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National Association of Waterfront Employers v. Chao

November 13, 2008

NATIONAL ASSOCIATION OF WATERFRONT EMPLOYERS, PLAINTIFF, AND OLD REPUBLIC INSURANCE COMPANY AND BITUMINOUS CONTRACTORS, INC., INTERVENORS,
v.
ELAINE L. CHAO, SECRETARY OF LABOR, DEFENDANT.



The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge

MEMORANDUM OPINION

National Association of Waterfront Employers ("NAWE") together with intervening plaintiffs challenge the Department of Labor's adoption of the Anonymous Claimant Rule in cases involving claims under the Longshore and Harbor Workers' Compensation Act ("Longshore Act"), 33 U.S.C. §§ 901-950, and the Black Lung Benefits Act ("Black Lung Act"), 30 U.S.C. §§ 901-944. This Rule provides that decisions and orders by administrative law judges will display the claimants' initials only, not their full names. Plaintiffs contend that the Rule is arbitrary and capricious and that it violates the Administrative Procedure Act ("APA"), 5 U.S.C. § 551 et seq., the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, the Longshore Act, the Black Lung Act, common law, and the First and Fifth Amendments to the U.S. Constitution. The Secretary moves to dismiss. As explained below, the motion to dismiss will be granted in part and denied in part.

I. FACTS

The Longshore Act and the Black Lung Act establish workers' compensation programs to pay benefits to certain maritime workers and coal mine employees, respectively. The Black Lung Act generally incorporates the adjudicative procedures of the Longshore Act. See 30 U.S.C. § 932(a) (incorporating 33 U.S.C. §§ 919 & 921, except as otherwise provided). Under these Acts, if a worker's claim for benefits is contested by his employer or by the employer's insurer, upon request of any party the matter is referred to the Office of the Chief Administrative Law Judge of the Department of Labor for a hearing by an administrative law judge ("ALJ"). See 33 U.S.C. § 919(d); 20 C.F.R. §§ 702.331, 725.451, & 725.452. After a hearing, the ALJ issues a decision and order awarding benefits or rejecting the worker's claim.*fn1

The Chief Administrative Law Judge of the Department of Labor declared by memorandum that as of August 1, 2006, decisions by ALJs involving the Longshore Act and the Black Lung Act would no longer display the claimant's full name in the caption and text. Compl., Ex. A (Mem. dated July 3, 2006). Instead, claimants would be identified by their first and last initials, and a cover memorandum with the claimant's full name would be sent only to the parties. Id. This rule is referred to as the Anonymous Claimant Rule.

The Anonymous Claimant Rule was adopted because the Department "has received a number of comments from past claimants and members of Congress raising concerns that the publication of [ALJ] decisions has resulted in the embarrassing public disclosure of the medical history and other intimate details of the claimants and their family members." Def.'s Mem. in Supp. of Mot. to Dismiss at 1. The Chief ALJ's memorandum instituting the new Rule explained further:

The 1996 e-FOIA amendments required agencies to publish adjudicatory decisions on the Internet.*fn2 A consequence of that law is that commercial Internet search engines negated any "practical obscurity" that was previously true of agency decisions relating to the [Black Lung Act] and the [Longshore Act]. Thus, to limit a claimant's exposure on the Internet, the Department of Labor has decided that it will avoid referring directly to the claimant's name in decisions and other orders that are required to be posted on the DOL web site on or after August 1, 2006.

Id. Even though the claimant name is concealed on the Internet, the name of the claimant is not considered secret, since hearings under the Black Lung Act and the Longshore Act are open to the public, see 30 U.S.C. § 932(a); 33 U.S.C. § 923(b); 20 C.F.R. §§ 702.344 & 725.464, and parties to the administrative proceeding have notice of the claimant's full name.

The rule change was issued as a rule of agency procedure, without notice and comment under 5 U.S.C. § 553(b)(3)(A). The Secretary of Labor did not publish the Rule as proposed in the Federal Register, did not put a proposed rule out for public comment, and did not publish it as a final rule.

A pre-existing rule that applied to claims under the Black Lung Act provided that ALJ decisions "shall contain . . . the names of the parties." 20 C.F.R. § 725.477(b).*fn3 After the adoption of the Anonymous Claimant Rule, this regulation was replaced with one that did not require ALJ decisions to contain party names. See 72 Fed. Reg. 4204-05 (Jan. 30, 2007); 20 C.F.R. § 725.477(b). The new regulation was published in the Federal Register as a final rule without opportunity for notice and comment because the Rule allegedly pertained "solely to the Department's formatting of decisions and orders." 72 Fed. Reg. 4204-05 (Jan. 30, 2007).

NAWE represents stevedoring companies and marine terminal operators on issues under the Longshore Act and on other federal issues. NAWE also publishes a monthly newsletter. NAWE brought a three count complaint against the Secretary of Labor, alleging that (1) the adoption of the Anonymous Claimant Rule violates the procedural requirements of the Longshore Act and the Administrative Procedure Act; (2) the Rule is arbitrary and capricious because the Chief ALJ adopted the Rule without the authority to do so; and (3) the Rule violates the Longshore Act, the APA, the common law, and the First and Fifth Amendments to the U.S. Constitution.

Old Republic Insurance Company and the Association of Bituminous Contractors, Inc., intervened as additional plaintiffs. Old Republic Insurance Company is a workers' compensation and employer liability insurer, insuring liabilities under the Black Lung Act. It also acts as claims administrator for self-insured coal mine operators. Association of Bituminous Contractors, Inc., is an employer association whose members are contractors who perform construction work for coal companies. Such construction companies are potentially liable under the Black Lung Act to employees whose work involves exposure to coal dust and who become disabled as a result. The intervenors' complaint adds allegations that the Anonymous Claimant Rule violates the Black Lung Act and FOIA. NAWE and the intervenors are collectively referred to here as Plaintiffs.

Plaintiffs seek a declaratory judgment that the Anonymous Claimant Rule violates the law, and they seek an injunction requiring the Secretary to withdraw the Rule, prohibiting the Secretary from adopting a new rule unless the Secretary uses formal rulemaking procedures, and prohibiting the Secretary from adopting a new rule requiring concealment of claimant names except when anonymity is based on individual special circumstances. The Secretary moves to dismiss for lack of jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Rule 12(b)(6).

II. LEGAL STANDARDS

Federal courts are courts of limited jurisdiction and the law presumes that "a cause lies outside this limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938). No action of the parties can confer subject matter jurisdiction on a federal court because subject matter jurisdiction is an Article III and a statutory requirement. Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003). The party claiming subject matter jurisdiction bears the burden of demonstrating that such jurisdiction exists. Khadr v. United States, 529 F.3d 1112, 1115 (D.C. Cir. 2008).

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the adequacy of a complaint on its face, testing whether a plaintiff has properly stated a claim. Federal Rule of Civil Procedure 8(a) requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a). A complaint must be sufficient "to give a defendant fair notice of the claims against him." Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007). Although a complaint does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief "requires more than labels and conclusions, and a formulaic recitation of the elements of a ...


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