Walsh v. Chevron Mining, Inc.

• Decision Date: 21 June 2021
• Docket Number: CIVIL ACTION NO. 4:20-CV-00010-HBB
• Parties: MARTIN J. WALSH, SECRETARY DEPARTMENT OF LABOR et al PLAINTIFF v. CHEVRON MINING, INC. DEFENDANT
• Court: U.S. District Court — Western District of Kentucky

MARTIN J. WALSH,¹ SECRETARY DEPARTMENT OF LABOR et al PLAINTIFF v. CHEVRON MINING, INC. DEFENDANT

CIVIL ACTION NO. 4:20-CV-00010-HBB

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY OWENSBORO DIVISION

June 21, 2021

MEMORANDUM OPINION AND ORDER

I. BACKGROUND

This matter is before the Court on Plaintiff Martin J. Walsh's and Defendant Chevron Mining, Inc.'s dueling motions for summary judgment (DN 16, 17). Defendant has responded to Plaintiff's motion (DN 21), and Plaintiff has responded to Defendant's motion (DN 20). Both parties have filed replies in support of their respective motions (DN 22, 23). The matter is ripe for adjudication. For the reasons below, Plaintiff's motion for summary judgment (DN 16) is DENIED, and Defendant's motion for summary judgment (DN 17) is GRANTED.

Pursuant to 28 U.S.C. § 636(c) and FED. R. CIV. P. 73, the parties have consented to the undersigned United States Magistrate Judge conducting all further proceedings in this case, including issuance of a memorandum opinion and entry of judgment, with direct review by the Sixth Circuit Court of Appeals in the event an appeal is filed (DN 11).

II. JURISDICTION

This Court has subject matter jurisdiction over this case pursuant to 28 U.S.C. §§ 1331 and 1345, 30 U.S.C. § 934(b)(4)(B), and 33 U.S.C. § 921(d) which was incorporated into the Black Lung Benefits Act ("BLBA") by 30 U.S.C. § 932(a). Further, this Court is the proper venue pursuant to 28 U.S.C. §§ 97(b) and 1391(b), 30 U.S.C. § 934(b)(4)(B) and 33 U.S.C. § 921(d) which was incorporated into the BLBA by 30 U.S.C. § 932(a).

III. SUMMARY OF THE FACTS²

This case is a civil action in which Plaintiff is seeking reimbursement to the Black Lung Disability Trust Fund ("Trust Fund") from Defendant (DN 1, ¶ 1). In addition to reimbursement, Plaintiff is also seeking "enforcement of an administrative law judge's final decision and order against Chevron Mining, awarding benefits to its former employee, James R. Alsbrooks (deceased), pursuant to the BLBA (Id.).

Defendant is the successor to Pittsburg & Midway Coal Company,³ which operated a coal mine in Hopkins County, Kentucky (Id. at ¶ 4). See 30 U.S.C. § 802(h)(2) (defining "coal mine"); 20 C.F.R. § 725.101(a)(12) (same). During its operation and the relevant time periods in this matter, Pittsburg & Midway and Defendant were classified as "operators" within the definitions of the BLBA (Id.). 30 U.S.C. § 802(d) ("'operator' means any owner, lessee, or other person whooperates, controls, or supervises a coal . . . mine"); 20 C.F.R. § 725.101(a)(23). The BLBA required Pittsburg & Midway to either secure insurance for benefits payments or qualify as a self-insurer (DN 1 ¶ 15). 30 U.S.C. § 933(a); see also (DN 17-2 PageID 170-75). Pittsburg & Midway opted for the latter and self-insured (DN 1 ¶ 16; DN 17-2 PageID 170-75).

Mr. Alsbrooks was employed by Pittsburg & Midway as a coal miner (DN 1 ¶ 14). On May 3, 2004, Mr. Alsbrooks filed a claim for BLBA benefits (Id. at ¶ 18). Several months later, on February 3, 2005, the District Director⁴ issued a determination that Mr. Alsbrooks was entitled to monthly disability benefits as a result of pneumoconiosis⁵ and found that Pittsburg & Midway was liable for such payments (Id. at ¶ 19; see also DN 17-2 PageID 164-75). Pittsburg & Midway requested a hearing before an administrative law judge and, in the interim, declined to pay benefits (DN 1 ¶ 20). Administrative Law Judge Daniel Solomon ("ALJ") issued his Decision and Order awarding benefits on July 16, 2009, and that Decision was subsequently appealed to the Benefits Review Board (DN 1 ¶¶ 23, 25; DN 17-1 PageID 138-39; DN 17-2 PageID 183-94). After two remands, the Benefits Review Board ultimately affirmed the ALJ's third Decision and Order (DN 1 ¶¶ 23, 25; DN 17-2 PageID 198-223). No further review was sought. Defendant began making monthly benefits payments to Mr. Alsbrooks, beginning in July 2009, and continued until Mr. Alsbrooks' death in June 2014 (DN 1 ¶ 24).

