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3Apr

Chevron Deference Applies to the Black Lung Benefits Rule-Out Evidentiary Standard

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By Kaitlin Price

On April 2, 2015, in the published opinion West Virginia CWP Fund v. Bender the Fourth Circuit denied petition for review of the award of benefits granted to the petitioner because it agreed that  the Department of Labor acted within its regulatory authority and the Administrative Law Judge had substantial evidence to support his decision.

The Black Lung Benefits Act 

The Black Lung Benefits act was enacted in 1969 “to provide benefits…to coal miners who are totally disabled due to pneumoconiosis (black lung disease) and to surviving dependents of miners whose death was due to such disease.” 30 U.S.C. Section 901(a). For a miner to establish he is entitled to black lung benefits he must show: (1) that he has black lung disease, in either it’s clinical or legal form; (2) that the black lung disease arouse out of the coal mine employment; (3) that he is totally disabled by a pulmonary or respiratory impairment; and (4) that his black lung disease is a substantially contributing cause of his total disability. There is now a rebuttable  presumption of total disability, the third element. This presumption is applied if a miner worked for at least 15 years in underground coal mines, if a chest x-ray does not show the presence of complicated black lung disease, and “if other evidence demonstrates the existence of a totally disabling respiratory or pulmonary impairment.” Section 921(c)(4).

If the miner qualifies for the rebuttable presumption of total disability then the Secretary of Labor may rebut the presumption by “establishing that (A) such miner does not, or did not, have pneumoconiosis, or that (B) his respiratory or pulmonary impairment did not arise out of, or in connection with, employment in the coal mine.”

Although Usery v. Turner Elkhorn Mining Co., a Supreme Court case, held that the rebuttable presumption of total disability only applied to the Secretary of Labor and not coal mine operators, in 1980 the Department of Labor promulgated a regulation that clarifies that the presumption applied both the the Secretary of Labor and Coal Mine Operators. In 1981, Congress eliminated the statutory presumption completely and following that the regulation was amended to reflect the statutory change.

Congress reenacted the exact same statutory presumption in March 2010 and then the Department of Labor promulgated a revised regulation in 2013. The 2013 regulation is the regulation that is at issue here. The regulation provides the evidentiary standard that is required to rebut the presumption of total disability. 20 C.F.R. Section 718.305(d)(1). This regulation creates a “Rule Out” requirement by which the coal mine operator, who seeks to rebut the presumption, must “rule out any connection between a miner’s pneumoconiosis and his disability.”

Procedural Posture 

In 2010, an Administrative Law Judge granted Page Bender, Jr., an underground coal miner, benefits under the Black Lung Benefits Act. The Administrative Law Judge applied the rebuttable presumption of total disability because Mr. Bender had been working as an underground coal miner for 21 years and there was a consensus among all medical experts that Bender suffered from a totally disabling respiratory condition.

The burden then shifted to the operator to disprove this presumption. Although the 2013 rule-out regulation was not promulgated at the time of the decision, the ALJ did apply an analogous rule-out standard. The operator attempted to rebut the presumption of total disability with three medical experts who agreed that Bender’s respiratory disability was not caused by his pneumoconiosis because he suffered from simple clinical pneumoconiosis. The experts testified that Bender’s lung cancer, cigarette use, and lung surgery were the causes of the total disability not working in the coal mines. Then, Bender presented conflicting medical evidence that the coal mines were a cause of his total impairment.

The ALJ considered the conflicting evidence and credited Bender’s expert’s causation opinion over the Petitioner’s because the ALJ did not find the evidence of other conditions strong enough to exclude coal dust exposure as a cause to Bender’s impairment. The Benefits Review Board affirmed the Administrative Law Judge’s Decision. Logan Coals, Inc., the named plaintiff is Logan Coals insurer, appealed to the Fourth Circuit seeking review of the Board’s decision.

Legal Challenge to the Rule-Out Rebuttal Standard 

The Fourth Circuit applied Chevron deference in evaluating the Rule-Out Regulation. The first step of Chevron is “whether Congress has directly spoken on the precise issue.” If Congress has directly spoken on the precise issue then both the court and the agency must give effect to Congress’s expressed intent. However, if the statute is silent or ambiguous to the issue, then the Court must determine “whether the agency’s answer is based on a permissible construction of the statute.”

Chevron Step One Application 

At Chevron step one, the Fourth Circuit determined that Section 921(c)(4) is silent regarding the evidentiary standard for the rebuttable presumption. The Fourth Circuit reasoned that the rebuttable presumption applies both to the Secretary of Labor and operators, but the statute only specifies how the Secretary overcomes this presumption. Therefore, the statute is silent on the evidentiary standard operators must satisfy to overcome the presumption.

The Fourth Circuit explained that the Supreme Court decision is Usery does not impact it’s analysis because the Court was interpreting the statute and not the regulation. The statute that the Supreme Court was interpreting merely addressed the elements of a claim that can be rebutted, whereas the regulation is providing the evidentiary standard that must be met to overcome the presumption. The Fourth Circuit concluded that Usery does not address whether the application of the rule-out standard applies to coal mine operators and if the regulation, which was promulgated after Usery, was within the agency’s authority.

