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Burton v. Drummond Co. Inc.

United States District Court, N.D. Alabama, Southern Division

October 12, 2018

VERBY BURTON, Plaintiff,
v.
DRUMMOND COMPANY INC, Defendant.

          MEMORANDUM OPINION

          R. DAVID PROCTOR UNITED STATES DISTRICT JUDGE.

         This matter is before the court on Defendant's Motion to Dismiss. (Doc. # 5). The Motion requires the court to decide whether it has subject matter jurisdiction over Plaintiff's claim and, if so, whether Plaintiff has stated a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(1), 12(b)(6). The court concludes the answer to both is yes. Thus, as more fully explained below, Defendant's Motion to Dismiss is due to be denied.

         I. Factual and Procedural Background

         Plaintiff Verby Burton is the widow of a deceased coal miner, Allan Burton, who Defendant Drummond Company employed to work in its coal mines in Alabama. (Doc. # 1 at ¶¶ 8-12). Allan Burton died in 2015 from coal workers' pneumoconiosis, commonly known as black lung disease. (Doc. # 15 at 9).

         Prior to his death, Allan Burton filed a claim for benefits under the Black Lung Benefits Act (“BLBA”) with the Department of Labor (“DOL”). (Doc. # 1 at ¶ 13; Doc. # 15 at 4-7). After his death, Verby Burton filed an additional and separate claim for survivor's benefits under the Act. (Doc. # 1 at ¶ 14; Doc. # 15 at 11-12). The DOL granted both Allan and Verby Burton's claims. (Id. at ¶¶ 15-22; Doc. # 15 at 24-55, 91-100). On Allan's claim, the DOL ordered Drummond to (1) pay $12, 197.90 in retroactive benefits to Verby (on behalf of Allan) and (2) reimburse the Black Lung Disability Trust Fund $18, 897.70 for interim benefits paid to Allan prior to his death. (Doc. # 15 at 54). On Verby's claim, the DOL ordered Drummond to (1) begin paying Verby monthly benefits of $644.50 per month and (2) reimburse the Trust Fund $12, 832.40 for interim benefits paid to Verby beginning in April 2015, when the DOL initially determined she was eligible for benefits. (Id. at 99). In its compensation orders, the DOL informed Drummond that “by failing to initiate benefits . . . within 10 days of the date payment is due, [Drummond] may be subject to payments of additional compensation of up to 20% of the amount due, ” pursuant to 33 U.S.C. § 914(f) and 20 C.F.R. § 725.607. (Doc. # 15 at 55, 100). The orders also explained that “failure to pay benefits as ordered may result in enforcement of the final award in Federal District Court” and that “[a]n appeal does not stay this penalty unless an Order staying payments has been issued by the Board or Court.” (Id.).

         Drummond declined to pay the benefits and instead appealed the decisions of the administrative law judges (“ALJs”) to the Benefits Review Board. See 33 U.S.C. § 921(b); (Docs. # 1 at ¶ 26; 5-1 at 2-4). Drummond did not obtain an order staying payment of the benefits from the Board (Doc. # 1 at ¶ 24), so the compensation orders became effective, and payment became due, after the orders issued. 20 C.F.R. § 725.502(a)(1). Because Drummond failed to pay the benefits it owed Verby Burton during the pendency of its appeals, the Black Lung Disability Trust Fund began paying Verby Burton's benefits as provided for by statute, 26 U.S.C. § 9501(d)(1)(A), and the BLBA's implementing regulations, 20 C.F.R. § 725.522(a). (Doc. # 1 at ¶ 25).

         The Benefits Review Board eventually affirmed in part and vacated in part the ALJ's decision on Allan Burton's claim and remanded the claim to the ALJ. (Doc. # 15 at 106-12). On remand, the ALJ considered additional medical evidence as required by the Board's decision but again awarded benefits on behalf of Allan Burton. (Id. at 127-37). Drummond then withdrew its appeal of Verby Burton's claim based on its earlier concession that Verby would be automatically entitled to benefits if Allan's claim succeeded. (Id. at 139; Doc. # 5-1 at 3). The DOL's compensation order awarding benefits on Verby Burton's claim (Doc. # 15 at 99-100) became final after Drummond withdrew its appeal. The DOL also issued a new compensation order following the ALJ's decision on remand regarding Allan Burton's claim. (Id. at 142). That compensation order awarded the same benefits as the DOL's first compensation order on Allan Burton's claim-$12, 197.90 in retroactive benefits to Verby Burton (on behalf of Allan) and a reimbursement of $18, 897.70 to the Black Lung Disability Trust Fund for interim benefits paid to Allan prior to his death. (Id.). Once the compensation orders became final, Drummond paid all of the benefits listed in the final compensation orders and reimbursed the Trust Fund for compensation it had paid Verby Burton during the pendency of Drummond's appeals. (Doc. # 5-1 at 4).

