BRB No. 00-1161 BLA
LEWIS HURST
Claimant-Petitioner
v.
DIRECTOR, OFFICE OF WORKERS'
COMPENSATION PROGRAMS, UNITED
STATES DEPARTMENT OF LABOR
Respondent )
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) DATE
ISSUED:09/24/2001
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) DECISION AND ORDER
Appeal of the Order on Remand Denying Petition for Adjustment of
Overpayment of Stuart A. Kaplan, Administrative Law Judge, United
States Department of Labor.
S. F. Raymond Smith (Rundle and Rundle, L.C.), Pineville, West
Virginia, for claimant.
Helen H. Cox (Howard M. Radzely, Acting Solicitor of Labor; Donald S.
Shire, Associate Solicitor; Rae Ellen Frank James, Deputy Associate
Solicitor; Richard A. Seid and Michael J. Rutledge, Counsel for
Administrative Litigation and Legal Advice), Washington, D.C., for the
Director, Office of Workers' Compensation Programs, United States
Department of Labor.
Before: SMITH, DOLDER, and McGRANERY, Administrative Appeals Judges.
PER CURIAM:
Claimant appeals the Order on Remand Denying Petition for Adjustment of
Overpayment (97-BLO-0025) of Administrative Law Judge Stuart A. Kaplan on a
claim filed pursuant to the provisions of Title IV of the Federal Coal Mine
Health and Safety Act of 1969, as amended, 30 U.S.C. §901 et seq.
(the Act). Claimant was awarded federal black lung benefits on September 28,
1983. Director's Exhibit 9. On March 24, 1991, claimant received an award of
benefits for permanent total disability from the West Virginia Workers'
Compensation Fund (WCF), sixty percent of which was designated as compensation
for disability caused by pneumoconiosis. Director's Exhibits 54, 55. Claimant
received a lump sum payment from the WCF in the amount of $75,000.35, from which
claimant's attorney deducted $14,809.60 for legal fees and $111.25 in medical
expenses. Director's Exhibit 58. On May 24, 1991, the district director
informed claimant that an overpayment of federal benefits existed in the amount
of $23,073.80 and that claimant was at fault in the creation of the overpayment.
In calculating the amount claimant owed, the district director used what has
been termed the "up-front" method. He began by determining that pursuant to 20
C.F.R. §725.535(d) (2000), claimant is entitled to receive sixty percent of
the attorney fee award allowed under West Virginia law and sixty percent of the
medical expenses without having this amount treated as a payment by which
claimant's federal benefits must be offset.[1]
Accordingly, the district director subtracted a total of $8,902.01 from the
overpayment and credited this sum against the amount of federal benefits that
claimant received from April 8, 1987, the effective date of claimant's state
award, through January 31, 1988. The total amount of overpayment that existed
subsequent to these calculations is $23,073.80 and covered the period from
February 1, 1988 through March 31, 1991.
In the Board's most recent Decision and Order, the Board cited its decision
in Cadle v. Director, OWCP, 19 BLR 1-56 (1994), and affirmed the
administrative law judge's determination that the district director correctly
calculated the amount of the overpayment claimant received as a result of an
award of state workers' compensation benefits.[2] Hurst v. Director, OWCP, BRB No. 99-0674 BLA (Mar. 8,
2000)(unpub.). The Board vacated the administrative law judge's finding that
claimant did not establish the prerequisites for waiver of recovery of the
overpayment, however, and remanded the case to the administrative law judge for
reconsideration of this issue. Id. On remand, the administrative law
judge received documents establishing that claimant does not contest that he
must repay a portion of the federal benefits that he has received; he only takes
issue with the amount of the overpayment. The administrative law judge relied
upon the Board's decision in Cadle and found that the district director's
application of the "up-front" method is appropriate and that the amount of the
overpayment is $23,046.80.
In the present appeal, claimant urges the Board to reconsider its holding
in Cadle, arguing that the method of calculation employed by the district
director is not consistent with Section 725.535 and has the effect of increasing
the amount of the overpayment by $2,987.01. Claimant maintains that rather than
determining the amount of the state award attributable to attorney fees and/or
medical expenses and then dividing that figure by the monthly state benefit
payments to determine the number of months in which claimant legitimately
received concurrent federal benefits, the district director should subtract the
attorney fees/medical expenses directly from the total of the concurrent federal
benefits. The Director, Office of Workers' Compensation Programs, has responded
and urges the Board to reject claimant's arguments on the ground that the
Board's prior disposition of this issue constitutes the law of the case.
The Board's scope of review is defined by statute. The administrative law
judge's Decision and Order must be affirmed if it is supported by substantial
evidence, is rational, and is in accordance with applicable law. 33 U.S.C.
