McNally Pittsburg Manufacturing Co. v. Director, Office of Workers' Compensation Programs

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
FEB 10 2004
TENTH CIRCUIT
PATRICK FISHER
Clerk
McNALLY PITTSBURG
MANUFACTURING COMPANY,
Petitioner,
v. No. 03-9508
(Benefits Review Board,
DIRECTOR, OFFICE OF WORKERS’ United States Department of Labor)
COMPENSATION PROGRAMS, (No. 97-1121 BLA)
UNITED STATES DEPARTMENT
OF LABOR,
Respondent.
BETTY L. SHERTZER, on behalf of
her late husband, Edward Shertzer,
Intervenor.
ORDER AND JUDGMENT *
Before EBEL, Circuit Judge, BRORBY, Senior Circuit Judge, and MURPHY,
Circuit Judge.
*
This order and judgment is not binding precedent except under the doctrines of
law of the case, res judicata and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
McNally Pittsburg Manufacturing Company (“McNally”) appeals the
decision and order of the Benefits Review Board (“the Board”) granting black
lung benefits to Edward Shertzer, a former employee. For the reasons stated
below, we reverse and remand.
I. Facts and Prior Proceedings
In August 1983, Mr. Shertzer filed an application for black lung benefits
against McNally, claiming he suffered from a respiratory illness that prevented
him from engaging in his regular employment. He made the claim pursuant to the
Black Lung Benefits Act, 30 U.S.C. §§ 901 - 944 (“the Act”). The Director,
Office of Workers’ Compensation Programs (“the Director”) denied his claim in
November 1983, finding Mr. Shertzer failed to establish any of the elements
necessary to qualify for black lung benefits. Specifically, he concluded the
evidence presented did not “show” Mr. Shertzer contracted pneumoconiosis, 1 the
disease was caused at least in part by coal mine work, and he was totally disabled
by the disease. Mr. Shertzer did not appeal these determinations.
1
Pneumoconiosis, commonly referred to as black lung disease, 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(b); 20 C.F.R.
§ 718.201(a).
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Nine years later, Mr. Shertzer filed a duplicate claim, which the Office of
Administrative Law Judges subsequently denied in August 1992. Being a
duplicate claim, the administrative law judge assigned to the claim first
considered whether a material change in Mr. Shertzer’s condition occurred since
denial of the prior claim as required by 20 C.F.R. § 725.309(d). Finding a
material change in condition, 2 the administrative law judge proceeded to consider
the merits of the claim and ultimately concluded Mr. Shertzer failed to satisfy any
requirements for award of benefits.
Mr. Shertzer then sought modification of the 1992 denial pursuant to 20
C.F.R. § 725.310. The same administrative law judge from the original duplicate
claim proceeding denied his claim in 1997 and again in 1999, following a remand
by the Board. In the interim, Mr. Shertzer died in 1998. His widow, Betty
Shertzer, then sought a final modification. In 2001, a different administrative law
judge reviewed her 1992 claim, accepted the modification, and awarded benefits.
The Board affirmed the award on appeal. McNally now appeals the Board’s
2
In making the initial material change determination, the Administrative Law
Judge utilized the standard pronounced in Spese v. Peabody Coal Co., 1988 WL 232660(Ben. Rev. Bd. Sept. 30, 1988). (Apt. Br. at A-4.) However, in Wyoming Fuel Co. v.
Director, OWCP, 90 F.3d 1502, 1511 (10th Cir. 1996), this court adopted a new standard
to be utilized in making the material change determination in question.
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affirmance of the administrative law judge’s 2001 decision amending benefits.
On appeal, McNally essentially makes two arguments. 3 First, McNally
contends the Board erred in affirming the 2001 decision because the
administrative law judge failed to properly determine whether a material change
in conditions occurred as required by Wyoming Fuel. Second, McNally contests
the sufficiency of the evidence relied on by the administrative law judge in
reviewing the merits of Mr. Shertzer’s claim that resulted in the benefits award.
For the reasons stated below, we agree with McNally that the
administrative law judge improperly applied the requisite standard in determining
whether Mr. Shertzer demonstrated a material change in conditions. We therefore
reverse and remand for the Board to consider whether the evidence indicates Mr.
Shertzer’s conditions in fact materially changed since the denial of his original
1983 claim. Because we remand this case to the Board for determination of the
threshold material change inquiry, we do not consider McNally’s contentions
regarding the sufficiency of the evidence in support of Mr. Shertzer’s disability
3
McNally also argues the Board erred in finding the administrative law judge
correctly harmonized the duplicate claim and modification provisions. We disagree and
find a miner may seek modification from the denial of his duplicate claim as explained by
the Board.
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benefits claim.
