Joe Robert Divine v. Heritage Coal Company, LLC and Peabody Energy Corporation (Board decision, December 16, 2022)

BRB final decision. This unpublished decision is not precedent. The Benefits Review Board affirmed the award of black lung benefits to Joe Robert Divine and held Heritage Coal Company and Peabody Energy Corporation responsible for payment. Under 20 C.F.R. § 802.406, a Board decision becomes final 60 days after issuance unless a timely petition for judicial review or a timely request for Board reconsideration is filed. A party may request Board reconsideration within 30 days under 20 C.F.R. § 802.407.

Plain-English summary

Joe Robert Divine sought black lung benefits after at least fifteen years of underground coal mine work. A judge found a totally disabling respiratory impairment, applied the fifteen-year presumption, and awarded benefits. Heritage Coal and its former parent and self-insurer, Peabody Energy, appealed only their responsibility for paying the award. They argued that the liability had shifted to Patriot Coal after Peabody transferred Heritage to Patriot, which later went bankrupt. The Board rejected their challenges, holding that Patriot's later self-insurance authorization did not release Peabody Energy from liability for this claim. It affirmed the benefit award and the designation of Heritage as the responsible operator and Peabody Energy as the responsible carrier.

Decision snapshot

• Authority: Carrier responsibility under 20 C.F.R. § 725.495 and the fifteen-year presumption under 30 U.S.C. § 921(c)(4).
• Outcome: Benefits award and Peabody Energy's carrier liability affirmed.
• Key point: The later transfer to Patriot did not relieve Peabody Energy of responsibility for a miner it insured while Heritage employed him.

Full text (DOL BRB public release)

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

BRB No. 2020-0553 BLA

JOE ROBERT DIVINE
)
)
Claimant-Respondent
)
)
v. )
)
HERITAGE COAL COMPANY, LLC
)
)
and
)
)
PEABODY ENERGY CORPORATION
) DATE ISSUED: 12/16/2022
)
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 Noran J. Camp, 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.

Before: BOGGS, Chief Administrative Appeals Judge, GRESH and JONES, Administrative Appeals Judges.

PER CURIAM:
Employer and its Carrier (Employer) appeal Administrative Law Judge (ALJ) Noran J. Camp’s Decision and Order Awarding Benefits (2018-BLA-06224) rendered on a claim 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 September 26, 2017.

The ALJ initially found Heritage Coal Company, LLC (Heritage), self-insured through its parent company Peabody Energy Corporation (Peabody Energy), is the responsible operator liable for the payment of benefits. He determined Claimant established at least fifteen years of underground coal mine employment and a totally disabling respiratory or pulmonary impairment. 20 C.F.R. §718.204(b)(2). Thus, he concluded Claimant invoked the presumption of total disability due to pneumoconiosis at Section 411(c)(4) of the Act, 30 U.S.C. §921(c)(4) (2018). 1 Further, he found Employer did not rebut the presumption and awarded benefits.

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. 2.2 It also asserts the duties that the district director performs create an inherent conflict of

1 Section 411(c)(4) of the Act provides a rebuttable presumption that a miner is totally disabled due to pneumoconiosis if he establishes at least fifteen years of underground or substantially similar surface coal mine employment and a totally disabling respiratory or pulmonary impairment. 30 U.S.C. §921(c)(4) (2018); see 20 C.F.R.
§718.305.
2 Article II, Section 2, Clause 2, sets forth the appointing powers:

[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.
2 interest that violates its due process rights. Finally, it contends the ALJ erred in finding it liable for the payment of benefits.3 Claimant did not file a response.

The Benefits Review 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.4 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 Heritage is the correct responsible operator and it was self-insured by Peabody Energy on the last day Heritage employed Claimant; thus we affirm these findings. 5 See Skrack v. Island Creek Coal Co., 6 BLR 1-710, 711 (1983); 20 C.F.R. §§725.494(e), 725.495, 726.203(a); Decision and Order at 27. Rather, it alleges Patriot Coal Corporation (Patriot) should have been named the responsible carrier and thus liability for the claim should transfer to the Black Lung Disability Trust Fund (Trust Fund).

