Case Information
*1 Before RICHARD S. ARNOLD, Chief Judge, HENLEY, Senior Circuit Judge, and
WOLLMAN, Circuit Judge.
___________
HENLEY, Senior Circuit Judge.
Lovilia Coal Company and its insurance carrier, Old Republic Insurance Company, (collectively Lovilia), petition for review of an order of the Benefits Review Board (Board) of the Department of Labor (DOL) awarding benefits under the Black Lung Benefits Act, 30 U.S.C. §§ 901-945 (the Act), to Wesley Harvey, a former coal miner employed by Lovilia. We affirm the award of benefits.
Background
Harvey, who was born in 1914, worked in coal mines from 1930 until 1975, when he retired after working more than ten years for Lovilia. Harvey first filed a claim for black lung benefits in *2 1973, which was denied. In 1977, Congress liberalized eligibility requirements for benefits, and Harvey's claim was reopened and reviewed under the more lenient standards, 30 U.S.C. § 945, but was denied. Harvey again filed claims for benefits in 1983, 1984 and 1987, which were all dеnied. In March 1990, Harvey again applied for benefits. The deputy director denied the claim, finding that Harvey had not established a material change in conditions. See 20 C.F.R. § 725.309(d) ("If [an] earlier miner's claim has been finally denied, the later claim shall also be denied, on the grounds of the prior denial, unless the deputy director determines that there has been a material change in conditions."). However, after Harvey submitted additional medical evidence and appeared before an administrative law judge (ALJ), the ALJ awarded benefits. The ALJ found that the additional evidence not only showed a material change in conditions, but also showed that Harvey was "totally disabled due to pneumoconiosis." See 30 U.S.C. § 901. In addition, the ALJ rejected Lovilia's argument that 30 U.S.C § 932 trаnsferred liability for payment of benefits from the company to the Black Lung Disability Trust Fund. Lovilia appealed to the Board. The Board rejected Lovilia's arguments relating to transfer of liability and material change, but held that the ALJ had erred in concluding that Harvey was totally disabled due to pneumoconiosis by relying solely on the opinion of Harvey's treating physician, Dr. Gordon Arnott. Accordingly, the Board remanded the case for a reconsideration based on all the evidence of record. On remand, the ALJ again awarded benefits. The Board affirmed, and this petition for review follows.
DISCUSSION
On appeal Lovilia first renews its argument that if Harvey is entitled to benefits, section 205 of the Black Lung Benefits Amendments of 1981, Pub. L. 97-119, Title II, 95 Stat 1635 (1981), codified at 30 U.S.C. §§ 932(c)(2), (j)(3), transferred liability for payment of the benefits from the company to the Black Lung Disability Trust Fund (Fund). Lovilia next raises several
challenges to 20 C.F.R. § 725.309(d), the "material change" regulation. In the event this court rejects its arguments relating to transfer of liability and material change, Lovilia goes on to argue that Harvey is not entitled to benefits.
Initially, we note that Lovilia's presentation of "the issues
reverses the usual order of inquiry; that is, we determine who should pay
before establishing whether the claimant is eligible for benefits."
Rochester & Pittsburgh Coal Co. v. Krecota,
As previously indicated, in 1977 Congress "substantially liberalized
the criteria for establishing an entitlement to benefits." Tonelli v.
Director,
no benefit shall be payable by any operator on account of death or total disability due to pneumoconiosis . . . which was the subject of a claim denied before March 1, 1978, and which is or has been approved in accordance with the provisions of section 945 of this title.
Section 932(j) provides that the Trust Fund is liable for "payment of benefits in cases . . . in which there was a claim denied before March 1, 1978, and such claim is or has been approved in accordance with the provisions of section 945 of this title." At the time of the enactment of the 1981 amendments and at all relevant times, DOL regulations defined a claim as "an assertion in writing of an individual's entitlement to benefits." 20 C.F.R. § 725.101(a)(22) (1977) (recodified at 20 C.F.R. § 725.101(a)(16) (1994)).
