1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

11-28-1995

LaBelle Processing Company v. Swarrow

Precedential or Non-Precedential:

Docket 95-3116

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1995

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 1995 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"LaBelle Processing Company v. Swarrow" (1995). 1995 Decisions. Paper 297.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/297
1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

---------- 

No. 95-3116 

---------- 

LABELLE PROCESSING COMPANY, 

 Petitioner 

 

v. 

JOHN SWARROW 

and 

DIRECTOR, OFFICE OF WORKERS' 

COMPENSATION PROGRAMS, UNITED 

STATES DEPARTMENT OF LABOR, 

 Respondents 

---------- 

On Petition for Review of the Final Decision 

of the Benefits Review Board 

(No. 93-1491 BLA) 

 

---------- 

Argued Tuesday, October 24, 1995 

BEFORE: SLOVITER, Chief Judge, 

COWEN and GARTH, Circuit Judges

---------- 

(Opinion filed November 28, 1995) 

 

---------- 

 

 Mark E. Solomons (Argued) 

 Laura Metcoff Klaus 

 Arter & Hadden 

 1801 K Street, N.W. 

 Suite 400K 

 Washington, DC 20006 
2 

 

 Attorney for Petitioner
3 

 Jean Zeiler (Argued) 

 United Mine Workers District 5 

 RD 1, Box 172 

 Belle Vernon, PA 15012 

 Attorney for Respondent Swarrow

 Thomas S. Williamson, Jr. 

 Donald S. Shire 

 Christian P. Barber 

 Dorothy L. Page (Argued) 

 United States Department of Labor 

 Office of the Solicitor 

 200 Constitution Avenue, N.W. 

 Washington, DC 20210 

 Attorney for Respondent Director,

 Office of Workers' Compensation 

 Programs, 

United States Department

 of Labor

 ---------- 

 OPINION OF THE COURT 

 ---------- 

GARTH, Circuit Judge: 

 Petitioner Labelle Processing Company ("Labelle") appeals an 

adverse decision of the Benefits Review Board ("BRB") of the 

United States Department of Labor ("DOL"). The BRB affirmed the 

decision of an administrative law judge ("ALJ") awarding blacklung benefits to John Swarrow, a former employee of Labelle. The 

BRB had jurisdiction to review the final decision of the ALJ 

pursuant to 33 U.S.C. § 921(b)(3), as incorporated into the Black 

Lung Benefits Act ("BLBA"), 30 U.S.C. § 901 et seq., by 30 U.S.C. 

§ 932(a). We have jurisdiction over the BRB's final order 
4 

pursuant to 33 U.S.C. § 921(c), as incorporated by 30 U.S.C. 

§ 932(a). 

 Labelle advances alternative arguments for reversal: (1) 

the ALJ's determination that Labelle's former employee was 

entitled to benefits under the BLBA violated principles of res 

judicata; and (2) the ALJ applied the wrong standard in finding 

that the employee had established "a material change in 

conditions," a necessary prerequisite to the filing of a 

duplicate claim under the BLBA. We hold that res judicata is 

inapplicable in the present context, but we agree that the ALJ 

did not apply the correct standard. We will therefore vacate the 

award of benefits and remand for further proceedings consistent 

with this opinion. 

I. 

 John Swarrow, Jr., the claimant-respondent, worked as a coal 

miner for over thirty-four years, retiring in June 1985, at the 

age of sixty-three. Swarrow worked for Labelle from May 1976 to 

June 1985. In his last position, as a barge loader, he worked in 

a small, very dusty control room, operating the controls to load 

coal from the preparation plant onto a barge. Other than when he 

was employed as a barge loader (a position that he held for three 

or four years), Swarrow worked in underground mines until he 

retired. 

 Swarrow testified that he retired because of respiratory 

problems, including chronic wheezing and difficulty climbing 

ninety-four stair-steps and a thirteen-step ladder to reach his 
5 

work station. Swarrow also testified that he had smoked one pack 

of cigarettes every three to four days for about forty years but 

stopped smoking upon retirement. Swarrow uses a Proventil0

inhaler and also takes other medication for his breathing 

problems. 

 On September 16, 1985, Swarrow filed a claim for benefits 

under the Black Lung Benefits Act of 1977, 30 U.S.C. § 901 et 

seq. The District Director denied Swarrow's claim on February 

21, 1986, informing Swarrow that he had a right to submit 

additional medical evidence or request a hearing before an ALJ. 

Swarrow subsequently obtained counsel and submitted additional 

medical evidence in support of his claim. Labelle also submitted 

medical evidence. After considering the new evidence, the 

District Director reaffirmed the denial of Swarrow's claim on May 

28, 1986. 

 Swarrow submitted the following medical evidence in support 

of his claim: chest x-rays; six pulmonary function tests; and 

three blood gas studies. The results from the pulmonary function 

tests (PFTs) and the blood gas studies, standing alone, did not 

establish total disability.0

 

0

Proventil is the brand name for albuterol, a beta-adrenergic 

bronchodilator, typically administered in the form of an 

inhalation aerosol. See Physicians' Desk Reference 2280-83 (49th 

ed. 1995). 

