Lovilia Coal Co. v. Wesley Harvey , 109 F.3d 445 ( 1997 )

___________
No. 95-4122
___________
Lovilia Coal Company; Old *
Republic Insurance Company, *
*
Petitioners, * On Petition for Review of a
* Decision and Order of the
v. * Benefits Review Board,
* United States Department
Wesley Harvey; Director, * of Labor.
Office of Workers' *
Compensation Programs, *
United States Department *
of Labor, *
*
Respondents. *
___________
Submitted: September 11, 1996
Filed: March 21, 1997
___________
Before RICHARD S. ARNOLD, Chief Judge, HENLEY, Senior Circuit Judge, and
WOLLMAN, Circuit Judge.
___________
HENLEY, Senior Circuit Judge.
Lovilia Coal Company and its insurance carrier, Old Republic
Insurance Company, (collectively Lovilia), petition for review of an order
of the Benefits Review Board (Board) of the Department of Labor (DOL)
awarding benefits under the Black Lung Benefits Act, 30 U.S.C. §§ 901-945
(the Act), to Wesley Harvey, a former coal miner employed by Lovilia. We
affirm the award of benefits.
Background
Harvey, who was born in 1914, worked in coal mines from 1930 until
1975, when he retired after working more than ten years for Lovilia.
Harvey first filed a claim for black lung benefits in
1973, which was denied. In 1977, Congress liberalized eligibility
requirements for benefits, and Harvey's claim was reopened and reviewed
under the more lenient standards, 30 U.S.C. § 945, but was denied. Harvey
again filed claims for benefits in 1983, 1984 and 1987, which were all
denied. In March 1990, Harvey again applied for benefits. The deputy
director denied the claim, finding that Harvey had not established a
material change in conditions. See 20 C.F.R. § 725.309(d) ("If [an]
earlier miner's claim has been finally denied, the later claim shall also
be denied, on the grounds of the prior denial, unless the deputy director
determines that there has been a material change in conditions.").
However, after Harvey submitted additional medical evidence and appeared
before an administrative law judge (ALJ), the ALJ awarded benefits. The
ALJ found that the additional evidence not only showed a material change
in conditions, but also showed that Harvey was "totally disabled due to
pneumoconiosis." See 30 U.S.C. § 901. In addition, the ALJ rejected
Lovilia's argument that 30 U.S.C § 932 transferred liability for payment
of benefits from the company to the Black Lung Disability Trust Fund.
Lovilia appealed to the Board. The Board rejected Lovilia's arguments
relating to transfer of liability and material change, but held that the
ALJ had erred in concluding that Harvey was totally disabled due to
pneumoconiosis by relying solely on the opinion of Harvey's treating
physician, Dr. Gordon Arnott. Accordingly, the Board remanded the case for
a reconsideration based on all the evidence of record. On remand, the ALJ
again awarded benefits. The Board affirmed, and this petition for review
follows.
DISCUSSION
On appeal Lovilia first renews its argument that if Harvey is
entitled to benefits, section 205 of the Black Lung Benefits Amendments of
1981, Pub. L. 97-119, Title II, 95 Stat 1635 (1981), codified at 30 U.S.C.
§§ 932(c)(2), (j)(3), transferred liability for payment of the benefits
from the company to the Black Lung Disability Trust Fund (Fund). Lovilia
next raises several
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challenges to 20 C.F.R. § 725.309(d), the "material change" regulation.
In the event this court rejects its arguments relating to transfer of
liability and material change, Lovilia goes on to argue that Harvey is not
entitled to benefits.
Initially, we note that Lovilia's presentation of "the issues
reverses the usual order of inquiry; that is, we determine who should pay
before establishing whether the claimant is eligible for benefits."
Rochester & Pittsburgh Coal Co. v. Krecota, 868 F.2d 600, 601 n.1 (3d Cir.
1989). "In this case, however, the government conceded that [Harvey] was
eligible for benefits." Id. "Thus, if we determine that liability should
be transferred to the government's Trust Fund we need not address the issue
of whether [Harvey] is eligible for benefits." Id. In addition, we note
that the regulations, 20 C.F.R. § 725.497(c), contemplate that transfer
issues should be decided "as early as possible in the process--even before
final disposition of the miner's claim." Big Horn Coal Co. v. Office of
Workers' Comp. Prog., 55 F.3d 545, 551 n.7 (10th Cir. 1995).
"Consequently, we will consider the transfer issue before approaching the
eligibility issue." Krecota, 868 F.2d at 601 n.1.
Transfer of Liability
As previously indicated, in 1977 Congress "substantially liberalized
the criteria for establishing an entitlement to benefits." Tonelli v.
Director, 878 F.2d 1083, 1984 n.2 (8th Cir. 1989). In addition, Congress
provided that "[c]laims denied before March 1, 1978 (the effective date of
the 1977 amendments) were to be reexamined under these less demanding
standards." Old Ben Coal Co. v. Luker, 826 F.2d 688, 693 (7th Cir. 1987).
