DEPARTMENT OF LABOR v. TRIPLETT
Legal provision: Article 3, Section 2, Paragraph 1: Case or Controversy Requirement
ORAL ARGUMENT OF MICHAEL R. DREEBEN ON BEHALF OF THE PETITIONER
Chief Justice Rehnquist: We'll hear argument first this morning in No. 88-1671, United States Department of Labor v. George Triplett, and a companion case.
Now, Mr. Dreeben.
Mr. Dreeben: Thank you, Mr. Chief Justice, and may it please the Court:
The question presented in this is whether the system for awarding attorney's fees in the Federal Black Lung Program violates the due process clause by denying claimants access to counsel.
We believe that the holding below, that the fee system is unconstitutional, is wrong for two basic reasons.
First, there is no adequate showing that meritorious black lung claims are being lost because of the attorney's fee system; or even that attorneys are unavailable for vast numbers of claimants.
Second, evaluated under the Mathews v. Eldridge test, the black lung system does not deny claimants fundamental fairness.
The black lung program is a unique Federal effort to pay disability benefits to eligible coal miners and their survivors.
Under the program, hundreds of thousands of miners have been paid benefits.
The fee regulations are designed to protect claimants by ensuring that no claimant must bear his own attorney's fees in a contested case.
They also provide that no fee will be charged if the applicant does not succeed in obtaining benefits.
These provisions serve the goals of maximizing the use of funds for the benefit of claimants, and relieving claimants of the responsibility of paying fees, win or lose.
Any system of fee regulation will discourage some attorneys from participating.
But in the context of this disability program, in which fee regulation is designed to protect claimants, and where changes to the fee system will impair other important government interests, we believe the Congress and the Department of Labor must have considerable flexibility to structure appropriate procedures.
Unidentified Justice: Mr. Dreeben, this case comes to us in a rather peculiar posture, does it not?
This was not an enforcement proceeding brought by the Department of Labor below--
Mr. Dreeben: That's correct, Justice--
Unidentified Justice: --against some lawyer who accepted unapproved fees.
Mr. Dreeben: --That's correct.
This is a state attorney disciplinary proceeding, in which the respondent collected fees that were not approved by the Department of Labor.
And the West Virginia Committee on Legal Ethics commenced a disciplinary proceeding based on the violation of--
Unidentified Justice: And I suppose that decision doesn't bind the United States, in any event, if it chose to enforce it some other way?
Mr. Dreeben: --That's correct, Justice O'Connor.
We do not believe that the decision binds the Department of Labor, except as to Respondent.
It does have the effect of res judicata as to Mr. Triplett.
And in that sense the United States is bound.
But I think the more fundamental interest that caused us to bring to the Court here is that the decision below, by holding that the fees are unconstitutional, the system for awarding fees, casts a cloud over the legitimacy of the program.
And we believe that the Department of Labor has an interest in establishing that its program is operated constitutionally and does not violate any due process interests.
We are also concerned that this decision may encourage lawyers in West Virginia and in other states to violate the Department of Labor's fee regulations, believing that they can do that with impunity.
And to a certain extent, that may be true, because the Department of Labor does not have an established mechanism to police the attorneys who practice before it and to ensure that they comply with the fee regulations.
Unidentified Justice: Do you... do you think the government has any standing problem here?
Mr. Dreeben: No, Chief Justice Rehnquist, we don't think the government has a standing problem.
The Department of Labor's interest here is in establishing that its fee system is constitutional.
And to the extent that it's bound against Respondent by virtue of having participated in this case as a party, it clearly has the standing of an aggrieved party to bring the case here.
But in any event, there is another petitioner in this Court, the Committee on Legal Ethics has filed its own petition.
It has an interest in continuing to enforce its disciplinary rules against Respondent.
And the sole reason given by the court below for not enforcing its own disciplinary rules was its belief that the fee system is unconstitutional.
Unidentified Justice: Mr. Dreeben, how did you get to be a party below?
Mr. Dreeben: The court, when it issued its initial opinion, invited the Department of Labor to intervene in the proceeding as a party, either to seek rehearing or to file a petition in this Court.
And the Department of Labor did intervene.
It had a limited amount of time to supplement the record, and it did that.
And it filed a petition for a rehearing, which was denied.
And subsequent to that we filed a petition in this Court, as did the Committee on Legal Ethics.
We don't actually believe the Court need to reach the standing question as to the government in this case, because the presence of the Committee on Legal Ethics as a petitioner satisfies any possible standing concerns from [inaudible].
Unidentified Justice: But, Mr. Dreeben, the Committee on Legal Ethics has virtually indicated that it doesn't care one way or the other.
I mean, if there is a... a Federal law that is valid, they're willing to enforce it.
If there isn't, they're not going to.
I... I don't see that they're... they have a real interest at stake here by virtue of what they're saying.
Mr. Dreeben: Well, the West Virginia Supreme Court believed that it wasn't going to enforce the disciplinary rules here, but the Committee on Legal Ethics has brought a petition to this Court, and it does continue to assert an interest in enforcing the disciplinary rules against Respondent.
Unidentified Justice: So what... what business have you got in taking up their cause?
Mr. Dreeben: Well, we believe that we have independent standing as well, because--
Unidentified Justice: Well, then we mustn't reach your standing... the question of your standing?
Mr. Dreeben: --Only if the Court concludes that the Committee on Legal Ethics does not have standing so that the case is not properly in this Court, unless the Department of Labor does.
We believe that either of those grounds would furnish an adequate basis for a decision in this Court.
Turning to the constitutional question--
Unidentified Justice: May... may I just ask one other question in these preliminary matters?
Is there any enforcement proceeding pending, or has the Department indicated any desire to bring an enforcement proceeding against this lawyer?
Mr. Dreeben: --No, Justice Stevens.
The Department actually doesn't have machinery set up to bring its own enforcement proceedings against lawyers.
It really does rely on state bar organizations like the Committee on Legal Ethics to enforce its regulations through the enforcement of their own disciplinary--
Unidentified Justice: You mean if a lawyer just, without regard to local discipline, just went ahead and ignored the regulations and charged people fees that the Department didn't approve and all, there would be no remedy, other than... other than ethical remedy?
