UNITED STATES DEPARTMENT OF LABOR, PETITIONER V. GEORGE R. TRIPLETT, ET AL. No. 88-1671 In the Supreme Court of the United States October Term, 1988 The Acting Solicitor General, on behalf of the United States Department of Labor, petitions for a writ of certiorari to review the judgment of the Supreme Court of Appeals of West Virginia in this case. Petition for a Writ of Certiorari to the Supreme Court of Appeals of West Virginia PARTIES TO THE PROCEEDING Petitioner, intervenor below, is the United States Department of Labor. Respondent, the respondent below, is George R. Triplett. The Committee on Legal Ethics of the West Virginia State Bar, the petitioner below, is a respondent in this Court under Rule 19.6 of the Rules of this Court. TABLE OF CONTENTS Question Presented Parties to the Proceeding Opinions below Jurisdiction Statutory and regulatory provisions involved Statement Reasons for granting the petition Conclusion OPINIONS BELOW The opinion of the Supreme Court of Appeals (App., infra, 1a-32a), is reported at 376 S.E. 2d 818. A dissenting opinion (App., infra, 33a-36a) and an opinion on rehearing (App., infra, 37a-41a) are unreported. The Findings of Fact, Conclusions of Law, and Recommendation Concerning Discipline of the Committee on Legal Ethics of the West Virginia State Bar (App., infra, 42a-51a), are unreported. JURISDICTION The judgment of the Supreme Court of Appeals was entered on October 26, 1988. A petition for rehearing was denied on December 21, 1988 (App., infra, 52a). On March 14, 1989, Chief Justice Rehnquist extended the time for filing a petition for a writ of certiorari to and including April 20, 1989. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTORY AND REGULATORY PROVISIONS INVOLVED Section 422(a) of the Black Lung Benefits Act, 30 U.S.C. 932(a) (1982 & Supp. IV 1986), incorporating various provisions of the Longshore and Harbor Workers' Compensation Act (LHWCA), and Section 28 of the LHWCA (33 U.S.C. 928 (1982 & Supp IV 1986)), which is one of the provisions so incorporated, are set forth in an appendix (App., infra, 53a-56a). The Department of Labor's regulations governing the payment of claimants' attorney's fees in black lung cases, 20 C.F.R. 725.365-725.367, are set forth in a appendix (App., infra, 57a-60a). QUESTION PRESENTED Whether the attorney's fee provisions of the Black Lung Benefits Act, as applied, violate the Due Process Clause of the Fifth Amendment by denying claimants access to counsel. STATEMENT In this case the Supreme Court of Appeals of West Virginia determined that the system for awarding attorney's fees in black lung cases violates the Due Process Clause of the Fifth Amendment, by denying claimants access to counsel. The court concluded that the attorney's fee system produces undue delays in payment and provides inadequate compensation, thereby discouraging most attorneys in West Virginia from representing claimants for black lung benefits. The court thus held that, as applied, the attorney's fee provisions are unconstitutional, and, consequently, the violation of those provisions cannot serve as the basis for attorney disciplinary proceedings. 1. The Black Lung Benefits Act, 30 U.S.C. 901 et seq. (1982 & Supp. IV 1986), "provides benefits to those who have become totally disabled because of pneumoconiosis, a chronic respiratory and pulmonary disease arising from coal mine employment," and to their eligible survivors. Pittston Coal Group v. Sebben, 109 S. Ct. 414, 417 (1988). A claimant for benefits may be represented "in any proceeding for determination of a claim" by a qualified representative, including an attorney. 20 C.F.R. 725.362, 725.363. As part of its protection for eligible beneficiaries, the Act regulates the payment of fees for a claimant's attorney. See 30 U.S.C. 932(a) (1982 & Supp. IV 1986) (incorporating, inter alia, 33 U.S.C. 928 (1982 & Supp. IV 1986)). The Department of Labor has also issued comprehensive regulations governing the award of such fees. 20 C.F.R. 725.362-725.367. Under the Act and the Department of Labor's regulations, an attorney for a black lung claimant is prohibited from charging a fee unless the fee has been approved by the appropriate agency or court. 33 U.S.C. 928(c); 20 C.F.R. 725.365. The regulations also provide that "(n)o contract or prior agreement for a fee shall be valid." 20 C.F.R. 725.365. When the claimant does not prevail in his effort to win benefits, no fee is approved. See General Dynamics Corp. v. Horrigan, 848 F.2d 321 (1st Cir.), cert. denied, 109 S. Ct. 554 (1988); Director, Office of Workmen's Compensation Programs v. Hemingway Transport Inc., 1 Ben Rev. Bd. Serv. 73 (Ben. Rev. Bd. 1974). When the claimant does prevail in a contested case, the coal mine operator, its insurance carrier, or, in certain instances, the Black Lung Disability Trust Fund (administered by the Director of the Office of Workers' Compensation Programs in the Department of Labor) pays "a reasonable attorney's fee." 30 U.S.C. 932(a) (1982 & Supp. IV 1986) (incorporating 33 U.S.C. 928(a)); 20 C.F.R. 725.367. The black lung regulations establish the procedures for applying for a fee and the criteria for its award. See 20 C.F.R. 725.366. The application must itemize the work done and note "the customary billing rate" of the person who performed it. Ibid. An approved fee "shall be reasonably commensurate with the necessary work done." 20 C.F.R. 725.366(b). The regulation identifies as factors to be taken into account in setting a fee "the quality of the representation, the qualifications of the representative, the complexity of the legal issues involved, the level of proceedings to which the claim was raised, the level at which the representative entered the proceedings, and any other information which may be relevant to the amount of fee requested." Ibid. An attorney must apply separately to the "deputy commissioner, administrative law judge, or appropriate appellate tribunal" before whom the services were performed. 