December 15, 1995
Prepared By
Office of General Counsel
Benefits Review Board
United States Department of Labor
Table of Contents
A. Requirement to File State Workers'
Compensation Claim; Offset
[Digest Headings: Section 725.535(b); Validity]B. Consequences of Filing a Part B Claim
[Digest Headings: Converting Part B Claims to Part C; Prior Findings of Entitlement]
- 1. Generally; Assessment of Interest On Past Due Benefit Installments
- 2. Under the 1981 Amendments to the Act
[Digest Headings: Trust Fund Liability]- 3. Overpayments
- a. Erroneous Information
- b. Income and Expenses
- c. Defeat the Purpose of the Act
- d. Changed Position for the Worse
- e. Miscellaneous
D. Applicable Law
[Digest Headings: Application of Current Law By Appellate Tribunal]
- 1. Abandonment
[Digest Headings: Distinguishing Sections 725.409 and 725.410]- 2. Merger of Claims/Duplicate Claims
- a. Tenth Circuit's Duplicate Claim Approach
- b. Material Change of Conditions
- 1). Seventh Circuit
- c. Merging Duplicate Claims
- d. Duplicate Survivor's Claims
- 1. Generally
- 2. Procedural issues
- 3. Mistake of fact/change in conditions
- 1. Onset of Total Disability Due to Pneumoconiosis
- a. Section 727.302; Validity
- b. Generally
- 2. The Effect of Continued Employment
- 1. Generally; Timeliness
- a. Thirty Day Notice; Section 725.458
- 2. Administrative Procedure Act
- 3. Law of the Case
- 4. Issues on Appeal
- a. Board's Authority
- b. Jurisdiction
[Digest Headings: Jurisdiction on Interest Cases]
- 1. Settlements and Releases
A. REQUIREMENT TO FILE STATE WORKERS' COMPENSATION CLAIM; OFFSET
DIGESTS
A miner who had been awarded state benefits for pneumoconiosis subsequently died due to causes unrelated to his pneumoconiosis. Pursuant to �-4-10(e) of the West Virginia Code, the survivor of the miner was entitled to a lump sum payment since the miner was in payment status at the time of his death and the cause of his death was unrelated to pneumoconiosis. The court held that an offset is mandated in this case since claimant would not have received the lump sum award had her spouse not been disabled due to pneumoconiosis. Carbon Fuel Co. v. Director, OWCP [Kyle], 20 F.3d 120, 18 BLR 2-228 (4th Cir. 1994).
Section 725.535(b) Validity
Section 725.535(b)(offset regulations) is consistent with Section 422(g) of the Act, 30 U.S.C. �2(g) and is reasonably related to the purpose of the Act. Harmon Mining Corp. v. Director, OWCP and Stewart, 826 F.2d 1388 (4th Cir. 1987), affirming Stewart v. Harmon Mining Corp., 5 BLR 1-854 (1983).
Offset
The Third Circuit agreed with the Director in these consolidated cases regarding offset, where the miners' state awards had been made pursuant to Section 301(i) of the Pennsylvania Occupational Disease Act, that Section 422(g) of the Act, 30 U.S.C. �2(g), was ambiguous. The Court held, however, that the Director's interpretation of 20 C.F.R. �5.533(a)(1) was inconsistent with the regulation. Consequently, the Court affirmed the Board's determination that employers paying federal black lung benefits could offset their payments by the amount of state benefits the miner received pursuant to Section 301(i) of the Pennsylvania Occupational Disease Act. Director, OWCP v. Eastern Asso. Coal Corp. [O'Brockta], F.3d , 19 BLR 2-164 (3d Cir. 1995).
B. CONSEQUENCES OF FILING A
PART B CLAIM
DIGESTS
Converting Part B Claims to Part C
Part B claims forwarded to DOL by SSA for payment or evaluation are converted to Part C claims for the purposes of benefit liability. Helen Mining Co. v. Director, OWCP, 924 F.2d 1269 (3d Cir. 1991); see also Saris v. Director, OWCP, 11 BLR 1-65 (1988).
Prior Findings of Entitlement
A prior determination of eligibility under Part B eliminates the requirement of independently establishing eligibility pursuant to Part C. Director, OWCP v. Saulsberry, 887 F.2d 667, 13 BLR 2-80 (6th Cir. 1989).
A finding by the Illinois Industrial Commission that claimant was partially disabled due to pneumoconiosis is not a bar under the theory of collateral estoppel to the alj's finding [under the Act] that claimant is totally disabled due to pneumoconiosis. Freeman United Coal Co. v. OWCP [Forsythe] 20 F.3d 289, 18 BLR 2-189 (7th Cir. 1994).
DIGESTS
The court held that prejudgment interest is due thirty days from the date of initial determination of entitlement. The Youghiogheny and Ohio Coal Co. v. Warren, 841 F.2d 134, 11 BLR 2-73 (6th Cir. 1988); see also Stapleton v. Westmoreland Coal Co., 785 F.2d 424, 8 BLR 2-109 (4th Cir. 1986), rev'd on other grounds sub nom. Mullins Coal Co., Inc. of Virginia v. Director, OWCP, supra; Peabody Coal Co. v. Blankenship, 773 F.2d 173 (7th Cir. 1985); Bethlehem Mines Corp. v. Director, OWCP, 766 F.2d 128 (3d Cir. 1985); Baldwin v. Oakwood Red Ash Coal Corp., 14 BLR 1-23 (1990) [for M.B.O. claims].
DIGESTS
Trust Fund Liability
Under the transfer of liability provisions of the 1981 Amendments, the Trust Fund is liable for claims denied, either by SSA or DOL, prior to March 1, 1977, and later approved. It is not liable for claims pending on March 1, 1978. The court held that a miner's claim and the survivor's claim of his widow must be considered separately in determining whether the transfer provisions were applicable to either, or both, claims. The Earl Patton Coal Co. v. Patton, 848 F.2d 668, 11 BLR 2-97 (6th Cir. 1988); see also Clark v. Director, OWCP, 917 F.2d 374 (8th Cir. 1990)[the court agreed with this principle, stating that a survivor's claim does not merge with a miner's claim].