In this case, the Board upheld the ALJ's rejection of Lovilia's transfer of liability argument. The Board reasoned that the only claim pending before the ALJ was Harvey's claim of March 1990 and that the claim could not support a transfer of liability since it was not, and could not have been, denied before March 1, 1978. The Board noted that although Harvey's 1973 claim had been denied before March 1, 1978, it had been denied, not approved, after review under section 945.
Lovilia argues that the Board has misinterpreted the term “claim,” as used in section 932. Lovilia asserts that under the plain meaning of the statute "claim" does not mean an application
In addition, the 1981 amendments, which were enacted in 1
response to a large deficit in the Trust Fund, raised taxes on coal
operators and tightened eligibility requirements. See Hawkins v.
Director,
In addition, we agree with the Director that even if the term "claim"
was ambiguous, the legislative history makes clear that it means an
application for benefits. Because Congress was concerned that a "transfer
of liability could рrove too burdensome for the debt-laden Trust Fund,
legislators specifically requested information on how many claims would
transfer, which claims they were and what the cost would be" and relied on
estimates that the amendment would transfer about 10,200 claims, valued at
approximately $1.4 to $1.5 billion. Old Ben Coal Co.,
intent to accommodate only a limited number of claims within estimated cost
limitations."). In any event, if any ambiguity existed, we would defer to
DOL's reasonable interpretation of the statute it is charged with
administering. See Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc.,
Lovilia also argues that consideration of Harvey's 1990 claim is
barred by the doctrine of res judicata. The doctrine "consist[s] of two
preclusion concepts: 'issue preclusion' and 'claim preclusion.'" Migra v.
Warren City Sch. Dist. Bd. of Educ.,
claim merged with his 1973 claim. See Tonelli v. Director, 878
F.2d 1083, 1087 (8th Cir. 1988) (under 20 C.F.R. § 725.309© "merger
is available only when a previously denied claim, reopened for
review under [30 U.S.C. § 945], and a second claim are pending at
the same time"). Because the claim is not subject to merger, it is
governed by the criteria of 20 C.F.R Part 718. If the claim had
been merged, "then the more liberal criteria of 20 C.F.R. 727 would
havе governed." Tonelli,
for cert. filed,
Relying on claim preclusion, Lovilia argues that Harvey's 1990 claim
was merely a "recycled" version of his 1973 claim and by "obtain[ing] a
better lawyer and a friendlier ALJ, he finally was able to get benefits."
Lovilia's Br. at 18, 31. Lovilia notes that in Pittston Coal Group v.
Sebben,
ground that the decision was wrong."
Contrary to Lovilia's assertion, Harvey was not attempting to
relitigate the previous denials of earlier claims; rather, he was
attempting to establish entitlement to benefits based on a change in
conditions since the denials. In such circumstances, res judicata does not
bar his claim. As the Fourth Circuit has stated, "res judicata does not
apply if the issue is claimant's рhysical condition or degree of disability
at two entirely different times." Lisa Lee Mines v. Director, 86 F.3d
1358, 1362 (4th Cir. 1996) (en banc) (quoting 3 A. Larson, The Law of
Workmen's Compensation, § 79.72(f) (1989)), cert. denied,
determination in а subsequent administrative proceeding, rather
than the preclusive effect of an administrative determination in a
court proceeding. See Astoria Fed. Sav. & Loan Ass'n v. Solimino,
Lovilia argues that these cases are wrongly decided because they are premised upon the erroneous assumption that pneumoconiosis -- which under the Act, 30 U.S.C. § 902(b), "means a chronic dust disease of the lung . . . arising out of coal mine employment" -- is a progressive disease. [4]
For the same reason, Lovilia argues that 20 C.F.R. § 725.309(d), which, as
indicated, allows for review of a subsеquent claim after a denial of a
previous claim if a miner demonstrates a "material change in conditions,"
violates res judicata. Specifically, Lovilia contends that if a coal miner
does not have pneumoconiosis or is not disabled by it at the time of an
initial denial and thereafter does not return to work in the mines, he
cannot develop the disease or become disabled by it, and thus could never
establish a change in conditions. We disagree. Quoting Mullins v. Coal
Co. v. Director,
coal mine employment' includes any chronic pulmonary disease resulting in respiratory or pulmonary impairment significantly related to . . . dust exposure in the coal mine employment." 20 C.F.R. § 718.201.