20 C.F.R. 725.366(a). A claim begins with processing by a Department of Labor deputy commissioner. 20 C.F.R. 725.401. Any party can then request a de novo hearing before an administrative law judge (ALJ). 20 C.F.R. 725.419. The ALJ's decision is subject to review by the Benefits Review Board, and review of that decision is available in a court of appeals. 30 U.S.C. 932(a) (1982 & Supp. IV 1986) incorporating, inter alia, 33 U.S.C. 921(c); 20 C.F.R. 725.481, 725.482. An award of attorney's fees is not enforceable until the claimant receives a final award of benefits (33 U.S.C. 928(a)). An approved fee at that point "shall be paid promptly and directly by the operator or carrier to the claimant's attorney in a lump sum after the order becomes final." 20 C.F.R. 725.367(a). The fees ultimately paid do not include interest. See Hobbs v. Director, Office of Workers' Compensation Programs, 820 F.2d 1528, 1530-1531 (9th Cir. 1987). Nevertheless, the attorney's risk of loss and the delay in payment can be reflected in the hourly rate charged by claimant's attorney. See Velasquez v. Director, Office of Workers' Compensation Programs, 844 F.2d 738, 739 (10th Cir. 1988); Hobbs, 820 F.2d at 1529; Thompson v. Potashnick Construction Co., 812 F.2d 574, 577 (9th Cir. 1987). 2. a. Beginning in 1978, respondent, a West Virginia lawyer, entered into contingent fee agreements with approximately fifteen black lung claimants (see App., infra, 2a, 46a-48a). These agreements entitled him to 25% of the back benefits recovered by the claimants as a result of his representation. Ibid. Between 1978 and 1983, claimants represented by respondent were awarded benefits, and he collected fees under the contingent fee arrangements. Since these fees were never approved by the appropriate agency or court, they were collected in violation of the statute and Department of Labor regulations. Id. at 47a-49a; see 33 U.S.C. 928(c), 20 C.F.R. 725.365. In 1987, the Committee on Legal Ethics of the West Virginia State Bar began a disciplinary proceeding against respondent based on his violations of the Department's fee regulations. Following a hearing, the Committee found respondent to have engaged in professional misconduct. App., infra, 42a-44a. The misconduct consisted of "(h)is failure to abide by the (Department) regulation," a failure that constituted among other things, "conduct that is prejudicial to the administration of justice" and that "adversely reflects on his fitness to practice law". Id. at 50a (citing West Virginia Code of Professional Responsibility, DR 1-102(A)(4), (5), and (6) (1982)). The Committee filed a complaint in the Supreme Court of Appeals of West Virginia to enforce a recommended six-month suspension. App., infra, 1a. b. The Supreme Court of Appeals denied enforcement of the suspension. App., infra, 1a-32a. The court held that the provisions for awarding attorney's fees under the black lung statute and the Department's regulations, as applied, "severely restrict (black lung) claimants' ability to find competent lawyers to represent them, and therefore the system violates due process." Id. at 24a. The court concluded that because the attorney's fee limitations were unconstitutional, respondent's failure to comply with the Department's regulations did not violate West Virginia ethical rules. /1/ Id. at 30a. The court acknowledged that the Department's regulations "appear() to provide for attorneys' fees that will fairly compensate competent counsel," but it nevertheless found that "the factual record before us reveals that this is not the case." App., infra, 16a. This "factual record" consisted solely of the affidavits of five attorneys submitted to the court as attachments to an amicus brief and of attorney testimony before a House of Representatives Subcommittee in 1985. Id. at 17a-20a (citing Investigation of the Backlog in Black Lung Cases: Hearings Before the Subcomm. on Labor Relations of the House Comm. on Education and Labor, 99th Cong., 1st Sess. (1985)). Based on that record, the court determined that the fee provisions manifested two inadequacies that deter "most" attorneys from taking on black lung cases. Those problems were "the long delay in payment, without any provision for interest, and the lack of premiums to offset the contingent nature of the work." App., Infra, 20a. The court added that "(t)his latter factor has become increasingly prominent as the approval rate (for claimants) has steadily declined" as a result of tighter eligibility criteria under 1981 amendments to the black lung statute. Ibid. The court cited an approval rate of 22.7% for claimants before an ALJ and 5.8% overall under the 1981 amendments. Ibid. The low approval rate, the court believed, established "not only the necessity of lawyer representation, but (also) the substantial risk that a lawyer will receive no fee at all for his work." Ibid. The court then evaluated the attorney's fee system under the three-factor test articulated by this Court in Mathews v. Eldridge, 424 U.S. 319 (1976), and Walters v. National Association of Radiation Survivors, 473 U.S. 305 (1985). App., infra, 20a-24a. Under this test, the court noted, it must weigh "the private interest that will be affected by the official action; the risk of an erroneous deprivation of such interest through the procedures used, the probable value, if any, of additional or substitute procedural safeguards; and the Government's interest in adhering to the existing system." Id. at 8a (quoting Walters, 473 U.S. at 321). Applying those factors, this Court in Walters had upheld