Opposition Brief — Pauley v. BethEnergy Mines, Inc.

—

Suprema Court, U.S.

; FILED

. ‘25 1990

No. 89-1714 HL 29

| _ SPANIOL, JR

CLERK

ty In the Supreme Court of the United

oe OcTOBER TERM, 1990

“4

~ HARRIET PAULEY, SURVIVOR OF JOHN C. PAULEY.

P| PETITIONER

Vv.

BETHENERGY MINES, INC., AND Director, OFFICE oF

WORKERS’ COMPENSATION PROGRAMS, UNITED STATES

DEPARTMENT OF LABOR

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT

KENNETH W. STARR

Solicitor General

DAVID L. SHAPIRO

Deputy Solicitor General

CHRISTOPHER J. WRIGHT

Assistant to the Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 514-2217

ROBERT P. Davis

Solicitor of Labor

ALLEN H. FELDMAN

Associate Solicitor

EDWARD D. SIEGER

Attorney

Department of Labor

Washington, D.C. 20210

QUESTIONS PRESENTED

1. Whether the rebuttal provisions of a Department of

Labor regulation satisfy Section 402(f)(2) of the Black Lung

Benefits Act, which requires the Department to apply

“(cjriteria * * * not more restrictive” than the criteria ap-

plied during an earlier phase of the black lung program.

2. Whether the statute, if construed to invalidate the

Department’s rebuttal provisions, violaies the constitutional

guarantee of due process.

(I)

TABLE OF CONTENTS

Page

Ne ec cca c esc ceccecceces l

ee cee eek ceceseces PTT Tiree l

EEE 2

eee Lc US ea ecescescceeesecces 5

EEE EE 10

TABLE OF AUTHORITIES

Cases:

Dayton v. Consolidation Coal Co. , 895 F.2d 173 (4th

Cir. 1990), petition for cert. pending, No.

ss eked ade uvccceses 7, 8,9, 10

Karcher v. May, 484 U.S. 72 (1987) ........... y

Krahel v. Consolidation Coal Co., No. 89-2394 (4th

Ss onc csedeccscccece 7

Meyer v. Zeigler Coal Co., 894 F.2d 902 (7th

Cir. 1990), petition for cert. pending, No.

Ne cece weeecccce 7

Pittston Coal Group v. Sebben, 109 S. Ct. 414

ee occ va uawcbceaverece 2, 5, 6, 8

Robinette v. Director, OWCP, No. 88-1144 (4th Cir.

Apr. 27, 1990), petition for cert. pending .... 7,8

Rosebud Coal Sales Co. v. Weigand, 831 F.2d 926

EE 4

Taylor v. Clinchfield Coal Co., 895 F.2d 178 (4th

Cir. 1990), petition for cert. pending, No.

ES LE 6, 7,8

Taylor v. Peabody Coal Co., 892 F.2d 503 (7th

Cir. 1989), petition for cert. pending, No.

Ee 7,8

Youghiogheny & Ohio Coal Company v. Milliken,

866 F.2d 195 (6th Cir. 1989) ................ 5, 6

(111)

IV

Statutes and regulations:

Black Lung Benefits Act, 30 U.S.C. 901 ef

OM,‘ cncianddedhenceeeeneed¥sa0densnenede

Se f - th eres

§ 402(f)(2), 30 U.S.C. 902(f)(2) ...........

BD UB. GREED oi vccccvcccesevevessusecccens

20 C.F.R.:

Section 410.412(a)(1) 2... 6... eee eee

Cn eu anentae she heat

cea cn Gene een

Section 410.490(c)(1)-(2) ..... 2.2... ee.

i ee Le ec ee ek eenenses

ee ha ek eee kee s

Section 727.203(a)(1)-(S) ...........-0005-

Section 727.203(b)M1)-(2) ....... 2... cee ees

i i ee ec an sane es

Section 727.203(b)(3)-(4) .............085-

Miscellaneous:

Employment Standards Admin., United States Dep't

of Labor, Annual Report on Administration of

the Black Lung Benefits Act for Calendar Year

SE es a os 64 oNUSRERECEAES Oh EGES

NMA NNN & NN lV YM

In the Supreme Court of the United States

OCTOBER TERM, 1990

No. 89-1714

HARRIET PAULEY, SURVIVOR OF JOHN C. PAULEY,

PETITIONER

Vv.

