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. e du/thir dc ir c uit_1998/36Filed 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 VenicassaJ. 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 f rom the decision of the Benefits Review Board ("Board")
, affirming the denial by the Administrative Law Judg e ("ALJ") of Venicassa's claim for black lung benefit s under the Black Lung Benefits Act, 30 U.S.C. S 901, et. s eq. (the "Act"). In an earlier hearing, the ALJ had dismisse d 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 th e OWCP to identify a second responsible operator to p ay

2benefits. We must decide whether, after the award o n the

merits to Venicassa, the Board could vacate that aw ard so that the ALJ might designate a second responsible o perator 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 designat ion of a second responsible operator. We will, therefore, grant the petition for review, vacate the decision of the Boa rd, and
remand this case to the Board to reinstate the ALJ' s ruling, granting Venicassa's claim for benefits and orderin g the Trust Fund to pay them.1

We have appellate jurisdiction in this matter pursu ant 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 Sectio n 21(c) of the Longshoreman's and Harbor Workers' Compensat ion 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 his tory, due in large part to the long delay by the OWCP in processing Venicassa's claim and to the acknowledge d error by the OWCP in designating the responsible coal min e operator.2

___________________________________________________ ______________

1. We are also asked to decide whether the ALJ's de termination at a second hearing, denying benefits, was supported by substantial
evidence. Venicassa submits that the denial of bene fits 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 i ssue, we do not need to reach this question.

2. Unfortunately, the OWCP's failure to designate t he proper responsible operator at the outset has exacerbated a problem al l 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).

3The petitioner in this case, Armando Venicassa, wor ked

in and around coal mining operations for 43 years b efore he retired in 1985. In 1986, he filed a claim with the OWCP for benefits under the Black Lung Benefits Act. Und er the Act, benefits are awardable to persons who are tota lly disabled due to pneumoconiosis, a disease known as "black lung." The OWCP processed Venicassa's claim for ben efits with the information he supplied. Venicassa indicat ed clearly on his claim form that his most recent empl oyer was Consolidation Coal Company, for whom he worked from January 1984 until his retirement in August 1985. However, despite being supplied with accurate infor mation, the OWCP erroneously designated United States Steel Corporation ("U.S. Steel") as the responsible opera tor.3

Venicassa's claim was then referred to the Departme nt of Labor's Office of Administrative Law Judges for a f ormal hearing. In February 1987, the Director of the OWCP
moved to remand the case for identification of anot her responsible operator. This motion to remand came 13 months after Venicassa had provided the OWCP with t he information to identify the proper responsible oper ator. In August 1988, prior to the formal hearing on Venicas sa's claim, the ALJ denied the motion to remand.4 Citing the
Benefits Review Board decision in Crabtree v. Bethl ehem Steel Corp.,7 BLR 1-354 (1984), the ALJ held that d ue process concerns dictated that the hearing go forwa rd and that, if U.S. Steel was not the responsible operato r, it would
be dismissed and the Director of the OWCP substitut ed to defend the claim. At the hearing, Venicassa testifi ed that U.S. Steel had been improperly designated as the responsible operator. The ALJ then dismissed U.S. S teel
and substituted the Director.

___________________________________________________ ______________

3. Venicassa indicated on his claim form that he wa s employed by U.S. Steel from 1942 until January 1984. The regulations define "responsible operator" as "the operator or other employer with w hich 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 t he 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.

4To succeed on a claim for black lung benefits, a cl aimant

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 resul t of coal mining. Under the Act, pneumoconiosis may be establ ished by x-ray evidence or by a finding of a physician th at 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, t he ALJ also heard five medical experts, four of whom diagn osed some form of lung disease related to coal dust expo sure. The one physician, who did not find lung disease re lated to coal exposure, did so without providing his reasoni ng. The ALJ, therefore, ascribed little weight to that opin ion. The ALJ concluded that the weight of medical opinion established the finding of pneumoconiosis. Since Ve nicassa had at least 10 years of coal mining employment, th e ALJ found that Venicassa was entitled to the statutory presumption that his pneumoconiosis arose as a resu lt of coal mine employment. 30 U.S.C. S 921(c) (1986). Th e ALJ credited Venicassa with 43 years of coal mine emplo yment
and found evidence sufficient to establish the exis tence of pneumoconiosis due to that employment. As a result, on June 23, 1989, the ALJ awarded benefits to Venicass a.

