K & R Contractors, LLC v. Michael Keene ( 2023 )

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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 20-2021
K & R CONTRACTORS, LLC,
Petitioner,
v.
MICHAEL KEENE; DIRECTOR, OFFICE OF WORKERS’ COMPENSATION
PROGRAMS, UNITED STATES DEPARTMENT OF LABOR,
Respondents.
-----------------------
PRATIK A. SHAH,
Court-Assigned Amicus Counsel.
On Petition for Review of an Order of the Benefits Review Board. (19-0242 BLA)
Argued: October 29, 2021 Decided: November 7, 2023
Before HARRIS, QUATTLEBAUM, and RUSHING, Circuit Judges.
Petition for review denied by published opinion. Judge Rushing wrote the opinion, in
which Judge Harris and Judge Quattlebaum joined.
ARGUED: Charity Ann Barger, STREET LAW FIRM, LLP, Grundy, Virginia, for
Petitioner. Amanda Lee Mundell, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Respondent Director, Office of Workers’ Compensation Programs.
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Brad Anthony Austin, WOLFE WILLIAMS & REYNOLDS, Norton, Virginia, for
Respondent Michael Keene. ON BRIEF: Thomas R. Scott, Jr., STREET LAW FIRM,
LLP, Grundy, Virginia, for Petitioner. Elena S. Goldstein, Deputy Solicitor of Labor,
Barry H. Joyner, Associate Solicitor, Jennifer L. Feldman, Deputy Associate Solicitor,
Gary K. Stearman, Counsel for Appellate Litigation, Cynthia Liao, Office of the Solicitor,
UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Federal
Respondent. Pratik A. Shah, Z.W. Julius Chen, Juliana C. DeVries, AKIN GUMP
STRAUSS HAUER & FELD LLP, Washington, D.C., for Court-Appointed Amicus
Counsel.
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RUSHING, Circuit Judge:
An administrative law judge (ALJ) working for the United States Department of
Labor (DOL) ordered K & R Contractors, LLC to pay living miner’s benefits to its former
employee Michael Keene pursuant to the Black Lung Benefits Act. The Benefits Review
Board affirmed, and K & R petitions this Court for review. K & R does not contest the
evidence supporting the benefits award but instead challenges the constitutional authority
of the two DOL ALJs who heard and decided Keene’s claim against K & R. First, K & R
contends that the ALJs were not appointed consistent with the Appointments Clause of the
Constitution. Second, K & R asserts that the ALJs are insulated from removal by two
layers of good-cause tenure protection, contrary to the Constitution’s vesting of the
executive power in the President.
The Director of the Office of Workers’ Compensation Programs at DOL filed a brief
on behalf of the Government arguing that, to save the ALJ removal scheme from
constitutional infirmity, we must impose a novel narrowing construction on one of the
applicable layers of protection, see 5 U.S.C. § 7521. No party took the position that the
removal protections were constitutional without adopting a limiting construction.
Therefore, to ensure full consideration of the removal issue, after oral argument we
appointed an amicus curiae to defend the constitutionality of the dual good-cause removal
provisions without the Government’s proposed narrowing construction. 1 We then received
further briefing from the parties in response to the amicus brief.
1
We thank appointed amicus curiae Pratik A. Shah and his colleagues for their
assistance to the Court.
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Having now fully considered the merits of the issues presented, we hold that both
ALJs were constitutionally appointed and that, even if the dual good-cause removal
protections were unconstitutional, K & R is not entitled to relief because it has not
identified any harm resulting from those removal provisions. We therefore deny the
petition for review.
I.
Before we discuss the facts of this case, some statutory background is necessary.
A.
We begin by describing adjudications under the Black Lung Benefits Act, 30 U.S.C.
§§ 901–944, which “provides benefits to ‘coal miners who are totally disabled due to
pneumoconiosis,’ commonly known as black lung disease,” W. Va. CWP Fund v. Dir., Off.
of Workers’ Comp. Programs, 880 F.3d 691, 694 (4th Cir. 2018) (quoting 30 U.S.C.
§ 901(a)). A disabled coal miner or his surviving dependent initiates the process by filing
a claim with a DOL district director. See 20 C.F.R. §§ 725.301, 725.303, 725.401. The
district director develops the record and identifies, if available, a coal mine operator who
may be held responsible for paying benefits to the claimant. See 20 C.F.R. §§ 725.401–
725.418. At the end of those proceedings, the district director issues a proposed order. 20
C.F.R. § 725.418.
Any party then may request a hearing before a DOL ALJ. 20 C.F.R. §§ 725.419,
725.421, 725.451. With some exceptions, these hearings are conducted in accordance with
the Administrative Procedure Act. See 33 U.S.C. § 919(d) (“[A]ny hearing held under this
chapter shall be conducted in accordance with the provisions of section 554 of Title 5.”);
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30 U.S.C. § 932(a) (incorporating procedures of the Longshore and Harbor Workers’
Compensation Act, 33 U.S.C. §§ 901–950, into the Black Lung Benefits Act); 20 C.F.R.
