Frances M. Estep v. Eastern Associated Coal Company, LLC (Board decision, October 31, 2022)

BRB final decision. The Benefits Review Board affirmed the black lung benefits awards in the miner's and survivor's claims. Under 20 C.F.R. § 802.406, a Board decision becomes final 60 days after issuance unless a timely petition for judicial review or Board reconsideration is filed. A party may request Board reconsideration within 30 days under 20 C.F.R. § 802.407. This is an unpublished decision and is not Board precedent.

Plain-English summary

Frances Estep pursued her late husband's black lung claim and her own survivor claim. The judge found complicated pneumoconiosis from coal mine work, supporting the miner's benefits award and Estep's automatic survivor benefits. Eastern Associated Coal and its self-insurer, Peabody Energy, did not contest those benefit findings before the Board. They instead argued that Peabody's liability had shifted to Patriot Coal or the federal Trust Fund after Eastern's later transfer to Patriot and Patriot's bankruptcy. The Board rejected those arguments and held Peabody remained liable because it insured Eastern when Eastern last employed the miner. Both benefits awards were affirmed.

Decision snapshot

• Authority: Complicated pneumoconiosis under 30 U.S.C. § 921(c)(3), automatic survivor benefits under 30 U.S.C. § 932(l), and responsible operator rules under 20 C.F.R. § 725.495.
• Outcome: Miner and survivor benefits awards affirmed; Eastern and Peabody remain responsible for payment.
• Key point: Patriot's later self-insurance and bankruptcy did not release Peabody from liability for Eastern's earlier employment of the miner.

Full text (DOL BRB public release)

U.S. Department of Labor Benefits Review Board 200 Constitution Ave. NW
Washington, DC 20210-0001

BRB Nos. 20-0488 BLA and 20-0489 BLA

FRANCES M. ESTEP
)
(o/b/o and Widow of CARMINE E. ESTEP)
)
)
Claimant-Respondent )
)
v. )
)
EASTERN ASSOCIATED COAL )
COMPANY, LLC
)
)
and
)
)
DATE ISSUED: 10/31/2022
PEABODY ENERGY c/o UNDERWRITERS )
SAFETY AND CLAIMS
)
)
Employer/Carrier- )
Petitioners )
)
DIRECTOR, OFFICE OF WORKERS’ )
COMPENSATION PROGRAMS, UNITED )
STATES DEPARTMENT OF LABOR )
)
Party-in-Interest )
DECISION and ORDER

Appeal of Decision and Order Awarding Benefits of Scott R. Morris, Administrative Law Judge, United States Department of Labor.

H. Brett Stonecipher and Tighe A. Estes (Reminger, Co., L.P.A.), Lexington, Kentucky, for Employer and its Carrier.

William M. Bush (Seema Nanda, Solicitor of Labor; Barry H. Joyner, Associate Solicitor), Washington, D.C., for the Director, Office of Workers’ Compensation Programs, United States Department of Labor.
Before: BOGGS, Chief Administrative Appeals Judge, ROLFE and JONES, Administrative Appeals Judges.

PER CURIAM:

Employer and its Carrier (Employer) appeal Administrative Law Judge (ALJ) Scott R. Morris’s Decision and Order Awarding Benefits (2019-BLA-05275, 2019-BLA-05333) rendered on claims filed pursuant the Black Lung Benefits Act, as amended, 30 U.S.C.
§§901-944 (2018) (Act). This case involves a miner’s claim filed on November 2, 2015, and a survivor’s claim filed on September 18, 2017.1

The ALJ initially found Eastern Associated Coal Company (Eastern), self-insured through its parent company Peabody Energy Corporation (Peabody Energy), is the responsible operator liable for the payment of benefits. He found Claimant established complicated pneumoconiosis and therefore invoked the irrebuttable presumption of total disability due to pneumoconiosis at Section 411(c)(3) of the Act. 30 U.S.C. §921(c)(3); 20 C.F.R. §718.304. He further found Claimant’s complicated pneumoconiosis arose out of his coal mine employment and awarded benefits. 20 C.F.R. §718.203.

The ALJ further found Claimant automatically entitled to survivor’s benefits under Section 422(l) of the Act, 30 U.S.C. §932(l) (2018),2 based on the award of benefits in the miner’s claim.