DIGESTS
An initial determination of entitlement by the district director as well as the ALJ's award of benefits is not erroneous information under 20 C.F.R. �0.561(f). McConnell v. Director, 993 F.2d 1454, 18 BLR 2-168 (10th Cir. 1993); see also Bracher v. Director, OWCP, 14 F.3d 1157, 18 BLR 2-97 (7th Cir. 1994).
The Tenth Circuit held that the agency's initial determination does not constitute erroneous information under Section 725.522(c). McConnell v. Director, OWCP, 993 F.3d 1454, 18 BLR 2-168 (10th Cir. 1993).
In determining the miner's income, the regulations take a functional approach to discerning income and expenses. Therefore, the income and expenses of both spouses should be considered. McConnell v. Director, 993 F.2d 1454, 18 BLR 2-168 (10th Cir. 1993).
Expenses for support of others for whom the miner (and his wife) have no legally responsibility should not be included in discerning income and expenses. Regulations count income and expenses of the household as defined by legal responsibility. McConnell v. Director, 993 F.2d 1454, 18 BLR 2-168 (10th Cir. 1993).
In McConnell, the Tenth Circuit noted that the regulation expressly state that recovery will defeat the purposes of the Act when the claimant needs substantially all of his income to cover his relevant expenses. Consequently, the court recognized that the regulations contemplate a small monthly cushion where warranted. In the instant case, the court concluded that $114 was a sufficient monthly cushion. McConnell v. Director, 993 F.2d 1454, 18 BLR 2-168 (10th Cir. 1993); but see Benedict v. Director, OWCP, 29 F.3d 1140, 18 BLR 2-309 (7th Cir. 1994).
The Tenth Circuit held that the income and expenses of both spouses are properly included in determining whether recovery of an overpayment would defeat the purposes of the Act, rejecting claimant's argument that his wife's social security benefits (kept in a separate account and used for the support of close relatives) should be excluded. Only support of others for whom claimant was "legally responsible", Section 410.561c(a)(3), could be considered. A "sufficient monthly cushion of almost $114" was deemed by the Court to meet claimant's concern that repayment of the overpayment would leave he and his wife with enough extra to cushion against expenses caused by their "poor health." McConnell v. Director, OWCP, 993 F.3d 1454, 18 BLR 2-168 (10th Cir. 1993).
Claimant had changed his position for the worse when he took a six week vacation upon receiving benefits. Claimant had spent a substantial and unrecoverable sum of money on an activity which he would not undertaken absent the award of benefits. McConnell v. Director, 993 F.2d 1454, 18 BLR 2- 168 (10th Cir. 1993).
The Tenth Circuit reversed and granted a waiver holding that claimant's decision to take a vacation with overpayment monies constituted a change in his position for the worse under 20 C.F.R. Ё410.561d, 725.542(b)(2). In enunciating a three part test, the Court held de novo that claimant had established (1) a change in position (2) for the worse and (3) a causal relationship between the benefits and the change in position. Determining that the amount of waiver is linked to the change of position, the Court relied on the uncontested testimony by claimant that his vacation cost "about $5,000" and remanded for reduction of the overpayment amount by that figure. [Thorough discussion of this holding by the Court] McConnell v. Director, OWCP, 993 F.3d 1454, 18 BLR 2-168 (10th Cir. 1993).
The Seventh Circuit held that because the receipt of interim benefits aided the claimant's saving efforts and put claimant in no worse position than if he had not received benefits, the ALJ correctly concluded that requiring claimant to repay the Trust Fund would not contravene equity and good conscience. Benedict v. Director, OWCP, 29 F.3d 1140, 18 BLR 2-309 (7th Cir. 1994).
All benefit payments paid prior to final adjudication are recoverable if the miner is ultimately determined ineligible for benefits. Bracher v. Director, OWCP, 14 F.3d 1157, 18 BLR 2-97 (7th Cir. 1994).
DIGESTS
Application of Current Law By Appellate Tribunal
The Sixth Circuit, citing Bradley v. School Board, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.476 (1974), held that it must apply the law in effect at the time it renders its decision unless doing so results in manifest injustice or there is legislative history or statutory directive to the contrary. In the instant case, in order to avoid a manifest injustice, the court held that the parties must have an opportunity to present relevant evidence to the ALJ regarding the change in the interpretation of law. Tackett v. Benefits Review Board, 806 F.2d 640, 10 BLR 2-93 (6th Cir. 1986); see also Harlan Bell Coal Co. v. Lemar, 904 F.2d 1042, 14 BLR 2-1 (6th Cir. 1990); Faries v. Director, OWCP, 909 F.2d 170, 14 BLR 2-37 (6th Cir. 1990).
The Sixth Circuit held employer entitled to a new trial on the issue of rebuttal pursuant to Section 727.203(b)(3). Here, the Board initially applied the holding in York v. Benefits Review Board, 819 F.2d 134 (6th Cir. 1987), based on the issuance of York subsequent to the 1985 ALJ decision denying benefits pursuant to subsection (b)(2). As the finding that subsection (b)(3) was not established was not challenged on appeal, it was affirmed by the Board. Subsequent attempts by employer to submit new evidence on subsection (b)(3) were not successful at the ALJ or Board levels. The Sixth Circuit, applying the holdings in Harlan Bell Coal Co. v. Lemar, 904 F.2d 1042 (6th Cir. 1990) and Tackett v. Benefits Review Board, 806 F.2d 640 (6th Cir. 1986), held the "manifest injustice" principle applicable to this case, reasoning that "...the change in (b)(2) altered the significance of (b)(3),...making rebuttal under (b)(2) more difficult to achieve, York made rebuttal under (b)(3) more attractive by comparison. Forcing Peabody to abide by its pre-York election to rebut primarily under (b)(2) -- just like forcing Peabody to rest on proof offered under the pre- York (b)(2) rebuttal standard -- creates a "manifest injustice" when the ALJ reconsiders the case under York." Greer slip op at 9. Finally, the Court distinguished Wright v. Island Creek Coal Co., 824 F.2d 505 (6th Cir. 1987), holding that employer preserved its right to contest subsection (b)(3) through its motion for reconsideration, thereby holding that the Board applied law of case in error. Peabody Coal Co. v. Greer, 62 F.3d 801, 19 BLR 2-235 (4th Cir. 1995).