§ 725.452(a) (“Except as otherwise provided by this part, all hearings shall be conducted
in accordance with the provisions of 5 U.S.C. 554 et seq.”). The ALJ takes evidence and
resolves contested questions of fact and law. See 5 U.S.C. § 556(c); 20 C.F.R. § 725.455.
If no party appeals, the ALJ’s decision is final. See 5 U.S.C. § 557(b); 20 C.F.R. § 725.479.
Any party dissatisfied with the ALJ’s ruling may appeal to the Benefits Review
Board. See 33 U.S.C. § 921(b); 20 C.F.R. § 725.481. In addition, “[t]he Board may, on its
own motion or at the request of the Secretary [of Labor], remand a case to the [ALJ] for
further appropriate action.” 33 U.S.C. § 921(b)(4). The Board’s decisions are subject to
judicial review in the court of appeals for the circuit in which the claimant’s injury
occurred. See 33 U.S.C. § 921(c); 20 C.F.R. § 725.482(a).
B.
This appeal concerns the hiring and firing of DOL ALJs, so we describe that process
next. Before 2018, DOL ALJs were hired through the competitive service. See 5 U.S.C.
§ 2102; 5 C.F.R. § 930.201(b). The Office of Personnel Management conducted a
competitive application and ranking process to identify entry-level candidates, then DOL
staff would select from among the finalists. DOL could also arrange for an experienced
ALJ to transfer from another agency. See 5 C.F.R. § 930.204(h).
In 2018, the Supreme Court held that Securities and Exchange Commission ALJs
are “Officers of the United States” within the meaning of the Appointments Clause, U.S.
Const. art. II, § 2, cl. 2, and so can be appointed only by the President, a court of law, or a
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head of department. Lucia v. SEC, 138 S. Ct. 2044, 2049 (2018). In response, President
Trump issued an executive order exempting ALJs from the competitive hiring process and
charging each agency with hiring its own ALJs. Exec. Order No. 13,843, 83 Fed. Reg.
32,755, 32,756 (July 10, 2018). The executive order also specified that incumbent ALJs
would “remain in the competitive service as long as they remain in their current positions.”
Id. at 32,757; see 5 C.F.R. § 6.8(d).
The Secretary of Labor can remove an ALJ from office “only for good cause
established and determined by the Merit Systems Protection Board [MSPB] on the record
after opportunity for hearing before the Board.” 5 U.S.C. § 7521(a). The MSPB exercises
original, not appellate, jurisdiction over proposed agency actions against ALJs. 5 C.F.R.
§ 1201.121(a). In other words, it is the MSPB who “determin[es] whether good cause
exists to take the agency’s requested action,” Dep’t of Health & Hum. Servs. v. Jarboe,
2023 M.S.P.B. 22, ¶ 10 (Aug. 2, 2023), and “authorizes the employing agency to remove”
the ALJ or impose some lesser sanction, id. at ¶ 6 (citing Soc. Sec. Admin. v. Levinson,
2023 M.S.P.B. 20, ¶¶ 37–38 (July 12, 2023)); see 5 C.F.R. § 1201.140(b) (MSPB “will
specify the penalty to be imposed”). Members of the MSPB can be removed from office
“by the President only for inefficiency, neglect of duty, or malfeasance in office.” 5 U.S.C.
§ 1202(d).
C.
We now turn to the facts underlying this dispute. Claimant Michael Keene worked
in coal mines for more than 34 years, the last three of which he worked for K & R. After
years of coal dust exposure, Keene developed breathing problems and eventually was
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diagnosed with pneumoconiosis. In February 2017, Keene filed a claim for benefits under
the Black Lung Benefits Act. The district director issued a proposed decision awarding
Keene benefits and designating K & R as the responsible operator. K & R requested a
hearing before an ALJ, and the matter was referred to the Office of Administrative Law
Judges.
Around the same time, DOL’s Chief ALJ recommended to the Secretary of Labor
that he ratify the appointments of incumbent DOL ALJs in view of the Lucia case then
pending before the Supreme Court. See Mem. from Hon. Stephen R. Henley, Chief ALJ,
to Sec’y of Labor (Dec. 20, 2017). 2 The Secretary adopted the recommendation and issued
letters ratifying the appointments of incumbent DOL ALJs, who had been hired through
the competitive service. One of the ALJs the Secretary ratified was the ALJ eventually
assigned to hear Keene’s claim, ALJ William Barto. The Secretary’s letter to ALJ Barto
stated:
In my capacity as head of the Department of Labor, and after due
consideration, I hereby ratify the Department’s prior appointment of you as
an Administrative Law Judge. This letter is intended to address any claim
that administrative proceedings pending before, or presided over by,
administrative law judges of the U.S. Department of Labor violate the
Appointments Clause of the U.S. Constitution. This action is effective
immediately.
