UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
April 4, 1985
ARMAND PAVESI, PETITIONER,
DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, RESPONDENT
On Petition for Review from the Order of the Benefits Review Board dated April 12, 1984, BRB No. 80-1183 BLA.
Before: ADAMS and WEIS, Circuit Judges and POLLAK, District Judge.*fn*
Opinion OF THE COURT
This is an appeal from a decision of the Benefits Review Board of the Department of Labor dated April 12, 1984, affirming a decision of an administrative law judge denying benefits to petitioner under the Black Lung Benefits Act, 30 U.S.C. §§ 901 and 945 (1982). Petitioner challenges the decision of the Benefits Review Board on the following grounds: (1) the Director could not, during the course of the administrative review of petitioner's claim, take a position contrary to the deputy commissioner's initial finding of eligibility; and (2) the decision of the Benefits Review Board is not supported by substantial evidence. We find petitioner's first contention unpersuasive. However, we also find that the decisions of the Benefits Review Board and of the administrative law judge do not establish that the disability suffered by petitioner was not one of the impairments [impairments] covered by the Black Lung Benefits Act. Accordingly, the decision of the Benefits Review Board will be vacated and the case remanded for further consideration.
Petitioner, Armand Pavesi, was born on June 24, 1913. He retired in 1977 after more than 45 years of work as a coal miner. In June 1973 petitioner filed his first application for Black Lung benefits with the Social Security Administration. The final denial of that claim was filed on September 25, 1973. On August 1, 1977, Mr. Pavesi filed an application for Black Lung benefits with the Department of Labor. Pursuant to the 1977 Amendments to the Black Lung Benefits Act, Pub.L.No. 95-239, 86 Stat. 153 (1978), the previously denied application was reactivated for administrative review under the procedures of section 945. Upon petitioner's election, the two applications were consolidated and reviewed by the Department of Labor, 30 U.S.C. § 945(a)(1) (1982).
The first stage of review took place before the deputy commissioner, an official of the Office of Workers' Compensation Programs, Division of Coal Mine Workers' Compensation. On June 27, 1979, the deputy commissioner issued a notice of initial finding of eligibility. That letter stated that Harmer Coal Company, Mr. Pavesi's last employer, should commence payment of benefits within thirty days. If such payments were not made, the notice recited, the Black Lung Disability Trust Fund would pay benefits for which Harmer Coal Company would be ultimately liable should the initial finding of eligibility for benefits be sustained on further review.
Petitioner Pavesi's application was then referred to an administrative law judge ("ALJ") for a formal hearing. Petitioner and Harmer Coal Company took part in that hearing on June 2, 1980. Although, under the regulations, 20 C.F.R. § 725.360(a)(5) (1984), the Director, Office of Workers' Compensation Programs ("Director"), is a party to such proceedings, no appearance was entered for the Director at the time of the hearing.
The ALJ concluded that petitioner had established the interim presumption of eligibility under the applicable regulation since petitioner had been employed as a coal miner for more than ten years and ventilatory studies had produced results within the prescribed ranges. 20 C.F.R. § 727.203(a)(2) (1984).
The evidence before the ALJ included two reports of evaluations of a September 1977 chest x-ray. The first report, by Dr. Lester Freedman, stated that the x-ray was positive for pneumoconiosis. The ALJ also had before him the results of pulmonary function studies. A study performed on September 28, 1977 resulted in a finding of "mild restriction, possible mild airways obstruction." A later study by Dr. C. Vaughn Strimlan yielded results indicative of a "moderately severe restrictive ventilatory pattern." Dr. Strimlan noted, however, that the technician performing the pulmonary function study remarked that there was poor patient effort. Mr. Pavesi testified that he gave full cooperation on all tests.*fn1
Reports from three examining physicians were also provided to the ALJ. Dr. M. I. Levine concluded that the petitioner was "totally and permanently disabled due to pneumoconiosis due to coal dust." However, the ALJ found the Levine report to be conclusory and unsupported by objective tests. Dr. Julian Eligator diagnosed "coalworker's pneumoconiosis" based upon an October 1977 examination. The Eligator report was also disregarded by the ALJ who felt that its findings were based upon only a cursory examination. By contrast, a report prepared by Dr. C. Vaughn Strimlan which presented the "final clinical impression" that there "was no evidence for coal workers' pneumoconiosis" was found convincing by the ALJ because it was based upon a thorough examination and supporting laboratory studies.
