Opposition — Old Ben Coal Co. v. Blaize

No. 82-1052 | + SHmecneR w. Sree,

In the Supreme Court of the Hnited States

OcToBER TERM, 1982

OLD Ben CoAL COMPANY, PETITIONER

Vv.

CorneLius J. BLAIZE, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT IN OPPOSITION

Rex E. Lee

Solicitor General

Department of Justice

Washington, D. C. 20530

(202) 633-2217

T. Timotuy RYAN, JR.

Solicitor of Labor

KAREN I, WARD

Associate Solicitor

ALLEN H, FELDMAN

Counsel for Appellate Litigation

JANICE B, CORWIN

Attorney

Department of Labor

Washington, D. C. 20210

QUESTIONS PRESENTED

1. Whether an employer who has been relieved of liabil-

ity for payment of black lung benefits by the 1981 amend-

ments to the Black Lung Benefits Act and the Internal

Revenue Code of 1954, and dismissed as a party in the court

of appeals, has standing in this Court to contest a claimant's

eligibility for benefits.

2. Whether, having dismissed the appeal for lack of a

case or controversy, the court of appeals properly vacated

as moot the decisions of the administrative law judge and

the Benefits Review Board.

TABLE OF CONTENTS

Page

COINS DERN ccccccccccenecccceccevecesocccces l

PEED pc cccccccccceseevecsccecsevcececccoes I

EEL Sc ccvccccccccscocccscnveeceressoeceece 2

PTAA ccccvccccccccccccccccccccccesoeccosces 5

COMIN cccccvccsccctccccccccovscccocccceces 11

TABLE OF AUTHORITIES

Cases:

A.L. Mechling Barge Lines v. United States,

Fee Us SOO ccccccccceccccncscccvecsccooce 8

Director, OWCP v. Perini North River

Associates, No. 81-897 (Jan. 11, 1983) ........ 9

Flast v. Cohen, 392 U.S. 83 ....cceccccsecceces 7

Kalaris v. Donovan, 697 F.2d 376

CE Gals BOE ceedscdocrccectneccconececss 9

United States v. Munsingwear,

Be Us BO cccevcderccscdecesscovecons 7-8,9

Constitution, statutes, regulations, and rule:

ey Se PATE TEE ccccccccnccccesececsces 5,7

Act of Dec. 29, 1981, Pub. L. No. 97-119,

9S Stat. 1635 OF 80g. occcccccccccccccccccccse 3

Black Lung Benefits Reform Act of 1977,

Pub. L. No. 95-239, 92 Stat. 95 et seq. ........ 2

Federal Coal Mine Health and Safety Act of

1969, Pub. L. No. 91-173, 83 Stat. 742,

as amended by the Black Lung Benefits Act of

1972, 30 U.S.C. (& Supp. V) 801 et seq.:

IV

Page

Constitution, statutes, regulations, and rule—Continued:

Title IV, 30 U.S.C. (& Supp. V) 901 et seq.:

Section 402(i)(1), 30 U.S.C. (& Supp. V)

GERET) cccccccccsccoscarsssvscenesner 6

Part B, 30 U.S.C. (& Supp. V) 921-925:

Section 45, 30 U.S.C. 915 ..ccccccccccccess 2

Part C, 30 U.S.C. (& Supp. V) 931-945:

Section 422, 30 U.S.C. (Supp. V) 932 ....... 3

Section 422(a), 30 U.S.C. (Supp. V)

SIGE ic kccccocccceuenens cectvsteuce 3, 10

Section 422(c), 30 U.S.C. (Supp. V)

GOED ccviectecadcccevusesenenees 3,6,7,8

Section 422(c)(2), 30 U.S.C. (Supp. V)

GIRIEMDD cc ccccccccveccecccsvssvestce 3, 6

Section 423, 30 U.S.C. (& Supp. V)

OUP ickavcvdscesconecesssakeuneesser 6,7

Section 424(b)(1), 30 U.S.C. (Supp. V)