Distinguishing Sections 725.409 and 725.410
The Fourth Circuit distinguished Section 725.409 from Section 725.410 (Notice to claimant) by noting that Section 725.409 applies where the record does not contain sufficient evidence to allow the agency to make a factual determination while Section 725.410 covers situations where there is enough evidence in the record and the appropriate agency has made its factual determination, citing Clark v. Director, OWCP, 838 F.2d 197, 11 BLR 2-46 (6th Cir. 1988). Adkins v. Director, OWCP, 878 F.2d 179, 12 BLR 2-313 (4th Cir. 1989).
2. MERGER OF CLAIMS/DUPLICATE CLAIMS
In Lukman v. Director, OWCP, 896 F.2d 1248, 13 BLR 2-332 (10th Cir. 1990), the court ruled that " ... the purpose of Section 725.309(d) was to provide relief from the ordinary principles of finality and res judicata to miners whose physical condition deteriorates" so as " ... to permit new claims to be filed even where modification under Section 725.310(a) was no longer available because more than a year had passed since the first claim was denied." 896 F.2d at 1253 - 1254, 13 BLR at 2-345 - 2-346. The court, thereafter, determined that all claims, whether the initial claim or a subsequent (duplicate) claim, must be processed essentially the same and must be adjudicated on the traditional three-tier system. After rejecting the Board's bifurcated approach, the court held that the district director:
- must determine simultaneously whether (1) there has been a material change in condition, and (2) whether the claimant is entitled to benefits. After such determinations by the deputy commissioner, a claimant is entitled to a hearing before an ALJ to examine both issues de novo. Finally, review on the merits of the ALJ's decision by the Board and the appropriate court of appeals is to be made available.
896 F.2d at 1254, 13 BLR at 2-345 - 2-346 (footnote omitted).
In Dotson v. Director, OWCP, 14 BLR 1-10 (1990)(en banc), the Board decided to follow the Lukman court's three-tier approach in all circuits. The Board held, therefore, that " ... any party dissatisfied with a District Director's determination on a duplicate claim is entitled to have the matter considered by the Office of Administrative Law Judges." 14 BLR at 1-11.
A "material change in conditions" is defined as evidence, which is relevant and probative, demonstrating that there is a reasonable possibility that it would change the prior administrative result. Spese v. Peabody Coal Co., 11 BLR 1-174, 1-176 (1988), dismissed with prejudice, No. 88- 3309 (7th Cir., Feb. 6, 1989)(unpub.). Where a "material change in conditions" is established, the subsequent claim is then considered a new and viable claim, and the filing date of the subsequent claim determines which substantive regulations apply. Spese, supra. In making a "material change of conditions" finding, the ALJ may consider not only the evidence available to the district director but also evidence considered for the first time by the ALJ. Rice v. Sahara Coal Co., BLR , BRB No. 88-1347 BLA (Aug. 31, 1990).
DIGESTS
The Sixth Circuit reviewed the Spese (Board) standard, McNew (7th Circuit) standard, and the Director's position in determining the proper standard to be utilized to establish a material change in conditions pursuant to 20 C.F.R. �5.309(d). The Court adopted the Director's position, i.e., to determine whether a material change in conditions is established, "the ALJ must consider all the new evidence, and determine whether the miner has proven at least one of the elements of entitlement previously adjudicated against him. If the miner establishes the existence of that element, he has demonstrated, as a matter of law, a material change. Then the ALJ must consider whether all of the record evidence, including that submitted with the previous claims, support a finding of entitlement to benefits." The Court granted due deference to the Director's position in this case involving statutory interpretation because the Director's interpretation is "reasonable in light of the purpose of the statute and the language included in Section 725.309(d)." The Court also held that the miner timely filed his duplicate claim pursuant to Section 725.308. Sharondale Corp v. Ross, 42 F.3d 993, 19 BLR 2-10 (6th Cir. 1994).
The Fourth Circuit agreed with employer and held that to establish a "material change in conditions" under 20 C.F.R. �5.309(d), claimant has to establish either that the miner did not have black lung disease at the time of the first application but has since contracted it and become totally disabled by it, or that his disease has progressed to the point of total disability although he was not totally disabled at the time of his first application. Thus the Court joins the Seventh Circuit in McNew and specifically rejected the Board's standard as enunciated in Shupink/Spese [II] and the Director's standard as adopted by the Sixth Circuit in Ross. The Board will continue to apply the Shupink standard in all circuits except the Fourth, Sixth and Seventh Circuits where published law dictates another standard. Lisa Lee Mines v. Director, OWCP[Rutter], 57 F.3d 402, 19 BLR 2-223 (4th Cir. 1995).