0

A "qualifying" pulmonary function study or blood gas study 

yields values that are equal to or less than the values set out 

in the tables at Part 718, Appendices B and C. See 20 C.F.R. 

§ 718.204(c)(1), (c)(2). In the absence of contrary probative 

evidence, "qualifying" test results (i.e. equal to or less than 

the table values) from pulmonary function or blood gas studies 

conclusively establish "total disability" within the meaning of 
6 

 Swarrow also submitted physicians' readings of the chest xrays. Two doctors, one of whom was a "B reader,"0

 found that the 

x-rays showed the presence of pneumoconiosis. Four other 

doctors, three of whom were "B readers," determined that the xrays were negative for pneumoconiosis. 

 In addition, Swarrow submitted the evaluations of several 

physicians who had examined him. Dr. George Riegel, at the 

request of the DOL, examined Swarrow on November 26, 1985 and 

determined that Swarrow did not suffer from coal workers' 

pneumoconiosis. In a report dated February 28, 1986, Dr. Thomas 

Morgan, Swarrow's treating physician since May 18, 1983, diagnosed chronic obstructive pulmonary disease (i.e. pneumoconiosis) 

and concluded that Swarrow was totally disabled due to exposure 

to coal dust. Dr. Peter Kaplan examined Swarrow on March 21, 

1986 and found no evidence of pneumoconiosis, opining that 

Swarrow was capable of performing the duties of his last job. 

 On May 18, 1987, Swarrow, through counsel, attempted to 

submit additional evidence.0 The DOL, however, returned the 

 

the regulations. See Director, OWCP v. Siwiec, 894 F.2d 635, 636 

(3d Cir. 1990) 

0

A "B reader" is a physician, often a radiologist, who has 

demonstrated proficiency in reading x-rays for pneumoconiosis by 

passing annually an examination established by the National 

Institute of Safety and Health and administered by the U.S. 

Department of Health and Human Services. See 20 C.F.R. 

§ 718.202(a)(ii)(E); 42 C.F.R. § 37.51. Courts generally give 

greater weight to x-ray readings performed by "B readers." See

Mullins Coal Co. v. Director, OWCP, 484 U.S. 135, 145 n.16 

(1987); Old Ben Coal Co. v. Battram, 7 F.3d 1273, 1276 n.2 (7th 

Cir. 1993). 

0

Swarrow attempted to submit medical evaluations performed by Dr. 

J.D. Silverman and Dr. Warfield Garson. Dr. Silverman examined 

Swarrow on April 3, 1987, diagnosing anthracosilicosis and 
7 

material, advising Swarrow that the new evidence was untimely and 

therefore would not be considered. Specifically, the DOL wrote, 

in a letter, that the evidence should have been submitted within 

one year from the initial decision denying Swarrow's claim, that 

is, one year prior to February 21, 1987. 

 On October 2, 1989, Swarrow filed a second application, or 

"duplicate claim," for black-lung benefits. In support of his 

new application for benefits, Swarrow resubmitted the medical 

evidence he had previously submitted or attempted to submit in 

connection with his original claim. This evidence included the 

reports by Drs. Garson and Silverman, which had been rejected as 

untimely by the DOL and accordingly had not been considered by 

the DOL in its review of Swarrow's original application. 

 Swarrow also submitted new medical evidence, including chest 

x-rays, PFTs, and blood gas studies. The PFTs and blood gas 

studies did not demonstrate, under the standards set forth in the 

federal regulations, a totally disabling respiratory impairment. 

 Additional medical reports by Drs. Fino and Kaplan were also 

submitted. Both physicians concluded that Swarrow did not suffer 

from pneumoconiosis.0 Another physician, Dr. Cander, based upon 

 

obesity. Dr. Silverman stated that Swarrow was totally disabled 

due to anthracosilicosis caused by exposure to coal dust, and 

further opined that Swarrow would be disabled even if he lost 

weight. 

 Dr. Garson examined Swarrow on June 2, 1986, diagnosing coal 

workers' pneumoconiosis, arteriosclerosis, arthritis and obesity. 

Dr. Garson concluded that Swarrow was totally disabled as a 

result of a combination of his medical problems. 

0

Dr. Gregory J. Fino examined Swarrow on October 21, 1987, and 

diagnosed bronchial asthma, asthmatic bronchitis, hypertension 

and a stomach ulcer. Dr. Fino also opined that Swarrow's asthma 

was unrelated to coal dust exposure. 
8 

his review of Swarrow's medical records, initially diagnosed 

Swarrow as totally disabled due to pneumoconiosis but later 

recanted, stating that "the presence of disabling pneumoconiosis 

has not been established by the information available."0 In 

addition to Drs. Morgan (Swarrow's treating physician), Garson 

and Silverman, two other examining physicians, Drs. Cho and 

Levine, concluded that Swarrow suffered from disabling 

pneumoconiosis.0

 Finding that Swarrow had not proven "a material change in 

conditions,"0 the District Director denied Swarrow's duplicate 

claim in an order dated February 27, 1990. On March 6, 1990, 

 

 Dr. Peter Kaplan examined Swarrow on March 21, 1986, June 

14, 1990, and December 6, 1991. On all three occasions, Dr. 