Mr. Dreeben: --Well, I wouldn't say that there would be no remedy.
There would be possibly a criminal remedy if there were fraud involved.
Unidentified Justice: No, assume no fraud; just assume they... they think it's a bad statute and the people are entitled to representation, and they're willing to work for a black lung claimant if they get paid.
Mr. Dreeben: There... there is a limited amount of machinery built into the current system that the Department of Labor might be able to draw upon to discipline attorneys or to preclude them from representing claimants in the future.
It doesn't have a... an adequate disciplinary mechanism, because its primary function is really to adjudicate black lung claims and to pay beneficiaries, not to police attorneys.
Now the rules are there, but it's been the long-standing practice of the Department, which it's found satisfactory, to rely on state committees on legal ethics to enforce unlawful fee arrangements.
Unidentified Justice: May I ask also, is... is that also the practice under the Longshoremen's Act, which I guess is the basis for... for this procedure, that they... they don't really enforce the provision, other than relying on local bar associations?
Mr. Dreeben: That's my understanding, Justice Stevens.
I don't think that this has been a major problem in the sense that there has been hundreds of cases that the Department of Labor becomes aware of in which people ignore the fee regulations, and the Department doesn't do anything.
I think cases like this serve a deterrent function, and most attorneys probably are not going to deliberately flout rules that they know are valid.
However, there has been something of a problem in the black lung area, particularly since this case, because some attorneys have notified the Department that they believe that the regulations are no longer valid and they intend to charge contingent fees and to collect 25 percent of back benefits.
And that does directly infringe upon the policy that supports the fee regulations.
We believe that the attorney's fee system is constitutional if evaluated under the Mathews v. Eldridge test, which the court below purported to apply but we believe applied incorrectly.
I'd like to note at the outset that it's notable that this decision rests upon an extraordinarily frail factual record.
There is very little in the record, other... to talk about how the fee system actually affects the incentives of attorneys, other than the affidavits of a relatively small number of attorneys, and some selective citations from congressional testimony.
We do not believe that that is a sufficient record to support a finding of unconstitutionality in dealing with a large-scale benefits program like the one at issue here.
Now, we also believe that it's inappropriate for a court to determine on such a small record that the Department has not acted in good faith to develop adequate procedures.
But, regardless of the criticisms of the record, we also think that the court went seriously astray in applying the analysis directed under Mathews v. Eldridge.
There are two important government interests that are served by the fee regulations.
The first is that benefits go for the benefit of a qualified claimant, or an applicant's survivor, so that the money that the government devotes to this program serves for the support of coal miners and their survivors and doesn't, in effect, turn into a lawyers' relief act, in which substantial amounts of the benefits are diverted to attorneys.
There is also a secondary motive underlying the fee regulation of ensuring that claimants do not make improvident agreements with attorneys.
And for that reason there is an approval requirement even when claimants do bear their own fees, which they do if a case is not contested.
There is a second important government interest that I believe the court overlooked, and that is the following.
Once Congress determined to protect claimants by shifting fees to the losing party, the responsible operator or the trust fund, the government has a substantial interest in assuring that the system under which that party must pay the fees determines the fees fairly.
In other words, it's not appropriate that the fees would be paid before a benefits award is final, because in that event the attorneys may collect the money that subsequently has to be repaid, and this could prove difficult as a practical matter.
Unidentified Justice: May I ask one other preliminary question?
What is the impact of the regulations on the situation in which a potential claimant would like to consult an attorney about whether or not he has a valid claim that he'd like to pursue?
May he do that and pay the attorney for that advice?
Mr. Dreeben: I'm not aware of any case that's actually raised that, Justice Stevens.
But I think we would take the position that that kind of consultation, preliminary to a benefits application, could not be compensated without approval from the appropriate agency.
And if no claim were actually filed, I believe that it would be impossible for the attorney legitimately to charge.
One important aspect--
Unidentified Justice: And what is the government interest that justifies that prohibition?
Mr. Dreeben: --The government interest that justifies that prohibition is in having a program that offers to claimants and their survivors the opportunity to apply without having any risk of paying attorney's fees at all.
There is no reason why a claimant who is not going to receive a benefit under this program pay attorney's fees in order to find that out.
That at least, I believe, is the theory underlying the total prohibition of any attorney's fees, unless the claimant actually prevails.
And so for that... that purpose actually helps claimants, because they can go to an appropriate Social Security office or Department of Labor office and receive a claims information form that tells them here are the basic criteria in the program.
It provides that you will have an attorney and you won't have to pay if you prevail and it's not contested.
And I think that that's a substantial government interest to be able to offer in a disability program of this type that was designed to reach hundreds of thousands of people, many of whom may have no idea whether they actually do have a valid claim, but might be willing to pay two, three, four or $500 dollars to find that out, and would thereby just lose that money.
I was saying that there is a second government interest in this program, and that is to ensure that if fees are to be borne by the losing party, they are determined fairly.
And that support is in the requirement that no fees are paid until a benefits award is final.
It also supports the method of determining fees in this case, which does not permit great multipliers.
It does account, I would like to stress, for both the delay factor and the risk of loss factor that were very heavily relied on by the court below.
The way in which the Longshore Act and the Black Lung Benefits Act account for these two factors is by assuming that the hourly rate of attorneys practicing in this field takes those matters into account.
Attorneys have argued in various papers filed with the government that these methods are not adequate to provide sufficient compensation.
But I think that the answer to that is the statute does call for the payment of a reasonable attorney's fee.
The Department of Labor has interpreted that to include a risk of loss component.
And the attorneys who are dissatisfied with the exact way in which that's been applied can continue to litigate that, and can attempt to obtain a larger benefits award... or a larger award of attorney's fees if they believe it's justified by the statutory criteria.
But any system of awarding fees that is in a sense contingent, which is this one, will have the effect of forcing attorneys to be somewhat selective in the cases that they take.
And we do not think that the... the way in which the Department of Labor has applied this program has denied all incentives for attorneys to take on cases that, after evaluation, appear reasonably meritorious.
Unidentified Justice: May I ask this question?
