Opposition Brief — Director, Office of Workers' Compensation Programs v. Greenwich Collieries

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; Supreme Court of the United States

3 October Term, 1993

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® DIRECTOR, OFFICE OF WORKERS’

3 COMPENSATION PROGRAMS, UNITED STATES

Z DEPARTMENT OF LABOR, -

Petitioner,

v.

GREENWICH COLLIERIES,

Respondent.

>

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Third Circuit

>

BRIEF OF RESPONDENT GREENWICH

COLLIERIES IN OPPOSITION

«

Joun J. Bacnato

Counsel of Record

Spence, Custer, SAYtor, WoLFe &

Rose

U.S. National Bank Building

P.O. Box 280

Johnstown, Pennsylvania 15907

(814) 536-0735

Mark E. SoLOMONS

Laura Metcorr Kiaus

ArTeR & Happen

Suite 400K

1801 K Street, N.W.

Washington, D.C. 20006

(202) 7100

{

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BEST

QUESTIONS PRESENTED

1. Does section 7(c) of the Administrative Procedure

Act, 5 U.S.C. § 556(d), authorize the U.S. Department of

Labor’s administrative law judges (“ALJ”) to find facts in

favor of certain classes of parties, based solely upon the

identity of the party, even if the fact is not, in the ALJ’s

opinion, supported by the weight of the evidence, i.e., a

preponderance, but the evidence pro and con is roughly

equal?

2. If section 7(c) of the Administrative Procedure

Act compels an ALJ to find only facts that are supported

by the weight of the evidence, has Congress expressly

superseded the requirements of section 7(c) in the Black

Lung Benefits Act and the Longshore and Harbor-

workers’ Compensation Act, in compliance with the rule

against supersedure contained in section 12 of the

Administrative Procedure Act, 5 U.S.C. § 559?

ii

LIST OF PARTIES AND RULE 29.1 STATEMENT

Andrew Ondecko (“Ondecko”) is a claimant for ben-

efits under the Black Lung Benefits Act. Petitioner below

and now Respondent, Greenwich Collieries, is a wholly

owned subsidiary of the Pennsylvania Mines Corpora-

tion. The Petitioner, Director, Office of Workers’ Compen-

sation Programs, United States Department of Labor, is

the administrator of the Black Lung Program and is a

statutory party in all black lung claims. 30 U.S.C. § 932(k).

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ..............cccccccccs. i

LIST OF PARTIES AND RULE 29.1 STATEMENT... ii

TABLE OF AUTHORITIES ........... ccc cece ccecese iv

STATEMENT OF THE CASE....................... 2

IE GOGKARb EbUdeEs bdveGicceckhbescnccseckc y

I. THE CIRCUITS AND THE AGENCY DISAGREE :

ll. THE THIRD CIRCUIT’S DECISION IN MAHER

ET Gu eeh ae eel diac édceaduecacukcus 13

Ill. THIS IS AN IMPORTANT CASE.............. 21

iv

TABLE OF AUTHORITIES

Page

Cases:

Adams v. Director, Office of Workers’ Compensation

Programs, 886 F.2d 818 (6th Cir. 1989).............. 4

Addington v. Texas, 441 ee Ge GOOD ov ccececctvces 8

Ardestani v. INS, 112 S. Ct. 515 (1991)............... 11

Bowen v. Georgetown Univ. Hospital, 488 U.S. 204

SD 48 08 d60cd cde rineendenedediebsNeskaoebenaces 17

Brownell v. We Shun, 352 U.S. 180 (1956) ............ 19

Campbell v. Director, Office of Workers’ Compensation

Programs, 846 F.2d 502 (8th Cir. 1988).............. 4

Compton v. Inland Steel Co., 933 F.2d 477 (7th Cir.

TEE Sonera iis Rralieea ee 3

Del Vecchio v. Bowers, 296 U.S. 280 (1935)......... 16, 17

Director, Office of Workers’ Compensation Programs

v. Alabama By-Products Co., 560 F.2d 710 (5th Cir.

PPS ASEERGhORaShdes chub teed pnseehnneeddee telus 11

Director, Office of Workers’ Compensation Programs

v. Peabody Coal Company, 554 F.2d 310 (7th Cir.

PONE 9669600600 ns tunnsbcdtondendcadeunbtcstécencs 11

Estate of Cowart v. Nicklos Drilling Co., 112 S. Ct.

ED oS heh sKnENKE Kees deneneSEEAeROkesecere: 17

Freeman United Coal Mining Co. v. Director, Office of

Workers’ Compensation Programs, 988 F.2d 706, reh’g

denied, 999 F.2d 291 (7th Cir. 1993)....... 4, 9, 10, 12, 14

Grizzle v. Pickands Mather & Co., 994 F.2d 1093 (4th

Gal SET $646 bnGe de wEned KdiuaeaddbedbhedkGuhescexce Mu

Maher Terminals, Inc. v. Director, Office of Workers’

Compensation Programs, 997 F.2d 1277 (3d Cir.

SEES SUA en dnccucneancupeusenssccanctacnaens passim

Vv

TABLE OF AUTHORITIES - Continued

Page

Marcello v. Bonds, 349 U.S. 302 (1958) ............... 19

Morrison-Knudtsen Constr. Co. v. Director, Office of

Workers’ Compensation Programs, 461 U.S. 624

Ss Sd nba me hand ihebdensdedentebscascesuaucees< 17

Mullins Coal Co. v. Director, Office of Workers’ -

sation Programs, 484 U.S. 135 (1987)....... 2, 3, 9, 10, 14

NLRB v. Patrick Plaza Dodge, Inc., 522 F.2d 804 (4th

i ME pundesecochuenhussesisssencesuuceénesie.s 18

NLRB v. Transportation Management Corp., 462 U.S.

