[Topic 17.1 Lien against assets – Generally]
A. U.S. Circuit Courts of Appeals
In Arch of Kentucky, Inc. v. Director, OWCP [Hatfield], ___ F.3d ___, Case No. 08-3311 (6th Cir. Feb. 17, 2009), the court held that the three year statute of limitations at 20 C.F.R. § 725.308 does not begin to run based on a medical opinion of total disability due to pneumoconiosis submitted in a claim that is ultimately outweighed by other medical evidence in the claim. As a consequence, the favorable medical opinion from the miner's first claim (filed in 1988) was deemed a "misdiagnosis" such that it did not bar the filing of a subsequent claim in 1993 under 20 C.F.R. § 725.309. To this end, the court held that any suggestion to the contrary in Tennessee Consolidation Coal Co. v. Kirk, 264 F.3d 602, 607 (6th Cir. 2001) is dicta and is not binding.
With regard to the 1993 subsequent claim, Employer failed to file a controversion within the prescribed 30-day time period. As a result, the administrative law judge awarded benefits. The court upheld the finding that Employer failed to timely controvert the miner's 1993 claim such that the miner was entitled to benefits. Moreover, the court held that Employer's explanation that "notice of the initial award got ‘lost-in-the-shuffle'" did not constitute "good cause" sufficient to waive the 30 day time deadline at 20 C.F.R. § 725.413(b) (1993). The court stated:
To this day, Arch has offered little to support its good-cause argument—there are no affidavits or other evidence in the record that would provide some detail to the attorney's vague assertion of a personnel problem.
. . .
Here, without any evidence explaining why or how the purported personnel problems caused the missed deadline or any evidence of the counsel's diligence once the problem was identified, it cannot be said that the ALJ abused her discretion in denying Arch's request to file an untimely controversion.
Further, the court concluded that Employer was barred from re-litigating the issue of its untimely controversion on modification at 20 C.F.R. § 725.310 reasoning that "there would be little use in having a default provision (at § 725.413(b)) in the first place if everything could be reopened by a subsequent request for modification."
[ untimely controversion cannot be corrected on modification; statute of limitations at 20 C.F.R. § 725.308 in a subsequent claim ]
In Energy West Mining Co. v. Director, OWCP [Oliver], ___ F.3d ___, Case No. 07-9588 (10th Cir. Feb. 20, 2009), the court held that the ten year rebuttable presumption at 20 C.F.R. § 718.203 does not apply to a diagnosis of legal pneumoconiosis; rather, a physician must state that the miner's chronic respiratory disease was caused, at least in part, from coal mine employment. The court stated:
Though COPD is not one of the diseases doctors call pneumoconiosis, it can nevertheless qualify under the legal definition of the term if it arises out of coal mining employment. A longstanding interpretation of the BLBA recognizes that Congress intended to compensate miners for ‘a broader class of lung diseases that are not pneumoconiosis as that term is used by the medical community.' (citations omitted).
. . .
Because COPD is most frequently caused by cigarette smoking and is commonly found among the general population, we have held that a miner whose claim to black lung benefits is based on COPD is not entitled to the ordinary rebuttable presumption that his or her disease arose out of coal mine employment provided he worked in the mines for at least ten years (under 20 C.F.R. § 718.203).
Slip op. at 4.
Next, the court addressed Employer's argument that its due process rights were violated because OWCP had destroyed the miner's prior (1980) claim. In considering the miner's 2002 subsequent claim, the court noted that OWCP had, in fact, destroyed the miner's 1980 claim "pursuant to its record-retention policy." As a result, the court stated that it knew "very little about the claim's adjudication aside from the fact that it was denied":
The destruction of (the miner's) 1980 claim file threw a wrench into these procedures. Because OWCP destroyed it, the evidence associated with the prior claim was not made a part of the record as § 725.309(d)(1) requires.
. . .
Instead, (the miner) was forced to establish all three elements of his claim by new evidence rather than just one, while Energy West was forced to defend all three elements without the ability to counter or impeach new evidence with old.
Slip op. at 6-7.
Nevertheless, the court rejected Employer's argument that it be dismissed from the case on grounds that it "was unable to mount a meaningful defense to (the miner's) present claim." The court noted that there are some circumstances where an employer should be dismissed on due process grounds, such as when "the government entirely fails to give notice of a claim, or delays so excessively in providing notice that the party's ability to mount a defense is impaired . . .." However, in this case, the court concluded that OWCP did not act in bad faith when it destroyed the contents of the 1980 claim file; rather, "[t]he undisputed evidence is that OWCP destroyed the file because it thought it would no longer be useful after nineteen years gathering dust." The court concluded that "the 1980 claim file cannot be said to be . . . ‘critical' to this adjudication." Indeed, Employer conceded in the subsequent claim that the miner had established coal workers' pneumoconiosis in the prior claim, but had not demonstrated that he was totally disabled by the disease.
