Warner Coal Co. v. Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor

• Decision Date: 17 December 1986
• Docket Number: 85-3767,Nos. 85-3766,s. 85-3766
• Citation: 804 F.2d 346
• Parties: In the Matter of WARNER COAL COMPANY, et al. (85-3766), Pyro Mining Company, et al. (85-3767), Petitioners, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR (85-3766/67), Respondent, L.C. Saylor (85-3766), John M. Slaton (85-3767), Respondents.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 346

804 F.2d 346

In the Matter of WARNER COAL COMPANY, et al. (85-3766), Pyro

Mining Company, et al. (85-3767), Petitioners, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED

STATES DEPARTMENT OF LABOR (85-3766/67), Respondent,

L.C. Saylor (85-3766), John M. Slaton (85-3767), Respondents.

Nos. 85-3766, 85-3767.

United States Court of Appeals, Sixth Circuit.

Argued Sept. 25, 1986.

Decided Oct. 30, 1986.

Opinion on Rehearing Dec. 17, 1986.

Mark E. Solomons (argued), Arter & Hadden, Washington, D.C., for petitioners.

J. Michael O'Neill, Diane Hodes, Thomas L. Holzman (argued), Mark Robson, Office of the Solicitor, U.S. Dept. of Labor, Washington, D.C., Henry E. Hayden (argued) Hayden & McKnown, Hartford, Ky., Stephen R. Chappell (argued), Goss, Chappell, Brashear, & Goss, Harlan, Ky., for respondents.

Before LIVELY, Chief Judge, MERRITT, Circuit Judge, and TIMBERS, Senior Circuit Judge ^*.

MERRITT, Circuit Judge.

In these consolidated cases arising under Part C of the Black Lung Benefits Act, 30 U.S.C. Secs. 931-945, ¹ the appellant is the insurance carrier for the mining company which employed the claimants. The insurance carrier in both cases seeks review of decisions by the Department of Labor's Benefits Review Board awarding benefits to claimants.

The basic issue in these cases is whether in the administration of the Act the Secretary of Labor must give written notice of the black lung claim to the insurance carrier for the claimant's employer prior to the administrative adjudication of a claim affecting the carrier's liability. In both cases, the Board said no. It held that under the applicable regulations, "[n]owhere is it stated that the carrier must receive notification," only that the coal mine operator must receive notice. The Board stated in Warner Coal Company v. Saylor that the issue of notice to the carrier was "irrelevant" and in Pyro Mining Company v. Slaton that the issue was "without merit."

Contrary to the decision of the Board, we hold that notice to the carrier is required by regulations adopted by the Secretary and by the statutory scheme. Specifically 20 C.F.R. Sec. 725.360(a)(4) provides that in such black lung benefits proceedings:

The following persons shall be parties:

(1) The claimant;

(2) A person other than a claimant, authorized to execute a claim on such claimant's behalf under Sec. 725.301;

(3) Any coal mine operator notified under Sec. 725.412 of its possible liability for the claim;

(4) Any insurance carrier of such operator. (Emphasis added.)

Thus under the Act the carrier is clearly a party to the litigation which adjudicates its interests. Moreover, 33 U.S.C. 919(b) (1982) provides notice shall be handled as follows:

Within ten days after such claim is filed the deputy commissioner, in accordance with regulations prescribed by the Secretary, shall notify the employer and any other person (other than the claimant), whom the deputy commissioner considers an interested party, that a claim has been filed. (Emphasis added.)

In light of the regulation adopted by the Secretary, we interpret the "interested party" language of the statute necessarily to include the carrier. Therefore, the statute read in conjunction with the regulation requires that notice be given to the carrier.

The Black Lung Act and the regulations adopted thereunder do not contemplate a later indemnity action by the employer against the carrier once liability is established but rather contemplate that the carrier, as a party, may be subject to liability in the original proceeding. For example, 33 U.S.C. Sec. 935 (1982) establishes the general framework for the substitution of the carrier for the employer. This section states in relevant part:

In any case where the employer is not a self-insurer, in order that the liability for compensation imposed by this chapter may be most effectively discharged by the employer, and in order that the administration of this chapter in respect of such liability may be facilitated, the Secretary shall by regulation provide for the discharge, by the carrier for such employer, of such obligations and duties of the employer in respect of such liability, imposed by this chapter upon the employer, as it considers proper in order to effectuate the provisions of this...