Indian Mountain v. DOWCP

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
INDIAN MOUNTAIN COAL COMPANY;
OLD REPUBLIC INSURANCE COMPANY,
Petitioners,
v.
No. 96-2262
DIRECTOR, OFFICE OF WORKERS'
COMPENSATION PROGRAMS, UNITED
STATES DEPARTMENT OF LABOR;
OWEN BOLLING,
Respondents.
On Petition for Review of an Order
of the Benefits Review Board.
(91-1705-BLA)
Submitted: March 31, 1998
Decided: June 11, 1998
Before WILKINSON, Chief Judge, and WILKINS and
WILLIAMS, Circuit Judges.
_________________________________________________________________
Reversed and remanded by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Mark E. Solomons, Laura Metcoff Klaus, ARTER & HADDEN,
Washington, D.C., for Petitioners. J. Davitt McAteer, Acting Solicitor
of Labor, Allen H. Feldman, Associate Solicitor for Special Appellate
and Supreme Court Litigation, Nathaniel I. Spiller, Deputy Associate
Solicitor, Mark S. Flynn, Senior Appellate Attorney, UNITED
STATES DEPARTMENT OF LABOR, Washington, D.C., for
Respondents.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
The issue presented by this appeal is whether Department of Labor
("DOL") administrative law judges ("ALJ") have jurisdiction to adju-
dicate actions brought by coal mine operators to recover benefit over-
payments to black lung claimants where the Director, Office of
Workers' Compensation Programs ("Director"), has no financial
interest in the outcome. Indian Mountain Coal Company ("employer")
appeals the decision of the Benefits Review Board ("Board") finding
that jurisdiction does not lie in such circumstances, arguing that the
Board's decision is unsupported by the statutory framework of the
Black Lung Benefits Act ("BLA"), 30 U.S.C.§ 901 et seq. (1994),
and its accompanying regulations, and violates employer's Due Pro-
cess rights by denying it a remedy where an overpayment occurs. The
Director responds, agreeing with employer that the relevant statutory
and regulatory provisions do not support the Board's decision, but
disagreeing with employer's Due Process argument. We agree with
the Director and employer that the applicable regulations are valid
and clearly empower ALJ's to resolve actions in which only an
employer or insurance carrier seeks recoupment of overpayments. In
light of our holding, we need not address employer's Due Process
argument.
This action began on July 16, 1979, when Owen Bolling, a former
coal miner, filed a claim for black lung benefits under Part C of the
BLA. Part C claims are claims filed after December 31, 1973, which
are reviewed by the Department of Labor and paid by a responsible
2
operator where one can be found. See 30 U.S.C. §§ 931-945 (1994).
A district director resolved Bolling's claim in his favor in August
1980 and named employer as the operator responsible for payment of
his benefits. Employer contested entitlement, however, so the DOL
commenced interim benefit payments to Bolling from the Black Lung
Disability Trust Fund ("Fund") pursuant to its authority under 30
U.S.C. § 934(a)(1) (1994). DOL informed Bolling, however, that he
might have to repay these benefits if his claim were ultimately denied.
After an ALJ awarded benefits to Bolling in December 1982, DOL
asked the employer's insurance carrier, Old Republic Insurance Com-
pany ("carrier") to reimburse the Fund for benefits already paid, total-
ing $22,857.10, and to begin direct compensation payments to Bolling
until employer's appeals were resolved. The employer complied with
both requests, but ceased making monthly payments in August 1986
when the Board reversed the ALJ's decision. By this time, employer
had paid $24,743.10 directly to Bolling, who had received a total of
$47,630.20 in overpayments. This Court affirmed the Board's deci-
sion in December 1987.
In June 1989, a district director ordered Bolling to repay all over-
payments received directly to the employer. Following a hearing, an
ALJ also concluded that Bolling was liable for repayment of the
entire amount, but directed Bolling to repay the Fund and the
employer separately in the amounts he received from each, respec-
tively. The ALJ rejected Bolling's attempt to establish that he was
entitled to a waiver of the overpayment received from the employer,
based on a regulation which states that waiver is unavailable where
the overpayment is made by a responsible operator. See 20 C.F.R.
§ 725.547 (1997). The ALJ found that waiver was potentially avail-
able for the monies paid directly by the Fund, but found that Bolling
failed to qualify for waiver under the applicable regulatory criteria,
because he possessed adequate financial resources to repay the over-
payment without undue burden to himself. See 20 C.F.R. § 725.542(1997).
Bolling appealed to the Board, which set aside the ALJ's order
based on its finding that the ALJ lacked subject matter jurisdiction.
