Reich v. Youghiogheny and Ohio Coal Co., 94-3728

• Decision Date: 22 September 1995
• Docket Number: No. 94-3728,94-3728
• Citation: 66 F.3d 111
• Parties: Robert B. REICH, Secretary, United States Department of Labor, Plaintiff-Appellee, v. The YOUGHIOGHENY AND OHIO COAL COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 111

66 F.3d 111

Robert B. REICH, Secretary, United States Department of Labor, Plaintiff-Appellee, v. The YOUGHIOGHENY AND OHIO COAL COMPANY, Defendant-Appellant.

No. 94-3728.

United States Court of Appeals Sixth Circuit.

Argued Aug. 7, 1995.

Decided Sept. 22, 1995.

Michael J. Denney, Deborah E. Mayer (argued and briefed), U.S. Department of Labor, Office of the Solicitor, Washington, DC, for plaintiff-appellee.

John G. Paleudis, John R. Estadt (argued and briefed), Gerald Patrick Duff, Hanlon, Duff, Paleudis & Estadt, St. Clairsville, OH, for defendant-appellant.

Before: RYAN, BATCHELDER, and MOORE, Circuit Judges.

BATCHELDER, Circuit Judge.

In this action to enforce a federal lien, the defendant coal company appeals from the district court's grant of summary judgment in favor of the Department of Labor ("the DOL"), awarding interest on payments made from the Black Lung Disability Trust Fund ("the Fund"). We affirm the judgment of the district court.

I.

The facts of this case are comprehensively set out in the opinion below, Reich v. Youghiogheny and Ohio Coal Co. (Reich v. Y & O ), 858 F.Supp. 1381 (S.D.Ohio 1994). The case presents two issues: (1) whether, having miscalculated the amount of interest due on interim benefits paid from the Fund and having received the operator's prompt payment of the incorrectly calculated interest, the DOL may correct its calculation and demand additional payment of interest; and (2) with regard to an operator's liability for payment of interest on "medical benefits only" (MBO) claims, whether interest accrues on MBO payments made by DOL from the Fund in the interim prior to thirty days after DOL's presentment of medical bills to the operator. ¹

II.

The Black Lung Benefits Act (the "Act"), codified as amended at 30 U.S.C. Secs. 901--951, was established to provide benefits to coal miners who are totally disabled by pneumoconiosis. 30 U.S.C. Sec. 901 (1986). The Act incorporated the procedural provisions of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. Secs. 901--950 ("the LHWCA"), except as otherwise provided by regulations of the Secretary of Labor. 30 U.S.C. Sec. 932(a); 20 C.F.R. Sec. 725.1(j).

See generally Pyro Mining Co. v. Slaton, 879 F.2d 187, 189-90 (6th Cir.1989) (discussing adjudicatory and review procedures applicable to claims under the Act). Thus, the Federal Rules of Civil Procedure, which apply in adjudications under the LHWCA, also apply to adjudications under the Act, except to the extent that matters of procedure are provided for in the Act. Fed.R.Civ.P. 81(a)(6).

The Secretary of Labor is authorized to promulgate additional regulations pursuant to the Act, in conformity with 5 U.S.C. Sec. 553 (the rulemaking provisions of the Administrative Procedure Act). ² 30 U.S.C. Secs. 936, 957. Also see 30 U.S.C. Secs. 921(a) and (b), 922(a)(6), 932(a) and (h). Such additional regulations have been promulgated and are codified at 20 C.F.R. Secs. 718--727. Those regulations relevant to the adjudication of claims under the Act are codified as Subpart D--Adjudication of Claims; Adjudication officers. 20 C.F.R. Secs. 725.350--725.422. Fed.R.Civ.P. 60, regarding relief from judgments or orders, applies to adjudications under the Act, since the regulations promulgated regarding adjudication of black lung benefits claims do not displace the Rule. See id.

After an initial determination of eligibility, the DOL is authorized to make interim payments of benefits to claimants from the Fund established pursuant to 26 U.S.C. Sec. 9501, upon giving notice of the claim and initial determination of eligibility to the responsible operator, which may either assume responsibility for the interim payments or contest liability pursuant to the prescribed procedures. 26 U.S.C. Sec. 9501(d)(1)(A)(i); 30 U.S.C. Sec. 922; 20 C.F.R. Secs. 725.410--725.420, 725.522. Coal mine operators who have been determined to be liable for benefits due to disabled claimants must secure the payment of black lung benefits. See 30 U.S.C. Secs. 932, 933; 20 C.F.R. Sec. 725.420(c). Operators who have been determined to be responsible under the Act are required to repay the Fund for the amount of benefits determined to be attributable to the operator, plus interest thereon. 30 U.S.C. Sec. 934; 20 C.F.R. Secs. 725.421(c), 725.522(b), 725.602, 725.608(b) and (c). The Act specifies the applicable rate of interest. 30 U.S.C. Sec. 934(b)(5); 20 C.F.R. Sec. 725.608(c).