Turning to the limitations of action period set forth at 20 C.F.R. § 725.308, Employer posited that "materials in the 1980 claim file might reveal that (the miner) received a communication of total disability from a physician long ago, ‘thereby rendering his current application untimely.'" The court disagreed:
Because black lung is a progressive disease, miners are permitted to file successive claims; if a claimant is not found to be totally disabled at the time of their initial claim for benefits, he or she can re-file at a later time and demonstrate that the disease has advanced to the point of incapacity. For this reason, we have previously recognized that ‘a final finding . . . that a claimant is not totally disabled due to pneumoconiosis repudiates any earlier medical determination to the contrary,' and resets the statute of limitations for filing a black lung claim. As our sister circuit has explained, a new limitations period begins after every denial of a black lung claim, ‘provided the miner works in the coal mines for a substantial period of time after the denial and a new medical opinion of total disability due to pneumoconiosis is communicated [to him].' Sharondale, 42 F.3d at 996.
Slip op. at 20. From this, the court held that, despite destruction of the 1980 claim record, the miner's subsequent claim was timely filed as:
. . . there can be no doubt that (the miner's) limitations period has reset. The denial of his previous claim invalidated whatever medical opinions formed the basis of that adjudication. More importantly, (the miner) continued to perform mining work for Energy West for thirteen years after the denial of his original claim—unquestionably a substantial period. And it is not disputed here that his present claim was filed within three years of a new disability diagnosis being communicated to him by Dr. Morgan. That is all the regulations require.
Slip op. at 20.
[ etiology of legal pneumoconiosis; destruction of claim record; statute of limitations at 20 C.F.R. § 725.308 in a subsequent claim ]
B. Benefits Review Board
By published decision in V.B. v. Elm Grove Coal Co., ___ B.L.R. 1-___, BRB No. 08-0515 BLA (Feb. 27, 2009), the Board noted that, pursuant to the Fourth Circuit's decision in this claim in Elm Grove Coal Co. v. Director, OWCP [Blake], 480 F.3d 278 (4th Cir. 2007), discovery of communications between a party's counsel and the party's testifying experts was permitted "and was necessary for a proper cross-examination" of the party's experts. Under the facts of the case, Employer maintained that "claimant's counsel had gone beyond merely providing drafting assistance to Drs. Lenkey and Cohen, such that the opinions expressed were those of claimant's attorney, and not of the physicians."
Claimant's counsel responded with an affidavit stating that, with regard to Dr. Lenkey, "he and his paralegal drafted a report that was consistent with Dr. Lenkey's views and submitted it to Dr. Lenkey, along with copies of all the relevant records so that Dr. Lenkey could review them again." Dr. Lenkey would then send a final report to counsel.
With regard to Dr. Cohen, Claimant's counsel explained that his office prepared a draft report "to summarize the record in the form that Dr. Cohen likes to use." From this, counsel stated that Dr. Cohen then "added to and revised the drafts to produce his opinion."
In regard to assisting both doctors, Claimant's counsel stated that "the summaries of the evidence and draft reports that he and his paralegal provided were based on his communications with the doctors, and that this assistance was provided to both reduce the time these two busy doctors had to spend on the case, and to reduce the miner's litigation costs." Counsel maintained in his affidavit that "the doctors' opinions expressed in the resulting reports ‘were, in fact, the doctors' opinions of [the miner's] condition."
Employer argued that counsel's affidavit should not have been admitted under Illinois Rule of Professional Conduct 3.7, which governs a lawyer acting as a witness because, "by filing an affidavit, Mr. Johnson compromised his role as advocate, and, therefore, either his affidavit should have been stricken from the record, or Mr. Johnson should have been required to withdraw from the case." The Board disagreed to hold that the administrative law judge is "not bound by statutory rules of evidence or by technical or formal rules of procedure" except as provided by the Administrative Procedure Act and 20 C.F.R. Part 725. To this end, the judge "is granted broad discretion in resolving procedural issues, including the admission of hearsay evidence." The board reasoned that the APA does not bar the consideration of hearsay evidence and "because Mr. Johnson was available for cross-examination, the administrative law judge found that his affidavit was admissible."
Moreover, the Board held that the judge properly noted that Illinois Rule of Professional Conduct 3.7 provides that an attorney need not withdraw if it would result in "substantial hardship on the client." In this vein, the judge concluded that "because of Mr. Johnson's longstanding association with the case, and his familiarity with the facts and its procedural posture, requiring him to withdraw at this stage of the litigation would result in a substantial hardship to claimant."
However, the Board held that the judge improperly denied Employer's request to "re-depose" Drs. Lenkey and Cohen in light of information contained in Mr. Johnson's affidavit and communications between counsel and the experts. In his denial of Employer's request, the judge stated that "[t]he issue of the mechanics of the drafting of the expert opinions is tangential to the issue of whether the reports are well reasoned, well documented, and credible." The judge then stated that "[b]oth Drs. Lenkey and Cohen have testified under oath and personally explained, in detail, the basis for their opinions" such that Employer "had ample opportunity to question both physicians, and the record will not be re-opened for cross-examination."
