Glen Coal Co. v. Seals

• Decision Date: 24 June 1998
• Docket Number: No. 96-4121,96-4121
• Citation: 147 F.3d 502
• Parties: GLEN COAL COMPANY and Old Republic Insurance Company, Petitioners, v. Jess SEALS and Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 502

147 F.3d 502

GLEN COAL COMPANY and Old Republic Insurance Company, Petitioners, v. Jess SEALS and Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents.

No. 96-4121.

United States Court of Appeals Sixth Circuit.

Argued Dec. 1, 1997.

Decided June 24, 1998.

Laura Metcoff Klaus (briefed), Mark E. Solomons (argued and briefed), Arter & Hadden, Washington, DC, for Petitioners.

Harold Ronnie Montgomery, Jonesville, VA, Christian P. Barber, Gary K. Stearman (argued and briefed), U.S. Department of Labor, Office of the Solicitor, Washington, DC, for Respondents.

Before: BOGGS and MOORE, Circuit Judges; and DOWD, District Judge. ^*

DOWD, D. J., delivered the opinion of the court. BOGGS, J. (pp. 515-17), delivered a separate opinion concurring in the judgment. MOORE, J. (pp. 517-22), delivered a separate opinion concurring in part and dissenting in part.

OPINION

DOWD, District Judge.

INTRODUCTION

Petitioners Glen Coal Company and its insurer Old Republic Insurance Company (collectively "Petitioners") appeal an award of benefits under the Black Lung Benefits Act. 30 U.S.C. §§ 901-945. An administrative law judge ("ALJ") of the United States Department of Labor ("DOL") ordered Petitioners to pay certain medical bills of Respondent Jess Seals ("Seals"), holding that Petitioners had failed to rebut a presumption established in the Fourth Circuit that Seals' medical bills were related to his pneumoconiosis (Black Lung disease of respiratory system). This award was subsequently affirmed by the Benefits Review Board. An appeal was noticed to the United States Court of Appeals for the Fourth Circuit, but it was then determined that Seals had incurred his injury from his work in coal mines in Kentucky. Accordingly, the Fourth Circuit granted Petitioners' motion to transfer the appeal to this Court in accordance with 28 U.S.C. § 1631.

On appeal, Petitioners argue for a remand to the ALJ on the grounds that the Fourth Circuit presumption applied below is inconsistent with the law of the Sixth Circuit because the presumption impermissibly reallocates the burden of proof in a manner that conflicts with § 7(c) of the Administrative Procedure Act ("APA"). 5 U.S.C. § 556(d). Specifically, Petitioners argue that under § 7(c) of the APA, the burden should be on Seals, the claimant, to prove that the medical bills are related to his pneumoconiosis. Seals and co-Respondent Director, Office of Workers' Compensation Programs, United States Department of Labor ("Director") (collectively "Respondents"), on the other hand, argue that the presumption merely reallocates the burden of production, and therefore does not violate § 7(c) of the APA.

These arguments require us to examine whether the Fourth Circuit presumption is consistent with Sixth Circuit law. This is a two step process: (1) does the presumption violate § 7(c) of the APA, in which case it is an impermissible presumption; and (2) if it does not violate § 7(c) of the APA, does it otherwise conflict with the law of this Circuit concerning Black Lung Benefits Act issues?

After careful review of the matter, and for the reasons set forth below, we hold that the judicial presumption created by the Fourth Circuit and applied by the ALJ is inconsistent with the law of the Sixth Circuit. While we find that the presumption does not violate § 7(c) of the APA, we find that it nonetheless runs afoul of the purposes of the Black Lung Benefits Act. As a result, we VACATE the decision awarding benefits to Seals, and REMAND to the ALJ for a determination of Petitioners' liability for the medical bills here in dispute under the legal standard stated herein for the Sixth Circuit.

Before addressing the substantive issues on appeal, an overview of the structure of the Black Lung Benefits Act is instructive.

OVERVIEW OF THE BLACK LUNG BENEFITS ACT

The Black Lung Benefits Act was enacted to "provide benefits ... to coal miners who are totally disabled due to pneumoconiosis and to the surviving dependents of miners whose death was due to such disease." 30 U.S.C. § 901(a). Under the Act, pneumoconiosis is defined as "a chronic dust disease of the lung and its sequelae, including respiratory and pulmonary impairments, arising out of coal mine employment." 30 U.S.C. § 902(a).

Part B of the Black Lung Benefits Act provides for monthly cash benefits to the claimant, but no health care benefits. 30 U.S.C. §§ 921-925. Part B claims are paid by the federal government and do not involve the mine operators or the DOL.

