Devendra Gummala v. U.S. Department of Labor

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[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 20-12839
Non-Argument Calendar
____________________
DEVENDRA GUMMALA,
Petitioner,
versus
U.S. DEPARTMENT OF LABOR,
CARNIVAL CORPORATION,
Respondents.
____________________
Petition for Review of a Decision of the
Department of Labor
Agency No. 2018 - 053
____________________
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2 Opinion of the Court 20-12839
Before LUCK, BRASHER, and ANDERSON, Circuit Judges.
PER CURIAM:
Broadly speaking, the Seaman’s Protection Act prohibits
employers from discharging “seamen” because they report sus-
pected safety violations. See 46 U.S.C. § 2114(a)(1). Devendra
Gummala alleged that his former employer, Carnival Corporation,
violated the Act by firing him as an onboard cruise ship photogra-
pher in retaliation for his safety complaints. The United States De-
partment of Labor dismissed Gummala’s complaint because he
was not a “seaman” under the Act. After careful consideration of
the administrative record and the parties’ briefs, we deny his peti-
tion for review of the Department’s final decision.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
From September 11, 2011, to June 12, 2014, Gummala
worked for Carnival Corporation’s Carnival Cruise Line division as
a photographer aboard the cruise ship Fascination. Carnival Cor-
poration was incorporated under the laws of Panama. The Carni-
val Cruise Line division had offices in Florida, where Carnival Cor-
poration had its headquarters.
In November and December 2013, Gummala used Carni-
val’s website to file complaints about safety violations. The human
resources department told Gummala that if the investigation into
the violations was going to be successful, he could not remain
anonymous. After “everyone within the [photography]
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20-12839 Opinion of the Court 3
department” became aware that Gummala had complained, he
was segregated from his team, managers confronted and threat-
ened him, and he was offered a transfer to another ship. On June
12, 2014, Carnival fired Gummala because, it claimed, he had a bad
performance review and the shipboard manager recommended
that he be terminated.
On June 22, 2014, Gummala submitted a complaint through
the Department’s website. In the online form, Gummala identified
his employer as “Carnival Cruise Lines.” Thus, the respondent in
this action was initially mislabeled “Carnival Cruise Lines, Inc.”
The Department construed Gummala’s complaint as “alleg[ing]
that [Carnival] terminated [him] in retaliation for making a safety
complaint to [Carnival] regarding a housekeeping hazard,” in vio-
lation of the Act.
Because the Act did not define “seaman,” the Department
defined it using the interim final rule implementing the Act. See 29
C.F.R. § 1986.101(m) (2013) (defining “seaman” as “any individual
engaged or employed in any capacity on board a vessel owned by
a citizen of the United States” (emphasis added)). The Department
found that the “[r]espondent, Carnival Cruise Lines, Inc., [was] a
Florida corporation and a wholly owned subsidiary of Carnival
Corporation, a Panamanian corporation,” so Carnival Cruise
Lines, Inc., was not a “citizen of the United States” under the Act
and, thus, Gummala could not be a “seaman.” See id. § 1986.101(d)
(2013) (defining “[c]itizen of the United States” to include a corpo-
ration that meets seven criteria, including that “[t]here is no
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4 Opinion of the Court 20-12839
contract or understanding by which the majority of the voting
power in the corporation may be exercised, directly or indirectly,
in behalf of a person not a citizen of the United States” and that
“[the corporation] is incorporated under the laws of the United
States or a [s]tate”). Having concluded that Gummala was not a
covered seaman, the Department dismissed his case.
Gummala requested a hearing with an administrative law
judge and made three arguments explaining why he was a “sea-
man” under the Act. First, he cited Supreme Court and Fifth Cir-
cuit authority and the Department’s website for definitions of “sea-
man” that did not depend on the employer’s United States citizen-
ship. Second, he disputed Carnival Corporation’s status as a non-
United States citizen because, despite its Panamanian registration,
the “majority of its board of directors as well as executives,” includ-
ing its chief executive officer and chairman of the board, were
United States citizens according to its corporate website. Third, he
maintained that Carnival’s legal team “admit[ted]” that his case fell
within the jurisdiction of the United States Coast Guard, “which
mean[t] [he was] a seaman according to [United States] laws.”
