Old Ben Coal Company v. Elmer H. Luker and the Director, Office of Workers' Compensation Programs, and United States Department of LaborOld Ben Coal Company v. Elmer H. Luker and the Director, Office of Workers' Compensation Programs, and United States Department of Labor
This is a petition for review of a final order of the Benefits Review Board (the “Board”), United States Department of Labor, awarding benefits under the Black Lung Benefits Act (the “Act”),
I.
Elmer Luker began working for Old Ben as a coal miner in 1932, working as a truck driver, tractor driver, driller, shooter and stripper. His employment exposed him to substantial amounts of coal mine dust. Luker testified that as a truck driver he made from nine to twelve round trips a day from the mine to the tipple where the loaded truck was emptied, over haulage roads made of “gob” (refuse from the coal, consisting of coal and impurities, such as sulphur balls). Although Raymond Wools, an Old Ben manager, asserted that the “gob” had been replaced by crushed rock earlier than 1969 (the date claimed by Luker), Wools admitted that the roads presented a continuing dust problem requiring two water trucks to hose them down. Even after 1969 there was a serious dust problem on the roads.
At the tiрple, where the coal was dropped considerable distances in unloading, more dust was generated, and continued to be generated even after a change which allowed the truck driver to move over the hopper while unloading. Dust was also generated by loading coal onto the trucks and by blasting to remove coal. Luker drove trucks that may not have had windows or trucks that had no air conditioning so the windows were kept open. At the end of the work day his face and other exposed parts of his body were occasionally “as black as the coal.”
Luker testified that he began seeing a doctor about his lungs in 1961 or 1962. In 1970 or 1971, a doctor told him he had to get out of the coal dust. However, he continued working past his sixty-fifth birthday, finally quitting in October 1973. He stated then that he could no longer climb the three flights of “stairs” on his truck because he was out of breath when he got to the top. Several doctors examined Luker. A 1973 pulmonary function study, administered by Dr. Getty, showed “moderately severe obstructive pulmonary disease.” An examination by Dr. Connerey in the same year showed that Luker’s “diaphragms moved poorly,” and his ventilatory capacity was “29% of normal.” Dr. Connerey concluded that Luker was 71% permanently disabled due to pneumoconiosis and obstructive emphysema. Dr. Stewart reported that Luker had a vital pulmonary function capacity of 47.4% of normal and agreed that Luker “definitely has chronic obstructive lung disease,” “more than likely” caused by Luker’s years of coal mining. Dr. Stewart concluded that Luker was “totally and permanently disabled from doing any gainful employment in which he is trained.” Dr. Peters found an x-ray “highly suggestive of findings consistent with pneumoconiosis” and concluded that Luker “would be unable to perform any type of gainful employment in a coal mine.”
Dr. Nay, retained by Old Ben, opined that Luker had “no evidence of pneumoconiosis” but agreed that Luker had “emphysema.” Dr. Nay said that “no evidence” established that Luker’s coal mine employment contributed to his pulmonary disease. X-ray evidence was interpreted variously as positive and negative by doctors. The most recent x-ray, dated October 22, 1974, was interpreted by Dr. Breitweiser to contain “calcification in small opacities” but no pneumoconiosis.
The ALJ credited medical reports intеrpreting a pulmonary function study and a chest x-ray. The AU also credited the reports of Drs. Connerey and Stewart. He specifically discredited the report of Dr. Nay and said: “The overwhelming weight of the evidence establishes the fact that Claimant does have pneumoconiosis and that Claimant does have a chronic obstructive lung disease with considerable emphysema.”
The ALJ applied the law as it stood in 1977 when he rendered his original November 1977 decision and concluded that Luker was totally disabled from pneumoconiosis that arose out of his coal mine employment.