Kaplan found no evidence of pneumoconiosis and no lung impairment. When deposed in 1991, however, Dr. Kaplan admitted that he 

had observed a decrease in Swarrow's lung function since the 1986 

tests, but attributed "some" of this decrease to aging and less 

than maximal effort exerted by Swarrow in performing the test. 

0

Dr. Leon Cander, who did not actually examine Swarrow, reviewed 

Swarrow's medical records upon request of the Office of Workers' 

Compensation (OWCP). After Dr. Cander reported that the records 

indicated disabling pneumoconiosis, the OWCP, on February 2, 

1990, forwarded a "revised" file to Dr. Cander and asked him to 

reevaluate his diagnosis. Upon reconsideration, Dr. Cander 

submitted a new report on February 12, 1991, withdrawing his 

earlier diagnosis and instead concluding that the medical 

evidence did not establish disabling pneumoconiosis. 

0

Dr. Yong Dae Cho examined Swarrow on November 8, 1989, and 

diagnosed disabling restrictive lung disease with hypoxia caused 

by coal dust exposure and obesity. 

 Dr. Macy I. Levine examined Swarrow on May 30, 1989 and 

November 5, 1991. On both occasions, Dr. Levine diagnosed 

pneumoconiosis, chronic bronchitis and obesity. Dr. Levine found 

that Swarrow was totally disabled and that the pneumoconiosis had 

been caused by coal dust exposure. Significantly, in his 1991 

report, Dr. Levine noted that "the pulmonary function test showed 

progression of [Swarrow's] respiratory impairment . . . ." 

0

DOL regulations allow the filing of "duplicate claims" where 

"there has been a material change in conditions." 20 C.F.R. 

§725.309(d). 
9 

Swarrow appealed the denial to the BRB. On December 5, 1990, the 

BRB remanded Swarrow's claim to the Office of Administrative Law 

Judges, based upon the Tenth Circuit's ruling in Lukman v. 

Director, OWCP, 896 F.2d 1248 (1990),0 for a hearing before an 

ALJ. 

 After a hearing, held on April 9, 1992, the ALJ, finding 

that Swarrow had established "a material change in conditions," 

issued its decision and order on March 31, 1993. This order 

awarded benefits to Swarrow. 

 Labelle appealed the award to the BRB. The BRB, on 

September 15, 1994, affirmed the award and denied Labelle's 

motion for reconsideration on January 4, 1995. This appeal by 

Labelle followed. 

II. 

 The BLBA provides for the payment of benefits to coal miners 

"who are totally disabled due to pneumoconiosis [also known as 

black lung disease]." Id. at § 901(a); 20 C.F.R. § 725.1(a). 

Pneumoconiosis is defined under the BLBA as "a chronic dust 

disease of the lung and its sequelae, including respiratory and 

pulmonary impairments, arising out of coal mine employment." 30 

U.S.C. § 902(b); 20 C.F.R. § 725.101(20). The "legal" definition 

 

0

Previously, the BRB had held that duplicate claims filed 

pursuant to section 725.309 must be appealed directly to the BRB 

rather than to an ALJ. Lukman v. Director, OWCP, 10 Black Lung 

Rep. (MB) 1-56 (1987), aff'd on recon., 11 Black Lung Rep. (MB) 

1-71 (Ben. Rev. Bd. 1988) (en banc), rev'd, 896 F.2d 1248 (10th 

Cir. 1990). Consistent with the Lukman rule, Swarrow had 

appealed directly to the BRB. The Tenth Circuit later reversed 

Lukman, holding that a claimant who filed a duplicate claim had a 

right to a hearing before an ALJ. Lukman, 896 F.2d at 1254. 
10 

of pneumoconiosis (i.e. any lung disease that is significantly 

related to, or substantially aggravated by, dust exposure in coal 

mine employment) is much broader than the medical definition, 

which only encompasses lung diseases caused by fibrotic reaction 

of lung tissue to inhaled dust. See Doris v. Director, OWCP, 938 

F.2d 492, 496 (4th Cir. 1991). 

 Congress granted the Secretary of Labor broad authority to 

promulgate regulations under the BLBA. 30 U.S.C. §§ 932(a), 

936(a); 20 C.F.R. § 725.301-.422; see also Director, OWCP v. 

National Mines Corp., 554 F.2d 1267, 1275 (4th Cir. 1977) 

(holding that validity of regulations will be sustained as long 

as "'reasonably related to the purposes of the enabling 

legislation'") (quoting Mourning v. Family Publications Serv., 

Inc., 411 U.S. 356, 369 (1973)). Congress expressly authorized 

the Secretary to establish and operate field offices which 

process claims filed by miners and their survivors. 30 U.S.C. 

