Court Opinion

ID: 2967539
Source: CourtListenerOpinion
Date Created: 2015-09-22 02:47:33.984236+00
Date Added: 2024-06-11T11:43:14.488398
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

ARMCO, INCORPORATED,                     
                           Petitioner,
                 v.
JAMES C. MARTIN; CHAFE MINING
COMPANY, INCORPORATED; CHARLES                   No. 01-1278
LIEBERMAN; DIRECTOR, OFFICE OF
WORKERS’ COMPENSATION PROGRAMS,
UNITED STATES DEPARTMENT OF
LABOR,
                      Respondents.
                                         
               On Petition for Review of an Order
                 of the Benefits Review Board.
                          (00-404-BLA)

                      Argued: November 2, 2001
                      Decided: January 14, 2002

      Before NIEMEYER and LUTTIG, Circuit Judges, and
         Frank J. MAGILL, Senior Circuit Judge of the
      United States Court of Appeals for the Eighth Circuit,
                     sitting by designation.

Petition for review denied and Board affirmed by published opinion.
Judge Niemeyer wrote the opinion, in which Judge Magill joined.
Judge Luttig wrote an opinion concurring in the judgment.

                             COUNSEL

ARGUED: Douglas Allan Smoot, JACKSON & KELLY, P.L.L.C.,
Morgantown, West Virginia, for Petitioner. Sarah Marie Hurley,
2                      ARMCO, INC. v. MARTIN
UNITED STATES DEPARTMENT OF LABOR, Washington, D.C.,
for Respondents. ON BRIEF: Kathy L. Snyder, JACKSON &
KELLY, P.L.L.C., Morgantown, West Virginia, for Petitioner. Don-
ald S. Shire, Associate Solicitor, Christian P. Barber, Counsel for
Appellate Litigation, UNITED STATES DEPARTMENT OF
LABOR, Washington, D.C., for Respondents.

                             OPINION

NIEMEYER, Circuit Judge:

   On James Martin’s application for black lung benefits, filed in
1989, the Benefits Review Board ordered the payment of benefits and
found Armco, Inc. to be the responsible coal mine operator, even
though Martin was employed by two other coal mine operators after
his layoff by Armco in 1982. In its petition for review, Armco con-
tends that under 20 C.F.R. § 725.493 (1999), Babcock Mining Com-
pany, Martin’s most recent employer, qualified as the responsible
operator and that because the Director of the federal Office of Work-
ers’ Compensation Programs ("Director") failed to join Babcock Min-
ing as a party, Martin’s benefits should be paid by the Black Lung
Disability Trust Fund, not by Armco. Armco also raises issues for the
first time on appeal, challenging the award of benefits to Martin. For
the reasons that follow, we deny Armco’s petition for review and
affirm the decision and order of the Board.

                                  I

   James Martin, of Beckley, West Virginia, filed a claim for black
lung benefits with the United States Department of Labor’s Office of
Workers’ Compensation Programs on January 4, 1989. He had not
worked for over two years because of a back injury; but before
December 11, 1986, when he quit working, Martin had worked under-
ground in coal mines as an electrician for 13 years. The last three
employers for whom he worked in coal mines were:

    Armco, Inc.              Feb. 1979 - July 1982
                               (3 years, 5 months)
    Chafe Mining Co.         Nov. 1982 - Nov. 1985 (3 years)
                        ARMCO, INC. v. MARTIN                          3
     Babcock Mining Co.       June 1986 - Dec. 1986 (6 months)

   The Department of Labor forwarded notice of Martin’s claim to
Chafe Mining and to Armco as potential responsible employers. It did
not forward notice to Babcock Mining because it concluded that Bab-
cock Mining could not be a responsible operator since Martin worked
for that company for less than one year. See 20 C.F.R. § 725.493
(1999). Because of disputes over the determination of the responsible
operator, the procedural course within the Department of Labor was
protracted.