The Board in its original March 1979 decision found substantial evidence to support the AU’s finding that Luker had a totally disabling pulmonary impairment. It relied on four pulmonаry function studies, reports by Drs. Stewart, Rucker and Peters, and Luker’s testimony. The Board also approved the AU’s finding that Luker’s total disability arose out of coal mine employment, based on the presumption, contained in
On remand, the ALJ considered testimony that the roads over which Luker drove were dusty enough to require the services of two water trucks to water down the dust. An absence of watering equipment contributed to high dust levels when coal was loaded and unloaded, and at the end of the day truck drivers’ clothes were dirty and uncovered portions of their body were “just about as black as the coal.” The AU concluded, in May, 1979, that conditions at the strip mine where Luker worked while loading, driving and unloading coal were occasionally intensely dusty and substantially similar to the conditions of dust exposure in underground mines. Therefore Luker “spent more than fifteen years performing jobs that exposed him to a heavy concentration of coal dust ... substantially similar to conditions in an underground mine” and Luker was entitled to the presumption that his totally disabling respiratory disease was pneumoconiosis.
See
The Board in a second decision in February 1986 affirmed the supplemental ALJ findings, noting that the AU “gave a detailed description of the wоrking conditions that he found to exist.” The Board held that since the ALJ “provided [a] sufficient rationale to support his findings,” it was unnecessary for the ALJ to resolve the alleged conflicts in Wool’s and Luker’s testimonies. The Board also held that Old Ben was “effectively precluded on this appeal from arguing the non-existence of statutory pneumoconiosis.”
Old Ben sought to establish that this case met the transfer of liability criteria because Luker had filed a “Part B” claim in March, 1973 with the former Department of Health, Education and Welfare (“HEW”), before he filed a “Part C” claim in September, 1974 with the Department of Labor (the “DOL”), which was adjudicated by the ALJ and the Board.
2
The Part B claim, denied on February 7, 1975, was never reviewed and approved under section 945. Old Ben recognized that Department of Health and Human Services (“HHS”) regulations require a claimant to elect review of a denied Part B claim within six months of the HHS mailing of a notice of election rights. Old Ben, however, sought to excuse Luker’s failure to eleсt review on the ground that he never received notice of his right to do so. Because Luker had died on October 5, 1984, Old Ben relied on affidavits from Luker’s widow and attorney claiming, respectively, that Luker did not receive an election notice and that Luker did not give his attorney an election card. The Director, Office of Workers’ Compensation Programs (the “Director” and “OWCP”), conceded the existence of the Part B claim and that it was a “claim denied” under
Old Ben concurrently sought to elect review for Luker, based on the widow’s affidavit, and submitted this affidavit to the Board. The affidavit states that the widow “hereby eleet[s] review” of Luker’s denied Part B claim and “would like the Social Security Administration to review this claim again.” The Board denied Old Ben’s motion to dismiss in February, 1986, at the same time that it affirmed the ALJ’s supplemental decision and order on benefits. The Board, relying on its previous decision in Chadwick v. Island Creek Coal Co., 7 Black Lung Rep. 1-883 (1985), aff'd en banc, 8 Black Lung Rep. 1-447 (1986), found it unnecessary to decide whether Luker received an election card from the Social Security Administration (the “SSA”) or whether the late filing of an election was valid and timely. The Board said that, even if no election card had been sent and the late election wаs valid, the denied Part B claim, upon review, would “merge into” Luker’s Part C claim. As the Board construed the DOL regulations, this merger of claims would extinguish the Part B claim, leaving only the Part C claim, which was not “denied” on or before the effective date of the 1977 amendments, and therefore did not fall within the 1981 transfer of liability provision.
II.
Two issues are presented on appeal: first, whether Luker is entitled to benefits, and, second, whether liability for Luker’s benefits claim should transfer from Old Ben to the Trust Fund pursuant to the 1981 Amendments. This court’s scope of review is limited to an evaluation of whether the AU’s and the Board’s decisions are rational, supported by substantial evidence and consistent with the applicable law.
3
The ALJ credited Dr. Stewart's assessment that Luker had a totally disabling pulmonary or respiratory impairment arising out of coal mine employment as consistent with earlier assessments by Drs. Getty and Connerey and with other evidence that Luker had a serious pulmonary impairment that totally disabled him. The AU also found it obvious from his own observations of Luker that the claimant was totally disabled from exposure to coal mine dust. The ALJ rejected Dr. Nay’s report as “contrary to the overwhelming weight of the evidence.” The ALJ thus appraised the medical evidence in a rational way. See id. at 363.
