Arch Coal, Inc. v. Hugler
2017 WL 1034688
D.D.C.2017Background
- Arch Coal had previously self-insured for three subsidiaries it sold (later acquired by Patriot Coal); Patriot carried self-insurance and some commercial coverage but later entered bankruptcy.
- The DOL issued Bulletin No. 16-01 directing District Directors to treat Arch Coal as the initial “Responsible Operator” for certain miners who last worked for those subsidiaries before 2006, unless commercial coverage is identified.
- District Directors, following the Bulletin, made preliminary determinations designating Arch Coal as Responsible Operator in dozens (later hundreds) of claims, forcing Arch to appear in agency proceedings to contest liability.
- Arch sued in district court alleging the Bulletin (1) conflicts with the Black Lung Benefits Act, (2) is an unpromulgated legislative rule violating the APA notice-and-comment requirement, (3) is impermissibly retroactive, and (4) is arbitrary and capricious; DOL moved to dismiss for lack of jurisdiction (and alternatively for failure to state a claim).
- The court considered whether the BLBA’s comprehensive administrative-review scheme precludes district-court jurisdiction over Arch’s challenges to the Bulletin.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court has jurisdiction or BLBA’s administrative scheme is exclusive | Arch: challenges to Bulletin (statutory and APA) are outside the administrative-review scheme and thus district court may hear them | DOL: BLBA creates a special, exclusive administrative scheme culminating in court-of-appeals review; district court lacks jurisdiction | Held: DOL’s motion granted — the BLBA’s review scheme is exclusive and Arch’s claims fall within it |
| Whether the Bulletin is a notice-and-comment legislative rule (de facto rule) | Arch: Bulletin has binding mandatory language and effectively changes substantive liability rules, so it is a de facto legislative rule requiring notice-and-comment | DOL: Bulletin binds only District Directors’ initial determinations; ultimate liability is adjudicated de novo by ALJs and appellate review, so it is not a legislative rule | Held: Bulletin is not a notice-and-comment rule with force of law; administrative process remains appropriate |
| Whether the Bulletin’s alleged retroactivity or APA violations are collateral and require district-court review | Arch: retroactivity and APA claims require court-level analysis and cannot be meaningfully addressed in individual adjudications | DOL: those claims are tied to Responsible Operator determinations and fall within agency expertise and the statutory review track | Held: Retroactivity/APA arguments are within the administrative-review scheme and should be raised in agency proceedings and appealed to the court of appeals |
| Whether limited pre-hearing discovery in the administrative process forecloses meaningful judicial review | Arch: administrative procedures (limited discovery) prevent meaningful review of the Department’s handling of Patriot assets and insurance allocation | DOL: administrative hearings allow depositions/interrogatories; District Director bears burden to show potential liability; appellate review uses full administrative record and can remand for further development | Held: Administrative process provides meaningful review; limited discovery does not place claims outside the scheme |
Key Cases Cited
- Jarkesy v. SEC, 803 F.3d 9 (D.C. Cir. 2015) (statutory review scheme ordinarily exclusive; test for whether claims fall within specialized review)
- Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994) (framework for determining when agency review scheme precludes district-court jurisdiction)
- Free Enterprise Fund v. PCAOB, 561 U.S. 477 (2010) (when administrative process would force plaintiffs to "bet the farm" and thus be inadequate)
- Nat’l Mining Ass’n v. Dep’t of Labor, 292 F.3d 849 (D.C. Cir. 2002) (challenge to notice-and-comment rule outside administrative-adjudication scheme)
- Elgin v. Dep’t of Treasury, 567 U.S. 1 (2012) (statutory administrative review scheme can preclude district-court jurisdiction for constitutional/statutory claims)
- Pyro Mining Co. v. Slaton, 879 F.2d 187 (6th Cir. 1989) (ALJ conducts de novo determination of Responsible Operator)
- Comp. Dep’t of Dist. Five, United Mine Workers of Am. v. Marshall, 667 F.2d 336 (3d Cir. 1981) (agency policy challenges within administrative-review scheme)