Clarence S. BERRY, Plaintiff-Appellant, v. UNITED STATES DEPARTMENT OF LABOR, Defendant-Appellee.
No. 15-6316
United States Court of Appeals, Sixth Circuit.
Argued: June 15, 2016; Decided and Filed: August 11, 2016
832 F.3d 627
Before: GIBBONS, GRIFFIN, and DONALD, Circuit Judges.
OPINION
GRIFFIN, Circuit Judge.
The Administrative Procedure Act authorizes judicial review of “final agency action,” subject to certain limitations. One of those limitations applies to decisions “committed to agency discretion by law.” Plaintiff Clarence Berry challenges the Department of Labor‘s refusal to reopen his claim for compensation benefits based on new evidence. The Department contends the APA does not authorize judicial review of such decisions, both because they are not a “final agency action” and because they are “committed to agency discretion by law.” We disagree on both points. The decision not to reopen Berry‘s claim for benefits based on new evidence satisfies the Supreme Court‘s litmus test for “final agency action,” and it is not the type of decision the Supreme Court has recognized as being “committed to agency discretion by law.” However, we nonetheless conclude that the district court properly dismissed plaintiff‘s complaint because his reopening request was not actually based on new evidence. It instead alleged a material error in the agency‘s initial decision. That distinction is critical because, under Supreme Court precedent, reopening requests based on material error are “committed to agency discretion by law” and therefore unreviewable. Accordingly, we affirm the judgment of the district court.
I.
In 2000, Congress enacted the little-known Energy Employees Occupational Illness Compensation Program Act,
Under Part B, a “covered employee” (or his or her survivor) is entitled to a lump sum payment of $150,000 “for the disability or death of that employee from that employee‘s occupational illness.”
Pertinent here, the process also allows for reopening of claims. See
II.
Plaintiff Clarence Berry is the son of Leslie Berry, Jr. In the early 1950s, Leslie worked for various construction subcontractors, including installing insulation for the Breiding Insulation Company between October and December 1952. During that time, Breiding did subcontracting work at the Paducah Gaseous Diffusion Plant. Everyone agrees the Paducah Plant is a “DOE facility” within the meaning of the Act. Less clear, however, is whether Leslie actually performed work at the Paducah Plant. Breiding‘s employment records were destroyed in a fire. And the local Insulators Union has no record of Leslie‘s work history because he was not a member of that union; he worked on a temporary permit and, according to the union, “records were not kept on the temporary workers.” As a result, there are no records of the specific job sites on which Leslie performed work for Breiding in 1952.
Fast-forward fifty years. Leslie died in 1995. Five years later, Congress passed the EEOICPA. Three years after that, on December 12, 2003, Leslie‘s son, Clarence Berry, filed a claim under Part B of the EEOICPA, seeking compensation as a survivor of a “covered beryllium employee.” See
Berry did not ask the Department to reconsider its denial or seek judicial review of the agency‘s decision. Instead, ten years later, on July 2, 2014, Berry filed a request to reopen his claim under
Mr. Leslie Berry was employed by Breiding/Breeding Insulation from October 1952—December 1952 (attached statement of social security earnings). Breeding Insulation held a contract with Paducah Gaseous Diffusion Plant from July 1952—October 1953 (attached Paducah Gaseous Diffusion Plant sub-contractor list).
When Mr. Berry‘s employment verification was researched by CPWR [the Center for Protection of Worker‘s Rights] it was found that Breiding Insulation records were destroyed in a fire. Mr. Berry belonged to Cement Masons Local 125 but worked on a permit through the Insulators Local. Because he was not a member of the Insulators Union, records are unavailable (attached CPWR research results).
Berry then filed this suit, challenging the Department‘s decision denying his request to reopen. The Department moved to dismiss the case, arguing that plaintiff failed to state a claim under the APA “because [the refusal to reopen] is not a ‘final agency action’ pursuant to
III.
This court has appellate jurisdiction under
We review de novo a district court‘s order dismissing a claim for failure to state a claim. Jama, 760 F.3d at 494. In reviewing a motion based on Rule 12(b)(6), “we accept all allegations in the complaint as true and determine whether the allegations plausibly state a claim for relief.” Roberts v. Hamer, 655 F.3d 578, 581 (6th Cir. 2011) (internal quotation marks omitted). The same de novo standard of review applies to questions of statutory interpretation. Id. at 582.
