Venicassa v. Consol Coal Co

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
2-27-1998
Venicassa v. Consol Coal Co
Precedential or Non-Precedential:
Docket 96-3736
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Filed February 27, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 96-3736
ARMANDO VENICASSA,
Petitioner
v.
CONSOLIDATION COAL COMPANY
and
DIRECTOR, OFFICE OF WORKERS' COMPENSATION
PROGRAMS, UNITED STATES DEPARTMENT OF LABOR,
Respondents
On Petition for Review of an Order of the Benefits
Review Board, United States Department of Labor
BRB No. 95-1760
Argued September 25, 1997
Before: COWEN, ROTH and LEWIS, Circuit Judges
(Opinion Filed February 27, 1998)
Robert L. Johnson, Esquire (Argued)
Paul A. Tershel, Esquire
Tershel & Associates
55 South Main Street
Washington, PA 15301
Attorneys for Armando Venicassa
J. Davitt McAteer,
Acting Solicitor of Labor
Donald S. Shire,
Associate Solicitor
Christian P. Barber, Esquire
Jeffrey S. Goldberg, Esquire (Argued)
United States Department of Labor
200 Constitution Avenue, N.W.
Suite N-2605
Washington, D.C. 20210
Attorneys for Director, Office of
Workers' Compensation Programs,
United States Department of Labor
William S. Mattingly, Esquire
(Argued)
Jackson & Kelly
600 Hampton Center, Suite B
P.O. Box 619
Morgantown, WV 26507
Attorney for Consolidated Coal
Company
OPINION OF THE COURT
ROTH, Circuit Judge:
Armando Venicassa has filed a Petition for Review from
the decision of the Benefits Review Board ("Board"),
affirming the denial by the Administrative Law Judge
("ALJ") of Venicassa's claim for black lung benefits under
the Black Lung Benefits Act, 30 U.S.C. S 901, et. seq. (the
"Act"). In an earlier hearing, the ALJ had dismissed United
States Steel Corporation, the responsible coal mine
operator, designated by the Office of Worker's
Compensation Programs ("OWCP"), and had awarded
benefits to Venicassa, to be paid by the Black Lung
Disability Trust Fund ("Trust Fund"). The Director of the
OWCP appealed this decision to the Board. The Board then
remanded Venicassa's claim to the OWCP to permit the
OWCP to identify a second responsible operator to pay
2
benefits. We must decide whether, after the award on the
merits to Venicassa, the Board could vacate that award so
that the ALJ might designate a second responsible operator
and begin the process all over again.
For the reasons we discuss below, we conclude that the
Board erred when it remanded this case for designation of
a second responsible operator. We will, therefore, grant the
petition for review, vacate the decision of the Board, and
remand this case to the Board to reinstate the ALJ's ruling,
granting Venicassa's claim for benefits and ordering the
Trust Fund to pay them.1
We have appellate jurisdiction in this matter pursuant to
the Longshoreman's and Harbor Workers' Compensation
Act, 33 U.S.C. S 902, made applicable to Black Lung
Benefits cases by 30 U.S.C. S 932(a). The decision of the
Benefits Review Board is a final order under Section 21(c)
of the Longshoreman's and Harbor Workers' Compensation
Act, 33 U.S.C. S 921(c) as incorporated by section 422(a) of
the Black Lung Benefits Act, 30 U.S.C. S 932(a).
FACTS AND PROCEDURAL BACKGROUND
This case comes to us with a lengthy procedural history,
due in large part to the long delay by the OWCP in
processing Venicassa's claim and to the acknowledged error
by the OWCP in designating the responsible coal mine
operator.2
_________________________________________________________________
1. We are also asked to decide whether the ALJ's determination at a
second hearing, denying benefits, was supported by substantial
evidence. Venicassa submits that the denial of benefits by the ALJ on
remand was irrational because the ALJ relied on the same medical
evidence that he had relied on to make the initial award of benefits.
Because of our decision on the second designation issue, we do not need
to reach this question.
2. Unfortunately, the OWCP's failure to designate the proper responsible
operator at the outset has exacerbated a problem all too familiar to us.
We have confronted a disturbing record of delay in processing claims for
black lung benefits in prior cases. See Kowalchick v. Director, OWCP, 893
F.2d 615 (3d Cir. 1990) (Benefits awarded 17 years after the initial claim
was filed); Lango v. Director, OWCP, 104 F.3d 573 (3d Cir. 1997) (noting
long delay in processing claim for benefits).
3
The petitioner in this case, Armando Venicassa, worked
in and around coal mining operations for 43 years before
he retired in 1985. In 1986, he filed a claim with the OWCP
for benefits under the Black Lung Benefits Act. Under the
Act, benefits are awardable to persons who are totally
disabled due to pneumoconiosis, a disease known as "black
lung." The OWCP processed Venicassa's claim for benefits
with the information he supplied. Venicassa indicated
clearly on his claim form that his most recent employer was
Consolidation Coal Company, for whom he worked from
January 1984 until his retirement in August 1985.
