ARKANSAS COALS, INC. аnd Old Republic Insurance Co., Petitioners, v. Albert LAWSON and Director, Office of Workers’ Compensation Programs, United States Department of Labor, Respondents.
No. 13-3563.
United States Court of Appeals, Sixth Circuit.
Argued: Dec. 6, 2013. Decided and Filed: Jan. 9, 2014.
739 F.3d 309
I am sensitive to the need to respect prior precedent and stare decisis, and I acknowledge the present case tests the murky boundaries between dictum and holding as well as the effect given to a judicial assumption. But it should be recalled that stare decisis means “to stand by things decided.” Black‘s Law Dictionary (9th ed.2009) (emphasis added). The unaddressed issues in the present case were not actually decided or implicitly held. This is not an instance where a court extensively discussed two out of three prongs of a test and then determined in a conclusory fashion that the test was satisfied, leaving subsequent courts to conсlude that the third prong was also satisfied. As there is no indication, apart from the majority‘s unsupported inferential leap, that the Gardner court addressed and decided that “involving a minor” modified all three terms in
Before: McKEAGUE and STRANCH, Circuit Judges; COLLIER, District Judge.*
OPINION
McKEAGUE, Circuit Judge.
This case involves a dispute over who should pay benefits under the Black Lung Benefits Act to a coal miner afflicted with pneumoconiosis. The claimant originally brought suit in 1992 and an administrative law judge determined that he was not medically qualified for benefits. In the same decision, the administrative law judge indicated that Arkansas Coals was not the “responsible operator” required to pay benefits. Approximately seventeen years later, the claimant filed a second claim alleging a change in his medical condition and requesting relief. After finding that his medical condition had worsened and that the claimant was now disabled, an administrative law judge awarded benefits and determined that Arkansas Coals was the resрonsible operator. The Benefits Review Board upheld this decision.
Arkansas Coals appeals the determination that it is the responsible operator. The company presents four arguments: 1) that the principle of finality and the Longshore Act bar reconsideration of the responsible operator designation after a determination has been made that a company is not the responsible operator; 2) that collateral estoppel precludes the Department of Labor from now asserting that Arkansas Coals is the responsible operator; 3) that the director waived the right to relitigate Arkansas Coals‘s liability; and 4) that even if the court reconsiders the question of the responsible operator, the uncontradicted evidence establishes that another company should be held liable. As the claimant was entitled to bring a second claim under
I.
A. The Structure of the Black Lung Benefits Act
Congress passed the Black Lung Benefits Act (“the Act“) and created the Black Lung Disability Trust Fund to provide benefits for miners and their survivors when a miner is killed or disabled by pneumoconiosis.
An operator is liable for benefits only if several conditions are met. First, the miner seeking benefits must have been “employed by the operator, or ... a successor operator, for a cumulative period of not less than one year,” and second, the “operator [must be] capable of assuming its liability for the payment of continuing benefits under this part.”
A director is responsible for identifying those operators that are potentially liable and for issuing an initial order designating the responsible operator.
One common reason why a director might select a prior employer as the responsible operator is if the most recent employer lacked insurance.
Because pneumoconiosis can lie dormant and then later appear, miners are allowed to file subsequent claims even after having a previous claim denied.2 Subsequent claims—additional claims for benefits filed “more than one year after the effective date of a final order denying a claim previously filed“—are permitted if the claimant “demonstrates that one of the applicable conditions of entitlement ... has changed since the date upon which the order denying the prior claim became final.”
When assessing a subsequent claim, all evidence, both new and old, is considered. Moreover, “no findings made in connection with the prior claim, except those based on a party‘s failure to contest an issue (see § 725.463), shall be binding on any party in the adjudication of the subsequent claim.”
B. Procedural History of Lawson‘s Claim
Albert Lawson began working as a coal miner in 1964 and retired from the industry in 1989. His employment with Arkansas Coals ran from 1980 to 1982, and he was subsequently employed by various coal companies from 1982 to 1989. After his employment with Arkansas Coals, only the Martin T. Mining & Exploration Company (“Martin Mining“) employed him for longer than one full year.