Congress's $10 fee limitation for attorneys in Veterans' Administration (VA) benefits proceedings, finding no due process violation. The court here applied the same factors to reach the opposite result. First, the court identified two government interests in the regulation of fees in the black lung program: (1) the fee approval requirement serves "to ensure that neither the responsible operator nor the Trust Fund will be overcharged," and (2) the prohibition of private fee agreements serves "to protect claimants from improvident agreements that needlessly deplete their benefits." App., infra, 21a. The court discounted these interests, however, because of its view that the fee system in operation has made lawyers "almost entirely unavailable to claimants," with the result that "under the current system the claimant seldom has an award to share." Ibid. Turning to the second factor, the court surmised that the absence of counsel poses a serious risk of an erroneous result. While acknowledging that it lacked statistics comparing the success rates of black lung claimants with and without counsel, the court asserted that the "black lung claims process is procedurally, factually and legally complex," and that "lawyer representation is virtually essential to prevent erroneous deprivations of benefits for victims of black lung." App., infra, 22a-23a. The court found support for its determination in the experiences of respondent's clients, who, the court stated, had failed to win benefits without counsel but had succeeded in winning benefits with counsel. Id. at 22a. The court speculated that respondent's "clients can probably be taken as representative of most claimants." Ibid. The court added that the advantage of having an attorney in a black lung case distinguished this case from Walters, where veterans represented by counsel were only "marginally more successful" than those who proceeded without lawyers. Id. at 21a-22a. The court also observed that, in contrast to the network of veterans' groups in Walters, nonlawyer representatives are not widely available for black lung claimants. Id. at 23a. Finally, the court evaluated the weight of the private interests at stake. In Walters, this Court had emphasized that VA benefits are awarded on the basis of disability rather than need, which reduced their weight in the analysis of the process that was due. 473 U.S. at 333. Although black lung benefits are also awarded on the basis of disability, not need, the court here insisted that the interest in obtaining black lung benefits deserved a weight comparable to the strong interest in retaining subsistence welfare benefits that was recognized in Goldberg v. Kelly, 397 U.S. 254 (1970). App., infra, 23a-24a. The court explained that since black lung benefits are awarded for total disability or death, they "may well provide the only means of subsistence" to claimants. Id. at 24a. Summarily balancing these factors, the court concluded that "the system as currently administered denies claimants for black lung benefits property without due process of law by severely restricting their right to obtain representation by competent counsel." App., infra, 28a; id. at 24a. Without citing any specific provision of the Constitution, the court also discovered an "independent" constitutional ground for invalidating the fee system: it effectively denies "qualified claimants the procedural safeguards provided by Congress that are essential to vindicate the right to benefits granted by Congress." Id. at 24a-25a. /2/ Two justices dissented. App., infra, 33a-36a. The dissenting opinion noted that the majority had decided a constitutional question never raised below, and, as a consequence, "there is no factual record developed." Id. at 33a. In particular, the dissent stated that "(t)he ex parte affidavits" of attorneys practicing in the black lung field were "woefully inadequate" to sustain the finding that the black lung fee system deprived claimants of access to counsel. Ibid. The dissent also found the majority's reliance on Walters to be "completely misplaced." App., infra, 33a. The dissent took issue with the majority's failure to give the appropriate deference to the "'duly enacted and carefully considered decision'" of Congress (id. at 34a (quoting Walters, 473 U.S. at 319)), and recalled that this Court in Walters had stressed that "'(i)t would take an extraordinarily strong showing of probability of error under the present system -- and the probability that the presence of attorneys would sharply diminish that possibility -- to warrant a holding that the fee limitation denies claimants due process of law.'" App., infra, 34a-35a (quoting Walters, 473 U.S. at 326). Applying that standard, the dissent was convinced that no such "'extraordinarily strong showing' has been made based on the generalized ex parte affidavits filed with this Court." App., infra, 35a (footnote omitted). 3. Recognizing that its decision "involves an important question of federal law," the majority invited the Department of Labor to intervene as a party. App., infra, 30a. In response, the Department of Labor did intervene, to supplement the record and to petition for rehearing, but the petition for rehearing was denied (App., infra, 37a-41a). In a brief opinion, the court rejected or ignored the Department's arguments that the fee system advances important government interests and does not unduly hinder black lung claimants in obtaining counsel. In particular, the court ignored the argument that Congress specifically intended, in regulating fees, to shield claimants from improvident fee agreements and to prevent dissipation of their benefits through payments to attorneys. The court also ascribed no significance to the Department's argument that, especially in view