Edd Potter Coal Co. v. Dir., Office of Workers' Comp. Programs

39 F.4th 202

EDD POTTER COAL COMPANY, INCORPORATED; Old Republic Insurance Company, Petitioners,

v.DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR ; Austine Salmons, Respondents.

No. 21-1623

United States Court of Appeals, Fourth Circuit.

Argued: May 4, 2022

Decided: June 30, 2022

ARGUED: Mark Elliott Solomons, GREENBERG TRAURIG LLP, Washington, D.C., for Petitioners. Jeffrey Steven Goldberg, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C.; Brad Anthony Austin, WOLFE, WILLIAMS & REYNOLDS, Norton, Virginia, for Respondents. ON BRIEF: Michael A. Pusateri, GREENBERG TRAURIG LLP, Washington, D.C., for Petitioners. Seema Nanda, Solicitor of Labor, Barry H. Joyner, Associate Solicitor, Jennifer L. Feldman, Deputy Associate Solicitor, Gary K. Stearman, Counsel for Appellate Litigation, Office of the Solicitor, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Federal Respondent.

Before WILKINSON, RICHARDSON, and RUSHING, Circuit Judges.

Petition for review denied by published opinion. Judge Wilkinson wrote the opinion, in which Judge Rushing joined. Judge Richardson wrote an opinion concurring in the judgment.

WILKINSON, Circuit Judge:

After Austine Salmons filed a benefits claim in this black lung case, an administrative law judge (ALJ) and the Benefits Review Board both determined that Edd Potter Coal Company would be responsible in the event that Salmons was entitled to benefits. Once the Board remanded the case to determine if benefits were in fact appropriate, Edd Potter decided to raise an Appointments Clause challenge for the first time. Both the ALJ and the Board concluded that Edd Potter had forfeited this issue by failing to timely raise it. We agree, as the Department of Labor's regulations require issue exhaustion both before the ALJ and before the Board. Given Edd Potter's double forfeiture, we deny the petition for review.

I.

In August 2011, former coal miner Austine Salmons filed a claim for benefits under the Black Lung Benefits Act. See 30 U.S.C. § 901 et seq. That Act provides benefits to "coal miners who are totally disabled by pneumoconiosis," also known as black lung disease, and to their surviving dependents. Id. § 901(a). And it sets up a system both to determine eligibility for benefits and to decide who is responsible for paying those benefits (often a coal mine operator). See 30 U.S.C. § 932.

Salmons' case first went to a Department of Labor district director, who notified Edd Potter that it was potentially responsible for the claim. After the district director proposed denying the claim, Salmons requested a de novo hearing in front of an ALJ. Before the ALJ, Edd Potter contested Salmons' entitlement to benefits and its own liability as the responsible operator. Yet it made no mention of any Appointments Clause challenge. In August 2017, the ALJ ruled that Edd Potter was the responsible operator and that Salmons was entitled to benefits.

Edd Potter appealed to the Benefits Review Board, once more disputing both its own responsibility and Salmons' entitlement to benefits. Again, though, it failed to raise an Appointments Clause challenge. On November 30, 2018, the Board first affirmed the ALJ's finding that Edd Potter was the responsible operator. It then vacated the ALJ's finding that Salmons was totally disabled and therefore remanded the case "for further proceedings consistent with this opinion." P.A. 92. The Board instructed that, on remand, the ALJ "must reconsider" the evidence of total disability and "may" reinstate certain findings already made. P.A. 91.¹

On January 9, 2019, with the case on remand before the ALJ, Edd Potter first raised its Appointments Clause challenge. It asked for Salmons' case to be reassigned to a properly appointed ALJ in light of Lucia v. SEC , ––– U.S. ––––, 138 S. Ct. 2044, 201 L.Ed.2d 464 (2018), which the Supreme Court had decided five months before the Board's initial ruling. In Lucia , the Supreme Court held that ALJs at the Securities and Exchange Commission were "Officers of the United States" subject to the Appointments Clause. Id. at 2049. As a result, those ALJs needed to be appointed by the President, a department head, or a court of law. Id. at 2051 ; see U.S. Const. art II, § 2, cl. 2. Because they hadn't been, one who made "a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case" was entitled to a new hearing before a different (and properly appointed) ALJ. Lucia , 138 S. Ct. at 2055 (emphasis added) (quoting Ryder v. United States , 515 U.S. 177, 182, 115 S.Ct. 2031, 132 L.Ed.2d 136 (1995) ). So had Edd Potter's request been granted, this case would have gone to a different ALJ, and Edd Potter would have had yet another chance to contest its status as the responsible party.

The ALJ denied Edd Potter's Lucia -based request, finding that Edd Potter "offer[ed] no support for a conclusion that its raising of the Appointments Clause is timely." P.A. 98. Because Edd Potter did not challenge the ALJ's authority to hear the case initially or on appeal, the ALJ determined that Edd Potter had forfeited its Appointments Clause challenge. Subsequently, the ALJ awarded benefits to Salmons.