In order to relieve coal companies of unexpected retroactive liability, in
1981 "Congress provided that liability for claims denied before March 1,
1978 which were thereafter approved under the liberalized eligibility
criteria should be transferred from coal operators to the Black Lung
Disability Trust Fund." Director v. Drummond Coal
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Co., 831 F.2d 240, 242 (11th Cir. 1987) (citing 30 U.S.C. §§ 932(c),(j)).1
As relevant here, 30 U.S.C § 932(c) provides:
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.
Section 932(j) provides that the Trust Fund is liable for "payment of
benefits in cases . . . in which there was a claim denied before March 1,
1978, and such claim is or has been approved in accordance with the
provisions of section 945 of this title." At the time of the enactment of
the 1981 amendments and at all relevant times, DOL regulations defined a
claim as "an assertion in writing of an individual's entitlement to
benefits." 20 C.F.R. § 725.101(a)(22) (1977) (recodified at 20 C.F.R. §
725.101(a)(16) (1994)).
In this case, the Board upheld the ALJ's rejection of Lovilia's
transfer of liability argument. The Board reasoned that the only claim
pending before the ALJ was Harvey's claim of March 1990 and that the claim
could not support a transfer of liability since it was not, and could not
have been, denied before March 1, 1978. The Board noted that although
Harvey's 1973 claim had been denied before March 1, 1978, it had been
denied, not approved, after review under section 945.
Lovilia argues that the Board has misinterpreted the term “claim,”
as used in section 932. Lovilia asserts that under the plain meaning of
the statute "claim" does not mean an application
1
In addition, the 1981 amendments, which were enacted in
response to a large deficit in the Trust Fund, raised taxes on coal
operators and tightened eligibility requirements. See Hawkins v.
Director, 907 F.2d 697, 702 n.8 (7th Cir. 1990); see also Lopatto,
The Federal Black Lung Program: A 1983 Primer, 85 W. Va. L. Rev.
677 (1983).
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for benefits, but means liability. Lovilia reasons "to insurers 'claims'
do not mean 'claim forms' or applications. It means liability." Lovilia's
Br. at 27. The Director responds that "claim" plainly means an application
for benefits. We agree with the Director. "The plainness or ambiguity of
statutory language is determined by reference to the language itself, the
specific context in which that language is used, and the broader context
of the statute as a whole." Robinson v. Shell Oil Co., 117 S. Ct. 843, 846
(1997). As relevant here, the dictionary defines "claim" as "a demand for
compensation or benefits (as one in accordance with the provisions of the
Social Security Act or workmen's compensation law”), Webster's Third New
Int'l Dictionary 414 (1965), and the Black Lung Act provides that a claim
for benefits must be filed timely and in a prescribed manner. See, e.g.,
30 U.S.C. §§ 923, 924, 932. Moreover, as the Director points out, at the
time of the 1981 amendments, "Congress was aware of the regulation['s]
definition, but did not enact any provisions to alter the definition."
Pagel, Inc. v. CIR, 905 F.2d 1190, 1192 (8th Cir. 1990).
In addition, we agree with the Director that even if the term "claim"
was ambiguous, the legislative history makes clear that it means an
application for benefits. Because Congress was concerned that a "transfer
of liability could prove too burdensome for the debt-laden Trust Fund,
legislators specifically requested information on how many claims would
transfer, which claims they were and what the cost would be" and relied on
estimates that the amendment would transfer about 10,200 claims, valued at
approximately $1.4 to $1.5 billion. Old Ben Coal Co., 826 F.2d at 694
(citing Hearings before the Subcomm. on Labor of the Senate Comm. on Labor
and Human Resources, 97th Cong., 1st Sess. 31, 77 (1981)); see also Earl
Patton Coal Co. v. Patton, 848 F.2d 668, 672 (6th Cir. 1988) ("Legislative
history shows that the transfer of liability provisions of the 1981
Amendments reflect a congressional
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intent to accommodate only a limited number of claims within estimated cost
limitations."). In any event, if any ambiguity existed, we would defer to
DOL's reasonable interpretation of the statute it is charged with
administering. See Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984). DOL's transfer of liability regulation
makes clear that unless a claim is subject to merger, 20 C.F.R.
§ 725.309(c), "the procedural history of each . . . claim must be
considered separately to determine whether the claim is subject to the
transfer of liability provisions." Id. § 725.496(c).2
Res Judicata
Lovilia also argues that consideration of Harvey's 1990 claim is
barred by the doctrine of res judicata. The doctrine "consist[s] of two
preclusion concepts: 'issue preclusion' and 'claim preclusion.'" Migra v.
Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 77 n.1 (1984). Under
claim preclusion, "'a final judgment on the merits bars further claims by
the parties or their privies based on the same cause of action.'" United
States v. Gurley, 43 F.3d 1188, 1195 (8th Cir. 1994) (quoting Montana v.
United States, 440 U.S. 147, 153 (1979)), cert. denied, 116 S. Ct. 73
(1995). Under issue preclusion, or, as it is sometimes called collateral
estoppel, “once a court has decided an issue of fact or law necessary to
its judgment, 'the determination is conclusive in a subsequent action
between the parties, whether on the same or a different claim.’” Tyus v.
Schoemehl, 93 F.3d 449, 453 (8th Cir. 1996) (quoting Restatement (Second)
of Judgments § 27 (1982)), pet.
2
Lovilia does not, and could not, argue that Harvey's 1990
claim merged with his 1973 claim. See Tonelli v. Director, 878
F.2d 1083, 1087 (8th Cir. 1988) (under 20 C.F.R. § 725.309© "merger
is available only when a previously denied claim, reopened for
review under [30 U.S.C. § 945], and a second claim are pending at
the same time"). Because the claim is not subject to merger, it is
governed by the criteria of 20 C.F.R Part 718. If the claim had
been merged, "then the more liberal criteria of 20 C.F.R. 727 would
have governed." Tonelli, 878 F.2d at 1084 n.3.
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for cert. filed, 65 U.S.L.W. 3539 (U.S. Jan. 27, 1997) (No. 96-1207).
Relying on claim preclusion, Lovilia argues that Harvey's 1990 claim
was merely a "recycled" version of his 1973 claim and by "obtain[ing] a
better lawyer and a friendlier ALJ, he finally was able to get benefits."
Lovilia's Br. at 18, 31.3 Lovilia notes that in Pittston Coal Group v.
Sebben, 488 U.S. 105, 123 (1988), the Supreme Court made clear that a black
lung claimant may not "seek[] to avoid the bar of res judicata on the
ground that the decision was wrong."
Contrary to Lovilia's assertion, Harvey was not attempting to
relitigate the previous denials of earlier claims; rather, he was
attempting to establish entitlement to benefits based on a change in
conditions since the denials. In such circumstances, res judicata does not
bar his claim. As the Fourth Circuit has stated, "res judicata does not
apply if the issue is claimant's physical condition or degree of disability
at two entirely different times." Lisa Lee Mines v. Director, 86 F.3d
1358, 1362 (4th Cir. 1996) (en banc) (quoting 3 A. Larson, The Law of
Workmen's Compensation, § 79.72(f) (1989)), cert. denied, 117 S. Ct. 763
(1997). This is so because "[t]he health of a human being is not
susceptible to once-in-a-lifetime adjudication." Id. The Third Circuit
also has explained that although a black lung claimant is "precluded from
collaterally attacking the prior denial of benefits, [he] may file a new
claim, asserting that he is now eligible for benefits because he has become
totally disabled due to coal miner's pneumoconiosis and that his disability
occurred subsequent to the prior adjudication." Labelle Processing Co. v.
Swarrow, 72 F.3d 308, 314
3
Lovilia refers to the preclusive effect of an administrative
determination in a subsequent administrative proceeding, rather
than the preclusive effect of an administrative determination in a
court proceeding. See Astoria Fed. Sav. & Loan Ass'n v. Solimino,
501 U.S. 104, 106 (1991).
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(3d Cir. 1995) (footnote omitted). Simply stated, "[r]es judicata is not
implicated when a miner brings a duplicate claim so long as the claimant
demonstrates that his or her physical condition . . . has changed."
Wyoming Fuel Co. v. Director, 90 F.3d 1502, 1510 (10th Cir. 1996).
Lovilia argues that these cases are wrongly decided because they are
premised upon the erroneous assumption that pneumoconiosis -- which under
the Act, 30 U.S.C. § 902(b), "means a chronic dust disease of the lung
. . . arising out of coal mine employment"4 -- is a progressive disease.
For the same reason, Lovilia argues that 20 C.F.R. § 725.309(d), which, as
indicated, allows for review of a subsequent claim after a denial of a
previous claim if a miner demonstrates a "material change in conditions,"
violates res judicata. Specifically, Lovilia contends that if a coal miner
does not have pneumoconiosis or is not disabled by it at the time of an
initial denial and thereafter does not return to work in the mines, he
cannot develop the disease or become disabled by it, and thus could never
establish a change in conditions. We disagree. Quoting Mullins v. Coal
Co. v. Director, 484 U.S. 135, 151-52 (1987), this court has recognized
that "'pneumoconiosis is a progressive and irreversible disease.'"
Robinson v. Missouri Mining Co., 955 F.2d 1181, 1185 (8th Cir. 1992).
