Peabody Coal Company and Old Republic Insurance Company v. Office of Workers' Compensation Programs, Estate of J.T. Goodloe, Larry Goodloe, Personal Representative, Estate of J.T. Goodloe, Larry Goodloe, Personal Representative, Jack N. Vanstone, Attorney v. Office of Workers' Compensation Programs, Peabody Coal Company and Old Republic Insurance Company
Docket: 96-1534
Court: Court of Appeals for the Seventh Circuit; June 9, 1997; Federal Appellate Court
J.T. Goodloe filed a claim for black lung benefits in 1978, which has remained unresolved for nineteen years, including over eight years after his death, due to ongoing disputes over his entitlement to benefits and attorney fees. The Court of Appeals for the Seventh Circuit remanded the case because the administrative law judge (ALJ) applied an incorrect legal standard in a decision made twelve years prior.
In a formal hearing on May 21, 1984, the ALJ initially denied Goodloe's claim for benefits on May 6, 1985. Although Goodloe was entitled to an interim presumption of total disability due to pneumoconiosis based on his thirty-three years of coal mining, the ALJ found he did not meet the criteria under sections (a)(1) or (a)(2) concerning chest x-rays and pulmonary function studies. However, the ALJ concluded that Goodloe did meet the criteria under section (a)(3) due to a qualifying blood gas study from 1984, indicating severely low oxygen levels.
Peabody Coal Company contested the validity of this 1984 blood gas study, citing significant discrepancies with a 1979 study. Testimony from three doctors, including Goodloe's physician, Dr. Henry Peters, expressed skepticism about the 1984 results. Dr. Peters had the results verified by the hospital laboratory, which confirmed their accuracy.
Dr. Peters was unable to recall the specific verification process of a laboratory test result and encouraged Peabody's counsel to contact the lab for clarification, though the record does not indicate if this was done. Defense expert Dr. David W. Howard expressed skepticism about a PO2 reading of 45, suggesting retesting due to potential errors in sample collection. He indicated that such a reading would typically necessitate oxygen therapy due to respiratory failure. Another defense expert, Dr. J. Frank Stewart, also recommended retesting based on the significant drop from Goodloe's previous normal readings, indicating possible errors. However, neither expert categorically invalidated the 1984 blood gas results; they merely suspected errors upon initial review.
The Administrative Law Judge (ALJ) noted that the 1984 test results appeared to qualify for a legal presumption of disability under section 727.203(a)(3). Despite Peabody's challenge regarding the validity of these results, the ALJ found insufficient grounds to dismiss them. The ALJ concluded that while both Drs. Stewart and Howard questioned the accuracy of the test, they did not rule out the possibility that the reading of 45 could be valid, particularly if Goodloe continued heavy smoking and was not physically active.
Following the invocation of the presumption, the ALJ assessed whether Peabody could rebut it under section 727.203(b). The ALJ determined that Peabody could not rebut the presumption by demonstrating that Goodloe was performing or was capable of performing coal mine work, as he had not worked in the mines for five years. However, the ALJ accepted Dr. Stewart's opinion that Goodloe had no pulmonary impairment preventing him from his usual work, favoring Stewart's assessment over those of Howard and Peters. Dr. Howard's opinion was deemed limited as it excluded the 1984 blood gas study, while Dr. Peters had made various inaccuracies regarding pulmonary medicine concepts.
The ALJ determined that rebuttal under section (b)(3) favored Dr. Stewart's assessment, which stated that Goodloe's disability, if present, was not linked to coal dust exposure. The ALJ, citing negative x-ray evidence for pneumoconiosis and Dr. Stewart's opinion, concluded that Goodloe did not have pneumoconiosis and thus rebutted the presumption under section (b)(4), leading to a denial of benefits. Goodloe appealed to the Benefits Review Board (BRB), which upheld the ALJ's interim presumption but reversed the rebuttal findings, referencing the precedent set in Wetherill v. Director, Office of Workers' Compensation Programs. The BRB held that the ALJ must assess total disability without considering causation, indicating that Dr. Stewart's opinion was insufficient for rebuttal under subsection (b)(2). Consequently, the BRB vacated the ALJ’s rebuttal findings and remanded the case for reevaluation based on Wetherill's standards.