pneumoconiosis is a progressive and irreversible disease") are mere dicta, we disagree and will not revisit the issue.
Material Change in Conditions
We next address Lovilia's argument that the ALJ applied the wrong standard in determining that Harvey had demonstrated a "materiаl change" in conditions. As previously indicated, 20 C.F.R. § 725.309(d), in relevant part, provides that "[i]f [an] earlier miner's claim has been finally denied, the later claim shall also be denied, on the grounds of the prior denial, unless the deputy director determines that there has been a material change in conditions." Neither the statute nor the regulations define "material change." In this case, the ALJ applied the Benefits Review Board's standard set forth in Spese v. Peabody Coal Co. , 11 Black Lung Rep. 1-174, 1-176 (Ben. Rev. Bd. 1988) (per curiam), which holds that a claimant can establish a material change by submitting "evidence which is relevant and probative so that there is a reasonable probability that [it] would change the prior administrative result." We do not address the validity of the Spese standard at length. The Director acknowledges that "[e]very circuit that has addressed the validity of the Spese standard has rejected it[,]" Wyoming Fuel Co. v. Director, 90 F.3d at 1508 (listing cases), and concedes it is wrong. In Wyoming Fuel, the court explained that appellate courts had rejected the Spese standard because it "violates principles of res judicata by permitting a claimant -- when attempting to show a material change -- to present evidence that merely shows the initial decision was in error, rather than limiting the evidence to that which shows that the claimant's condition has worsened since the previous denial." Id. at 1508-09. Instead, the Director asks this court to adopt his "one-element" standard, as did the Third Circuit, Labelle Processing Co.
v. Swarrow,
Tenth Circuit, Wyoming Fuel Co. v. Director, 90
v. Office of Workers' Comp. Prog.,
lung disease at the time of first application but has since contracted it and become totally disabled by it, or that his disease has progressed to the point of becoming totally disabling although it was not at the time of the first application." 946 F.2d at 556. However, the court believed that "[i]t is not enough that the new application be supported by new evidence of disease or disability, because such evidence might show merely that the original denial was wrong." Id.
F.3d at 1511, do not follow his "one-element" approach. However, the [6]
Director reminds this court that "[w]hen, like in this case, the issue is
whether the agency has erred in interpreting its own regulations, the
Supreme Court has stated that: provided the agency's interpretation 'does
not violate the Constitution or a federal statutе, it must be given
controlling weight unless it is plainly erroneous or inconsistent with the
regulation.'" Shalala v. St. Paul-Ramsey Med. Ctr.,
We first reject Lovilia's argument that the Director's one-element
approach is not entitled to Chevron deference because it is inconsistent
with his past positions. "Of course the mere fact that an agency
interpretation contradicts a prior agency position is not fatal." See
Smiley v. Citibank, 116 S. Ct. 1730, 1734 (1996). Unless a change is
arbitrary or capricious or an abuse of discretion, "change is not
invalidating, since the whole point of Chevron is to leave the discretion
provided by the ambiguities of a statute with the implementing agency."
Id. We also reject Lovilia's related argument that no deference is due
because the Director's position is a mere litigating position. In the
circumstances of this case, the Director's "position is in no sense a 'post
hoc rationalizatio[n]’ advanced by an agency seeking to defend past agency
action against attack." Auer v. Robbins,
claimant in the prior denial that there has been a material change
in that condition since the prior claim was denied."