Moreover, we have noted that "pneumoconiosis is a progressive disease which
(according to medical testimony accepted by Congress) is difficult for
miners and doctors to identify." Newman v. Director, 745 F.2d 1162, 1164
(8th Cir. 1984). Although Lovilia contends that the statements in our
opinions, as well as in the opinions of the Supreme Court and other courts
of appeals, see, e.g., Labelle Processing, 72 F.3d at 314 (listing cases
"acknowleg[ing] that
4
"For purposes of this definition, a disease 'arising out of
coal mine employment' includes any chronic pulmonary disease
resulting in respiratory or pulmonary impairment significantly
related to . . . dust exposure in the coal mine employment." 20
C.F.R. § 718.201.
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pneumoconiosis is a progressive and irreversible disease") are mere dicta,
we disagree and will not revisit the issue.
Material Change in Conditions
We next address Lovilia's argument that the ALJ applied the wrong
standard in determining that Harvey had demonstrated a "material change"
in conditions. As previously indicated, 20 C.F.R. § 725.309(d), in
relevant part, provides that "[i]f [an] earlier miner's claim has been
finally denied, the later claim shall also be denied, on the grounds of the
prior denial, unless the deputy director determines that there has been a
material change in conditions." Neither the statute nor the regulations
define "material change." In this case, the ALJ applied the Benefits
Review Board's standard set forth in Spese v. Peabody Coal Co., 11 Black
Lung Rep. 1-174, 1-176 (Ben. Rev. Bd. 1988) (per curiam), which holds that
a claimant can establish a material change by submitting "evidence which
is relevant and probative so that there is a reasonable probability that
[it] would change the prior administrative result."
We do not address the validity of the Spese standard at length. The
Director acknowledges that "[e]very circuit that has addressed the validity
of the Spese standard has rejected it[,]" Wyoming Fuel Co. v. Director, 90
F.3d at 1508 (listing cases), and concedes it is wrong. In Wyoming Fuel,
the court explained that appellate courts had rejected the Spese standard
because it "violates principles of res judicata by permitting a claimant --
when attempting to show a material change -- to present evidence that
merely shows the initial decision was in error, rather than limiting the
evidence to that which shows that the claimant's condition has worsened
since the previous denial." Id. at 1508-09.
Instead, the Director asks this court to adopt his "one-element"
standard, as did the Third Circuit, Labelle Processing Co.
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v. Swarrow, 72 F.3d at 318; Fourth Circuit, Lisa Lee Mines v. Director, 86
F.3d at 1363; and Sixth Circuit, Sharondale Corp. v. Ross, 42 F.3d 993, 998
(6th Cir. 1994). Under the Director's standard, an ALJ "making a material
change determination must consider whether the weight of the new evidence
of record (that is, the evidence developed since the denial of the earlier
claim), submitted by all the parties, establishes at least one of the
elements of entitlement previously adjudicated against the miner."
Director's Br. at 32. In order to establish entitlement to black lung
benefits, a claimant has to establish three elements: "[1] total
disability; [2] that disability was caused 'at least in part by
pneumoconiosis;' [3] that 'disability arose out of coal mine employment.'"
Barnes v. ICO Corp., 31 F.3d 678, 680 (8th Cir. 1994) (quoting Mullins v.
Director, 484 U.S. at 141). Moreover, "[t]he element in question must be
one capable of change," for example, the existence of pneumoconiosis or
total disability. Director's Br. at 33. If a claimant presents such
evidence, "[a]bsent contrary evidence clearly demonstrating that the denial
of the initial claim was a mistake," an inference of material change is
"compelled" and an ALJ "must then consider whether all the evidence in the
record, including the evidence predating the denial of the prior claim,
supports an entitlement to benefits." Id.
The Director acknowledges that the Seventh Circuit, Sahara Coal Co.
v. Office of Workers' Comp. Prog., 946 F.2d 554, 556 (7th Cir. 1991),5 and
Tenth Circuit, Wyoming Fuel Co. v. Director, 90
5
In Sahara Coal, the Seventh Circuit held that "[a] material
change in conditions means either that the miner did not have black
lung disease at the time of first application but has since
contracted it and become totally disabled by it, or that his
disease has progressed to the point of becoming totally disabling
although it was not at the time of the first application." 946
F.2d at 556. However, the court believed that "[i]t is not enough
that the new application be supported by new evidence of disease or
disability, because such evidence might show merely that the
original denial was wrong." Id.
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F.3d at 1511,6 do not follow his "one-element" approach. However, the
Director reminds this court that "[w]hen, like in this case, the issue is
whether the agency has erred in interpreting its own regulations, the
Supreme Court has stated that: provided the agency's interpretation 'does
not violate the Constitution or a federal statute, it must be given
controlling weight unless it is plainly erroneous or inconsistent with the
regulation.'" Shalala v. St. Paul-Ramsey Med. Ctr., 50 F.3d 522, 527 (8th
Cir. 1995) (quoting Stinson v. United States, 508 U.S. 36, 45 (1993)). As
the Director points out, this means we may not "'reject reasonable
administrative interpretation even if another interpretation may also be
reasonable.'" Id. (quoting Creighton Omaha Reg'l Health Care Corp. v.
