Duplicate claims, filed under 20 C.F.R. 725.309(d), and requests for modification by claimants, filed under 20 C.F.R. 725.310, have become prevalent. Claimants who have been denied federal black lung benefits persist in relitigating their claims. The United States Court of Appeals for the Fourth Circuit recently imposed some limitations on claimants’ ability to relitigate duplicate claims under Section 725.309(d) in Lisa Lee Mines v. Director, OWCP __ F.3d __, No. 94-2523 (4th Cir. June 16, 1995).
Kilcullen, Wilson & Kilcullen filed the appeal in the Fourth Circuit on behalf of Lisa Lee in order to challenge the interpretation of Section 725.309 adopted by the Benefits Review Board and by the Director, OWCP. The issue before the Court hinged on the requirement in Section 725.309 that the miner establish a “material change in conditions.”
Section 725.309 of the regulations was promulgated by the Secretary of Labor and provides that if a miner’s claim has been finally denied for a period of one year or more, he may file a duplicate claim. Under the regulation, the duplicate claim must be denied on the basis of the prior denial, unless it is determined that there has been a “material change in conditions.” By way of contrast, the modification provision at Section 725.310 of the regulations, which implements 33 U.S.C. § 922, provides that a previously denied claim may be reopened at any time before one year from the date of the denial, if the claimant can demonstrate a “change in conditions” or a “mistake in a determination of fact.”
The Benefits Review Board adopted an extremely liberal standard for determining what may constitute a “material change in conditions” under Section 725.309 in Spese v. Peabody Coal Co., 11 BLR 1-174 (1988). Under Spese, the claimant could establish a “material change in conditions” merely by producing evidence which reflected “a reasonable possibility that [it] would change the prior administrative result.”
The Director, OWCP, did not agree with the Spese standard, but adopted an equally liberal standard, whereby a claimant would be required to simply prove “at least one of the elements of entitlement previously decided against him.” Both the Spese “reasonable possibility” standard and the Director’s “one element” standard in our view were too liberal and did not accord proper deference to the prior “final” denial. The Board’s Spese standard was rejected by the Seventh Circuit in Sahara Coal Company v. OWCP, 946 F.2d 554 (7th Cir. 1991), and by the Sixth Circuit in Sharondale Corporation v. Ross, 42 F.3d 993 (6th Cir. 1994). The Seventh Circuit adopted a standard which required the claimant to prove that pneumoconiosis had become totally disabling since the prior denial and made clear that mistakes in a decision on the first application could not be grounds for entitlement under Section 725.309. In Sharondale, the Sixth Circuit adopted the Director’s “one element” standard. It is interesting to note, however, that in a previous unpublished decision in which Kilcullen, Wilson & Kilcullen represented the operator, the Sixth Circuit applied the stricter Sahara standard at our urging. McGuire v. Little Bill Coal Co., No. 93-3008, 1994 W.L. 3349 (6th Cir. January 5, 1994) (unpublished). It is not clear why the Sixth Circuit changed its mind in Sharondale and felt that the Director’s “one element” standard had to be given deference.
The facts in the Lisa Lee case were that the claimant originally filed for federal black lung benefits in 1986 and presented evidence of complicated pneumoconiosis. (Under the Act evidence of complicated pneumoconiosis provides an irrebuttable presumption of entitlement under 30 U.S.C. § 921(c)(3).) Despite uncontradicted evidence of complicated pneumoconiosis, the Department of Labor denied the claim. The claimant failed to take any action following this denial within one year and the claim, therefore, was not subject to modification under Section 725.310 of the regulations. More than two and one-half years after his first claim was denied the claimant filed a duplicate claim under Section 725.309(d). Once again evidence of complicated pneumoconiosis was produced.
The administrative law judge determined that the original denial by the Department of Labor was mistaken and was “null and void.” The Benefits Review Board rejected the administrative law judge’s rationale that the original decision was “null and void”, but nevertheless applied the Spese standard to find that the evidence was sufficient to establish a “reasonable possibility” that the prior result would change. On that basis, the Board affirmed the award of benefits.
Like the invalid Spese standard, the “one element” standard purposed by the Director allows the claimant to bootstrap into reconsideration of the original decision denying benefits .... Effectively, therefore, the original decision denying benefits is reopened without a showing of actual material change .... Indeed, given that the Director’s “one element” standard suffers from the same fundamental flaw as does the Spese standard, namely, that it permits reconsideration of critical determinations underlying a decision denying benefits where no material change in the conditions prompting those determinations is actually shown, we are at a loss to understand how the Director can urge this standard and at the same time concede the invalidity of the Spese standard. Slip Op. at 7-8.
The Fourth Circuit’s concerns about the “one element” standard were justified. In Havner v. Tennessee Consolidated Coal Co., BRB No. 93-2501 BLA (May 30, 1995), the Board vacated an administrative law judge’s denial of benefits under Section 725.309. Havner arose within the jurisdiction of the Sixth Circuit and the Board applied the Sharondale “one element” standard. The Board found that “one element” (i.e. pneumoconiosis) had been established and remanded the claim to the administrative law judge to consider whether the evidence developed in the original claim could establish entitlement. This gives the claimant the opportunity to correct “mistakes” in the original denial under Section 725.309 in cases arising within the Sixth Circuit. Hopefully, the Sixth Circuit will revisit this issue at some point and will abandon the “one element” standard.