Lawson filed his first Black Lung Benefits Act claim on May 23, 1990. The director named Arkansas Coals as the responsible operator, and Arkansas Coals filed a motion to dismiss noting that Martin Mining employed Lawson for more than one year after he had worked for Arkansas Coals. In response, the director informed the ALJ that Martin Mining had been insured only up until July 29, 1987, and was not insured on the date of Lawson‘s last exposure. Finding there to be a “substantial dispute as to issues of fact,” the ALJ denied the motion to dismiss Arkansas Coals as the responsible operator, noting that “the Director should be allowed to introduce this evidence at the hearing.” Order on the Mot. to Dismiss the Employеr.
Following a formal hearing, and after reviewing the opinion of eight different doctors, the ALJ issued a decision in 1992 denying Lawson‘s request for benefits after determining that the “existence of pneumoconiosis has not been established.” Decision and Order Denying Benefits. While the ALJ‘s ultimate decision and order turned on the medical issues in dispute, the court did discuss in dicta the “Responsible Operator Issue.”
On February 25, 2009, Lawson filed a subsequent claim, giving rise to this action. After reviewing his new claim, the director approved benefits and named Arkansas Coals as the responsible operator. Arkansas Coals appealed, arguing that its designation as the responsible operator was blocked by principles of finality and collateral estoppel. The ALJ disagreed, holding that neither issue nor claim preclusion applied because the ALJ‘s determination regarding the responsible operator in Lawson‘s first claim was not “necessary to the outcome of the case.” Decision and Order Awarding Benefits. As such, the director had “no incentive to challenge thе responsible operator finding on appeal.”
The ALJ further determined that substantial evidence supported the conclusion that Arkansas Coals had been properly designated as the responsible operator. The director presented evidence that he had searched the relevant records and discovered that Martin Mining neither had an insurance policy, nor was an approved self-insurer, when Lawson worked for the company. This statement constituted prima facie evidence that Martin Mining was not financially capable of assuming its liability for the benefits. As the employer that had next employed Lawson for more than one year and that was insured, Arkansas Coals thus became the responsible operator.
Arkansas Coals attempted to rebut the presumption that it was the responsible operator. Arkansas Coals presented testimony from Mr. Gearheart, a former co-owner of Martin Mining, which suggested that Martin Mining was a contractor for a third company, RMJ. If Martin Mining was in fact a contractor, RMJ might be an alternate source of insurance coverage. The ALJ ultimately rejected this interpretation after characterizing Gearheart‘s deposition as oblique, “marred by faulty memory,” and “fall[ing] far short of carrying the Employer‘s burden.”
Arkansas Coals appealed the ALJ‘s determination to the Benefits Review Board. In a per curiam decision and order issued July 31, 2012, the Benefits Review Board affirmed the ALJ‘s determination and reasoning. The Board subsequently denied Arkansas Coals Motion for Rehearing on March 7, 2013. This appeal followed.
II.
This court reviews legal conclusions de novo. See Morrison v. Tenn. Consol. Coal Co., 644 F.3d 473, 477 (6th Cir.2011). Deference should be granted, however, to the Department of Labor‘s interpretation of the Act. See Anderson Bros. Ford v. Valencia, 452 U.S. 205, 219 (1981) (“[A]bsent some obvious repugnance to the statute, the Board‘s regulation implementing this legislation should be accepted by the courts, as should the Board‘s interpretation of its own regulation.“). “A court should defer to an agency‘s interpretation of its own regulation, advanced in a legal brief, unless that interpretation is plainly erroneous or inconsistent with the regulation.” Cumberland River, 690 F.3d at 485 (internal citation and quotation marks omitted). “[A] failure by the ALJ to apply the correct legal standard presents a legal question over which the Review Board and
Arkansas Coals challenges on appeal its designation as the responsible operator. The primary issue then is not whether Lawson is or is not entitled to benefits—Lawson will receive benefits regardless—but rather, who will pay for his benefits. Arkansas Coals presents four arguments on appeal: 1) that reconsideration is blocked by the principles of finality and the Longshore Act; 2) that reconsideration is blocked by the doctrine of collateral estoppel; 3) that the Department of Labor has waived the right to relitigate Arkansas Coals‘s liability; and 4) that even if the court reconsiders the question of the responsible operator, that uncontradicted evidence establishes that another company should be held liable. We consider each of these arguments in turn and conclude that Arkansas Coals was designated appropriately as the responsible operator.
