Opinion ID: 722605
Heading Depth: 2
Heading Rank: 3

Heading: The Board applied an incorrect standard in deciding

Text: 24 whether Brandolino demonstrated a material change 25 in conditions. 26 The regulations permit a claimant to bring a subsequent claim after the claimant had been denied benefits in a prior claim. See 20 C.F.R. § 725.309(d). However, before having the merits of such a duplicate claim considered, the claimant must first demonstrate as a threshold matter that there has been a material change in conditions since the time of the previous denial. Id. The regulations fail to define what a miner must prove to demonstrate such a material change. In the present case, the ALJ applied, and the Board endorsed, the so-called Spese standard. See Spese v. Peabody Coal Co., BRB No. 86-3316 BLA, 1988 WL 232660 (Ben. Rev. Bd. Sept. 30, 1988). The Spese standard defines proof of a material change of conditions as that evidence which is relevant and probative so that there is a reasonable possibility that it would change the prior administrative result. Id. at  2. In deciding whether such a material change occurred under the Spese standard, the ALJ considers evidence supportive of a finding of a material change, but not any contrary evidence. Shupink v. LTV Steel Co., BRB No. 91-1320 BLA, 1992 WL 368663, at  2 (Ben.Rev.Bd. Oct. 2, 1992). Brandolino argues that the ALJ was correct in applying the Spese standard. Both Wyoming Fuel and the Director argue that the Spese standard is invalid, although they dispute what standard we should apply. 27 Every circuit that has addressed the validity of the Spese standard has rejected it. See Sahara Coal Co. v. OWCP, 946 F.2d 554 (7th Cir.1991) (holding that the Spese standard violates res judicata principles); Sharondale Corp. v. Ross, 42 F.3d 993, 997-98 (6th Cir.1994) (rejecting Spese on res judicata principles but adopting in its place a different standard from Sahara Coal 's test); Labelle Processing Co. v. Swarrow, 72 F.3d 308, 317 (3d Cir.1995) (same as Sharondale Corp.); Lisa Lee Mines v. Director, OWCP, 86 F.3d 1358, 1363 (4th Cir.1996) (en banc) (rejecting Spese standard on vagueness grounds). In Sahara Coal, the Seventh Circuit recognized that the denial of a miner's claim is res judicata once it is final and bars a subsequent application unless there has been a material change in conditions. Id. at 556. It 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. The court therefore considered the Board's Spese standard to be a plain misreading of the regulation which makes mincemeat of res judicata. Id. It rejected the Spese standard for confusing a change in the claimant's condition with the presentation of newly discovered evidence. Id. 10 Other circuits considering this issue have rejected Spese on similar grounds. See Sharondale Corp., 42 F.3d at 997; Labelle Processing, 72 F.3d at 317. 28 We agree with our sister circuits that the Spese standard violates principles of res judicata by permitting a claimant--when attempting to show a material change--to present evidence that merely shows the initial decision was in error, rather than limiting the evidence presented to that which shows that the claimant's condition has worsened since the previous denial. Instead, in considering whether a claimant demonstrates a material change, the ALJ must apply a standard that denies the claimant the opportunity to relitigate the earlier denial of benefits while permitting the claimant to prove that his or her conditions have worsened materially since the earlier denial. 29 In place of the Spese standard, Wyoming Fuel urges this Court to adopt the standard crafted by the Seventh Circuit in Sahara Coal. 11 There, the court stated that to demonstrate a material change in conditions a miner must establish either: (1) both that the miner did not have black lung disease at the time of the first application but since contracted it and that he has become totally disabled by it; or (2) that the miner's disease has progressed to the point of becoming totally disabling although it was not at the time of the first application. 946 F.2d at 556. However, we find three flaws with the Sahara Coal standard. First, consistent with the Director's concerns, we find discomfort in the fact that the language of the Sahara Coal standard might require a claimant to establish a material change in an element that was not adjudicated in the earlier denial. For example, if the ALJ denied the first claim solely on the grounds that the claimant did not have pneumoconiosis, the claimant should be required to prove that his or her characteristics of pneumoconiosis have become materially more severe since the first denial of benefits. At the same time, the claimant should not be required to prove that his or her disability has materially changed during this time period because there never was a determination that he or she was not totally disabled when benefits were first denied. Second, the Sahara Coal test requires that in order to prove a material change in conditions, the claimant must prove that he or she currently satisfies the elements of an entitlement to benefits. We do not believe, and nowhere do the regulations suggest, that a claimant, in order merely to establish the threshold issue of material change, must go this far. Third, Sahara Coal requires in order to demonstrate material change that a claimant prove that he or she did not meet the elements of entitlement at the time the claim was brought. In effect, Sahara Coal requires the claimant to argue against self-interest by imposing a duty on the claimant to persuade the court that he or she did not meet the elements of entitlement at the time of the prior denial, even though when the claimant brought the prior claim he or she alleged that the elements of entitlement were met. We therefore disagree that a claimant must prove that he or she did not meet a particular element at the time the prior claim was denied so long as the claimant proves that his or her conditions have materially changed from the time of the prior denial. 