of the Trust Fund's $3 billion debt to the government, the fee system serves an important governmental interest in avoiding overpayment. The court viewed this to be an argument that the current system of fees is justified as a way to keep down the number of successful claimants. Id. at 39a-40a. As to the factual record, the Department presented statistics with its rehearing petition regarding the outcome of recent black lung cases before administrative law judges. App., infra, 40a. The statistics indicated that in 92% of cases resulting in an award or denial of benefits, the claimants had attorneys, and prevailed 29% of the time; in the remaining 8% of cases, the claimants proceeded pro se, and prevailed 11.6% of the time. Ibid. Without commenting on the overwhelming rate of representation at the ALJ level shown by these figures, the court read the statistics to mean only claimants with counsel "have a likelihood of prevailing that is 2.5 times greater than claimants appearing pro se." Ibid. Thus, the court concluded, the Department "has simply reinforced with more elaborate statistics the conclusion that we reached in the original opinion -- namely, that a claimant's chance of prevailing when he is represented by counsel is substantially higher than when he appears pro se." Ibid. REASONS FOR GRANTING THE PETITION The court below had declared unconstitutional the federal black lung attorney's fee system, as applied, in one of the nation's principal coal-mining states. That holding cannot be reconciled with the decisions of this Court addressing due process challenges to administrative procedures, and, in particular, is wholly at odds with the reasoning and result in Walters v. National Association of Radiation Survivors, supra. In Walters, this Court sustained against a due process challenge Congress's decision to limit to $10 the attorney's fee available in VA proceedings. Contrary to Walters, the court below failed to pay any deference to the congressional policy in favor of fee regulation, and relied on a factual showing far too meager to justify a sweeping conclusion that an Act of Congress is being unconstitutionally applied. The decision below has important, and detrimental, practical ramifications. The black lung benefits program handles thousands of claims each year. The decision below substantially deprives black lung claimants in West Virginia of the protection against overreaching and against unjustified diminution of their benefits that Congress mandated in regulating attorney's fees. Although the decision does not preclude the Department's own enforcement of the attorney's fee limitations, it does remove the primary method on which the Department relies to enforce the fee provisions in West Virginia -- state bar disciplinary proceedings. If not reversed by this Court, the decision may also encourage attorneys in other coal-mining States to flout the black lung fee requirements. Because the decision below is wrong, and because it undermines the protection for black lung claimants envisioned by Congress, review by this Court is warranted. 1. The court's holding that the black lung fee system is unconstitutional cannot be squared with this Court's decisions regarding the regulation of attorney's fees. From the outset, the court below starkly misconceived its proper role by failing to pay the necessary deference owed to an Act of Congress. This Court has admonished that "(j)udging the constitutionality of an Act of Congress is properly considered the gravest and most delicate duty that (the judiciary) is called upon to perform, and we begin our analysis here with no less deference than we customarily must pay to the duly enacted and carefully considered decision of a coequal and representative branch of our Government." Walters, 473 U.S. at 319 (citations and internal quotation marks omitted); Rostker v. Goldberg, 453 U.S. 57, 64 (1981); Blodgett v. Holden, 275 U.S. 142, 148 (1927) (Holmes, J.). The court below failed to heed that guiding principle. Instead, it insisted on drawing broad and unsound conclusions from a record far too sparse to serve as the basis for overturning an Act of Congress as administered by a federal agency. In finding the black lung attorney's fee system to be unconstitutional, the court purported to follow this Court's established framework for assessing due process challenges. In executing that task, however, the lower court misapplied all three factors to which this Court has directed inquiry: (1) the private interest that will be affected, (2) he risk of an erroneous deprivation of that interest through the procedures used, and the probable value of additional or alternative procedural safeguards, and (3) the government's interest in adhering to the present system, including the fiscal and administrative burdens the additional requirements would entail. Walters, 473 U.S. at 321; Mathews, 424 U.S. at 335. a. The court significantly undervalued the government interests served by the black lung attorney's fee limits. Congress's purpose in regulating black lung attorney's fees is to protect claimants from improvident agreements that needlessly deplete their benefits. The regulation of attorney's fees in the black lung program results from Congress's incorporation of Section 28 of the Longshore and Harbor Workers' Compensation Act (LHWCA) (33 U.S.C. 928) into the Black Lung Benefits Act. The LHWCA has protected claimants against imprudent fee arrangements since its enactment in 1927. Act of Mar. 4, 1927, ch. 509, Section 28, 44 Stat. 1438. The same reasons that prompted the regulation of attorney's fees in the LHWCA context are equally applicable here. Section 28 of the LHWCA, as originally enacted, provided that no one may charge a claimant a fee unless approved by the