J.J. Cassone Bakery, Inc. v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 16, 2008 Decided January 23, 2009

No. 07-1300

J.J. CASSONE BAKERY, INC.,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

BAKERY, CONFECTIONERY AND TOBACCO WORKERS' UNION,

LOCAL 3,

INTERVENOR

Consolidated with 07-1345

On Petition for Review and Cross-Application for

Enforcement

of an Order of the National Labor Relations Board

Marc L. Silverman argued the cause for petitioner. With

him on the briefs was Laura B. Friedel.

Elizabeth A. Heaney, Attorney, National Labor Relations

Board, argued the cause for respondent. With her on the brief

were Ronald E. Meisburg, General Counsel, John H.

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Ferguson, Associate General Counsel, Linda Dreeben,

Deputy Associate General Counsel, and Fred B. Jacob,

Supervisory Attorney. William M. Bernstein and Jill A.

Griffin, Attorneys, entered appearances.

Before: GINSBURG, GARLAND and GRIFFITH, Circuit

Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge: The National Labor Relations

Board held J.J. Cassone Bakery engaged in unfair labor

practices when the Bakery, Confectionary, Tobacco Workers’

& Grain Millers International Union Local No. 3, AFL-CIO

attempted to organize Cassone’s employees. Cassone argues

the Board violated the Administrative Procedures Act and

denied it due process by authorizing an Administrative Law

Judge who had not been present at the reception of testimony

to review the record and issue a decision. We deny

Cassone’s petition for review and grant the Board’s cross-

application for enforcement.

I. Background

Cassone is a family-owned commercial and retail bakery.

In 1999 the Union tried to organize Cassone’s employees for

perhaps the sixth time in 20 years. J.J. Cassone Bakery, 350

N.L.R.B. No. 6, at 10 (June 26, 2007) (Cassone II). At the

Union’s request, the Board held an election but the Union was

again unsuccessful, garnering only about 21 percent of the

votes cast. Id. at 6.

The Union and two individual employees filed unfair

labor practice charges alleging Cassone had threatened

several Union supporters and fired two of them prior to the

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election and had disciplined or fired several members of the

organizing committee and other Union supporters after the

election, all in violation of the National Labor Relations Act,

29 U.S.C. §§ 151-69. The General Counsel issued a

complaint and Administrative Law Judge Howard Edelman,

acting for the Board, held a 12-day hearing at which he heard

the testimony of various employees and of management

officials. ALJ Edelman ruled against the Company in all

respects relevant to its petition for review. J.J. Cassone

Bakery, 345 N.L.R.B. 1305 (2005) (Cassone I). Cassone

objected on the ground that portions of Edelman’s opinion

were copied verbatim from the briefs filed by the General

Counsel and by the Union.

The Board set aside the decision and remanded the case

for review by a different ALJ in order to dispel any

appearance of partiality created by Edelman’s copying. The

Board rejected Cassone’s request for a new hearing because it

was satisfied “Judge Edelman conducted the hearing itself

properly.” Id at 1305. The Board instructed the substitute

ALJ to reopen the record only if necessary and instructed him

to rely upon ALJ Edelman’s “demeanor-based credibility

determinations unless they are inconsistent with the weight of

the evidence.” Id.

In a “Supplemental Decision,” ALJ Steven Davis agreed

with all but one of ALJ Edelman’s findings. Cassone II, 350

N.L.R.B. No. 6, at 5-27. Having conducted a “careful review

of the record,” Davis reported “Edelman’s demeanor-based

credibility determinations, with the exception of his

credibility determination as to [one witness], are completely

consistent with the weight of the evidence, and are also fully

supported by the evidence.” Id. at 6-7.

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Cassone again sought review by the Board, excepting to

ALJ Davis’ “failure to observe the witnesses’ demeanor and

to make independent credibility resolutions,” as well as to his

reliance upon the original ALJ’s credibility determinations.

On review, the Board “carefully examined the record and

[found] no basis for reversing” ALJ Davis’ conclusions with

regard to ALJ Edelman’s credibility determinations. Cassone

II, 350 N.L.R.B. No. 6, at 1. The Board affirmed ALJ Davis’

findings of fact and conclusions of law in all respects relevant

here. Id. at 1-4.

II. Analysis

Cassone challenges the Board’s Order on the ground that

it violates both the APA and Cassone’s right, under the Fifth

Amendment to the Constitution of the United States, to due

process of law; in both respects, the Company’s objection is

that the second ALJ based his decision upon the credibility of

witnesses whose testimony he did not personally hear and see.

As explained below, we do not consider whether the Board

violated the APA because Cassone forfeited that argument;

we hold only that the Board did not violate Cassone’s right to

due process.

