National Mines Corp. v. Steve Conley

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 19a0544n.06
Case No. 19-3139
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Oct 24, 2019
NATIONAL MINES CORP., et al., ) DEBORAH S. HUNT, Clerk
Petitioners, )
) ON PETITION FOR REVIEW OF
v. ) AN ORDER OF THE BENEFITS
) REVIEW BOARD, UNITED
STEVE B. CONLEY, et al., ) STATES DEPARTMENT OF
Respondents. ) LABOR
)
BEFORE: ROGERS, WHITE, and READLER, Circuit Judges.
CHAD A. READLER, Circuit Judge. Steve Conley worked for at least fifteen years as
a coal miner. Several times he presented claims for black lung benefits to the Department of Labor,
but each time he was denied as ineligible. Finally in 2012, an Administrative Law Judge of the
Department awarded Conley benefits. National Mines appealed that determination to the Benefits
Review Board, which affirmed the ALJ’s finding.
From there, the plot thickened. National Mines filed a motion for reconsideration, arguing
for the first time that the appointment of the Administrative Law Judge who decided the case
violated the Appointments Clause of the U.S. Constitution. For support, National Mines invoked
the United States Supreme Court’s then-recent decision in Lucia v. SEC, 138 S. Ct. 2044 (2018).
But the Board denied the motion on the grounds that National Mines could not raise an argument,
even a constitutional one, for the first time in a motion for reconsideration.
Case No. 19-3139, National Mines Corp. v. Conley
In its appeal to this Court, National Mines again raises its Appointments Clause challenge.
Following appellate briefing in this case, another panel of this Court issued a published decision
in Island Creek Coal Co. v. Bryan, 937 F.3d 738 (6th Cir. 2019), reh’g denied (Sept. 24, 2019),
which held that petitioners in a nearly identical situation to National Mines forfeited their
Appointments Clause argument by failing to raise it in their initial briefing before the Board. After
Bryan, the same must be true here. As National Mines’ Appointments Clause argument was thus
forfeited below, we DENY the petition for review.
I. BACKGROUND
Petitioners National Mines Corporation and Old Republic Insurance Company challenge
the decision of an Administrative Law Judge (or “ALJ”) in the Department of Labor awarding
benefits to former coal miner Steve Conley under the Black Lung Benefits Act. Conley began
filing for black lung benefits as far back as 1989. For Conley, the fourth time was charmed. An
ALJ in February 2012 made the benefits award at issue here. In making that award, the ALJ found
that, unlike the conditions underlying prior denials, Conley had now demonstrated his total
disability. Adding in the fact that Conley had worked for at least fifteen years as a coal miner, he
now enjoyed a statutory presumption that his disability was due to pneumoconiosis. See 30 U.S.C.
§ 921(c)(4) and 20 C.F.R. § 718.305. The ALJ further concluded that National Mines had not
rebutted this presumption.
National Mines appealed the award to the Department’s Benefits Review Board. The
Board affirmed the benefits award on June 20, 2018. The very next day, the Supreme Court issued
its opinion in Lucia. There, the Supreme Court held that ALJs of the Securities and Exchange
Commission are considered to be officers of the United States. 138 S. Ct. at 2053. As such, the
Supreme Court explained, those ALJs must be appointed in a manner consistent with the
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Appointments Clause of the U.S. Constitution, Art. II, §2, cl. 2, which specifies that the
appointment of an inferior officer must be made by the President, a court of law, or the head of a
department. Id. at 2051, 2054.
ALJs of the Department of Labor, including the ALJ who decided Conley’s case, had been
appointed by Department staff members, rather than the Department’s head, the Secretary of
Labor. Bryan, 937 F.3d at 744. Realizing as much, National Mines filed a motion for
reconsideration with the Board. In that motion, National Mines for the first time argued that the
appointment of the ALJ who awarded Conley benefits violated the Appointments Clause.
Although the Secretary of Labor later ratified the appointments of ALJs in the Department, this
was too little, too late, said National Mines, as it occurred after Conley had already been awarded
benefits. But the Board denied the motion. Because National Mines raised the Appointments
Clause issue for the first time in a motion for reconsideration, it had forfeited the issue. National
Mines then filed a petition for review with this Court.
Meanwhile, after the parties here filed their briefs before this Court, a separate panel
decided Bryan, 937 F.3d at 738. Bryan presented a nearly identical scenario: petitioners raised
their Appointments Clause challenge for the first time in a motion for reconsideration before the
Benefits Review Board. After a thorough forfeiture analysis, we held in Bryan that the petitioners
had forfeited their Appointments Clause challenge by failing to raise it pursuant to the Board’s
own issue exhaustion requirements. Id. at 754.