Mr. Pavesi testified that he had suffered from shortness of breath during his last three or four years in the mines. He said that his respiratory problems had become markedly worse since his retirement: walking was so great an effort that sometimes he could go no more than 100 feet before he was required to stop and rest.
The ALJ concluded, in a decision and order dated September 15, 1980, that the employer had rebutted the presumption of disability. The ALJ found the report of Dr. Strimlan and the x-ray reading by Dr. Cole persuasive that Mr. Pavesi did not suffer from pneumoconiosis. Accordingly, the ALJ denied Mr. Pavesi's benefits claim.
Mr. Pavesi appealed this determination to the Benefits Review Board on October 6, 1980. While the claim was pending before the Board, Congress passed the 1981 Amendments to the Black Lung Benefits Act, Pub. L. No. 97-119, 95 Stat. 1635 (1981). Those amendments altered section 932 of the Black Lung Benefits Act to provide that the Black Lung Disability Trust Fund, not the employer, should be responsible for payment of benefits on a claim which had been denied prior to March 1, 1978 and which "is or has been approved in accordance with the provisions of section 945."*fn2
Because Mr. Pavesi's claim had been denied by the Social Security Administration prior to 1978 and had been consolidated with his later application to the Department of labor for section 945 administrative review, on March 18, 1982, the Benefits Review Board issued a show cause order inquiring whether the claim should be returned to the deputy commissioner's office for payment of benefits by the Black Lung Disability Trust Fund. Harmer Coal Company responded that it had no objections to a remand provided it would be released from responsibility for payment of benefits pursuant to the 1981 Amendments. The Director responded to the show cause order as well. The Director stated that it had no objection to the dismissal of the employer and the substitution of the Black Lung Disability Trust Fund as the party ultimately responsible for payment of any benefits due. But the Director did oppose a remand for payment of benefits. The Director stated that this opposition was based upon the fact that evidence presented to the ALJ which supported the denial of benefits was not presented to the deputy commissioner at the time of the initial determination of eligibility. No response to the show cause order was received from the petitioner. On the basis of these submissions, the Benefits Review Board, in an order dated September 14, 1983, retained jurisdiction of the claim.
Petitioner filed a motion for reconsideration on September 23, 1983. The motion argued, as petitioner argues to this Court, that the Director cannot depart from the position taken by the deputy commissioner in the initial finding of disability. In an opinion dated December 12, 1983, the Benefits Review Board concluded that petitioner's objections were unfounded and denied the motion for reconsideration.
A final decision on the merits of petitioner's application for benefits was issued by the Benefits Review Board on April 12, 1984. The Benefits Review Board found the decision of the ALJ to be supported by substantial evidence and affirmed the denial of benefits.
Petitioner's principal challenges to the final decision of the Benefits Review Board are: (1) the Director was without authority to take a position contrary to the original position taken by the deputy commissioner,*fn3 and (2) the decision of the ALJ and, thus, the affirmance of that decision by the Benefits Review Board, were not based upon substantial evidence.
