Freeman v. Harris, 78-3551
| Decision Date | 19 September 1980 |
| Docket Number | No. 78-3551,78-3551 |
| Citation | 625 F.2d 1303 |
| Parties | Albert W. FREEMAN, Plaintiff-Appellee, v. Patricia Roberts HARRIS, Secretary of Health and Human Services, Defendant- Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
J. R. Brooks, U. S. Atty., Elizabeth E. Todd, Asst. U. S. Atty., Birmingham, Ala., Walter E. McCabe, Jr., Baltimore, Md., for defendant-appellant.
William E. Mitch, Birmingham, Ala., for plaintiff-appellee.
Appeal from the United States District Court for the Northern District of Alabama.
Before FAY, KRAVITCH and RANDALL, Circuit Judges.
The Secretary of Health, Education and Welfare ("the Secretary") appeals from the decision of the district court that the effect of HEW's practice of offsetting both Social Security disability payments and Black Lung benefits against state workers' compensation payments is contrary to the intent of Congress. 1 We affirm in part and reverse and remand in part.
The plaintiff, Albert Freeman, suffered an injury to his arm while employed in the coal mines of the U.S. Pipe and Foundry Company in Alabama. This injury entitled him to state workers' compensation payments which were awarded beginning September 8, 1969. Subsequently, Freeman was awarded Title II Social Security disability benefits 2 based on a finding that he was disabled. 3 Freeman filed an application for black lung benefits on April 30, 1970. Three years later, he was found to be totally disabled due to pneumoconiosis (black lung) and was awarded benefits under the Federal Coal Mine Health and Safety Act of 1969. 4
Though at first blush it would seem that plaintiff has received everything he asked for and thus odd that he is a plaintiff at all, let alone a prevailing plaintiff, the arithmetic of the situation shows that this is not the case. Freeman's workers' compensation payments were.$203.60 per month. His Social Security payments would have been $348.90 per month had he not received state workers' compensation. Because of a statutory deduction 5 of workers' compensation benefits from Social Security payments, however, he actually received $226.90 per month from Social Security. Likewise, had Freeman not been receiving workers' compensation, his black lung benefits would have been $252.80 per month. Again, because of a statutory offset 6 against workers' compensation, he actually received $49.20 in black lung benefits.
In total, he received $479.70 per month through the three programs. Freeman is in court because had he not been awarded state workers' compensation payments, he would have received $601.70 per month through Social Security and Black Lung benefits. He contends that the $122.00 per month less that he received under the three programs compared to what he would have received under the two federal programs is an unconstitutional penalty for the exercise of his right to pursue state workers' compensation. 7 The district court avoided the constitutional issue and held simply that the "double offset" procedure followed by HEW had an effect contrary to Congressional intent. We agree, making it unnecessary to reach the constitutional claim.
It is important at the outset to clarify what is at issue and what is not. Freeman does not argue that the offset provisions of the Social Security Act are unconstitutional, Richardson v. Belcher, 404 U.S. 78, 92 S.Ct. 254, 30 L.Ed.2d 231 (1971), nor does he argue that the offset provisions of the Black Lung Act are unconstitutional. 8 Furthermore, Freeman concedes that if a "double offset" was intended, the Secretary correctly calculated the offset under each program. Freeman's sole argument is that the effect of the "double offset" is contrary to the intent of Congress.
To determine whether or not the cumulative effect of the two offsets is inconsistent with Congressional intent, we must first determine what the goals of Congress were in implementing these two federal programs.
Social Security was first proposed by President Roosevelt as part of the New Deal legislative reform. As initially instituted, the Social Security Act of 1935 contained no provisions for disability insurance. It did, however, provide old age and unemployment insurance which, as a general rule, the states were not providing.
In 1956 the Social Security Act was expanded to include monthly benefits for disabled wage earners. 9 As enacted in 1956 there was a full offset of workers' compensation payments against Social Security disability benefits. 70 Stat. 816 (1956). "It is self-evident that the offset reflected a judgment by Congress that the workmen's compensation and disability insurance programs in certain instances served a common purpose, and that the workmen's compensation programs should take precedence in the area of overlap." Richardson v. Belcher, 404 U.S. at 82, 92 S.Ct. at 257. The offset provision was repealed in 1958, 72 Stat. 1025 (1958), but was reinstituted in 1965 in a slightly different form, 79 Stat. 406 (1965).