GRATE) vcccccccccccescccesasevcess 5,9

Section 435, 30 U.S.C. (Supp. V)

OOD cv cdecnadcecccepeabsscunveenens 3,7,9

Section 435(a)(1)(B), 30 U.S.C. (Supp. V)

DASA MIND) oc cccevccccesccccvccosseses 2

Section 435(a)(3)(A), 30 U.S.C. (Supp. V)

GASTRIN) cccccvsccecccvccenecoseves 2

28 U.S.C. 1254(1) ..ccceccccccccvvecccccones +

TO UGC. SE cccecscncncesecdoacccstenss 3, 10

33 U.S.C. 922 wccccccccvcccccccccccccvovccse 10

Vv

Page

Constitution, statutes, regulations, and rule—Continued:

20 C.F.R.:

PE PU cece etabcseseeeuceedawesinecess 10

BOSON T29.SO MONT) ccccecccccccccccccess )

Section 725.410(a)-(b) ......ceceeeeeves 9, 10

UE FEIMEEE KWCH cd écedveveeccescosccs )

BOSON TASMIAM) ccccccccccescccccccccs 10

Section TAS. ASANO) occccccccccccscccccces i)

20 C.F.R.:

Section 801.102-B01.104 ...ccccccccccevees 9

BOGOR TES STIO cccccccccscceseccecsces y

Fed. R. App. P.42(B) .cccccccccccccccccccvees 3

Miscellaneous:

S. Rep. No. 95-209, 95th Cong., Ist Sess.

CDDT ED ccvccrcccccccssscteescecevoceccccece 6

Iu the Supreme Court of the United States

OcToBER TERM, 1982

No. 82-1052

OLD BEN CoAL COMPANY, PETITIONER

Vv.

CorNELIvus J. BLAIZE, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT IN OPPOSITION

OFINIONS BELOW

The judgment order of the court of appeals (Pet. App.

3-5) is unreported. The decision and order of the Benefits

Review Board (Pet. App. 6-32) are reported at 3 Black Lung

Rep. (MB) 1-710. The opinion and order of the administra-

tive law judge (Pet. App. 33-45) are unreported.

JURISDICTION

The judgment of the court of appeals was entered on

August 16, 1982. A petition for rehearing was denied on

September 22, 1982 (Pet. App. 1-2). The petition for a writ

of certiorari was filed on December 20, 1982. The jurisdic-

tion of this Court is invoked under 28 U.S.C. 1254(1). See

pages 5-7, infra.

2

STATEMENT

1. In March 1973, respondent Cornelius J. Blaize ap-

plied for benefits under “Part B” of Title IV of the Federal

Coal Mine Health and Safety Act of 1969 (the Act), as

amended by the Black Lung Benefits Act of 1972, 30 U.S.C.

921-925. The claim was ultimately denied by the Social

Security Appeals Council of the Department of Health,

Education, and Welfare in September 1975 (Pet. App. 7-8

n.1; id. at 34),

In July 1974, while his initial claim was pending, Blaize

filed with the Department of Labor a second claim for

benefits under “Part C” of Title IV of the Act, as amended

by the Black Lung Benefits Act of 1972, 30 U.S.C. 931-945.!

Before this claim was determined, the Act was amended by

the Black Lung Benefits Reform Act of 1977 (the Reform

Act), Pub. L. No. 95-239, 92 Stat. 95 et seq., to provide for

review of previously denied “Part B” claims under new and

expanded eligibility criteria. Blaize elected to have his pre-

viously denied “Part B” claim reviewed by the Department

of Labor in accordance with Section 435(a)(1)(B) of the Act

as amended by the Reform Act, 30 U.S.C. (Supp. V)

945(a)(1)(B). His “Part B” claim was then transferred to the

Department of Labor and merged with his pending “Part

C” claim. A deputy commissioner of the Office of Workers’

Compensation Programs (OWCP) determined that Blaize

was entitled to benefits under the Act as amended by the

Reform Act, 30 U.S.C. (Supp. V) 945(a)(3)(A) and (b)(1),

and identified petitioner Old Ben Coal Company as the

'Part “B” of the Act applies to claims filed on or before June 30, 1973;

these claims were to be adjudicated by the Social Security Administra-

tion. Part “C” applies to claims filed after December 31, 1973; these

claims were to be adjudicated by the Department of Labor (DOL).