Chevron Step Two Analysis 

Since the Fourth Circuit found that Congress did not express its intent regarding the evidentiary standard for overcoming the rebuttable presumption of total disability, it proceeded to Chevron step two. Under Chevron step two, the court should defer to the agency’s interpretation if its “choice represents a reasonable accommodation of conflicting policies that were committed to the agency’s care by the statute. The Fourth Circuit explained that it will not upset the agency’s choice “unless it appears from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned.”

The Fourth Circuit determined that the agency’s interpretation was not. First, Department of Labor’s regulation in question 20 C.F.R. Section 718.305 was enacted when Congress reenacted the statutory presumption, but Congress did not change the rebuttable standard for coal mine operators. Therefore, the Fourth Circuit assumes that Congress intended to keep the agency’s interpretation of the statute. Second, the Fourth Circuit concluded that the rule-out evidentiary standard advances Congress’ purpose for enacting the statutory presumption. The Fourth Circuit also noted that the rule-out standard will only have to be satisfied by operators in cases of very serious conditions. Finally, any other type of rebuttal standard would thwart Congress’ intent in creating the presumption in the first place.

The Fourth Circuit also noted that the Sixth Circuit addressed this same issue of whether “the regulatory rule-out standard lawfully applies to coal mine operators” and the Sixth Circuit, in Big Branch Res., Inc., v. Ogle, also concluded that it lawfully applies.

The Administrative Law Judge’s Decision is Supported By Substantial Evidence 

The Petitioner argues that the Administrative Law Judge’s decision was not supported by substantial evidence because the ALJ did not credit the Petitioner’s experts. However, the standard to rebut the presumption of disability due to pneumoconiosis is that an operator must establish “no part of the miner’s respiratory or pulmonary total disability was caused by pneumoconiosis.” Here, the Petitioner’s experts simply asserted there were other contributing cause’s to the miner’s conditions, which is not enough to overcome the presumption. Instead, the experts needed to be able to explain why pneumoconiosis (black lung disease) was not at least one of the causes of the miner’s respiratory or pulmonary disability.

The Fourth Circuit found that it was within the ALJ’s power to weigh the credibility of the experts in making his determination. The ALJ reasonably determined that the Petitioner’s experts opinions were inadequate to rebut the presumption. Therefore, the Fourth Circuit concluded that there was substantial evidence to support the ALJ’s opinion.

The Fourth Circuit denied Petitioner’s petition for review because the agency regulation does apply to mine operators and the ALJ had substantial evidence to support his determination.

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24Mar

The Fourth Circuit Adopts a Common Law Duty for “Quasi-Public” Professional Organizations and Deferential Review of Agency Decisions

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By Taylor Ey

Today the Fourth Circuit issued its published opinion of the civil case, Professional Massage Training Center, Inc. v. Accreditation Alliance of Career Schools and Colleges, affirming the district court’s decision in part, and reversing in part.

The plaintiff Professional Massage Training Center (“PMTC”) brought a due process action against the defendant Accreditation Alliance of Career Schools and Colleges (“ACCSC”) when the ACCSC denied PMTC’s application for accreditation in 2010.  The Fourth Circuit held that the district court inappropriately applied a de novo standard of review when it considered the ACCSC’s accreditation decision and reversed the judgment.

“Quasi-Public” Professional Organizations Have a Common Law Duty

The Fourth Circuit recognized that professional organizations, like accreditation agencies, have a duty to employ fair procedures when making decisions affecting their members.  The Fourth Circuit cautioned that while the duty exists it does not allow courts to take de novo review of accreditation agencies.

The Proper Standard of Review Is Substantial Evidence or Arbitrary or Capricious

When reviewing decisions of accreditation agencies, the court should give significant, but not total, deference to the agencies.  The Court reasoned that like federal agencies, accreditation agencies have knowledge and experience in assessing a school’s compliance with the appropriate standards, and, therefore, the accreditation agencies merit a degree of deference from the federal courts.

The District Court Failed to Give Adequate Deference to the Agency

The Fourth Circuit listed a number of reasons to explain why the district court did not give adequate deference to the accreditation agency.  First of all, the district court conducted a four-day bench trial, receiving depositions and live testimony, all which expanded the administrative record.  According to the Fourth Circuit, the district court should not have acted as the “primary investigator and finder of fact” in this manner.  Furthermore, the ACCSC gave PMTC significant opportunities to argue its case after its accreditation was revoked, including granting additional time for PMTC to make improvements.

ACCSC’s Accreditation Revocation Was Not Arbitrary or Capricious

PMTC was given adequate due process before its accreditation was revoked, including adequate notice that it was not in compliance and ample opportunities to remedy.

ACCSC Was Not Biased Against PMTC

PMTC alleged that ACCSC was biased against it.  However, the Fourth Circuit stated that a decision maker at an administrative agency is entitled to a presumption of honesty and integrity.  Because ACCSC did not have a pecuniary interest in the outcome of the revocation decision and was not the target of criticism from PMTC, the Fourth Circuit did not find this argument to have any merit.

The Fourth Circuit Upheld the District Court’s Decision to Dismiss State Law Claims

The district court held that PMTC was not entitled to relief as a matter of law for its state law claims of breach of contract, negligence, and tortious interference with a contract.  The Fourth Circuit affirmed the district court’s decision.

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19Mar

Grant of SSA Commissioner’s Motion for Judgment on the Pleadings Reversed

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By Evelyn Norton

Yesterday, in a published opinion, in the civil case of Mascio v. Colvin, the Fourth Circuit reversed the decision of the District Court for the Eastern District of North Carolina to grant the motion of the Social Security Administration Commissioner for judgment on the pleadings.