§ 901(a). 

 Part 718 of the black lung regulations sets forth the 

criteria for evaluating disability claims filed after March 31, 

1980, or claims filed before that date but adjudicated after 

March 31, 1980. See id. at §§ 718.2, 725.4(a). As previously 

stated, Swarrow filed his claim on September 16, 1985. Under 

Part 718, to obtain benefits, a claimant must establish that (1) 

he is totally disabled (2) due to pneumoconiosis, (3) which he 

contracted as a result of coal mine employment. See id. at 

§ 718.201-.204; see also Director, OWCP v. Mangifest, 826 F.2d 

1318, 1320 (3d Cir. 1987). 
11 

 When a claim is filed, the District Director marshals the 

relevant evidence, schedules medical testing, notifies interested 

parties, and issues a decision awarding or denying benefits. See 

generally 20 C.F.R. § 725.401-.418. Any party objecting to the 

District Director's decision may request reconsideration or a 

formal hearing before an ALJ. Id. at § 725.419, .421. 

 If a party requests a formal hearing, an ALJ will conduct a 

de novo hearing and then issue a decision awarding or denying the 

claim based upon the evidence presented. Id. at § 725.461(a), 

.476. Any party dissatisfied with the ALJ's decision and order 

may, within thirty days of the filing of the order (or the filing 

of the denial of a request for reconsideration), appeal the 

decision to the BRB. Id. at § 725.479-.480. 

 The BRB, a quasi-judicial body composed of five members 

appointed by the Secretary, is authorized to hear "appeals . . . 

from decisions or orders with respect to [black lung] claims for 

compensation or benefits . . . ." Id. at § 801.102(6); see also

33 U.S.C. § 921(b); 20 C.F.R. § 801.101-.201. As an appellate 

tribunal, the BRB reviews the ALJ's decision based upon the 

hearing record. See 33 U.S.C. § 921(b)(3), as incorporated by 30 

U.S.C. § 932(a). "The [ALJ's] findings of fact . . . shall be 

conclusive if supported by substantial evidence in the record 

considered as a whole." Id.

 A claimant or employer who is "adversely affected or 

aggrieved by a final order of the [BRB]" may appeal that order to 

the United States Court of Appeals for the circuit in which the 

injury occurred by filing a petition for review within sixty days 
12 

of the issuance of the BRB order. Id. at § 921(c); 20 C.F.R. 

§ 802.410(a). See also generally Lukman v. Director, OWCP, 896 

F.2d 1248, 1252-53 (10th Cir. 1990) (presenting overview of 

procedure); Kalaris v. Donovan, 697 F.2d 376, 381-83 (D.C. Cir.) 

(same), cert. denied, 462 U.S. 1119 (1983). 

III. 

 The Benefits Review Board is bound by an ALJ's factual 

findings "if they are rational, supported by substantial 

evidence, and consistent with applicable law." Elliot Coal 

Mining Co. v. Director, OWCP, 17 F.3d 616, 626 (3d Cir . 1994). 

See also 33 U.S.C. § 921(b)(3), as incorporated by 30 U.S.C. 

§ 932(a); Kowalchick v. Director, OWCP, 893 F.2d 615, 619 (3d 

Cir. 1990). Substantial evidence is defined as "such relevant 

evidence as a reasonable mind might accept as adequate to support 

a conclusion." Kowalchick, 893 F.2d at 620. 

 We review the Board's decision to determine whether the 

Board properly deferred to the ALJ's fact findings which were 

supported by substantial evidence. Hillibush v. Department of 

Labor, 853 F.2d 197, 202 (3d Cir. 1988); Kertesz v. Crescent 

Hills Coal Co., 788 F.2d 158, 162 (3d Cir. 1986). We exercise 

plenary review over questions of law. Carozza v. U.S. Steel 

Corp., 727 F.2d 74 (3d Cir. 1984). We will defer, however, to 

the Director's reasonable interpretation of the statute and the 

Department's regulations. Pauley v. BethEnergy Mines, Inc., 501 

U.S. 680, 696 (1991); Director, OWCP v. Barnes & Tucker Co., 969 

F.2d 1524, 1527 (3d Cir. 1992). 
13 

IV. 

 Labelle argues that Swarrow's duplicate claim is barred by 

res judicata principles. Labelle asserts that "[t]he only 

difference [between Swarrow's duplicate claim and his original 

claim] was that he got more doctors to say he had pneumoconiosis 

and he found a sympathetic ALJ." Petitioner's Brief at 26. 

According to Labelle, the decisions of the BRB and the ALJ below, 

in essence, "permit unsuccessful claimants to keep filing claims 

until the right mixture of doctors, lawyers and ALJs produce[] an 

award of benefits." Id. 

 Under the doctrine of res judicata or claim preclusion, a 

subsequent suit based on the same cause of action as a prior suit 

that involved the same parties or their privies is barred where 

there has been a final judgment on the merits in the prior suit. 