Claims filed between July 1, 1973 and December 3i, 1973, were to be

adjudicated by DOL under Section 415 of the Act.

3

“responsible operator” (Pet. App. 8 n.1; id. at 34), Peti-

tioner contested the award and requested a formal hearing

before an administrative law judge (ALJ).

On February 28, 1980, after a hearing, the administrative

law judge found that Blaize was entitled to benefits (Pet.

App. 33-43). Petitioner appealed the decision to the Benef-

its Review Board (the Board), which, by a divided vote,

reversed the decision and order of the administrative law

judge and denied benefits (id. at 6-32).

2. Blaize and the Director, OWCP, sought review of the

Board’s decision in the court of appeals pursuant to 33

U.S.C. 921(c), as incorporated by 30 U.S.C. (Supp. V)

932(a). While this appeal was pending, the Act was

amended once again by the 1981 amendments to the Black

Lung Benefits Act and the Internal Revenue Code of 1954,

Act of Dec, 29, 1981, Pub. L. No. 97-119, 95 Stat. 1635 e¢

seq. Section 205(a)(1) of Title II of the 1981 amendments,

which amends Section 422 of the Black Lung Benefits Act,

was designed to relieve individual coal mine operators of

unanticipated liabilities arising from application of the

expanded eligibility criteria of the Reform Act when pre-

viously denied claims were reviewed under Section 435 of

the Act.? Because Section 422(c), 30 U.S.C. (Supp. V)

932(c), relieved petitioner of all potential liability for Bla-

ize’s merged claims, the Director moved, pursuant to Rule

42(b) of the Federal Rules of Appellate Procedure, to dis-

miss petitioner as a party, to dismiss the appeal, and to

*Section 422(c)(2), 30 U.S.C. (Supp. V) 932(c)(2), relieves employers

of liability for payment of claims that were denied prior to March |,

1978, as occurred in this case, It transfers liability for payment of these

previously denied claims to the Black Lung Disability Trust Fund

(Trust Fund). If such claims are approved upon review under Section

435, 30 U.S.C. (Supp. V) 945, the Trust Fund, and not the employer,

pays the benefits, Respondent Blaize’s merged claims were reviewed

and approved by the deputy commissioner under Section 435,

4

vacate the decision of the Benefits Review Board and

remand the case to the deputy commissioner for assump-

tion of liability by the Trust Fund.’ Petitioner agreed that it

should be dismissed as a party and that the appeal should be

dismissed, since the 1981 amendments had removed its

stake in the outcome of the proceedings and had rendered

moot the issue of its liability. However, petitioner opposed

the portion of the Director's motion that sought vacation of

the Board's decision and a remand for assumption of liabil-

ity by the Trust Fund.

The court of appeals granted the Director's motion (Pet,

App. 3-5). It dismissed petitioner as a party, dismissed the

appeal, and vacated the orders of the Benefits Review

Board and the administrative law judge. The court noted

that “[a]ll parties agree that Old Ben Coal must be dismissed

as a party since the Revenue Act[1981 Amendments], Title

II, §205 relieves the operator of liability and requires that

the type of claim asserted here be presented to the Secretary

of Labor for review, with benefits to be paid by the Black

Lung Disability Trust Fund if approved by the Secretary”

(Pet. App. 4). In explaining its decision to vacate the deci-

sions of the Benefits Review Board and the administrative

law judge, the court stated that “[t]he Revenue Act requires

this court not only to dismiss this appeal but also to vacate

all adjudicatory proceedings below in which Old Ben was

the only party to contest the initial administrative finding”

of entitlement by the deputy commissioner (id. at 5), The

court rejected petitioner's contention that the 1981 amend-

ments required the Director to be bound by the decision of

the Benefits Review Board denying Blaize’s claim of enti-

tlement, reasoning that “Blaize and the Director should not

be bound by an order of the Board when appellate review

)Blaize did not object to this motion.