A. Reconsideration of the Responsible Operator Designation Is Not Prohibited by the Longshore Act
Arkansas Coals contends that the Longshore Act and principles of finality block reconsidеration of the responsible operator designation and offers three arguments: 1)
1. 33 U.S.C. § 922 does not bar reconsideration of the responsible operator
The Longshore Act,
Section 922, entitled “Modification of awards,” states:
on the ground of a change in conditions or because of a mistake in a determination of fact ... the deputy commissioner may, at any time prior to one year after the date of the last payment of compensation, whеther or not a compensation order has been issued, or at any time prior to one year after the rejection of a claim, review a compensation case [and] ... issue a new compensation order.
Arkansas Coals argues that § 922 imposes a one-year time limit on the Department of Labor‘s ability to modify the responsible operator designation, citing to USX Corp. v. Director, OWCP, 978 F.2d 656 (11th Cir.1992). In USX Corp., the Department of Labor issued an amended award of benefits relieving USX of responsibility for a Black Lung Benefits Claim and shifting liability onto the Trust Fund.
Arkansas Coals‘s reliance on USX for the proposition that § 922 imposes a binding restriction on the modification of the responsible operator is misplaced. USX involved an attempt to modify an award by an aggrieved party. Because the Trust Fund was the designated payer, the Department of Labor in USX had an incentive to fully litigate the issue of the responsible operator. The party that was forced to pay benefits was also the party restricted by the statutory limitation on modification in § 922. Here, there was no award of benefits. Thus, it would be counterintuitive for a prevailing party, who is not responsible for the payment of any benefits, to nonetheless seek modification of the order. See Lisa Lee Mines v. Director, OWCP, 86 F.3d 1358, 1363 (4th Cir.1996) (en banc), cert. denied, 519 U.S. 1090, 117 S. Ct. 763, 136 L. Ed. 2d 711 (1997); accord Peabody Coal Co. v. Spese, 117 F.3d 1001, 1008 (7th Cir.1997) (en banc). Such an interpretation of § 922 would mandate preventative litigation and waste time and resources.
Finally, while Arkansas Coals is correct that
2. 20 C.F.R. § 725.408(b)(2) does not preclude the director from offering evidence in a subsequent claim after failing to submit the proof in an earlier proceeding
Arkansas Coal argues that
Section 725.408 is entitled “Operator‘s Response.” Even more tellingly, subsection (a)(2),4 which is referenced by subsection (b)(2), is narrowly and clearly focused on when and how an operаtor may contest its identification to a director. Subsection (a)(2) says nothing about the conditions under which a director can present additional evidence in further proceedings. The notion that this subsection acts as a restriction on when and how the director can present evidence is completely unsubstantiated.
3. Relitigation of the responsible operator is permitted under 20 C.F.R. § 725.309(d)(4)
Section 725.309(d)(4) controls the balance between promoting finality of claims and allowing the court to reopen suit and reconsider findings. The regulation, which is titled “Additional claims; effect of a prior denial of benefits” provides:
If the claimant demonstrates a change in one of the applicable conditions of entitlement, no findings made in connection with the prior claim, except those based on a party‘s failure to contest an issue (see § 725.463), shall be binding on any party in the adjudication of the subsequent claim. However, any stipulation made by any party in connection with the prior claim shall be binding on that party in the adjudication of the subsequent claim.
