Peabody Coal Co. v. Director, OWCP ( 1999 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 98-3263
___________
Peabody Coal Co.; *
Old Republic Insurance Co., *
*
Petitioners, *
* Petition for Review of an Order
v. * of the Benefits Review Board,
* United States Department of Labor.
Director, Office of Workers’ *
Compensation Programs, United *
States Department of Labor; *
Mary B. Ricker; Mary D. Ricker, *
*
Respondents. *
___________
Submitted: April 21, 1999
Filed: June 22, 1999
___________
Before McMILLIAN, LOKEN, and MURPHY, Circuit Judges.
___________
MURPHY, Circuit Judge.
The statute that provides benefits to survivors of coal miners who suffered from
black lung disease was amended in 1972 to define widow as including some surviving
divorced wives as well as wives at the time of death. Frank Ricker was covered by the
statute and when he died the Director, Office of Workers’ Compensation Programs,
Department of Labor (DOL), awarded full benefits to his surviving wife and to his
surviving divorced wife. Ricker’s employer, Peabody Coal Co., and its insurer, Old
Republic Insurance Co., maintained that under the applicable statutory and regulatory
interpretations the women were only entitled to partial benefits. The Benefits Review
Board upheld the award, and Peabody and Old Republic filed this petition for review
of the board’s order. We affirm.
I.
The Black Lung Benefits Act (the Act), 30 U.S.C. § 901 et seq., provides for the
payment of benefits when a coal miner is totally disabled by pneumoconiosis or was
totally disabled by pneumoconiosis at the time of his death1 or died due to
pneumoconiosis. See id. § 921(a). Frank Ricker filed a claim for benefits under the
Act in 1976 and was awarded benefits in 1981, which continued until his death in
January 1990. At the time Frank died, his surviving wife was Mary B. Ricker whom
he had married in July 1984. He was also at that time still required to make support
payments to his prior wife, Mary D. Ricker; their marriage had lasted more than ten
years.
The Act provides that when a miner receiving benefits dies, “benefits shall be
paid to his widow (if any) at the rate the deceased miner would receive such benefits.”
Id. § 922(a)(2). When the Act was passed in 1969, the statute defined widow simply
to mean the miner’s wife at the time of his death. See Federal Coal Mine Health and
Safety Act of 1969, Pub. L. No. 91-173, § 402(e), 83 Stat. 742, 793. Three years later,
however, in 1972, Congress amended the definition of widow to include any surviving
divorced wife who had been married to a miner for ten years immediately preceding
their divorce and who had been entitled to or receiving substantial support from the
1
This category of benefits is only available for claims filed within a certain period
of time; Frank Ricker’s claim falls within this category.
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miner at the time of his death.2 See Black Lung Benefits Act of 1972, Pub. L. No. 92-
303, sec. 1(c)(3), § 402(e), 86 Stat. 150, 152.
There is no dispute in this case that both of Frank’s surviving wives are entitled
to benefits under the Act, but the parties disagree on the amount of benefits the wives
should receive. Under the 1972 amendment Mary D. was entitled to benefits as
Frank’s surviving divorced wife, and the DOL determined that she is entitled to the
same benefit as Mary B., his wife at the time of his death.3 Its position is that each
should receive benefits at the same rate Frank would have. The petitioners argue on
the other hand that each should receive only 75% of Frank’s entitlement, consistent
with the DOL manual in effect at the time he died.
The DOL’s Coal Mine (Black Lung Benefits Act) Procedure Manual, ch. 2-900,
§ 8(b), (Feb. 1980), directed that benefits for more than one surviving widow be
calculated in the same manner as for more than one surviving child. Under the 1980
manual the benefit to be shared would thus be calculated by taking the amount of the
deceased miner’s basic benefit and adding 50% for two survivors, 75% for three
survivors, or 100% for four or more survivors. This augmented benefit would then be
2
The number of cases in which there could be more than one entitled widow is
limited by the statutory requirements that the surviving divorced wife have been
married to the miner for at least ten years and been entitled to or receiving substantial
support at the time of his death and that the surviving wife not be remarried. See
30 U.S.C. § 902(e). Neither side has presented any data on the frequency of claims
from two surviving widows, but the DOL has represented that to the best of its
knowledge the issue of the benefit amount has only been raised by an employer twice
in cases reaching the federal courts — once in this case and once in Piney Mountain
Coal Co. v. Mays, No. 97-2560, 1999 WL 274066, at *9–*11 (4th Cir. May 5, 1999).