Hosp.,
Lovilia also contends that the Director's one-element standard is not
entitled to deference because it violates section 7(c) Administrative
Procedures Act (APA), 5 U.S.C. 556(d), which requires that "the proponent
of a rule or order has the burden of proof." Lovilia relies on Director
v. Greenwich Collieries,
Here, Lovilia argues that the Director's one-element approach
impermissibly shifts the burden of persuasion from the claimant to the coal
company. We disagree. There is no dispute that the Director's
interpretation creates a presumption--that is, it calls for an "inference
of an ultimate fact from a predicate one." Mullins,
from those presumptions because the rule "attempt[ed] to go one step further" and "[i]n so doing," id. at 280, impermissibly shifted the burden of persuasion (i.e., "the notion that if the evidence is evenly balanced, the party that bears the burden of persuasion must lose"). Id. at 272. In this case, the Director's interpretation is akin to the statutory and regulatory presumptions which ease a black lung claimant's burden of production, but do not shift the burden of persuasion, as that term is used in Greenwich Collieriеs. See Lovell v. Poway Unified Sch. Dist., 90 F.3d 367, 373 (9th Cir. 1996) ("'Burdens of persuasion affect the outcomes only of cases in which the trier of fact thinks that plaintiff's and defendant's positions equiprobable.'") (quoting Bristow v. Drake St., Inc., 41 F.3d 345, 353 (7th Cir. 1994)).
Lovilia also argues that the Director's one-element standard violates
due process. "Like all rules of evidence that permit an inference of an
ultimate fact from a predicate one, black lung benefits presumptions rest
on a judgment that the relationship between the ultimate and the predicate
facts has a basis in the logic of common understanding." Mullins, 484 U.S.
at 157 n.30. To satisfy due process concerns, however, "it is only
essential that there shall be some rational connection between the fact
proved and the ultimate fact presumed, and that the inference of one fact
from proof of another shall not be so unreasonable as to be a purely
arbitrary mandate." Usery v. Turner Elkhorn Mining Co.,
In this case, Lovilia argues that the Director's standard violates
due process because there is no rational connection between the fact
presumed -- material change -- and the fact proved -- new evidence of
disease or disability. However, Lovilia's argument is based on the premise
that pneumoconiosis is not a progressive disease, a premise we have
previously rejected. Lovilia also argues that the presumption is
irrational because new evidence of disease or disability "might show merely
that the original denial was wrong, and would thereby constitute an
impermissible collateral attack on that denial." Sahara Coal,
The Director countеrs that Lovilia misunderstands his standard. The Director asserts that his standard is faithful to the language of the regulation and to both claim and issue preclusion principles. The Director maintains that his standard ensures that a miner has experienced a material change in conditions and prevents an impermissible collateral attack on a previous denial by presuming that the initial denial was correct and requiring the claimant to establish an element of entitlement capable of change with new evidence. For example, the Director explains that if a miner was found not to have pneumoconiosis at the time of an earlier denial, and he thereafter establishes that he has the disease, in the absence of evidence showing thе denial was a mistake, an inference of "material change" is not only permitted but "compelled." We agree. Cf. Mullins, 484 U.S at 158-59 ("Secretary's reading of the interim presumption's invocation burden satisfies both the purposes of the statute and the need for a logical connection between the proven fact and the presumed conclusion.") (footnote omitted).
The Director also asserts that his one-element standard promotes
administrative and judicial efficiency, while at the same
*15
time respects issue preclusion principles, which requires that a
determination of an issue "must have been essential to the final judgment."