Bowen, 822 F.2d 785, 789 (8th Cir. 1987)).
We first reject Lovilia's argument that the Director's one-element
approach is not entitled to Chevron deference because it is inconsistent
with his past positions. "Of course the mere fact that an agency
interpretation contradicts a prior agency position is not fatal." See
Smiley v. Citibank, 116 S. Ct. 1730, 1734 (1996). Unless a change is
arbitrary or capricious or an abuse of discretion, "change is not
invalidating, since the whole point of Chevron is to leave the discretion
provided by the ambiguities of a statute with the implementing agency."
Id. We also reject Lovilia's related argument that no deference is due
because the Director's position is a mere litigating position. In the
circumstances of this case, the Director's "position is in no sense a 'post
hoc rationalizatio[n]’ advanced by an agency seeking to defend past agency
action against attack." Auer v. Robbins, 1997 WL 65558, *6 (Feb. 17, 1997)
(quoting Bowen v. Georgetown Univ.
6
In Wyoming Fuel, the Tenth Circuit held that "a claimant must
prove for each element that actually was decided adversely to the
claimant in the prior denial that there has been a material change
in that condition since the prior claim was denied." 90 F.3d at
1511.
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Hosp., 488 U.S. 204, 212 (1988)). "There is simply no reason to suspect
that the [Director's] interpretation does not reflect the agency's fair and
considered judgment on the matter in question." Id.
Lovilia also contends that the Director's one-element standard is not
entitled to deference because it violates section 7(c) Administrative
Procedures Act (APA), 5 U.S.C. 556(d), which requires that "the proponent
of a rule or order has the burden of proof." Lovilia relies on Director
v. Greenwich Collieries, 512 U.S. 267 (1994). In Greenwich Collieries, the
Supreme Court invalidated the DOL's "true doubt" rule, which provided that
if the evidence was evenly balanced, a black lung claimant was entitled to
benefits. The Court held that the rule violated section 7(c) because it
"shifted the burden of persuasion to the party opposing the benefits
claim." Id. at 269.
Here, Lovilia argues that the Director's one-element approach
impermissibly shifts the burden of persuasion from the claimant to the coal
company. We disagree. There is no dispute that the Director's
interpretation creates a presumption--that is, it calls for an "inference
of an ultimate fact from a predicate one." Mullins, 484 U.S. at 157 n.30.
However, the presumption does not violate Greenwich Collieries. In fact,
in that case, the Court noted that "due to Congress' recognition that
[black lung] claims . . . would be difficult to prove, claimants . . .
benefit from certain statutory presumptions easing their burden." 512 U.S.
at 280 (citing e.g. 30 U.S.C. § 921(c)). In addition, the Court recognized
that DOL's "solicitude for benefits claimants is reflected in the
regulations adopting additional presumptions." Id. (citing 20 C.F.R.
§§ 718.301-718-306). The Court indicated that the statutory and regulatory
presumptions which ease a claimant's burden of production (i.e., a party's
obligation to come forward with evidence supporting its claim") do not
violate the APA. 512 U.S. at 272. The Court distinguished the true doubt
rule
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from those presumptions because the rule "attempt[ed] to go one step
further" and "[i]n so doing," id. at 280, impermissibly shifted the burden
of persuasion (i.e., "the notion that if the evidence is evenly balanced,
the party that bears the burden of persuasion must lose"). Id. at 272.
In this case, the Director's interpretation is akin to the statutory and
regulatory presumptions which ease a black lung claimant's burden of
production, but do not shift the burden of persuasion, as that term is used
in Greenwich Collieries. See Lovell v. Poway Unified Sch. Dist., 90 F.3d
367, 373 (9th Cir. 1996) ("'Burdens of persuasion affect the outcomes only
of cases in which the trier of fact thinks that plaintiff's and defendant's
positions equiprobable.'") (quoting Bristow v. Drake St., Inc., 41 F.3d
345, 353 (7th Cir. 1994)).
Lovilia also argues that the Director's one-element standard violates
due process. "Like all rules of evidence that permit an inference of an
ultimate fact from a predicate one, black lung benefits presumptions rest
on a judgment that the relationship between the ultimate and the predicate
facts has a basis in the logic of common understanding." Mullins, 484 U.S.
at 157 n.30. To satisfy due process concerns, however, "it is only
essential that there shall be some rational connection between the fact
proved and the ultimate fact presumed, and that the inference of one fact
from proof of another shall not be so unreasonable as to be a purely
arbitrary mandate." Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 28
(1976) (internal quotation omitted). Moreover, the Supreme Court has
recognized that "[t]he process of making the determination of rationality
is, by its nature, highly empirical, and in matters not within specialized
judicial competence or completely commonplace, significant weight should
be accorded the capacity of Congress to amass the stuff of actual
experience and cull conclusions from it." Id. (quotation omitted). We
also keep in mind that "black lung presumptions, no less than any
presumption established or recognized in law, are the product of both
factual understandings and policy concerns." Mullins, 484 U.S. at 157.