  The district director of the Department of Labor initially denied
Martin’s application for benefits on June 29, 1989. He later denied
Martin’s offer to include additional evidence as untimely. But upon
Martin’s request, he forwarded Martin’s claim to the Office of
Administrative Law Judges for a hearing.

   Before the Administrative Law Judge ("ALJ"), Armco filed a
motion to dismiss the claim against it on the basis that it was not the
responsible operator or, in the alternative, to remand to the district
director for a determination of who the proper responsible operator
was. In its motion, Armco stated that "[t]he miner lists only six
months of employment with [Babcock Mining] thus, presumably,
Babcock Mining Co., is not the responsible operator as defined by 20
C.F.R. § 725.492." Armco therefore asserted that the next most recent
employer, Chafe Mining, was the responsible operator. The Director
agreed with Armco’s assessment of responsibility, but opposed dis-
missal. Instead, he favored a remand to the district director for further
evidentiary development. Accordingly, the ALJ remanded the claim
for a determination of the "putative responsible operator."

   On remand, the district director concluded that the most recent
responsible operator was Chafe Mining. Chafe Mining, however, was
not a viable company because it had filed for bankruptcy and was no
longer an active corporation. The former principal of Chafe Mining
(its president, secretary, and treasurer), Charles Lieberman, would be
responsible individually, but Lieberman submitted information show-
ing that he lacked the financial capacity to assume liability for Mar-
tin’s claim. Accordingly, the district director concluded, in a decision
and order of July 10, 1991, that Lieberman was liable for the claim
4                       ARMCO, INC. v. MARTIN
and, "[s]hould it be determined that Charles Lieberman does not have
the wherewithal to assume liability or he is otherwise found not liable
in this matter, Armco, Inc. will be liable as the secondary operator in
this claim." The matter was then referred back to the ALJ for a hear-
ing.

   Following a hearing on both the merits of Martin’s claim and the
responsible operator issue, the ALJ issued his decision and order on
August 18, 1993, concluding that Martin was entitled to benefits.
Considering the x-ray evidence, the ALJ concluded that "true doubt"
existed as to whether or not the three x-rays demonstrated the exis-
tence of pneumoconiosis, and, pursuant to the law then applicable, he
resolved that doubt in favor of Martin. The ALJ also considered medi-
cal evidence and decided that the reasoned medical opinions pres-
ented in the case established the existence of pneumoconiosis. With
respect to the responsible operator, the ALJ concluded that Babcock
Mining was the most recent employer to have employed Martin for
a cumulative period of one year. Even though Martin had worked at
Babcock Mining for only six months, he worked for more than 125
working days during that period, and, according to the ALJ, he there-
fore satisfied the one-year requirement of 20 C.F.R. § 725.493(b).
Because the Director had not joined Babcock Mining as a potential
responsible operator, the ALJ transferred liability to the Black Lung
Disability Trust Fund ("Trust Fund"). The ALJ also determined that
Chafe Mining and its former president, Lieberman, were not capable
of assuming liability for the payment of benefits if it were later deter-
mined that benefits should not be paid by the Trust Fund.

   The Director appealed this decision, and on appeal, the Benefits
Review Board affirmed the award of benefits to Martin. It agreed with
the ALJ’s decision not to join Babcock as a responsible operator
because the Director had failed to name Babcock Mining in the initial
stages of the claim. But it observed that the ALJ never addressed
Armco’s potential liability as a responsible operator. Accordingly, the
Board vacated the ALJ’s finding that the Trust Fund was liable for
Martin’s benefits and remanded the claim to the ALJ for further con-
sideration of the responsible operator issue.

   On remand, the ALJ again found the Trust Fund liable for Martin’s
black lung benefits. It reasoned that Babcock Mining was the most
                        ARMCO, INC. v. MARTIN                          5
recent responsible operator, as defined by applicable regulations, and
because Babcock Mining was not joined, the Trust Fund would be lia-
ble. The Director again appealed this determination to the Board.

   Once again, the Board vacated the ALJ’s assignment of liability to
the Trust Fund and remanded the case for further consideration by the
ALJ. In its opinion, the Board specifically disagreed with the ALJ’s
conclusion that a miner who establishes that he worked for at least
125 days must be credited with one year of coal mine employment.

