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[Federal Register: December 20, 2000 (Volume 65, Number 245)]
[Rules and Regulations]
[Page 79969-80018]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20de00-17]
[[pp. 79969-80018]] Regulations Implementing the Federal Coal Mine Health and Safety
Act of 1969, as Amended
[[Continued from page 79968]]
[[Page 79969]]
The commenters opposed to the Department's proposal also objected
to the Department's failure to consult the National Institute of
Occupational Safety and Health (NIOSH). Although NIOSH had commented
favorably on the Department's proposal, and specifically on the
provision recognizing the progressive nature of pneumoconiosis, the
Department decided, in light of the divergent comments it had received
from medical professionals, to seek additional guidance from NIOSH. The
Department transmitted a copy of all of the testimony and commentary it
had received to Dr. Linda Rosenstock, the Director of NIOSH, and asked
NIOSH to determine, in light of the then existing record, whether NIOSH
continued to support the Department's proposal. NIOSH responded, in a
December 7, 1998 letter from Dr. Paul Schulte, the Director of NIOSH's
Education and Information Division, that ``[t]he unfavorable comments
received by DOL do not alter our previous position: NIOSH scientific
analysis supports the proposed definitional changes.'' Dr. Schulte
provided additional medical references to support NIOSH's conclusion.
The Department notified parties of this additional evidence in its
second notice of proposed rulemaking. See 64 FR 54978-79 (Oct. 8,
1999).
One commenter accuses the Department of obtaining assistance from
NIOSH's information officer rather than its scientific staff. The
Department does not agree that the identity or title of the agency
official through whom NIOSH chose to communicate its response to the
Department's inquiry renders that response invalid. The Department's
request was sent to the Director of NIOSH, and observed that the
resolution of the issues related to the definition of the term
``pneumoconiosis'' required scientific and medical expertise. Dr.
Schulte's letter, transmitted on behalf of NIOSH in response to the
Department's request, specifically refers to ``NIOSH scientific
analysis.'' Accordingly, the Department rejects the commenter's
inferences that its consultation with NIOSH was less than complete, and
that the Department sought to exclude the agency's scientific staff. To
the extent that the statute imposes an obligation to consult with NIOSH
on the definition of ``pneumoconiosis,'' the Department has fully
complied with that obligation.
The commenters opposed to the Department's proposal also attack the
scientific basis of the conclusion that the Department and NIOSH have
drawn from the evidence of record. In the following discussion, where a
scientific article or treatise is cited, the Department has also cited
to a Rulemaking Record Exhibit or, when appropriate, the Federal
Register, where that source appears. This second citation is not an
exhaustive list; thus, each source may appear at additional points in
the Rulemaking Record. In support of their attack, the commenters have
submitted an analysis of the available medical literature from Dr.
Gregory Fino, a Board-certified physician in Internal Medicine and
Pulmonary Disease, and Dr. Barbara Bahl, who has a doctorate in nursing
and biostatistics. Drs. Fino and Bahl analyze nine articles and
textbooks dealing with latency, which they define parenthetically as
``0/0 or 0/1 to 1/0+.'' The analysis thus focuses on evidence that
would show that a miner whose chest X-rays are classified by a
radiologist as ``negative'' (0/0 or 0/1 under the ILO-UC classification
scheme, see 20 CFR 718.102(b)), after he leaves the mine can develop a
disease that will result in chest X-rays that are classified as
``positive.'' Under the ILO-UC scheme, an X-ray classified as category
1, 2, or 3, ranging from 1/0 to 3/3, is considered positive for simple
pneumoconiosis. An X-ray classified as A, B, or C is considered
positive for complicated pneumoconiosis, also known as progressive
massive fibrosis or massive pulmonary fibrosis. 20 CFR 718.102(b),
718.304(a) (1999). They conclude that ``the medical literature provides
no evidence that coal workers' pneumoconiosis or silicosis in
coalminers is a latent disease. There is also no evidence to show that
the development of pulmonary impairment is latent.'' Rulemaking Record,
Exhibit, 89-37, Appendix C at 29.
Drs. Fino and Bahl also analyzed five articles dealing with
progression, which they define parenthetically as ``1/0 to
1/0.+'' Their analysis of progression thus focuses on whether
individuals whose chest X-rays are initially read as 1/0, the lowest
positive classification in the ILO-UC scheme, may have later chest X-
rays classified greater than 1/0. They observe that ``there are authors
who have identified progression of pneumoconiosis in coal miners,'' but
that other authors have reached the contrary conclusion. They conclude
as follows:
Why do some miners progress within the ILO scale of simple
pneumoconiosis and others do not? The answer lies in the proper
definition of pneumoconiosis. Careful attention must be made to
differentiate simple coal workers' pneumoconiosis and silicosis. The
miners who have been described to progress over time after exposure
ceases are miners who have likely contracted silicosis, not simple
coal workers' pneumoconiosis. * * *
Silicosis may be a progressive disease in a small percentage of
miners after coal mine dust exposure ends. The literature does not
support the statement that coal workers' pneumoconiosis is
progressive absent further dust exposure. There are no studies that
show progressive impairment in miners who have left the mines. The
studies do not show any progression in industrial bronchitis after a
miner leaves the mines. In fact, the studies do suggest that the
minor reduction in the FEV1 [Forced Expiratory Volume in one second]
as a result of industrial bronchitis occurs in the first few years
of mining and then the effect over the remaining years in the mines
is negligible and may even recover.
Rulemaking Record, Exhibit 89-37, Appendix C at 30-31. In
evaluating the medical evidence contained in the rulemaking record, the
Department is mindful that Congress provided an exceptionally broad
definition of the term ``pneumoconiosis:'' ``a chronic dust disease of
the lung and its sequelae, including respiratory and pulmonary
impairments, arising out of coal mine employment.'' 30 U.S.C. 902(b).
The regulatory definitions promulgated by the Department over the last
25 years have reflected the scope of this provision.
In 1978, the Department promulgated its interim criteria, 20 CFR
Part 727. Those criteria included a definition of ``pneumoconiosis'' at
20 CFR 727.202. After repeating the statutory definition, the
regulation further provided that ``[t]his definition includes, but is
not limited to, coal workers' pneumoconiosis, anthracosilicosis,
anthracosis[,]anthrosilicosis, massive pulmonary fibrosis, progressive
massive fibrosis[,] silicosis, or silicotuberculosis arising out of
coal mine employment.'' 43 FR 36825 (Aug. 18, 1978). The Department
promulgated its permanent criteria, 20 CFR Part 718, in 1980. Section
718.201, entitled ``Definition of pneumoconiosis,'' contained a
definition that was identical to that of Sec. 727.202. 45 FR 13685
(Feb. 29, 1980). The federal courts of appeals have long recognized
that the Act compensates not merely coal workers' pneumoconiosis, as
that term is used by the medical community, but ``legal''
pneumoconiosis. See, e.g., Peabody Coal Co. v. Lowis, 708 F.2d 266, 268
n.4 (7th Cir. 1983) (``the `legal' definition of pneumoconiosis
contained in the above-quoted regulation [Sec. 727.202] includes not
only `true or clinical' pneumoconiosis but also other respiratory or
pulmonary diseases arising from dust exposure in coal mine
employment''); Gulf & Western Industries v. Ling, 176 F.3d 226, 231
(4th Cir. 1999) (``[the regulations detail the breadth of what is
frequently called
[[Page 79970]]
`legal' pneumoconiosis * * *''); see also the Department's preamble to
Sec. 718.201.
The Department has reviewed all of the medical literature
referenced in the record, and does not agree that it lacks support for
the proposition that pneumoconiosis is a latent, progressive disease.
Contrary to Dr. Fino's conclusions, a number of medical references
document the latent, progressive nature of the disease. For example,
Seaton, in ``Coal Workers' Pneumoconiosis,'' in Morgan, WKC and Seaton
A, eds., Occupational Lung Diseases (WB Saunders Co., 3d ed. 1995) 389,
see also Rulemaking Record, Exhibit 89-37, Appendix C at 34, 42,
contains the observation that ``PMF [Progressive massive fibrosis] may
occur after dust exposure has ceased, even when the miner has left the
industry with no apparent simple pneumoconiosis, although this will
only occur if the worker has had substantial dust exposure'').
Similarly, National Institute for Occupational Safety and Health,
Criteria for a Recommended Standard: Occupational Exposure to
Respirable Coal Mine Dust, Sec. 4.2.1.3.1, Rulemaking Record, Exhibit
2-1 at 48, summarized an article (Maclaren WM, Soutar CA, ``Progressive
massive fibrosis and simple pneumoconiosis in ex-miners,'' Br. J. Ind.
Med. 42:734-740 (1985)) as follows: ``Among 1,902 ex-miners who had not
developed PMF within 4 years of leaving mining, 172 (9%) developed PMF
after leaving mining. Of those 172 miners with PMF, 32% had no evidence
of simple CWP (category 0) when they left mining.'' In that article, in
fact, Maclaren and Soutar reported both small opacities (evidence of
simple pneumoconiosis) and large opacities (evidence of complicated
pneumoconiosis) in ex-miners who did not show evidence of coal workers'
pneumoconiosis after the miners left the industry.
Moreover, contrary to the conclusion of Dr. Fino and Dr. Bahl, the
study conducted by Donnan et al. did find significant evidence of
latency. Donnan PT, Miller BG, Scarisbrick DA, Seaton A, Wightman AJA,
Soutar CA, ``Progression of simple pneumoconiosis in ex-coalminers
after cessation of exposure to coalmine dust,'' IOM report TM/97/07
(Institute of Occupational Medicine, December 1997) 1-67, see also
Rulemaking Record, Exhibit 89-37, Appendix C at 26, 29. Dr. Fino and
Dr. Bahl write that ``only one out of 200 miners [in the study] was
found to progress from a negative to a positive film.'' That
conclusion, however, was not the conclusion of the study's authors.
Their tables 3.4a (Median profusion score for 14 CWP progressors and 19
PMF progressors) and 3.4b (Median profusion score for 161 CWP non-
progressors) compare X-rays taken within two years of the dates on
which the 200 miners left the coal mining industry with X-rays taken 10
years later. They demonstrate that of 138 ex-miners whose early X-rays
were read as 0/0 or 0/1, 11 had later X-rays read as positive for
either simple or complicated pneumoconiosis. This proportion, 7.97%,
has epidemiologic significance, and supports the authors' conclusion
that ``[t]he results have demonstrated that progression does occur
after cessation of exposure.'' Donnan et al. at 23.
In light of this evidence, the Department is not persuaded by the
reliance Dr. Fino and Dr. Bahl place on the conclusion of Drs.
Merchant, Taylor and Hodous in ``Occupational Respiratory Diseases''
(National Institute for Occupational Safety and Health, 1986), see also
Rulemaking Record, Exhibit 89-37, Appendix C at 26. Dr. Fino and Dr.
Bahl quote the textbook's statement that ``the chance of radiological
progression over ten years at a mean dust concentration of 2 milligrams
per cubic meter is essentially zero for a miner with x-ray category 0/
0.'' This textbook was published by the Division of Respiratory Disease
Studies of the Appalachian Laboratory for Occupational Safety and
Health, a component of the National Institute of Occupational Safety
and Health, more than 10 years prior to the Donnan study. In light of
NIOSH's conclusion that scientific analysis supports the Department's
regulations, the Department does not agree that the statement by
Merchant et al. requires the Department to revise its regulatory
approach.
Similarly, the Department is not persuaded by Dr. Fino and Dr.
Bahl's attempt to dismiss the effect of silica on coal miners, and
therefore to discount the applicability of studies demonstrating the
latency and progressivity of silicosis. It remains the Department's
position that pneumoconiosis, as defined in the statute, 30 U.S.C.
902(b), is both latent and progressive. The statutory definition
includes both simple coal workers' pneumoconiosis and silicosis.
Although they acknowledge studies showing that silicosis is a latent,
progressive disease, Dr. Fino and Dr. Bahl argue that coal workers'
pneumoconiosis must be distinguished from silicosis. The Black Lung
Benefits Act, however, does not permit such a distinction. As discussed
above, the regulatory definition of the term ``pneumoconiosis,''
implementing the broad statutory definition, includes silicosis within
the list of conditions that must be considered pneumoconiosis. In
addition, inclusion of silicosis in the definition of pneumoconiosis is
based on practical as well as legal considerations. It is difficult to
separate the effects of coal and silica in the occupational setting.
Coal contains a number of non-organic materials, including quartz, and
the percentage of quartz is greater in high rank coals. Seaton, ``Coal
Workers' Pneumoconiosis,'' in Morgan, WKC and Seaton A, eds.,
Occupational Lung Diseases (WB Saunders Co., 3d ed. 1995) 389, see also
Rulemaking Record, Exhibit 89-37, Appendix C at 34, 42. Seaton and
colleagues reported a cohort of miners who had a rapid progression of
radiologic findings resembling silicosis, despite a relatively low
total coal dust exposure. Seaton A, Dick JA, Dodgson J, Jacobsen M.,
``Quartz and pneumoconiosis in coal miners,'' Lancet 2:1272 (1981), see
also Rulemaking Record, Exhibit 2-1 at 50. Analysis revealed that the
percentage of quartz in the mixed coal mine dust was significantly
higher in these affected miners than in matched controls. They
concluded that quartz exposure was an important factor contributing to
pneumoconiosis in some miners and that disease in such miners was more
aggressive. Moreover, miners who drill into hard rock, such as those
who bore shafts or work as roof bolters, are exposed to higher
concentrations of quartz and are known to be at higher risk for
developing silicosis. Seaton, ``Coal Workers' Pneumoconiosis,'' in
Morgan, WKC and Seaton A, eds., Occupational Lung Diseases (WB Saunders
Co., 3d ed. 1995) 389, see also Rulemaking Record, Exhibit 89-37,
Appendix C at 34, 42. Based on these observations, it is reasonable to
conclude that there is a clear risk of developing pneumoconiosis with
characteristics of silicosis in coal miners exposed to dusts with high
quartz content. Accordingly, the Department believes that it may
properly rely on studies of silicosis in promulgating regulations
governing the compensability of pneumoconiosis as that term has been
defined by Congress. See also Beckett WS, ``Occupational Respiratory
Diseases,'' The New England Journal of Medicine, 342:406-13 (Feb. 12,
2000) (citing a study of silicosis to support the conclusion that
``[w]ith many substances (including coal and silica dust), the disease
may progress for decades after the exposure has ceased.''). (Dr.
Beckett's review article did not appear until after the
[[Page 79971]]
rulemaking record had closed; it is cited only as additional evidence
confirming the Department's previous use of studies involving
silicosis).
Finally, there is also evidence that lung function can continue to
deteriorate after a miner leaves the coal mining industry. The authors
of Dimich-Ward H and Bates DV, ``Reanalysis of a longitudinal study of
pulmonary function in coal miners in Lorraine, France,'' Am J Ind Med,
25:613-623 (1994), see also 62 FR 3344 (Jan. 22, 1997), demonstrated a
decline of pulmonary function in both smoking and non-smoking coal
miners that continues over time even after retirement from mining.
Given this evidence of progression, it is clear that a miner who may be
asymptomatic and without significant impairment at retirement can
develop a significant pulmonary impairment after a latent period.
Because the legal definition of ``pneumoconiosis'' includes impairments
that arise from coal mine employment, regardless of whether a miner
shows X-ray evidence of pneumoconiosis, this evidence of deterioration
of lung function among miners, including miners who did not smoke, is
particularly significant.
The commenters also cite the 1985 report of the Surgeon General,
U.S. Department of Health and Human Services, The Health Consequences
of Smoking: Cancer and Chronic Lung Disease in the Workplace (1985),
see also Rulemaking Record, Exhibit 89-21, Appendix 11, in support of
their argument. Of the seven items listed in the ``Summary and
Conclusions'' section of Chapter Seven, ``Respiratory Disease in Coal
Miners,'' none addresses the latency or progressivity of
pneumoconiosis. In addition, the Surgeon General's report, which
focused on the health consequences of smoking, did not review many of
the articles on which the Department's conclusion is based. Because the
overwhelming majority of the references cited by the Department in its
first and second notices of proposed rulemaking, see 62 FR 3343-44
(Jan. 22, 1997); 64 FR 54978-79 (Oct. 8, 1999), as well as the
references discussed above, were prepared after 1985, this is not
surprising. Accordingly, the Department does not believe that anything
in the Surgeon General's report requires the Department to ignore the
conclusions that it has drawn from the studies and articles in the
rulemaking record.
Contrary to the commenters' argument, then, the record does contain
abundant evidence demonstrating that pneumoconiosis is a latent,
progressive disease. That evidence is certainly sufficient to justify
the Department's regulation governing subsequent claims. Moreover,
neither the regulation permitting subsequent claims nor the
Department's explicit recognition of the progressive nature of the
disease represents a departure from the Department's prior positions.
The Department's original promulgation of a regulation governing
subsequent claims in 1978 was based on the progressive nature of the
disease. 43 FR 36785 (Aug. 18, 1978). The federal courts of appeals
have also recognized that pneumoconiosis is a progressive disease.
Plesh v. Director, OWCP, 71 F.3d 103, 108 (3d Cir. 1995)
(``pneumoconiosis is progressive and incurable''); Labelle Processing
Co. v. Swarrow, 72 F.3d 308, 314-315 (3d Cir. 1995) (``Congress, in
enacting the BLBA, recognized the perniciously progressive nature of
the disease * * *. Moreover, courts have long acknowledged that
pneumoconiosis is a progressive and irreversible disease.'');
Kowalchick v. Director, OWCP, 893 F.2d 615, 621 (3d Cir. 1990) (``That
the three earliest x-rays of record * * * were read negative is not
inconsistent with the progressive nature of pneumoconiosis.'');
Shendock v. Director, OWCP, 893 F.2d 1458, 1467 n.10 (3d Cir. 1990)
(``it is well recognized that pneumoconiosis is a progressive disease
whose symptoms increase in severity over time''); Bethenergy Mines Inc.
v. Director, OWCP, 854 F.2d 632, 636 (3d Cir. 1988) (``Due to the
progressive nature of pneumoconiosis, a coal mine operator is less
likely to know the details underlying a particular claim than an
employer is in the typical case arising under the LHWCA.''); Zielinski
v. Califano, 580 F.2d 103, 107 (3d Cir. 1978) (``pneumoconiosis and
related lung diseases progress slowly''); Eastern Associated Coal Corp.
v. Director, OWCP, ____ F.3d ____, No. 99-1312, slip op. at pp. 11-12
(4th Cir. July 12, 2000) (observing ``the assumption of progressivity
that underlies much of the statutory regime''); Lane Hollow Coal Co. v.
Lockhart, 137 F.3d 799, 803 (4th Cir. 1998) (``pneumoconiosis is
progressive and irreversible''); Adkins v. Director, OWCP, 958 F.2d 49,
51 (4th Cir. 1992) (``pneumoconiosis is a progressive disease''); Greer
v. Director, OWCP, 940 F.2d 88, 90 (4th Cir. 1991) (pneumoconiosis is
``a slowly-progressing condition''); Hamrick v. Schweiker, 679 F.2d
1078, 1081 (4th Cir. 1982) (``pneumoconiosis is a progressive
disease''); Prater v. Harris, 620 F.2d 1074, 1082 (4th Cir. 1980)
(``pneumoconiosis is a progressive disease''); Barnes v. Mathews, 562
F.2d 278, 279 (4th Cir. 1977) (``pneumoconiosis is a slow, progressive
disease often difficult to diagnose at early stages''); Crace v.
Kentland-Elkhorn Coal Corp., 109 F.3d 1163, 1167 (6th Cir. 1997)
(``because of the progressive nature of pneumoconiosis, more recent
evidence is often accorded more weight''); Consolidation Coal Co. v.
McMahon, 77 F.3d 898, 906 (6th Cir. 1996) (recognizing ``the
progressive nature of pneumoconiosis''); Sharondale Corp. v. Ross, 42
F.3d 993, 997 (6th Cir. 1994) (``the material change provision
[provides] relief from the principles of finality for those miners
whose conditions have deteriorated due to the progressive nature of
black lung disease''); Johnson v. Peabody Coal Co., 26 F.3d 618, 620
(6th Cir. 1994) (``Pneumoconiosis is a progressive debilitating
disease.''); Woodward v. Director, OWCP, 991 F.2d 314, 320 (6th Cir.
1993) (``Pneumoconiosis is a progressive and degenerative disease.'');
Campbell v. Consolidation Coal Co., 811 F.2d 302, 303 (6th Cir. 1987)
(recognizing ``the progressive nature of pneumoconiosis''); Back v.
Director, OWCP, 796 F.2d 169, 172 (6th Cir. 1986) (``Because of the
progressive nature of pneumoconiosis, earlier negative and later
positive X-rays of the same individual are not necessarily in
conflict.''); Orange v. Island Creek Coal Co., 786 F.2d 724, 727 (6th
Cir. 1986) (``pneumoconiosis * * * is a progressive disease'');
Director, OWCP v. Bivens, 757 F.2d 781, 788 (6th Cir. 1985) (``the
Black Lung Benefits Act provides compensation for disability based on
an invisible and progressive disease''); Collins v. Sec'y of HHS, 734
F.2d 1177, 1180 (6th Cir. 1984) (``Medically we note that
pneumoconiosis is a slow, progressive disease. Its characteristics and
symptoms often do not manifest themselves in a way that promote [sic]
immediate detection. In some cases the disease may take years before it
is readily detectable.''); Smith v. Califano, 682 F.2d 583, 587 (6th
Cir. 1982) (``coal workers'' pneumoconiosis * * * is a progressive
disease''); Hill v. Califano, 592 F.2d 341, 345 (6th Cir. 1979)
(``pneumoconiosis is a slowly progressive disease''); Morris v.
Mathews, 557 F.2d 563, 568 (6th Cir. 1977) (recognizing Congressional
finding that ``pneumoconiosis [is] a progressive chronic dust disease
of the lung''); Begley v. Mathews, 544 F.2d 1345, 1354 (6th Cir. 1976)
(describing pneumoconiosis as ``a disease known to be of a slowly
progressive character''); Amax Coal Co. v. Franklin, 957 F.2d 355, 359
(7th Cir. 1992) (``Black lung
[[Page 79972]]
disease, at least when broadly defined, is a progressive disease * *
*.''); Dotson v. Peabody Coal Co., 846 F.2d 1134, 1139 (7th Cir. 1988)
(``Pneumoconiosis is a progressive disease* * *''.); Russell v.
Director, OWCP, 829 F.2d 615, 616 (7th Cir. 1987) (``Coal miners''
pneumoconiosis (black lung) is a progressive, debilitating disease.'');
Amax Coal Co. v. Director, OWCP, 801 F.2d 958, 964 (7th Cir. 1986)
(recognizing ``the difficulty of clinically diagnosing the progressive
disease''); Consolidation Coal Co. v. Chubb, 741 F.2d 968, 973 (7th
Cir. 1984) (``In light of the progressive nature of pneumoconiosis,
[the ALJ's] according greater weight to the recent x-ray was not
irrational.''); Lovilia Coal Co. v. Harvey, 109 F.3d 445, 450 (8th Cir.
1997) (recognizing progressive nature of pneumoconiosis); Robinson v.
Missouri Mining Co., 955 F.2d 1181, 1184 (8th Cir. 1992)
(``pneumoconiosis is a progressive disease''); Campbell v. Director,
OWCP, 846 F.2d 502, 509 (8th Cir. 1988) (``pneumoconiosis is a
progressive disease''); Newman v. Director, OWCP, 745 F.2d 1162, 1165
(8th Cir. 1984) (``pneumoconiosis is a progressive disease''); Padavich
v. Mathews, 561 F.2d 142, 146 (8th Cir. 1977) (``Pneumoconiosis is a
progressive illness* * *.''); Humphreville v. Mathews, 560 F.2d 347,
349 (8th Cir. 1977) (``pneumoconiosis is a progressive disease'');
Wyoming Fuel Co. v. Director, OWCP, 90 F.3d 1502, 1507 (10th Cir. 1996)
(recognizing ``the nature of pneumoconiosis as a disease that develops
progressively and is difficult to diagnose''); Lukman v. Director,
OWCP, 896 F.2d 1248, 1253 (10th Cir. 1990) (recognizing real purpose of
duplicate claims regulation is to provide ``miners with progressively
worsening health full and equal access to black lung benefits.'');
Ohler v. Sec'y of HEW, 583 F.2d 501, 506 (10th Cir. 1978)
(``pneumoconiosis is a progressive disease, as is emphysema''); Paluso
v. Mathews, 573 F.2d 4, 10 (10th Cir. 1978) (``It is well-established
medically that pneumoconiosis is a progressive disease which frequently
defies diagnosis.''); Alabama Dry Dock and Shipbuilding Corp. v.
Sowell, 933 F.2d 1561, 1566 (11th Cir. 1991) (black lung ``can lie
essentially dormant in the body for many years after an employee has
left his employment before progressing to the point where [it] is
disabling''); Curse v. Director, OWCP, 843 F.2d 456, 457 (11th Cir.
1988) (recognizing black lung disease develops slowly and
progressively); Doss v. Califano, 598 F.2d 419, 421 (11th Cir. 1979)
(``pneumoconiosis is a progressive disease''); but see Zeigler Coal Co.
v. Lemon, 23 F.3d 1235, 1238 (7th Cir. 1994) (chastising an
administrative law judge for assuming that pneumoconiosis is
progressive without any evidence in the record to support the
assumption).
Although one commenter asserts that the regulation creates an
irrebuttable presumption that each miner's condition is progressive, it
actually does no such thing. As revised, Sec. 725.309 simply
effectuates the current one-element test adopted by a substantial
number of federal appellate courts and most recently the Benefits
Review Board, Allen v. Mead Corp., ____ Black Lung Rep. (MB) ____, BRB
No. 99-0474 BLA (May 31, 2000). The one-element test allows a miner who
demonstrates a material change in one of the conditions of entitlement
previously decided against him to avoid an automatic bar on
establishing his current entitlement to benefits. To the extent that
the commenter would require each miner to submit scientific evidence
establishing that the change in his specific condition represents
latent, progressive pneumoconiosis, the Department disagrees and has
therefore not imposed such an evidentiary burden on claimants. Rather,
the miner continues to bear the burden of establishing all of the
statutory elements of entitlement, except to the extent that he is
aided by two statutory presumptions, 30 U.S.C. 921(c)(1) and (c)(3).
The revised regulation continues to afford coal mine operators an
opportunity to introduce contrary evidence weighing against
entitlement.
(c) One comment submitted in connection with the first notice of
proposed rulemaking, and cited by another comment submitted in
connection with the second notice of proposed rulemaking, suggests that
the Department's proposed revision would compensate the 15 to 20
percent of cigarette smokers who develop chronic airway obstruction if
they spent 10 years or more in the coal mining industry. The Department
does not agree that the possibility that miners will suffer reduced
pulmonary function as a result of cigarette smoking justifies the
automatic denial of additional claims by miners under Sec. 725.309. In
addition, the previously cited study by Dimich-Ward and Bates
documented the progressive decrement in lung function among both miners
who smoked and those who did not. Dimich-Ward H, Bates DV, ``Reanalysis
of a longitudinal study of pulmonary function in coal miners in
Lorraine, France,'' Am J Ind Med, 25:613-623 (1994), see also 62 FR
3344 (Jan. 22, 1997). The Department accordingly believes that a miner
who files his first claim before he is truly totally disabled, but
later becomes totally disabled, must be afforded an opportunity to
establish that his condition is related to his coal mine employment.
Under Sec. 718.204, the miner continues to bear the burden of proving
this element of his entitlement. To the extent that a coal mine
operator produces medical evidence demonstrating that the miner's total
disability is due solely to cigarette smoking, that evidence would also
be relevant to the inquiry under Sec. 718.204.
(d) A number of comments argue that Sec. 725.309 violates accepted
principles of claim preclusion and issue preclusion, particularly with
respect to the treatment of additional claims filed by miners'
survivors. The Department disagrees. In its initial proposal, the
Department explained that its additional filing rules gave full effect
to the principles of claim preclusion but that the applicability of
these principles was limited in two important respects: (1) The liberal
reopening provision created by Congress under Sec. 22 of the Longshore
and Harbor Workers' Compensation Act, 33 U.S.C. 922, incorporated into
the Black Lung Benefits Act by 30 U.S.C. 932(a); and (2) the
recognition that an individual's eligibility for workers' compensation
benefits is not fixed at a single time, but, especially with respect to
occupational diseases, may be subject to relitigation even if the
worker's first claim is denied. 62 FR 3352 (Jan. 22, 1997). Under these
principles, and subject to the limitation that the party must have a
full and fair opportunity to litigate its position, Kremer v. Chemical
Constr. Corp., 456 U.S. 461, 481 n. 22 (1982), a final adjudication of
the merits of a cause of action will preclude the parties from
relitigating issues that were or could have been raised in the first
proceeding. Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 476
(1998), citing Federated Department Stores, Inc. v. Moitie, 452 U.S.
394, 398 (1981).
Section 725.309 applies these principles to the adjudication of
black lung benefits claims. For example, if the sole basis for denying
a miner's claim is a finding on an issue that is not subject to change,
and that the miner had an opportunity to fully and fairly litigate, a
subsequent claim by the miner must also be denied. Thus, where the
first claim was denied solely on the grounds that the applicant did not
work as a miner, and he does not allege that he engaged in any
additional coal mine employment since he filed that application, his
second claim must be denied as well. Where the issue is subject to
change, however, neither claim preclusion principles nor
[[Page 79973]]
Sec. 725.309 bars the litigation of the miner's additional claim. For
example, where the original denial was based on the miner's failure to
establish that his respiratory impairment was totally disabling, and
new evidence establishes that that condition has worsened, the miner
should not be barred from prosecuting a second application for
benefits.
The regulation gives similar treatment to cases involving miners'
survivors. Where a previous survivor's claim was denied solely on the
basis that the survivor did not prove that the miner died due to
pneumoconiosis, an element not subject to change, the survivor may be
barred from litigating another claim filed more than one year after the
denial of the first one. The Department does not agree, however, with
the commenters' suggestion that none of the elements of a survivor's
claim is subject to change. In the case of a miner's survivor, for
example, the Secretary's regulations recognize, consistent with
Departmental practice, court of appeals precedent, and applicable
Social Security law, that although a miner's survivor who remarries is
not then eligible for benefits, she may become re-entitled to benefits
if that marriage ends. See preamble to Sec. 725.213. Section 725.309
recognizes this possibility by allowing a miner's survivor to litigate
a second claim where one of the grounds on which the first claim was
denied, e.g., that the survivor was married, is subject to change.
Moreover, Sec. 725.309 incorporates two other limitations which are
accepted components of traditional claim preclusion. First, where none
of the elements is subject to change, and denial by virtue of claim
preclusion is appropriate under Sec. 725.309, the regulation requires
the party defending the claim to specifically plead that doctrine. The
Supreme Court has observed that ``[c]laim preclusion (res judicata), as
Rule 8(c) of the Federal Rules of Civil Procedure makes clear, is an
affirmative defense.'' Rivet, 522 U.S. at 476. Section 725.309
similarly requires an operator seeking the denial of an additional
survivor's claim by virtue of preclusion to raise that issue at the
appropriate time. Like traditional claim preclusion, Sec. 725.309
offers the party defending the cause of action an affirmative defense
that is subject to waiver if not properly and timely raised. See, e.g.,
Garry v. Geils, 82 F.3d 1362, 1367 n. 8 (7th Cir.1996).
Second, claim preclusion is inappropriate even in traditional civil
litigation where the party against whom the defense is invoked was not
able to fully litigate those issues which the defendant now seeks to
bar. Kremer, 456 U.S. at 481 n. 22. For example, this issue would arise
if the administrative law judge adjudicating the survivor's first claim
found that the survivor's remarriage barred her entitlement, and
alternatively concluded that the miner did not die due to
pneumoconiosis. In that case, the survivor could not have overturned
the adverse finding on the cause of the miner's death because she would
not have been able to avoid the prohibition on the eligibility of
remarried widows. Accordingly, she could not be said to have had a full
and fair opportunity to litigate the issue of the cause of the miner's
death. In these circumstances, neither ordinary principles of claims
preclusion nor Sec. 725.309 would preclude her from litigating her
entitlement to benefits in a subsequent claim.
Similarly, the Department's application of claim preclusion to
additional claims contains an exception based on the absence of an
opportunity to fully and fairly litigate the issues in a previous
proceeding. As the Department explained in its second notice of
proposed rulemaking, where one of the applicable conditions of
entitlement has changed, e.g., where the miner has become totally
disabled or a survivor has ended her second marriage, neither the party
defending against the claim--the coal mine operator or the Trust Fund--
nor the claimant is entitled to rely on findings made in connection
with the denial of an earlier claim for benefits. 64 FR 54985 (Oct. 8,
1999). One commenter's suggestion that an administrative law judge's
determination in the original proceeding that an X-ray is not worthy of
credit precludes any further litigation of that issue in a subsequent
proceeding simply reflects a misunderstanding of the tenets of issue
preclusion. Where that finding was not essential to the original denial
of benefits, because the ALJ ultimately denied benefits on another
basis, or used alternative bases, issue preclusion would not prevent a
second factfinder from making a different finding, based on his
independent weighing of the evidence, in connection with an additional
claim.
(e) One comment opposes the revised version of Sec. 725.309,
suggesting it represents a revised application of the common law
concept of claim preclusion to adjudications under the Act. In fact,
however, with one exception in the case of survivors' entitlement, the
revised version of section 725.309 functions no differently than the
former regulation with respect to this common law doctrine. As the
Department observed in its initial proposal, its ``one-element'' rule,
allowing a miner to avoid claim preclusion by establishing one of the
conditions of entitlement decided against him in the previous
adjudication, derives from a series of appellate decisions adopting the
Department's interpretation of the former regulation. See 62 FR 3351
(Jan. 22, 1997); see also 64 FR 54984 (Oct. 8, 1999). The provision
requiring the denial of survivors' claims is also substantially the
same as the former rule. Like the revised version, the former rule was
subject to waiver just as any other affirmative defense would be under
common law. See Clark v. Director, OWCP, 838 F.2d 197, 200 (6th Cir.
1988) (permitting the Director to waive reliance on section 725.309).
The provision governing additional survivors' claims has been altered
only in order to accommodate revisions to section 725.213, which will
explicitly permit a remarried survivor to establish her entitlement to
benefits upon ending her marriage. Accordingly, the Department does not
agree that it has substantially revised the applicability of the common
law doctrine of claim preclusion under the Black Lung Benefits Act.
(f) One comment argues that the one-element test codified by the
revised regulation violates the principles of issue preclusion. The
commenter suggests that an X-ray that is found not to be credible in an
earlier adjudication may not be credited in a subsequent adjudication.
Common law principles of issue preclusion, however, do not require such
a result. Instead, once a claimant has submitted new evidence in order
to establish one of the elements of entitlement previously resolved
against him, an administrative law judge must conduct a de novo
weighing of the evidence relevant to the remaining elements, regardless
of whether any of that evidence is newly submitted. The Court of
Appeals for the Seventh Circuit discussed this issue at length in
Peabody Coal Co. v. Spese, 117 F.3d 1001 (7th Cir. 1997) (en banc). It
held as follows:
The law of preclusion also bars relitigation of issues between
the same parties when those issues were actually litigated and
necessary to the decision of the earlier tribunal. See Astoria Fed.
Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 107, 111 S.Ct. 2166,
2169, 115 L.Ed.2d 96 (1991) (preclusion applies to administrative
agency acting in judicial capacity to resolve fact issues properly
before it); United States v. Wyatt, 102 F.3d 241, 245 n. 5 (7th Cir.
1996), cert. denied, __ U.S. __, 117 S.Ct. 1325, 137 L.Ed.2d 486
(1997); Waid v. Merrill Area
[[Page 79974]]
Public Schools, 91 F.3d 857, 866 (7th Cir. 1996) (state agency
hearing). * * *
* * * * *
[The Fourth Circuit, in Lisa Lee Mines v. Director, OWCP, 86
F.3d 1358 (4th Cir. 1996) (en banc), cert. denied, 519 U.S. 1090
(1997)] pointed out, correctly, that a claimant who loses on three
possible alternate grounds has no incentive to take an appeal to
``correct'' the agency on grounds 2 and 3, even if he thinks there
was error, if ground 1 is unassailable. Assuming that the passage of
time has led to a material change in ground 1 and he can demonstrate
this to the Director, the question is whether he should be barred
from proceeding on a new claim just because he has not also
developed new evidence to negate grounds 2 and 3. Under the
Director's ``one-element'' approach, as endorsed by the Fourth
Circuit and others, * * * the answer is no. This answer is
consistent with general principles of issue preclusion, under which
holdings in the alternative, either of which would independently be
sufficient to support a result, are not conclusive in subsequent
litigation with respect to either issue standing alone. See Lisa Lee
Mines, 86 F.3d at 1363, citing Restatement (Second) of Judgments
Sec. 27, comment i (1982); Comair Rotron, Inc. v. Nippon Densan
Corp., 49 F.3d 1535, 1538 (Fed. Cir. 1995) (issue on which
preclusion is sought must have clearly been necessary to judgment);
Baker Elec. Co-op., Inc. v. Chaske, 28 F.3d 1466, 1475 (8th Cir.
1994); Gelb v. Royal Globe Insur. Co., 798 F.2d 38, 45 n. 6 (2d Cir.
1986).
