Opinion ID: 6929869
Heading Depth: 2
Heading Rank: 1

Heading: Who is an “Operator” Under the Act

Text: The Act imposes liability for the payment of black lung benefits on coal mine operators who meet specified statutory and regulatory criteria. It defines an “operator” responsible for the payment of benefits at Section 3(d): For the purposes of this [Act], the term— “operator” means any owner, lessee, or other person who operates, controls, or supervises a coal or other mine or any independent contractor performing services or construction at such mine.... 30 U.S.C.A. § 802(d) (1986); see also 20 C.F.R. §§ 725.101(a)(27), 726.491 (1992) (defining operator in accordance with § 3(d) of Act); National Indus. Sand Assoc. v. Marshall, 601 F.2d 689, 700 (3d Cir.1979). Thus, operators were defined, in both the Act and the regulations, as “any owner, lessee, or other person who operates, controls, or supervises a coal or other mine....” 30 U.S.C.A. § 802(d); 20 C.F.R. §§ 725.-101(a)(27), 725.491. DOL has conceded that not all owners are “responsible operators”: The Department agrees that not all owners of coal lands or mineral rights could be found to be liable coal mine operators. Each case must be determined on the basis of its own facts measured against the requirements of the act. 43 Fed.Reg. 36,772, 36,803 (Aug. 18, 1978). The Director nevertheless argues that the term “operator” should be read to embrace three distinct entities: (1) an “owner” of a coal mine; (2) a “lessee” of a coal mine; and (3) any “other person who operates, controls, or supervises” a coal mine. According to the Director, the status of owner or lessee is sufficient in and of itself to make an owner or lessee an operator under the text of the statute. Thus, the Director asserts that the liability of an “owner” or “lessee,” unlike the liability of any “other person,” is not contingent on the additional statutory criteria of operating, controlling or supervising. The Director argues that its interpretation of the term “operator” follows from basic principles of statutory construction; otherwise, he says, use of the terms “owner” and “lessee” would be meaningless because they would be included within the phrase “other person who operates, controls or supervises.”
In analyzing the Act’s text, “we assume ‘that the legislative purpose is expressed by the ordinary meaning of the words used.’” Air Courier Conference v. United States Postal Serv., 959 F.2d 1213, 1217 & n. 3 (3d Cir.1992) (quoting American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748 (1979)). If the Act’s meaning is plain from the text, our job is done, because “judicial deference to an agency’s construction of a statute in conflict with the statute’s plain meaning would be inappropriate.” Id. at 1224. In applying these principles, we first consider the statute from a grammatical standpoint. The clause in § 3(d) introduced by the relative pronoun “who” is an adjective clause which modifies one or more of the series of nouns that precedes it. Whether it modifies only “other person,” the last noun or substantive phrase in the series, or the entire series of nouns including “owner” and “lessee” is the syntactical question before us. In making his argument, it seems to us the Director must rely on the grammatical principle or “doctrine of the last antecedent.” Under that principle, “qualifying words, phrases, and clauses are to be applied to the words or phrase immediately preceding, and are not to be construed as extending to and including others more remote.” Azure v. Morton, 514 F.2d 897, 900 (9th Cir.1975); see United States ex rel. Santarelli v. Hughes, 116 F.2d 613, 616 (3d Cir.1940) (contrary “construction flies in the face of common sense in grammar hardened into law”); 2A Norman J. Singer, Sutherland Statutory Construction § 47.33 (5th ed. 1992). The punctuation of this section indicates, however, that the doctrine of the last antecedent does not apply to the limiting relative clause in § 802(d). The first two nouns in the series, “owner, lessee,” are not only separated by a comma, inter se, but are also separated from the general term “other person” by a comma before the conjunction “or.” Under the normal rules of English punctuation for words in a series, it is the absence of a comma or other punctuation before the coordinate conjunction “or” that would indicate it and its modifier, the limiting adjective clause, are to be treated separately rather than as part of the whole series. See The Gregg Reference Manual at 35 (7th ed. 1993); see also 1A Sutherland Statutory Construction § 21.15. Conversely, the presence of a comma before the last clause in the statute suggests that the limiting clause applies to the entire series. This use of a comma to set off a modifying phrase from other clauses indicates that the qualifying language is to be applied to all of the previous phrases and not merely the immediately