Eastern Associated v. DOWCP ( 1998 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
EASTERN ASSOCIATED COAL
CORPORATION,
Petitioner,
v.
No. 98-1214
DIRECTOR, OFFICE OF WORKERS'
COMPENSATION PROGRAMS, UNITED
STATES DEPARTMENT OF LABOR; JAMES
H. DUELLEY,
Respondents.
On Petition for Review of an Order
of the Benefits Review Board.
(96-282-BLA)
Submitted: August 11, 1998
Decided: September 22, 1998
Before WILKINS, WILLIAMS, and MICHAEL, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Mark E. Solomons, Laura Metcoff Klaus, ARTER & HADDEN
L.L.P., Washington, D.C., for Petitioner. Marvin Krislov, Deputy
Solicitor of National Operation, Donald S. Shire, Associate Solicitor,
Patricia M. Nece, Counsel for Appellate Litigation, Helen H. Cox,
UNITED STATES DEPARTMENT OF LABOR, Washington, D.C.,
for Respondent Director. James Hook, Waynesburg, Pennsylvania,
for Respondent Duelley.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Eastern Associated Coal Corporation ("EACC") petitions for
review of orders of the Benefits Review Board affirming the decision
of the administrative law judge ("ALJ") initially and upon reconsider-
ation, granting black lung benefits to retired coal miner James Duel-
ley. EACC contends that the ALJ abused his discretion by finding that
EACC failed to demonstrate good cause for its failure to timely con-
trovert the initial administrative award of benefits. Finding no error,
we affirm.
Duelley filed an application for black lung benefits in September
1989. The Department of Labor ("DOL") identified EACC as the
responsible operator liable for any benefits. EACC accepted its status
as the responsible operator. On March 7, 1990, DOL issued a "Notice
of Initial Finding" stating that it had found Duelley entitled to benefits
as of September 1, 1989. The notice also stated that if EACC was to
contest the initial finding:
[EACC] must file a controversion (CM-970) with this office
within thirty days of the date of this notice. The record will
remain open for an additional period of 30 days unless
extended for good cause by the Deputy Commissioner, for
the submission of additional evidence, including the exami-
nation of the claimant by a physician of your choice.
If you fail to respond within 30 days, you will be deemed
to have accepted the initial finding, and this failure shall be
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considered a waiver of your right to contest this claim unless
good cause is shown to excuse such failure (CFR 725.413).
The notice also identified Duelley's son as his sole dependent. How-
ever, it noted that Duelley was recently divorced and the notice would
be amended to reflect the status of the divorced spouse once the DOL
received a copy of the divorce decree. On April 3, 1990, DOL noti-
fied EACC that it had received Duelley's divorce decree and the
notice would not be amended.
On April 19, 1990, EACC responded and controverted Duelley's
eligibility. It submitted some medical evidence and requested a thirty-
day extension to have Duelley examined. On May 2, 1990, EACC
again controverted Duelley's entitlement to benefits and requested a
hearing.
On May 8, 1990, the DOL issued a proposed decision and order
awarding benefits and ordering EACC to pay. In its cover letter, the
DOL stated "since [EACC] failed to respond to the Notice of Initial
Findings within the time specified in that Notice, you are deemed to
have accepted those findings; such failure is considered a waiver of
your right to contest the claim unless it is excused for good cause
shown." EACC was provided thirty days to request either a revision
of the proposed decision and order or a hearing before an ALJ.
On May 15, 1990, EACC responded by stating that"[a]lthough the
controversion was not filed within thirty days of the date of the Notice
of Initial Finding, Eastern has good cause for the late filing and would
request that you so find and accept the controversion as filed."
According to EACC, there were two reasons for the late filing. EACC
explained that the late controversion was the result of administrative
problems encountered as a result of a decision to consolidate the han-
dling of black lung claims with Peabody Holding Company's in-
house staff. In addition, when the notice was received, a major portion
of Peabody Holding Company was in the process of being purchased,
which required those individuals responsible for managing black lung
claims to become involved in meetings.
A claims examiner for the DOL found that EACC failed to show
good cause for its delay in filing the controversion. EACC was
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informed it had thirty days to request a revision of the proposed deci-
sion and order or to request a hearing. EACC requested both a revi-
sion and a hearing.
The DOL forwarded the case to the Office of Administrative Law
Judges. On transmittal form CM-1025 both the DOL and EACC con-
tested whether EACC filed a timely controversion. EACC also con-
tested the merits of Duelley's claim.
At the hearing, EACC's counsel withdrew several issues. The ALJ
asked about the "issues under 14" (the lateness of filing the controver-
sion). EACC's counsel stated that he believed it, along with other
issues on the second page, did not need to be addressed. The ALJ
asked if "they are simply reserved." EACC's counsel responded affir-
matively. The ALJ then announced that the only issue"before us is
the question of total disability." After taking evidence, the ALJ issued
a decision denying the claim, finding that medical evidence did not
establish a total disability due to pneumoconiosis.
Duelley appealed to the Board questioning the timeliness of
EACC's controversion. The Board held that the ALJ"erred by not
first making a finding as to whether good cause existed for employ-
er's late filing of the controversion prior to reaching the merits of the
claim." The Board rejected EACC's contention that Duelley waived
the issue by not raising it at the hearing. The Board stated that the
ALJ was required to consider any issue which is raised in writing
before the district director or marked as contested on form CM-1025.