The Third Circuit, following the holdings in the Fourth Circuit in Lisa Lee Mines v. Director, OWCP, 57 F.3d 402 (4th Cir. 1995), the Sixth Circuit in Sharondale Corp. v. Ross, 42 F.3d 993 (6th Cir. 1994), and the Seventh Circuit in Sahara Coal Co. v. Director, OWCP, 946 F.2d 554 (7th Cir. 1991), rejected the Board's Spese/Shupink standard and adopted the Director's interpretation: "...the ALJ must consider all of the new evidence, favorable and unfavorable, and determine whether the miner has proven at least one of the elements of entitlement previously adjudicated against him. If the miner establishes the existence of that element, he has demonstrated, as a matter of law, a material change. Then the ALJ must consider whether all of the record evidence, including that submitted with the previous claims, supports a finding of entitlement to benefits." Swarrow, slip op at 15. The Court stated that "pneumoconiosis is a latent dust disease" that may not become manifest until long after exposure to the causative agent, noting that Congress recognized the "perniciously progressive nature of the disease" which does not improve. An extensive discussion of this issue is included with various references. The Court therefore vacated the award of benefits and remanded for the ALJ to apply the proper standard in finding a material change in conditions established. Note that the Court holds that applying the wrong standard does constitute error. Labelle Processing Co. v. Swarrow, F.3d , No. 95-3116 (3d Cir. Nov. 28, 1995).
The Third Circuit held that the doctrine of res judicata does not apply in this case regarding material change in conditions because the second claim asserts a new cause of action, citing Board of Trustees of Trucking Employees v. Centra, 983 F.2d 495, 504 (3d Cir. 1992), a claim preclusion case. Denial of first claim established only that claimant was not then totally disabled due to pneumoconiosis, and while claimant may not attack that denial, he may file subsequent claims based on disability occuring after the date of that denial. Labelle Processing Co. v. Swarrow, F.3d , No. 95-3116 (3d Cir. Nov. 28, 1995).
In Sahara Coal Co. v. Director, OWCP [McNew], 946 F.2d 554, 15 BLR 2-227 (7th Cir. 1991), the court took exception with the Board's definition of material change in conditions. The court held that in determining whether the evidence established a material change in conditions it was not enough that the new application was supported by new evidence of disease or disability. Rather the court defined material change in conditions as either that the miner did not have black lung at the time of the first application but had since contracted it and became totally disabled by it, or that his disease had progressed to the point of becoming totally disabled although it was not at the time of the first application. The court further stressed that the initial determination of whether there is a material change in conditions is for the fact-finder, not the Board. [In all circuits except for the Seventh, the Board continues to follow Spese.]
The merger provision of Section 725.309(c) was intended to allow a post-March 1, 1978, claim to be evaluated under the more lenient Part 727 interim regulations only if a claimant's earlier claim had not already been evaluated under those regulations or is otherwise not final. In other words, a post-March 1, 1978, claim can only merge with a prior claim which is still "subject to review under Part 727 of this sub-chapter." 20 C.F.R. �5.309. Principles of finality, therefore, require that a subsection claim, unless merged with an earlier claim by Section 725.309, be denied on the grounds of the earlier denial. Alternatively upon a showing of a "material change in conditions," the subsequent claim may be evaluated as a new claim under the permanent Part 718 regulations. Here, since the miner did provide evidence of a material change in conditions with his subsequent claim, the court determined that the Board properly determined that the subsequent claim was a new claim entitled to review under the Part 718 regulations. Bath v. Director, OWCP, No. 88-3713 (3d Cir., Apr. 10, 1989) (unpub.).
The court, citing Spese v. Peabody Coal Co., 11 BLR 1-178 (1988), dismissed with prejudice, No. 88-3309 (7th Cir., Feb 6, 1989)(unpub.), held that merger is available only when a previously denied claim, reopened for review under Part 727, and a subsequent claim are pending at the same time. Once a claim reviewed under Part 727 has been finally denied, even due to abandonment, see 20 C.F.R. �7.102(b)(5), it cannot be revived merely by filing a subsequent claim. Tonelli v. Director, OWCP, 878 F.2d 1083, 12 BLR 2-319 (8th Cir. 1989); see also West v. Director, OWCP, 896 F.2d 308, 13 BLR 2-323 (8th Cir. 1990).
Merger pursuant to Section 725.309(c) is permissible in cases of pending multiple claims by the same claimant. Therefore, a pending living miner's claim cannot be merged with a pending survivor's claim. The Earl Patton Coal Co. v. Patton, 848 F.2d 668, 11 BLR 2-97 (6th Cir. 1988).
In cases where the record contains two survivors' claims filed by the same claimant, the Board has held that the subsequent claim must be denied on the same basis of the earlier claim unless the subsequent claim is filed within one year of the last activity involving the earlier claim. Thus, the "material change in conditions" phrase is not applicable to duplicate survivors' claims; duplicate survivors' claims may only be considered if the subsequent claim satisfies the requirements under Section 725.310 for a request for modification. Mack v. Matoaka Kitchekan Fuel, 12 BLR 1-197 (1989). The United States Court of Appeals for the Sixth Circuit reversed the Board's application of the foregoing principle, holding that the Section 725.309 bar to duplicate survivors' claims was inapplicable to that case because this basis for denying the duplicate survivor's claim had not been relied on by the Director below. Jordan v. Director, OWCP, 892 F.2d 482, 13 BLR 2-184 (6th Cir. 1989).
Section 22 of the Longshore and Harbor Workers' Compensation Act provides that the one year period in which a party may request modification runs from the date of the rejection of the claim. In deciding Garcia v. Director, OWCP, 12 BLR 1-24 (1988), the Board considered the structure of the regulations, as well as the authority granted the district director, and determined that modification is available within one year from the last denial issued in the judicial or administrative process. If a duplicate claim was filed within one year of the issuance of the last denial, the duplicate claim constitutes a timely request for modification of claimant's initial claim pursuant to 20 C.F.R. �5.310. 33 U.S.C. �2(a); Stanley v. Betty B. Coal Co., 13 BLR 1-72 (1990).
Section 22 of the LHWCA, 33 U.S.C. �2, as incorporated into the Act by 30 U.S.C. �2(a), governs the modification of awards. It authorizes the district director to "review a compensation ... in accordance with the [claims] procedure prescribed in ... section 919" and to issue a new compensation order "on the ground of a change in conditions or ... a mistake in determination of fact by the deputy commissioner." The implementing regulations are found at 20 C.F.R. �5.310.