However, despite being supplied with accurate information,
the OWCP erroneously designated United States Steel
Corporation ("U.S. Steel") as the responsible operator.3
Venicassa's claim was then referred to the Department of
Labor's Office of Administrative Law Judges for a formal
hearing. In February 1987, the Director of the OWCP
moved to remand the case for identification of another
responsible operator. This motion to remand came 13
months after Venicassa had provided the OWCP with the
information to identify the proper responsible operator. In
August 1988, prior to the formal hearing on Venicassa's
claim, the ALJ denied the motion to remand.4 Citing the
Benefits Review Board decision in Crabtree v. Bethlehem
Steel Corp.,7 BLR 1-354 (1984), the ALJ held that due
process concerns dictated that the hearing go forward and
that, if U.S. Steel was not the responsible operator, it would
be dismissed and the Director of the OWCP substituted to
defend the claim. At the hearing, Venicassa testified that
U.S. Steel had been improperly designated as the
responsible operator. The ALJ then dismissed U.S. Steel
and substituted the Director.
_________________________________________________________________
3. Venicassa indicated on his claim form that he was employed by U.S.
Steel from 1942 until January 1984. The regulations define "responsible
operator" as "the operator or other employer with which the miner had
the most recent periods of cumulative employment of not less than one
(1) year..." 20 C.F.R. S 725.493 (a)(1).
4. The record reflects that the ALJ, who ruled on the remand motion in
August 1988, did not receive the case until May or June of that year
even though the case was referred to the Office of Administrative Law
Judges in September of the previous year. Appendix 56-57.
4
To succeed on a claim for black lung benefits, a claimant
must establish that he suffers from pneumoconiosis and,
as a result, is totally disabled. In addition, the claimant
must establish that the pneumoconiosis is the result of coal
mining. Under the Act, pneumoconiosis may be established
by x-ray evidence or by a finding of a physician that the
miner suffers from the disease. 30 U.S.C. S 902(f)(1) (1986);
20 C.F.R. S 718.202.
At the hearing, the ALJ concluded that Venicassa's chest
x-rays did not establish pneumoconiosis. However, the ALJ
also heard five medical experts, four of whom diagnosed
some form of lung disease related to coal dust exposure.
The one physician, who did not find lung disease related to
coal exposure, did so without providing his reasoning. The
ALJ, therefore, ascribed little weight to that opinion. The
ALJ concluded that the weight of medical opinion
established the finding of pneumoconiosis. Since Venicassa
had at least 10 years of coal mining employment, the ALJ
found that Venicassa was entitled to the statutory
presumption that his pneumoconiosis arose as a result of
coal mine employment. 30 U.S.C. S 921(c) (1986). The ALJ
credited Venicassa with 43 years of coal mine employment
and found evidence sufficient to establish the existence of
pneumoconiosis due to that employment. As a result, on
June 23, 1989, the ALJ awarded benefits to Venicassa.
The Director appealed this decision to the Benefits
Review Board. In its review of the ALJ's decision, the Board
did not address the merits of the entitlement to benefits.
Instead, it vacated the award and remanded the case to the
deputy commissioner for determination of another
responsible operator. The Board found it significant that
the Director had filed the Motion to Remand before a formal
hearing had been held. For this reason, the Board held that
the due process concerns of relitigating the case were less
compelling than those facing the Crabtree Court.
On remand, the OWCP designated Consolidation Coal as
the responsible operator. Venicassa's benefits were then
stopped. In December 1994, a second hearing on
Venicassa's eligibility for benefits was held before the same
ALJ. Consolidation Coal submitted evidence in addition to
that presented at the first hearing. Venicassa submitted
5
only the record of the medical evidence from thefirst
hearing. In addition, Venicassa testified about the
deterioration of his health during the more than five years
since the initial award of benefits. The physicians, who had
presented medical testimony at the first hearing regarding
Venicassa's respiratory problems, did not testify in person
at the second hearing.
At the conclusion of the second hearing, the ALJ denied
Venicassa's claim for benefits. Venicassa appealed to the
Benefits Review Board on June 23, 1995. On October 22,
1996, the Board issued a final decision, affirming the
decision of the ALJ. Venicassa then timely filed his petition
for review with this Court.
ANALYSIS
We review decisions of the Benefits Review Board and of
the ALJ for errors of law. Lango v. Director, OWCP, 104 F.3d
573, 575 (3d Cir. 1997); Kowalchick v. Director, OWCP, 893
F.2d 615, 619 (3d Cir. 1990).
The petitioner contends that the Board's reversal of the
award of benefits and its decision to remand this case for
the designation of a second responsible operator violated
due process and subjected him to substantial prejudice. He
argues that to make him relitigate a claim, on which he has
already won an award of benefits on the merits, violates
due process. He further contends that, under the rationale
of the Benefits Review Board in Crabtree, the efficient
administration of the Black Lung Benefits Act dictates that
the case should not have been remanded and that the
Trust Fund should be reinstated as payor.
The Director argues that, although a mistake occurred in
the designation of U.S. Steel as the responsible operator at
the outset, the Director attempted to correct the mistake
with the motion to remand for designation of another
responsible operator. The Director further contends that the
ALJ's denial of that motion was in error and that the Trust
Fund is not the appropriate payor because ultimately
Consolidation Coal was identified as the responsible
operator.