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In this case, Lovilia argues that the Director's standard violates
due process because there is no rational connection between the fact
presumed -- material change -- and the fact proved -- new evidence of
disease or disability. However, Lovilia's argument is based on the premise
that pneumoconiosis is not a progressive disease, a premise we have
previously rejected. Lovilia also argues that the presumption is
irrational because new evidence of disease or disability "might show merely
that the original denial was wrong, and would thereby constitute an
impermissible collateral attack on that denial." Sahara Coal, 946 F.2d at
556.
The Director counters that Lovilia misunderstands his standard. The
Director asserts that his standard is faithful to the language of the
regulation and to both claim and issue preclusion principles. The Director
maintains that his standard ensures that a miner has experienced a material
change in conditions and prevents an impermissible collateral attack on a
previous denial by presuming that the initial denial was correct and
requiring the claimant to establish an element of entitlement capable of
change with new evidence. For example, the Director explains that if a
miner was found not to have pneumoconiosis at the time of an earlier
denial, and he thereafter establishes that he has the disease, in the
absence of evidence showing the denial was a mistake, an inference of
"material change" is not only permitted but "compelled." We agree. Cf.
Mullins, 484 U.S at 158-59 ("Secretary's reading of the interim
presumption's invocation burden satisfies both the purposes of the statute
and the need for a logical connection between the proven fact and the
presumed conclusion.") (footnote omitted).
The Director also asserts that his one-element standard promotes
administrative and judicial efficiency, while at the same
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time respects issue preclusion principles, which requires that a
determination of an issue "must have been essential to the final judgment."
Tyus, 93 F.3d at 453. In the context of a black lung claim, the Fourth
Circuit explained, "[a] black lung claimant must prove every element of his
claim. If he loses on one, or two, or three elements, the end result is
the same: a denial." Lisa Lee Mine, 86 F.3d at 1363. Under issue
preclusion principles, "holdings in the alternative, either of which
independently would be sufficient to support the result . . . [are] not
conclusive with respect to either issue standing alone." Id. (internal
quotation omitted); see also Ritter v. Mount St. Mary's College, 814 F.2d
986, 993 (4th Cir.) ("where the court in the prior suit has determined two
issues, either of which could independently support the result, then
neither determination is considered essential to the judgment"), cert.
denied, 484 U.S. 913 (1987). "For this reason, if [a black lung claimant]
loses on more than one element, but only one is in fact a correct basis for
denial, the law does not impose a duty upon him to file a meaningless
appeal to 'correct' the erroneous alternative holdings." Lisa Lee Mines,
86 F.3d at 1363. Also, for this reason, the Director asserts that once a
claimant establishes entitlement to one element with new evidence, he can
establish entitlement to the remaining elements with old evidence.
As the Fourth Circuit noted, "[a] rational system would
simultaneously account for the progressiveness of the disease, discourage
useless appeals of alternate holdings, and require, at the threshold, a
palpable basis to believe that conditions have changed over time." Lisa
Lee Mines, 86 F.3d at 1364. We agree with the Fourth Circuit that "[t]he
Director's 'one-element' approach accomplishes this difficult task." Id.
at 1364-65. We thus reject Lovilia's due process argument.
Apparently realizing the weakness of its due process argument,
Lovilia concedes that the presumption "might not be so bad if the
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inference of changed conditions" was rebuttable. Lovilia's Reply Br. at
15. However, Lovilia asserts because the presumption is irrebuttable, it
is "illegal," but does not explain why. An irrebuttable, or "conclusive
presumption does, of course, foreclose the person against whom it is
invoked from demonstrating, in a particularized proceeding, that applying
the presumption to him will in fact not further the lawful governmental
policy the presumption is designed to effectuate." Michael H. v. Gerald
D., 491 U.S. 110, 120 (1989). Although the Director does not dispute that
his standard creates a mandatory presumption, that is it "compels" rather
than permits an inference, see First Dakota Nat. Bank v. St. Paul Fire &
Marine Ins. Co., 2 F.3d 801, 813 (8th Cir. 1993), the Director argues it
does not create an irrebuttable presumption because it allows an employer
to dispute the presumed fact.
The Director is correct that as a technical matter his interpretation
does not create an irrebuttable presumption. If, however, it did, or as
a practical matter it does, it is not illegal. In Michael H., the Supreme
Court recognized some confusion about its so-called "irrebuttable
presumption cases" and explained that the "cases must ultimately be
analyzed as calling into question not the adequacy of procedures but --
like our cases involving classifications framed in other terms, . . . --
the adequacy of the 'fit' between the classification and the policy that
the classification serves." 491 U.S. at 121 (internal citation omitted).