Patriot was initially another Peabody Energy subsidiary. Director’s Exhibit 33. In 2007, after Claimant ceased his coal mine employment with Heritage, Peabody Energy transferred a number of its other subsidiaries, including Heritage, 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. Id. Although Patriot’s self-insurance authorization made it retroactively liable for the claims of miners who

3 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).
4 This case arises within the jurisdiction of the United States Court of Appeals for

the Sixth Circuit because the Miner performed his coal mine employment in Kentucky. See Shupe v. Director, OWCP, 12 BLR 1-200, 1-202 (1989) (en banc); Director’s Exhibit 3.
5 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 46-47 (unpaginated). Generally, Employer argues Bulletin No. 16-01 contradicts liability rules under the Act, was issued without notice and comment, and violates the Administrative Procedure Act. Id. Apart from one sentence summarizing its arguments, Employer has not set forth sufficient detail to permit the Board to consider the merits of these issues. See Cox v. Benefits Review Board, 791 F.2d 445, 446-47 (6th Cir. 1986); Sarf v. Director, OWCP, 10 BLR 1-119, 1-120-21 (1987); Fish v. Director, OWCP, 6 BLR 1-107, 1-109 (1983); 20 C.F.R. §802.211(b).

3 worked for Heritage, Patriot later went bankrupt and can no longer provide for those benefits. Id. Neither Patriot’s self-insurance authorization nor any other arrangement, however, relieved Peabody Energy of liability for paying benefits to miners last employed by Heritage when Peabody Energy owned and provided self-insurance to that company, as the ALJ held. Decision and Order at 26-27.

Employer raises several arguments to support its contention that Peabody Energy was improperly designated the self-insured carrier in this claim and thus the Trust Fund, not Peabody Energy, is responsible for the payment of benefits following Patriot’s bankruptcy. Employer’s Brief at 14-53 (unpaginated). It argues the ALJ erred in finding Peabody Energy liable for benefits because:6 (1) the district director is an inferior officer not properly appointed under the Appointments Clause 7 ; (2) the regulatory scheme requiring the district director to determine the liability of a responsible operator and its carrier when, at the same time, the DOL 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; (7) the ALJ’s reliance on 20 C.F.R. §§725.495(a)(2)(i) and 725.493(b)(2) is misplaced; and (8) the DOL violated its due process rights by not maintaining adequate record s with respect to Patriot’s bond and failing to comply with its duty to monitor Patriot’s financial

6 Employer also argues 20 C.F.R. §725.456(b)(1) violates the Longshore and Harbor

Workers’ Compensation Act and the APA. Employer’s Brief at 46-47 (unpaginated). That regulation specifies “[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 that the ALJ excluded. Further, although ALJ Camp rendered the decision at issue in the present appeal, Employer asserts “ALJ [John P. Sellers, III] 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 46-47 (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).
7 Employer raised this argument for the first time in a Joint Pre-Hearing Statement

to the ALJ. Decision and Order at 4.

4 health.8 Employer’s Brief at 3-34 (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.

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 (Oct. 25, 2022), 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.9 Thus we affirm the ALJ’s determination that Heritage and Peabody Energy are the responsible operator and carrier, respectively, and are liable for this claim.

8 Employer also states it wants to “preserve” its argument that its due process rights

were violated because the ALJ “cut off” discovery “prematurely.” Employer’s Brief at 40 (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).
9 Employer argues the ALJ erred in excluding the depositions of David Benedict

and Steven Breeskin, two former Department of Labor (DOL) Division of Coal Mine Workers’ Compensation officials. Employer’s Brief at 4-14 (unpaginated). In Bailey, the same depositions were admitted and the Board held they do not support Employer’s argument that the DOL released Peabody Energy from liability when it authorized Patriot to self-insure and released a letter of credit that Patriot financed under Peabody Energy’s self-insurance program. Bailey v. E. Assoc. Coal Co., BLR , BRB No. 20-0094 BLA, slip op. at 15 n. 17 (Oct. 25, 2022). Given the Board has previously held the depositions do not support Employer’s argument, any error in excluding them here is harmless. See Shinseki v. Sanders, 556 U.S. 396, 413 (2009) (appellant must explain how the “error to which [it] points could have made any difference”); Larioni v. Director, OWCP, 6 BLR 1- 1276 (1984).

5
Accordingly, the ALJ’s Decision and Order Awarding Benefits is affirmed.

SO ORDERED.

JUDITH S. BOGGS, Chief
Administrative Appeals Judge

DANIEL T. GRESH
Administrative Appeals Judge

MELISSA LIN JONES
Administrative Appeals Judge