Supposing the government would advance the same interest in all other claims against the government for which attorneys fees can be recovered if the plaintiff is successful... civil rights claims of one kind or another and claims against the government... would you think that would be constitutional?
Mr. Dreeben: I'm not sure, Justice Stevens, whether it would or wouldn't.
It would... the... it would depend upon a rather particularized analysis of exactly what is at stake in each type of program.
What makes this program special is that it is a Federal disability benefits program in which the government is prepared to come up with money to pay people who satisfy these statutory criteria.
Unidentified Justice: Of course, the government has to come up with money to pay people whose constitutional rights are violated if they sue them [inaudible].
Mr. Dreeben: Yes, that is true.
Unidentified Justice: And I suppose they have to budget for that.
Mr. Dreeben: But I think that the... the... the flexibility that... that is warranted when the... when the... the individual interest at stake is a disability benefit, is somewhat greater than in some of the other areas that... that could be identified, perhaps a Federal torts claims act suit, or a constitutional rights suit.
Unidentified Justice: Mr. Dreeben, I don't understand what you're saying.
I... I thought the government's position was that there is no... no constitutional obligation to provide attorney's fees anyway.
And I assume there is no constitutional obligation to provide attorney's fees for 1983 actions either.
Mr. Dreeben: No, there isn't, Justice Scalia.
But the analysis, I think, would be the same as it is in this case.
One would look at the three factors identified under Mathews v. Eldridge and try to determine whether a fundamentally fair proceeding can be achieved if--
Unidentified Justice: But I thought part of your argument was that Mathews doesn't even apply anyway because this is not the taking away of a... that... that it... it is not a Mathews kind of a benefit.
Didn't the government make that argument here?
Mr. Dreeben: --Well, the... the question of whether applicants have a protected property interest under the due process clause was noted in the opinion below and it's noted in our brief.
But we don't think that the Court need to decide in this case any more than it needed to decide it in the Walters case.
There is at least one beneficiary in this case who is actually awarded benefits, and a... a hearing was to be held to be determine whether the operator's challenge to that award would be sustained or rejected.
And in that context we think that under this Court's cases there is a protected due... property interest that would require appropriate procedures.
And because the court below--
Unidentified Justice: To... to take the benefit away from the person--
Mr. Dreeben: --Yes.
Unidentified Justice: --But isn't there also a liberty interest involved, if just any ordinary citizen wants to talk to a lawyer about the possibility of suing somebody, and the... and there's a category of cases that you are saying the government could say, no, you can't do that if you have to pay him.
The only way you can consult a lawyer is if he's willing to do it for free.
And you can say that in the black lung area, but you're not so sure about it in the civil rights area.
But is... isn't there... that possibly of some constitutional significance, that just the ordinary citizen's desire to... to get advice?
Mr. Dreeben: --Well, I... I think that there is a liberty interest that could be asserted in that context, but I do not think that it lends any additional weight to the kind of claim that's being pressed in this case on behalf of black lung claimants.
It might have a different significance in some other context.
But here the primary aim is to obtain benefits the Congress provided under an entitlement program to make up for the fact that states were not really adequately affording benefits for this particular occupational disease.
Unidentified Justice: But... but isn't there also another interest?
I mean of course if you file a claim you want to get the benefit, but... but most situations, before somebody gets involved in a lawsuit, the person wants to know whether all the... the turmoil that's associated with litigation is worth the trouble.
And you... you just don't like to have people blithely going ahead and suing.
Sometimes they need... need good advice on whether it's worth the... the mental anguish and all the other difficulties and burdens associated with litigation to get involved in it.
And what you're saying, in effect, is that that decision on whether to assume that cost of prosecuting a claim must be made without the benefit of counsel, unless counsel is willing to work for nothing.
Mr. Dreeben: I... I think that's essentially right.
Unidentified Justice: Yeah.
Mr. Dreeben: And I think that that actually makes some sense in this... in this program.
The... the typical beneficiary is not someone who has a vast amount of resources.
It's probably also not the kind of person who is terribly sophisticated in legal matters.
And Congress can take into consideration in that particular type of situation that there is a danger of exploitation.
And it want... if it wants to avoid that danger of exploitation it sets up a fee system in which the beneficiary doesn't pay fees at the outset.
The program is, in essence, contingent, and the lawyer does have to undertake the initial analysis of the case without the benefit of being paid.
But that is not very unusual in a personal injury context.
In fact I would suggest that it's the norm in any area that's a contingent area.
The lawyer evaluates the case up front to try to decide whether there is a sufficient amount of merit to the case to make it reasonable for him to go forward, or for her to go forward.
Unidentified Justice: In that respect, is this program any different from the Veterans' Administration program that we've upheld?
That is to say, would they have allowed the lawyers to charge fees for initial consultation?
Mr. Dreeben: No, I... I don't think so, Justice Scalia.
I think that the statute there was quite explicit, that... that there was a $10 cap on fees in any context.
Unidentified Justice: For everything.
Mr. Dreeben: And I think that as a matter of statutory construction, this program should be dealt with in the same sense.
That is, that the attorney's fees regulations apply to preliminary consultations just as much as to pressing the actual benefits claim.
Otherwise they would really fail over their fundamental purpose of making sure that the claimants had the opportunity to participate in this program without the risk that they would lose money if their claim did not succeed by virtue of having to pay an attorney.
Unidentified Justice: But suppose it were shown, counsel, that in a significant number of cases, a meritorious claim was not prosecuted because the fee schedule was unreasonably restrictive or unreasonably low.
What would be your position then?
Mr. Dreeben: Well, our... I would like to say at the outset, of course, that we don't think that's been shown in this case.
But if there were some showing that the fee system actually was preventing people from getting counsel, we still think that this program would be constitutional as applied.
The reason is that the Department of Labor has taken some significant steps to ensure that even if a claimant does not have counsel he has a fair opportunity to press his benefits claim.
And we do not think that the risk of a loss without an attorney is so significant in the context of this program that the fee system should be invalidated and the government interests supported be denied in order to allow some people to get lawyers.
