Opinion ID: 6929869
Heading Depth: 3
Heading Rank: 1

Heading: Long and the Right to Control

Text: On this question, the Director argues that even if a lessor must have “operated, supervised, or controlled” a coal mine after June 30, 1973 to be liable to its own former employees who worked as miners after December 31, 1969, the lease and sublease agreements Elliot made granting mining rights to the actual operators gave Elliot, as a matter of law, substantial power to control its lessees’ mining operations. Thus, according to the Director, Elliot is a responsible operator who is liable for Kovalchick’s black lung benefits. Relying on Long, the Director argues that a substantial right of control is present whenever a lessor retains a right of reentry for breach coupled with a right to monitor production and require periodic payments of minimum royalties. Subject to any deference due the Secretary or the Director, our scope of review over the statute and regulations is plenary. As we have already explained, we need not defer to the Board’s interpretation of the Act in Long. See Barnes, 969 F.2d at 1527. Thus, we will follow Long only to the extent we believe its reasoning is persuasive. Moreover, Long is distinguishable. There, the Board found that the leases were essentially contracts of adhesion. Long, 1 BLR at 1-168. In this case, there is no similar evidence that the leases were adhesive in nature. Clearfield Bituminous Coal Corporation, the company the Board held responsible in Long, was a subsidiary of the New York Central Railroad formed to mine coal for the railroad’s use. Id. at 1-150. In 1968, the New York Central and Pennsylvania Railroads merged. Id. at 1-151. When the merged railroad’s need for coal gradually diminished and eventually ceased, Clearfield systematically phased out its own direct coal mining operations. Id. It replaced them with a system of identical leasing arrangements which had many of the aspects of a contract of adhesion. Id. at 1-168. Under those leases, other firms undertook to operate Clearfield’s mines and made rental and royalty payments directly to Clearfield. 22 Id. at 1-151. The Board held in Long that Clearfield had retained such substantial powers of supervision and control over its working mines that it came within the responsible operator provisions of the Act and regulations. Id. at 1-171. Thus, the Board held it liable for black lung benefits due any former employees who had worked for it as miners after December 31, 1969, and held that the ALJ erred in determining otherwise. Id. at 1-175. The regulations themselves incorporate much of the Long rationale with respect to owner and lessor liability for black lung benefits payable to miners employed after December 31, 1969. 23 Accordingly, we believe Long is persuasive in holding as a principle of law that an actual exercise of control is not necessary. Cf. id. at 1-171 to 172. Therefore, we reject Elliot’s argument that the Act and the regulations require actual operation, supervision or control and that the mere existence of an unex-ercised right to control cannot make a lessor or owner a responsible operator. To the contrary, we believe that the statute and the regulations impose liability for black lung benefits on mining companies who transfer the right to mine coal on lands they had once worked to subsidiaries or others over whose mining operations they have the power to exercise substantial, effective control. In determining who is a “responsible operator” under the Act, we think some analogy to the National Labor Relations Board’s framework for determining whether an individual is a “supervisor” within the meaning of Section 2(11) of the National Labor Relations Act, 29 U.S.C.A § 152(11) (West 1973), is not inappropriate. Supervisors include persons who have the power to make effective recommendations about employee disciplinary measures, not just those who carry them out. Under this analogy to section 2(11) of the NLRA, the validity of the Director’s proposed per se litmus test for determining when a right of control exists is doubtful. See NLRB v. Keystone Pretzel Bakery, Inc., 696 F.2d 257, 260 (3d Cir.1982) (in banc) (supervisor status is factual finding of ALJ that can only be overturned absent substantial evidence). Moreover, in referring to the legislative history of the Black Lung Reform Act, the Secretary herself, as we have pointed out, has stated that the determination of who is a responsible operator must be determined on a case-by-case basis. See 43 Fed.Reg. at 36,803 (“Each case must be determined on the basis of its own facts measured against the requirements of the Act.”).