In Bryan’s wake, we ordered the parties to file supplemental briefing on the issue of
whether Bryan controls the forfeiture issue in this case. National Mines responded with four
principal arguments as to why we should hear its Appointments Clause challenge, despite Bryan:
(1) National Mines asserts a structural constitutional challenge, which should not be subject to
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waiver; (2) the decision in Bryan created a circuit split with the Third Circuit’s decision in
Kreschollek v. Southern Stevedoring Co., 78 F.3d 868 (3d Cir. 1996); (3) the Benefits Review
Board has only appellate jurisdiction, so before this Court issued clear guidance as to the scope of
the Board’s authority to review a constitutional challenge, the Board lacked authority to decide the
question de novo; and (4) Bryan did not address and/or fully explore other exceptions, including
National Mines’ assertion that the Appointments Clause argument was not available to it, given
that it appealed to the Board before Lucia was decided. We now turn to those arguments.
II. NATIONAL MINES FORFEITED ITS CONSTITUTIONAL ARGUMENT
National Mines offers numerous reasons why we should excuse its failure to exhaust the
Appointments Clause issue before the Benefits Review Board. With a nearly identical posture to
this case, Bryan controls our forfeiture analysis. And that decision undermines each of National
Mines’ arguments.
First, citing Freytag v. C.I.R., 501 U.S. 868 (1991), National Mines argues that a structural
constitutional issue may never be waived. Relying on separation of powers principles, the
Supreme Court in Freytag held that the Appointments Clause objection raised in that case was a
structural constitutional objection that could, in the Supreme Court’s discretion, be considered on
appeal even though it had not been raised below. 501 U.S. at 878–79. Yet in Bryan, in a setting
nearly identical to that here, we rejected application of the exception from Freytag. 937 F.3d at
754. We noted that the exhaustion mandate in Freytag arose on prudential grounds, which in turn
gave the Court discretion to adopt prudential exceptions to the mandate. Id. Because the Black
Lung Benefits Act’s exhaustion mandate is not prudential, we declined to apply the Freytag
exception. Id. at 749, 754. We see no reason to treat National Mines differently from the
petitioners in Bryan, nor has National Mines provided us with one.
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Second, National Mines argues that Bryan creates a circuit split with the Third Circuit in
Kreschollek, 78 F.3d 868. If Bryan did split the circuits, we are nevertheless bound to follow our
Circuit’s side in the split, absent intervening en banc or Supreme Court authority to the contrary.
See United States v. Paige, 634 F.3d 871, 873 (6th Cir. 2011). Nor, for that matter, are we
convinced that a split now exists. The appellant in Kreschollek brought a facial constitutional
challenge to a section of the Longshore and Harbor Workers’ Compensation Act, on the grounds
that the Act did not provide for a predeprivation hearing before termination of benefits for certain
injured employees. Id. at 869–70. The Third Circuit held that the district court had jurisdiction to
hear the constitutional challenge to the Act since the statute made it impossible for the Benefits
Review Board to grant the relief sought, namely, a predeprivation hearing. Id. at 875. But Byran
held that an Appointments Clause challenge in the black lung context is an as-applied challenge.
937 F.3d at 753. Such a claim asks the Board to remedy a defect within the Department of Labor
itself, one that can fairly be raised with the Board.
National Mines’ further arguments are equally unconvincing. For instance, Bryan makes
clear that the Benefits Review Board has the power to decide a constitutional claim. 937 F.3d at
753. And because the Board has power to “provide effective relief” on that claim by granting a
new hearing before a properly appointed judge, it is not futile to bring such a claim before the
Board. See id. Bryan further answered whether the Appointments Clause issue was available to
the parties pre-Lucia. See id. at 754. Indeed, the year before the Benefits Review Board heard
National Mines’ appeal, the Tenth Circuit had held in Bandimere v. SEC, 844 F.3d 1168, 1188
(10th Cir. 2016), that ALJs in the Securities and Exchange Commission were inferior officers.
With that in mind, we are hard pressed to accept National Mines’ suggestion that Lucia suddenly
gave National Mines the keys to a legal argument previously under lockdown.
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In short, we see no reason to excuse National Mines’ failure to exhaust the Appointments
Clause issue before the Benefits Review Board. The issue was thus forfeited. Accordingly, we
deny National Mines’ request for remand.
III. CONCLUSION
For these reasons, the petition for review is DENIED.
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