The Board reasoned that because the regulations do not permit waiver
of overpayments made by employers, there was no continuing contro-
3
versy between Bolling and the employer. Moreover, because the
employer fully reimbursed the Fund for the interim payments it made
to Bolling, the Director lacked any economic interest in the case. On
reconsideration, the Board reiterated its view that the case provided
no justiciable controversy to decide, and further found that circuit
cases construing the recoupment provisions of the Longshore and
Harbor Workers' Compensation Act ("Longshore Act") 33 U.S.C.
§ 901 et seq. (1994) lent further support to its original holding.
Employer subsequently filed this appeal, in which Bolling elected not
to participate.
The statutory authority for actions to recover overpayments is codi-
fied at 30 U.S.C. §§ 932(b), 940. Section 923(b) incorporates the
overpayment provisions of the Social Security Act, which are found
in Section 204(a) of that statute and codified at 42 U.S.C. § 404(a)
(1994). Because social security benefits are paid by the Social Secur-
ity Administration, the language of section 204(a) speaks in terms of
overpayments made from United States Treasury Funds rather than
overpayments made by employers. Section 923(b) incorporates but
does not alter that language. Rather, § 923(b) merely states that the
provisions of section 204 "shall be applicable under this part with
respect to [eligible benefit recipients] as if benefits under this part
were benefits under Title II of [the Social Security Act]." 30 U.S.C.
§ 923(b).
The words "this part" refer to Part B of the BLA, which governs
Part B claims filed by claimants. Any claim filed before January 1,
1974 is a Part B claim, adjudicated and paid by the Social Security
Administration. See Sea "B" Mining Co. v. Director, Office of Work-
ers' Compensation Programs, 45 F.3d 851, 852 (4th Cir. 1995).
Because black lung benefits in Part B claims were paid by the Social
Security Administration, it is not surprising that when Congress incor-
porated section 204 into Part B of the BLA, it made no reference to
employers.
Congress later amended Part C of the BLA, which governed claims
filed after December 31, 1973, largely for the purpose of shifting lia-
bility for benefits from the Fund to private employers. See Director,
Office of Workers' Compensation Programs v. Bethlehem Mines
Corp., 669 F.2d 187, 189 (4th Cir. 1982). The relevant amendments
4
incorporated the provisions of Part B to Part C"to the extent appro-
priate." 30 U.S.C. § 940 (1994). Part C also incorporated numerous
provisions of the Longshore Act, "except as otherwise provided . . .
by regulations of the Secretary." 30 U.S.C. § 932(a) (1994).
The statutory references to "the Secretary" indicate the Secretary of
Labor, who administers Part C of the Act and adjudicates Part C
claims. Sea "B" Mining Co., 45 F.3d at 852. Pursuant to the discussed
authority delegated to it by Congress, the Secretary promulgated regu-
lations which implement the provisions of Section 204(a) of the
Social Security Act. Various courts have, at least implicitly by decid-
ing the appeal, recognized that the statutory provisions discussed, and
the regulations implemented by the Secretary pursuant to the author-
ity delegated by those provisions, confer jurisdiction on ALJ's to
decide overpayment cases wherein the Fund seeks recovery of an
overpayment. See Bratcher v. Director, Office of Workers' Compen-
sation Programs, 14 F.3d 157 (7th Cir. 1994); Napier v. Director,
Office of Workers' Compensation Programs, 999 F.2d 1032 (6th Cir.
1993); McConnell v. Director, Office of Workers' Compensation
Programs, 993 F.2d 1454 (10th Cir. 1993). The parties cite no cases,
nor have we located any, which address whether these provisions also
authorize ALJ's to exercise jurisdiction over recoupment actions
brought by employers.
The Secretary clearly believed that Congress intended the recoup-
ment provisions of Section 204(a) to apply to employers. Title 20,
section 725.547 of the Code of Federal Regulations is entitled
"Applicability of overpayment and underpayment provisions to opera-
tor or carrier." Id. Subsection (a) of that section provides:
The provisions of this Subpart relating to overpayments and
underpayments shall be applicable to overpayments and
underpayments made by responsible operators or their insur-
ance carriers, as appropriate. However, if an overpayment
has been made by an operator the provisions of §§ 725.541-
725.544 shall not be applicable.