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 be nefits. Instead, it vacated the award and remanded the case to the deputy commissioner for determination of another responsible operator. The Board found it significan t that
the Director had filed the Motion to Remand before a formal hearing had been held. For this reason, the Board h eld that the due process concerns of relitigating the case w ere less compelling than those facing the Crabtree Court.

On remand, the OWCP designated Consolidation Coal a s the responsible operator. Venicassa's benefits were then stopped. In December 1994, a second hearing on Venicassa's eligibility for benefits was held befor e the same
ALJ. Consolidation Coal submitted evidence in addit ion to that presented at the first hearing. Venicassa subm itted

5only the record of the medical evidence from thefir st

hearing. In addition, Venicassa testified about the deterioration of his health during the more than fi ve years since the initial award of benefits. The physicians , who had presented medical testimony at the first hearing re garding Venicassa's respiratory problems, did not testify i n person at the second hearing.

At the conclusion of the second hearing, the ALJ de nied 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 hi s petition
for review with this Court.

ANALYSIS

We review decisions of the Benefits Review Board an d of the ALJ for errors of law. Lango v. Director, OWCP, 104 F.3d 573, 575 (3d Cir. 1997); Kowalchick v. Director, OW CP, 893 F.2d 615, 619 (3d Cir. 1990).

The petitioner contends that the Board's reversal o f the
award of benefits and its decision to remand this c ase for the designation of a second responsible operator vi olated due process and subjected him to substantial prejud ice. He argues that to make him relitigate a claim, on whic h he has already won an award of benefits on the merits, vio lates due process. He further contends that, under the ra tionale of the Benefits Review Board in Crabtree, the effic ient administration of the Black Lung Benefits Act dicta tes 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 occurr ed in the designation of U.S. Steel as the responsible op erator at the outset, the Director attempted to correct the m istake with the motion to remand for designation of anothe r responsible operator. The Director further contends that the
ALJ's denial of that motion was in error and that t he Trust Fund is not the appropriate payor because ultimatel y Consolidation Coal was identified as the responsibl e operator.

6We begin our review with an examination of the

regulations, under the Black Lung Benefits Act, whi ch govern the designation of a responsible operator. T hese regulations provide:

At any time during the processing of a claim under this part, after sufficient evidence has been mad e available to the deputy commissioner, the deputy commi ssioner may identify a coal mine operator...which ma y be liable for the payment of the claim .... Such ident ification shall be made as soon after the filing of th e 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 cumulativ e 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 t he evidence necessary to designate the proper responsi ble operator. However, the Director argues that, under the Act and the applicable regulations, a coal mine operato r may be designated as responsible operator for the purposes of defending a claim for Black Lung Benefits "at any t ime" during the processing of the claim. The Director cl aims, therefore, that the ALJ improperly refused to reman d the case for the designation of a second responsible op erator.

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, s ince from the outset the Director had enough information to n ame the proper responsible operator, Venicassa should not b e penalized for the Director's failure to do so. Veni cassa contends that, because the OWCP did not make a prom pt resolution of the responsible operator issue, the A LJ's decision to go forward with the hearing on the meri ts was appropriate; to proceed otherwise would have subjec ted Venicassa to further substantial delay in the proce ssing of
his claim.

7When the ALJ considered the Director's motion to

remand the case for designation of another responsi ble operator, he relied on the decision of the Benefits Review Board in Crabtree. In Crabtree, the Board dismissed Bethlehem Steel as the responsible operator. Instea d, however, of remanding the case for identification o f another responsible operator, the Board held that the Trust Fund would be liable for benefits because the delay invo lved in relitigating the claim would offend due process. In Crabtree, the Board concluded that "the Department of Labor i s not entitled to a second opportunity to identify anothe r putative responsible operator." Id. at 1-356-357.