5

fails because of intervening mootness” (ibid.). The court

concluded that “{s]ince the initial finding of eligibility is not

affected, and since the Director takes the position that

Blaize is entitled to black lung benefits, we assume that

appropriate action will be taken to transfer liability for

payment to the Trust Fund” (ibid.).

ARGUMENT

The petition should be denied because, under settled

principles, petitioner lacks standing to contest the issue of

respondent Blaize’s entitlement to black lung benefits. The

court of appeals properly granted the Director's motion to

dismiss petitioner as a party and to dismiss the appeal as

moot because Section 205(a)(1) of Title II of the 1981

amendments, enacted during the pendency of the appeal,

relieved petitioner of all potential liability for payment of

benefits to Blaize. In its response to the Director's motion,

petitioner agreed that it should be dismissed as a party and

that the appeal should be dismissed; petitioner does not

question its dismissal as a party even now. In these circum-

stances, petitioner may not invoke this Court's jurisdiction

under 28 U.S.C. 1254(1), and this case does not present a

case or controversy as required by Article III of the

Constitution,

1. Petitioner is expressly barred by Section 424(b)(1) of

the Black Lung Benefits Act, 30 U.S.C. (Supp. V) 934(b)(1),

from participating in any action brought to determine

claims for benefits to be paid by the Black Lung Disability

Trust Fund. That statute provides in pertinent part:

No operator or representative of operators may bring

any proceeding, or intervene in any proceeding, held

for the purpose of determining claims for benefits to be

paid by the fund, except that nothing in this section

6

shall affect the rights, duties, or liabilities of any opera-

tor in proceedings under section [422] or section [423]

of this title. In a case where no operator responsibility

is assigned pursuant to section [422] and [423] of this

title, a determination by the Secretary that the fund is

liable for the payment of benefits shall be final.

The legislative history of this provision clearly demon-

strates that Congress intended to preclude operators from

participating in litigation concerning payments by the Trust

Fund:

While operators, by means of the tax levied against the

sale or use of the coal they produce, pay into the fund,

the operators are to have no title or interest in the fund

assets; and operators will have no right to litigate any

questions concerning the assignment of claims to the

fund or the payment of benefits out of the fund's assets.

S. Rep. No. 95-209, 95th Cong., Ist Sess. 7 (1977).

Respondent Blaize’s claim is one in which “no operator

responsibility is assigned” pursuant to Sections 422 and

423. Section 422(c)(2), as amended by Section 205(a)(1) of

Title II of the 1981 amendments, provides in pertinent part

that “no benefit shall be payable by any operator on

account of death or total disability due to pneumoconiosis

* * * which was the subject of a claim denied before March

1, 1978, and which is or has been approved in accordance

with the provisions of [Section 435].” 30 U.S.C. (Supp. V)

932(c)(2). Blaize’s “Part B” claim was denied by the Social

Security Appeals Council of the Social Security Administra-

tion in September 1975 (Pet. App. 8); it thus clearly falls

within the relevant statutory definition of a “claim denied”

as one that was “denied by the Social Security Administra-

tion.” 30 U.S.C. (Supp. V) 902(i)(1). Under Section 422(c),

7

as amended, once Blaize’s “Part B” claim was denied by the

Social Security Administration and merged with his pend-

ing “Part C” claim for review under Section 435, petitioner

was no longer even potentially liable for payment of bene-

fits because, even if the claim were subsequently approved,

the Trust Fund would pay it.4

In light of this background, petitioner does not question

that it was properly dismissed as a party in the court of

appeals since Section 422(c) of the Act as amended relieved

petitioner of liability for payment of Blaize’s claim.‘

Because the Director agrees that Blaize is entitled to bene-

fits, there no longer is an adversarial relationship or a case

or controversy as required by Article III of the Constitu-

tion. See Flast v. Cohen, 392 U.S. 83, 94-95 (1968). Further-

more, because petitioner was properly dismissed as a party

by the court of appeals, it may not seek to invoke this

Court's jurisdiction pursuant to 28 U.S.C. 1254(1), which

authorizes this Court to review cases in the courts of appeals

“[b]y writ of certiorari granted upon the petition of any

party to any civil * *.* case * * *” (emphasis added).