§921(b)(3), as incorporated into the Act by 30 U.S.C. §932(a);
O'Keeffe v. Smith, Hinchman & Grylls Associates, Inc., 380 U.S. 359
(1965).
Pursuant to 20 C.F.R. §§725.533(a)(1) and 725.535(b), concurrent
state and federal benefits for disability caused by pneumoconiosis are
duplicative and federal benefits must be reduced, or offset, by the amount of
state benefits. Section 725.535(c) provides that if a state award is paid "in a
lump sum in commutation of or a substitution for periodic benefits," the
reduction in federal benefits is to be made so as to "approximate as nearly as
practicable" the month-by-month method set forth in Section 725.535(b). Under
Section 725.535(d), the amount received in payment for legal or medical expenses
incurred in procuring the state award is not treated as concurrent state
benefits. In Cadle, the decision in which the Board held that the "up-front" method is permissible, the miner received a lump sum payment of state
workers' compensation benefits, a portion of which was attributable to attorney
fees. The district director used the "up-front" method of calculating the
amount of the overpayment of federal benefits. The administrative law judge
found that the district director's calculations were not consistent with the
remedial purpose of the Act, as they increased the amount of the overpayment for
which the miner was liable. The administrative law judge instructed the
district director to deduct the attorney fee portion of the lump sum award
directly from the total of the concurrent federal black lung benefits payments
that the miner received. On appeal, the Director contended that the "up-front"
method is rational and consistent with the terms of Section 725.535. The Board
held that the Director's interpretation of the pertinent regulation is entitled
to deference, as the Director is responsible for the administration of the Act
and the implementing regulations. The Board also noted that the United States
Court of Appeals for the Third Circuit held in Director, OWCP v. Barnes and
Tucker Co. [Molnar], 969 F. 2d 1524, 16 BLR 2-99 (3d Cir. 1992), that the
"up-front" method is consistent with the Act and the regulations. Accordingly,
the Board vacated the administrative law judge's Decision and Order and remanded
the case to the district director for collection of the overpayment as
calculated under the "up-front" method. Cadle, 19 BLR at 1-59-1-60.
In the present case, claimant acknowledges that the administrative law
judge did not err in relying upon Cadle to affirm the district director's
assessment of the amount of the overpayment. Claimant asserts that it is the
Board's responsibility to now overturn the holding in Cadle, as the
Director's interpretation of the overpayment provisions is not entitled to
deference as the "up-front" method does not comport with the language of the Act
or the regulations and conflicts with the remedial purpose of the Act. The
allegations set forth by claimant amount to a reiteration of the contentions
raised in his prior appeal. Inasmuch as claimant has advanced no new argument
in support of altering the Board's disposition of the issue presented in
claimant's appeal and no intervening case law has contradicted the Board's
resolution of the issue, it constitutes the law of the case and will not be
disturbed. See Coleman v. Ramey Coal Co., 18 BLR 1-9 (1993); Bridges
v. Director, OWCP, 6 BLR 1-988 (1984).
Accordingly, the administrative law judge's Order on Remand Denying
Petition for Adjustment of Overpayment is affirmed.
SO ORDERED.
ROY P. SMITH
Administrative Appeals Judge
NANCY S. DOLDER
Administrative Appeals Judge
REGINA C. McGRANERY
Administrative Appeals Judge
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Footnotes.
1)The Department of Labor has amended the regulations implementing the Federal
Coal Mine Health and Safety Act of 1969, as amended. These regulations became effective on January 19,
2001, and are found at 20 C.F.R. Parts 718, 722, 725, and 726 (2001). All citations to the regulations, unless
otherwise noted, refer to the amended regulations.
Pursuant to a lawsuit challenging revisions to forty-seven of the regulations implementing the Act, the
United States District Court for the District of Columbia granted limited injunctive relief for the duration of
the lawsuit, and stayed, inter alia, all claims pending on appeal before the Board under the Act, except
for those in which the Board, after briefing by the parties to the claim, determined that the regulations at issue
in the lawsuit would not affect the outcome of the case. National Mining Ass'n v. Chao, No.
1:00CV03086 (D.D.C. Feb. 9, 2001)(order granting preliminary injunction). The Board subsequently issued
an order requesting supplemental briefing in the instant case. On August 9, 2001, the District Court issued its
decision upholding the validity of the challenged regulations and dissolving the February 9, 2001 order
granting the preliminary injunction. National Mining Ass'n v. Chao, Civ. No. 00-3086 (D.D.C. Aug.
9, 2001). The court's decision renders moot those arguments made by the parties regarding the impact of the
challenged regulations.
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2)A complete recitation of the procedural history of this case is set forth in the Board's
Decision and Order in Hurst v. Director, OWCP, BRB No. 99-0647 BLA (Mar. 8, 2000)(unpub.), slip
op. at 1-4.
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NOTE: This is an UNPUBLISHED BLA Document.
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