Court Opinion

ID: 9464216
Source: CourtListenerOpinion
Date Created: 2023-08-04 23:27:42.76485+00
Date Added: 2024-06-11T17:38:30.907869
License: Public Domain

HAYNSWORTH, Chief Judge,
dissenting:
I respectfully dissent.
*1153The majority recognizes that deference is due the findings and conclusion of the Secretary in resolving this mixed question of fact and of law. In reversing, however, the majority can point to no error of law which influenced the decision of the Secretary. What it does is to take a different view of the facts, which, though substantially undisputed, can become colored in the process of a selective statement of them. In my view, the Secretary’s statement of the facts was more balanced, and should be accepted by this court.
Ball and his brothers were not paid wages or anything resembling wages. They were paid a fixed sum per ton of coal delivered to the tipple. Whether the partnership made profits, and the amount of those profits, depended upon the volume of coal the partnership could deliver, and the costs incurred by the partnership in the extraction and delivery of that coal. The contract did not stipulate the number of miners to be employed by the partnership, or the wages to be paid them. In these days, there are limits to which any employer may hold labor costs down on an hourly basis, but within those limits, the partnership was free to keep its hourly labor costs low or to pay some premium for exceptionally productive employees. The management of the work was for the partnership, and the amount of the partnership’s earnings was in direct relationship to the quality of the performance of the partnership in the discharge of its managerial function.
Moreover, the parties were in complete agreement that they intended an independent contractual relationship in which Jewell Coal Company would have no right to direct or control the manner in which the work was done. Its sole interest was that coal be produced and delivered to the tipple. See Kinty v. United Mine Workers of America, 544 F.2d 706 (4th Cir. 1976). How and when it was done was up to the partnership. Thus, before any possible dispute about black lung disease appeared on the horizon, Jewell solemnly reported that the parties maintained an independent contractual relationship, and the partnership recognized this relationship by paying self-employment taxes on the earnings of the partners and social security taxes on the earnings of its employees. I cannot look upon the partnership actions in discharging these tax obligations of an independent contractor as an inadvertence on the part of an uneducated coal miner. Relatively uneducated employers are not likely to pay tax obligations unless they are convinced that the law requires it. Moreover, the partnership employed its own accountant. The conduct of the partners was entirely consistent with the expressed conclusion of Jewell Coal Company that the mutual intent of both parties was to create an independent contractual relationship in which Ball Brothers was to manage its business free of control by Jewell and to reap and retain what profits would accrue from good management of the work.
The case would be perfectly clear and beyond dispute had Jewell not provided capital investment and engineering services for the Ball Brothers, paid their electricity bill, and included the partners and their employees in its workmen’s compensation coverage. These seem to me of no great significance in deciding where the right to control lay, for such arrangements were simply the practical consequence of economic considerations.
The partner’s mining operation was simply not large enough to justify the employment of a full time engineer. Anticipated cost of part-time engineering services by Jewell’s employee was doubtless reflected in the tonnage price, and one would suppose that any reduction in price that resulted cost the partnership less than the fee it would have had to pay to procure the services of an independent engineer, if there were such a person in the vicinity. Similarly, placing the cost of electricity on Jewell probably represented a net savings to both parties, as would inclusion of these people in Jewell’s workmen’s compensation insurance. It seems obvious to me that the parties intended that Jewell would assist the partnership in obtaining electric power, part-time engineering service, and workmen’s compensation protection at minimal *1154cost to the partnership. That kind of assistance does not convert an independent contractual relationship into one of employer and employee. Surely that should not be the case when the basic arrangement compensated the partnership on the basis of so many dollars per ton of coal delivered to the tipple and where the profits of the partnership depended on the quality of its managerial performance and the productivity it could achieve in the work of the partners and their employees.
It is also true, of course, that Jewell provided the capital investment in the mine and its equipment. There is no indication that Ball Brothers had the financial resources to have made any such capital investment, but there again that circumstance was surely reflected in the agreed tonnage price. Moreover, it is not unusual for a businessman to seek initial capital financing from persons who will derive a direct economic benefit from the successful operation of a proposed business. Neither alone, nor in combination with the other services for which Jewell paid, is it enough to override the clear fact that the business of the partnership was entrepreneurial, and that the mutual intention of the parties was that control of the work and the manner in which it was done was vested in the partnership.
There is a suggestion in the opinion of the majority that resort to such arrangements might be a means to defeat in part the beneficent purposes of the pneumoconi-osis legislation. This arrangement long antedated that statute, however. If there is anything after enactment of that legislation which indicates a resort to subterfuge to partially avoid liabilities under the statutes, the Secretary and his hearing officers will know about it long before we, and he will be quite free to strike those arrangements down. Meanwhile, we are reviewing his fact finding and determination of a mixed question of law and fact. I think we should recognize the facts as found by the Secretary, those strongly pointing in support of his conclusion, as well as those which point in the other direction. The Secretary did weigh all the facts, and I can find no fault with the manner in which he weighed the facts in coming to his conclusion.
Under those circumstances, I believe that the Secretary’s conclusion is binding upon us.