National Mines Corp. v. Carroll
| Citation | 64 F.3d 135 |
| Decision Date | 21 August 1995 |
| Docket Number | No. 94-3711,94-3711 |
| Parties | In the Matter of NATIONAL MINES CORPORATION; and Old Republic Insurance Company, Petitioners, v. Martha CARROLL, Widow of Andrew J. Carroll; and Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents. . Submitted Under Third Circuit LAR 34.1(a) |
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
George H. Thompson, Thompson, Calkins & Sutter, Pittsburgh, for petitioners.
Thomas S. Williamson, Jr., Sol. of Labor, Donald S. Shire, Associate Sol., Helen H. Cox, Christian P. Barber, U.S. Dept. of Labor, Washington, DC, for respondent Director, Office of Workers' Compensation Programs.
Before: GREENBERG, COWEN, and SAROKIN, Circuit Judges.
This matter is before us on a petition for review of a decision and order of the Benefits Review Board of the United States Department of Labor dated October 26, 1994, affirming an award of benefits on a miner's and survivor's claim filed pursuant to the provisions of the Black Lung Benefits Act, as amended, 30 U.S.C. Sec. 901 et seq. (the "Act").
This case originated when the miner, Andrew J. Carroll, filed a claim for benefits on June 7, 1978. The Department of Labor (the "DOL") issued a Notice of Initial Finding on June 25, 1979, indicating that it had determined preliminarily that Carroll had become totally disabled as of June 7, 1978, and identifying National Mines Corporation as the operator potentially liable for benefits to be paid from June 1, 1978. See 20 C.F.R. Secs. 725.413, 725.412. The DOL required National Mines to file a controversion to the determination within 30 days or be deemed to have accepted the initial finding of entitlement and to have waived its right to contest the claim, absent good cause shown. See 20 C.F.R. Sec. 725.413. The notice was sent to National Mines on June 27, 1979, but not to its insurance carrier, Old Republic Insurance Company. On September 30, 1980, the DOL issued an Award of Benefits addressed to Old Republic which, in light of National Mines' failure to respond to the June 25, 1979 order, was essentially a default judgment. However, neither National Mines nor Old Republic initiated payment and thus the Black Lung Disability Trust Fund made the payments on their behalf from June 1978 to February 1981. 1
On March 25, 1981, counsel entered an appearance on behalf of National Mines and Old Republic who together are the petitioners. By letter dated July 10, 1981, petitioners' counsel informed DOL that Old Republic intended to controvert Carroll's claim. Old Republic stated that it elected to have Carroll examined by a physician on September 3, 1981, and requested that the record stay open on the ground that this was the earliest available appointment. On September 25, 1981, and June 16, 1983, Old Republic submitted the results of its medical testing. The matter then languished.
By letter dated September 24, 1986, a supervisor at Old Republic wrote to the DOL claims examiner inquiring into the status of Carroll's claim. The letter referred to an August 12, 1986 telephone conversation in which "it was determined that the initial finding issued by the Department of Labor [in] June, 1979 was not controverted by either Old Republic Insurance Company or [its] attorney." The supervisor stated that the DOL claims examiner had indicated in that conversation that she "would review the file and issue an amended notice." However, the supervisor stated that no amended order or notice had been received. The supervisor sent similar letters of inquiry on July 6, 1987, and June 1, 1989. 2
On August 14, 1989, pursuant to 20 C.F.R. Secs. 725.310 and 725.480, the DOL entered an order directing Carroll to show cause within 30 days why Old Republic should not be given the opportunity to controvert the claim. 3 The order stated as a finding of fact that "[a]n initial finding of entitlement to benefits was made on June 25, 1979; the responsible operator's insurance company was not notified of that finding and, therefore, did not have the opportunity to controvert the claim." Because Carroll did not respond, the DOL gave Old Republic 30 days to controvert the claim. On October 3, 1989, Old Republic filed an "Operator Controversion Form" on behalf of itself and National Mines. In its supplemental response, petitioners argued, inter alia, that the DOL was precluded by the statute of limitations set forth in 20 C.F.R. Sec. 725.603(c)(6) from collecting benefit reimbursements from both National Mines and Old Republic because the DOL had failed to bring an enforcement action within six years of the date upon which there had been a final determination of liability, September 30, 1980.
