Mary Fox v. Elk Run Coal Company, Inc. , 739 F.3d 131 ( 2014 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-2387
MARY L. FOX, on behalf of Gary N. Fox, deceased,
Petitioner,
v.
ELK RUN COAL COMPANY, INCORPORATED; DIRECTOR, OFFICE OF
WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF
LABOR,
Respondents.
No. 12-2402
ELK RUN COAL COMPANY, INCORPORATED,
Petitioner,
v.
DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED
STATES DEPARTMENT OF LABOR; MARY L. FOX, on behalf of Gary
N. Fox, deceased,
Respondents.
On Petitions for Review of Orders of the Benefits Review Board.
(11-0793-BLA; 09-0438-BLA)
Argued: October 29, 2013 Decided: January 3, 2014
Before TRAXLER, Chief Judge, and WILKINSON and FLOYD, Circuit
Judges.
Affirmed by published opinion. Judge Wilkinson wrote the
opinion, in which Chief Judge Traxler and Judge Floyd joined.
ARGUED: Allan Norman Karlin, Morgantown, West Virginia, for
Petitioner/Cross-Respondent. Alvin Lee Emch, JACKSON KELLY,
PLLC, Charleston, West Virginia, for Respondent/Cross-Petitioner
Elk Run Coal Company, Incorporated. ON BRIEF: John Cline, Piney
View, West Virginia; Sarah W. Montoro, ALLAN N. KARLIN &
ASSOCIATES, Morgantown, West Virginia, for Petitioner/Cross-
Respondent. Kathy Lynn Snyder, JACKSON KELLY, PLLC, Morgantown,
West Virginia, for Respondent/Cross-Petitioner Elk Run Coal
Company, Incorporated.
2
WILKINSON, Circuit Judge:
Appellant Mary Fox contends that Elk Run Coal Company
committed fraud on the court and thereby deprived her husband,
coal miner Gary Fox, of nearly a decade of benefits under the
Black Lung Benefits Act (“BLBA”). The Benefits Review Board
(“BRB”) found that Elk Run’s conduct was not sufficiently
egregious to meet the high bar for a claim of fraud on the court
because it did not amount to an intentional design aimed at
undermining the integrity of the adjudicative process under the
BLBA. We now affirm and find that Elk Run’s conduct, while
hardly admirable, did not, under clear Supreme Court and circuit
precedent, demonstrate the commission of a fraud upon the court.
See, e.g., Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322
U.S. 238 (1944); Great Coastal Express, Inc. v. Int’l Bhd. of
Teamsters, 675 F.2d 1349 (4th Cir. 1982).
I.
A.
Pneumoconiosis, commonly known as “black lung,” is a
progressive and irreversible pulmonary condition that can
afflict those regularly exposed to coal dust. Mullins Coal Co.
v. Dir., OWCP, 484 U.S. 135, 138 (1987). In recognition of the
effects of this disease, Congress adopted the BLBA to require
private coal companies to compensate miners and their families.
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Id. at 138-39. The BLBA permits coal workers or their surviving
dependents to apply for benefits by filing a claim with the
District Director of the U.S. Department of Labor’s Office of
Workers’ Compensation Programs (“Director”). 20 C.F.R.
§§ 725.301-725.423. In order to award benefits, the Director
must find that the coal worker has pneumoconiosis arising out of
his or her coal mine employment, is totally disabled, and the
pneumoconiosis substantially contributed to the worker’s
disability. Id. § 725.202(d).
Once the Director makes an initial finding on whether the
claimant is entitled to benefits, either party may request an
evidentiary hearing before an ALJ. Id. §§ 725.401-725.480.
Such a request initiates an adversarial process under the
Administrative Procedure Act (“APA”). Id. § 725.452(a); Elm
Grove Coal Co. v. Dir., OWCP, 480 F.3d 278, 283 (4th Cir. 2007)
(finding that the BLBA incorporates the APA’s administrative
adjudication procedures); see also U.S. Dep’t of Labor v.
Triplett, 494 U.S. 715, 733 (1990) (Marshall, J., concurring)
(noting that “the black lung process is highly adversarial”).