117 F.3d at 1008.
The commenter's example, an X-ray that is found not to be credible
in the previous adjudication, illustrates the operation of the
regulation. If the prior claim was denied solely on the basis that the
miner failed to establish the existence of pneumoconiosis, the
commenter's concern about a re-weighing of the X-ray evidence submitted
in the prior adjudication is simply unfounded. Because this was the
only issue resolved against the claimant, he must introduce new
evidence that demonstrates the existence of the disease if he is to
avoid an automatic denial of an additional claim. Consequently, the
factfinder may not award benefits simply by redetermining the
credibility of the earlier evidence. In most cases, however, the denial
of the prior claim will rest on multiple findings. For example, an
administrative law judge may conclude that the claimant has not
established either that he suffers from pneumoconiosis or that he
suffers from a totally disabling respiratory impairment. In such a
case, the Department's regulation, consistent with the principles of
issue preclusion set forth in Spese, requires that the claimant submit
new evidence relevant only to one of the issues. If he submits new
evidence that establishes his total disability, the factfinder must
weigh the X-ray evidence de novo. Far from contravening accepted
principles of issue preclusion, the Department's regulation gives those
principles full force and effect. The commenter's suggestion, that a
party must be bound by a credibility determination that it was unable
to overturn on appeal, turns those principles on their head.
(g) One comment suggests that the Department would breach its
fiduciary duty to the Black Lung Disability Trust Fund in any case in
which it affirmatively waived its right to rely on the automatic denial
of an additional survivor's claim. The Department's obligation to the
Trust Fund is to ensure that the Fund not be required to pay non-
meritorious claims, i.e., that the Trust Fund does not pay benefits to
individuals who do not meet the statutory eligibility criteria. Where
appropriate, the Department will invoke the automatic denial provision
in order to reduce the transaction costs that the Fund would incur in
defending a non-meritorious survivor's claim. The Department does not
believe, however, that it is obligated to invoke claim preclusion in
order to bar a claim in which a surviving spouse meets all of the
conditions of entitlement and simply erred in filing a first
application while remarried.
(h) One comment suggests that the Department should penalize
individuals who file an additional claim without a change in condition.
The Department disagrees. In its second notice of proposed rulemaking,
the Department announced its desire to reduce the costs associated with
non-meritorious claims by providing applicants with a more realistic
view of their possible entitlement based on better pulmonary
evaluations and better reasoned explanations of the denials of their
claims. 64 FR 54968, 54984 (Oct. 8, 1999). The Department also
explained, however, that it did not believe that it was appropriate to
penalize an applicant simply because he had filed a previous claim for
benefits prematurely. Id. The complete pulmonary evaluation provided by
the Department includes difficult tests, and the Department does not
believe that a miner would deliberately subject himself to that testing
if he did not truly believe that he met the Act's eligibility criteria.
Moreover, preventing a miner from filing an additional claim merely on
the grounds that a previous additional claim was denied may result in
the denial of benefits to individuals who meet the Act's eligibility
requirements. Even requiring miners to wait an additional period of
time between additional claims would involve similar risks. The average
applicant for benefits is over 60 years old, and any delay in the
receipt of benefits may effectively deny them the right to receive
benefits and appropriate medical treatment. Accordingly, the Department
does not intend to ``penalize'' individuals who file unsuccessful
subsequent claims.
(i) A number of comments object that the revisions encourage the
repeated relitigation of cases without Congressional authority. The
Department has previously explained that section 725.309 does not allow
the relitigation of denied claims. 64 FR 54968, 54984-85 (Oct. 8,
1999). Once a claim has been denied, and the one-year time period for
modification has passed, a claimant cannot thereafter seek to have that
claim reopened. Even if he prevails on a subsequent claim, the miner
will be unable to obtain benefits for any period prior to the date on
which the earlier denial became final. Thus, rather than encouraging
repeated relitigation, the Department is simply effectuating
Congressional intent that miners who are totally disabled due to
pneumoconiosis receive compensation for their injury. Additional or
subsequent claims must be allowed in light of the latent, progressive
nature of pneumoconiosis. Thus, the additional claim is a different
case, with different facts (if the claimant is correct that his
condition has progressed). There is no indication that Congress
intended to deny a miner benefits, or otherwise penalize him, for
erroneously filing an application before his disease had progressed to
the point of total disability.
Moreover, as the Department explained in its second notice of
proposed rulemaking, the revised version of Sec. 725.309 does not have
a reopening effect equivalent to that of H.R. 2108. 64 FR 54972 (Oct.
8, 1999). The House of Representatives passed H.R. 2108 in 1994, but
the Senate adjourned without taking action on the legislation. If
enacted, the bill would have required the de novo consideration of any
claim filed on or after January 1, 1982, without regard to any earlier
denials. The Department's regulation does not have that effect. It
simply codifies the Department's former rule, as interpreted by the
appellate courts, and provides procedures to be followed upon the
filing of an additional claim covering later periods of alleged benefit
entitlement. Accordingly, the Department is not authorizing the
reopening or relitigation of claims in excess of Congressional
authority. In addition, as the Department has previously explained,
Congress' failure to enact legislation governing additional claims does
not prevent the Department
[[Page 79975]]
from promulgating regulations on that subject as long as the
regulations are issued pursuant to an appropriate grant of statutory
authority. Ibid.
(j) One comment suggests that the Black Lung Disability Trust Fund
should be liable for the payment of any subsequent claims that are
approved. The commenter states that imposing the liability for these
claims on the insurance industry is fundamentally unfair. The
Department disagrees. As revised, section 725.309 does not alter the
adjudication of additional claims in any substantive manner. Since
1978, section 725.309 has recognized the need for allowing additional
claims and provided the conditions under which such claims could be
approved. As the Department has repeatedly emphasized, the revised
regulation simply effectuates the gloss given this regulation by the
federal courts of appeals. The Department recognizes that additional
claims filed after the effective date of these regulatory revisions
will be adjudicated under new procedural rules, and under regulations
that clarify the entitlement criteria in Part 718 in a manner
consistent with appellate interpretations of the existing criteria. The
insurance policies purchased by coal mine operators to secure their
liability under the Black Lung Benefits Act require the insurer to
assume the risk of adverse appellate court interpretations of the
statute and regulations as well as the possibility of revision of the
statutory criteria. See 20 CFR 726.203(b) (1999) (insurance
endorsement). Accordingly, the Department does not agree that the
insurance industry is entitled to relief from the effect of revising
Sec. 725.309.
(k) A number of comments voice their approval of the changes in the
Department's second notice of proposed rulemaking. No other comments
have been received concerning this section and no other changes have
been made to it.
20 CFR 725.310
(a) In its first notice of proposed rulemaking, the Department
proposed amending subsection (b) to limit the documentary medical
evidence that parties are entitled to submit in connection with a
request for modification. 62 FR 3353 (Jan. 22, 1997). The Department
amended subsection (c) to reconcile a number of appellate decisions
concerning the district director's ability to conduct modification
proceedings under the Black Lung Benefits Act and to ensure that any
party requesting modification receives a de novo adjudication of the
existing evidence of record. The Department also revised subsection (d)
with the stated purpose of prohibiting the recovery, by either the
Trust Fund or a responsible operator, of benefits paid pursuant to a
final award of benefits that is later modified. In its second notice of
proposed rulemaking, the Department added two provisions to subsection
(d). The first would allow the recovery of any benefits that were paid
when the claimant was at fault in creating the overpayment. The second
provision implemented the Department's intention to bar recovery of
overpayments arising from modification of awards where the award was
final before initiation of the modification proceedings. 64 FR 54985-86
(Oct. 8, 1999). In addition, the Department proposed revising the
evidentiary limitation in subsection (b) to correspond to similar
changes in Sec. 725.414. Finally, the Department responded to comments
addressing the responsibility of factfinders to reweigh the evidence of
record on modification, and the district director's authority to
initiate modification in responsible operator cases.
(b) One comment argues that the Department's proposed regulation
destroys the effect of claim preclusion and issue preclusion, while
another comment suggests that the revised regulation would allow an
adjudicator simply to reweigh the evidence of record and reach a
conclusion different from the one reached before. Both observations are
correct, and both outcomes are mandated by the statutory language that
the regulation implements, 33 U.S.C. 922, incorporated into the Black
Lung Benefits Act by 30 U.S.C. 932(a). In Banks v. Chicago Grain
Trimmers Association, 390 U.S. 459 (1968), the Supreme Court reversed
an appellate court's holding that a claimant's modification request was
barred by res judicata, or claim preclusion. Instead, the Court held
that the statute clearly authorized reopening compensation awards in
order to correct factual errors. In O'Keeffe v. Aerojet-General
Shipyards, Inc., 404 U.S. 254, 255 (1972), the Court held that a
factfinder was authorized to grant modification under section 22
``merely on further reflection on the evidence initially submitted.''
See also Betty B Coal Co. v. Director, OWCP (Stanley), 194 F.3d 491,
497 (4th Cir. 1999) (modification procedure is extraordinarily broad,
especially insofar as it permits the correction of mistaken factual
findings); The Youghiogheny & Ohio Coal Co. v. Milliken, 200 F.3d 942,
954 (6th Cir. 1999) (ALJ has the authority on modification simply to
rethink his conclusions). One commenter also objects that the
regulation would prohibit an administrative law judge from simply
denying a modification request based on the claimant's failure to
present additional evidence. In its second notice of proposed
rulemaking, the Department observed that the Supreme Court's O'Keeffe
decision requires this result. 64 FR 54986 (Oct. 8, 1999). Accordingly,
the commenters' observations do not provide a basis for altering the
Department's proposal.
(c) Two comments renew the argument that the Department should not
be able to initiate modification in responsible operator cases. The
Department responded to a similar comment in its second notice of
proposed rulemaking by citing the clear statutory language providing
the district director with the independent authority to initiate
modification. (``Upon his own initiative, * * *, on the ground of a
change in conditions or because of a mistake in a determination of fact
* * * the deputy commissioner may * * * issue a new compensation order.
* * * 33 U.S.C. 922(a), as incorporated by 30 U.S.C. 932(a)). The
Department also observed that there were awarded cases in which a coal
mine operator is nominally liable for the payment of benefits but,
because of bankruptcy, dissolution, or other events, can no longer pay.
In such cases, the Department noted the district director's need to
exercise his modification authority. 64 FR 54986 (Oct. 8, 1999). In
response, one commenter requests that the Department limit its
authority to initiate modification to those specific cases involving
operator bankruptcy. The Department declines to do so. The district
director's initiation of modification in any case, whether the
defendant is a responsible operator or the Trust Fund, is consistent
with Congress's intent. Congress has included in the Black Lung
Benefits Act section 22 of the Longshore and Harbor Workers'
Compensation Act, a workers' compensation program in which the
overwhelming majority of cases represent disputes between an employee
and his private employer. Thus, Congress clearly contemplated that the
district director would exercise his modification authority in cases
involving private employers. The examples provided by the Department in
its second notice of proposed rulemaking were not intended to be an
exclusive listing of the circumstances in which a district director
would be justified in initiating modification in a responsible operator
case. Because the
[[Page 79976]]
Department does not believe it can readily identify all of the
circumstances in which district director-initiated modification would
be appropriate, it does not intend to limit the district director's
discretion in the initiation of modification proceedings.
(d) One comment argues that an operator seeking to modify a
benefits award should not be able to obtain new pulmonary testing, but
should instead be limited to the report of one consultant. The
commenter also argues, however, that miners should be able to submit
the results of additional testing in support of a modification petition
seeking to change a denial of benefits to an award. The Department does
not agree that opposing parties should be governed by different
evidentiary rules. One of the Department's goals in proposing a
limitation on the submission of documentary medical evidence, as
reflected in Sec. 725.414 and Sec. 725.310, is to ensure that claimant
and the responsible operator have an equal opportunity to present the
highest quality evidence to the factfinder. That goal would not be
served by creating an evidentiary advantage for a claimant who requests
modification of a denial of benefits. In such cases, both the claimant
and the responsible operator, or Trust Fund in appropriate cases, will
be entitled to submit one medical report, and associated testing, as
well as appropriate rebuttal evidence, as outlined in the Department's
second notice of proposed rulemaking.
(e) One comment argues that in light of the evidentiary limitations
imposed by section 725.310 and 725.408, an operator will be deprived of
its ability to seek modification of an erroneous responsible operator
determination that is discovered after the hearing. The Department
disagrees that the regulations will always prevent an operator from
seeking modification of a responsible operator determination based on
newly discovered evidence. It is true, however, that the regulations
limit the types of additional evidence that may be submitted on
modification and, as a result, an operator will not always be able to
submit new evidence to demonstrate that it is not a potentially liable
operator.
The Department explained in its previous notices of proposed
rulemaking that the evidentiary limitations of Secs. 725.408 and
725.414 are designed to provide the district director with all of the
documentary evidence relevant to the determination of the responsible
operator liable for the payment of benefits. The regulations recognize,
and accord different treatment to, two types of evidence: (1)
Documentary evidence relevant to an operator's identification as a
potentially liable operator, governed by Sec. 725.408; and (2)
documentary evidence relevant to the identity of the responsible
operator, governed by Sec. 725.414 and 725.456(b)(1). Under section
725.408, a coal mine operator that has been identified as a potentially
liable operator by the district director with respect to a particular
claim for benefits must contest that identification within 30 days of
the date on which it receives that notification, and must submit
certain evidence within 90 days of receipt of notification.
Sec. 725.408(a), (b). The specific issues on which the operator must
submit all of its documentary evidence within this 90-day period
include whether the operator was an operator after June 30, 1973;
whether it employed the miner for a cumulative period of not less than
one year; whether the miner was exposed to coal mine dust while working
for the operator; whether the operator employed the miner for at least
one day after December 31, 1969; and whether the operator is
financially capable of assuming liability for the payment of benefits.
The time period for submitting this evidence may be extended for good
cause, Sec. 725.423, but the operator may not thereafter submit any
further documentary evidence on these issues. Sec. 725.408(b)(2).
Sections 725.414 and 725.456(b)(1) govern the remaining documentary
evidence relevant to the liability issue, i.e., evidence relevant to
which of the miner's former employers is the responsible operator
according to the criteria set forth in Sec. 725.495. Under
Sec. 725.414, an operator may submit documentary evidence to prove that
a company that more recently employed the miner should be the
responsible operator. This evidence must be submitted to the district
director in accordance with a schedule to be established by the
district director. Sec. 725.410. Additional documentary evidence may be
submitted only upon a showing of extraordinary circumstances.
Sec. 725.456(b)(1).
The operator's ability to seek modification based on additional
documentary evidence will thus depend on the type of evidence that it
seeks to submit. Where the evidence is relevant to the designation of
the responsible operator, it may be submitted in a modification
proceeding if extraordinary circumstances exist that prevented the
operator from submitting the evidence earlier. For example, assume that
the miner's most recent employer conceals evidence that establishes
that it employed the miner for over a year, and that as a result an
earlier employer is designated the responsible operator. If that
earlier employer discovers the evidence after the award becomes final,
it would be able to demonstrate that extraordinary circumstances
justify the admission of the evidence in a modification proceeding.
That same showing, however, will not justify the admission of
evidence relevant to the employer's own employment of the claimant.
Under Sec. 725.408, all documentary evidence pertaining to the
employer's employment of the claimant and its status as a financially
capable operator must be submitted to the district director. The
comment appears to suggest that there will be cases in which an
operator discovers evidence bearing on its own employment of the miner
after the period for submitting evidence has closed. The Department
does not believe that there are extraordinary circumstances sufficient
to justify the admission of this evidence in any further proceedings.
The evidence in question is within the control of the operator notified
by the district director or, where an insurance company is the real
party-in-interest, in the control of a party with whom that insurer has
contracted to provide necessary coverage. The time period set forth in
section 725.408 is adequate to permit a full investigation and
development of this evidence. If the operator or insurer is unable to
locate the evidence within that period, it should seek an extension of
time from the district director.
A party's ability to seek reconsideration under Sec. 22 of the
Longshore and Harbor Workers' Compensation Act is subject to the
limitation that reconsideration must `` `render justice under the Act.'
'' McCord v. Cephas, 532 F.2d 1377, 1380-81 (D.C. Cir. 1976). In
McCord, an employer declined to supply evidence and participate in the
initial adjudication of the claimant's application for benefits under
the Longshore and Harbor Workers' Compensation Act. After the award
became final, the employer sought reconsideration. The D.C. Circuit
held that although the adjudication officer had jurisdiction to
consider the employer's request, his consideration should take the
interests of justice into account. See also General Dynamics Corp. v.
Director, OWCP, 673 F.2d 23, 25 (1st Cir. 1982). In order to properly
administer the Black Lung Benefits Act in accordance with this
expression of Congressional intent, S.Rep. No. 588, 73d Cong., 2d
Sess., 3-4 (1934); H.R.Rep. No. 1244, 73d Cong., 2d Sess.,
[[Page 79977]]
4 (1934), the Department has balanced the desire of operators to
request modification against the Department's interest in ensuring that
potentially liable operators submit all of the evidence relevant to
their employment of the miner while the claim is first pending before
the district director. The Department believes that it is appropriate
to prohibit an operator's ability to introduce, in a modification
proceeding, ``new'' evidence relevant to the operator's employment of
the miner or the operator's status as a financially capable operator.
(f) One comment argues that the Department has not taken sufficient
steps to prevent the misuse of modification by claimants who file
repeated modification petitions. The commenter has supplied no
information that suggests there is a widespread problem involving the
filing of non-meritorious modification petitions by claimants. Like
operators, claimants may only obtain such reconsideration as will
render justice under the Act, and operators remain free to assert, on a
case-by-case basis, that the application of this standard requires a
denial of a claimant's request for modification. The Department does
not believe, however, that it should establish numerical or temporal
limitations (e.g., limiting claimants to a maximum number of
modification requests, or no more than a certain number in a given time
period) on a claimant's right to seek modification. Congress's
overriding concern in enacting the Black Lung Benefits Act was to
ensure that miners who are totally disabled due to pneumoconiosis
arising out of coal mine employment, and the survivors of miners who
die due to pneumoconiosis, receive compensation. Because any limitation
on the right to file modification petitions could deny, or delay, the
payment of compensation to eligible claimants, the Department does not
believe that such limitations are appropriate.
(g) One comment suggests that the proposal authorizes claimants to
petition for modification in order to avoid the repayment of an
overpayment. The Department does not believe that the regulation
addresses this situation. The Department's current practice, in cases
in which payments from the Black Lung Disability Trust Fund have been
made based on the district director's initial determination, and
benefits have subsequently been denied by a higher tribunal, has been
to suspend the collection of any potential overpayment if that denial
has been appealed further. The Department currently permits its
district directors to exercise discretion as to whether to suspend
collection where the original denial has become final and the claimant
has filed a request for modification. For example, in cases where the
request is based solely on a change in the miner's condition, a
district director could reasonably conclude that the overpayment of
benefits for a period prior to that change should not be suspended. In
both former Sec. 725.547(c) and new Sec. 725.549(a), district directors
are permitted to ``issue appropriate orders to protect the rights of
the parties.'' The Department anticipates that any disputes over the
collection of overpayments will be resolved under that provision.
Accordingly, there is no need to address the collection of overpayments
in the regulation governing modification.
(h) No other comments have been received concerning this section,
and no other changes have been made to it.
20 CFR 725.311
(a) The Department proposed revising Sec. 725.311 in its first
notice of proposed rulemaking in order to remove the rule allowing
parties an additional 7 days within which to respond to a document that
is sent by mail, and to add the birthday of Martin Luther King, Jr., to
the list of legal holidays contained in the regulation. 62 FR 3354
(Jan. 22, 1997). The Department also sought to resolve a split between
the Courts of Appeals for the Fourth and Tenth Circuits governing the
time period for responding to a document which was supposed to be
served by certified mail but was not. Compare Dominion Coal Corp. v.
Honaker, 33 F.3d 401, 404 (4th Cir. 1994) with Big Horn Coal Co. v.
Director, OWCP, 55 F.3d 545, 550 (10th Cir. 1995). In a case in which
the party actually received the document, notwithstanding improper
service, the rule would commence the time period for response upon a
party's actual receipt of the document. The Department did not address
this regulation in its second notice of proposed rulemaking. See list
of Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 8,
1999).
(b) One comment objects to deletion of the seven-day grace period,
formerly applicable to all documents sent by mail, arguing that the
Department has no good reason to eliminate it. The commenter also
suggests that, if the grace period is not replaced with something else,
the regulation will cause unnecessary litigation over deadlines and the
unnecessary deprivation of the parties' rights.
When the Department first proposed section 725.311, see 43 FR
17743-44 (April 25, 1978), the regulation contained a three-day mailing
rule which paralleled the rule in the Federal Rules of Civil Procedure.
Compare Fed. R. Civ. P. 6(e). In the final rule, the Department changed
the time period to seven days ``[i]n view of the difficulties
encountered in mail deliveries in many rural coal mining areas.'' 43 FR
36786 (Aug. 18, 1978). The Department's experience in administering the
black lung benefits program, however, has suggested that the grace
period contained in the former regulation was a source of confusion for
the parties as well as for the district directors. For example, it
could be argued that the former regulation added an additional seven
days to the one-year time limit for filing a modification petition, or
the 30-day time limit for filing a response to a proposed decision and
order. The federal rule has engendered similar litigation. See, e.g.,
FHC Equities v. MBL Life Assurance Corp., 188 F.3d 678, 681-82 (6th
Cir. 1997) (rule does not apply to time periods that begin with entry
of an order or judgment).
Accordingly, the Department has eliminated the seven-day grace
period insofar as it formerly applied to all documents served by mail.
The Department believes that, rather than increasing litigation, the
revised regulation will provide the parties with more exact notice of
when pleadings are due, and thus will reduce litigation over issues
raised by the seven-day grace period. As a general rule, the analogy
between the Department's black lung regulations and the federal rules
is inexact. The federal rules govern the filing of a variety of
pleadings, including responses to complex motions. Rule 6(e) attempts
to ensure that a party receives the full amount of time--usually thirty
days--allotted by the drafters of the rules for preparing a response.
In contrast, the documents whose filing is governed by Part 725 are
relatively straightforward and simple. They include responses to a
schedule for the submission of evidence issued under Sec. 725.410,
which will contain the district director's designation of the
responsible operator, and a proposed decision and order issued under
Sec. 725.418. The regulations require that a party do no more within
the initial 30-day period following the issuance of these documents
than indicate its agreement or disagreement with the assertions or
findings contained in the document. The Department believes that this
30-day time period, commencing with the date the document is sent,
provides ample time for the parties' responses. Deleting the grace
period
[[Page 79978]]
ensures that all parties to a claim, including claimants who are not
represented by an attorney, are able to ascertain their response time
from the date of a document.
The Department recognizes that one of the filings governed by Part
725 is more complex. Section 725.408 requires that an operator that has
been identified by the district director of its status as a potentially
liable operator must accept or contest that identification within 30
days of the date on which it receives notification from the district
director. That response requires the operator to address five specific
assertions: that the operator was an operator after June 30, 1973; that
the operator employed the miner for a cumulative period of not less
than one year; that the miner was exposed to coal mine dust while
working for the operator; that the miner's employment with the operator
included at least one working day after December 31, 1969; and that the
operator is capable of assuming liability for the payment of benefits.
That response requires more investigation than the others in Part 725.
In addition, unlike the other response times governed by Part 725, the
operator's response does not begin to run on the date that the
notification is mailed, but on the date that it is received. In order
to ensure that operators have the full 30 days in which to file their
responses, and to allow the Department to assess the timeliness of that
response, the Department has added a sentence to subsection (d). This
provision will allow the district director to presume, in the absence
of evidence to the contrary, that the notice was received seven days
after it was mailed.
(c) One comment urges enlarging the number of communications which
must be sent by certified mail to include several types of decisional
documents issued by the district director. Specifically, the commenter
suggests use of certified mail to serve the following documents:
initial determination; proposed decision and order; decision on
modification; denial by reason of abandonment; notice of conference;
and memorandum of conference. The Department's revised regulations
ensure that all important documents are served by certified mail. See
proposed Sec. 725.407(b) notification of potentially liable operator,
Sec. 725.409(b) (denial by reason of abandonment); Sec. 725.410(c)
(evidentiary submission schedule); Sec. 725.418(b) (proposed decision
and order). The revised regulations eliminate the district director's
initial finding and memorandum of conference. The ``initial
determination'' is a document, served on all the parties after the
issuance of a proposed decision and order, requesting that the
designated responsible operator commence the payment of benefits. It
does not require a written response. 20 CFR 725.420 (1999). With
respect to a case in which a petition for modification is being
adjudicated, the district director may issue either a proposed decision
and order or a denial by reason of abandonment at the conclusion of the
proceedings; both of these documents must be served by certified mail.
The Department believes the current requirements provide adequate
protection for the parties, and therefore declines to add the notice of
conference to the list of documents which must be served by certified
mail. Section 724.416, governing the conduct of informal conferences,
permits the imposition of sanctions only for a party's unexcused
failure to attend. In the case of a claimant, the district director
must offer the claimant an opportunity to explain why he did not appear
at the conference. See Sec. 725.409(b). The Department believes that
failure to receive the notice of conference would constitute an
adequate explanation for a claimant's failure to appear. Similarly, any
employer against whom the district director has imposed sanctions for
an unexcused failure to appear at an informal conference may request
reconsideration based on its failure to receive the required notice.
Obviously, district directors may obviate the need for disputes over
whether a party received the notice by sending it via certified mail.
(d) Two comments urge the Department to afford a party either a
rebuttable presumption or a conclusive finding of non-receipt of a
document if it must be sent by certified mail, the party alleges a
failure to receive it, and the Department cannot produce a signed
return receipt. The recommended presumption is not necessary. In the
foregoing circumstances, an allegation of non-receipt and absence of
the signed return receipt is sufficient to impose on the Department the
burden to prove by some other evidence that the individual received the
document. The lack of the signed receipt itself, however, should not be
conclusive if other circumstances demonstrate the individual actually
received the document. The Department therefore declines to amend the
proposal.
(e) One comment argues that subsection (d) is inconsistent with
existing law. The commenter believes subsection (d) requires the
response time to commence upon service of the document rather than the
date of actual receipt when a document is served in violation of the
certified mail requirement. Subsection (d), however, states that the
response time ``shall commence on the date the document was received.''
The provision is therefore clear that only actual receipt of a document
served in violation of a certified mail requirement commences the
recipient's time for response.
(f) No other comments concerning this section were received, and no
changes have been made in it.
Subpart D
20 CFR 725.351
The Department made only technical changes to section 725.351 in
its initial notice of proposed rulemaking, and the rule was not open
for comment. See 62 FR 3340-41 (Jan. 22, 1997). In its second notice of
proposed rulemaking, the Department proposed deleting the requirement
in subsection (a)(3) that a district director must seek the approval of
the Director, OWCP, before issuing a subpoena to compel the production
of documents. 64 FR 54986-87 (Oct. 8, 1999). No comments were received
concerning this section, and no changes have been made in it.
20 CFR 725.362
In its initial notice of proposed rulemaking, the Department
proposed revising section 725.362 in order to conform the regulation to
the requirements of 5 U.S.C. 500(b), which allows an attorney to enter
an appearance without submitting an authorization signed by the party
he represents. The Department also proposed adding a requirement that a
notice of appearance, whether by an attorney or by a lay
representative, include the OWCP number of the claim. 62 FR 3354 (Jan.
22, 1997). The Department did not discuss the rule in its second notice
of proposed rulemaking. See list of Changes in the Department's Second
Proposal, 64 FR 54971 (Oct. 8, 1999). No comments were received
concerning this section, and no changes have been made in it.
20 CFR 725.365
The Department received one comment relevant to Sec. 725.365. This
section was not open for comment; it was repromulgated without
alteration for the convenience of the reader. See 62 FR 3341 (Jan. 22,
1997); 64 FR 54970 (Oct. 8, 1999). Therefore no changes are being made
in it.
20 CFR 725.366
The Department has received one comment relevant to Sec. 725.366.
This
[[Page 79979]]
section had only technical revisions made to it and was not open for
comment, see 62 FR 3341 (Jan. 22, 1997); 64 FR 54970 (Oct. 8, 1999).
Therefore no changes are being made in it.
20 CFR 725.367
(a) In its initial notice of proposed rulemaking, the Department
proposed a number of revisions to clarify the application of section 28
of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 928,
as incorporated by 30 U.S.C. 932(a), and made relevant to adjudications
under the Black Lung Benefits Act. 62 FR 3354 (Jan. 22, 1997). The
regulation provided a non-exclusive list of instances in which an
operator could be held liable for the payment of a claimant's
attorney's fee, and recognized the Trust Fund's liability for fees by
making it coextensive with that of a responsible operator. The
Department proposed a substantial revision of this regulation in its
second notice of proposed rulemaking. 64 FR 54987-88 (Oct. 8, 1999).
Because the evidentiary limitations proposed by the Department make
legal representation for claimants advisable at the earliest possible
stage of claims adjudication, the Department revised the regulation to
require operators or the Trust Fund to pay a reasonable fee for any
necessary work done even if the work was performed prior to the date on
which the operator controverted the claimant's entitlement to benefits.
Thus, although the creation of an adversarial relationship and the
ultimately successful prosecution of a claim were still necessary to
trigger employer or fund liability for attorneys' fees, the date on
which the adversarial relationship commenced no longer served as the
starting point for such liability. The Department rejected comments
suggesting that lay representatives should be entitled to collect fees
from responsible coal mine operators or the fund. The Department also
discussed the several appellate court decisions and their impact on
responsible operator and fund liability for attorneys' fees.
(b) The Department has revised the first sentence of subsection
(a)(1) and the first sentence of subsection (a)(2) in order to reflect
changes to Secs. 725.410 and 725.412. In place of the former initial
finding, the district director will issue a schedule for the submission
of additional evidence under Sec. 725.410. This schedule will include
the district director's preliminary analysis of the medical evidence of
record, and his designation of the responsible operator liable for the
payment of benefits. Section 725.412 provides that, following receipt
of the schedule, the designated responsible operator may file a
statement accepting the claimant's entitlement to benefits. The
operator may avoid any liability for attorneys' fees by filing this
statement within 30 days of the issuance of the schedule. If it fails
to do so, the responsible operator will be considered to have created
an adversarial relationship between the operator and the claimant. If
the district director exercises his authority under Sec. 725.415 or
Sec. 725.417 to issue another schedule for the submission of additional
evidence in order to designate a different operator as the responsible
operator, and that operator is ultimately determined to be liable for
the payment of benefits, that operator will be liable for the payment
of attorneys' fees only if it fails to accept the claimant's
entitlement within 30 days of the date upon which it is notified of its
designation. In cases where there is no operator liable for the payment
of benefits, the district director's issuance of a schedule for the
submission of additional evidence will create the adversarial
relationship between the Black Lung Disability Trust Fund and the
claimant, such that the Trust Fund will be liable for attorneys' fees
if the claim is successfully prosecuted. Similarly, in subsection
(a)(4) the Department has deleted the reference to an operator's
``notice of controversion'' contesting a claimant's request for an
increase in the amount of benefits payable. As revised, the regulations
do not require a specific notice of controversion to create the
adversarial relationship between a claimant and an employer.
The Department has also substituted the phrase ``reasonable fees
for necessary services'' for the phrase ``fees for reasonable and
necessary services'' in subsection (a), and has substituted the phrase
word ``necessary'' for the word ``reasonable'' in subsections (a)(1)-
(5). The changes make the regulation consistent with Sec. 725.366(a).
The previous wording was not intended to create a different test for
gauging the need for an attorney's services, and the revision will
eliminate any potential confusion.
(c) Two comments argue that the Department's proposal violates the
plain language of the incorporated provision of the Longshore and
Harbor Workers' Compensation Act governing the payment of attorneys'
fees. Specifically, they argue that section 28 permits employer
liability for a claimant's attorney's fees only for services rendered
after the employer controverts the applicant's eligibility for
benefits. One of the commenters also cites the expectation, created by
the statute, that a claimant is responsible for a portion of the fees
owed to his attorney and specifically the fee for any service provided
before the employer controverts the applicant's entitlement. The
commenter suggests that, by removing that responsibility from the
claimant, the Department has not properly implemented the statute.
The Department does not agree that the revised regulation violates
the plain language of the statute. The only court to have considered
this issue is the Court of Appeals for the Fourth Circuit. In Kemp v.
Newport News Shipbuilding and Dry Dock Co., 805 F.2d 1152 (4th Cir.
1986), the court held that the LHWCA is ambiguous on the issue of
whether an employer may be liable for attorneys' fees incurred by a
claimant before the employer has controverted the claimant's
entitlement. 805 F.2d at 1153. Instead, the statute provides only that
an employer will be liable for attorneys' fees after it contests the
applicant's entitlement, leaving unresolved the starting point of such
liability. The court recently reiterated its interpretation of LHWCA
Sec. 28 in Clinchfield Coal Co. v. Harris, 149 F.3d 307, 310-11 (4th
Cir. 1998). In resolving statutory ambiguity through the regulatory
process, the Department is entitled to select any reasonable
interpretation that is consistent with Congressional intent. Chevron
U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-3
(1984).
The Department is fundamentally altering the obligations of the
parties at the district director level in a manner that will encourage
claimants to consult with attorneys much earlier in the process. Among
other things, the Department is limiting the quantity of medical
evidence that all parties are entitled to submit. In addition, at the
claimant's request, the Department will provide his treating physician
with the test results obtained during the complete pulmonary evaluation
authorized by section 413(b) of the Act, 30 U.S.C. 923(b). Because
these revisions will require claimants to make critical decisions at
the earliest stage of adjudication, the regulations must also encourage
attorneys to represent claimants as early as possible. The Department
hopes that claimants will receive advice when that advice is most
helpful. Insurance carriers, who are primarily liable in cases in which
they provide insurance to the responsible operator, as well as self-
insured operators, most commonly have the assistance of experienced
attorneys and claims processing agents in the early
[[Page 79980]]
stages of claim development, and the Department believes that claimants
should have comparable aid. Accordingly, the Department believes that
it is justified in adopting a new interpretation as to the starting
point of the employer's or the fund's liability for attorneys' fees.
In addition, contrary to the suggestion of the commenter, the
Department's proposal does not eliminate all instances in which a
claimant may be responsible for his attorney's fees. Section 28(c), 33
U.S.C. 928(c), states that ``[a]n approved attorney's fee, in cases in
which the obligation to pay the fee is upon the claimant, may be made a
lien upon the compensation due under an award.'' The commenter argues
that a claimant will never be liable for attorneys' fees under the
Department's proposal, and that the proposal thus contravenes the
statutory language. The Department does have the authority to vary
incorporated provisions of the Longshore Act for purposes of
administering the Black Lung Benefits Act, see 30 U.S.C. 932(a). It has
not done so in this case, however. Instead, the Department's regulation
does contemplate that a claimant may be liable for an attorney's fee.
20 CFR 725.365. For example, in any case in which the liable party,
either the Trust Fund or the operator, accepts the claimant's
entitlement prior to the expiration of the 30-day period in
Sec. 725.412(b) but the claimant has nevertheless retained counsel who
has performed services in connection with the claim, the prerequisite
for shifting fee liability--the controversion of entitlement--has not
been met. A similar case may arise where the operator initially
designated the responsible operator by the district director fails to
accept the claimant's eligibility, but the finally designated
responsible operator does accept the claimant's eligibility. In such a
case, the responsible operator would not be liable for the payment of
the claimant's attorney's fee. Because the overwhelming majority of
coal mine operators contest claimant eligibility at this stage, the
Department does not expect this kind of case to arise often. In either
case, however, the claimant remains responsible for any reasonable fees
approved by the district director for necessary work performed in
obtaining the award. Accordingly, the Department's revised attorney fee
regulation does not violate any statutory command.
(c) One comment observes that the Department's revisions would
expand the availability and award of attorneys' fees, while another
argues that the Department's provision may not be applied
retroactively. It has consistently been the Department's position that
before liability for a claimant's attorney's fee may shift to a
responsible operator or the fund, there must be a controversion of
entitlement sufficient to create an adversarial relationship followed
by the successful prosecution of a claim. Nothing in this regulation
alters that requirement. The Department does agree, however, that once
these prerequisites are met, the revised regulation could result in the
award of higher attorneys' fees. The Department believes that an
increase in attorneys' fees is necessary in order to encourage earlier
attorney involvement in the adjudicatory process, and that such
involvement will be helpful to claimants in light of the evidentiary
restrictions imposed by these regulations. The Department also hopes to
encourage a larger number of attorneys to represent claimants by
allowing the award of higher fees. During the rulemaking hearings,
witnesses repeatedly brought to the Department's attention that few
attorneys are willing to represent claimants, in part because of the
many restrictions on the award of attorneys' fees. Transcript, Hearing
on Proposed Changes to the Black Lung Program Regulations, (June 19,
1997), p. 22 (testimony of Cecil Roberts); p. 168 (testimony of John
Cline); pp. 238-239, 246 (testimony of Grant Crandall). The Department
also agrees that the rule should not be applied retroactively, and has
changed Sec. 725.2 accordingly.
(d) Several comments agree with the Department's revisions, but two
urge the Department to take further steps to increase the participation
of attorneys in black lung benefits adjudications by providing
additional attorney funding from the Black Lung Disability Trust Fund.
Specifically, the commenters urge the Department to make funds
available to pay black lung associations and other non-profit groups
assisting claimants or to advance fees awarded to claimant attorneys
litigating against responsible operators before the award of benefits
becomes final. The commenters also urge the Department to repeal the
prohibition on receiving fees for time spent preparing a fee petition,
and to clarify the right of attorneys to obtain fees for time spent
litigating their right to fees.
The Department cannot agree that amounts from the Trust Fund should
be made available to pay additional attorneys' fees. In its initial
proposal, the Department observed that one of its goals in revising the
regulation of attorneys' fees was to ensure that the liability of the
Trust Fund for such fees was coextensive with that of a liable coal
mine operator. 62 FR 3354 (Jan. 22, 1997). This liability derives from
a series of appellate court opinions holding that the Trust Fund must
stand in the shoes of a coal mine operator in any case in which no
operator may be held liable for the payment of benefits. 62 FR 3354
(Jan. 22, 1997). Those opinions rejected the Department's argument that
the Trust Fund could not be held liable for any attorneys' fees.