Remand for reconsideration of the operator issue would be tantamount to relitigating the clai m. If the Department identifies another responsible op erator, then that operator is entitled to contest th e 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 doe s not bind any other operator(s) who were not a party t o the proceedings. This piecemeal approach encoura ges two undesirable results. First, a claimant who h as established entitlement in the first round o f proceedings may lose his award in a later ro und against another operator. A first finding of entitlement, even though fully developed and litigated, c an be defeated in subsequent proceedings by a diff erent operator, and not always on the merits. Seco nd, piecemeal litigation obviously is not compat ible with
the efficient administration of the Act and expeditious processing of claims.

In view of the aforementioned consideration s, the Department must resolve the operator issue i n a preliminary proceeding, see 20 C.F.R. S725.4 12(d), and/or proceed against all putative responsi ble operators at every stage of the claims adjud ication. Even a separate preliminary proceeding on th e operator issue alone is more desirable than fully lit igating the claim against each operator individually. .. . The Trust Fund therefore must assume liability in the absence of any other potentially liable operator.

8Id. at 1-357.

The Director contends, however, that Crabtree shoul d not have prevented the OWCP from identifying Consolidat ion Coal as the responsible operator even after the ALJ had awarded benefits payable by the Trust Fund. The Dir ector urges that the critical distinction between Venicas sa's case
and the Crabtree decision is that here a motion to remand was filed before the hearing on the merits. Therefo re, Crabtree does not apply. The Director contends that remand, at the time that the motion was filed, woul d have been appropriate under Crabtree because remand woul d have been prior to litigation of the claim; Crabtre e held only
that the Director could not wait until after the AL J had awarded benefits against the Trust Fund before seek ing 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 Dir ector claims he did not have an opportunity to ascertain the correct responsible operator.5

___________________________________________________ ______________

5. In making this argument, the Director also relie s 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 positi on. In Trace Fork, the ALJ dismissed the coal company as responsible opera tor, refusing to remand the case for the designation of another resp onsible 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. Th e Fourth Circuit held that dismissal of Trace Fork as responsible operato r was proper and affirmed the refusal to remand for the naming of an other responsible operator. The Board and the Fourth Circuit based th eir decisions on Crabtree and on the holding in that case that the D irector must resolve the responsible operator issue in a preliminary pro ceeding or else proceed against all potential operators at each sta ge of the adjudication in order to avoid piecemeal litigation and due proc ess concerns. The

Trace Fork court found that to remand the case woul d allow a second operator to challenge the claimant's entitlement to benefits. The court concluded, "We are unwilling to potentially upset t he finding that [claimant] is entitled to benefits, a matter alread y 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.

9In resolving the motion to remand in the instant ca se, the

ALJ concluded that the "Director blew it" in failin g to name the proper responsible operator. (Appendix 56). For this reason, the ALJ dismissed U.S. Steel and substitute d the Trust Fund as the responsible party. The ALJ's deci sion places the incentives in the proper place -- the Di rector should have gotten it right the first time. That wo uld not have been an onerous task because, from the outset, the OWCP had in its possession all the information nece ssary to name the proper responsible operator.

The Director, however, argues that the plain langua ge of the regulations allows for the designation of a res ponsible 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, 87 7 F.2d 1300 (6th Cir. 1989).

Although we have not decided a case involving the f ailure of the OWCP to correctly name the responsible opera tor in the first instance, Oglebay addresses such a situat ion in a black lung, widow's benefits case. In Oglebay, the court considered the identification of a responsible oper ator nearly ten years after the claim was filed. The Dir ector appealed a decision of the Benefits Review Board wh ich 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 c laim was filed was valid and that the transfer of liability to the Fund was improper. In reaching this conclusion, the Sixt h Circuit interpreted the regulation, governing the identific ation 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 process ing 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 oper ator. Oglebay, 877 F.2d at 1304. The court reasoned that neither the applicable statutes nor regulations indicated t hat identification of the responsible operator should b e disregarded merely because it was inefficiently rea ched; the operator would not be substantially prejudiced in d efending
the matter on its merits.

10The Director asks us to disregard Crabtree and foll ow the

Sixth Circuit's reasoning in Oglebay. We are not, h owever, bound by Oglebay. Moreover, the instant case is eas ily distinguishable from Oglebay. First, Oglebay involv ed a dispute between the OWCP and the responsible operat or. The case before us involves a dispute between the c laimant, 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 cas e, the decision to remand was made after a formal hearing on the
merits and after the ALJ had awarded benefits. In o ther words, the Crabtree concerns about due process and piecemeal litigation -- relied on by the ALJ in den ying 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 be tween this case and Oglebay. The Oglebay court reasoned t hat inefficient identification of the responsible opera tor does not invalidate that identification. In our case, howeve r, 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 Venica ssa, who had already litigated the case on the merits and wo n. It also penalized Consolidation Coal, which had to litigate a 10 year old claim.