Board of Trustees of Trucking Employees v. Centra, 983 F.2d 495, 

504 (3d Cir. 1992). Although Swarrow's initial claim resulted in 

a final judgment and involved the same parties as his present 

claim, his second claim asserts a new cause of action. 

Consequently, res judicata does not apply and Swarrow's new claim 

is not barred. 

 A claim, even though it is a second claim, in which "a 

material change in conditions" is asserted and established cannot 

be barred when it states a new cause of action. Of course, new 

factual allegations supporting a previously denied claim will not 

create a new cause of action for the same injury previously 

adjudicated. See, e.g., Rogerson v. Secretary of Dep't of Health 
14 

& Human Servs., 872 F.2d 24, 29 (3d Cir. 1989). In contrast, new 

facts (i.e. events occurring after the events giving rise to the 

earlier claim) may give rise to a new claim, which is not 

precluded by the earlier judgment. See Lawlor v. National Screen 

Serv. Corp., 349 U.S. 322, 328 (1955); Allegheny Int'l, Inc. v. 

Allegheny Ludlum Steel Corp., 40 F.3d 1416, 1429-30 (3d Cir. 

1994); see also Restatement (Second) of Judgments § 24 cmt. f 

(1982) ("Material operative facts occurring after the decision of 

an action with respect to the same subject matter may . . . be 

made the basis of a second action not precluded by the first."). 

 The denial of the first claim filed by Swarrow established 

only that Swarrow was not then totally disabled due to 

pneumoconiosis. See Cooley v. Island Creek Coal Co., 845 F.2d 

622, 624 (6th Cir. 1988) (noting that issue to be decided is 

miner's physical condition at the time of the hearing); Klouser 

v. Hegins Mining Co., 6 Black Lung Rep. (MB) 1-110, 1-115 (Ben. 

Rev. Bd. 1983) (same). Although it is true that Swarrow is now 

precluded from collaterally attacking the prior denial of 

benefits, Swarrow may file a new claim, asserting that he is now

eligible for benefits because he has become totally disabled due 

to coal miner's pneumoconiosis and that his disability occurred 

subsequent to the prior adjudication.0

 

0

Of course, the doctrine of collateral estoppel, or issue 

preclusion, may bar a claimant from relitigating issues decided 

in a previous action. For instance, if the ALJ had found that 

Swarrow had not established that he was a "miner" under the Act, 

Swarrow may not later relitigate that issue (unless, of course, 

he subsequently worked as a miner). 
15 

 Labelle contends that because Swarrow did not return to work 

in a coal mine after the denial of his first claim, he cannot, as 

a matter of law, establish a new cause of action. According to 

Labelle, Swarrow could not contract pneumoconiosis subsequent to 

the initial denial of benefits without further exposure to coal 

dust. 

 Labelle's argument overlooks the fact that pneumoconiosis is 

a latent dust disease. See Richard Sloane, The Sloane-Dorland 

Annotated Medical-Legal Dictionary 558 (1987) ("On any given date 

pneumoconiosis may not be detectable . . . . The disease, 

nevertheless, may progress and later destroy sufficient lung 

tissue [to become detectable]."). A latent condition such as 

pneumoconiosis may not become manifest until long after exposure 

to the causative agent (i.e. coal dust). See The Merck Manual of 

Diagnosis and Therapy (Robert Berkow & Andrew J. Fletcher, eds., 

16th ed. 1992) (explaining that progressive massive fibrosis, a 

form of pneumoconiosis "may develop after exposure has ceased, or 

. . . progress without further exposure"); David V. Bates et al., 

A Longitudinal Study of Pulmonary Function in Coal Miners in 

Lorraine, France, 8 Am. J. Indus. Med. 21, 21 (1985) (observing 

continued, accelerated rates of decline in lung function loss 

after retirement from mining in both smokers and nonsmokers). 

 Indeed, Congress, in enacting the BLBA, recognized the 

perniciously progressive nature of the disease. See Robert L. 

Ramsey & Robert S. Habermann, The Federal Black Lung Program --

The View from the Top, 87 W. Va. L. Rev. 575, 575 (1985) ("Due to 

the insidious nature of progressive occupational respiratory 
16 

disorders such as pneumoconiosis, Congress found that state 

programs, which were aimed at adjudicating time-definite 

injuries, often precluded recovery due to the running of statutes 

of limitations."). The DOL, the agency with purview over black 

lung claims, has also noted 

that pneumoconiosis is a progressive disease, and that 

while the symptoms may, on occasion, subside, the 

condition itself does not improve. . . . 

. . . [T]he Department has stricken the language of 

proposed § 718.404(a)(1), which required notification 

of the Office if the respiratory or pulmonary condition 

of a recipient of benefits improved. This change is in 

response to comments and testimony stating that 

pneumoconiosis does not, in fact, improve. . . . In 

order to reflect the fact that the symptoms of 

pneumoconiosis generally continue, even though 

statutory entitlement may cease, the Department has 

changed the title of this section from "cessation of 

disability" to "cessation of entitlement." Although 

the Department agrees that the disease does not 

improve, section 22 of the [LHWCA] provides for 

modification of awards on a change in condition or 

mistake in determination of fact. Subsection (b) of 

this regulation effectuates this provision. 