PP RN GS4dncnnscsbanndbonesend 10, 11, 12, 19, 20

Pennsylvania R. Co. v. Chamberlain, 288 U.S. 33

Se 6b cuscdnutdsscncestedentsedcennivabensecese 18

Potomac Electric Power Co. v. Director, Office of

Workers’ Compensation Programs, 461 U.S. 624

I Whth Caden as cedeauth eebnsvbeendedkdbdekeceres 17

Professional Reactor Operator Society v. U.S. Nuclear

Regulatory Commission, 939 F.2d 1047 (D.C. Cir.

ad es Gabbhedis edi cevubaddecsebeacicenes 11, 19

Provance v. United States Steel Corp., 1 Black Lung

Rep. (MB) 1-483 (Ben. Rev. Bd. 1978) ............. 16

Robinson v. Pickands Mather & Co., 914 F.2d 35 (4th

I I ed i elk a 3

Santosky v. Kramer, 455 U.S. 745 (1982)............... 8

Skukan v. Consolidation Coal Co., 993 F.2d 1228 (6th

SE EE > 6 thdnte dbidniddtosséhdeunideunthoot 9, 10, 12

Southern Pac. Co. v. Sheppard, 112 F.2d 147 (5th Cir.

Db tkideedeehad» s¥tuueltenaltndie dav ondince cess 16

Southern S.S. Co. v. Norton, 101 F.2d 825 (3d Cir.

PChuvdudhedeneusdesesheusunsusakeuacedsucseuses 16

vi

TABLE OF AUTHORITIES - Continued

Page

Steadman v. SEC, 450 U.S. 91 (1981)............. passim

Trent Coal Co. v. Day, 739 F.2d 116 (3d Cir. 1984) .... 11

U.S. Industries v. Director, Office of Workers’ Com-

pensation Programs, 455 U.S. 608 (1976)............ 16

U.S. Pipe & Foundry Co. v. Webb, 595 F.2d 264 (5th

Be SE Unease cssacvescdddeveneensoudecccdeseces 11

STATUTES AND REGULATIONS:

Administrative Procedure Act, as amended, 5

U.S.C. §§ 551-559, 701-706 (1988)................... 1

Section 4(b), 5 U.S.C. § 551(10)(E) (1988) .......... 18

Section 7(c), 5 U.S.C. § 556(d) (1988)............... 2

Section 12, 5 U.S.C. § 559 (1988)........ 8, 13, 19, 21

Black Lung Benefits Act, as amended, 30 U.S.C.

i vos sdunads dhesheendvadtionceesens 2

Section 422(a), 30 U.S.C. § 932(a) (1988)............ 6

Section 422(k), 30 U.S.C. § 932(k) (1988)............ ii

Longshore Act, as amended, 33 U.S.C. §§ 901-952

Dh sine cusensebeduceUeedssnesdeenndateresecees 6

Section 19(d), 33 U.S.C. § 919(d) (1988) ......... 7, 18

Section 20(a), 33 U.S.C. § 920(a) (1988)............ 16

Se Wes Ob ED GUD ote dddecsceuccesctevcssecces 13

Federal Coal Mine Health and Safety Act of 1969,

Pub. L. No; 91-173, 83 Stat. 792, as amended ...... 2

Vii

TABLE OF AUTHORITIES - Continued

Page

Longshore and Harbor Workers’ Compensation

Act, Pub. L. No. 92-576, 86 Stat. 1261 (1972)...... 16

Black Lung Benefits Act of 1972, Pub. L. No.

ee 2

Black Lung Benefits Revenue Act of 1977, Pub. L.

INO. 95-227, 92 Stat. 11 (1978)........ 2c cece eenee 2

Black Lung Benefits Reform Act of 1977, Pub. L.

INO. 95-259, 2 Stat. GB (197B)..... cc ccccccccccess 2

Black Lung Benefits Revenue Act of 1981 and

Black Lung Benefits Amendments of 1981, Pub.

L. No. 97-119, 95 Stat. 1635 (1981)............... 2, 3

Consolidated Omnibus Budget Reconciliation Act

of 1985, Pub. L. No. 99-272, 100 Stat. 312, 313

SN dd ceUEGVaNEGUbaneGEvEbdesedeékcnesédeerecee 2

Omnibus Budget Reconciliation Act of 1987, Pub.

L. No. 100-203, 101 Stat. 1330 (1987)............... 2

Black Lung Program Regulations

wo cccnsevcesecsonecacacess 5

ee Ne I nrc cncccccvsececeveseanes 13

ree Se 2 13

re SE Nc vc ckccsccscccencodsvene 13

MISCELLANEOUS:

Sen. Comm. on the Judiciary, 79th Cong., 2d Sess.,

Legislative History, Administrative Procedure Act

DP RibuledNEGbwadenevessekeeaceecncess: 7, 8, 19, 20

S. Rep. No. 209, 95th Cong., Ist Sess. (1977) ..... 14, 15

S. Rep. No. 743, 92d Cong., 2d Sess. (1972) ......... 14

Viii

TABLE OF AUTHORITIES - Continued

Page

S. Rep. No. 248, 79th Cong., 2d Sess. (1946).......... 7

H.R. Rep. No. 1980, 79th Cong., Ist Sess. (1945)..... 18

Fe Come, TOE. ZOGD GHGs < ccc cccvcccccecscvccccvecse 8

fe Se fF PPPTTET TTT Tree 8

Attorney General’s Manual on the Administrative

Pe EE nn cock cp ceeded aise ee anes ¢ 19

3A Larson, The Law of Workmen's Compensation

SE 6b 6s66nocdsnekddes sednesvenasbeeianstsses ase 16

Verkuil, et al., Administrative Conference of the

United States, The Federal Administrative Judiciary

ED hincosdeseubVeebisstcendéedbencartesssnos ces 21

Brief for Federal Respondent, Mullins Coal Co. v.