2. Having recognized that petitioner no longer had a

legally cognizable interest in the outcome of the case, the

court of appeals properly applied the doctrine of United

4Section 423, 30 U.S.C. (& Supp. V) 933, concerns insurance cover-

age requirements for operators found liable for payments under Section

422 and is therefore inapplicable to the instant case.

‘Petitioner, in its response to the Director's motion to dismiss the

appeal, conceded (at 7-8) that “Section 205 removes Old Ben's ‘concrete

stake in the outcome of the case’ [citation omitted] * * *. Whether this

Court affirms or reverses the Board's decision, Old Ben has no liability

for payment of benefits as a result of enactment of Section 205. Thus, as

to Old Ben, the issue of liability is moot. Accordingly, Old Ben is no

longer a party adversely affected or aggrieved by the Board's decision.”

8

States v. Munsingwear, 340 U.S. 36, 39 (1950), in which

this Court stated:

The established practice of the Court in dealing with a

civil case from a court in the federal system which has

become moot while on its way here or pending our

decision on the merits is * * * to vacate the judgment

below and remand with a direction to dismiss.

Accord, A.L. Mechling Barge Lines v. United States, 368

U.S. 324, 329 (1961) (Munsingwear procedure “equally

applicable to unreviewed administrative orders”). The pur-

pose of this procedure, as explained in Munsingwear (340

U.S. at 40-41), is to clear

the path for future relitigation of the issues between the

parties and [to] eliminate[] a judgment, review of

which was prevented through happenstance. When

that procedure is followed, the rights of the parties are

preserved; none is prejudiced by a decision which in the

statutory scheme was only preliminary.

Petitioner contends that the court of appeals should not

have applied the Munsingwear doctrine to the instant case

because the case was not entirely mooted pending appeal.

Specifically, petitioner argues (Pet. 11-12) that the issue of

Blaize’s entitlement to benefits and the issue of the procedu-

ral requirements for a claim to be “approved” under Section

422(a) of the Act as amended are still alive. However, the

crucial point—overlooked by petitioner—is that there no

longer is a live controversy among the parties to this case, a

point that petitioner appears to have conceded below. See

note 5, supra. As previously explained, under Section

422(c) of the Act as amended, 30 U.S.C. (Supp. V) 932(c),

once respondent Blaize’s “Part B” claim was denied by the

Social Security Administration and merged with his pend-

ing “Part C” claim for review under Section 435, petitioner

9

was no longer even potentially liable for repayment of

benefits; thus, even if the claim were subsequently approv-

ed, payment would be made by the Trust Fund.®

Petitioner also contends (Pet. 7-9) that the Munsingwear

doctrine should not have been applied because the purposes

served by the doctrine are not present here. In support of

this contention, petitioner argues that the Board’s order

denying settlement has a limited res judicata effect, will not

be applied to any collateral proceedings, and will not

unfairly prejudice respondent Blaize. Contrary to petition-

er’s contention, however, the Board’s order does have con-

sequences adverse to the Director and to Blaize. First, the

6There is no merit to petitioner's assertion (Pet. 8, 13) that Blaize’s

claim was not “approved” for payment by the Trust Fund because it was

the Board that rendered the final decision of the Secretary of Labor and

the Board determined that Blaize was ineligible for benefits. Petitioner

fails to recognize that the Board is an independent, quasi-judicial body

within the Department of Labor. 20 C.F.R. 801.102-801.104; cf. Kalaris

v. Donovan, 697 F.2d 376 (D.C. Cir. 1983). Like any other party, the

Director appears before the Board and has a right to seek review in the

courts of appeals of adverse decisions rendered by the Board. 20C.F.R.