The District Court Found that the SSA Properly Denied Mascio Supplemental Benefits

Plaintiff Bonnilyn Mascio alleged that she was disabled from severe degenerative disc disease, carpal tunnel syndrome, and adjustment disorder.  Thus, Mascio applied for supplemental security income benefits from the SSA.  However, the SSA denied Mascio’s application.

In 2008, an administrative law judge found Mascio was not disabled.  The district court reversed and remanded the decision.  A second administrative law judge also found that Mascio was not disabled from March 15, 2005, to November 30, 2009.  In response, Mascio filed a complaint in the district court.  The district court granted the Commissioner’s  motion for judgment on the pleadings, upholding the denial of benefits to Mascio.

Upon De Novo Review, the Fourth Circuit Concluded Remand was Required

On appeal, Mascio argued that the administrative law judge erred in: (1) not conducting a function-by-function analysis; (2) not including Mascio’s concentration, persistence, or pace limitation in his hypothetical to the vocational expert; (3) determining Mascio’s residual functional capacity before assessing her credibility; and (4) not applying the “great weight rule” to Mascio’s subjective claims of pain.

The Fourth Circuit reviewed the district court’s decision on a motion for judgment on the pleadings de novo.  The Court affirms a disability determination when an administrative law judge applies correct legal standards and substantial evidence supports the factual findings.

The Fourth Circuit Found the Administrative Law Judge Failed to Provide a Thorough Analysis

First, the Court agreed with Mascio that the administrative law judge failed to conduct a function-by-function analysis in assessing Mascio’s residual functional capacity.  The Court found that the administrative law judge’s opinion was “sorely lacking in the analysis needed . . . to review meaningfully [its] conclusions.”  Furthermore, the Court found that the administrative law judge neglected to address conflicting evidence in the record regarding Mascio’s residual functional capacity.  As a result, the Court stated that it was left only to guess as to how the administrative law judge arrived at his conclusions.  Therefore,  remand was necessary.

Second, the Fourth Circuit found that the administrative law judge gave no explanation as to why he did not include Mascio’s concentration, persistence, or pace limitation in the hypothetical tendered to the vocational expert.  The Court entertained possible explanations, such as the administrative law judge found excluding Mascio’s concentration, persistence, or pace limitation from the hypothetical was appropriate because the limitation does not affect her ability to work.  Ultimately, however, the administrative law judge’s failure to provide his explanation on this matter necessitated a remand.

Third, the Fourth Circuit found that the administrative law judge determined Mascio’s residual functional capacity without properly assessing her credibility.  Indeed, the administrative law judge only employed vague boilerplate language stating that he did not believe Mascio’s claims of limitations.  Nowhere else did the administrative law judge explain his decision to discredit Mascio’s statements.  Thus, the Court concluded such a lack of explanation required remand.

Fourth, the Fourth Circuit stated that the “great weight rule” does not exists in this circuit, as Mascio argued.  Mascio simply misread unpublished cases, which are not binding on the Court.  Thus, the Court declined to adopt the rule.

District Court Reversed

The Fourth Circuit reversed and remanded the grant of the SSA Commissioner’s motion for judgment on the pleadings.

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3Mar

Nonpermanent Residents who are Convicted for Illegal Entry and Serve the Maximum Sentence of 180 Days are Barred from Showing “Good Moral Character” Under § 1101(f)

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By Katharine Yale

Today in Tiscareno-Garcia v. Holder, a published civil case, the Fourth Circuit denied in part, and dismissed in part Rafael Tiscareno-Garcia’s (“Plaintiff”) petition for review of an order of the Board of Immigration Appeals (“BIA”).

Background Leading up to Removal Proceedings and Procedural History

Plaintiff is a Mexican national who was apprehended three times in less than two years for his illegal presence in the United States. Shortly after his last arrest, Plaintiff illegally entered the US again and avoided apprehension for ten years while living in Raleigh, North Carolina.

In November 2010, Plaintiff was arrested during a workplace raid by the Immigration and Customs Enforcement (“ICE”) division of the Department of Homeland Security (“DHS”). Plaintiff was charged with illegal entry in violation of 8 U.S.C. § 1325(a). Illegal entry is a misdemeanor offense and the sentence for such an offense can be no more than six months. Plaintiff pled guilty. Before serving 181 days in prison, DHS served Plaintiff with a Notice to Appear (“NTA”) stating that he was subject to removal. Once Plaintiff was released from prison, DHS began the removal proceedings.

First, the proceedings went before an Immigration Judge (“IJ”). Plaintiff conceded that he was subject to removal, but argued that removal would cause a hardship to his citizen children and that for the ten years he had been living in the US, he was a law-abiding citizen. The government countered that because Plaintiff was incarcerated for 181 days, he was statutorily barred from establishing “good moral character” under § 1101(f)(7).

The IJ agreed with the government’s contention and BIA affirmed, thereby ruling that Plaintiff was ineligible for cancellation of removal. Plaintiff appealed from BIA’s decision.

Should a Conviction for Illegal Entry Preclude a Finding that an Alien is of Good Moral Character?

Plaintiff’s argument below and on appeal was that illegal entry should not be used to defeat a showing of “good moral character” under § 1101(f)(7). He argued that the court is not bound by the plain language of the statute because including illegal entry under § 1101(f)(7) produces an absurd result.

