ARMCO, Inc. v. Martin

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.