In light of the rulings now by the Fourth, Sixth and Seventh Circuits rejecting the Spese standard, it is unclear whether the Board will continue to cling to Spese in cases arising in other circuits. Kilcullen, Wilson & Kilcullen currently has the issue of the Spese standard pending before the United States Court of Appeals for the Tenth Circuit and we anticipate that the Tenth Circuit will join the other circuits in rejecting the Spese standard.
The fundamental question still remaining unanswered is whether Section 725.309(d) of the regulations is even valid. In our appeal to the Fourth Circuit we challenged the underlying validity of the regulation as being unauthorized by the statute and as being inconsistent with 33 U.S.C. § 922. The Fourth Circuit found it unnecessary to resolve the validity issue in Lisa Lee, given its disposition of the case on other grounds. If we ultimately can be successful in invalidating the regulation, we can completely eliminate the relitigation of claims where the denial has been in place for one year or more.
The modification regulation at Section 725.310, implementing 33 U.S.C. § 922, allows for the reopening of a claim by any party on the grounds of a change in conditions or because of a mistake of fact, at any time before one year from the date of the last payment of benefits, or at any time before one year following the denial of a claim. This regulation has been construed very liberally by the Board and the circuit courts.
The liberal attitude adopted by the circuit courts is reflected in Jessee v. Director, OWCP, 5 F.3d 723 (4th Cir. 1993) and Consolidation Coal Company v. Worrell, 27 F.3d 227 (6th Cir. 1994). Under the approach which has been adopted, modification can be obtained in “almost limitless terms” and a party need “simply allege that the ultimate fact ... was mistakenly decided.” Jessee, 5 F.3d at 724-25.
Although Jessee and Worrell involved modification requests by claimants, the liberal approach adopted in those cases should be equally applicable to modification requests filed by operators. We have had some success in obtaining modification on behalf of our clients under Section 725.310. In appropriate cases, we have filed for modification while we have had appeals pending before the Benefits Review Board, as specifically allowed by the Board’s rules at 20 C.F.R. § 802.301(c). Once modification proceedings are instituted under the Board’s rules, the Board will dismiss the appeal without prejudice and remand the claim to the district director for modification proceedings. During the course of modification proceedings we have had success in obtaining a new examination of the claimant, as allowed by the Part 725 regulations. Occasionally, it has been necessary to obtain an order from the Office of Administrative Law Judges to compel such an examination, where the claimant does not voluntarily cooperate.
The Board recently heard oral argument in Branham v. Bethenergy Mines, Inc., BRB No. 94-149 BLA (argued June 6, 1995). Branham concerns the issue of an operator’s right to seek modification. The Board’s decision should be forthcoming later this year.
When a claimant files a request for modification, the request does not merely reopen issues which were resolved against the claimant during the original proceedings. The modification request, as an exception to res judicata, reopens all of the issues in the claim. Therefore, an operator may challenge any adverse factual finding made by the administrative law judge in the initial decision denying benefits. For example, it is possible that an administrative law judge may have found the existence of pneumoconiosis established in the original decision, but may have denied benefits because the claimant failed to establish total disability. During the course of modification proceedings, the operator is entitled to challenge the original pneumoconiosis finding. The administrative law judge may deny benefits on modification on the grounds that the evidence does not establish pneumoconiosis. Lester v. Dominion Coal Co., BRB No. 94-3944 BLA (March 28, 1995).
Two recent decisions have clarified claimants’ burden of establishing total disability under 20 C.F.R. § 718.204(c). In an appeal Kilcullen, Wilson & Kilcullen filed with the United States Court of Appeals for the Fourth Circuit, the Court vacated the Board’s affirmance of an award of benefits, ruling that the Board misapplied Section 718.204 of the regulations. Jewell Smokeless Coal Corp. v. Street, 42 F.3d 241 (4th Cir. 1994).
The Fourth Circuit, in Jewell Smokeless Coal Corp., clearly adopted a two-part standard for Section 718.204, requiring the claimant to first establish total disability from a respiratory or pulmonary impairment and, secondly, to establish that such impairment is due in part to pneumoconiosis. At issue in Jewell Smokeless Coal Corp. was whether claimant could rely upon his heart disease, in combination with his respiratory condition, to carry his burden of establishing total disability. The Court, in reversing the Board, ruled that heart disease could not be considered in assisting claimant in establishing total disability.
The Third Circuit in Beatty v. Danri Corp., 49 F.3d 993 (3d Cir. 1995), similarly, adopted the two-part test under Section 718.204 of the regulations, citing Jewell Smokeless Coal Corp. The Third Circuit, like the Fourth Circuit, clearly held that total disability must be due to a respiratory impairment and not due to nonrespiratory conditions. Beatty involved a case where the claimant suffered from a stroke and had heart disease, as well as pneumoconiosis.
— Ronald E. Gilbertson
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