On appeal, Employer contends the district director, the Department of Labor (DOL) official who initially processes claims, is an inferior officer who was not appointed in a manner consistent with the Appointments Clause of the U.S. Constitution, art. II § 2, cl. 2.3

1 Claimant is the widow of the Miner, who died on October 18, 2016. Survivor’s Claim (SC) Director’s Exhibit 12; Miner’s Claim (MC) Director’s Exhibit 12. She is pursuing the miner’s claim on his estate’s behalf and her survivor’s claim. MC Director’s Exhibit 22; SC Director’s Exhibits 3. Employer’s appeal in the miner’s claim was assigned BRB No. 20-0488 BLA, and its appeal in the survivor’s claim was assigned BRB No. 20- 0489 BLA. The Benefits Review Board has consolidated these appeals for purposes of decision only. Estep v. E. Assoc. Coal Co., BRB Nos. 20-0488 BLA and 20-0489 BLA (Oct. 15, 2020) (Order) (unpub.).
2 Section 422(l) of the Act provides that the survivor of a miner who was determined

to be eligible to receive benefits at the time of his death is automatically entitled to survivor’s benefits without having to establish the miner’s death was due to pneumoconiosis. 30 U.S.C. §932(l) (2018).
3 Article II, Section 2, Clause 2, sets forth the appointing powers:

2
It also asserts the duties performed by the district director create an inherent conflict of interest that violates its due process. It contends the ALJ erred in finding it liable for the payment of benefits.4 Claimant has not filed a response. The Director, Office of Workers’ Compensation Programs (the Director), responds, urging the Board to reject Employer’s conflict of interest and Appointments Clause arguments and to affirm the determination that Employer is liable for benefits.

The Board’s scope of review is defined by statute. We must affirm the ALJ’s Decision and Order if it is rational, supported by substantial evidence, and in accordance with applicable law.5 33 U.S.C. §921(b)(3), as incorporated by 30 U.S.C. §932(a); O’Keeffe v. Smith, Hinchman & Grylls Assocs., Inc., 380 U.S. 359, 362 (1965).

Employer does not challenge the ALJ’s findings that Eastern is the correct responsible operator and it was self-insured by Peabody Energy on the last day Eastern employed the Miner; thus we affirm these findings. 6 See Skrack v. Island Creek Coal Co.,

[The President] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.

U.S. Const. art. II, § 2, cl. 2.
4 We affirm, as unchallenged, the ALJ’s finding that Claimant established entitlement to benefits. See Skrack v. Island Creek Coal Co., 6 BLR 1-710, 711 (1983).
5 This case arises within the jurisdiction of the United States Court of Appeals for

the Fourth Circuit because the Miner performed his coal mine employment in West Virginia. See Shupe v. Director, OWCP, 12 BLR 1-200, 1-202 (1989) (en banc); MC Director’s Exhibit 3.
6 Employer also “preserve[s]” its “ability to challenge” Black Lung Benefits Act (BLBA) Bulletin No. 16-01 as an invalid rule. Employer’s Brief at 39-40 (unpaginated). Employer generally argues Bulletin No. 16-01 contradicts liability rules under the Act, was issued without notice and comment, and violates the Administrative Procedure Act. Id. Employer’s one-sentence summary of its arguments, does not set forth sufficient detail to permit the Board to consider the merits of any issues identified. See Cox v. Benefits Review Board, 791 F.2d 445, 446-47 (6th Cir. 1986); Sarf v. Director, OWCP, 10 BLR 1-119, 1- 3
6 BLR 1-710, 711 (1983); 20 C.F.R. §§725.494(e), 725.495, 726.203(a); Decision and Order at 5-9. Patriot Coal Corporation (“Patriot”) was initially another Peabody Energy subsidiary. MC Director’s Exhibits 24, 37, 39. In 2007, after the Miner ceased his coal mine employment with Eastern, Peabody Energy transferred a number of its other subsidiaries, including Eastern, to Patriot. Id. That same year, Patriot was spun off as an independent company. Id. On March 4, 2011, Patriot was authorized to insure itself and its subsidiaries, retroactive to 1973. MC Director’s Exhibit 39. Although Patriot’s self- insurance authorization made it retroactively liable for the claims of miners who worked for Eastern, Patriot later went bankrupt and can no longer provide for those benefits. MC Director’s Exhibits 24, 39. Neither Patriot’s self-insurance authorization nor any other arrangement, however, relieved Peabody Energy of liability for paying benefits to miners last employed by Eastern when Peabody Energy owned and provided self-insurance to that company, as the ALJ held. Decision and Order at 5-9.

