Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor v. Peabody Coal Co.

Decision Date19 April 1977
Docket NumberNos. 76-1577 and 76-1648,s. 76-1577 and 76-1648
Citation554 F.2d 310
PartiesDIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Petitioner, * v. PEABODY COAL COMPANY and Old Republic Insurance Company, Respondents. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Petitioner,* v. SOUTHWESTERN ILLINOIS COAL CORPORATION, Respondent.
CourtU.S. Court of Appeals — Seventh Circuit

Mark E. Solomons, U. S. Dept. of Labor, Washington, D. C., for petitioner.

John L. Kilcullen, Washington, D. C., Thomas Q. Keefe, East St. Louis, Ill., for respondents.

Before PELL and SPRECHER, Circuit Judges, and DILLIN, District Judge. **

PELL, Circuit Judge.

In as simple terms as are permitted where the ultimate decisional statement is necessarily dependent upon frequent references to multinumbered and alphabetized statutory provisions, much of these appeals is concerned with the fact that Congress provided for recovery of money by those suffering from black lung disease but in so doing the method of reducing claims to possession was by referring to an entirely different compensation statute which itself was amended subsequent to the black lung statutes. While we as the panel to which this case was assigned must accept responsibility for the opinion which follows, we regret having to answer for the embranglement which will face any reader but the most knowledgeable in this particular field of legislative endeavor as we attempt to wend our way through the daedalian verbiage here involved. The one clear aspect of these cases is that the resulting bureaucratic disagreements as to the correct solution of the issue resulting from the statutory shambles has successfully thus far thwarted the effective implementation of a societal program deemed essential by the Congress.

William Lowe, a coal miner, quit his employment with the Peabody Coal Company (Peabody) on January 9, 1974. He filed a claim for benefits under Part C of Title IV of the Federal Coal Mine Health and Safety Act of 1969, (FCMHSA) as amended by the Black Lung Benefits Act of 1972, 30 U.S.C. § 901 et seq. (1970 ed. and Supp. V, 1975,) on February 21, 1974. He died of "black lung and emphysema" on April 15, 1974. Ten days later, on April 25, 1974, Olga Lowe, his widow, filed her Part C claim for benefits.

Scott Vancil was employed for fifteen years or more in underground coal mines, leaving such employment in 1952 for road construction work. He filed a claim for benefits under Part B of the Act 1 on August 15, 1973.

These consolidated appeals present important questions regarding the administrative hearing upon the Lowe and Vancil claims. The hearing on the Lowe claims was conducted by Hearing Officer Nicodemo DeGregorio who is not an administrative law judge appointed pursuant to 5 U.S.C. § 3105. For this reason Peabody objected to his authority to conduct the hearing. On March 19, 1976, the hearing officer issued a Decision and Order, ruling that William Lowe was totally disabled by pneumoconiosis at the time of his death, that his death was due to pneumoconiosis, and that Peabody was liable for the payment of benefits to Olga Lowe pursuant to the Act. Peabody appealed this decision to the Benefits Review Board (BRB). On April 19, 1976, the BRB vacated the hearing officer's decision on the ground that the hearing officer was not a duly qualified administrative law judge and remanded the case for a new hearing.

Similarly, the hearing on the Vancil claim was conducted by Hearing Officer Thomas G. Egan, who is not an administrative law judge appointed pursuant to 5 U.S.C. § 3105. For this reason Southwestern Illinois Coal Corporation (Southwestern) objected to his authority to conduct the hearing. On March 9, 1976, the hearing officer issued a Decision and Order, ruling that Scott Vancil was totally disabled due to pneumoconiosis arising out of his coal mine employment, that the provisions of § 422(f)(2) of the Act, 30 U.S.C. § 932(f) (2) (Supp. V, 1975), precluded Southwestern from being held liable for benefits, but that the Secretary of Labor was liable for the benefits due or to become due after January 1, 1974, under § 424 of the Act, 30 U.S.C. § 934 (Supp. V, 1975), as made applicable to the claim through § 415(a)(1), 30 U.S.C. § 925(a) (1) (Supp. V, 1975). The Director, Office of Workers' Compensation Programs, United States Department of Labor (Director), appealed this decision to the Benefits Review Board. The BRB vacated the hearing officer's decision on the ground that the hearing officer was not a duly qualified administrative law judge and remanded the case for a new hearing.