The administrative law judge issued an order to show cause
requesting briefing on the retroactive application of the 2016
amendment to 29 C.F.R. section 1986.101(d), which broadened the
definition of “citizen of the United States” to encompass any cor-
poration that had a principal place of business or base of operations
in a state. See 29 C.F.R. § 1986.101(d) (2016) (“Citizen of the United
States means an individual who is a national of the United States
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20-12839 Opinion of the Court 5
. . . . ; a corporation incorporated under the laws of the United
States or a State; a corporation, partnership, association, or other
business entity if the controlling interest is owned by citizens of the
United States or whose principal place of business or base of oper-
ations is in a State; or a governmental entity of the Federal Govern-
ment of the United States, of a State, or of a political subdivision of
a State. The controlling interest in a corporation is owned by citi-
zens of the United States if a majority of the stockholders are citi-
zens of the United States.”). After briefing, the administrative law
judge concluded that the regulation did not apply retroactively be-
cause the amendment did more than merely clarify existing law
and, if applied here, would impair Carnival Corporation’s rights.
Applying the version of 29 C.F.R. section 1986.101(d) (2013) gov-
erning at the time Gummala was fired, the administrative law
judge concluded that he was not a “seaman” under the Act and dis-
missed his complaint.
Gummala appealed the administrative law judge’s decision
to the administrative review board. The focus of the dispute before
the board was whether the regulation’s 2016 definition of “citizen
of the United States” applied retroactively.
Gummala argued that it did for three reasons. First, under
29 C.F.R. section 1986.101(r), “[a]ny future amendments” to the
Act affecting a definition in 29 C.F.R. section 1986.101 would apply
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6 Opinion of the Court 20-12839
instead of the definition in the regulation.1 Second, the regulation
was procedural, not substantive, and regulated secondary conduct,
so its retroactive application would not produce retroactive effects
impairing Carnival Corporation’s rights. Third, the amendment
merely clarified the previous definitions and did not change any-
thing substantively.
The board rejected these arguments because section
1986.101(r) dealt with the relationship between the Act and its im-
plementing regulations, not between different versions of the reg-
ulations; because, even if procedural, the 2016 definition of “citizen
of the United States,” if applied, “would create retroactive effects
by attaching new legal consequences” to past conduct; and because
the administration itself described the definition as part of its deci-
sion to “make . . . changes,” not to clarify. Gummala filed a motion
for reconsideration, which the board denied. 2
1
The regulation Gummala quoted, 29 C.F.R. section 1986.101(r), provides
that “[a]ny future amendments to [the Act] that affect the definition of a term
or terms listed in this section will apply in lieu of the definition stated herein.”
29 C.F.R. § 1986.101(r).
2
We asked the parties to address a jurisdictional question about whether the
administrative review board’s decision was the final agency decision for pur-
poses of our jurisdiction under the Act. After reviewing the parties’ responses,
we agree with them that it is and that we have jurisdiction to consider the
petition for review.
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20-12839 Opinion of the Court 7
STANDARD OF REVIEW
Under the Administrative Procedures Act, we review
“agency action[s], findings, and conclusions” to determine whether
they are “arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law.” 5 U.S.C. § 706(2)(A); see also 46
U.S.C. §§ 2114(b), 31105(d) (incorporating the APA into the Sea-
man’s Protection Act). And we review the Department’s legal con-
clusions de novo. Stone & Webster Constr., Inc. v. U.S. Dep’t of
Labor, 684 F.3d 1127, 1132 (11th Cir. 2012).
DISCUSSION
The only issue on appeal is whether the administrative re-
view board erred when it decided that the 2016 definition of a “cit-
izen of the United States” did not apply retroactively. Carnival is
not a United States citizen—and Gummala is not a seaman—under
the 2013 definitions, but Carnival is—and Gummala is—under the
2016 definitions. Accordingly, Gummala has a viable claim under
the Act only if the 2016 regulation, and specifically its new, broader
definition of “citizen of the United States” for corporations, applies
retroactively.