The Director contends, however, that, because the m otion to remand was made prior to litigation of the claim on the merits, remand and designation of a responsible ope rator were appropriate and did not raise due process conc erns. 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 respons ible operator. To resolve this dispute, we must go back to the language of the regulation.

The regulation allows for the designation of a resp onsible 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 ope rator. The Director argues that, while the OWCP clearly er red in

11failing to identify Consolidation Coal as the respo nsible

operator at the outset, the ALJ erred in denying th e 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 oper ator 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 proces sing 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 design ation 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 evid ence has been made available to the deputy commissioner." Th e regulation then further limits the process by provi ding that the designation "shall be made as soon after thefil ing of the claim as evidence obtained permits." 20 C.F.R. S 725.412(a). The focus of the regulation is clearl y on the swift and accurate designation of the responsible o perator so that the claim may be resolved through the prese ntation of evidence to the fact finder by the appropriate p arties.

Because the OWCP did not make a timely designation of the proper responsible operator, nor did it even ma ke a timely attempt to correct its misdesignation or to add Consolidation Coal as a potential responsible opera tor, we conclude that the ALJ at the first hearing correctl y designated the Trust Fund as the defending party. 6

Moreover, this result is consistent with the purpos e behind the establishment of the Trust Fund. The Tru st Fund was established by the Black Lung Benefits Rev enue 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 Revenu e 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 du e process considerations.

12U.S.C.C.A.N.) (codified at 30 U.S.C. S 934a). The f und 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 pr ovides 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 paymen t of such benefits." 26 U.S.C. S 9501(d)(B).7

In order to support its argument that the Trust Fun d should be liable only in the absence of an identifi able responsible operator, the Director emphasizes a por tion of the Act's legislative history which states that Con gress intended to ensure that individual coal operators, rather than the Trust Fund, would be liable for claims.8 T he Sixth Circuit relied on these statements in holding that, where a responsible operator has been identified, the trans fer of

___________________________________________________ ______________

7. The provision reads that the Trust Fund shall be liable for the payment of benefits in any case in which the Secret ary determines that:

(a) the operator liable for the payment of s uch benefits --

(i) has not commenced payment of such benefi ts within 30 days
after the date of an initial determination o f eligibility by the Secretary, or

(ii) has not made a payment within 30 days a fter 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, wi th respect to claims
related to which the miner worked on or after Janua ry 1, 1970, to ensure that individual coal operators rather than t he 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 L ung Benefits Reform Act and Black Lung Benefits Revenue Act of 1 977, 612 (Comm. Print 1979). See also Old Ben Coal Co. v. Luker, 82 6 F.2d 688, 693 (7th Cir. 1987).

13liability to the Trust Fund is improper. Oglebay, 8 77 F.2d

at 1304.

However, investigation into the legislative history indicates that Congress did not contemplate the sit uation before us. Indeed, the Trust Fund's architects were motivated by a desire to curb the ability of coal m ine operators to transfer assets in order to sidestep l iability as responsible operators.

At the time of the Trust Fund's creation, its draft ers were cognizant of the structural changes in the coal ind ustry
which resulted in the consolidation of numerous coa l companies and the disappearance of others. They wer e particularly conscious of the impact of these chang es on future claimants and of their effect on the respons ibility of successor and former operators.9

During the last two decades, the coal indust ry has undergone major structural changes. Of the 5 0 largest coal companies, 29 have become captive of ot her industries ...In most instances, these acqui sitions transferred intact the ownership of the mine s 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 dis eases arising out of employment in their mines ... .

S. Rep. 209, at 9.

Thus, while the Act evidences an intent that indivi dual coal mine operators, rather than the Trust Fund, as sume liability for the payment of black lung benefits, t he rationale behind this determination is the protection of clai mants

___________________________________________________ ______________

9. "When the black lung benefits provisions of the Federal Coal Mine Health and Safety Act of 1969 were first enacted, i t was the expectation of Congress that after the Federally financed porti on of the program terminated, individual coal mine operators would as sume the liability for benefits either under an approved state workers' co mpensation program

or under Part C of the Federal Act. In order to fac ilitate 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.

