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. e du/thir dc ir c uit_1997/119Filed June 3, 1997

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 96-3464

In the Matter of: PENN ALLEGHENY COAL COMPANY
and OLD REPUBLIC INSURANCE COMPANY,
Petitioners

v.

HARRY D. WILLIAMS and DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Respondents

Petition for Review of a Decision and Order of the Benefits Review Board, United States Department of Labor (No. 95-1398BLA)

Submitted Pursuant to Third Circuit LAR 34.1(a) May 22, 1997

Before: SLOVITER, Chief Judge , ROTH, C ircuit Judge and POLLAK,* District Judge

(Filed June 3, 1997)

George H. Thompson Thompson, Calkins & Sutter Pittsburgh, PA 15219

Attorney for Petitioners

___________________________________________________ ______________

*Hon. Louis H. Pollak, United States District Court for the Eastern District of Pennsylvania, sitting by designation.Robert J. Bilonick

Pawlowski, Tulowitzki & Bilonick
603 North Julian Street Ebensburg, PA 15931

Attorney for Respondent Harry D. Williams

J. Davitt McAteer Acting Solicitor of Labor
Donald S. Shire
Associate Solicitor
Christian P. Barber Counsel for Appellate Litigation
Jennifer U. Toth U.S. Department of Labor Washington, D.C. 20210

Attorneys for Director, Office of Workers' Compensation Programs

OPINION OF THE COURT

SLOVITER, Chief Judge

.

Henry D. Williams filed a claim for benefits under the Black Lung Benefits Act, as amended, 30 U.S.C. §§ 9 01- 945, claiming he had pneumoconiosis as a result of his coal mine employment. Williams worked in the coal mining industry for about 35 years, most of it underground . He retired from his operator job in 1982. His last emp loyer was Penn Allegheny Coal Company.

The District Director of the Office of Workers' Compensation Programs found Williams eligible for benefits. After a hearing the Administrative Law Ju dge (ALJ) awarded benefits. Penn Allegheny appealed and the Benefits Review Board (the Board or BRB) affirmed t he ALJ's decision. The Board denied Penn Allegheny's M otion for Reconsideration. Penn Allegheny and Old Republi c Insurance Company (collectively referred to as Penn Allegheny) then filed this Petition for Review.

2I.

In order to establish eligibility for benefits, a c laimant must establish the existence of pneumoconiosis, sho w that it arose out of coal mine employment, and show that s/he is totally disabled as a result of the pneumoconios is. Beatty v. Danri Corp. & Triangle Enterprises , 49 F.3d 993, 997 (3d Cir. 1995).

The language of 20 C.F.R. § 718.202, set forth in t he margin, provides that pneumoconiosis may be shown through 1) a chest x-ray; 2) a biopsy; 3) statutory presumptions (which are not applicable here); 4) a physician's evaluation.1 In order to determine whet her Williams had pneumoconiosis, the ALJ reviewed docto rs' reports concerning x-rays, biopsies, and Williams' general health history. The x-rays all showed changes in th e lungs but the physicians disagreed whether they showed si gns of

___________________________________________________ ______________

1. "A finding of the existence of pneumoconiosis ma y be made as follows:

(1) A chest X-ray conducted and classified in acco rdance with § 718.102 may form the basis for a finding of the e xistence of pneumoconiosis.

. . .

(2) A biopsy or autopsy conducted and reported in compliance with § 718.106 may be the basis for a finding of th e existence of pneumoconiosis.

. . .

(3) If the presumptions described in SS 718.304, 7 18.305 or § 718.306 are applicable, it shall be presumed that the miner is or was suffering from pneumoconiosis.

(4) A determination of the existence of pneumoconi osis may also be made if a physician, exercising sound medical ju dgment, notwithstanding a negative X-ray, finds that the mi ner suffers or suffered from pneumoconiosis as defined in § 718.20 1. Any such finding shall be based on objective medical evidenc e such as bloodgas studies, electrocardiograms, pulmonary function studies, physical performance tests, physical examination, a nd medical and work histories. Such a finding shall be supported b y a reasoned medical opinion."

