Bethenergy Mines, Inc. v. Henderson , 4 F. App'x 181 ( 2001 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
BETHENERGY MINES, INCORPORATED, 
Petitioner,
v.
JAMES HENDERSON; DIRECTOR,  No. 99-2495
OFFICE OF WORKERS’ COMPENSATION
PROGRAMS, UNITED STATES
DEPARTMENT OF LABOR,
Respondents.

On Petition for Review of an Order of the
Benefits Review Board.
(98-1357-BLA, 92-449-BLA)
Argued: November 3, 2000
Decided: February 16, 2001
Before WILKINSON, Chief Judge, and WILKINS and
LUTTIG, Circuit Judges.
Reversed and remanded by unpublished per curiam opinion.
COUNSEL
ARGUED: William Steele Mattingly, JACKSON & KELLY,
P.L.L.C., Morgantown, West Virginia, for Petitioner. Barry H.
Joyner, Office of the Solicitor, UNITED STATES DEPARTMENT
OF LABOR, Washington, D.C., for Respondent Director; Ray
Edmond Ratliff, Jr., Charleston, West Virginia, for Respondent Hen-
2 BETHENERGY MINES v. HENDERSON
derson. ON BRIEF: Henry L. Solano, Solicitor of Labor, Donald S.
Shire, Associate Solicitor, Christian P. Barber, Counsel for Appellate
Litigation, Office of the Solicitor, UNITED STATES DEPART-
MENT OF LABOR, Washington, D.C., for Respondent Director.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Respondent James Henderson was awarded black lung benefits by
an ALJ in 1987. Petitioner BethEnergy Mines, Inc., Henderson’s
employer, sought modification of the award, contending that the ALJ
had made "a mistake in a determination of fact" in initially awarding
benefits to Henderson. Upon reconsideration, the ALJ found, based
on new evidence proffered by BethEnergy, that it had been mistaken
in a determination of fact. Nevertheless, the ALJ denied reopening
because it held that reopening would not "render justice under the
Act." The Benefits Review Board affirmed. For the reasons that fol-
low, we reverse and remand.
I.
As with many cases involving black lung benefits, James Hender-
son’s claim has a complicated and protracted history. Henderson
worked as a coal miner for 45 years, primarily as a motorman and
general laborer. J.A. 45, 52, 61, 72. Over time, Henderson developed
breathing difficulties, and he filed an application for black lung bene-
fits on February 1, 1980.1 J.A. 15. His claim was initially denied by
1
Because Henderson’s application was originally filed between the
dates of June 30, 1973, and April 1, 1980, the disposition of his claim
is governed by the "interim regulations" promulgated by the Secretary of
Labor. See 20 C.F.R. pt. 727; Mullins Coal Co. v. Director, OWCP, 484
U.S. 135, 137 (1987). The "interim regulations" created the interim pre-
sumption at issue in this case.
BETHENERGY MINES v. HENDERSON 3
the Department of Labor, prompting him to request a hearing before
an ALJ. J.A. 22. More than seven years after Henderson filed his
application, the ALJ awarded benefits, holding that Henderson had
invoked, and BethEnergy Mines, Inc. ("BethEnergy")2 had failed to
rebut, the interim presumption codified at 20 C.F.R. § 727.203. J.A.
15-17.
The federal black lung statute provides disability benefits to a
miner if: (1) he or she is totally disabled; (2) the disability was
caused, at least in part, by pneumoconiosis; and (3) the disability
arose out of coal mine employment. See Mullins Coal Co. v. Director,
OWCP, 484 U.S. 135, 141 (1987). Each of the elements for eligibility
is presumed under section 727.203(a) if a miner has been engaged in
at least ten years of coal mine employment and meets one of five reg-
ulatory requirements, which are aimed at determining whether a
claimant has pneumoconiosis. See 20 C.F.R. § 727.203(a). The types
of medical evidence that can be used to satisfy the requirements for
invocation of the interim presumption include, inter alia, x-rays,
blood gas and pulmonary studies, and documented medical opinions.
See 20 C.F.R. § 727.203(a)(1)-(4).
At the time of the hearing before the ALJ, the prevailing law in this
circuit was that even "credible evidence [of] a [single] qualifying X-
ray indicat[ing] the presence of pneumoconiosis" was sufficient to
invoke the interim presumption. Stapleton v. Westmoreland Coal Co.,
785 F.2d 424, 426 (4th Cir. 1986) (en banc), rev’d, 484 U.S. 135(1987). The record in Henderson’s case contained two positive x-ray
readings. Consequently, BethEnergy conceded that Henderson had
met the Stapleton test, but sought to rebut the presumption, despite
the two positive x-rays, by establishing that Henderson was able to do
his "usual coal mine work or comparable and gainful work" or that
his total disability "did not arise in whole or in part out of coal mine
employment." 20 C.F.R. § 727.203(b)(2), (3).
In awarding benefits to Henderson, the ALJ found that Henderson
had invoked the interim presumption because "[t]he x-ray evidence
establishes and the Employer concedes that Claimant has pneumoco-
2
During the pendency of Henderson’s claim, Bethlehem Mines, Inc.,
has reorganized and is now known as BethEnergy Mines, Inc.