6
We begin our review with an examination of the
regulations, under the Black Lung Benefits Act, which
govern the designation of a responsible operator. These
regulations provide:
At any time during the processing of a claim under this
part, after sufficient evidence has been made available
to the deputy commissioner, the deputy commissioner
may identify a coal mine operator...which may be liable
for the payment of the claim .... Such identification
shall be made as soon after the filing of the claim as
the evidence obtained permits ....
20 C.F.R. S 725.412(a). The responsible operator is defined
as "the operator or other employer with which the
individual had the most recent periods of cumulative
employment of not less than one (1) year." 20 C.F.R.
S 725.493(a)(1).
It is uncontested that, as of January 1986 when
Venicassa first filed his claim, the OWCP had all the
evidence necessary to designate the proper responsible
operator. However, the Director argues that, under the Act
and the applicable regulations, a coal mine operator may be
designated as responsible operator for the purposes of
defending a claim for Black Lung Benefits "at any time"
during the processing of the claim. The Director claims,
therefore, that the ALJ improperly refused to remand the
case for the designation of a second responsible operator.
The regulations also state, however, that the
identification of the responsible operator shall be made "as
soon after the filing of the claim as the evidence obtained
permits." For this reason, Venicassa argues that, since from
the outset the Director had enough information to name the
proper responsible operator, Venicassa should not be
penalized for the Director's failure to do so. Venicassa
contends that, because the OWCP did not make a prompt
resolution of the responsible operator issue, the ALJ's
decision to go forward with the hearing on the merits was
appropriate; to proceed otherwise would have subjected
Venicassa to further substantial delay in the processing of
his claim.
7
When the ALJ considered the Director's motion to
remand the case for designation of another responsible
operator, he relied on the decision of the Benefits Review
Board in Crabtree. In Crabtree, the Board dismissed
Bethlehem Steel as the responsible operator. Instead,
however, of remanding the case for identification of another
responsible operator, the Board held that the Trust Fund
would be liable for benefits because the delay involved in
relitigating the claim would offend due process. In Crabtree,
the Board concluded that "the Department of Labor is not
entitled to a second opportunity to identify another putative
responsible operator." Id. at 1-356-357.
Remand for reconsideration of the operator issue
would be tantamount to relitigating the claim. If the
Department identifies another responsible operator,
then that operator is entitled to contest the claim,
develop its own evidence, request a hearing, etc., until
it has exhausted the full gamut of available procedures
for adjudicating entitlement. The fact that claimant has
established entitlement against employer does not bind
any other operator(s) who were not a party to the
proceedings. This piecemeal approach encourages two
undesirable results. First, a claimant who has
established entitlement in the first round of
proceedings may lose his award in a later round
against another operator. A first finding of entitlement,
even though fully developed and litigated, can be
defeated in subsequent proceedings by a different
operator, and not always on the merits. Second,
piecemeal litigation obviously is not compatible with
the efficient administration of the Act and expeditious
processing of claims.
In view of the aforementioned considerations, the
Department must resolve the operator issue in a
preliminary proceeding, see 20 C.F.R. S725.412(d),
and/or proceed against all putative responsible
operators at every stage of the claims adjudication.
Even a separate preliminary proceeding on the operator
issue alone is more desirable than fully litigating the
claim against each operator individually. ... The Trust
Fund therefore must assume liability in the absence of
any other potentially liable operator.
8
Id. at 1-357.
The Director contends, however, that Crabtree should not
have prevented the OWCP from identifying Consolidation
Coal as the responsible operator even after the ALJ had
awarded benefits payable by the Trust Fund. The Director
urges that the critical distinction between Venicassa's case
and the Crabtree decision is that here a motion to remand
was filed before the hearing on the merits. Therefore,
Crabtree does not apply. The Director contends that
remand, at the time that the motion was filed, would have
been appropriate under Crabtree because remand would
have been prior to litigation of the claim; Crabtree held only
that the Director could not wait until after the ALJ had
awarded benefits against the Trust Fund before seeking to
identify a second responsible operator. Because the motion
to remand was filed 18 months before the hearing on the
merits and was denied prior to the hearing, the Director
claims he did not have an opportunity to ascertain the
correct responsible operator.5
_________________________________________________________________
5. In making this argument, the Director also relies on Director, OWCP v.
Trace Fork Coal Company, 67 F.3d 503 (4th Cir. 1995). However, Trace
Fork does not in fact support the Director's position. In Trace Fork, the
ALJ dismissed the coal company as responsible operator, refusing to
remand the case for the designation of another responsible operator, and
then named the Trust Fund as payor. The ALJ awarded benefits and the
Director appealed the ALJ's finding that the Trust Fund was liable. The
Benefits Review Board affirmed the ALJ's ruling. The Fourth Circuit held
that dismissal of Trace Fork as responsible operator was proper and
affirmed the refusal to remand for the naming of another responsible
operator. The Board and the Fourth Circuit based their decisions on
Crabtree and on the holding in that case that the Director must resolve
the responsible operator issue in a preliminary proceeding or else
proceed against all potential operators at each stage of the adjudication
in order to avoid piecemeal litigation and due process concerns. The
Trace Fork court found that to remand the case would allow a second
operator to challenge the claimant's entitlement to benefits. The court
concluded, "We are unwilling to potentially upset the finding that
[claimant] is entitled to benefits, a matter already fully litigated on
the
merits. The Director had full opportunity, and even a motion, to
ascertain the responsible operator as a preliminary matter, but simply
refused." Trace Fork, 67 F.3d at 508.
