Thomas J. Smith, Inc. v. Director, Office of Workers' Compensation Programs

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 10-3762
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THOMAS J. SMITH, INC. and
ROCKWOOD CASUALTY INSURANCE COMPANY,
Petitioners
v.
DIRECTOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS,
UNITED STATES DEPARTMENT OF LABOR and WAYNE KOUGH,
Respondents
__________________________
On Petition for Review of a Final Order of the
Benefits Review Board,
United States Department of Labor
(Agency No. BRB 09-0741 BLA)
Administrative Law Judge: Hon. Michael P. Lesniak
__________________________
Submitted Under Third Circuit LAR 34.1(a)
April 16, 2012
Before: VANASKIE, ALDISERT and BARRY, Circuit Judges
(Filed: May 18, 2012)
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OPINION
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VANASKIE, Circuit Judge.
Thomas J. Smith, Inc. (“TSI”) petitions for review of a July 22, 2010, Decision
and Order of the Department of Labor’s Benefits Review Board (“Board”) that awarded
Black Lung Benefits Act benefits to Wayne E. Kough. See 30 U.S.C. §§ 901-944,
amended by the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, §
1556, 124 Stat. 119 (2010). The sole issue presented in the petition is whether the
Administrative Law Judge (“ALJ”) erred in denying TSI’s request to order Kough to
submit to a post-hearing physical examination. 1 We see no error and will deny the
petition for review.
I.
Kough suffers from chronic obstructive pulmonary disease (“COPD”), resulting in
a breathing impairment of sufficient severity to establish total disability. Kough filed a
claim for benefits under the Black Lung Benefits Act, 30 U.S.C. §§ 901-944, on April 24,
2007. TSI contested the claim, and a hearing was held before an ALJ on October 21,
2008.
Parties to federal black lung claims are required to exchange medical evidence
twenty days before a hearing. See 20 C.F.R. § 725.456(b)(2) (stating that “documentary
material, including medical reports, which was not submitted to the district director, may
be received into evidence . . . if such evidence is sent to all other parties at least twenty
days before a hearing is held in connection with the claim”). Both parties complied with
this requirement, exchanging their expert reports in advance of the twenty-day deadline.
1
We have jurisdiction to review TSI’s petition under 33 U.S.C. § 921(c).
2
TSI had Kough examined by its medical expert, Dr. Fino, on March 26, 2008. Dr.
Fino found that Kough was totally disabled by COPD, but concluded that cigarette
smoking, rather than exposure to coal dust, caused the disease. Dr. Fino’s report and
deposition testimony were admitted into evidence by the ALJ.
Kough prepared two expert medical reports in anticipation of the administrative
hearing. Dr. Rasmussen authored a report on September 9, 2008, after reviewing
Kough’s medical records and Dr. Fino’s report. Dr. Rasmussen concluded that Kough’s
exposure to coal dust was a material contributing factor to his totally disabling COPD.
Shortly thereafter, Dr. Begley examined Kough on September 23, 2008, and drafted a
report agreeing with Dr. Rasmussen’s conclusion that Kough’s disability had been
caused, at least in part, by his exposure to coal dust. Three days later, on September 26,
2008, Kough sent both reports to TSI – twenty-five days prior to the hearing.
Accordingly, Kough satisfied the requirement that documentary material, including
medical reports, be sent to the opposing party at least twenty days before the hearing. See
20 C.F.R. § 725.456(b)(2). TSI deposed Dr. Rasmussen about the content of his expert
report on October 15, 2008. The ALJ admitted this deposition testimony into evidence.
TSI did not depose or otherwise examine Dr. Begley before, during, or after the hearing.
During the ALJ hearing on October 21, 2008, and in a post-hearing brief, TSI
claimed that the Rasmussen and Begley reports were “surprise evidence” and that it
should be given an opportunity to rebut the reports with additional post-hearing evidence
of its own. TSI sought an order from the ALJ to require Kough to submit to a post-
hearing physical examination on December 5, 2008, to be conducted by Dr. Kaplan, a
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TSI expert, who had not previously offered a medical opinion in the case. The ALJ did
not order the post-hearing physical exam. Instead, the ALJ permitted TSI to submit
rebuttal evidence in the form of a supplemental report by Dr. Fino; or, in the alternative,
have Dr. Kaplan review the evidence of record and prepare a report. After reviewing all
the evidence, which included a TSI post-hearing rebuttal report authored by Dr. Kaplan,
the ALJ awarded Kough benefits. The Board affirmed.
II.
Federal black lung adjudications must comply with the due process requirements
of the Fifth Amendment and the Administrative Procedure Act (“APA”). See N. Am.