The program is--
Unidentified Justice: Well, part of my hypothetical was that a significant number of meritorious claims were not prosecuted as a result of the low fee schedule or restrictive fee schedule.
And I think your answer was, oh well, the act allows those claims to be prosecuted anyway.
But you then took away one of my factual predicates.
Mr. Dreeben: --Your assumption, Justice Kennedy, is that people would not pursue the claim--
Unidentified Justice: Yes.
Mr. Dreeben: --Pro se at all?
Unidentified Justice: Yes.
Mr. Dreeben: Again, I would note that there isn't a showing of that's happening.
That would be a different case and perhaps a harder case, because it might suggest that in some sense the program is so inhospitable to pro se claimants that they refuse to participate.
Unidentified Justice: But what would be... what would be the grounds for the constitutional objection, the First Amendment ground that you were barred from seeking an entitlement?
Mr. Dreeben: I'm not really sure what constitutional provision would be involved.
The first question would be whether the Court was prepared to say that someone who has a... someone who was an applicant has a protected property interest.
We would dispute that, and if that contention prevailed then there would be no constitutional issue, other than either a First Amendment or some sort of a liberty issue in consulting counsel, and it's not clear to me that either of those interests would be sufficient to determine that this program is unconstitutional.
This is, after all, a program in which Congress is attempting to supplement financial benefits for a certain category of workers, and it sets up a program which it believes is fair.
And unless there's a showing that it's fundamentally unfair to people who proceed pro se, the decision of some individuals not to proceed pro se probably would not be a ground [inaudible].
Unidentified Justice: Do you think the... do you think there's a... Justice Scalia brought this up.
Do you think there's a constitutional right for the government to pay for counsel and before... in a hearing to determine the entitlement to benefits?
Do you think there's a constitutional right to counsel in this case?
I... I... perhaps there is, as in Goldberg, if the party wants to hire one, you have to permit the counsel.
But is there a constitutional right to provide counsel?
Mr. Dreeben: No, I don't think that there is a constitutional right to provide counsel.
This isn't a case like Gideon v. Wainwright, or Lassiter v. Department of Social Services.
Unidentified Justice: Well Goldberg... Goldberg said that the government doesn't need to provide counsel in a pre-termination hearing--
Mr. Dreeben: That's correct.
Unidentified Justice: --But that the claimant has the right to--
Mr. Dreeben: That's correct.
Unidentified Justice: --hire his own.
Mr. Dreeben: That's correct.
But in Walters, the Court noted that the program at issue in Goldberg didn't have a policy against prohibiting the welfare applicant from dividing his check with the lawyer, and that policy is very clearly present here, just as it was present in Walters, and thus there has to be some sort of a weighing process to determine whether the program becomes fundamentally unfair if somebody does not have free and unrestrained access to lawyers.
Unidentified Justice: But weren't you suggesting, in answer to my and several other questions, that there is constitutional authority to prohibit counsel?
Mr. Dreeben: I think there would be constitutional authority to prohibit counsel, provided that the procedure itself is designed to operate without lawyers, which was the case in the Walters decision.
It really is not the case here to the extent that the Department of Labor actually wants lawyers out of the system.
It doesn't want lawyers out of the system.
What it does is provide what it believes is fair compensation for lawyers, and it provides a procedure where, if somebody does not proceed with a lawyer, they still have a fair chance to establish their claim.
And it balances various factors.
It tries to ensure that government money is essentially applied to the benefit of beneficiaries, it tries to ensure that claimants don't squander their fees consulting attorneys when they don't have a valid claim.
And we think that Congress really needs to have a considerable amount of latitude to structure these types of programs within the general bounds of fairness.
Unidentified Justice: But do you think that latitude would go to the extent that where the Defendants can have lawyers, as I guess they can here, the government could say that those interests would best be served by flatly prohibiting lawyers for all claimants because they'll get a fair hearing, the tribunals will look out for their interests, and so forth?
Mr. Dreeben: I think that would be a much harder case.
Unidentified Justice: Well, sure it would be a harder case, but what do you think about the... outcome of that case?
Mr. Dreeben: Well, it would really depend on whether in analyzing the specific procedures that claimants without counsel could get a fair hearing.
I think it's possible.
I think the closer that you move to a pure adjudicatory model and you unbalance the scales by allowing one side to have lawyers and the other side not--
Unidentified Justice: Well, we do have an adjudicatory model here, unlike the Veterans system, because the government doesn't pay the awards here, and the people who do have their own lawyers.
Mr. Dreeben: --Well, the government does pay a substantial number of awards.
Unidentified Justice: Well, but not in one category.
Isn't one category entirely financed by the operators?
Mr. Dreeben: Yes, it is.
Unidentified Justice: Well, I'm directing my question to that category.
Mr. Dreeben: Well, as to that category, of course, the government isn't paying but it still does provide a variety of protections for claimants.
The initial stage of the process is not adversarial.
It's a claims examiner which helps.
Then the ALJ proceeding is really not like a proceeding in Court.
Obviously, evidentiary rules don't apply, and the ALJs do take some steps to assist the pro se claimants.
And finally, the Benefits Review Board reviews with particular care any case brought up by a pro se claimant.
Unidentified Justice: And the question is whether all of that is sufficient if, say, one side can have a lawyer but the other side can't.
Mr. Dreeben: In a certain category of cases that's correct.
Unidentified Justice: Do you think it would be sufficient?
Mr. Dreeben: I think that that is sufficient in this case.
I'd like to reserve the balance of my time.
Unidentified Justice: Very well, Mr. Dreeben.
ORAL ARGUMENT OF JANE MORAN ON BEHALF OF THE RESPONDENTS
Mr. Moran: Mr. Chief Justice, may it please the Court:
A very interesting thing happened in this case when it was in front of the West Virginia Supreme Court.
As you've been told, the Department was given the opportunity to petition for a rehearing, which they did, and they filed a motion asking to be allowed to supplement the record, which was granted.
Now, one would assume that the Department at this point would put together the very strongest evidence that they had to convince the West Virginia Supreme Court that their findings were incorrect.
Included in the evidence that they presented was an affidavit by their own chief administrative law judge, Nahum Litt, and that affidavit is interesting both because of its brevity and because of the limits of its scope.