9
In resolving the motion to remand in the instant case, the
ALJ concluded that the "Director blew it" in failing to name
the proper responsible operator. (Appendix 56). For this
reason, the ALJ dismissed U.S. Steel and substituted the
Trust Fund as the responsible party. The ALJ's decision
places the incentives in the proper place -- the Director
should have gotten it right the first time. That would not
have been an onerous task because, from the outset, the
OWCP had in its possession all the information necessary
to name the proper responsible operator.
The Director, however, argues that the plain language of
the regulations allows for the designation of a responsible
operator "at any time" during the processing of the claim.
Therefore the OWCP should be allowed to rectify its
mistake. The Director relies on the Sixth Circuit's decision
in Director, O.W.C.P. v. Oglebay Norton Company, 877 F.2d
1300 (6th Cir. 1989).
Although we have not decided a case involving the failure
of the OWCP to correctly name the responsible operator in
the first instance, Oglebay addresses such a situation in a
black lung, widow's benefits case. In Oglebay, the court
considered the identification of a responsible operator
nearly ten years after the claim was filed. The Director
appealed a decision of the Benefits Review Board which had
dismissed the company as responsible operator. The Sixth
Circuit held that the identification of the company as
"responsible operator" nearly ten years after the claim was
filed was valid and that the transfer of liability to the Fund
was improper. In reaching this conclusion, the Sixth Circuit
interpreted the regulation, governing the identification of
the responsible operator (20 C.F.R. S 725.412(a)). The Court
noted that the regulation permits identification of the
responsible operator at any time during the processing of
the claim. In addition, the Sixth Circuit found the transfer
of liability to the Trust Fund to be improper when there is
an affirmative identification of a responsible operator.
Oglebay, 877 F.2d at 1304. The court reasoned that neither
the applicable statutes nor regulations indicated that
identification of the responsible operator should be
disregarded merely because it was inefficiently reached; the
operator would not be substantially prejudiced in defending
the matter on its merits.
10
The Director asks us to disregard Crabtree and follow the
Sixth Circuit's reasoning in Oglebay. We are not, however,
bound by Oglebay. Moreover, the instant case is easily
distinguishable from Oglebay. First, Oglebay involved a
dispute between the OWCP and the responsible operator.
The case before us involves a dispute between the claimant,
the Director, and the putative responsible operator. Second,
in Oglebay the ALJ decided to remand the case for
determination of another responsible operator prior to
holding a hearing on the merits. In the instant case, the
decision to remand was made after a formal hearing on the
merits and after the ALJ had awarded benefits. In other
words, the Crabtree concerns about due process and
piecemeal litigation -- relied on by the ALJ in denying the
motion to remand -- are greater in the instant case than
were those faced by the court in Oglebay.
Moreover, there is another important distinction between
this case and Oglebay. The Oglebay court reasoned that
inefficient identification of the responsible operator does not
invalidate that identification. In our case, however, the
Director had before it all the relevant information necessary
to designate the proper responsible operator -- but failed to
do so. The OWCP's failure here is more than mere
inefficiency. Indeed, this failure penalized Venicassa, who
had already litigated the case on the merits and won. It also
penalized Consolidation Coal, which had to litigate a 10
year old claim.
The Director contends, however, that, because the motion
to remand was made prior to litigation of the claim on the
merits, remand and designation of a responsible operator
were appropriate and did not raise due process concerns.
Consolidation Coal argues, on the other hand, that the
critical issue here is not the timing of the motion to remand
but the timing of the identification of the responsible
operator. To resolve this dispute, we must go back to the
language of the regulation.
The regulation allows for the designation of a responsible
operator "at any time." Thus, the Director asserts that,
upon receiving the motion to remand, the ALJ should have
allowed the designation of a second responsible operator.
The Director argues that, while the OWCP clearly erred in
11
failing to identify Consolidation Coal as the responsible
operator at the outset, the ALJ erred in denying the motion
to remand the case in order to correct the problem. The
Director contends that the Act gives the OWCP sole
responsibility for identifying the responsible operator who
may be liable for payment of benefits. 20 C.F.R.
SS 725.410(b), 725.412. The Director relies on the
regulatory language which provides for designation of a
responsible operator "at any time during the processing of
a claim" and contends that a claim is still being "processed"
even after it is referred to the ALJ for a hearing.
While the regulation clearly states that the designation of
the responsible operator may be made "at any time," the
language of the regulation triggers the process by providing
that the designation be made "after sufficient evidence has
been made available to the deputy commissioner." The
regulation then further limits the process by providing that
the designation "shall be made as soon after thefiling of
the claim as evidence obtained permits." 20 C.F.R.
S 725.412(a). The focus of the regulation is clearly on the
swift and accurate designation of the responsible operator
so that the claim may be resolved through the presentation
of evidence to the fact finder by the appropriate parties.