BETHENERGY MINES, INC., AND DIRECTOR, OFFICE OF

WORKERS’ COMPENSATION PROGRAMS, UNITED STATES

DEPARTMENT OF LABOR

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-19a)

is reported at 890 F.2d 1295. The decision and order of the

Benefits Review Board (Pet. App. 20a-22a) and the deci-

sion and order of the administrative law judge (Pet. App.

23a-4la) are unreported.

JURISDICTION

The judgment of the court of appeals (Pet. App. 44a-45a)

was entered on December 7, 1989. The order denying the

rehearing petition was entered on February 6, 1990. Pet.

App. 42a-43a. The petition for a writ of certiorari was filed

on May 7, 1990. The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

(1)

2

STATEMENT

1. The Black Lung Benefits Act, 30 U.S.C. 901 ef seq.,

provides benefits to former coal miners and their survivors

for total disability or death due to pneumoconiosis. Disabili-

ty claims filed by June 30, 1973, were considered by the

Department of Health, Education, and Welfare (HEW)

under regulations that included a presumption of entitle-

ment to benefits (20 C.F.R. 410.490) that was available to

certain claimants. Claims filed after that date are considered

by the Department of Labor. Claims filed with the Depart-

ment of Labor before April 1, 1980, are subject to Section

402(f)(2) of the statute, 30 U.S.C. 902(f)(2), which provides

that the “[{c}riteria” applied to those claims “shall not be more

restrictive than the criteria applicable to a claim” adjudicated

by HEW. See Pittston Coal Group v. Sebben, 109 S. Ct.

414, 417-419 (1988).

In response to Section 402(f)(2), Labor promulgated its

own presumption regulation, 20 C.F.R. 727.203. While

there were only two ways to invoke HEW’s presumption

(see 20 C.F.R. 410.490(b)(1)), there are five ways to invoke

Labor’s presumption. See 20 C.F.R. 727.203(a)(1) and (5).

Once the presumption had been invoked, HEW’s regula-

tion specified that the presumption could be rebutted (1)

by proving that the miner was doing his usual coal mine

work or comparable work or (2) by proving that the miner

was capable of doing such work. 20 C.F.R. 410.490(c)(1)

and (2). In contrast, Labor’s regulation specifies four rebut-

tal methods. The first two generally correspond to the two

specified HEW methods. 20 C.F.R. 727.203(b)(1) and (2).

The third and fourth Labor methods allow a party con-

testing entitlemént to defeat a claim either (3) by proving

that the disability or death of the miner did not arise in

whole or in part from coal mine employment or (4) by prov-

ing that the miner does not or did not have pneumoconiosis.

20 C.F.R. 727.203(b)(3) and (4).

3

2. In 1978, after about 30 years of coal mining, John

Pauley applied for black lung benefits. Pet. App. 25a. A

deputy commissioner in the Department of Labor’s Office

of Workers’ Compensation Programs (OWCP) found him

eligible for benefits, but respondent Bethenergy Mines, the

responsible coal mine operator, contested eligibility and ob-

tained a hearing before an administrative law judge. /bid.

The ALJ concluded that Pauley had properly invoked the

presumption of eligibility for benefits based on his 30 years

of coal mining and on x-ray evidence showing that he had

pneumoconiosis. /d. at 4a, 36a.

Bethenergy conceded the existence of the disease and its

relationship to coal mining. Pet. App. 4a, 36a. But it Sought

to rebut the presumption under Labor’s third rebuttal pro-

vision by showing that, although Pauley was disabled, his

disability did not arise in whole or in part from the disease.

The ALJ concluded that the operator had succeeded in

rebutting the presumption under Labor’s regulation since

the operator had shown that “pneumoconiosis is not a con-

tributing factor in claimant’s disability.” /d. at 38a. Rather,

the medical evidence showed that Pauley was disabled due

to arthritis and residual hemipariesis resulting from a stroke.

Id. at 36a-37a. However, the ALJ went on to hold that the

third rebuttal provision in Labor’s regulation is contrary to

Section 402(f)(2) because there was no comparable rebut-

tal provision on the face of HEW’s regulation. According-

ly, the ALJ held that “the claimant is entitled to benefits.”