To encourage coal workers to pursue their claims with the aid of
counsel, the BLBA includes a provision for reasonable attorney’s
fees if the claimant is successful. 30 U.S.C. § 932(a)
(incorporating 33 U.S.C. § 928(a)). This adversarial posture
between the parties remains in the event that either party
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appeals the ALJ’s ruling to the BRB, 20 C.F.R. § 725.481, as
well as in any subsequent appeals to the circuit covering the
state in which the claimant allegedly contracted pneumoconiosis,
33 U.S.C. § 921(c).
B.
Gary Fox worked in West Virginia as a coal miner for over
30 years before his death from coal worker’s pneumoconiosis in
2009. 1 X-rays taken of his chest in 1997 revealed an
unidentified mass in his right lung. In 1998, a pathologist in
West Virginia named Dr. Gerald Koh concluded from surgical
samples that, among other things, the mass was an “inflammatory
pseudotumor,” but did not diagnose pneumoconiosis. Nonetheless,
Fox filed a claim in 1999 for benefits under the BLBA which the
Director granted in early 2000. Because Fox was employed by Elk
Run at the time of his claim, Elk Run exercised its right under
the BLBA to request a hearing before an ALJ.
Prior to the hearing, Elk Run obtained the pathology slides
from Fox’s 1998 surgical procedure and provided them to two
additional pathologists: Dr. Richard Naeye and Dr. P. Raphael
Caffrey. Both pathologists wrote reports summarizing their
conclusions. Elk Run also requested opinions from several
1
Gary Fox’s surviving spouse and successor-in-interest,
Mary Fox, took over his claim after his death and all references
to the appellant as “Fox” after his passing are to her.
5
radiologists and submitted them, along with Dr. Koh’s report but
not Dr. Naeye’s or Dr. Caffrey’s, to four pulmonary specialists.
The four pulmonologists concluded that, based on the evidence
available to them, Fox likely did not have coal worker’s
pneumoconiosis at that time.
The evidentiary hearing occurred on September 19, 2000, at
which Fox appeared pro se and Elk Run was represented by
counsel. The ALJ informed Fox that he had a right to
representation and, when Fox responded that he had not been able
to find an attorney, the ALJ confirmed his competency and
willingness to proceed without counsel. (Fox had, however,
procured an attorney to represent him in his concurrent West
Virginia worker’s compensation claim related to pneumoconiosis).
During the hearing, the ALJ admitted into the record the reports
of Dr. Koh, the radiologists, and the pulmonologists, along with
additional exhibits offered by Elk Run. Fox offered only his
own testimony. Elk Run did not submit the reports of Dr. Naeye
or Dr. Caffrey, nor did it disclose their existence to Fox or
the ALJ. The ALJ denied Fox’s claim on January 5, 2001, finding
that Fox failed to show he had pneumoconiosis or that he was
totally disabled due to pneumoconiosis. Fox did not appeal.
Fox retained counsel and filed a new claim on November 8,
2006. The Director again found him eligible for benefits and
Elk Run once more requested an evidentiary hearing. But this
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time Fox, through his attorney, conducted vigorous discovery and
requested that Elk Run hand over the 1998 pathology slides and
disclose additional documents and reports pertaining to Fox’s
medical condition. After some foot dragging, Elk Run admitted
liability for Fox’s 2006 claim and disclosed the slides and
several documents to Fox, including the pathology reports of Dr.
Naeye and Dr. Caffrey. Recognizing that the BLBA bars any
entitlement to benefits before the ALJ’s 2001 judgment became
final, 20 C.F.R. § 725.309(c)(6), Fox moved to set aside that
judgment, contending that Elk Run had committed fraud on the
court because it had not disclosed the Naeye and Caffrey reports
to its expert pulmonologists.
On July 20, 2011, the ALJ found that the Naeye and Caffrey
reports diagnosed “complicated pneumoconiosis,” J.A. 416, and
thus “clearly contradicted Dr. Koh’s finding of an inflammatory
pseudotumor,” J.A. 427. The ALJ then determined that Elk Run’s
failure to disclose the Naeye and Caffrey reports to its other
expert witnesses tainted their conclusions and that, while
“perhaps initially not concocted as such,” J.A. 427, Elk Run’s
“actions, taken as a whole, constitute a scheme to defraud,”
J.A. 429. Dismissing Elk Run’s arguments that its attorneys
were not defrauding the court but rather zealously representing
their client, the ALJ ruled that Elk Run had committed fraud on
7
the court, set aside the 2001 judgment, and awarded Fox benefits
dating back to January 1997.