45 Fed. Reg. 13,694 (Feb. 29, 1980) (emphasis added). 

 Moreover, courts have long acknowledged that pneumoconiosis 

is a progressive and irreversible disease. See Mullins Coal Co. 

v. Director, OWCP, 484 U.S. 135, 151 (1987); Kowalchick v. 

Director, OWCP, 893 F.2d 615, 621 (3d Cir. 1990); accord Back v. 

Director, OWCP, 796 F.2d 169, 172 (6th Cir. 1986); Orange v. 

Island Creek Coal Co., 786 F.2d 724, 727 (6th Cir. 1986); 

Consolidation Coal Co. v. Chubb, 741 F.2d 968, 973 (7th Cir. 

1984); Andryka v. Rochester & Pittsburgh Coal Co., 14 Black Lung 

Rep. (MB) 1-34 (1990); Stanley v. Betty B Coal Co., 13 Black Lung 
17 

Rep. (MB) 1-72 (1990); Belcher v. Beth-Elkhorn Corp., 6 Black 

Lung Rep. (MB) 1-1180 (1984). 

 Labelle contends, however, that "simple" pneumoconiosis, in 

contrast to its "complicated" form, is not a progressive disease, 

but has submitted no medical evidence to support this assertion. 

In support of the proposition that "[p]neumoconiosis is 

progressive only in its advanced or complicated form," Labelle 

relies entirely on two sources: Usery v. Turner Elkhorn Mining 

Co., 428 U.S. 1 (1976); and Report of the Surgeon General, The 

Health Consequences of Smoking: Cancer and Chronic Lung Disease 

in the Workplace (1985) [hereinafter "Surgeon General's Report"]. 

 Usery does not directly support Labelle's contention. The 

Usery Court, in providing background information about pneumoconiosis, merely noted that "the disease is progressive, at least

in its complicated stage . . . ." Usery, 428 U.S. at 7-8 

(emphasis added). The inference that Labelle would have us draw 

(i.e. the disease is not progressive unless in its complicated 

stage) is not warranted. The Usery Court merely qualified its 

observation that pneumoconiosis is a progressive disease; it did 

not state that "simple" pneumoconiosis cannot progress in the 

absence of exposure to coal dust. 

 Similarly, Labelle's reliance on the Surgeon General's 

Report is misplaced. The report does state that "[s]imple CWP 

[coal-workers' pneumoconiosis] does not progress in the absence 

of further exposure." Surgeon General's Report, supra at 294. 

This statement, however, addressed only the progressive nature of 

clinical pneumoconiosis. 
18 

 Legal pneumoconiosis (i.e. pneumoconiosis within the meaning 

of the BLBA) is defined more broadly than the medical (clinical) 

definition of pneumoconiosis. The legal definition encompasses 

all "chronic pulmonary disease[s] resulting in respiratory or 

pulmonary impairment significantly related to, or substantially 

aggravated by dust exposure in coal mine employment." 20 C.F. R. 

§ 718.201. "The definition includes, but is not limited to, coal 

workers' pneumoconiosis, anthracosilicosis, anthracosis, 

anthrosilicosis, massive pulmonary fibrosis, progressive massive 

fibrosis, silicosis or silicotuberculosis, arising out of coal 

mine employment." Id.

 Significantly, the Surgeon General's Report discusses 

chronic bronchitis caused by coal dust exposure but at no point 

suggests that industrial chronic bronchitis cannot progress in 

the absence of continuing dust exposure. See Surgeon General's 

Report, supra at 183-85, 299-300. Chronic bronchitis, as a 

chronic pulmonary disease, falls within the legal definition of 

pneumoconiosis. 

 Moreover, even if Labelle had established that "simple" 

pneumoconiosis could not progress without further dust exposure, 

it is far from evident that Swarrow necessarily suffered from the 

simple form of the disease.0 Indeed, implicit in the ALJ's 

 

0

Labelle asserts that "complicated" pneumoconiosis can be 

diagnosed only by x-ray, biopsy or autopsy, citing 30 U.S.C. 

§ 921(c)(3) in support of this contention. That statutory 

provision, however, does not address the distinction between 

"complicated" and "simple" pneumoconiosis. The statute merely 

creates an irrebuttable presumption of entitlement to benefits, 

without proof of disability, where the diagnosis of pneumoconiosis is established by one of the methods listed in the 
19 

finding that Swarrow demonstrated "a material change in 

conditions" is the recognition that Swarrow's respiratory ailment 

had progressed until Swarrow was totally disabled. 

 If Swarrow's earlier exposure to coal dust caused his 

present disability and pneumoconiosis was merely latent at the 

time of his initial application for benefits but has since become 

manifest, Swarrow would be entitled to prove that the disease has 

progressed to the point of total disability since the filing of 

his original claim. Moreover, if the ALJ were convinced by 

Swarrow's proofs (and if the ALJ's findings were supported by 

substantial evidence), Swarrow would be entitled to receive black 

lung benefits. In sum, we reject Labelle's argument that 

Swarrow's duplicate claim is barred by res judicata. 