Petitioner asserts that, once the Director was substituted as the party responsible for payment of all benefits due, the Director was bound to agree to a remand of the matter for payment of benefits. In support of this position, petitioner notes that the deputy commissioner is an official of the Office of Workers' Compensation Programs. As a result, petitioner contends, the initial finding of disability by the deputy commissioner necessarily reflects the views of the Director with regard to that application. Therefore, petitioner contends, this initial finding is binding on the Director throughout the processing of the application for benefits.*fn4
The contention that the Director is bound by an initial decision of the deputy commissioner has been presented to and rejected by this Court in a similar context. In Director, Office of Workers' Compensation Programs v. Brodka, 643 F.2d 159 (3d Cir. 1981), Judge Sloviter observed that when, as in the present case, the Director is acting as the representative of the Black Lung Disability Trust Fund, the Director has an "obligation to protest unjustified claims against it [the Fund], Gurule v. Director, Office of Workers' Compensation Programs, 11 BRBD 664, 673 (1979)." Id. at 162.*fn5 Therefore, this Court held, the Director can appeal from the decision of the deputy commissioner on the question of the amount of the claimant's attorney's fees when the Black Lung Disability Trust Fund would be liable for those fees. Nothing in that decision suggests that a finding of eligibility should be treated differently.*fn6
Petitioner's position is also contradicted by the regulations governing administrative proceedings under the Black Lung Benefits Act. No regulation precludes the Director from disagreeing with the initial finding of eligibility of the deputy commissioner. As Judge Sloviter noted in Brodka, the Director is a party to the administrative proceedings from the outset. 20 C.F.R. § 725.360(a)(5) (1984). Any party, including the Director, can appeal an adverse decision of the deputy commissioner if the appeal is timely under the regulations. 20 C.F.R. § 725.419(a) (1984). See Brodka supra, 643 F.2d at 162-63. Therefore, the regulations support the proposition that the Director may dispute the initial finding of eligibility and seek further review of that determination.*fn7
Moreover, after the enactment of the 1981 Amendments to the Black Lung Benefits Act, the Department of Labor issued a regulation which explicitly authorizes the Director to oppose the payment of benefits in these circumstances:
Procedure following dismissal of an operator. After it has been determined that an operator or carrier must be dismissed as a party in any claim in accordance with this section, the Director shall take such action as is authorized by the Act to bring about the proper and expeditious resolution of the claim in light of all relevant medical and other evidence. Action to be taken in this regard by the Director may include, but is not limited to the assignment of the claim to the Black Lung Disability Trust Fund for the payment of benefits, the reimbursement of benefits previously paid by an operator or carrier if appropriate, the defense of the claim on behalf of the Trust Fund, or proceedings authorized by § 725.310.
20 C.F.R. § 725.497(d) (1984) (emphasis added).*fn8 In sum, the Director's actions in this proceeding are consistent with the regulations promulgated pursuant to the Black Lung Benefits Act.
Petitioner's contention that the Director was bound by the initial finding of eligibility finds no greater support in the statute. Under the 1981 Amendments to the Black Lung Benefits Act, ultimate responsibility for payment of benefits was shifted from Mr. Pavesi's last employer to the Black Lung Disability Trust Fund. The relevant portion of the amendments is now codified in section 932(c) of Title 30, which states, in pertinent part:
no benefit shall be payable by any operator on account of death or total disability due to pneumoconiosis . . . which was the subject of a claim denied before March 1, 1978, and which is or has been approved in accordance with the provisions of section 945 of this title.
Because this provision relieves the former employer from liability for payment of benefits, responsibility for such claims such as Mr. Pavesi's then falls upon the Black Lung Disability Trust Fund. 30 U.S.C. § 932(j) (1982).
Petitioner suggests that this language requires immediate payment by the Black Lung Disability Trust Fund of all claims denied prior to March 1, 1978 which were revived under section 945 of the Black Lung Benefits Act and were later approved at any point in the administrative process, even if the approval was reversed at a subsequent stage of the process. It is asserted that the initial finding of eligibility on petitioner's application compels the conclusion that petitioner's application for benefits " has been approved in accordance with the provisions of section 945." 30 U.S.C. § 932(c) (1982) (emphasis added).
This reading of the 1981 Amendments has been rejected by the Court of Appeals for the Seventh Circuit in a similar case. Markus v. Old Ben Coal Co., 712 F.2d 322 (1983). There, an initial finding of eligibility was followed by a de novo review by an administrative law judge. The ALJ concluded that the application for benefits should be denied and the Benefits Review Board found the ALJ's decision to be supported by substantial evidence. Faced with the petitioner's assertion that the 1981 Amendments mandated automatic payment of benefits to any individual who had been found eligible at any step of the administrative process, the court concluded:
such a reading could hardly have been contemplated by Congress. A more natural reading is simply that the use of the phrase "has been" was Congress' means of authorizing assessments against the Fund for claims which "had been" approved under the pre-existing Section 945 procedures (in effect since 1977) but prior to the enactment of the 1981 Amendments. Indeed, in testimony before the Senate Subcommittee on Labor and Human Resources, the Deputy Under Secretary for Labor and Employment Standards noted that the transfer provision applied to "claims denied and closed prior to the 1977 Amendments, and subsequently reopened and approved pursuant to the special review process established by those amendments," Hearings Before the Subcommittee on Labor, Committee on Labor and Human Resources, United States Senate, Dec. 14, 1981, p.19. The "special review process" established pursuant to the 1977 Amendments includes the entire array of determinations and appeals witnessed in the instant case, not just the interim, positive determination in May, 1979. It would be most unusual for Congress to countenance the establishment [establishment] of a multi-tiered claim review process if, as petitioner's reading would have it, liability automatically ensued from a positive determination at the first level. In short, we think the plain sense of the statute when viewed against the history of the Amendments, is that the provision creating liability when a claim "is or has been approved" under Section 945 is simply a grandfather clause which Congress felt necessary to hold the industry Fund liable for claims, unlike the one presented here, which had survived the entire gauntlet of appeals and reviews prior to the 1981 enactments but after the 1977 Amendments.