First, the court reiterated that it must first determine legislative intent, according to Chevron. If the intent of Congress is clear, then the court and the agency must uphold the clear and unambiguous intent of Congress. Plaintiff conceded that the statute was clear and unambiguous, but argued that it would not make sense for Congress to bar aliens from applying for cancellation based on an illegal entry conviction, when it was the illegal entry that rendered the alien removable in the first place. His argument was that almost all nonpermanent residents who apply for cancellation of removal could be charged and convicted of illegal entry, and that therefore the relief under § 1229b(b) would be illusory.

The Fourth Circuit recognized that there are “exceptionally rare” cases when the reading of the plain language of the statute would produce an absurd result at odds with congressional intent and that would “shock the general moral or common sense.” However, the court also recognized that it is “more than a little hesitant” to go against what Congress expressed in a clearly written statute.

Nonpermanent Residents who are Convicted for Illegal Entry and Serve the Maximum Sentence of 180 Days are Barred from Showing “Good Moral Character” Under § 1101(f)

Here, the court found that Plaintiff fell short of demonstrating a truly absurd result. The court concluded that the statutory scheme in § 1229b(b) and § 1101(f) was reasonable in providing the benefit of cancellation of removal to some nonpermanent residents and not to others.   The statute does not provide relief to those nonpermanent residents who conduct themselves in a way that is “antithetical to ‘good moral character,’” or those who spend more than 180 days in jail. Plaintiff fell into the latter category.

The court went on to conclude that it was sensible for Congress to use the length of incarceration “as a proxy for seriousness.” Further, not all nonpermanent residents enter the US illegally as Plaintiff contended. Some nonpermanent residents may be lawfully admitted, but later violate the terms of their visas. Others may be convicted of illegal entry, but do not serve the maximum sentence of 180 days that would preclude them from cancellation of removal.

Under the standard articulated in Sigmon Coal, the court only had to find that there were plausible reasons for Congress to intend the result compelled by the statute. The court held that the reasons stated above were plausible reasons for Congress to exclude relief to those nonpermanent aliens who serve six months in jail for an illegal entry conviction.

If a Conviction for Illegal Entry Precludes a Finding that an Alien is of Good Moral Character, when does the Required Ten Year Showing End?

There are two showings that a plaintiff must make to show eligibility for cancellation of removal under 8 U.S.C. § 1229b(b)(1): that he or she has been physically present in the US for at least ten years; and that he or she has been a person of good moral character during the ten year period.   Here, the Plaintiff argued that the ten year period should end when the NTA is served. However, the BIA’s position is that the ten year period ends with the entry of a final administrative decision.

The Fourth Circuit found that it did not have jurisdiction to address this claim because Plaintiff did not raise this argument with the BIA.   The Fourth Circuit can only review final orders of removal and here, Plaintiff did not exhaust all administrative remedies with the agency. The court dismissed Plaintiff’s argument that he was not able to address the issue with BIA because his lawyer did not receive the NTA prior to the order of removal. Plaintiff could have raised the claim after his lawyer was instructed to show why Plaintiff was not ineligible for cancellation of removal, and therefore the government’s failure to provide a copy of the NTA to Plaintiff’s lawyer was not a barrier to exhausting all administrative remedies.

The Fourth Circuit denied in part and dismissed in part Plaintiff’s petition for review of BIA’s order.

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17Feb

Fourth Circuit Defers to the Social Security Administration Commissioner in Case Deciding Benefits

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By Taylor Ey

Last Friday, February 13, the Fourth Circuit issued its unpublished opinion in the civil case Watson v. Colvin.

History of the Case

Mr. Watson was seeking disability insurance benefits and supplemental security income, but acting Social Security Commissioner Colvin (“the Commissioner”) denied his claim.  Mr. Watson sought review of the Commissioner’s determination before a magistrate judge in the United States District Court for the District of Maryland, at Baltimore.  The magistrate judge upheld the Commissioner’s decision, and Mr. Watson sought review before the Fourth Circuit.

The Commissioner’s Determination Is Reviewed Under a Substantial Evidence Standard

The Fourth Circuit reviewed the record to determine whether the Commissioner’s findings were supported by substantial evidence.  Under this standard, the Fourth Circuit was not permitted to reweigh the evidence or make credibility determinations.  Even where reasonable minds could differ, the court deferred to the Commissioner’s determination.

The Fourth Circuit Affirmed the Lower Court’s Decision

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16Feb

Fourth Circuit Finishes the Job After District Court’s “Mandate Rule” Misstep

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By Elissa Hachmeister

In Tanner v. Commissioner of Social Security, an unpublished opinion issued on February 12, 2015, the Fourth Circuit affirmed the District Court for the District of South Carolina’s judgment upholding the Social Security Administration’s decision to deny Madeline Brown Tanner’s claim for disability insurance benefits. Although the district court erroneously failed to consider some of Tanner’s arguments after incorrectly applying the “mandate rule,” the Fourth Circuit nonetheless affirmed because its independent assessment of all Tanner’s challenges showed that the agency’s decision was supported by substantial evidence. Thus, even if the district court had considered all her arguments, reversal still would not have been warranted.