4 BETHENERGY MINES v. HENDERSON
niosis." J.A. 15. The ALJ also concluded that BethEnergy failed to
rebut the interim presumption. J.A. 15-17.
The BRB affirmed the award of benefits to Henderson, and
BethEnergy filed a motion for reconsideration, which the BRB, sitting
en banc, denied. J.A. 19-20. We affirmed the BRB’s decision by pub-
lished opinion. See Bethlehem Mines Corp. v. Henderson, 939 F.2d
143 (4th Cir. 1991). Approximately two months following our deci-
sion in Bethlehem Mines, BethEnergy filed a timely petition for modi-
fication pursuant to 20 C.F.R. § 725.310(a). J.A. 37-39. That section
provides:
Upon his or her own initiative, or upon the request of any
party on grounds of a change in conditions or because of a
mistake in a determination of fact, the deputy commissioner
may, at any time before one year after the denial of a claim,
reconsider the terms of an award or denial of benefits.3
BethEnergy petitioned for modification on the ground that the ALJ
was mistaken when it concluded that Henderson had invoked the
interim presumption with qualifying x-ray evidence. Its petition was
primarily based upon two events occurring after the ALJ awarded
benefits to Henderson: (1) Dr. Zaldivar recanted a prior positive x-ray
reading, which was a basis for the ALJ’s original award of benefits,
stating that the poor quality of the x-ray had caused him to mistakenly
conclude that it showed pneumoconiosis, J.A. 43, 121; and (2) the
Supreme Court rejected Stapleton’s rule that the interim presumption
could be invoked with one qualifying item, adopting instead a
requirement that the claimant prove an "invocation fact by a prepon-
derance of the evidence," Mullins, 484 U.S. at 154, 161 n.35.
BethEnergy not only relied on Zaldivar’s recantation in demon-
strating that Henderson was no longer entitled to the interim presump-
tion under Mullins, but it also presented additional x-ray evidence
showing that Henderson did not have pneumoconiosis. By the time of
3
Although the modification regulation refers only to a "deputy com-
missioner," we have previously held that the term also includes "an ALJ
to whom a modification request has been referred." Jessee v. Director,
OWCP, 5 F.3d 723, 725 n.2 (4th Cir. 1993).
BETHENERGY MINES v. HENDERSON 5
the modification hearing before the ALJ, BethEnergy had obtained 41
negative x-ray readings versus the sole positive x-ray reading by Dr.
Bassali.4 J.A. 171-72.
Despite these developments, the ALJ did not conclude that there
had been a "mistake in a determination of fact" until after the BRB
had remanded the case twice. J.A. 193-94. Then, though the ALJ
found "that the preponderance of the evidence does not establish the
existence of pneumoconiosis," the ALJ still refused to reopen the
record on the ground that doing so would not "render justice under the
Act." J.A. 189. First, the ALJ noted that BethEnergy had conceded
the existence of pneumoconiosis under section 727.203(a)(1), and had
failed to challenge invocation of the interim presumption based upon
Mullins or any other ground before the BRB or this court. Second, the
ALJ found that BethEnergy "sat on its heels" by failing to develop its
own medical evidence prior to the first hearing. J.A. 188. Therefore,
the ALJ denied modification, deciding it was improper to allow
BethEnergy either to relitigate its claim through the back door "after
it failed on a previous theory" or to correct counsel’s misjudgments
belatedly. J.A. 189. The BRB affirmed, relying on the reasoning of
the ALJ. J.A. 199. BethEnergy filed a timely petition for review in
this court. J.A. 200-203.
II.
The modification of an award or denial of benefits under the Black
Lung Benefits Act can be based upon either a "mistake in a determi-
nation of fact" or a "change in conditions." See 20 C.F.R. § 725.310.5We must reverse an ALJ’s decision on a modification request if the
ALJ abused its discretion. See O’Loughlin v. Parker, 163 F.2d 1011,
1012 (4th Cir. 1947); see also Betty B Coal Co. v. Director, OWCP,
194 F.3d 491, 501 (4th Cir. 1999) (noting that "we would not hesitate
4
BethEnergy informed the court at argument that the x-ray read by
Bassali has been destroyed and, as a result, no further readings of that x-
ray are possible.
5
The modification procedures for black lung cases are expressly incor-
porated from the Longshore and Harbor Workers’ Compensation Act.
See 30 U.S.C. § 932(a) (incorporating 33 U.S.C. § 922); Consolidation
Coal Co. v. Borda, 171 F.3d 175, 180 (4th Cir. 1999).
6 BETHENERGY MINES v. HENDERSON
to correct abuses" of an ALJ’s discretion to grant or deny reopening).
Under the abuse of discretion standard, reversal is warranted when we
have "a definite and firm conviction" that the tribunal below "commit-
ted a clear error of judgment in the conclusion it reached upon a
weighing of the relevant factors." See Westberry v. Gislaved Gummi
AB, 178 F.3d 257, 261 (4th Cir. 1999) (internal quotations omitted).