Director, Office of Workers’ Compensation Pro-

grams, 484 U.S. 135 (1987) (No. 86-327) ............ 3

No. 93-744

®

In The

Supreme Court of the United States

October Term, 1993

rY

DIRECTOR, OFFICE OF WORKERS’

COMPENSATION PROGRAMS, UNITED STATES

DEPARTMENT OF LABOR,

Petitioner,

Vv.

GREENWICH COLLIERIES,

Respondent.

¢

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Third Circuit

>

BRIEF OF RESPONDENT GREENWICH

COLLIERIES IN OPPOSITION

¢

Respondent Greenwich Collieries respectfully

opposes the petition for a writ of certiorari to the United

States Court of Appeals for the Third Circuit. Greenwich

acknowledges, however, that disagreements among sev-

eral courts of appeals over the meaning of key provisions

of the Administrative Procedure Act, 5 U.S.C. §§ 551-559,

governing on-the-record adjudications before dozens of

federal boards and agencies warrant the attention of this

Court.

STATEMENT OF THE CASE

A. In 1987, this Court held that a claimant for bene-

fits under the Black Lung Benefits Act,! may utilize a

very powerful presumption called the “interim presump-

tion” if the clairaant establishes a fact that invokes the

presumption by a preponderance of the evidence. Mullins

Coal Co. v. Director, Office of Workers’ Compensation Pro-

grams, 484 U.S. 135, 159 (1987). In petitioning the case to

this Court, the Mullins Coal Company argued that the

application of a preponderance standard is compelled by

the plain language of the regulation, as well as by section

7(c) of the Administrative Procedure Act (“APA”). 5

U.S.C. § 556(d). The APA argument was based, in part, on

this Court’s decision in Steadman v. SEC, 450 U.S. 91

(1981). In Mullins, this Court agreed that the plain lan-

guage of the regulation establishing the interim presump-

tion embodied a traditional preponderance-of-the-

evidence standard of proof, and did not, for this reason,

reach the APA question. Mullins Coal, 484 U.S. at 161 n.35.

In briefing this question, the Department of Labor

(“DOL”) agreed that section 7(c) applied in black lung

' Part C of Title IV of the Federal Coal Mine Health and

Safety Act of 1969, as amended by the Black Lung Benefits Act

of 1972, 86 Stat. 150, and as further amended by the Black Lung

Benefits Reform Act of 1977, 92 Stat. 95, the Black Lung Benefits

Revenue Act of 1977, 92 Stat. 11, the Black Lung Benefits Reve-

nue Act of 1981, and the Black Lung Benefits Amendments of

1981, 95 Stat. 1635, Consolidated Omnibus Budget Reconcilia-

tion Act of 1985, 100 Stat. 3:2, 313 (1986), Omnibus Budget

Reconciliation Act of 1987, 101 Stat. 133C (1987) (hereinafter

referred to as the “BLBA”).

claims, but noted that it was applied “as modified by a

‘true doubt’ rule.” Brief for the Federal Respondent at 34,

Mullins Coal, 484 U.S. 135 (No. 86-327). Under the true

doubt rule, “close calls go to the claimant.” Id. at 33. This

Court noted DOL’s advocacy of a true doubt rule, but did

not expressly approve or disapprove the rule. Mullins

Coal, 484 U.S. at 144 n.12.2 As dissenting Justice Marshall

suggested, the rule was not frequently used. See id. 484

U.S. at 163 n.2 (Marshall J. dissenting). This was true

while the interim presumption and other very generous

statutory presumptions and rules oi proof applied.

In 1980, DOL repealed the interim presumption for

new claims, having been instructed to do so by Congress

in 1978. In 1981, after concluding that the black lung

program was excessively generous and had outstripped

reasonable attempts at benefit funding as a result of over-

inclusive benefit criteria, Congress repealed many of the

Act’s statutory presumptions and rules of proof designed

to give claimants a special advantage in adjudications.

Black Lung Benefits Revenue Act of 1981 and Black Lung

Benefits Amendments of 1981, Pub. L. 97-119, 95 Stat.

1635, §§ 201-04 (1981). See Compton v. Inland Steel Co., 933

F.2d 477, 484-90 (7th Cir. 1991) (Coffey J. concurring).

Under the new law, most claimants are required to prove

their eligibility by competent evidence. See e.g., Robinson

v. Pickands Mather & Co., 914 F.2d 35, 38 (4th Cir. 1990);

2 It may be argued that the rule was expressly disapproved

in the Court's adoption of a preponderance standard.

Adams v. Director, Office of Workers’ Compensation Pro-

grams, 886 F.2d 818, 820 (6th Cir. 1989); Campbell v. Direc-

tor, Office of Workers’ Compensation Programs, 846 F.2d 502,

503 (8th Cir. 1988).

By the late 1980s, some ALJs often employed the true

doubt rule to resolve evidentiary conflicts or merely to

excuse themselves from conducting a careful review of

the evidence. Use of the rule is not compelled by the Act,

any regulation or judicial decision and ALJs treat it as an

optional decisional device. The Department of Labor’s

Benefits Review Boa:d, which conducts the appellate

review of ALJs’ decisions, has not held that an ALJ must

employ the true doubt rule and generally allows ALJs to

use the true doubt rule or the preponderance standard at

the ALJs’ election. Because the rule has no concrete

source and its jurisprudence is ad hoc, the applicability of

the rule in any case has always been unpredictable,

depending more on the identity of the ALJ than on the

characteristics of the proof in the record.