The ALJ's decision was vacated and the case remanded for consider-
ation of whether good cause excused EACC's late filing.*
On remand, EACC reasserted its reasons for the late filing. EACC
also argued that the proposed decision and order amounted to a
default judgment which is disfavored in those instances in which there
is a meritorious defense. The ALJ found that EACC failed to establish
_________________________________________________________________
*The Board noted that the ALJ may not have had jurisdiction to con-
sider the merits of the claim if EACC did not show good cause. How-
ever, in the interest of judicial economy, the Board addressed the merits
of the claim and found that the ALJ's findings were supported by sub-
stantial evidence.
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good cause. The ALJ noted that EACC received actual notice of the
Notice of Findings and was a large, stable entity which is expected
to have well-established procedures in place for handling claims. The
ALJ also noted that default judgments, although generally disfavored,
are more likely sustainable when the party contesting the default judg-
ment, and not the party's counsel, was at fault, as in this case.
On appeal to the Board, EACC asserted that the Notice of Initial
Finding was incomplete because it indicated it would be amended and
that its controversion was timely as to the announcement informing
EACC that the notice would not be amended. The Board rejected this
argument on the basis that EACC had already conceded its controver-
sion was untimely. In addition, the Board determined that its prior
holding that EACC's controversion was untimely was the law of the
case and no exception to that doctrine was established.
The Board also rejected EACC's contention that Duelley was not
prejudiced by the late filing. According to the Board, Duelley was
prejudiced by the potential loss of benefits and by having to refund
an overpayment of interim benefits. Finally, the Board concluded that
even if Duelley was not prejudiced, EACC failed to establish good
cause for extending the period in which to file a controversion and the
ALJ's findings was a proper exercise of his discretion. The ALJ's
decision was affirmed.
We note that, pursuant to statutory authority, the Secretary of
Labor has established a regulatory framework governing the filing
and adjudication of black lung claims. See 30 U.S.C.A. §§ 932(a),
936(a) (West 1986 & Supp. 1998). The district director of the Office
of Workers' Compensation Programs of the Department of Labor has
authority to process the claim, determine the responsible operator and
make an initial determination regarding entitlement. See 20 C.F.R.
§§ 725.401, 725.412 (1997). If an initial determination is made find-
ing the coal miner is entitled to benefits, the responsible operator has
thirty days from the date of the notice to contest the determination.
An operator who fails to file a timely response shall be deemed to
have accepted the initial findings of the deputy commissioner and
shall not be permitted to raise issues or present evidence with respect
to issues inconsistent with the initial findings in any further proceed-
ing conducted with respect to the claim. Good cause may excuse an
5
operator's failure to submit a timely response. See 20 C.F.R.
§§ 725.413(b)(3), 725.414(b) (1997).
We review the ALJ's decision not to find good cause for abuse of
discretion. See, e.g., Underwood v. Elkay Mining, Inc., 105 F.3d 946,
949 (4th Cir. 1997); see also Mendoza v. Merit Sys. Protection Bd.,
966 F.2d 650, 653 (Fed. Cir. 1992); Union Flights, Inc. v. Administra-
tor, F.A.A., 957 F.2d 685, 688 (9th Cir. 1992). We, like the Board,
reject EACC's contention that the Notice of Initial Finding was not
complete and did not warrant a response until the DOL determined
whether it was to be amended. The notice clearly indicated EACC's
obligation to respond and the consequences if it failed to do so. Fur-
thermore, the potential amendment would not have impacted Duel-
ley's entitlement to benefits. Finally, EACC conceded that its
controversion was indeed late. It was not until EACC appealed the
ALJ's decision to the Board that it argued that the Notice of Initial
Finding did not trigger its obligation to respond.
Likewise, we reject EACC's contention that Duelley waived the
issue regarding the late filing of the controversion. As the Board
stated, the issue was identified as contested by the DOL and must be
resolved prior to the ALJ asserting his authority over the merits of the
claim. See 20 C.F.R. § 725.463(a)(1997); Pothering v. Parkson Coal
Co., 861 F.2d 1321, 1329 (3d Cir. 1988). The issue was not with-
drawn or waived by either the DOL or EACC. The issue was not
Duelley's to raise before the ALJ, inasmuch as it had already been
decided in his favor, nor was it his to waive.
Finally, we find the ALJ did not abuse his discretion in determining
that EACC did not demonstrate good cause in its late filing of the
controversion. EACC essentially contends that the bar to contesting
the merits of Duelley's claim due to its failure to show good cause for
its late filing is too severe a penalty. Once the ALJ determined that
EACC failed to show good cause, it was not within his discretion to
fashion a remedy. The regulations compelled the ALJ to bar EACC's
challenge to the merits. EACC fails to show some reasonable basis for
noncompliance. See Adams v. AlliedSignal Gen. Aviation Avionics, 74
F.3d 882, 887 (8th Cir. 1996). Heavy workload or inattention to office
chores do not constitute good cause. See Father & Sons Lumber &
Bldg. Supplies, Inc. v. N.L.R.B., 931 F.2d 1093, 1096 (6th Cir. 1991);
6
Mollura v. Miller, 621 F.2d 334, 335 (9th Cir. 1980). EACC was obli-
gated to file a timely response to notice of the adverse decision. The
failure to do so was entirely due to EACC's inattention to its own
obligations. EACC could have, but did not, request a longer time to
respond.
Accordingly, we affirm the Board's orders. We deny EACC's
motion for oral argument because the facts and legal contentions are
adequately presented in the materials before the court and argument
would not aid in the decisional process.
AFFIRMED
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