Gummala makes four arguments for retroactive application.
First, he argues that, by its plain meaning, 29 C.F.R. section
1986.101(r) demonstrates a “clear congressional intent” that the
Act’s definitions apply retroactively. Second, the Act’s definition of
“seaman” is broader than the Jones Act’s definition, he claims, and
because he is a seaman under the Jones Act, he is a seaman under
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8 Opinion of the Court 20-12839
the Act. Third, he contends that the effect of a retroactive applica-
tion on Carnival would be minimal because Carnival’s conduct
would not be illegal; rather, application “would only alter whether
[Gummala] may continue to bring a lawsuit in this jurisdiction.”
Fourth, according to him, not applying the definition retroactively
would defeat the Act’s main purpose of encouraging the reporting
of safety violations and would fail to serve the interests of fairness
and justice. He points to his own case—and its hard-taught lesson
that reporting safety violations “is not worth losing your job” or
suffering the ensuing “hardships and stress”—to make this final ar-
gument.
The presumption against retroactivity “is deeply rooted in
our jurisprudence,” Landgraf v. USI Film Products, 511 U.S. 244,
265 (1994), and “has consistently been explained by reference to the
unfairness of imposing new burdens on persons after the fact,” id.
at 270. This presumption applies not only to statutes but also to
regulations. “Retroactivity is not favored in the law. Thus, con-
gressional enactments and administrative rules will not be con-
strued to have retroactive effect unless their language requires this
result.” Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208
(1988)); see also Sierra Club v. Tenn. Valley Auth., 430 F.3d 1337,
1351 (11th Cir. 2005) (“Retroactive application of administrative
rules is highly disfavored, and they will not be construed to have
retroactive effect unless their language requires this result.” (quo-
tation marks omitted)). Because “an administrative agency’s
power to promulgate legislative regulations is limited to the
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20-12839 Opinion of the Court 9
authority delegated by Congress,” an agency may issue regulations
with retroactive effect only if Congress, “in express terms,” em-
powers the agency to do so. Bowen, 488 U.S. at 208.
There is nothing in the 2016 definition of “citizen of the
United States” in 29 C.F.R. section 1986.101(d), or the language of
the amendment, that requires that it be applied retroactively. See
81 Fed. Reg at 63396-401. Indeed, there is strong evidence that the
Department did not wish for the regulation redefining “citizen of
the United States” to have retroactive application: The administra-
tion set an effective date of September 15, 2016, for the regulation,
see Procedures for the Handling of Retaliation Complaints Under
the Employee Protection Provision of the Seaman’s Protection
Act, as Amended, 81 Fed. Reg. 63396, 63396 (Sept. 15, 2016) (codi-
fied at 29 C.F.R. pt. 1986), and “[t]here is no point in specifying an
effective date if a provision is to be applied retroactively,” Sierra
Club, 430 F.3d at 1351.
Also, the Act does not contain an express delegation of
power from Congress to the Department regarding regulations, let
alone a delegation to promulgate retroactive regulations. See 46
U.S.C. § 2114. Nor do the parts of the Surface Transportation As-
sistance Act that are incorporated into the Act. See 49 U.S.C. §
31105(b)–(d). Thus, even if the Department intended to apply the
2016 definition retroactively, Congress did not give it the power to
promulgate retroactive regulations under the Act.
We are mindful that an “administrative regulation does not
operate retroactively merely because it applies to prior conduct;
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10 Opinion of the Court 20-12839
rather, [it] has retroactive effect if it ‘would impair rights a party
possessed when [the party] acted, increase [the party’s] liability for
past conduct, or impose new duties with respect to transactions al-
ready completed.’” Ga. Power Co. v. Teleport Communs. Atlanta,
Inc., 346 F.3d 1033, 1042 (11th Cir. 2003) (quoting Landgraf, 511
U.S. at 280). However, if we applied the 2016 definition of United
States citizen to Carnival’s 2014 conduct, that is exactly what would
happen here—Carnival would be a citizen of the United States,
Gummala would be a seaman, and a viable claim might lie against
Carnival under the Act, meaning that Carnival’s rights would be
impaired, liabilities would be increased, and duties would be ex-
panded. This is so because the 2016 definition marks a major shift
in the number and kind of corporations that qualify as citizens un-
der the Act.
