United States Department of Labor v. Triplett

494 U.S. 715, 110 S. Ct. 1428, 108 L. Ed. 2d 701, 1990 U.S. LEXIS 1666

• Court: Supreme Court of the United States
• Decided: March 28, 1990
• Docket: 88-1671
• Status: Published

Opinions

Justice Scalia

delivered the opinion of the Court.

‡

These cases call into question the constitutionality of the Department of Labor’s administration of that provision of the Black Lung Benefits Act of 1972 which prohibits the acceptance of attorney’s fees for the representation of claimants, except such fees as are approved by the Department. Respondent Triplett contends that the Secretary of Labor’s manner of implementing this restriction violates the Due Process Clause of the Fifth Amendment because it renders qualified attorneys unavailable and thereby deprives claimants of legal assistance in the prosecution of their claims.

I

The Black Lung Benefits Act of 1972, 83 Stat. 792, as amended, 30 U. S. C. §901 et seq. (1982 ed. and Supp. V), provides federal funds to those who have been totally disabled by pneumoconiosis, a respiratory disease commonly caused by coal mine employment, and to their eligible survivors. See Pittston Coal Group v. Sebben, 488 U. S. 105, 108 (1988). The Department of Labor (Department) awards benefits after adjudication by a deputy commissioner, and after review (if requested) by an administrative law judge (ALJ), the Benefits Review Board, and a federal court of appeals. 20 CFR §§725.410, 725.419(a), 725.481 (1989); 30 U. S. C. §932(a) (1982 ed., Supp. V) (incorporating 33 U. S. C. § 921(c) (1982 ed.)).

A claimant may be represented throughout these proceedings by an attorney, 20 CFR §§725.362, 725.363(a) (1989), and the Act provides that when the claimant wins a contested case the employer, his insurer, or (in some cases, see 30 U. S. C. §934 (1982 ed.)) the Black Lung Disability Trust Fund shall pay a “reasonable attorney’s fee” to the claimant’s lawyer. 30 U. S. C. § 932(a) (incorporating 33 U. S. C. § 928(a) (1982 ed.)). The Act also incorporates, however, that provision of the Longshore and Harbor Workers’ Compensation Act (LHWCA), 44 Stat. 1438, as amended, 33 U. S. C. § 928(d) (1982 ed.), which prohibits an attorney from receiving a fee — whether from the employer, insurer, or Trust Fund, or from the claimant himself — unless approved by the appropriate agency or court. 30 U. S. C. § 932(a) (1982 ed., Supp. V). The Department’s regulations invalidate all contractual agreements for fees, see 20 CFR §§725.365, 802.203(f) (1989), and the Department will not approve a fee if the claimant is unsuccessful, see Director, OWCP v. Hemingway Transport Inc., 1 BRBS 73, 75 (1974). Once the claimant’s compensation order becomes final, 33 U. S. C. § 928(a), the attorney may apply to each tribunal before whom the services were performed, 20 CFR § 725.366(a) (1989), and shall be awarded a fee “reasonably commensurate with the necessary work done,” § 725.366(b), taking into account “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.

Respondent George R. Triplett (hereinafter respondent) violated these restrictions by receiving unapproved fees. He agreed to represent claimants in exchange for 25% of any award obtained, and collected those fees without the required approval. The Committee on Legal Ethics of the West Virginia State Bar initiated a disciplinary action against respondent for these infractions. The committee, after a hearing, recommended a 6-month suspension, and filed a complaint in the West Virginia Supreme Court of Appeals to enforce that sanction.

That court denied enforcement. Although respondent had not raised such a contention, it occurred to the court that the Act’s restriction on payment of fees, as implemented by the Department, might violate the Due Process Clause of the Fifth Amendment and thus be impermissible as the premise for the disciplinary action. After asking for and receiving supplemental briefing on the issue, it held the Department’s implementation of the Act unconstitutional because it “effectively den[ied] claimants necessary access to counsel,” and, alternatively, because it “den[ied] qualified claimants the procedural safeguards provided by Congress that are essential to vindicate the right to benefits also granted by Congress.” 180 W. Va. 533, 536, 544, 378 S. E. 2d 82, 85, 93 (1988). Two justices dissented, finding the factual record upon which the majority relied “woefully inadequate.” Id., at 549, 378 S. E. 2d, at 98.

After issuing this opinion, the court invited the Department to intervene. The Department did so, supplemented the record, and petitioned for rehearing. The court denied the petition in a brief opinion that found the Department’s proffered justifications for the fee limitation system, and its new evidence, unpersuasive. Id., at 547, 378 S. E. 2d, at 96.

Both the Department (in No. 88-1671) and the committee (in No. 88-1688) petitioned for certiorari. We granted the petitions. 493 U. S. 807 (1989).