The reinstitution of the offset was triggered by data submitted to legislative committees which showed that in the majority of the states, the typical worker who was receiving workers' compensation and federal disability benefits actually received more in benefits than his pre-disability take-home pay. Hearings on H.R. 6675 Before the Senate Comm. on Finance, 89th Cong., 1st Sess. 151 (1965). This was thought to cause two evils: first, it reduced a worker's incentive to return to the work place and hence impeded rehabilitative efforts; and second, it created fears that the duplication of benefits would lead to an erosion of state workers' compensation programs. Hearings on H.R. 6675 Before the Senate Comm. on Finance, 89th Cong., 1st Sess. 252, 259, 366, 540, 738-40, 892-97, 949-54, 990 (1965).
Section 424a of title 42 was then enacted to deal with the problem. As is relevant here, it requires an offset of Social Security disability payments against workers' compensation so that the total benefits received by the worker under the two programs do not exceed 80% of his pre-disability income. Social Security disability payments, then, supplement state workers' compensation only when the workers' compensation payments are less than 80% of the worker's pre-disability income. This eradicated the problem of a worker being financially better off disabled than if he or she returned to work.
It did not, however, require a worker to apply for state workers' compensation and thus did not insure that the state programs were primarily liable for such payments. However, because Social Security disability payments are less than 80% of a workers' pre-disability income, the system which resulted after the 1965 amendment did encourage workers to pursue state workers' compensation as well as federal Social Security.
The general purpose of Title IV of the Federal Coal Mine Health and Safety Act ("the Black Lung Benefits Act") is set out in 30 U.S.C. § 901(a) (1976). There Congress stated:
Congress finds and declares that there are a significant number of coal miners living today who are totally disabled due to pneumoconiosis arising out of employment in one or more of the Nation's coal mines; . . . and that few States provide benefits for death or disability due to this disease . . . . It is, therefore, the purpose of this subchapter to provide benefits, in cooperation with the States, to coal miners who are totally disabled due to pneumoconiosis . . . ; and to ensure that in the future adequate benefits are provided to coal miners and their dependents in the event of their death or total disability due to pneumoconiosis.
Through a complex statutory scheme, 10 the Black Lung Benefits Act seeks to compensate workers totally disabled by black lung. Recognizing that few states provided workers' compensation for disability resulting from this condition, the federal government undertook to be responsible for claims filed between September 20, 1969, and June 30, 1973. 30 U.S.C. § 921 (1976). 11 June 31 1973, through December 31, 1973, was set up as a transitional period. Initially, the federal government, through the Department of Labor, would determine eligibility for benefits of miners who filed claims during that period, and would pay the claims for those six months. On January 1, 1974, responsibility for the payment of such claims shifted to the responsible operator. 30 U.S.C. § 925(a)(5) (1976). Claims filed after December 31, 1973, are paid through state workers' compensation plans if the State has developed a plan which meets the approval of the Secretary of Labor. 30 U.S.C. § 931 (1976). If there is no approved state workers' compensation plan, such claims are processed by the Secretary of Labor and paid by the operator. 30 U.S.C. § 932 (1976).
The statutory scheme, then, provides that the federal government shall have the responsibility for payment of benefits to the backlog of miners who are black lung victims. By putting subsequent responsibility directly on the coal mine operators in the absence of a state plan of compensation, the statute encourages the operators to lobby their state legislators for adequate workers' compensation plans in this area.
More important for our inquiry, however, is the fact that the statute requires a claimant whose claim will be paid by the federal government 12 to pursue state workers' compensation prior to or contemporaneously with the pursuit of federal benefits if the worker would possibly be entitled to state benefits based on the black lung disability. 30 U.S.C. § 923(c) (1976). If the worker is entitled to workers' compensation, there is a dollar-for-dollar reduction of black lung benefits based on benefits received from the state. 13 There is a clear legislative desire, therefore, for state workers' compensation programs to be the primary provider of disability payments and for the...
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