Because the OWCP did not make a timely designation of
the proper responsible operator, nor did it even make a
timely attempt to correct its misdesignation or to add
Consolidation Coal as a potential responsible operator, we
conclude that the ALJ at the first hearing correctly
designated the Trust Fund as the defending party. 6
Moreover, this result is consistent with the purpose
behind the establishment of the Trust Fund. The Trust
Fund was established by the Black Lung Benefits Revenue
Act of 1977 "to provide a more effective means of
transferring the responsibility for the payment of benefits
from the Federal government to the coal industry ...." 20
C.F.R. S 725.490(a). The Black Lung Benefits Revenue Act
of 1977, (Pub. Law 95-227) (92 Stat. 11) (1978
_________________________________________________________________
6. Contrary to the approach of the petitioner, and to the views expressed
in the dissent, we do not ground our decision on due process
considerations.
12
U.S.C.C.A.N.) (codified at 30 U.S.C. S 934a). The fund is
financed by the coal industry through an excise tax on the
sale of coal. 26 U.S.C. S 9501.
The Director argues that the Trust Fund should not be
liable in this instance because the Trust Fund was created
to assume liability for benefits in the event that no
responsible operator could be found. The statute provides
that the Trust Fund is available for the payment of benefits
in any case in which the Secretary determines that "there
is no operator who is required to secure the payment of
such benefits." 26 U.S.C. S 9501(d)(B).7
In order to support its argument that the Trust Fund
should be liable only in the absence of an identifiable
responsible operator, the Director emphasizes a portion of
the Act's legislative history which states that Congress
intended to ensure that individual coal operators, rather
than the Trust Fund, would be liable for claims.8 The Sixth
Circuit relied on these statements in holding that, where a
responsible operator has been identified, the transfer of
_________________________________________________________________
7. The provision reads that the Trust Fund shall be liable for the
payment of benefits in any case in which the Secretary determines that:
(a) the operator liable for the payment of such benefits --
(i) has not commenced payment of such benefits within 30 days
after the date of an initial determination of eligibility by the
Secretary, or
(ii) has not made a payment within 30 days after the payment is
due,
(b) there is no operator who is required to secure payment of such
benefits, ...
26 U.S.C. S 9501(d) (emphasis added).
8. "It is further the intention of this section, with respect to claims
related to which the miner worked on or after January 1, 1970, to
ensure that individual coal operators rather than the trust fund bear the
liability for claims arising out of such operator's mines, to the maximum
extent feasible." S. Rep. 209, 95th Cong., 1st Sess. 9 (1977), reprinted
in
House Comm. On Educ. And Labor, 96th Cong., Black Lung Benefits
Reform Act and Black Lung Benefits Revenue Act of 1977, 612 (Comm.
Print 1979). See also Old Ben Coal Co. v. Luker, 826 F.2d 688, 693 (7th
Cir. 1987).
13
liability to the Trust Fund is improper. Oglebay, 877 F.2d
at 1304.
However, investigation into the legislative history
indicates that Congress did not contemplate the situation
before us. Indeed, the Trust Fund's architects were
motivated by a desire to curb the ability of coal mine
operators to transfer assets in order to sidestep liability as
responsible operators.
At the time of the Trust Fund's creation, its drafters were
cognizant of the structural changes in the coal industry
which resulted in the consolidation of numerous coal
companies and the disappearance of others. They were
particularly conscious of the impact of these changes on
future claimants and of their effect on the responsibility of
successor and former operators.9
During the last two decades, the coal industry has
undergone major structural changes. Of the 50 largest
coal companies, 29 have become captive of other
industries ...In most instances, these acquisitions
transferred intact the ownership of the mines and
operations of existing coal producers to the larger and
more diversified parent corporations. ... It was
originally the intent of Congress that such entities
should bear the liability for black lung diseases arising
out of employment in their mines ... .
S. Rep. 209, at 9.
Thus, while the Act evidences an intent that individual
coal mine operators, rather than the Trust Fund, assume
liability for the payment of black lung benefits, the rationale
behind this determination is the protection of claimants
_________________________________________________________________
9. "When the black lung benefits provisions of the Federal Coal Mine
Health and Safety Act of 1969 were first enacted, it was the expectation
of Congress that after the Federally financed portion of the program
terminated, individual coal mine operators would assume the liability for
benefits either under an approved state workers' compensation program
or under Part C of the Federal Act. In order to facilitate assessment of
liability against coal mine operators, Section 422(I) prohibited the
avoidance of such liability by coal mine operators through the
mechanism of a post enactment transfer of assets...." S. Rep. 209 at 8.
14
from the denial of benefits due to the disappearance of any
responsible operator. Here, because of the failure of the
OWCP to identify the responsible operator "as soon after
the filing of the claim as the evidence obtained permits," it
is the claimant who will suffer unless the Trust Fund
assumes responsibility for payment of the benefits. This
result will protect the claimant, which is the purpose of the
Act.