It does not challenge the findings of the court that too many pro se claimants are being forced to proceed without counsel.
It does not challenge the assertions in the briefs below that only 12 attorneys in the entire State of West Virginia will take these cases on a regular basis.
In fact, he goes into some detail explaining the very unusual efforts that are being made by his administrative law judges to help people to find the counsel that will take these cases.
The reason for this can be found in his testimony before the Congressional Subcommittee on Government Operations in June of 1985.
Judge Litt was asked at that time what could be done about all these attorneys complaints about delays, meaning delays in processing of claims, delays in processing fee petitions.
Judge Litt responded, and I quote,
"I have not addressed what other avenues might be explored that would change that and provide for better representation."
"One of the fears I certainly intend to stress is if you go to a larger and larger number of cases being tried in a given year with a finite number of attorneys who are willing to take these cases, that we will end up with more and more claimants being pro se, and being poorly represented in an ever-increasing complex area of law."
This was in June of 1985, and the Department of Labor now tells the Court that they have never kept any statistics that would tell them how often people are represented in front of the administrative law judges.
Unidentified Justice: Ms. Moran, I don't... it seems to me that... I don't know that we can very well tell how many people are not being represented on the basis of scattered indications by Judge Litt or anybody else if there are no impossible for me to predict whether they are going to do the things that I think they should do.
And our problem right now, which has been recognized by the West Virginia Supreme Court, is that we have many black lung claimants with good claims that are being lost because of the manner in which the law is being applied by the Department of Labor.
The briefs would have this Court believe that 92 percent of the black lung claimants are being represented.
This figure is grossly misleading, and I would ask the Court to look very closely at the source of these figures.
The Department tells us that they have never kept any statistics on this, so in December of 1988 they had their employee, Miss Denney, go to the administrative law judge's office, and she reviewed approximately 3,700 files which had been docketed with the administrative law judge's office in fiscal 1987.
In December of 1988, she found that 77.1 percent of those cases had been either dismissed, remanded, or she found no decision there.
This is one year... over one year--
--Now, where do we find this, counsel?
This is in the record of the supreme court... the state supreme court?
Mr. Moran: These figures that I'm giving you statistics.
But even if we could, can't Congress make the judgment that even though a large number of people might not be able to get counsel, in our judgment it's worth it to enable more funds to be dispensed to those who are seriously enough harmed that they have enough incentive on their own, without having to get counsel, to go... to go and make claims?
Why would that be an unreasonable judgment?
It all comes out of the same pot.
Well, Your Honor, I would say first of all I don't think Congress has made that judgment.
I don't think it's that clear.
I think Congress has indicated some very serious concern about this, and they continue to have hearings on the question of attorney's fees and the sufficiency of attorney's fees and the availability of counsel.
Unidentified Justice: So if what you say is correct, why do we have any reason to believe that Congress won't change?
And they're in a much better position than we are to figure out whether people who should be represented aren't?
Mr. Moran: Well, Your Honor, I mean no disrespect when I say it's very hard for me to figure out why Congress does much of what they do, and it's now, Your Honor?
Unidentified Justice: Yes.
Mr. Moran: These are in the evidence that was submitted by the Department of Labor to the West Virginia Supreme Court.
Unidentified Justice: Let me ask you, the Supreme Court made some of its own findings of fact at the appellate level in the state system?
Mr. Moran: They made findings of fact, Your Honor, based on the affidavits of the attorneys which were submitted to the Court, the testimony that had been given in the ethics hearing, two congressional hearings in which... I believe there was eight attorneys testified.
Judge Litt testified.
Unidentified Justice: Is your challenge to the statute a facial challenge?
Mr. Moran: No, as it's applied, Your Honor.
Unidentified Justice: As it's applied in this case?
Mr. Moran: As it's applied in this case and generally in West Virginia, that the fee structure--
Unidentified Justice: Did the Department of Labor in the state Supreme Court ask the case be remanded to the trial court for further findings?
Mr. Moran: --No, they did not.
Unidentified Justice: This all arises out of a Department of Labor regulation, doesn't it?
Mr. Moran: It arises out of Mr. Triplett's failure to comply with the Department of Labor regulation, yes, Your Honor.
Unidentified Justice: Well, the regulation is what sets the fee, isn't it?
Mr. Moran: Well, the regulation does not set the fee, no.
There is no--
Unidentified Justice: Well, it sets--
Mr. Moran: --Standard fee.
That is determined... when an attorney applies for fees, he must... he must--
Unidentified Justice: --Is it the regulation that sets consent?
Mr. Moran: --Pardon me, Your Honor?
Unidentified Justice: Do you have to have... does the regulation or does the statute say that you need consent to have a--
Mr. Moran: The regulation.
Unidentified Justice: --Well, isn't that what's at issue here?
Mr. Moran: Yes, and that's why I argue, Your Honor, that the--
Unidentified Justice: You must argue that the regulation is inconsistent with the statute.
Mr. Moran: --I argue... yes, that it is inconsistent with the intent of the black lung law.
Unidentified Justice: And you say that there's no basis for the Department of Labor to construe the statute the way it has under its regulation, is that right?
Mr. Moran: I say that it is inconsistent with the intent of the law, and that the effect of it is to prevent people with good claims from getting an attorney.
Unidentified Justice: So you think it's just irrational to construe the statute in this way, that there's no other way to construe the statute other than what you urge?
Mr. Moran: Let me say, Your Honor, one of the positions that the Department of Labor has taken is that we are holding out for straight contingency fees with no regulation.
That is not our position.
It has never been our position.
We think that regulation is appropriate.
We have... the first thing that I am asking this Court today is to support the West Virginia court in their... in their finding that the statute is unconstitutional as it is applied.
However, we have other suggestions that we would make.
Unidentified Justice: Ordinarily, we wouldn't get to the question of whether the statute is unconstitutional as applied until... if you're arguing that the regulation isn't supported by the statute.
And if you were to accept that--
Mr. Moran: I think... I must say it is not supported by the statute, because I think it's effect is inconsistent with the statute and with the intents of the statute.
Unidentified Justice: --Do you have anything more to say on that subject?