By letter dated November 16, 1989, the DOL informed petitioners that because it had accepted the controversion, the DOL intended to rescind the Decision and Order of September 30, 1980, which had been based upon National Mines' failure to controvert the initial findings. Old Republic objected to the rescission. In response, the DOL stated that it would not rescind the Decision and Order of September 30, 1980, and that the issue would be addressed at an informal conference.
After an informal conference, a DOL deputy commissioner recommended that the September 30, 1980 decision and order be rescinded. The deputy commissioner also stated that "[t]he Controversions filed by [petitioners] on October 3, 1989 and October 17, 1989 are herewith accepted as timely." The case was referred subsequently to the Office of the Administrative Law Judges for consideration of several contested issues, including the questions of whether the September 30, 1980 Decision and Order should be considered final and whether the six-year statute of limitations set forth in 20 C.F.R. Sec. 725.603(c)(6) precludes imposition of liability on National Mines and/or Old Republic for any benefits awarded in this case.
On October 22, 1991, a formal hearing was held. On December 14, 1992, the administrative law judge ("ALJ") issued a Decision and Order--Awarding Benefits. The ALJ determined, as a preliminary matter, that the rescission of the September 30, 1980 order was proper and equitable. The ALJ concluded that the claim had been reopened on petitioners' own initiative. In support of his conclusion that National Mines and Old Republic "were aware of [Carroll's] claim and [had] attempted to file a controversion well before the expiration of the six-year statute of limitations," the ALJ cited the petitioners' counsel's appearance on March 25, 1981, and the subsequent letter, dated July 10, 1981, which stated that petitioners were controverting the claim and electing to have Carroll examined by a physician. 4 The ALJ concluded that a final determination regarding Carroll's eligibility had not been reached yet, thereby precluding the applicability of the six-year statute of limitations.
The ALJ also determined that the medical evidence showed that Carroll was totally disabled due to pneumoconiosis and that, as a result, his widow was entitled to benefits on his behalf as well as survivor's benefits under 20 C.F.R. Sec. 725.212. The ALJ determined that Carroll was entitled to benefits commencing June 1, 1978, and that the widow was entitled to derivative benefits commencing on June 1, 1989. Consequently, National Mines was ordered to pay benefits under the Act to Carroll with derivative benefits to his widow and to reimburse the Trust for payments previously made.
National Mines and Old Republic appealed the Decision and Order to the Benefits Review Board, specifically challenging the ALJ's findings regarding the applicability of the statute of limitations set forth in 20 C.F.R. Sec. 725.603(c)(6) and the commencement of benefits date. On October 26, 1994, the Board issued a Decision and Order affirming the ALJ's award of benefits. On December 23, 1994, National Mines and Old Republic filed a petition for review to this court challenging the Board's affirmance of the ALJ's decision to rescind the September 30, 1980 Award of Benefits. 5
We have jurisdiction over the petition for review pursuant to 33 U.S.C. Sec. 921(c), as incorporated by the Act, 30 U.S.C. Sec. 932(a). We review decisions of the Board "for errors of law and to assure that it has adhered to its own standard of review." BethEnergy Mines, Inc. v. Director, OWCP, 39 F.3d 458, 462-63 (3d Cir.1994) (citing Director, OWCP v. Barnes & Tucker Co., 969 F.2d 1524, 1526-27 (3d Cir.1992)). "[T]he Board must accept an ALJ's findings of fact if they are supported by substantial evidence in the record considered as a whole." Id. at 463. We exercise plenary review over the Board's legal determinations. Id.
Petitioners do not challenge the award of benefits on the merits. Rather, they argue that the DOL was without authority to rescind its September 30, 1980 Award of Benefits and thereby reopen the claim. Petitioners allege that the DOL, after nine years of inactivity, realized in 1989 that no action had been taken within the six-year statute of limitations period set forth in 20 C.F.R. Sec. 725.603(c)(6) to enforce the lien against them. Petitioners assert that the DOL, to reinstate its enforcement rights, reopened the case without authority to restart the running of the six-year statute of limitations and legitimize a future enforcement action.
In the first place, petitioners' reliance on section 725.603(c)(6) is misplaced. Under that section, a lien for the amount paid out by the Fund due to an employer's failure to pay benefits arises in favor of the United States against the employer's property when liability for those benefits finally is determined. 30 U.S.C. Sec. 934(b)(2); 20 C.F.R. Sec. 725.603(b). Section 725.603(c)(6) provides that the Secretary of Labor may enforce the lien in a district court where "the proceeding is commenced...
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