Pet. App. 40a.

The Benefits Review Board affirmed. Pet. App. 20a-22a.'

' John Pauley died in December 1988, while the case was pending

before the Benefits Review Board. His wife, Harriet Pauley, who is

listed as the petitioner, was never formally substituted as a party before

the Board or the court of appeals. We believe that if Mr. Pauley’s death

had been called to their attention, the Board or the court would have

substituted Mrs. Pauley as a party. Because Mr. Pauley had been found

eligible for benefits when he died, Pet. App. 23a-4la, Mrs. Pauley

4

3. The court of appeals reversed. Pet. App. la-19a. It

began by noting that “[t}he purpose of the Benefits Act is

to provide a recovery for a miner totally disabled at least

in part by pneumoconiosis if the disability arises out of coal

mine employment,” and that the ALJ had made unchal-

lenged findings that “Pauley’s disability did not arise even

in part out of coal mine employment.” /d. at 12a, 13a. It

then determined that Section 402(f)(2) did not require an

award of benefits in that circumstance, for two reasons.

First, the court of appeals noted that, as part of the

statutory definition of “total disability,” Section 402(f)(2)

requires that the criteria applied by the Secretary of Labor

in determining whether someone is totally disabled must be

no more restrictive than the criteria applied by HE W in mak-

ing that determination. However, the court stated, “if Con-

gress had intended ‘criteria’ under [Section 402(f)(2)] to in-

clude rebuttal criteria or criteria relating to matters other

than those dealing with ‘total disability’ it would have said

so directly rather than dealing with the matter diffidently

in the section.” Pet. App. 17a. Since the rebuttal provision

at issue relates not to the question whether the claimant is

disabled, but rather to the question whether the disability

arose out of coal mine work, the court concluded that it

is not contrary to Section 402(f)(2).

Second, the court noted that although there was “no case

law indicating how the rebuttal provisions of 20 C.F.R.

§ 410.490 were applied by the Department of Health,

Education, and Welfare,” it did not believe that HEW would

have awarded benefits under the facts of this case. Pet. App.

became eligible for these benefits as his survivor without having to refile

or otherwise validate the claim. See 30 U.S.C. 932(/); Rosebud Coal

Sales Co. v. Weigand, 831 F.2d 926, 927-928 (10th Cir. 1987); 20 C.F.R.

725.212. In May 1990, the government moved the Board tc correct this

oversight and substitute Mrs. Pauley as a party nunc pro tunc. On July

23, 1990, the Board issued an order stating that it “has no jurisdiction

to consider the Director's request” because the case “is currently pend-

ing at the United States Supreme Court.” The Director intends to seek

reconsideration of this order.

17a. To the contrary, the court interpreted a cross-reference

in HEW’s regulation to 20 C.F.R. 410.412(a)(1) — which in

turn refers to the cause of the claimant’s disability —to

authorize “rebuttal by a showing that the claimant’s disabili-

ty did not arise at least in part from coal mine employment.”

Ibid. Thus, the court concluded, the same result was re-

quired under both regulations, and Labor’s regulation was

not more restrictive than HEW’s.

The court of appeals added that “there is an apparent con-

flict between other circuits as to issues similar to those before

us. Compare Youghiogheny & Ohio Coal Company v.

Milliken, 866 F.2d 195 (6th Cir. 1989), with Taylor v.

Peabody Coal Co., {892 F.2d 503 (7th Cir. 1989)].” Pet.

App. 19a. The court decided not to “attempt to harmonize

those cases.” /bid. The full court subsequently denied a peti-

tion for rehearing en banc, with one judge dissenting. /d.

at 42a-43a.

ARGUMENT

Although we believe the decision of the court of appeals

is correct, we agree with petitioner that the questions

presented warrant review by this Court. The various deci-

sions of the courts of appeals are not reconcilable, and the

conflict has disrupted the administrative process. Moreover,

even though Section 402(f)(2) applies only to claims filed

before April 1, 1980, the conflict is significant because an

estimated 2,000-3,500 claims are still subject to that Section.