   On remand, this time before a different ALJ, Armco was found to
be the responsible operator and was ordered to pay benefits to Martin.
In reaching its conclusion, the ALJ agreed with the Board that Bab-
cock Mining could not be named the responsible operator because
Babcock Mining did not employ Martin for at least one calendar year.
The ALJ also agreed that both Chafe Mining and its president, Lieber-
man, were financially incapable of assuming liability for the claim.
The ALJ therefore concluded that Armco, as the next most recent
operator who satisfied all of the criteria of a responsible operator, was
liable. The ALJ reversed the finding that the Trust Fund was liable for
payment of Martin’s benefits and ordered Armco to pay the benefits.
Armco appealed this decision to the Board, challenging only the
ALJ’s designation of Armco as the responsible operator.

  On appeal before the Board for the third time, the Board issued a
decision and order dated January 5, 2001, affirming the ALJ’s deter-
mination that Armco is the responsible operator. From that decision
and order, Armco petitioned this court for review.

                                   II

   Armco’s principal argument on appeal is that it is not the coal mine
operator statutorily responsible for paying Martin’s black lung bene-
fits. While it agrees that the operator responsible is the one "with
which the miner had the most recent periods of cumulative employ-
ment of not less than 1 year," 20 C.F.R. § 725.493(a)(1), it argues that
Babcock Mining is the operator that meets that description under the
provisions of 20 C.F.R. § 725.493(b). It maintains that subsection (b)
provides that the one-year employment requirement is satisfied by
demonstrating that the employee worked "for a period of at least 125
6                      ARMCO, INC. v. MARTIN
working days." Id. Because Martin worked for Babcock Mining from
June 11, 1986, to December 11, 1986, a period of at least 125 work-
ing days, it asserts that Babcock Mining, not Armco, is the "most
recent" employer with whom Martin worked "not less than one year"
and therefore is responsible for paying Martin’s black lung benefits.
Because Babcock Mining was not properly joined in this action,
Armco argues that liability for the payments therefore should revert
to the Trust Fund.

   Alternatively, Armco contends that because the Director breached
its duty to ensure that Chafe Mining — a more recent employer than
Armco — had secured its future liability for the payment of benefits,
Chafe Mining’s inability to pay should result in benefits being paid
out of the Trust Fund rather than by Armco. Had the Director required
Chafe Mining to secure its benefits’ obligations, Chafe Mining would
have been the responsible operator, not Armco.

   The Director contends that, consistent with the Department of
Labor’s standing interpretation of 20 C.F.R. § 725.493, the responsi-
ble operator is the one for whom the employee regularly worked for
one calendar year. The Director argues that the 125-day requirement
of § 725.493(b) relates only to the determination of whether the
employee worked regularly during the year and is not a definition of
the one-year requirement. In response to Armco’s alternative argu-
ment, the Director contends that the Department of Labor’s enforce-
ment decisions are irrelevant to a court’s adjudication of the issues.
The Director’s decision whether to ensure that coal mine operators
have secured their future liability is discretionary. Thus, this court
would have no legal authority to require payment from the Trust Fund
based on the Director’s failure to ensure that Chafe Mining would be
able to pay any future liability. Because Armco meets the statutory
and regulatory definition of a "responsible operator," the Trust Fund
cannot be liable.

   Because resolution of who is the responsible operator is determined
in this case by statutory interpretation, our review is plenary. See
Dehue Coal Co. v. Ballard, 65 F.3d 1189, 1193 (4th Cir. 1995).

   The Black Lung Benefits Act holds coal mine operators responsi-
ble for paying black lung benefits to miners who worked for them
                         ARMCO, INC. v. MARTIN                           7
after December 31, 1969. See 30 U.S.C. § 932. As authorized by that
Act, the Secretary of Labor has, by regulation, apportioned operator
liability in circumstances where the miner has worked for more than
one operator. See 20 C.F.R. §§ 725.492 & 725.493 (1999) (subse-
quently amended).