Tanner’s Twice Denied Claim and District Court Review

Tanner applied for disability insurance benefits, but her claim was denied after a hearing before an administrative law judge (ALJ). Tanner sought review of the decision, filing suit in the United States District Court for the District of South Carolina challenging the ALJ’s determinations regarding three main issues: (1) opinion evidence; (2) Tanner’s credibility; and (3) the effects of her impairments in combination. A magistrate judge recommended remand for additional consideration of opinion evidence, but rejected Tanner’s other arguments. Accepting the recommendation, the district court vacated the agency’s decision denying Tanner disability benefits.

On remand, Tanner had a second hearing before a different ALJ, but her claim was again denied. She filed suit to appeal the decision, raising substantially the same challenges as before. The magistrate judge recommended the district court uphold the second decision. In reviewing the second agency decision, the magistrate judge did not consider Tanner’s challenges to the ALJ’s determinations on the issues of credibility and the effects of her impairments in combination. The judge reasoned that these arguments had already been rejected; those earlier determinations were “the law of the case” and thus the “mandate rule” prohibited further review. The district court accepted the magistrate judge’s recommendation, adopting the judge’s assessment in its decision upholding the second denial of benefits.

Improper Application of the “Mandate Rule”

The district court, through the magistrate judge, was confused in its application of the “mandate rule,” which prohibits lower courts from considering questions that have been resolved by a higher court. The Fourth Circuit presumed, without deciding, that the mandate rule applies to agencies; thus the Social Security Administration (SSA) must respect the mandate or decision of the district court or an appellate court on remand. Nonetheless, the mandate rule did not require the ALJ to reconsider only certain opinion evidence on remand under the circumstances in this case. New evidence was presented at the second hearing, obliging the ALJ to reassess Tanner’s disability claim de novo per agency regulations. ALJ findings based on new evidence do not violate any earlier mandate set by a district court or an appellate court.

Reviewing an SSA Disability Determination 

An SSA disability determination will be upheld if the ALJ has applied correct legal standards and the ALJ’s factual findings are supported by substantial evidence. Bird v. Comm’r of Soc. Sec. Admin., 699 F.3d 337, 340 (4th Cir. 2012). The same standard of review applies whether the reviewing court is a district court or an appellate court. Because the district court did not fully consider Tanner’s challenges to the second agency decision, the Fourth Circuit undertook its own independent assessment of all of Tanner’s arguments. The Fourth Circuit found that the ALJ determinations challenged by Tanner were supported by substantial evidence. The district court’s mistaken invocation of the mandate rule was therefore harmless error since reversal would not have been appropriate even if all of Tanner’s arguments had been considered.

Court of Appeals for the Fourth Circuit Affirmed

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30Jan

The Fourth Circuit Dismissed a Social Security Appeal Because It Was Not Filed Timely

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By David Darr

Today, in Schaller v. Colvin, an unpublished per curium opinion, the Fourth Circuit dismissed an appeal from the Eastern District of North Carolina due to failure to enter a timely appeal. Because of this, the Eastern District of North Carolina’s decision denying William Howard Schaller social security benefits stood.

Was Schaller’s Appeal Timely?

The only issue that the Fourth Circuit needed to decide in this appeal was whether Schaller’s notice of appeal was filed timely.

The Eastern District of North Carolina Denied Schaller Social Security Benefits

On December 1, 2009, Schaller filed an application for a period of disability and disability insurance benefits with the Social Security Administration (SSA) alleging disability since September 18, 2002. Schaller claimed disability from sleep apnea, circadian rhythm disorder, morbid obesity, degenerative disc disease, depression, and a history of alcohol abuse. Schaller claimed that he could no longer work at the North Carolina Department of Transportation as a result of these conditions causing him to be unable to sleep. Schaller claimed that he could not keep a regular sleep schedule and function at his job. The SSA denied his claim initially and again upon reconsideration. Schaller appealed and was heard before an administrative law judge (ALJ). The ALJ found that Schaller suffered from severe impairments that resulted in a mild limitation to daily living, mild difficulties in social functioning, and moderate difficulties in concentration. These impairments made it so that Schaller could no longer work at his previous job. However, these limitations were not severe enough to eliminate Schaller from the work force and he could find gainful employment at a number of existing jobs. Therefore, the ALJ denied Schaller’s claim.

Schaller then brought the current action against Carolyn Colvin, Acting Commissioner of the SSA, in the Eastern District of North Carolina, pursuant to 42 U.S.C. §§ 405(g), 1383(c)(3), to seek judicial review of the SSA’s denial of disability benefits. Each party filed cross-motions for summary judgment.  A magistrate found that the ALJ’s decision was not erroneous. The magistrate issued a recommendation that the district court grant the SSA’s motion for summary judgment. The district court then adopted the magistrate’s recommendation as a final decision, dismissing Schaller’s action and upholding the decision of the SSA to deny Schaller’s claim. Schaller filed the current appeal sixty-two days after the district court’s final judgment was entered.

Parties Are Given Sixty Days to File a Notice of Appeal

Rule 4(a)(1)(B)(ii) of the Federal Rules of Appellate Procedure gives parties in a civil action to which an agency of the United States is a party sixty days after the district court’s entry of judgment to file a notice of appeal.

Schaller Filed His Appeal Too Late

Schaller filed his notice of appeal sixty-two days after the district court entered final judgment. Sixty-two days is not considered a timely appeal unless the district court extends the period. Timely filing a notice of appeal in a civil case is a jurisdictional requirement for the appellate court. An appellate court is forced to dismiss an appeal for lack of jurisdiction if the notice of appeal was not timely filed. Therefore, the Fourth Circuit was forced to dismiss the appeal because it was not timely filed.