On this point, the Board concluded that the judge erred and remanded the claim to allow Employer the opportunity to cross-examine Drs. Lenkey and Cohen based on its access to communications between Claimant's counsel and the experts. Further, in reconsidering evidence on remand, the Board instructed that the judge "must qualify all of the evidence as ‘reliable, probative, and substantial,' including Mr. Johnson's affidavit, before relying upon it, pursuant to the standard set forth in United States Steel Mining Co. v. Director, OWCP [Jarrell], 187 F.3d 384, 389 (4th Cir. 1999)."
[ discovery of communications between counsel and medical
expert; cross-examination of expert based on communications ]
In R.B. v. Southern Ohio Coal Co., BRB No. 08-0465 BLA, ALJ Case No. 2007-BLA-5136 (Feb. 19, 2009)(unpub.), the Board has scheduled oral argument in Pittsburgh, Pennsylvania on Tuesday, April 21, 2009 to hear the parties' positions on the following issues:
Whether the authority of an administrative law judge under 20 C.F.R. § 725.456(e) to remand a claim to the district director for a complete pulmonary evaluation pursuant to 20 C.F.R. § 725.406 may be exercised prior to the assembly of the evidentiary record at the formal hearing?
Whether the administrative law judge erred in issuing an Order of Remand without prior notice to the parties?
Whether the concession of the Director, Office of Workers' Compensation Programs, for the first time on appeal, that the pulmonary evaluations of (certain named coal miners) are incomplete, requires that liability for benefits in these cases be transferred to the Black Lung Disability Trust Fund?
[ oral argument scheduled by Board; authority of the ALJ ]
[ENDNOTES]
1 Citations are generally omitted with the exception of particularly noteworthy or recent decisions.
2 The Court noted that an ALJ's order requiring LIGA to pay the additional amount constituted a "supplemental order of default." See In re Comp. under the LHWCA (Abbott v. La. Ins. Gty. As'n), 889 F.2d 626, 630 (5th Cir. 1989). The Court observed that it is not proper to appeal final orders under §14(f) to the Benefits Review Board. Rather, a district court is the initial venue for review of the supplemental orders, with a subsequent appeal to the appropriate court of appeals. See Tidelands Marine Serv. v. Patterson, 719 F.2d 126, 129 (5th Cir. 1983). Such an order will be enforced pursuant to §18(a) if it is "in accordance with law," that is if all procedural requirements were met.
3 LIGA is a guaranty fund created by state law, which pays statutorily permitted claims when a private insurer becomes insolvent.
4 Compare Sea-Land Serv., Inc. v. Barry, 41 F.3d 903, 908-09 (3d Cir.1994) (holding that filing and mailing are "two distinct procedures"), and Jeffboat, Inc. v. Mann, 875 F.2d 660, 662-63 & n.4 (7th Cir.1989) (finding the question "arguable" and noting that the statute "does not explicitly make mailing part of filing"), with Nealon v. Cal. Stevedore & Ballast Co., 996 F.2d 966, 970-71 (9th Cir.1993) (holding that filing includes service on the parties). In Nealon, the Ninth Circuit found the statutory language "highly ambiguous," and rested its decision on analogous cases decided under the Black Lung Act and the LHWCA's purpose of delivering benefits to injured workers.
5 This decision was not summarized in the February 2008 issue of the Longshore Newsletter.
6 For purposes of decision, the Board consolidated this case with M.K. v. Maersk Pacific/APM Terminals Pacific Ltd., BRB No. 08-0450 and R.B. v. Yusen Terminals, Inc., BRB 08-0606.
7 The ILWU-PMA is a joint labor-management multi-employer trust fund established in compliance with §302(e) of the Labor-Management Relations Act and 29 U.S.C. §186(c). The ALJ's orders were appealed by ILWU-PMA Welfare Plan which pays medicals and benefits on behalf of its participants.
8 E.g., 20 C.F.R. §702.242(a) states that a settlement application "shall be in the form of a stipulation signed by all parties." (Emphasis supplied).
9 An ALJ's approval of a §8(i) settlement agreement is a "compensation order(s) in favor of the claimant" within the meaning of §702.162(f). See also 33 U.S.C. §919(c); 20 C.F.R. §702.243; 20 C.F.R. §702.348.
10 Here, ILWU-PMA has timely filed §17 lien applications with both the district director and the ALJs.
11 The Board noted that this language falls short of an actual acknowledgement by employer that it has an obligation to pay the liens.
12 The Board observed that §702.162(c) provides that only the claimant may dispute "the right of the trust fund to the lien or the amount stated." Thus, employer does not have any right to challenge the propriety of the §17 liens raised by ILWU-PMA in these cases. With regard to medical benefits, while employer is liable to ILWU-PMA for any reimbursement, ILWU-PMA's rights rest on claimant's entitlement under §7, and claimant must establish the treatment is reasonable and necessary for the work injury in order to establish entitlement. The provision in the settlement agreement providing that employer will pay, adjust or litigate the claims against ILWU-PMA would require ILWU-PMA to prove entitlement. As ILWU-PMA's rights are derivative of claimant's rights, they cannot be litigated separately.