   According to 20 C.F.R. § 725.493(a) (1999), the "responsible oper-
ator" — the operator responsible for paying black lung benefits to a
miner — is "the operator or other employer with which the miner had
the most recent periods of cumulative employment of not less than 1
year" and who also meets the other requirements set out in 20 C.F.R.
§ 725.492(a).1 Section 725.493(b) defines the one-year-of-
employment requirement as follows:

      [A] year of employment means a period of 1 year, or partial
      periods totaling 1 year, during which the miner was regu-
      larly employed in or around a coal mine by the operator or
      other employer. Regular employment may be established on
      the basis of any evidence presented, including the testimony
      of a claimant or other witnesses, and shall not be contingent
      upon a finding of a specific number of days of employment
      within a given period. However, if an operator or other
      employer proves that the miner was not employed by it for
      a period of at least 125 working days, such operator or other
      employer shall be determined to have established that the
      miner was not regularly employed for a cumulative year by
      such operator or employer for purposes of paragraph (a) of
      this section.

20 C.F.R. § 725.493(b) (1999).2
  1
     The other requirements for operator liability, which are not at issue
in this case, are that the miner’s disability or death must have arisen, at
least in part, out of his employment with that operator; the operator must
have operated a coal mine or other facility for any period after June 30,
1973; the miner must have worked for the operator for at least one day
after December 31, 1969; and the operator must be capable of providing
for the payment of benefits. 20 C.F.R. § 724.492(a) (1999).
   2
     The term "one year" is also used and defined in 20 C.F.R. § 718.301
(1999), the section setting out when miners are eligible for various pre-
8                        ARMCO, INC. v. MARTIN
   A straightforward reading of § 725.493(b)’s language reveals a
two-step inquiry for determining operator liability. Under the first
step, a court must determine whether a miner worked for an operator
for "a period of one year, or partial periods totaling one year." 20
C.F.R. § 725.493(b) (1999). If the court determines that this one-year
requirement has been met, it must then undertake the second inquiry
of whether a miner’s employment during that one year was "regular,"
i.e. whether, during the one year, the miner "was regularly employed
in or around a coal mine." Id. (emphasis added).

   The remainder of subsection (b) is devoted to the question of how
to determine "regular employment." The next sentence explains that
"[r]egular employment may be established on the basis of any evi-
dence presented, including the testimony of a claimant or other wit-
nesses, and shall not be contingent upon a finding of a specific
number of days of employment within a given period." Id. (emphasis
added). The sentence thereafter establishes that if this evidence
reveals that "the miner was not employed by [the operator] for a
period of at least 125 working days, such operator or other employer
shall be determined to have established that the miner was not regu-
larly employed for a cumulative year." Id. (emphasis added). Finally,
for establishing the 125-day minimum for regular employment, the
subsection defines a working day to be "[all] or part of a day for
which a miner received pay." Id. (emphasis added). All three sen-
tences thus define "regular employment" and do not undermine the
threshold requirement of one year of employment.

sumptions set out in the Black Lung Benefits Act. Section 718.301(b)
states that "a year of employment means a period of one year, or partial
periods totaling one year, during which the miner was regularly
employed in or around a coal mine by the operator or other employer"
and that "[i]f an operator or other employer proves that the miner was not
employed in or around a coal mine for a period of at least 125 working
days during a year, such operator or other employer shall be determined
to have established that the miner was not regularly employed for a year
for purposes of this section." Thus, we agree with the parties that the
term "one year," as used in both provisions, should have the same mean-
ing. See Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 479
(1992); Dorsey Trailers, Inc. v. NLRB, 233 F.3d 831, 843 (4th Cir.
2000).
                        ARMCO, INC. v. MARTIN                         9
   In short, to satisfy the requirements of subsection (b), it must be
shown that (1) a miner worked for the coal mine operator for one year
or partial periods totaling one year and (2) the miner worked regularly
during that one-year period. To fulfill the requirement of working
"regularly," the subsection imposes a minimum of 125 working days.
Thus, the regulations provide that responsible operator liability does
not arise unless an operator employed a miner for one calendar year
during which the miner regularly worked for that operator, defining
"regularly worked" to be a minimum of 125 work days.