CONCLUSION
The Black Lung Benefits Act was enacted in order to
ensure benefits for coal miners who have been totally
disabled due to black lung disease as a result of their work
in coal mines. Despite possessing accurate information
regarding Venicassa's employment history, the Office of
Worker's Compensation Programs failed to designate the
proper responsible operator to defend the claim. As a result
of this failure, the Benefits Review Board ruled that
Venicassa had to relitigate his claim. We conclude,
however, that the OWCP's failure to make a timely
designation of the proper responsible operator should not
have jeopardized the award of benefits which had been
made to Venicassa. We will, therefore, grant the petition for
review, vacate the decision of the Benefit's Review Board,
and remand this case for reinstatement of the June 23,
1989, order and award of the Administrative Law Judge.
15
COWEN, Circuit Judge, dissenting.
Today the majority holds that a district director is not
authorized, under any circumstances, to correct a mistaken
responsible operator identification. Because this holding is
contrary to, inter alia, the Director's reasonable
interpretation of 20 C.F.R. S 725.412(a) and (c),
congressional intent, and the Sixth Circuit's decisions in
Caudill Construction Co. v. Abner, 878 F.2d 179 (6th Cir.
1989) and Director, OWCP v. Oglebay Norton Co., 877 F.2d
1300 (6th Cir. 1989), I must respectfully dissent.
I.
The standards governing our review of an agency's
interpretation of its own regulations are well known and not
in dispute. We owe "substantial deference" to the agency's
interpretation, which has " ``controlling weight unless it is
plainly erroneous or inconsistent with the regulation.' "
Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114
S. Ct. 2381, 2386 (1994) (quoting Bowles v. Seminole Rock
& Sand Co., 325 U.S. 410, 414, 65 S. Ct. 1215, 1217
(1945)); see also Sekula v. FDIC, 39 F.3d 448, 453 (3d Cir.
1994). Absent constitutional or statutory violations, the
only circumstance in which we do not defer is where "an
``alternative reading is compelled by the regulations's plain
language or by other indications of the [agency's] intent at
the time of the regulation's promulgation.' " Thomas
Jefferson Univ., 512 U.S. at 512, 114 S. Ct. at 2386-87
(quoting Gardebring v. Jenkins, 485 U.S. 415, 430, 108
S. Ct. 1306, 1314 (1988)). "In addition, we give judicial
deference to the Director, as policymaker, rather than to
the Board, which is purely an adjudicator." Director, OWCP
v. Eastern Coal Corp., 54 F.3d 141, 147 (3d Cir. 1995)
(citations omitted). I believe that the majority fails to adhere
to these fundamental principles. Indeed, the most striking
aspect of the majority's opinion is its complete failure even
to mention our duty, under most circumstances, to defer to
an agency's interpretation of its own regulations.
II.
Section 725.412 provides, in pertinent part, as follows:
16
(a) At any time during the processing of a claim
under this part, after sufficient evidence has been
made available to the [district director], the[district
director] may identify a coal miner [sic] operator (see
S 725.491) which may be liable for payment of the
claim. . . . Such identification shall be made as soon
after the filing of the claim as the evidence obtained
permits. . . .
. . . .
(c) If within one year after the final adjudication of a
claim, the adjudication officer determines that an
operator which may be liable for the payment of
benefits has not been notified under this section, such
adjudication officer shall give notice of possible liability
and an opportunity to respond to such operator. The
adjudication officer shall then take such further action
on the claim as may be appropriate.
20 C.F.R. S 725.412(a), (c).
A. The Director's Interpretation
According to the Director, section 725.412 provides that:
(1) a district director1 is authorized to correct mistaken
responsible operator identifications; (2) such corrections
may occur "at any time" during the processing of a claim,
and up to one year after final adjudication; and (3) a
district director has no duty--beyond the "at any time"
limitation above--to identify a responsible operator within a
reasonable time after the information necessary to make an
identification becomes available to him. Each of these
contentions will be addressed in turn.
1. Ability to Make Corrections
The Director asserts that section 725.412 "clearly
authorizes the correction of a mistaken responsible
_________________________________________________________________
1. A district director is a person authorized to develop and adjudicate
claims for black lung benefits. For administrative purposes only,
regulations substitute the term district director for the term deputy
commissioner, which is found in the Longshore Act. See 20 C.F.R.
S 725.101(a)(11).
17
operator identification . . . ." Respondent's Br. at 12. I
agree. There is simply nothing in the regulation that is
inconsistent with this interpretation. Nor does this
interpretation conflict with any statutory or constitutional
provisions. On the contrary, the Director's view effectuates
clear congressional intent to limit Trust Fund liability to
those instances in which no responsible operator can be
identified. See 26 U.S.C. S 9501(d). Moreover, it is
supported by two persuasive Sixth Circuit decisions. See
Oglebay, 877 F.2d at 1305 (corrections permitted pursuant
to section 725.412(a)); Caudill Const., 878 F.2d at 181
(corrections permitted pursuant to section 725.412(c)).
Consequently, we must defer to the Director's reasonable
interpretation.
2. Timing of Corrections
The Director next contends that section 725.412(a) and
(c) authorize the district director or ALJ to correct a
mistaken responsible operator identification "at any time"
during the processing of a claim, and up to one year after
a final adjudication. The Director also contends that the
ability to make such corrections is not limited to cases--
such as this one--where an attempt to correct a mistaken
identification occurs prior to final adjudication of a claim.