Although the Department's regulations have been revised to acknowledge
the Trust Fund's liability under these circumstances, the Department
does not believe that the statute can be read in the manner suggested
by these commenters to authorize the expenditure of additional amounts
of Trust Fund moneys to increase counsel availability for black lung
claimants.
With respect to time spent preparing a fee petition and litigating
the issue of attorneys' fees, two comments seek the revision of
material in Sec. 725.366. Because Sec. 725.366 was not listed among the
regulations open for comment, no changes are being made in it. 62 FR
3341 (Jan. 22, 1997); 64 FR 54970 (Oct. 8, 1999). Moreover, the
regulation's current language does not prohibit an attorney from
receiving a fee for time spent litigating the amount of his attorney's
fees, and the Department does not believe that more explicit language
is necessary. The Benefits Review Board has held that time spent by an
attorney defending a fee represents ``necessary work done,'' so as to
entitle the attorney to an additional fee under 20 CFR 802.203(c)
(1999), see Workman v. Director, OWCP, 6 Black Lung Rep. (MB) 1-1281,
1-1283 (Ben Rev. Bd. 1984), and the Department believes that
Secs. 725.366 and 725.367 require the same result. The prohibition in
Sec. 725.366 on fees for time spent filling out a fee application
presents an entirely different question from whether it is reasonable
to require an employer who unsuccessfully challenges that application
to pay a fee for the necessary additional time that the attorney was
required to spend defending his fee request. Because the Department
believes that the current regulations permit an award of attorneys'
fees in the latter case, it is not necessary to change the regulation.
(e) No other comments were received concerning this section, and no
changes have been made in it.
[[Page 79981]]
Subpart E
20 CFR 725.403
The Department made only technical revisions to Sec. 725.403 in its
first notice of proposed rulemaking, and the regulation was not open
for comment. 62 FR 3341 (Jan. 22, 1997). In its second notice of
proposed rulemaking, the Department proposed deleting Sec. 725.403. 64
FR 54988 (Oct. 8, 1999). Section 725.403 implemented the requirement in
30 U.S.C. 923(c) that claimants who filed applications under the Black
Lung Benefits Act between July 1 and December 31, 1973, 30 U.S.C. 925,
must file a claim under the workers' compensation law of their state
unless such filing would be futile. Because the time period for filing
such claims expired over 25 years ago, the Department proposed removing
Sec. 725.403, and specifically invited comment on its removal. The
Department did not receive any comments on the proposed removal of
Sec. 725.403 and therefore has removed it from further publications of
the Code of Federal Regulations. The Department has not altered the
rules applicable to any claim filed between July 1 and December 31,
1973, however. Parties interested in reviewing Sec. 725.403 may consult
20 CFR 725.403 (1999).
20 CFR 725.404
The Department received one comment relevant to Sec. 725.404. The
Department made only technical revisions to this section, and the
regulation was not open for comment; see 62 FR 3340-41 (Jan. 22, 1997);
64 FR 54970 (Oct. 8, 1999). Therefore no changes are being made in it.
20 CFR 725.405
(a) In its first notice of proposed rulemaking, the Department
proposed revising subsection (b) to recognize its practice of refusing
to provide a complete pulmonary evaluation to claimants who never
worked as a miner. 62 FR 3354 (Jan. 22, 1997). The Department did not
discuss Sec. 725.405 in its second notice of proposed rulemaking. See
list of Changes in the Department's Second Proposal, 64 FR 54971 (Oct.
8, 1999).
(b) Two comments argue the regulation is too limited because it
does not address the district director's obligation to develop evidence
other than medical evidence. The Department disagrees. The specific
purpose of this regulation is stated in its title: ``Development of
medical evidence; scheduling of medical examinations and tests.'' The
development of evidence in general is addressed at Sec. 725.404. In any
event, subsection (d) of Sec. 725.405 authorizes the district director
to collect ``other evidence'' concerning the miner's employment and
``[a]ll other matters relevant to the determination of the claim.''
This language is sufficiently broad to acknowledge the district
director's obligations concerning evidentiary development of a claim as
well as the authority to discharge those obligations. No useful purpose
would be served by a more specific enumeration of particular areas of
inquiry in this provision.
The type of inquiry urged by these commenters is covered in more
detail elsewhere in the Secretary's regulations. Section 725.495(b)
imposes on the Director, OWCP, the burden of proving that the
responsible operator designated liable for the payment of benefits is a
potentially liable operator. In addition, Sec. 725.495(d) requires that
if the responsible operator designated for the payment of benefits is
not the operator that most recently employed the miner, the district
director must explain the reasons for his designation. These provisions
make necessary the district director's gathering of a miner's
employment history, including, in most instances, his Social Security
earnings record. Indeed, Sec. 725.404(a) requires each claimant to
furnish the district director with a complete and detailed history of
coal mine employment and, upon request, supporting documentation. The
district director must send to each operator notified of its potential
liability for a claim copies of the claimant's application and all
evidence obtained by the district director relevant to the miner's
employment. Sec. 725.407(b), (c). If the district director concludes
that the miner's most recent employer cannot be designated the
responsible operator because it is not financially capable of assuming
liability for the payment of benefits, the district director must
explain his conclusion based on a search of the records maintained by
the OWCP. Sec. 725.495(d). Only if the OWCP has no record of insurance
or authorization to self-insure for that last employer, and the record
so states, may OWCP name an employer other than the miner's most recent
as the responsible operator for the claim. Thus, the district
director's obligation to develop the evidence of record, other than
medical, is set forth elsewhere in the regulations where relevant.
(c) One comment recommends changing the regulatory reference to
``miner'' in paragraph (a) from Sec. 725.202 to Sec. 725.101(a)(19).
This recommendation is rejected. While both sections define ``miner,''
Sec. 725.202 provides the more detailed definition as well as the
criteria and presumptions which apply to determining whether a
particular individual satisfies the definition.
(d) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.406
(a) In its first notice of proposed rulemaking, the Department
proposed revising Sec. 725.406 to address the relationship between the
evidentiary limitations contained in Sec. 725.414 and the complete
pulmonary evaluation provided by the Department under 30 U.S.C. 923(b).
62 FR 3354-55 (Jan. 22, 1997). As initially proposed, Sec. 725.406
retained the Department's practice of allowing a claimant to select the
physician to perform the complete pulmonary evaluation at the
Department's expense. In those cases, however, the report generated by
the evaluation would have counted as one of the two reports that the
claimant was entitled to submit into evidence. If, on the other hand,
the claimant went to a physician selected by the Department, the
evaluation would not count against the limitations imposed on the
claimant. Instead, in cases in which the Black Lung Disability Trust
Fund would bear liability for benefits, such a report would count as
one of the two reports that could be offered by the Director. In cases
in which a responsible operator was potentially liable for benefits,
the complete pulmonary evaluation provided by a doctor of the
Department's choosing would not have counted against the evidentiary
limit imposed on either the responsible operator or the claimant. The
Department also discussed its responsibilities for ensuring that the
report, and each component of the evaluation, substantially complied
with the Department's quality standards. Finally, the Department
clarified the mechanism by which it might seek reimbursement of the
cost of the evaluation from an operator that had been finally
determined to be liable for the payment of claimant's benefits.
The Department proposed major revisions to Sec. 725.406 in its
second notice of proposed rulemaking. 64 FR 54988-990 (Oct. 8, 1999).
The Department agreed with commenters who suggested that it placed an
unnecessary burden on a claimant to choose whether or not to select a
physician to perform his complete pulmonary evaluation. In most cases,
such a choice would be made before a claimant obtained representation,
and could result in a claimant being limited
[[Page 79982]]
thereafter to the submission of only one additional medical report.
Accordingly, the Department proposed the creation of a list of
physicians, authorized by the Department to perform complete pulmonary
evaluations. Miners who applied for benefits would be required to
select a physician from that list, but could choose any listed doctor
either in their state of residence or from a contiguous state. The
resulting evaluation would not be considered one of the two medical
reports that a claimant was entitled to submit in support of his claim
for benefits.
The Department further stated its intent to develop more rigorous
standards for selecting physicians authorized to perform a complete
pulmonary evaluation. The Department's suggested standards included:
(1) Qualification in internal or pulmonary medicine; (2) ability to
perform each of the necessary tests; (3) ability to schedule the
claimant for an evaluation promptly; (4) ability to produce a timely,
comprehensive report; and (5) willingness to answer follow-up questions
and defend his conclusions under cross-examination. The Department
specifically sought comment on these and other standards for selecting
physicians to be included on its list, 64 FR 54989 (Oct. 8, 1999). In
addition, the Department stated its intention to survey clinics and
physicians on the fees they charged for these services, with the goal
of attracting highly qualified doctors to perform the testing and
evaluation required by the Department for the complete pulmonary
evaluation. The Department also added subsection (d) to the proposed
regulation in order to allow a claimant to have the Department send the
objective test results obtained in connection with the complete
pulmonary evaluation to his treating physician. The Department noted
its intent to make available to each claimant at least one set of
legally sufficient objective test results so that no claimant would be
hindered by a lack of financial resources in pursuing his application
for benefits. 64 FR 54989 (Oct. 8, 1999).
The Department rejected comments suggesting the deletion of
subsection (e), permitting the district director to clarify
``unresolved medical issues.'' The Department also discussed comments
concerning the district director's ability to determine whether all
parts of the complete pulmonary evaluation were in substantial
compliance with the Department's quality standards. The Department
revised subsection (c) to provide a claimant whose initial tests do not
comply with the quality standards due to a lack of effort with one
additional opportunity to take those tests. Finally, the Department
discussed its treatment of subsequent claims, in which the Department
provides a new complete pulmonary evaluation, and modification
requests, in which it does not. 64 FR 54989-90 (Oct. 8, 1999).
(b) Several comments continue to oppose subsection (e), observing
that if the Department develops a list of highly qualified physicians
to perform the complete pulmonary evaluation, it should have no need to
seek the opinion of yet another physician at this stage of the
adjudication. Another comment objects to the proposed substitution of
evidence under subsection (e), calling it the destruction of relevant
evidence. In response to the initial proposal, the same commenter
objected to subsection (e) because the district director's authority to
have the miner retested and reexamined invited piecemeal and protracted
evidentiary development. The Department has reconsidered the authority
granted by subsection (e), and agrees that the provision should be
deleted. The Department has relabeled subsection (f) as subsection (e)
to accommodate this revision. The deletion of subsection (e) does not
affect the district director's authority under subsection (c) to
determine whether the individual components of the complete pulmonary
evaluation have been administered and reported in compliance with the
Department's quality standards. The Department agrees, however, that
the district director should have no need to send the claimant for
additional examination and testing after completion of a complete
pulmonary evaluation, the components of which are in substantial
compliance with the applicable quality standards, Sec. 725.406(a)-(c).
Under revised Sec. 725.406, the initial evaluation will be performed by
a highly qualified physician who may be asked to clarify and/or
supplement an initial report if unresolved medical issues remain.
(c) Two comments state that a miner should be entitled to choose an
authorized physician anywhere in the country to perform his complete
pulmonary evaluation rather than being limited to one from his state of
residence or a contiguous state. The commenters state that claimants
would be willing to pay the additional costs incurred as a result of
such travel. Although the commenters suggest that there will not be a
sufficient supply of physicians in some areas, such as Wyoming and
Alabama, the Department has no evidence that would support that
contention. Moreover, even if the Department is unable to obtain a
sufficient pool of physicians in certain states (a pool that includes
physicians in all contiguous states), the Department will simply adjust
the procedural rules applicable to claimants who reside in those
states. The absence of a sufficient pool of physicians in some limited
number of states would not justify a national exception to the policy
of requiring claimants to submit to a complete pulmonary evaluation in
their own region. In addition, claimants remain free to go to any
physician of their choosing for the development of evidence in support
of their claims.
(d) One comment argues that claimants should be randomly assigned
to physicians on the Department's list rather than allowing claimants
their own choice. The Department disagrees. The list that the
Department ultimately compiles will contain physicians who are well-
qualified to perform complete pulmonary evaluations, and whose opinions
the Department is willing to accept in the initial stages of
adjudication of the claimant's eligibility. Claimants may already be
acquainted with one or more physicians on the list, and requiring that
claimant submit to an examination by a different physician, perhaps in
a neighboring state, would be inefficient. Accordingly, the Department
has not changed the regulation.
The commenter also argues that the mere fact that a physician is
included on the Department's approved list by meeting the Department's
standards does not guarantee that the physician will provide an
impartial opinion, particularly when a claimant has a role in selecting
the physician who will perform the complete pulmonary evaluation. The
Department does not believe that it is required to provide an absolute
guarantee of the impartiality of physicians selected for inclusion on
the list. By establishing high standards for the performance of these
evaluations, and by ensuring that only highly qualified physicians are
included on the approved list, the Department will be taking
appropriate steps to ensure impartial opinions. In addition, the
Department has revised subsection (c) to limit a miner's choice of the
examining physician in two respects. First, the miner may not select a
close relative of himself or his spouse. The regulation uses the term
``fourth degree of consanguinity'' to exclude, among others, parents,
children, grandchildren, brothers, sisters, nephews, nieces, aunts,
uncles, and first cousins from those individuals otherwise qualified to
perform a complete pulmonary evaluation. Second, the miner may not
select any physician who has examined him or treated him in the year
preceding
[[Page 79983]]
his application for benefits. The Department believes that it would be
inappropriate to allow a miner to select a physician with whom he has
an ongoing treatment relationship to perform the complete pulmonary
evaluation paid for by the Department. Although the Department does not
mean to suggest that a physician would be unable to provide an
impartial assessment of the miner's respiratory condition in such a
case, his opinion could present at least the appearance of a conflict
of interest. In order to ensure the credibility of the Department's
pulmonary evaluation, the Department has adopted a bright-line test, in
the form of a one-year cutoff, that will be easily understood by miners
and their physicians. The Department believes that a physician's
examination or treatment of the miner prior to the one-year period
preceding the miner's application should not disqualify that physician
from performing the complete pulmonary evaluation. The Department
reserves the right to delete a physician from the list if he is unable
to provide an impartial opinion.
(e) Several comments argue that the Department needs to make public
the criteria it will use to select physicians for inclusion on the
list. In its second notice of proposed rulemaking, the Department
notified interested parties that these criteria will be published in
the Department's Black Lung Program Manual which will be available to
the public. 64 FR 54989 (Oct. 8, 1999). Interested parties will thus be
able to monitor the Department's standards and use of these standards
in selecting physicians for inclusion on the list.
In addition, a number of commenters responded to the Department's
request for comments on the standards that the Department proposed to
use to select physicians. Two commenters emphasized the importance of
requiring that the evaluations be performed by a physician board-
certified in internal medicine or a physician board-eligible in
pulmonary medicine or one with extensive knowledge of pulmonary
disease. The Department will make every effort to ensure that its list
includes highly qualified physicians. Optimally, the Department will be
able to enlist the services of Board-certified internists who have a
subspecialty in pulmonary medicine, who are Board-eligible in pulmonary
medicine, or who can demonstrate extensive experience in the diagnosis
and treatment of pneumoconiosis to perform complete pulmonary
evaluations. There may be circumstances, however, in which there will
not be a sufficient supply of such highly qualified physicians willing
to perform the evaluation. In such areas, the criteria will need to
afford the Department enough flexibility to ensure an adequate supply
of physicians who meet certain minimum qualifications, such as
affiliation with a black lung clinic funded in part by the Department
of Health and Human Services.
Two comments urge the Department to rule out physicians who have
demonstrated that they do not accept one or more of the basic premises
of the Black Lung Benefits Act. These commenters urge the Department to
review the opinions and depositions of each physician who seeks to be
included on the list, eliminating those with opinions which make it
impossible to provide a sound evidentiary basis for the district
director's initial decision. Another comment urges the Department to
accept any physician who applies for inclusion on the list provided
that the physician possesses the necessary professional qualifications.
As an initial matter, the Department does not intend to screen
physicians who apply for inclusion on the list beyond satisfying itself
that the basic requirements for inclusion are met. The Department
simply does not have the resources to conduct an intensive review of
the medical reports and/or deposition testimony submitted by each
physician in previous black lung cases. The Department reserves the
right, however, to exclude from its list of approved physicians those
who prove unable to provide opinions that are consistent with the
premises underlying the statute and the Secretary's regulations. The
federal courts of appeals have held that a denial of benefits may not
be based on a medical opinion that is fundamentally at odds with the
premises of the Black Lung Benefits Act. See, e.g., Lane Hollow Coal
Co. v. Director, OWCP, 137 F.3d 799, 804-5 (4th Cir. 1998); Penn
Allegheny Coal Co. v. Mercatell, 878 F.2d 106, 109-110 (3rd Cir. 1989);
Robbins v. Jim Walter Resources, Inc., 898 F.2d 1478, 1482 (11th Cir.
1990); Wetherill v. Director, OWCP, 812 F.2d 376, 382 (7th Cir. 1987);
Kaiser Steel Corp. v. Director, OWCP, 757 F.2d 1078, 1083 (10th Cir.
1985). The Department reserves the right to determine appropriate
exclusions from the list on a case-by-case basis.
(f) One comment states that the regulation should require the
district director to explain to a claimant the possible consequences of
having his test results provided to his treating physician. The
Department intends to provide such information to claimants, see also
64 FR 54989 (Oct. 8, 1999), but does not believe that the regulation
must reflect this intention. The regulation itself does state that a
report from the claimant's treating physician, based on the
Department's clinical testing, will count as one of the two reports the
claimant is entitled to submit into evidence under Sec. 725.414,
Sec. 725.406(d).
(g) One comment states that the Department's requirements prevent
physicians from exercising their professional judgment by dictating the
tests that they are required to perform and by emphasizing promptness
and timeliness over completeness and thoroughness. The Department
disagrees. The Act authorizes the Department to set minimal quality
standards for medical evidence. Reports of physical examination must
substantially comply with the applicable quality standards,
Sec. 718.104. That regulation requires that a report of physical
examination be based on, among other things, a chest X-ray, a pulmonary
function test, and a blood gas study, unless medically contraindicated.
Because these tests are necessary for a complete pulmonary evaluation,
the Department has authorized their performance under Sec. 413(b) of
the Act, 30 U.S.C. 923(b), for the last two decades. The Department
expects that each physician included on the list will not only be able
to administer these tests, but will commit to doing so in substantial
compliance with the Department's quality standards, Secs. 718.102-.106.
The Department does not believe that its requirements prevent a
physician from preparing a thorough and complete medical report. In
order to process claims expeditiously, however, the Department must
also ensure that the examination is scheduled promptly, and the
resulting report is prepared in a timely manner. The Department
recognizes that, in some cases, the claimant's choice of a physician
may result in a slight delay if the physician he has selected is busy.
The delay in such a case, however, is solely within the control of the
claimant. If he is willing to accept the delay, he may wait for that
physician. If not, he may choose another from the Department's approved
list.
(h) Several comments approved of the revisions affording the
claimant the right to select a doctor to perform the complete pulmonary
evaluation from an approved list.
(i) No other comments were received concerning this regulation.
20 CFR 725.407
(a) In its first notice of proposed rulemaking, the Department
proposed moving subsections (a) and (c) of 20
[[Page 79984]]
CFR 725.407 (1999) to Sec. 725.406 and eliminating subsection (b). See
preamble to Secs. 725.407 and 725.408, 62 FR 3355 (Jan. 22, 1997). In
their place, the Department proposed a new regulation governing the
identification and notification of ``potentially liable operators,'' a
subset of the miner's former employers that might be liable for a given
claim. Depending on the complexity of the miner's employment history,
section 725.407 would permit the district director initially to notify
one or more potentially liable operators, and their insurers, of the
existence of a claim and would also allow the notification of
additional potentially liable operators at any time prior to referral
of the case to the Office of Administrative Law Judges. The proposal
placed no time limit on the notification of an operator if that
operator fraudulently concealed its identity as an employer of the
miner.
In its second notice of proposed rulemaking, the Department
proposed revising subsection (d) to permit the district director to
notify additional potentially liable operators after an administrative
law judge reversed a district director's denial by reason of
abandonment pursuant to Sec. 725.409 and remanded the case for further
proceedings. 64 FR 54990 (Oct. 8, 1999). The Department observed that
without this provision, subsection (d) could have been read to prohibit
the notification of additional operators, notwithstanding the fact that
the district director had not been able to complete his administrative
processing of the claim before its referral to the Office of
Administrative Law Judges. In addition, the Department rejected a
suggestion that it provide guidelines for district directors to use in
determining the cases in which it would be appropriate to name more
than one potentially liable operator.
(b) The Department has made two changes to Sec. 725.407 to conform
to changes to other regulations in this subpart. The Department has
deleted the reference to a district director's initial finding in
subsection (a) because the district director will no longer issue
initial findings. The Department has replaced the reference to
Sec. 725.413 in the first sentence of subsection (d) with a reference
to Sec. 725.410(a)(3). This change reflects a move to Sec. 725.410 of
the district director's authority to dismiss potentially liable
operators that the district director has previously notified.
(c) One comment objects that the Secretary's regulations preclude
the dismissal of potentially liable operators who can prove that they
were not properly named. This comment is more appropriately addressed
under Sec. 725.465, the regulation governing the dismissal of claims
and parties.
(d) One comment argues that the revised regulation will raise the
litigation costs of responsible operators. The commenter observes that
the Department does not dispute the allegation, made in response to the
Department's first notice of proposed rulemaking, that the Department's
changes will generally increase litigation costs by $6,000 per claim.
The commenter states that the revisions in the Department's second
notice of proposed rulemaking will result in an additional $6,000 in
costs per claim. With regard to the first figure, the commenter appears
to have mischaracterized its prior comment. An economic analysis
conducted by Milliman & Robertson, Inc., and submitted to the
Department in response to the first notice, was based in part on an
assumption that ``the average defense costs of $6,000 per claim
currently expended by the responsible operators/insurers primarily on
claims that are initially awarded or denied and appealed by the
claimant (presently, approximately 30% of all claims filed), will be
expended on all claims at the earliest stage of adjudication.''
Rulemaking Record, Exhibit 5-174, Appendix 5 at 4. This economic
analysis did not assert that costs would rise in all cases, but that
operators and insurers would be required to incur the cost of fully
developing evidence in cases (70 percent of the claims filed) in which
they formerly did not have to do so. The analysis did not assert that
the Department's proposal would raise litigation costs in the remaining
30 percent of cases. The Department has no basis on which to dispute
the industry's statement that its average defense costs, in cases that
proceed beyond an initial denial of benefits by the district director,
are $6,000. In fact, the economic analysis prepared for the Department
in connection with the Regulatory Flexibility Act adopted the figures
provided by the Milliman & Robertson economic analysis with respect to
the costs of litigating claims at various levels of adjudication.
Rulemaking Record, Exhibit 80 at 42.
The Department's second notice of proposed rulemaking, however,
undermined the assumption that all of an employer's defense costs would
be expended at the earliest stage of adjudication. Under the
Department's first proposal, an employer would have been required to
develop all of its evidence regarding both its liability as an operator
and the claimant's eligibility while the case was pending before the
district director. The Department's second notice of proposed
rulemaking, however, proposed a substantial alteration in procedure
that would permit parties to maintain their current practice of
deferring the development of medical evidence until after a case has
been referred to the Office of Administrative Law Judges. 64 FR 54993
(Oct. 8, 1999). The Department has adopted this second proposal in
these final regulations. Consequently, while potentially liable
operators will be required to develop evidence relevant to their
liability while claims are pending before the district directors, they
will no longer need to expend money on the development of medical
evidence in those cases (70% of cases, according to industry estimates)
that do not proceed beyond the district director level. In addition,
the Department has further revised its regulations to require that all
but one potentially liable operator, the one finally designated as
responsible operator, be dismissed as parties to the case upon issuance
of the district director's proposed decision and order. See
Sec. 725.418(d) and explanation accompanying Sec. 725.414. Thus, only
one potentially liable operator will incur costs in the adjudication of
each claim for benefits beyond the district director level.
Under the revised regulations, potentially liable operators will be
required to submit evidence to the district director in each case
regarding their employment of the miner. See Sec. 725.408. In addition,
in the small number of cases in which the Department does not name the
miner's most recent employer as the responsible operator, the earlier
employer that has been designated the responsible operator may incur
additional costs in attempting to establish that a more recent employer
should be held liable for the payment of benefits. In comparison to the
costs of developing medical evidence, however, the Department believes
that the additional costs imposed by the regulations will not be
significant.
The industry submitted an additional analysis by Milliman and
Robertson to the Department in response to the second notice of
proposed rulemaking. Rulemaking Record, Exhibit 89-37, Appendix A. That
analysis abandons the assumption that the Department's regulations will
cause the expenditure of $6,000 in defense costs in every case, rather
than only those that proceed beyond the district director level, and
replaces it with an assumption that claims defense costs will rise from
their
[[Page 79985]]
current level of $6,314 to $12,000 under the new regulations.
Rulemaking Record, Exhibit 89-37, Appendix A at 16. It is this
analysis, apparently, that gives rise to the statement that the second
notice of proposed rulemaking will result in an additional $6,000 in
costs per claim. The economic analysis contains no explanation for its
assumption that defense costs will double under the new regulations.
Because the Department's regulations will actually reduce the quantity
of medical evidence a party may submit from former levels, eliminate
the need to expend money on developing medical evidence in the majority
of cases, and eliminate potentially liable operators other than the
designated responsible operator as parties to each case beyond the
district director level, the Department believes that the assumption is
incorrect.
(e) No other comments have been received concerning this
regulation.
20 CFR 725.408
(a) The Department proposed eliminating 20 CFR Sec. 725.408 (1999)
in its first notice of proposed rulemaking, and replacing it with a
regulation designed to elicit necessary information from a miner's
former employers. 62 FR 3355-56 (Jan. 22, 1997). As proposed,
Sec. 725.408 required any operator notified of its liability under
Sec. 725.407 to file a response within 30 days of its receipt of that
notification, indicating its intent to accept or contest its
identification as a potentially liable operator. Specifically, an
operator that contests its liability was required to admit or deny five
assertions relevant to that liability: (1) That it operated a coal mine
after June 30, 1973; (2) that it employed the miner for a cumulative
period of not less than one year; (3) that the miner was exposed to
coal mine dust while employed by the operator; (4) that the miner's
employment with the operator included at least one working day after
December 31, 1969; and (5) that the operator is financially capable of
assuming its liability for the payment of benefits. The regulation
required the operator to submit all documentary evidence relevant to
these issues while the case was pending before the district director,
within 60 days from the date on which the operator received
notification.
In its second notice of proposed rulemaking, the Department
responded to comments that the 60-day time period was too short by
enlarging it to 90 days. 64 FR 54990-91 (Oct. 8, 1999). In addition,
the Department observed, the period could be extended by the district
director for good cause shown pursuant to Sec. 725.423. The Department
also acknowledged that, as proposed, the regulation required
potentially liable operators to develop and submit evidence in cases
that ultimately did not proceed beyond the earliest stage of
adjudication. The Department stated that the district director's
receipt of this information was necessary, however, in order to ensure
that the correct parties were named in those cases that did proceed to
the Office of Administrative Law Judges. The Department stated that it
did not believe that the cost of developing this evidence would be
significant. Finally, the Department rejected the suggestion that it
bifurcate the administrative law judge's resolution of entitlement and
liability issues.
(b) The Department has modified subsection (a)(1), and has added
the phrase ``any of'' to subsection (a)(3), to clarify the meanings of
those sentences.
(c) One comment argues that the Department's revision of this
regulation injects additional complexity, adds unnecessary burdens and
expense in cases involving multiple operators, and sets traps for
unwary litigants. The commenter also argues that the Department's
revision is based on the erroneous premise that operators are always
better informed as to their employment of the miner. The Department
agrees that the revised regulations place additional burdens on coal
mine operators who have, in the past, routinely filed form
controversions of their liability for benefits and waited until the
case was referred to the Office of Administrative Law Judges to develop
their defenses. In its first notice of proposed rulemaking, the
Department explained its intention to change this practice in order to
provide the district director with sufficient information to allow him
to identify the proper responsible operator. Requiring the submission
to the district director of all evidence relevant to the liability
issue has become even more important in the final revision of the
Department's rules. As revised, the regulations will permit the
district director to refer a case to the Office of Administrative Law
Judges with no more than one operator as a party to the claim, the
responsible operator as finally designated by the district director.
See Sec. 725.418(d) and explanation accompanying Sec. 725.414. The
regulations prohibit the remand of cases for the identification of
additional potentially liable operators, or to allow the district
director to designate a new responsible operator, thereby reducing
delay in the adjudication of the merits of a claimant's entitlement.
This change also places the risk that the district director has not
named the proper operator on the Black Lung Disability Trust Fund,
however. 62 FR 3355-56 (Jan. 22, 1997). The Department believes that
the additional demands placed upon potentially liable operators are not
unreasonable. In addition, the Department does not accept the criticism
that the regulation sets traps for unwary litigants. The nature of the
evidence required by the Department, and the time limits for submitting
that evidence, are clearly set forth in the regulations, and will be
communicated to potentially liable operators who are notified of a
claim by the district director.
The commenter also argues that the Department's revision is based
on the erroneous premise that operators are better able to obtain
information about their employment of the miner than is the government.
The commenter states that the situation is made more difficult where
the employment relationship was remote in time or if the miner worked
for many different companies. The Department agrees that, in some
cases, it may be more difficult for employers, and particularly for
insurers, to readily ascertain the facts of the miner's employment.
Clearly, however, operators and insurers are in a better position to
ascertain these facts than is the Department of Labor. To the extent
that an employer or insurer has difficulty in obtaining evidence in a
specific case, it may ask that the time period for developing this
evidence be extended. The Department will provide the operators
notified of a claim the information that it has, including a copy of
the miner's application and all evidence relating to his coal mine
employment, Sec. 725.407(c).
(d) One comment argues that the 90-day time limitation for an
operator to submit documentary evidence in support of its position as
to liability remains inadequate, and that, in any event, it should not
commence until the operator receives the claimant's employment history,
the Itemized Statement of Earnings obtained from the Social Security
Administration, and, where applicable, the policy number of the
insurance policy that the Department believes provides appropriate
coverage. The Department intends to make every effort to supply a
potentially liable operator notified of a claim with all of the
information pertinent to that notification. As noted above, this
information will include a copy of the employment history provided by
the claimant. The Department will also provide the applicable insurance
policy number if it has it. Similarly, if the Department has received
the Itemized Statement of
[[Page 79986]]
Earnings, it will provide a copy to the potentially liable operator.
The Department's receipt of that record, however, depends on the speed
with which the Department's request is processed by the Social Security
Administration. It will not be possible in all cases to supply that
record to potentially liable operators at the time they receive
notification. The initial information supplied to the operator should
nevertheless be sufficient to allow it to accept or reject its
notification as a potentially liable operator. If the operator needs
additional time to respond to that initial notification, it may request
an extension of time for good cause shown pursuant to Sec. 725.423.
Operators are not limited to a single extension of time in which to
obtain this evidence, although a district director may reasonably
expect the operator to demonstrate its diligence prior to requesting an
additional extension.
(e) Several comments have misconstrued the requirements of
Sec. 725.408. Two comments argue that the proposal would shift the
burden to the named responsible operator to investigate the proper
responsible operator within 90 days and that the 90-day time period is
unrealistic for that purpose. One comment argues that the revised
regulations are objectionable because they make a responsible operator
responsible not only for its own defense but also for the defense of
other potentially liable operators. This statement has never been true
with respect to liability determinations, and, under the Department's
final regulations, is no longer true of entitlement determinations.
Another comment argues that DOL's rationale for imposing this time
limit on operators--i.e., that operators have better access to the
claimant's entire work record--is flawed. Section 725.408, however,
does not govern the introduction of evidence relevant to the liability
of other operators that employed the miner. Instead, the evidence
required by Sec. 725.408 is limited to evidence relevant to the
notified operator's own employment of the miner and that operator's
financial status. Documentary evidence relevant to another operator's
liability is required later pursuant to the schedule established
pursuant to Sec. 725.410(b), and in accordance with the limitations set
forth in Sec. 725.414(b). Accordingly, the Department will discuss
these comments under Secs. 725.410 and 725.414.
(f) One comment argues that by creating adversity among the miner's
former employers, the Department's revised regulations will create
ethical problems for the limited pool of attorneys who currently
represent employers in black lung benefits cases, and will therefore
deprive employers of their right to the counsel of their choice. The
Department acknowledges that the revised regulations increase the
adversity among a miner's former employers in any case in which the
district director has designated as the responsible operator an
operator other than the operator that most recently employed the miner.
In such a case, where the designated responsible operator may seek to
develop evidence to show that a more recent employer should be
designated the responsible operator, an attorney clearly could not
represent both employers. Moreover, to the extent that the attorney has
previously represented one of the operators, the applicable ethical
rules of the attorney's state bar may prevent the attorney from
accepting representation of the other operator. In most cases, however,
this problem will be more illusory than real. Most of the cases in
which the Department will name more than one potentially liable
operator will be cases in which the miner's most recent employer is out
of business, and had no insurance, or cannot be located. As a general
rule, these employers typically have not participated in the
adjudication of earlier black lung benefits claims. Accordingly, there
will be few, if any, attorneys who will be unable to represent the
designated responsible operator. Moreover, in cases in which the
interests of potentially liable operators are not directly adverse,
state rules typically permit an attorney to represent a client, even if
the attorney has represented another party to the case previously, if
the attorney obtains the consent of the previous client.
The Department recognizes that there may be a small minority of
cases in which a true conflict is unavoidable. For example, if the
miner's most recent employer, ABC Coal Co., denies that it employed the
claimant as a miner, the Department may also name the miner's next most
recent employer, XYZ Coal Co., as a potentially liable operator. An
attorney who represented ABC in previous litigation could not now
represent XYZ, whose interests are directly adverse. The possibility of
such a conflict, however, is not a limitation on the Department's
efforts to revise the regulations implementing the Black Lung Benefits
Act. The Administrative Procedure Act does guarantee a party the right
to be represented by counsel during an administrative adjudication. 5
U.S.C. 555(b). Contrary to the commenter's suggestion, however, nothing
in that Act requires an administrative agency to structure its rules in
order to preserve the ability of a limited number of attorneys to
represent coal mine operators. Where the state ethics rules require an
attorney to decline representation of a client, that client is entitled
to seek other counsel. The Department does not believe that coal mine
operators will be unable to find competent counsel to represent their
interests. In fact, the Department has included two or more coal
companies as parties in cases under the former regulations, see, e.g.,
Martinez v. Clayton Coal Co. et al., 10 Black Lung Rep. (MB) 1-24 (Ben.
Rev. Bd. 1987) (involving three coal mine operators), and did not
receive any reports that the operators encountered problems in
obtaining representation.
(g) One comment states that the regulation denies mine operators a
reasonable opportunity to develop a record. In its second notice of
proposed rulemaking, the Department explained its belief that the 90-
day time period, which may be extended for good cause, affords
sufficient time for operators to submit evidence relevant to their
employment of the miner. 64 FR 54990 (Oct. 8, 1999). It cannot be
emphasized too often that the period provided by Sec. 725.408 does not
require the development of evidence relevant to the designation of
other potentially liable operators as the responsible operator. That
evidence will be submitted later, in accordance with the schedule
established by the district director pursuant to Sec. 725.410.
(h) One comment argues that the regulation creates an impermissible
presumption and thus violates the Supreme Court's decision in Director,
OWCP v. Greenwich Collieries, 512 U.S. 267 (1994). Section 725.408 does
not create any presumptions. To the extent that the commenter objects
to any other presumption used to establish the identity of the
responsible operator liable for the payment of benefits, the Department
discussed similar objections in its second notice of proposed
rulemaking, see 64 FR 54972-74 (Oct. 8, 1999), and its response to
comments under Sec. 725.495 of Subpart G of this part.
(i) One comment states the response time given potentially liable
operators under Sec. 725.408 should mirror the time period given
claimants to submit information in Sec. 725.404. The Department
disagrees. Section 725.404 provides that claimants must provide the
district director with a complete and detailed employment history as
well as proof of age, marriage, death, family relationship, dependency,
or other
[[Page 79987]]
matters of public record. If the information submitted by the claimant
is insufficient, the district director must give the claimant a
specified reasonable period of time within which to provide the
information. Claimants applying for benefits have a positive incentive
to supply this information; without it, the district director is unable
to complete processing of the case, and any award of benefits will
necessarily be delayed. In contrast, Sec. 725.408 seeks information
from the claimant's former employers, who have no similar incentive to
provide information to the Department. The regulation thus establishes
a presumptively reasonable period of time within which an employer must
provide that information, and allows the employer to seek an extension
of that period for good cause. Because Secs. 725.404 and 725.408 affect
different parties with different incentives, and serve different
purposes, the Department does not believe that the time periods need be
made identical.
(j) One comment urges that operators be given the 60 days
originally proposed by the Department to respond to notification of
potential liability rather than 90. The Department has retained the 90-
day time period, which may be extended for good cause, to accommodate
the operator community's general objection to the 60-day period and to
provide additional time, as a matter of right, in that small percentage
of cases in which the miner's employment history is complex or in the
distant past.
(k) No other comments were received concerning this regulation, and
no other changes have been made in it.
20 CFR 725.409
(a) The Department proposed revising Sec. 725.409 in its first
notice of proposed rulemaking to make explicit one basis for denying a
claim by reason of abandonment. The Department observed that the Court
of Appeals for the Fourth Circuit had confirmed the Department's use of
the authority in subsection (a)(3) to dismiss a claim by reason of
abandonment based on a claimant's failure to appear at an informal
conference. Wellmore Coal Co. v. Stiltner, 81 F.3d 490, 497 (4th Cir.
