Freeman United Coal Min. Co. v. Director, Office of Workers' Compensation Programs

• Decision Date: 01 October 1996
• Docket Number: No. 95-2486,95-2486
• Citation: 94 F.3d 384
• Parties: FREEMAN UNITED COAL MINING COMPANY, Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, United States Department of Labor, and Marie Tasky, widow of Victor Tasky, Respondents.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 384

94 F.3d 384

FREEMAN UNITED COAL MINING COMPANY, Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, United

States Department of Labor, and Marie Tasky, widow

of Victor Tasky, Respondents.

No. 95-2486.

United States Court of Appeals, Seventh Circuit.

Argued April 19, 1996.

Decided Aug. 29, 1996.

Rehearing and Suggestion for Rehearing En Banc Denied Oct. 1, 1996.

Kathryn S. Matkov, Karin T. O'Connell (argued), Gould & Ratner, Chicago, IL, for petitioner Freeman United Coal Mining Company.

Ida Castro, Dept. of Labor, Appellate Litigation, Washington, DC, Patricia M. Nece, Dept. of Labor, Office of the Solicitor, Washington, DC, for respondent Office of Workers' Compensation.

Rebecca Whittington, Feirich, Mager, Green & Ryan (argued), Carbondale, IL, for respondent Maria Tasky.

Thomas O. Shepherd, Jr., Benefits Review Bd., Executive Counsel, Clerk of the Bd., Washington, DC, Donald S. Shire, Rodger Pitcairn (argued), Dept. of Labor, Office of the Solicitor, Washington, DC, for party-in-interest Benefits Review Bd.

Before FLAUM, EASTERBROOK, and MANION, Circuit Judges.

FLAUM, Circuit Judge.

Freeman United Coal Mining Company ("Freeman") seeks review of an order of the Benefits Review Board (the "Board") of the Department of Labor (the "DOL") awarding Marie Tasky benefits under the Black Lung Benefits Act, 30 U.S.C. § 901, et seq. (the "Act"). Victor Tasky filed claims for benefits in 1981 and 1982, and after his death, his wife Marie Tasky filed a claim for survivor's benefits in 1985. The Administrative Law Judge ("ALJ") determined that the DOL had improperly closed Mr. Tasky's original application, and therefore evaluated Mrs. Tasky's claim under the regulations applicable at the time his first claim was filed. The Board agreed with the ALJ's determination that the 1981 application remained viable and affirmed the ALJ's decision on the merits to award Mrs. Tasky benefits. Freeman argues that the ALJ and the Board erred in concluding that the DOL improperly closed Mr. Tasky's original claim and that the ALJ's award of benefits is not supported by substantial evidence. We hold that Mrs. Tasky's claim was erroneously adjudicated under the 1981 standards and accordingly remand this matter for further proceedings.

I.

Mr. Tasky submitted his first application for benefits to the DOL on January 26, 1981. Mr. Tasky was assisted in the claim process by a lay representative from his union. A deputy commissioner in the DOL's Office of Workers' Compensation Programs denied Mr. Tasky's claim on March 31, 1981, finding that Mr. Tasky had failed to establish that he was totally disabled by pneumoconiosis. The deputy commissioner informed Mr. Tasky of the denial in a March 31 letter, which clearly stated that if Mr. Tasky disagreed with the determination and wished to further pursue his claim, he was required, within sixty days, to submit additional evidence or request a formal hearing. On April 13, 1981, Mr. Tasky's representative asked the deputy commissioner to reconsider the case. On April 17, the deputy commissioner refused this request, stating that the claim had been denied because total disability had not been established. Several days later Mr. Tasky's representative once again requested reconsideration, without submitting any additional evidence. In a letter dated April 28, 1981, the deputy commissioner again apprised Mr. Tasky that his application had been denied informally on March 31 because the medical evidence in his file failed to demonstrate total disability. The letter further advised Mr. Tasky to "submit additional evidence and/or request a hearing before May 30, 1981" if he intended to pursue his claim.

In reaction to these exchanges, Mr. Tasky's representative then wrote to the DOL on May 6, 1991, stating:

I am writing this letter in regard to [Mr. Tasky] to inform your Department that [he] intends to pursue [his] claim for Black Lung benefits.

Additional medical evidence will be submitted as soon as possible.

Pursuant to the reconsideration provision of the Act I hereby request that you retain this file for 1 year from the date of the initial finding. If the additional medical evidence submitted is found to be insufficient to invoke a finding of entitlement I ask the case be referred to the Office of the Administrative Law Judge for a formal hearing.

