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Director v. Forsyth Energy Inc.

decided: December 11, 1981.

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, PETITIONER,
v.
FORSYTH ENERGY, INC., OLD REPUBLIC COMPANIES, ALEX C. MCCLUSKIE, FORSYTH-CARTERVILLE COAL COMPANY, AND RAY LEGAN, RESPONDENTS



Petitions for Review of Orders of the Benefits Review Board, United States Department of Labor

Before Swygert, Senior Circuit Judge, Sprecher, Circuit Judge, and Crabb, District Judge.*fn*

Author: Swygert

The two claims consolidated for this appeal involve the interpretation of Section 435(a)(2)(A) under Title IV of the Federal Coal Mine Health and Safety Act of 1969, as amended, 30 U.S.C. §§ 901 et seq.*fn1 (hereinafter "the Act").

Before resolving the issues presented by this appeal, we find it necessary to discuss the history of the Act. Congress enacted Title IV of the Act*fn2 to provide benefits for coal miners totally disabled by pneumoconiosis and the eligible survivors of miners who died due to the disease. The financial responsibility for the compensation of miners was divided into two parts. Under Part B of the 1969 Act, all claims for benefits filed before January 1, 1973 were to be adjudicated by the Secretary of Health, Education and Welfare. If approved, these claims were to be paid from general federal revenues. Under Part C, claims on or after January 1, 1973 were to be filed under an approved state workers' compensation law. In the absence of an approved state plan, claims were filed with and processed by the United States Department of Labor. Part C claims were to be paid by a responsible coal mine operator if one could be identified. A coal mine operator was required to secure the payment of benefits for which it might be found liable by purchasing an approved policy of insurance or by qualifying as a self insurer with the Department of Labor. If no operator was found to be responsible or if an operator failed to pay benefits for any number of reasons, the claim was to be paid from general federal revenues.*fn3

In 1972, the Act was amended to alter the filing periods and extend the program termination date.*fn4 The Part B filing period was enlarged to encompass all claims filed prior to July 1, 1973. Part C now included all claims filed after December 31, 1973. Those claims filed between July 1 and December 31, 1973 were covered by section 415, which provided that the United States had responsibility for these claims until December 31, 1973. Thereafter, responsible operators could be found liable for benefits as if the claim had been filed pursuant to Part C.*fn5

Subsequent to January 1, 1974, when Part C went into effect, it became clear that Congress's original intention to transfer all liability for Part C claims to the coal industry was not being realized.*fn6 In order to finally and completely ensure that coal mine operators bear the fiscal responsibility for payment of Black Lung Benefits, the Act was amended by the Black Lung Benefits Reform Act of 1977*fn7 and the Black Lung Benefits Revenue Act of 1977.*fn8 The Revenue Act established the Black Lung Disability Trust Fund, the corpus of which is supported principally through an excise tax levied on the sale of coal. The fund is to be used to pay benefits to claimants where there is no coal operator required to pay or where an operator is in default.*fn9 The principal feature of the Reform Act was the establishment of more lenient standards of eligibility and a mechanism providing for the review under the new standards of all claims pending or denied under the old standards.

According to section 15 of the Reform Act (section 435 of the Act), all pending or denied Part B claimants are required to make an election under section 435(a) and their claims follow one of three courses:

(1) The claimant could choose review of his claim by the Secretary of HEW and his claim could be approved by HEW under section 435(a)(2)(A), and forwarded to the Secretary of Labor as an initial determination of eligibility with instructions to make or otherwise provide for the payment of the claim in accordance with this part.*fn10

(2) The claimant could choose review of his claim by the Secretary of HEW and his claim could be denied by HEW under section 435(a)(2)(B) and, if denied, then transferred to the Secretary of Labor for review with an opportunity to submit additional evidence; or

(3) The claimant could choose review by the Secretary of Labor under section 435(a)(1)(B), with the opportunity to submit additional evidence.

I

The sole issue on these appeals is whether claims approved pursuant to section 435(a)(2)(A) (Course (1), supra) are the responsibility of the individual coal operators or of the Black Lung Disability Trust Fund.

Both of the claims involved in these appeals are old Part B claims which were previously denied.*fn11 After the 1977 amendments were passed, both claimants elected review by HEW and both claims were approved. Pursuant to § 435(a)(2) (A), the approved claims were certified to the Secretary of Labor who proceeded to identify a responsible coal operator. When the respective responsible coal operators refused to commence benefit payments, each case was heard de novo by an administrative law judge. The administrative law judges determined that the coal operators were liable for payment of benefits. These decisions were appealed to the Benefits Review Board of the United States Department of Labor. The Review Board overturned the administrative law judges' decisions based on its ruling in Yakubco v. Republic Steel Corp.*fn12 In Yakubco, the Review Board held that individual coal operators are not responsible for old Part B claims certified under section 435(a)(2)(A). The Review Board determined that these claims were to be paid only from the Black Lung Disability Trust Fund. The Director of the Department of Labor's Office of Workers' Compensation Programs appealed from this Review Board ruling in order to protect the assets of the trust fund.

Under the respondent-operators' interpretation of the Act, HEW's determination of eligibility is final and the claims can only be paid from the trust fund. Under the petitioner-Director's interpretation, HEW's determination of eligibility triggers an interim payment mechanism: if a responsible operator can be identified, he must assume the payments, but he has the opportunity to controvert the determination of ...


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