During and after these payments, Defendant also reimbursed the Trust Fund "for all principal amounts paid in interim months benefits and for diagnostic and medical treatment expenses" (Id. ¶ 26). Additionally, Defendant issued payments to Mr. Alsbrooks for all the past-due benefits from May 2004 through January 2005 (Id. at ¶ 27). After these payments, on June 17, 2014, the District Director contacted Defendant requesting reimbursement of the interest accrued on the principal amounts previously described (Id. at ¶ 31). Defendant has disputed the District Director's assessment of interest⁶ and, as a result, has refused to pay the alleged interest amounts (Id. at ¶ 36). This dispute regarding interest has led to the present matter.

Plaintiff filed the complaint on January 17, 2020 (DN 1), and Defendant answered on March 18, 2020 (DN 6). As noted at the forefront, the parties have consented to the undersigned conducting all further proceedings in this case, including issuance of a memorandum opinion and entry of judgment (DN 11). On March 15, 2021, both parties filed cross-motions for summary judgment, both parties responded to the opposing motion, and both parties replied in support of their respective motions (DN 16, 17, 20, 21, 22, 23).

IV. STATUTORY, REGULATORY, AND PROCEDURAL BACKGROUND

A. BLBA and the Trust Fund

The BLBA, 30 U.S.C. § 901 et seq, provides a mechanism for "coal miners . . . who are totally disabled due to pneumoconiosis arising out of employment in one or more of the Nation's coal mines" to receive benefits payments. Id. § 901(a). To receive the payments under the BLBA, the applicant "must show that (1) he or she is a miner (2) who suffers from pneumoconiosis (3) arising out of coal mine employment, which (4) contributes to (5) his or her total disability." Zurich Am. Ins. Grp. v. Duncan, 889 F.3d 293, 296 (6th Cir. 2018). This initial determination of eligibility is processed and decided by the District Director. 20 C.F.R. § 725.401. Next, a formal hearing before an administrative law judge may be requested. Id. § 725.421. After, the administrative law judge issues their decision, a party may appeal to the Benefits Review Board. Id. § 725.481. While not exercised in the present case, it is possible for an aggrieved party to have the court of appeals for the circuit, the Sixth Circuit in this case, review the Benefits Review Board's determination and request the Board's order be modified or set aside. Id. § 725.482.

If the applicant is eligible for payments, these payments may be made to (1) the "miner who meets the conditions" set forth above; (2) the "surviving spouse . . . of a deceased miner who meets the conditions[;]" (3) "the child of a deceased miner who meets the conditions" if the miner is deceased and there is no surviving spouse; (4) the "surviving dependent parents, where there is no surviving spouse or child, or the surviving dependent brothers or sisters, where there is no surviving spouse, child, or parent, of a miner, who meets the conditions[;]" or (5) the "child of a miner's surviving spouse who was receiving benefits under [number 3] at the time of such spouse's death." 20 C.F.R. § 725.201(a); see Shepherd v. Incoal, Inc., 915 F.3d 392, 399 (6th Cir. 2019).

After establishing eligibility for the benefits payments, the determination then turns to who shall pay these benefits. In order to secure payment of these benefits, operators of coal mines must either qualify as a self-insurer or obtain insurance for the payment of the benefits. 30 U.S.C. § 933(a); 20 C.F.R. § 725.494(e). The miner's "most recent employer that meets [the conditions of employing the miner for at least one year and being capable of paying benefits under the BLBA] is deemed the 'responsible operator' and is forced to foot the bill."⁷ Karst Robbins Coal Co. v. Dir., OWCP, 969 F.3d 316, 320 (6th Cir. 2020) (citing 20 C.F.R. § 495(a)(1)).

If an operator fails to, or refuses to, commence payments of the benefits within thirty days after the "date of an initial determination of eligibility[,]" then the BLBA allows for the Trust Fund to begin paying those benefits. 26 U.S.C. § 9501(d)(1); see also 20 C.F.R. §§ 725.420(c), 725.522(a). The Trust Fund will also pay for the costs of any travel or examinations necessary to determine whether the miner is eligible for the benefits payments. 20 C.F.R. § 725.406(e).

However, the BLBA dictates that when an eligible miner, or an applicable recipient under 20 C.F.R. § 725.201(a), receives payments dispensed from the Trust Fund, and the Secretary of Labor determines that the operator is liable for those payments and expenses, then the operator "is liable to the United States for repayment to the fund of the amount of such benefits the payment of which is properly attributed to him plus interest thereon." 30 U.S.C. § 934(b)(1); see also 20 C.F.R. §§ 725.420, 725.602(a) ("In any case in which the fund has paid benefits, including medicalbenefits, on behalf of an operator . . . which is determined liable therefore, or liable for a part thereof, such operator . . . shall simultaneously with the first payment of benefits made to the beneficiary, reimburse the fund (with interest) for the full amount of all benefit payments made by the fund with respect to the claim."). The interest rate of these amounts would be established by the Internal Revenue Code of 1954. Id. § 934(b)(5)(B); see also 26 U.S.C. § 6621; 20 C.F.R. § 725.608(d)(3).

This calculation of interest, or more specifically the determination of when interest begins, is the focal point of the conflict in this matter.

B. Parties' Motions for Summary Judgment

1. Plaintiff's Motion for Summary Judgment

Plaintiff claims that Defendant owes the Trust Fund $12,734.83 in interest, as a result of Defendant's (or their predecessor-in-interest's) refusal to pay the principal amounts issued by the Trust Fund until after the Benefits Review Board's final determination (DN 16 PageID 50-53). The amount was...