Arkansas Coals nonetheless argues that the responsible employer determination is separate and independent of issues concerning a miner‘s health. But the regulation does not distinguish between health and other issues, and this court is bound to give deference to the department‘s interpretation оf the regulation. See Cumberland River, 690 F.3d at 485. Under a plain language reading of the statute, the
The claim that all findings, including the responsible operator designation, will be reconsidered is further supported by the proposed rulemaking commentary of § 725.309. And as the Supreme Court has explained, when an agency interprets its own regulation, the Court, as a general rule, defers to it “unless that interpretation is ‘plainly erroneous or inconsistent with the regulation.‘” Chase Bank USA, N.A. v. McCoy, — U.S. —, 131 S. Ct. 871, 880, 178 L. Ed. 2d 716 (2011) (quoting Auer v. Robbins, 519 U.S. 452, 461 (1997)); see also
[A]ssume that in a prior adjudicatiоn an administrative law judge found that the claimant was a miner but that he did not suffer from pneumoconiosis ... In a subsequent claim, the claimant establishes that he now suffers from pneumoconiosis, and argues that the operator is precluded from relitigating his status as a miner. The claimant is incorrect. Because the operator was not aggrieved by the denial of benefits, it could not appeal the ALJ‘s decision to the Benefits Review Board to seek reversal of the finding that the claimant was a miner. The operator thus did not have a full and fair opportunity to litigate the claimant‘s status, and may not be bound by the prior finding.
62 Fed. Reg. 3338, 3353 (Jan. 22, 1997).5 Not only does the benefit of allowing fresh findings inure to claimants and coal operators alike,6 but granting the right to both parties to recontest findings makes practical sense given the successful litigant‘s limited inclination аnd ability to challenge the decision. Arkansas Coals fails to point to any commentary or case indicating that the determination of the responsible operator in an initial claim, where benefits are denied, would later be enforced in a subsequent claim.
Arkansas Coals argues in the alternative that the Department failed to “contest” the responsible operator designation, and therefore, conceded the issue. Section 725.309(d)(4) provides “no findings made in connection with the prior claim, except those based on a party‘s failure to contest an issue (see § 725.463), shall be binding.”
While less than perfect, the director‘s conduct satisfied the requirement that a party “contest an issue.” Whether a party has contested an issue is defined in reference to § 725.463. Section 725.463(a) provides that “the hearing shall be confined to those contested issues which have been identified by the district director (see § 725.421) or any other issue raised in writing before the district director”
In conclusion, the claim that the Longshore Act and principles of finality bar relitigation of the responsible operator designation is not supported by the text of the regulation, the relevant case law, the underlying statutory purpose, or the department‘s explanatory commentary. As there has been a change in Lawson‘s medical condition, we conclude reconsideration of the responsible operation designation is permitted under
B. Collateral Estoppel Bar Does Not Reconsideration of the Responsible Operator
Arkansas Coals also argues that the doctrine of collateral estoppel bars reconsideration of the company‘s designation as a responsiblе operator. This argument also fails. Collateral estoppel, otherwise termed issue preclusion, bars “successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment, even if the issue recurs in the context of a different claim.” Taylor v. Sturgell, 553 U.S. 880, 891 (2008) (internal citation and quotation marks omitted). The doctrine has been applied to administrative decisions, particularly when an agency acts in a judicial capacity and issues a final determination. See Astoria Fed. Sav. & Loan Ass‘n v. Solimino, 501 U.S. 104, 107, 111 S. Ct. 2166, 115 L. Ed. 2d 96 (1991). There are four requirements for issue preclusion to apply:
- the precise issue must have been raised and actually litigated in the prior proceedings;
- the determination of the issue must have been necessary to the outcome of the prior proceedings;
the prior procеedings must have resulted in a final judgment on the merits; and - the party against whom estoppel is sought must have had a full and fair opportunity to litigate the issue in the prior proceeding.