V. 

 Labelle argues, in the alternative,0 that the ALJ applied 

the wrong standard in determining whether Swarrow demonstrated "a 

material change in conditions." The ALJ applied the standard 

enunciated by the BRB in Spese v. Peabody Coal Co., 11 Black Lung 

Rep. (MB) 1-174 (Ben. Rev. Bd. 1988) (per curiam). Labelle notes 

 

provision. See 30 U.S.C. § 921(c)(3). Swarrow did not rely on 

that presumption but rather submitted proof that he was totally 

disabled due to pneumoconiosis. 

0

Labelle also argues, in the alternative, that the ALJ's decision 

must be reversed because the ALJ failed to satisfy the 

factfinder's duty of explanation. In its brief, Labelle fails to 

specify the findings of fact that the ALJ allegedly did not fully 

explain. Rather Labelle contests each of the determinations made 

by the ALJ. Our reading of the ALJ's opinion does not disclose 

the shortcomings of which Labelle complains. We do not, however, 

reach or decide this issue in light of our holding that the ALJ 

applied the incorrect legal standard. 
20 

that the courts of appeal that have addressed this issue have 

uniformly rejected the Spese standard. Labelle argues that the 

Third Circuit should likewise reject that standard. 

 Under 20 C.F.R. § 725.309(d), when a miner files more than 

one claim for benefits, the later claims are merged with the 

first claim if the earlier claim is still pending. If an earlier 

claim has been denied, however, a later claim must likewise be 

denied "unless the [District Director] determines that there has 

been a material change in conditions or the later claim is a 

request for modification and the requirements of § 725.310 are 

met." 20 C.F.R. § 725.309(d). Section 725.310 permits the 

District Director, "at any time before one year from the date of 

the last payment of benefits, or at any time before one year 

after the denial of a claim, [to] reconsider the terms of an 

award or denial of benefits." Id. at § 725.310(a). Therefore, 

because Swarrow filed his second claim on October 2, 1989, more 

than one year after the denial of his first claim on February 21, 

1986, Swarrow must establish a material change in conditions. 

 Neither the BLBA nor its associated regulations explicitly 

define "a material change in conditions." However, in Spese,

0

the BRB interpreted section 725.309 to require that the claimant 

submit "evidence which is relevant and probative so that there is 

a reasonable possibility that it would change the prior 

administrative result." Spese, 11 Black Lung Rep. (MB) at 1-176; 

 

0

An appeal of the Board's decision was taken to the United States 

Court of Appeals for the Seventh Circuit, but was dismissed with 

prejudice by stipulation. See Spese v. Peabody Coal Co., No. 

88-3309 (7th Cir. Feb. 2, 1989) (order). 
21 

see also Shupink v. LTV Steel Co., 17 Black Lung Rep. (MB) 1-24, 

1-27 (1992); Rice v. Sahara Coal Co., 15 Black Lung Rep. (MB) 

1-19, 1-21 (1990) (en banc). In Shupink, the BRB reaffirmed 

Spese and explained that under the Spese formulation, the ALJ 

examines only the favorable new evidence and does not weigh the 

favorable evidence against unfavorable new evidence. Shupink, 17 

Black Lung Rep. at 1-28. See also Sharondale Corp. v. Ross, 42 

F.3d 993, 997 (6th Cir. 1994). 

 The Seventh Circuit rejected the Spese standard as "a plain 

misreading of the regulation [i.e. 20 C.F.R.309(d)] . . . ." 

Sahara Coal Co. v. Director, OWCP, 946 F.2d 554, 556 (7th Cir. 

1991) (Posner, J.). Characterizing the Spese framework as 

"mak[ing] mincemeat of res judicata," the Seventh Circuit 

declared that "the [BRB] had confused a change in the claimant's 

condition with the presentation of newly discovered evidence that 

might justify reopening the case as under Rule 60(b) of the 

Federal Rules of Civil Procedure." Id.

 In criticizing Spese, the Sahara court voiced its concern 

that the doctrine of finality, an integral aspect of res 

judicata, not be eroded by a subsequent application for black 

lung benefits. As recited by the Sahara court, 

[i]t is not enough that the new application is 

supported by new evidence of disease or disability, 

because such evidence might show merely that the 

original denial was wrong, and would thereby constitute 

an impermissible collateral attack on that denial. 

Id.
22 

 In place of the Spese/Shupink standard, which looked only to 

an evaluation of favorable new evidence, the Seventh Circuit 

offered its own definition of "material change": 

A material change in conditions means either that the 

miner did not have black lung disease at the time of 

the first application but has since contracted it and 

become totally disabled by it, or that his disease has 

progressed to the point of becoming totally disabling 

although it was not at the time of the first 

application. 

Id. 

 Recently, the Fourth Circuit, in Lisa Lee Mines v. Director, 

OWCP, adopted the Sahara0 standard over competing formulations. 

