "district director" in the Department of Labor investigates the claim and issues a proposed order granting or denying benefits. 20 C.F.R. § 725.418(a). From that order, a miner or operator may request a hearing before an administrative law judge. 33 U.S.C. § 919(d); 20 C.F.R. § 725.419(a). The judge typically holds a hearing under the Administrative Procedure Act's adjudication rules, 5 U.S.C. § 554, and issues a benefits decision with accompanying findings of fact and conclusions of law. 20 C.F.R. §§ 725.450-.79. Following that decision, the miner or operator may appeal a "substantial question of law or fact" to the Benefits Review Board. 33 U.S.C. § 921(b)(3); 20 C.F.R. § 725.481. After exhausting these internal agency steps, the miner or operator may lastly obtain judicial review of "a final order of the Board" from a court of appeals. 33 U.S.C. § 921(c); 20 C.F.R. § 725.482(a).

         Department of Labor staff (not the Secretary of Labor) had been appointing the administrative law judges who adjudicate benefits disputes within the agency. Yet the Constitution's Appointments Clause dictates the method for appointing "Officers of the United States," allowing Congress to place the appointment power for "inferior Officers" only "in the President," the "Courts of Law," or the "Heads of Departments." U.S. Const. art. II, § 2, cl. 2. Thus, if administrative law judges qualify as "inferior Officers" rather than employees, their staff appointments violated the Constitution. In December 2017, anticipating that the Supreme Court might review this question, the Secretary of Labor ratified the appointments of the existing administrative law judges. Several months later, on June 21, 2018, the Court held that an SEC administrative law judge was an inferior officer who had been unconstitutionally appointed. Lucia, 138 S.Ct. at 2055.

         This administrative backdrop sets the stage for these two benefits disputes. (We highlight their general facts now and save the details for our later substantial-evidence review.)

         Dorris Cunningham (No. 18-4022). Petitioner Dorris Cunningham worked at a Kentucky coal mine from 1952 until his 1993 retirement. Respondent Island Creek Coal eventually came to operate the mine. After his retirement, Cunningham applied for black-lung benefits, but his claims were denied because he was not "totally disabled." In February 2014, Cunningham filed his current application. After a district director proposed awarding benefits, Island Creek requested a hearing with an administrative law judge. The judge found that Cunningham again failed to show that he was totally disabled. On June 27, 2018, a few days after Lucia, the Benefits Review Board affirmed. In a motion for reconsideration, Cunningham argued for the first time that the Secretary of Labor had not properly appointed the administrative law judge who rejected his claim. The Board denied the motion. It found that Cunningham had "waived" this constitutional issue because he raised it "only after the Board issued its decision on the merits."

         Melyndia Bryan (Nos. 18-3680, 18-3909). Bert Bryan worked in underground coal mines for at least 16 years between 1972 and 1989. He applied for black-lung benefits in July 2010, but died two years later. His wife, Respondent Melyndia Bryan, assumed his claim and filed a separate survivor's claim. A district director awarded benefits on both claims and found Island Creek (the Petitioner in Bryan's cases) to be the responsible operator. Island Creek requested a hearing with an administrative law judge. The judge found that Bert Bryan had a total disability due to pneumoconiosis, that he had been entitled to benefits from the date of his application to the date of his death, and that Melyndia was entitled to survivor's benefits. Island Creek appealed both claims to the Benefits Review Board. In February 2018, the Board affirmed the judge's decision on the original claim, but suggested that Island Creek had not appealed the survivor's claim. After Island Creek filed a motion for reconsideration, the Board recognized that Island Creek had in fact appealed. Yet, on June 15, 2018, the Board affirmed the decision on the survivor's claim too. In another motion for reconsideration after Lucia, Island Creek for the first time challenged the appointment of the administrative law judge who awarded benefits. The Board found that Island Creek (like Cunningham) had "waived" this issue by failing to raise it sooner.

         From these final orders of the Benefits Review Board, Cunningham and Island Creek sought this court's review, requesting a new hearing before a properly appointed administrative law judge (and raising fact-specific substantial-evidence challenges). We consolidated their petitions for review. In this court, the Director of the Office of Workers' Compensation Programs in the Department of Labor (the "Department of Labor") concedes that the administrative law judges who oversaw these disputes were not constitutionally appointed. But the Department of Labor argues that Island Creek and Cunningham forfeited their constitutional claims by not exhausting them with the agency.

         II.

         We start with the exhaustion question. At the outset, we note what this question is not about. To begin with, it does not implicate our subject-matter jurisdiction. EPA v. EME Homer City Generation, L.P., 572 U.S. 489, 512 (2014); Herr v. U.S. Forest Serv., 803 F.3d 809, 822 (6th Cir. 2015). The law grants the courts of appeals adjudicative authority over "a final order of the Board," 33 U.S.C. § 921(c), and Island Creek and Cunningham timely petitioned from final orders. Cf. Weinberger v. Salfi, 422 U.S. 749, 763-67 (1975). This question also does not implicate what some cases have called the "exhaustion of remedies": a requirement that a party complete the agency's internal remedial steps (including administrative appeals) before turning to the judiciary. Sims v. Apfel, 530 U.S. 103, 107 (2000). Island Creek and Cunningham litigated these disputes before an administrative law judge, 33 U.S.C. ยง 919(d), and appealed the judge's decision to the Benefits Review ...


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