IV.
The question presented—whether the Department‘s decision not to reopen Berry‘s claim is subject to judicial review—is one of first impression, at least as it pertains to the EEOICPA. But the framework for our analysis is well-defined. The APA authorizes aggrieved individuals to seek judicial review of agency decisions, subject to certain conditions.
A.
We must initially decide whether the refusal to reopen constitutes “final agency action” for purposes of APA re-
First, the Department‘s denial letter marked the end of its process for deciding whether to reopen Berry‘s claim. It came after plenary review of the existing administrative record, in light of the new evidence purportedly establishing Berry‘s1 entitlement to benefits. The decision itself was not “informal” or “tentative.” Id. at 151. It “definitive[ly]” denied Berry‘s request: “[T]he request to vacate the September 2, 2004 [final decision] is denied“—period, full stop. See Williamson Cty. Reg‘l Planning Comm‘n v. Hamilton Bank, 473 U.S. 172, 193 (1985) (requiring that the agency arrive at “a definitive position on the issue“). There was no opportunity for further administrative review of the request. See
Second, the DOL‘s decision had a “sufficiently direct and immediate” impact on Berry. Abbott Labs., 387 U.S. at 152. The decision caused “legal consequences” for Berry, as it determined his ineligibility for compensation despite new evidence purportedly establishing his father‘s employment history. Bennett, 520 U.S. at 178. In the realm of government benefits, where the sole purpose of the administrative proceedings is to determine an individual‘s entitlement to benefits, the decision not to reopen a
The Department contends that the “final agency action” in this case was the initial 2004 decision denying Berry‘s claim for benefits, the implication being that there can only be one “final agency action” in a particular administrative proceeding. Although this argument might have some force as applied to intermediate agency decisions, it does not hold true in the reopening context. The underlying rationale of the Supreme Court‘s “pragmatic” approach to finality is to prevent unnecessary judicial intervention into agency proceedings. Abbott Labs., 387 U.S. at 149-52; Ciba-Geigy Corp. v. E.P.A., 801 F.2d 430, 436 (D.C. Cir. 1986) (stating that judicial review of interlocutory challenges to tentative decisions would “improperly intrude[] into the agency‘s decisionmaking process” and “squander[] judicial resources since the challenging party still enjoys an opportunity to convince the agency to change its mind“). The concerns animating the finality analysis are simply not present in the reopening context. The Department‘s initial determination that a claimant is ineligible for compensation is no longer at issue. See I.C.C. v. Bhd. of Locomotive Eng‘rs, 482 U.S. 270, 278 (1987) (“[W]hat is reviewable is merely the lawfulness of the refusal.“). Instead, judicial review is limited to a discrete, after-the-fact decision by the agency whether its initial decision should remain in place in light of new evidence. In that context, there is no concern about interlocutory intrusion, piecemeal review, or the prospect of an agency change-of-heart. Nor would it encourage “repetitive or belated litigation of stale eligibility claim,” as the Department contends. Because judicial review is limited to the lawfulness of the refusal itself, a claimant cannot perpetually litigate the merits of the agency‘s initial determination under the guise of requests to reopen.
For these reasons, we hold that the Department‘s refusal to reopen an EEOICPA Part B claim constitutes “final agency action” under the APA.
B.
A “final agency action” is presumptively reviewable under the APA. Sackett v. E.P.A., — U.S. —, 132 S.Ct. 1367, 1373 (2012). That presumption may be overcome if, among other things, the decision is “committed to agency discretion by law.” See
Contending that the refusal to reopen a Part B claim is this kind of discretionary decision, the Department argues that “the traditional rule of administrative law, as recognized by the Supreme Court, [is] that ‘an agency‘s refusal to reopen a closed case is generally “committed to agency discretion by law” and therefore exempt from judicial review.‘” Appellee Br. at 17, quot-
1.
The leading case on the reviewability of reopening decisions is Interstate Commerce Commission v. Brotherhood of Locomotive Engineers, 482 U.S. 270 (1987) (“BLE“). In BLE, several railroad companies sought approval for a corporate merger and acquisition of track rights. Id. at 273. The ICC approved the application, and its decision was affirmed on judicial review. Id. at 274. Soon after, the Brotherhood of Locomotive Engineers (a union of railroad workers involved in the administrative proceedings) petitioned the ICC to reconsider its decision, arguing that it made an error in its initial approval. Id. at 276. The ICC denied the petition, and the Brotherhood sought judicial review of the denial. Id.
