Court Opinion

ID: 9489810
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:24:50.815156+00
Date Added: 2024-06-11T17:53:43.798681
License: Public Domain

MILBURN, J., delivered the opinion of the court, in which SUHRHEINRICH, J., joined. ROSEN, J. (pp. 1138^5), delivered a separate dissenting opinion.
MILBURN, Circuit Judge.
In this action seeking review of a final administrative determination that an employer engaged in discrimination in violation of a federal contract, brought under the Administrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq., the Department of Labor appeals the district court’s denial of its motion to remand and the district court’s grant of plaintiff Cissell Manufacturing Company’s motion for summary judgment. On appeal, the issue is whether the district court erred in granting Cissell Manufacturing Company’s (“Cissell”) motion for summary judgment and denying the Department of Labor’s (“the Department”) motion to remand upon determining that the Department had failed to present evidence that established its jurisdiction over the case. For the reasons that follow, we reverse and remand.
I.
A.
In September 1978, Larry Brown began working for plaintiff Cissell, which manufactures commercial laundry and dry cleaning equipment at its facilities in Louisville, Kentucky. Brown worked as a welder on the “dryer line,” where he welded together the bottom of dryers as the dryers were pulled along a conveyor belt. Approximately three months later, Brown was transferred to another position within the same job classification. At that position, Brown worked as a welder at the “spider table,” where he welded four-pronged metal components together. On April 26, 1983, Brown was involved in an accident at work that caused injuries to his knees. In response, Cissell prepared an accident report and recommended that Brown see a doctor. Brown, however, chose not to see a doctor at that time and continued to work without complaint or loss of time from work.
In August 1983, Cissell transferred Brown to another position on the dryer line. Shortly after being reassigned to the dryer line, Brown complained of having pain in his knees and asked to return to the spider table position, Cissell arranged for Brown to see an orthopedic surgeon, Dr. Raymond Shea, on August 11, 1983. Dr. Shea concluded that Brown had chondromalacia patellae, a form of arthritis that involves degeneration of the cartilage in the knee, and advised Brown to avoid jobs with excessive bending and lifting at the knees. Dr. Shea also concluded that Brown could safely perform his job on the *1134dryer line. When Brown returned to work on August 15, 1983, he asked to return to the doctor immediately. Cissell’s personnel manager, Anna Mae Royalty, advised Brown to continue working and to keep his scheduled appointment with Dr. Shea on August 18, 1993. Brown did not report to work on August 16, 1993, however, and instead scheduled an appointment with Dr. Shea for that day. Dr. Shea determined that Brown could return to work without restrictions. Brown returned to work on August 17, 1983, and went to Dr. Shea’s office for a checkup on August 23, 1983. Dr. Shea noted that Brown had much less pain in his knees and sent Brown back to work with no restrictions. Dr. Shea also gave Brown knee sleeves to wear while at work.
In September 1983, Brown placed a bid to request to transfer from his welder classification to a spot welder classification, a lower paying classification. Brown was transferred to the spot welder classification on September 6, 1983. As a spot welder, Brown was initially put on the production line welding dryer cabinets, and he worked in that position for approximately three weeks. Brown was next assigned to a handyman position and eventually was assigned to the basket department. In the basket department, Brown and two other men assembled and spot welded dryer baskets. Brown remained in this position for approximately one year without any complaint concerning his knees.
On August 31, 1984, Brown visited his own physician, Dr. Jerold E. Tomlin, without advising anyone at Cissell. Dr. Tomlin found that Brown had full painless range of motion of both knees and advised Brown to perform exercises and to avoid kneeling, deep knee bending, and stairs as- much as possible. Because Cissell had not received any reports of new' injury or any complaints regarding Brown’s knees, Cissell refused to authorize payment for Dr. Tomlin’s services.
Brown continued working as a spot welder and did not complain that he was having pain in his knees. However, on October 9, 1984, Brown returned to Dr. Tomlin and obtained a note that contained medical restrictions. The note, labeled a “Disability Certificate,” stated that Brown should not be placed in a job that required stooping or deep knee bends and that Brown should preferably be given a sit-down position. On October 10, 1984, Brown gave the note to the union steward, Lee Warfield, and Warfield delivered the note to Cissell’s personnel department. Brown’s foreman, Junior Winn, who had not seen the note, received instructions to send Brown home. Accordingly, Winn told Brown to “hit the clock,” and Brown did so. The union steward then informed Brown that he could not return to work until all medical restrictions were lifted. Cissell presented evidence that it had no permanent sit-down positions in the spot welding classification and that all of the jobs in the welding department required some bending or stooping.
Brown then filed a worker’s compensation claim. While the claim was pending, Brown received twenty-six weeks of sick leave under the collective bargaining agreement. When the twenty-six weeks of sick leave were near expiration, Brown obtained ánother note from Dr. Tomlin that stated that Brown could not return to work involving squatting or carrying heavy loads for the next ninety days. Brown subsequently was placed on two consecutive ninety-day unpaid leaves of absence. When Brown’s second leave of absence expired, Cissell notified him in a letter dated July 11, 1985, that, pursuant to the collective bargaining agreement, Brown’s employment would be terminated unless he returned to work. Brown did not return to work, and his employment was terminated on October 10, 1985.1