Georgia-Pacific Consumer Products LP v. Four-U-Packaging, Inc., 701 F.3d 1093, 1098 (6th Cir.2012). The parties agree that the first and third requirements have been satisfied. They disagree whether the second and fourth requirements have been fulfilled.
Arkansas Coals argues that identification of the actual parties was necessary to the outcome of the proceeding because the ALJ could not have assessed the claim without first determining the parties. In other words, determination of parties was a critical threshold issue. The Department of Labor counters that the claim was denied on the basis of medical evidence, making the determination of the responsible operatоr immaterial. At its core, the parties are contesting what it means for something to be “necessary.”
The Department of Labor has the stronger position. The word “necessary” modifies “outcome of the proceeding.” “To say that X is ‘necessary’ to Y is the same thing as saying that it is impossible for Y to exist unless X also exists.” Bies v. Bagley, 535 F.3d 520, 525 (6th Cir.2008). The ALJ could have denied the first claim without having addressed the issue of the responsible operator. One can easily imagine a case where multiple parties are involved, there is a debate over the issue of the responsible operator, and the ALJ bypasses the question entirely by dismissing the claim on other grounds. The fact that the ALJ in this case did address the issue of the responsible operator does not make its determination necessary.
This conclusion—that the identification of the responsible оperator is not “necessary” when benefits are not awarded—is supported by other Benefits Review Board determinations. See M.R. v. Karst Robbins Coal Co., BRB No. 09-0119 BLA, 2009 WL 3794427, at *6 (Ben.Rev.Bd. Oct. 21, 2009) (unpub.) (stating that collateral estoppel does not preclude relitigation of the responsible operator issue because “benefits were denied in claimant‘s original claim, and thus, the determination as to the responsible operator was not necessary to support the denial of benefits“); O.Y. v. Golden Chip Coal Corp., BRB No. 06-0888 BLA, 2008 WL 3860901, *2 (Ben.Rev.Bd. July 24, 2008) (unpub.); Hughes v. Clinchfield Coal Co., 21 Black Lung Rep. (Juris) 1-134, 1-137 (Ben.Rev.Bd. 1999) (en banc). Though this court is not bound by the Board‘s determinations, they do constitute persuasive evidence. See Kentland Elkhorn Coal Corp. v. Hall, 287 F.3d 555, 567 (6th Cir.2002).
Arkansas Coals has not provided any contrary authority to indicate that the identification of the responsible operator is “necessary” when benefits are not awarded. And the cases, which Arkansas Coal citеs for the proposition that collateral estoppel prevents relitigation, actually involve the award of benefits or civil damages. See Jonida Trucking, Inc. v. Hunt, 124 F.3d 739, 744 (6th Cir.1997); Gen. Elec. Med. Sys. Europe v. Prometheus Health, 394 Fed.Appx. 280 (6th Cir.2010); USX v. Director, OWCP, 978 F.2d 656 (11th Cir.1992). It is logical that where benefits are awarded, a responsible operator must be decided to determine who pays. As benefits were not awarded in the present case, and as no case authority has been presented suggesting a contrary interpretation, the responsible operator determination was not necessary to the original ruling and collateral estoppel does not apply.
Arkansas Coals argues that by failing to produce evidence before the ALJ, the director waived the right to relitigate the designation of the responsible operator. In support of this claim, Arkansas Coals cites to Jonida Trucking, Inc. v. Hunt, 124 F.3d 739, 744 (6th Cir.1997). In Jonida, the Benefits Review Board awarded a claimant black lung benefits and the employer appealed, arguing that it had been improperly designated the responsible operator. The court first noted that the employer had been informed that it was potentially liable and had failed to respond within the appropriate time frame. Based on these facts, the court held that the employer “waived the right to dispute its liability as the responsible operator,” as it had not shown good cause for its failure to respond.