The ALJ also considered all the relevant evidence in determining that dust conditions in Luker’s surface mining were substantially similar to conditions in an underground coal mine, thus bringing into play the presumption in
In addition, the AU did not err in finding that Old Ben had failed to rebut the presumption at
Later, pursuant to the remand from the Board, the AU specifically found that conditions during Luker’s strip mine employment were comparable to conditions in an underground mine and therefore held that Luker’s admitted pulmonary impairment could be presumed to be pneumoconiosis under
III.
The more difficult issue before us is whether liability for payment of benefits to Luker was transferred under the 1981 Amendments from Old Ben to the Trust Fund. As originally enacted, Title IV of the Federal Coal Mine Health and Safety Act of 1969 (“FCMHSA”) established two programs — Parts B and C — under which coal miners totally disabled by work-related pneumoconiosis could receive benefits. Claims were adjudicated under Part B or Part C depending essentially on when they were filed. Part B was a federally funded program, administered by the SSA, a part of HEW, which governed all claims for benefits filed before January 1, 1973. Originally, Part C was a joint federal and state program, administered by the DOL, which governed claims filed between Jаnuary 1, 1973 and December 31, 1976, relying primarily on state workers’ compensation laws. If those laws did not provide adequate coverage, Part C claimants could file in a DOL program, which looked to coal mine operators to pay benefits.
In 1972, Title IV of the FCMHSA was designated by an amendment as the Black Lung Benefits Act. This amendment, which was intended to defer the transition from Part B to Part C claims, also extended the period for filing Part B claims to June 30, 1973, and postponed the effective date for Part C claims for one year until January 1, 1974. Claims filed between July 1, 1973 and December 31, 1973 were transition claims to be administered by the DOL, with benefits to be paid by the federal government. Also, the termination date for Part C claims was extended and then eventually removed.
By 1977, the Part B program was costing the federal government over $1 billion a year, and the Part C program had become primarily a federal responsibility due, inter alia, to the inadequacy of workers’ compensation coverage and the inability of the DOL .to identify responsible operators. In response to these problems, Congress amended the Act to create the Trust Fund to be financed by an excise tax on the sale of coal. The Trust Fund was to pay benefits in cases where a miner’s last coal mine employment ended before January 1, 1970 or where a responsible operator could not be identified. Nonetheless, Congress intended to “ensure that individual coal operators rather than the trust fund bear the liability for claims arising out of such operators’ mines to the mаximum extent feasible.” S.Rep. No. 209, 95th Cong., 1st Sess. 9 (1977), reprinted in House Comm. on Educ. and Labor, 96th Cong., Black Lung Benefits Reform Act and Black Lung Benefits Revenue Act of 1977, 612 (Comm.Print 1979). In 1977, Congress also amended the Act by establishing more lenient standards of eligibility for benefits. Claims denied before March 1, 1978 (the effective date of the 1977 amendments) were to be reexamined under these less demanding standards. Review of pending or denied Part C claims was automatic. Review of pending or denied Part B claims was not automatic; rather the Secretary of HHS had to notify Part B claimants of their right to request review of these claims. Part B claimants were then “required to make an election” to have either the DOL or HHS review their claims.
Review by HHS was to be on the existing file. But, if the Part B claimant elected DOL review or if HHS did not аpprove the reviewed claim, the Part B claim was to be transferred to. the DOL and the claimant would be permitted to supplement the evidence in his file. A request for review by either HHS or the DOL had to be received by the SSA within six months from the date on which the notice was mailed.
The 1981 Amendments were adopted primarily in response to a growing concern
Since there was concern in Congress that this transfer of liability could prove too burdensome for the debt-laden Trust Fund, legislators specifically requested information on how many claims would transfer, which claims they werе and what their cost would be. See Black Lung Benefits and Revenue Amendments of 1981: Hearings before the Subcomm. on Labor of the Senate Comm. on Labor and Human Resources, 97th Cong., 1st Sess. 31, 77 (1981) (statement of Sen. Randolph); id. at 80 (statement of Sen. Nickles). Industry representatives testified that the amendment’s definition of transferring claims included about 10,200 claims. An insurance industry representative broke these numbers down to an estimate that 8,000 Part B and 2,000 Part C claims were intended to be transferred, valued by another insurance representative at approximately $1;4 to $1.5 billion. These claims comprised only a fraction of the total number of claims that were or could have been reopened and reviewed under the more liberal 1977 eligibility criteria. 127 Cong.Rec. 31,511 (1981). The estimates were repeated by Representative Perkins (providing the SSA’s explanation) who said:
Together, the provisions will affect approximately 10,200 cases. This consists of approximately 8,000 cases originally filed with the Social Security Administration (1,400 Part B cases approved by SSA, and 6,543 Part B cases approved by DOL), and about 2,200 Part C, responsible operator cases.