Once again, the Director's interpretation is not
inconsistent with the regulation. Moreover, it is not
inconsistent with due process. Due process is simply not
implicated when--as here--an attempt to correct a
misidentification is made prior to final adjudication of the
claim.2 Cf. Caudill Const., 878 F.2d at 181 (district director
authorized to correct misidentification of responsible carrier
"even where a final compensation order has been issued
against the operator"). While it might seem unfair to require
a claimant who has already proven entitlement once to
have to prove it again, relitigation of a finally-decided claim
_________________________________________________________________
2. Because a motion to remand was made prior tofinal adjudication of
the merits in this case, we need not consider the Director's position that
due process would not bar a district director's attempt to correct a
mistaken responsible operator identification when that attempt is not
made until after final adjudication.
18
is not unprecedented in the black lung program. The
statutorily prescribed modification procedure, for example,
allows a fact finder, upon any party's motion, to review
previously-considered facts and find a "mistake in a
determination of fact." 20 C.F.R. S 725.310. Indeed, the
Supreme Court has observed that
the "plain import of [the modification statute] was to
vest a [district director] with broad discretion to correct
mistakes of fact, whether demonstrated by wholly new
evidence, cumulative evidence, or merely further
reflection on the evidence initially submitted.
O'Keeffe v. Aerojet-General Shipyards, Inc., 404 U.S. 254,
256, 92 S. Ct. 405, 407 (1971) (per curiam). Thus, "the
statute and regulations give the [district director] the
authority, for one year after the final order on the claim, to
simply rethink a prior finding of fact." Jessee v. Director,
OWCP, 5 F.3d 723, 724-25 (4th Cir. 1993).
In addition, Venicassa had no expectation of finality in
the ALJ's 1989 award of benefits. See id. ("[T]he principle of
finality" just does not apply to Longshore Act and black
lung claims as it does in ordinary lawsuits."). The Director
appealed that decision to the Board, arguing not only that
the ALJ had erroneously denied the remand motion, but
that he had erred in awarding benefits.3 Venicassa had no
reason, therefore, to believe that the ALJ's award settled the
issue of his entitlement to benefits. His entitlement
remained at issue regardless of the identity of the liable
party. We must defer to the Director's interpretation of this
regulation.
_________________________________________________________________
3. By filing a motion to remand, and then renewing it at the hearing, the
Director did everything within his control to correct the mistaken
responsible operator identification before the ALJ awarded benefits
payable by the Trust Fund. The Director could not order the ALJ to
grant the motion, see Director, OWCP v. Newport News Shipbuilding and
Dry Dock Co., 514 U.S. 122, 134, 115 S. Ct. 1278, 1287 (1995); Old Ben
Coal Co. v. Luker, 826 F.2d 688, 696 n.4 (7th Cir. 1987), and an appeal
to the Board at that point would have been interlocutory.
19
3. Duty to Identify as Soon as Evidence Permits
Finally, the Director asserts that it is inappropriate to
mandate identification of a responsible operator within a
reasonable time after the information necessary to make an
identification becomes available to the district director.
Such a reading, according to the Director, "essentially reads
a time limitation into the regulation that ``would inject a
degree of uncertainty into future responsible operator
identifications.' " Respondent's Br. at 30 (quoting Oglebay,
877 F.2d at 1303).
The Director's interpretation of this language is
inconsistent with the regulation. While section 725.412(a)
includes the phrase "at any time during the processing of
the claim," it also includes the phrase "[s]uch identification
shall be made as soon after the filing of the claim as the
evidence obtained permits." Thus, the Director
impermissibly reads the second phrase completely out of
the regulation for all practical purposes. See Oglebay, 877
F.2d at 1306-07 (Wellford, J., dissenting). Because meaning
must be given to every word "so that no part will be
inoperative or superfluous, void or insignificant," Sekula, 39
F.3d at 454-55 n.16, this aspect of the Director's
interpretation is entitled to no deference.
4. Conclusion
Based on the foregoing, I conclude that a district director
is authorized to correct a mistaken responsible operator
identification at any time prior to final adjudication of a
claim. However, such corrections must be made within a
reasonable time after the information necessary to make
such a correction becomes available to him. Because the
Director sought to correct the mistaken identification in
this case approximately eighteen months before final
adjudication of the claim, he acted within a reasonable
time, and the ALJ should have granted his motion to
remand. I would therefore affirm the Board's decision to
vacate Venicassa's award so that the ALJ could designate
the proper responsible operator.
B. The Majority's Interpretation
According to the majority, section 725.412(a) must be
interpreted as follows:
20
While the regulation clearly states that the
designation of the responsible operator may be made
"at any time," the language of the regulation triggers
the process by providing that the designation be made
"after sufficient evidence has been made available to
the deputy commissioner." The regulation then further
limits the process by providing that the designation
"shall be made as soon after the filing of the claim as
evidence obtained permits." 20 C.F.R. S 725.412(a). The
focus of the regulation is clearly on the swift and
accurate designation of the responsible operator so
that the claim may be resolved through the
presentation of evidence to the fact finder by the
appropriate parties.
Maj. Op. at 12.