Id. at 325-26.*fn9
We concur in the Seventh Circuit's analysis of this aspect of the 1981 Amendments. The interpretation of those Amendments proposed by Mr. Pavesi in the present case strains the plain language of the statute to reach a result which is supported neither by logic nor by legislative history.
Accordingly, we conclude that the 1981 Amendments to the Black Lung Benefits Act do not mandate payment of benefits to any individual whose claim was approved at an initial or intermediate administrative proceeding but disapproved at a later stage of the administrative process. Section 932(c) merely provides that the Black Lung Disability Trust Fund, not the former employer, must shoulder the costs of benefits awarded as the result of final determinations of eligibility pursuant to the section 945 procedure established in the 1977 Amendments to the Black Lung Benefits Act. Section 932(c) merely provides that the Black Lung Disability Trust Fund, not the former employer, must shoulder the costs of benefits awarded as the result of final determinations of eligibility pursuant to the section 945 procedure established in the 1977 Amendments to the Black Lung Benefits Act, Section 932(c) does not expand the liability of the Black Lung Disability Trust Fund beyond that which would have been faced by the employer prior to the Amendments. Liability -- whether that of the employer or that of the Fund -- necessarily requires a determination of eligibility which has become "final" under the procedure established by the statute and regulations.
Mr. Pavesi's final argument in support of the proposition that the Director cannot depart from the initial finding of the deputy commissioner is that the Director's actions in the present case violated petitioner's due process rights. Petitioner asserts that the Director's decision to oppose liability once the Director was substituted for the employer as the party responsible for payment of benefits constituted a change in position from the Director's original stand with regard to the question of eligibility.*fn10 The conclusion that the Director changed his position is predicated upon the assumption that the initial finding of the deputy commissioner is equivalent to a decision of the Director.
In light of our conclusion that no provision of the Black Lung Benefits Act and no regulation issued thereunder ties the Director to the position taken by the deputy commissioner, the factual predicate for Mr. Pavesi's due process argument -- that the Director changed his position -- appears to be lacking. However, assuming arguendo that petitioner could establish a basis for the proposition that the Director's original position in this proceeding was that of the deputy commissioner, the Director's decision to alter that position and to contest petitioner's eligibility does not violate due process.*fn11 It is well established that "an agency may alter or reverse its position if the change is supported by a reasoned explanation." Environmental Defense Fund, Inc. v. Costle, 211 U.S. App. D.C. 313, 657 F.2d 275, 289 (D.C. Cir. 1981). See American Petroleum Institute v. E.P.A., 661 F.2d 340, 355 (5th Cir. 1981); Hatch v. Federal Energy Regulatory Commission, 210 U.S. App. D.C. 110, 654 F.2d 825, 834 (D.C. Cir. 1981). In the present case, the Director gave a clear explanation for opposing a remand for payment of benefits.*fn12 In the response to the show cause order, the Director stated: "the administrative law judge relied upon the medical report and deposition testimony of Dr. C. Vaughn Strimlan (Employer's Exhibit Nos. 1 and 2), evidence which was not available to the deputy commissioner when the claim was before him for consideration." Therefore, there is no support in the record for the petitioner's contention that the Director acted arbitrarily or capriciously in opposing petitioner's right to benefits before the Benefits Review Board.
