Fox ex rel. Fox v. Elk Run Coal Co.

• Decision Date: 03 January 2014
• Docket Number: 12–2402.,Nos. 12–2387,s. 12–2387
• Parties: Mary L. FOX, on behalf of Gary N. FOX, deceased, Petitioner, v. ELK RUN COAL COMPANY, INCORPORATED; Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents. Elk Run Coal Company, Incorporated, Petitioner, v. Director, Office of Workers' Compensation Programs, United States Department of Labor; Mary L. Fox, on behalf of Gary N. Fox, deceased, Respondents.
• Court: U.S. Court of Appeals — Fourth Circuit

739 F.3d 131

Mary L. FOX, on behalf of Gary N. FOX, deceased, Petitioner,

v.ELK RUN COAL COMPANY, INCORPORATED; Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents.

Elk Run Coal Company, Incorporated, Petitioner,

v.Director, Office of Workers' Compensation Programs, United States Department of Labor; Mary L. Fox, on behalf of Gary N. Fox, deceased, Respondents.

Nos. 12–2387, 12–2402.

United States Court of Appeals,Fourth Circuit.

Argued: Oct. 29, 2013.

Decided: Jan. 3, 2014.

ARGUED:Allan Norman Karlin, Morgantown, West Virginia, for Petitioner/Cross–Respondent. Alvin Lee Emch, Jackson Kelly, PLLC, Charleston, West Virginia, for Respondent/Cross–Petitioner Elk Run Coal Company, Incorporated. ON BRIEF:John Cline, Piney View, West Virginia; Sarah W. Montoro, Allan N. Karlin & Associates, Morgantown, West Virginia, for Petitioner/Cross–Respondent. Kathy Lynn Snyder, Jackson Kelly, PLLC, Morgantown, West Virginia, for Respondent/Cross–Petitioner Elk Run Coal Company, Incorporated.

Before TRAXLER, Chief Judge, and WILKINSON and FLOYD, Circuit Judges.

Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Chief Judge TRAXLER and Judge FLOYD joined.

WILKINSON, Circuit Judge:

Appellant Mary Fox contends that Elk Run Coal Company committed fraud on the court and thereby deprived her husband, coal miner Gary Fox, of nearly a decade of benefits under the Black Lung Benefits Act (“BLBA”). The Benefits Review Board (“BRB”) found that Elk Run's conduct was not sufficiently egregious to meet the high bar for a claim of fraud on the court because it did not amount to an intentional design aimed at undermining the integrity of the adjudicative process under the BLBA. We now affirm and find that Elk Run's conduct, while hardly admirable, did not, under clear Supreme Court and circuit precedent, demonstrate the commission of a fraud upon the court. See, e.g., Hazel–Atlas Glass Co. v. Hartford–Empire Co., 322 U.S. 238, 64 S.Ct. 997, 88 L.Ed. 1250 (1944); Great Coastal Express, Inc. v. Int'l Bhd. of Teamsters, 675 F.2d 1349 (4th Cir.1982).

I.

A.

Pneumoconiosis, commonly known as “black lung,” is a progressive and irreversible pulmonary condition that can afflict those regularly exposed to coal dust. Mullins Coal Co. v. Dir., OWCP, 484 U.S. 135, 138, 108 S.Ct. 427, 98 L.Ed.2d 450 (1987). In recognition of the effects of this disease, Congress adopted the BLBA to require private coal companies to compensate miners and their families. Id. at 138–39, 108 S.Ct. 427. The BLBA permits coal workers or their surviving dependents to apply for benefits by filing a claim with the District Director of the U.S. Department of Labor's Office of Workers' Compensation Programs (“Director”). 20 C.F.R. §§ 725.301–725.423. In order to award benefits, the Director must find that the coal worker has pneumoconiosis arising out of his or her coal mine employment, is totally disabled, and the pneumoconiosis substantially contributed to the worker's disability. Id. § 725.202(d).

Once the Director makes an initial finding on whether the claimant is entitled to benefits, either party may request an evidentiary hearing before an ALJ. Id. §§ 725.401–725.480. Such a request initiates an adversarial process under the Administrative Procedure Act (“APA”). Id. § 725.452(a); Elm Grove Coal Co. v. Dir., OWCP, 480 F.3d 278, 283 (4th Cir.2007) (finding that the BLBA incorporates the APA's administrative adjudication procedures); see also U.S. Dep't of Labor v. Triplett, 494 U.S. 715, 733, 110 S.Ct. 1428, 108 L.Ed.2d 701 (1990) (Marshall, J., concurring) (noting that “the black lung process is highly adversarial”). To encourage coal workers to pursue their claims with the aid of counsel, the BLBA includes a provision for reasonable attorney's fees if the claimant is successful. 30 U.S.C. § 932(a) (incorporating 33 U.S.C. § 928(a)). This adversarial posture between the parties remains in the event that either party appeals the ALJ's ruling to the BRB, 20 C.F.R. § 725.481, as well as in any subsequent appeals to the circuit covering the state in which the claimant allegedly contracted pneumoconiosis, 33 U.S.C. § 921(c).

B.