2
Available at https://www.dol.gov/sites/dolgov/files/OALJ/PUBLIC/FOIA/
Frequently_Requested_Records/ALJ_Appointments/Memorandum_on_Ratification_of_
Appointment_of_USDOL_ALJs_(Dec_20_2017).pdf [https://perma.cc/WC4D-VBXB].
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Letter from R. Alexander Acosta, Sec’y of Labor, to Hon. William T. Barto, ALJ (Dec. 21,
2017). 3
Several weeks later, the Keene matter was transmitted to ALJ Barto. K & R moved
to reassign the claim to a different ALJ, arguing that ALJ Barto had not been
constitutionally appointed and that the two levels of ALJ removal protection violate the
Constitution. At a hearing in August 2018, ALJ Barto denied the motion, noting that the
Secretary had ratified his appointment before he took any substantive action in the case.
In January 2019, for reasons unrelated to this case, the Keene matter was transferred
from ALJ Barto to ALJ Francine Applewhite. The Secretary of Labor had accepted ALJ
Applewhite’s request for a transfer from the Social Security Administration and appointed
her to a DOL ALJ position effective October 28, 2018. The Secretary’s letter to ALJ
Applewhite stated:
Pursuant to my authority as Secretary of Labor, I hereby appoint you as an
Administrative Law Judge in the U.S. Department of Labor, authorized to
execute and fulfill the duties of that office according to law and regulation
and to hold all the powers and privileges pertaining to that office. U.S. Const.
art. II, § 2, cl. 2; 5 U.S.C. § 3105. This action is effective upon transfer to
the U.S. Department of Labor.
Letter from R. Alexander Acosta, Sec’y of Labor, to Francine L. Applewhite, ALJ (Sept.
12, 2018). 4
3
Available at https://www.dol.gov/sites/dolgov/files/OALJ/PUBLIC/FOIA/
Frequently_Requested_Records/ALJ_Appointments/Secretarys_Ratification_of_ALJ_
Appointments_12_21_2017.pdf [https://perma.cc/UAW7-PL74].
4
Available at https://www.dol.gov/sites/dolgov/files/OALJ/PUBLIC/FOIA/
Frequently_Requested_Records/ALJ_Appointments/Appointment_Letters_Alford_thru_
Wang_09_12_2018_posted_Redacted.pdf [https://perma.cc/FD65-DQMS].
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After the transfer, K & R again objected that DOL ALJ “appointments and removal
protections” were unconstitutional, this time taking issue with incumbent ALJs’ retention
of competitive service status. J.A. 19. ALJ Applewhite rejected K & R’s Appointments
Clause challenge, reasoning that she had been “appointed by the Secretary of Labor on
October 28, 2018,” before taking any action in the case. J.A. 25. ALJ Applewhite found
that Keene was entitled to benefits under the Act, designated K & R as the responsible
operator, and ordered K & R to begin paying benefits.
K & R appealed to the Benefits Review Board, asserting two grounds for vacatur.
First, K & R reiterated its claim that neither ALJ Barto nor ALJ Applewhite had been
constitutionally appointed. Second, K & R argued that “the ALJ[s] lacked the authority to
adjudicate this case because the limitations on their removal violate the separation of
powers.” J.A. 61. In support of its removal argument, K & R described the Supreme
Court’s decision in Free Enterprise Fund v. Public Company Accounting Oversight Board,
561 U.S. 477 (2010), and quoted Justice Breyer’s concurrence in Lucia, where he opined
that “‘Congress seems to have provided administrative law judges with two levels of
protection from removal without cause—just what Free Enterprise Fund interpreted the
Constitution to forbid in the case of the [PCAOB] members.’” J.A. 62 (quoting Lucia, 138
S. Ct. at 2060 (Breyer, J., concurring)). According to K & R, insulating ALJs “from
removal by the Secretary at will” contravened “the separation of powers principle.” J.A.
62.
Keene did not respond to K & R’s appeal, but the Government did. The Director of
the Office of Workers’ Compensation Programs filed a brief responding to both of K &
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R’s constitutional arguments on the merits. See 20 C.F.R. § 725.482(b) (“The Director,
Office of Workers’ Compensation Program[s], . . . shall be considered the proper party to
appear and present argument on behalf of the Secretary of Labor in all review proceedings
conducted pursuant to . . . the Act . . . .”).
The Benefits Review Board affirmed ALJ Applewhite’s order. The Board rejected
K & R’s Appointments Clause challenge, reasoning that ALJ Applewhite had been validly
appointed by the Secretary of Labor before she was assigned this case and the Secretary’s
ratification of ALJ Barto’s appointment cured any constitutional defect in his hiring.