appropriate court or administrative officer. Ibid. This provision was specifically designed to protect a class of unsophisticated workers who had been subjected to "sharp practices" of people who represented them. See Hearing on H.R. 9498 Before the House Comm. on the Judiciary, 69th Cong., 1st Sess. 40 (1926) (statement of Harry S. Austin, attorney for the International Longshoremen's Association) (1926 House Hearings); Hearings on S. 3170 Before a Subcomm. of the Senate Comm. on the Judiciary, 69th Cong., 1st Sess. 68-69 (1926) (statment of O.G. Brown, Council of American Shipbuilders and the New York and New Jersey Dry Dock Association) (1926 Senate Hearings). /3/ The provision was modeled on an early New York worker's compensation law, see Banks v. Chicago Grain Trimmer's Ass'n, 390 U.S. 459, 466 (1968), that was intended to "insure as large a return to the injured workman in compensation for injuries incurred in the course of his employment as possible." In re Fisch, 188 App. Div. 525, 177 N.Y.S. 338, 341 (1919). The Black Lung Benefits Act has included the LHWCA fee provision since its enactment in 1969. See Federal Coal Mine Health and Safety Act of 1969, Pub. L. No. 91-173, Tit. IV, Section 422, 83 Stat. 796. /4/ As with LHWCA claimants, black lung claimants are susceptible to exploitation because they typically have limited education. See U.S. Department of Labor, Employment Standards Admin., A Sample Survey of All Sources of Both Monetary and Non-Monetary Income of Black Lung Beneficiaries 14 (1983) (while some widows have more education, three-fourths of miners did not attend high school). "(R)ational paternalism" in restricting fees is a proper legislative purpose (Walters, 473 U.S. at 323), especially when, as in this instance, the claimant population is susceptible to exploitation that might deprive them of their full share of benefits. This Court long ago recognized the legitimacy of protecting claimants "against improvident contracts, in the interest not only of themselves and their families, but of the public." Yeiser v. Dysart, 267 U.S. 540, 541 (1925) (upholding provision in Nebraska worker's compensation statute requiring approval of fees charged a claimant). The court below gave that congressional policy short shrift because of its view that "under the current system the claimant seldom has an award to share." See App., infra, 21a. Like the district court in Walters (473 U.S. at 323), the West Virginia court erred by "cavalierly dismissing" Congress's long-asserted purpose. The court also erred by ignoring the impairment of other government interests that would flow from its preferred fee system. The court suggested that the Department could adopt a statewide "multiplier" to compensate claimant's attorneys for their risk of loss. App., infra, 25a. But that approach would drive up costs to operators and, more particularly, to the Black Lung Disability Trust Fund, which is already some $3 billion in debt to the federal treasury. See Id. at 39a. Moreover, it is unclear what kind of a multiplier would be permissible in view of this Court's opinion in Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 107 S. Ct. 3078 (1987), where four Members opposed any risk of loss enhancement in fee-shifting arrangements (id. at 3087) and a fifth Member found an enhancement permissible only when limited to the range necessary to attract competent counsel in the local market (id. at 3090-3091 (O'Conner, J., concurring)). Judging from the experience of lower courts, see, e.g., Student Public Interest Research Group v. AT&T Bell Laboratories, 842 F.2d 1436, 1451-1452 (3d Cir. 1988), the court's proposed multiplier would likely lead to expensive and counterproductive litigation over fees. See also Levins v. Benefits Review Board, 724 F.2d 4 (1st Cir. 1984) (employers have due process rights to hearings to contest attorney's fees). Likewise, the court's proposal (App., infra, 25a) to allow contingent fees would defeat Congress's purpose of preserving as much as possible of the pool of benefits for the claimant. Those problems underscore the government's interest in adhering to the present system, which fairly compensates claimants' attorneys without the complications caused by the alternatives proposed by the court. /5/ b. Given the weight of these government interests, as the dissent here recognized, "(i)t would take an extraordinarily strong showing of probability of error under the present system -- and the probability that the presence of attorneys would sharply diminish that possibility -- to warrant a holding that the fee limitation denies claimants due process of law." App., infra, 34a-35a (quoting Walters, 473 U.S. at 326). There plainly was no such showing here. To begin, the court's pivotal conclusion -- that the fee system had produced a shortage of lawyers -- lacks any adequate foundation in the record. The court relied solely on a few attorney affidavits, together with excerpts from congressional testimony expressing a general unhappiness with the fee system and a belief that there was a consequent shortage of attorneys. App., infra, 16a-20a. That sort of impressionistic evidence is not sufficient to sustain a finding of unconstitutionality for an administrative program receiving 7,000 or 8,000 new claims a year -- as the Department of Labor says is the case with the Black Lung Program -- particularly when the Department presented statistics showing a 92% rate of representation at the ALJ level. This Court had made clear its rejection of such "anecdotal evidence" to sustain across-the-board findings about the operation of vast federal programs. See, e.g., Walters, 473 U.S. at 324 n.11. The court here failed even to acknowledge the Department's evidence of the high rate of representation of black