B.
On October 25, 1985, Brown filed a complaint with the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) alleging that Cissell had discriminated against him on the basis of his handicap.2 After investigating the charge, the *1135OFCCP filed an administrative complaint against Cissell on August 28, 1987. The complaint alleged that Cissell had violated § 508 of the Rehabilitation Act, as amended, 29 U.S.C. § 793, by failing to reasonably accommodate Brown’s disability. On December 21, 1988, an administrative law judge (“ALJ”) initially concluded that Brown was not handicapped under Section 503 and recommended granting summary judgment in favor of Cissell. However, on December 5, 1989, the Assistant Secretary for Employment Standards (“the Assistant Secretary”) rejected the ALJ’s recommendation and remanded the ease to the ALJ. The ALJ held an administrative hearing on April 25 and 26, 1990, and, in May 1992, the ALJ issued a ruling in which he concluded that Brown was handicapped under Section 503 and that Cis-sell had failed to reasonably accommodate Brown’s impairment. The ALJ recommended that Brown be reinstated with full seniority and benefits, that Cissell pay Brown back pay with interest, and that Cis-sell cease its “no light duty” policy.
On February 14, 1994, the Acting Assistant Secretary issued a final decision and order upholding the ALJ’s recommendation. The order further provided that the failure to comply within sixty days would result in debarment, pursuant to which all of Cissell’s federal contracts would be cancelled and Cis-sell would become ineligible for the award of any other government contracts. Cissell filed a motion to stay the debarment proceedings with the .Assistant Secretary, and the motion was denied.
C.
On March 15, 1994, Cissell initiated this action, seeking judicial review of the Assistant Secretary’s final administrative decision. In its complaint, Cissell alleged that the Assistant Secretary’s decision should be reversed, among other reasons, because the Department had not proved that it had jurisdiction over Brown’s case. Cissell also sought an injunction against the Department’s debarment proceedings. On April 20, 1994, after holding a hearing, the magistrate judge recommended that a temporary restraining order be issued pending disposition of the preliminary injunction issue or adjudication of the underlying claims. The district court issued a temporary restraining order on April 29, 1994, and then a preliminary injunction on May 28, 1994, staying the debarment proceedings pending the court’s disposition of the case.
On July 25, 1994, Cissell filed a motion for summary judgment arguing that the Department lacked jurisdiction over Brown’s complaint under § 503 of the Rehabilitation Act. At the time that the OFCCP initiated administrative proceedings against Cissell, § 503 of the Rehabilitation Act required that a contractor who entered into a contract in excess of $2500 with a Federal department or agency for the sale of personal property or non-personal services for the United States “take affirmative action to employ and advance in employment qualified handicapped individuals”' when “employing persons to carry out such [government] contract[s].” 29 U.S.C. § 793(a) (1985) (emphasis added).3 The OFCCP relied on a jurisdictional regulation promulgated by the Department that interpreted the meaning of § 503 when it initiated proceedings against Cissell. The regulation presumed that all employees of a contractor that held at least one covered contract were employed to carry out those contracts unless the contractor received a waiver from the Director of the OFCCP by demonstrating that certain of its facilities were in “all respects separate and distinct from activities ... related to the performance of the contract.” 41 C.F.R. 60-741.3(a)(5) (hereinafter *1136referred to as “the presumption/waiver regulation”).
However, while this case was pending before the ALJ on remand, the district court for the District of Columbia invalidated the Department’s presumption/waiver regulation upon finding that the regulation was inconsistent with § 503’s statutory language. Washington Metro. Area Transit Auth. v. DeArment, 1991 WL 185167, at *2 (D.D.C. Jan. 3, 1991) (unpublished opinion) (“WMATA”). The Department did not appeal the judgment in WMATA and no longer relies on the presumption/waiver regulation. See 57 Fed.Reg. 48084 (to be codified at 41 C.F.R. pt. 60-741) (proposed Oct. 21, 1992) (proposing to replace the presumption/waiver regulation with a regulation setting forth standards for determining whether particular workers are employed to carry out covered government contracts).
Although the presumption/waiver regulation was declared invalid in WMATA on January 3, 1991, the OFCCP did not present any additional evidence that Brown was employed to carry out a covered government contract before the Assistant Secretary’s final decision on February 14, 1994.4 Thus, Cissell argued in its motion for summary judgment that, because the Department had failed to present such evidence, it had failed to show that it had jurisdiction over the case.
In response to Cissell’s motion for summary judgment, the Department filed a motion to remand on August 22, 1994. In its motion, the Department conceded that it had applied an erroneous legal standard in the administrative proceedings by applying its presumption/waiver regulation. The Department argued, however, that the ease should be remanded for further agency proceedings so that the OFCCP could establish proof that Brown had worked on a covered federal contract.