As the rule was applied more frequently following

repeal of statutory proof enhancements, challenges to the

validity of the rule increased. The rule is not the product

of congressional deliberation or even the give and take of

the regulatory process. For claim defendants, it seemed

that the rule was employed solely for the purpose of

rejecting otherwise persuasive, if not compelling, evi-

dence. It is self-evident that a claimant who proves his or

her case by evidence has no need for a true doubt rule.

Judge Easterbrook is correct in observing that the rule's

purpose seems to be to “re-create” the repealed presump-

tions and rules possibly “overriding the contrary judg-

ment of Congress.” Freeman United Coal Mining Co. v.

Office of Workers’ Compensation Programs, 999 F.2d 291, 293

(7th Cir. 1993) (statement of Easterbrook J. respecting the

suggestion for reh. en banc).

B. Andrew Ondecko filed a claim for black lung

benefits on January 31, 1989. The claim was properly

adjudicated under DOL’s permanent eligibility rules

adopted following repeal of the interim presumption.

20 C.F.R. Part 718 (1993). DOL administratively denied

the claim and a hearing before an ALJ was requested. On

August 3, 1990, ALJ Joan Huddy Rosenzweig awarded

benefits. The ALJ found that Ondecko suffered from

pneumoconiosis by applying true doubt to a factual

record containing one qualified physician’s opinion that

Ondecko’s x-rays showed pneumoconiosis and the opin-

ions of eight qualified readers that the chest x-rays were

negative for the disease. App. 41a. The ALJ also deter-

mined that Ondecko was totally disabled due to the dis-

ease by applying true doubt to a record containing a

family doctor’s opinion that Ondecko was so disabled

and the opinions of four highly qualified specialists to the

contrary. App. 44a. Greenwich appealed to the Benefits

Review Board and there argued that the true doubt rule

was inappropriately applied because the proof was not

equal® and that the rule was, also, an unauthorized

3 Greenwich continues in its belief that the evidence in this

case is far from equal, and that the ALJ's finding to the contrary

is not supported by substantial evidence or an accurate, rea-

soned review of the record. The true doubt rule is so offensive to

claim defendants because it is most often used in this fashion

and not to address irreconcilable evidence. Greenwich expressly

preserves its right to further challenge the ALJ's weighing of the

evidence.

supersedure of the APA-mandated preponderance-of-the-

evidence standard. The Board affirmed, holding that the

rule is valid and that the Board would not disturb the

ALJ’s weighing of the evidence. App. 20a, 21a.

The United States Court of Appeals for the Third

Circuit reversed. App. 2a. The Court found that DOL’s

regulations assigning to claimants the burden of “pro-

ving” facts alleged, coupled with section 7(c) of the APA

foreclose a result in which employers are assigned the

burden of disproving entitlement facts in a black lung

claim. In construing section 7(c), the Third Circuit relies

on this Court’s holding in Steadman v. SEC, 450 U.S. 91,

interpreting the third sentence in section 7(c) to prohibit

an ALJ from finding a fact unless the finding is supported

by a preponderance of the reliable and probative evi-

dence in the record. App. 12a-13a.

The Third Circuit observes that the true doubt rule

impermissibly excuses the claimant from proving the

facts needed to support an award. The award made by

the ALJ was, therefore, vacated and the case was

remanded for a determination of whether the evidence

supporting an award preponderated. App. 16a. Rehearing

was denied, en banc. App. 48a.

C. The Black Lung Act contains no procedures of its

own for the adjudication of claims filed with DOL. For

this purpose, the Black Lung Act incorporates by refer-

ence the adjudicatory provisions of the Longshore and

Harborworkers’ Compensation Act. 33 U.S.C. §§ 901-952

(“LHWCA”), incorporated in parts by reference into

30 U.S.C. § 932(a). The LHWCA provides: “Notwithstand-

ing any other provisions of this chapter, any hearing held

under this chapter shall be conducted in accordance with

the provisions of section 554 of Title 5.” 33 U.S.C.

§ 919(d).

On the same day that Ondecko’s case was argued to

the Third Circuit, the panel also heard argument in a

Longshore claim filed on behalf of Michael Santoro. Here

too, the ALJ resolved conflicts in the evidence by applica-

tion of the true doubt rule, and the Third Circuit vacated

and remanded for a review of the record under a prepon-

derance standard. The Third Circuit’s decision in San-

toro’s case differs from its decision in Ondecko in its

complete reliance on section 7(c), and in particular on the

third sentence of that paragraph. Maher Terminals, Inc. v.

Director, Office of Workers’ Compensation Programs, 997 F.2d

1277, 1282-85 (3d Cir. 1993). DOL also has asked this

Court to review the decision in Maher.

Greenwich Collieries believes that the analysis in

Maher is correct, and that the Third Circuit’s partial

reliance in Ondecko on DOL’s regulations purporting to

assign a burden of persuasion to claimants in the tradi-

tional way, is unnecessary. When the framers of the APA

set out to adopt uniform standards for administrative

adjudication, an important purpose was to control the

way agencies evaluated proof and reached findings of

fact. See Sen. Comm. on the Judiciary, Legislative History,

the Administrative Procedure Act, 79th Cong., 2d Sess. 185,

208, 210, 321, 365 (1946) (“Legislative History”). Congress

intended these features of administrative adjudication to

parallel the traditional standards applied in the courts.

Steadman, 450 U.S. at 101 (quoting S. Rep. No. 248, 79th

Cong., 2d Sess. 365 (1946)). Congress did not leave room

for agency corrections or deviations for any reason. “[I]t

will be the duty of the reviewing courts to prevent avoid-

ance of the requirements of the bill by any manner or

form of indirection. . . . ” 92 Cong. Rec. 2148, 2159

(statement of Sen. McCarran). “Implied amendments [to

the APA] shall be precluded.” Legislative History, supra p.