Although the ALJ was permitted to consider whether reopening
would "render justice under the Act," we conclude that the ALJ nev-
ertheless abused its discretion by misapplying that standard to the
case at hand.6 The ALJ did not deny reopening because of a conclu-
sion that there was no mistake of fact or change in conditions. Nor
did the ALJ find that BethEnergy had engaged in misconduct — such
as improperly withholding evidence or filing multiple modification
requests in order to harass a claimant — which would have raised
equitable concerns counseling against a reopening of the proceedings.
Rather, the ALJ denied rehearing essentially in the interest of finality,
to prevent BethEnergy from getting "another bite at the apple."
We have, however, expressly disavowed the importance of finality
in such circumstances, concluding instead that "to the extent the ‘prin-
ciple of finality’ ever applies to black lung claims,’" it does not apply
to properly filed modification requests. Jessee, 5 F.3d at 725; see also
Borda, 171 F.3d at 180 (stating that the modification provision in
black lung cases is "inherently broad" and has been interpreted "ex-
pansively," and that the principle of finality does not apply in black
lung claims as it does in ordinary lawsuits). Similarly has the
Supreme Court rejected the application of res judicata to modification
requests. See Jessee v. Director, OWCP, 5 F.3d 723, 725 (4th Cir.
6
Contrary to BethEnergy’s assertion, we cannot say that the ALJ
applied an incorrect legal standard when it considered whether reopening
the award of benefits to Henderson would "render justice under the Act."
The Supreme Court has declared that an ALJ’s exercise of discretion in
modification cases may be guided by that principle. See O’Keeffe v.
Aerojet-General Shipyards, Inc., 404 U.S. 254, 256 (1971) (per curiam)
(stating that an ALJ should "review factual errors in an effort ‘to render
justice under the Act’"); see also Betty B Coal, 194 F.3d at 497-98("[T]he modification procedure is flexible, potent, easily invoked, and
intended to secure ‘justice under the Act.’").
BETHENERGY MINES v. HENDERSON 7
1993) (citing Banks v. Chicago Grain Trimmers Ass’n, 390 U.S. 459,
461-65 (1968)). Finality and res judicata simply are not appropriate
factors in adjudicating modification requests because an ALJ may
simply reverse a decision, with or without a request for modification,
even when there is no new evidence or solely new evidence to con-
sider. See O’Keeffe, 404 U.S. at 255; Jessee, 5 F.3d at 725. In modifi-
cation cases, the paramount interest is in ensuring that eligible
claimants receive benefits and that ineligible claimants do not, and
when that interest clashes with an interest in finality, the latter must
yield.
The BRB stated in a related case that "[o]ne could hardly find a
better reason for rendering justice than that it would be unjust or
unfair to require an employer to pay benefits to a miner who does not
meet the requirements of the Act." L.C. Branham, 21 Black Lung
Rep. 1-79, 1-83 (Ben. Rev. Bd. March 19, 1998); see also 30 U.S.C.
§ 901(a) ("[T]he purpose of this subchapter [is] to provide benefits,
in cooperation with the States, to coal miners who are totally disabled
due to pneumoconiosis . . . .") (emphasis added). Because here, too,
due to a lack of evidence of pneumoconiosis, it may well be unfair
or unjust to require the employer to pay benefits, the ALJ in its discre-
tion should have granted the petition to reopen.
III.
The only remaining question is whether we should remand this
case to the BRB for further proceedings or decide Henderson’s eligi-
bility for benefits today. The Director urges a remand because the
ALJ placed the burden of persuasion on Henderson to prove that he
was eligible for the interim presumption, rather than requiring
BethEnergy to disprove that fact. See Metropolitan Stevedore Co. v.
Rambo, 521 U.S. 121, 139 (1997) (stating that the burden of persua-
sion for a modification request is on the proponent of such request).
BethEnergy does not dispute that Metropolitan Stevedore controls or
that the burden of persuasion was placed on the wrong party; rather,
it contends that remand would be a "waste of time." We find it unnec-
essary to remand on the question of whether a mistake in fact has
occurred based on the x-ray evidence. There are now 41 negative x-
ray readings in the record, 25 of which are interpretations of x-rays
that were taken after the sole positive x-ray reading by Bassali. J.A.
8 BETHENERGY MINES v. HENDERSON
172. And the x-ray read by Bassali — the only x-ray which could sup-
port invocation of the interim presumption — has been destroyed. No
reasonable ALJ could conclude that Henderson is eligible for the
interim presumption under section 727.203(a)(1) based on the x-ray
evidence, regardless of which party has the burden of establishing a
"mistake in a determination of fact." We do believe, however, that
remand is appropriate to determine whether Henderson can invoke the
interim presumption through other qualified medical evidence. Due to
its denial of reopening, the ALJ has yet to have the opportunity to
independently consider whether Henderson could invoke the interim
presumption through blood gas or pulmonary studies or other quali-
fied medical evidence.
The decision of the Board is reversed and the case is remanded
with instructions to reopen proceedings.
REVERSED AND REMANDED WITH INSTRUCTIONS