I mean, ordinarily we give a considerable deference to the views of a Department to whom Congress has confided the administration of the act as to regulation.
Mr. Moran: Well, Your Honor, I have... I would say in response to that, that we now have in excess of a 96 percent denial rate on initial application, and after three levels of appeal we only add 1 percent to that.
I think that we have to ask whether Congress put this whole system together for 4 percent of the people who are applying for benefits to be able to qualify, and that one of the problems is, these cases come down again and again.
Unidentified Justice: I think maybe they're very... maybe they're very generous at the first level.
I mean, that would explain it as well as anything else.
Mr. Moran: No, Your Honor, I'm saying--
Unidentified Justice: I mean, this is a benefits program.
I assume that Labor regards this as a benefits program.
Mr. Moran: --I'm saying that they're denied.
That there are more than 96 percent of the cases denied at the initial level.
Unidentified Justice: At the initial stage?
Mr. Moran: That's correct.
Unidentified Justice: What were you saying about the appeals?
Mr. Moran: There is only 1 percent added to that.
There is an overall denial rate of 5 percent... of 95 percent.
Unidentified Justice: I suppose there are an awful lot of the 96 percent that are denied have counsel.
Mr. Moran: No, Your Honor.
That... I was trying to break down this figure--
Unidentified Justice: What percent of that?
Mr. Moran: --I don't have that figure, Your Honor.
The only people who have those figures are the Department of Labor, and the only figures that we have available are the findings of Miss Denney, and what Miss Denney's figures come down to is that she looked at 800... well, if I may go back.
She found that 77.1 percent in over a year after being filed with the administrative law judges have gone nowhere, and it is our position that the figure of representation on that 77.1 percent would be the most informative figure for this Court.
Unidentified Justice: Miss Moran, I guess they aren't allowing reasonable fees then.
I mean, if they are not... if lawyers are not coming into the system, the fees being allowed are not reasonable.
Mr. Moran: Your Honor, they are not reasonable for the amount of work that is entailed, for the level of expertise that is involved and for the delay in receiving fees.
Unidentified Justice: Well, you don't have any argument with the agency over that.
They say that they're supposed to be giving out reasonable fees.
It seems to me that what you should be litigating is before the agency whether they are giving out high enough fees.
But the... I mean, the system can work so long as they give high enough fees, isn't that right?
There's nothing inherently bad about the system.
Mr. Moran: But, Your Honor, what... how do we determine the fee for the affidavit before the Supreme Court saying... from the attorney saying that he has been owed $30,000 in fees for upwards to ten years, for close to ten years?
Unidentified Justice: Well, however you determine it, it doesn't render the statute unconstitutional.
It just means the agency is not giving high enough fees to bring lawyers into the system.
Isn't that your basic complaint?
Mr. Moran: Well, Your Honor, I believe, based on the prior decisions of this Court that when we find that, whether it's the fee or whether it's the handling, the processing of the fee, if generally the effect of this is to be inadequate, then the regulation is improper.
It is inconsistent with the intent of getting these benefits to worthy recipients.
Unidentified Justice: The regulation says reasonable fees.
I mean, it seems to me what's the matter is that in each case enough fee is not being given, and the lawyers should litigate to get more fees.
It seems to me that that's the solution.
Every time an agency doesn't live up to its regulation, we don't strike the regulation down.
We say you have to live up to it.
Mr. Moran: If I may, Your Honor, the other problem along with the actual dollar amount of the fee are the inordinate delays in waiting for them, the fact that the attorney who tells us he's owed $30,000 in fees is not going to receive one cent of interest on those fees.
There is a procedure that requires the attorney to submit a petition at each level.
At first at the deputy commissioner, at the ALJ, the Benefit Review Board... each one of those persons who determine that fee may come up with a different level.
Therefore, it is impossible to predict what fee is going to be paid.
Unidentified Justice: If he's not getting interest, he should get higher fees.
I think a fee without interest should be higher than a fee that draws interest until the time it's paid, and that argument should be made to the agency.
Mr. Moran: Well, Your Honor, with all due respect to the agency and to this Court, I don't that the Department of Labor administrative law judges or the deputy commissioners are going to provide for fees for the lack of interest.
They are going to take the position that nobody is telling them that they have to pay interest.
Unidentified Justice: Take them to court.
Mr. Moran: Well--
Unidentified Justice: And you will get a judge under the Administrative Procedure Act to say this is arbitrary and capricious action.
You have a regulation that says reasonable fees.
You are not paying reasonable fees.
Mr. Moran: --Your Honor, I have taken them to court in the vehicle that I had to work with.
Unidentified Justice: When would... when would this lawyer who... who didn't get consent of the agency, when would he get paid, if he won?
Mr. Moran: You're talking about my client now, Your Honor?
Unidentified Justice: Yes.
Mr. Moran: In fact, my client has returned every cent of fees that he received.
Unidentified Justice: Well, I... I know, but here... here's a lawyer who says I should be free from this consent requirement.
I should be able to make my own deal with a particular client.
So, he says he... he... establishes... he... he makes a contingency arrangement with them.
Now, he isn't going to get paid until there's a final decision, is he?
Mr. Moran: That's correct, until... until--
Unidentified Justice: And so the... that's going to be considerably delayed, I suppose.
Mr. Moran: --Well, I... I think we could compare what happens--
Unidentified Justice: Would he be paid any sooner than he would be under the... under the--
Mr. Moran: --Oh, yes, Your Honor.
The litigation over attorney's fees and... and the affidavits that were submitted to--
Unidentified Justice: --It takes as long after the final decision--
Mr. Moran: --Yes, that's correct, Your Honor.
Unidentified Justice: --to... to litigate attorneys fees as it did to get the liability judgment, I guess.
Mr. Moran: I don't know whether I can absolutely balance the two--
Unidentified Justice: Yeah.
Mr. Moran: --but the affidavits that were submitted to the West Virginia Supreme Court show that there are considerable periods of time of waiting after the fee is approved.
Unidentified Justice: And of course he isn't going to get paid at all if he doesn't win?
Mr. Moran: That's right.
