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RB&F Coal, Inc. v. Mullins

United States Court of Appeals, Fourth Circuit

November 18, 2016

RB&F COAL, INCORPORATED; OLD REPUBLIC INSURANCE COMPANY, Petitioners,
v.
DELORIS J. MULLINS, o/b/o and Widow of Turl Mullins; DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Respondents.

          Argued: September 21, 2016

         On Petition for Review of an Order of the Benefits Review Board. (14-0169 BLA)

         ARGUED:

          Mark Elliott Solomons, GREENBERG TRAURIG LLP, Washington, D.C., for Petitioners.

          Victoria Susannah Herman, WOLFE WILLIAMS & REYNOLDS, Norton, Virginia; Rebecca Jayne Fiebig, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondents.

         ON BRIEF:

          Laura Metcoff Klaus, GREENBERG TRAURIG LLP, Washington, D.C., for Petitioners.

          Joseph E. Wolfe, WOLFE WILLIAMS & REYNOLDS, Norton, Virginia, for Respondent Deloris Mullins. M. Patricia Smith, Solicitor of Labor, Rae Ellen Frank James, Associate Solicitor, Sean G. Bajkowski, Counsel for Appellate Litigation, Rita A. Roppolo, Office of the Solicitor, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondent Director, OWCP.

          Before WILKINSON and FLOYD, Circuit Judges, and Irene M. KEELEY, United States District Judge for the Northern District of West Virginia, sitting by designation.

         Affirmed by published opinion. Judge Floyd wrote the opinion, in which Judge Wilkinson and Judge Keeley joined

          FLOYD, Circuit Judge

         R B & F Coal Inc., and Old Republic Insurance Company (collectively, "RB&F") seek relief from an order of the Department of Labor's (DOL) Benefits Review Board (BRB) holding RB&F responsible for the payment of benefits to a coal miner, Turl Mullins, and survivor's benefits to his widow, Deloris Mullins, under the Black Lung Benefits Act, (BLBA), 30 U.S.C. § 901 et seq.[1] The parties agree that the Mullins family is entitled to benefits. The only remaining dispute is whether RB&F or another operator is liable for the claim. We find that RB&F is liable, and therefore affirm the decision of the BRB.

         I. Before discussing the undisputed facts of this case, it is helpful to understand the statutory schemes at issue. The BLBA provides benefits to miners who are disabled by pneumoconiosis. 30 U.S.C. §§ 901(a), 922(a), 932(c). The mine operator that employed the disabled miner is liable for payment of those benefits. See id. § 932(b). In instances where a miner claiming benefits was employed by multiple coal mine operators, the BLBA authorizes the Secretary of Labor to promulgate regulations to establish standards for apportioning liability among operators. Id. § 932(h).

         The "responsible operator"--the operator ultimately found liable for the BLBA claim--is the most recent company to employ the miner, so long as that employer qualifies as a "potentially liable operator." 20 C.F.R. § 725.495(a)(1). The regulation then outlines five criteria an employer must satisfy in order to be a potentially liable operator, only one of which is relevant to this case: the operator and/or its insurer must be financially capable of assuming liability. Id. § 725.494(e). Once a miner files a claim, a DOL district director determines whether any of the miner's previous employers qualify as potentially liable operators. Id. § 725.407(a). If one or more operators are considered potentially liable operators, the district director names the potentially liable operator that most recently employed the miner as the "responsible operator." Id. §§ 725.407(b), 725.495(d).

         The DOL bears the initial burden of proving that the operator it designates as responsible is a "potentially liable operator" under § 725.494.[2] Id. § 725.495(b). If the responsible operator designated by the district director believes that another party should be designated as the responsible operator, that operator bears the burden of proving that another operator more recently employed the miner, and that the later employer meets the § 725.494 criteria. Id. § 725.495(c)(2).

         The Virginia Property and Casualty Insurance Guaranty Association (VPCIGA), is a state chartered non-profit association established by the legislature to "provide prompt payment of covered claims to reduce financial loss to claimants or policyholders resulting from the insolvency of an insurer." Va. Code Ann. § 38.2-1600.[3] All insurance companies that conduct business in Virginia are required by state law to join, and the association is funded by mandatory contributions from those members. Id. §§ 38.2-1604.

         When a member insurer becomes insolvent, the VPCIGA takes on liability for some, but not all, of its obligations. See id. § 38.2-1606(A)(1). The VPCIGA is required to pay "covered claims" as that term is defined in the Guaranty Act. Id. In relevant part, the Guaranty Act provides: "Notwithstanding any other provision of this chapter, a covered claim shall not include any claim filed with the [VPCIGA] after the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer." Id. § 38.2-1606(A)(1)(b).

         II. Turning now to the facts of this appeal, Turl Mullins worked as a coal miner for several years including stints with RB&F between 1985 and 1986 and Wilder Coal ("Wilder") between 1986 and 1988.[4] Mullins was diagnosed with pneumoconiosis in 2009, and filed a claim for benefits under the BLBA in that same year. As discussed above, under DOL regulations, liability for those 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. 20 C.F.R. § 725.494. By the time Mullins filed his claim, Wilder was out of business. Further, its insurer, Rockwood Insurance Co. ("Rockwood"), a member of the VPCIGA, had been declared insolvent by a Pennsylvania court in August of 1991. See Boyd & Stevenson Coal Co. v. Dir., Office of Workers' Comp. Programs, 407 F.3d 663, 665 (4th Cir. 2005). Following Rockwood's insolvency, the court appointed a liquidator who set the final date for filing claims against Rockwood as August 26, 1992. See Uninsured Employer's Fund v. Mounts, 484 S.E.2d 140, 144 (Va.App. 1997), aff'd, 497 S.E.2d 464 (Va. 1998). The VPCIGA assumed responsibility for claims filed before that date--i.e., "covered claims"--but not for claims filed after that date. See id.; Va. Code Ann. § 38.2-1606(A)(1).

         A DOL district director found that Mullins was entitled to benefits and that RB&F was the responsible operator. Contesting its liability, RB&F requested that the case be transferred to ...


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