Edd Potter again appealed to the Board. Reasoning that the Appointments Clause issue was " ‘non-jurisdictional’ and subject to the doctrines of waiver and forfeiture," the Board found that Edd Potter had forfeited the issue by waiting until after the Board had remanded the case. P.A. 147. And the Board saw no basis to excuse Edd Potter's forfeiture because the agency could effectively address the Appointments Clause claim and because decades-old precedent already said "everything necessary to decide" Lucia . P.A. 148 (quoting 138 S. Ct. at 2053 ). The Board then affirmed the ALJ's award of benefits.

Edd Potter timely petitioned this court for review. We review the legal conclusions of the ALJ and of the Board de novo. Sea "B" Mining Co. v. Addison , 831 F.3d 244, 252 (4th Cir. 2016).

II.

It is firmly established that, before an agency, parties must raise all issues they seek to maintain on appeal "at the time appropriate under its practice." United States v. L.A. Tucker Truck Lines, Inc. , 344 U.S. 33, 37, 73 S.Ct. 67, 97 L.Ed. 54 (1952) ; South Carolina v. U.S. Dep't of Labor , 795 F.2d 375, 378 (4th Cir. 1986) ; see also Sims v. Apfel , 530 U.S. 103, 107–10, 120 S.Ct. 2080, 147 L.Ed.2d 80 (2000). This requirement, typically known as issue exhaustion, "obliges a party to challenge an issue it disputes during an initial proceeding." Joseph Forrester Trucking v. Dir., Off. of Workers' Comp. Programs , 987 F.3d 581, 586 (6th Cir. 2021). Derived from more general issue-preservation principles, issue-exhaustion requirements foster fairness to administrators and litigants by putting them on notice of disputed issues. See L.A. Tucker Truck Lines , 344 U.S. at 37, 73 S.Ct. 67. They promote efficiency as well by avoiding piecemeal litigation. See McCarthy v. Madigan , 503 U.S. 140, 145, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992).

Forfeiture results when a party fails to raise an issue at the appropriate time. Indeed, "[n]o procedural principle is more familiar ... than that a constitutional right may be forfeited" when a party fails "to make timely assertion of the right before a tribunal having jurisdiction to determine it." Yakus v. United States , 321 U.S. 414, 444, 64 S.Ct. 660, 88 L.Ed. 834 (1944). And forfeiture is "essential to the orderly administration of justice," not "a mere technicality."

Freytag v. Comm'r , 501 U.S. 868, 894–95, 111 S.Ct. 2631, 115 L.Ed.2d 764 (1991) (Scalia, J., concurring in part and in the judgment) (quoting 9 C. Wright & A. Miller, Federal Practice and Procedure § 2472 (1971) ). Arguments made in initial administrative proceedings should not be treated as a rough draft, to be expanded whenever a new idea pops into a party's head. Instead, the "very word ‘review’ presupposes that a litigant's arguments have been raised and considered in the tribunal of first instance." Id. at 895, 111 S.Ct. 2631.

These principles undoubtedly apply to Edd Potter's Appointments Clause challenge. After all, Appointments Clause challenges are not jurisdictional. See Jones Brothers, Inc. v. Sec'y of Labor , 898 F.3d 669, 678 (6th Cir. 2018) ; NLRB v. RELCO Locomotives, Inc. , 734 F.3d 764, 794–95 (8th Cir. 2013) ; Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd. , 574 F.3d 748, 756 (D.C. Cir. 2009). As a result, they are "subject to ordinary principles of waiver and forfeiture." Joseph Forrester Trucking , 987 F.3d at 587 (quoting Jones Brothers , 898 F.3d at 678 ); see also David Stanley Consultants v. Dir., Off. of Workers' Comp. Programs , 800 F. App'x 123, 127–28 (3d Cir. 2020) (finding forfeiture of Appointments Clause challenge in black lung context); Energy West Mining Co. v. Lyle , 929 F.3d 1202, 1206 (10th Cir. 2019) (same).

To determine whether Edd Potter forfeited its Appointments Clause challenge, we think it best to employ the same three-step framework as the Sixth Circuit. See Island Creek Coal Co. v. Bryan , 937 F.3d 738, 746 (6th Cir. 2019) (introducing framework); Joseph Forrester Trucking , 987 F.3d at 587–92 (applying framework). We first ask whether issue exhaustion is required before the ALJ and before the Board. Concluding that it is, we next ask whether Edd Potter exhausted its Appointments Clause challenge. Concluding that it did not, we finally ask whether Edd Potter's forfeiture should be excused. Finding no basis to do so, we deny Edd Potter's petition for review.

A.

Normally, "issue-exhaustion rules are creatures of statute or regulation." Carr v. Saul , ––– U.S. ––––, 141 S. Ct. 1352, 1358, 209 L.Ed.2d 376 (2021) ; see also Sims , 530 U.S. at 107–08, 120 S.Ct. 2080. Here, the Director concedes that nothing in the Black Lung Benefits Act explicitly requires issue exhaustion. The Director instead relies upon the Department of Labor's...