Carbon Fuel Co. v. Office of Workers' Compensation Programs, U.S. Dept. of Labor

• Decision Date: 30 March 1994
• Docket Number: No. 93-1935,93-1935
• Parties: CARBON FUEL COMPANY, Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR; Verna Kyle, widow of John Kyle, Respondents.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 120

20 F.3d 120

62 USLW 2616

CARBON FUEL COMPANY, Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED

STATES DEPARTMENT OF LABOR; Verna Kyle, widow of

John Kyle, Respondents.

No. 93-1935.

United States Court of Appeals, Fourth Circuit.

Argued Feb. 7, 1994.

Decided March 30, 1994.

ARGUED: Douglas Allan Smoot, Jackson & Kelly, Charleston, WV, for petitioner. Helen Hart Cox, U.S. Dept. of Labor, Washington, DC, for respondent Director; Edward G. Atkins, Charleston, WV, for respondent Kyle. ON BRIEF: Ann B. Rembrandt Before WILKINSON and HAMILTON, Circuit Judges, and WILSON, United States District Judge for the Western District of Virginia, sitting by designation.

Jackson & Kelly, Charleston, WV, for petitioner. Thomas S. Williamson, Jr., Sol. of Labor, Donald S. Shire, Associate Sol., Michael J. Denney, Counsel for Appellate Litigation, U.S. Dept. of Labor, Washington, DC, for respondent Director.

OPINION

WILKINSON, Circuit Judge:

The question before us is whether a survivor's federal black lung benefits must be offset by a state workers' compensation award where both awards depended upon a showing that the decedent had been totally disabled due to pneumoconiosis, although pneumoconiosis was not the cause of death. Because the offset provision of the federal Black Lung Benefits Act, 30 U.S.C. Sec. 932(g), requires an offset of state workers' compensation benefits which are conditioned upon death or disability due to pneumoconiosis, we hold that the offset is required in this case. We thus reverse the decision of the Benefits Review Board to the contrary.

I.

Plaintiff Verna Kyle is the widow of John Kyle. John Kyle worked as a coal miner in West Virginia for several decades. Following his retirement from the mines in 1973, Kyle filed claims for both federal black lung and state workers' compensation benefits. In 1975, the West Virginia Occupational Pneumoconiosis Board found John Kyle to be totally and permanently disabled due to occupational pneumoconiosis. The West Virginia Workers' Compensation Commission then awarded Kyle state workers' compensation benefits on the basis of that disability determination. The Department of Labor's Office of Workers' Compensation Programs ("OWCP") similarly found John Kyle to be eligible for a federal award under the Black Lung Benefits Act, 30 U.S.C. Secs. 901-945, and named Carbon Fuel Company as the coal mine operator liable for paying the federal benefits. However, because Kyle was also receiving state workers' compensation benefits, OWCP offset his federal award by the amount he received from West Virginia. See 30 U.S.C. Sec. 932(g).

In 1989, John Kyle died of metastatic cancer, which was unrelated to his pneumoconiosis, and Verna Kyle filed for federal and state survivor's benefits. Because John Kyle had died of causes unrelated to the disability for which he was receiving state workers' compensation, West Virginia granted his widow a lump sum payment equal to 104 weeks of his state workers' compensation payments. See W.VA.CODE Sec. 23-4-10(e). OWCP also awarded Verna Kyle survivor's benefits. However, because she was receiving state payments as well, OWCP offset Verna Kyle's federal black lung benefits by the amount of her state award. Kyle protested the offset, and the case was heard before an Administrative Law Judge in March 1991.

After the hearing, the ALJ rejected the offset from Verna Kyle's federal benefits. This decision was upheld on appeal by the Benefits Review Board, with one judge dissenting. Applying West Virginia law, the Board found Verna Kyle's claim for state survivor's benefits to be distinct from her husband's original receipt of workers' compensation. Verna Kyle, the Board reasoned, received survivor's benefits from the state because her husband had died of cancer, not because of his occupational pneumoconiosis. The Board concluded that her state award could not be used to offset her federal award because federal black lung benefits may be offset only by those state benefits granted on the basis of pneumoconiosis. OWCP and Carbon Fuel Company appeal the Board's decision.

II.

Because this dispute involves the interpretation of the federal and West Virginia statutory schemes for awarding black lung benefits, we begin our analysis with those provisions. In passing the Black Lung Benefits Act, 30 U.S.C. Secs. 901-945, Congress did not intend that the federal government would become the primary benefits provider. Rather Congress expressed "a clear legislative desire ... for state workers' compensation programs to be the primary provider of disability payments and for the federal government to be responsible only if the state program is not adequate." Freeman v. Harris, 625 F.2d 1303, 1307 (5th Cir.1980). Thus, while the Act's benefit structure does ensure that miners suffering from pneumoconiosis--as well as their dependents--receive sufficient support, see 30 U.S.C. Secs. 921-922, it also includes an "offset" provision which reduces federal benefits by the amount of any state award. This "offset provision was enacted to avoid the duplication of Workman's Compensation benefits by Black Lung benefits." Director, OWCP, United States Dep't of Labor v. Barnes & Tucker Co., 969 F.2d 1524, 1526 (3d Cir.1992). The offset provision reads:

The amount of benefits payable under this section shall be reduced, on a monthly or other appropriate basis, by the amount of any compensation received under or pursuant to any Federal or State workmen's compensation law because of death or disability due to pneumoconiosis.

30 U.S.C. Sec. 932(g); see also 20 C.F.R. Sec. 725.535(a).

Whether there will be any offset under Sec. 932(g) therefore depends on the presence of a state workers' compensation award made "because of death or disability due to pneumoconiosis." In this case, the West Virginia award was made pursuant to Sec. 23-4-10(e) of the West Virginia Code. Section 23-4-10(e) reads in relevant part:

(e) If a person receiving permanent total disability benefits dies from a cause other than a disabling injury leaving any dependents as defined in subdivision (d) of this section, a lump sum payment shall be made to such dependents in an amount equal to one hundred four times the weekly benefit the worker was rec[e]iving at the time of his death.

John Kyle died from causes unrelated to his occupational disability (pneumoconiosis), and it is undisputed that Verna Kyle is eligible for state benefits under Sec. 10(e).

III.

On appeal, Verna Kyle contends that the fact that her benefits were awarded under W.VA.CODE Sec. 23-4-10(e) is dispositive of the offset issue. Reflecting the reasoning of the Benefits Review Board, Kyle maintains that her state benefits arose out of her husband's death from a cause unrelated to occupational pneumoconiosis. Indeed, she characterizes her Sec. 10(e) award as one she was entitled to...