Unidentified Justice: But how does... how does that bear on the validity of the regulation?
It doesn't seem to me there is anything in the language of the regulation that imposes that delay.
Mr. Moran: Well, the language of the regulation directly applies to the... the necessity to submit fee applications to different bodies, to different judicial bodies and... and as is explained in the affidavit, one of the things that happens is you present a petition to the deputy commissioner.
The file is in the administrative law judge's office, and it takes two years to get from the administrative law judge's office back down to the deputy commissioner.
This is specifically what is described in the affidavits.
Unidentified Justice: Well, isn't it hard to say that the regulation that calls for the payment of reasonable attorney's fees, isn't it hard to say that's inconsistent with the statute?
What... what should the regulation say?
Mr. Moran: Well, I... I'm not arguing with the... with the reasonable attorney's fees, Your Honor.
I'm arguing with the method that one must use to attach the--
Unidentified Justice: And is there any... do you think there's any... anything inconsistent with the statute to require consent for a private agreement?
Mr. Moran: --To require the Department's consent?
No, Your Honor, I do not find some kind of regulation to be inconsistent.
Unidentified Justice: Well, then, what's wrong with this regulation?
Mr. Moran: The regulation is that they have created a very cumbersome manner of us collecting the fees which adds a great deal of time to the... to the time involved for processing, and also that when... when this is applied, that a reasonable fee becomes less reasonable when you have to wait ten years for it.
Unidentified Justice: Well, then, you... you really don't argue on the same basis, then, as the Supreme Court of West Virginia did or... the... it's holding was that the statute was unconstitutional.
You're really not arguing that?
Mr. Moran: No, no, they're not... no, Your Honor, they do not argue that the statute is unconstitutional.
They argue that it is unconstitutional as applied.
I mean, that's their position, that it is unconstitutional as applied.
Unidentified Justice: Well... what... what's the... what's the difference?
You... the... you mean it was unconstitutional as applied to Mr. Triplett?
Mr. Moran: And as generally applied in the state of West Virginia.
Unidentified Justice: Well, what... what's the difference between saying a statute is unconstitutional as generally applied in the state of West Virginia and saying it's unconstitutional in toto?
Mr. Moran: I would say the regulation that is between the two, between the statute and the application, and... and that is what we're attacking... is that the regulation creates such a cumbersome way of... of proceeding.
Unidentified Justice: Are you... are you claiming that the statute is... is unconstitutional?
Mr. Moran: --I am claiming that the... the regulation is an unconstitutional application of the statute.
Unidentified Justice: Well, but there is... do you really need to say that the... if the regulation doesn't conform to the statute, I would think say it... it's not supported by the statute.
It's not authorized by the statute rather than it's an unconstitutional application of the statute.
Mr. Moran: Well, it is unconstitutional, Your Honor, in that the method in which it's applied prohibits people access to counsel to represent them in their claims.
Of the 23 percent that Ms. Denney found an indication of an award or a denial of benefits, she tells us that claimants with counsel had a better than two-to-one chance of winning as compared to those who did not have counsel.
Every piece of evidence that was in front of the West Virginia Supreme Court indicates that there is a serious problem in the availability of counsel.
In addition, in our brief we cite a Law Review article by Alan Prunty and Mark Solomons.
Alan Prunty is the head of the administrative... the administrative head of the Black Lung Division of Jackson & Kelly, which is a law firm in Charleston that represents more responsible operators than any other law firm in the country.
Mr. Solomons was with the Department of Labor from 1983 until 1980 and has appeared many times in front of this Court.
Both Mr. Prunty and Mr. Solomons concur with the findings of the West Virginia Supreme Court.
They recognize this as a real and a widespread problem, and their article says it will not be resolved until there is some accommodation in the attorney fee structure.
Probably the single most important failing in Ms. Denney's statistics--
Unidentified Justice: Excuse me, Ms.... Ms. Moran, if some accommodation in the fee structure... what do you seek from this Court?
Mr. Moran: --I seek from this Court--
Unidentified Justice: Do you want us to write a whole new structure or... or--
Mr. Moran: --No, Your Honor, I'm not asking that.
I think that appropriately that is to be done by the Department of Labor.
However, if we have suggestions I am asking that this Court uphold the West Virginia Supreme Court's ruling that it is unconstitutional in its application.
Unidentified Justice: --Well, but wait.
It... it seems to me that in order for the individual who's been... who... who's been charged with practicing unlawfully, in order for him to vindicate himself against that charge, we would have to strike down that... we would have to say under no circumstances is it valid to prevent a lawyer from charging a fee that isn't approved by the agency.
Don't we have to find that that provision could not under any reasonable system be left in place?
Mr. Moran: No.
And I think--
Unidentified Justice: We don't have to say that?
Mr. Moran: --I think that's a very important point for me to make if I have failed to do it, Your Honor.
I think that is the position that the Department of Labor is taking, that we are... we are asking for an absolute bar of regulation.
We are not.
We do not find it inappropriate that there is some form of regulation, and the amicus brief supports us in that.
Unidentified Justice: Well, how does this lawyer win, then, if it's okay to prevent him from charging a fee that isn't approved by the agency?
If your only complaint is the agency is not approving high enough fees, he loses.
Mr. Moran: That's... that's not my only complaint, Your Honor.
I am also complaining that the system is so burdensome that it is a disincentive to attorneys to take the cases.
Unidentified Justice: No, but don't you have to establish--
Mr. Moran: --along with the actual dollar fee.
Unidentified Justice: --that it's burdensome in the specific respect that it requires a lawyer to get his fee approved by the agency?
That is... that is what this lawyer was charged of... charged with.
That's the provision he violated.
If you don't establish that that provision is unconstitutional, is... could not be there in any good system, then it seems to me he was properly--
Mr. Moran: Your Honor, I think what the West Virginia Supreme Court says is that it... it's more complex than that, that he was... that he was asked to seek approval of a fee which is being controlled in an unconstitutional manner.
I think... I think the Supreme... the West Virginia Supreme Court finds that it is a rather complex system that he was being asked to follow.
It's not... the... I don't think the Supreme Court has said that it an absolute bar on regulation.
