Hale v. Three H Coal Co.
| Decision Date | 09 March 2023 |
| Docket Number | 22-0030 BLA |
| Parties | RAY L. HALE Claimant-Respondent v. THREE H COAL COMPANY and OLD REPUBLIC INSURANCE COMPANY Employer/Carrier- Petitioners DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR Party-in-Interest |
| Court | Court of Appeals of Black Lung Complaints |
UNPUBLISHED OPINION
Appeal of the Decision and Order Finding Three H Coal Company, Inc. as Responsible Operator and Awarding Benefits of Jodeen M Hobbs, Administrative Law Judge, United States Department of Labor.
Michael A. Pusateri and Patricia Karppi (Greenberg Traurig LLP), Washington, D.C., for Employer and its Carrier.
Gary K. Stearman (Seema Nanda, Solicitor of Labor; Barry H Joyner, Associate Solicitor; Andrea J. Appel, Counsel for Administrative Appeals), Washington, D.C., for the Director, Office of Workers' Compensation Programs, United States Department of Labor.
Before: GRESH, Chief Administrative Appeals Judge, ROLFE and JONES, Administrative Appeals Judges.
DECISION AND ORDER
Employer and its Carrier (Employer) appeal Administrative Law Judge (ALJ) Jodeen M. Hobbs's Decision and Order Finding Three H Coal Company, Inc. as Responsible Operator and Awarding Benefits (2020-BLA-05724) on a subsequent claim filed on October 28, 2018,[1] pursuant to the Black Lung Benefits Act as amended, 30 U.S.C. §§901-944 (2018) (the Act or BLBA).
The ALJ granted Employer's Motion to Withdraw Controversion on the entitlement issues and thus awarded benefits. She further found Three H Coal Company (Three H Coal) is the correctly named responsible operator liable for the payment of benefits.
On appeal, Employer argues the removal provisions applicable to ALJs render the ALJ's appointment unconstitutional. It also challenges Three H Coal's designation as the responsible operator. Claimant did not file a response. The Director, Office of Workers' Compensation Programs (the Director), filed a response, urging the Benefits Review Board to reject Employer's constitutional challenges and affirm the ALJ's determination that Employer is liable for benefits. Employer filed a reply brief, reiterating its arguments.
The Board's scope of review is defined by statute. We must affirm the ALJ's Decision and Order if it is rational, supported by substantial evidence, and in accordance with applicable law.[2] 33 U.S.C. §921(b)(3), as incorporated by 30 U.S.C. §932(a); O'Keeffe v. Smith, Hinchman & Grylls Assocs., Inc., 380 U.S. 359 (1965).
Employer challenges the constitutionality of the removal protections afforded ALJs.[3] Employer's Brief at 5-10; Employer's Reply Brief at 1-3. It generally argues the removal provisions in the Administrative Procedure Act (APA), 5 U.S.C. §7521, are unconstitutional, citing Justice Breyer's separate opinion and the Solicitor General's argument in Lucia v. SEC, 585 U.S., 138 S.Ct. 2044 (2018).[4] Employer's Brief at 5-10; Employer's Reply Brief at 1-3. It also relies on the United States Supreme Court's holdings in Free Enter. Fund v. Public Co. Accounting Oversight Bd., 561 U.S. 477 (2010) and Seila Law v. CFPB, 591 U.S., 140 S.Ct. 2183 (2020), as well as the United States Court of Appeals for the Federal Circuit's holding in Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019), vacated, 594 U.S., 141 S.Ct. 1970 (2021). Employer's Brief at 5-10; Employer's Reply Brief at 1-3. For the reasons set forth in Howard v. Apogee Coal Co., BLR, BRB No. 20-0229 BLA, slip op. at 3-5 (Oct. 18, 2022), we reject Employer's arguments.
The district director is charged with determining which of a miner's "potentially liable operator[s]" is the "responsible operator" liable for benefits. 20 C.F.R. §§725.407(a), 725.495(a)(1). To be a "potentially liable operator," a coal mine operator must have employed the miner for at least one year and be financially capable of assuming liability for the payment of benefits.[5] 20 C.F.R. §725.494(e). The "responsible operator" is the potentially liable operator that most recently employed the miner. 20 C.F.R §725.495(a)(1).
If the designated responsible operator is not the operator that most recently employed the miner, the district director is required to explain the reasons for such designation. 20 C.F.R. §725.495(d). If the reasons include the most recent employer's inability to assume liability for the payment of benefits, the record must include a statement that the Office of Workers' Compensation Programs (OWCP) has no record of insurance coverage for that employer or of its authorization to selfinsure. Id. In the absence of such a statement, "it shall be presumed that the most recent employer is financially capable of assuming its liability for a claim." Id.
