RECENT SIGNIFICANT DECISIONS
Black Lung Benefits Act
Office of Administrative Law Judges
United States Department of Labor
MONTHLY DIGEST # 123
October 1995 - January 1996
A. Circuit courts of appeals
In Lisa Lee Mines v. Director, OWCP , 19 B.L.R. 2-225 (4th Cir. 1995), the Fourth Circuit adopted the standard enunciated by the Seventh Circuit in Sahara Coal Co. v. Director, OWCP [McNew] for demonstrating a "material change in conditions" in a duplicate claim. However, by Order dated November 16, 1995, the court determined that it would rehear the matter in banc which operates to vacate the panel's decision.
[ III - 92, "material change in conditions" ]
In Warth v. Southern Ohio Coal Co. , ___ F.3d ___, Case No. 94-2635 (4th Cir. July 31, 1995), the Fourth Circuit held that, for purposes of entitlement to benefits under the Act, chronic obstructive lung disease is encompassed in the legal definition of pneumoconiosis. Thus, the assumption by a physician that pneumoconiosis causes a restrictive impairment, rather than an obstructive impairment, is erroneous and undermines his conclusions.
[ II - 36, "pneumoconiosis" defined ]
In National Mines Corp. v. Carroll , ___ F.3d ___, Case No. 94-3711 (3d Cir. Aug. 30, 1995), the Third Circuit held that both the responsible operator and its carrier must be notified of potential liability for the payment of benefits. In this vein, the court found that the carrier's due process rights were violated where the district director only notified Employer, and not its carrier, of such potential liability. As a result, the court ordered that the claim be reopened under the modification provisions of the Act and notice properly served upon the carrier.
[ III - 82, insurance carrier as named party ]
B. Benefits Review Board
In Pickens v. Director, OWCP , 19 B.L.R. 1-___, BRB No. 92-1978 (Aug. 31, 1995), Claimant was found liable for an overpayment of black lung benefits because he received a concurrent state award for permanent total disability, 15% of which was due to pneumoconiosis. Claimant paid $7,600 in attorney's fees in order to obtain the state award.
The Board held that in determining the extent to which the overpayment should be reduced in light of the legal expenses incurred in connection with the state award as required by 20 C.F.R. § 725.535(d), the burden is on Claimant to establish the amount of legal expenses which are related to obtaining that portion of the state award attributable to pneumoconiosis. Mere submission of payment receipts, without any indication that the time charged was spent obtaining the pneumoconiosis portion of the state award is insufficient. The Board concluded that in the absence of more specific evidence supplied by a claimant, the percentage of the state award due to pneumoconiosis is an acceptable form of "other evidence" under § 725.535(d) in determining the portion of attorney's fees to be excluded from the amount of the overpayment.
Depending upon how the fees or expenses are apportioned, the regulatory exclusion can provide a significant reduction in the amount of the overpayment for which Claimant is liable. In Cadle v. Director, OWCP, 19 B.L.R. 1-56 (1994), the Board set forth the method for apportioning legal fees and medical expenses incurred in connection with the state claim where the attorney's fees and costs are awarded by the state in a lump sum without any mandate for their disbursement. First, if the state award is in a lump sum, it is broken down into monthly payments. Then, the monthly state award is credited toward Claimant's legal fees and expenses, thereby delaying the reduction of Claimant's federal monthly benefits on account of his concurrent state award until he has received an amount of state benefits equal to the attorney's fees and costs. See also Director, OWCP v. Barnes and Tucker Co. , 969 F.2d 1524 (3d Cir. 1992).
Note that, in Cadle, the Board overruled Scuilli v. Bethlehem Mines Corp. , 8 B.L.R. 1-206 (1985) to the extent it is inconsistent with Cadle . In Scuilli , the Board held that attorney's fees and expenses should be spread evenly over the life of a benefit award on a monthly basis and then subtracted on a monthly basis from the state monthly benefit; the net state benefit amount is then used to determine the offset. Since most state benefit awards are more generous than federal awards, the effect of this pro rata method is to eliminate any exclusion for attorney's fees and expenses from the amount of the overpayment.
[ III - 79, overpayment/offset ]
In Williams v. Humphreys Enterprises, Inc., ___ B.L.R. ___, BRB No. 88-0111 BLA (Aug. 31, 1995)(on reconsideration), Board affirmed its prior decision in Williams v. Humphreys Enterprises, Inc. , 17 B.L.R. 1-126 (1993), in which it had held that the mere transfer of a majority of a company's assets is insufficient to make it a "successor" for purposes of designating a responsible operator. Rather, a "successor operator" must exercise direct control of the day-to-day operations of the mining operations of the predecessor company whose assets it has purchased.
[ II - 81, successor operator ]