14from the denial of benefits due to the disappearanc e 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 pe rmits," it
is the claimant who will suffer unless the Trust Fu nd assumes responsibility for payment of the benefits. This result will protect the claimant, which is the purp ose of the

Act.

CONCLUSION

The Black Lung Benefits Act was enacted in order to
ensure benefits for coal miners who have been total ly disabled due to black lung disease as a result of t heir work in coal mines. Despite possessing accurate informat ion regarding Venicassa's employment history, the Offic e 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 th at Venicassa had to relitigate his claim. We conclude, however, that the OWCP's failure to make a timely designation of the proper responsible operator shou ld not have jeopardized the award of benefits which had be en made to Venicassa. We will, therefore, grant the pe tition 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 Jud ge.

15COWEN, Circuit Judge, dissenting.

Today the majority holds that a district director i s not authorized, under any circumstances, to correct a m istaken responsible operator identification. Because this h olding 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 decis ions in Caudill Construction Co. v. Abner, 878 F.2d 179 (6t h 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 know n and not in dispute. We owe "substantial deference" to the a gency's interpretation, which has " `controlling weight unl ess it is plainly erroneous or inconsistent with the regulati on.' " Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 51 2, 114 S. Ct. 2381, 2386 (1994) (quoting Bowles v. Seminol e 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 violation s, the only circumstance in which we do not defer is where "an `alternative reading is compelled by the regulation s's plain language or by other indications of the [agency's] intent at the time of the regulation's promulgation.' " Thoma s Jefferson Univ., 512 U.S. at 512, 114 S. Ct. at 238 6-87 (quoting Gardebring v. Jenkins, 485 U.S. 415, 430, 108 S. Ct. 1306, 1314 (1988)). "In addition, we give ju dicial deference to the Director, as policymaker, rather t han to the Board, which is purely an adjudicator." Directo r, OWCP v. Eastern Coal Corp., 54 F.3d 141, 147 (3d Cir. 19 95) (citations omitted). I believe that the majority fa ils to adhere to these fundamental principles. Indeed, the most s triking aspect of the majority's opinion is its complete fa ilure even to mention our duty, under most circumstances, to d efer to an agency's interpretation of its own regulations.

II.

Section 725.412 provides, in pertinent part, as fol lows:

16(a) At any time during the processing of a claim

under this part, after sufficient evidence h as been made available to the [district director], t he[district director] may identify a coal miner [sic] op erator (see S 725.491) which may be liable for payment o f the
claim. . . . Such identification shall be ma de as soon after the filing of the claim as the evidenc e obtained permits. . . .

. . . .

(c) If within one year after the final adju dication of a claim, the adjudication officer determines t hat an operator which may be liable for the payment of
benefits has not been notified under this se ction, such adjudication officer shall give notice of po ssible liability and an opportunity to respond to such operat or. The adjudication officer shall then take such fu rther 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 m istaken responsible operator identifications; (2) such corr ections 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 t ime" limitation above--to identify a responsible operato r within a reasonable time after the information necessary to make an
identification becomes available to him. Each of th ese 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

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1. A district director is a person authorized to de velop and adjudicate claims for black lung benefits. For administrative purposes only, regulations substitute the term district director f or the term deputy commissioner, which is found in the Longshore Act. See 20 C.F.R. S 725.101(a)(11).

17operator identification . . . ." Respondent's Br. a t 12. I

agree. There is simply nothing in the regulation th at is inconsistent with this interpretation. Nor does thi s interpretation conflict with any statutory or const itutional provisions. On the contrary, the Director's view ef fectuates clear congressional intent to limit Trust Fund liab ility to those instances in which no responsible operator ca n be identified. See 26 U.S.C. S 9501(d). Moreover, it i s supported by two persuasive Sixth Circuit decisions . See Oglebay, 877 F.2d at 1305 (corrections permitted pu rsuant 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 reaso nable interpretation.