Applying the 2016 definition to earlier conduct would mean
“new and unforeseen legal consequences” for corporations like
Carnival that were incorporated outside the United States but
headquartered in it. Rendon v. U.S. Att’y Gen., 972 F.3d 1252, 1263
(11th Cir. 2020) (holding that a law has retroactive effect when it
“attaches new legal consequences to events completed” before it
(quoting Vartelas v. Holder, 566 U.S. 257, 273 (2012))). In other
words, retroactive application of the regulation would produce ret-
roactive effects.
Gummala’s arguments that we should apply the definition
retroactively are unavailing. First, because 29 C.F.R. section
1986.101(r) is a regulation issued by the administration, not a
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20-12839 Opinion of the Court 11
statute enacted by Congress, it cannot tell us about Congress’s in-
tent regarding retroactivity. See United States v. Bd. of Trs. for
Univ. of Ala., 908 F.2d 740, 747 (11th Cir. 1990) (“[Federal agency]
regulations are not conclusive on the issue of Congressional in-
tent.”). Even if it could, section 1986.101(r) says that if Congress
amends the Act and the amendment affects one of the definitions
in section 1986.101—for example, if the Act, as amended, supplies
a statutory definition for “seaman”—then the Act’s definition
trumps the regulation’s. 29 C.F.R. § 1986.101(r). This is an unre-
markable proposition. See Ga. by Dep’t of Med. Assistance v.
Heckler, 768 F.2d 1293, 1299 (11th Cir. 1985) (describing “the well
established rule that an agency regulation which conflicts with a
statute passed by Congress is without any legal effect”). Section
1986.101(r) does not indicate any congressional intent, much less
clear congressional intent, that the regulation’s definitions apply
retroactively.
Gummala’s other arguments fare no better. Neither the Act
nor the regulation defining its terms refers to the Jones Act at all,
see 46 U.S.C. § 2114; 29 C.F.R. § 1986.101, and thus, the Jones Act
cannot help us interpret “seaman” as that term is used in the Act.3
3
The Department referred to the Jones Act, and to how the definition of “sea-
man” under the Act was broader than that under the Jones Act, in its discus-
sion of the 2013 definitions. See Procedures for the Handling of Retaliation
Complaints Under the Employee Protection Provision of the Seaman’s Pro-
tection Act (SPA), as Amended, 78 Fed. Reg. 8390, 8394 (Feb. 6, 2013). How-
ever, as the Department explains, the definition of “seaman” in the Act was
meant to be broader only in some respects not relevant here, not in all
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12 Opinion of the Court 20-12839
Retroactive application would expose Carnival and other corpora-
tions to unexpected liabilities, as discussed above, so the effect
would be more than minimal. And when we are dealing with ret-
roactivity, the fairness and justice with which we are primarily con-
cerned is that counseling against the disruption of settled expecta-
tions. See Landgraf, 511 U.S. at 265 (“Elementary considerations
of fairness dictate that individuals should have an opportunity to
know what the law is and to conform their conduct accordingly;
settled expectations should not be lightly disrupted.”). We agree
with the Department that, although the 2016 definitions “better ef-
fectuate the [Act] than their predecessor[s],” the “good reasons for
revising the definitions do not cure the unfairness that would result
if the revised definitions were applied to previously-filed cases.”
For these reasons, we deny Gummala’s petition for review.
PETITION DENIED.
respects. See id. (“[The Act] and the Jones Act are fundamentally different
types of statutes that need not be squarely consistent in their coverage.”). Im-
portantly, the regulation defines the Act’s terms without reference to the Jones
Act.