1996). The Department proposed to add subsection (a)(4) to the
regulation to clarify that authority. In addition, the Department
proposed to clarify the procedures for denying claims by reason of
abandonment. 62 FR 3356 (Jan. 22, 1997). In the second notice of
proposed rulemaking, the Department explained that, because of the
severe effect of a dismissal, it had proposed revising Sec. 725.416,
the regulation governing informal conferences, to ensure that the
parties to a claim are provided with the district director's reasons
for holding an informal conference. Thus, under revised Sec. 725.416,
the district director is required to explain why he believes an
informal conference will assist in the voluntary resolution of the
issues in the case. The Department also rejected a suggestion that an
administrative law judge should be permitted to hear the merits of
claimant's entitlement in a case in which the claimant has requested a
hearing as to the district director's dismissal of the claim, and the
ALJ finds error in the district director's denial of the claim by
reason of abandonment. In response to this comment, the Department
added a sentence to subsection (c) of the regulation, to clarify its
intent that an administrative law judge must remand a case for further
administrative processing if he finds the district director erred in
denying the claim. Finally, the Department rejected a comment that the
proposal would increase the number of additional claims filed.
(b) Two comments continue to object to the Department's
unwillingness to allow an administrative law judge to consider the
merits of a claimant's entitlement to benefits if he finds that the
district director improperly denied the claim by reason of abandonment.
In its second notice of proposed rulemaking, the Department explained
that a denial by reason of abandonment may take place before the
administrative processing of the claim has been completed, such as when
a claimant unjustifiably refuses to attend a required medical
examination. Sec. 725.409(a)(1); 64 FR 54991 (Oct. 8, 1999). The
Department has reconsidered its complete prohibition on allowing an
administrative law judge to resolve the merits of a claim, however.
Where the parties have completed their submission of evidence to the
district director, and the district director has completed his analysis
of the evidence relevant to the liability of all potentially liable
operators, and has made a final designation of the responsible operator
liable for the payment of benefits, the Department agrees that it would
make no sense to require remand to the district director in the event
the administrative law judge overturns his denial by reason of
abandonment. Accordingly, the Department has revised subsection (c) to
permit the Director, through the Office of the Solicitor, to make a
case-by-base determination as to whether remand for further
administrative processing is necessary. If further remand would be
pointless, the Director's consent, which must be made in writing, would
allow the case to proceed on the merits of the claimant's entitlement
to benefits. The Department has also added a new sentence to subsection
(c) to clarify the effect of a denial of a claim by reason of
abandonment on a subsequent claim filed by the same individual.
(c) Several comments state that the Department should refer a claim
for a hearing on the merits even if the claim has been denied by reason
of abandonment. The Department disagrees. A claimant whose claim has
been denied by reason of abandonment has suggested, by his actions,
that he no longer wishes to pursue his claim for benefits. Referring
all of these cases to an administrative law judge for hearing would be
pointless and inefficient. It is true that in some cases, the claimant
may have decided that he still desires benefits, but believes that the
action required of him by the district director is unreasonable.
Requiring these claimants to request an administrative law judge to
resolve their dispute does not impose an unreasonable burden.
Accordingly, the Department has not altered this requirement in the
regulation.
(d) Several comments request that the Department reconsider denying
a claim by reason of abandonment as an appropriate sanction. Another
comment supports the denial. The Department explained its reason for
using a denial by reason of abandonment where a claimant fails to
attend an informal conference in its second notice of proposed
rulemaking. 64 FR 54991-92 (Oct. 8, 1999). The Department continues to
believe that, although a denial is a harsh sanction, it is the only
valid sanction that may be imposed for a claimant's failure to
participate in the adjudication process. A claimant whose failure to
participate is the result of simple negligence may avoid that sanction
by indicating his willingness to comply with the district director's
initial instructions.
(e) Several comments request that the Department reconsider its use
of informal conferences. These comments are more appropriately
addressed under Sec. 725.416.
(f) No other comments were received concerning this section.
20 CFR 725.410-725.413
(a) In its first notice of proposed rulemaking, the Department
proposed new Secs. 725.410-725.413 in order to streamline the
investigation and initial adjudication of claims for black lung
benefits. 62 FR 3356 (Jan. 22, 1997). The
[[Page 79988]]
proposed regulations provided for concurrent investigations into the
medical issues surrounding the claimant's eligibility and the identity
of the operator liable for the payment of any benefits. Under the
proposed regulations, those investigations would have culminated in an
initial finding containing the district director's preliminary
resolution of both issues. If any party indicated dissatisfaction with
the initial finding, the district director would have proceeded to an
initial adjudication of the claim and would have established a schedule
for the submission of evidence. The proposed regulations included a
number of significant changes. For example, the Department stated that
it would not honor hearing requests made before the conclusion of
administrative proceedings. In addition, the Department provided
claimants with up to one year to respond to an initial finding.
In its second notice of proposed rulemaking, the Department did not
discuss Secs. 725.410, 725.412, or 725.413. See list of Changes in the
Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999). The
Department did discuss Sec. 725.411, although it did not propose any
additional changes to that regulation. Instead, the Department advised
all interested parties that it intended to substantially revise the
documents used in connection with the issuance of an initial finding
under Sec. 725.411. The Department noted its commitment to improve the
quality of the information provided to parties to the adjudication of
black lung claims. The Department hoped that improved communication
would make district office claims processing easier to understand and
would also give claimants a clearer picture of the medical evidence
developed in connection with their claims. It was hoped that with
better information, claimants would be able to make more informed
decisions as to how to proceed. In response to a number of comments,
the Department stated that a hearing request filed within one year of
the initial finding would constitute a request for further adjudication
of the claim. The Department also discussed its decision not to honor
premature hearing requests, i.e., requests for hearing made before the
district director issued a proposed decision and order. Additionally,
the Department rejected the suggestion that the one-year response time
to an initial finding impermissibly extended a claimant's modification
rights. Finally, the Department explained its decision not to permit an
extension under Sec. 725.423 of the one-year time period.
(b) A number of comments continue to object to the Department's
proposal with respect to the initial adjudication of claimant
eligibility and operator liability. Among other things, these
commenters criticize the increased formality and complexity of the
proposed procedure; the burdensome requirement that operators must
respond to initial findings in all cases; and the Department's failure
to honor premature hearing requests. In response to these comments, the
Department has reconsidered the procedural rules governing district
director claims processing, and has altered the proposal in a number of
significant respects.
(i) The Department will no longer issue an initial finding of
claimant eligibility and operator liability. Instead, following the
development of certain medical evidence under Sec. 725.405, including
the complete pulmonary evaluation authorized by Sec. 725.406, and the
submission of evidence relevant to the employment of the miner by
potentially liable operators notified pursuant to Sec. 725.407, the
district director will issue a schedule for the submission of
additional evidence. Sec. 725.410. This schedule will notify the
parties of the district director's preliminary evaluation of the
evidence regarding the miner's eligibility, but will not require a
formal response as to eligibility from any party. In the event that the
district director concludes that the evidence supports an award of
benefits, and there is no operator that may be held liable for the
payment of benefits, Sec. 725.411 requires the district director to
issue immediately a proposed decision and order awarding benefits
payable by the Black Lung Disability Trust Fund. In such a case, the
district director will not issue a schedule for the submission of
additional evidence because no further evidentiary development is
needed. In the event the district director's preliminary evaluation of
the medical evidence in a Trust Fund case weighs against a benefits
award, the district director will issue a schedule allowing the
submission of additional medical evidence, but the claimant need not
respond. Instead, the claimant may wait until the issuance of the
proposed decision and order, which will provide him 30 days within
which to request a hearing. Similarly, an operator need not respond to
a district director's schedule for the submission of evidence. Silence
on an operator's part as to the claimant's entitlement to benefits
after issuance of the district director's schedule will be deemed a
contest of that entitlement. The revised regulations thus eliminate
certain responses that previously would have been required following
issuance of the proposed initial findings. In addition, they eliminate
the one-year period of time that the proposal would have provided a
claimant to respond to the initial finding. Two commenters continued to
object to that time period. Instead, all parties will have the
statutory period, one year, to file a request for modification after
the district director's proposed decision and order becomes effective.
The proposed decision and order becomes effective 30 days after
issuance, see Sec. 725.419.
By replacing the notice of initial finding with a less formal
schedule for the submission of additional evidence, the Department
hopes to further its goal of providing more easily understood
documents. The schedule will summarize the medical evidence developed
by the Department, and provide a clear explanation of why that evidence
may fail to establish a claimant's entitlement to benefits. In
addition, the schedule will provide a clear explanation of the steps
remaining in the district director's claim processing. A number of
commenters had objected to the complexity of the Department's proposed
procedures, and the Department believes that this simplified, revised
process will eliminate confusion.
(ii) The schedule will also contain the Department's preliminary
designation of the responsible operator liable for the payment of
claimant's benefits. Along with the schedule, the district director
will supply all potentially liable operators with a copy of the
evidence needed to meet the Director's initial burden of proof under
Sec. 725.495, if such a showing is necessary. Within 30 days of the
date on which the schedule is issued, the designated responsible
operator must either agree or disagree with the district director's
designation. If it disagrees, it must submit any evidence regarding the
liability of other operators in accordance with the district director's
schedule. The schedule must provide a minimum of 60 days to submit
evidence pertaining to both responsible operator liability and the
claimant's entitlement, and an additional 30 days to respond to other
parties' evidence. These periods may be extended pursuant to
Sec. 725.423 for good cause shown. In addition, the designated
responsible operator may, but does not have to, agree that the claimant
is entitled to benefits. Silence on this issue for 30 days after the
district director issues a schedule will be deemed a decision to
contest the claimant's benefit entitlement sufficient
[[Page 79989]]
to make the responsible operator liable for a reasonable attorney's fee
if the claimant successfully prosecutes his claim.
(iii) The Department has also deleted the language in proposed
Sec. 725.411 which would have rendered invalid premature hearing
requests. Accordingly, the Department will continue its current
practice of following the decision in Plesh v. Director, OWCP, 71 F.3d
103, 111 (3d Cir. 1995). Under that decision, the Department may
complete its administrative processing of the claim, but must forward a
claim for a hearing at the conclusion of that processing if the
claimant has previously filed a request for a hearing and that request
has not been withdrawn. The Department has revised Sec. 725.418 to
accomplish this result and to extend similar treatment to operators.
See response to comments under Sec. 725.418.
(c) Two comments submitted in connection with the Department's
first notice of proposed rulemaking, and renewed in connection with the
Department's second notice of proposed rulemaking, argue that the
Department's proposed Sec. 725.413 improperly transfers adjudication
powers from the administrative law judge to the district director in
violation of the Administrative Procedure Act. The Department
disagrees. The regulations currently permit the district director to
issue a proposed decision and order. Any party aggrieved by the
proposed decision and order may request a formal hearing before the
Office of Administrative Law Judges, making the district director's
factual findings irrelevant. If no party objects to the proposed
decision and order, however, it becomes final. 20 CFR 725.419 (1999).
The revised regulations continue that procedure. They do not deny any
party the right to an adjudication of contested issues by an
administrative law judge, as provided by both the Administrative
Procedure Act, 5 U.S.C. 556, and section 19 of the Longshore and Harbor
Workers' Compensation Act, 33 U.S.C. 919, as incorporated by 30 U.S.C.
932(a).
(d) Several comments submitted in connection with the Department's
first notice of proposed rulemaking state that the time frames for
developing and submitting evidence to the district director are too
short. These time frames, which have been moved from proposed
Sec. 725.413(c)(2) to Sec. 725.410(b), set only the minimum periods for
evidentiary submissions. Section 725.423 allows any party to request
additional time within which to take a required action if good cause is
shown. In addition, the Department has relaxed the requirements for the
development of documentary medical evidence in Secs. 725.414 and
725.456, and has increased the opportunities for submitting such
evidence outside the periods established by Sec. 725.410. The
Department has not modified, however, the requirement contained in the
original proposal, that all documentary evidence pertaining to operator
liability must be submitted to the district director in the absence of
extraordinary circumstances. In a small number of claims, the
responsible operator designated by the district director may wish to
submit documentary evidence to meet its burden of establishing that
another employer of the miner should be the responsible operator. The
Department estimates that these cases will represent less than 10
percent of all responsible operator claims. The Department recognizes
that, in some of these cases, the initial 60-day period may be
insufficient to allow the designated responsible operator to complete
its development of the necessary evidence. In such a case, however, the
operator may request that the district director grant it additional
time. In addition, if the district director finds the evidence
submitted by the designated responsible operator persuasive, he may
designate a different operator as the responsible operator only after
he provides that operator, pursuant to Sec. 725.410, with at least 60
additional days to develop its own evidence relevant to both the
liability and eligibility issues. Finally, in a case in which the
operator encounters particular difficulty in obtaining the necessary
evidence, it may be able to establish the existence of ``extraordinary
circumstances'' permitting the introduction of such evidence after the
case is referred to the Office of Administrative Law Judges. No changes
are necessary in response to these comments.
(e) One comment submitted in connection with the Department's first
notice of proposed rulemaking objects to the district director's
authority to reinstate an operator which has been dismissed. This
authority is necessary to correct erroneous dismissals, especially
since an operator can not be named a party to a claim once a case is
referred to the Office of Administrative Law Judges for a hearing on
the merits, Sec. 725.407(d). The remainder of the commenter's
objections pertain more properly to Sec. 725.414, and are addressed
under that regulation.
(f) In light of the extensive changes to Secs. 725.410-.413, none
of the other comments received concerning the proposed revisions to
these regulations remain relevant.
20 CFR 725.414
(a) In its first notice of proposed rulemaking, the Department
proposed to limit the quantity of documentary medical evidence that
parties to a claim would be able to submit. Specifically, the
Department's initial proposal would have permitted the claimant and the
party opposing the claimant's entitlement each to submit the results of
no more than two complete pulmonary examinations or consultative
reports, and one review of each of its opponent's diagnostic studies
and examinations. Parties could submit additional documentary medical
evidence only by demonstrating extraordinary circumstances. In
proposing this limitation, the Department acknowledged the concerns of
the Court of Appeals for the Sixth Circuit in Woodward v. Director,
OWCP, 991 F.2d 314, 321 (6th Cir. 1993). In that decision, the court
noted the superior financial resources of some parties allowed the
development of a greater quantity of evidence with the result that the
``truth-seeking function of the administrative process is skewed and
directly undermined.'' 991 F.2d at 321. 62 FR 3356-61 (Jan. 22, 1997).
In cases in which the Department named more than one potentially liable
operator as a party to the claim, the proposal delegated responsibility
for the development of documentary medical evidence to the responsible
operator designated by the district director. Other operators would be
permitted to submit documentary medical evidence, up to the limit of
two medical evaluations per side, only by showing that the designated
responsible operator had not undertaken a full development of the
evidence and that, without it, the potentially liable operator was
unable to secure a full and fair litigation of the claimant's
eligibility.
The Department also proposed to require that all documentary
evidence--evidence relevant to operator liability as well as medical
evidence relevant to a claimant's eligibility--be submitted while the
case was pending before the district director. Like the limitation on
the quantity of medical evidence, the required submission of evidence
to the district director was made subject to an extraordinary
circumstances exception. The Department observed that this proposal
would end parties' current practice of delaying the development of
evidence on both issues until a claim was referred to the Office of
Administrative Law Judges. It would also provide district directors
with a
[[Page 79990]]
better evidentiary record on which to adjudicate a claim. The proposal
would have required parties to identify all of their witnesses while a
case was pending before the district director. Finally, the Department
explained that both proposed revisions were permissible exercises of
the broad regulatory authority granted the Department under the Black
Lung Benefits Act.
The Department proposed several significant revisions in its second
notice of proposed rulemaking. 64 FR 54992-96 (Oct. 8, 1999).
Responding to numerous comments, the Department withdrew its proposed
requirement that all documentary medical evidence be submitted to the
district director. Instead, the Department proposed to retain the
current procedures, allowing parties to submit documentary medical
evidence to the Office of Administrative Law Judges up to 20 days prior
to the formal hearing. See preamble to Sec. 725.456. The Department did
not revise its proposal with respect to documentary evidence relevant
to the issue of operator liability, however. Any such evidence that was
not submitted to the district director could be submitted to the
administrative law judge only upon a showing of extraordinary
circumstances. The Department observed that this proposal represented a
weighing of the claimant's interest in the prompt adjudication of his
entitlement against the interest of the Department in protecting the
Black Lung Disability Trust Fund from unwarranted liability. Under the
Department's proposal, the Director, OWCP, would be unable to have a
case remanded to the district director for the development of
additional evidence as to operator liability once a case was referred
to the Office of Administrative Law Judges for an adjudication of the
merits. This provision helped to ensure the prompt adjudication of the
claimant's entitlement. The procedure also subjected the Trust Fund to
the risk, however, that a district director would not name the correct
operator as a party to the claim before the case was referred to OALJ.
Such a risk could be justified only if the district director was able
to examine all of the documentary evidence relevant to the issue of
operator liability.
Although numerous comments had objected to the Department's
limitation on the quantity of medical evidence, the Department did not
propose to alter that limitation. In order to accommodate the differing
circumstances of individual cases, however, and to ensure that all
parties were given due process, the Department proposed revising the
standard that would allow a party to exceed that limitation.
Accordingly, the Department replaced the ``extraordinary
circumstances'' exception with a ``good cause'' standard that would be
easier to meet in appropriate cases. The Department also clarified the
types of documentary medical evidence that parties would be entitled to
submit, in order to resolve some of the ambiguities presented by its
original proposal. Specifically, the Department proposed that a party's
affirmative case be limited to two chest X-ray interpretations, the
results of two pulmonary function studies, two arterial blood gas
studies, and two medical reports. In rebuttal, each party would be able
to submit one piece of evidence analyzing each piece of evidence
submitted by the opposing side. For example, an operator could have
each of the claimant's chest X-rays reread once, and could submit one
report challenging the validity of each pulmonary function test
submitted by the claimant. The Department also provided the parties
with an opportunity to rehabilitate the evidence they had submitted in
connection with their affirmative case that had been the subject of
rebuttal. The second proposal justified the medical evidentiary
limitations as applied to multiple potentially liable operators named
as parties to the same claim. Finally, the Department clarified the
provision in subsection (a)(4) as allowing the submission of hospital
records and any other treatment records relating to the mine's
respiratory or pulmonary condition without regard to the evidentiary
limitations elsewhere in the regulation.
(b) A number of comments continue to object to the proposed
requirement that more than one potentially liable operator might be
retained as a party to a claim and might have to participate in a joint
defense of the claimant's eligibility for benefits subject to the same
medical evidentiary limitations as would be present in a case involving
only one operator. The Department proposed this requirement in order to
ensure that a claimant in a multiple operator case--a case in which the
identity of the responsible operator was in doubt--would not have to
face more documentary medical evidence than a claimant whose
eligibility was opposed by only one potentially liable operator. On
further reflection, however, the Department has decided not to retain
more than one potentially liable operator as a party to each case after
the case is referred to the Office of Administrative Law Judges. The
final revisions to the regulations attempt to simplify and streamline
the processing of claims at the district director level. For example,
the final rules eliminate certain party responses formerly required to
be filed with the district director, and thus reduce the parties'
transaction costs. Similarly, in these final rules, the Department has
simplified the adjudication of claims beyond the district director
level by permitting the district director to refer a case to the Office
of Administrative Law Judges with only one designated responsible
operator as a party to the claim. See explanation accompanying
Secs. 725.415, 725.416, 725.417, 725.418, and 725.421.
The Department recognizes that this solution may slightly increase
the Black Lung Disability Trust Fund's liability. In the event the
responsible operator designated by the district director is adjudicated
not liable for a claim, the Black Lung Disability Trust Fund will pay
any benefit award. The Department's proposals, on the other hand, would
have subjected the Trust Fund to liability only where the miner was not
employed by any operator that met the criteria for a potentially liable
operator, or where the district director had not named as a party to
the claim the operator ultimately held to be the responsible operator.
The Department's final regulations create Trust Fund liability in
different circumstances: where the district director's designation of
the responsible operator proves to be incorrect. For example, if the
miner's most recent employer, ABC Trucking Co., argues that it did not
employ the claimant as a miner, the proposal would have permitted the
district director to retain, as parties to the claim, the miner's prior
employers as fallback potentially liable operators. Under the final
regulation, however, if the district director designates ABC as the
responsible operator, and the ALJ awards benefits but finds that the
miner's next most recent employer, XYZ Coal Co., should have been the
responsible operator, benefits will be payable by the Trust Fund. The
Department intends that, once a claim is referred to the Office of
Administrative Law Judges, the Department shall not be able to impose
liability for that claim on any operator other than the one finally
designated as responsible operator by the district director, whether
through remand by the administrative law judge or through modification
of a finally awarded claim. This limitation will eliminate a major
source of delays in the adjudication of claims, and prevent a claimant
from having to relitigate his entitlement to benefits. To the extent
[[Page 79991]]
that a denied claimant files a subsequent claim pursuant to
Sec. 725.309, of course, the Department's ability to identify another
operator would be limited only by the principles of issue preclusion.
For example, where the operator designated as the responsible operator
by the district director in a prior claim is no longer financially
capable of paying benefits, the district director may designate a
different responsible operator. In such a case, where the claimant will
have to relitigate his entitlement anyway, the district director should
be permitted to reconsider his designation of the responsible operator
liable for the payment of the claimant's benefits.
The Department does not believe that the risk of increased Trust
Fund liability is significant. Serious disputes about the identity of
the responsible operator arise in less than 10 percent of claims. In
addition, the regulations still require that all of the documentary
evidence relevant to the issue of operator liability be submitted to
the district director, and that all of the potential witnesses as to
this issue be identified. In fact, the Department's willingness to
accept the risk that the district director's designation will be
incorrect reinforces the need for both of those requirements. Thus, the
district director will be able to make a determination as to the
identity of the responsible operator based on the same information that
will be available to the administrative law judge. In such
circumstances, the Department believes that any additional risk of
liability imposed on the Trust Fund is acceptable.
The Department has made extensive revisions to Sec. 725.414 to
implement this change. Subsection (a)(3)(iv) and the introductory
paragraph of subsection (a)(3) have been deleted, and references to
potentially liable operators other than the designated responsible
operator have been removed from subsections (a)(2)(ii), (a)(3)(i),
(a)(3)(ii), and (c). The Department has revised subsection (a)(3)(iii)
to reflect the Trust Fund's right to develop evidence in a case in
which the district director has notified one or more potentially liable
operators of their liability pursuant to Sec. 725.407, but has
subsequently dismissed all of the operators. The revised regulation
also recognizes the Trust Fund's right to develop and submit evidence
relevant to the compensability of a claimant's medical benefits. The
Department has also revised subsections (b)(1) and (b)(2) to clarify
the meaning of the regulation.
In addition, the Department has deleted subsection (a)(6). As
proposed, subsection (a)(6) would have required the district director
to admit into the record all of the evidence submitted while the case
was pending before him. As revised, however, the regulation may require
the exclusion of some evidence submitted to the district director. In
the more than 90 percent of operator cases in which there is no
substantial dispute over the identity of the responsible operator, most
of the evidence available to the district director will be the medical
and liability evidence submitted pursuant to the schedule for the
submission of additional evidence, Sec. 725.410. In the remaining
cases, however, the district director may alter his designation of the
responsible operator after reviewing the liability evidence submitted
by the previously designated responsible operator. For example, he may
decide that the evidence submitted by ABC Trucking Co. establishes that
the claimant did not work as a miner for that company, and may
designate the claimant's next most recent employer, XYZ Coal Co., as
the responsible operator. In such a case, the regulations require that
the district director issue another schedule for the submission of
additional evidence in order to give XYZ Coal the opportunity to submit
additional evidence bearing on its liability for benefits. If the
district director ultimately concludes that XYZ should be designated
the responsible operator, the regulation requires him to exclude the
medical evidence previously developed by ABC, unless XYZ adopts that
evidence as its own, Sec. 725.415(b). The Department has revised
Sec. 725.415(b) to defer the development of any additional medical
evidence in such a case until after the district director has completed
his analysis of all evidence pertaining to operator liability and has
made a final responsible operator determination. At that point, the
responsible operator will have an opportunity, if it was not the
initially designated responsible operator, to develop its own medical
evidence or adopt medical evidence submitted by the initially
designated responsible operator. Because the district director will not
be able to determine which medical evidence belongs in the record until
after this period has expired, the Department has revised
Secs. 725.415(b) and 725.421(b)(4) to ensure that the claimant and the
party opposing entitlement are bound by the same evidentiary
limitations. Accordingly, the Department has deleted the requirement in
Sec. 725.414(a)(6) that the district director admit into the record all
of the medical evidence that the parties submit.
The Department does not expect the deletion to have a significant
practical effect. Because the Department withdrew its first proposal
requiring that all medical evidence be submitted to the district
director, see paragraph (a), above, the Department expects that parties
generally will not undertake the development of medical evidence until
the case is pending before the administrative law judge. Certainly, if
the designated responsible operator believes itself not to be liable
for a given claim, it might defer the development of medical evidence
while developing evidence relevant to liability. Accordingly, in the
overwhelming majority of cases, there will be no evidence that the
district director will be required to exclude from the record. The
Department recognizes, however, the theoretical possibility that a
claimant may have to undergo additional physical examination and
testing. In the example discussed above, if ABC Trucking had submitted
the result of its examination and pulmonary testing, XYZ could, if it
chose not to use ABC's evidence, require the claimant to submit to an
additional examination. The Department does not believe that this is a
likely scenario, however, even in cases in which the district director
changes his designation of the responsible operator.
(c) Two comments dispute the Department's observation, in its
second notice of proposed rulemaking, 64 FR 54996 (Oct. 8, 1999), that
autopsy and biopsy reports are generally not developed in connection
with a claim, and that those reports need not be addressed in the
Department's evidentiary limitations. The Department has reconsidered
its earlier proposal allowing the admission of these reports without
regard to number, and agrees that the evidentiary limitations of
Sec. 725.414 should be revised. Accordingly, the regulation now permits
each side to submit, as part of its affirmative case, one report of an
autopsy and one report of each biopsy. Subsections (a)(2)(i) and
(a)(3)(i) have been revised accordingly. In addition, the Department
has revised subsections (a)(2)(ii) and (a)(3)(ii) to allow each side to
submit one report in rebuttal of an autopsy report and one report in
rebuttal of each biopsy report offered by the opposing side. The
Department has also deleted the reference to autopsy and biopsy reports
in subsection (a)(4), the catch-all provision permitting the
introduction of evidence that is not addressed elsewhere in
Sec. 725.414.
(d) Several comments object to the Department's proposed addition
of subsection (e). This provision, which tracks the current regulation
at 20 CFR 725.414(e)(1) (1999), would have
[[Page 79992]]
prohibited the introduction of evidence before an administrative law
judge which was obtained by a party while the claim was pending before
a district director but which was withheld from the district director
or any other party. Another comment states that the subsection is
meaningless since it suggests that withheld evidence must be admitted
upon the request of a party, even absent a showing of extraordinary
circumstances. The Department agrees that this provision should be
deleted. See preamble to Sec. 725.456, paragraph (b). Accordingly,
subsection (e) has been deleted. A corresponding change has been made
to Sec. 725.456.
(e) A number of comments argue that the Department should limit the
claimant and the party opposing entitlement to one examination and one
set of pulmonary testing. Thus, instead of being able to submit the
results two pulmonary function studies and two arterial blood gas
studies, each party would be entitled to submit only one set of test
results. One commenter states that this revision would simply maintain
the status quo with respect to testing. The Department disagrees. The
former regulations do not limit the number of test results a party may
submit, and evidentiary records often contain a substantial number of
such tests. The Department recognizes that the testing may be difficult
for some claimants. In the absence of good cause, the Department's
regulations limit the maximum total number of tests to five in the vast
majority of cases involving a designated responsible operator (four in
a case in which the Black Lung Disability Trust Fund will be liable for
the payment of any benefits), and spread these tests out over time. The
first such test will be performed in connection with the complete
pulmonary evaluation shortly after the claimant files his application,
Sec. 725.406. The last test will most likely be performed shortly
before the formal hearing, as parties seek to complete the development
of their evidence before the twentieth day prior to the hearing, as
required by Sec. 725.456(b)(2). It would not be appropriate to further
limit the testing that a claimant must undergo. An operator who wishes
to submit the results of two physical examinations performed in
accordance with Sec. 718.104 is entitled to have the physicians who
perform those examinations administer appropriate testing, see
Sec. 718.104(a)(6). Accordingly, the Department has not changed the
regulation in this respect.
(f) A number of comments continue to object generally to the
Department's proposed limitations on the quantity of medical evidence
that parties may submit in the adjudication of a black lung claim.
Among other things, they argue that the proposed limitations violate
Sec. 413(b) of the Black Lung Benefits Act, 30 U.S.C. 923(b), which
requires the consideration of ``all relevant evidence,'' and infringe
on the rights of coal mine operators under the due process clause of
the Constitution. The Department has previously addressed both
arguments. In its first notice of proposed rulemaking, the Department
explained that Sec. 413(b), which is contained in Part B of the Black
Lung Benefits Act, was incorporated into Part C, governing
adjudications by the Department of Labor, ``to the extent
appropriate.'' 30 U.S.C. 940. The proposed evidentiary limitations thus
represent the extent to which the Department believes that medical
evidence should be submitted for consideration by the factfinder. In
addition, the Department has noted that Sec. 413(b) does not require
the admission of all evidence simply because that evidence could be
described as relevant, and that the Department was free to prescribe
conditions under which evidence would be admissible in black lung
adjudications. 62 FR 3358-59 (Jan. 22, 1997). The Department discussed
the requirements of the due process clause in its second notice of
proposed rulemaking. The Department observed that a due process
analysis involves weighing the potentially disparate interests of a
number of parties. 64 FR 54994-95 (Oct. 8, 1999). In the Department's
view, the regulation achieves the correct balance, particularly in
light of the Department's decision to permit parties to exceed the
numerical limitations on documentary medical evidence upon a showing of
good cause. To the extent that these commenters objected, on due
process grounds, to the requirement that potentially liable operators
other than the responsible operator defer to the responsible operator's
development of medical evidence, those objections have been rendered
moot by the Department's revisions permitting only one designated
responsible operator to be included as a party to a case before the
Office of Administrative Law Judges.
The Department also cannot accept the assertion, made by several
commenters, that the numerical limits are fundamentally unfair, and
that they will result in inaccurate and incomplete evaluations of the
claimant's pulmonary condition. In cases involving a coal mine
operator, the record may contain up to five medical reports--two
submitted by the claimant, two by the operator, and the results of the
complete pulmonary evaluation. Each of these reports may be based on
independent medical testing. Accordingly, the Department does not agree
that the evaluation of the claimant's medical status will be less than
complete and thorough. Moreover, the Department does not agree that
requiring the parties to develop medical evidence meeting certain
quality standards, Secs. 718.102--718.107, will result in an unfair
adjudication of the claimant's entitlement to benefits.
(g) One comment suggests that the Department's rationale for its
proposed change is insufficient, and that anecdotal evidence of a few
cases in which coal mine operators submitted a large volume of evidence
does not demonstrate that the current procedure is unfair. The
commenter further argues that the former system, developed under the
Administrative Procedure Act, is a fair system. The Department agrees
that the APA generally provides a fair basis for the adjudication of
parties' interests in the administrative context. In its first notice
of proposed rulemaking, however, the Department demonstrated that
Congress did not explicitly impose the requirements of the APA on
adjudications under the Federal Mine Safety and Health Act. See 62 FR
3359 (Jan. 22, 1997). In addition, the Department expressed its
preference for a bright-line test that allows adjudication officers to
resolve issues of eligibility based on the quality of the medical
evidence developed by the parties rather than merely the quantity of
evidence that parties with superior financial resources may be able to
submit. The Department continues to believe that the adjudications that
will take place under these revised regulations will result in fairer,
more credible evaluations of black lung claims than the former system
permitted.
(h) One comment argues that the ``minimum'' number of examinations
that may be submitted by the parties is not equal. The commenter also
objects that the claimant is entitled to travel a longer distance to
obtain his medical evidence than the employer is authorized to send him
to obtain its medical evidence. Specifically, the commenter states that
a claimant could travel less than one hundred miles away for the
complete pulmonary evaluation provided by the Department under
Sec. 725.406, but then travel a longer distance to obtain a subsequent
examination at his own expense. Because the limitation on the travel an
operator can require is tied to the distance traveled for the
Sec. 725.406 evaluation, the commenter argues that
[[Page 79993]]
the claimant could in fact travel much farther than the operator is
permitted to send him in obtaining its evidence. The commenter's
emphasis on a ``minimum'' number of medical reports is puzzling; since
parties on both sides remain free not to submit any medical evidence,
the Department believes that the commenter refers to the maximum
permissible number of reports and tests. That limitation is equally
balanced. Unless the administrative law judge finds that good cause
justifies the admission of additional evidence, each side may submit up
to two medical reports, two chest X-ray interpretations, the results of
two pulmonary function studies and arterial blood gas studies, one
report of each biopsy, and one autopsy report. The Department believes
that the limitation applicable to each type of evidence per side
represents an inherently fair way of ensuring that the adjudication
officer's focus is on the quality of the evidence submitted rather than
on its quantity. To the extent that the comment refers to the
claimant's ability to select the physician to perform the complete
pulmonary evaluation from among those on the Department's list, the
Department has responded to that comment under Sec. 725.406. See
preamble to Sec. 725.406, paragraph (b).
With respect to the travel requirements, the Department believes
that a coal mine operator should not be entitled to wait to develop its
medical evidence until after the claimant has finished his evidentiary
development in order to learn how far it may ask the claimant to
travel. The complete pulmonary evaluation offers the claimant the
opportunity to travel anywhere in his state or any contiguous state at
Departmental expense. The Department does not believe that a claimant
will deliberately select a closer physician for this examination and
then pay for his own travel to a more distant location for either of
the two medical reports that he is entitled to submit. Accordingly, the
Department believes that the distance a claimant travels for the
complete pulmonary evaluation, or 100 miles, whichever is greater,
represents a proper limitation on a coal mine operator's ability to
compel the claimant to travel. Moreover, the regulation's proscription
on additional travel is not absolute. Like the former regulation, 20
CFR 725.414(a)(1999), which subsection (a)(3)(i) mirrors, subsection
725.414(a)(3)(i) permits an operator to request the district director
to authorize a trip of greater distance. Operators who are unable to
find a qualified physician within the 100-mile radius thus may seek
permission to send the claimant further.
(i) Three comments suggest that the determination as to whether
additional evidence would provide only marginal utility should not be
made by regulation of the Department of Labor but by administrative law
judges on a case-by-case basis. These commenters contend it is up to
administrative law judges to determine when evidence is cumulative and
that the Department should not micromanage the adjudicatory process.
The Department has previously expressed its preference for a ``bright-
line'' limitation over the ad hoc determinations of individual
adjudication officers. 62 FR 3357 (Jan. 22, 1997). Where the
circumstances compel a determination of whether additional medical
evidence should be allowed, i.e., upon an allegation of good cause for
submitting medical evidence in excess of the evidentiary limitation,
that determination will be made by administrative law judges. The need
for such a determination in some cases, however, does not obviate the
more compelling need for a general rule limiting the amount of medical
evidence that parties may submit in black lung benefits claims. The
Department believes that it should be incumbent on the party seeking to
exceed that limit to demonstrate good cause for submitting additional
evidence.
(j) One comment argues that the Department should include the
``good cause'' exception in Sec. 725.414 as well as in Sec. 725.456,
and that its failure to do so represents a trap for the unwary. The
Department does not agree that the ``good cause'' exception needs to be
repeated in Sec. 725.414. As a practical matter, the Department's
removal of the requirement that parties submit all of their documentary
medical evidence before the district director will generally cause
parties to delay the development of their evidence until a case reaches
the administrative law judge. Thus, the Department does not anticipate
that there will be many occasions on which a party would ask the
district director, rather than the administrative law judge, to find
``good cause'' to exceed the numerical limitations of Sec. 725.414. In
any event, because any finding on this issue by the district director
would be subject to de novo review by an administrative law judge, the
Department does not believe that the absence of an explicitly stated
``good cause'' exception while a case is pending before the district
director will impair the parties' development of evidence.
(k) One comment argues that, contrary to the opinion expressed in
the Department's second notice of proposed rulemaking, the progressive
nature of pneumoconiosis should not constitute ``good cause'' for the
submission of additional evidence because it is scientifically
unsupported. In its second notice of proposed rulemaking, the
Department had suggested that the progressive nature of the disease
might justify an administrative law judge's finding of good cause to
admit documentary medical evidence in excess of the Sec. 725.414
limitations when both parties had fully developed their evidence prior
to the hearing but the hearing had to be rescheduled due to weather
conditions. 64 FR 54994-95 (Oct. 8, 1999). The commenter suggests that
a claim of regression should be automatic good cause. The Department
has discussed the evidence demonstrating the progressive nature of
pneumoconiosis in its response to comments under Sec. 725.309. The
Department does not agree that a bare claim of ``regression'' should
entitle a coal mine operator to exceed the Sec. 725.414 evidentiary
limitations. The example provided by the Department was intended to
illustrate one of the circumstances in which the ``good cause''
exception might apply; it was not intended to provide an automatic
right to submit documentary medical evidence in excess of the
limitations in any particular case.
(l) One comment states that the ``good cause'' exception is
unnecessarily complex and leaves many unanswered questions. The
commenter poses a hypothetical situation involving a claimant's
submission of an additional report of examination, and asks what
additional evidence the opposing party may submit in response or in
rebuttal. The Department does not believe that the regulation or this
preamble can explicitly anticipate every conceivable situation that may
arise in the adjudication of claims. Instead, the Department fully
expects that administrative law judges will be able to fashion a remedy
in all cases that both permits the party opposing entitlement to
develop such rebuttal evidence as is necessary to ensure a full and
fair adjudication of the claim, and retains the principle inherent in
these regulations that the fairest adjudication of a claimant's
entitlement will occur when the factfinder's attention is focused on
the quality of the medical evidence submitted by the parties rather
than on its quantity.