Gary Fox worked in West Virginia as a coal miner for over 30 years before his death from coal worker's pneumoconiosisin 2009.¹ X-rays taken of his chest in 1997 revealed an unidentified mass in his right lung. In 1998, a pathologist in West Virginia named Dr. Gerald Koh concluded from surgical samples that, among other things, the mass was an “inflammatory pseudotumor,” but did not diagnose pneumoconiosis. Nonetheless, Fox filed a claim in 1999 for benefits under the BLBA which the Director granted in early 2000. Because Fox was employed by Elk Run at the time of his claim, Elk Run exercised its right under the BLBA to request a hearing before an ALJ.

Prior to the hearing, Elk Run obtained the pathology slides from Fox's 1998 surgical procedure and provided them to two additional pathologists: Dr. Richard Naeye and Dr. P. Raphael Caffrey. Both pathologists wrote reports summarizing their conclusions. Elk Run also requested opinions from several radiologists and submitted them, along with Dr. Koh's report but not Dr. Naeye's or Dr. Caffrey's, to four pulmonary specialists. The four pulmonologists concluded that, based on the evidence available to them, Fox likely did not have coal worker's pneumoconiosis at that time.

The evidentiary hearing occurred on September 19, 2000, at which Fox appeared pro se and Elk Run was represented by counsel. The ALJ informed Fox that he had a right to representation and, when Fox responded that he had not been able to find an attorney, the ALJ confirmed his competency and willingness to proceed without counsel. (Fox had, however, procured an attorney to represent him in his concurrent West Virginia worker's compensation claim related to pneumoconiosis). During the hearing, the ALJ admitted into the record the reports of Dr. Koh, the radiologists, and the pulmonologists, along with additional exhibits offered by Elk Run. Fox offered only his own testimony. Elk Run did not submit the reports of Dr. Naeye or Dr. Caffrey, nor did it disclose their existence to Fox or the ALJ. The ALJ denied Fox's claim on January 5, 2001, finding that Fox failed to show he had pneumoconiosis or that he was totally disabled due to pneumoconiosis. Fox did not appeal.

Fox retained counsel and filed a new claim on November 8, 2006. The Director again found him eligible for benefits and Elk Run once more requested an evidentiary hearing. But this time Fox, through his attorney, conducted vigorous discovery and requested that Elk Run hand over the 1998 pathology slides and disclose additional documents and reports pertaining to Fox's medical condition. After some foot dragging, Elk Run admitted liability for Fox's 2006 claim and disclosed the slides and several documents to Fox, including the pathology reports of Dr. Naeye and Dr. Caffrey. Recognizing that the BLBA bars any entitlement to benefits before the ALJ's 2001 judgment became final, 20 C.F.R. § 725.309(c)(6), Fox moved to set aside that judgment, contending that Elk Run had committed fraud on the court because it had not disclosed the Naeye and Caffrey reports to its expert pulmonologists.

On July 20, 2011, the ALJ found that the Naeye and Caffrey reports diagnosed “complicated pneumoconiosis,” J.A. 416, and thus “clearly contradicted Dr. Koh's finding of an inflammatory pseudotumor,” J.A. 427. The ALJ then determined that Elk Run's failure to disclose the Naeye and Caffrey reports to its other expert witnesses tainted their conclusions and that, while “perhaps initially not concocted as such,” J.A. 427, Elk Run's “actions, taken as a whole, constitute a scheme to defraud,” J.A. 429. Dismissing Elk Run's arguments that its attorneys were not defrauding the court but rather zealously representing their client, the ALJ ruled that Elk Run had committed fraud on the court, set aside the 2001 judgment, and awarded Fox benefits dating back to January 1997.

On appeal, the BRB accepted the ALJ's factual findings, but held that Elk Run's “conduct did not rise to the level of fraud on the court” because Elk Run “did not engage in a deliberate scheme to directly subvert the judicial process.” J.A. 444. Because Elk Run had admitted liability for Fox's 2006 claim, the BRB held that Fox was entitled to benefits beginning in June 2006. One member of the BRB panel dissented, writing that Elk Run's conduct constituted fraud on the court because it had failed to disclose all the relevant medical evidence to its own experts.

II.

Fox asks this court to set aside the ALJ's 2001 judgment, which would have the effect of moving the onset of her entitlement to benefits under the BLBA from June 2006 to January 1997. She claims that the judgment was fraudulently procured because, although Elk Run knew that the Naeye and Caffrey reports diagnosed her husband with pneumoconiosis, it intentionally failed to disclose those reports to its own experts and later relied on the conclusions of those experts to controvert Fox's 1999 claim that he had pneumoconiosis. While Elk Run's conduct over the course of this litigation warrants nothing approaching judicial approbation, we are unable to say that it rose to the level of fraud on the court.

The standard of review in cases under the Black Lung Benefits Act is well settled. We sustain an ALJ's factual findings if there is “substantial evidence” on the record to support them. Harman Min. Co. v. Dir., OWCP, 678 F.3d 305, 310 (4th Cir.2012). Fox maintains that, whereas the BRB should have affirmed the ALJ's ruling on substantial evidence grounds, it instead improperly held that the ALJ erred “as a matter of law.” J.A. 444. However, the operative facts here are simply not disputed and only the application of the fraud on the court doctrine is at issue. That issue is one of law, which we review de...