7 at 43.4 See also Professional Reactor Operator Society v. U.S.

Nuclear Regulatory Commission, 939 F.2d 1047, 1052 (D.C.

Cir. 1991).

The APA does not contemplate the allocation of bur-

dens or standards of proof with an eye toward the iden-

tity of the party the proof favors. The third sentence of

section 7(c) of the APA, in light of Steadman, most natu-

rally means that ALJs may not find facts unless the facts

are proven by a preponderance. This is the instruction to

the factfinder that is embodied in section 7(c) “concern-

ing the degree of confidence society thinks he should

have in the correctness of factual conclusions. ... ”

Santosky v. Kramer, 455 U.S. 745, 755 (1982) (quoting

Addington v. Texas, 441 U.S. 418, 423 (1979)). No agency’s

regulatory gloss is necessary, and no agency’s super-

sedure is appropriate.

The Third Circuit came to this conclusion in Maher

and the court is correct in that holding.

¢

4 The tone of many of the comments of the framers and

sponsors of the APA exhibit concern that full voluntary agency

compliance with its provisions might not be readily forthcom-

ing. The unusual rule against supersedure in section 12 under-

scores the concern. 5 U.S.C. § 559.

ARGUMENT

I. THE CIRCUITS AND THE AGENCY DISAGREE

There is no doubt that the circuits disagree. The

Third Circuit here finds the true doubt rule to be incom-

patible with the APA, Steadman and Mullins Coal. On

these authorities, the rule is invalidated. The Sixth Circuit

and the Seventh Circuit find no such incompatibility and

have approved the use of the rule. Skukan v. Consolidation

Coal Co., 993 F.2d 1228 (6th Cir. 1993); Freeman United Coal

Mining Co. v. Director, Office of Workers’ Compensation Pro-

grams, 988 F.2d 706, reh’g denied, 999 F.2d 291 (7th Cir.

1993). The Fourth Circuit rejects the reasoning of the

Seventh Circuit, but has deferred its consideration of the

validity of the rule. Grizzle v. Pickands Mather & Co., 994

F.2d 1093, 1098 n.7 (4th Cir. 1993).°

Even where the rule has been approved, there is little

agreement on the reasoning that supports it. The only

thing that has been consistent in DOL’s defense of the

rule is the inconsistency of the agency’s arguments. Much

of what is argued in the petition for certiorari is new or

revisionist. Here, DOL argues variously that the APA

does not apply, at least in the black lung claims, unless

DOL wishes it, and then that it applies only to the degree

5 DOL cites several cases arising in other circuits where an

ALJ's use of a true doubt rule was approved. None of these

cases involved a challenge to the validity of the rule, and they

are not, therefore, in conflict with the Third Circuit's opinions

here. No court of appeals has disagreed with the Third Circuit's

invalidation of the rule in Maher in a case arising under the

LHWCA. Prior applications of the rule in LHWCA cases have

not been tested in the face of an APA challenge.

10

that DOL wishes. DOL’s Petition for Writ of Certiorari at

24. But if the APA applies, then it does not allocate

“burdens of persuasion” and the agency is free to do so

consistent with the objectives of the LHWCA or BLBA.

Those objectives, of course, contemplate favoring claim-

ants, and if the agency elects to do so by embracing a true

doubt rule, its judgment deserves deference. Finally, if

the APA applies, and if it obligates factfinders to find

facts only if they are supported by a preponderance of the

evidence, then the remedial objectives of the BLBA and

LHWCA supersede the APA. Id.

The Seventh Circuit held that the APA “unquestiona-

bly” applies in black lung adjudications. Freeman United,

988 F.2d at 710 n.6. This court, however, settled on the

conclusion that the APA does not assign “burdens of

persuasion” and that these burdens are assigned judi-

cially. Taking the true doubt rule as its own, the Seventh

Circuit adopts it, in light of certain legislative comments,

as a matter of judicial preference. Id. 988 F.2d at 711.

Support for the approach is drawn from a footnote in this

Court’s decision in NLRB v. [ransportation Management

Corp., 462 U.S. 383, 403 n.7 (1983), two snippets of legisla-

hive history and Mullins Coal. Freeman United, 988 F.2d at

711-12.

The Sixth Circuit agrees with the Seventh that “the

true doubt rule is a judicial construct which sprang from”

the remedial purpose of the BLBA. Skukan, 993 F.2d at

1236-7 n.8. The Sixth Circuit recognizes, however, that

DOL’s regulations assign the burden of persuasion to

claimants on facts not legislatively presumed, but this

court apparently does not believe that the job of assign-

ing burdens is DOL’s job. Id. 993 F.2d at 1238.

11

No court has agreed with DOL’s belief that the courts

must defer to DOL’s interpretation of its regulations to

extract the rule, and no court has agreed with DOL’s view

that, at least in black lung cases, it is bound by the APA at

the agency’s option only.® No court of appeals has agreed

with DOL’s unstated but apparent belief that deference

should be accorded the agency’s interpretation of the

APA in light of the objectives of the BLBA and LHWCA.

Deference is not appropriate on this account. See

Ardestani v. INS, 112 S. Ct. 515, 526 (1991) (Blackmun J.

dissenting); Professional Reactor Operator Society, 939 F.2d

at 1051.

The only identifiable center of gravity for DOL, the

Sixth Circuit and the Seventh Circuit has two simple

components. The first is that the “burden of proof” foot-

note in Transportation Management, addressing the first

sentence of section 7(c) of the APA, overrules or neutral-

izes the holding in Steadman addressing the third sen-

tence in section 7(c).?7 The second is that the remedial

6 DOL has argued from time to time, as it does here, that it

is bound neither by the APA nor the procedural imperatives of

the LHWCA. No court has agreed with DOL on these accounts,

and indeed the plain language of section 19(d) of the LHWCA,

33 U.S.C. § 919(d), forbids DOL’s interpretation, at least as to

that provision. See Director, Office of Workers’ Compensation Pro-

grams v. Alabama By-Products Co., 560 F.2d 710, 718 (Sth Cir.