DIGESTS
A request for modification need not be formal in nature. It simply must be a writing which indicates an intention to seek further compensation. Fireman's Fund Insurance Co. v. Bergeron, 493 F.2d 545 (5th Cir. 1974). For example, in Cobb v. Schirmer Stevedoring Co., 2 BRBS 132 (1975), aff'd, 577 F.2d 750, 8 BRBS 562 (9th Cir. 1978), the Board held that a district director's written memorandum summarizing his telephone conversation with claimant was sufficient to constitute a modification request under Section 22 because the memorandum indicated that claimant was dissatisfied with his compensation. See also McKinney v. O'Leary, 460 F.2d 371 (9th Cir. 1972); Madrid v. Coast Marine Construction Co., 22 BRBS 148 (1989).
The district director need not issue a modification order within one year; rather, the modification process need only be initiated within that time period. Banks v. Chicago Grain Trimmers Assoc., 390 U.S. 459, 88 S.Ct. 1140 (1968); Candado Stevedoring Corp. v. Willard, 185 F.2d 23 (2d Cir. 1950); American Mutual Liability Ins. Co. of Boston v. Lowe, 85 F.2d 625 (3d Cir. 1936).
Where employer has been determined not to be the responsible operator and thus has ended its payment of benefits (but the Trust Fund continues to pay benefits), the one year statute of limitations for modifying the dismissal of the employer runs from the date of the employer's last payment of benefits. USX Corp. v. Director, OWCP, 918 F.2d 656, 17 BLR 2-29 (11th Cir. 1992).
A petition for modification must be initiated before the district director. Lee v. Consolidation Coal Co., 843 F.2d 159, 11 BLR 2-106 (4th Cir. 1988); Saginaw Mining Co. v. Mazzulli, 818 F.2d 1278, 10 BLR 2-119 (6th Cir. 1987); Director, OWCP v. Peabody Coal Co. [Sisk], 837 F.2d 295, 11 BLR 2-31 (7th Cir. 1988); Director, OWCP v. Palmer Coking Coal Co. [Manowski], 867 F.2d 552 (9th Cir. 1989); Director, OWCP v. Kaiser Steel Corp. [Zupon], 860 F.2d 377, 12 BLR 2-25 (10th Cir. 1988); Director, OWCP v. Drummond Coal Co. [Cornelius], 831 F.2d 240, 10 BLR 2- 322 (11th Cir. 1987); Hoskins v. Director, OWCP, 11 BLR 1-144 (1988). For cases arising in the Seventh, Ninth, Tenth, and Eleventh Circuits, a district director may only correct his or her own mistakes of fact and not those made by an ALJ. Director, OWCP v. Jourdan, 975 F.2d 1286, 17 BLR 2-9 (7th Cir. Sept. 21, 1992); Sisk, supra; Manowski, supra; Zupon, supra; Cornelius, supra; see generally Yates v. Armco Steel Corp., 10 BLR 1-132 (1987).
Under the provisions of the Longshore and Harbor Workers' Compensation Act made applicable to the adjudication of black lung benefits claims by 30 U.S.C. �2(a), initial administrative determinations become final after 30 days if not appealed to the Benefits Review Board, see 33 U.S.C. �1(a), and persons aggrieved by a final order of the Board may have such an order set aside only by petitioning for review in a Court of Appeals within 60 days of the final order, see 33 U.S.C. �1(c). Pittston Coal Group v. Sebben, 488 U.S. 105, 12 BLR 2-89 (1988).
In Garcia v. Director, OWCP, 12 BLR 1-24 (1988), the Board noted the regulatory scheme providing for continuing availability of modification proceedings within one year following any denial by the district director, even after the district director has considered modification once. Garcia, supra at 1-26. Under the regulatory sections referenced in Section 725.310(c), the resulting actions by the district director at the conclusion of modification proceedings all provide subsequent opportunities to seek modification of that action. See 20 C.F.R. Ё725.310(c), 725.409(b), 725.418(a), 725.419(d), 725.421. To achieve the intent of Congress underlying Section 22, the parties as well as the district director on his or her own motion, may request modification of any decision issued by the district director as the condition of the miner may change with the progressive nature of pneumoconiosis or a mistake in fact could be discovered as the district director considers new evidence in the procedure. See generally Orange v. Island Creek Coal Co., 786 F.2d 724, 8 BLR 2-192, 2-197 (6th Cir. 1986). Furthermore, the modification process remains available throughout appellate proceedings. See O'Keeffe v. Aerojet-General Shipyards, Inc., 404 U.S. 254 (1971); see generally Director, OWCP v. Peabody Coal Co. [Sisk], 837 F.2d 295, 11 BLR 2-31 (7th Cir. 1988); Director, OWCP v. Drummond Coal Co., 831 F.2d 240, 10 BLR 2-322 (11th Cir 1987); Ashworth v. Blue Diamond Coal Co., 11 BLR 1-167 (1988); Hoskins v. Director, OWCP, 11 BLR 1-144 (1988).
The Sixth Circuit held that "[O]nce a request for modification is filed, no matter the grounds stated, if any, the district director has the authority, if not duty, to reconsider all the evidence for any mistake of fact or change in conditions" concluding that claimant's second claim, filed within one year of the denial of his initial claim, constituted a request for modification and entitled claimant to review under Part 727. The Court then upheld the award based on substantial evidence. Consolidation Coal Co. v. Worrell, 27 F.3d 227, 18 BLR 2-290 (6th Cir. 1994).
The Third Circuit rejected employer's argument that the district director improperly reopened this claim more than 30 days following an unchallenged award of benefits. The Court noted that "33 U.S.C. �2 authroizes the DOL to repoen an otherwias final award to "render justice under the act." [O'Keeffe at 255] and also explained that DOL's realization that it had failed to properly serve the carrier in this case, resulting in a potential violation of its due process rights, "DOL reasonably could treat Old Republic's submissions [of evidence submitted more than 30 days following the award] as a request for time to file a timely controversion." National Mines Corp. v. Carroll, F.3d , No. 94- 3711 (3d Cir. Aug. 30, 1995).