II. Standard of Review
In reviewing a decision by the Board, this court will only review the
decision for errors of law and confirm the Board’s adherence to the substantial
evidence standard governing its review of the factual findings of an
administrative law judge. See Maddaleni v. Director, OWCP, 961 F.2d 1524,
1525 (10th Cir. 1992). Further, we do not defer to the Board’s interpretation of
the Act or the regulations, but review them de novo. Wyoming Fuel, 90 F.3d at
1506. As noted in Lukman v. Director, OWCP, 896 F.2d 1248, 1250 (10th Cir.
1990), statutory and regulatory interpretations of the procedural requirements for
the determination of black lung benefits are questions of law subject to this same
de novo review.
III. Discussion
On appeal, McNally argues the Board erred by not remanding the present
case back to the administrative law judge, contending he improperly applied the
standards pronounced in Wyoming Fuel concerning the adjudication of duplicate
claims. Specifically, McNally contends the administrative law judge erred by not
finding whether a material change of condition occurred since denial of the
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original 1983 claim. We agree.
Under the relevant regulations, in order for a potential claimant to be
eligible for disability benefits, a claimant must prove (1) the presence of
pneumoconiosis; (2) the pneumoconiosis arose at least in part out of his or her
coal mine employment; and (3) total disability due to the pneumoconiosis. See
Wyoming Fuel, 90 F.3d at 1505. For duplicate claims – new claims filed more
than one year after the denial of a previous claim – we held a claimant must first
prove a “material change in conditions” since the time of the prior denial before
the merits of the claim are considered. Id. at 1505.
Because the regulations do not define what must be proved to demonstrate
a material change, we clarified this standard in our Wyoming Fuel decision. Id. at
1508. At issue in Wyoming Fuel was whether the administrative law judge
properly concluded a claimant proved a material change in conditions and
subsequently correctly awarded benefits. Id. at 1504. At the time of the duplicate
claim proceeding, the administrative law judge applied the Board-endorsed Spese
standard, applied in Spese, 1988 WL 232660 at *2, which defined proof of a
material change in conditions as “evidence which is relevant and probative so that
there is a reasonable probability that it would change the prior administrative
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result.” Wyoming Fuel, 90 F.3d at 1508 (quotation marks and citation omitted).
After considering the Spese standard, we rejected it, finding it violative of
res judicata principles. Id. at 1508-09. We explained the Spese standard was
problematic:
by permitting a claimant – when attempting to show a material
change – to present evidence that merely shows the initial decision
was in error, rather than limiting the evidence presented to that which
shows that the claimant’s condition has worsened since the previous
denial. Instead, ... the [administrative law judge] must apply a
standard that denies the claimant the opportunity to relitigate the
earlier denial of benefits while permitting the claimant to prove that
his or her conditions have worsened materially since the earlier
denial.
Id. at 1509.
After reviewing standards adopted in other circuits, we developed our own
standard, taking into consideration traditional notions of res judicata as well as
the plain language of the statute and relevant regulations. Id. at 1511. We stated
a claimant establishes a material change in conditions by proving each element
“has worsened materially since the time of the prior denial.” Id. Practically
speaking, in order for an administrative law judge to determine whether a
claimant establishes this necessary change in his or her physical conditions, the
administrative law judge should determine whether evidence obtained after the
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prior denial demonstrates a material worsening of those elements found against
the claimant. Id. at 1512.
Having articulated the relevant standard, we now turn to the case before us.
We first review the administrative law judge’s material change in conditions
analysis with respect to the presence of the pneumoconiosis element and then
review his analysis for the total disability element.
A. Pneumoconiosis
Before reviewing the evidence to make his material change in conditions
determination, the administrative law judge correctly articulated the Wyoming
Fuel standard: “In order to meet the claimant’s threshold burden of proving a
material change in a particular element, ... the claimant need show only that this
element has worsened materially since the time of the prior denial.” However, in
determining whether a material change in conditions actually took place with
respect to whether Mr. Shertzer contracted pneumoconiosis, the administrative
law judge misapplied the standard by comparing evidence available at the time of
the 1997 denial of Mr. Shertzer’s request for modification to the evidence
available at the time of the most current review. The administrative law judge
should instead have compared the evidence available at the time of the 1983 claim
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with the evidence currently at his disposal. The administrative law judge’s
comparison baldly does not comply with the mandate of Wyoming Fuel because of
this erroneous comparison.
Despite this error, Mrs. Shertzer contends the Board’s decision may still be
affirmed by this court, arguing the error is harmless. 4 She reasons the erroneous
time frame considered is irrelevant because the administrative law judge found a
material change of conditions. We disagree. Apart from the error made by the
administrative law judge in comparing conditions during the wrong time period,
he also failed to point to any specific evidence or facts establishing a material
change in conditions from the 1983 denial. Without this analysis, nothing
prevents Mrs. Shertzer from simply relitigating the denial of the original 1983
claim. In other words, in this duplicate claim situation, a distinction must be
made “between an actual worsening in [the] miner’s health and the presentation of
evidence tending to show that the prior denial was wrong.... When the miner does
not make [a material change] showing, there is no assurance that the same issue is
not being adjudicated in the duplicate claim as in the prior denial.” Wyoming
Fuel, 90 F.3d at 1510.