1977); Director, Office of Workers’ Compensation Programs v. Pea-

body Coal Co., 554 F.2d 310, 341-42 (7th Cir. 1977); see also Trent

Coal Co. v. Day, 739 F.2d 116, 117 (3d Cir. 1984); U.S. Pipe &

Foundry Co. v. Webb, 595 F.2d 264, 273 (Sth Cir. 1979).

7? This is quite plain. Steadman holds that the courts are not

free, in an APA proceeding, to establish the standard for deter-

mining how much proof is needed to support a finding of fact

12

purpose of the BLBA allows the affirmation of a true

doubt rule, because the rule favors claimants. The Third

Circuit also acknowledged the remedial nature of the

BLBA and LHWCA, but was unable to conclude that

Transportation Management authorized a departure from

Steadman, inasmuch as the two cases addressed different

sentences in section 7(c) of the APA and different issues.

Maher, 992 F.2d at 1282-83.

The on-the-record adjudication provisions of the APA

apply in hundreds of different categories of proceedings

conducted by many federal boards and agencies. Most of

the statutes incorporating the APA carry a remedial or

benevolent public purpose. The question that is presented

here by DOL is whether the APA ought to give way when

the agency finds it too constraining.

Two feder | courts of appeals have effectively

refused to follow this Court's decision in Steadman, and a

federal agency has asked them not to do so. That surely

merits this Court's attention. It is, perhaps, more impor-

tant that the Department of Labor seeks to introduce a

party identity based standard for evaluating proof in

APA litigation, without congressional approval.® This is a

because “Congress has spoken.” Steadman, 450 U.S. at 96. The

Seventh Circuit thinks Congress was silent, thus authorizing a

judicial assignment of the standard. Freeman United, 988 F.2d at

711. The Sixth Circuit agrees, citing Freeman. Skukan, 993 F.2d at

1236.

8 Congress could, of course, adopt a true doubt rule for

black lung and longshore claims. When procedures for the adju-

dication of publicly funded veterans benefits claims were

revised and formalized in 1988, Congress expressly adopted a

true doubt rule, codifying an informal but longstanding agency

13

dangerous and inappropriate path to take, and it is one

that was anticipated and closed by the framers of the

APA in their adoption of the rule against supersedure.

5 U.S.C. § 559. This Court should step in to enforce that

rule.

Il. THE THIRD CIRCUIT’S DECISION IN MAHER IS

CORRECT

There is no language in either the BLBA or LHWCA

suggesting a true doubt rule. DOL’s LHWCA regulations

are silent on the point as are the BLBA regulations in

force for claims filed prior to the repeal of the statutorily

mandated presumptions. See 20 C.F.R. Part 727. DOL’s

new BLBA regulations assign claimants the “burden of

proving” their cases, 20 C.F.R. § 718.403, but elsewhere

under a general heading state “Congress intended that

claimants be given the benefit of all reasonable doubt.”

Id. § 718.3(c). No regulation articulates a “true doubt”

rule as it is described by DOL.

The Social Security Administration (“SSA”), which

adjudicated all black lung claims from 1970 to 1974,

employed no true doubt rule, but required claimants to

prove all facts not statutorily presumed, by a traditional

practice. 38 U.S.C. § 5107(b). DOL has not asked Congress to

adopt a true doubt rule for either the BLBA or LHWCA. When

the BLBA was substantially revised in 1982, to repeal most of

the presumptions and rules of proof most helpful to claimants,

DOL did not ask Congress to adopt a true doubt rule.

14

preponderance of the evidence. Mullins Coal, 484 U.S. at

154-55 n.27.?

There is no arguable source for the rule in the legisla-

tive history of the LHWCA, and DOL strains the relevant

text in relying on the black lung legislative materials cited

in support of the rule. DOL’s Petition for Certiorari at

18-19 (citing S. Rep. No. 743, 92d Cong., 2d Sess. 11

(1972); S. Rep. No. 209, 95th Cong., Ist Sess. 13 (1977)).

The 1972 Senate Report notes Congress's intent to resolve

doubts in favor of claimants, but this comment prefaces

the introduction of several new statutory presumptions

and rules of proof enacted in 1972, for implementation by

SSA. There was no DOL program at the time. In the next

paragraph, the Committee stated: “The Committee bill

gives the benefit of the doubt to claimants by [adopting

the new statutory provisions].” S. Rep. No. 743, supra.

Later in the same discussion, the Committee emphasizes

that when the new statutory provisions do not apply,

“It]he Committee intends that the burden will be placed

on the claimant to prove the existence of pneu-

moconiosis. . . . ” Id. at 13. The 1972 passage, which is

relied upon by the Sixth Circuit, the Seventh Circuit and

DOL, is more naturally read to restrict SSA’s authority to

relax proof standards beyond what Congress wrote. SSA

9 SSA applies no true doubt rule or its equivalent in disabil-

ity insurance adjudications. Whether or not the APA applies in

SSA’s disability insurance programs, the decisions in Skukan

and Freeman United suggest that a true doubt rule may be

applied in SSA claims as a matter of judicial preference. The

Social Security Act is no less remedial than the BLBA or

LHWCA.

15

adopted no true doubt rule. The 1977 document, in con-

text, is no more compelling. It simply recommends the

promulgation of regulations containing more liberal crite-

ria for objective testing. S. Rep. No. 209, supra p. 14 at 13.