On appeal, the BRB accepted the ALJ’s factual findings, but
held that Elk Run’s “conduct did not rise to the level of fraud
on the court” because Elk Run “did not engage in a deliberate
scheme to directly subvert the judicial process.” J.A. 444.
Because Elk Run had admitted liability for Fox’s 2006 claim, the
BRB held that Fox was entitled to benefits beginning in June
2006. One member of the BRB panel dissented, writing that Elk
Run’s conduct constituted fraud on the court because it had
failed to disclose all the relevant medical evidence to its own
experts.
II.
Fox asks this court to set aside the ALJ’s 2001 judgment,
which would have the effect of moving the onset of her
entitlement to benefits under the BLBA from June 2006 to January
1997. She claims that the judgment was fraudulently procured
because, although Elk Run knew that the Naeye and Caffrey
reports diagnosed her husband with pneumoconiosis, it
intentionally failed to disclose those reports to its own
experts and later relied on the conclusions of those experts to
controvert Fox’s 1999 claim that he had pneumoconiosis. While
Elk Run’s conduct over the course of this litigation warrants
8
nothing approaching judicial approbation, we are unable to say
that it rose to the level of fraud on the court.
The standard of review in cases under the Black Lung
Benefits Act is well settled. We sustain an ALJ’s factual
findings if there is “substantial evidence” on the record to
support them. Harman Min. Co. v. Dir., OWCP, 678 F.3d 305, 310
(4th Cir. 2012). Fox maintains that, whereas the BRB should
have affirmed the ALJ’s ruling on substantial evidence grounds,
it instead improperly held that the ALJ erred “as a matter of
law.” J.A. 444. However, the operative facts here are simply
not disputed and only the application of the fraud on the court
doctrine is at issue. That issue is one of law, which we review
de novo. See Westmoreland Coal Co. v. Cox, 602 F.3d 276, 282
(4th Cir. 2010).
A.
Fraud on the court is not your “garden-variety fraud.”
George P. Reintjes Co. v. Riley Stoker Corp., 71 F.3d 44, 48
(1st Cir. 1995). Ordinarily, when a party believes that its
opponent has obtained a court ruling by “fraud” or
“misrepresentation,” it may move for relief under Federal Rule
of Civil Procedure 60(b)(3). Litigants have one year following
the final judgment in which to make a Rule 60(b)(3) motion.
Fed. R. Civ. P. 60(c)(1). As we recognized in Great Coastal
Express, Inc. v. International Brotherhood of Teamsters, this
9
one year limit balances the competing interests of relieving an
aggrieved party from the hardships of an unjustly procured
decision against the deep “[r]espect for the finality of
judgments . . . engrained in our legal system.” 675 F.2d 1349,
1354-55 (4th Cir. 1982). Therefore, after a year, the public’s
powerful interest in leaving final judgments undisturbed
generally triumphs and “ordinary” fraud will not suffice to set
aside a ruling. Id. at 1355.
But, as often happens with a rule, there is an exception.
The savings clause in Rule 60(d)(3) permits a court to exercise
its inherent equitable powers to obviate a final judgment after
one year for “fraud on the court.” The Supreme Court addressed
this doctrine in Hazel-Atlas Glass Co. v. Hartford-Empire Co.,
when it set aside a fraudulently obtained ruling by finding that
it was the product of one party’s “deliberately planned and
carefully executed scheme” that severely undermined the
“integrity of the judicial process.” 322 U.S. 238, 245-46
(1944). The Court held that ordinary cases of fraud would not
suffice to violate the “deep rooted policy in favor” of finality
but that, on the facts before it, the aggrieved party could not
“have been expected to do more than it did to uncover the
fraud.” Id. at 244, 246. Moreover, the harm of the fraud in
Hazel-Atlas was so broad that it “involve[d] far more than an
injury to a single litigant,” but was rather a “wrong against
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the institutions set up to protect and safeguard the public,
institutions in which fraud cannot complacently be tolerated
consistently with the good order of society.” Id. at 246.