preceding phrase. Cf. National Sur. Corp. v. Midland Bank, 551 F.2d 21, 34 (3d Cir.1977) (lack of a comma limited application of the qualifying language to the word immediately preceding it). If Congress intended to define operator in the way the Director argues, it should not have inserted a comma before the word “or”; alternately perhaps it could have said: “ ‘operator’ means any owner [of], lessee [of], or other person who operates, controls, or supervís-ese,] a coal or other mine.... ” If we read the clause “who operates, controls or supervises a coal or other mine” to modify just the catch-all phrase “other person,” all owners or lessees would be operators without regard to what they own. The statute would read “operator means any owner [or] lessee ...” without limitation to owners or lessees of coal mines. The dependent clause “who operates, controls or supervises” cannot be sensibly read to modify only “other person.” The Director’s suggestion is bad grammar and leaves no logical connection between “owner” or “lessee” and “mine.” Accordingly, the punctuation and syntax of § 3(d) indicates that the “doctrine of the last antecedent” does .not help the Director in this case. The Director’s construction of § 3(d) invites us to take a distorted view of the statutory language — one separating “owner” and “lessee” from “other person” instead of recognizing all three belong in one category which is distinguished from a second, namely, “independent contractor.” This distortion is made clearly apparent by the regulatory definition of “operator” which was promulgated after the 1977 amendments to the statute. That regulation provides: “Operator” means any owner, lessee, or other person who operates, controls or supervises an underground mine; or any independent contractor identified as an operator performing services or construction at such mine. 30 C.F.R. § 48.2(e) (1992); see also infra n. 19. The semi-colon between the two categories is particularly striking. For these reasons, we also think the Director’s reliance on Association of Bituminous Contractors, Inc. v. Andrus, 581 F.2d 853 (D.C.Cir.1978), is misplaced. In holding that a mine could have more than one operator, the court stated: There is always an owner of a coal mine, yet the statute includes lessees and “other persons” within the definition of operator as well. So there must be some cases where the person who operates, controls, or supervises is not the owner. In those cases, the definition of operator must encompass the owner and such other person. The district court supports its conclusion that only one person could be an operator by reading the clause “who operates, controls, or supervises a coal mine” to apply to “owner,” “lessee” and “other person.” If that were the correct reading, the specification of owner and lessee would then be superfluous. The statute could merely have read “‘operator’ means any person who operates, controls, or supervises a coal mine.” Id. at 8(32 (emphasis in original). We do not read “owner” and “lessee” to be superfluous; they are merely examples of entities or individuals that fall within the nonexclusive definition of “operator.” Andrus did not concern an owner or lessee’s liability for black lung benefits due a former employee but instead addressed whether an independent construction company that was actually engaged in constructing a new tunnel shaft at a mine, as well as the owner of the coal mine, could be held liable for the construction company’s safety violations. The court of appeals in Andrus held that the definition of “operator” as “other person” could include independent contractors who operate, supervise or control a coal mine, and that in such a case, the independent contractor and the land owner would both be responsible for payment of fines levied for violation of the safety regulations. Id. at 862-63; see also Cyprus Indus. Minerals Co. v. Federal Mine Safety & Health Review Comm’n, 664 F.2d 1116, 1118-19 (9th Cir.1981) (both owner and independent contractor liable for safety violations of independent contractor). Andrus might be distinguished on this functional basis. It concerned responsibility for safety measures and therefore was decided without regard to the effect of the 1977 Amendments to the Black Lung Benefits Act or the Reform Act. See Bituminous Coal Operators’ Ass’n, Inc. v. Hathaway, 406 F.Supp. 371, 375 (D.C.Va.) (in light of different remedial purposes of the subchapters of this chapter, construction placed on particular definitions in one subchapter cannot be mechanically applied to all subchapters), aff'd, 547 F.2d 240 (4th Cir.1975). We understand that syntax and grammatical rules do not completely control issues of statutory interpretation. See Longview Fibre Co. v. Rasmussen, 980 F.2d 1307, 1311 (9th Cir.1992). Still, additional support for our parsing of the text of the Act, insofar as it concerns liability for black lung