(m) One comment argues that the Department's regulations improperly
deny a dismissed operator the right to defend itself, in violation of
the Black Lung Benefits Act, the Longshore and
[[Page 79994]]
Harbor Workers' Compensation Act, and the Administrative Procedure Act.
Under the regulations, if an operator is dismissed by the district
director, and is not reinstated before a case is referred to the Office
of Administrative Law Judges, it may not be held liable for benefits.
Such an operator will therefore not need to defend itself. If the
district director dismisses an operator and later realizes that he did
so incorrectly, he may reinstate that operator but must provide it with
an opportunity, under Sec. 725.410, to develop additional evidence.
Consequently, the Department does not agree that the regulations limit
the rights of dismissed operators.
(n) One comment states that the requirement that a party identify a
testifying witness while a claim is pending before the district
director is unreasonable and onerous, and that it diminishes the
authority of administrative law judges. This comment is more
appropriately addressed under Sec. 725.457, governing the use of
witnesses before an administrative law judge. See preamble to
Sec. 725.457, paragraph (b).
(o) A number of comments generally favor the Department's medical
evidentiary limitations.
(p) No other comments were received concerning this section, and no
other changes have been made in it.
20 CFR 725.415
(a) In its first notice of proposed rulemaking, the Department
revised Sec. 725.415 to require the district director to issue a
proposed decision and order in each case. Citing the need to strengthen
the integrity of the district director's adjudication, the Department
proposed removing the district director's authority to refer a claim to
the Office of Administrative Law Judges without first issuing a
proposed decision and order. 62 FR 3361 (Jan. 22, 1997). The Department
did not discuss Sec. 725.415 in its second notice of proposed
rulemaking. See list of Changes in the Department's Second Proposal, 64
FR 54971 (Oct. 8, 1999).
(b) The Department has revised subsection (b) in light of its
decision not to allow more than one operator to remain a party to a
black lung claim after the conclusion of district director processing.
As revised, the regulation recognizes the district director's authority
to reconsider his initial designation of a responsible operator
following the submission of liability evidence by that initially
designated operator. Where the district director believes that that
evidence establishes that the first operator is not the proper
responsible operator, he may issue another schedule for the submission
of additional evidence under Sec. 725.410, designating a new
responsible operator and providing that operator with time within which
to submit its own evidence relevant to the liability issue. If, after
reviewing that operator's evidence, the district director decides that
his first designation was correct, he may not allow the second
designated responsible operator to develop any additional medical
evidence. If, however, he decides that his second designation was
correct (or proceeds to a third or fourth designation), he must provide
the operator that he finally determines to be the responsible operator
with the opportunity to submit medical evidence. That operator may
develop its own evidence, or may adopt any evidence previously
submitted by an operator. In either case, the finally designated
responsible operator is subject to the evidentiary limitations set
forth in Sec. 725.414.
(c) The Department has replaced the reference to Sec. 725.413(c)(2)
with a reference to Sec. 725.410(b) in order to reflect the new
provision governing the time period for submitting documentary evidence
to the district director. The Department has also deleted the word
``operator's'' from the title of the regulation. As revised, the
Department's regulations do not provide a separate period for the
development of an operator's evidence.
(d) One comment submitted in connection with the first notice of
proposed rulemaking states that this section affords the district
director too much authority, but does not identify which specific
powers are objectionable. Without more detail, the Department cannot
respond meaningfully to the commenter's concerns. Subsection (b) does
enumerate the possible actions a district director may take after
reviewing all of the evidence developed in conjunction with the claim.
The district director may notify additional potentially liable
operators, issue another schedule for the submission of additional
evidence, schedule a conference, issue a decision, or take any other
action appropriate to the circumstances of the claim. The district
director must enjoy some degree of flexibility in determining how to
proceed once evidentiary development has concluded. For example, the
district director may determine, in light of evidence submitted by the
designated responsible operator, that one or more additional
potentially liable operators must be notified of the claim, or that a
previously notified potentially liable operator should be designated
the responsible operator. In such cases, the district director must
have sufficient authority to permit the parties to submit additional
evidence on the liability issue. Accordingly, the Department does not
view the authority provided the district director as excessive.
(e) One comment states that eliminating the requirement in
Sec. 725.414, as initially proposed, that all documentary medical
evidence be submitted to the district director has also eliminated the
need to strengthen the integrity of the district director's
adjudication. The Department disagrees. In light of the Department's
final revisions, the proposed decision and order will be the only
decisional document that the district director issues addressing the
claimant's eligibility for benefits and the liability of a responsible
operator for the payment of those benefits. A substantial number of
claimants currently accept the district director's conclusions
regarding their eligibility, and do not seek further review of their
claims for benefits. The alternative to issuing proposed decisions and
orders--referring all cases to the Office of Administrative Law Judges
(OALJs) for a formal hearing on the merits--would represent a
considerable and unnecessary expenditure of the resources of the OALJs,
the Office of Workers' Compensation Programs, and the coal mine
operators who must litigate such cases. Accordingly, the Department
does not agree that Sec. 725.415 should be revised to retain the
current rule under which district directors may simply forward cases to
the OALJs. Also, issuance of some document is necessary to establish
the date from which the parties' modification rights begin to run. The
Department believes that it will be easier for all parties if there is
only one such document in each case.
(f) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.416
(a) In its first notice of proposed rulemaking, the Department
proposed revising subsection (c) to provide for the imposition of
sanctions on any party that failed to appear at a scheduled informal
conference and whose absence was not excused. The Department also
proposed revising subsection (d) to put parties on notice that those
attending the conference would be deemed to have the authority to
stipulate to facts or issues or resolve the claim. 62 FR 3361 (Jan. 22,
1997). In its second notice of proposed rulemaking, the Department
responded to a number of comments from a variety of sources urging the
elimination of informal conferences.
[[Page 79995]]
Although the Department declined to eliminate conferences, it proposed
revising subsection (b) to require the district director to articulate
specific reasons for holding one. In the absence of such a statement,
the district director would be prohibited from imposing sanctions for a
party's failure to appear. In addition, in order to reduce parties'
costs, the Department proposed to recognize the current practice of
allowing parties to participate in informal conferences by telephone.
64 FR 54996 (Oct. 8, 1999).
(b) A number of comments generally oppose the use of informal
conferences, contending they create additional delay and complexity in
district director claims processing. As explained in both its first and
second notices of proposed rulemaking, the Department believes that
informal conferences may serve useful purposes, including, in
appropriate cases, narrowing issues, achieving stipulations, and
crystallizing positions. 62 FR 3361 (Jan. 22, 1997); 64 FR 54996 (Oct.
8, 1999). The Department agrees, however, that conferences should not
unduly delay the further adjudication of a claim. In addition, they
should be held only in appropriate circumstances. Accordingly, the
Department has made two major changes to Sec. 725.416. In subsection
(a), the Department has added the requirement that a district director
conduct any conference within 90 days of the date on which the period
for submitting evidence under Sec. 725.410(b) closes, unless one of the
parties requests a postponement for good cause. The Department has also
deleted the reference in subsection (b) to the district director's
discretion to reschedule conferences. Subsection (a) permits the
district director to reschedule conferences, but only upon the motion
of a party. The Department has also replaced the reference to
Sec. 725.413(c)(2) in subsection (a) with a reference to
Sec. 725.410(b) in order to reflect a change in those regulations. In
addition, in order to further limit the delay caused by informal
conferences, the Department will continue to require that the district
director issue a decision within 20 days of the close of all conference
proceedings, including the time permitted for the submission of any
additional evidence. See Sec. 725.417.
The Department has made a second major change to Sec. 725.416 to
remove any appearance of impropriety in the informal conference
process. The district director is a subordinate of the Director, Office
of Workers' Compensation Programs, a party in each claim for black lung
benefits. The district director is also responsible for the development
of evidence on behalf of the Black Lung Disability Trust Fund. These
dual roles may affect the degree to which the district director is
viewed as a neutral arbiter of the issues before him. An appearance of
a conflict of interest is particularly troubling in a case in which
there is no operator liable for the payment of benefits, and the
claimant lacks representation. In order to minimize any appearance of
unfairness, the Department believes that conferences should be held
only when all parties are capable of making informed judgments to
protect their own interests. Accordingly, in addition to explaining why
holding a conference in a particular claim would be beneficial, the
Department will inform the parties that no conference will be held if
all parties do not have representation. In the event that a claimant is
not represented, the district director will not hold a conference. An
appointed lay representative is sufficient, however, to allow an
informal conference to go forward, 20 CFR 725.362, 725.363 (1999). The
regulation extends the same protection to operators that are neither
insured nor self-insured. Many self-insured coal mine operators and
insurers do not obtain formal representation at this stage of
adjudication, but have claims processing personnel, either in their
offices or in the claims servicing organizations that they use, who are
knowledgeable concerning the entitlement and liability criteria of the
Black Lung Benefits Act and its implementing regulations. The
Department believes that such personnel should be able to enter into
binding stipulations on behalf of the self-insured or insured coal mine
operator. The Department has replaced the reference to Sec. 725.362 in
subsection (d) with a reference to subsection (b) to accomplish this
result. Accordingly, the regulation deems that such operators are
represented for purposes of scheduling an informal conference. By
contrast, the Department intends that operators that are neither
insured nor self-insured--operators that are not often called upon to
participate in the adjudication of black lung benefits claims--should
not be asked to enter into stipulations without the benefit of a formal
representative's advice. Because there will no longer be any
conferences involving unrepresented claimants, the Department has
deleted the last two sentences of subsection (e). The district director
may continue to exercise his discretion, however, to determine whether
parties understand any stipulations which they are asked to enter.
Exercise of this discretion is particularly important where a claimant
is represented by a lay representative.
(c) One comment submitted in connection with the first notice of
proposed rulemaking and renewed in connection with the second notice of
proposed rulemaking objects to the regulation contending it improperly
provides for an adjudication of the claim before the district director
that is neither on the record nor under oath. The commenter also
objects generally to the discretion given the district director to
determine the procedures to be used at the conference. The Department
recognizes that the informal conference will not be conducted under
oath and on the record, but believes that the changes it has made to
the informal conference procedures obviate this objection. As revised,
an informal conference will only be held if all parties to a claim are
represented or are deemed to be represented. This revision removes the
danger that the district director will be able to obtain a stipulation
from an unsophisticated party. Moreover, following the termination of
the informal conference proceedings, the district director will issue a
proposed decision and order. The district director's ``adjudication''
of the claim is thus subject to the consent of the parties. A request
for a hearing will require the district director to forward the claim
to the Office of Administrative Law Judges for de novo adjudication.
Consequently, the district director's inability to conduct the informal
conference under oath, and to have the conference transcribed, will not
affect the substantive rights of any party.
(d) No other comments have been received concerning this section.
20 CFR 725.417
(a) In its first notice of proposed rulemaking, the Department
proposed revising subsection (b) to incorporate the limitations on
documentary evidence contained in Sec. 725.414. 62 FR 3361 (Jan. 22,
1997). The Department did not discuss Sec. 725.417 in its second notice
of proposed rulemaking. See list of Changes in the Department's Second
Proposal, 64 FR 54971 (Oct. 8, 1999).
(b) The Department has revised subsection (b) to clarify the
district director's authority to seek additional information on the
issue of responsible operator liability even after he has held a
conference. The conference may provide the district director with
additional information regarding the claimant's employment history.
Accordingly, subsection (b) authorizes the district director to issue
another
[[Page 79996]]
notification of potential operator liability under Sec. 725.407 and/or
another schedule for the submission of additional evidence under
Sec. 725.410.
(c) One comment objected to the requirement in proposed subsection
(d) that parties respond in writing to the district director's
memorandum of conference. The Department agrees that this response is
unnecessary, and has further streamlined its informal adjudication of
claims by eliminating in its entirety the memorandum of conference and
the required response that would have followed. Instead, at the
conclusion of informal conference proceedings, including the submission
of any additional evidence, the district director will issue a proposed
decision and order under Sec. 725.418. The Department has also revised
subsection (b) in order to clarify the meaning of the sentence.
(d) One comment urges the Department to create a time limit within
which the district director must issue a decision after holding a
conference. Subsection (c), 20 CFR 725.417(c) (1999), requires the
district director to issue a decision within 20 days of the conclusion
of the informal conference proceedings. Consequently, no change in the
regulation is required.
(e) One comment submitted in connection with the first notice of
proposed rulemaking recommended amending subsection (b) to allow
submission of post-conference supplementary reports from any physician
who has already prepared a report if clarification of the physician's
report is needed. No change in the proposed regulation is necessary. A
party may request the opportunity to submit additional evidence post-
conference which may further support its position or a physician's
views. The only restriction imposed by subsection (b) is that such
additional evidentiary development cannot circumvent the numerical
limitations in Sec. 725.414. To the extent that the comment implies a
``clarifying'' report should be considered an extension of the initial
report, the Department disagrees. Excluding supplementary reports from
the Sec. 725.414 limitations would create an exception which
eviscerates the limitation. A party could invite comment from the
physician on almost any aspect of the medical evidence in the record
under the guise of ``clarifying'' the physician's views in light of
that evidence. In effect, the supplementary report would constitute
another medical report. Moreover, any internal ambiguity or omission in
the physician's opinion should be apparent upon receipt and review of
the report, and can therefore be corrected before submitting the report
into the record. If, however, some aspect of a physician's report has
been the subject of rebuttal evidence by an opposing party,
Sec. 725.414 does allow the rehabilitation of the original report by
the submission of a clarifying report from the original doctor. Such
rehabilitative evidence is allowed by the evidentiary limitations in
Sec. 725.414.
(f) One comment argues that the regulation is questionable in light
of the changes made to Sec. 725.414. In the absence of any further
explanation by the commenter, the Department is unable to respond.
(g) The Department received no other comments concerning this
section.
20 CFR 725.418
(a) The Department proposed revising subsection (a) in its first
notice of proposed rulemaking to identify the proposed decision and
order as the step which follows a district director's memorandum of
conference or, if no conference was held, the period established by the
district director for the submission of evidence. The revision was
intended to require the issuance of a proposed decision and order in
each case, and to eliminate the district director's option of referring
the case for a hearing without issuing a proposed decision and order.
62 FR 3361 (Jan. 22, 1997). The Department did not discuss Sec. 725.418
in its second notice of proposed rulemaking. See list of Changes in the
Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999).
(b) The Department has added subsection (d) to provide explicitly
that, to the extent he has not done so before, the district director
must dismiss, as parties to the claim, all potentially liable operators
except one. Moreover, the regulation guarantees that no operator may be
the finally designated responsible operator unless it: (1) Was notified
of its potential liability pursuant to Sec. 725.407, and thus given the
opportunity to submit evidence under Sec. 725.408; and (2) given the
opportunity to submit additional evidence relevant to the liability of
other potentially liable operators and the claimant's eligibility
pursuant to Sec. 725.410.
(c) The Department has deleted the reference in the first sentence
of subsection (a) to the parties' responses to the district director's
recommendations because a district director will no longer issue a
memorandum of conference following the termination of conference
proceedings. See preamble to Sec. 725.416. In its place, the Department
has added a reference to the 20-day time period provided by
Sec. 725.417(c) within which the district director must issue a
proposed decision and order. In addition, the Department has replaced
the reference to Sec. 725.413(c)(2) with a reference to 725.410(b) in
order to reflect changes to those regulations. The Department has
deleted the words ``to be'' in the first sentence of subsection (a) as
unnecessary, and has revised the last sentence of subsection (a) to
clarify the meaning of the regulation. The Department has also revised
subsection (b) to clarify that the proposed decision and order is the
document that must be served on the parties by certified mail.
(d) A number of comments objected to the Department's proposed
revision of Sec. 725.411, which would have treated a hearing request
filed before the conclusion of district director processing as a
request for the further adjudication of the claim. See 62 FR 3356 (Jan.
22, 1997). The Department believes that its amended procedures in
Secs. 725.410 through 725.412, 725.416--725.417, will eliminate much of
the confusion that has led parties to file hearing requests before the
conclusion of administrative processing. Whereas the Department's
original proposal authorized the district director to issue an initial
finding, a memorandum of conference, and a proposed decision and order,
the revised regulations provide for the issuance of only one decisional
document in most cases: A proposed decision and order. The Department
does agree, however, that it should honor any hearing request that is
filed by a party even if it is filed before the conclusion of a
district director's processing. Accordingly, the Department has added
subsection (c) to require that the proposed decision and order apprise
parties of their right to a hearing. Where a party has previously filed
a hearing request, and can reasonably be said to be aggrieved by the
proposed decision and order, the district director will inform the
party that the case will be referred to the Office of Administrative
Law Judges unless the party revokes its previous request. In the case
of a claimant who has previously requested a hearing, the district
director will forward the case if he has denied benefits. In the case
of an operator who has previously requested a hearing on either the
claimant's eligibility or its liability for benefits, the district
director will forward the case if he has awarded benefits.
(e) One comment submitted in connection with the first notice of
proposed rulemaking and renewed in response to the second notice of
proposed rulemaking expresses general
[[Page 79997]]
dissatisfaction with the issuance of a proposed decision and order
calling it an unnecessary procedural step. The issuance of this
document, however, is the logical culmination of the claims
adjudication process at the district director level. Under the revised
procedures adopted by the Department, it will serve as the district
director's only attempted resolution of the issues of claimant
eligibility and operator liability. The proposed decision and order
thus serves either as a final disposition of the claim if the parties
accept the decision, or as the conclusion of the initial stage of
adjudication if a party aggrieved by the result intends to pursue the
case to the hearing stage. The Department therefore rejects the
suggestion that a proposed decision and order is unnecessary.
(f) No other comments were received concerning this section.
20 CFR 725.419
The Department received two comments relevant to Sec. 725.419. This
section was not open for comment; only technical changes were made to
it. See 62 FR 3340-41 (Jan. 22, 1997); 64 FR 54970 (Oct. 8, 1999).
Therefore no changes are being made in it.
20 CFR 725.421
(a) In its first notice of proposed rulemaking, the Department
proposed deleting language in subsection (a) to allow district
directors to maintain the files of cases which have been referred to
the Office of Administrative Law Judges. Formerly, those files had been
sent to the national office of OWCP's Division of Coal Mine Workers'
Compensation. 62 FR 3361 (Jan. 22, 1997). The Department did not
discuss Sec. 725.421 in its second notice of proposed rulemaking. See
list of Proposed Changes in the Department's Second Proposal, 64 FR
54971 (Oct. 8, 1999).
(b) The Department has revised subsection (b)(3) to ensure that the
record is sufficient to establish that the district director provided
the finally designated responsible operator with notification of its
status as a potentially liable operator under Sec. 725.407 as well as
its designation as the responsible operator pursuant to Sec. 725.410.
In addition, the Department has revised subsection (b)(4) to ensure
that the record forwarded to the Office of Administrative Law Judges
contains only medical evidence submitted by the claimant and the
finally designated responsible operator or fund, as appropriate. See
explanation accompanying Secs. 725.414, 725.415. All evidence relevant
to the issue of operator liability shall be made a part of the record.
(c) In subsection (a), the Department has added the word
``evidentiary'' and deleted the phrase ``in the claim'' to clarify the
meaning of the sentence.
(d) One comment submitted in connection with the Department's first
notice of proposed rulemaking objects to subsection (c) because it
requires a party to pay for copies of documents which have previously
been provided. The commenter argues that claimants in particular are
unaware of the importance of keeping all documents associated with
their claims. No change is made in response to this comment. Subsection
(c) is a rule of general applicability, and affects responsible
operators and insurance carriers as well as claimants. The provision
states that the district director shall determine the amount of the
copying fee. It therefore allows the district director to consider
mitigating factors (the individual's financial condition, the cost of
the documents being replaced, etc.) as grounds for reducing or waiving
the copying fee. No other comments concerning this section were
received, and no changes have been made in it.
20 CFR 725.422
The Department received several comments relevant to Sec. 725.422.
This section was not open for comment; it was repromulgated without
alteration for the convenience of the reader; see 62 FR 3341 (Jan. 22,
1997); 64 FR 54971 (Oct. 8, 1999). Therefore, no changes are being made
in it.
20 CFR 725.423
(a) In its first notice of proposed rulemaking, the Department
proposed the addition of Sec. 725.423 to consolidate all of the
provisions governing extensions of time in subpart E of part 725. With
the exception of two time periods, one in Sec. 725.411(a)(1)(i)
governing a claimant's response to an unfavorable initial finding and
the other in Sec. 725.419 governing responses to a district director's
proposed decision and order, the proposed regulation would have allowed
any time period to be extended for good cause shown provided a request
for an extension was filed before the time period expired. 62 FR 3361
(Jan. 22, 1997). The Department did not discuss Sec. 725.423 in its
second notice of proposed rulemaking. See list of Proposed Changes in
the Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999).
(b) The Department has eliminated the reference in Sec. 725.423 to
the time period set forth in Sec. 725.411(a)(1) because that time
period has been eliminated from the regulations. See preamble to
Secs. 725.410-.413.
(c) One comment submitted in connection with the first notice of
proposed rulemaking objects to a single regulation governing extensions
of time. The commenter would prefer individual provisions in each
affected regulation to add clarity to the proceedings. The Department
disagrees. In terms of an efficient structure for the program
regulations, a single provision with application to the entire Subpart
E is more logical than a series of repetitive provisions added to each
regulation containing a time frame for action.
(d) One comment submitted in connection with the first notice of
proposed rulemaking urges explicit recognition that a request for an
extension of time may be honored even if submitted after the time
period for taking action has expired. This suggestion cannot be
adopted. A ``well-settled'' principle of the black lung program
requires the parties to ``strictly adhere to the substantive and
procedural requirements of the Black Lung Benefits Act and its
implementing regulations.'' Jordan v. Director, OWCP, 892 F.2d 482, 486
(6th Cir. 1989). Strict adherence to clearly delineated time frames for
taking action promotes ``a just, efficient and final resolution'' of
claims. 892 F.2d at 487. Any party, however, may ask for additional
time to act. The Department believes a requirement that the extension
be sought before the time for acting elapses is reasonable. See
generally Fetter v. Peabody Coal Co., 6 Black Lung Rep. 1-1173, 1-1175
(1984). Each party has notice of when some action must be taken during
the adjudication process. Even if the party cannot complete the action
itself, it may at least complete the request for additional time.
Submitting a timely request for an extension is not an onerous burden.
(e) One comment recommends including proposed Sec. 725.411(a)(1)(i)
among the time periods which can be extended. As originally proposed,
section 725.411(a)(1)(i) would have afforded a claimant who has been
denied benefits one year from the district director's initial finding
within which to request further adjudication. The revisions made by the
Department to Secs. 725.410-.413 have eliminated the time period in
Sec. 725.411(a)(1)(i). Accordingly, the comment is no longer relevant.
(f) One comment urges the Department to specify that a party cannot
seek an extension of its right to file a request for modification under
Sec. 725.310 if that request is not filed before the expiration of the
one-year
[[Page 79998]]
time period. By its terms, section 725.423 governs the extension of
time periods in subpart E of part 725. It thus does not govern section
725.310, which is located in subpart C. The Department does not believe
that a catchall provision for the entire part 725 is appropriate, and,
in the absence of such a provision, believes that Sec. 725.423 should
not include a reference to any regulations outside of subpart E.
(g) One comment argues that the Department should not create a non-
statutory jurisdictional bar by refusing to permit an extension of time
in the case of a proposed decision and order. The commenter argues that
the Department's regulation violates the rights of parties under the
Administrative Procedure Act and the Black Lung Benefits Act to obtain
a hearing. The Department disagrees. The time limit established by
Sec. 715.419 for responding to a proposed decision and order is
necessary to create finality in those cases where no party contests the
district director's initial adjudication of a claim. In the event that
the Department issues a proposed decision and order awarding benefits
and the designated responsible operator fails to respond in a timely
manner, the Department must be able to enforce the award against the
operator. Enforcement of an award under Sec. 21(d) of the Longshore and
Harbor Workers' Compensation Act, 33 U.S.C. 921(d), as incorporated by
30 U.S.C. 932(a), and the collection of benefits owed the Black Lung
Disability Trust Fund under 30 U.S.C. 934, however, require that the
decision and order awarding benefits be final. The time limit in the
current version of Sec. 725.419, 20 CFR 725.419 (1999), has been
interpreted to be jurisdictional, Freeman United Coal Mining Co v.
Benefits Review Board, 942 F.2d 415, 422 (7th Cir. 1991), and
Sec. 725.423 simply recognizes that interpretation. Contrary to the
commenter's suggestion, assigning finality to a district director's
proposed decision and order awarding benefits in the absence of a
timely objection by the designated responsible operator violates no
provision in the Administrative Procedure Act or the Black Lung
Benefits Act. Nothing in either statute requires the Department to give
effect to a party's late request for a hearing following the conclusion
of the district director's administrative proceedings.
(h) No other comments were received concerning this section.
Subpart F
20 CFR 725.452
(a) The Department proposed adding subsection (d) in its first
notice of proposed rulemaking to prohibit the deciding of a case
without holding a hearing unless the administrative law judge believes
an oral hearing is not necessary, notifies the parties that he intends
to decide the case on the record, and the parties do not object. 62 FR
3361 (Jan. 22, 1997). The Department did not discuss this regulation in
its second notice of proposed rulemaking. See list of Changes in the
Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999).
(b) One comment objects to the Department's insistence on an in-
person hearing. The commenter states that an administrative law judge
should be entitled to decide whether a hearing is necessary in the
event that the parties disagree. The regulation reflects the
Department's consistent position that any party is entitled to a
hearing before an administrative law judge in a case that is not
appropriate for summary judgment. Section 19(c) of the Longshore and
Harbor Workers' Compensation Act requires a hearing ``upon application
of any interested party.'' 33 U.S.C. 919(c), as incorporated by 30
U.S.C. 932(a). In its recent decision in Robbins v. Cyprus Cumberland
Coal Co., 146 F.3d 425, 430 (6th Cir. 1998), the Sixth Circuit
recognized the existence of such a right in a modification proceeding.
See also Cunningham v. Island Creek Coal Co., 144 F.3d 388, 389-90 (6th
Cir. 1998); Pyro Mining Co. v. Slaton, 879 F.2d 187, 190 (6th Cir.
1989). The Robbins court explained several reasons for requiring an in-
person hearing:
The mere fact that parties rarely bring a live expert is
immaterial. [The claimant] should have had the opportunity to bring
a live expert. Additionally, although the ALJ required any
documentary evidence to be introduced in advance, the Director
correctly points out that [the claimant] could request and receive
permission at a hearing to introduce additional documentary
evidence.
146 F.3d at 429. The in-person hearing also allows the parties to offer
lay testimony on such issues as the miner's employment and medical
history. Finally, the Department believes that guaranteeing the ability
of all parties to appear before a highly qualified administrative law
judge increases the parties' confidence in the fairness and
impartiality of the adjudication process. Contrary to the commenter's
suggestion, the Department does not insist that an in-person hearing
must be held in every case. The parties remain free to move for summary
judgment under subsection (c) in those rare cases where there is no
genuine dispute as to a material issue of fact. In all other cases,
however, the Department's revised regulation gives each party to a
claim the right to insist on an in-person hearing. Permitting the
cancellation of a hearing over the objection of even one of the
parties, in a case involving disputed facts, would contravene the
explicit command of 33 U.S.C. 919, as incorporated by 30 U.S.C. 932(a).
No other comments were received concerning this section, and no changes
have been made in it.
20 CFR 725.453
Although the Department received comments under this section, the
regulation was not open for comment, see 62 Fed. Reg. 3341 (Jan. 22,
1997); 64 Fed. Reg. 54970-71 (Oct. 8, 1999). The regulation was
repromulgated only for the convenience of readers. Accordingly, no
changes are being made in this section.
20 CFR 725.454
(a) In its first notice of proposed rulemaking, the Department
proposed eliminating the provision allowing administrative law judges
to reopen the record for the receipt of additional evidence for ``good
cause.'' 62 FR 3361 (Jan. 22, 1997). The Department's proposal
reflected the evidentiary limitations then imposed by Sec. 725.414. The
Department did not discuss the regulation in its second notice of
proposed rulemaking. See list of Changes in the Department's Second
Proposal, 64 FR 54971 (Oct. 8, 1999).
(b) Several comments submitted in response to both the Department's
1997 proposal and its 1999 reproposal oppose removal from the current
regulation of the administrative law judge's authority to reopen the
record to receive additional evidence for good cause shown. The
Department responded to those objections when it reproposed
Sec. 725.414(c), (d) and Sec. 724.456(b) for additional comment. 64 FR
54994-95 (Oct. 8, 1999). At that time, the Department changed the
proposed standard for the admission of documentary medical evidence in
excess of the regulations' numerical limitations from one of
``extraordinary circumstances'' to ``good cause,'' while leaving the
standard for admission of additional evidence relating to operator
liability--evidence that was not submitted to the district director--
one of extraordinary circumstances. In any event, the standard to be
used to govern the introduction of documentary evidence while a case is
pending before the Office of Administrative Law Judges
[[Page 79999]]
more properly belongs in Sec. 725.456, and it remains there. In that
regulation, medical evidence in excess of the limitations contained in
Sec. 725.414 may be admitted into the record upon a showing of good
cause. No change has been made in Sec. 725.454 in response to these
comments.
(c) One comment recommends clarifying subsection (a) to underscore
the claimant's right to request a hearing site somewhere outside the
75-mile radius around his residence for the convenience of his
representative. No change is made in response to this comment.
Subsection (a) specifically provides that a claimant may request an
alternate location, and does not limit the site to a specific area or
distance from the claimant's residence. A claimant may therefore
request the administrative law judge to move the hearing site beyond
the 75-mile boundary. Claimants, however, cannot be accorded an
unqualified right to determine where hearings should be convened. All
matters relating to the conduct of the hearing are ultimately the
responsibility of the administrative law judge. He or she must balance
the interests and rights of all the parties against the convenience of
a particular site for the claimant. Consideration must also be given to
administrative convenience and the efficient allocation of human and
financial resources in general. An administrative law judge generally
schedules several claims for adjudication in one location.
(d) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.456
(a) The Department proposed revising section 725.456 in its first
notice of proposed rulemaking in order to reflect its original proposal
in Sec. 725.414 requiring parties to submit all of their documentary
evidence to the district director. As originally proposed, section
725.456 would have prohibited the introduction of any additional
evidence before the administrative law judge in the absence of
extraordinary circumstances. 62 FR 3361-62 (Jan. 22, 1997). In its
second notice of proposed rulemaking, the Department eliminated the
requirement in Sec. 725.414 that parties submit all of their
documentary medical evidence to the district director in the absence of
extraordinary circumstances, although it retained that requirement with
respect to documentary evidence relevant to the issue of operator
liability. Instead, the Department proposed allowing admission of
documentary medical evidence in excess of the Sec. 725.414 numerical
limitations upon a showing of good cause. Accordingly, in its second
proposal, the Department revised section 725.456, adding subsections
from 20 CFR 725.456 (1999) to govern the submission of documentary
medical evidence to the administrative law judge. 20 CFR 725.456(b)(1)-
(3), (c), (d) (1999). The Department also revised subsection (f), now
subsection (e), to reflect changes to Sec. 725.406. 64 FR 54996 (Oct.
8, 1999).
(b) A number of comments object to the Department's addition of
proposed subsection (c) to Sec. 725.456, which prohibits parties from
introducing documentary evidence at the formal hearing that was in
their possession while the case was pending before the district
director and was withheld from the district director or any other
party. Several of the comments argue under a parallel provision,
proposed Sec. 725.414(e), that the provision will most severely affect
claimants who are not represented by counsel while the case is pending
before the district director, and who may unwittingly fail to provide
the district director with evidence that they have developed. Another
comment urges the Department to harmonize subsection (c) with section
725.414(e).
Subsection (c) was originally promulgated by the Department in
1978, and was designed to ensure that the district director's initial
determination of the claimant's eligibility was based on all of the
available evidence regarding the miner's medical condition. The
subsection was also designed to ensure that the parties had adequate
time to respond to an opponent's evidence. See 43 FR 36794, 36798 (Aug.
18, 1978). The revised regulations, however, will significantly alter
the adjudication of black lung benefits cases. In particular, the
district director will make his initial determination in reliance on a
complete pulmonary evaluation performed by a highly qualified
physician, and will already have all of the evidence relevant to the
identification of the responsible coal mine operator. Moreover, as the
commenters point out, an unrepresented claimant who obtains an opinion
from his treating physician may inadvertently fail to submit it to the
district director, and, under proposed subsection (c), would be
prevented from submitting it thereafter to the administrative law
judge. In addition, the 20-day requirement in subsection (b)(2) will
ensure that parties have an adequate period in which to respond to the
opposing party's evidence. Thus, the Department does not believe that
subsection (c) remains necessary. Neither of the stated bases for the
original adoption of the rule remain. Accordingly, proposed subsection
(c) is deleted, and proposed subsections (d), (e), and (f) are
redesignated as subsections (c), (d), and (e), respectively. The
Department has made a corresponding deletion of proposed section
725.414(e). Since both subsections are now deleted, there is no need to
harmonize them.
(c) One comment argues that the Department's revision imposes
increased costs on coal mine operators by ``front-loading'' the
evidentiary development process in claims where such development is
unnecessary or could be delayed. This comment appears to be based on
the mistaken belief that the Department's regulations continue to
require the parties to submit all of their documentary medical evidence
to the district director. The Department revised its proposal in 1999,
and Sec. 725.456, as reproposed, will allow both the claimant and the
designated responsible operator in a claim to delay their development
of documentary medical evidence until shortly before the formal
hearing. In the event that a claim does not proceed beyond the district
director level, the operator will not have to develop any medical
evidence. This is the operators' current practice in many claims.
The Department acknowledges, however, that operators will still be
required to submit evidence regarding their potential liability for the
claim to the district director while the claim is being adjudicated at
this earliest stage. Under the former regulations, an operator did not
have to submit any evidence to support its denial of liability until
the case was referred to the Office of Administrative Law Judges for a
formal hearing. In a number of cases, where no party requested a
hearing, the operator did not need to develop or submit this evidence
at all. Thus, the commenter's observation that the revised regulations
will require the ``up-front'' development of evidence is well-taken
with respect to operator liability evidence. In both its initial notice
of proposed rulemaking and its second notice of proposed rulemaking,
however, the Department explained its intention to require potentially
liable operators to submit evidence relevant to their employment of the
miner and their financial capability to pay benefits at the earliest
possible stage. 62 FR 3355-56 (Jan. 22, 1997); 64 FR 54990-91 (Oct. 8,
1999). In these final regulations, the Department has also required
operator development and submission of any evidence relevant to the
liability of another party during the district director's claims
processing. Evidentiary
[[Page 80000]]
development as to other parties will be necessary, however, only in
that small percentage of claims in which the identity of the
responsible operator is in serious question. See Sec. 725.414(b). The
Department continues to believe that these requirements are justified
by the Department's need to ascertain the positions of potentially
liable operators on these issues while the case is pending before the
district director, especially given the fact that potentially liable
operators other than the designated responsible operator will no longer
be parties once a case has been referred to the Office of
Administrative Law Judges. In addition, the Department continues to
believe that the increased costs that operators will have to bear as a
result of this ``front-loading'' will not be significant.
(d) One comment submitted in response to the 1997 proposal and the
1999 reproposal states that the Department's revision eliminates the
authority of administrative law judges to perform certain functions.
Another comment argues that the revision marginalizes administrative
law judges and demeans their powers and duties. Although neither
comment offers specific examples of functions, powers, and duties that
the Department has eliminated by revising section 725.456, the
Department has independently reviewed the provision and does not
believe that it eliminates any function currently performed by the
administrative law judge, nor any power or duty that administrative law
judges currently possess. Under the revised regulations, administrative
law judges will retain full authority to decide any issue in respect of
a claim, as required by section 19(a) of the Longshore and Harbor
Workers' Compensation Act, 33 U.S.C. 919(a), as incorporated by 30
U.S.C. 932(a). Neither the Longshore Act nor the Administrative
Procedure Act gives administrative law judges the right to demand that
more evidence be made available for their decision-making. To the
extent that they are unpersuaded by the evidence of record, the
administrative law judge must decide that issue against the party that
bears the burden of producing the evidence on that issue.
(e) One comment argues that the revised regulation denies the
rights of all parties to fully cross-examine adverse evidence and
witnesses. The Department does not agree that section 725.456 affects
the rights of any party to cross-examine adverse evidence. In
Richardson v. Perales, 402 U.S. 388, 409 (1971), the Supreme Court
emphasized the importance of preserving the parties' ability to cross-
examine the authors of written medical reports, the evidentiary basis
of Social Security's disability determinations. Similarly, the
Department's regulations provide all parties with a full and fair
opportunity to conduct cross-examination. If the author of a report
testifies at the hearing, the opposing party may clearly avail itself
of the opportunity to conduct live cross-examination. In cases where
the documentary medical evidence stands on its own, the opposing party
may question the author of the report under conditions determined by
the administrative law judge. See Sec. 725.459. Finally, the
administrative law judge has the authority, in appropriate cases, to
issue a subpoena to compel the attendance of a witness at the hearing.
In addition, in any case involving documentary medical evidence, the
opposing party has the right, under section 725.414, to submit
documentary rebuttal evidence of its own. Accordingly, the Department
does not agree that its revisions to 725.456 in any way limit the right
of parties to conduct an effective cross-examination.
(f) One comment argues that a party should not be required to make
an independent showing of ``good cause'' in order to put on its case.