DOL overlooks the legislative materials accompanying

the extensive 1981 amendments under which Ondecko’s

case was decided. These amendments reversed course in

a program perceived by Congress to be out of control, by

repealing virtually all of the liberalizing provisions

referred to in the 1972 and 1977 materials.1°

DOL also takes the Court on a curious trek in seeking

to create a lineage for the true doubt rule dating back to

the 1930s and the early days of the LHWCA. In arguing

'© It bears mention also that much of LIOL’s diccussion of

the need for a true doubt rule is both misleading and disin-

genuous. DOL points out that black lung claimants are “sick and

elderly individuals with limited resources,” “who find it diffi-

cult . . . to prove that their diseases are totally disabling or coal

mine related ... .” DOL notes that clinical “tests” may be fallible

“and that x-rays are imperfect means of ascertaining the exis-

tence of pneumoconiosis. .. . ” Id. These rhetorical flourishes, if

they were ever factual, have not been true for many years. Like

any other federal program that transfers billions of dollars

within a fairly restricted geographical area, the program has

spawned its own related industries that serve the needs of

claimants and employers alike. Few claimants with an arguable

case will be abandoned by this system or will be unable to

access it. Similarly, black lung is an exhaustively studied dis-

ease, and largely because of Congress's interest in it, x-ray and

testing technologies are probably better than most. The case that

is being presented to the Court here should not be influenced by

the popular, but largely false, mythology often cited in black

lung cases. Time has passed by these notions, and the 1981

amendments tq the BLBA demonstrate congressional awareness

of the current reality.

16

the case to the courts of appeals, DOL traced the rule to a

1978 Benefits Review Board decision in a black lung case.

Provance v. United States Steel Corp., 1 Black Lung Rep.

(MB) 1-483, 1-486 (Ben. Rev. Bd. 1978). There is no articu-

lation of a true doubt rule predating this decision, and

none of the earlier LHWCA cases cited by DOL holds that

employers must bear a “burden of persuasion” on all

factual issues presented in a claim. For the most part, the

earlier references to doubt resolving are judicial embel-

lishments in cases where the adjudicator’s findings are

being sustained because they are supported by substan-

tial evidence. See e.g., Southern S.S. Co. v. Norton, 101 F.2d

825, 827 (3d Cir. 1939); Southern Pac. Co. v. Sheppard,

112 F.2d 147, 148 (5th Cir. 1940).

The LHWCA cases cited for historical context focus

generally on the presumption of occupational causation

contained in section 20(a) of the LHWCA, 33 U.S.C.

§ 920(a), and virtually all of them predate the 1972 incor-

poration of the APA into the LHWCA. Pub. L. No. 92-576

§ 14, 86 Stat. 1261 (1972). Section 20(a) of the LHWCA

presumes that an injury or disease is occupationally

related, but it shifts no ultimate burdens to employers. It

is a bursting bubble rule that “falls out of the case” when

contrary probative evidence is offered. Del Vecchio v.

Bowers, 296 U.S. 280, 286 (1935). This Court has previ-

ously rejected the theory that section 20(a) shifts ultimate

burdens, and the opinion in the case fairly clearly pre-

cludes a section 20(a) based true doubt rule, as the rule is

described by DOL. U.S. Industries v. Director, Office of

Workers’ Compensation Programs, 455 U.S. 608, 613-15 &

n.7 (quoting 3A Larson, The Law of Workmen’s Compensa-

tion § 78.10 at 15-2 (1976)).

17

It appears, in fact, that the ALJ in Maher layered a

true doubt rule on top of section 20(a) because section

20(a) was not adequate to establish the claim. DOL

defends this enhancement of the statutory rule, notwith-

standing Del Vecchio, because of the independent viability

of the true doubt rule. DOL’s Petition for Writ of Cer-

tiorari at 10. This Court has often reminded the agency

that the LHWCA may not be expanded beyond its terms

on the pretext of boundless liberality. Estate of Cowart v.

Nicklos Drilling Co., 112 S. Ct. 2589, 2594 (1992); Morrison-

Knudtsen Constr. Co. v. Director, Office of Workers’ Compen-

sation Programs, 461 U.S. 624, 635-36 (1983); Potomac Elec-

tric Power Co. v. Director, Office of Workers’ Compensation

Programs, 449 U.S. 268, 282 & n.24 (1980).

No operational true doubt rule predates the Board’s

1978 decision, and even after it was announced the rule

was infrequently used in BLBA or LHWCA cases until

fairly recently. DOL’s attempt to provide a noble vintage

for the rule is not accurate. For the most part, DOL’s

reasoning, and in particular, its deference claim are 1993

developments originating in this litigation. Were this a

case in which the Court might be inclined to defer to the

agency, and this should not be such a case, this Court

would be deferring to a litigation-bred argument post-

dating by thirteen years, the regulations being inter-

preted. DOL’s deference claim is tenuous in this environ-

ment. See Bowen v. Georgetown Univ. Hospital, 488 U.S. 204,

212-13 (1991).

B. The solution to the questions presented here is

not found in the remote sources and revisionist history

presented by DOL, but in the plain language of the APA,

its history and Steadman. Neither the BLBA nor the

18

LHWCA contains anything remotely resembling a true

doubt rule. Both statutes, however, make the APA on-the-

record adjudication provisions applicable “[nJotwith-

standing any other provisions of this Act... .” 33 U.S.C.

§ 919(d). The APA prescribes standards of proof for the

agency adjudications in which it applies. One of those

standards is that ALJs needing to find facts may find

them if they are supported by a congressionally deter-

mined “minimum quantity of the evidence.” Steadman,

450 U.S. at 100. The minimum quantity of evidence that is

acceptable to support a finding of fact in an APA pro-

ceeding is a preponderance. Id. at 100-104; see also H.R.

