ARCH COAL, INC., Plaintiff, v. Edward HUGLER, Acting Secretary of Labor, and U.S. Department of Labor, Defendants.
Civil Action No. 16-669 (JDB)
United States District Court, District of Columbia.
Signed 03/16/2017
For the reasons explained above, plaintiffs have alleged sufficient facts to state a claim for intentional infliction of emotional distress. Whether the events occurred as plaintiffs allege, and whether Bahi‘s conduct is sufficiently outrageous for plaintiffs to prevail on that claim, are questions of fact that must be further developed through discovery, and ultimately decided by a jury. Bahi‘s motion to dismiss will therefore be denied. A separate order has been issued on this date.
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Laura Metcalf Klaus, Mark Elliott Solomon, Greenberg Traurig, LLP, Washington, DC, for Plaintiff.
Bailey Wilson Heaps, U.S. Department of Justice, Washington, DC, for Defendants.
1
JOHN D. BATES, United States District Judge
The Office of Workers’ Compensation Programs within the Department of Labor is charged with determining the “Responsible Operator” liable for a worker‘s black lung benefits claim. The process has several steps, the first of which is the District Director‘s initial determination of the Responsible Operator. The Department issued a guidance document—Bulletin No. 16-01—instructing District Directors to make an initial determination that Arch Coal, Inc. (the plaintiff), is the Responsible Operator for certain miners who previously were emplоyees of three subsidiaries that were once owned by Arch Coal but
Arch Coal argues that this Bulletin is unlawful because it contradicts the Black Lung Benefits Act‘s liability rules,
BACKGROUND
I. STATUTORY AND REGULATORY BACKGROUND
The Black Lung Benefits Act,
Generally, a miner‘s most recent employer is responsible for paying claims to miners who become disabled or died due to employment in that operator‘s mine.
When there is no operator able to pay the claim, or if the Responsible Operator fails to pay, the Black Lung Disability Trust Fund provides payment.
The parties may then seek review of the ALJ‘s decision by a panel of the Benefits Review Board.
II. FACTUAL AND PROCEDURAL BACKGROUND
Arch Coal is a mining corporation that was formed in 1997. Compl. [ECF No. 1] ¶ 26. It received the Department‘s authorization to self-insure against its future black lung benefits liability.
In May 2015, Patriot Coal declared bankruptcy (for the second time).
In November 2015, the Department issued Bulletin No. 16-01 to “provide guidance for district office staff in adjudicating claims in which the miner‘s last coal-mine employment of at least onе year was with one of the 50 subsidiary companies that have been affected by the Patriot Coal Corporation bankruptcy.” Bulletin No. 16-01 [ECF No. 10-2] at 1. The 50 subsidiaries include the three at issue here.
Pursuant to the Bulletin, District Directors around the country made preliminary determinations that Arch Coal was the Responsible Operator for numerous claims. Compl. ¶¶ 56-57. At the time the complaint was filed in April 2016, this was 70 claims; at oral argument in January 2017, Arch Coal updated this number to 175 claims.
In response to the District Directors’ determinations, Arch Coal filed this action in April 2016. The Department then moved tо dismiss. After full briefing, the Court held a hearing on January 26, 2017.
LEGAL STANDARD
The government has moved to dismiss for lack of subject matter jurisdiction and failure to state a claim.
The party seeking to invoke the jurisdiction of the federal court bears the burden of establishing the court‘s jurisdiction. See U.S. Ecology, Inc. v. Dep‘t of the Interior, 231 F.3d 20, 24 (D.C. Cir. 2000). But plaintiffs are not the only ones with jurisdictional responsibilities; the court also has an “affirmative obligation to ensure that it is acting within the scope of its . . . authority.” Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001). Thus, “plaintiff‘s factual allegations . . . will bear closer scrutiny in resolving a 12(b)(1) motion’ than in resolving a 12(b)(6) motion for failure to state a claim.”
DISCUSSION
The Department of Labor argues that this court lacks subject matter jurisdiction because the Black Lung Benefits Act assigns exclusive jurisdiction to the Department‘s administrative process and then the relevant federal court of appeals. Arch Coal agrees that the Act does require certain claims tо proceed from the Department‘s administrative process straight to the court of appeals—and thus the district court would not have jurisdiction—but argues the challenges it raises here are not of that type.