In both cases, the BRB relied upon its prior decision in Fields v. A.K.P. Coal Company, Inc., 3 BRBS 269 (1976), being reconsidered on other grounds. The BRB read the Fields decision as holding that in a case where a potentially responsible operator and/or carrier participate and where a well-founded objection to the qualifications of a hearing officer to conduct a formal hearing under the Act is made during the adjudication before that official, a Decision and Order based on that proceeding is invalid, because a hearing under the Act must be conducted by a qualified administrative law judge. Not only is the Fields decision the basis of the decisions rendered in the present cases, but it also figures in a continuing legal dispute between the United States Civil Service Commission (CSC) and the Department of Labor. Because of the peculiar interaction of that dispute with our disposition of the present petitions, it is appropriate to set forth a summary of that legal debate.

Approximately two months before the Secretary of Labor was to begin processing Part B and Part C black lung claims, a personnel officer in the Department of Labor submitted to the CSC's Office of Administrative Law Judges position descriptions for review and classification as Administrative Law Judge, GS-935. One of the descriptions was designed for cases arising under the Black Lung Benefits Act of 1972, P.L. 92-303. By a letter dated May 25, 1973, the Director of the CSC office opined that the CSC did not have jurisdiction to classify the requested positions as administrative law judges because the language of the incorporating clause in the Black Lung Benefits Act of 1972 (the amended FCMHSA) did not incorporate the subsequent October 1972 amendments to the Longshoremen's and Harbor Workers' Compensation Act (the amended LHWCA).

The CSC's initial response to the request for administrative law judges essentially rested upon its conclusion that, under a rule of statutory construction first recognized formally by the United States Supreme Court in Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524, 624, 9 L.Ed. 1181 (1838), and approved a century later in Hassett v. Welch, 303 U.S. 303, 314, 58 S.Ct. 559, 82 L.Ed. 858 (1938), an adopting statute takes the adopted statute as it exists at the time of adoption. The CSC noted that the black lung amendments had been enacted on May 19, 1972, and the LHWCA amendments were enacted some five months later, on October 27, 1972. The CSC concluded that there was no question but that prior to the October 1972 amendments to the LHWCA, hearings under the Federal Coal Mine Health and Safety Act of 1969 were not subject to the requirements of the Administrative Procedure Act. The CSC directed legal inquiry toward the question whether the language of the incorporating clause in the black lung amendments incorporated the subsequent amendments to the LHWCA and concluded that it did not.

In a letter dated June 14, 1973, the Solicitor of Labor challenged the conclusions of the CSC on the basis that the October 1972 amendments were applicable to and were adopted by the Black Lung Benefits Act of May 1972. Subsequently, on January 18, 1974, the Secretary of Labor himself addressed a letter to the Chairman of the CSC. The Secretary's letter observed that any substantial deviation from the adjudicatory scheme provided in the LHWCA could seriously jeopardize the appellate procedures provided for in that statute. His letter also noted that such deviation would make "the utilization of the statutory Benefits Review Board and the U.S. Court of Appeals for appellate purposes highly questionable."

Approximately one month later, on February 25, 1974, the CSC formally determined that it could not properly classify the hearing officer positions for black lung cases as administrative law judges. On March 7, 1974, Chairman Hampton sent to the Secretary of Labor still another letter explaining the CSC's position. The letter set forth once again the CSC's view that the adjudication of black lung cases was controlled by the provisions of the LHWCA as of the date the black lung amendments adopted the hearing procedures.

Up to this point, the dispute had focused on the hearing procedures. Because the Secretary of Labor was mandated to process black lung claims, the choice was made to amend the then-existing regulation requiring the use of administrative law judges in the adjudication of black lung claims so as to permit individuals other than administrative law judges appointed pursuant to 5 U.S.C. § 3105 to hear the claims. In February 1976, however, the BRB's Fields decision struck down as invalid the new, superceding regulations.

The Fields opinion found that the regulations authorizing non-administrative law judge hearing officers to conduct hearings under the Black Lung Benefits Act were in conflict with Section 19(d) of the Longshoremen's Act 2 and Section 559 of the Administrative Procedure Act. 3 One essential ground of its analysis was the BRB's conclusion that the May 1972 amendments incorporated the subsequent October amendments to the LHWCA. Thus, the BRB disagreed with a legal analysis which the CSC had consistently pressed for approximately three years.

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