II

A

We deal first with the parties’ standing. On petitioners’ side, the Committee on Legal Ethics has the classic interest of a government prosecuting agency arguing for the validity of a law upon which its prosecution is based. It has preferred charges against respondent that rest upon his disregard of the fee restrictions administered by the Department; those charges cannot be sustained if the restrictions themselves are unlawful. Since the committee has standing, we need not inquire whether the Department does as well. Bowsher v. Synar, 478 U. S. 714, 721 (1986).

B

On respondent’s side, Triplett invokes not his own legal rights and interests, but those of the black lung claimants who hired him. Respondent’s defense to the disciplinary-proceeding is that the fee scheme he is accused of violating contravenes those claimants’ due process rights because, by prohibiting collection pursuant to voluntary fee agreements and failing to provide adequate alternative means of attorney compensation, it renders claimants unable to obtain legal representation for their black lung claims. Ordinarily, of course, a litigant “ ‘must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.’” Valley Forge Christian College v. Americans United for Separation of Church & State, Inc., 454 U. S. 464, 474 (1982) (quoting Warth v. Seldin, 422 U. S. 490, 499 (1975)). This is generally so even when the very same allegedly illegal act that affects the litigant also affects a third party. See United States v. Payner, 447 U. S. 727, 731-732 (1980) (criminal defendant “lacks [third-party] standing under the Fourth Amendment to suppress . . . documents illegally seized from” his banker). When, however, enforcement of a restriction against the litigant prevents a third party from entering into a relationship with the litigant (typically a contractual relationship), to which relationship the third party has a legal entitlement (typically a constitutional entitlement), third-party standing has been held to exist. See Secretary of State of Maryland v. Joseph H. Munson Co., 467 U. S. 947, 954-958 (1984) (professional fundraiser given third-party standing to challenge statute limiting its commission to 25% as violation of clients’ First Amendment right to hire him for a higher fee). A restriction upon the fees a lawyer may charge that deprives the lawyer’s prospective client of a due process right to obtain legal representation falls squarely within this principle. See Caplin & Drysdale, Chartered v. United States, 491 U. S. 617, (1989).** There is no question that a due process right to representation is placed at issue here, since at least one of the claimants who retained respondent received benefits that the Government was seeking to recover as erroneously paid. See 180 W. Va., at 543, n. 31, 378 S. E. 2d, at 92, n. 31; Walters v. National Assn. of Radiation Survivors, 473 U. S. 305, 320, n. 8 (1985).

Accordingly, we find standing on both sides of this action.

Ill

In Walters v. National Assn. of Radiation Survivors, supra, we upheld against due process attack a statutory $10 limitation on attorney’s fees payable by veterans seeking disability or death benefits in proceedings before the Veterans’ Administration. We began there, as we begin here, by noting the heavy presumption of constitutionality to which a “carefully considered decision of a coequal and representative branch of our Government” is entitled. Id., at 319. We determined in Walters that the Government had an interest in administering benefits in an informal and nonadversarial fashion so that claimants would receive the entirety of an award without having to divide it with a lawyer. Id., at 321-323. We accorded that interest “great weight,” id., at , and required those challenging the law to make “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.” Ibid. Applying a similar analysis here, we conclude that the fee limitation scheme must be upheld.

The Government pursues an obvious and legitimate interest through the current regime. The regulation of attorney’s fees payable by claimants themselves is designed to protect claimants from their “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 similar state limitation). When fees are payable by persons other than the claimants, as Congress has provided, regulation is designed to assure fairness to the employer, carrier, or Trust Fund, and to protect those sources from a depletion that would leave other claimants without a source of compensation. The Government has good reason, moreover, to defer payment until the compensation award is final. A regime of payment immediately upon success at every level, subject to recovery in the event the judgment in favor of the claimant is reversed at a higher level, would impose upon the payor the onerous task of seeking to obtain a refund.

In Walters v. National Assn. of Radiation Survivors, supra, we assumed that the fee limitation would make attorneys unavailable to claimants, but nevertheless upheld the statute because attorneys were not essential to vindicate the claims. Here, we need not reach the latter issue unless respondent has proved what was assumed in that case, viz., that the regime made attorneys unavailable to his prospective clients at the time respondent violated the Act. That showing contains two component parts: (1) that claimants could not obtain representation, and (2) that this unavailability of attorneys was attributable to the Government’s fee regime. That is no small burden, and respondent has failed to bear it.