On November 28, 1994, the district court found that the Department had failed to establish that the OFCCP ever had jurisdiction over Brown’s complaint. Relying on PPG Industries, Inc. v. United States, Civil Action No. 89-0757 (D.D.C. Dec. 22, 1993) (unpublished opinion), rev’d, 52 F.3d 363 (D.C.Cir.1995), the district court denied the motion to remand and explained, “It would indeed constitute a manifest injustice to [Cissell] for this Court to allow [the Department] the opportunity to collect jurisdictional facts that it could have known for three (3) years might be necessary and yet failed to obtain,” J.A. 50. The district court granted Cissell’s motion for summary judgment and denied the Department’s motion for reconsideration on March 3, 1995. This timely appeal followed.
II.
The Department argues that the district court erred in granting Cissell’s motion for summary judgment and denying its motion to remand upon concluding that it had failed to prove that it had jurisdiction over the case. When reviewing an administrative agency’s final decision under the APA, “[w]e review the district court’s decision de novo, applying the appropriate standard of review to the agency’s decision.” Schuck v. Frank, 27 F.3d 194, 197 (6th Cir.1994). In this case, the district court addressed the issue of whether the ease should be dismissed for lack of jurisdiction or remanded to the agency so that the record could be supplemented to establish jurisdiction.
It is well settled that when an agency makes an error of law in its administrative proceedings, a reviewing court should remand the case to the agency so that the agency may take further action consistent with the correct legal standards. South Prairie Constr. Co. v. Local No. 627, Int’l Union of Operating Eng’rs, 425 U.S. 800, 806, 96 S.Ct. 1842, 1845, 48 L.Ed.2d 382 (1976) (per curiam); SEC v. Chenery Corp., 318 U.S. 80, 94-95, 63 S.Ct. 454, 462-63, 87 L.Ed. 626 (1943); Harlan Bell Coal Co. v. Lemar, 904 F.2d 1042, 1046 (6th Cir.1990) (“If the ALJ or the Board has erred by ... reviewing evidence under an incorrect legal standard, then we must remand the case for additional proceedings.”); Faries v. Director, *1137OWCP, 909 F.2d 170, 173 (6th Cir.1990) (“Where the ALJ or BRB has erred by reviewing evidence under an incorrect legal standard, remand of the case for additional proceedings is normally appropriate.”). See also PPG Indus., Inc. v. United States, 52 F.3d 363, 365 (D.C.Cir.1995); Rhode Island Higher Educ. Assist. Auth. v. Secretary, U.S. Dep't of Educ., 929 F.2d 844, 857 (1st Cir.1991); Thompson v. United States Dep’t of Labor, 885 F.2d 551, 555 (9th Cir.1989). In NLRB v. Food Store Employees Union, 417 U.S. 1, 94 S.Ct. 2074, 40 L.Ed.2d 612 (1974), the Supreme Court explained that a reviewing court must remand a case in which an administrative agency committed an error of law except where “crystal-clear Board error renders a remand an unnecessary formality.” Id. at 8, 94 S.Ct. at 2079.
Cissell argues that it would be unfair to remand the case at this time in order to allow the OFCCP to reopen the proceedings to establish its jurisdiction over the case because it failed to make a timely motion for remand after the presumption/waiver regulation was declared invalid in WMATA The District of Columbia Circuit recently addressed a similar challenge in PPG Industries. In PPG Industries, the court rejected the employer’s argument that it would be unfair to remand the case to allow the OFCCP to reopen the proceedings against it because the agency had failed to establish jurisdiction at any time during the administrative proceedings.5 The court held that no . principle of administrative law prohibits “an agency from reopening proceedings to" take new evidence after the grounds upon which it relied are determined by a reviewing court to be invalid.” PPG Industries, 52 F.3d at 366 (noting that the Supreme Court explicitly found that a reopening is one of the courses an agency may follow after a reviewing court has determined that the agency’s initial determination included an error of law). See Food Store Employees Union, 417 U.S. at 10-11, 94 S.Ct. at 2080; Fly v. Heitmeyer, 309 U.S. 146, 148, 60 S.Ct. 443, 444, 84 L.Ed. 664 (1940). Likewise, we have remanded eases to agencies so that they could reopen the proceedings and take additional evidence where an agency’s legal error prevented the parties from developing the record on an issue. See Harlan Bell, 904 F.2d at 1047; Tackett v. Benefits Review Bd., 806 F.2d 640, 642 (6th Cir.1986) (per curiam).
The court further held in PPG Industries that the “fairness” question regarding the length of time between the initiation of administrative proceedings and the Department’s motion to- remand to establish its jurisdiction should first be decided by the Secretary and only should be raised before the district court on review under the APA. PPG Industries, 52 F.3d at 366 (citing FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 146, 60 S.Ct. 437, 443, 84 L.Ed. 656 (1940)). Therefore, the court reversed the district court concluding that it was improper for the district court to consider the “fairness” question before it had been presented to the Secretary. Id.6
We agree with and adopt the reasoning of the District of Columbia Circuit in PPG Industries. We conclude that in this ease, the district court erred in denying the Department’s motion to remand by concluding that allowing the OFCCP to present evidence that Brown was employed to carry out a covered government contract would constitute “a manifest injustice.” J.A. 50. Cissell must first present its “fairness” question to the Secretary before it may be reviewed under the APA. Accordingly, we hold that the district court erred in denying the Department’s *1138motion to remand the ease for further agency proceedings.7
III.
For the reasons stated, the judgment of the district court is REVERSED and the case is REMANDED to the district court with instructions to remand the case to the Department of Labor for further proceedings.