         On May 24, 2018, Verby Burton filed this action against Drummond seeking additional compensation and interest she claims Drummond owes her under the DOL's final compensation orders, pursuant to 33 U.S.C. § 914(f) and 20 C.F.R. § 725.607. Before addressing the merits of Ms. Burton's claim, the court first reviews the relevant statutory framework.

         II. Federal Black Lung Program Statutory Framework

         The federal black lung program derives from several related statutes. In 1969, Congress enacted the Federal Coal Mine Health and Safety Act, Pub. L. No. 91-173, 83 Stat. 742 (1969) (codified as amended at 30 U.S.C. § 801 et seq.). Title IV of that Act established a benefits program for coal miners who were totally disabled by pneumoconiosis and for the surviving dependents of miners who died from the disease. See 30 U.S.C. § 901. Congress has amended Title IV several times since it was enacted, including once in 1972 through the Black Lung Benefits Act, Pub. L. No. 92-303, 86 Stat. 150 (1972) and again in 1977 with the Black Lung Benefits Reform Act of 1977, Pub. L. No. 95-239, 92 Stat. 95 (1978) (both codified as amended at 30 U.S.C. § 901 et seq.). At the same time it passed the 1977 Reform Act, Congress also passed the Black Lung Benefits Revenue Act of 1977, Pub. L. No. 95-227, 92 Stat. 11 (1978), which established the Black Lung Disability Trust Fund. The Trust Fund exists to pay benefits if no responsible coal mine operator can be identified or if the operator fails to pay benefits after they become due. 26 U.S.C. § 9501(d)(1); 20 C.F.R. §§ 725.1(c), 725.522(a).

         Under the Black Lung Benefits Act (“BLBA”) and its amendments, disabled miners or their surviving dependents may file benefits claims with the Secretary of Labor, who is responsible for processing the claims and awarding benefits where appropriate. See 30 U.S.C. §§ 902(c), 932(a); 20 C.F.R. § 725.1(a), (c). The Secretary is also responsible for promulgating the Act's implementing regulations. 30 U.S.C. § 932(a); 20 C.F.R. § 725.1(a). Individual coal mine operators are primarily liable for benefits, though, as explained above, the Trust Fund may pay benefits if no responsible operator can be identified or if the operator fails to pay benefits during the pendency of its appeal, after an initial finding of liability. 20 C.F.R. §§ 725.1(c), 725.522(a).

         BLBA claims are first evaluated and adjudicated by a district director within the Department of Labor. Id. §§ 725.350(b), 725.401. If either a BLBA claimant or a mine operator is dissatisfied with the district director's determination of benefits, the party may request a hearing before an ALJ. Id. §§ 725.421, 725.451. Any party dissatisfied with an ALJ's decision may appeal to the Benefits Review Board, and the Board's decisions are in turn reviewable by the U.S. Courts of Appeals. 33 U.S.C. § 921(b)-(c); 20 C.F.R. §§ 725.481, 725.482.

         Various procedural and other provisions contained in the Longshore and Harbor Workers' Compensation Act (“LHWCA”), 33 U.S.C. § 901 et seq., govern the adjudication of BLBA claims filed on or after January 1, 1974. See 30 U.S.C. § 932(a) (incorporating the LHWCA's provisions, subject to enumerated exceptions); 20 C.F.R. § 725.1(j). Among the provisions of the LHWCA incorporated into the BLBA are 33 U.S.C. §§ 914(f) and 921(d). This case turns on the operation of these two provisions.

         Section 914(f) provides additional compensation for BLBA beneficiaries when an operator fails to timely pay an award, unless the operator appeals the award and obtains an order staying payment. Section 914(f) states:

If any compensation, payable under the terms of an award, is not paid within ten days after it becomes due, there shall be added to such unpaid compensation an amount equal to 20 per centum thereof, which shall be paid at the same time as, but in addition to, such compensation, unless review of the compensation order making such award is had as provided in [33 U.S.C. § 921] and an order staying payment has been issued by the Board or court.

33 U.S.C. § 914(f). The BLBA's implementing regulations provide that an award of benefits “shall be considered due after the issuance of an effective order requiring the payment of benefits by a district director, administrative law judge, Benefits Review Board, or court, notwithstanding the pendency of . . . an appeal to the Board or court.” 20 C.F.R. § 725.502(a)(1). The only exception to this rule is “where the payment of such benefits has been stayed by the Benefits Review Board or appropriate court.” Id. The regulations further provide that § 914(f)'s provision of additional compensation for late payments applies with equal force where an operator fails to timely pay an award and the Trust Fund pays the benefits in its stead. See 20 C.F.R. § 725.607(b).[1]

         Notably, § 914(f) does not contain an independent enforcement mechanism. It does not, for instance, create a private right of action authorizing a BLBA beneficiary to sue in federal court to collect 20 percent additional compensation. This is where § 921(d) comes into play.

         Section 921(d) provides a private cause of action for BLBA beneficiaries to enforce a final benefits award in ...


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