3
Although Mary B. had filed for divorce in December 1989, the divorce was
apparently not finalized prior to Frank’s death. Mary B. died in October 1998.
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shared by the survivors, and the miner’s surviving wife and surviving divorced wife
would each receive 75% of the basic benefit (i.e., (100% + 50%) / 2).
When Frank died in 1990, the DOL awarded both Mary D. and Mary B. 100%
of the basic benefit instead of calculating the benefits according to the method in the
1980 manual. Old Republic declined to pay the full amount, claiming that the DOL’s
calculation was incorrect. The DOL then provided petitioners with a copy of an
internal 1988 memorandum from the Director of the Office of Workers’ Compensation
Programs (a unit within the DOL) to an Assistant Secretary. Our record does not
include a copy of this memorandum, but does contain petitioners’ response to the
Director. Their response indicates that the internal memorandum suggested that in the
author’s opinion the Act could be interpreted either way, that the DOL had decided to
change its policy to conform to that of the Social Security Administration (SSA),4 and
that it would apply its new interpretation retroactively. The Director’s briefing
represents that a 1988 review of the applicable statutes, regulations, and legislative
history had led to the conclusion that the existing rule was “untenable,”5 and that as a
result the DOL changed its practice. This reevaluation and change of practice led to
4
The Social Security Administration administers black lung claims filed through
June 1973, the Social Security Administration and DOL have joint responsibility for
claims filed from July to December 1973, and the DOL administers claims filed in 1974
or later. The Director asserts that the SSA paid both a surviving wife and a surviving
divorced wife a full basic benefit. Petitioners argue, however, that the DOL manual
rule was consistent with the SSA practice and rule. Nonetheless, petitioners’ counsel
stated in a 1992 letter to the DOL that his “file indicates[] SSA may have routinely
ignored its own rule and paid a full primary benefit to each equal status
survivor/spouse.” Neither side has provided record evidence to establish what the SSA
actually did at any particular time.
5
This review followed an administrative law judge award of full basic benefits
to both a surviving wife and a surviving divorced wife. The Director initially appealed
the award, but then asked that the appeal be dismissed after concluding that the practice
of not providing full basic benefits was not in accord with the Act as amended.
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the publication in 1992 of a revised Coal Mine (Black Lung Benefits Act) Procedure
Manual which stated the new rule that “a surviving spouse and a surviving divorced
spouse [are] both . . . entitled to full basic benefits plus full augmentation.” Coal Mine
(Black Lung Benefits Act) Procedure Manual, ch. 2-900, § 8(f), (Dec. 1992).
Petitioners did not contest that benefits were due both women. Mary B.
qualified for benefits as a surviving spouse since she had been married to Frank at the
time of his death and was not remarried, and Mary D. qualified for benefits as a
surviving divorced spouse since she had been married to Frank for at least ten years
and received substantial monetary support from him. Petitioners argued to the DOL,
however, that the change in widow benefit shares was a substantive change and
therefore required notice and comment rule making. In May 1990 the DOL sent a letter
to Old Republic stating: “At this time, you should go ahead and” make payments under
the old rule, and the DOL would “get back to you at a later date regarding a decision
on this matter.” Old Republic then began paying Mary D. and Mary B. monthly
benefits and reimbursed them for the missed January through April payments; all of
these benefits were calculated using the old rule. On June 1, 1992, the DOL ordered
Peabody to make all future payments according to the new rule and to issue
supplemental checks for the amount underpaid from January 1990 through May 1992.
The petitioners refused to pay the additional amount, and beginning with the July 1992
benefit, the DOL began sending monthly checks to Mary D. and Mary B. for the
difference in benefits that the petitioners had refused to pay. The DOL also forwarded
the matter for a hearing.
An administrative law judge (ALJ) ruled against Peabody,6 concluding that the
DOL had properly required a full basic benefit for each widow. The ALJ concluded
that the DOL policy was consistent with Congressional intent, that notice and comment
rule making was not required because the rule change was interpretative, and that the
6
Old Republic was not listed as a party at this stage.
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DOL had not applied a new rule retroactively because it had simply corrected a
previous misinterpretation of statutes and regulations. The ALJ ordered Peabody to
pay both Mary D. and Mary B. the full basic benefit and to reimburse the DOL for the
amounts it had paid to the widows. Peabody and Old Republic appealed the decision
and order to the Benefits Review Board (BRB). The BRB affirmed in part and vacated
in part. It affirmed the ALJ’s decision that paying a full basic benefit to both widows
was proper under the Act, but remanded the case for the ALJ to reexamine whether the
rule change was interpretative or substantive under the “substantial impact test” in
American Bancorp., Inc. v. Board of Governors of Fed. Res. Sys., 509 F.2d 29, 33 (8th
Cir. 1974).