   This position has been maintained by the Director. See Croucher
v. Director, OWCP, 20 Black Lung Rep. (MB) 1-68, at 1-72 to 1-73
(Aug. 29, 1998). And further support is provided by the fact that the
Department of Labor recently revised the regulations at issue to clar-
ify its intent to hold operators liable for the payment of benefits only
if they had regularly employed the miner for a full calendar year. In
20 C.F.R. § 725.494(c) (2001), the Department of Labor states that an
operator is a responsible operator only if the miner at issue "was
employed by the operator . . . for a cumulative period of not less than
one year." The section then references 20 C.F.R. § 725.101(a)(32)
(2001), which defines a "year" as "a period of one calendar year (365
days, or 366 days if one of the days is February 29), or partial periods
totaling one year, during which the miner worked in or around a coal
mine or mines for at least 125 ‘working days.’" Although these later
revisions do not bind our interpretation of the regulations as they
stood at the time of the claim’s resolution, they do inform our analysis
of what the earlier, less clearly written regulations were intended to
mean.

   In reaching this conclusion, we also join the Tenth and Third Cir-
cuits, which have interpreted § 725.493 in the same way. See North-
ern Coal Co. v. Director, OWCP, 100 F.3d 871, 876 (10th Cir. 1996)
(interpreting 20 C.F.R. § 725.493(b) to include "two distinct require-
ments regarding a miner’s employment in order to find that an
employer is a ‘responsible operator’: (1) a miner must have been
employed by the employer for not less than one year; and (2) during
the one-year employment period a miner must have been employed
for ‘at least 125 working days’ in order for the employment to be
deemed ‘regular’"); Director, OWCP v. Gardner, 882 F.2d 67, 71
(3d. Cir. 1989) (holding that the term "one year" in 20 C.F.R.
10                      ARMCO, INC. v. MARTIN
§ 725.493 means "a period spanning 365 days"). But see Landes v.
OWCP, 997 F.2d 1192, 1195 (7th Cir. 1993) (equating a miner’s
work for 125 days to "one year of work"); Yauk v. Director, OWCP,
912 F.2d 192, 195 (8th Cir. 1989) (holding that, for purposes of 20
C.F.R. § 718.301(b), if a miner works for 125 days, "the miner will
be credited with one year of coal mine employment"). As the Third
Circuit explained, this two-step inquiry means that "the one-year
employment requirement sets a floor for the operator’s connection
with the miner, below which the operator cannot be held responsible
for the payment of benefits. The 125-day limit relates to the minimum
amount of time the miner may have been exposed to coal dust while
in the employment by the operator." Gardner, 882 F.2d at 69-70.

   Because Babcock Mining employed Martin for only six months —
from July 11, 1986, to December 11, 1986 — Babcock Mining was
not a responsible operator as defined by 20 C.F.R. § 725.493 (1999).
The next most recent operator was Chafe Mining, but it did not secure
its future liability for the payment of black lung benefits and therefore
could not be a "responsible operator." See 20 C.F.R. § 725.492(a)(4)
(1999). Accordingly, the next most recent operator was Armco, who
did meet all of the requirements for responsible operator liability.

   Armco argues alternatively that even if Babcock Mining is not the
responsible operator, Chafe Mining, the next most recent employer,
employed Martin for a period longer than one year. Armco asserts
that because the Director erred in failing to ensure that Chafe Mining
secured its future ability to pay benefits, the responsibility for those
benefits should be borne by the Trust Fund. We find this argument to
be without merit.