lung claimants at the ALJ level, thereby overlooking its obligation to consider "the risk of error inherent in the truth-finding process as applied to the generality of cases." Walters, 473 U.S. at 321 (emphasis added). Moreover, even assuming that substantial numbers of attorneys are generally unavailable, the court never adequately explained how the present fee system bears responsibility for the attorney shortage. The 5% initial approval rate of claims under the 1981 amendments to the black lung statute may well be a significant factor discouraging attorney representation (App., infra, 14a n.15, 20a. This low rate derives naturally from Congress's decision to tighten black lung eligibility standards in 1981. /6/ See Black Lung Benefits Amendments of 1981, Pub. L. No. 97-119, 95 Stat. 1643 (1981); 127 Cong. Rec. 31,979 (1981) (statement of co-sponsor Sen. Nickles contemplating a 4% approval rate under the 1981 amendments). Reduced attorney interest can reasonably be expected in a litigation area with limited chances of success, but that result cannot rationally be attributed to the fee system. Similarly, the court erroneously seized on the delay in black lung adjudications and in the payment of fees as a key reason for the unavailability of claimants' attorneys (App., infra, 20a). Delays also exist for claims adjudicated under earlier versions of the law that are more favorable to claimants -- and attorneys are widely available to handle such claims. See Investigation of the Backlog in Black Lung Cases: Hearings Before the Subcomm. on Labor Standards of the House Comm. on Education and Labor, 99th Cong., 1st Sess. 103 (1985) (statement of Gerald F. Sharp, counsel for District 28, UMW). Delay in payment, therefore, is not the determinative factor in any attorney shortage that may exist. /7/ The court also marshalled no persuasive evidence to show that in the "generality of cases" (Walters, 473 U.S. at 330), attorneys materially improve the results for black lung claimants. In its initial opinion, the court relied exclusively on the experiences of the handful of claimants represented by respondent. The court found it significant that after retaining respondent as their lawyer, those claimants had obtained benefits that had been previously denied. App., infra, 22a. But even if the improved results in those few cases were attributable to respondent's efforts, there was no basis for the court's speculation that these claimants "can probably be taken as representative of most claimants." Ibid. Moreover, in its opinion on rehearing, the court seriously misconstrued the Department's statistics as showing that lawyers necessarily produce a better outcome for claimants. Id. at 40a (characterizing the statistics as "conclusively demonstrat(ing) that at the (ALJ) level, claimants represented by counsel have a likelihood of prevailing that is 2.5 times greater than claimants appearing pro se"). The Department's figures do not support any inference that attorneys were the reason for the difference in outcome noted by the court. Most critically, almost all (92%) of the claimants were represented by counsel and only a small percentage of the claimants proceeded pro se. That fact significantly undercuts the use of comparative success rates as a ground for concluding that pro se claimants win less frequently because they lack lawyers. An equally likely explanation of the results is that the pro se claimants simply failed to attract lawyers because their cases were not strong enough. Compare Lassiter v. Department of Social Services, 452 U.S.18, 29 n.5 (1981) (similar statistics were "unilluminating"). Even if the fee system discourages representation in such marginal cases, it remains true that "a process which is sufficient for the large majority of a group of claims is by constitutional definition sufficient for all of them." Walters, 473 U.S. at 330. c. Finally, by giving too much weight to the private interest affected, the court erred in its analysis of the third factor in the Mathews test. In both Walters and Mathews, this Court stressed that the disability benefits involved were not based on need, nor did they constitute a recipient's sole means of livelihood. The same is true here. The court's efforts to categorize black lung benefits as similar to the subsistence welfare benefits in Goldberg v. Kelly ignores this Court's previous assessment of the relative weight of disability benefits for due process purposes. As the Court explained in Mathews (424 U.S. at 340), the unusually heavy weight given the private interest in Goldberg came from the unique nature of welfare as "assistance * * * given to persons on the very margin of subsistence * * *." Terminating aid "'may deprive an eligible recipient of the very means by which to live while he waits.'" Ibid. (quoting Goldberg). This factor is "'not present in the case of * * * virtually anyone else whose governmental entitlements are ended.'" Ibid. (quoting Goldberg; ellipsis in Mathews). Here, as in Mathews, the disability benefits sought are but one form of government aid that claimants may seek. Id. at 342. Thus, the court below erred in placing black lung benefits on the same plane as the welfare payments in Goldberg. /8/ In sum, the lower court erred by ignoring or trivializing important government interests, overemphasizing claimants' interests, and failing adequately to assess the effect of the fee system on the availability of claimants' attorneys. The court's determination that the black lung fee system violates the due process rights of claimants rests on an entirely inadequate factual record, and should be reversed. /9/ 2. The court's declaration that the black lung fee system is unconstitutional allows West Virginia attorneys to enter into fee arrangements