Thus, not only must fraud on the court involve an intentional
plot to deceive the judiciary, but it must also touch on the
public interest in a way that fraud between individual parties
generally does not.
We have likewise underscored the constricted scope of the
fraud on the court doctrine. In Great Coastal, we held that
fraud on the court is a “nebulous concept” that “should be
construed very narrowly” lest it entirely swallow up Rule
60(b)(3). 675 F.2d at 1356. We stressed that this doctrine
should be invoked only when parties attempt “the more egregious
forms of subversion of the legal process . . . , those that we
cannot necessarily expect to be exposed by the normal adversary
process.” Id. at 1357. Even the “perjury and fabricated
evidence” present in Great Coastal, which were “reprehensible”
and unquestionable “evils,” were not adequate to permit relief
as fraud on the court because “the legal system encourages and
expects litigants to root them out as early as possible.” Id.
Instead, the doctrine is limited to situations such as “bribery
of a judge or juror, or improper influence exerted on the court
by an attorney, in which the integrity of the court and its
11
ability to function impartially is directly impinged.” Id. at
1356.
In succeeding cases we have emphasized this circumscribed
understanding of fraud on the court. In Cleveland Demolition
Co. v. Azcon Scrap Corp., we held that fraud on the court
involves “corruption of the judicial process itself” and thus
the doctrine cannot support allegations involving a “routine
evidentiary conflict.” 827 F.2d 984, 986 (4th Cir. 1987)
(internal quotation marks omitted). To hold otherwise, we
found, would “seriously undermine[] the principle of finality”
by permitting “parties to circumvent the Rule 60(b)(3) one-year
time limitation.” Id. at 987. Later, in In re Genesys Data
Technologies, Inc., we recognized that “[c]ourts and authorities
agree that fraud on the court must be narrowly construed” or it
would “subvert the balance of equities” contained within Rule
60(b)(3). 204 F.3d 124, 130 (4th Cir. 2000) (internal quotation
marks omitted). “Because the power to vacate a judgment for
fraud upon the court is so free from procedural limitations, it
is limited to fraud that seriously affects the integrity of the
normal process of adjudication.” Id. (internal quotation marks
omitted). We therefore held that “[f]raud between parties”
would not be fraud on the court, “even if it involves [p]erjury
by a party or witness.” Id. (internal quotation marks omitted).
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B.
Proving fraud on the court thus presents, under Supreme
Court and circuit precedent, a very high bar for any litigant.
Fox has not met that high standard in this case. Elk Run’s
alleged fraud does not directly impact the integrity and
workings of the black lung benefits process in the way that
Hazel-Atlas and Great Coastal require. Fox does not allege that
Elk Run bribed or otherwise improperly influenced any officials
involved in the benefits process, nor does she claim that Elk
Run encouraged or conspired with its witnesses to suborn
perjury. Rather, she argues that Elk Run’s nondisclosure of
certain pathology reports to its own experts “instills
uncertainty and cynicism” into the black lung benefits system.
But that is not harmful enough to be a “wrong against the
institutions set up to protect and safeguard the public.”
Hazel-Atlas, 322 U.S. at 246. Indeed, if alleged “uncertainty
and cynicism” were the standard for fraud on the court, we find
it difficult to imagine how any claim of fraud in an
adjudicatory proceeding would not fall under its extensive
canopy. Every litigant could be expected to inflate its
personal loss into an alleged systemic harm. Elk Run’s
nondisclosure simply does not “amount[] to anything more than
fraud involving injury to a single litigant.” Gleason v.
Jandrucko, 860 F.2d 556, 560 (2d Cir. 1988).
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Conduct that is not exemplary need not undermine the
“integrity of the court and its ability to function impartially”
within the meaning of “fraud on the court.” Great Coastal, 675
F.2d at 1356. The adversary process exists because it permits
each side to present its own case as well as to test its
opponent’s in order to expose vulnerabilities of every sort and
variety. It is, to some extent, a self-policing mechanism. The
relevant provision of the APA contains no requirement that a
party present the most probative evidence in its possession;
instead, it is permitted to offer any evidence it would like so
long as that evidence is relevant. 5 U.S.C. § 556(d) (“Any oral
or documentary evidence may be received, but the agency as a
matter of policy shall provide for the exclusion of irrelevant,
immaterial, or unduly repetitious evidence.”). Therefore, while
the ALJ found the Naeye and Caffrey opinions were “more
probative” than Dr. Koh’s, J.A. 428, Elk Run was under no
obligation to advance those reports as evidence because someone
else may believe them superior.