Claims for medical benefits only are filed, processed and adjudicated in the same way, except that the DOL is required to accept the Social Security Administration's finding of entitlement as its initial determination. 20 C.F.R. Sec. 725.701A(b)(1). The DOL must notify an operator who has been determined liable for the payment of benefits to a miner. 20 C.F.R. Sec. 725.704. ³ The operator is required to notify the miner and the authorized medical care providers of the operator's responsibility for medical services due to the miner's disability from pneumoconiosis. Id. For those black lung beneficiaries whose coal mine employment terminated on or after January 1, 1970, the agency must "immediately authorize the payment of medical benefits and thereafter inform the responsible operator ... of the operator's right to contest the claimant's entitlement for medical benefits." 20 C.F.R. Sec. 725.701A(b)(2) (emphasis added). Operators required to provide medical benefits "have the right to participate in the adjudication of the claim." 20 C.F.R. Sec. 725.701A(f).

When a dispute arises concerning an MBO claim, the regulations provide that the DOL shall first attempt informal resolution; however, if informal resolution is unsuccessful, the DOL must refer the matter for hearing and adjudication by an administrative law judge (ALJ). 20 C.F.R. Sec. 725.707(a) and (b). "During the pendency of such adjudication, the [DOL] may order the payment of medical The Act provides a six-year statute of limitations for the DOL to collect from the responsible operator the repayment of benefits paid by the Fund. The limitations period runs from "the date on which the liability was finally determined." 30 U.S.C. Sec. 934(b)(4)(B). As a tax lien arises by operation of law on the date of the tax assessment, a lien for reimbursement to the Fund arises upon the final determination of the operator's liability. See 20 C.F.R. Sec. 725.603(c)(4); 26 U.S.C. Secs. 6323(f) and (g); 26 U.S.C. Secs. 6321-6322.

benefits prior to final adjudication under the same conditions applicable to benefits awarded under Sec. 725.522." 20 C.F.R. Sec. 725.707(b).

III.

A. The government may correct its calculations and collect additional interest from Y & O.

The operator's argument on this issue is, in essence, that it should not be expected to do its own math and that it is unfair not to permit the operator to benefit from the Government's mistake. Y & O's theories for barring the Government from correcting its interest calculations fail. First, Y & O erroneously characterizes the DOL's demand for interest as a "final order." The final order as to this issue was the Benefits Review Board's December 27, 1985, decision and order affirming the ALJ's final determination of the miner's eligibility for black lung benefits and Y & O's responsibility for those benefits. Y & O did not appeal the Board's order within sixty days after the date it was filed; therefore, the Board's December 27, 1985, order became final. 33 U.S.C. Sec. 921(c), incorporated by 30 U.S.C. Sec. 932(a). In calculating the interest due the Government for the interim benefits DOL paid the claimant from the Fund, the DOL claims examiner was not issuing a "final order pursuant to [30 U.S.C. Sec. 932(a) that was] binding on both the Y & O and the [DOL]," as Y & O contends. Rather, because he had no discretion in performing the interest calculation, the assessment and terms of which were mandated by law, the DOL claims examiner was merely performing a ministerial function akin to that of an employee of the Internal Revenue Service who issues a tax assessment. See, e.g., Bowman v. United States, 824 F.2d 528, 531 (6th Cir.1987) (holding taxpayers liable for statutory interest that accrued on federal income tax deficiency, notwithstanding Government's failure to provide taxpayers with form and Government's tardiness in discovering deficiency and responding to their request for information).

Neither does res judicata bar the Government from revisiting the issue of the correct amount of interest on this claim, because the fact that the agency's initial demand was a ministerial act and not a final order makes res judicata inapplicable. ⁴ See, e.g., Astoria Fed. Sav. and Loan Ass'n. v. Solimino, 501 U.S. 104, 107-08, 111 S.Ct. 2166, 2169-70, 115 L.Ed.2d 96 (1991) (holding that the common law doctrines of collateral estoppel and res judicata apply to final determinations by administrative agencies acting in a judicial capacity). See also Maxwell Co. v. NLRB, 414 F.2d 477, 479 (6th Cir.1969) (holding that the principle of res judicata has no application to administrative agencies' exercise of powers other than their quasi-judicial powers). That Y & O could have litigated the correctness of the agency's interest calculation supports the conclusion that the agency's initial demand was not a final order, since the courts, rather than the agency, would have had the last word on that issue. See id.

Further, Y & O's reliance on the theory of administrative finality is misplaced. That theory generally bars a litigant from seeking review of administrative rulemaking after the statutory deadline for appeal has Y & O's argument that the doctrine of equitable estoppel bars the Government from recalculating and collecting the correct amount of interest is similarly misplaced. Doubtless, it was irksome to Y & O to discover that the company owed more than $11,000 in additional interest on this claim. The DOL has conceded...