The Department does not agree that Sec. 725.456 prohibits a party from
putting on its affirmative case. In combination with Sec. 725.414, this
provision places reasonable limitations on the number of medical
reports and tests that a party may submit into evidence. A showing of
``good cause'' is necessary only in the event that a party seeks to
convince the administrative law judge that the particular facts of a
case justify the submission of additional medical evidence, either in
the form of a documentary report or testimony. The Department believes
that in the majority of cases, the quantity of medical evidence
permitted by the regulations, even in the absence of a good cause
showing, will provide a more than adequate evidentiary basis for an
administrative law judge to determine the claimant's eligibility for
benefits.
(g) Three comments approve of the Department's reinstatement of the
20-day rule governing the introduction of documentary evidence before
the administrative law judge.
(h) One comment argues that Sec. 725.457(d) is invalid in that it
prohibits a physician from testifying as to medical evidence relevant
to the miner's condition that is not contained in the record. This
comment is more appropriately addressed under section 725.457.
(i) No other comments were received concerning this section and no
other changes have been made in it.
20 CFR 725.457
(a) In its initial notice of proposed rulemaking, the Department
proposed revising subsection (c) to conform the regulation to the
requirement then in Sec. 725.414 that a party identify all of its
potential witnesses while the claim was pending before the district
director. The Department also proposed adding a subsection (d) to
address the permissible scope of a medical witness's testimony. 62 FR
3362 (Jan. 22, 1997). In light of changes to Sec. 725.414 in the second
notice of proposed rulemaking, the Department proposed altering the
witness identification requirement so that it applied only to witnesses
who were testifying to the liability of a potentially liable operator
or the designation of the responsible operator. Thus, under the
reproposal, the testimony of witnesses relevant to the liability of a
potentially liable operator and/or the identification of the
responsible operator was permissible only if the identity of that
witness was disclosed to the district director.
In the second proposal, the Department eliminated the requirement
that parties identify their medical witnesses while the case was
pending before the district director because, as revised, the
regulations allowed parties to forego development of medical evidence
until a case was referred to the Office of Administrative Law Judges.
In the reproposal, the testimony of medical witnesses was limited by
only two considerations. First, the total number of medical reports and
medical witnesses offered by a party could not exceed the limitations
set forth in Sec. 725.414 except upon a showing of good cause. Second,
a party had to provide the other parties to a claim with appropriate
notice of a witness' testimony: 10 days notice of any expert witness
who would testify at the hearing, or 30 days notice of a deposition.
The Department also revised subsection (d) to permit physicians to
testify with respect to any medical evidence relevant to the miner's
physical condition that was admitted into evidence. 64 FR 54996 (Oct.
8, 1999). The Department has added a clause to subsection (a) to
clarify its intent that parties provide 10 days notice of any medical
witness that they intend to present at the hearing, including witnesses
who have prepared a medical report that has already been submitted into
evidence.
(b) One comment argues that it is unreasonable to require a party
to
[[Page 80001]]
identify a testifying witness while the claim is pending before the
district director and that the requirement illegally diminishes the
authority of the administrative law judge who conducts the hearing. The
Department disagrees. This limitation is a reasonable extension of the
requirement, set forth in Subpart E, that parties develop all of the
evidence relevant to the liability of potentially liable operators
while the case is pending before the district director. In both notices
of proposed rulemaking, the Department explained that requiring the
submission of evidence relevant to liability was intended to offset the
risk that the Black Lung Disability Trust Fund would be required to
assume liability in the event that none of the potentially liable
operators named by the district director was ultimately determined to
be the responsible operator. See 62 Fed. Reg. 3355-56 (Jan. 22, 1997);
64 Fed. Reg. 54993 (Oct. 8, 1999). A party should not be able to avoid
the required evidentiary development before the district director by
submitting its evidence to the administrative law judge in the form of
witness testimony. Accordingly, the regulations require that parties
identify all such witnesses while the case is pending before the
district director. The regulations also recognize, however, that a
party may submit additional documentary evidence on the liability issue
at the hearing upon a showing of extraordinary circumstances,
Sec. 725.456(b)(1), and the regulations should provide the same
standard for allowing witnesses' testimony. For example, the Department
intends that a party will have shown extraordinary circumstances to
present the testimony of a previously unidentified witness whose
testimony is relevant to the issue of operator liability when the
witness originally identified by the party is no longer available to
testify. Accordingly, the Department has revised subsection (c)(1) to
reflect this exception. The Department has also revised subsection
(c)(1) to reflect its decision to permit the district director to refer
the case to the Office of Administrative Law Judges with only one
potentially liable operator, the designated responsible operator, as a
party to the claim. The Department has also added a clause to
subsection (c)(2) to clarify its intent that the combination of
physician testimony and documentary medical reports may exceed the
numerical limitations of Sec. 725.414 only upon a showing of good
cause. The Department has also deleted the last clause of this
subsection; the introductory sentence of subsection (c) is sufficient
to make clear the Department's intent that the limitations in the
subsection are intended to govern testimony at a hearing as well as by
deposition or interrogatories.
The Department does not agree, however, that revised Sec. 725.457
diminishes the authority of administrative law judges. Under the
procedures incorporated into the Black Lung Benefits Act from the
Longshore and Harbor Workers' Compensation Act and the Administrative
Procedure Act, administrative law judges are neutral arbiters of the
issues presented to them for resolution. Based on the evidence
submitted by the parties within the confines of the regulations
promulgated by the Secretary, ALJs have ``full power and authority to
hear and determine all questions in respect of such claim.'' 33 U.S.C.
919(a), as incorporated by 30 U.S.C. 932(a). The requirement that
parties identify witnesses relevant to the issues of operator liability
while a case is pending before the district director, and the
limitation on expert testimony, are legitimate agency procedural rules
designed to ensure the timely presentation of the evidence needed to
adjudicate black lung benefits claims.
(c) Two comments state that the notice provision in subsection (a)
should be harmonized with section 725.414(c). The Department does not
believe that these provisions are in conflict. Subsection 725.414(c)
requires the designated responsible operator to identify witnesses
whose testimony may be introduced, either at the hearing or by
deposition, on the issues relevant to operator liability while the
claim is pending before the district director in the absence of
extraordinary circumstances. The Department anticipates that the vast
majority of these witnesses will be ``fact witnesses,'' i.e., witnesses
whose testimony will establish certain facts pertaining to the miner's
employment. For example, an operator may present testimony to establish
that the claimant did not work as a miner while working for the
operator, or that the claimant was not exposed to coal mine dust.
Because these witnesses are not ``expert witnesses,'' the 10-day notice
requirement of section 725.457(a) is inapplicable. In cases where the
witness who will appear at the hearing is an expert witness, such as a
witness who will testify to the coal industry's use of certain terms in
a coal mine lease, the party offering that witness's testimony must
also provide 10 days notice to all other parties to the claim. That
time allows the other parties sufficient time to prepare to cross-
examine the expert witness at the hearing. If the witness testifies by
deposition, the 30-day notice required by Sec. 725.458 provides
sufficient time for preparation.
(d) One comment argues that the Department's limitation on the
testimony of physicians found in Sec. 725.457(d) is more restrictive
than that in the Federal Rules of Evidence and inconsistent with
section 23 of the Longshore and Harbor Workers Compensation Act, 33
U.S.C. 923, as incorporated by 30 U.S.C. 932(a). The Department's
regulation prohibits a physician who offers testimony from relying on
materials relevant to the miner's medical condition that are not part
of the record. The commenter contrasts the regulation with the Seventh
Circuit's recent decision in Peabody Coal Co. v. Director, OWCP, 165
F.3d 1126 (7th Cir. 1999). In Peabody Coal, the Seventh Circuit
reversed an award of benefits because the administrative law judge had
discredited a medical opinion that was based on an autopsy review not
admitted into the record. The court held that under Rule 703 of the
Federal Rules of Evidence, an expert witness may base his opinion on
materials that ``need not be admissible, let alone admitted, in
evidence, provided that they are the sort of thing on which a
responsible expert draws in formulating a professional opinion.'' 165
F.3d at 1128. The court further noted that it could not think of any
reason why black lung adjudications should be subject to tighter
restrictions on expert testimony, and added that ``[n]either Congress
nor the Department of Labor thinks so. Nothing in the statute or
regulations applicable to such cases supports the decision of the
administrative law judge to impose tighter limits on expert witnesses
in black lung cases than the Federal Rules of Evidence impose in
ordinary civil and criminal trials.'' 165 F.3d at 1129.
The regulations under which Peabody Coal was adjudicated, however,
did not contain any limitations on the quantity of medical evidence
that a party was entitled to submit to the administrative law judge.
Because the Department has now limited the amount of documentary
medical evidence in the record, it cannot allow parties to avoid that
limitation by presenting an expert witness who will be free to examine
additional material that may not be admitted into the record. For
example, if the party has already submitted a medical report prepared
by one physician, and a consultative report prepared by a second
physician, it is not entitled to submit the consultative report of a
third physician in the absence of good cause. The regulation ensures
that the party is not allowed to
[[Page 80002]]
avoid that limitation simply by having the second physician testify,
not only about his own conclusions, but also about the conclusions
reached by a third doctor. The Department believes that the limitation
contained in subsection (d) is an appropriate means of ensuring the
parties' adherence to the evidentiary limitations imposed by section
725.414. Like section 725.414, the revised version of section 725.457
will apply only to claims filed after the effective date of these
regulations.
Contrary to the commenter's objection, then, the Department's
revision does not ``violate'' the Seventh Circuit's decision in Peabody
Coal. The court did not base its decision on an interpretation of
unambiguous statutory language, but by using the Federal Rules of
Evidence in a case in which the statute and regulations were silent.
165 F.3d at 1129. By promulgating a regulation that will produce a
result contrary to the court's decision in the same circumstances, the
Department has simply exercised its authority to fill in a gap
identified by the court. ``The power of an administrative agency to
administer a congressionally created * * * program necessarily requires
the formulation of policy and the making of rules to fill any gap left,
implicitly or explicitly, by Congress.'' Morton v. Ruiz, 415 U.S. 199,
231 (1974).
Nor does section 725.457 violate section 23 of the Longshore Act.
Section 23(a) provides that an administrative law judge ``shall not be
bound by common law or statutory rules of evidence or by technical or
formal rules of procedure, except as provided by this chapter.'' 33
U.S.C. 923(a), as incorporated by 30 U.S.C. 932(a). Even if this
provision could be read as prohibiting the Department from promulgating
any regulations under the Longshore Act that govern hearing procedures
and the submission of evidence, the Black Lung Benefits Act explicitly
authorizes the Secretary of Labor to promulgate regulations that vary
incorporated Longshore Act provisions in order to properly administer
the black lung benefits program. 30 U.S.C. 932(a); Director, OWCP v.
National Mines Corp., 554 F.2d 1267, 1274 (4th Cir. 1977). As discussed
above, the limitation on the scope of testimony by physicians set forth
in Sec. 725.457 is necessary in order to ensure that parties adhere to
the limitations on the quantity of medical evidence permitted each side
in the adjudication of a claim for black lung benefits. Accordingly,
the Department does not agree that the limitation violates section 23
of the Longshore Act.
(e) One comment approves of the Department's revision of the
regulation with respect to the testimony of medical witnesses.
(f) No other comments were received concerning this section.
20 CFR 725.458
(a) In its first notice of proposed rulemaking, the Department
proposed revising this regulation to ensure that the limitation on the
scope of a physician's testimony set forth in Sec. 725.457 was also
applicable to testimony offered by deposition and to responses to
interrogatories. 62 FR 3362 (Jan. 22, 1997). The Department did not
discuss this regulation in its second notice of proposed rulemaking.
See list of Changes in the Department's Second Proposal, 64 FR 54971
(Oct. 8, 1999). The Department did revise Sec. 725.457(d), however, in
order to allow a physician who testifies at a hearing to address all of
the medical evidence of record. By incorporating Sec. 725.457(d),
Sec. 725.458 also incorporated this expansion of the permissible scope
of a physician's testimony.
(b) The Department received several comments concerning the cross-
reference to Sec. 725.457(d). The reference to Sec. 725.457(d)
incorporates into the rule governing depositions and interrogatories
the limitations on the scope of physician-witnesses' testimony at
hearing. For the reasons expressed in connection with the reproposal of
Sec. 725.457, the scope of allowable physician testimony has been
broadened to allow a physician to address all of the other medical
evidence of record. 64 FR 54996 (Oct. 8, 1999). No response is
therefore necessary to comments addressing the operation of
Sec. 725.458, with one exception. One commenter suggests that
Sec. 725.458 will permit a party to introduce the deposition testimony
of physicians who have not previously submitted medical reports,
thereby circumventing the evidentiary limitations imposed by
Sec. 725.414. In the second notice of proposed rulemaking, the
regulation governing witness' testimony generally, Sec. 725.457, was
amended to make the Department's intent clear. 64 FR 55044 (Oct. 8,
1999). Subsection (c) specifically prohibits a witness' testimony, even
if taken by deposition or interrogatory, unless the witness meets the
requirements of Sec. 725.414. Thus, in the absence of a finding of good
cause pursuant to Sec. 725.456(b)(1), if a party has submitted the
maximum number of documentary medical reports permitted under
Sec. 725.414, it may not submit the testimony of a physician-witness at
a hearing or by deposition or interrogatory who has not submitted a
written medical report. A physician who has not submitted a written
report may testify only if the party has not yet reached the maximum
number of documentary medical reports allowed. In such a case, the
physician's testimony would not exceed the Sec. 725.414 limitations.
(c) One comment urged the Department to replace the 30-day notice
requirement in the regulation with a requirement that the parties need
only give ``reasonable notice'' of the date, time and place of the
deposition, and the name and address of each person to be examined, the
current requirement under Fed. R. Civ. P. 30(b)(1). The Department has
no reason to believe that the 30-day notice requirement has proved to
be unworkable or even has resulted in major inconvenience to the
parties in black lung benefits adjudications. Parties remain free under
the regulation to agree to less than 30 days' notice when they believe
it is reasonable to do so. Many parties to black lung claims do not
secure representation until shortly before the hearing, however, and
the Department believes that the 30-day notice of deposition, if sent
to an unrepresented party, provides an appropriate period of time not
only to obtain the necessary representation but also to arrange for
participation in a deposition.
(d) One comment submitted in connection with the Department's first
notice of proposed rulemaking urges the Department to require parties
to identify, while the case is pending before the district director,
all physicians that will be deposed. The commenter argues that this
requirement would expedite the claims process, eliminate surprise, and
require the timely development of positions. In its second notice of
proposed rulemaking, the Department eliminated the proposal, contained
in the first notice of proposed rulemaking, that parties submit all of
their documentary medical evidence while a case is pending before the
district director. The Department explained that the revision reflected
the wishes of numerous commenters, and was particularly necessary in
the case of claimants who might be unable to obtain representation
until shortly before the hearing. 64 FR 54992-93 (Oct. 8, 1999). In
light of this revision, the Department does not believe that it would
be appropriate to require parties to identify all medical witnesses
while a case is pending before the district director. This requirement
would effectively reinstate the original proposal by requiring parties
to
[[Page 80003]]
undertake the development of their case as to medical eligibility at
the earliest stage of adjudication. The Department believes that this
suggestion would adversely affect unrepresented claimants. Section
725.458 provides that all parties must give 30 days notice of any
deposition, and section 725.457(a) provides that parties must give 10
days notice of expert witnesses who will testify at the hearing. The
commenter has not suggested that these time periods, which were
contained in the program's former regulations, have proved to be
insufficient.
(e) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.459
(a) The Department proposed revising section 725.459 in its first
notice of proposed rulemaking in order to require any party who compels
a witness to appear at a deposition or hearing or respond to
interrogatories for the purpose of cross-examination to pay that
witness's costs. The Department also restructured and consolidated the
remainder of the regulation. 62 FR 3362 (Jan. 22, 1997). The Department
reconsidered how such costs should be assigned in its second notice of
proposed rulemaking, and proposed that the party offering the witness's
affirmative testimony should also pay any costs associated with his
subsequent cross-examination. The sole exception to this rule pertained
to indigent claimants and required administrative law judges to
apportion the costs of cross-examining a witness offered by such a
claimant between the claimant and the party or parties defending the
claim. 64 FR 54997 (Oct. 8, 1999). The second proposal also required an
administrative law judge to determine the least intrusive and expensive
means of cross-examination as appropriate and necessary for a full and
true disclosure of the facts. 64 FR 55044 (Oct. 8, 1999).
(b) The Department has substituted the term ``shall'' for the term
``may'' in the fourth and fifth sentences of subsection (b) in order to
clarify its intention that the administrative law judge is required,
rather than merely permitted, to consider the apportionment of the
costs of cross-examination in each case involving a witness offered by
an indigent claimant.
(c) Two comments approve of the Department's revision of section
725.459 to impose the costs of producing a witness for cross-
examination upon the party relying on the witness's opinion, as well as
the provision allowing administrative law judges to apportion costs in
cases involving indigent claimants.
(d) One comment argues that the Department's proposal violates
section 28 of the Longshore and Harbor Workers' Compensation Act by
attempting to shift costs to employers in cases other than those
authorized by statute. Section 28(d), 33 U.S.C. 928(d), incorporated
into the Black Lung Benefits Act by 30 U.S.C. 932(a), requires an
employer to pay the costs, fees, and mileage for necessary witnesses
attending the hearing at the request of a claimant in any case in which
an attorney's fee is awarded against the employer. Section 28(d) also
requires that the necessity for the witness and the reasonableness of
an expert witness fee be approved by an administrative law judge,
Benefits Review Board, or court. Section 28(a) limits an employer's
liability for attorneys' fees to cases in which the claimant
successfully prosecutes his claim for benefits after the employer or
carrier contests the claimant's entitlement. Accordingly, the commenter
argues, the Department cannot shift the cost of cross-examination to
employers in cases where the claimant is unsuccessful.
The Department does not agree. The Black Lung Benefits Act
incorporates a variety of Longshore Act provisions governing the
payment of costs and fees to witnesses. As with all such provisions,
the Act explicitly authorizes the Department to vary the terms of those
incorporated provisions in order to properly administer the black lung
benefits program and effectuate Congress's intent in providing black
lung benefits. See 30 U.S.C. 932(a) (permitting the Secretary to
``otherwise provide[] * * * by regulations * * *''); Director, OWCP v.
National Mines Corp., 554 F.2d 1267, 1274 (4th Cir. 1977). In addition
to section 28 of the Longshore Act, incorporated section 7 of the
Longshore Act also governs the payment of costs by an operator. Section
7(e) provides the Secretary with the power to order an examination of
an employee ``[i]n the event that medical questions are raised in any
case,'' and to authorize an additional review or reexamination upon the
request of any party. 33 U.S.C. 907(e), as incorporated by 30 U.S.C.
932(a). This statutory section further provides that the Secretary may
``charge the cost of examination or review under this subsection to the
employer, if he is a self-insurer, or to the insurance company which is
carrying the risk, in appropriate cases * * *.'' Thus, by its explicit
terms, the cost-shifting mechanism of section 7(e) is not dependent on
the miner's successful prosecution of his claim. Rather, Congress, in
incorporating section 7(e) into the Black Lung Benefits Act,
demonstrated its concern that miners not have to bear all the costs
incurred in determining their entitlement to benefits, even in the
event that they are ultimately unsuccessful.
In drafting a regulation governing the payment of witnesses' fees
and costs, the Department was cognizant of its obligation to provide
all parties with the right to conduct appropriate cross-examination of
the witnesses offered by opposing parties. In Richardson v. Perales,
402 U.S. 388, 409 (1971), the Supreme Court recognized that the ability
to cross-examine the preparer of an ex parte medical report served as
an important guarantee of the reliability of such a report. Because the
overwhelming majority of medical issues in the adjudication of a black
lung benefits claim are decided on the basis of ex parte medical
reports, rather than on testimony offered at the hearing, the
Department must ensure that parties are permitted access to their
opposing party's witnesses for the purpose of cross-examination.
At the same time, however, the Department must ensure that parties
are not able to prevent an opposing party from offering a particular
witness' opinion simply by scheduling a deposition of that witness.
This is a particular problem where the claimant is indigent. Such a
claimant must initially pay a physician to provide him with a medical
opinion. If the operator exercises its right to cross-examine that
physician, the claimant may not be able to afford the additional fees
and costs necessary to pay the physician for the time he spends
answering interrogatories or attending a deposition. Absent a mechanism
permitting the apportionment of such costs, the claimant may be faced
with the administrative law judge's refusal to consider his doctor's
opinion because the doctor was not made available for cross-
examination. The Department does not believe that Congress intended
this result, and does not believe that a party's right to cross-
examination should be used to exclude evidence offered by an opposing
party that cannot afford the costs of expert testimony.
In those few cases in which there might be tension, section 725.459
strikes an appropriate balance between the twin goals of guaranteeing
the right of cross-examination and ensuring a full and fair
adjudication of an indigent claimant's eligibility for benefits.
Consistent with incorporated Longshore Act provisions, as varied in
order to
[[Page 80004]]
accommodate the needs of the black lung benefits program, and based on
the Department's inherent to authority fill the statutory gaps left by
Congress in the Black Lung Benefits Act, the revised regulation
governing witness' fees represents a sensible cost-spreading measure in
those relatively few cases in which a claimant is indigent.
(e) One comment suggests that the Department's witness fee
regulation violates Supreme Court precedent. Although the commenter
does not cite any specific decision, the Court's seminal decisions on
cost-shifting, Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437
(1987), and West Virginia University Hospitals v. Casey, 499 U.S. 83
(1991), do not prevent the Department from shifting the costs of cross-
examination to employers in special circumstances. In Crawford Fitting,
the Court discussed sections 1920 and 1821 of Title 28 of the United
States Code, which authorize shifting witness fees of up to $40 per
day. The Court ``held that these provisions define the full extent of a
federal court's power to shift litigation costs absent express
statutory authority to go further.'' Casey, 499 U.S. at 86, explaining
the decision in Crawford Fitting. As discussed above, the Department
believes that the Black Lung Benefits Act, by incorporating various
provisions of the Longshore Act and authorizing the Secretary to vary
those provisions in order to administer the black lung program,
provides ample statutory authority for the Department's cost-shifting
regulation. The existence of that authority compels the conclusion that
the revised regulation does not violate the Court's decisions in
Crawford Fitting and Casey.
(f) One comment argues that the Administrative Procedure Act does
not provide the Department with the authority to limit a party's right
to cross-examine an adverse witness. The Department discussed the
extent to which the Black Lung Benefits Act incorporates the
Administrative Procedure Act and the extent to which the Department may
vary that incorporation by regulation in its second notice of proposed
rulemaking. 64 FR 54972 (Oct. 8, 1999). In addition, the Administrative
Procedure Act requires only that parties be allowed to ``conduct such
cross-examination as may be required for a full and true disclosure of
the facts.'' 5 U.S.C. 556(d). The Seventh Circuit has recently observed
that, under the standard used by the Social Security Administration, a
standard identical to the one in the Administrative Procedure Act, ``
`[c]ross-examination is * * * not an absolute right in administrative
cases.' '' Butera v. Apfel, 173 F.3d 1049, 1057 (7th Cir. 1999),
quoting Central Freight Lines, Inc. v. United States, 669 F.2d 1063,
1068 (5th Cir. 1982). The Court thus upheld a decision by SSA not to
grant a claimant's subpoena to compel the attendance at the hearing by
two physicians who had examined the claimant. See also Copeland v.
Bowen, 861 F.2d 536, 539 (9th Cir. 1988) (holding that a disability
claimant is ``not entitled to unlimited cross-examination, but is
entitled to such cross-examination as may be required for a full and
true disclosure of the facts.''); Yancey v. Apfel, 145 F.3d 106, 113
(6th Cir. 1998) (no absolute right to subpoena reporting physician);
Flatford v. Chater, 93 F.3d 1296, 1305 (6th Cir. 1996) (same).
Subsection (b) of the revised regulation meets the APA standard by
permitting the ALJ to determine the level of cross-examination that is
required for a full and true disclosure of the facts.
(g) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.465
(a) The Department made a technical change to section 725.465 in
its first notice of proposed rulemaking, but did not open the rule for
comment. 62 FR 3341 (Jan. 22, 1997). In its second notice of proposed
rulemaking, the Department proposed revising subsection (b) to prohibit
administrative law judges from dismissing potentially liable operators
previously identified by the district director as parties to the case,
except upon the motion or the written agreement of the Director. 64 FR
54997 (Oct. 8, 1999).
(b) One comment argues that the Department's proposed limitation on
the ability of administrative law judges to dismiss potentially liable
operators as parties to a case impermissibly usurps the authority of
administrative law judges and violates the Administrative Procedure
Act. The commenter states that the proposal violates the fundamental
rights of coal mine operators and forces them to remain in a proceeding
after they have been adjudicated not to be a proper party. Finally, the
commenter states that the proposal violates section 424(a) of the Act,
30 U.S.C. Sec. 934(a).
The Department does not agree that any party has a fundamental
right to be dismissed from a black lung benefits adjudication prior to
the final resolution of the issue of operator liability. The
Department's final regulations, however, governing the treatment of
claims in which more than one company has been named as a potentially
liable operator have rendered these objections moot except in one
instance. As finally revised, section 725.418 requires the district
director to dismiss all but one operator as a party before referring
the case to the Office of Administrative Law Judges. The Department has
revised Sec. 725.465 accordingly. If the district director erroneously
fails to dismiss all operators except the one finally designated
responsible pursuant to section 725.418(d), the ALJ may do so at any
time. Subsection (b), however, continues to prohibit the ALJ from
dismissing the responsible operator designated by the district director
except upon the consent of the Director. The Department believes that
this regulation remains necessary to prevent the premature dismissal of
the designated operator by an administrative law judge. Currently, some
administrative law judges resolve the responsible operator issue in a
preliminary decision, and may dismiss the responsible operator(s)
identified by the district director. In such cases, the Director, as
the representative of the Black Lung Disability Trust Fund, must either
file an interlocutory appeal with the Benefits Review Board, cf.
Collins v. J & L Steel, 21 Black Lung Rep. (MB) 1-183, 1-1-186 (Ben.
Rev. Bd. 1999), and ask that the adjudication of claimant's entitlement
be held in abeyance pending the outcome of the appeal, or await the
ALJ's resolution of the claimant's entitlement and then file an appeal.
Both options are problematic. If the Director files an interlocutory
appeal and the Board rejects the Director's arguments and affirms the
dismissal, the Director may be unable to seek further review under the
stricter standards that the federal appellate courts apply to
interlocutory orders. See, e.g., Redden v. Director, OWCP, 825 F.2d
337, 338 (11th Cir. 1987), citing Coopers & Lybrand v. Livesay, 437
U.S. 463 (1978). If the Director waits until after the claimant's
eligibility is resolved to appeal the responsible operator issue to the
Board, the Board may affirm the dismissal solely because the operator
did not have an opportunity to participate in the adjudication of the
merits of the claim. Crabtree v. Bethlehem Steel Corp., 7 Black Lung
Rep. (MB) 1-354 (Ben. Rev. Bd. 1984). Neither of these options
represents an efficient means of resolving the issue of operator
liability in the context of adjudicating a miner's eligibility for
benefits.
The revised regulation is intended to eliminate these problems, and
ensure that the designated responsible operator and the Director have
the opportunity to fully litigate the liability issue at all
[[Page 80005]]
levels. Moreover, the regulation does not create any undue hardships.
If, after considering all of the evidence relevant to the responsible
operator issue, the ALJ finds that the designated responsible operator
is not liable for the payment of benefits, but concludes that the
claimant is entitled to benefits, the operator merely has to wait until
the Director, on behalf of the Trust Fund, files an appeal with the
BRB. The operator may then participate in that appeal in defense of the
ALJ's liability determination if it wishes. If the Director does not
petition for review of the ALJ's liability decision, the operator need
not participate in any further adjudication of the case, regardless of
whether it is formally included as a party.
Moreover, the revised regulation violates neither section 424 of
the Black Lung Benefits Act, 30 U.S.C. 934, nor the Administrative
Procedure Act. Section 424 requires coal mine operators who have been
determined to be liable for the payment of benefits to a claimant to
reimburse the Black Lung Disability Trust Fund for amounts the Trust
Fund paid to that claimant on an interim basis. The statute requires,
however, that the operator's liability have been ``finally determined''
before the reimbursement obligation may be enforced. 30 U.S.C.
934(b)(4)(B). Under the incorporated provisions of the Longshore and
Harbor Workers' Compensation Act, that final determination includes not
only an administrative law judge's decision, but also decisions by the
Benefits Review Board and the court of appeals. Obviously, an appeal by
an aggrieved party, including the Director, OWCP, on an operator
liability issue cannot proceed in the absence of all the necessary
parties. Thus, it is necessary that the designated responsible operator
remain a party to a claim even while it is on appeal. Similarly,
nothing in the Administrative Procedure Act gives administrative law
judges the authority to issue final decisions on issues. Accordingly,
the revised regulation does not violate any statutory provision. As
revised, Sec. 725.465 simply ensures that no responsible operator
designated by the district director will be dismissed prior to a final
determination of claimant eligibility and operator liability except
with the approval of the Director.
Finally, the regulation does not preclude the designated
responsible operator, in a case in which the district director
committed an obvious error, from seeking the written agreement of the
Director that it be dismissed as a party. The regulation, rather than
giving the Director's representative veto power over an ALJ's decision,
as the commenter asserts, simply protects the interests of the Trust
Fund, and ensures that the Director, as a party to the litigation,
receives a complete adjudication of his interests. The Board has upheld
the similar requirement in subsection (d), which prohibits the
dismissal of a claim in which the claimant has been paid interim
benefits from the Trust Fund, absent the Director's consent. Boggs v.
Falcon Coal Co., 17 Black Lung Rep. (MB) 1-62, 1-66 (1992).
(c) No other comments have been received concerning this regulation
and no changes have been made in it.
20 CFR 725.478
(a) The Department proposed revising this regulation in its initial
notice of proposed rulemaking in order to recognize the opinions of
three appellate courts and the Benefits Review Board that had rejected
the Department's interpretation of the former regulation. The
Department had argued that under the former regulation an
administrative law judge's decision and order should be considered
filed on the date that the ALJ mailed it to the parties. The proposal
adopted the view that the date of actual receipt of an administrative
law judge's decision and order by the Division of Coal Mine Workers'
Compensation (DCMWC) constitutes its filing date and renders the
decision effective. Thus, the date of DCMWC's receipt triggers the
running of the 30-day period for challenging an administrative law
judge's decision. The proposal conformed the regulation to existing
caselaw. 62 FR 3362-63 (Jan. 22, 1997). The Department also proposed
moving the last two sentences of the former regulation to a more
appropriate location in Sec. 725.502. The Department did not discuss
this regulation in its second notice of proposed rulemaking. See list
of Changes in the Department's Second Proposal, 64 FR 54971 (Oct. 8,
1999).
(b) One comment stated that the revised regulation would extend the
appeal time by several days, presumably because of the time used to
send the file from the Office of Administrative Law Judges to DCMWC.
The courts, however, rejected the Director's interpretation of the
former regulation because it impermissibly shortened the 30-day
statutory appeal time. Trent Coal Co. v. Day, 739 F.2d 116, 118 (1984);
Daugherty v. Director, OWCP, 897 F.2d 740, 742 (1990). Following the
reasoning of these decisions, the revision does not lengthen the appeal
time, but simply recognizes the appeal time guaranteed by the statute.
(c) No further comments have been received concerning this section,
and no changes have been made in it.
20 CFR 725.479
(a) In its first notice of proposed rulemaking, the Department
proposed adding subsection (d) to provide that the 30-day period to
appeal an administrative law judge's decision and order will commence
upon a party's receipt of that document even though it was not served
by certified mail or there was some other defect in service. 62 FR 3363
(Jan. 22, 1997). The Department did not discuss this regulation in its
second notice of proposed rulemaking. See list of Changes in the
Department's Second Proposal, 64 FR 54971 (Oct. 8, 1999).
(b) Several comments suggest that subsection (d) is unnecessary
because strict adherence to the requirement in Sec. 725.478 for service
of an administrative law judge's decision by certified mail would
eliminate any question as to the date of receipt of that decision.
Subsection (d) does not supplant the requirement for serving decisions
by certified mail. It simply establishes that actual receipt of a
decision overcomes any technical defect in service for purposes of
triggering appeal and reconsideration rights. These defects are not
limited to cases where service is not made by certified mail. For
example, a decision may be mailed to the wrong address but the party to
whom it should have been sent later learns of the decision and obtains
a copy. The revised regulation would begin the 30-day appeal period
upon that party's receipt. The provision thus provides an element of
finality to decisions while protecting the parties' rights to pursue
litigation in a timely manner.
(c) One comment objects to subsection (d) as too technical and
subject to violation by unwary litigants. The Department disagrees with
this characterization. Subsection (d) eliminates any doubt that a party
must exercise its options for challenging a decision in a timely manner
once the party has received the decision and despite any defect in
service. This provision therefore protects the litigants' rights and
interests by dispelling any confusion as to the effectiveness of any
decision which reaches the parties despite technical nonconformance
with the service process.
(d) No other comments were received concerning this section, and no
changes have been made in it.
[[Page 80006]]
Subpart G
20 CFR 725.490
In its first notice of proposed rulemaking, the Department proposed
the reorganization and renaming of the rules governing the
identification of responsible coal mine operators. Section 725.490
retained its title and much of its language. The Department proposed
deleting the last clause of the last sentence of subsection (b),
however, in order to reflect a move to part 726 of the regulations
governing the obligations of coal mine operators to secure the payment
of benefits. 62 FR 3363-65 (Jan. 22, 1997). No comments were received
concerning this section, and no changes have been made in it.
20 CFR 725.491
(a) The Department proposed revising section 725.491 in order to
clarify the meaning of the statutory term ``operator.'' 62 FR 3363
(Jan. 22, 1997). Section 725.491 retains some material from the
Secretary's current regulations, such as the rebuttable presumption of
exposure to dust currently found in 20 CFR 725.492(c). Much of section
725.491's language is new, however. In particular, the Department
sought to ensure that terms critical to the identification of a company
potentially liable for the payment of benefits under the Black Lung
Benefits Act, such as ``owner'' and ``independent contractor,'' were
defined broadly in keeping with Congress' intent that the coal mining
industry bear liability for individual claims to the maximum extent
feasible. The Department's goal in proposing these revisions was to
insure that any company, partnership, or individual that employed a
``miner'' could be held liable under the Act. The regulation also
implements the Department's view that the officers of an uninsured
corporate coal mine operator should not be considered coal mine
operators in their own right. The Benefits Review Board has recently
accepted that view with respect to the Department's current
regulations. Lester v. Mack Coal Co., 21 Black Lung Rep. (MB) 1-126, 1-
130-131 (Ben. Rev. Bd. 1999).
In its second notice of proposed rulemaking, the Department revised
subsection (a)(2)(i) in response to one comment to ensure the
consistent use of the term ``coal mine dust'' rather than ``coal
dust.'' 64 FR 54998 (Oct. 8, 1999). In addition, the Department
responded to comments about its definition of independent contractors
in subsection (c) and its exclusion of the federal government and state
governments as operators in subsection (f). 64 FR 54997-98 (Oct. 8,
1999).
(b) One comment suggests that retroactive application of the
Department's revised responsible operator regulations is impermissible.
Although these new regulations will apply only to claims filed after
the date on which the revisions become effective, see Sec. 725.2, the
commenter argues that the Department is expanding the scope of the term
``operator,'' and that with respect to refiled claims, the newly
amended definition will be applied retroactively. In this regard, the
commenter argues that the Department's reliance on the jurisdiction of
the Mine Safety and Health Administration to regulate under the Black
Lung Benefits Act is inappropriate. We understand the commenter's
argument to be that the Department should not have relied on cases
decided under the Federal Mine Safety and Health Act (FMSHA) in
promulgating its definition of the term ``operator.'' The Department
cited such cases in both notices of proposed rulemaking. 62 FR 3364
(Jan. 22, 1997); 64 FR 54997-98 (Oct. 8, 1999). The commenter suggests
that the MSHA's jurisdiction is based on an agreement with the
Occupational Safety and Health Administration (OSHA) to ensure that all
American workplaces are subject to inspection by one of the two
agencies, and that the Department's adoption of FMSHA criteria
represents an expansion of coverage under the Black Lung Benefits Act.
The Department disagrees with the premise of the argument. The
Black Lung Benefits Act, which is subchapter IV of the Federal Mine
Safety and Health Act, has incorporated the definition of the term
``operator'' found in section 3(d) of the FMSHA, 30 U.S.C. 802(d),
since its enactment in 1969. The Secretary's regulations do not attempt
to expand that definition, either by imposing liability on companies
that are not currently liable for benefits, or by increasing the number
of employees for which a coal mine operator may be held liable. The
Black Lung Benefits Act and the Secretary's implementing regulations
have consistently contained expansive definitions of terms such as
``operator'' and ``independent contractor,'' see, e.g., 20 CFR
725.491(b)(1)(company need not directly supervise work in order to be
considered an operator). In addition, regardless of any agreement
between MSHA and OSHA, the definitions set forth in the FMSHA create an
outer limit for MSHA's jurisdiction; MSHA simply cannot exercise
authority over employers and activities not covered by the FMSHA. These
definitional provisions also govern the extent of coverage under the
Black Lung Benefits Act. Accordingly, the regulations implementing the
Black Lung Benefits Act must recognize and account for the extent of
coverage provided by the FMSHA.