A. The APA claim

Section 554(d) of the APA provides: “The employee who

presides at the reception of evidence ... shall make the

recommended decision or initial decision required by section

557 of this title, unless he becomes unavailable to the

agency.” 5 U.S.C. § 554(d). Section 557(b) in turn provides:

“When the agency did not preside at the reception of

evidence, the presiding employee ... shall initially decide the

case unless the agency requires, either in specific cases or by

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general rule, the entire record to be certified to it for

decision.” Id. § 557(b). Cassone argues the Board violated

§ 554(d) because ALJ Davis issued a decision to which

§ 557(b) applies without having “preside[d] at the reception

of evidence.” We shall not consider this argument because it

is forfeit, Cassone having failed to raise it before the Board at

a proper time.

Section 10(e) of the National Labor Relations Act

provides: “No objection that has not been urged before the

Board ... shall be considered by the court, unless the failure or

neglect to urge such objection shall be excused because of

extraordinary circumstances.” 29 U.S.C. § 160(e). Although

“we have not required ... the ground for the exception [to] be

stated explicitly in the written exceptions filed with the

Board, we have required, at a minimum [to preserve the

point], that the ground be ‘evident by the context in which

[the exception] is raised.’” Parsippany Hotel Mgmt. Co. v.

NLRB, 99 F.3d 413, 417 (1996) (citing Consolidated

Freightways v. NLRB, 669 F.2d 790, 794 (D.C. Cir. 1981)).

Cassone contends it raised its § 554(d) argument by

citing, in its brief to the Board in support of its exceptions to

ALJ Davis’ decision, a case that turns upon the predecessor to

§ 554(d). The Board, on the other hand, says the citation was

not sufficient to put it on notice that Cassone intended to

pursue an APA argument. In our view, regardless of the

adequacy of the citation as notice, Cassone forfeited this

argument by failing to avail itself of either of the two

opportunities it had to raise the argument prior to filing

exceptions to ALJ Davis’ decision.

Pursuant to the regulations of the Board, Cassone could

have raised its APA argument first in a motion for rehearing

when the Board remanded the case to the second ALJ. See 29

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C.F.R. § 102.48(d)(1) (“A party to a proceeding before the

Board may ... move for reconsideration, rehearing, or

reopening of the record after the Board decision or order”);

see also W & M Props. of Conn. v. NLRB, 514 F.3d 1341,

1345 (D.C. Cir. 2008) (“If aggrieved by the Board’s remedy,

[the petitioner] should have filed a motion for reconsideration

pursuant to the Board’s rules and regulations”). Cassone had

yet another opportunity to raise its APA argument after the

Board remanded the case; at the outset of the proceeding on

remand, ALJ Davis “offered the parties an opportunity to file

a brief ... concerning the Board’s Order, but none did.”

Cassone II, 350 N.L.R.B. No. 6, at 5 n.2. See Millar v.

F.C.C., 707 F.2d 1530, 1538 (D.C. Cir. 1983) (“[W]e think

appellants’ failure to raise before the substitute examiner the

question of rehearing testimony constituted a waiver” of the

argument).

By failing to raise its objection before the Board until

after the second ALJ had issued his decision, Cassone

deprived the agency of the most timely and least wasteful

opportunity to remedy the alleged violation of § 554(d). As

we observed in Marcus v. Dir., Office Workers’ Comp.

Programs, U.S. Dep’t of Labor, 548 F.2d 1044, 1051 (1976),

“[i]t will not do for a claimant to suppress his misgivings

while waiting anxiously to see whether the decision goes in

his favor. A contrary rule would only countenance and

encourage unacceptable inefficiency in the administrative

process.” Cf. United States v. L.A. Tucker Truck Lines, Inc.,

344 U.S. 33, 37 (1952) (“orderly procedure and good

administration require that objections to the proceedings of an

administrative agency be made while it has the opportunity

for correction in order to raise issues reviewable by the

courts”).

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Cassone had yet a third opportunity to raise its APA

argument before the Board and again failed to do so. In its

brief to the Board, Cassone never metioned an argument

based upon § 554(d), nor did it even cite to that provision; the

closest it came was to cite a case that turned upon the

predecessor to § 554(d). As a practical matter we do not

think a party can ordinarily be said to have given a tribunal

actual notice of its argument merely by citing to a case

relevant to that argument without so much as mentioning, let

alone stating, the argument itself.

B. Due process of law

Turning to Cassone’s due process argument, we note

that, in contrast with other aspects of a Board decision, which

we review deferentially, see Mall Contractors of America v.