It is well established that where Congress has created “a special statutory review scheme . . . it is ordinarily supposed that Congress intended that procedure to be the exclusive means of obtaining judicial review in those cases to which it applies.” Jarkesy v. SEC, 803 F.3d 9, 15 (D.C. Cir. 2015) (quoting City of Rochester v. Bond, 603 F.2d 927, 931 (D.C. Cir. 1979)). Such a special statutory review scheme exists when “(i) such intent is ‘fairly discernible in the statutory scheme’ and (ii) the litigant‘s claims are of the typе Congress intended to be reviewed within [the] statutory structure.”
There can be no serious dispute at step one: Congress has undoubtedly created a special statutory review scheme for miners’ claims under the Black Lung Benefits Act, and the intent that the review scheme be exclusive is “fairly discernible.” Two Circuits have so held and no court has disagreed. See Louisville & Nashville R.R. Co. v. Donovan, 713 F.2d 1243, 1244 (6th Cir. 1983); Comp. Dep‘t of Dist. Five, United Mine Workers of Am. v. Marshall, 667 F.2d 336, 337 (3d Cir. 1981).
Moreover, the BLBA‘s claims adjudication scheme is nearly indistinguishable from the ones at issue in Jarkesy and Thunder Basin. In Thunder Basin, the Supreme Court explained that the Mine Safety and Health Administration investigates and sanctions a mine operator, who сan then challenge the sanction before an ALJ, appeal the ALJ‘s decision to a Commission within the agency, and, finally, seek review in a federal court of appeals. 510 U.S. at 202-04. In the scheme at issue in Jarkesy, the Securities and Exchange Commission initiated the sanction process, and the sanctioned entity could then seek review in the relevant appellate court. 803 F.3d at 16 (citing
The much closer quеstion is whether Arch Coal‘s claims are of the type that fall within the proper scope of this exclusive statutory review scheme. The Court concludes that Arch Coal‘s challenges to the Bulletin are within the scope of this review scheme because they are ultimately about whether Arch Coal is liable for certain miners’ compensation claims—which is the core issue that the agency adjudicates (i.e., who is the responsible operator?) through orders under this review structure.
There are some types of claims a plaintiff can make that are not “of the type Congress intended to be rеviewed within [the] statutory structure.” See Thunder Basin, 510 U.S. at 212. A claim falls outside of the administrative process‘s scope if it is “wholly collateral to a statute‘s review provisions,” is “outside the agency‘s expertise,” or if following the administrative process would “foreclose all meaningful judicial review.” Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 489 (2010) (internal quotation marks omitted) (quoting Thunder Basin, 510 U.S. at 212-13). Likewise, if a plaintiff must “bet the farm“—that is, unnecessarily undertake significant legal risks—to initiate an enforcement proceeding to “test[] the validity of the law,” then the administrative process does not provide a “meaningful avenue of relief” and therefore such claims fall outside of its scope.
A claim can also fall outside the scope of the administrative process if it is a challenge to a notice-and-comment rule. See Nat‘l Mining, 292 F.3d at 858. In National Mining, the Department promulgated a regulation that changed many of the procedures for adjudicating miners’ claims under the same statute at issue here.
The fact that Arch Coal raises statutory claims—that the Bulletin violates the BLBA and the APA—does not indicate
Arch Coal‘s challenge to the Bulletin is fundamentally about whether it is properly determined to be the “Responsible Operator” in the 175 compensation claims before the agency. Although Arch Coal disputes that characterization of its claims, see Pl.‘s Opp‘n [ECF No. 12] at 34 n.19, 37-38, its complaint belies the point when it identifies Arch Coal‘s injury as needing to defend against the compensation claims before the agency, Compl. ¶ 59. The Bulletin itself is also сlear that it only pertains to orders regarding compensation claims. See Bulletin No. 16-01 at 1 (the Bulletin‘s “purpose” is to “provide guidance for district office staff in adjudicating claims” (emphasis added)). As National Mining explains, the administrative process is about orders (not rules), 292 F.3d at 856; moreover, orders are fundamentally about “underlying operator liability,” See E. Mining Serv. v. Office of Workers’ Comp. Programs, 45 F.3d 851, 855 (4th Cir. 1995);
Nor must Arch Coal “bet the farm” to challenge the Bulletin through the administrative review process. Unlike in Free Enterprise Fund and McNary—where the plaintiffs would have had to intentionally provoke enforcement proceedings that could lead to substantial fines or deportation, respectively—Arch Coal is already in the midst of the enforcement proceedings: the District Directors have already made initial determinations that Arch Coal is the “Responsible Operator” for certain compensation claims, and Arch Coal can avаil itself of the remaining stages of the review process to challenge that determination. Compare Compl. ¶ 57, with Free Enterprise Fund, 561 U.S. at 490, and McNary, 498 U.S. at 496-97.