127 Cong.Rec. 31,748 (1981).
Final regulations implementing the 1981 Amendments were issued by the DOL on May 31, 1983.
See
48 Fed.Reg. 24,272-93 (1983) (codified at
In adopting final rules, the DOL specifically discussed and rejected two methods for establishing transfer liability that ostensibly would achieve uniformity of claimant treatment. According to the DOL,
The DOL’s construction of regulations to reflect Congress’ purpose in enacting the 1981 Amendments warrants great deference from the courts, because the DOL is authorized to administer the statute.
See Udall v. Tallman,
We generally accept the Director’s аrgument that the regulations (at least as applied to the effects of merger) conform to, and reconcile, the various and interrelated purposes of Congress: altering eligibility requirements, bolstering the finances of the Trust Fund and transferring part of the unanticipated liabilities incurred by responsible operators under the 1977 amendments. In general, satisfaction of these purposes is achieved by honoring the number and kind of claims which Congress intended to be transferred.
None of the parties disputes that Luker’s Part C claim adjudicated in this case fails to meet the statutory conditions for transfer of liability, because it was neither denied prior to March 1, 1978, nor reviewed and approved under the 1977 amendments. On the other hand, Luker’s Part B claim was indeed “denied” before March 1, 1978, and Old Ben argues that the claim should also be considered reviewed and approved under the 1977 amendments. Old Ben argues that Luker’s Part B claim qualifies for transfer of liability because Luker’s widow recently “elected” review of the claim and, in the alternative, because the Part B claim can be merged with the Part C claim so that the two claims together will meet the denial and approval conditions for transfer.
The Board, of course, did not decide whether Luker’s election was valid and timely, but rather interpreted the DOL regulation,
The Director urges that we agree with the Board’s result but reject its analysis. According to the Director, Old Ben’s attempt to transfer liability must fail for two reasons: first, because any election for review of the Part B claim must be addressed to the SSA rather than to the Board (a part of the DOL), and second, even if a DOL election were permissible, Old Ben has not established good cause for Luker’s failure to request review within six months of notification by the SSA of his election rights. The Director suggests that the DOL, in explaining and promulgating its 1983 regulations, rejected the approach of the Board toward defining transferability of claims, which the Board adopted in dicta in
Chadwick.
As discussed above, the DOL considered and rejected two alternative methods of calculating transferability, concluding that they failed adequately to achieve Congress’ apparent intended result. The Director suggests that the Board erred in
Chadwick
and in its arguments in this case in construing what claims are transferable. The Director also disagrees with the Board’s premise that the DOL regulations on merger of claims require a Part B claim to merge “into” a pending Part C claim. Instead, the Director claims that the regulations provide that certain claims will merge “with” instead of “into” certain other claims and say nothing about how the merged claim should be treated for transfer of liability purposes.
See
With respect to the Director's first argument against Old Ben’s position, HHS requires that a request that either HHS or the DOL review a denied Part B claim must be received “by the Social Security Administration” within six mоnths from the date the SSA mailed an election notice to the Part B claimant unless good cause exists to extend the period.
The other branch of the Director’s argument is that, quite apart from the fact that the election is now being submitted to the “wrong” agency, the evidence Old Ben has presented is insufficient to establish the requisite good cause to excuse Luker’s failure earlier to request review of his Part B claim.
See
Arguably it may be presumed that the notice was received by Luker because “a timely and accurate mailing raisеs a rebut-table presumption that the mailed material was received.”
In re Nimz Transp., Inc.,
Therefore, based on his evidence of the mailing of the notice to Luker and its non-receipt by HHS, together with Old Ben’s belated filing with the wrong agency, the Director would have us reject the Board’s rationale but affirm its result denying transfer of liability to the Trust Fund. As noted, the Board, relying on Chadwick, found it unnecessary to decide whether Luker’s election for review was “valid and timely.” Instead the Board relied on its merger analysis, which we reject. Apparently, the Board (whose position is, of course, not represented before us) believed the merger analysis would advance uniformity of claimant treatment.
