Bethenergy Mines Inc. v. Director, Office of Workers' Compensation Programs

• Decision Date: 31 October 1994
• Docket Number: No. 94-3247,94-3247
• Citation: 39 F.3d 458
• Parties: BETHENERGY MINES INC., Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, United States Department of Labor; and Eva Vrobel, widow/John, Respondents. . Submitted under Third Circuit LAR 34.1(a)
• Court: U.S. Court of Appeals — Third Circuit

Page 458

39 F.3d 458

BETHENERGY MINES INC., Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, United

States Department of Labor; and Eva Vrobel,

widow/John, Respondents.

No. 94-3247.

United States Court of Appeals, Third Circuit.

Submitted under Third Circuit LAR 34.1(a)

Oct. 31, 1994.

Decided Nov. 15, 1994.

John J. Bagnato, Spence, Custer, Saylor, Wolfe & Rose, Johnstown, PA, for petitioner.

Thomas S. Williamson, Jr., Sol. of Labor, Donald S. Shire, Associate Sol., Patricia M. Nece, Gary K. Stearman, U.S. Dept. of Labor, Office of the Sol., Washington, DC, for respondent Director, Office of Workers' Compensation Programs.

Robert J. Bilonick, Pawlowski, Tulowitzki, Bilonick & Walter, Ebensburg, PA, for respondent Eva Vrobel.

Before: GREENBERG and McKEE, Circuit Judges, and POLLAK, District Judge. ^*

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The matter is before the court on a petition for review brought by BethEnergy Mines, Inc. arising from an application filed on March 9, 1978, by John Vrobel under the Black Lung Benefits Act, as amended, 30 U.S.C. Secs. 901 et seq. The petition seeks review of an April 6, 1994 order of the Benefits Review Board ("the Board") denying BethEnergy's motion for reconsideration of a Decision and Order of the Board dated December 29, 1992. Vrobel was a coal miner who for approximately 34 years worked underground. In large part Vrobel worked for BethEnergy which last employed him on or about September 26, 1977. Vrobel died in 1985 and his widow, Eva Vrobel, has been substituted as a party in this case. Thus, Eva Vrobel and the Director, Office of Workers' Compensation Programs ("Director"), are the respondents.

The Department of Labor initially awarded benefits to Vrobel but BethEnergy denied liability and accordingly the claim was submitted as a contested matter. There was a formal hearing before an Administrative Law Judge ("ALJ") on December 18, 1986. In February 1987, BethEnergy submitted a closing statement which contended that the evidence was insufficient to invoke the interim presumption of total disability provided in 20 C.F.R. Sec. 727.203(a)(1). ¹ Alternatively, BethEnergy argued that even if the interim presumption was invoked, the evidence established that it had been rebutted.

In a decision issued on April 30, 1987, the ALJ found that Vrobel demonstrated that the interim presumption should be invoked under 20 C.F.R. Sec. 727.203(a)(1) on the basis of x-ray evidence establishing the existence of pneumoconiosis. The ALJ further found that BethEnergy failed to establish rebuttal of the presumption under 20 C.F.R. Sec. 727.203(b)(1), (b)(3) or (b)(4). ² However, the ALJ found that BethEnergy could establish rebuttal under (b)(2) because from a pulmonary standpoint Vrobel could perform his usual coal mine employment or comparable gainful work. In addition, the ALJ determined that an opinion of a Dr. McQuillan that Vrobel did not have a totally disabling respiratory impairment was supported by the opinions of two other doctors who examined Vrobel. App. at 152. As a result, the ALJ denied Vrobel benefits.

Eva Vrobel then appealed to the Board, arguing that Vrobel's pulmonary impairment prevented him from working and, accordingly, the ALJ erroneously had found that BethEnergy established (b)(2) rebuttal. In its answering brief BethEnergy argued that even if the Board found that in view of Kertesz v. Crescent Hills Coal Co., 788 F.2d 158 (3d Cir.1986), the ALJ's initial finding of rebuttal was inappropriate, the evidence nevertheless demonstrated that Vrobel's disability was unrelated to coal mine employment, thereby establishing (b)(3) rebuttal. App. at 122-23. Kertesz held that the causation of a miner's total disability is not relevant in determining whether there was rebuttal under (b)(2). Id. at 162 n. 5. Instead, a finding of any totally disabling condition will preclude (b)(2) rebuttal.

As BethEnergy anticipated, the Board remanded the case on December 30, 1988, for the ALJ to reconsider rebuttal under (b)(2) pursuant to Kertesz, and it also instructed the ALJ to reconsider rebuttal under (b)(3) pursuant to Bernardo v. Director, OWCP, 790 F.2d 351 (3d Cir.1986). App. at 113. In Bernardo, we determined that rebuttal under (b)(3) solely relates to the source of the miner's total disability, and not the degree of disability. Thus, the pneumoconiosis need not be the exclusive source of the disability.