The Forth Circuit Denied Schaller’s Appeal

The Fourth Circuit dismissed the appeal for lack of jurisdiction because the appeal was not timely filed.

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28Jan

Fourth Circuit Not “Playing Games” in Retaliatory Firing Case 

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By Joshua P. Bussen

On Monday, January 26, in the civil case of Jones v. Southpeak Interactive Corporation, a published opinion, the Fourth Circuit established that in a claim for retaliatory firing under 18 U.S.C. § 1514A, part of the Sarbanes-Oxley Act of 2002 (“SOX”), evidence of an administrative complaint that was not answered within 180 days is sufficient to exhaust a plaintiff’s administrative remedies, that such claims under SOX are subject to a four-year statute of limitations, and finally, that under SOX emotional distress damages are available to plaintiffs.

Plaintiff Whistle-Blows on Video Game Developer

In 2009, Andrea Jones (“Jones”), the plaintiff in this case, was serving as the chief financial officer of Southpeak Interactive, the defendant. In February of that year, the company placed an order for over 50,000 video games from Nintendo. Southpeak, however, was in a predicament. It needed the games “as soon as possible” but did not have the funds to cover the cost up front. To avoid a potentially problematic delay, the chairman of Southpeak’s board, Terry Phillips, wired Nintendo $307,400 from his personal account. In May of that year Southpeak had not recorded the debt properly on its balance sheet or its quarterly financial report, which was filed with the Securities Exchange Commission (“SEC”).

When Jones became aware of the improper filing, she reported to Southpeak’s audit committee that she suspected the company was engaged in fraud. In response, Southpeak sought to rectify the improper filing with the SEC by submitting an amendment. In the proposed amendment, Southpeak denied any intentional fraud. Jones was asked to sign the report, and refused. On August 13, 2009, Jones sent a letter to Southpeak’s outside counsel stating that: “I do not know how a conclusion of no intentional wrongdoing or fraud can be reached.” The board of Southpeak convened a special meeting that very same day and fired Jones. This claim for retaliatory discharge under 18 U.S.C. § 1514A(a) ensued.  18 U.S.C. § 1514A(a) states that it is illegal for publicly traded companies to retaliate against employees who report potentially unlawful conduct.

OSHA Filing Was Sufficient to “Exhaust” Administrative Options

On October 5, 2009, Jones filed a complaint with the Occupational Safety and Health Administration (“OSHA”)—claiming her discharge was a retaliation to her reporting the company’s fraud. After 180 days of no action from OSHA, Jones informed the administration that she was electing to file a federal lawsuit pursuant to 18 U.S.C. § 1514A(b)(1)(B) of SOX and 29 C.F.R.§ 1980.114(b).  Her actions were satisfactory to the Fourth Circuit to fulfill her claim for administrative remedies, which were required to be exhausted under the statute.

Retaliatory Discharge Claims Fall Under SOX’s Four-Year Statute of Limitations

Southpeak also sought to have Jones’s claim dismissed for having lapsed the applicable statute of limitations. The Fourth Circuit easily dismissed this argument. Under 28 U.S.C. 1658(a), the section of the law that Jones brought her claim under, a plaintiff has a four-year window to file a claim for retaliatory discharge.

Emotional Distress Damages are Available to Plaintiffs Under SOX

Southpeak, additionally, attempted to have the award of emotional distress damages overturned.  The defendant claimed that this award was improper under SOX, however, the Fourth Circuit found 18 U.S.C. § 1514A(c)(1) instructive. Under that provision of SOX, in a successful claim for a retaliatory firing, a plaintiff may be entitled to “all relief necessary to make [her] whole.” The court read that provision broadly enough to mean that emotional distress damages were to be included.

Was the “Final” Verdict Really Final?

Southpeak, finally, attempted to have the verdict overturned because it claimed the jury was “confused” in its verdict. This argument held little merit to the circuit judges, as the jury was polled by a clerk at the conclusion of the trial—with each juror confirming the verdict—and the decision was not “clearly against the weight of the evidence.” Therefore, the court dismissed the argument.

District Court for the Eastern District of Virginia’s Decision Affirmed

Because the District Court for the Eastern District of Virginia found that the administrative remedy had been exhausted, the claim was not barred by any statute of limitations, that emotional damages were available to Ms. Jones, and that there was no evidence of jury “confusion,” the Fourth Circuit affirmed.

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27Jan

Power Fuels Jurisdictional Debate Over Coal Facility

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By Chad M. Zimlich

Today, in the civil case Power Fuels, LLC v. Federal Mine Safety & Health, a published opinion, the Fourth Circuit denied a petition for review by Power Fuels, LLC (“Power Fuels”) to the Secretary of Labor’s assignment of jurisdiction over Power Fuels’ facility.

Defining What Facilities Fall under the Mine Act

The main issue before the Court was whether or not Power Fuels’ facility fell under the jurisdiction of the Department of Labor’s Mine Safety and Health Administration (“MSHA”) as defined by the Federal Mine Safety and Health Act of 1977 (“Mine Act”), 30 U.S.C. § 802(h)(1)(C), (i). The Mine Act, which covers operators of a “coal or other mine,” including facilities engaged in the “work of preparing coal,” was created by Congress in order to improve working conditions for individuals working in the coal industry. Power Fuels disputed its placement under MSHA’s jurisdiction, arguing instead that it belonged under the jurisdiction of the Occupational Safety and Health Administration (“OSHA”).