In light of our conclusion that there is no merit in petitioner's first argument, it is necessary to consider petitioner's assertion that the denial of benefits was not supported by substantial evidence. Mr. Pavesi does not contest the ALJ's dismissal of the views expressed by Dr. Eligator and Dr. Levine or the credence given by the ALJ to Dr. Cole's reading of the x-rays. Petitioner contends solely that the opinion of Dr. Strimlan was not a sufficient basis on which to conclude that petitioner did not suffer from pneumoconiosis as defined by the Black Lung Benefits Act.
Once the interim presumption of disability created by § 921(c) of the Act and 20 C.F.R. § 727.203(a)(2) (1984) has been established, the burden shifts to the party opposing an award of benefits to establish one of the requirements of 20 C.F.R. § 727.203(b) (1984).*fn13 In the present case, the ALJ concluded that the requirements of subsection (4) of that regulation had been established by the petitioner's former employer. That subsection states that the presumption will be rebutted if "all relevant medical evidence" establishes "that the miner does not, or did not, have pneumoconiosis."
The Black Lung Benefits Act defines pneumoconiosis as:
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) (1982). The regulations which implement the Act expand on this definition.
This definition includes but is not limited to, coal workers' pneumoconiosis, anthraco-silicosis, anthracosisanthro-silicosis, massive pulmonary fibrosis, progressive massive fibrosis silicosis, or silicotuberculosis arising out of coal mine employment.
20 C.F.R. § 727.202 (1984). At oral argument, counsel for the Director conceded, as is obvious from the definition in the statute and the regulations, that the medical definition of pneumoconiosis, or "coal workers' pneumoconiosis," is far narrower than the definition [definition] of pneumoconiosis in the Black Lung Benefits Act.
It is well established that the Black Lung Benefits Act is to be liberally construed to assure widespread benefits to miners disabled by black lung disease. See Echo v. Director, Office of Workers' Compensation Programs, 744 F.2d 327, 330 (3d Cir. 1984); Palmer Coking Coal Co. v. Director, Office of Workers' Compensation Programs, 720 F.2d 1054, 1058 (9th Cir. 1983). Therefore, the Act must be applied in a manner which assures compensation to every miner who suffers from any of the several lung impairments covered by the Black Lung Benefits Act. Consequently, for the decisionmaker to conclude that the claimant does not suffer from pneumoconiosis, the party opposing an award of benefits must point to persuasive evidence which establishes that the claimant does not suffer from pneumoconiosis as defined by the statute and regulations -- neither coal workers' pneumoconiosis, as that term is used in the medical profession, nor any other chronic dust disease of the lung arising out of coal mine employment.
In reaching the conclusion that the presumption of disability had been rebutted under 20 C.F.R. § 727.203(b)(4) (1984), the ALJ stated:
I find Dr. Strimlan's report to be a reasoned medical evaluation with substantiating documentation. Based on his examination and studies, he concluded there was no evidence of coal worker's pneumoconiosis.
Neither the ALJ's decision nor the report of Dr. Strimlan on which the ALJ relies states whether Dr. Strimlan's conclusion that petitioner did not suffer from "coal workers' pneumoconiosis" was equivalent to a finding that petitioner suffered from no lung impairment within the definition of pneumoconiosis found in the statute and regulations.*fn14 In addition, it is not possible to determine from the ALJ's decision whether there was any evidence other than Dr. Strimlan's statement that petitioner did not have "coal workers' pneumoconiosis" which would support a conclusion that petitioner did not have pneumoconiosis under the statutory definition. Under these circumstances, we cannot conclude that the decision of the ALJ is supported by substantial evidence. However, because it is unclear from the record currently before us whether the ALJ relied on evidence apart from the single statement by Dr. Strimlan referred to in the ALJ's decision in reaching the legal conclusion that petitioner did not suffer from pneumoconiosis, we conclude that the matter should be remanded to the Benefits Review Board for reconsideration. In particular, it may be appropriate for the ALJ to clarify the basis for his original conclusion or for the ALJ to take further evidence to clarify the issue.*fn15
We have concluded that there is no support for Mr. Pavesi's contention that his case should have been remanded for immediate payment of benefits merely because the Black Lung Disability Trust Fund was substituted as the ultimately responsible party. But we have also concluded that the record on appeal does not assure that the denial of benefits was based upon evidence that petitioner did not suffer from any lung impairment within the statutory definition of pneumoconiosis. Accordingly, we vacate the denial of benefits and remand for reconsideration in light of this opinion.