NLRB, 514 F.3d 27, 31 (2008), “a reviewing court owes no

deference to the agency’s pronouncement on a constitutional

question.” Lead Indus. Ass’n v. EPA, 647 F.2d 1130, 1173-74

(D.C. Cir. 1980). In other words, we entertain Cassone’s due

process claim de novo. See 33 CHARLES ALAN WRIGHT &

CHARLES H. KOCH, JR. FEDERAL PRACTICE & PROCEDURE:

JUDICIAL REVIEW § 8363, at 256 (2008) (“Courts are free to

conduct de novo review of an administrative resolution of a

constitutional issue”).

Cassone argues the Board denied it a fair hearing, and

hence denied it due process, because ALJ Edelman’s brief-

copying created an appearance of partiality. See Schweiker v.

McClure, 456 U.S. 188, 195 (1982) (“[D]ue process demands

impartiality on the part of those who function in judicial or

quasi-judicial capacities”); United States v. Microsoft, 253

F.3d 34, 46 (D.C. Cir. 2001) (en banc) (holding district

judge’s actions gave rise to “an appearance of partiality” and

remanding to different district judge despite finding “no

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evidence of actual bias”). In Cassone’s view, only a new

hearing could remedy the appearance of partiality created by

Edelman’s brief-copying. In response, the Board argues a

new hearing was not necessary because review of the record

by an independent ALJ and further review by the Board cured

any appearance of partiality created by ALJ Edelman’s

copying.

This is, regrettably, far from the first Board case with a

brief-copying ALJ. In Casino Ready Mix v. NLRB, 321 F.3d

1190, 1202 (2003), we affirmed the Board’s decision because

it “adopted the ALJ’s findings only to the extent that they

were consistent with the Board’s Decision and Order. The

Decision and Order reflects the Board’s own independent

review of the record, which the Board affirmatively states that

it conducted.” In Waterbury Hotel Mgmt. v. NLRB we

recognized “wholesale cutting and pasting from proposed

findings and conclusions warrants particularly close scrutiny,

[but noted] we have never held ... this practice alone

demonstrates impermissible bias” such as would deprive a

petitioner of a fair hearing. 314 F.3d 645, 651 (2003)

(internal citations omitted). Again we were satisfied with the

Board’s decision because the Board had “independently

reviewed the entire record, including the judge’s decision, in

consideration of the exceptions and briefs.” Id. (internal

quotation marks omitted).

Cassone would have us distinguish Waterbury on the

ground that here the Board’s decision to remand the matter to

a different ALJ rather than affirm Edelman’s decision

suggests the copyist conducted the hearing in a biased

manner. For support, Cassone points to yet another case

involving brief-copying by the self-same ALJ Edelman. See

Fairfield Tower Condominium Ass’n, 343 N.L.R.B. 923

(2004). There, however, the Board accepted the copyist’s

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findings because “the Board itself ha[d] independently

reviewed the entire record in consideration of the exceptions

and briefs and .... conclude[d] that the judge’s reliance here

on the Charging Party’s and General Counsel’s briefs does

not constitute reversible error.” Id. at 923 n.1. So, too, in this

case the Board affirmatively stated in its Order remanding the

case that, notwithstanding his later scissors-and-paste

approach to composition, ALJ Edelman “conducted the

hearing itself properly.” Cassone I, 345 N.L.R.B. at 1305.

Cassone does not provide a single example from the hearing

to suggest otherwise. Its distinction therefore fails.

We have not “mandated [a] process of analysis” for the

Board to follow when reviewing an ALJ’s decision that

includes a significant portion copied from a party’s brief.

Casino Ready Mix, 321 F.3d at 1202. Instead, we have

directed the Board to give “close scrutiny” to such a decision,

Waterbury, 314 F.3d at 651, and to conduct its own

independent review of the record, Casino Ready Mix, 321

F.3d at 1202. Here, the Board took pains to review the entire

record when Edelman’s offending decision first came before

it, Cassone I, 345 N.L.R.B. at 1305, and it did so again when

it reviewed ALJ Davis’ subsequent findings, Cassone II, 350

N.L.R.B. No. 6, at 1 n.2; ALJ Davis also reviewed the entire

record before making those findings, id. at 6. Their decisions

clearly show both the Board and ALJ Davis closely

scrutinized the record assembled by Edelman; the agency’s

careful reassessment of the record dispels any appearance of

partiality along with Cassone’s constitutional objection. We

therefore conclude Cassone received a fair hearing consistent

with its right to due process of law.

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III. Conclusion

For the reasons set out above, we hold the Board did not

violate Cassone’s right to due process. Cassone was not

deprived of a fair hearing when the Board relied upon a

decision issued by an ALJ who, although not present at the

reception of evidence, reviewed the record assembled by the

ALJ who was present and independently determined whether

the presiding ALJ’s findings were supported by the record.

Cassone’s argument that this procedure violated § 554(d) of

the APA is forfeit because it was not timely presented to the

Board, if it was presented at all, and therefore is not properly

before us.

So ordered.