After analyzing petitioners’ arguments in light of American Bancorp., the ALJ
issued a supplemental decision and order reinstating his earlier decision and order.
Petitioners’ motion for reconsideration was denied, and they appealed to the BRB,
which affirmed. Peabody and Old Republic then filed this petition for review.
II.
Petitioners argue on appeal that the rule the DOL applied to determine benefits
for Frank’s surviving widows is contrary to the settled interpretation of the statute as
reflected in the 1980 DOL procedure manual. They also argue that the new rule is
substantive rather than interpretative, see 5 U.S.C. § 553(b)(3)(A), so the DOL violated
the Administrative Procedure Act because it did not have authority to institute the rule
without using the notice and comment procedures required by 5 U.S.C. § 553.7 Finally,
7
In January 1997 a proposed comprehensive revision of the black lung
regulations was published for notice and comment. See 62 Fed. Reg. 3337 (1997).
These proposed regulations included a new paragraph, 20 C.F.R. § 725.212(b), that
would formally promulgate the new rule. See 62 Fed. Reg. at 3350–51, 3390. Final
regulations have not yet been published.
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they argue that the new rule cannot be applied retroactively. The DOL’s position is
that the BRB correctly approved the ALJ’s decision that both Mary D. and Mary B.
were entitled to a full basic benefit and that the new rule is interpretative rather than
substantive. We are thus presented with questions of statutory interpretation and the
appropriate standard of review on this petition for review of an agency action.
The Fourth Circuit has recently considered the issue of benefit allocation to two
widows in Piney Mountain Coal Co. v. Mays, No. 97-2560, 1999 WL 274066, at
*9–*11 (4th Cir. May 5, 1999). In that case it affirmed the BRB’s awards of full basic
benefits to the coal miner’s widow and to his former spouse. The court observed from
its study of the Act and the regulations that “a surviving widow is a beneficiary in her
own right” so her situation is not the same as where multiple dependants require
augmentation of the miner’s basic benefit. Id. at *10. It would be contrary to the
regulatory scheme “to deem just one of the widows a primary beneficiary and the other
as a dependant augmentee.” Id. It reviewed the legislative history and the Director’s
reasons for reinterpreting the Act and concluded that the Director’s interpretation was
reasonable. See id. at *10–*11.8
We must begin our inquiry by asking “whether Congress has directly spoken to
the precise question at issue.” Chevron v. Natural Resources Defense Council, 467
U.S. 837, 842 (1984). When asking this question we are to “employ[] traditional tools
of statutory construction.” Id. at 843 n.9. If we determine that “Congress has not
directly addressed the precise question at issue,” then we must ask whether the
agency’s interpretation “is based on a permissible construction of the statute.” Id. at
8
Mays was decided subsequent to the oral argument in this case. Petitioners
have recently filed a motion for leave to file a supplemental brief discussing Mays and
what the parties there argued. Since we have already received and reviewed relevant
portions of the Mays briefs pursuant to Fed. R. App. P. 28(j) and are familiar with the
points discussed in the supplemental brief, the motion to file it is denied.
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843. If the agency interpretation is reasonable, a court must defer to it. See id. at 844.9
Mays used this deferential standard of review without deciding whether Congress has
already made the point clear. In this case the Director asks for no deference. He
requests that we treat the new rule as not having the force and effect of law and as
being subject to de novo review.
We begin by examining the Act itself. The Act states that a deceased miner’s
“widow (if any)” shall receive benefits “at the rate the deceased miner would receive
such benefits if he were totally disabled,” 30 U.S.C. § 922(a)(2), and the 1972
amendment included within the definition of widow both a surviving wife and a
surviving divorced wife who meets certain qualifications. See Black Lung Benefits Act
of 1972, Pub. L. No. 92-303, sec. 1(c)(3), § 402(e), 86 Stat. 150, 152 (codified at
30 U.S.C. § 902(e)). The Act as amended thus says on its face that someone meeting
the expanded definition of widow is entitled to receive the same benefits as the
deceased miner would receive, which would be a full basic benefit with augmentation.