benefits, can be found in the “mischief’ rule, discussed in the venerable Heydon’s Case, 76 Eng.Rep. 637 (Ex.1584). That canon of construction directs a court to look to the “mischief and defect” that the statute was intended to cure. Id. at 638. Here, the legislative history of the 1977 Amendments to the Act and the Secretary’s own comments concerning them indicate that the statute was aimed at those, who sought to avoid liability by a quick change of corporate garb that served only to disguise the economic identity of the mining company which continued to benefit from the mining operations. Accordingly, we do not believe the statute itself can be read to mean that all persons who owned or leased coal bearing property after June 30, 1973, are operators who are responsible for black lung benefits due their former employees. We reject, as contrary to the plain meaning of the statute, the Director’s interpretation of § 802(d)’s text as imposing liability on all owners of coal lands worked by others without regard to whether the owner or lessee is itself an operator who has retained some right to control or supervise others’ mining operations on lands they own or lease.
Our reading of the statutory text defining “operator” is also supported by its specific legislative history. The Senate reports state that the term “operator” includes “any individual, organization, or agency, whether owner, lessee or otherwise, that operates, controls, or supervises a coal mine, either directly or indirectly.” 115 Cong.Rec.S. 39,985 (daily ed. December 18, 1969) (analysis of Federal Coal Mine Health and Safety Act of 1969 by Subcommittee on Labor of the Committee on Labor and Public Welfare of the United States Senate); see also S.Rep. No. 411, 91st Cong. 1st Sess. 48 (1969). In considering the meaning of the phrase “operator,” the Secretary has commented extensively on the legislative history of the 1977 Amendments. In those comments, the Secretary has noted that Congress intended to prevent businesses from escaping liability for black lung benefits by a change of corporate form or identity that had no substantial economic effect on the power to control the exploitation of the mineral resources. She said: The 1977 amendments to the black lung provisions of the Act were motivated in significant part by the inability of the Secretary of Labor to assess coal operator liability in the vast majority of part C claims under the then existing law. This difficulty was caused primarily by the many and intricate corporate changes which characterized business in the coal industry during the late 1950’s and 1960’s. During this time, many large and medium size coal operators terminated their own mining operations, diversified their interests and began leasing their coal land to other operators both large and small. Many claims were received from the former employees of coal operators turned lessors, and the Department experienced considerable difficulty in assessing liability against these businesses. In response to the difficulties encountered by the Department in assessing operator liability in lessor cases, as well as many other cases involving corporate changes, Congress established the coal tax and Black Lung Disability Benefits Trust Fund, terminating Federal liability for black lung claims, and significantly amended section 422(i) of the Act to clearly require the payment of benefits by an operar tor which had undergone substantial corporate changes. In order to decrease the burden on operators and former operators, the Act established that liability would not be imposed on an operator if the miner’s last employment with the operator occurred before January 1, 1970. While the cutoff date would absolve most coal lessors of liability for their former miners, the lessor problem remained. Accordingly, in the development of the revised section 422(i), the Senate report contained the following language: “In addition, a number of business entities which previously engaged in extensive coal mining operations, although no longer directly involved in the extraction of coal, still derive substantial revenues from the leasing of coal properties    It was originally the intent of Congress that such entities should bear the liability for each lung disease arising out of employment in their mines. ” The explanation of section 422(i)(2) provides, “It is the intention of this section to require the payment of benefits by the prior operator where, for example, such operator now derives revenues from the leasing of coal mines   [ ]. The Senate amendments to section 422(i) were adopted by the Conference Committee unchanged. There can be little doubt that Congress confirmed the view held by the Department concerning the potential liability of certain lessors. 