Thus it falls to each party to shape and refine its case,
subject of course to the risk that its adversary will discredit
it. One elementary component of the adversary system is cross-
examination, which the Supreme Court has recognized is the
“greatest legal engine ever invented for the discovery of
truth.” California v. Green, 399 U.S. 149, 158 (1970) (internal
14
quotation marks omitted). Cross-examination helps to safeguard
against the ALJ’s concern that, if parties were free to withhold
probative medical evidence from their experts, “an expert
medical opinion could never be accepted as a reliable
diagnosis.” J.A. 430. A party relying on weak evidence to
sustain its case runs the risk that its experts will crumble
upon cross-examination or otherwise be impeached by the opposing
party. The presence of that deterrent means, however, that
routine evidentiary disputes as this cannot clear the high bar
for an action for fraud on the court. Cleveland Demolition, 827
F.2d at 986.
In fact, this case illustrates the principle. The ALJ
recognized that Elk Run’s case in the 1999 claim was vulnerable
when it found that Elk Run “built its case around Dr. Koh’s
pathology report.” J.A. 428. Fox had the right to cross-
examine Dr. Koh regarding his qualifications and conclusions.
5 U.S.C. § 556(d) (“A party is entitled to . . . conduct such
cross-examination as may be required for a full and true
disclosure of the facts.”). He had the right to cross-examine
Elk Run’s other experts to test their understanding of and
reliance on Dr. Koh’s report. He had the right to question the
apparent lack of additional pathology reports. He had the right
to present a contradictory medical opinion from a pathologist of
his own choosing. That he did none of those things is not so
15
much an indictment of the adversary system as it is a statement
that he did not fully avail himself of it.
Fox admits that an attorney experienced in black lung
claims would have recognized that “something was fundamentally
wrong” with how Elk Run presented its case as to Fox’s 1999
claim. Appellant’s Resp. 16. Indeed, once Fox retained an
attorney for his 2006 claim, he pursued discovery and was
successful in obtaining the pathology reports and 1998 pathology
slides. Elk Run’s alleged misconduct could have been “exposed
by the normal adversary process.” Great Coastal, 675 F.2d at
1357. Our legal system therefore expected Fox to uncover Elk
Run’s conduct during the adjudication of Fox’s 1999 claim or, if
it amounted to Rule 60(b)(3) fraud, at most one year after the
2001 judgment became final. George P. Reintjes, 71 F.3d at 49
(holding that even perjury is “a common hazard of the adversary
process with which litigants are equipped to deal through
discovery and cross-examination and, where warranted,” a Rule
60(b)(3) motion).
Fox contends that the black lung benefits process is
somehow different from an ordinary adversarial procedure and, in
effect, urges us to alter that process by finding that Elk Run
had a duty to share with its experts all of the medical
information it had obtained. To that end, the ALJ found that
Elk Run had a duty to “provide accurate evidence to its expert
16
witnesses.” J.A. 430. But that duty--and the judicial
supervision that would inescapably go with it--would carry ALJs
far afield from their role as neutral arbiters. See Underwood
v. Elkay Min., Inc., 105 F.3d 946, 949 (4th Cir. 1997) (finding
that the ALJ in a BLBA proceeding is the “trier of fact” charged
with “evaluat[ing]” and “weigh[ing] the evidence”) superseded on
other grounds as recognized in Elm Grove, 480 F.3d at 291. Any
duty imposed upon a party to furnish its expert witnesses
certain documents would improperly impinge on that party’s right
to develop its own evidence, handle its own experts, and present
its own case. See, e.g., Hickman v. Taylor, 329 U.S. 495, 511
(1947) (holding in the context of the work product privilege
that the adversary system requires a party’s attorney be
permitted to “assemble information, sift what he considers to be
the relevant from the irrelevant facts, prepare his legal
theories and plan his strategy without undue and needless
interference”). Fox’s proposed duty would launch an infinite
number of new challenges by parties alleging their opponents’
breach of the duty, thereby thrusting judges deep into the heart
of the adversary process and the attorney-client relationship.