Tyus,
As the Fourth Circuit noted, "[a] rational system would
simultaneously account for the progressiveness of the disease, discourage
useless appeals of alternate holdings, and require, at the threshold, a
palpable basis to believe that conditions have changed over time." Lisa
Lee Mines,
Apparently realizing the weakness of its due process argument,
Lovilia concedes that the presumption "might not be so bad if the
*16
inference of changed conditions" was rebuttable. Lovilia's Reply Br. at
15. However, Lovilia asserts because the presumption is irrebuttable, it
is "illegal," but does not explain why. An irrebuttable, or "conclusive
presumption does, of course, foreclose the person against whom it is
invoked from demonstrating, in a particularized proceeding, that applying
the presumption to him will in fact not further the lawful governmental
policy the presumption is designed to effectuate." Michael H. v. Gerald
D.,
The Director is correct that as a technical matter his interpretation
does not create an irrebuttable presumption. If, however, it did, or as
a practical matter it does, it is not illegal. In Michael H., the Supreme
Court recognized some confusion about its so-called "irrebuttable
presumption cases" and explained that the "cases must ultimately be
analyzed as calling into question not the adequacy of procedures but --
like our cases involving classifications framed in other terms, . . . --
the adequacy of the 'fit' between the classification and the policy that
the classification serves."
Because we find that the Director's interpretation of 20 C.F.R. § 725.309(d) is reasonable, we join the Third, Fourth and *17 Sixth Circuits in adopting the Director's one-element standard, and do not [7]
address the Seventh and Tenth Circuit approaches. Even if we found that they were also reasonable, we would be obligated to defer to the Director's standard. [8]
Harvey's Claim
Finally, we turn to Harvey's clаim. Lovilia asserts that if this court adopts the Director's one-element standard, then we must remand so that the ALJ can apply the standard. The Director and Harvey contend that a remand is unnecessary because the evidence submitted in support of Harvey's 1990 claim, as a matter of law, not only demonstrates a material change in conditions, but, as the ALJ found, that, as of March 1, 1990, Harvey was totally disabled by pneumoconiosis and is thus entitled to benefits.
In support of his present claim for benefits, Harvey submitted a November 1992 letter by Dr. Gordon Arnott, in which the doctor stated:
This man has worked in the coal mines for 32 years. During the last four years, he had considerable trouble with breathing. He has X-Ray findings of Black Lung Disease.
Mr. Harvey requires breathing treatment, medication to dilаte his lungs, inhaler treatments, and cortisone 7 Like the Fourth Circuit in Lisa Lee Mines, "[w]e do not endorse . . . the closing paragraph of Sharondale Corp., 42 F.3d at
999, where . . . the Sixth Circuit seems to have required consideration of evidence behind the earlier denial to determine whether it 'differ[s] qualitatively' from the new evidence." 86 F.3d at 1363 n.11.
We note, however, our agreement with the Tenth Circuit's 8
criticism of the Seventh Circuit's Sahara Coal standard, Wyoming
Fuel,
injections to help him with his breathing. He has been in the hospital with this condition on numerous occasions. He will continue to be disabled by this problem.
In addition, Harvey submitted medical recоrds showing that Dr. Arnott had
treated Harvey for breathing problems since 1988, including
hospitalizations solely because of breathing problems or where his
pulmonary condition was a significant diagnosis. For example, in August
1991, Harvey was admitted to the hospital after he came to the emergency
room "severely short of breath and unable to function at all" and breathing
treatments "were not real effective." He was again admitted in September
1991 for "marked shortness of breath, dyspnea, and wheezing."