43 Fed.Reg. 36,772, 36,803 (Aug. 18, 1978) (emphasis added and citations omitted). The Senate Report to which the Federal Register discussion refers does evidence Congress’s intent to prevent coal operators from evading liability by shifting corporate form. See S.Rep. No. 209, 95th Cong., 1st Sess. 8-9 (1977). It stated that under the 1977 Amendments business entities no longer directly involved in coal extraction would still be liable for benefits to their former employees if they derived substantial revenues from the leasing of coal properties. Id. DOL has thus stated, in response to comments arguing that use of the term “lessee” in § 3(d) precludes the assessment of liability against a lessor, that “[t]he definition [of operator] extends to any owner or other person who ‘operates, controls or supervises a coal mine,’ ” and moreover, that such “control may be established either ‘directly or indirectly.’ ” 43 Fed.Reg. at 36,803. “It is the opinion of the Department that a lessor of coal mines is an owner of a coal mine and, depending upon the facts of each case, may, either directly or indirectly, supervise and control the lessee’s mining of coal.” Id. (emphasis added). 18
In accordance with its statutory authorization, DOL promulgated the regulations found at 20 C.F.R. Part 725, Subpart F entitled “Responsible Coal Mine Operators.” Under it, mining companies were relieved of responsibility for payment of benefits to miners they had employed after December 31, 1969, if, but only if, they ceased “operating” coal mines by June 30, 1973. In those regulations, the Secretary herself defines “operator” as follows: § 725.491 Operator defined. (a) In accordance with section 3(d) of the Act, an operator for purposes of this part is “any owner, lessee or other person who operates, controls, or supervises a coal mine or any independent contractor performing services or construction at such mine....” 20 C.F.R. § 725.491(a) (1992). It will be seen at once that this regulation tracks the language of § 3(d) of the Act verbatim except for its elimination of the comma after lessee. 19 Other succeeding provisions of the regulations concerning operators give no clear indication that the Secretary, as opposed to her subordinate, the Director, interprets § 3(d) of the Act to impose a per se liability on all owners and lessees who grant others the right to extract coal from lands they own outright or from lands on which they hold the right to extract the coal in place. Section 725.491(b)(2) relates to a lessor’s responsibility for claims made by employees of the lessee. It clearly imposes liability on lessors who possess or retain the right to control certain aspects of the lessee’s mining operations, but it does so in permissive terms that seem to negate any per se rule. It reads: (b)(2) Where a coal mine is leased and the lease■ empowers the lessor to make decisions with respect to the terms and conditions under which coal is to be extracted or prepared, such as, but not limited to, the manner of extraction or preparation or the amount of coal to be produced, the lessor may be considered an operator with respect to employees of the lessee. An individual land owner or others who lease coal lands or mineral rights, who have never been coal mine operators or are not in the regular business of leasing coal mines, shall not be considered a coal mine operator in accordance with the terms of this section. Where a lessor previously operated a coal mine, it may be considered an operator with respect to employees of any lessee of such mine, particularly where the leasing , arrangement was executed or renewed after the effective date of this part and does not require the lessee to secure benefits provided by the Act. Id. § 725.491(b)(2) (emphasis added). Subsection (b)(3) also relates to a lessor’s secondary liability for black lung benefits due its lessee’s employees. It too requires a case-by-case determination of responsibility dependent on the facts of each case. It provides: (b)(3) In any claim in which the liability of a lessor for claims arising out of employment with a lessee is brought into question, the lessee shall be considered primarily liable for the claim, and the liability of the lessor may be established only after it has been determined that the lessee is unable to provide for the payment of benefits to a successful claimant. In any case involving the liability of a lessor for a claim arising out of employment with a lessee, any determination of lessor liability shall be made on the basis of the facts present in the case in consideration of the terms and intent of the act and this part. Id. § 725.491(b)(3) (emphasis added). Elliot’s liability to its own former employees, such as Kovalchick, who worked after January 1, 1970, the effective date of the original Act, is, however, based on subsection (b)(4). It reads, in pertinent part: (b)(4) A former coal mine operator which has become a lessor of coal miner [sic] shall be liable for approved claims arising out of coal mine employment with such lessor during