with black lung claimants without the risk of state bar disciplinary sanctions. Attorneys may thus charge claimants contingent fees, contrary to the Department's regulations and to the intent of Congress that a claimant's contested award be preserved intact for the claimant. Also contrary to the statute, attorneys may charge fees to claimants who will never even receive benefits. West Virginia is an important state for such a gap in protection to emerge. The Department of Labor informs us that, in fiscal year 1987, approximately 18% of the 8,292 black lung filings arose in West Virginia, and it estimates that a comparable percentage of the approximately 7,000 benefit filings in fiscal year 1988 were in that State. The court's decision therefore affects attorneys who handle almost one-fifth of the claims filed in the black lung program. Removing the state bar's disciplinary proceedings as a sanction will significantly damage the Department of Labor's ability to protect claimants from inappropriate and unlawful fees. The Department advises us that it relies on such proceedings as the primary means of enforcing the black lung fee requirements. Existing regulations are unlikely to fill the void left by the court's holding here. As a practical matter, the Department's multi-level, case-by-case system of adjudication is simply not equipped to undertake an investigation into conduct that typically involves multiple claimants and comes to light after claims have been finally adjudicated. /10/ Moreover, criminal prosecution is not an effective tool to deal with unlawful fee arrangements. Indeed, while the LHWCA authorizes fines or imprisonment for unauthorized fee activities (33 U.S.C. 928(e)), that provision has been held not to be incorporated into the black lung statute. United States v. Carter, 760 F.2d 266 (4th Cir. 1985) (per curiam). /11/ It is difficult, of course, to predict the extent to which the court's holding will encourage noncompliance with the black lung fee requirements either in West Virginia or elsewhere. But based on past experience in the black lung program, it is likely that some lawyers will take advantage of the court's decision by entering into unsupervised fee arrangements. In its early years, the black lung system witnessed certain lawyers "soaking coal miners with fat fees for very little work" (see House Comm. on Education and Labor, 96th Cong., Black Lung Benefits Reform Act and Black Lung Benefits Revenue Act of 1977, at 1 (Comm. Print 1979) (Statement of Rep. Heckler)), and the Department advises us that it continues to see attorneys entering into contingent fee agreements or other unapproved arrangements. See, e.g., Wells v. Director, Office of Workers' Compensation Programs, 9 Black Lung Rep. 1-63 (Ben. Rev. Bd. 1986); In re Shoemaker, 11 Black Lung Rep. 3-145 (ALJ 1988); Taylor v. Director, Office of Workers' Compensation Programs, 11 Black Lung Rep. 3-184 (ALJ 1988). /12/ As a practical matter, while the decision below will not directly prohibit the Department from enforcing its fee regulations, it threatens to expose black lung claimants to precisely the harms that Congress has sought to prevent. It is not for the courts to revise Congress's economic and social policies under the aegis of general constitutional guarantees, particularly on a factual record as frail as the one here. The policy choices in the black lung program reflect a careful balance of competing values, after examination by Congress and by the agency charged with administering the program. Courts should not use the Due Process Clause as the vehicle for redetermining federal policy with respect to the reasonable regulation of attorney's fees. CONCLUSION The petition for a writ of certiorari should be granted Respectfully submitted. WILLIAM C. BRYSON Acting Solicitor General JOHN R. BOLTON Assistant Attorney General DAVID L. SHAPIRO Deputy Solicitor General MICHAEL R. DREEBEN Assistant to the Solicitor General WILLIAM KANTER JOHN S. KOPPEL Attorneys Department of Justice JERRY G. THORN Acting Solicitor of Labor ALLEN H. FELDMAN Associate Solicitor MARY-HELEN MAUTNER Counsel for Appellate Litigation EDWARD D. SIEGER Attorney Department of Labor APRIL 1989 /1/ The court rejected the Committee's charge in its complaint that Triplett had misrepresented his fee arrangements to the Department, finding that the Committee had not adequately alleged such a violation and that the evidence did not support it in any event. App., infra, 5a-6a. /2/ While not purporting to direct the Labor Department to adopt any particular fee regulations, the court suggested that the Department "could provide for a contingent fee," or could use a "multiplier * * * to enhance the 'normal' hourly fee to compensate for the risk of loss." App., infra, 25a. /3/ Both the Senate and the House considered bills requiring approval of claims for "legal services" for claimants' representatives. See H.R. 9498, 69th Cong., 1st Sess. Section 38 (1926), reprinted in the 1926 House Hearings, supra, at 11; S. 3170, 69th Cong., 1st Sess. Section 38 (1926), reprinted in 1926 Senate Hearings, supra, at 11. The attorney for the International Longshoremen's Association proposed a criminal sanction, modeled on New York's worker's compensation law, to strengthen the fee provision. 1926 House Hearings, supra, at 40. The attorney for the Council of American Shipbuilders and the New York and New Jersey Dry Dock Association pointed out that limiting approval requirements to "legal services" allowed non-lawyers to exploit injured workers and suggested that only lawyers be allowed to represent claimants. 