As just discussed, we find that there is an "adequate fit" between the
Director's one-element standard and the finality and efficiency policies
it is designed to serve. Moreover, as the Director notes, his
interpretation serves the remedial purpose of the Act. See Labelle
Processing, 72 F.3d at 318.
Because we find that the Director's interpretation of 20 C.F.R.
§ 725.309(d) is reasonable, we join the Third, Fourth and
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Sixth Circuits7 in adopting the Director's one-element standard, and do not
address the Seventh and Tenth Circuit approaches. Even if we found that
they were also reasonable, we would be obligated to defer to the Director's
standard.8
Harvey's Claim
Finally, we turn to Harvey's claim. Lovilia asserts that if this
court adopts the Director's one-element standard, then we must remand so
that the ALJ can apply the standard. The Director and Harvey contend that
a remand is unnecessary because the evidence submitted in support of
Harvey's 1990 claim, as a matter of law, not only demonstrates a material
change in conditions, but, as the ALJ found, that, as of March 1, 1990,
Harvey was totally disabled by pneumoconiosis and is thus entitled to
benefits.
In support of his present claim for benefits, Harvey submitted a
November 1992 letter by Dr. Gordon Arnott, in which the doctor stated:
This man has worked in the coal mines for 32 years. During the
last four years, he had considerable trouble with breathing.
He has X-Ray findings of Black Lung Disease.
Mr. Harvey requires breathing treatment, medication to dilate
his lungs, inhaler treatments, and cortisone
7
Like the Fourth Circuit in Lisa Lee Mines, "[w]e do not
endorse . . . the closing paragraph of Sharondale Corp., 42 F.3d at
999, where . . . the Sixth Circuit seems to have required
consideration of evidence behind the earlier denial to determine
whether it 'differ[s] qualitatively' from the new evidence." 86
F.3d at 1363 n.11.
8
We note, however, our agreement with the Tenth Circuit's
criticism of the Seventh Circuit's Sahara Coal standard, Wyoming
Fuel, 90 F.3d at 1509-10, but for reasons stated above, we tend to
disagree with the Tenth Circuit that the Director's interpretation
of 20 C.F.R. § 725.309(d) is not entitled to deference.
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injections to help him with his breathing. He has been
in the hospital with this condition on numerous occasions.
He will continue to be disabled by this problem.
In addition, Harvey submitted medical records showing that Dr. Arnott had
treated Harvey for breathing problems since 1988, including
hospitalizations solely because of breathing problems or where his
pulmonary condition was a significant diagnosis. For example, in August
1991, Harvey was admitted to the hospital after he came to the emergency
room "severely short of breath and unable to function at all" and breathing
treatments "were not real effective." He was again admitted in September
1991 for "marked shortness of breath, dyspnea, and wheezing."
In the circumstances of this case, we agree with the Director that a
remand is unnecessary. As to material change, in this case, there is no
question "whether the ALJ merely disagreed with the previous
characterization of the strength of the evidence or whether [Harvey] indeed
had shown the existence of a material change in his conditions since the
earlier denial." Sharondale Corp., 42 F.3d at 999. In this case, the ALJ
expressly found that the "hospital records dramatically demonstrate that
[Harvey's] respiratory status has worsened substantially" since the
previous denial, and that the evidence showed both the existence of
pneumoconiosis and disability. ALJ order of July, 28, 1993 at 7. Thus,
a remand for a material change finding "would serve no useful purpose."
Olson v. Shalala, 48 F.3d 321, 323 (8th Cir. 1995); see also Lisa Lee
Mines, 86 F.3d at 1362 (although ALJ applied Spese standard, remand
unnecessary where claimant "ha[d] shown a stark change in condition").
As to entitlement, Lovilia challenges the ALJ's findings that Harvey
had pneumoconiosis, that it arose out of coal mine employment, and that
Harvey was totally disabled by the disease. We, like the Board, must
uphold "an ALJ's findings if they are
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rational, supported by substantial evidence, and consistent with the
applicable law." Associated Elec. Coop., Inc. v. Hudson, 73 F.3d 845, 848
(8th Cir. 1996).
On appeal, Lovilia concedes that the "Act does not require positive
X-rays[,]" id. at 848 (citing 20 C.F.R. § 718.202(b) ("[n]o claim for
benefits shall be denied solely on the basis of a negative chest X-ray")).