What Fox requests is something akin to a civil Brady rule,
where parties would be obligated to disclose or at least
identify any evidence helpful to their opponent regardless of
whether it is privileged. See Brady v. Maryland, 373 U.S. 83,
17
86 (1963) (finding that due process requires the government to
disclose to a criminal defendant information favorable to his
defense). But courts have only in rare instances found Brady
applicable in civil proceedings, mainly in those unusual cases
where the potential consequences “equal or exceed those of most
criminal convictions.” Demjanjuk v. Petrovsky, 10 F.3d 338, 354
(6th Cir. 1993); see also Brodie v. Dep’t of Health and Human
Servs., No. 12-1136 (RMC), slip op. at 9-10 (D.D.C. June 27,
2013) (examining cases and declining to apply Brady in an
administrative hearing). We see no reason to expand Brady to
this administrative adjudication. In a criminal case, the
government’s duty to disclose under Brady arises from the
obligation of the prosecutor not simply to convict, but to see
that justice is done. United States v. Agurs, 427 U.S. 97, 110-
11 (1976). The civil context is not analogous. There, the
basic duty of an attorney to his or her client is not offset by
the countervailing duty a government prosecutor has to exercise
in the interest of justice his or her awesome and extraordinary
powers.
Fox points out that her husband proceeded pro se before the
administrative tribunal in his 1999 claim, but that point, while
appealing, carries only so far. Fox was instructed of his right
to an attorney who would receive compensation if his claim was
successful. He had retained counsel for his state benefits
18
claim, demonstrating that he knew the advantages of professional
representation. It is true that Fox’s pro se presentation of
his 1999 claim did not match the counselled presentation of his
2006 claim. But the narrow confines of fraud on the court
doctrine have never permitted claimants to relitigate old claims
they have lost, simply because a better prior case presentation
might have resulted in an earlier success. Finally, courts are
not at liberty to exceed the parameters of what Congress has
provided. Of course, Congress might have provided counsel to
miners under the BLBA at public expense, but it did not do so.
Instead, Congress left to the practiced judgment of attorneys
which claims for benefits they thought were most likely to be
successful. And in doing so, Congress adopted within the BLBA
the dynamics of the adversary process. See Triplett, 494 U.S.
at 733 (Marshall, J., concurring) (“Because an operator faces
the prospect of paying significant awards, it is often willing
to pay substantial legal fees to defend against black lung
claims.”); Treadway v. Califano, 584 F.2d 48, 49 (4th Cir. 1978)
(holding that in its 1972 amendments to the BLBA, Congress made
the benefits adjudication process “adversarial” because “the
burden of the payment might be imposed upon an individual coal
operator or upon the industry”). Recognizing Fox’s claim would
alter Congress’s adversary design beyond our authority to do so.
19
Elk Run insists it has done nothing wrong and that it has
proceeded properly at every turn. It maintains that the medical
evidence in general and Dr. Naeye’s pathology report in
particular are more ambiguous than Fox makes them out to be. It
further notes that no party is bound by every conclusion of the
experts it may hire. See Horn v. Jewell Ridge Coal Corp., 6
Black Lung Rep. (Juris) 1-933, 1-937 (Ben. Rev. Bd. 1984).
Finally, it contends that it did not have any intent to defraud
the court by declining to disclose the reports of Dr. Naeye and
Dr. Caffrey because, as non-testifying consulting experts, their
reports were protected by the work product privilege--a
protection that would have been lost if the reports had been
provided to Elk Run’s testifying experts. See Elm Grove, 480
F.3d at 303 n.25. We see no reason to address these matters
when a plain, narrow disposition is available. We bestow no
blessing and place no imprimatur on the company’s conduct, other
than to hold that it did not, under a clear chain of precedent,
amount to a fraud upon the court.
III.
For the foregoing reasons, the judgment of the Benefits
Review Board is affirmed.
AFFIRMED
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