Since the due process issue in this case first arose during the original enforcement proceeding in the West Virginia Supreme Court of Appeals, no lower court had heard evidence or made factual findings. Although the committee had heard evidence concerning respondent’s misconduct, it made no findings regarding the effect .of the fee regime on the availability of lawyers. The “factual record” upon which the court relied to invalidate this federal program consisted of testimony by two lawyers in the disciplinary proceeding, five affidavits attached to an amicus brief to the court, and statements by attorneys in hearings before a House of Representatives Subcommittee in 1985. Since it is critical to our disposition of the case, we shall describe the evidence the court relied upon in some detail.

As to the first issue — unavailability of attorneys — the court relied upon three lawyers’ assessments. One stated that “fewer qualified attorneys are accepting black lung claims,” and that more claimants are proceeding pro se. 180 W. Va., at 541, 378 S. E. 2d, at 90. According to a second attorney, “few attorneys are willing to represent black lung claimants.” Ibid. A third lawyer’s evaluation was not contained in the record, but consisted of his 1985 testimony to the House subcommittee that “many of his colleagues had ‘ . . . stated unequivocally that they would not take black lung cases ....’” Id., at 542, 378 S. E. 2d, at 91 (quoting Hearings on Investigation of Backlog in Black Lung Cases before the Subcommittee on Labor Relations of the House Committee on Education and Labor, 99th Cong., 1st Sess., 188 (1985)). (The court did not mention the testimony of other witnesses before the Subcommittee to the opposite effect. See, e. g., id., at 45.)

This will not do. We made clear in Walters that this sort of anecdotal evidence will not overcome the presumption of regularity and constitutionality to which a program established by Congress is entitled. 473 U. S., at 324, n. 11. The impressions of three lawyers that the current system has produced “few” lawyers, or “fewer qualified attorneys” (whatever that means), and that “many” have left the field, are blatantly insufficient to meet respondent’s burden of proof, even if entirely unrebutted.

In unneeded addition, there was rebuttal here — affirmative indication that attorneys willing to take black lung cases were in adequate supply. Data submitted by the Department in support of its petition for rehearing showed that in 1987 claimants were represented by counsel at the AL J stage in 92% of cases resulting in grant or denial of benefits. Although these statistics are not conclusive of adequate attorney availability (they do not show, for example, the proportion of unrepresented claimants who never reached the ALJ stage), they are the only nonanecdotal evidence in the record, and they powerfully suggest that claimants whose chances of success are high enough to attract contingent-fee lawyers have no difficulty finding them.

Even if respondent had demonstrated an unavailability of attorneys, he would have been obliged further to show that its cause was the regulation of fees. He did not do so. In finding to the contrary, the West Virginia Supreme Court of Appeals relied mainly on statements by attorneys concerning the delay in receiving payment. Of the three lawyers who claimed that there was a shortage of attorneys (see supra, at 723), two attributed the shortage, in part, to the delay in payment of fees. 180 W. Va., at 541, 542, 378 S. E. 2d, at 90, 91. See also id., at 536, n. 6, 378 S. E. 2d, at 85, n. 6 (lawyer testified that he had not yet been paid in “three or four” cases in which he had prevailed); id., at 541-542, 378 S. E. 2d, at 90-91 (testimony at congressional hearings that payment was delayed 2-3 years); id., at 541, 378 S. E. 2d, at 90 (lawyer stated that he is owed more than $30,000 in fees that have been awarded but not paid). The court thought this proved that the delay built into the fee-approval system produced the unavailability of attorneys: “In a small, depressed West Virginia town $30,000 is a substantial amount of money for an individual practitioner. In the long run, as John Maynard Keynes once observed, we are all dead. In the short run, lawyers have offices to run, mortgages to pay and children to educate.” Ibid.

The court did not explain why the Keynesian imperative of cash-on-the-barrelhead has not eliminated the contingent fee, the very institution respondent seeks to shield from regulation — which itself yields no office funds, mortgage payments, or tuition fees until often lengthy litigation is completed. The answer, of course, is that the contingent fees contracted for are high enough to compensate not only for the contingency but also for the delay until the contingency is resolved. There is no apparent reason why compensation cannot render palatable the additional delay inherent in the Department’s approval procedure as well. At one point the West Virginia Supreme Court of Appeals seemed to acknowledge this, asserting that its whole case against the Department’s scheme boils down to the fact that the fees are too low: “It is clear from the evidence before us that most lawyers are unwilling to represent black lung claimants because of the inadequate fees awarded by the DOL.” Id., at 545, 378 S. E. 2d, at 94. The evidence to support this economic assessment is similar to that for the unavailability of attorneys: small in volume, anecdotal in character, and self-interested in motivation — to wit, a portion of the affidavit of one claimants’ attorney who has not abandoned the practice. Id., at 541, 378 S. E. 2d, at 90 (citing Muth affidavit). On the face of the matter, it is difficult to understand how the Department could maintain a system of inadequate fees if it wanted to. The statute itself requires that the fees awarded be “reasonable,” see 33 U. S. C. §928(a) (1982 ed.); 30 U. S. C. §932(a) (1982 ed., Supp. V), which the agency has interpreted to include a requirement that they compensate for delay, cf. Hobbs v. Director, OWCP, 820 F. 2d 1528, 1529 (CA9 1987) (applying LHWCA); and where the statutory requirement is not observed, the dissatisfied attorney has a remedy in the appropriate court of appeals, see 33 U. S. C. §§ 921(c), 928(a) (1982 ed.); 30 U. S. C. §932(a) (1982 ed., Supp. V); Hobbs v. Director, OWCP, supra.

