Bailey v. E. Associated Coal Co.

• Decision Date: 25 October 2022
• Docket Number: BRB 20-0094 BLA
• Parties: STEVY C. BAILEY Claimant-Respondent v. EASTERN ASSOCIATED COAL COMPANY and PEABODY ENERGY CORPORATION Employer/Carrier-Petitioners DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR Party-in-Interest
• Court: Court of Appeals of Black Lung Complaints

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STEVY C. BAILEY Claimant-Respondent v. EASTERN ASSOCIATED COAL COMPANY and PEABODY ENERGY CORPORATION Employer/Carrier-Petitioners

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR Party-in-Interest

BRB No. 20-0094 BLA

Court of Appeals of Black Lung

October 25, 2022

Appeal of the Decision and Order Awarding Benefits in a Subsequent Claim of Theresa C. Timlin, Administrative Law Judge, United States Department of Labor.

Joseph E. Wolfe and Brad A. Austin (Wolfe Williams & Reynolds) Norton, Virginia, for Claimant.

H Brett Stonecipher and Tighe A. Estes (Reminger Co., L.P.A.) Lexington, Kentucky, for Employer and its Carrier.

Jeffrey S. Goldberg (Seema Nanda, Solicitor of Labor; Barry H. Joyner, Associate Solicitor), Washington, D.C., for the Director, Office of Workers' Compensation Programs, United States Department of Labor.

Before: BOGGS, Chief Administrative Appeals Judge, BUZZARD, ROLFE, GRESH, and JONES, Administrative Appeals Judges.

DECISION AND ORDER EN BANC

Employer and its Carrier (Employer) appeal Administrative Law Judge (ALJ) Theresa C. Timlin's Decision and Order Awarding Benefits in a Subsequent Claim (2018-BLA-06036) pursuant to the Black Lung Benefits Act, as amended, 30 U.S.C. §§901-944 (2018) (Act). This case involves a subsequent claim^[1] filed on March 9, 2016.

The ALJ found Employer is the responsible operator and Peabody Energy Corporation (Peabody Energy) is the responsible carrier. She accepted the parties' stipulation that Claimant has twenty-six years of underground coal mine employment and found he established complicated pneumoconiosis, thereby invoking the irrebuttable presumption of total disability due to pneumoconiosis at Section 411(c)(3) of the Act, 30 U.S.C. §921(c)(3), and establishing a change in an applicable condition of entitlement. 20 C.F.R. §725.309(c). She further found Claimant's complicated pneumoconiosis arose out of his coal mine employment, 20 C.F.R. §718.203, and awarded benefits.

On appeal, Employer argues the district director, the Department of Labor (DOL) official who initially processes claims, is an inferior officer who was not appointed in a manner consistent with the Appointments Clause of the Constitution, Art. II § 2, cl. 2.^[2] It further contends the ALJ erred in finding Peabody Energy is the liable carrier.^[3] Claimant responds, urging affirmance of the award. The Director, Office of Workers' Compensation Programs (the Director), responds, urging the Benefits Review Board to reject Employer's constitutional arguments and affirm the ALJ's determination that Peabody Energy is liable for benefits.^[4]

The Board's scope of review is defined by statute. We must affirm the ALJ's Decision and Order if it is rational, supported by substantial evidence, and in accordance with applicable law.^[5] 33 U.S.C. §921(b)(3), as incorporated by 30 U.S.C. §932(a); O'Keeffe v. Smith, Hinchman & Grylls Assocs., Inc., 380 U.S. 359 (1965).

Appointments Clause: District Director

Citing Lucia v. SEC, 585 U.S., 138 S.Ct. 2044 (2018) Employer contends the district director lacked the authority to identify the responsible operator and process this case because the district director is an "inferior officer" of the United States not properly appointed under the Appointments Clause. Employer's Brief at 37-44 (unpaginated).

We conclude Employer forfeited its Appointments Clause challenge. Appointments Clause issues are "non-jurisdictional" and thus are subject to the doctrines of waiver and forfeiture. See Lucia, 138 S.Ct. at 2055 (requiring "a timely challenge to the constitutional validity of the appointment of an officer who adjudicates [a party's] case"); Edd Potter Coal Co. v. Dir., OWCP [Salmons], 39 F.4th 202, 207 (4th Cir. 2022) (because Appointments Clause challenges are not jurisdictional, "they are 'subject to ordinary principles of waiver and forfeiture'") (quoting Joseph Forrester Trucking v. Dir., OWCP [Davis], 987 F.3d 581, 587 (6th Cir. 2021)). Indeed, it is a "settled rule in seemingly every forum for dispute resolution," including black lung claims, "that [an adjudicator's] authority should be challenged at the 'earliest practicable moment' to 'prevent[ ] litigants from abiding the outcome of a lawsuit and then overturning it if adverse upon a technicality of which they were previously aware.'" Davis, 987 F.3d at 592 (quoting Glidden Co. v. Zdanok, 370 U.S. 530, 535 (1962)) (cautioning against excusing forfeited arguments because of the risk of sandbagging); Fleming v. USDA, 987 F.3d 1093, 1100 (D.C. Cir. 2021) (raising issues in an untimely fashion is not proper exhaustion and does not preserve those issues for review); In re DBC, 545 F.3d 1373, 1380 (Fed. Cir. 2008) (declining to excuse waived Appointments Clause challenge to discourage "sandbagging").