the time the lessor was a coal mine operator, if such employment terminated on or after January 1, 1970, and the conditions for liability contained in § 725.492 are met. Id. § 725.491(b)(4). Subsection (b)(4) does not specifically refer to the language of § 3(d) limiting the class of owners or lessees who are subject to liability for black lung benefits to those who continue to operate, supervise or control mining operations that others conduct on their coal lands after June 30, 1973. Instead, § 725.491(b)(4) refers us by cross-reference to the conditions of liability set out in § 725.492. Section 725.492 provides, in pertinent part: § 725.492 Responsible operator defined. (a) A “responsible operator” is the operator which is determined liable for the payment of benefits under this part for any period after December 31, 1973. In order for an employer to be considered a responsible operator in any case, the following shall be established: (1) The miner’s disability or death shall have arisen at least in part out of employment in or around a mine or other facility during a period when the mine or facility was operated by such operator, except as provided in § 725.-493(a)(2); (2) The operator shall have been an operator of a coal mine or other facility for any period after June SO, 1973; (3) The miner’s employment with the operator or other employer shall have included at least 1 working day (§ 725-493(b)) after December 31, 1969; and (4) The operator or the employer shall be capable of assuming its liability for the payment of continuing benefits under this part, through any of the following means: (i) By obtaining a policy or contract of insurance ...; or (ii) By qualifying as a self-insurer ...; or (in) By possessing any assets that may be available for the payment of benefits _ (b) In the absence of evidence to the contrary, a showing that a business or corporate entity exists shall be deemed sufficient evidence of an operator’s capability of assuming liability under this part. 20 C.F.R. §§ 725.492(a), (b) (1992) (emphasis added). The parties to this dispute agree that the conditions for liability contained in § 725.492(a)(1), (a)(3), and (a)(4) are met. Thus, Elliot’s liability to Kovalchick depends solely on whether it was “an operator of a coal mine ... for any period after June 30, 1973” in accord with § 725.491(b)(4)’s incorporation of the conditions of § 725.492(a)(2). Because § 725.492(a)(2) does not expressly refer to an owner’s or lessee’s right to control, supervise or direct mining operations conducted on its coal lands after June 30, 1973, the Director contends that neither control, nor a right to control, play any part in determining whether an owner or lessee who grants another a right to mine coal on the owner’s or lessee’s lands is an “operator” responsible for the black lung benefits due its own former employees. In making that argument, the Director ignores the Secretary’s use of the controlling word “operator” in § 725.492(a)(2), the definition of operator in § 725.491(a), and the statute’s limitation of the liability of an owner or lessee of coal lands to those owners or lessees who retain rights to supervise, direct or control mining operations on their coal lands. We begin with the word “operator.” We assume that it should be given its normal meaning unless it is apparent the Secretary has given some artificial, technical meaning to it. The dictionary defines “operator” as follows: “[ojne who works a business, undertaking, etc.” The Oxford English Dictionary at 1996 (Compact ed. 1981); see also The American Heritage Dictionary at 871 (2d College ed. 1982) (“operator” is “[t]he owner or director of a business or industrial concern.”). The regulations do indicate that the word “operator” as used in § 725.492(a)(2) has been given its broad dictionary meaning in accord with the text of § 3(d) of the statute and the purpose behind the 1977 amendments to include owners or lessees who would not normally be thought of as “operators” of coal mines but for their retention of effective power to control, ie., direct, the extraction of coal from lands they had once mined. That expansion of meaning is shown in § 725.491(a)’s general definition of “operator.” It, like § 3(d) of the Act, limits the owners, lessees or others who are classed as “operators” to those who retain “control” over mining operations on their lands. We think, however, that the Director’s even broader proposed interpretation which would include all “owners” as well as all “lessors” would reduce § 725.492 to the meaningless tautology that an operator is an operator— true but not helpful to analysis. Moreover, such an interpretation conflicts with the limiting clause of § 725.491(a)’s definition of operator — and the definition in the statute. Thus, to give meaning to § 725.492(a)(2), as § 725.491(b)(4) requires, our inquiry continues. 