Donovan v. McKee, Civ. A. No. 5:83-5256.

• Decision Date: 03 March 1987
• Docket Number: Civ. A. No. 5:83-5256.
• Citation: 669 F. Supp. 138
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, et al., Plaintiffs, v. Kenneth McKEE, Roger McKee, and Robert Bailey, Defendants.

669 F. Supp. 138

Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, et al., Plaintiffs, v. Kenneth McKEE, Roger McKee, and Robert Bailey, Defendants.

Civ. A. No. 5:83-5256.

United States District Court, S.D. West Virginia, Beckley Division.

March 3, 1987.

James B. Leonard, Associate Regional Sol., Dept. of Labor, Arlington, Va., for plaintiffs.

Stephen B. Goad, Princeton, W.Va., John D. Wooton, Beckley, W.Va., for defendants.

MEMORANDUM OPINION

DENNIS R. KNAPP, District Judge.

The Secretary of Labor filed this action on August 26, 1983, to enforce compliance with a Decision & Order issued on April 5, 1976. In his order Hearing Officer Aaron Silverman directed two corporations, Sunnyside Coal Corporation (Sunnyside) and J & J Coal Company, Inc. (J & J), to pay federal black lung benefits plus interest to David L. Cline (Cline) beginning January 1, 1974, and further, to reimburse the Secretary plus interest for benefits the Secretary had advanced to Cline. This matter is pending before the Court on motions of plaintiff and defendant, Roger McKee, for summary judgment. The material facts are undisputed.

Cline was employed by Sunnyside, a partnership comprised of Roger McKee, Kenneth McKee and Emel Hatfield, from November, 1972 until January, 1974, when Sunnyside was reorganized into another partnership, J & J, with Roger and Kenneth McKee as partners. Neither partnership was a self-insurer nor maintained workers compensation insurance for black lung. Cline continued to work for the J & J partnership until December 12, 1974. On March 27, 1975, J & J and Sunnyside corporations were chartered by the West Virginia Secretary of State and the two merged into J & J Coal Company, Inc., on March 26, 1976, with Kenneth McKee as president, A.E. Baldwin, vice-president, Robert Bailey, Secretary, and Roger McKee, Treasurer. Roger McKee was elected vice-president on March 26, 1976, and A.E. Baldwin became treasurer.

On December 28, 1973, Cline applied for black lung benefits with the Department of Labor based on his employment with Sunnyside. Sunnyside contested the claim. However, on April 5, 1976, Cline's claim was approved against Sunnyside Coal Corporation and Sunnyside Coal Corp., Inc., and/or J & J Coal Company, Inc., as successors in interest to the partnership. On April 26, 1977, the Benefits Review Board affirmed the hearing officer's ruling.

Defendants concede corporate liability for the benefits. The threshold issue for the Court's determination is the personal liability of the individual defendants.

Defendants Roger and Kenneth McKee were partners in both Sunnyside and J & J prior to their incorporating. Accordingly, pursuant to the provisions of the 1969 Black Lung Act, the McKees are "prior operators" and personally liable in said capacity for the payment of successor's liability for Federal Black Lung Benefits (30 U.S.C. § 932(i).

At the time Sunnyside was found liable for benefits to Cline, the Act did not provide for statutory personal liability on corporate officers for the delinquency of corporations for the payment of black lung benefits. However, § 423(d)(1) (30 U.S.C. § 933(d)(1)), which became effective March 1, 1978, assesses personal liability on certain corporate officials if the employer required to secure benefits fails to do so. In such case the:

president, secretary and treasurer of such corporation shall be severally personally liable, jointly with such corporation, for any benefit which may accrue under this subchapter in respect of any disability which may occur to any employee of such corporation while it shall so fail to secure the payment of benefits as required by this section.

Defendants object to the retrospective application of § 423(d)(1). The Supreme Court in the case of Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 96 S.Ct. 2882, 49 L.Ed.2d 752 (1976), determined that "the retrospective aspect of legislation, as well as the prospective aspects, must meet the test of due process, and the justifications for the latter may not suffice for the former." Finding no due process violation, the Supreme Court imposed liability for black lung benefits on coal mine operators for compensation for a former miner's death or disability due to pneumoconiosis arising out of his employment in its mines although his employment was terminated prior to the passage of the Coal Mine Health & Safety Act. Defendants have shown no due process violation herein.

"It is by now well established that legislative Acts adjusting the burdens and benefits of economic life come to the Court with a presumption of constitutionality, and that the burden is on one complaining of a due process violation to establish that the legislature has acted in an arbitrary and irrational way." 96 S.Ct. at 2892.

Further, the case of Bradley v. Richmond School Board, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974), sustains the principle that a court must apply the law in effect at the time its decision is rendered, in the absence of statutory mandate, legislative history or a resulting manifest injustice. The statute herein and its...