The regulations implementing the Act clearly set out the steps a party must take to preserve an issue before the district director, ALJ, and Board. After a claim is filed, the district director shall take such action as is necessary to develop, process, and make determinations with respect to the claim. 20 C.F.R. §725.401. As the district director processes a claim, the parties have opportunities to raise issues, make arguments, and submit evidence. See, e.g., 20 C.F.R. §§725.408, 725.410, 725.412, 725.414. "After the evidentiary development of the claim is completed and all contested issues, if any, are joined," the district director must issue a proposed decision and order "which purports to resolve a claim on the basis of the evidence submitted to or obtained by the district director." 20 C.F.R. §725.418.

Upon receiving a proposed decision and order from the district director, a party, to seek further review, must object to that proposal by "'specify[ing] the findings and conclusions' of the district director" with which it disagrees. Salmons, 39 F.4th at 208 (quoting 20 C.F.R. §725.419(b)); Davis, 987 F.3d at 588. The party must then request a hearing before the Office of Administrative Law Judges (OALJ) and, in doing so, specifically highlight "'any contested issue of fact or law' on which a hearing should be held." Salmons, 39 F.4th at 208 (quoting 20 C.F.R. §725.451); Davis, 987 F.3d at 588. In any claim in which a hearing is requested "and with respect to which the district director has completed evidentiary development and adjudication without having resolved all contested issues," the district director must refer the claim to the OALJ for a hearing. 20 C.F.R. §725.421(a).

Failure to contest an issue at this stage has consequences. In any case referred to the OALJ for a hearing, the district director is required to provide a "statement . . . of contested and uncontested issues in the claim." 20 C.F.R. §725.421(b)(7). The "hearing shall be confined to those contested issues which have been identified by the district director . . . or any other issue raised in writing before the district director." 20 C.F.R. §725.463(a) (emphasis added). An ALJ may consider a new issue "only if such issue was not reasonably ascertainable by the parties at the time the claim was before the district director."^[6] Salmons, 39 F.4th at 208 (quoting 20 C.F.R. §725.463(b)). Absent application of the exception for issues not reasonably ascertainable, failure to contest an issue before the claim is transferred to the OALJ constitutes forfeiture of the issue. Johnson v. Royal Coal Co., 326 F.3d 421, 425 (4th Cir. 2003) (holding 20 C.F.R. §725.463(a) is among the "provisions [that] define the outer limit of the scope of the hearing, preventing its expansion"); Kott v. Dir., OWCP, 17 BLR 1-9 (1992); Thornton v. Dir., OWCP, 8 BLR 1-277 (1985).

The Board's review of legal questions, in turn, is limited to "conclusions of law on which the decision or order appealed from was based." 20 C.F.R. §802.301(a); Salmons, 39 F.4th at 208 ("The Board's [limited scope of] review on appeal reinforces the requirement of issue exhaustion in front of an ALJ."); Davis, 987 F.3d at 588; see 33 U.S.C. §921(b)(3).^[7] Thus, the Board routinely declines to consider arguments not properly raised below, including untimely Appointments Clause challenges. See, e.g., Salmons, 39 F.4th at 210 (affirming Board's holding that the employer forfeited its Appointments Clause challenge by waiting until after the Board had remanded the case to the ALJ to raise it); Davis, 987 F.3d at 588 (affirming Board's holdings that three employers forfeited Appointments Clause arguments as consistent with Board's decades-long, "near black-letter" application of "the principle that issues not raised before the ALJ are forfeited"); Powell v. Serv. Emps. Int'l, Inc., 53 BRBS 13, 15 (2019) (Appointments Clause argument not raised to the ALJ is forfeited); Kiyuna v. Matson Terminals, Inc., 53 BRBS 9, 11 (2019) (Appointments Clause argument forfeited when first raised in a motion for reconsideration to the ALJ).

Employer asserted for the first time during the June 5, 2019 hearing that the district director was not properly appointed and thus lacked authority to adjudicate this claim, and it waited until filing its October 4, 2019 post-hearing brief to provide any substantive argument supporting its position. Hearing Transcript at 8-9; Employer's Post-Hearing Brief at 7-12. Employer failed, however, to raise these arguments during the preceding three years, either while this case was pending before the district director or in its request for a hearing to the OALJ, in contravention of the black lung issue exhaustion regulations. 20 C.F.R. §§725.419(b) (any response to a proposed decision and order must specify the findings and conclusion with which the responding party disagrees), 725.451 (after the district director issues a decision, a...