(c) One comment argues that even if certain individuals, such as
food service workers, may be considered ``miners'' under the BLBA, the
Department should not require the employers of such individuals to bear
liability for the payment of any benefits to which they become
entitled. The commenter suggests that the Department's regulation would
require a number of companies with only a tenuous relationship to the
mining of coal to purchase insurance in order to cover the risk that
they will be liable for the payment of benefits. Adopting the
commenter's suggestion that these companies should be exempt from
liability, however, would require imposing potential liability for
their employees' claims on the Black Lung Disability Trust Fund. In its
initial proposal, the Department took note of Congress' intent that the
coal mining industry, rather than the Black Lung Disability Trust Fund,
bear liability for the payment of individual claims to the maximum
extent feasible. See 62 FR 3363 (Jan. 22, 1997). Accordingly, if
individuals whose work is integral to the extraction or preparation of
coal but who may not be considered traditional coal miners are
determined to be entitled to benefits under the Act as a result of
occupational exposure to coal mine dust, their employers must bear
responsibility for the payment of those benefits. For example,
individuals who transport coal during the extraction or preparation
process, Norfolk & Western Railway Co. v. Roberson, 918 F.2d 1144,
1149-50 (4th Cir. 1990), cert. denied, 500 U.S. 916, and who deliver
supplies essential to the extraction or preparation of coal, Pinkham v.
Director, OWCP, 7 Black Lung Rep. (MB) 1-55, 1-57 (Ben. Rev. Bd. 1984),
have been determined to be ``miners'' under the Black Lung Benefits
Act. The regulatory definition of the term ``operator'' must be broad
enough to ensure that the employer of such an individual bears direct
liability for any benefits to which the miner is entitled.
(d) One comment objects to the Department's exclusion in subsection
(f) of state and federal governments from the term ``operator.'' With
respect to state governments, the commenter argues that there is no
indication that Congress intended to exempt the states from the Act's
broad coverage of coal mine operators. As the Department has previously
explained, however, the test
[[Page 80007]]
under relevant Supreme Court decisions is not whether Congress
indicated its intention to exempt the states from coverage, but whether
Congress indicated a clear intention to include the states. See 64 FR
54998 (Oct. 8, 1999), discussing Gregory v. Ashcroft, 501 U.S. 452
(1991). The commenter does not allege that the BLBA meets this test
with respect to state governments, noting only that the language of the
Act could easily be construed to cover state employees. Although the
commenter also objects to the exemption from liability under the Black
Lung Benefits Act of the federal government, it argues that federal
mine inspectors, the only federal employees who could be potentially
covered by the BLBA, should not be considered ``miners.'' The
Department agrees, and has taken the same position in litigation.
The commenter's true complaint appears to be that the liability for
benefits payable to a claimant who was a miner before he became a coal
mine inspector will fall on the operator that employed the claimant as
a miner. The Fourth Circuit interpreted the Department's current
regulations to require this result in Eastern Associated Coal Corp. v.
Director, OWCP, 791 F.2d 1129, 1131-32 (4th Cir. 1986). Specifically,
the court held that to the extent that an individual contracts
pneumoconiosis as a result of work as a federal coal mine inspector,
his exclusive remedy against the government lies under the Federal
Employees' Compensation Act (FECA), 5 U.S.C. 8101 et seq. If such an
individual is also able to obtain benefits under the Black Lung
Benefits Act, based on other work as a miner, liability for those
benefits rests with the coal mine operator that most recently employed
the individual as a miner. See also Consolidation Coal Co. v. Borda,
171 F.3d 175, 179 (4th Cir. 1999). The commenter has offered no reason
for the Department to revise its regulation to produce a different
outcome.
(e) No other comments have been received concerning this section,
and no changes have been made in it.
20 CFR 725.492
(a) The Department proposed revising section 725.492 to
specifically define the term ``successor operator'' and address the
issues posed by this category of coal mine operator. 62 FR 3364 (Jan.
22, 1997). The revised regulation largely tracks the language of
section 422(i) of the Act, 30 U.S.C. 932(i), and provisions contained
in the current version of 20 CFR 725.493. In addition, the Department
clarified the definition to give effect to Congress' demonstrated
interest in ensuring that a wide variety of commercial transactions was
sufficient to give rise to successor liability under the Black Lung
Benefits Act. 30 U.S.C. 932(i)(3). The Department did not make any
additional revisions to this regulation in its 1999 proposal, 64 FR
54998-99 (Oct. 8, 1999), but did respond to two comments relating to
the purchase of coal assets in a corporate reorganization or
liquidation and the primary liability of a prior operator's insurance
company.
(b) One comment states that subsection (e) exceeds the scope of the
Act by suggesting that a purchase of mineral rights alone may be
sufficient to attach liability to the purchaser as a successor
operator. The commenter argues that the BLBA imposes liability only on
operators of coal mines. Subsection (e) defines ``acquisition'' of a
coal mine to include any transaction that transfers the right to
extract or prepare coal at a mine. This regulation is based on the
statutory definition of an ``operator,'' which includes not only the
operator of a mine but also the mine's owner. 30 U.S.C. 802(d). In
addition, the Department's regulations have long recognized that the
lessor of coal mining property may bear liability for the payment of
benefits in certain cases. See 20 CFR 725.491(b)(2) (1999). The
Department does agree, however, that, in order to become liable as a
successor operator, the acquirer of mining property must continue to
derive an economic benefit from the coal on the property. Thus, the
mere acquisition of mineral rights alone, without the actual
extraction, preparation, or transportation of coal, or coal mine
construction, will not subject the acquirer to successor operator
liability.
(c) No other comments have been received concerning this section.
The Department has added a comma in subsection (c) and deleted a comma
in subsection (d)(1) in order to clarify the punctuation of the
regulation.
20 CFR 725.493
(a) In its first notice of proposed rulemaking, the Department
proposed revising section 725.493 to define the required relationship
between a coal mine operator and a coal miner, the statutory basis for
an operator's liability for the miner's claim under the Black Lung
Benefits Act. 30 U.S.C. 932(a). 62 FR 3364 (Jan. 22, 1997). The
Department made a technical change in its second notice of proposed
rulemaking. It also added more specific language to subsection (a)(1)
to recognize as sufficient to establish the requisite employment
relationship a variety of arrangements between a worker and the entity
that supervises that work. 64 FR 54999 (Oct. 8, 1999).
(b) One comment states that the Department's regulation will
eliminate the current operator practice of leasing employees. The
Department's response to this comment is set forth under section 726.8.
No other comments have been received concerning this section, and no
changes have been made in it.
20 CFR 725.494
(a) Section 725.494 provides the criteria for the identification of
one or more ``potentially liable operators'' with respect to a claim
for benefits. 62 FR 3364 (Jan. 22, 1997). For each claim, the group
potentially includes all of those operators who meet the criteria
currently contained in 20 CFR 725.492 and 725.493 (e.g., employment of
the miner for a year, including at least one day after December 31,
1969). This revised regulation also explains the factors used to
consider whether a company is financially capable of assuming liability
for the payment of benefits. In the second notice of proposed
rulemaking, the Department made several technical changes to the
regulation to make it easier to read. 64 FR 54999 (Oct. 8, 1999). The
Department responded to one comment contending that the presumption in
subsection (a) was illegal by citing the broad statutory grant of
authority given the Department to create regulatory presumptions and by
noting that the presumption appears in the current regulations at 20
CFR 725.493(a)(6). The Department responded to a comment concerning
subsection (e) by explaining that subsection (e) did not contain a
presumption, but simply recited the evidence needed to support a
finding that an operator is financially capable of assuming liability
for the payment of benefits. The Department further explained that the
criteria in section 725.494 have no effect on a miner's eligibility for
benefits.
(b) One comment received in connection with the Department's
consideration of alternatives under the Regulatory Flexibility Act
urges the Department to identify only the coal mine operator that is
most likely to be liable for the payment of benefits as the responsible
operator. The commenter does not distinguish between processing the
claim at the district director level and the formal adjudication of the
claim beyond that level. The commenter's main concern, however, appears
to be the transaction costs imposed by the proposed ``joint defense''
requirement. The Department has eliminated the requirement that
operators participate in the joint defense of the claimant's
[[Page 80008]]
entitlement by prohibiting more than one operator from participating in
a case beyond the district director level, and by requiring the
district director to exclude from the record any documentary medical
evidence submitted by an operator other than the finally designated
responsible operator. See explanation accompanying Secs. 725.414,
725.415, 725.421. This revision does not require any alteration in the
text of Sec. 725.494. To the extent that the commenter is objecting to
the district director's notification of more than one operator as
potentially liable operators, the Department's explanation of the need
for this requirement is set forth in the preamble to Sec. 725.407.
In addition, a number of courts have been critical of the length of
time it takes to resolve individual black lung benefits claims, see,
e.g., C&K; Coal Co. v. Taylor, 165 F.3d 254, 258 (3d Cir. 1999), and
have held that the delays may deprive operators of their due process
rights. Lane Hollow Coal Co. v. Director, OWCP, 137 F.3d 799, 807 (4th
Cir. 1998). Some of these delays have been caused by remands from the
Office of Administrative Law Judges in order to require the
identification of additional responsible operators and the development
of more evidence on responsible operator issues. The Department's
revised regulations governing the identification and adjudication of
the liable coal mine operator are intended to prevent such delays from
occurring in the future. In all claims filed after the effective date
of these revisions, the Department will have only one opportunity,
while the case is pending before the district director, to obtain
evidence from the operators that employed the miner. To facilitate the
district director's resolution of the responsible operator issue, the
regulations require the submission of evidence relevant to the criteria
in section 725.494 to the district director and enhance the district
director's ability to use subpoenas to compel the production of
additional documents. Once all of this evidence is forwarded to the
Office of Administrative Law Judges for a formal hearing, the
administrative law judge assigned to the case will determine, in light
of the evidentiary burdens imposed by section 725.495, whether the
district director designated the proper responsible operator. If the
administrative law judge determines that the district director did not
designate the proper responsible operator, liability will fall on the
Trust Fund. No remand for further development of the responsible
operator issue is permissible.
(c) No comments have been received specifically relating to this
section, and no changes have been made in it.
20 CFR 725.495
(a) Section 725.495 contains the criteria for deciding which of the
miner's former employers will be the responsible operator liable for
the payment of benefits to the miner and/or his survivors. 62 FR 3364-
65 (Jan. 22, 1997). From among the employers that meet the criteria in
Sec. 725.494 for a potentially liable operator, section 725.495 assigns
liability to the company that most recently employed the miner. In
addition, the regulation explicitly assigns burdens of proof in the
adjudication of the responsible operator issue. The regulation thus
fills the regulatory void noted by the Fourth Circuit in Director, OWCP
v. Trace Fork Coal Co., 67 F.3d 503, 507 (4th Cir. 1995). In its second
notice of proposed rulemaking, the Department again addressed this
issue, rejecting arguments that the Department's assignment of burdens
of proof violated the Fourth Circuit's decision. 64 FR 54999 (Oct. 8,
1999).
(b) The Department has revised the language of the first sentence
of subsection (d) to reflect changes in the manner in which the
district director will process claims, set forth in Secs. 725.410-
725.413, as well as the change in Sec. 725.418(d) which prohibits the
district director from forwarding a case to the Office of
Administrative Law Judges with more than one operator as a party. See
explanation accompanying Sec. 725.414. The district director will
identify the designated responsible operator in a document titled a
schedule for the submission of additional evidence rather than in an
initial finding. See explanation accompanying Secs. 725.410-725.413.
Moreover, to help ensure that the district director properly identifies
the responsible operator, sections 725.415 and 725.417 permit the
district director to re-designate the responsible operator, by issuing
another schedule for the submission of additional evidence, if he
determines that his initial designation may have been erroneous. See
explanation accompanying Secs. 725.415 and 725.417. Accordingly, the
Department has replaced the reference in subsection (d) to the operator
``initially found liable'' with a reference to the operator that is
``finally designated'' as the responsible operator.
(c) One comment suggests that a miner's prior employer should not
have to bear liability for a claim when the financial inability to pay
benefits of another coal mine operator who more recently employed the
miner is the responsibility of the Department. For example, the
commenter notes, the Department accepted as insurers a number of
``group self-insurance associations'' that are currently unable to make
benefit payments because they did not adequately secure the payment of
claims for which they were ultimately held liable. Under section
423(a)(2) of the Act, 30 U.S.C. 933(a)(2), however, the Department is
obligated to accept insurance coverage from any company, association,
person or fund that is authorized under the laws of any State to insure
workmen's compensation. Compare 33 U.S.C. 932(a)(1)(B) (Longshore and
Harbor Workers' Compensation Act provision giving the Department
authority to approve insurers under that Act). Accordingly, the
Department's ``decision'' to accept these state group associations as
insurers was not based on an exercise of discretion but rather on the
understanding that they were authorized under the laws of their states
to insure workers' compensation. The Department thus did not
voluntarily assume the risk that these associations would become
insolvent.
By contrast, the Department does have the authority to accept or
reject applications for self-insurance and to set the minimum standards
applicable for qualifying as a self-insurer. 30 U.S.C. 933(a)(1). To
the extent that the security deposited by a self-insured coal mine
operator pursuant to Sec. 726.104 proves insufficient to pay individual
claims, the Department agrees that the liability for those claims
should not be placed on operators that previously employed the miner.
Rather, in establishing the amount of security required, the Department
voluntarily accepts the risk that self-insured operators will not have
deposited sufficient security to pay claims if they are liquidated or
become bankrupt.
Accordingly, the Department has added paragraph (a)(4) to section
725.495. The regulation does not affect the liability of any operator
that employed the miner after his employment with the self-insured
operator ended, even if that latter employment only lasted one day,
provided the miner's cumulative period with that employer totalled at
least one year. In determining the length of this cumulative period,
the factfinder should include any period for which the employer is
considered a successor operator to the miner's actual employer, see C&K;
Coal Co. v. Taylor, 165 F.3d 254, 257 (3d Cir. 1999). Like the
[[Page 80009]]
remainder of section 725.495, this provision shall be applicable only
to claims filed after the date upon which these revisions become
effective. This provision does not affect the liability of any operator
that employed the miner after he left employment with the self-insured
operator.
(d) Several comments continue to object to the imposition of a
burden of proof on the potentially liable operator that the Department
designates as the responsible operator. The regulation imposes on the
Department the initial burden of establishing that the designated
operator is a potentially liable operator, assisted by a presumption in
subsection (b) that the designated operator is financially capable of
assuming liability for the payment of benefits. In addition, if the
district director designates as the responsible operator any operator
other than the miner's most recent employer, he must include in the
record a statement explaining the reasons for his finding and, if
appropriate, an explanation of the Department's search of its insurance
files. The burden then shifts to the designated responsible operator to
prove either that it is financially incapable of assuming liability for
the payment of benefits or that another potentially liable operator
(i.e., an operator that meets the criteria in Sec. 725.494) employed
the miner more recently. The Department's rationale for this revision
is fully set forth in its explanation of the original proposal. 62 FR
3363-65 (Jan. 22, 1997).
(e) One comment argues that the Department's imposition of the
burden of proof on the designated responsible operator violates the
Supreme Court's decisions in Director, OWCP v. Greenwich Collieries,
512 U.S. 267 (1994) and Metropolitan Stevedore Co. v. Rambo, 117 S. Ct.
1953 (1997), as well as the Administrative Procedure Act. The
Department's response to this comment is fully set forth at 64 FR
54972-74 (Oct. 8, 1999). Congress gave the Department particularly
broad authority to promulgate regulations governing the identification
of the operator responsible for the payment of benefits, 30 U.S.C.
932(h), including the authority to create ``appropriate presumptions''
for determining whether pneumoconiosis arose out of a miner's
employment with an individual coal company, and to establish
``standards for apportioning liability among more than one operator,
where such apportionment is appropriate.'' This authority has been
construed to permit the assignment of liability to a single operator.
See National Independent Coal Operators Association v. Brennan, 372 F.
Supp. 16, 24 (D.D.C.), aff'd, 419 U.S. 955 (1974). The burdens imposed
by section 725.495 are thus fully consistent with the statutory
authority granted the Department.
(f) Two comments argue that potentially liable operators should not
be required to submit all of their evidence demonstrating the liability
of other more recent of the miner's employers within the first 90 days
after they receive notice of the claim. As the Department has discussed
more fully in its response to comments concerning section 725.408, the
90-day time limit in that regulation is applicable only to the
submission of evidence, generally within the control of an operator
notified by the Department, which establishes that the operator is not
a potentially liable operator in the claim. This includes evidence that
the employer was not an operator for any period after June 30, 1973;
that the operator did not employ the miner as a miner for a cumulative
period of at least one year; that the miner was not exposed to coal
mine dust while working for the employer; that the miner's employment
did not include at least one working day after December 31, 1969; and
that the employer is financially incapable of assuming liability for
the payment of benefits. See Secs. 725.408(a)(2)(i)-(v), 725.494(a)-
(e). By contrast, documentary evidence submitted to demonstrate a more
recent employer's potential liability is governed by section 725.414,
which states that the evidence must be submitted pursuant to a schedule
established by the district director after a party has indicated its
dissatisfaction with the district director's initial findings of
eligibility and liability. The submission of this evidence is therefore
not subject to the 90-day time limit.
(g) No other comments have been received concerning this section,
and no other changes have been made in it.
20 CFR 725.497
Although the Department received comments relevant to this section,
the regulation was not open for comment, see 62 Fed. Reg. 3341 (Jan.
22, 1997); 64 Fed. Reg. 54971 (Oct. 8, 1999). It was inadvertently
omitted from the list of technical revisions. Accordingly, no changes
are being made in this section.
Subpart H
20 CFR 725.502
(a) The Department proposed significant changes to the current
Sec. 725.502 in its initial notice of proposed rulemaking. 62 FR 3412-
13 (Jan. 22, 1997). The most important changes were designed to make
clear to responsible operators their obligations under the terms of an
effective award of benefits even though the claim might still be in
litigation. By clarifying the obligations of a liable party pursuant to
an effective award, the Department hoped to promote operator
compliance. 62 FR 3366 (Jan. 22, 1997). The Department therefore
proposed that a responsible operator pay all of the benefits due under
the terms of an effective award, i.e., both prospective monthly
benefits and retroactive benefits. The proposed regulation also defined
when benefits become due after the issuance of an ``effective''
decision awarding benefits. 62 FR 3412-13 (Jan. 22, 1997). Coupled with
an assessment of an additional twenty-percent of any unpaid
compensation (33 U.S.C. 914(f) as incorporated by 30 U.S.C. 932(b),
proposed Sec. 725.607), proposed Sec. 725.502 substantially clarified
the responsible operator's benefit payment obligations. In its second
notice of proposed rulemaking, the Department responded to comments
opposing the changes. Without disputing the statutory incorporation of
Sec. 14(f), the commenters contended that the addition of twenty-
percent of unpaid compensation to late payments was punitive. They also
opposed the obligation to pay retroactive benefits while an award was
on appeal, arguing such a requirement violated Congressional intent and
that recovery of those payments was unlikely in the event the award was
overturned. 64 FR 54999-55000 (Oct. 8, 1999). Citing Congressional
intent that the coal industry bear primary responsibility for benefits,
the Department defended the assessment of an additional twenty-percent
of unpaid compensation as a means to promote prompt compliance with
effective awards. The Department noted its concern that operators
rarely paid benefits while an award was on appeal, thereby shifting the
financial burden and ultimate risk of loss to the Trust Fund. Moreover,
the Department noted that requiring payment of retroactive benefits
during active litigation was consistent with Congressional intent. The
liable party is generally required to pay all benefits due the claimant
under the terms of an effective award, and the ``benefits due'' include
retroactive benefits. Congress enacted one exception: the Trust Fund is
authorized to pay only future monthly benefits when it pays on behalf
of an operator. 64 FR 55000 (Oct. 8, 1999). In response to another
comment, the Department agreed that the law clearly requires the Trust
Fund to pay interim benefits if an
[[Page 80010]]
operator obtains a stay of payments. The Department also concluded the
proposed regulation required the operator to continue to pay benefits
despite the pendency of a modification petition until a new effective
order is issued pursuant to Sec. 725.310. Finally, the Department
reiterated its view that prospective monthly benefits are due and
``shall be paid'' when an administrative law judge's award becomes
effective, i.e., when the order is filed in the office of the district
director. The Department did propose one change to Sec. 725.502(b)(1)
in its second notice. That change made monthly benefits due on the
fifteenth day of the month following the month for which the benefits
are paid, instead of the first business day of that month as originally
proposed. 64 FR 55050 (Oct. 8, 1999). The Department has proposed one
minor change in the final rule. Subsection (b)(2) requires the district
director to compute the amount of retroactive benefits and interest a
responsible operator owes the claimant, and to inform the parties. The
Department has added language at the end of the last sentence of
subsection (b)(2) to clarify that the district director must attach a
current table of applicable interest rates to the computation.
(b) The Department has received one new comment in response to the
second notice of proposed rulemaking. The commenter renews the
objections stated in its response to the initial notice of proposed
rulemaking, contending the Department did not respond adequately to its
concerns in the 1999 preamble discussion. The comment cites several
objections to requiring payment of retroactive benefits while an award
is on appeal, and also objects to the assessment of the twenty-percent
additional compensation for failure to pay such benefits. Specifically,
the comment argues that use of the twenty-percent additional
compensation is inconsistent with Congressional intent because the
assessment was intended only to help claimants obtain prompt payment,
and not reduce Trust Fund outlays. The comment also contends Congress
intended the Fund to pay interim benefits during litigation on behalf
of operators, and recoup those payments from operators only after the
claimant ultimately prevails. In the commenter's view, Congress
intended the Fund to share the risk of unsupportable awards with
operators by assuming the operator's liability until litigation
concluded and the validity of the award was established. The comment
criticizes Sec. 725.502(b)(2) because it will increase operator
payments and lead to larger, and more numerous, overpayments. Finally,
the comment objects to Sec. 725.502(c), which requires the payment of
one month of benefits if the miner-claimant dies in the month when
eligibility commences. The comment states that the provision, in
effect, allows duplicate benefits for that month in the event the
survivor becomes entitled to benefits.
(c) The criticisms leveled at Sec. 725.502(b)(2) rest on one basic
premise: Since 1981, Congress has intended for the Trust Fund to pay
prospective monthly benefits in all awarded claims remaining in
litigation in which there is potential operator liability. Based on
this premise, the commenter contends that an operator cannot be
compelled by means of the Sec. 14(f) ``penalty'' to pay any benefits--
retroactive or prospective--until the award is final because no
retroactive benefits are due and the Trust Fund is liable for the
prospective benefits pending entry of a final award. The Department
disagrees with the comment's premise and the conclusions derived from
it.
As an initial matter, the comment does not cite any statutory
section, legal authority, legislative history or other evidence for its
position as to Congressional intent and the operation of the Trust
Fund. It relies, instead, on an ``understanding'' or ``agreement''
between Congress and the members of the public affected by the 1981
amendments to the Black Lung Benefits Act (BLBA). None of the available
material, however, supports the comment's views.
First, the expenditures which the Fund may undertake are a matter
of statutory mandate. Under the Internal Revenue Code (in which the
Trust Fund provisions appear), monies are available if ``the operator
liable for the payment of such benefits * * * has not made a payment
within 30 days after that payment is due[.]'' 26 U.S.C.
9501(d)(1)(A)(ii). The only limitation prohibits the payment of
retroactive benefits by the Fund on behalf of operators in claims filed
after the 1981 amendments. 26 U.S.C. 9501(d)(1)(A). The provision is
clear: The operator is liable for any benefits which are due, and the
Fund will pay only prospective benefits if the operator defaults.
Section 9501(d)(1)(A)(ii) does not suggest Congress intended as a
routine practice to relieve the operator of the obligation to pay
benefits which are due while the claimant's entitlement remains in
dispute.
Second, the legislative history of the creation and later-amended
operation of the Black Lung Disability Trust Fund supports the
Department's position. The historical antecedents are described in
detail in Old Ben Coal Co. v. Luker, 826 F.2d 688, 693-94 (7th Cir.
1987). Briefly, Congress created the Fund in 1978 to relieve the
federal government of its de facto primary financial responsibility for
the Part C program. The Fund assumed responsibility for claims for
which no operator was liable or in which the responsible operator
defaulted on its payment obligations. Congress intended to ``ensure
that individual coal operators rather than the trust fund bear the
liability for claims arising out of such operator's mines to the
maximum extent feasible.'' S. Rep. 95-209, 95th Cong., 1st Sess. 9
(1977), reprinted in Committee on Education and Labor, House of
Representatives, 96th Cong., Black Lung Benefits Reform Act and Black
Lung Benefits Revenue Act of 1977 at 612 (Comm. Print) (1979) (emphasis
supplied). By the conclusion of the 1981 fiscal year, however, the Fund
had accumulated a deficit of approximately $1.5 billion. H.R. Rep. 97-
406, 97th Cong., 1st Sess. 4 (1981), reprinted in U.S.C. C. & A.N.
2673. Individual responsible operators had also become burdened with
unanticipated retroactive liabilities from denied claims which were
reopened and approved under the 1978 legislation. Congressional concern
over the Trust Fund's deficit prompted changes to the BLBA in 1981; the
remedial actions included raising the excise tax on coal that provided
revenue for the Fund, increasing the interest rate on operator
liabilities to the Fund, and tightening eligibility criteria for
claimants. Congress also relieved a limited group of operators from
their retroactive liabilities based on the procedural histories of
certain claims. These liabilities transferred to the Fund. Finally,
Congress limited the Trust Fund to paying only prospective benefits if
a responsible operator failed or refused to pay after entry of an
initial determination of entitlement. The 1981 Amendments, however, did
not disturb the operator's legal obligation to pay all benefits due
under an effective award. 127 Cong. Rec. 29,932 (1981).
Against this background, the comment's position is untenable. In
1981, Congress amended the BLBA, in large part because the Fund was in
economic crisis. The objective of the amendments was to eliminate the
deficit by increasing revenues and revising eligibility criteria. A
fiscally-concerned Congress would not then impose on the Fund the
operators' collective liability for benefits pending conclusion of
entitlement litigation in every claim.
[[Page 80011]]
The ability to recoup from the operator the amount paid by the Fund if
the award survived litigation, plus interest, would restore only some
of the revenues expended on interim benefits. Initial awards which were
eventually overturned would become overpayments; recovering
overpayments from a largely elderly and unemployed population was
problematic at best. Given these circumstances, the Department rejects
the argument that Congress intended the Fund to absorb all operators'
liabilities as a matter of course until the conclusion of litigation in
every approved claim.
The Department also rejects the comment's argument that vigorous
use of the payment of additional compensation pursuant to section 14(f)
is contrary to Congressional intent. The Department provided a detailed
response to this argument in its second notice of proposed rulemaking.
64 FR 54999-55000 (Oct. 8, 1999). The response cited Congress'
intention to impose liability on the operators to the maximum feasible
extent, together with the provision's purpose to ensure the operator's
prompt compliance with its benefit obligations. The only significant
concern shown by Congress with respect to the use of section 14(f) was
the caveat that the provision not apply until the operator ``has the
right to contest the claim.'' 127 Cong. Rec. 19, 645 (1981). This
concern is met by the requirement that Sec. 14(f) does not apply until
an effective award is in place, and an effective award arises only
after the operator has had an opportunity for a hearing. The Department
believes Sec. 725.502(b) promotes Congress' overall objective to shift
liability for the payment of benefits to those operators who owe the
benefits. The significance of this objective has become more obvious
since the 1981 amendments. The Fund's indebtedness to the U.S. Treasury
at the conclusion of fiscal year 1997 was $ 5.487 billion. OWCP Annual
Report to Congress for FY 1997 at 24.
(d) The comment challenges the allowance of one month of benefits
if the miner dies in the first month during which all eligibility
requirements are established. The comment contends that such a payment
is not authorized by statute, and that a duplicate payment occurs if
the miner-claimant dies and the survivor establishes entitlement
independently because the miner's death was due to pneumoconiosis. The
Department rejects this argument as a reason for eliminating the
provision. As an initial matter, this provision was first promulgated
as part of the original Sec. 725.502. See 43 FR 36806 (Aug. 18, 1978).
No comments were received then in response to the regulation, nor did
the Department receive any comments in response to its initial notice
of proposed rulemaking. See also 20 CFR 410.226(a). In any event, the
payment of benefits twice for the same month of eligibility in these
circumstances is proper. The program has always paid benefits for
periods during which the miner established (s)he was totally disabled
by pneumoconiosis arising out of coal mine employment. 33 U.S.C.
906(a), as incorporated by 30 U.S.C. 932(a), 922(a)(1). Although
generally a miner's entitlement terminates in the month before the
month of death (Sec. 725.203(b)(1)), Sec. 725.502(c) creates an
exception to that rule to recognize the successful prosecution of a
claim, albeit only for one month of benefits. The program also pays
survivor's benefits to eligible recipients if a miner dies due to
pneumoconiosis, 30 U.S.C. 922(a)(2), and begins such benefit payments
with the month of the miner's death, 20 CFR 725.212-725.213. The
statute does not prohibit the payment of benefits twice in one month in
the rare event a miner entitled to benefits for disability dies due to
pneumoconiosis in the first month of his or her eligibility. No change
in the regulation is necessary.
(e) No other comments were received concerning this section, and no
other changes have been made in it.
20 CFR 725.503
(a) In its initial notice of proposed rulemaking, the Department
proposed adding Sec. 725.503(d) to provide specific guidelines for
determining the onset date for benefits awarded based on a modification
petition. The proposed rule set forth the date from which benefits
would be payable based either on a mistake in a determination of fact
or on a change in the miner's condition. 62 FR 3366, 3412-13 (Jan. 22,
1997). In the case of a mistaken factual determination, the proposal
employed the rules used in a miner's or a survivor's claim. If the
award was based on a change in conditions and if the precise month in
which the miner became disabled could not be ascertained, the proposed
rule pegged the onset date to the earliest evidence supporting an
element of entitlement not previously found in the claimant's favor,
provided the evidence was developed after the most recent factfinder's
denial of benefits. The proposed regulation drew criticism both for
setting the onset date too late and for setting it too early, thereby
allegedly violating a statutory requirement prohibiting the payment of
benefits before the onset of the miner's entitlement. In the second
notice of proposed rulemaking, the Department altered
Sec. 725.502(d)(2), noting a concern that the regulation as originally
proposed would generate too much litigation. 64 FR 55001, 55050 (Oct.
8, 1999). The reproposed version required the actual onset date of
entitlement to be determined if possible. If that date could not be
ascertained, however, Sec. 725.503(d)(2) set a default onset date using
the date the miner filed the modification petition. The Department
adopted this approach because the filing date of the application for
benefits is the default onset date for approved miners' claims (20 CFR
725.503(b)), and that method had worked well in the adjudication of
black lung claims in general. The Department therefore proposed using a
similar method in change in conditions cases. 64 FR 55001 (Oct. 8,
1999). Use of a filing date reflects ``the logical premise'' that the
miner would file a claim or a modification petition when (s)he believed
(s)he is entitled to benefits. In the final rule, the Department has
made two minor changes to Sec. 725.503(b) and (c). Each subsection
begins with similar language referring to the entitled individual to
whom benefits are payable, i.e., the miner entitled to benefits
(subsection (b)), and the survivor entitled to benefits (subsection
(c)). The purpose of this change is simply to use parallel language in
each subsection to identify the individual receiving benefits.
(b) One comment opposes the use of default onset dates for both
claims and modification petitions. The comment contends the default
date creates a presumption of entitlement to benefits as of the filing
date when the claimant has not proven this fact. The commenter believes
such a presumption violates the Administrative Procedure Act (APA), 5
U.S.C. 556(d), and the Supreme Court's decision in Director, OWCP v.
Greenwich Collieries, 512 U.S. 267 (1994). The Department disagrees
with the general proposition that a default onset date based on a
presumption of entitlement as of a certain date violates the APA and
Greenwich Collieries. The Department addressed this issue at length in
its second notice of proposed rulemaking. 64 FR 54972-74 (Oct. 8,
1999). To summarize: the Federal Mine Safety and Health Act (FMSHA), of
which the Black Lung Benefits Act (BLBA) is a part, generally is exempt
from the provisions of the APA. 30 U.S.C. 956. The BLBA, however,
incorporates section 19 of the Longshore and Harbor Workers'
Compensation Act (LHWCA), 33 U.S.C. 919(d), thereby making the APA
applicable to the
[[Page 80012]]
adjudication of claims. The incorporation of the APA (and 5 U.S.C.
556(d) in particular) is subject to one important constraint: Congress
conferred on the Secretary the authority to vary the terms of the
incorporated provisions by regulation. 30 U.S.C. 932(a) (provisions of
LHWCA apply to BLBA ``except as otherwise provided * * * by regulations
of the Secretary''). See generally Director, OWCP v. National Mines
Corp., 554 F.2d 1267, 1273-74 (4th Cir. 1977); Patton v. Director,
OWCP, 763 F.2d 553, 559-60 (3d Cir. 1985). In Greenwich Collieries, the
issue before the Court concerned the Department's authority to displace
5 U.S.C. 556(d) via a regulatory presumption (20 CFR 718.3) that
required a finding for the claimant if the evidence for and against a
particular finding was evenly balanced. The Court considered
Sec. 718.3(c) too ambiguous to vary the APA's burden of proof
requirements as to the BLBA. It therefore held that the party who bears
the burden of persuasion under the APA must prevail by a preponderance
of the evidence. In so holding, the Court also acknowledged the
Department's regulatory authority, consistent with the APA, to utilize
presumptions which ease a party's burden of production. 512 U.S. at
280-81. The Court did not address the Department's argument that it has
the authority to override 5 U.S.C. 556(d) by regulation and shift the
burden of persuasion as well.
Since Greenwich Collieries, three courts have addressed the
Department's authority to create presumptions which alter the parties'
evidentiary burdens. Although no court has considered the Department's
statutory authority to shift a burden of persuasion, all three courts
have approved either directly or in dicta the Department's authority to
create presumptions which shift the burden of production. In Glen Coal
Co. v. Seals, 147 F.3d 502 (6th Cir. 1998), the Sixth Circuit
considered whether a judicially-created presumption of medical benefits
coverage for the treatment of pulmonary disorders was consistent with
circuit caselaw. See Doris Coal Co. v. Director, OWCP, 938 F.2d 492
(4th Cir. 1991) (holding miner previously found totally disabled due to
pneumoconiosis who receives treatment for pulmonary disorder is
presumed to receive treatment for pneumoconiosis for purposes of
medical benefits coverage). The majority held that the decisions below
erroneously relied on the Doris Coal opinion when Sixth Circuit law
applied and was inconsistent with Fourth Circuit precedent. 147 F.3d at
514 (Dowd, D.C.J.), 515 (Boggs, J.). Judge Boggs (concurring), however,
agreed with Judge Moore (dissenting) ``that it would not necessarily
contravene Greenwich Collieries for the Secretary to adopt a regulation
shifting the burden of production in the manner of Doris Coal.'' 147
F.3d at 517. In Gulf & Western Indus. v. Ling, 176 F.3d 226 (4th Cir.
1999), the Fourth Circuit upheld the validity of the Doris Coal
presumption under the APA as interpreted by Greenwich Collieries. The
Court agreed with Seals that the presumption shifts the burden of
production, not persuasion, and therefore was valid under the APA. 176
F.3d at 233-34. Most recently, the Eighth Circuit considered whether,
for purposes of a subsequent claim, a ``material change'' in a miner's
condition could be presumed if the miner established one element of
entitlement not previously proven in connection with a prior denied
claim. Lovilia Coal Co. v. Harvey, 109 F.3d 445 (8th Cir. 1997); see 20
CFR 725.309 (miner must show ``material change in condition'' between
denial of one claim and filing of later claim). The Court rejected the
operator's argument that the presumption of change violated 5 U.S.C.
556(d) and Greenwich Collieries. In so doing, the Court cited Greenwich
Collieries' explicit approval of burden shifting presumptions which
ease a party's obligation to produce evidence in support of its claim.
109 F.3d at 452-53.
Thus, the courts have upheld the Department's authority to shift
the burden of production to the party opposing entitlement upon a
showing of the predicate facts which support the presumption without
violating the APA. Section 725.503 does create a presumption of
entitlement to benefits as of the filing date of the claim absent
contrary evidence. The presumption rests on a twofold basis: (i) The
miner has established he is entitled to benefits; and (ii) the
Department's belief that an individual will file a claim when he
believes himself entitled to benefits. See 43 FR 36828-36829 (Aug. 18,
1978). The presumption, however, shifts only the burden of production
to the party opposing benefits. That party may overcome the presumed
entitlement date by introducing credible medical evidence that the
miner was not disabled for some period of time after he filed his
claim. See Ling, 176 F.3d at 233 (holding, in context of another black
lung presumption which shifts burden of production, party must
introduce ``credible'' evidence supporting its position). ``Credible''
evidence means medical opinions which are consistent with the
adjudicator's findings in the underlying award of benefits. If the
adjudicator has accepted evidence that the miner is totally disabled as
of a certain date, then any later medical opinion contradicting this
evidence is necessarily not credible. Medical opinions pre-dating the
evidence of entitlement, however, may establish the miner was not
disabled when he filed his application. See Rochester & Pittsburgh Coal
Co. v. Krecota, 868 F.2d 600, 603 (3d Cir. 1989) (holding ALJ
erroneously awarded benefits from filing date when evidence proved
miner was not disabled at that time). The burden of persuasion remains
with the claimant to provide medical evidence sufficient to overcome
the opponent's. Similarly, a claimant may also prove he is entitled to
benefits commencing before he filed his benefits application. In such a
situation, the burden of persuasion remains, as always, with the
claimant. The comment does not provide any other rationale for its
position that default onset dates violate the APA. The Department
therefore declines to abandon its use of such onset dates when the
medical evidence fails to establish the date on which the miner became
totally disabled due to pneumoconiosis.