On March 13, 1989, the ALJ in his Decision and Order on Remand awarded benefits to Vrobel. App. at 108. The ALJ found that BethEnergy failed to establish rebuttal under (b)(2) as Vrobel had a shoulder condition that could have been totally disabling. App. at 108. In addition, the ALJ determined that BethEnergy failed to establish (b)(3) rebuttal because the medical evidence in the record supported a finding that Vrobel's total disability at least partly was associated with his coal mine employment. Consequently, BethEnergy failed to establish that there was no significant relationship between the total disability and coal mine employment. App. at 109.

On April 11, 1989, BethEnergy filed a motion for reconsideration, arguing that the ALJ's finding in the initial Decision and Order under (b)(2), i.e. that Vrobel was not totally disabled due to a respiratory or pulmonary impairment, was sufficient to establish rebuttal under (b)(3). ³ BethEnergy further asserted that (b)(2) rebuttal was satisfied because the evidence had failed to establish that Vrobel was totally disabled as a result of any condition. App. at 74. In addition, BethEnergy alleged for the first time that changes in the interpretation of (b)(2) and (b)(3) had affected adversely its defense of the claim and it requested an opportunity to submit additional evidence. ⁴ App. at 68. On reconsideration, in a Decision and Order of July 5, 1989, the ALJ rejected BethEnergy's argument concerning total disability under (b)(2) and reiterated that BethEnergy failed to establish that Vrobel was not totally disabled from any condition. However, the ALJ determined that (b)(3) rebuttal was established. In reaching this conclusion, the ALJ applied Marcum v. Director, OWCP, 11 Black Lung Rep. (MB) 1-23 (1987). Construing Marcum, the ALJ stated that (b)(3) rebuttal could be invoked "if the weight of the evidence establishes that the Claimant did not have a totally disabling pulmonary or respiratory impairment." ⁵ App. at 58. The ALJ then adopted his finding in the initial decision that there was no medical evidence which established a totally disabling respiratory impairment. App. at 58. Consequently the ALJ determined that application of the Marcum standard precluded a recovery of benefits.

Vrobel appealed to the Board, claiming that the ALJ's finding that BethEnergy established (b)(3) rebuttal was erroneous because he incorrectly applied the (b)(3) rebuttal standard. Vrobel further argued that proper application of Bernardo would illustrate that BethEnergy could not establish (b)(3) rebuttal, just as the ALJ previously determined when he applied the correct standard in the Decision and Order on Remand. On April 11, 1990, BethEnergy responded, asserting that the ALJ's (b)(3) rebuttal finding on reconsideration was correct because the physicians' opinions contained in the record ruled out any relationship between coal dust exposure and disability, thereby addressing the source of the miner's disability. App. at 45-47.

On December 29, 1992, the Board determined that the ALJ applied the wrong standard when he concluded that rebuttal was established under (b)(3). The Board reasoned that inasmuch as the ALJ found that Vrobel had a respiratory impairment arising out of coal mine employment, app. at 109, 153, the issue to decide, in accordance with Carozza v. United States Steel Corp., 727 F.2d 74, 78 (3d Cir.1984), was whether this respiratory impairment was a contributing cause of the miner's total disability or whether it aggravated his total disability. ⁶ App. at 37. As we explained in Kline v. Director, OWCP, 877 F.2d 1175, 1179 (3d Cir.1989), for rebuttal under (b)(3) "it is necessary to 'rule out' a possible causal connection between a miner's disability and his coal mine employment."

The Board then stated that the ALJ properly had considered (b)(3) rebuttal in his initial Decision and Order on Remand, in which he awarded benefits. The Board indicated that in the ALJ's decision on reconsideration he had applied the wrong test when he held that (b)(3) rebuttal was established since Vrobel did not have a totally disabling pulmonary or respiratory impairment. Furthermore, the Board noted that the ALJ credited the medical opinions that Vrobel had a pulmonary impairment arising out of his coal mine employment, thereby justifying a determination that BethEnergy failed to show that there was "no significant relationship" between disability and coal mine employment. Id. at 37. The Board also concluded that because BethEnergy failed to meet the "no significant relationship" test, which it regarded as less stringent and more easily met than the Carozza no "contribution standard," the ALJ's initial finding precluded rebuttal under Carozza. Therefore, the Board reversed the ALJ's finding of (b)(3) rebuttal and awarded benefits.

On January 25, 1993, BethEnergy requested that the Board reconsider its award of benefits to Vrobel. It premised this request on two arguments: (1) due process and fundamental fairness require that BethEnergy be given an opportunity to develop new evidence to address the standard for establishing (b)(2) and (b)(3) rebuttal, which allegedly changed during the litigation of Vrobel's claim; and (2) the Supreme Court's decision in Mullins Coal Co. v. Director, OWCP, 484 U.S. 135, 108 S.Ct. 427, 98 L.Ed.2d 450 (1987), concerning the invocation of the interim presumption of total disability under C.F.R. Sec. 727.203(a)(1) warranted...