On remand, the ALJ found that Peabody did not rebut the presumption under (b)(2) due to insufficient evidence regarding Goodloe's overall disability status and capability for coal mine work. Additionally, the ALJ ruled that Peabody failed to meet the rebuttal requirements under (b)(3) as it did not adequately "rule out" a causal link between Goodloe's disability and coal mine employment. The ALJ noted Dr. Stewart's failure to clarify the etiology of Goodloe’s pulmonary issues and his ambiguity regarding the x-ray evidence for pneumoconiosis. Ultimately, the ALJ concluded that Peabody did not fulfill its burden to prove the absence of pneumoconiosis under (b)(4) and awarded benefits to Goodloe, permitting his attorney to submit a fee application.
Peabody appealed to the Benefits Review Board (BRB) regarding the Administrative Law Judge (ALJ)'s (1) substantive findings and (2) the fee awarded to Goodloe's attorney. The BRB observed that Peabody did not dispute the ALJ's conclusion on the insufficiency of evidence for rebuttal under section (b)(2) but contested findings under sections (b)(3) and (b)(4). Specifically, Peabody argued that the ALJ imposed an excessively high burden of proof, inadequately credited Dr. Stewart's opinion for section (b)(3) rebuttal, and overlooked Dr. Howard's testimony. The BRB upheld the ALJ's conclusions but agreed that the attorneys' fees should not have been increased due to the contingent nature of claims. Peabody also contended three errors in the ALJ's analysis: shifting the burden of proof regarding the 1984 blood gas study, misinterpreting the implications of Goodloe's non-disabling pulmonary impairment for rebuttal under section (b)(2), and erroneously finding that Peabody did not disprove Goodloe's pneumoconiosis, particularly by disregarding Dr. Howard's opinion and not adequately weighing Dr. Stewart's.
In response, Goodloe argued there was no evidence to invalidate the 1984 blood gas test and that the opinions of Dr. Stewart and Dr. Howard were insufficient to rebut the interim presumption as they did not reference the study. Goodloe further asserted that regulations allow for fee compensation considering both the contingent nature of claims and delays in payment.
The court clarified that it reviews the ALJ's decisions rather than those of the BRB, affirming that an ALJ's decision will not be overturned if it is rational, supported by substantial evidence, and complies with the law. The definition of substantial evidence is provided, emphasizing the necessity for the ALJ to consider all relevant medical evidence and not to disregard qualified medical opinions without adequate justification.
The ALJ initially found that Goodloe was entitled to the interim presumption based on a 1984 blood gas study, which Peabody disputed through expert testimony. However, the ALJ incorrectly required Peabody to disprove the study's validity instead of placing the onus on Goodloe to prove the presumption by a preponderance of the evidence. Citing Mullins Coal Co., the text emphasizes that the burden of proof lies with the claimant, and the ALJ's reasoning improperly shifted this burden to the employer. The ALJ noted questions raised by both Peabody's and Goodloe's experts regarding the study's validity but erroneously concluded that Peabody failed to invalidate it. The remand requires the ALJ to apply the correct legal standard, mandating Goodloe to prove the study's validity. If found valid, the presumption should be invoked. The ALJ should consider the testimony of Dr. Peters, who verified the study results and noted Goodloe's physical symptoms, alongside the skepticism expressed by other doctors. The text also clarifies that it is premature to address rebuttal issues or attorney fees until the ALJ determines whether Goodloe has met his burden. If so, the ALJ must then examine Peabody's ability to rebut the presumption, referencing the interpretation in Freeman United Coal Mining Co. v. Foster.
In Foster, the court examined whether section (b)(2) allows for rebuttal when a miner cannot perform their usual coal mine duties due to a condition other than pneumoconiosis. The language of section (b)(2) initially suggests a straightforward reference to disability; however, a cross-reference to section 410.412(a)(1) clarifies that "total disability" is defined specifically concerning activities the miner cannot perform due to pneumoconiosis. In the Foster case, the miner's inability to work stemmed from a back injury rather than pneumoconiosis, leading the court to conclude that the employer successfully rebutted the claim under section (b)(2). This indicated that the assessment should include whether the inability to work is linked to coal dust exposure. The court rejected previous interpretations from Wetherill, ruling that a miner whose pneumoconiosis is not disabling and who could work but for a non-pneumoconiosis-related injury is not considered totally disabled by pneumoconiosis and thus is not entitled to benefits. The court reversed and remanded the case, expressing hope to avoid prolonged litigation.
Additionally, the court addressed whether Peabody waived its argument, concluding that since Peabody raised the issue in its initial appeal to the Benefits Review Board (BRB) and the BRB ruled against it, the ruling became the law of the case. Peabody was not required to raise the argument again in subsequent appeals unless there was a change in the law, which did not occur. Therefore, the issue was preserved for appeal to the court.