(c) The same comment contends that using default dates based on
filing dates violates section 6 of the Longshore and Harbor Workers'
Compensation Act (LHWCA), 33 U.S.C. 906, as incorporated by the Black
Lung Benefits Act (BLBA), 30 U.S.C. 932(a). The comment suggests using
as an alternative default date the date of the earliest medical
evidence the adjudicator accepts as sufficient to prove the miner is
totally disabled by pneumoconiosis. The Department rejects this
position. Section 6(a) of the LHWCA provides in relevant part that
``[n]o compensation shall be allowed for the first three days of the
disability * * * Provided, however, That in case the injury results in
disability of more than fourteen days, the compensation shall be
allowed from the date of the disability.'' 33 U.S.C. 906(a). As
discussed above, Congress expressly granted the Secretary the power to
tailor incorporated Longshore Act provisions to fit the black lung
program: the LHWCA sections apply to the BLBA ``except as otherwise
provided * * * by regulations of the Secretary.'' 30 U.S.C. 932(a);
Director, OWCP v. National Mines Corp., 554 F.2d 1267, 1273-1274 (4th
Cir. 1977).
In 1978, the Secretary promulgated 20 CFR 725.503 to implement
section 6(a). 43 FR 36806 (Aug. 18, 1978). Like the revised
Sec. 725.503, the 1978 regulation
[[Page 80013]]
prescribed two alternative means for determining the entitlement date.
The adjudicator had to first consider whether the evidence established
the month during which the miner became totally disabled due to
pneumoconiosis. If the evidence was insufficient to identify the
specific month, the adjudicator resorted to the default date: the month
in which the miner filed his or her claim. Section 725.503(d)(2) adopts
the same general approach for modification petitions, and substitutes
the month the claimant filed the modification petition as the default
date if the award is premised on a change in the miner's condition. 64
FR 55050 (Oct. 8, 1999). In the comments accompanying the promulgation
of 20 CFR 727.302, the Secretary explained the reasoning behind the
adoption of a default entitlement date:
This approach was adopted in view of the great difficulty
encountered in establishing a date certain on which pneumoconiosis,
often a latent, progressive, and insidious disease, progressed to
total disability. The filing date was thought to be fair since proof
of onset, which was usually obtained after filing, would likely fix
the date of total disability at the time at which the medical tests
were administered. The filing date, on the other hand, was likely to
be a more accurate measure of onset since it would be the date, or
close to the date, on which the claimant felt the need to file for
benefits, presumably because disability had become total.
43 FR 36828-36829 (August 18, 1978). The Secretary also emphasized that
``a reasonable effort will always be made to establish the month of
onset.'' 43 FR 36806 (August 18, 1978).
Section 725.503 therefore deals with the difficulties inherent in
identifying the particular month a miner's lung condition deteriorated
to the point he became totally disabled due to pneumoconiosis. As noted
above, the Department has long since concluded that pneumoconiosis is a
latent and progressive disease which may manifest itself pathologically
over a lengthy period of time. See generally Sec. 718.201, responses to
comments. As a result, detecting the precise month when the
deterioration reached the level of compensable disability is
problematic at best. In addition, clinical evidence of disability on a
particular date does not mean the miner became disabled that day. The
test may simply detect a condition which developed sometime earlier.
Green v. Director, OWCP, 790 F.2d 1118, 1119 n.4 (4th Cir. 1986).
Notwithstanding these difficulties, however, an award of benefits must
set a date from which those benefits are payable. 20 CFR 725.503(f); 64
FR 55050 (Oct. 8, 1999). If the medical evidence in a particular case
pinpoints the disability date, that date must be used. In many cases,
the evidence is inconclusive or contradictory over time. Even if the
earliest positive evidence establishes the miner's entitlement, that
evidence only proves the miner was disabled on that date. Such evidence
is entirely consistent with a compensable disability antedating the
medical testing for some unknown period of time. See Green, 790 F.2d at
1119 n. 4. Consequently, the Department has consistently found a
default entitlement date necessary, as a rule of administrative
convenience, in order to implement the black lung program in an
effective manner. See generally 30 U.S.C. 936(a) (authorizing Secretary
to ``issue such regulations as [she] deems necessary to carry out the
provisions of'' title IV). The choice of the filing date reflects the
rational assumption that claimants, by and large, file claims or
modification petitions when they believe themselves entitled to
benefits (although compensable disability may in fact have occurred
either prior to, or after, the application date). The Department
recognizes claimants may file modification petitions for other reasons
as well, e.g., the claimant may secure the services of an attorney,
obtain new medical evidence, or intend to prevent the underlying claim
from becoming finally denied. These reasons do not detract from the
underlying logic of the default onset date; rather, they simply explain
why a claimant takes a particular action at a particular time. The
natural impetus to pursue benefits at all is the individual's belief
that (s)he is entitled to them. Like the default onset date for claims,
the same explanation supports a similar approach for awards obtained on
modification if the miner's condition has changed to the point of
compensable disability and the actual onset date cannot be ascertained.
The Department believes the filing date strikes a reasonable
balance between overcompensating and undercompensating the miner.
Section 6(a) requires the liable party to pay benefits ``from the date
of the disability.'' 33 U.S.C. 906(a), as incorporated. If the medical
evidence does not identify that date, the miner might receive either
more, or less, compensation than the amount to which (s)he is entitled
by using the filing date. Obviously, if the medical evidence proves
that the miner became disabled only after he filed, then the filing
date is inapplicable; the adjudicator must select some later date to
avoid compensating the miner for a period of time when (s)he was not
eligible. See Rochester & Pittsburgh Coal Co. v. Krecota, 868 F.2d 600,
603 (3d Cir. 1989) (holding that ALJ erroneously relied on filing date
when medical evidence clearly indicated miner was not disabled until
several years later). Absent such evidence, however, the rationale
underlying section 725.503 ensures the miner will receive the
approximately correct amount of compensation. Accordingly, the
Department rejects the comment's position that a default onset date
based on a filing date--of either a claim or a modification petition--
violates section 6(a).
The same comment also states that the use of default onset dates
originated under part B of the BLBA and derives from the Social
Security Act. The commenter contends that section 6(a) supersedes the
Social Security Act rule for purposes of part C of the BLBA. As
discussed above, default onset dates are entirely consistent with
section 6(a). Furthermore, the comment does not explain why their
origin has any legal relevance. The comment does not state a basis for
eliminating default onset dates for part C claims.
(d) One comment opposes using the date the claimant petitioned for
modification as the default onset date if benefits are awarded based on
a change in the miner's condition. The commenter contends the proper
default date should be immediately after the date of the adverse
decision which was overturned on modification. For the reasons set out
in comment (c), the Department rejects this suggestion. The filing date
is the most rational point to begin benefits if the date on which the
miner's pulmonary condition changed sufficiently to make him or her
entitled to benefits is not established by the evidence of record. If,
however, the record contains credible evidence of the miner's
entitlement predating the modification petition, the onset date should
be the date of that evidence provided no later credible evidence
refuting entitlement exists, and the evidence was developed after the
date on which the most recent denial by a district director or
administrative law judge became effective.
(e) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.515
(a) The Department did not open Sec. 725.515 for comment when it
issued the initial notice of proposed rulemaking, 62 FR 3341 (Jan. 22,
1997). The Department proposed amending Sec. 725.515 in its second
notice of
[[Page 80014]]
proposed rulemaking to conform it to changes in federal law which make
black lung benefits payable by the Black Lung Disability Trust Fund
subject to garnishment for child support and alimony. 64 FR 54971,
55001 (Oct. 8, 1999).
(b) Although one comment has suggested the Department allow
claimants and responsible operators to negotiate settlements rather
than fully litigate every claim, the Department opposes this
suggestion. The Department's principal response to the issue of
settlements appears in the Final Regulatory Flexibility Analysis,
below. The Department takes the same position with respect to any
assignment, release or commutation of benefits except to the extent
authorized by the Black Lung Benefits Act (BLBA) or the Secretary's
regulation. Such agreements are void. Norfolk Shipbuilding & Drydock
Corp. v. Nance, 858 F.2d 182, 186 (4th Cir. 1988), cert. den. 492 U.S.
911 (1989). The BLBA prescribes precisely the amount of monthly
benefits to which a claimant is entitled. 30 U.S.C. 922(a). This
statutory compensation schedule represents Congress' judgment as to the
reasonable level of monthly benefits a totally disabled miner or his or
her survivor should receive. By incorporating section 16 regarding
releases (and 15 regarding waiver, see Brown v. Forest Oil Corp., 29
F.3d 966, 968 (5th Cir. 1994)) of the Longshore and Harbor Workers'
Compensation Act (LHWCA), 33 U.S.C. 916, 915, into the BLBA, 30 U.S.C.
932(a), Congress demonstrated its intent to ensure that claimants
receive the full amount of benefits to which they become entitled,
thereby having less need to resort to other means of support, including
public assistance. See generally 1 Larson's Workers' Compensation Law
(MB) Sec. 1.03[2] (1999). Moreover, making agreements to reduce, divert
or bargain away benefits absolutely void also provides some level of
protection to claimants' rights; no party who negotiates such an
agreement can rely on its terms in the event the claimant elects to
pursue his or her full rights under a claim. Such protections are
especially appropriate given the claimant population most affected by
the BLBA, i.e., elderly, disabled and less educated retired workers and
their survivors. Prohibiting settlements also recognizes the
progressive nature of pneumoconiosis. Because this disease may evolve
over a period of years, the availability of settlements may encourage a
miner-claimant to forego a future claim for full benefits after the
pneumoconiosis has progressed to the point of compensable disability in
lieu of the present payment of a lesser amount. The Department
therefore considers settlements ill-suited to the BLBA program.
Finally, although it incorporated sections 16 and 15 of the LHWCA into
the BLBA, Congress did not incorporate section 8 (allowing for district
director approval of certain settlements under the LHWCA). The
Department does not believe Congress meant to allow settlements to
occur under the BLBA in the absence of an express and direct
incorporation of such intent.
(c) No comments were received concerning this section, and no
further changes have been made in it.
20 CFR 725.522
In its initial notice of proposed rulemaking, the Department
proposed a shortened Sec. 725.522, in which subsections (a) and (b) of
20 CFR 725.522 were combined in proposed Sec. 725.522(a). Discussion of
when benefit payments are due was moved to a newly expanded
Sec. 725.502. These proposed changes were part of a general rewriting
of the regulations governing the payment of benefits, Part 725, Subpart
H. 62 FR 3365-67 (Jan. 22, 1997). Although no comments were received
concerning this section, the Department reiterates that the cost of a
miner's complete pulmonary examination at Trust Fund expense--defined
as a ``benefit'' under Sec. 725.101(a)(6)--is not a payment included
within ``overpayments'' for purposes of subsection (b). See 62 FR 3351
(Jan. 22, 1997); 64 FR 54982 (Oct. 8, 1999). No changes have been made
in this section.
20 CFR 725.530
(a) In its initial notice of proposed rulemaking, the Department
proposed a new Sec. 725.530(a), setting out an operator's or carrier's
obligation to pay benefits immediately when they become due pursuant to
an effective order, and the consequences of an operator's failure to
pay such benefits. 62 FR 3415-16 (Jan. 22, 1997). This proposed change
was part of a general rewriting of the regulations governing the
payment of benefits, Part 725, Subpart H. 62 FR 3365-67 (Jan. 22,
1997).
(b) Two comments object generally to the imposition of a
``penalty'' for an operator's failure to pay benefits when due, citing
comments addressed to Sec. 725.502. For the reasons expressed in the
response to those comments, no changes are made to either regulation.
(c)(i) Several comments object to the imposition of a ``penalty''
for failure to pay a benefit within ten days after the payment is due,
arguing that ten days is not enough time to calculate correct benefit
amounts under the Black Lung Benefits Act (BLBA). The Department
disagrees. This regulation does not change existing law in any material
manner. The BLBA incorporates Sec. 14 of the Longshore and Harbor
Workers' Compensation Act, 33 U.S.C. 914, which governs the payment of
compensation under that Act. 30 U.S.C. 932(a). Section 14(f) provides
that additional compensation, in the amount of twenty percent of unpaid
benefits, shall be paid if an employer fails to pay within ten days
after the benefits become due. The twenty-percent additional
compensation provision has been an incorporated provision of Part C
since the inception of the statute. Consequently, Sec. 725.530 merely
restates existing law: failure to pay the full amount of benefits owed
the claimant within ten days after the benefits are due shall result in
the payment of an additional twenty percent of the unpaid benefits. See
also Sec. 725.607(a) (twenty-percent additional compensation assessed
on unpaid benefits); Sproull v. Director, OWCP, 86 F.3d 895, 900-01
(9th Cir. 1996), cert. den. sub nom. Stevedoring Services of America,
Inc. v. Director, OWCP, 117 S.Ct. 1333 (1997) (holding twenty percent
additional compensation applies to late payment of interest
notwithstanding employer timely paid underlying benefits) This
assessment is self-executing, and attaches automatically upon the
failure to make timely payment regardless of any equitable
considerations explaining the untimeliness. Severin v. Exxon Corp., 910
F.2d 286, 288 (5th Cir. 1990). The Department also notes that monthly
benefit amounts are fixed by law and adjusted only once a year. Most
black lung benefits are paid by insurance companies or self-insured
coal companies who have ready access to current monthly benefits rates
and the expertise to make any necessary computations. Finally, the
Department notes that the actual amount of time available to the party
liable for benefits to make a timely payment has been enlarged by
virtue of changes made in Sec. 725.502(b). That regulation requires the
liable party to pay the benefits due, pursuant to an effective order,
for any given month by the fifteenth day of the following month. 64 FR
55050 (Oct. 8, 1999). Liability for additional compensation in the
amount of twenty-percent for defaulting on a payment cannot be invoked
until an additional ten calendar days have passed after the monthly
benefit becomes due. See Pleasant-El v. Oil Recovery Co., Inc., 148
F.3d 1300, 1303 (11th Cir. 1998); Burgo
[[Page 80015]]
v. General Dynamics Corp., 122 F.3d 140, 143 (2nd Cir. 1997) cert. den.
118 S.Ct. 1839 (1998); Reid v. Universal Maritime Serv. Corp., 41 F.3d
200, 202 (4th Cir. 1994); Irwin v. Navy Resale Exchange, 29 Ben. Rev.
Bd. Serv. 77 (1995); contra Quave v. Progress Marine, 912 F.2d 798, 800
(5th Cir. 1990) (holding ten days means ten business days). With
respect to the initial payment after entry of an award, the responsible
operator should always have at least 25 days (as shown by the following
example) in which to make the computation and make the first payment of
monthly benefits. If an award becomes effective on the last day of
January, the operator has until February 15th in which to pay the
benefits attributable to January; the operator also has an additional
ten days to avoid liability for additional compensation. This amount of
time should be sufficient to allow the calculation of the benefit
amount due and pay the claimant, and therefore to comply fully with the
regulatory deadlines. This minimum period of 25 days comes close to the
30 day-period suggested by one comment as ``more reasonable.'' In fact,
in cases in which the order awarding benefits becomes effective at the
beginning of the month, the operator will have far more than the
suggested 30 days in which to issue the check. As for payments
subsequent to the initial payment, the operator has ample time to
calculate and issue the monthly benefits check before incurring the
assessment of additional compensation for untimeliness. Continuing with
the previous example: If the operator has made the initial payment on
February 15th, the next installment is not due until March 15th; the
operator then has an additional ten days until the Sec. 14(f)
assessment attaches in which to make the payment. (ii) The more complex
computations involve retroactive benefits. Under Sec. 725.502(b)(2), an
operator need not pay retroactive benefits until the district director
computes this amount, within 30 days after issuance of an effective
award, and informs the responsible operator of it. Benefits and
interest for periods prior to the effective date of the order are not
due until the thirtieth day following issuance of the district
director's computation. This time is sufficient to verify the district
director's computation, and actually allows the employer considerably
more time than the ten days provided by 20 CFR 725.607(a) in which to
pay retroactive benefits before liability for twenty-percent additional
compensation may be imposed.
(c) One comment contends the proposed changes depart from current
departmental practice and penalize operators for appealing awards of
benefits. The Department disagrees. Section 14(f), as noted above, is
an incorporated statutory provision which has been a part of part C of
the BLBA from the beginning. Its incorporation represents a policy
determination by Congress to promote the prompt compliance of a
responsible operator with the terms of an effective award. The proposed
changes to the regulations do not vary the operation of section 14(f).
Rather, they simply implement Congress' intent in placing section 14(f)
into the BLBA. Whether current administrative practice does not apply
section 14(f) to the maximum extent cannot change the plain meaning of
the provision. Finally, imposition of additional compensation for
failing to pay benefits in a timely manner is not a penalty for
pursuing an appeal of an award. Section 14(f) is a tool for ensuring
compliance with an operator's benefits obligations once an effective
award is in place and regardless of what subsequent litigation strategy
the operator chooses to pursue.
(d) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.533
The Department did not open Sec. 725.533 for comment when it issued
the initial notice of proposed rulemaking, 62 FR 3341 (Jan. 22, 1997).
When the Department issued its second notice of proposed rulemaking, it
proposed minor changes in the regulation and invited comments from the
public. 64 FR 54971, 55001-02 (Oct. 8, 1999). Specifically, the
Department proposed deleting provisions concerning section 415
``transition'' claims, 30 U.S.C. 925, in both the current 20 CFR
725.403 and 725.533. Although the Department does not intend to alter
the rules applicable to any section 415 claim that may remain in
litigation, parties have adequate access to these rules in earlier
editions of the Code of Federal Regulations. In the final rule, the
Department has added a comma after the word ``circumstances'' in the
first sentence of subsection (a) for grammatical purposes. No comments
were received concerning this section, and no other changes have been
made in it.
20 CFR 725.537
(a) The Department proposed changing Sec. 725.537 in the initial
notice of proposed rulemaking to harmonize the regulation with proposed
Sec. 725.212(b), which requires full benefits to be paid to each
surviving spouse of a deceased miner if more than one eligible survivor
exists. 62 FR 3366, 3417 (Jan. 22, 1997).
(b) Two comments state that the Department cannot retroactively
apply the regulation permitting more than one surviving spouse of a
deceased miner to receive monthly benefits as a beneficiary without
regard to the existence of any other entitled spouse (see
Sec. 725.212(b)). The comments contain no citation to specific
precedent and no further explanation. They do not afford the Department
a sufficient basis for any change to the regulation. The Department has
also addressed comments concerning the retroactive effect of the
regulations in connection with Sec. 725.2, and see 64 FR 54981-82 (Oct.
8, 1999).
(c) One comment contends the change permitting full benefits to
multiple survivors is grounded on a false premise. The commenter states
that the Social Security Administration (SSA) did not grant full
benefits to multiple surviving spouses under part B of the Black Lung
Benefits Act (BLBA), and ``required'' the Department to use the same
rules. The comment does not provide any basis for either proposition.
The Department rejects the comment for several reasons. First, the
commenter cites no statutory authority, SSA regulation, or other
evidence for its description of SSA practice, and thus no conclusions
can be drawn about that agency's official practice concerning the
issue. Second, SSA administered Part B of the BLBA, but the Department
has had sole authority over Part C since January 1, 1974. Whatever
SSA's internal views or practice, it cannot bind the Department if the
Department concludes the statute requires a different result. Third,
the Department believes the law compels what the revised regulation
provides. In the initial notice of proposed rulemaking, the Department
provided a detailed legal analysis of the pertinent statutory
authorities and legislative history, all of which support awarding full
monthly benefits to more than one surviving spouse. See 62 FR 3350-51
(Jan. 22, 1997). Congress amended the Social Security Act in 1965 to
allow benefits to a divorced surviving spouse as a ``widow'' of the
miner. Pub. L. No. 89-97, section 308(b)(1), 79 Stat. 286 (1965). The
legislative history of the amendment clearly established Congress'
intent that payment of benefits to two (or more) ``widows'' would not
reduce the benefits paid to either. S. Rep. No. 404, 89th Cong., 1st
Sess. (1965), reprinted in 1965 U.S.C.C.
[[Page 80016]]
& A.N. 1943, 2047. In 1972, Congress amended the BLBA definition of
``widow'' to use the Social Security Act definition. 30 U.S.C. 902(e).
The legislative history is equally clear that Congress intended to
conform the BLBA definition to the Social Security Act definition. S.
Rep. No. 743, 92nd Cong., 2d. Sess., reprinted in 1972 U.S.C.C. & A.N.
2305, 2332. The BLBA also reinforces this interpretation because it
requires a ``widow'' to receive benefits at prescribed rates and makes
no allowance for a reduction based on the existence of more than one
widow. 30 U.S.C. 922(a)(2). To date, two courts of appeals and the
Benefits Review Board have accepted the Department's position. Peabody
Coal Co. v. Director, OWCP [Ricker], 182 F.3d 637, 642 (8th Cir. 1999);
Mays et al. v. Piney Mountain Coal Co., 21 Black Lung Rep. 1-59, 1-65/
1-66 (1997), aff'd 176 F.3d 753, 764-765 (4th Cir. 1999). No court has
reached a contrary result, and no comment has addressed the substance
of this analysis. Consequently, the Department has no basis for
changing the regulation.
(d) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.543
(a) The Department did not open Sec. 725.543 for comment when it
issued the initial notice of proposed rulemaking, 62 FR 3341 (Jan. 22,
1997). The Department received a number of comments, however, offering
general criticisms of the overpayment waiver and adjustment criteria;
the program had been using criteria developed by the Social Security
Administration (SSA) for waiver of overpayments incurred under Part B
of the Black Lung Benefits Act (BLBA). In response, the Department
proposed revising Sec. 725.543 to adopt the waiver standards in 20 CFR
part 404, which are used by the SSA in administering title II of the
Social Security Act. 64 FR 55055 (Oct. 8, 1999). The Department
explained that the part 404 criteria better reflect the current law
than the part 410 criteria because the part 410 have not been revised
since 1972. 64 FR 55002 (Oct. 8, 1999).
(b) One comment generally opposes the extension of the overpayment
waiver and recovery procedures to claims involving responsible
operators, and incorporates by reference its response to Sec. 725.547.
The comment does not specifically address the substance of proposed
Sec. 725.543. The Department responds to comments concerning
Sec. 725.547 at that provision.
(c) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.544
(a) The Department did not open Sec. 725.544 for comment when it
issued the initial notice of proposed rulemaking, 62 FR 3341 (Jan. 22,
1997). The Department did receive one comment which noted that the
maximum amount subject to compromise had been raised to $100,000. 64 FR
55002 (Oct. 8, 1999). The Department proposed changing Sec. 725.544 to
reflect that fact, and to replace the reference to the Federal Claims
Collection Act of 1966, now repealed, with a citation to 31 U.S.C.
3711. 64 FR 55055-56 (Oct. 8, 1999).
(b) One comment opposes in general terms the extension of the
overpayment waiver and recovery procedures to claims involving
responsible operators, and incorporates by reference its response to
Sec. 725.547. The comment does not specifically address the substance
of proposed Sec. 725.544. In any event, this provision only applies to
the compromise of debts owed the United States government. See 31
U.S.C. 3711(a).
(c) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.547
(a) In the initial notice of proposed rulemaking, the Department
proposed amending Sec. 724.547 to extend the waiver and adjustment
provisions to overpayments owed by claimants to responsible operators.
62 FR 3366, 3419 (Jan. 22, 1997). Formerly, these protections had
applied only to claimants who had been overpaid by the Trust Fund. 20
CFR Sec. 725.547(a). The Department concluded that the opportunity to
obtain a waiver or adjustment of the debt should be made available to
all claimants regardless of their benefits' source. The Department
received numerous comments opposing the proposed change for a variety
of reasons. 64 FR 55002-03 (Oct. 8, 1999). Comments urging the
Department to limit recoveries to the adjustment of future benefits,
and objections based on increased difficulties for operators in
recovering overpayments, were rejected based on the policy
considerations set forth in the initial notice of proposed rulemaking.
62 FR 3366-67 (Jan. 22, 1997). The Department also rejected the
position that waiver of an overpayment owed an operator amounted to the
unconstitutional deprivation of property, citing caselaw upholding
overpayment recoveries under the more restrictive Longshore and Harbor
Workers' Compensation Act (LHWCA), 33 U.S.C. 914(j), 922, as
incorporated by 30 U.S.C. Sec. 932(a). Finally, the Department
addressed comments urging changes in the legal test for waiver by
noting that the test is derived from an incorporated provision of the
Social Security Act (SSA). The Department did, however, propose changes
to Sec. 725.543, adopting more current criteria for waiver. See 64 FR
55055 (Oct. 8, 1999).
(b) Two comments oppose the Department's use of the SSA waiver
provisions rather than the LHWCA approach to the problem. The Black
Lung Benefits Act (BLBA) incorporates the overpayment provisions of
both statutes. 42 U.S.C. 404(b), as incorporated by 30 U.S.C. 923(b),
940 (SSA); 33 U.S.C. 914(j), 922, as incorporated by 30 U.S.C. 932(a)
(LHWCA). The SSA requires the agency to obtain reimbursement of
overpaid benefits unless the claimant can prove recovery would either
deprive him of the financial resources to pay for necessary expenses,
or violate equity and good conscience regardless of his financial
condition. The LHWCA, however, limits recovery to the adjustment of
future benefits; if no benefits will be paid, no overpayment can be
recovered. In the initial notice of proposed rulemaking, the Department
reviewed the reasons for using the SSA provisions: judicial precedent
upholding the Department's authority to recover overpayments under the
SSA scheme; adverse financial consequences for the Fund if the
Department used the more restrictive Longshore provisions; and the
protections afforded claimants by the waiver procedure, which limits
recovery to those individuals who can afford to reimburse the overpaid
benefits. 62 FR 3366-67 (Jan. 22, 1997). In the second notice of
proposed rulemaking, the Department acknowledged the comments
advocating use of the LHWCA model but relied on the policy
considerations previously advanced. 64 FR 55002 (Oct. 8, 1999). The
Department continues to believe that these considerations provide valid
reasons for using the SSA provisions as the basis for the Department's
overpayment recovery procedures. Moreover, adopting the more current
overpayment criteria in 20 CFR part 404 will conform the Department's
practice to changes in the law since 1972. See 64 FR 55055 (Oct. 8,
1999). The Department therefore disagrees with the commenters who urge
that the SSA overpayment procedures be abandoned in favor of the LHWCA
model.
[[Page 80017]]
(c) One comment states that the Department's response to comments
in the second notice of proposed rulemaking, 64 FR 55002-03 (Oct. 8,
1999), failed to answer several concerns raised in the initial round of
comments. Specifically, the original comment contended that: the LHWCA
provisions supersede the SSA provisions with respect to part C claims,
citing Bracher v. Director, OWCP, 14 F.3d 1157 (7th Cir. 1994); the
Department must evaluate the cost of recovering overpayments against
the amounts actually recovered; caselaw on waiver issues contradicts
the Department's view that the standards will protect claimants from
burdensome recoveries; and courts apply inconsistent interpretations of
the waiver standards. None of the commenter's arguments warrant
changing the basic overpayment recovery procedures. (i) The Seventh
Circuit Court of Appeals' decision in Bracher does not support the
commenter's position. The Court actually declined to address the
relationship between the SSA and LHWCA overpayment provisions because
the petitioner failed to make the argument in earlier proceedings. 14
F.3d at 1161. The Court also noted, in passing, that the Department has
the explicit statutory authority in 30 U.S.C. 932(a) to modify
incorporated LHWCA provisions by issuing regulations which vary the
terms of those provisions. (ii) With respect to the costs involved in
undertaking overpayment proceedings, this factor may be considered in
determining whether to pursue individual cases. Cost alone is not a
reason to ignore the duty to recover overpayments imposed by the BLBA.
(iii) The Department disagrees that the cases cited by the commenter
demonstrate that the waiver and recovery procedures provide inadequate
protection of claimants' interests. The comment incorrectly states that
the Seventh Circuit upheld a $47 difference between a claimant's
monthly income and expenses as a sufficient cushion to allow repayment
of an overpayment. Benedict v. Director, OWCP, 29 F.3d 1140 (7th Cir.
1994). The Court actually found that the claimant's monthly income
exceeded his expenses by at least $110 (not including interest income),
and that the available financial assets would enable the claimant to
repay the overpayment without adverse effect on his living standard.
The comment also cites Bracher, 14 F.3d 1157, as another example of the
lack of protection afforded claimants by the waiver procedures. In that
decision, the Seventh Circuit held an individual cannot claim reliance
on ``erroneous information'' from the agency as a basis for waiver if
the ``information'' is a district director's award which is later
overturned. The Court correctly noted that characterizing such awards
as erroneous agency information would result in waiver for virtually
any overturned award, and render meaningless a regulatory provision
which makes interim awards ``overpayments.'' 14 F.3d at 1162. See also
McConnell v. Director, OWCP, 993 F.2d 1454, 1458 (10th Cir. 1993); Weis
v. Director, OWCP, 16 Black Lung Rep. 1-56, 1-58 (1990). The comment
does not explain in what manner Bracher proves the Department has
exaggerated the extent to which the waiver and recovery regulations
protect claimants' interests. (iv) Finally, the commenter contends that
the circuits have reached inconsistent results in determining whether
to waive recovery of overpayments, citing Benedict, 29 F.3d 1140, and
McConnell, 993 F.2d 1454. Specifically, the comment expresses concern
that one court granted a waiver for the claimant because he spent the
benefits on a vacation while another court denied waiver to a claimant
who saved the benefits. The results reached in these cases are not
inconsistent. In McConnell, the Court granted the waiver because the
miner relied on the receipt of the benefits to pay for the vacation;
his detrimental reliance could be directly linked to the benefits
because he would not have taken the vacation without the additional
money. The Court concluded that permitting the Department to recoup the
amount of benefits spent on the vacation would violate ``equity and
conscience.'' 993 F.2d at 1461. With respect to the balance of the
overpayment, the Court held that the miner had the financial capacity
to repay the benefits because he had a $114 monthly cushion after
comparing his income and expenses. 993 F.2d at 1160. Similarly, in
Benedict, the Court considered a $110 monthly cushion sufficient. The
Court rejected the argument that recovery would violate ``equity and
good conscience'' because the miner did not relinquish any right or,
unlike McConnell, undertake an expense because of the availability of
the benefits. The Department therefore rejects the comment's
interpretation of these decisions.
(d) One comment focuses on the differences between the LHWCA and
BLBA programs as a basis for distinguishing caselaw under the LHWCA
holding that limitations on overpayment recovery do not deprive
employers of property rights. The comment stresses that LHWCA claimants
generally suffer job-related traumatic injuries which are promptly
known by the employer, and the claims litigation is resolved quickly.
By contrast, the commenter notes that BLBA claimants generally file
after retirement and the entitlement litigation is lengthy because the
issues are contentious; the protracted litigation therefore causes
delays and correspondingly larger overpayments since operators must pay
benefits during the litigation. Based on these contrasts, the comment
argues that the limitations imposed on the operator's right to recover
overpayments by Sec. 725.547 should be abandoned because the operator
has no effective means of defending its interests. In effect, the
commenter argues that the inherent delays in BLBA claims adjudication
raise due process concerns because the delays generate large
overpayments which will be uncollectible under Sec. 725.547.
The comment rests on the premise that inherent delays exist in the
adjudication of black lung claims, and that the delays amount to per se
denial of due process. Delay alone, however, is not a due process
violation. C & K Coal Co. v. Taylor, 165 F.3d 254, 259 (3d Cir. 1999).
``It is not the mere fact of the government's delay that violates due
process, but rather the prejudice from such delay.'' Consolidation Coal
Co. v. Borda, 171 F.3d 175, 183 (4th Cir. 1999). In the context of
black lung entitlement litigation, delays have prompted courts to
transfer liability from operators to the Black Lung Disability Trust
Fund because agency errors have deprived the operators of the ability
to defend themselves in a meaningful manner as required by due process.
Island Creek Coal Co. v. Holdman, 202 F.3d 873, 883-84 (6th Cir. 2000);
Borda, 171 F.3d at 183-84; Lane Hollow Coal Co. v. Director, OWCP
[Lockhart], 137 F.3d 799, 808 (4th Cir. 1998). In each of those cases,
unwarranted delays by the agency precluded the operators from asserting
defenses to liability; in effect, the claimant won by default.
Accordingly, delay at some point in the opportunity for adjudication of
a case may constitute a denial of due process, but a mere allegation of
delay without any explanation why the delay is unreasonable does not
substantiate a due process violation. Abbott v. Louisiana Ins. Guaranty
Assoc., 889 F.2d 626, 632-33 (5th Cir. 1989), citing Cleveland Bd. of
Education v. Loudermill, 470 U.S. 532, 547 (1985).
The commenter implies that the prejudice which establishes the
denial
[[Page 80018]]
of due process is the unrecoverable overpayments generated by the time-
consuming litigation over entitlement. The possibility exists that some
claims will be approved and require years of litigation before final
denial, thereby generating large overpayments that may be waived in
overpayment proceedings under Sec. 725.547. Such a possibility,
however, does not establish a general violation of due process. First,
the Department is not solely responsible for the delays in black lung
benefits litigation, and the caselaw is clear that only prejudicial
delays caused by the government are the basis for due process concerns.
Second, the prejudicial effect of delay must be considered in the
factual context of actual cases, and not simply in the abstract. Third,
the existence of large overpayments is not necessarily evidence of due
process violations. If the underlying entitlement adjudication process
works in a fair manner, then due process has been provided and the size
of the resulting overpayment is irrelevant. ``The Due Process Clause
does not create a right to win litigation; it creates a right not to
lose without a fair opportunity to defend oneself.'' Lane Hollow Coal
Co., 137 F.3d at 807 (emphasis in original). Finally, the fact that
large overpayments may eventually be waived does not necessarily amount
to a due process violation. Section 725.547 provides operators with the
opportunity to recover overpayments through an adjudicatory scheme
similar to the entitlement process, with rights to evidentiary
development, hearing and appeal. The comment does not explain why
elimination of the waiver process will enhance the operators' ability
to recover overpayments. The comment does not state a sufficient basis
for abandoning the regulation.
(e) One comment supports Sec. 725.547.
(f) No other comments were received concerning this section, and no
changes have been made in it.
20 CFR 725.548
(a) Formerly, in any case involving an underpayment or an
overpayment, Sec. 725.547(c) and (d) empowered district directors to
issue orders protecting the parties' interests and to resolve disputes
over the orders using the procedures applicable to entitlement issues.
20 CFR 725.547. Based on its title, ``Applicability of overpayment and
underpayment provisions to operator or carrier,'' section 725.547
applied only to cases involving responsible operators. The Department
intends that these provisions should apply to overpayment and
underpayment cases involving both responsible operators and the Black
Lung Disability Trust Fund. Accordingly, the Department proposed
Sec. 725.548 in the second notice of proposed rulemaking as a
regulation of general applicability, and moved Sec. 725.547(c) and (d)
to the proposed regulation. 64 FR 55003, 55056-57 (Oct. 8, 1999).
(b) No comments were received concerning this section, and no
changes have been made in it.
Subpart I
20 CFR 725.606
(a) In its initial notice of proposed rulemaking, the Department
proposed revising Sec. 725.606 in order to require that uninsured
operators, including coal mine construction and coal transportation
employers, secure the payment of benefits in individual claims that
have been awarded and for which they have been determined liable. 62 FR
3367 (Jan. 22, 1997). The regulation establishes a procedure under
which such an operator may be compelled to post the necessary security
in the absence of evidence demonstrating that the operator has taken
other action to secure the benefit payments. In addition, the
regulation distinguishes between operators who were required to, but
did not, comply with the security requirement in 30 U.S.C. 933, and
coal mine construction and coal transportation employers, who are not
required to comply with that requirement. An uninsured employer that
failed to comply with 30 U.S.C. 933 is required to post security worth
no less than $175,000, while an uninsured employer that is either a
coal mine construction or transportation employer is entitled to an
individualized assessment of the amount of security required based on
actuarial projections. That company also must secure the payment of all
future benefits, however. The Department corrected a typographical
error in subsection (c) in its second notice of proposed rulemaking,
and responded to a comment regarding coal mine construction employers.
The commenter argued that the proposal inappropriately imposed personal
liability on the corporate officers of a coal mine construction
employer that fails to comply with the post-award security requirement,
and further stated that the proposal was unnecessary with respect to
coal mine construction employers, who comply with their obligations to
pay benefits. The Department responded by demonstrating the legal basis
for its imposition of personal liability on the officers of corporate
coal mine construction employers. The Department also observed that,
notwithstanding compliance by coal mine construction employers, there
was no basis for excluding construction companies from the requirements
imposed by the Black Lung Benefits Act. 64 FR 55003 (Oct. 8, 1999).
(b) One comment continues to disagree with the requirement that
coal mine construction employers secure the payment of awarded claims,
arguing that the Department's experience with construction employers
has been satisfactory. In its second notice of proposed rulemaking, the
Department discussed a similar comment at length. 64 FR 55003 (Oct. 8,
1999). The Department did not dispute the observation that coal mine
construction employers generally complied with their obligations to pay
awarded claims. The Department explained, however, that the proposed
revision to Sec. 725.606 represented the Department's attempt to
fulfill its responsibility to identify all parties' obligations under
the Black Lung Benefits Act. The Department also noted that proposed
Sec. 725.606 represented an efficient means of enforcing the
obligations of all parties.
The commenter now states that the proposal would impose an onerous
and punitive burden on coal mine construction employers. The Department
disagrees. The regulation does not require an uninsured employer to
deposit funds with a Federal Reserve Bank in every case. Instead, such
a deposit is required only if the employer cannot satisfy the
adjudication officer that the award is otherwise secured. For example,
a large, well-established coal mine construction employer may be able
to demonstrate that its current size and assets are sufficient to allow
it to pay benefits for the lifetime of the claimant. In such a case,
the adjudication officer may permit the employer to meet the security
requirement in a manner other than depositing funds with a Federal
Reserve Bank. An employer, for example, may purchase an indemnity bond,
one of the methods specifically listed in subsection (a), or may
request that the adjudication officer approve another mechanism that
will guarantee the payment of benefits in case the employer ever
becomes unable to meet its obligations.
In addition, the Department does not accept the premise that it
must allow coal mine construction employers to avoid the security
requirement simply because most of them are current in their payment
obligations. If even one such employer currently paying benefits seeks
bankruptcy protection, all of the awarded claims for which that
employer
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