1926 Senate Hearings, supra, at 68-69. The Senate later passed a bill incorporating a criminal sanction and requiring approval of claims for legal services "or for any other services rendered in respect of a claim," 1926 House Hearings, supra, at 129; the full provision of that bill was enacted without change in 1927. In 1972, when Congress added a fee shifting provision to Section 28, it reaffirmed the principle that "no fee may be received unless approved" by the appropriate court or administrative official. H.R. Rep. No. 1441, 92d Cong., 2d Sess. 21 (1972). /4/ The fee provisions, and other portions of the Longshore statute, were added to Part C of the black lung statute in conference. See H.R. Conf. Rep. No. 761, 91st Cong., 1st Sess. 89-91 (1969). During debate on the conference report, supporters of the legislation uniformly stated their intent to incorporate into Part C the enumerated Longshore provisions. See 115 Cong. Rec. 39,707, 39,709 (Rep. Perkins), 39,712-39,713 (Rep. Dent); 39,718 (Rep. Burton); 39,996 (section-by-section analysis of the Conference Report, presented by Sen. Williams); 39,999 (Sen. Javits). /5/ As discussed above (at 4), the hourly component of the fee award can now take into account the delay in payment, as well as the risk of loss borne by the attorney. See Velasquez, 844 F.2d at 739; Hobbs, 820 F.2d at 1529; Potashnick Construction Co., 812 F.2d at 577. These provisions for delay and risk of loss satisfy the statutory requirement that a prevailing attorney obtain a "reasonable fee" (33 U.S.C. 928(a)). Indeed, for meritorious claims, existing procedures could result in a greater attorney's fee for the claimant's lawyer than would be available under a contingent fee arrangement. Cf. Blanchard v. Bergeron, 109 S. Ct. 939 (1989) (reasonable attorney's fee under 42 U.S.C. 1983 not limited to contingent fee agreement). /6/ Of course, Congress's choice to tighten eligibility standards raises no due process question. See Schweiker v. Wilson, 450 U.S. 221, 238 (1981). /7/ Congress and the Department of Labor are aware of the delay resulting from the 1978 amendments to the black lung statute, which required the reopening of about 200,000 claims. See Report to the Honorable Donald J. Pease, House of Representatives, by the U.S. General Accounting Office, Adjudication of Black Lung Claims by Labor's Office of Administrative Law Judges and Benefits Review Board App. I 7 (Oct. 26, 1984). The Department has made substantial progress in eliminating the backlog at the ALJ level, though delays still exist at the Benefits Review Board. See Oversight Hearing on the Administration of the Black Lung Program: Hearing Before the Subcomm. on Labor Standards of the House Comm. on Education and Labor, 100th Cong., 2d Sess. 67 (1988) (statement of Rep. Wise). /8/ Additionally, the court appeared to believe (App., infra, 23a) that applicants for benefits, who have not yet been found eligible, have as strong a "property" interest in benefits as current recipients, who have been found eligible for benefits under an entitlement program. This Court has never held that applicants have any property interest at all under the Fifth Amendment, much less that an applicant's interest is equal to a recipient's. See Lyng v. Payne, 476 U.S. 926, 942 (1986). /9/ The alternative theory advanced by the court -- that it was unconstitutional for the Department to administer a process that denied claimants access to benefits that Congress has provided -- simply restates the due process claim in a different guise and therefore has no "independent significance." Walters, 473 U.S. at 335 (rejecting claim that the $10 fee limitation violated the First Amendment because that claim is "at base, * * * inseparable from the() due process claim"). /10/ As discussed above (at 4), black lung claims and fee petitions are processed first by deputy commissioners in the Office of Workers' Compensation Programs (OWCP) and may then go to ALJs and the Benefits Review Board. Deputy commissioners have general authority to issue "appropriate orders" (20 C.F.R. 725.351(a)(5)), but such a provision may not be specific enough to allow discipline. See Camp v. Herzog, 104 F. Supp. 134, 137-138 (D.D.C. 1952); J. Stein, G. Mitchell & B. Mezines, Administrative Law Section 42.02(1), at 42-17 (1987). While an ALJ has authority to exclude an attorney from the proceeding because of unethical or improper conduct (29 C.F.R. 18.34(g)(3)), the provision has not been tested as a general means of enforcing the fee requirements. The Benefits Review Board may exclude attorneys whose conduct merits a suspension or loss of license (see 53 Fed. Reg. 16,519 (1988), adding 20 C.F.R. 802.202(e)), but this provision cannot be used against West Virginia lawyers in light of the Supreme Court of Appeals' decision here that violations of the Department's regulations are not unethical. /11/ It is also generally difficult to prove that entering into a fee agreement satisfies the elements, for example, of mail fraud or obstruction of justice (see 18 U.S.C. 1341, 1505; cf. RXs 16, 17; App., infra, 5a-6a (court's finding that respondent's conduct did not involve misrepresentation)), even if as happened here, the threat of prosecution results in an attorney's agreement to reimburse clients, (see RXs 16, 17 to hearing before Committee on Legal Ethics concerning respondent's pre-trial diversion). /12/ The record in this case substantiates the prevalence of such conduct. Cf. Tr. 14 (statement by respondent's attorney at the hearing before the State Bar: "I think we all know that it's something that a lot of attorneys were doing, were taking their contingent fee contracts on these Black Lung cases"); Tr. 178 (testimony by Floyd Gibson, a former member of Committee on Legal Ethics, that there was a strong feeling, discussed regularly among attorneys, that the government did not have any business regulating black lung attorney's fees). APPENDIX