Ark. Coals, Inc. v. Lawson

• Decision Date: 09 January 2014
• Docket Number: No. 13–3563.,13–3563.
• Citation: 739 F.3d 309
• Parties: ARKANSAS COALS, INC. and Old Republic Insurance Co., Petitioners, v. Albert LAWSON and Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents.
• Court: U.S. Court of Appeals — Sixth Circuit

739 F.3d 309

ARKANSAS COALS, INC. and 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.

ARGUED:Mark E. Solomons, Greenberg Traurig, LLP. Washington, D.C., for Petitioners. Jonathan P. Rolfe, United States Department of Labor, Washington, D.C., for Federal Respondent. ON BRIEF:Mark E. Solomons, Laura Metcoff Klaus, Greenberg Traurig, LLP. Washington, D.C., for Petitioners. Jonathan P. Rolfe, Gary K. Stearman, United States Department of Labor, Washington, D.C., for Federal Respondent.

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 responsible 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 20 C.F.R. § 725.309(d)(4)¹ and as the determination that Arkansas Coals was the responsible operator was not “necessary” to the resolution of the initial claim, we reject the finality and collateral estoppel arguments. Likewise, as the director contested Arkansas Coals's denial of its responsible operator status during the initial claim, we also reject the waiver argument. Finally, substantial evidence supports the administrative law judge's determination that Arkansas Coals is the responsible operator, and therefore, relief on the grounds that another company is the responsible operator is also denied. As the Benefits Review Board properly determined that Arkansas Coals was the responsible operator, we AFFIRM the Benefits Review Board's decision.

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. 30 U.S.C. § 901. Pneumoconiosis, popularly known as black lung, is a “chronic dust disease of the lung and its sequelae, including respiratory and pulmonary impairments” that develops from inhalation of coal dust. 30 U.S.C. § 902(b). A miner is entitled to benefits if the disability arose “at least in part, out of employment in a mine during a period after December 31, 1969.” 30 U.S.C. § 932(c). To ensure that the fund does not bear the sole burden of black lung claims, the Department of Labor (“the Department”), following congressional authorization, established regulations to ensure that coal mine operators are liable “to the maximum extent feasible” for awarded claims. Director, OWCP v. Oglebay Norton Co., 877 F.2d 1300, 1304 (6th Cir.1989) (internal quotation marks and citations omitted).

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.” 20 C.F.R. § 725.494(c), (e). An operator is capable of assuming liability if it satisfies one of the following three conditions: “(1) the operator obtained a policy or contract of insurance ...; (2) [t]he operator qualified as a self-insurer ... during the period in which the miner was last employed by the operator ...; or (3) [t]he operator possesses sufficient assets to secure the payment of benefits in the event the claim is awarded in accordance with § 725.606.” § 725.494(e)(1)-(3). The operator that “most recently employed the miner” for more than one year and that satisfies one of the § 725.494(e) criteria is held liable. If that operator fails to satisfy one of the § 725.494(e) criteria, then the operator that next most recently employed the miner and that satisfies one of the § 725.494(e) criteria is held liable. § 725.495(a)(3). The Black Lung Disability fund provides benefits if “there is no operator who is liable for the payment of such benefits.” 26 U.S.C. § 9501(d)(1)(B).

A director is responsible for identifying those operators that are potentially liable and for issuing an initial order designating the responsible operator. 20 C.F.R. §§ 725.401, 725.418(d). The responsible operator may then request a de novo hearing before an administrative law judge (“ALJ”). §§ 725.419(a), 725.455(a). The director bears the burden of proof that the responsible operator is potentially liable, and if the responsible operator is not the employer that most recently employed the miner, then the director must explain the reason for the designation. § 725.495(b), (d).

One common reason why a director might select a prior employer as the responsible operator is if the most recent employer lacked insurance. See§ 725.494(e)(1)-(3). Under such circumstances, the director must provide “a statement that the Office has searched the files it maintains ..., and that the Office has no record of insurance coverage for [the most recent] employer, or of authorization to self-insure.” § 725.495(d). “Such a statement shall be prima facie evidence that the most recent employer is not financially capable of assuming its liability for a claim.” Id. And as discussed above, if the most recent employer is incapable of assuming its liability for the payment of benefits, then the operator that most recently employed the miner and that satisfies one of the § 725.494 criteria is held liable. In the absence of a statement regarding insurance coverage, it is presumed that the most recent employer is financially capable of assuming its liability for a claim. However, if the director satisfies the prima facie requirement by searching the office files, the burden shifts to the designated responsible operator to “demonstrate that the more recent employer possesses sufficient assets to secure the payment of benefits in accordance with § 725.606.” § 725.495(c).

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.” § 725.309(d) (emphasis added). “[T]he applicable conditions of entitlement shall be limited to those conditions upon which the prior denial was based.” § 725.309(d)(2). See generally Cumberland River, 690 F.3d at 477 (describing the claims process under the Act).

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.” 20 C.F.R. § 725.309(d)(4). The one exception is for stipulations by either party, which are treated as binding. Id.

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 Employer.

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...