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Administrative – Earlier Mine Operator Must Pay Black Lung Benefits

RB&F Coal Inc. v. Mullins (Lawyers Weekly No. 001-163-16, 20 pp.) (Floyd) No. 15-1656, Nov. 18, 2016; On Petition for Review; 4th Cir.

Holding: The Benefits Review Board did not err in imposing liability for black lung benefits on a miner’s earlier employer, after his most recent employer went out of business, that employer’s insurance carrier was insolvent, and the miner filed his claim too late to be a “covered claim” under the Virginia Guaranty Act; the 4th Circuit upholds a decision that the miner’s previous employer was a “responsible operator” liable to cover benefits for the miner’s surviving family.

Out of Business

The parties agree that the miner’s family is entitled to benefits. The only remaining dispute is whether prior RB&F Coal Inc. or another operator is liable for the claim.

Under Department of Labor regulations, liability for black lung benefits falls to the mine operator that most recently employed the miner for at least a year, so long as that employer is financially capable of assuming liability for the claim.

By the time the miner here filed his claim, his later employer, Wilder Coal, was out of business. Wilder’s insurance carrier Rockwood, a member of the Virginia Property and Casualty Insurance Guaranty, had been declared insolvent by a Pennsylvania court in August 1991. Following that carrier’s insolvency, the court appointed a liquidator who set the final date for filing claims against Rockwood as Aug. 26, 1992. The VPCIGA assumed responsibility for claims filed before that date, or “covered claims.”

An administrative law judge determined that under DOL regulations, the burden for the miner’s benefits shifted to his earlier employer, RB&F, to show that the later employer was financially capable of assuming liability. The ALJ then found that RB&F had failed to show either that Wilder or Rockwood was capable of assuming liability for the claim, or that the claim was a “covered claim” obligating the VPCIGA to assume liability. The ALJ concluded that RB&F was properly named as the responsible operator and was liable for the claim. The Benefits Review Board upheld that decision.

In its petition for review, RB&F claims that since Wilder’s liability was fully covered by Rockwood, which was a member of the VPCIGA, then it cannot be found to be incapable of assuming liability because the VPCIGA is now obligated to pay the claim. We disagree.

A mine operator cannot be the “responsible operator” if it is financially incapable of assuming liability. Under the Virginia Guaranty Act, Va. Code § 38.2-1606(A)(1), Wilder’s obligations for the claim are not otherwise guaranteed by the VPCIGA. The final date for filing claims against Rockwood was Aug. 26, 1992. This miner’s claim was filed in 2009, 17 years after the final date to file his claim against Rockwood had passed. As such, this is not a “covered claim” under the Guaranty Act, and the VPCIGA is under no obligation to pay it. Boyd & Stevenson Coal Co. v. Director, OWCP, 407 F.3d 663 (4th Cir. 2005), the case cited by respondent, does not apply here to void the claim filing bar date.

Guaranty Act

The VPCIGA is not an insurer in the traditional sense. It is a state guaranty association; it only steps into the shoes of the insolvent insurance company for “covered claims.” With regards to Rockwood’s insolvency, the Virginia courts have made it clear that VPCIGA was not intended to cover claims against Rockwood after Aug. 26, 1991. In Uninsured Employer’s Fund v. Mounts, 484 S.E. 2d 140 (Va. App. 1997), the court held that because the claim in question was filed after the 1992 cutoff date, the VPCIGA was barred by statute from considering Mounts’ claim to be a covered claim, and was not authorized to pay benefits. The mere existence of a state guaranty company does not impose liability on the guaranty company for all of the state’s insolvent insurance companies’ Black Lung Benefits Act claims.

Under DOL regulations, the liability for the miner’s claim falls to the potentially liable operator that most recently employed the miner. Since Wilder cannot be found to be a “potentially liable operator” under 20 C.F.R. § 725.494, the liability properly falls to the miner’s next most recent employer, RB&F.

Finally, contrary to RB&F’s claim, the burden-shifting analysis under 20 C.F.R. § 725.495(c) had no impact on the ALJ’s or the BRB’s decision.

Decision of the BRB is affirmed.

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