DIGESTS
The intended purpose of modification based on a mistake in fact is to vest the fact-finder "with broad discretion to correct mistakes of fact, whether demonstrated by wholly new evidence, cumulative evidence, or merely further reflection on the evidence initially submitted." O'Keeffe v. Aerojet-General Shipyards, Inc., 404 U.S. 254, 257 (1971). See Director, OWCP v. Drummond Coal Co. [Cornelius], 831 F.2d 240, 10 BLR 2-322 (11th Cir. 1987); Dobson v. Todd Pacific Shipyards Corp., 21 BRBS 174 (1988).
The fact-finder must determine if a mistake in a determination of fact was demonstrated or if a change in condition had occurred and, if so, whether reopening the case would render justice under the Act. Banks v. Chicago Grain Trimmers Association, Inc., 390 U.S. 459 (1967); McCord v. Cephas, 532 F.2d 1377, 3 BRBS 371, 376 (D.C. Cir. 1976); Wynn v. Clevenger Corp., 21 BRBS 290 (1988).
The language of Section 22 of the LHWCA is a relic of a time when district directors had full adjudicative authority over benefits claims. The adjudicative authority has been transferred to ALJs in order to satisfy the procedural requirements of the APA, leaving district directors principally with administrative functions. Cornelius, supra; Yates v. Armco Steel Corp., 10 BLR 1-132 (1987). See also Eifler v. Director, OWCP, 926 F.2d 663, 15 BLR 2-1 (7th Cir. 1991).
Modification may be relied upon by the district director to correct misidentification in the case of a responsible carrier, even where a final compensation order has been issued against the operator. Caudill Construction Company v. Abner, 878 F.2d 179, 12 BLR 2-335 (6th Cir. 1989).
The modification procedure does not "render meaningless" the finality of a Decision and Order which is not appealed within the requisite appeal time. The appellate process concerns the legal validity of an award whereas the modification procedure is aimed toward reviewing factual errors in an effort to render justice under the Act. O'Keeffe, supra.
Section 22 of the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. �2, which is incorporated into the Act by 30 U.S.C. �2(a), and implemented by 20 C.F.R. �5.310, authorizes the district director to modify an award or denial of benefits based upon a mistake in fact or change in conditions. It is well settled, however, that an error or change of law is not a proper ground for modification. Stokes v. George Hyman Construction Co., 19 BRBS 110, 113 (1986); Jenkins v. Kaiser Aluminum & Chemical Sales, Inc., 17 BRBS 183, 185 (1985); Swain v. Todd Shipyards Corp., 17 BRBS 124, 125 (1985); Donadi v. Director, OWCP, 12 BLR 1-66 (1989), aff'd on reconsideration, 13 BLR 1-24 (1989). The authority of a district director is restricted to administrative and ministerial matters, which relate to the development and processing of claims. See Saginaw Mining Company v. Mazzulli, 818 F.2d 1278, 10 BLR 2-119 (6th Cir. 1987); Director, OWCP v. Drummond Coal Company, 831 F.2d 240, 10 BLR 2-323 (11th Cir. 1987). If the case involves neither a mistake in fact nor a change in condition, but rather an error of law, initiation of modification procedures under Section 22 of the LHWCA, 33 U.S.C. �2 is not proper. However, a mixed question of law and fact would be subject to modification under Section 22 of the LHWCA, 33 U.S.C. �2. See Jenkins, supra; Presley v. Tinsley Maintenance Service, 9 BRBS 588, 592 (1979).
The First Circuit noted that while the basic criterion is whether reopening will "render justice" under the Longshore Act, "[a] bare claim of need to reopen to serve the interests of justice...is not enough. In deciding whether to reopen a case under �, a court must balance the need to render justice against the need for finality in decision making." General Dynamics Corp. v. Director, OWCP, 673 F.2d 23, 25 (1st Cir. 1982); see also McDonald v. Director, OWCP, 897 F.2d 1510, 23 BRBS 56 (CRT) (9th Cir. 1990).
In considering the modification issue, the ALJ must conduct an independent assessment of the newly submitted evidence to determine whether the newly submitted evidence, including any evidence submitted subsequent to the district director's determination, is sufficient to establish the requisite change in conditions or mistake in a determination of fact. Kovac v. BCNR Mining Corp., 14 BLR 1-156 (1990).
There is an important difference between change in condition and a mistake of fact. A change in condition--a worsening of the applicant's black lung disease to the point where it is now totally disabling--entitles him to benefits from the date of the change. The correction of a mistake of fact, showing that he had totally disabling black lung disease at the time of the original hearing, entitles him to benefits from the date--which might be long before that hearing--on which he became totally disabled. Jarka v. Hughes, 299 F.2d 534, 536-37 (2d Cir. 1962); Eifler v. Director, OWCP, 926 F.2d 633, 15 BLR 2-1 (7th Cir. 1991).
In establishing modification based on a change in condition, the deterioration in the miner's condition need not be great. It need only be a perceptible change. On the other hand, in seeking "reconsideration" of a claim based on a mistake of fact, the moving party's submission need only establish "a high probability of error to warrant a hearing." Definitive proof of the mistake is for the hearing. Amax Coal Co. v. Franklin, 957 F.2d 355, 16 BLR 2-50 (7th Cir. 1992).
If a claimant avers generally that the ultimate fact was mistakenly decided, the district director (or alj) has the authority, without more, to modify the denial of benefits. [According to the court, there is no need for a smoking gun factual error, changed conditions, or startling new evidence]. Jessee v. Director, OWCP, 5 F.3d 723, 18 BLR 2-26 (4th Cir. 1993).
