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

• Decision Date: 02 November 1987
• Docket Number: No. 86-7512,86-7512
• Citation: 831 F.2d 240
• Parties: DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Petitioner, v. DRUMMOND COAL COMPANY and Miles Cornelius, Respondents.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 240

831 F.2d 240

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED

STATES DEPARTMENT OF LABOR, Petitioner, v. DRUMMOND COAL COMPANY and Miles Cornelius, Respondents.

No. 86-7512.

United States Court of Appeals, Eleventh Circuit.

Nov. 2, 1987.

Michael J. Denny, Thomas L. Holzman, Ellen L. Beard, U.S. Dept. of Labor, Washington, D.C., for petitioner.

A. Inge Selden, III, H. Thomas Wells, William S. Dodson, Jr., Birmingham, Ala., for respondents.

Petition for Review of an Order of the Department of Labor Benefits Review Board (Alabama Case).

Before TJOFLAT and ANDERSON, Circuit Judges, and HENDERSON, Senior Circuit Judge.

ANDERSON, Circuit Judge:

Though clouded in procedural obscurity, the parties' basic dispute is over who should pay Miles Cornelius' black lung benefits--the Black Lung Disability Trust Fund, established by the United States ¹ or Drummond Coal Company, Cornelius' former employer. Because the Benefits Review Board correctly determined that the Trust Fund bears liability for Cornelius' benefits, we deny the Director's Petition for Review.

I. BACKGROUND

A. Statutory and Regulatory Scheme

This Petition for Review concerns a claim for benefits under Title IV of the Federal Coal Mine Health and Safety Act of 1969, as amended, 30 U.S.C. Sec. 901, et seq. ("Black Lung Benefits Act"). The Black Lung Benefits Act provides that black lung claims are to be processed by the Secretary of Labor in accordance with the procedural provisions of the Longshore and Harbor Workers' Compensation Act ("Longshore Act"). 30 U.S.C. Sec. 932(a). Section 19 of the Longshore Act, 33 U.S.C. Sec. 919, prescribes the basic claims procedure: claims are filed with a deputy commissioner ² who notifies all interested parties, investigates the claim, and orders a hearing at the request of any interested party. 33 U.S.C. Secs. 919(a)--919(c). Hearings are then held before an administrative law judge ("ALJ"), pursuant to the procedural requirements of the Administrative Procedures Act. 33 U.S.C. Sec. 919(d). Section 21 of the Longshore Act establishes the procedure for review and enforcement of compensation orders outlining the jurisdiction and role of the Benefits Review Board, which hears appeals from determinations made by administrative law judges, and of the courts of appeal which may hear petitions for review of final decisions of the Benefits Review Board. 33 U.S.C. Sec. 921.

The statutory provision most relevant to this appeal is Sec. 22 which governs the modification of awards. ³ This section authorizes the deputy commissioner to review and modify a compensation award either on his own initiative or at the request of a party. The deputy commissioner may issue a new compensation order "on the ground of a change in conditions or because of a mistake in a determination of fact by the deputy commissioner." 33 U.S.C. Sec. 922.

The Department of Labor has promulgated extensive procedural rules regulating the processing and adjudication of black lung claims. 20 C.F.R. Part 725. The claims are initially processed by a subdivision of the Department which employs the deputy commissioners. Though the deputy commissioner has principally administrative responsibilities, he may deny a claim by reason of abandonment and he is empowered to make an initial finding as to a claimant's eligibility. 20 C.F.R. Secs. 725.410-725.422. Any party that disagrees with the deputy commissioner's initial resolution may request a hearing before an ALJ or the deputy commissioner may refer a case for hearing on his own initiative. 20 C.F.R. Sec. 725.451.

The modification regulation at issue in this case, 20 C.F.R. Sec. 725.310, provides that "[u]pon his or her own initiative, or upon the request of any party on grounds of a change in conditions or because of a mistake in a determination of fact, the deputy commissioner may ... reconsider the terms of an award or denial of benefits." These modification proceedings may only be initiated before a deputy commissioner and are subject to all the same procedural requirements as an original claim. Thus, such modification orders are also subject to a review before an ALJ, before the Benefits Review Board, and ultimately on petition for review before this court. The deputy commissioner is specifically empowered, see 20 C.F.R. Sec. 725.480, to modify any final decision (including that of an ALJ) if the conditions set forth in Sec. 725.310 (i.e., a change of condition or a mistake of fact) are satisfied.