30 The Director finds similar fault with the Sahara Coal standard. The Director therefore asks us to adopt a rule crafted by the Director and adopted by three other circuits. See Sharondale Corp., 42 F.3d at 998; Labelle Processing, 72 F.3d at 317-18; Lisa Lee Mines, 86 F.3d 1358, 1362. Under the Director's so-called one-element rule, the ALJ decides whether the new evidence of record, submitted by all parties, establishes at least one of the elements of entitlement previously adjudicated against the miner. If the new evidence establishes an element, the Director's standard infers that this element has materially changed from the time of the previous denial. The elements that can be used to prove a material change are those capable of change such as the existence of pneumoconiosis or total disability. In considering whether a claimant established a material change, the ALJ can consider only new evidence which relates to the conditions at the time of the second claim. If one element is established, a material change has been demonstrated and then the judge considers whether all the evidence of record--including evidence predating the denial of the prior claim--supports an entitlement to benefits. Among the several reasons advanced by the Director in favor of this standard, the Director reminds us that the we must grant deference to the Director's standard so long as we find it reasonable. See Sharondale Corp., 42 F.3d at 998. 31 The Sixth Circuit in Sharondale Corp. agreed with the Director when it selected the one-element standard over the Sahara Coal standard. Although it considered both standards reasonable, the court adopted the Director's standard due to the deference conventionally accorded agency interpretations. 42 F.3d at 997-98. It considered the Director's interpretation reasonable because it implicitly recognizes that the doctrine of res judicata is not implicated by the claimant's physical condition or the extent of his disability at two different times. Id. at 998. Accord Labelle Processing, 72 F.3d at 317-18; Lisa Lee Mines, at 1362. 32 However, we disagree with these circuits and find the Director's standard to be flawed for four reasons. The first flaw is identical to one of our concerns with Sahara Coal and involves what a claimant must show in order to prove a material change. The Director's standard finds a material change in conditions when a claimant proves that he or she presently meets one of the elements of entitlement. However, we do not believe that to prove material change a claimant must go as far as proving that he or she actually satisfies one of the elements. Instead, a claimant can meet the material change threshold by proving that his or her condition has worsened materially from the time of the prior denial, even if the claimant does not presently meet an element of entitlement. 12 33 The second flaw relates to which evidence a claimant may present to meet his burden of proving that one of the elements decided against him has materially changed. In meeting this burden, the Director's standard permits a claimant to present any evidence that was not presented at a prior hearing so long as it relates to the miner's conditions at the time of the duplicate claim. Such a standard could allow a claimant to demonstrate a material change using only evidence that shows conditions identical to that presented--and rejected--at the time of the claimant's earlier claim. As noted by the dissent in Lisa Lee Mines, under the Director's standard, 34 [a] claimant, for example, who is denied benefits and then files a duplicate claim accompanied by an additional probative x-ray taken after the initial denial that is identical to the x-rays presented with the initial claim would receive black lung benefits on his duplicate claim, notwithstanding that his condition has not changed at all. For, he has, according to the majority, prove[d], under all of the probative medical evidence of his condition after the prior denial, at least one of the elements previously adjudicated against him. Not only is such a holding irreconcilable with the plain language of section 725.309(d), it makes mincemeat of the doctrine of res judicata underlying section 725.309(d) by permitting the previous decision to be reevaluated, as the majority itself says, ad infinitum. 