The Eleventh Circuit held that Section 435(c) and Section 727.302(c) are constitutionally valid. Thus, it is proper to distinguish Section 435 claims from other claims regarding the onset of disability date. Curse v. Director, OWCP, 843 F.2d 456, 11 BLR 2-139 (11th Cir. 1988).
DIGESTS
The Third Circuit applied Section 725.503(b) which provides that benefits are payable from the month when a claim is filed only when the evidence does not establish when the disease progressed to such a stage as to render the miner totally disabled. Thus, the court held that since the uncontradicted evidence in this case established that the miner was not totally disabled as of 1983, and since the miner has produced no evidence to establish disability prior to 1985, a finding of onset of disability as of 1977 (the date of filing) is precluded. The Court remanded the case to the ALJ to reconsider the onset date. Rochester & Pittsburgh Coal Co. v. Krecota, 868 F.2d 600, 12 BLR 2-178 (3d Cir. 1989).
The Tenth Circuit held that where the miner's disability clearly occurred prior to Jan. 1, 1974, the earliest date from which benefits are payable under Part C, the ALJ need not make a specific finding as to the actual month of onset of the miner's disability.
Velasquez v. Director, OWCP, 835 F.2d 262, 11 BLR 2- 19 (10th Cir. 1987).
The Fourth Circuit held that where the evidence contains insufficient evidence as to the precise month of the miner's onset of disability, the claim filing date is the appropriate onset of disability date. Green v. Director, OWCP, 790 F.2d 1118, 9 BLR 2-32 (4th Cir. 1986).
The Seventh Circuit held that positive x-ray evidence plus lay testimony was sufficient to establish the miner's onset of disability date based upon the facts of this case. Zettler v. Director, OWCP, 886 F.2d 831 (7th Cir. 1989).
The Board summarized its holdings in Gardner v. Consolidation Coal Co., 12 BLR 1-184 (1989) and Lykins v. Director, OWCP, 12 BLR 1-181 (1989) by stating the principle that if medical evidence does not establish the date on which claimant became totally disabled, then claimant is entitled to benefits as of his filing date, unless uncontradicted medical evidence indicates that claimant was not totally disabled at some point subsequent to his filing date. Edminston v. F & R Coal Co., 14 BLR 1-65 (1990).
Continued employment has been deemed not inconsistent with total disability where the work is characterized by sporadic work, poor performance, or marginal earnings. Hanna v. Califano, 579 F.2d 67 (10th Cir. 1978).
The Sixth Circuit ruled that F.R.C.P. 32(d)(1) is applicable to the Black Lung Act. Therefore, all errors and irregularities in the giving of the 30-day notice required under 20 C.F.R. �5.458 are waived unless a written objection is promptly served upon the party giving notice. Brown Badgett, Inc. v. Jennings, 842 F.2d 899, 11 BLR 2-122 (6th Cir. 1988).
Pursuant to 20 C.F.R. �5.478, the thirty-day period in which a party is entitled to appeal to the Board is triggered by the date on which the ALJ's decision is filed with the district director's office. Director, OWCP v. Seals, 942 F.2d 986, 15 BLR 2-193 (6th Cir. 1991).
Unless the ALJ has sufficiently explained the weight he has given to obviously probative exhibits to say that his decision is supported by substantial evidence approaches an abdication of the court's duty to scrutinize the record as a whole to determine whether the conclusions reached are rational. Ziegler Coal Co. v. Sieberg, 839 F.2d 1280, 11 BLR 2-80 (7th Cir. 1988)(quoting Arnold v. Secretary of HEW, 567 F.2d 258, 259 (4th Cir. 1977)); see also Old Ben Coal Co. v. Warren Battram, 18 BLR 2-42 (7th Cir. 1993); Peabody Coal Co. v. Helms, 859 F.2d 486 (7th Cir. 1988); Schaaf v. Mathews, 574 F.2d 157 (3d Cir. 1978); Litwaitis v. Mathews, 427 F.Supp. 458 (E.D. Pa. 1976).
The Seventh Circuit, citing Bridges v. Director, OWCP, 6 BLR 1-988 (1984), held that issues not preserved as a result of a remand, cannot be raised in a second appeal. The "law of the case" doctrine permits an exception where an intervening change in controlling law dictates a result different from that directed by the appellate body. Freeman United Coal Co. v. Benefits Review Board, 912 F.2d 164, 14 BLR 2-53 (7th Cir. 1990); Richardson v. United States, 841 F.2d 993 (9th Cir. 1988); see also Piambino v. Barley, 757 F.2d 1112 (11th Cir. 1985); Goodpasture, Inc. v. M. F. Pollet, 668 F.2d 1003 (5th Cir. 1982); Delano v. Kitch, 663 F.2d 990 (10th Cir. 1981).
DIGESTS
The Courts of Appeals for the Sixth and Third Circuits have held that the Board has the authority to determine the constitutional validity of the regulations underlying the programs which the Board administers. Gibas v. Saginaw Mining Co., 748 F.2d 1121, 7 BLR 2-53 (6th Cir. 1984); Carozza v. United States Steel Corp., 727 F.2d 74, 6 BLR 2-15 (3d Cir. 1984); see also McCluskey v. Ziegler Coal Co., 2 BLR 1-1248 (1981).
The Third Circuit rejected employer's assertion that the Board violated its statutory authority by engaging in de novo fact finding when it reversed the ALJ's Section 727.203(b)(3) finding and reinstated the ALJ's previous finding that Section 727.203(b)(3) was not established. The Court held that the Board acted within its scope of review in making the legal determination that the ALJ's decision on reconsideration was clearly contrary to law. "While the board could have remanded the matter, we hardly can fault it for bringing these protracted proceedings to a close." As all the critical factual determinations had been made by the ALJ, the Board would have had to determine that "the ALJ might deviate from his prior finding" to justify remand. BethEnergy Mines, Inc. v. Director, OWCP [Vrobel], 39 F.3d 458, 19 BLR 2-95 (3d Cir. 1994).