One thing that it is very important to communicate to the Court that is... that was missing from Ms. Denney's figures is the picture of representation on the other side, which has always been an important factor to this Court in determining due process issues.
In fact, the benefit trust fund is always represented by the Solicitor General's office.
It is virtually unheard of for an identified responsible operator to appear unrepresented.
These claims... the actuarial tables cited in our brief show that these claims are worth $150,000 over the lifetime of the coal miner and his family, and responsible operators are--
Unidentified Justice: --Ms. Moran, may I ask one... may I ask one other background fact?
Mr. Moran: --Yes, Your Honor.
Unidentified Justice: These claims, as I remember during a period before '73 or 4 sometime, were administered by HEW rather than the Secretary of Labor and the government picked up the tab.
Mr. Moran: That's correct.
Unidentified Justice: Did the HEW have the same rules about attorney's fees that labor does?
Mr. Moran: Well, I think at the very beginning, Your Honor, they were using the same system that we use now with social security which... it requires regulation.
It requires fee approval.
But the understanding was that the attorneys could get up to 25 percent of the back benefits.
When they went from--
Unidentified Justice: So, it was the social security system rather than the... than this particular labor--
Mr. Moran: --They were applying the system that is used by the social security system, yes.
Unidentified Justice: --I see.
Mr. Moran: And also, a thing that has to be considered in evaluating that, Your Honor, is like the Walters VA system.
At that time it was a user-friendly system.
The approval rates were very high, and it... the government... the representatives of the government were obliged to help people with their claims.
In fact, counsel for the Department of Labor... it... there is regulation in the black lung regulations that provide for appointment of counsel.
And at one point the Department of Labor did provide counsel for claimants to represent an initial award when it was being challenged by the responsible operator, which it is 90 percent of the time.
They also... the Department of Labor also provided informal conferences, as the Social Security Administration does, to work with people and to help unrepresented people put their claims together.
Both of those practices have been discontinued without any explanation.
There's... I would contend that this is a clear recognition on the part of the Department that people need help.
The Department of Labor argues that we should use fundamental fairness, and I would go along with that.
Goldberg and Mathews tell us that it is... fundamental fairness is a procedure that is tailored to the capacities and circumstances of those to be heard to ensure a meaningful opportunity to be heard.
The Department of Labor argues we can't provide for better representation of claimants because it will cost money and because it will make the process more adversarial.
In other words, if we ensure that claimants are as well represented as the operators and the trust fund, there's a real danger that eligible miners who are now being lost in the morass are, in fact, going to be able to successfully pursue their claim and they're going to demand benefits.
The West Virginia Supreme Court found that this was an unconstitutional kind of fiscal responsibility which is denying the benefits that Congress has promised to sick old coal miners who, by the way, the Department of Labor tells us three-quarters of the claimants never attended high school.
So, we have the... these sick old coal miners with less than a grade school education defending their claims against highly paid, skillful experts in the field of black lung law.
It is not surprising that we only have a 5 percent approval rate at this time.
The West Virginia Supreme Court found that this was unacceptable and cannot be tolerated.
Unidentified Justice: Thank you, Ms. Moran.
Mr. Dreeben, you have two minutes remaining.
REBUTTAL ARGUMENT OF MICHAEL R. DREEBEN ON BEHALF OF THE PETITIONER
Mr. Dreeben: Thank you, Mr. Chief Justice.
The low approval rate in the program as it's currently structured is not an accident.
Congress was aware when it tightened the eligibility criteria in 1981 that there would, indeed, be a low approval rate, and there is no showing in this record or anywhere else that I'm aware of that that low approval rate flows from the presence or absence of counsel in a particular case.
The respondent has relied quite heavily on the affidavit of Ms. Denney.
I would only suggest that affidavit indicates that there is a higher rate of representation than Respondent would have one believe, and the burden in this case was not on the Department of Labor to establish the constitutionality of its program.
The burden was on whoever challenged it to establish that it was not constitutional.
And, finally, the regulation that governs fees, we believe, is consistent with the statute and can be applied consistently to provide a sufficient incentive for lawyers to come into the system.
Unidentified Justice: Mr. Dreeben, am I correct that the agency concedes that the rate has to be high enough to allow for the contingency?
Mr. Dreeben: Justice Scalia, the agency construes a reasonable attorney's fee to include a component for risk of loss and for delay.
There's going to be some fighting about how you determine those two factors, and I don't think that the Department would agree with some of the proposals that have been made to it to give a multiplier of two, three, four, five or six because of the contingency factor.
In any area where there's a contingency factor lawyers are going to be selective, but I think that's a good thing, not a bad thing, and the regulation is adequate to provide a sufficient fee, we believe.
And if the lawyers disagree, they can litigate that issue.
Chief Justice Rehnquist: Thank you, Mr. Dreeben.
The case is submitted.
Argument of Speaker
Mr. Speaker: The opinion of the Court in No. 88-1671, United States Department of Labor versus Triplett will be announced by Justice Scalia.
Argument of Justice Scalia
Mr. Scalia: This case is here on writ of certiorari to the Supreme Court of Appeals of West Virginia.
It concerns the Black Lung Benefits Act which prohibits attorneys from receiving fees for representing claimants except as those fees are approved by the Department of Labor.
The Department’s regulations invalidate all contractual fee agreements.
Respondent is an attorney who represented claimants on a contingent fee basis and he collected those fees without the requisite approval.
The Committee on Legal Ethics of the State Bar recommended that respondent be suspended, but the West Virginia Supreme Court of Appeals denied enforcement ruling that the prohibition on receipt of contingency fees violated the claimant’s due process rights by denying them access to counsel.
In an opinion filed with the Clerk, we reverse the judgment and remand the case for further proceedings.
We first conclude that petitioner, Committee on Legal Ethics, has standing and that respondent has third party standing to raise his client’s due process claims.
On the merits, we find that respondent has failed to prove that the scheme he challenges made attorneys unavailable to his prospective clients at the time he violated the Act.
Justice Stevens has filed a concurring opinion; Justice Marshall has filed an opinion concurring in the judgment in part two of which Justice Brennan has joined; Justice Brennan has filed a separate statement.