On appeal, the Supreme Court held that the reopening decision was “unreviewable.” Id. at 277. Surveying its decisions, the Court observed that “all of our cases entertaining review of a refusal to reopen appear to have involved petitions alleging ‘new evidence’ or ‘changed circumstances’ that rendered the agency‘s original order inappropriate.” Id. at 278 (citing Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 295 (1974), and ICC v. Jersey City, 322 U.S. 503, 514-18 (1944)). None of its previous cases, the Court noted, “reviewed the denial of a petition to reopen based upon no more than ‘material error’ in the original agency decision.” Id. at 278-79. The Court explained the rationale behind this traditional distinction:
If review of denial to reopen for new evidence or changed circumstances is unavailable, the petitioner will have been deprived of all opportunity for judicial consideration—even on a “clearest abuse of discretion” basis—of facts which, through no fault of his own, the original proceeding did not contain. By contrast, where no new data but only “material error” has been put forward as the basis for reopening, an appeal places before the courts precisely the same substance that could have been brought there by appeal from the original order—but asks them to review it on the strange, one-step-removed basis of whether the agency decision is not only unlawful, but so unlawful that the refusal to reconsider it is an abuse of discretion.
Id. at 279. Consequently, the Court concluded that “where a party petitions an agency for reconsideration on the ground of ‘material error,’ i.e., on the same record that was before the agency when it rendered its original decision, an order which merely denies rehearing of the prior order is not itself reviewable.” Id. at 280.
As support for its holding, the Court cited
If the petition that was denied sought reopening on the basis of new evidence or changed circumstances review is available and abuse of discretion is the standard; otherwise, the agency‘s refusal to go back over ploughed ground is nonreviewable.
Nothing in BLE‘s rationale indicates that its holding was limited to ICC proceedings. See BLE, 482 U.S. at 280 (citing favorably decisions involving other agencies). Although this court has not had occasion to apply BLE‘s holding in a published decision, other circuits have done so in a variety of administrative contexts. For instance, in Sendra Corp. v. Magaw, 111 F.3d 162 (D.C. Cir. 1997), a case involving the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the D.C. Circuit summarized BLE‘s holding in universal terms: “An agency‘s denial of a petition ... for reconsideration is not itself subject to judicial review if the petition alleges only ‘material error’ in the agency‘s original decision.... On the other hand, if an agency denies a petition for reconsideration alleging ‘new evidence’ or ‘changed circumstances,’ the agency‘s denial is reviewable as a final agency action....” Id. at 166; see also Schoenbohm v. F.C.C., 204 F.3d 243, 245 (D.C. Cir. 2000), as amended (June 28, 2000) (“Denial of a petition for reconsideration ... is generally nonreviewable unless the request for reconsideration was based on new evidence or changed circumstances.“); Vill. of Barrington, Ill. v. Surface Transp. Bd., 758 F.3d 326, 328-29 (D.C. Cir. 2014) (reviewing for an abuse of discretion the decision to deny reopening based on new evidence but denying review insofar as petitioner alleged material error).
Following the distinction drawn in BLE, we hold that requests to reopen EEOICPA Part B claims based on new evidence are subject to judicial review under the APA; those based solely on a material error in the original decision are not.
2.
The Department‘s counterarguments are unavailing.
As for its recitation of the governing rule, the Department relied on the Supreme Court‘s decision in Your Home, in which the Court stated that “an agency‘s refusal to reopen a closed case is generally ‘committed to agency discretion by law’ and therefore exempt from judicial review.” Your Home, 525 U.S. at 455. This passage, however, must be read in context. In support of that proposition, Your Home cited BLE, which distinguished between reopening requests based on “material error” (unreviewable) and those based on “new evidence or changed circumstances” (reviewable). See Your Home, id. at 282; see also Lincoln v. Vigil, 508 U.S. 182, 191 (1993) (“[In BLE], we held that
The Department also contends that, because the EEOICPA lacks any provision governing the adjudication of reopening requests, the only source of judicially manageable standards is
We disagree. The Department‘s distinction between subsection (b) and (c) begs the question: who decides whether the “claimant-oriented” standard in
V.