Regarding the constitutionality of the ALJs’ removal protections, the Board “decline[d] to
address the issue” because K & R “failed to adequately brief” it. J.A. 89–90. The Board
nevertheless addressed the issue in a lengthy footnote, distinguishing Free Enterprise Fund
and Lucia on the ground that neither decision explicitly decided whether the removal
protections for ALJs were unconstitutional. Subsequently, the Board denied K & R’s
motion for reconsideration.
K & R petitioned this Court for review, challenging the constitutionality of both the
ALJ appointments and the ALJ removal protections. We have jurisdiction, 33 U.S.C.
§ 921(c), and review these legal questions de novo, Island Creek Coal Co. v. Compton, 211
F.3d 203, 208 (4th Cir. 2000).
II.
The Appointments Clause prescribes the exclusive means of appointing “Officers
of the United States,” a “class of government officials distinct from mere employees.”
Lucia, 138 S. Ct. at 2049. Only the President, with the advice and consent of the Senate,
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can appoint “‘principal’ officers,” United States v. Arthrex, Inc., 141 S. Ct. 1970, 1979
(2021) (quoting Edmond v. United States, 520 U.S. 651, 659 (1997)), while Congress may
vest the appointment of “inferior Officers” in “the President alone, in the Courts of Law,
or in the Heads of Departments,” U.S. Const. art. II, § 2, cl. 2.
The parties agree that DOL ALJs are inferior officers in light of the Supreme Court’s
decision in Lucia. Like the SEC ALJs in Lucia, DOL ALJs “hold a continuing office
established by law,” exercise “significant discretion” when carrying out “important
functions” on behalf of the executive branch, and “issue decisions” that can become the
“last[]word” in agency proceedings. Lucia, 138 S. Ct. at 2053–2054 (internal quotation
marks omitted); see also Carr v. Saul, 141 S. Ct. 1352, 1357 (2021). DOL ALJs, like their
SEC counterparts, conduct trial-like hearings, receive evidence, examine witnesses, issue
subpoenas, rule on procedural and dispositive motions, and render decisions. See Lucia,
138 S. Ct. at 2053 (citing Freytag v. Comm’r of Internal Revenue, 501 U.S. 868, 881–882
(1991)); 20 C.F.R. §§ 725.351(b), 725.452–725.476. Recognizing these similarities among
ALJs, courts have extended Lucia “to ALJs in other executive department federal
agencies.” Brooks v. Kijakazi, 60 F.4th 735, 740 (4th Cir. 2023) (SSA ALJs); see, e.g.,
Calcutt v. FDIC, 37 F.4th 293, 320 (6th Cir. 2022) (FDIC ALJs), rev’d on other grounds,
143 S. Ct. 1317 (2023); Fleming v. U.S. Dep’t of Agric., 987 F.3d 1093, 1103 (D.C. Cir.
2021) (USDA ALJs); Jones Bros., Inc. v. Sec’y of Labor, 898 F.3d 669, 679 (6th Cir. 2018)
(Fed. Mine Safety & Health Rev. Comm’n ALJs).
Congress can vest the appointment of inferior officers like DOL ALJs in the “Heads
of Departments”—here, the Secretary of Labor. U.S. Const. art. II, § 2, cl. 2; see 29 U.S.C.
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§ 551 (establishing the “Secretary of Labor” as the “head” of “the Department of Labor”);
5 U.S.C. § 3105 (“Each agency shall appoint as many administrative law judges as are
necessary for proceedings[.]”). Consistent with that authority, the Secretary of Labor
appointed both DOL ALJs who presided over this case. In September 2018, the Secretary
appointed ALJ Applewhite as a DOL ALJ, effective upon her transfer to DOL in October
2018, months before she was assigned the Keene matter. And the Secretary ratified DOL’s
prior appointment of ALJ Barto in December 2017, before he took any action in the Keene
case. We decline K & R’s invitation to look behind the individual appointment letters
signed by the Secretary to inquire into his deliberative process. The letters are “conclusive
evidence that the appointment[s] [were] made,” Marbury v. Madison, 5 U.S. (1 Cranch)
137, 158 (1803), and the Secretary’s lawful exercise of his appointment authority resolves
the constitutional question.
K & R nevertheless contends that the Secretary’s actions were ineffective because
both ALJs were originally appointed through the competitive service and allegedly remain
in the competitive service. As an initial matter, we reject K & R’s assertion that ratification
by a department head cannot prospectively cure a prior unconstitutional appointment.
Courts have recognized that, in some circumstances, a department head can by ratification
remedy defects in agency action initially taken without lawful authority. See, e.g., Decker
Coal Co. v. Pehringer, 8 F.4th 1123, 1127 n.1 (9th Cir. 2021); Wilkes-Barre Hosp. Co. v.