Jonida is distinguishable on three grounds. First, although the Department of Labor did not present supplemental evidence, it actually contested Arkansas Coals‘s motion to dismiss and the issue of the responsible operator before the ALJ. Second, Jonida involved only a single claim and appeal, not an appeal brought on a successive claim. Finally, Jonida involved an actual award of benefits, and therefore, the responsible operator presumably had a fuller incentive to litigate its designation. As Jonida is distinguishable and the Department of Labor contested the responsible operator designation, see supra, the Department has not waived the right to relitigate.
D. The Naming of Arkansas Coals as the Responsible Operator Is Supported by Substantial Evidence
Finally, Arkansas Coals argues that the еvidence establishes that it was not the responsible operator. An ALJ‘s factual determinations are considered “conclusive if they are supported by substantial evidence and are in accord with the applicable law.” Morrison, 644 F.3d at 478. “Substantial evidence is defined as relevant evidence that a reasonable mind might accept as adequate to support a conclusion.” Cumberland, 690 F.3d at 483. In other words, factual determinations must “rest within the realm of rationality.” Morrison, 644 F.3d at 478. If the substantial evidence standard is met, this court cannot easily set aside the ALJ‘s findings. “A remand or reversal is only appropriate when the ALJ fails to consider all of the evidence under the proper legal standard or there is insufficient evidence to support the ALJ‘s finding.”
Substantial evidence supports the ALJ‘s conclusion that Arkansas Coals was properly designated as thе responsible operator. Arkansas Coals employed Lawson from 1980 to 1982, satisfying the one year employment requirement. Subsequent to this, various coal companies employed Lawson, but only Martin Mining employed him for longer than one full year. When Arkansas Coals challenged its designation as the responsible operator, the director provided a statement, pursuant to
Just as it argued before the ALJ, Arkansas Coals attempts to rebut the presumption that it was the responsible operator with testimony from Gearheart, suggesting that Martin Mining was a contractor for a third company, RMJ. Far from providing clarity on the question of whether Martin Mining was capable of securing the payment of benefits, Gearheart‘s testimony is unclear and at times inconsistent. For example, when Gearheart was questioned on whether Martin Mining had a contract to mine coal for another company, BMC, Gearheart responded, “No. They was—we—let‘s see. RMJ. Martin T. Mining. I believe that was the name of it. I can‘t remember. Edgar Jones.” Pets. Apx. 65 (emphasis added). When lаter questioned whether RMJ was responsible for covering the black lung insurance for workers like Lawson, Gearheart indicated that RMJ was, but then stated that he had no proof that RMJ had actually acquired insurance. Gearheart assumed that insurance existed because Kentucky law required insurance. Thus, even assuming that Martin Mining contracted for RMJ, which is not entirely clear, Gearheart‘s testimony fails to demonstrate that RMJ actually acquired insurance to secure the payment of benefits.
Arkansas Coals argues in the alternative that Martin Mining was related or a sub-entity of Coker Coal Company and that Coker Coal should be held liable. But when Gearheart was asked about the relationship between Coker Coal and Martin Mining, he clarified, “We had Coker Coal Company, also ... That‘s a different coal company [from Martin T. Mining].”
Taken together, it is clear that the ALJ was correct when it assessed Gearheart‘s testimony as oblique, “marred by faulty memory,” and “fall[ing] far short of carrying the Employer‘s burden.” Decision and Order Awarding Benefits. As no other persuasive evidence has been presented to satisfy the employer‘s burden, we find that there is substantial evidence that Arkansas Coals is the responsible operator.
III.
For the aforementioned reasons, we AFFIRM the Benefits Review Board‘s decision.
CONSOLIDATION COAL COMPANY, Petitioner, v. Lorene MAYNES, widow of Cleving G. Maynes; Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, Respondents.
No. 12-3653.
United States Court of Appeals, Sixth Circuit.
Argued Nov. 22, 2013. Decided and Filed Jan. 9, 2014.