The designated responsible operator may be relieved of liability only if it proves it is either financially incapable of assuming liability for benefits or another potentially liable operator that is financially capable of assuming liability more recently employed the miner for at least one year. 20 C.F.R. §725.495(c)(2); RB&F Coal, Inc. v. Mullins, 842 F.3d 279, 282 (4th Cir. 2016). If the district director fails to identify the proper responsible operator prior to the claim's transfer to the ALJ, the improperly designated operator must be dismissed and the Black Lung Disability Trust Fund must assume liability for benefits. See Rockwood Cas. Ins. Co. v. Director, OWCP [Kourianos], 917 F.3d 1198, 1215 (10th Cir. 2019); 20 C.F.R. §725.407(d); 65 Fed.Reg. 79,920, 79,985 (Dec. 20, 2000) ().
The district director determined that while Chestnut Ridge Mining Company (Chestnut Ridge), self-insured through the Virginia Coal Producer's Self-Insurance Association (VCP), more recently employed Claimant for at least one year,[6] VCP is insolvent and thus Chestnut Ridge is financially incapable of assuming liability for the payment of benefits. Director's Exhibits 21, 29 at 9. As support, the district director provided a statement that the OWCP has no record of insurance coverage for Chestnut Ridge as 20 C.F.R. §725.495(d) requires, as well as a statement from the administrator of the Virginia Uninsured Employers' Fund (Uninsured Employer's Fund) that it does not guarantee federal black lung claim liabilities. Director's Exhibits 22, 24. Having found Three H Coal was the next most recent operator to employ Claimant and it meets the criteria of 20 C.F.R. §725.495(d), the district director designated it as the responsible operator. Director's Exhibits 20, 41.
The ALJ considered Employer's contention that the district director failed to properly name the Uninsured Employer's Fund and Virginia Property and Casualty Insurance Guaranty Association (Guaranty Association) as potentially liable guarantors of VCP's liability for this claim.[7] Decision and Order at 4-6. The ALJ noted that while Chestnut Ridge, self-insured through VCP, was the last operator to employ Claimant for at least one year, she agreed with the district director's determination that VCP was insolvent and that the Uninsured Employer's Fund does not guarantee federal black lung claim liabilities. Id. at 6. She also determined that the Guaranty Association is not liable for VCP's obligations because VCP is a selfinsurance association, which the Guarantee Association does not cover. Id. As the Uninsured Employer's Fund and the Guaranty Association were not liable as a matter of law for Claimant's claim, the ALJ found the district director was not obligated to provide notice of the claim to either company. Id.
In addition, as the district director entered a statement confirming OWCP searched its files and found no record of insurance coverage for Chestnut Ridge or of authorization for it to self-insure, the ALJ found it constitutes prima facie evidence that Chestnut Ridge is not financially capable of assuming its liability for the claim and that the burden shifted to Three H Coal, as the designated operator, to show that it is not liable for benefits. Id. at 4. Further finding Three H Coal did not dispute its status as a potentially liable operator and did not establish Chestnut Ridge is financially capable of assuming liability for the claim, the ALJ found Three H Coal is the properly designated responsible operator. 20 C.F.R. §§725.494(e), 725.495(c)(2); Decision and Order at 4-7.
Employer argues the ALJ erred in finding Three H Coal is the potentially liable operator that most recently employed Claimant for a cumulative period of at least one year. Specifically, it asserts Chestnut Ridge more recently employed Claimant for one year and the ALJ erred in finding it financially incapable of assuming liability for the claim via either the Uninsured Employer's Fund or the Guaranty Association. Employer's Brief at 10-19; Employer's Reply Brief at 3-7. We disagree. For the reasons that follow, we hold substantial evidence supports the ALJ's finding that Employer did not carry its burden to establish Chestnut Ridge is financially capable of assuming liability for this claim via either the Uninsured Employer's Fund or the Guaranty Association. See 20 C.F.R. §725.495(c)(2); Compton v. Island Creek Coal Co., 211 F.3d 203, 207-208 (4th Cir. 2000); Milburn Colliery Co. v. Hicks, 138 F.3d 524, 528 (4th Cir. 1998).
The Virginia legislature created the Uninsured Employer's Fund to "provid[e] funds for [state workers'] compensation benefits awarded against any uninsured or self-insured employer." Va. Code Ann. § 65.2-120l(A). The statute expressly provides that the Virginia Workers' Compensation Commission may order a payment from the Uninsured Employer's Fund only for...
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