20 C.F.R. § 725.547(a) (1997).
Sections 725.541-544 contain the criteria for establishing a claim-
ant's entitlement to receive a waiver of his liability to repay an over-
5
payment. Subsection (c) of § 725.547 authorizes the Office of
Workers' Compensation Programs to "take any necessary action," and
deputy commissioners to "issue appropriate orders. . . to protect the
rights of the parties" in overpayment cases. Id. Finally subsection (d)
of that section provides that disputes arising out of such orders "shall
be resolved by the procedures set out in Subpart E of this part." 20
C.F.R. § 725.547(d) (1997). Subpart E contains the procedural provi-
sions which govern the conduction of administrative hearings and
appeals from administrative decisions. See 20 C.F.R. §§ 725.450-
725.483 (1997).
Thus, the Secretary created an administrative scheme for employer
actions to recover overpayments which essentially mirrors the scheme
applicable to recoupment actions brought by the Director on behalf of
the Fund, except that she elected to exclude the claimant's right to
seek waiver of the overpayment where such payment comes from an
employer. The Board did not discuss these regulations, or their under-
lying statutory basis, but implicitly found the regulations invalid to
the extent that they permit a recoupment action by employers. The
Director correctly contends, however, that her view as to whether
these regulations are authorized by statute is entitled to judicial defer-
ence. See Pauley v. Bethenergy Mines, Inc., 501 U.S. 680, 696-98
(1991). Similarly, we have held that the Director's reasonable inter-
pretation of an ambiguous or silent statutory provision is entitled to
judicial deference. See See v. Washington Metropolitan Area Transit
Authority, 36 F.3d 375, 383 (4th Cir. 1994).
We agree with the Director and the employer that the relevant stat-
utory scheme can reasonably be interpreted to authorize actions by
employers to recover overpayments, regardless of the Director's
financial interest in the case. Although the overpayment provisions
incorporated from the Social Security Act do not expressly mention
employers, Congress applied them to Part C claims, knowing that
they would typically be paid by employers. Congress created no
exceptions to the statute's overpayment scheme specifically limiting
the rights of employers.
Nor do any limitations on the rights of mine operators appear in the
Longshore Act. The BLA incorporates many provisions of the Long-
shore Act, some of which limit a longshore employer's right to
6
recover overpayments from longshore claimants to circumstances
where the employer may receive an offset against future compensa-
tion. See, e.g., 33 U.S.C. §§ 914(j), 922 (1996).* Incorporation of
these provisions, however, does not evince Congressional intent to
liken the rights of coal mine operators under the BLA to those of
longshore employers under the Longshore Act, and thereby treat oper-
ators' recoupment rights differently from those of the Fund in black
lung cases. In contrast to the BLA, the Longshore Act does not autho-
rize recovery of overpayments by either employers or the govern-
ment, suggesting that it is the nature of the claim, rather than the
public or private nature of the payor, that Congress thought to be sig-
nificant. Congress treated black lung and longshore claims differently,
expressly applying the overpayment provisions of the Social Security
Act to black lung claims but not to longshore claims. The Longshore
Act provides no reason for applying its recoupment provisions to
operators but not the Fund, and a construction applying them to both
would read out of the BLA Congress' express application of the over-
payment provisions of the Social Security Act to black lung cases. It
would also run afoul of the cited cases recognizing that ALJs possess
jurisdiction to administratively adjudicate overpayment claims initi-
ated by the Fund.
One jurisdictional provision of the Longshore Act which the BLA
incorporates provides that the Secretary may subject to administrative
adjudication "questions in respect of [a] claim." 33 U.S.C. § 919(a)
(1996). We agree with the employer and the Director that recoupment
actions involving employers are no more or less related to a claim
than recoupment actions brought by the Trust Fund, inasmuch as both
bear on a claimant's entitlement to retain compensation benefits. Sec-
tion 919(a) therefore does not limit jurisdiction in this case anymore
than it does in any other overpayment case, and it is clear that ALJ's
are empowered to decide some overpayment cases.
_________________________________________________________________
*These provisions are not part of an overpayment scheme akin to that
which exists in black lung cases, but are consistent with various other
provisions in the Longshore Act that are aimed primarily at prohibiting
double recoveries. See 33 U.S.C. §§ 903, 908(j), 933(f) & (h). See also
generally Carter v. Director, Office of Workers' Compensation
Programs, 751 F.2d 1398, 1400-02 (D.C. Cir. 1985)(discussing statutory
intent to avoid double recoveries through use of offset provisions).
7
Finally, any analysis of the statutory scheme cannot ignore the
broad policy-making authority that the drafters of the BLA delegated
to the Secretary. Congress specifically authorized the Secretary to
determine the "appropriate" extent to which Part B's overpayment
provisions ought to apply to Part C cases, and incorporated portions
of the Longshore Act "except as otherwise provided . . . by regula-
tions of the Secretary." 30 U.S.C. § 932(a) (1994). We need not
decide whether § 932(a) would permit the Secretary to promulgate a
regulation which displaces an incorporated provision of the Long-
shore Act in the absence of authority that can be found from an exam-
ination of the BLA's statutory scheme, as we have found such
authority present in this case. That authority, together with the Direc-
tor's considerable discretion, firmly supports the validity of the regu-
lation at issue in this case.