Power Fuels and the Use of Coal in Its Facility

The facts of the case were not in dispute. The facility that Power Fuels owns and operates, which is located in Wise County, Virginia, and began operations in 2011, is one that blends coal. The facility supplies coal and biomass to a power plant run by Dominion Virginia Power (“Dominion”), which, in turn, produces electricity for the Virginia Electric and Power Company. In fact, Power Fuels’ facility is located on the adjoining property to Dominion.

Power Fuels mixes an average of eight thousand tons of coal per day for Dominion, or about eighty percent of the fuel Dominion consumes. The amount and specificity of the blending that Power Fuels does is based on orders by Dominion, however, Power Fuels does not “extract, crush size, screen, or wash coal during this process.” Power Fuels then transports the blended coal across the street via truck.

The year after Power Fuels began operation, an MSHA inspector noticed trucks delivering coal to Power Fuels and notified MSHA of the coal-preparation facility. After an MSHA investigator inspected the site and the findings were reviewed by the MSHA and the Department of Labor, the Secretary determined the facility was subject to MSHA’s jurisdiction. Upon further inspections, three citations were issued for violations of MSHA standards. Power Fuels contested these citations arguing a lack of jurisdiction. In November of 2013, an administrative law judge (“ALJ”) for the Federal Mine Safety and Health Review Commission held an evidentiary hearing, and concluded that Power Fuels prepared coal under the definition of the Mine Act and that the MSHA was within its jurisdiction. After the Commission declined discretionary review, Power Fuels appealed to the Fourth Circuit.

The Mine Act’s Broad Scope Protects the Safety and Health of Individuals at All Facilities Working With Coal, Not Just Mines

The Court refuses to adopt Power Fuels’ strict interpretation of the definitions contained in the Mine Act. The definitions are seen to be broadly interpreted in order to serve Congress’ purpose and intent of the Act.

Power Fuels and the Definition of a “Coal Preparation” Facility

The Court first examined the general protections that are afforded to workers via the Occupational Safety and Health Act of 1970 (“OSH Act”). The OSH Act assures safe working conditions, but the implications of its jurisdiction are different than that of the Mine Act. However, where Congress has enacted industry-specific statutes granting an individual agency authority, such as the Mine Act, the OSH Act does not apply. The Secretary of Labor administers both Acts, but, in practice, the more specific Act displaces the general OSH Act. Additionally, the Mine Act is “comprehensive in its coverage” of individuals exposed to the hazards of mining.

After laying out the Mine Act and the Congressional intent behind it, the Court points out in the definition of “coal or other mine” the phrase “includes custom coal preparation facilities.” Coupled with this is the definition of facilities that engage in the “work of preparing the coal” including actions such as “the breaking, crushing, sizing, cleaning, washing, drying, mixing, storing, and loading of bituminous coal, lignite, or anthracite, and such other work of preparing such coal as is usually done by the operator of the coal mine.” The Court intimates that the definition therefore receives the broadest possible interpretation, with any doubts favoring inclusion.

The Court goes on to say that Power Fuels’ contention that it does not do the work normally associated with an operator of a coal mine holds no weight. By pure definition, Power Fuels is covered by the Mine Act. Power Fuels “receives, tests, weighs, samples, mixes, blends, stores, loads, and transports coal,” all which logically lends itself to the definition of a “coal preparation” facility.

The Mine Safety and Health Administration Had Authority

The Court denies the petition for review, and rejects Power Fuels attempt to restrict the Mine Act to only “paradigmatic coal-mine operator[s.]” The Secretary of Labor’s interpretation of the Mine Act was reasonable and Congress’ intent was plain. The MSHA has authority over Power Fuels and other similarly operated facilities.

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22Jan

Fourth Circuit Upholds “Aggravated Felony” Arson Conviction for Lawful Permanent Resident

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By Michael Mitchell

Defendant Challenges Classification of Arson Conviction as “Aggravated Felony” to Avoid Deportation

Today, in Sandra Espinal-Andrades v. Eric Holder, Jr., the Fourth Circuit considered whether the Defendant’s arson conviction qualifies as an aggravated felony under the Immigration and Nationality Act (“INA”). The court reviewed this Board of Immigration Appeals (“BIA”) case de novo.

BIA Found Defendant’s Arson Conviction Qualified for “Aggravated Felony” Classification Sufficient for Removal

Espinal became a lawful permanent resident after she immigrated to the United States from El Salvador in 1999. She plead guilty to one count of first degree arson in exchange for the state dropping her three additional related charges. She was sentenced to 360 days in prison. The Department of Homeland Security believed that the Defendant’s first degree arson conviction qualified as an aggravated felony, a classification that an immigration judge confirmed and ordered for her removal. Her appeal of this aggravated felony classification to the BIA was dismissed based on agency precedent.

Fourth Circuit Finds Congress Intended Aggravated Felony Classification to Cover State Arson Offenses

Relying on Chevron deference, criminal state statutes may qualify as an aggravated felony under the INA in spite of lacking a federal jurisdictional element based on BIA precedent if the agency’s interpretation of the state statute is a “permissible construction.”