35 See 86 F.3d at 1366 (Luttig, J., dissenting) (citing Sahara Coal, 946 F.2d at 556). We find the same flaw with the Director's standard. The Director's standard does not appear to violate res judicata on its face because whether a miner possesses a particular condition in separate years poses separate questions. At the same time, however, the Director's standard, like the Spese standard, fails to recognize the distinction between an actual worsening in a miner's health and the presentation of evidence tending to show that the prior denial was wrong. Res judicata is not implicated when a miner brings a duplicate claim so long as the claimant demonstrates that his or her physical condition--and therefore the issue before the court--has changed. When the miner does not make such a showing, there is no assurance that the same issue is not being adjudicated in the duplicate claim as in the prior denial. The doctrine of issue preclusion (or collateral estoppel) therefore bars a duplicate claim when a miner fails to present evidence showing that his condition has worsened after his previous claim was denied. See generally 18 Wright, Miller & Cooper, Federal Practice and Procedure § 4402 (distinguishing claim preclusion and issue preclusion). 36 The third flaw with the Director's standard is that the one-element aspect of the standard incorrectly enables a claimant to relitigate elements decided against the claimant in the first claim without proving a material change in each particular element decided against him or her. The Director's standard would permit, for example, a claimant who initially was denied benefits both because he or she did not have pneumoconiosis and because he or she was not totally disabled to have the merits of his or her new claim considered merely by demonstrating that the presence of pneumoconiosis has materially changed since the first claim was denied without showing that the severity of his or her disability also has materially changed. Thus, the claimant effectively would be able to reopen the finding of non-disability in violation of res judicata principles without showing any change in that element. 37 Fourth, under the Director's standard, once the claimant meets the material change threshold by proving an element of entitlement based on new evidence, all the evidence of record becomes relevant to deciding whether the claimant meets the remaining elements of entitlement. However, evidence that was considered in rejecting a prior claim is probative only to the miner's condition at the time of the earlier denial. Res judicata bars relitigation of whether the miner met a particular element at the time of the earlier denial. 38 Having considered the various standards, it seems that the Director has made this inquiry needlessly complicated and that all of our concerns are best addressed simply by applying traditional notions of res judicata and the plain language of the statute and applicable regulations. Thus, we hold that in order to bring a duplicate claim, a claimant must prove for each element that actually was decided adversely to the claimant in the prior denial that there has been a material change in that condition since the prior claim was denied. 13 In order to meet the claimant's threshold burden of proving a material change in a particular element, the claimant need not go as far as proving that he or she now satisfies the element. 14 Instead, under the plain language of the statute and regulations, and consistent with res judicata, the claimant need show only that this element has worsened materially since the time of the prior denial. As an example of how a claimant might show a condition has worsened materially, the claimant might offer to compare past and present x-rays reflecting that any conditions suggesting that the claimant has pneumoconiosis have become materially more severe since the last claim was rejected. As another example, the claimant might present more extreme blood gas test results obtained since the prior denial to indicate that his or her disability has becomes materially more severe since the last claim was rejected. 15 However, a new interpretation of an old x-ray that was taken before the prior denial or a further blood gas result identical to results considered in the prior denial does not demonstrate that a miner's condition has materially changed. 16 39 In the present case, the claims examiner considering Brandolino's 1982 claim concluded that Brandolino did not have pneumoconiosis, that he was not totally disabled due to pneumoconiosis, and that any pneumoconiosis did not arise out of coal mine work. In considering Brandolino's duplicate claim, the ALJ and Board incorrectly applied the Spese standard to decide whether Brandolino demonstrated a material change in any of his conditions. Instead, in order to decide whether Brandolino met the threshold requirement of proving a material change in his conditions, the ALJ should have considered whether, comparing evidence obtained after his prior denial to evidence considered in or available at the time of in his prior claim, Brandolino demonstrated that each of these elements previously found against him have worsened materially since the previous denial. 17 Because the ALJ did not use the proper legal standard to consider Brandolino's change in conditions, and we find insufficient evidence in the record supporting a material change in conditions under the standard discussed above, we must remand action for further proceedings. 18 40