. Cissell nominally reinstated Brown as an employee when the Worker’s Compensation Board awarded Brown a ten percent disability payment in December 1985.

. Brown initiated two separate actions against . Cissell before filing his complaint with the OFCCP. In the first lawsuit, Brown filed a complaint in federal court alleging race discrimina*1135tion. In the second, Brown filed a complaint in state court alleging that Cissell had breached the collective bargaining agreement, and Cissell removed the action to federal court. The district court in each case granted summary judgment in favor of Cissell.

. In-1992, the Rehabilitation Act was amended to delete the language that requires affirmative action only for persons “employfed] to carry out such contract^]." 29 U.S.C. § 793(a) (1988 & 1994 Supp). Thus, the amendment makes clear that § 503's affirmative action requirement applies to all employees of a contractor who enters into a covered government contract. Therefore, the jurisdictional question at issue in this case will not occur in cases arising after the Act’s 1992 amendment.

. Neither the OFCCP nor Cissell addressed the validity of the presumption/waiver regulation pri- or to the Assistant Secretary’s final decision.

. Cissell attempts to distinguish the present case from PPG Industries by asserting that in PPG Industries, the Department made a timely motion to remand after the WMATA decision. We note that although the presumption/waiver regulation was not invalidated by WMATA until after both parties had filed motions for summary judgment in the district court in PPG Industries, the Department did not make a motion to remand until "[sjome months later.” PPG Industries, 52 F.3d at 365. Moreover, the court’s decision in PPG Industries did not turn on the timeliness of the motion to remand. In fact, the employer in PPG Industries argued that a remand would be unfair because of the length of time that had passed since the Department initiated proceedings against it. Accordingly, we find that PPG Industries is not distinguishable from the present case.

. We note that in PPG Industries, the District of Columbia Circuit reversed the case on which the district court in this case relied.

. Although the district court addressed only the jurisdictional issue, Cissell argues that we may affirm the district court's grant of Cissell’s motion for summary judgment on other grounds. However, as we noted in City of Kingsport, Tennessee v. Steel and Roof Structure, Inc., 500 F.2d 617 (6th Cir.1974), “it would be inappropriate for us to affirm a summary judgment on grounds not considered by the District Court.” Id. at 620. See Brader v. Allegheny Gen. Hosp., 64 F.3d 869, 877 (3d Cir.1995). Accordingly, we will not reach CisselTs alternative arguments.