2. Timing of Corrections

The Director next contends that section 725.412(a) and (c) authorize the district director or ALJ to corre ct a mistaken responsible operator identification "at an y time" during the processing of a claim, and up to one yea r after a final adjudication. The Director also contends th at the ability to make such corrections is not limited to cases-- such as this one--where an attempt to correct a mis taken identification occurs prior to final adjudication o f a claim.

Once again, the Director's interpretation is not inconsistent with the regulation. Moreover, it is n ot inconsistent with due process. Due process is simpl y not implicated when--as here--an attempt to correct a misidentification is made prior to final adjudicati on of the claim.2 Cf. Caudill Const., 878 F.2d at 181 (distri ct director authorized to correct misidentification of responsi ble carrier "even where a final compensation order has been iss ued 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-d ecided claim

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2. Because a motion to remand was made prior tofina l adjudication of the merits in this case, we need not consider the D irector's position that due process would not bar a district director's att empt to correct a mistaken responsible operator identification when t hat attempt is not made until after final adjudication.

18is not unprecedented in the black lung program. The

statutorily prescribed modification procedure, for example, allows a fact finder, upon any party's motion, to r eview 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 statu te] was to vest a [district director] with broad discre tion to correct mistakes of fact, whether demonstrated by wh olly new evidence, cumulative evidence, or merely fur ther reflection on the evidence initially submitt ed.

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 th e 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 finali ty in the ALJ's 1989 award of benefits. See id. ("[T]he p rinciple 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 on ly that the ALJ had erroneously denied the remand motion, b ut 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 entitleme nt remained at issue regardless of the identity of the liable party. We must defer to the Director's interpretati on of this regulation.

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3. By filing a motion to remand, and then renewing it at the hearing, the Director did everything within his control to corre ct the mistaken responsible operator identification before the ALJ awarded benefits payable by the Trust Fund. The Director could not o rder the ALJ to grant the motion, see Director, OWCP v. Newport New s Shipbuilding and Dry Dock Co., 514 U.S. 122, 134, 115 S. Ct. 1278, 1 287 (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 interloc utory.

193. Duty to Identify as Soon as Evidence Perm its

Finally, the Director asserts that it is inappropri ate to mandate identification of a responsible operator wi thin a reasonable time after the information necessary to make an
identification becomes available to the district di rector. Such a reading, according to the Director, "essenti ally reads a time limitation into the regulation that `would i nject a degree of uncertainty into future responsible opera tor 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 process ing of the claim," it also includes the phrase "[s]uch ide ntification 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 ou t of the regulation for all practical purposes. See Ogle bay, 877 F.2d at 1306-07 (Wellford, J., dissenting). Because meaning must be given to every word "so that no part will b e 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 ope rator identification at any time prior to final adjudicat ion of a claim. However, such corrections must be made withi n a reasonable time after the information necessary to make
such a correction becomes available to him. Because the Director sought to correct the mistaken identificat ion in this case approximately eighteen months before fina l adjudication of the claim, he acted within a reason able time, and the ALJ should have granted his motion to
remand. I would therefore affirm the Board's decisi on to
vacate Venicassa's award so that the ALJ could desi gnate the proper responsible operator.

B. The Majority's Interpretation

According to the majority, section 725.412(a) must be interpreted as follows:

20While the regulation clearly states that th e

designation of the responsible operator may be made "at any time," the language of the regulatio n triggers the process by providing that the designatio n be made
"after sufficient evidence has been made ava ilable to the deputy commissioner." The regulation the n further limits the process by providing that the des ignation "shall be made as soon after the filing of t he claim as evidence obtained permits." 20 C.F.R. S 725. 412(a). The focus of the regulation is clearly on the sw ift and accurate designation of the responsible oper ator 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 responsibl e operator as soon as the evidence reasonably permits , see Oglebay, 877 F.2d at 1306-07 (Wellford, J., dissent ing), it fails to provide any mechanism for the correction o f a mistaken responsible operator identification, regar dless of how quickly and reasonably the attempted correction is made. See Maj. Op. at 10 ("The ALJ's decision [to d eny the Director's motion to remand] places the incentives in the proper place--the Director should have gotten it ri ght the
first time. That would not have been an onerous tas k, because, from the outset, the OWCP had in its posse ssion 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 inconsisten t with, and completely ignores, our obligation to defer to an agency's interpretation of its own regulations unle ss it is plainly erroneous or inconsistent with the regulati on.4 Here,