725.482(a)(b). More importantly, petitioner overlooks the fact that

under Section 424(b)(1) of the Act, 30 U.S.C. (Supp. V) 934(b)(1), “{iJn

a case [such as this] where no operator responsibility is assigned pursu-

ant to Section [422] [as amended] * * * a determination by the Secre-

tary that the fund is liable for the payment of benefits shall be final.”

Contrary to petitioner’s contention (Pet. 15 n.8), the Director is the

designee of the Secretary responsible for administration and enforce-

ment of the Black Lung Benefits Act. 20 C.F.R. 802.410(b); see Direc-

tor, OWCP v. Perini North River Associates, No. 81-897 (Jan. 11,

1983), slip op. 5 n.10. The deputy commissioner is authorized by the

Director to make initial determinations with respect to claims, subject

to review upon further development of the record, according to proce-

dures established by the implementing regulations. See 20 C.F.R.

725.351(a)(1). In this case, the deputy commissioner issued an initial

finding of entitlement with respect to respondent Blaize’s claim in

accordance with 20 C.F.R. 725.410(a)-(b), 725.411.

10

Board’s decision that emphyzema may not qualify as statu-

tory pneumoconiosis (Pet. App. 16) has precedential value

adverse to the Director. Second, Blaize will have been effec-

tively denied his statutory right of review of the Board’s

decision in the court of appeals. See 33 U.S.C. 921(c), as

incorporated by 30 U.S.C. (Supp. V) 932(a). While Blaize

retains the right to petition for modification of the Board’s

decision, his entitlement to such relief is conditioned on a

showing “of a change in conditions or * * * a mistake ina

determination of fact” by the Board. 33 U.S.C. 922, as

incorporated by 30 U.S.C. (Supp. V) 932(a). Finally, if

Blaize files a new application for benefits, his claim will be

subject to the more rigorous eligibility criteria of 20 C.F.R.

Part 718, applicable to all claims filed after March 1, 1980,

and to additional eligibility and evidentiary requirements

imposed by the 1981 amendments.

Petitioner finally contends (Pet. 14-17) that if the Mun-

singwear doctrine is found to be applicable in this case, the

court of appeals’ order should be modified so as to vacate

the deputy commissioner's initial finding of eligibility as

well as the subsequent orders of the ALJ and the Board. As

the court of appeals correctly pointed out (Pet. App. 4-5),

however, the initial finding was made by the deputy com-

missioner prior to identification of petitioner as the respon-

sible operator and, therefore, prior to the point in time at

which any rights or liabilities of petitioner attached. See 20

C.F.R. 725.410(a)-(b), 725.412(a). In these circumstances,

the initial finding predates the controversy and need not be

expunged.’

7Although the court of appeals left the Director's initial finding of

eligibility undisturbed, we do not interpret its decision as a general

ruling that the Director is bound by his initial finding whenever the

intervening mootness doctrine applies so as to require the vacation of

subsequent adjudicatory proceedings. Here, the court of appeals did

not order the Director to make payment from the Trust Fund. Rather,

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

Rex E. Lee

Solicitor General

T. TrimoTny RYAN, JR.

Solicitor of Labor

KAREN I, WARD

Associate Solicitor

ALLEN H. FELDMAN

Counsel for Appellate Litigation

JANICE B, CORWIN

Altorney

Department of Labor

MARCH 1983

the court stated that “{s]ince the initial finding of eligibility is not

affected [by its order] and since the Director takes the position that

Blaize is entitled to black lung benefits, we assume that appropriate

action will be taken to transfer liability for payment to the Trust Fund”

(Pet. App. 5; emphasis added). Thus, the court's order is consistent with

the Director's position that in cases such as the present one, he retains

flexibility to reassess his initia! finding. In the instant case, no formal

reassessment is necessary, however, since the administrative record was

thoroughly developed, and the Director consistently has adhered to the

position that Blaize is entitled to benefits.