Given BLE‘s new-evidence v. material-error dichotomy, we are left to determine whether Berry‘s reopening request is actually based on “new evidence” or whether it simply alleges a “material error” in the original decision. This case comes to us at the motion-to-dismiss stage. Thus, in making this determination, our review is typically limited to the complaint‘s allegations, which we must construe in the light most favorable to the plaintiff. Philadelphia Indem. Ins. Co. v. Youth Alive, Inc., 732 F.3d 645, 649 (6th Cir. 2013). However, we may look outside the four corners of the complaint and consider materials attached to a motion to dismiss if they are referred to in the complaint and central to the claim. See Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir. 1997). Nor are we constrained to accept “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Mr. Leslie Berry was employed by Breiding/Breeding Insulation from October 1952—December 1952 (attached statement of social security earnings). Breeding Insulation held a contract with Paducah Gaseous Diffusion Plant from July 1952—October 1953 (attached Paducah Gaseous Diffusion Plant sub-contractor list).
When Mr. Berry‘s employment verification was researched by CPWR [the Center for Protection of Worker‘s Rights] it was found that Breiding Insulation records were destroyed in a fire. Mr. Berry belonged to Cement Masons Local 125 but worked on a permit through the Insulators Local. Because he was not a member of the Insulators Union, records are unavailable (attached CPWR research results).
Berry‘s request simply provided new insight on the significance of the existing record evidence, arguing that the Department failed to recognize that Leslie worked for a company (“Breiding Insulation,” a.k.a. “Breeding Insulation“) that performed subcontracting work at the Paducah Plant. The evidence he referenced was, in the Department‘s words, “duplicate to evidence already reviewed and considered in the final decision of September 2, 2004.” Thus, Berry‘s reopening request was not based on “new evidence,” but on a material error in the original decision. Indeed, in describing the nature of his request in his brief on appeal, Berry conceded it was based on a purported error in the initial compensation decision:
The new and corrected information that Berry provided to DOL when he submitted his Request for Reopening Based on New Employment Information was that DOL had been searching for employment records from a company that did not exist and he properly identified the correct company name so that his case could be reopened and the record corrected and his claim properly paid.
He reiterated this position in his reply brief:
[T]he denial [of the petition to reopen was] only made because the information that was included in the reopening request was in the record prior to the FAB. Berry requested DOL to review the records and recognize DOL‘s error in that DOL had been searching for Leslie Berry‘s employer under an incorrectly spelled name and that there [were] sufficient records to determine that Leslie Berry was employed during the relevant period of time working at the PGDP. The Denial only states that the documents referenced were in the file, not that the Director or anyone else bothered to review DOL‘s mistake in spelling Leslie Berry‘s employer‘s name incorrectly.
(Emphasis added.) By Berry‘s own description, this is a classic example of a reopening request based on a material error in the original decision.
Accordingly, we conclude that Berry‘s request to reopen his claim was based on a purported material error in the Department‘s original decision. Under BLE, such reopening requests are “committed to agency discretion” and unreviewable under the APA. The district court therefore properly dismissed plaintiff‘s complaint.
VI.
We affirm the judgment of the district court.
B. The Hospitals’ Remaining Arguments
The hospitals also argue that the Secretary‘s interpretation and application of the numerator of the Medicaid proxy as excluding KHCP patient days violates the Equal Protection Clause and is arbitrary and capricious. The hospitals challenge only the Secretary‘s application of the Medicaid proxy as violating the Equal Protection Clause and do not bring an Equal Protection Clause challenge to the statute itself. Because “the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress,” Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984), these arguments presuppose that the Medicaid proxy is ambiguous and are cognizable only if the Secretary had discretion in how to interpret and apply that ambiguous statute. In light of our holding that the Medicaid proxy is unambiguous in its exclusion of KHCP patient days, we have no need to address the hospitals’ equal protection and arbitrary-and-capricious arguments. As the Secretary must follow the clear directive of Congress, she had no discretion in how to apply the Medicaid proxy and thus lacked the statutory authority to interpret the statute in a way that would have included KHCP patient days in the numerator of the Medicaid proxy.
III.
For the foregoing reasons, we affirm the district courts’ grants of summary judgment to the Secretary.
Marilyn ZORETIC, Plaintiff-Appellant, v. John DARGE, Deputy Sheriff, et al., Defendants-Appellees.
No. 14-2008
United States Court of Appeals, Seventh Circuit.
Argued January 4, 2016; Decided August 8, 2016
Rehearing Denied September 2, 2016