20 C.F.R. § 718.202(a).

3pneumoconiosis or some other disease. The ALJ then

reviewed the biopsy evidence, as analyzed by the ph ysicians but they also disagreed as to what the biopsy discl osed.

Drs. James A. Puckett and Gary F. Haverty diagnosed Williams, based on a biopsy, as having pulmonary fi brosis with evidence of anthracosilicosis in the right low er lung and mild pulmonary fibrosis with evidence of anthracosilicosis in the left lower lung. Dr. Joshu a Perper testified he unquestionably detected the presence o f coal workers' pneumoconiosis based on the biopsy slides. On the other hand, Dr. Robert J. Sinnenberg reviewed t he biopsy slides and reported the slides showed scatte red deposits of coal dust, but nothing to indicate that these deposits amounted to coal workers' pneumoconiosis. He
detected interstitial fibrosis but felt it was asso ciated with Williams' history of microplasma pneumonia.

Dr. Everett Oesterling reported it was not possible to make a definite diagnosis of pneumoconiosis from th e slides available from the biopsy. He believed the t issue slides were inadequate for giving a diagnosis becau se they were taken from the lower instead of the upper lung s and were too compressed. He did, however, detect some evidence of fibrosis along with some black pigment fragments on the tissue slides.

After considering all of the pathology reports, the ALJ found the conclusions of Drs. Puckett, Haverty and Perper to outweigh those of Drs. Oesterling and Sinnenberg and found that pneumoconiosis had been established by t heir biopsy reports. The ALJ then found that the positiv e biopsies lent support to the opinions of those phys icians who had concluded that the x-rays showed changed lu ng conditions due to pneumoconiosis.

In accordance with 20 C.F.R. § 718.202(a)(4), the A LJ examined conflicting reports by nine different phys icians. The ALJ then found that the physicians' reports pro vided a basis for concluding that Williams had established that he had pneumoconiosis and that it arose out of his coa l mining employment. The ALJ also found that Williams had established his total disability and was therefore entitled to benefits under the Black Lung Benefits Act, as amen ded, 30 U.S.C. § 901-945.

4On its appeal to the BRB, Penn Allegheny argued tha t the ALJ erred when he found that the x-rays and physici ans' reports established pneumoconiosis. The Board affir med the ALJ's finding that the x-rays established pneumoconiosis and in a footnote stated that "Inasm uch as we affirm the administrative law judge's findings p ursuant to Section 718.202(a)(1), and Section 718.202(a) pr ovides alternative methods of establishing the existence o f pneumoconiosis, we need not address employer's arguments regarding Section 718.202(a)(2) and (4)." BRB Opinion at 3 n.3. That is, the Board reasoned that any one of the four methods of determining the presence of pneumoconiosis listed in § 718.202(a) may by itself establish the existence of the condition, independe nt of the evidence provided by the other three methods.

Penn Allegheny now petitions this court for review.

II.

Penn Allegheny argues that the Board acted contrary to law and/or abused its authority by relying exclusiv ely on the chest x-ray evidence, and failing to consider t hat evidence in conjunction with the biopsy evidence an d the physicians' reports. It asserts that once the ALJ f ound it necessary to consider the x-ray evidence in light o f the biopsy evidence, the Board was precluded from findi ng the presence of pneumoconiosis based on the x-ray evide nce alone. The Director agrees that the Board erred in interpreting 20 C.F.R. § 718.202 as providing disju nctive methods of establishing the presence of pneumoconio sis. Instead, the Director argues, the methods of proof set forth in that regulation are to be weighed together to de termine
whether a claimant has the disease.

The Board's scope of review is limited to consideri ng whether the ALJ's findings of fact and conclusions of law are rational, supported by substantial evidence, an d consistent with applicable law. O'Keeffe v. Smith, Hinchman and Grylls Associates, Inc. , 380 U.S. 359, 362 (1965). The Board must affirm the ALJ's findings of fact if the y are supported by substantial evidence in the record as a whole.
Kertesz v. Crescent Hills Coal Co. , 788 F.2d 158, 163 (3d Cir. 1986).