See 30 U.S.C. § 922(a)(1), (4). The statutory language thus provides for full benefits
to both Mary D. and Mary B.10 “[C]ourts must presume that a legislature says in a
statute what it means and means in a statute what it says there. When the words of a
statute are unambiguous . . . judicial inquiry is complete.” Connecticut Nat’l Bank v.
Germain, 503 U.S. 249, 253–54 (1992) (quotation omitted).
9
There is also authority indicating that less deference is due when an
interpretative rule is being reviewed. See, e.g., Shalala v. Guernsey Mem’l Hosp., 514
U.S. 87, 99 (1995) (interpretative rules “do not have the force and effect of law and are
not accorded that weight in the adjudicatory process”); Batterton v. Francis, 432 U.S.
416, 425 n.9 (1977) (A “court is not required to give effect to an interpretative
regulation.”).
10
Since neither Mary D. nor Mary B. are entitled to augmentation, full benefits
in this case would be a full basic benefit without augmentation.
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Not only does the text of the Act state that both a surviving wife and a qualifying
surviving divorced wife are entitled to full benefits, but the structure of the Act also
supports our reading of this language. At the same time Congress added surviving
divorced wives to the definition of widow, it added provisions describing how to divide
benefits among surviving children, dependent parents, and dependent siblings. See
Black Lung Benefits Act of 1972, Pub. L. No. 92-303, sec. 1(b)(1), (2), § 412(a)(3),
(5), 86 Stat. 150, 150–51 (codified as amended at 30 U.S.C. § 922(a)(3), (5)).
Congress did not, however, make any provision for dividing benefits among widows.
This strengthens the reading of the other language, reinforcing the intent for
§ 922(a)(2)’s full benefit to apply to each widow. Both the text and structure of the Act
thus support the conclusion that Congress intended a surviving wife and a surviving
divorced wife to each receive a full benefit.
Having concluded that Congress answered the question at issue in the text and
structure of the Act, it is not necessary to consider whether the DOL’s interpretation
“is based on a permissible construction of the statute,” Chevron, 467 U.S. at 843, nor
what amount of deference to give that interpretation. “If the intent of Congress is clear,
that is the end of the matter; for the court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress.” Id. at 842–43.11 Since both this court
11
We of course recognize that the DOL, an agency with responsibility for
administering the Act, interpreted it differently until after its review in 1988. To the
extent that the Act were viewed as ambiguous, one would turn to the legislative history.
See Blum v. Stenson, 465 U.S. 886, 896 (1984). The legislative history reveals that
Congress intended the 1972 amendment to redefine the “term ‘widow’ . . . to conform
to the Social Security Act definition.” S. Rep. No. 92-743 (1972), reprinted in 1972
U.S.C.C.A.N. 2305, 2332.
The Social Security Act had been amended in 1965 to extend benefits to
surviving divorced spouses. See Social Security Amendments of 1965, Pub. L. No. 89-
97, sec. 308(b)(1), § 202(e)(1), 79 Stat. 286, 376–77. Congress had then made clear
its intent regarding the payment of benefits to more than one widow: “Payment of a
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and the DOL must give effect to Congressional intent that multiple widows each
receive a full benefit, Mary D. and Mary B. are entitled to full benefits under the Act,
and would be even if the DOL had never changed its rule.12
III.
We conclude that Congress clearly intended the Act as amended to provide full
benefits to qualifying widows. Accordingly, we affirm the order of the Benefit Review
Board.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
wife’s or widow’s benefit to a divorced women would not reduce the benefits paid to
any other person on the same social security account and such wife’s or widow’s
benefit would not be reduced because of other benefits payable on the same account.”
S. Rep. No. 89-404 (1965), reprinted in 1965 U.S.C.C.A.N. 1943, 2047. Because
Congress specifically intended to tie the definition of widow in the Act to its definition
in the Social Security Act, we can infer a similar intent for widows’ benefits. Cf. Wolf
Creek Collieries v. Robinson, 872 F.2d 1264, 1266–67 (6th Cir. 1989). Since
Congress did not intend to reduce social security benefits when paying more than one
widow, it follows that Congress similarly intended each qualifying widow to receive
full benefits under the Act.
12
Because we apply the clear intent of Congress, we do not need to reach the
issue of whether the agency interpretation amounts to an interpretative or substantive
rule. We also note that neither the application of our de novo interpretation of the
statute nor the application of a new agency rule that corrects an erroneous original
interpretation of a statute is retroactive. See Manhattan General Equipment Co. v.
Commissioner, 297 U.S. 129, 135 (1936).
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