In the circumstances of this case, we agree with the Director that a
remand is unnecessary. As to material change, in this case, there is no
question "whether the ALJ merely disagreed with the previous
characterization of the strength of the evidence or whether [Harvey] indeed
had shown the existence of a material change in his conditions since the
earlier denial." Sharondale Corp.,
As to entitlement, Lovilia challenges the ALJ's findings that Harvey had pneumoconiosis, that it arose out of сoal mine employment, and that Harvey was totally disabled by the disease. We, like the Board, must uphold "an ALJ's findings if they are
rational, supported by substantial evidence, and consistent with the
applicable law." Associated Elec. Coop., Inc. v. Hudson,
On appeal, Lovilia concedes that the "Act does not require positive X-rays[,]" id. at 848 (citing 20 C.F.R. § 718.202(b) ("[n]o claim for benefits shall be denied solely on the basis of a negative chest X-ray")). Indeed, the regulations provide that a determination of pneumoconiosis may be made "if a physician, exercising sound medical judgment, notwithstanding a negative X-ray, finds that the miner suffers from pneumoconiosis." 20 C.F.R. § 718.202(a)(4). However the doctor's finding must be "based on objective medical evidence such as blood gas studies, electrocardiograms, pulmonary function studies, physical performance tests, physical examination, and medical and work histories" and be "supported by a reasoned medical opinion." Id. In addition, a determination of "total disability may be [] found if a physician exercising reasoned medical judgment, based on medically acceptable clinical and laboratory diagnostic techniques, concludes that a miner's respiratory or pulmonary condition prevents him" from performing his usual coal mine duties or comparable work. Id. § 718.204(c)(4).
Lovilia also recognizes that in evaluating medical opinions an ALJ may assign great weight to the opinion of a treating physician. Hudson, 73 F.3d at 848. However, Lovilia incorrectly asserts that there is no record evidence showing that Dr. Arnott was in fact Harvey's treating physician. As the ALJ noted, the medical records clearly show that Dr. Arnott had treated Harvey for breathing problems since 1988. "Because [Dr. Arnott] regularly treated [Harvey] for his breathing problems . . ., the ALJ had discretion to assign more weight to his opinion." Id. at 849.
Lovilia also incorrectly argues that the ALJ erred in concluding that Dr. Arnott's opinion was a reasoned medical
opinion. Although it is "up to the finder of fact to decide as a matter of credibility whether a physician's report is sufficiently documented and reasoned[,]" id. at 848, as Lovilia points out, an ALJ must view the report "in light of the studies conducted and the objective indications upon which the medical opinion or conclusion is based." Logsdon v. Direсtor, 853 F.2d 613, 615 (8th Cir. 1988) (internal quotation omitted). However, this does not mean that an ALJ may "use the studies to form his or her own medical opinion and to substitute that opinion for the opinion of an expert." Id. (internal quotation omitted).
In this case, the ALJ did not err in concluding that Dr. Arnott's
opinion was well-documented and reasoned. The ALJ evaluated the doctor's
opinion against the medical records. In fact, the ALJ discounted Dr.
Arnott's statement that Harvey had X-ray evidence of pneumoconiosis because
no X-rays of record supported that statement. The ALJ also noted the
objective medical tests did not conclusively demonstrate the existence of
pneumoconiosis, but found that Dr. Arnott's opinion was nonetheless well-
documented because it was supported by records of numerous hospitalizations
and treatments for breathing problems, physical examinations, consideration
of objective tests, and work history. In Campbell v. Director, 846 F.2d
502, 508 (8th Cir. 1988), we found that a doctor's report was a "documented
opinion of a physician exercising reasoned medical judgment" even though
it differed from equivocal test results. We explained that "Congress has
recognized that tests and X-rays designed to detect pulmonary impairments
caused by the inhalation of coal dust are far from infallible." Id
(internal quotation omitted). See also Ware v. Director,
Also, cоntrary to Lovilia's arguments, the ALJ did not ignore the
other medical evidence of record. The ALJ noted the earlier
*21
medical opinions indicated that Harvey did not have pneumoconiosis, but
found they were not relevant since they did not address Harvey's condition
at the time of the administrative hearing. See Robinson v. Missouri
Mining,
separate findings that [claimant] suffered from pneumoconiosis and that it
was a contributing cause of his disability"); Consolidation Coal Co. v.
Hage,
Accordingly, we affirm the Board's award of black lung benefits. "Because [Harvey] worked as a miner for more than 10 years, 9
there is a rebuttable presumption that the pneumoconiosis arose out
of coal mine employment." Hudson ,
A true copy.
Attest:
Clerk, U.S. Court of Appeals, Eighth Circuit.