B. Facts

The tangled procedural and legislative history of this case requires elaboration. Miles Cornelius originally filed his claim for black lung benefits in 1973. At that time, the Black Lung Benefits Act had rather stringent eligibility requirements. The deputy commissioner to whom Cornelius' claim was referred determined that he did not satisfy the then-existing eligibility requirements and administratively denied his claim in April 1976 and again in March 1977. Following the later denial Cornelius sought a hearing before an ALJ to review his claim.

However, before Cornelius' claim was scheduled for a hearing, Congress amended the Black Lung Benefits Act and authorized the Secretary of Labor to promulgate revised, less restrictive medical eligibility criteria. 30 U.S.C. Sec. 902(f)(2). At the same time, Congress mandated that all previously denied and pending claims were to be reviewed in light of the 1977 amendments. 30 U.S.C. Sec. 945. This right to review applied to all claims denied before March 1, 1978 or pending at that time. As a result of this reexamination requirement, Cornelius' claim was returned to a deputy commissioner. The deputy commissioner then determined that Cornelius was eligible to receive benefits under the revised eligibility criteria and that Drummond Coal Company, his former employer, was responsible for the payment of those benefits. Drummond Coal Company sought review of this determination in a hearing before ALJ James Howard.

While Cornelius' claim was pending before the ALJ, Congress again amended the Black Lung Benefits Act. Apparently, Congress realized that its liberalized eligibility rules had reopened thousands of pending claims which would not have met the earlier stringent requirements. Therefore, in order to relieve coal companies of this excessive retroactive burden, Congress provided that liability for claims denied before March 1, 1978 which were thereafter approved under the liberalized eligibility criteria should be transferred from coal operators to the Black Lung Disability Trust Fund. 30 U.S.C. Secs. 902(i), 932(c)(2), 932(j)(3).

Implementing this new congressional mandate, ALJ Howard determined that Cornelius' claim had been denied prior to March 1, 1978 and, consequently, entered an order transferring liability for this claim from Drummond to the trust fund. The Director did not appeal this determination of the ALJ to the Benefits Review Board as he was permitted to do. ⁴

Cornelius' claim file was then returned by the ALJ to the deputy commissioner so that the deputy commissioner could authorize and begin benefit payments to Cornelius from the trust fund. Instead, the deputy commissioner reviewed Cornelius' file and came to the conclusion that the ALJ had relied upon a mistaken factual determination; in his view, Cornelius' claim had not been denied prior to March 1, 1978. Rather, he asserted, it had still been pending at that time. Relying on his modification authority under Sec. 22 of the Longshore Act, 33 U.S.C. Sec. 922, the deputy commissioner issued an order to the parties that they show cause why the ALJ's decision should not be modified by reinstating Drummond as the party liable for payment of Cornelius' benefits. ⁵

While this show cause order was pending, ALJ Howard sua sponte vacated the deputy commissioner's order, reinstated his original determination, and imposed liability upon the trust fund. ⁶ The Director appealed this judgment to the Benefits Review Board and the Board affirmed the ALJ. The Board concluded that 33 U.S.C. Sec. 922 does not permit a deputy commissioner to modify the order of an ALJ based upon a factual error made by the ALJ. Instead Sec. 22 only allows a deputy commissioner to modify a prior order only if he later discovers that he has made a mistake of fact or that there has been a change of circumstance. Consequently, the Board concluded that the deputy commissioner had no authority to modify the ALJ's order based upon his perception that the ALJ had factually erred.

The Director now petitions for review of the Board's ruling and raises two issues. First, the Director contends that the ALJ lacked the "authority" to sua sponte vacate the deputy commissioner's show cause order and hence the case should be remanded to the deputy commissioner to complete the modification process which he began. Second, the Director contends that the deputy commissioner may use his modification powers to alter the final judgment of an ALJ when that judgment rests upon a factual error.

II. DISCUSSION

Initially, we confront the Director's assertion that ALJ Howard lacked the authority or power to sua sponte vacate the deputy commissioner's show cause order and reinstate his original opinion transferring liability to the trust fund. The Director did not raise this issue before the Benefits Review Board. "Under general rules of appellate review, an appellate court should not overrule an administrative decision unless the administrative body erred against objections presented to it." Taft v. Alabama By-Products Corp., 733 F.2d 1518, 1523 (11th Cir.1984) (citation omitted); see also Myron v. Martin, 670 F.2d 49, 51 (5th Cir.1982). Where, however, as in this case, the unvoiced objection asserts that the administrative body lacked jurisdiction or authority to act as it did, the objection is quasi-jurisdictional in nature and is not waived by a failure to raise the issue below. United States v. L.A. Tucker Truck Lines, 344...