20 If all owners were automatically included in the broader category of “operator,” there would be no need for §§ 725.491(b)(4) and 725.492. Section 725.491(b)(4) requires the facts of each situation to be measured against the criteria of § 725.492. The Director’s per se interpretation would render this regulatory cross-reference superfluous. The Secretary has specifically stated: Coal mine lessors are most likely to be former operators with extensive land or mineral rights holdings or other large commercial enterprises, and some of them have the capability to mine their own coal when conditions are favorable. While few lessors exercise day-to-day control over their leased properties, standard coal leases frequently demand a specified level of production and royalties, and retain numerous rights for the lessor.       [TJhe revised section 422(i) of the act and the explanations of that section further clarify the potential liability of a lessor in the black lung benefits' context of the act. It is the opinion of the Department that a lessor of coal mines is an owner of a coal mine and, depending on the facts of the case, may, either directly or indirectly, supervise and control the lessee’s mining of coal. Actual day-to-day supervision and control is not required by the Act. 43 Fed.Reg. at 36,803 (emphasis added). In 1981, the Secretary published a proposed amendment to § 725.491(b)(2) which would have prevented certain coal mine lease terms such as minimum royalty and tonnage requirements, rights of inspection and approval, and reentry rights, from being used to establish that a coal mine lessor was an operator with respect to its liability for its lessees’ employees. See 46 Fed.Reg. 8570 (proposed Jan. 27, 1981). 21 Comments in response to the proposed § 725.491 regulation registered substantial opposition to the provisions by which a lessor of a coal mine may be considered a coal mine operator liable for benefits to a lessee’s employees, as well as opposition to a lessor’s liability in general. The Secretary subsequently withdrew the proposal after receiving comments favoring continued case by case adjudication on the issue. See 52 Fed.Reg. 26,352 (July 14, 1987). The Director argues that this amendment, if it had been effectuated, would have only affected lessors who were responsible under § 725.491(b)(2) for benefits to their lessees’ employees, not lessors like Elliot who may be responsible for benefits to their own former employees under § 725.491(b)(4). We think, however, that the Director’s per se argument cannot stand in the face of the language of § 3(d), the use of the word “operator” in Regulation § 725.492(a)(2) and Regulation § 725.491(a)’s definition of “operator.” The Director’s argument that all owners, lessees and lessors are automatically responsible operators with respect to their own former employees without regard to supervision and control, like Elliot’s equally simplistic argument that it is not liable if it is not actually an operator of coal mines within the dictionary definition of that word, proves too much. If accepted in the broad sense the Director advances it, every person who owned land from which they permitted others to mine coal after June 30,1973, would be an operator responsible under § 3(d) for the payment of black lung benefits to any of their own employees who worked after December 31, 1969, under § 3(d). We do not think the Secretary’s regulations go that far. Even Long v. Bituminous Coal Corp., 1 BLR 1-149 (1977), the case decided prior to promulgation of the 1978 regulations on which the Director and the Board heavily rely, rejected this broad argument. Instead, Long required inquiry into the question of whether a former operator who becomes an owner/lessor before June 30, 1973, maintained a right to control the mining operations of its lessees through the terms of its lease agreements with them. For all these reasons, the Director’s per se argument seems contrary to the text of both the regulations and the statute which we think impose on lessors or owners liability for Part C claims of their own former employees who worked for them after January 1, 1970, only if the lessor or owner itself either continues to operate coal mines after June 30, 1973, or has the power to control the mining operations after that date and we so hold. Because we hold that the Director’s per se interpretation of the Act is contrary to the plain meaning of § 3(d) of the Act, as well as the Director’s own regulations, it becomes necessary to determine whether Elliot had some substantial right or power to supervise, control, or operate a coal mine after the June 30,1973, cut-off date in order to incur liability to its former employees. The question whether the lessor of coal mines supervises mining operations, either directly or indirectly, is expressly said to depend “on the basis of [the case’s] own facts measured against the requirements of the act.” 43 Fed.Reg. at 36,803.