While the majority properly concludes that section
725.412(a) requires the designation of a responsible
operator as soon as the evidence reasonably permits, see
Oglebay, 877 F.2d at 1306-07 (Wellford, J., dissenting), it
fails to provide any mechanism for the correction of a
mistaken responsible operator identification, regardless of
how quickly and reasonably the attempted correction is
made. See Maj. Op. at 10 ("The ALJ's decision [to deny the
Director's motion to remand] places the incentives in the
proper place--the Director should have gotten it right the
first time. That would not have been an onerous task,
because, from the outset, the OWCP had in its possession
all the information necessary to name the proper
responsible operator.") (emphasis added). This view is
incorrect for several reasons.
First, the majority's interpretation is inconsistent with,
and completely ignores, our obligation to defer to an
agency's interpretation of its own regulations unless it is
plainly erroneous or inconsistent with the regulation.4 Here,
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4. The majority expressly disavows reaching its conclusion on due
process grounds. See Maj. Op. at 12 n.6. It does not, however, offer any
reason why the Director's interpretation is not owed"substantial
deference." Indeed, rather than defer to the Director's interpretation of
its own agency guidelines, the majority defers to the Benefit Review
21
the Director reads section 725.412 to permit the correction
of mistaken responsible operator identifications. Because
this view is not "plainly erroneous or inconsistent with the
regulation," see Caudill Const. Co., 878 F.2d at 181;
Oglebay, 877 F.2d at 1305, it is entitled to substantial
deference.
Second, the majority's conclusion that a district director
is never authorized to correct a mistaken responsible
operator identification fails to give any effect whatsoever to
section 725.412(c). Such a reading violates our duty "to give
each word of the [regulation] operative effect[,]" Smith v.
Magras, 124 F.3d 457, 462 (3d Cir. 1997), and renders this
provision "inoperative or superfluous, void or insignificant."
Sekula, 39 F.3d at 454-55 n.16 (quotation marks omitted).
Third, the majority view is at odds with clear
congressional intent, expressed over a period of years, to
limit Trust Fund liability to instances in which no
responsible operator can be identified. See 26 U.S.C.
S 9501(d). In creating the Trust Fund, Congress intended to
"ensure that individual coal operators rather than the trust
fund bear the liability for claims arising out of such
operator's mines to the maximum extent feasible." S. Rep.
No. 95-209, 95th Cong., 1st Sess. 9 (1977), reprinted in
House Comm. on Educ. and Labor, 96th Cong., Black Lung
Benefits Reform Act and Black Lung Benefits Revenue Act
of 1977, 612 (Comm. Print 1979); see also Old Ben Coal,
826 F.2d at 693.
_________________________________________________________________
Board's interpretation of section 725.412 in Crabtree v. Bethlehem Steel
Corp., 7 BLR 1-354 (1984). See id. at 11 ("In other words, the Crabtree
concerns about due process and piecemeal litigation . . . are greater in
the instant case than were those faced by the court in Oglebay."). Such
deference, however, is improper for two reasons. First, "we give judicial
deference to the Director, as policymaker, rather than to the Board,
which is purely an adjudicator." Eastern Assoc. Coal Corp., 54 F.3d at
147 (citations omitted). Second, Crabtree was wrongly decided because it
fails to provide for the correction of mistaken responsible operator
identifications and improperly injects a requirement into the regulation
that the responsible operator must be identified at a preliminary
proceeding. Crabtree; 7 BLR at 1-357; see also Director, OWCP v. Trace
Fork Coal Co., 67 F.3d 503, 508 (4th Cir. 1995) (requiring identification
of a responsible operator at a preliminary proceeding).
22
Finally, the majority's interpretation also conflicts with
the Sixth Circuit's decision in Oglebay, where at least two
judges (and possibly a third5) concluded that section
725.412(a) authorizes the correction of a mistaken
responsible operator identification.6 It is also at odds with
Caudill Construction, where the Sixth Circuit observed that
subsection (c) "permits notification of a new operator where
investigation reveals that prior identification was mistaken."
878 F.2d at 181. Contrary to the majority's interpretation of
the regulation, it is clear that section 725.412(a) and (c)
both authorize the correction of mistaken responsible
operator identifications.
I respectfully dissent.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
_________________________________________________________________
5. Although Judge Wellford expressed concern in his Oglebay dissent
with "giving the [district director] unfettered discretion to name a
responsible operator at any time, virtually without limitation[,]" 877
F.2d
at 1306 (Wellford, J., dissenting), and with "encourag[ing] sloppy and
unreasonable administration of the Act[,]" id. at 1307 (Wellford, J.,
dissenting), he did not consider whether section 725.412 authorized the
correction of mistaken responsible operator identifications. It is
interesting to note, however, that Judge Wellford joined the majority
opinion in Caudill Construction, a case decided just seven days before
Oglebay, which observed that section 725.412(c) "permits notification of
a new operator where investigation reveals that prior identification was
mistaken . . . ." 878 F.2d at 181.
6. The majority correctly observes that Oglebay is somewhat
distinguishable from the instant case because correction of the mistaken
responsible operator identification was made prior to final adjudication
of the claim. However, this distinction is immaterial because, as noted
above, relitigation of a finally-decided claim is: (1) consistent with the
regulation; (2) consistent with congressional intent; (3) not uncommon in
the black lung program; and (4) does not violate due process.
23