1. In Pittston Coal Group v. Sebben, 109 S. Ct. 414

(1988), this Court held that the invocation portion of

Labor’s presumption (which is not at issue here) violated

Section 402(f)(2)’s command to apply “criteria” no more

restrictive than those applied by HEW. The Court did not

decide whether Labor’s rebuttal provisions were valid

6

because the respondents in Sebben had conceded their validi-

ty. 109 S. Ct. at 423. For the same reason, the Court did

not decide whether application of Labor’s rebuttal methods

was constitutionally required. /bid.

Since Sebben, four courts of appeals have addressed the

validity of Labor’s rebuttal provisions. The court below and

the Sixth Circuit have upheld the provisions. Pet. App.

la-19a; Youghiogheny & Ohio Coal Co. v. Milliken, 866

F.2d 195 (6th Cir. 1989). In both of those cases, miners in-

voked Labor’s presumpiion by proving the existence of

pneumoconiosis. Pet. App. 4a; 866 F.2d at 197. In both

cases, benefits were denied because coal mine operators

proved under Labor’s third rebuttal method (20 C.F.R.

727.203(b)(3)) that the miners’ disabilities did not arise in

whole or in part from the disease. Pet. App. 4a-Sa, 37a-38a;

866 F.2d at 197.

The Fourth and Seventh Circuits have invalidated parts

of Labor’s rebuttal reguiation. In Taylor v. Clinchfield Coal

Co., 895 F.2d 178 (4th Cir. 1990), petition for cert. pend-

ing, No. 90-113 (filed July 17, 1990), an ALJ concluded

that a miner who had invoked the presumption did not have

pneumoconiosis, so that the relevant operator had rebutted

the presumption under the fourth method listed in Labor's

regulation. The ALJ also concluded that the miner was not

totally disabled as a result (in whole or in part) of

pneumoconiosis, so that the presumption had been rebutted

under the third method as well. The Fourth Circuit con-

cluded that Labor’s four rebuttal methods “permit rebuttal

of more elements of entitlement to benefits than do the in-

terim HEW regulations which permit rebuttal solely through

attacks on the element of total disability,” and held that

they were contrary to Section 402(f)(2). 895 F.2d at 182-183.

7

Accord Dayton v. Consolidation Coal Co., 895 F.2d 173

(4th Cir. 1990), petition for cert. pending, No. 90-114

(filed July 17, 1990).?

In Taylor v. Peabody Coal Co., 892 F.2d 503 (7th Cir.

1989), petition for cert. pending, No. 89-1696 (filed May

2, 1990), an ALJ concluded that the presumption had been

rebutted under Labor’s second method because th. medical

evidence showed only a mild respiratory impairment that

did not prevent the miner from doing his usual coal mine

work. 892 F.2d at 505. The ALJ awarded benefits, however,

on the theory that HE W’s second rebuttal method required

proof not only that the miner was able to work, but also

that the miner could actually obtain work. The court of ap-

peals, in affirming the award, spoke broadly. In the order

issued on rehearing, the court said that it had “held that

to the extent the Department of Labor regulations allow

rebuttal— when HEW’s do not—the Labor rules are in-

valid.” Pet. App. 2a.’

? In Taylor v. Clinchfield Coal, the Fourth Circun found no substan-

tial evidence of rebuttal under Labor's third method, but suggested that

HEW’s regulation might have allowed a third method of rebuttal

“similar” to Labor's third method, and remanded for consideration of

that issue. 895 F.2d at 183. In an unpublished decision following Taylor

v. Clinchfield Coal, the court concluded that this suggestion was

“dicta” and that HEW’s regulation allowed only two rebuttal methods.

Robinette v. Director, OWCP, No. 88-1144 (4th Cir. Apr. 27, 1990),

slip op. 8 & n.9, petition for cert. pending (filed July 25, 1990). See

also Arahel v. Consolidation Coal Co., No. 89-2394 (4th Cir. Apr. 5,

1990) (unpublished), slip op. 5-6 (“we have recently held that applica-

tion of the rebuttal provisions of 20 C.F.R. § 727.20%b)3) and (4)

violates 30 U.S.C. § 902(f)").

> Although Labor's third rebuttal method was not directly at issue

in Taylor v. Peabody Coal, the author of the panel opinion in that case

subsequently stated that “this court held in Taylor v. Peabody Coal

* * * that § 727.20Mb\ 3) was invalid.” Mever v. Zeigler Coal Co. , 894

F.2d 902, 905 n.3 (7th Cir. 1990), petition for cert. pending, No. 89-7383

(filed Apr. 27, 1990).