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4. The majority expressly disavows reaching its con clusion on due process grounds. See Maj. Op. at 12 n.6. It does no t, however, offer any reason why the Director's interpretation is not owe d"substantial deference." Indeed, rather than defer to the Direct or's interpretation of its own agency guidelines, the majority defers to t he Benefit Review

21the Director reads section 725.412 to permit the co rrection

of mistaken responsible operator identifications. B ecause this view is not "plainly erroneous or inconsistent with the regulation," see Caudill Const. Co., 878 F.2d at 18 1; Oglebay, 877 F.2d at 1305, it is entitled to substa ntial

deference.

Second, the majority's conclusion that a district d irector is never authorized to correct a mistaken responsib le operator identification fails to give any effect wh atsoever to section 725.412(c). Such a reading violates our dut y "to give each word of the [regulation] operative effect[,]" Smith v. Magras, 124 F.3d 457, 462 (3d Cir. 1997), and rende rs this provision "inoperative or superfluous, void or insi gnificant." Sekula, 39 F.3d at 454-55 n.16 (quotation marks omi tted).

Third, the majority view is at odds with clear congressional intent, expressed over a period of ye ars, 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 int ended to "ensure that individual coal operators rather than the trust fund bear the liability for claims arising out of s uch operator's mines to the maximum extent feasible." S . Rep. No. 95-209, 95th Cong., 1st Sess. 9 (1977), reprint ed in House Comm. on Educ. and Labor, 96th Cong., Black L ung Benefits Reform Act and Black Lung Benefits Revenue Act of 1977, 612 (Comm. Print 1979); see also Old Ben C oal,
826 F.2d at 693.

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Board's interpretation of section 725.412 in Crabtr ee 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. Fi rst, "we give judicial deference to the Director, as policymaker, rather t han to the Board, which is purely an adjudicator." Eastern Assoc. Coa l Corp., 54 F.3d at 147 (citations omitted). Second, Crabtree was wrong ly decided because it fails to provide for the correction of mistaken res ponsible operator identifications and improperly injects a requiremen t into the regulation that the responsible operator must be identified at a preliminary proceeding. Crabtree; 7 BLR at 1-357; see also Dire ctor, OWCP v. Trace Fork Coal Co., 67 F.3d 503, 508 (4th Cir. 1995) (re quiring identification of a responsible operator at a preliminary proceedi ng).

22Finally, the majority's interpretation also conflic ts with

the Sixth Circuit's decision in Oglebay, where at l east two judges (and possibly a third5) concluded that secti on 725.412(a) authorizes the correction of a mistaken responsible operator identification.6 It is also a t odds with Caudill Construction, where the Sixth Circuit obser ved that subsection (c) "permits notification of a new opera tor where investigation reveals that prior identification was mistaken." 878 F.2d at 181. Contrary to the majority's interpr etation of the regulation, it is clear that section 725.412(a) and (c) both authorize the correction of mistaken responsib le operator identifications.

I respectfully dissent.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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5. Although Judge Wellford expressed concern in his Oglebay dissent with "giving the [district director] unfettered dis cretion to name a responsible operator at any time, virtually without limitation[,]" 877

F.2d at 1306 (Wellford, J., dissenting), and with "encou rag[ing] sloppy and unreasonable administration of the Act[,]" id. at 1 307 (Wellford, J., dissenting), he did not consider whether section 72 5.412 authorized the correction of mistaken responsible operator identif ications. It is interesting to note, however, that Judge Wellford j oined the majority opinion in Caudill Construction, a case decided jus t seven days before Oglebay, which observed that section 725.412(c) "pe rmits notification of a new operator where investigation reveals that pri or identification was
mistaken . . . ." 878 F.2d at 181.

6. The majority correctly observes that Oglebay is somewhat distinguishable from the instant case because corre ction of the mistaken responsible operator identification was made prior to final adjudication of the claim. However, this distinction is immateri al because, as noted above, relitigation of a finally-decided claim is: (1) consistent with the regulation; (2) consistent with congressional inten t; (3) not uncommon in the black lung program; and (4) does not violate du e process.

23