At oral argument we raised the question whether, under
SEC v. Chenery Corp.,
We believe, however, partly because of Chenery considerations and more importantly because factfinding is involved, that a remand is appropriate, if not required, here. It is a considerable overstatement to assert that the Board has no policymaking functions. An adjudicatory role by no means excludes the making of policy. Having said аll this, however, we do not believe that, under the particular facts of this case, the filing of an election with the “wrong” agency, here with the Board (a part of the DOL) instead of the SSA, could alone preclude transfer of liability. After all, the DOL is the agency charged with administering the law and it is highly likely that an election delivered to the Board would find its way to its proper destination. In fact, the affidavit supplied by Luker’s widow specifically requests review by HHS, not by the DOL. 6 Here the notification was made directly to the Board and served on the Solicitor of the DOL; there is no suggestion how any party could have been prejudiced by this technical misdelivery. Nor is there reason to believe that filing with the SSA as opposed to the Board will have an appreciable effeсt on the number of cases reviewed and transferred (thus violating congressional intent). At least under the present facts, we conclude as a matter of law that the misdirection of the election is not alone sufficient to defeat transfer.
This leaves us, however, with significant questions of fact on the issue of “good cause” for the late filing. The issue is whether the affidavits submitted by Old Ben are sufficient in light of the good cause requirement for late elections. We believe these are issues properly for the Board, as the finder of fact, and not in the first instance for this court.
We therefore remand to the Board for consideration in light of the regulations of the DOL and the SSA to determine whether liability should transfer from Old Ben to the Trust Fund. As we have noted, entitlement to the benefits has been established. Also as noted, merely filing with the DOL instead of the SSA under the present facts does not render the filing ■ invalid. But factfinding by the Board is required to determine whether there has been compliance with the regulations in other respects. The final decision and order of the Board insofar as it relates to transfer of liability is therefore vacated and the matter is remanded to the Board for redetermination of transfer liability. 7
Affirmed in Part, Vacated in Part and Remanded.
Notes
. See infra at 693-94 (describing "Part B” and "Part C" of the Act).
. See infra at 693-94 (describing “Part B” and "Part C” of the Act).
. With respect to review of the ALJ’s decision, the standard of review is "whether the court of appeals believes that
the administrative law
. Old Ben counters, based on certain ALJ and Board decisions, that the DOL has been inconsistent in its interpretation of the transfer provisions. But the decisions of the Board and of the AUs are not chargeable to the Director. Both the AUs and the Board function in independent adjudicatory capacities. On the other hand, the Director, as the delegate of the Secretary of Labor, exercises rulemaking authority and, of course, his interpretations are entitled to deference.
See Potomac Elec. Power Co. v. Director, OWCP,
. Old Ben also argues in its reply brief that it was not necessary for Luker to submit a formal election card to obtain review of his denied Part B claim (since the action was not specifically required by section 435 of the Act,
We do not accept this argument as a way around the SSA regulations which require a specific election — whether by the formal election card or by some other means — to have the Part B claim reviewed. Under the controlling SSA regulations,
. Mrs. Luker in her affidavit says:
I would like the Social Security Administration to review [Elmer Luker’s] claim again.
Attachment E to Old Ben’s Motion to Dismiss, filed June 22, 1985.
. After issuance of this opinion, the director, OWCP, asked for clarification of procedures on remand, with the possibility of reference to the SSA for an initial determination of "good cause.”
Old Ben in a response appears to support the suggestion for reference to the SSA and raises the further possibility of an administrative determination by DOL as to transfer.
In the present context, the "good cause" determination is relevant only to the question of transfer liability (i.e. whether Old Ben or the Trust Fund is liable). Therefore, we contemplate that the Board (to which we remand the transfer of liability question) will, if factual questions are involved, refer the matter to an ALJ for an appropriate hearing.
The AU’s determination is, of course, subject to review by the Board, with right of appeal to the courts.
No question of entitlement to benefits remains since these have been decided by this opinion; hence, we do not understand the references to "eligibility" in the submissions before us.