Accordingly, we find that the Director's view that the relevant stat-
utory provisions authorized the Secretary to promulgate regulations
granting employers the right to seek recovery of overpayments is rea-
sonable. As these regulations were properly authorized, the Board
erred by invalidating them, and finding no basis for jurisdiction. We
also disagree with the Board's apparent view that jurisdiction is lack-
ing on mootness grounds. It is clear that a controversy exists between
Bolling and the employer and its carrier in this case. That controversy
concerns the issue of liability for a sum of $47,630.20, and the possi-
bility that Bolling lacks a legitimate defense to the employer's claim
that he is liable for that sum does not render the case moot. Rather,
if Bolling has no defense, the employer is entitled to an order direct-
ing Bolling to repay the overpayment.
This result is mandated by the Board's own decision in Justus v.
Knox Creek Coal Co., 16 BLR 1-95 (1992), which the Board actually
cited as authority for its finding of no jurisdiction. In Justus, after
receiving a favorable liability determination, an employer reimbursed
the Fund for interim benefits paid by the Fund and sought to recover
its overpayment from the claimant. Claimant sought a hearing before
an ALJ solely to argue that he was entitled to a waiver of his obliga-
tion to repay the overpayment. The ALJ found that because the regu-
lations did not permit waiver where the overpayment came from an
employer, there was no need to conduct a hearing. Accordingly, the
ALJ granted summary judgment to the employer and entered an order
8
directing the claimant to repay the entire overpayment to the
employer.
Justus appealed to the Board, which agreed with the ALJ that there
was no justiciable issue and therefore no need to conduct a hearing.
The Board, however, did not find that the ALJ lacked jurisdiction to
order repayment, but rather affirmed the ALJ's order directing such
action. Moreover, the Board found that because the employer had
fully reimbursed the Fund for all interim payments, as it was required
to do by regulation, the repayment should be made directly to the
employer, and the claimant could not seek waiver even for the pay-
ments initially paid by the Fund. See Justus, 1992 WL 105817 at *2.
The Board's also cited to its decision in Brown v. Sea "B" Mining
Co., 17 BLR 1-115 (1993) (en banc), apparently based on its view
that this case undercut the claims of the employer and the Director
that this action was in respect of a claim. We reviewed the cited deci-
sion in Sea "B" Mining Co. v. Director, Office of Workers' Compen-
sation Programs, 45 F.3d 851 (4th Cir. 1995). We upheld the Board's
holding that an ALJ lacked jurisdiction to consider an action by the
Fund against a coal mine operator to recoup interest on monies paid
by the Fund as interim benefits to a claimant. We adopted the reason-
ing of other courts that such questions are collateral to an underlying
"claim" for benefits because such disputes are exclusively between
the fund and the operator and do not involve the claimant's eligibility
for some or all of the compensation sought or granted. Id. at 855. As
we have stated, however, recoupment actions such as the one at issue
are not collateral to the underlying claim because they directly con-
cern the claimant's entitlement to keep all or a portion of the benefits
awarded to him.
Finally, we find that the Board improperly relied on decisions from
other circuit courts to support its apparent finding that the limitations
in the Longshore Act upon an employer's recoupment rights some-
how deprive coal mine operators of any recoupment rights. We have
explained that those provisions do not apply in black lung cases.
Moreover, the decisions cited by the Board simply do not support its
position on this point. Rather, these decisions merely found that long-
shore employers could not bring recoupment actions in federal dis-
trict court against claimants. See Ceres Gulf v. Cooper, 957 F.2d
9
1199, 1207-08 (5th Cir. 1992); Stevedoring Servs. of Am., Inc. v.
Eggert, 953 F.2d 552, 557 (9th Cir. 1992). In this case, the employer
and its carrier properly sought to recover the overpayment through the
administrative process.
Accordingly, the decision of the Board is reversed, and the case is
remanded for further proceedings consistent with this opinion. If on
remand it is discovered that there are no contested issues left to be
decided, the Board should modify the ALJ's order to require Bolling
to pay all benefits directly to the employer. We dispense with oral
argument because the facts and legal contentions are adequately pre-
sented in the materials before the court and argument would not aid
the decisional process.
REVERSED AND REMANDED WITH INSTRUCTIONS
10