Indeed, the regulations provide that a determination of pneumoconiosis may
be made "if a physician, exercising sound medical judgment, notwithstanding
a negative X-ray, finds that the miner suffers from pneumoconiosis." 20
C.F.R. § 718.202(a)(4). However the doctor's finding must be "based on
objective medical evidence such as blood gas studies, electrocardiograms,
pulmonary function studies, physical performance tests, physical
examination, and medical and work histories" and be "supported by a
reasoned medical opinion." Id. In addition, a determination of "total
disability may be [] found if a physician exercising reasoned medical
judgment, based on medically acceptable clinical and laboratory diagnostic
techniques, concludes that a miner's respiratory or pulmonary condition
prevents him" from performing his usual coal mine duties or comparable
work. Id. § 718.204(c)(4).
Lovilia also recognizes that in evaluating medical opinions an ALJ
may assign great weight to the opinion of a treating physician. Hudson,
73 F.3d at 848. However, Lovilia incorrectly asserts that there is no
record evidence showing that Dr. Arnott was in fact Harvey's treating
physician. As the ALJ noted, the medical records clearly show that Dr.
Arnott had treated Harvey for breathing problems since 1988. "Because [Dr.
Arnott] regularly treated [Harvey] for his breathing problems . . ., the
ALJ had discretion to assign more weight to his opinion." Id. at 849.
Lovilia also incorrectly argues that the ALJ erred in concluding that
Dr. Arnott's opinion was a reasoned medical
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opinion. Although it is "up to the finder of fact to decide as a matter
of credibility whether a physician's report is sufficiently documented and
reasoned[,]" id. at 848, as Lovilia points out, an ALJ must view the report
"in light of the studies conducted and the objective indications upon which
the medical opinion or conclusion is based." Logsdon v. Director, 853 F.2d
613, 615 (8th Cir. 1988) (internal quotation omitted). However, this does
not mean that an ALJ may "use the studies to form his or her own medical
opinion and to substitute that opinion for the opinion of an expert." Id.
(internal quotation omitted).
In this case, the ALJ did not err in concluding that Dr. Arnott's
opinion was well-documented and reasoned. The ALJ evaluated the doctor's
opinion against the medical records. In fact, the ALJ discounted Dr.
Arnott's statement that Harvey had X-ray evidence of pneumoconiosis because
no X-rays of record supported that statement. The ALJ also noted the
objective medical tests did not conclusively demonstrate the existence of
pneumoconiosis, but found that Dr. Arnott's opinion was nonetheless well-
documented because it was supported by records of numerous hospitalizations
and treatments for breathing problems, physical examinations, consideration
of objective tests, and work history. In Campbell v. Director, 846 F.2d
502, 508 (8th Cir. 1988), we found that a doctor's report was a "documented
opinion of a physician exercising reasoned medical judgment" even though
it differed from equivocal test results. We explained that "Congress has
recognized that tests and X-rays designed to detect pulmonary impairments
caused by the inhalation of coal dust are far from infallible." Id
(internal quotation omitted). See also Ware v. Director, 814 F.2d 514, 517
(8th Cir. 1987) (equivocal test results did not impeach doctor's diagnosis
of pneumoconiosis based on claimant's "medical history, employment history,
and symptoms").
Also, contrary to Lovilia's arguments, the ALJ did not ignore the
other medical evidence of record. The ALJ noted the earlier
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medical opinions indicated that Harvey did not have pneumoconiosis, but
found they were not relevant since they did not address Harvey's condition
at the time of the administrative hearing. See Robinson v. Missouri
Mining, 955 F.2d at 1184 ("[a]s pneumoconiosis is a progressive disease,"
the ALJ should consider "temporal proximity . . . in determining which of
two different medical opinions to credit"). The ALJ also noted that in
1987 Dr. Des Camps had reported that Harvey had obstructive lung disease
due to coal dust exposure and cigarette smoking and that in April 1990 Dr.
B. C. Hillyer diagnosed Harvey as having moderate chronic obstructive
pulmonary disease due to cigarette smoking. Contrary to Lovilia's
suggestion, these reports are not inconsistent with the ALJ's finding that
as of March 1990 Harvey had pneumoconiosis and that it "arose at least in
part out of coal mine employment." 20 C.F.R. § 718.203(a)(emphasis
added).9 Cf. Hudson, 73 F.3d at 849 (doctor's opinion that symptoms
consistent with heart disease and smoking did "not contradict ALJ's
separate findings that [claimant] suffered from pneumoconiosis and that it
was a contributing cause of his disability"); Consolidation Coal Co. v.
Hage, 908 F.2d 393, 394 (8th Cir. 1990) (employer's "cigarette defense"
insufficient to rebut statutory presumption of existence of
pneumoconiosis).
Accordingly, we affirm the Board's award of black lung benefits.
9
"Because [Harvey] worked as a miner for more than 10 years,
there is a rebuttable presumption that the pneumoconiosis arose out
of coal mine employment." Hudson, 73 F.3d at 848 (citing 20 C.F.R.
§ 718.203(b). As the ALJ found, no contrary evidence rebuts this
presumption.
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A true copy.
Attest:
Clerk, U.S. Court of Appeals, Eighth Circuit.
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