NLRB, 857 F.3d 364, 371 (D.C. Cir. 2017); cf. Edmond, 520 U.S. at 654–655, 666
(concluding that the ratified appointments in that case were valid). Here, the Secretary’s
express ratification of ALJ Barto’s appointment cured any constitutional defect in his
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original hiring by DOL. And ratification wasn’t necessary for ALJ Applewhite, because
the Secretary himself appointed her as a DOL ALJ in the first instance. Her prior
employment as an ALJ in another executive agency is irrelevant. Both ALJs, therefore,
had been constitutionally appointed by the time they took any action in this case.
We likewise reject K & R’s unsupported contention that retaining incumbent ALJs
in the competitive service after their valid appointment poses an Appointments Clause
problem. Whether these ALJs remained in the competitive service after the Secretary
appointed them is neither here nor there; because they were appointed in accordance with
the Constitution before they took action in this case, K & R’s Appointments Clause
challenges fail.
III.
We next consider K & R’s objection that the DOL ALJs are unconstitutionally
insulated from the President’s removal authority. Before proceeding to the merits, we must
first address the threshold question of exhaustion.
A.
By regulation, issue exhaustion is required in an administrative appeal to the
Benefits Review Board. Edd Potter Coal Co. v. Dir., Off. of Workers’ Comp. Programs,
39 F.4th 202, 209 (4th Cir. 2022); see 20 C.F.R. § 802.211(a). A party must “list[] the
specific issues to be considered on appeal” and “present[] . . . an argument with respect to
each issue” in order to preserve them for the Board’s review. 20 C.F.R. § 802.211(a), (b).
Failure to raise an issue at the appropriate time results in forfeiture. Edd Potter Coal, 39
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F.4th at 206. Here, the Board concluded that K & R had forfeited its challenge to the ALJ
removal provisions by failing to adequately brief the issue.
Courts reviewing agency action “regularly ensure against the bypassing of”
regulatory issue exhaustion requirements “by refusing to consider unexhausted issues.”
Sims v. Apfel, 530 U.S. 103, 108 (2000). But a party’s “failure to preserve arguments by
waiving [or forfeiting] them in the administrative forum is not a jurisdictional bar to our
review.” 5 Newport News Shipbuilding & Dry Dock Co. v. Holiday, 591 F.3d 219, 225 n.5
(4th Cir. 2009). And because the issue exhaustion requirement is not jurisdictional, “it may
be waived or forfeited” by the opposing party. United States v. Muhammad, 16 F.4th 126,
130 (4th Cir. 2021); see Fleming, 987 F.3d at 1099 (“[A] nonjurisdictional, mandatory
exhaustion requirement functions as an affirmative defense, and thus can be waived or
forfeited by the government’s failure to raise it.”).
The Director has waived K & R’s forfeiture and has instead urged us to resolve the
constitutional question on the merits. In their briefs, neither the Director nor Keene raise
issue exhaustion or forfeiture as a ground for denying the petition. When asked about the
Government’s position on forfeiture at oral argument, counsel for the Director confirmed,
“We have not pressed that argument on appeal. . . . [The removal issue is] a pure question
5
K & R did not waive this constitutional challenge. See United States v. Olano,
507 U.S. 725, 733 (1993) (“[W]aiver is the intentional relinquishment or abandonment of
a known right.” (internal quotation marks omitted)). It identified the issue but failed to
sufficiently brief it, which amounts to forfeiture.
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of law that’s certainly been briefed,” and “it’s an important issue that this Court can
reach.” 6 Oral Arg. at 29:42–29:54, 30:25.
The respondents’ reluctance to rely on K & R’s forfeiture before the Board as a
ground to avoid judicial review of the removal issue is well founded, because its objection
to the ALJ removal provisions is a facial constitutional challenge about which the Board
has “no special expertise and for which [it] can provide no relief.” Carr, 141 S. Ct. at
1361; see McCarthy v. Madigan, 503 U.S. 140, 147–148 (1992). The Supreme Court has
recognized time and again that “agency adjudications are generally ill suited to address
structural constitutional challenges, which usually fall outside the adjudicators’ areas of
technical expertise.” Carr, 141 S. Ct. at 1360; see Free Enter. Fund, 561 U.S. at 491.
What’s more, the Board has no authority to remedy the alleged separation-of-powers
violation. K & R seeks to invalidate the statutes governing removal of DOL ALJs. While
each of the three branches of our federal government has an obligation to interpret the
Constitution, only the judiciary possesses the power to enjoin enforcement of statutes
inconsistent with the Constitution. See Marbury, 5 U.S. (1 Cranch) at 177–178.
6
Reaching the merits of the removal-protections issue presents no Chenery
problem, contrary to court-appointed amicus’s suggestion. “[A] reviewing court, in
dealing with a determination or judgment which an administrative agency alone is
authorized to make, must judge the propriety of such action solely by the grounds invoked
by the agency” and cannot “affirm the administrative action by substituting what it
considers to be a more adequate or proper basis.” SEC v. Chenery Corp., 332 U.S. 194,
196 (1947). The constitutionality of an act of Congress is not a judgment entrusted to DOL
alone, nor is the alleged unconstitutionality of the ALJ removal provisions an alternative
basis for affirming the Board’s decision. Cf. Axon Enter., Inc. v. FTC, 143 S. Ct. 890, 905
(2023) (“Claims that tenure protections violate Article II . . . [are] detached from
considerations of agency policy” and “distant from [agency] competence and expertise.”