DIGESTS
An affected or aggrieved party may initiate an appeal in any circuit in which the miner was engaged in coal mine employment, as provided for under 33 U.S.C. �1(c). Hon v. Director, OWCP, 699 F.2d 441, 5 BLR 2-43 (8th Cir. 1983). see Danko v. Director, OWCP, 846 F.2d 366, 368, 11 BLR 2- 157, 2-159 (6th Cir. 1988); Wetherill v. Director, OWCP, 812 F.2d 376, 379 n.6, 9 BLR 2-239, 2-242 n.6 (7th Cir. 1987); Bernardo v. Director, OWCP, 772 F.2d 576, 578 (9th Cir. 1985); Consolidation Coal Co. v. Chubb, 741 F.2d 968, 6 BLR 2-92 (7th Cir. 1984). See also Shupe v. Director, OWCP, 12 BLR 1-200 (1989). The Third Circuit held that, pursuant to 33 U.S.C. �1(c), it does not have jurisdiction to review an order of an administrative law judge, "upon which the Board has not yet passed." Consequently, as the Board had not issued a final order, the petition for review was dismissed as interlocutory. Elliott Mining Co., Inc. v. Director, OWCP [Kovalchick ], 956 F.2d 448, 16 BLR 2-24 (3rd Cir. 1992).
The district court (rather than the administrative law judge or the Board) has jurisdiction over the reimbursement of principal and interest upon interim payments made by the Trust Fund. Collection actions, the enforcement of liens and the calculation of statutory interest are all within the traditional purview of the district courts. The Youghiogheny and Ohio Coal Co. v. Vahalik, 970 F.2d 161, 16 BLR 2-94 (6th Cir. 1992).
The Tenth Circuit rejected employer's argument that the pendency of a motion for modification [of the Board's decision] made the Board's decision non-final and therefore not appealable. Consequently, the court held that it had jurisdiction to consider the petition for review. Hansen v. Director, OWCP, No. 91-9559 (10th Cir., Jan. 20, 1993).
After determining that the proper forum for approval was the body before which the attorney's work was performed, the court, citing 33 U.S.C. �8(c), approved a fee settlement agreement for services before it, even though the final compensation order had not been entered. Eifler v. Peabody Coal Co., 13 F.3d 236, 18 BLR 2-86 (7th Cir. 1993).
The Third Circuit held that Section 725.603 appeals belong in the District Courts and the case before them concerned an administrative determination of liability and not review of a judgement in a district court enforcement action. National Mines Corp. v. Carroll, F.3d , No. 94-3711 (3d Cir. Aug. 30, 1995).
Jurisdiction on Interest Cases
The Third Circuit affirmed the Board's decision that it lacked subject matter jurisdiction to resolve disputes regarding interest assessed against coal mine operators on reimbursements to the Black Lung Disability Trust Fund (the Fund) for medical benefits that the Fund previously paid to or on behalf of claimants. The Court held that refusal by the ALJ and the Board to exercise jurisdiction over interest assessment cases did not deny the operators the right to a hearing and review as required by 33 U.S.C. Ё919 and 921, stressing that the operator's opportunity to challenge an interest assessment was controlled by statutory provisions concerning access to the district courts for enforcement of black lung liability. The Court held that the operators' challenge to the interest assessed against them is a collateral attack on a final compensation order, jurisdiction over which rests in the district courts pursuant to 30 U.S.C. �4(b)(4)(A). BethEnergy Mines, Inc. v. Director, OWCP [Pierson], 32 F.3d 843, 18 BLR 2-351 (3d Cir. 1994).
The Fourth Circuit, agreeing with the Third, Sixth and Seventh Circuits, affirmed the Board's holding that they had "no jurisdiction over issues involving the computation of interest assessed against coal mine operators on reimbursements paid to the Fund by coal mine operators for medical benefits paid by the Fund, as they are not "in respect of a claim" under 33 U.S.C. �9(a)." Sea "B" Mining Co. v. Director, OWCP, F.3d , 19 BLR 2-49 (4th Cir. 1995).
The Sixth Circuit, relying on Vahalik, upheld the decisions of the ALJ and the Board, see Brown v. Sea B. Mining Co., 17 BLR 1-115 (1993)(en banc), aff'd, Sea "B" Mining Co. v. Director, OWCP, F.3d , 19 BLR 2-49 (4th Cir. 1995), that jurisdiction to consider a challenge to the DOL's method of calculating interest due on unpaid reimbursements of monies paid on behalf of coal operators by the Trust Fund in MBO cases lies with the District Courts. B & S Coal Co. v. Director, OWCP, 35 F.3d 1041, 18 BLR 2- 373 (6th Cir. 1994).
The Seventh Circuit, agreeing with the Third and Sixth Circuits, held that the federal district court is the appropriate forum for resolving disputes regarding computation of interest on reimbursements to the Fund for medical benefits. See Bethenergy Mines, Inc. v. Director, OWCP [Pierson], 32 F.3d 843, 18 BLR 2-351 (3d Cir. 1994); B & S Coal Co. v. Director, OWCP, 35 F.3d 1041, 18 BLR 2-373 (6th Cir. 1994). The Court reasoned that the interest issue was not "in respect of such claim" pursuant to 33 U.S.C. �9(a) as all questions in respect of such claim were resolved as employer admitted underlying liability and the amount of medical benefits was agreed upon. The Court noted that there was no statute explicitly providing for either administrative or judicial review of the DOL's computation of interest due under 30 U.S.C. �4(b). Peabody Coal Co. v. Director, OWCP [Ayers], 40 F.3d 906, 19 BLR 2-34 (7th Cir. 1994).
There is no authority under the Act for releases or settlement agreements. Therefore, a release agreement executed by the operator and the claimant does not bar liability being imposed upon the operator for black lung benefits. Niece Mining Company v. Quillen, No. 88-4170 (6th Cir., Aug. 28, 1989)(unpub.).