Chevron Deference For BIA’s Controlling Precedent Even Though State Crime Lacked Federal Jurisdictional Element

In a published opinion by Circuit Judge Wynn, the Court considered whether the agency’s decision should be afforded deference under Chevron v. NRDC. The first step of Chevron is whether the statute is silent or ambiguous regarding the question presented. If so, the court next determines whether the agency’s interpretation “is based on a permissible construction of the statute.” Typically, BIA’s single-member decisions do not receive Chevron deference “because they lack precedential value.” However, this particular decision relies on precedential en banc and three-member panel decisions, such that this controlling precedent can be given Chevron deference.

Under the INA, aliens convicted of an “aggravated felony at any time after admission is deportable.” While the Maryland statute under which Espinal was charged is nearly identical to the INA, it lacks the federal jurisdictional element that the destroyed property be “used in interstate or foreign commerce.” Nevertheless, the INA states that aggravated felony includes violations of both federal and state law.

Applying Chevron analysis, the court first considered whether “Congress has directly spoken to the precise question at issue” by examining the statute’s plain language meaning. This involved defining the terms “described in” and “defined in,” which the court concluded evidenced Congress’s intent to include state statutes as aggravated felonies even if they did not address a federal jurisdictional element. Thus, the statute was not ambiguous. Furthermore, under the second step of Chevron, the court considered whether the BIA’s interpretation was reasonable applying an “arbitrary and capricious” standard. Because the single-member BIA panel relied on precedential agency decisions, the Fourth Circuit found that the BIA’s interpretation was reasonable to find that Espinal’s arson conviction qualified as an aggravated felony.

BIA’s Classification of “Aggravated Felony” for Arson Conviction Upheld by Fourth Circuit Based on Chevron Deference

The Fourth Circuit denied the Defendant’s petition for review of the BIA’s classification of her arson conviction as an “aggravated felony” under the INA. As a lawful permanent resident convicted of an aggravated felony, Espinal may be deported back to El Salvador.

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14Jan

Va. Unauthorized Use Not Felony Under INA “Theft Offense”

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By Andrew Kilpinen

Today, in Julio Castillo v. Eric Holder, Jr., the 4th Circuit vacated an order of removal finding that Castillo’s 1995 conviction of unauthorized use of a motor vehicle does not qualify categorically as an “aggravated felony” under the Immigration and Nationality Act (“INA”).

Castillo argued on appeal that his conviction for unauthorized use of a motor vehicle did not qualify as an “aggravated felony” because it is not a “theft offense.” The INA defines “aggravated felony” to include “theft offenses,” but does not define a “theft offense.”

The Board of Immigration Appeals (“BIA”) has interpreted “theft offenses” to “[consist] of the taking of, or exercise of control over, property without consent whenever there is criminal intent to deprive the owner of the rights and benefits of ownership, even if such deprivation is less than total or permanent.” In re Garcia-Madruga, 24 I.&N. Dec. 436, 440 (BIA 2008).

The 4th Circuit undertook a categorical analysis to determine if the underlying elements of the Virginia crime Castillo was convicted of constituted an “aggravated felony” under the INA. In essence, the 4th Circuit examined Virginia Appellate Court decisions to determine whether an individual could be realistically convicted under the elements of unauthorized use in Virginia while not satisfying the elements of “aggravated felony.”

The INA’s “theft offense” does not consider “glorified borrowing” a felony; however, the 4th Circuit found that the Virginia code could realistically impose a felony conviction for “glorified borrowing.” Therefore, the Court vacated Castillo’s removal order.

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25Nov

ALJ’s Decision to Deny Disability Benefits Affirmed

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By: Katharine Yale

Today, in Jones v. Astrue, an unpublished opinion, the Fourth Circuit affirmed an Administrative Law Judge’s decision to deny Jones’ application for insurance disability benefits.   The ALJ found that Jones’ hearing loss, knee pain, and foot problems did not render her disabled.

Substantial Evidence is the Standard of Review for the ALJ’s Denial.

In reviewing the ALJ’s conclusion, the Fourth Circuit was limited to evaluating whether the correct law was applied, and whether the ALJ’s findings were supported by substantial evidence.   Evidence is substantial when a reasonable mind might accept the relevant evidence as adequate to support the conclusion.   In the case that there is conflicting evidence, the reviewing court will defer to the ALJ’s conclusion, if the conflicting evidence would allow reasonable minds to differ.

The ALJ’s Decision to Deny Jones’ Disability Application Was Supported By Substantial Evidence.

The Fourth Circuit found that the ALJ correctly gave less weight to the opinions of Audiologist Fowler and Dr. Redmond. The two opinions were inconsistent with other substantial evidence such as Jones’ ability to perform everyday activities and communicate effectively at the hearings.

Additionally, the Fourth Circuit found that the ALJ was correct in not fully crediting Jones’ testimony regarding her impairment. Jones was able to communicate effectively at the hearing in front of the ALJ, and described her daily activities in a way that lessened the effect of her testimony regarding her impairment. This evidence supported the ALJ’s decision to give the testimony less credit.

Jones’ remaining two arguments were not raised at the district court and therefore could not be considered on appeal. The Fourth Circuit found, to the extent that Jones challenged the ALJ’s conclusion that her knee pain was not sufficiently severe, that the conclusion was supported by substantial evidence.   Even though Jones reported pain, the evidence presented showed that she pulled her knee while working out, and that the injury did not present a disabling condition.

The Fourth Circuit Affirmed the ALJ’s Decision to Deny Jones’ Application for Disability Benefits.

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