4
The Director concedes the administrative law judge erred in applying Wyoming
Fuel, but likewise asserts the error was harmless.
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In this case, a comparison must be made of the evidence presented for each
claim. In finding for Mrs. Shertzer, the administrative law judge relied primarily
on new evidence obtained after the claimant’s death to conclude Mr. Shertzer
suffered from coal workers’ pneumoconiosis at the time of his death.
Specifically, he placed great weight on the reports of Drs. John A. Heidingsfelder
and Francis H.Y. Green. Both doctors concluded Mr. Shertzer suffered from
mixed dust pneumoconiosis. Dr. Heidingsfelder, who performed the autopsy on
Mr. Shertzer’s body, based his medical opinion on the autopsy as well as
pathology reports. Dr. Green based his opinion on pathology slides, x-ray reports,
pulmonary function and arterial blood gas studies, the autopsy report, and other
medical reports, but placed great weight on the autopsy report in his ultimate
conclusion. Alternatively, in the original 1983 denial, it appears the Director
relied primarily upon a number of x-ray interpretations that the Director
concluded did not “show” the presence of pneumoconiosis.
Because the type of evidence relied on in these two proceedings differs, a
specific finding by the administrative law judge on this issue was required.
Unlike comparisons between two sets of x-rays clearly showing a marked change
over time, reliance on different types of evidence in analyzing a claimant’s past
and present condition does not provide a clear answer for the differences in their
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results. See id. at 1511 (“[To meet the threshold burden] a claimant might offer
to compare past and present x-rays reflecting that any conditions suggesting ...
pneumoconiosis have become materially more severe since the last claim was
rejected.”) Such a discrepancy in the results between different types of evidence
can have explanations other than a material change in conditions. For instance, in
this case, the older x-ray evidence simply may have not shown or established the
presence of disease, although discoverable by the new evidence produced by the
more invasive physical autopsy examination. 5
By not specifically addressing the prior evidence in making his material
change determination, which specifically found Mr. Shertzer had not shown the
existence of pneumoconiosis in 1983, this court cannot determine from the record
whether the administrative law judge’s material change-in-conditions finding was
based on his determination of an actual material worsening of Mr. Shertzer’s 1983
condition or on another explanation, which might only establish the presentation
of evidence tending to show the prior denial was wrong, leading to an improper
adjudication of the first claim. See Wyoming Fuel, 90 F.3d at 1510. Therefore, to
5
Of note is the fact the administrative law judge also found x-ray evidence from
1998 unhelpful in establishing a material change in conditions for Mr. Shertzer’s
pneumoconiosis claim.
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ensure compliance with res judicata principles, we must remand this issue to the
administrative law judge for further consideration.
B. Total Disability
In addition to the incorrect analysis as to the presence of pneumoconiosis
element, we also conclude the administrative law judge erred by not making the
threshold material change inquiry with respect to the total disability element.
Because the administrative law judge relied on the other administrative law
judge’s determination Mr. Shertzer was totally disabled, he determined it
unnecessary to consider whether a material change in conditions occurred with
respect to the claimant’s disability status. 6 This inquiry is mandated, however,
because in 1983, the Director found Mr. Shertzer failed to establish any of the
necessary elements to receive benefits. 7 We therefore remand this issue as well.
6
Although the administrative law judge is correct in stating the other
administrative law judge found Mr. Shertzer disabled, it is unclear whether he found the
claimant disabled due to pneumoconiosis. We direct the Board to address this issue on
remand.
7
McNally also argues a claimant should be required to also prove a material
change in conditions as to the causation element. We disagree. As discussed in Wyoming
Fuel, because the element requiring a claimant to show his or her pneumoconiosis arose
at least in part from coal mine element is not technically progressive like the other two
elements, a claimant need not demonstrate a material change for this element to pass the
threshold inquiry. Wyoming Fuel, 90 F.3d at 1512 n.17.
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IV. Conclusion
In sum, we hold the Board erred in affirming the administrative law judge’s
decision that erroneously failed to properly apply the material change-in-
conditions standard in determining a worsening of Mr. Shertzer’s physical
condition occurred and finding him totally disabled. Because we conclude the
administrative law judge incorrectly applied the legal standard of Wyoming Fuel
on these points, we REMAND Mr. Shertzer’s claim for further proceedings
consistent with this opinion and VACATE the Board’s award of benefits.
Entered by the Court:
WADE BRORBY
United States Circuit Judge
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