   The regulations anticipate and provide for the situation where a
potentially responsible operator is financially unable to pay a miner’s
benefits. Section 725.492 establishes four requirements that must be
satisfied before an operator is determined liable for the payment of
benefits, including the requirement that "[t]he operator or the
employer shall be capable of assuming its liability for the payment of
continuing benefits." 20 C.F.R. § 725.492(a)(4) (1999). Because
Chafe Mining is not capable of paying continuing benefits, a factual
finding that Armco does not challenge, the Board properly concluded
that Chafe Mining cannot be the responsible operator. After finding
                         ARMCO, INC. v. MARTIN                         11
Chafe Mining incapable of being the responsible operator, the Board
correctly looked to the next most recent employer for whom Martin
worked at least one year — Armco. Having concluded that Armco
met all of the requirements of 20 C.F.R. §§ 725.492 and 725.493, the
Board properly found Armco to be the operator responsible for paying
benefits to Martin.

   Because the regulations call for finding the operator who meets all
the criteria of a responsible operator rather than having liability revert
to the Trust Fund if the first potentially responsible operator does not
meet all the criteria, we find no basis for requiring the payment of
Martin’s benefits out of the Trust Fund.

   We therefore affirm the Board’s designation of Armco as the
responsible operator in this case.

                                   III

   Armco raises three additional issues that it did not present to the
Board. First, Armco contends that the procedures used in deciding
whether to award benefits have been changed by the Supreme Court’s
decision in Director, OWCP v. Greenwich Colliers, 512 U.S. 267
(1994) (invalidating the "true doubt" rule), and this court’s decision
in Island Creek Coal Co. v. Compton, 211 F.3d 203 (4th Cir. 2000)
(holding that the ALJ must weigh all relevant evidence together,
rather than analyzing the evidence separately depending on its type).
It argues that had the ALJ applied these new procedures, he would not
have awarded benefits to Martin. Second, Armco contends that the
ALJ erred in crediting the opinion of a non-board certified doctor and
in attributing bias to a doctor based on the identity of the party who
presented his opinion. Finally, Armco challenges the ALJ’s decision
to set January 1, 1989 — the first day of the month when Martin’s
claim was first made — as the date of onset of his disability. In doing
so, the ALJ followed 20 C.F.R. § 725.503(b), which provides that
where evidence does not establish the month of onset, "benefits shall
be payable to such miner beginning with the month during which the
claim was filed." Armco contends that this regulation violates § 7(c)
of the Administrative Procedure Act by improperly allocating the bur-
den of proof.
12                      ARMCO, INC. v. MARTIN
   Because Armco did not present these issues to the Board, the deci-
sion and order of the Board did not address or decide them. We con-
clude therefore that Armco has waived these issues for consideration
on appeal. See, e.g., South Carolina v. United States Dep’t of Labor,
795 F.2d 375, 378 (4th Cir. 1986).

                                  IV

   For the foregoing reasons, the petition of Armco for review is
denied and the decision and order of the Benefits Review Board is
affirmed.

                                  PETITION FOR REVIEW DENIED

LUTTIG, Circuit Judge, concurring in the judgment:

   I concur in the judgment of the court, but not in its opinion. I con-
cur in the judgment because Armco is, and Babcock Mining is not
and cannot be, the coal mine operator responsible, by statute and reg-
ulation, for payment of Martin’s black lung benefits. The court never
actually addresses Armco’s argument that Babcock Mining is the
responsible operator under 20 C.F.R. § 725.493. However, that argu-
ment is unavailing because it rests upon a fundamental misreading of
the regulation. Section 725.493(b) provides that an employer may
establish that a miner was not "regularly employed for a cumulative
year," through proof that the miner "was not employed by [that
employer] for a period of at least 125 working days." However, this
regulation does not provide the converse, upon which Armco’s argu-
ment rests — namely, that regular employment for a cumulative year
is established through proof that the miner was employed for a period
of at least 125 working days. The mere fact that Martin worked for
Babcock Mining for a period of in excess of 125 days, therefore, does
not establish that Martin worked for that operator for the required
one-year period. Because of this, and because Martin was not other-
wise regularly employed by Babcock Mining for a period of one year
or for partial periods totaling one year, Babcock Mining is not and
cannot be considered the coal mine operator responsible for Martin’s
black lung benefits.