(internal quotation marks omitted)).
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Comparing K & R’s two constitutional claims illustrates the point. Its
Appointments Clause challenge contests “how the Department of Labor applied its
statutory appointments power.” Edd Potter Coal, 39 F.4th at 211 (internal quotation marks
omitted). The Board can decide that claim and “grant the requested relief of reassignment
to a different ALJ” who has been properly appointed by the Secretary, as it has done in
numerous other black lung cases. Id. But what relief could the Board offer if it agreed
with K & R that the relevant statutes unconstitutionally shield DOL ALJs from removal?
The remedies granted by Article III courts, such as striking one layer of good-cause tenure
protection from the statutory scheme, would be unavailable because an agency cannot
invalidate a statute enacted by Congress to govern and restrain the agency. See Calcutt, 37
F.4th at 313; Jones Bros., 898 F.3d at 673. Nor could the Board compel the MSPB, an
independent executive branch agency, to construe its authority over ALJ removal in a
manner to avoid the constitutional problem. In this circumstance, it would have been futile
to bring the removal claim to the Board and “senseless for an Article III court to enforce
forfeiture.” Jones Bros., 898 F.3d at 677; see also Carr, 141 S. Ct. at 1361 (“It makes little
sense to require litigants to present claims to adjudicators who are powerless to grant the
relief requested.”).
Given the Director’s waiver of any argument that K & R forfeited its removal-
protections claim by failing to exhaust it, Keene’s decision not to raise the issue, and the
nature of the facial constitutional challenge K & R presses, we agree with the parties that
we can and should consider K & R’s objection to the DOL ALJ removal protections.
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B.
Article II of the Constitution vests “[t]he executive Power” in “a President,” who
must “take Care that the Laws be faithfully executed.” U.S. Const. art. II, § 1, cl. 1; id. § 3.
“Because no single person could fulfill that responsibility alone, the Framers expected that
the President would rely on subordinate officers for assistance.” Seila Law LLC v. CFPB,
140 S. Ct. 2183, 2191 (2020). And “[s]ince 1789, the Constitution has been understood to
empower the President to keep these officers accountable—by removing them from office,
if necessary.” Free Enter. Fund, 561 U.S. at 483.
The Supreme Court has “recognized only two exceptions to the President’s
unrestricted removal power.” Seila Law, 140 S. Ct. at 2192. First, Congress can “create
expert agencies led by a group of principal officers removable by the President only for
good cause.” Id. (citing Humphrey’s Executor v. United States, 295 U.S. 602 (1935)).
Second, Congress can provide for-cause “tenure protections to certain inferior officers with
narrowly defined duties.” Id. (citing United States v. Perkins, 116 U.S. 483 (1886), and
Morrison v. Olson, 487 U.S. 654 (1988)). If these inferior officers are appointed by “Heads
of Departments,” U.S. Const. art. II, § 2, cl. 2, then “it is ordinarily the department head,
rather than the President, who enjoys the power of removal,” Free Enter. Fund, 561 U.S.
at 493.
In Free Enterprise Fund, the Supreme Court held that these “separate layers of
protection” may not be combined. Id. at 483–484. Specifically, the Court held that the
President may not be “restricted in his ability to remove a principal officer, who is in turn
restricted in his ability to remove an inferior officer, even though that inferior officer
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determines the policy and enforces the laws of the United States[.]” Id. at 484. “[S]uch
multilevel protection from removal is contrary to Article II’s vesting of the executive power
in the President.” Id. The removal mechanism at issue in Free Enterprise Fund insulated
inferior officers from the President by two layers of for-cause tenure. Congress had
provided that members of the Public Company Accounting Oversight Board could be
removed only “‘for good cause’” as determined by the Securities and Exchange
Commission after notice and opportunity for a hearing. 7 Id. at 486 (quoting 15 U.S.C.
§ 7211(e)(6)). And members of the Commission could be removed by the President only
for “inefficiency, neglect of duty, or malfeasance in office.” Id. at 487 (internal quotation
marks omitted). The Supreme Court held that “the dual for-cause limitations on the
removal of Board members contravene[d] the Constitution’s separation of powers.” Id. at
492.
K & R contends that the same problem afflicts the removal restrictions Congress
imposed for DOL ALJs. They also “exercise significant executive power” yet are insulated
from the President by “two levels of protection from removal.” Id. at 514. The Secretary
of Labor can remove a DOL ALJ “only for good cause.” 5 U.S.C. § 7521(a). But the
statute withdraws from the Secretary—and therefore the President—the decision whether
good cause exists. “That decision is vested instead in other tenured officers . . . none of
7
More specifically, a “Board member [could not] be removed except for willful
violations of the [Sarbanes-Oxley] Act, Board rules, or the securities laws; willful abuse of
authority; or unreasonable failure to enforce compliance—as determined in a formal
Commission order, rendered on the record and after notice and an opportunity for a
hearing.” Id. at 503 (citing 15 U.S.C. § 7217(d)(3)).
