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
 5
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
 8
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.