Director, Office of Workers' Compensation Programs, United States Department of Labor v. Peabody Coal Company

Citations: 330 F.3d 830; 2003 U.S. App. LEXIS 10831; 2003 WL 21251576Docket: 01-4358

Court: Court of Appeals for the Sixth Circuit; June 2, 2003; Federal Appellate Court

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The Director of the Office of Workers' Compensation Programs (OWCP) is seeking reimbursement from Peabody Coal Company for survivor-benefit payments made to the widow of a miner from the Black Lung Disability Trust Fund. Peabody Coal argues it should not reimburse these payments because they previously overpaid benefits due to the miner's false statements about his workers' compensation claims. The Director asserts that this matter falls under the Department of Labor's jurisdiction as a modification of benefits, while Peabody Coal claims it pertains to reimbursement, which should be handled in district court. The Benefits Review Board upheld an Administrative Law Judge's (ALJ) dismissal of the OWCP's petition for lack of jurisdiction.

Factual background reveals that William Givens had been awarded federal black lung benefits in 1980, with Peabody Coal designated as the responsible operator. Throughout his life, he received both federal and Kentucky workers' compensation benefits, leading to an overpayment situation due to misrepresentations about his state benefits. Upon Mr. Givens's death, his widow, Margie Givens, was entitled to survivor's benefits. However, due to prior overpayments and an agreement between Peabody Coal and Mrs. Givens to offset future benefits against the overpayment amount, Peabody Coal resisted the district director's order reinstating her federal benefits. The dispute led to Mrs. Givens receiving payments from the Trust Fund while awaiting resolution.

When Peabody Coal refused to comply with the district director's order, the matter was referred to an ALJ, who determined that Mrs. Givens's claim was final and that Peabody Coal was liable for her benefits under the applicable statute.

Jurisdiction for enforcing agency orders is designated to district courts, as specified in 30 U.S.C. 934(b)(4)(A). The Administrative Law Judge (ALJ) ruled that he lacked subject matter jurisdiction regarding a matter of collection and reimbursement, a decision upheld by the Benefits Review Board on October 31, 2001. The review of the Board's decision focuses on ensuring no legal errors were made and that the ALJ's factual findings were supported by substantial evidence. 

The appeal centers on whether the original decision awarding benefits to Mr. Givens is final. The Director contends that Peabody Coal's liability remains unresolved due to their dispute over continuing payments to Mrs. Givens. Conversely, Peabody Coal maintains the benefits are final, asserting that Mrs. Givens's right to benefits has been established, and their dispute pertains solely to collection and reimbursement, thus falling under district court jurisdiction.

The Director cites provisions from the Longshore and Harbor Workers' Compensation Act allowing for compensation award modifications but fails to demonstrate how this impacts the finality of Mrs. Givens's benefits entitlement. Peabody Coal argues that their potential setoff against payments does not affect the established entitlement to benefits, supported by precedent indicating that liability assumption by the operator finalizes entitlement. The dispute primarily revolves around reimbursement to the Trust Fund, with the Director's attempts to differentiate the case from precedent deemed ineffective.

In the case involving Mrs. Givens, the operator contested the miner's initial award of benefits until admitting liability, which led to a dispute over reimbursement amounts owed to the Trust Fund. The Director claims Mrs. Givens's entitlement is contested, but this overlooks the historical context of her claim. Under 20 C.F.R. 725.212, Mrs. Givens became automatically entitled to survivor's benefits upon her husband's death, with the relevant determination occurring in 1980 rather than at Mr. Givens's death in 1989 or when payments started in 1998. Peabody Coal has been established as the responsible operator, making this case a typical Vahalik scenario where once eligibility and liability are determined, jurisdiction shifts to district courts for enforcing agency orders.

Both the Administrative Law Judge (ALJ) and the Benefits Review Board dismissed the case for lack of subject matter jurisdiction, aligning with Vahalik and the Black Lung Benefits Act. The Secretary can pursue civil actions in district courts for unpaid liabilities under 30 U.S.C. 934(b)(4)(A). The Director did not adequately address the implications of a 1993 settlement between Mrs. Givens and Peabody Coal regarding overpayment offsets, which complicates her claim rather than affecting the agency's finalization of benefits. Peabody Coal's defense regarding offsets is an equitable issue best suited for district court consideration, not an administrative agency. Despite the Director's framing of the dispute as an initial benefits determination, it is fundamentally a collection action to enforce an agency order. Consequently, the dismissal by the Benefits Review Board is affirmed due to lack of jurisdiction.