Employer raises several arguments to support its contention that Peabody Energy was improperly designated the self-insured carrier in this claim and thus the Black Lung Disability Trust Fund (the Trust Fund), not Peabody Energy, is responsible for the payment of benefits following Patriot’s bankruptcy.7 Employer’s Brief at 3-44 (unpaginated). It argues the ALJ erred in finding Peabody Energy liable for benefits because : (1) the district

120-21 (1987); Fish v. Director, OWCP, 6 BLR 1-107, 1-109 (1983); 20 C.F.R.
§802.211(b).
7 Employer argues 20 C.F.R. §725.456(b)(1) violates the Longshore and Harbor Workers’ Compensation Act and the Administrative Procedures Act (APA). Employer’s Brief at 40-41 (unpaginated). That regulation specifies that “[d]ocumentary evidence pertaining to the liability of a potentially liable operator and/or the identification of a responsible operator which was not submitted to the district director shall not be admitted into the hearing record in the absence of extraordinary circumstances.” 20 C.F.R.
§725.456(b)(1). Employer has not identified any documentary evidence relevant to liability the ALJ excluded. Further, although ALJ Morris rendered the decision at issue in the present appeal, Employer asserts “ALJ Sellers and the Director’s actions in this matter ultimately devest [sic] the ALJ of any control over the discovery and development of the record on the liability issue which is inconsistent with the Act.” Employer’s Brief at 40- 41 (unpaginated). Employer has failed to identify any action or finding by either ALJ Sellers or “the Director” pertinent to this case which implicates the issue raised in its argument. Thus we decline to address this argument. See Cox, 791 F.2d at 446-47; 20 C.F.R. §802.211(b).

4 director is an inferior officer not properly appointed under the Appointments Clause;8 (2) the regulatory scheme, whereby the district director must determine the liability of a responsible operator and its carrier when the DOL also administers the Trust Fund, creates a conflict of interest that violates its due process right to a fair hearing; (3) 20 C.F.R.
§725.495(a)(4) precludes Peabody Energy’s liability; (4) before transferring liability to Peabody Energy, the DOL must establish it exhausted any available funds from the security bond Patriot gave to secure its self-insurance status; (5) the DOL released Peabody Energy from liability; (6) the Director is equitably estopped from imposing liability on the company; and (7) the DOL violated its due process rights by not maintaining adequate records with respect to Patriot’s bond and failing to comply with its duty to monitor Patriot’s financial health.9 Employer’s Brief at 3-44 (unpaginated). It maintains that a separation agreement – a private contract between Peabody Energy and Patriot – released it from liability and the DOL endorsed this shift of complete liability when it authorized Patriot to self-insure. Id.

The Board has previously considered and rejected these arguments in Bailey v. E.
Assoc. Coal Co., BLR , BRB No. 20-0094 BLA, slip op. at 3-19 (Oct. 25, 2022) (en banc); Howard v. Apogee Coal Co., BLR , BRB No. 20-0229 BLA, slip op. at 5-17 (Oct. 18, 2022); and Graham v. E. Assoc. Coal Co., BLR , BRB No. 20-0221 BLA, slip op. at 7-8 (June 23, 2022). For the reasons set forth in Bailey, Howard, and Graham, we reject Employer’s arguments.10 Thus we affirm the ALJ’s determination that Eastern and Peabody Energy are the responsible operator and carrier, respectively, and are liable for this claim.

8 Employer raised this argument for the first time at the September 11, 2019 hearing.

Hearing Transcript at 6.
9 Employer also states that it wants to “preserve” its argument that its due process

rights were violated because the ALJ “cut off” discovery “prematurely.” Employer’s Brief at 32-35 (unpaginated). Employer neither asks the Board to address this issue nor sets forth any argument that would permit our review. See Cox, 791 F.2d at 446-47; 20 C.F.R.
§802.211(b).
10 Employer argues the ALJ’s reliance on 20 C.F.R. §§725.495(a)(2)(i) and 725.493(b)(2) is misplaced. Employer’s Brief at 33-34 (unpaginated). Although the ALJ discussed these regulations, he did not rely on either of them and instead rendered his finding “[r]egardless of the [] analysis” of those regulations. Decision and Order at 5-6. Thus, we need not consider this argument.

5
Because we have affirmed the award of benefits in the miner’s claim and Employer raises no specific challenge to the survivor’s claim, we affirm the ALJ’s determination that Claimant is derivatively entitled to survivor’s benefits. 30 U.S.C. §932(l); see Thorne v. Eastover Mining Co., 25 BLR 1-121, 1-126 (2013).

Accordingly, the ALJ’s Decision and Order Awarding Benefits is affirmed.

SO ORDERED.

JUDITH S. BOGGS, Chief
Administrative Appeals Judge

JONATHAN ROLFE
Administrative Appeals Judge

MELISSA LIN JONES
Administrative Appeals Judge

6