Part C of the Black Lung Benefits Act, on the other hand, establishes an employer-funded federal workers compensation program to provide benefits, in cooperation with the states, for total disability or death due to pneumoconiosis, and is administered by the DOL. 30 U.S.C. §§ 931-945. ¹ Medical benefit entitlements under Part C of the Black Lung Benefits Act are governed generally by 20 C.F.R. §§ 725.701-725.707. The procedure for determining entitlement has been held to be a two-stage procedure. See Lute v. Split Vein Coal Company, No. 84-2087 BLA, O.W.C.P. No. 179-10-8699, 1987 WL 107347, * 2 (Ben.Rev.Bd. March 20, 1987). The first stage is the liability phase, which involves the determination of whether the miner is totally disabled from pneumoconiosis, thereby making the employer/operator responsible; and the second stage is the determination of the employer/operator's liability for individual medical bills. See Lute, supra, at * 2.

The first stage is governed by 20 C.F.R. § 727.203, which states that a miner is entitled to an "interim presumption" of total disability due to pneumoconiosis resulting from coal mine work if the miner worked in a coal mine for over 10 years and the miner can offer certain listed medical evidence. ² Following the miner's offering of this evidence, the miner is entitled to the statutory "interim presumption" that he is totally disabled from pneumoconiosis. Then, the employer can rebut this presumption in one of four listed ways. ³ Alternatively, the employer could concede that the miner is totally disabled, but argue that some malady other than or in addition to a respiratory ailment is responsible for the disability, employing one of the listed rebuttal methods. Cal-Glo Coal Company v. Yeager, 104 F.3d 827, 831 (6th Cir.1997).

After the decision has been made that the miner is totally disabled from pneumoconiosis, the employer/operator is liable for the medical bills incurred in treatment. See Lute, supra, at * 2. The analysis then moves to the second stage. With liability settled, the question becomes whether the individual bills are related to the miner's pneumoconiosis. The procedure for disputes concerning medical benefits is found in 20 C.F.R. § 725.707. This section, unlike the section concerning the initial determination of liability, does not set out any statutory presumptions. Rather, it merely states that if the dispute cannot be resolved by the district director, then it proceeds to the Office of Administrative Law Judges. 20 C.F.R. § 725.707(b).

BACKGROUND FACTS

Seals was a miner for approximately seventeen years. He stopped working in 1972, at the age of 42, following a back injury. Additionally, Seals smoked a pack of cigarettes a day for approximately 35 years.

Within a year of stopping work, Seals was awarded benefits from the Social Security Administration under Part B of the Black Lung Benefits Act. 30 U.S.C. §§ 921-925. This award is not at issue in this case because, as explained above, Part B claims are paid by the federal government and do not involve the mine operators or the DOL.

On June 27, 1979, Seals filed a claim for health benefits under Part C of the Black Lung Benefits Act. See 30 U.S.C. §§ 931-945. These benefits are at issue in this case.

The Old Republic Insurance Company ("Old Republic"), the black lung insurance carrier for the Glen Coal Company ("Glen Coal"), was notified of Seals' claim sometime in 1984. Old Republic agreed without further proceedings to pay the cost of black lung related health care provided to Seals. In fact, the parties entered into an agreement stating that Seals "meets the standard of total disability under the Black Lung Benefits Act (30 U.S.C. 901 et seq.). The above coal mine operator [ (Glen Coal) ] further agrees to pay medical benefits and to reimburse the Black Lung Disability Trust Fund for any medical benefit payments made." Subsequently, on June 11, 1984, the DOL deputy commissioner issued an uncontested award of benefits to Seals providing as follows:

The responsible operator [ (Glen Coal) ] shall provide to the claimant [ (Seals) ] all reasonable and necessary medical benefits required for the treatment of his pneumoconiosis condition, including the reasonable costs of transportation to obtain such treatment, beginning, June 27, 1979 and continuing, in accordance with the provisions and limitations of the Act.

The DOL also informed Old Republic that no bills had been submitted in the period from June 1979 to June 1984 for treating Seals' pneumoconiosis.

The Longshore and Harborworkers' Compensation Act ("LHWCA") requires a health care provider who begins to treat a compensation beneficiary to give notice to the employer and to provide certain reports outlining the course of treatment to be followed. 33 U.S.C. § 907(d). Petitioners here, however, claim that after accepting liability to pay the cost of treating Seals' pneumoconiosis, Petitioners never received a first report from a treating physician, and, in fact, did not receive any information from any physician at all.

Nonetheless, beginning in 1985, Old Republic began receiving bills for prescription antibiotics and bronchodilators ⁴ for Seals. No information was provided to show that the infection being treated was caused by pneumoconiosis, and for that reason, Old Republic declined to pay the bills. Old Republic wrote several letters to the pharmacist who...