Mr. Tasky took no further action on his application for over eighteen months. Then on November 15, 1982, his representative sent the results of an arterial blood gas study to the deputy commissioner. In response to this new evidence, the deputy commissioner explained that the denial of Mr. Tasky's claim became final on March 31, 1982, one year after the informal denial. The DOL invited Mr. Tasky to submit a new application, which he did on November 29, 1982. This claim was eventually denied by the deputy commissioner, after which Mr. Tasky requested a formal hearing with an administrative law judge. However, on September 23, 1985, before an administrative law judge heard the case, Mr. Tasky died.

After her husband's death, Mrs. Tasky submitted an application for survivor's benefits in December of 1985. Mr. Tasky's 1982 claim was remanded to the deputy commissioner and consolidated with his widow's application. The deputy commissioner determined that Mrs. Tasky was not entitled to benefits, and Mrs. Tasky subsequently requested a formal hearing. The ALJ held a formal hearing on January 6, 1988 and issued a decision in July of 1988. The ALJ determined that the DOL had improperly closed Mr. Tasky's original 1981 claim, and therefore adjudicated the case under the standards in existence at the time that claim was filed. On the merits the ALJ found that Mr. Tasky had been totally disabled due to pneumoconiosis prior to his death and, consequently, awarded Mrs. Tasky benefits. Freeman appealed this decision to the Board, which affirmed the ALJ's determination that the 1981 claim was viable, but remanded the case to the ALJ for reweighing of the medical evidence under 20 C.F.R. § 718.204. On remand the ALJ again ruled in favor of Mrs. Tasky, and on April 26, 1995, the Board affirmed the ALJ's award of benefits. Freeman then filed a petition for review in this court, requesting that we vacate the Board's order affirming the award of benefits.

II.

Freeman argues that the ALJ and the Board erred in concluding that Mr. Tasky's 1981 claim was inappropriately closed by the DOL and hence that the ALJ and the Board evaluated Mrs. Tasky's application under incorrect legal standards. At issue in this case is the proper interpretation of 20 C.F.R. § 725.410(c), which sets forth procedures to be followed after an initial finding by the DOL of ineligibility for benefits. The regulation provides in relevant part:

If the evidence submitted does not support an initial finding of eligibility, the deputy commissioner shall so notify the claimant in writing. This notification shall specify the reasons why the claim cannot be approved, the additional evidence necessary to establish entitlement, the right of the claimant to submit additional evidence, and the right to request a hearing. Within 60 days from the mailing of such notice, unless such period is extended by the deputy commissioner for good cause shown, the claimant may submit new evidence or request a hearing. If the claimant: (1) Takes no action within the specified 60 day period, the claim shall be considered denied by reason of abandonment....

20 C.F.R. § 725.410(c). The ALJ held that Mr. Tasky's letter of May 6, 1981 was a request for a formal hearing under 20 C.F.R. § 725.410(c) that prevented the deputy commissioner's initial denial from becoming final. Moreover, the ALJ found that if the DOL had determined that the letter was insufficient to preserve Mr. Tasky's rights, the DOL had a duty to inform him of that fact. The Board reached the same conclusion as the ALJ regarding the effect of the May 6 letter, reasoning that the letter expressed an "unconditional intent to pursue the 1981 claim beyond the district director level" and thereby satisfied Mr. Tasky's obligations under 20 C.F.R. § 725.410(c).

The Director of the Office of Workers' Compensation Programs (the "Director") has weighed in with a competing interpretation of the regulation. The Director maintains that the regulation clearly requires a claimant whose claim is initially denied to either request a formal hearing or submit new evidence within sixty days. In the Director's view, a request for a hearing that is conditioned on a future event is insufficient to satisfy the terms of 20 C.F.R. § 725.410(c). Moreover, the Director asserts that if a claimant fails to request a hearing or submit new evidence within the sixty-day period, his claim is automatically deemed denied by reason of abandonment. Thus, according to the Director, the DOL is under no obligation to inform a claimant that his prior correspondence did not meet the requirements of the regulation before a claim can be denied due to abandonment. The Director therefore concludes that Mr. Tasky's May 6, 1981 letter lacked legal effect and joins Freeman in requesting that we vacate the decision and order of the Board.

We begin our analysis by observing that "[b]ecause the black lung regulations are issued by the Office of Workers' Compensation rather than by the Benefits Review Board, it is to the former body rather than the latter [that] we owe the usual deference that courts give agencies' interpretations of their own regulations or governing statutes." Sahara Coal Co. v. OWCP, 946 F.2d 554, 557 (7th Cir.1991); see Potomac Elec. Power Co. v. Director, OWCP, 449 U.S. 268, 278 n. 18, 101 S.Ct. 509, 514-15 n. 18, 66 L.Ed.2d 446 (1980). Thus, while we review the legal determinations of the Board (and the ALJ) de novo, Freeman United Coal Mining Co. v. OWCP, 20 F.3d 289, 293 (7th Cir.1994), the Director's interpretation of the regulation "is controlling unless...