Furthermore, the Bulletin is not a notice-and-comment rule. Unlike in National Mining, the Department here did not chose “to gain all of the law-declaring attributes of an APA notice-and-comment rulemaking.” Nat‘l Mining, 292 F.3d at 858. But Arch Coal argues that the Bulle-
While there might be some de facto rules that a court would treat as notice-and-comment rules for the purpose of determining whether a challenge falls within the scope of an exclusive administrative scheme, the Bulletin is not one of them. Contrary to the plaintiff‘s аrguments, the Bulletin does not have the force of law or have a legally cognizable immediate effect on Arch Coal. It does contain mandatory language, as the government concedes, but that only binds the District Director. Regardless of the District Director‘s decision, both parties are entitled to a hearing before an ALJ, where the ALJ will make an independent determination de novo.
Hence, a District Director‘s determination—mandated by the Bulletin—does not have the force of law in determining whether Arch Coal will ultimately be designated as the “Responsible Operator.” At most, the Bulletin‘s only effect is to require Arch Coal to spend time and money litigating compensation claims before the agency. While time and money are real costs, “the expense and annoyance of litigation is part of the social burden of living under government.” Jarkesy, 803 F.3d at 26 (quoting FTC v. Standard Oil Co. of Cal., 449 U.S. 232, 244 (1980)). Such harm is “insufficient for [the court] tо infer an exception to an otherwise exclusive scheme.”
Arch Coal also contends that the ALJ and the Benefits Review Board are actually bound by the District Director‘s determination under
Arch Coal next argues that, as was true in National Mining, this Court is better suited to “analyze carefully all of the regulations together as well as the entire rulemaking process, which would not be feasible in individual adjudications.” Nat‘l Mining, 292 F.3d at 858. Certainly there are many compensation claims at issue here (175, at Arch Coal‘s last count), and it might be more efficient to adjudicate those jointly in a district court rather than individually through administrative adjudications. But that is not the type of “feasibility” the D.C. Circuit referred to in National Mining. Rather, the court there was explaining that a district court is more competent to make an evaluation about whether a rule applies retroactively (and whether the statute authorizes retroactive application of a rule) than an agency is. See id. at 858-60. Determining whether a rule has a retroactive effect requires understanding the interaction of the new regulation with existing regulations, and how the new regulation affects substantive rights.
Here, although Arch Coal does argue that the Bulletin has an impermissibly retroactive effect, there is no reason why that claim cannot be first heard by the Department. There is nothing specific to Arch Coal‘s challenge that would require this Court to engage in the type of analysis for which it has particular experience distinct from that of the agency. See Free Enter. Fund, 561 U.S. at 491. Rather, Arch Coal fundamentally claims that it is not the Responsible Operator under existing Department regulations. This is exactly the type of claim that the Department has expertise in, and that “Congress intended to be reviewed within [the] statutory structure.” See Thunder Basin, 510 U.S. at 212.
Finally, Arch Coal argues that it cannot receive meaningful relief on Count IV through the administrative review scheme—and therefore Count IV falls outside of the scope of that scheme—because the administrative process does not permit discovery. Count IV of the complaint alleges that the Department has a duty to first apply Patriot‘s self-insurance assets to the compensation claims at issue, then if those assets are insufficient, to pay those claims out of the Black Lung Disability Trust Fund.
Arch Coal has not identified which regulations or agreements it believes the Department has breached. It does, however, seek a “declaration that the Department of Labor‘s imposition of new and unanticipated liabilities on Arch Coal is arbitrary, capricious, an abuse of discretion and not in accordance with law.”
Count IV, then, is precisely the tyрe of claim the administrative review process was designed to handle. Arch Coal believes that Patriot Coal should be designated as the Responsible Operator and that the Trust Fund should pay any claims that Patriot‘s assets cannot; the government, on the other hand, believes that Arch Coal is the Responsible Operator for the employees at issue. There is a review structure for assessing this determination.
Moreover, it is not clear what additional discovery Arch Coal would need to fairly present its claims to the Department and eventually to the court of appeals. Although the hearing prоcedures do not envision discovery of the type that occurs in the district court, the parties may take depositions or interrogatories.
CONCLUSION
For the reasons explained above, the Department‘s motion to dismiss for lack of subject matter jurisdiction will be granted. A separate order has been issued on this date.
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ESTATE OF Earnest BOYLAND, et al., Plaintiffs,
v.
Michael YOUNG, Acting Secretary, U.S. Dep‘t of Agriculture, et al., Defendants.
Case No. 15-cv-1112 (TSC)
United States District Court, District of Columbia.
Signed 03/16/2017
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