The courts of appeals have acknowledged the conflict.

Both the Fourth Circuit, 895 F.2d at 183 n.2, and the

Seventh Circuit, 892 F.2d at 506, noted their disagreement

with the approach of the Sixth Circuit. The court below,

in turn, noted the conflict between the Sixth and Seventh

Circuits “as to issues similar to those before us,” and de-

clined to attempt to harmonize the decisions. Pet. App. 19a.

And the dissenting judge on the Fourth Circuit recognized

the conflict among the circuits and stated that “[i}t seems

to me that by adopting the views of the Third and Sixth

Circuits concerning these murky and confusing regulations

we [would] do less violence to congressional intent, and

[would] avoid both upsetting the statutory scheme and rais-

ing due process problems.” 895 F.2d at 184; see also

Robinette v. Director, OWCP, No. 88-1144 (4th Cir. Apr.

27, 1990), slip op. 7-8 n.8, petition for cert. pending (filed

July 25, 1990) (asking the Court to “definitively resolve this

conflict”).

2. Although Section 402(f)(2) applies only to claims filed

before April 1, 1980 (see Sebben, 109 S. Ct. at 418-419),

the conflict among the four courts of appeals can still be

expected to have a significant, detrimental impact on the

administration of the black lung program. An estimated

2,000 to 3,500 claims governed by Section 402(f)(2) are still

in litigation, and about, 83% of them arise in the Third,

Fourth, Sixth, and Seventh Circuits. Because the vaidity

of Labor’s rebuttal provisions appears to be the only

substantial legal question remaining concerning the applica-

tion of Section 402(f)(2), we believe that a very high per-

centage of the outstanding claims are affected by the

conflict.

The present value of a single black lung claim has been

estimated at between $118,316 and $185,656. See Employ-

ment Standards Admin., United States Dep’t of Labor, An-

nual Report on Administration of the Black Lung Benefits

9

Act for Calendar Year 1979, at 32 (1980). Thus, the claims

are of great importance to the individual claimants and,

given their cumulative value (as much as $650 million), of

great importance to the coal industry.

There is, in our view, one substantial question as to

whether this case, rather than one of the Fourth Circuit cases

in which a petition for a writ of certiorari is pending, is the

most appropriate vehicle for resolution of the existing con-

flict. As noted (see note |, supra), Mr. Pauley died in 1988

and h‘s widow was not promptly substituted as claimant.

The failure to effect her substitution raises the question

whether Mrs. Pauley was entitled to petition for certiorari

in light of “the general rule that one who is not a party or

has not been treated as a party to a judgment has no right

to appeal therefrom.” Karcher v. May, 484 U.S. 72, 77

(1987) (citations omitted). Since the statute provides benefits

to survivors as well as miners and expressly states that sur-

vivors of eligible miners are not required to refile or other-

wise validate the miners’ claim (see note |, supra), we believe

that Mrs. Pauley is the proper party and that substitution

nunc pro tunc is appropriate. However, the Benefits Review

Board rev ently decided that it lacks jurisdiction to consider

the gove"nment’s unopposed substitution motion. /bid. The

governs. ent intends to seek reconsideration of this ruling,

but in view of this substitution issue, which is not in itself

one warranting this Court's attention, the Court may wish

to hold this case and to grant plenary review in one of the

Fourth Circuit cases.*

* For the reasons more fully stated in our brief in response to the

certiorari petition in that case, we believe that, of the petitions that are

currently before the Court, Consolidation Coal Co. v. Dayton, No.

90-114, is the most appropriate of the Fourth Circuit cases for plenary

review.

10

CONCLUSION

The petition for a writ of certiorari should either be

granted or held and disposed of as appropriate in light of

the disposition of Consolidation Coal Co. v. Dayton, No.

90-114.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

David L. SHAPIRO

Deputy Solicitor General

CHRISTOPHER J. WRIGHT

Assistant to the Solicitor General

ROBERT P. Davis

Solicitor of Labor

ALLEN H. FELDMAN

Associate Solicitor

EDWARD D. Si®GER

Attorney

Department of Labor

JuLy 1990

US GOVERNMENT PRINTING OF FICE 1990- 262 20320029

a a