To establish the requisite causality between the Department’s scheme and the (alleged) unavailability of attorneys, the court also relied upon the impressions of the three lawyers (see supra, at 723) who attributed the departure of many black lung attorneys to the risk of nonrecovery if the claimant loses. 180 W. Va., at 541-542, 378 S. E. 2d, at 90-91. But as noted above, the existence in this country of a thriving contingent-fee practice demonstrates that this risk can be compensated for — so it comes down once again to the level of compensation. And we note that the Benefits Review Board has construed the regulations of the Secretary of Labor governing the award of attorney’s fees to permit consideration of the attorney’s risk of going unpaid. See Risden v. Director, OWCP, 11 BRBS 819, 824 (1980).

Finally, to establish the necessary causality the court relied on the conclusory impressions of interested lawyers as tó the effect of the Department’s fee regime on the availability of attorneys. One lawyer, for example, whose experience consisted of representing two claimants prior to 1981, said that he did not take black lung cases because of the difficulty in obtaining fees. 180 W. Va., at 536, n. 6, 378 S. E. 2d, at 85, n. 6; Tr. 206. Cf. 180 W. Va., at 542, 378 S. E. 2d, at 91. Perhaps so; but that does not come close to proving that the fee regime dried up the supply of attorneys.

In sum, the evidence relied upon by the West Virginia Supreme Court of Appeals did not remotely establish either that black lung claimants are unable to retain qualified counsel or that the cause of such inability is the attorney’s fee system administered by the Department. The court therefore had no basis for concluding that that system deprives claimants of property without due process of law.

IV

It is not clear to us what the West Virginia Supreme Court of Appeals meant by what it described as its “independent basis” for finding a due process violation, which was set forth as follows:

“Congress has conferred upon qualified claimants the right to receive black lung benefits. Congress has also prescribed the remedy (the claims process) to guarantee this right, an essential part of which is the right to counsel. It is, therefore, unconstitutional for the Department of Labor by its regulations to deny qualified claimants the procedural safeguards provided by Congress that are essential to vindicate the right to benefits also granted by Congress.” Id., at 544, 378 S. E. 2d, at 93.

It seems to us this adds nothing to the prior analysis except the assertion that the right to counsel, besides being constitutionally required (as we have earlier assumed), was part of the statutory “remedy” prescribed by Congress. If that were so, of course, it would not be necessary to invoke the Due Process Clause, since in denying the right the Department of Labor would be violating the statute. In any case, the asserted basis is not “independent” — or at least not independent of the central proposition that black lung claimants have been deprived of their ability to obtain counsel. Our conclusion that that proposition has not remotely been established disposes of the West Virginia Supreme Court of Appeals’ alternative ground of decision as well.

* * *

The judgment of the West Virginia Supreme Court of Appeals is reversed, and the cases are remanded for further proceedings not inconsistent with this opinion.

It is so ordered.

Justice White and Justice Blackmun join all but Part II-B of this opinion.

We disagree with Justice Marshall’s view that ASARCO Inc. v. Kadish, 490 U. S. 605 (1989), renders our inquiry into third-party standing inappropriate. See post, at 729-732. Whether a litigant can assert the rights of a third party under a particular statute is “closely related to the question whether a person in the litigant’s position would have a right of action on the claim,” Warth v. Seldin, 422 U. S. 490, 500, n. 12 (1975). Thus, while state courts are fully entitled to entertain disputes that would not qualify as cases or controversies under Article III, it is questionable whether they have the power, by granting or denying third-party standing, to create or destroy federal causes of action. See Haitian Refugee Center v. Gracey, 257 U. S. App. D. C. 367, 381-382, and n. 12, 809 F. 2d 794, 808-809, and n. 12 (1987). We follow longstanding precedent in ascertaining the third-party standing of a respondent in a case arising from state court. See Secretary of State of Maryland v. Joseph H. Munson Co., 467 U. S. 947, 954 (1984); Barrows v. Jackson, 346 U. S. 249 (1953).