5Our standard of review for questions of law is plen ary.

BethEnergy Mines, Inc. v. Director, OWCP , 32 F.3d 843, 846 (3d Cir. 1994). We will, however, defer to the Dire ctor's reasonable interpretations of its regulations. Beat ty v. Danri Corp. & Triangle Enterprises , 49 F.3d 993, 997 (3d Cir. 1995). We owe this deference to the Director and no t the Board, because it is the Director who formulates po licy. Bonessa v. U.S. Steel Corp. , 884 F.2d 726, 732 (3d Cir. 1989).

We agree with the Director that "although section 718.202(a) enumerates four distinct methods of establishing pneumoconiosis, all types of relevant evidence must be weighed together to determine whether the
claimant suffers from the disease." Director's Brie f at 15.
See also , 30 U.S.C. § 923(b) ("in determining the validity of claims under this part, all relevant evidence shall be considered"); Kertesz , 788 F.2d at 163 (the ALJ should review all medical evidence presented in determinin g presence of pneumoconiosis).

It is significant that the language of the regulati on does not list the methods in the disjunctive. The word " or" does not appear between the paragraphs enumerating the f our approved means of determining the presence of pneumoconiosis. It follows that the Board erred whe n it found the presence of pneumoconiosis based on the x -ray evidence alone without evaluating the other relevan t evidence. However, we need not disturb the Board's
decision if the error was harmless. Because the ALJ used the correct legal standard, we may independently ev aluate the evidence presented to the ALJ to determine whet her the ALJ's findings are supported by substantial evidenc e. Kertesz , 788 F.2d at 163.

The ALJ thoroughly examined all of the evidence presented to him and reviewed the biopsy evidence a fter finding the x-ray evidence to be conflicting. The A LJ was within his discretion to credit the opinions of Drs . Puckett, Haverty and Perper over those of Oesterling and Sinnenberg. In fact, Dr. Oesterling's opinion that the tissue slides were inadequate to rule out pneumoconiosis w as inconsistent with Dr. Sinnenberg's conclusion that the biopsy showed no pneumoconiosis, leaving Dr.

6Sinnenberg's report unsupported by other medical

evidence. Although Dr. Oesterling's opinion would t end to undercut the opinion of those doctors who found the presence of pneumoconiosis, those doctors were supp orted by each other as well as by the clinical and radiol ogical evidence. In any event, under 20 C.F.R. § 718.106(c ) a negative biopsy report is not conclusive evidence t hat a miner does not have pneumoconiosis. In contrast, th e same section provides that positive findings will consti tute evidence of pneumoconiosis. Id . The ALJ was also within his discretion to place more weight on the opinions of Drs. Puckett and Haverty as they were the physicians who performed the actual biopsy.

Pursuant to the regulation which makes a physician' s evaluation relevant, the ALJ also considered the va rious reports of the other physicians. He found that thos e from Drs. Miller, Long, Gress and Malhotra, which found the presence of pneumoconiosis, were more persuasive th an those of Drs. Garrettson, McKinley, Strother and Sc ott, which did not. He explained that Dr. Garrettson's 1 982 report was outweighed by more recent reports, and t hat the determinations of Dr. McKinley that Williams was to tally disabled due to an unknown etiology and of Drs. Str other and Scott that Williams was suffering from idiopath ic pulmonary fibrosis were less persuasive than those of the other physicians. The ALJ concluded that the biopsyand xray evidence as a whole lent more weight to the determinations of those physicians who had found Wi lliams to have pneumoconiosis.

III.

We conclude that the ALJ's determination of pneumoconiosis is supported by substantial evidence and that the ALJ properly and thoroughly evaluated all of the relevant evidence. We will therefore deny the Petit ion for Review, but do so for reasons different than those given by
the BRB.

7A True Copy:

Teste:

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

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