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whom is subject to the President’s direct control.” Free Enter. Fund, 561 U.S. at 495.
Only the MSPB can “establish[] and determine[]” whether good cause exists to remove a
DOL ALJ. 5 U.S.C. § 7521(a). And the President can remove members of the MSPB
“only for inefficiency, neglect of duty, or malfeasance in office.” 5 U.S.C. § 1202(d).
The Supreme Court in Free Enterprise Fund foresaw the possibility that its holding
would implicate the statutory removal protections for ALJs. See 561 U.S. at 507 n.10; id.at 542–543 (Breyer, J., dissenting). In a footnote, the Court declined to address “that subset
of independent agency employees who serve as [ALJs],” but noted several potential
distinctions: whether ALJs are “Officers of the United States” was disputed; unlike the
PCAOB, many ALJs “perform adjudicative rather than enforcement or policymaking
functions”; and some ALJs “possess purely recommendatory powers.” Id. at 507 n.10.
K & R responds that the potential distinctions highlighted by the Court in Free
Enterprise Fund do not distinguish DOL ALJs from the constitutional principles driving
the Court’s separation-of-powers holding. To begin with, eight years after Free Enterprise
Fund, the Supreme Court held that SEC ALJs are inferior officers of the United States,
because they exercise significant discretion when carrying out important executive
functions. See Lucia, 138 S. Ct. at 2053. As explained above, DOL ALJs similarly are
“inferior Officers” in an executive department, not employees of an independent agency.
U.S. Const. art. II, § 2, cl. 2; see 29 U.S.C. § 551. Their decisions determining rights and
responsibilities under federal law and imposing penalties to enforce the law are not mere
recommendations but become final if no party appeals. See 20 C.F.R. §§ 725.479, 726.313.
And although DOL ALJs perform adjudicative functions, their activities “‘are exercises
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of—indeed, under our constitutional structure they must be exercises of—the executive
Power,’ for which the President is ultimately responsible.” Arthrex, 141 S. Ct. at 1982
(quoting Arlington v. FCC, 569 U.S. 290, 305 n.4 (2013)); see also Seila Law, 140 S. Ct.
at 2198–2199 & n.2.
The Director adds that the Black Lung Benefits Act incorporates the procedures
used in the Longshore and Harbor Workers’ Compensation Act, see 30 U.S.C. § 932(a), a
framework that requires the agency to use ALJ adjudicators, see 33 U.S.C. § 919(d) (“Any
such hearing shall be conducted by a[n] administrative law judge qualified under section
3105 of [Title 5].”). Although Congress briefly authorized non-ALJ adjudicators to hear
black lung claims, see 30 U.S.C. § 932a, the Director identifies what he calls a “sunset
provision” in the statute, pursuant to which the Secretary’s authority to appoint non-ALJ
adjudicators in black lung cases expired in 1979, see id. Statutory Note (“Extension of
Adjudication Period Through March 1, 1979”); see also Pub. L. No. 95-239, § 7(i), 92 Stat.
95, 100 (1978). 8 As a result, it may not be the case that DOL “has the choice whether to
use ALJs for hearings” to determine black lung claims. Free Enter. Fund v. PCAOB, 537
F.3d 667, 699 n.8 (D.C. Cir. 2008) (Kavanaugh, J., dissenting). A statutory requirement
to use ALJs, who Congress has insulated from the President’s removal authority by two
layers of for-cause tenure protection, brings the separation-of-powers question into sharp
relief.
The Director notes that the Ninth Circuit relied on 30 U.S.C. § 932a to conclude
8
that “[n]o statute mandates that the DOL employ ALJs in adjudicating [black lung] benefits
claims,” without acknowledging the sunset provision. Pehringer, 8 F.4th at 1133.
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The courts of appeals are divided about whether the dual for-cause limitations on
the removal of ALJs—specifically, 5 U.S.C. § 7521 and § 1202(d)—are constitutional.
The Ninth Circuit has upheld the constitutionality of the combined removal protections as
applied to DOL ALJs. See Pehringer, 8 F.4th at 1136; see also Calcutt, 37 F.4th at 319
(doubting, in dicta, whether these removal limitations are unconstitutional as applied to
FDIC ALJs). The Fifth Circuit, on the other hand, has held these removal restrictions
unconstitutional in a case about SEC ALJs. See Jarkesy v. SEC, 34 F.4th 446, 465 (5th
Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023); see also Fleming, 987 F.3d at 1123 (Rao,
J., dissenting in part) (concluding these removal limits are unconstitutional as applied to
USDA ALJs).