Coal Co. v. Miller, 870 F.2d 948, 950-51 (3d Cir. 1989). The APA guarantees a party’s
right “to present his case or defense by oral or documentary evidence, to submit rebuttal
evidence, and to conduct such cross-examination as may be required for a full and true
disclosure of the facts.” 5 U.S.C. § 556(d). The ALJ, however, retains “discretion to
guide the course of the hearing . . . includ[ing] the power to make reasonable,
nonarbitrary decisions regarding the admission or exclusion of evidence for procedural
reasons.” See Warner-Lambert Co. v. Heckler, 787 F.2d 147, 162 (3d Cir. 1986) (citation
omitted).
TSI bears the burden “to make a strong showing that the ALJ has abused his
discretion” in denying its request to order Kough to undergo a post-hearing physical
examination. Id. (internal quotation marks and citation omitted). The ALJ’s decision
will be upheld unless TSI shows “that the adjudication was infected by ‘some prejudicial,
fundamentally unfair element.’” Energy W. Mining Co. v. Oliver, 555 F.3d 1211, 1219
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(10th Cir. 2009) (quoting Betty B Coal Co. v. Dir., Office of Workers’ Comp. Program,
194 F.3d 491, 501 (4th Cir. 1999)).
TSI argues that a post-hearing physical examination was required based on the
Board’s decision in Shedlock v. Bethlehem Mines Corp., 9 BLR 1-195, 1986 WL 66283,
and our decision in North American Coal, 870 F.2d 948. In Shedlock, the claimant
timely submitted a medical report of an examination performed “just prior” to the twenty-
day deadline. Shedlock, 1986 WL 66283, at *4. In response, the employer had the
claimant examined by a different doctor eighteen days before the hearing. Id. The ALJ
did not admit the employer’s examination report, citing the twenty-day rule. Id. The
Board reversed, holding that the claimant’s submission of a medical examination report
“just prior to the deadline imposed by the 20-day rule for submitting documentary
evidence into the record, coupled with the administrative law judge’s refusal to allow
employer the opportunity to respond to claimant’s introduction of this ‘surprise’
evidence, constituted a denial of employer’s due process right to a fair hearing.” Id.
The Board later clarified that Shedlock “merely requires that [the] employer be
given some opportunity to respond to evidence submitted immediately prior to the 20 day
deadline,” but does not “require that [the] employer be allowed to have the claimant re-
examined.” Owens v. Jewell Smokeless Coal Corp., 14 BLR 1-47, 1990 WL 284129, at
*1 (en banc). Accordingly, TSI had the right to submit rebuttal evidence in some form,
but did not have the automatic right to an examination after the hearing. The Board
concluded that the ALJ’s decision to permit TSI to rebut Kough’s experts’ reports with its
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own medical report, in lieu of an additional post-hearing examination, was a reasonable
exercise of his discretion.
In North American Coal, we reviewed an ALJ decision that denied an employer
the opportunity to respond to evidence that was timely submitted by the claimant on the
eve of the twentieth day before the hearing. By refusing to permit the employer to
develop any responsive evidence, the ALJ violated the employer’s due process right to a
full and fair hearing. See N. Am. Coal Co., 870 F.2d at 951-52. We, however, did not
specifically state that the employer had the right to have the claimant re-examined. The
rebuttal evidence offered by the employer, and improperly disallowed, was a report from
a physician which critiqued the reports submitted by the claimant. Id. at 952. The
employer was also prohibited from cross-examining the claimant’s expert “although it
did all that it could in seeking from the ALJ an opportunity” to do so. Id. at 951. We
found that the ALJ violated the employer’s due process rights by providing “no
opportunity” to submit any responsive evidence. Id. at 953.
Unlike North American Coal, TSI had ample opportunity to dispute Kough’s
experts’ findings and present its own evidence to ensure a fair hearing. TSI’s medical
expert, Dr. Fino, physically examined Kough prior to the hearing and submitted an expert
report based on that examination and other evidence. TSI then had the opportunity to
cross-examine Dr. Rasmussen about the contents of his report prior to the hearing.
Although the ALJ denied TSI’s request for a post-hearing examination, TSI was given
alternative avenues to present rebuttal evidence in the form of a supplemental report by
Dr. Fino or the submission of a new report by Dr. Kaplan based on a review of the
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evidence of record. TSI availed itself of this opportunity by submitting a post-hearing
medical report authored by Dr. Kaplan, which the ALJ admitted and weighed in its
decision-making process.
In sum, the ALJ afforded TSI a meaningful opportunity to present evidence at
every juncture of the proceeding. Neither the APA, relevant regulations, nor our
precedent dictates that TSI had the additional right to conduct a post-hearing physical
examination. Accordingly, the ALJ did not abuse its discretion in denying TSI’s request.
III.
For the foregoing reasons, we will deny the petition for review.
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