Rep. No. 1980, 79th Cong., 1st Sess. 37 (1945). Where

evidence is in conflict or “equally supports two inconsis-

tent inferences,” the evidence falls short of a prepon-

derance and no fact is established. Pennsylvania R. Co. v.

Chamberlain, 288 U.S. 33, 39 (1933).

The third sentence of section 7(c) of the APA instructs

the factfinder that “[a] sanction may not be imposed or

rule or order issued” unless the APA proof standards are

satisfied. Where evidence relating to a fact needed to

support a rule, order or sanction"! is no stronger or more

persuasive than evidence to the contrary, no fact is

proven and under the APA no fact may be found. See e.g.,

NLRB v. Patrick Plaza Dodge, Inc., 522 F.2d 804, 809 (4th

Cir. 1975).

11 The APA defines “sanction” to include “the whole or any

part” of an agency’s assessment of damages or compensation.

5 U.S.C. § 551(10)(E).

19

Section 12 of the APA provides, inter alia:

Subsequent statutes may not be held to

supersede or modify this subchapter . . .

except to the extent that it does so

expressly... .

5 US.C. § 559.

Supersedure is narrowly construed and it must be

statutory. Brownell v. We Shun, 352 U.S. 180, 185 (1956);

Marcello v. Bonds, 349 U.S. 302, 310 (1958); Professional

Reactor Operator Society, 939 F.2d at 1052; Attorney Gen-

eral’s Manual on the Administrative Procedure Act 75 (1947).

DOL has made no appropriate case for supersedure

and seeks to escape section 12 mostly by reading any

meaning out of the third sentence of section 7(c) and

ignoring this Court’s interpretation of it in Steadman.

DOL’s argument is that the ALJ does not look only at the

proof when it is being weighed, but rather looks to see

who the parties are before getting on with the job. Ambi-

guities in the proof are then resolved not based upon the

strength and persuasion of the proof alone, but in the

final analysis, on the identity of the party the proof

favors. It seems quite clear that this is not what the

authors and proponents of the APA had in mind. See

Legislative History, supra p. 7 Foreward (1946).

DOL’s discussion of shifting burdens, burdens of per-

suasion, and Transportation Management diverts attention

from the central issues that are presented here. It is surely

true that standards of proof and burdens of proof are

related elements in the course of decisionmaking in APA

matters as well as all other kinds of litigation. It is also

true that the terminology and operation of these rules of

20

proof may become confusing, and if there has been any-

thing consistent in DOL’s arguments in support of the

true doubt rule, it is in the agency’s efforts to exploit this

confusion.

The confusion is not, however, too difficult to dispel.

The preponderance-of-the-evidence standard, as it is

described in section 7(c) of the APA and Steadman,

embodies a simple instruction. The instruction is that

facts ultimately found must be supported by evidence

that is at least slightly better than contrary evidence. DOL

seeks to use the burden of proof language in the first

sentence of section 7(c) to diminish the meaning intended

in the third sentence. It may be that the APA does not

assign ultimate burdens of persuasion, but the APA

clearly does establish a fact finding standard. It does not

do violence to any part of section 7(c) to effectuate the

meaning of the third sentence and let the burdens fall

where they may for all the parties to any proceeding. This

reading harmonizes Steadman and Transportation Manage-

ment, and accords with the intent of the APA’s framers

that section 7(c) operate as a whole. Legislative History,

supra p. 7 at 216, 302.

The first and second sentence of the section

[7(c)], therefore mean that where a party

having the burden of proceeding has come

forward with a prima facie and substantial

case, he will prevail unless his evidence is

discredited or rebutted. In any case, an

agency must decide “in accordance with the

evidence.” Where there is evidence pro and

con, the agency must weigh it and decide in

accordance with the preponderance.

Id. at 270-71.

21

DOL argues for a reading that creates irreconcilable

tension between the first and third sentences of section

7(c). DOL’s reasoning is wrong on that account alone. The

Third Circuit was correct in its reading of the relevant

language.

Ill. THIS IS AN IMPORTANT CASE

DOL argues that the case is important because it may

affect future BLBA and LHWCA claims, and indeed that

is true. For the private litigants here, it is important for

another reason. The comprehensive standards for admin-

istrative adjudication in the APA protect private litigants,

not only in BLBA and LHWCA matters, but in many

other matters of importance as well, from the attempts of

agencies to re-design basic adjudicatory procedures indi-

rectly to advance their policy objectives. The APA was

designed to ensure a level playing field when litigants

enter an ALJ’s courtroom. 5 U.S.C. § 559. The APA maxi-

mizes the independence of the adjudicator and guaran-

tees the fairness of the basic rules insulating both from

the ebb and flow of agency policies and politics. Agencies

have no great affection for the APA because it is a

restraint. Researchers have attributed the phenomenal

growth in the number of federal non-APA judges and

relative stagnation in the growth in the size of the ALJ

corps, at least in part, to agency dissatisfaction with the

independence of APA adjudicators and the inviolability

of APA rules. See generally, Verkuil, et al., Administrative

Conference of the United States, The Federal Administrative

Judiciary (1992).

22

DOL may convince Congress to free it from the APA

or expressly to enact a true doubt rule. Until that time,

this Court should enforce the APA according to its terms.

e

CONCLUSION

The Petition for a Writ of Certiorari to the United

States Court of Appeals for the Third Circuit should be

granted for the purpose of affirming the Third Circuit's

holdings in these cases.

Respectfully submitted,

JouHN J. BAGNATO

SPENCE, CUSTER, SAYLOR,

Wo re & Rose

U.S. National Bank Building

P.O. Box 280

Johnstown, Pennsylvania 15907

Mark E. SOLOMONS

LaurRA Metcorr Kiaus

Arter & HADDEN

Suite 400K

1801 K Street, N.W.

Washington, D.C. 20006