“Notwithstanding this debate, it is ‘a well-established principle governing the
prudent exercise of this Court’s jurisdiction that normally the Court will not decide a
constitutional question if there is some other ground upon which to dispose of the case.’”
Bond v. United States, 572 U.S. 844, 855 (2014) (quoting Escambia Cnty. v. McMillan,
466 U.S. 48, 51 (1984) (per curiam)); see also Ashwander v. Tenn. Valley Auth., 297 U.S.
288, 347 (1936) (Brandeis, J., concurring). Here, regardless of how we answer the
constitutional question presented by the removal provisions, we would be required to deny
the petition because K & R has not asserted any harm resulting from the allegedly
unconstitutional statutes, as explained below. Consequently, we are constrained to avoid
resolving that constitutional question in this case.
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C.
The relief K & R seeks for the alleged constitutional violation is vacatur of the
agency’s decision and remand for new hearing before a different ALJ who is properly
accountable to the President. See Seila Law, 140 S. Ct. at 2196 (“[W]hen [a removal]
provision violates the separation of powers it inflicts a here-and-now injury on affected
third parties that can be remedied by a court.” (internal quotation marks omitted)).
Unfortunately for K & R, the Supreme Court has recently clarified that vacatur is not
automatically warranted when a court concludes that an executive branch decisionmaker
was subject to unconstitutional removal restrictions. See Collins v. Yellen, 141 S. Ct. 1761,
1787–1789 (2021).
An executive officer who was properly appointed may lawfully exercise the power
of his office. A constitutional defect in the procedure for removing that officer—unlike a
defect in his appointment—is “no basis for concluding” that he “lacked the authority to
carry out the functions of the office.” Id. at 1788. As the Supreme Court explained in
Collins, “the unlawfulness of the removal provision does not strip [the officer] of the power
to undertake the other responsibilities of his office,” which he lawfully fills. Id. at 1788
n.23. Rather, the actions of a lawfully appointed executive officer fulfilling the duties of
his office are legitimate and enforceable, even if the President’s authority to remove the
officer was unconstitutionally limited during his tenure.
The Court nevertheless acknowledged the “possibility” that an unconstitutional
removal provision could “inflict compensable harm.” Id. at 1789. It gave two “clear-cut”
examples: suppose “the President had attempted to remove [the officer] but was prevented
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from doing so by a lower court decision holding that he did not have ‘cause’ for removal,”
or suppose “the President had made a public statement expressing displeasure with actions
taken by [the officer] and had asserted that he would remove [him] if the statute did not
stand in the way.” Id. “In those situations,” the Court explained, “the statutory [removal]
provision would clearly cause harm.” Id.Collins instructs that a party who has successfully challenged an unconstitutional
removal restriction is not entitled to have the underlying agency action set aside absent
reason to believe that the unconstitutional removal provision itself inflicted harm. The
courts of appeals have followed the Supreme Court’s guidance and denied relief on
removal claims when the challengers have not shown that the constitutional violation
caused them harm. See CFPB v. Law Offices of Crystal Moroney, P.C., 63 F.4th 174, 179–
181 (2d Cir. 2023); Cmty. Fin. Servs. Assoc. of Am., Ltd. v. CFPB, 51 F.4th 616, 631–633
(5th Cir. 2022), cert. granted, 143 S. Ct. 978 (2023); Integrity Advance, LLC v. CFPB, 48
F.4th 1161, 1170–1171 (10th Cir. 2022); Calcutt, 37 F.4th at 316–317; Kaufmann v.
Kijakazi, 32 F.4th 843, 849–850 (9th Cir. 2022).
K & R has not asserted any possible harm resulting from the allegedly
unconstitutional limitations on the President’s ability to remove DOL ALJs. And nothing
in the record suggests the Secretary of Labor attempted or desired to remove ALJ
Applewhite or ALJ Barto. Therefore K & R is not entitled to vacatur of the Board’s
decision affirming ALJ Applewhite’s order regardless of whether the removal protections
for DOL ALJs are constitutional.
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IV.
In sum, the Secretary of Labor properly appointed ALJ Applewhite and ratified the
appointment of ALJ Barto consistent with their status as inferior officers of the United
States under the Appointments Clause. The Secretary made these appointments before the
ALJs took any action in the Keene matter, therefore the ALJs lawfully possessed the
authority to adjudicate the case and render the decision holding K & R responsible for
paying black lung benefits to Keene. Because the ALJs were exercising the lawful
authority of their offices, and K & R does not claim that the allegedly unconstitutional
removal provisions caused it any harm, K & R is not entitled to any relief on its removal
protections claim. That is true even if we agreed with K & R that the dual for-cause
limitations on removal unconstitutionally insulate DOL ALJs from the President’s
authority. Accordingly, we do not decide that constitutional question and deny K & R’s
petition for review.
PETITION FOR REVIEW DENIED
24