57 F.3d 402, 407 (4th Cir. 1995). The BRB, however, has refused 

to acquiesce to the circuit courts' rejection of Spese, instead 

adhering to its discredited definition of "material change." See

Shupink, 17 Black Lung Rep. at 1-27 (stating that the Board would 

continue to apply Spese "except [in cases] arising within the 

jurisdiction of the . . . Seventh Circuit."). 

 We agree with our sister circuits that Spese confuses the 

standard for modification of a decision with the standard for new 

claims based on "a material change in conditions." 

 The Director, while not agreeing with Labelle's res judicata

argument, does agree with Labelle that the ALJ erred in following 

Spese. The Director, however, urges us to adopt a different 

standard than the standard enunciated in Sahara: 

Under the Director's interpretation, the ALJ must 

consider all of the new evidence, favorable and 

unfavorable, and determine whether the miner has proven 

 

0

The Sahara standard is also commonly referred to as the McNew

standard because Mr. McNew was the claimant in Sahara. 
23 

at least one of the elements of entitlement previously 

adjudicated against him. If the miner establishes the 

existence of that element, he has demonstrated, as a 

matter of law, a material change. Then the ALJ must 

consider whether all of the record evidence, including 

that submitted with the previous claims, supports a 

finding of entitlement to benefits. 

Sharondale Corp. v. Ross, 42 F.3d 993, 997-98 (6th Cir. 1994). 

 The Sixth Circuit recently embraced the Director's proposed 

standard after considering the Spese and Sahara standards. See 

id. at 998. The Sixth Circuit acknowledged that the Sahara

standard was "a reasonable interpretation of material change," 

id. at 997, but deferred to the DOL's interpretation, accurately 

noting that "courts must defer to the agency 'entrusted by 

Congress to make such policy determinations.'" Id. at 998 

(quoting Pauley v. BethEnergy Mines, Inc., 501 U.S. 680, 696 

(1991)). 

 Notably, "[b]ecause the black lung regulations are issued by 

the [OWCP] rather than by the [BRB], it is to the former body 

rather than the latter tha[t] we owe the usual deference that 

courts give agencies' interpretations of their own regulations or 

governing statutes." Sahara, 949 F.2d at 557. See also Potomac 

Elec. Power Co. v. Director, OWCP, 449 U.S. 268, 278 n.18 (1980); 

Director, OWCP v. Barnes & Tucker Co., 969 F.2d 1524, 1527 (3d 

Cir. 1992); Saginaw Mining Co. v. Mazzulli, 818 F.2d 1278, 1283 

(6th Cir. 1987); Bethlehem Mines Corp. v. Director, OWCP, 766 

F.2d 128, 130 (3d Cir. 1985). 

 Of course, deference to an agency's interpretation of its 

own regulations is warranted only when the interpretation is 
24 

reasonable. Chevron, Inc. v. Natural Resources Defense Council, 

Inc., 467 U.S. 837, 845 (1984). We may supply our own 

construction of a regulation if the agency's interpretation is 

"plainly erroneous or inconsistent with the regulation." 

Lukosevicz v. Director, OWCP, 888 F.2d 1001, 1006 (3d Cir. 1989) 

(quotations omitted). 

 Labelle argues that the Director's interpretation is not 

faithful to the purpose or language of section 725.309(d) 

(material change in condition) and that we should consequently 

reject the Director's interpretation. We disagree. Adoption of 

the Director's interpretation accords with the principle that 

courts should liberally construe remedial legislation, such as 

the BLBA, so as to include the largest number of claimants within 

its entitlement provisions. See Pavesi v. Director, OWCP, 758 

F.2d 956, 964 (3d Cir. 1985); Echo v. Director, OWCP, 744 F.2d 

327, 330 (3d Cir. 1984). Because the Director's construction of 

its own regulation is not unreasonable, deference should be given 

to that interpretation. 

VI. 

 Lastly, Swarrow urges us to affirm the ALJ's award of 

benefits, even if we conclude that the ALJ applied the wrong 

standard, under the theory that the error was harmless. We 

cannot agree with that disposition. The ALJ may very well 

decide, on remand, that all of the new evidence, favorable and 

unfavorable, on balance, satisfies (or does not satisfy) the 

Sharondale standard defining "a material change in conditions." 
25 

If no material change is found, then Swarrow cannot pursue his 

second claim. On the other hand, if the ALJ finds that Swarrow 

has proved "at least one of the new elements previously 

adjudicated against him," Sharondale, 42 F.3d at 997, Swarrow 

will have demonstrated a material change. At that point, the ALJ 

must consider all of the record evidence, including that 

submitted with the prior claim, to determine whether such 

evidence supports a finding of entitlement to benefits. These 

determinations, however, must be made in the first instance by an 

ALJ. 

 Accordingly, we will vacate the BRB's September 15, 1994 

award of benefits to Swarrow, with the direction that Swarrow's 

claim be remanded to the ALJ for further proceedings consistent 

with this opinion.