Frontier-Kemper Constructors, Inc. v. Dir., Office of Workers' Comp. Programs

876 F.3d 683

FRONTIER-KEMPER CONSTRUCTORS, INCORPORATED, Petitioner,

v.DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR; Grat M. Smith, Respondents.

No. 16-1849

United States Court of Appeals, Fourth Circuit.

Argued: September 12, 2017

Decided: November 30, 2017

Amended: December 12, 2017

ARGUED: Mary Lou Smith, HOWE, ANDERSON & SMITH, P.C., Washington, D.C., for Petitioner. Sarah Marie Hurley, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C.; Joseph E. Wolfe, WOLFE WILLIAMS & REYNOLDS, Norton, Virginia, for Respondents. ON BRIEF: M. Patricia Smith, Solicitor of Labor, Maia S. Fisher, Acting Associate Solicitor, Gary K. Stearman, Counsel for Appellate Litigation, Office of the Solicitor, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondent Director, Office of Workers' Compensation Programs. Victoria S. Herman, WOLFE WILLIAMS & REYNOLDS, Mt. Hope, West Virginia, for Respondent Grat M. Smith.

Before WILKINSON, MOTZ, and DIAZ, Circuit Judges.

Affirmed by published opinion. Judge Diaz wrote the opinion, in which Judge Wilkinson and Judge Motz joined.

DIAZ, Circuit Judge:

Frontier-Kemper Constructors, Inc. ("Frontier-Kemper") appeals the Decision and Order of the U.S. Department of Labor Benefits Review Board holding Frontier-Kemper responsible for the payment of benefits to a coal miner, Grat M. Smith, under the Black Lung Benefits Act (the "BLBA"), 30 U.S.C. § 901 et seq. Frontier-Kemper does not contest Smith's eligibility for benefits, but instead disputes its liability for the claim. We find that Frontier-Kemper is liable and therefore affirm.

I.

A.

Before discussing the details of Frontier-Kemper's challenge, we provide a brief overview of the statutory and regulatory framework through which the BLBA imposes liability on employers for the payment of miners' claims.

The BLBA provides benefits to miners who are disabled by pneumoconiosis.¹ 30 U.S.C. §§ 901(a), 922(a), 932(c). The disabled miner's most recent employer is generally liable for payment of those benefits, but if no employer is found liable (or the employer is no longer in business), the Black Lung Disability Trust Fund pays the benefits. 26 U.S.C. § 9501(d)(1).

Only "operators," as defined by the Federal Mine Safety and Health Act (the "FMSHA"), can be liable for black lung benefits claims. Prior to 1977, the FMSHA defined "operator" as "any owner, lessee, or other person who operates, controls, or supervises a coal mine." 30 U.S.C. § 802(d) (1976). In 1977, Congress amended this definition to include "any independent contractor performing services or construction at such mine." 30 U.S.C. § 802(d).

When an operator is acquired or reorganizes, liability for benefits claims transfers to the "successor operator." See 30 U.S.C § 932(i). Successor operators are liable to pay such benefits for "miners previously employed by [a] prior operator as if the acquisition had not occurred and the prior operator had continued to be an operator." 30 U.S.C § 932(i)(1) To that end, the BLBA regulations provide that "any employment with a prior operator shall also be deemed to be employment with the successor operator." 20 C.F.R. § 725.493(b)(1).

Often, a miner claiming benefits has worked for multiple employers over the course of his or her career. In that case, the "responsible operator" is the most recent employer, so long as that employer qualifies as a "potentially liable operator." 20 C.F.R. § 725.495(a)(1). For an operator to be potentially liable, an operator or its successor must have employed the miner for a cumulative period of at least one year. 20 C.F.R. § 725.494(c).

After determining a miner's eligibility for benefits and identifying potentially liable operators, the Department of Labor awards benefits and assigns liability. The operator liable for benefits may then request a de novo hearing before an Administrative Law Judge ("ALJ"), and if dissatisfied with the result, appeal to the Board. See 20 C.F.R. § 725.450, 725.481.

B.

During the 1970s, Frontier Constructors and Kemper Construction formed a partnership (the "Partnership") that worked on heavy construction projects in the mining industry. Smith, who worked for a variety of coal mine construction companies throughout his career, was employed by the Partnership from December 1973 through August 1974.

In 1982, the Partnership reorganized into a newly-formed corporation, Frontier-Kemper. Many years later, Frontier-Kemper hired Smith to work on two mine repair projects, from August through November 2005. After x-rays revealed opacities in Smith's lungs, he filed a claim under the BLBA. The Department of Labor determined that Frontier-Kemper was a successor operator to the Partnership. Thus, Smith's employment with the Partnership was deemed to be employment with Frontier-Kemper.

The Department then considered whether Smith's combined employment with the two companies totaled at least one year. Based on Smith's Social Security Administration wage records and additional discussions with Smith during 2010, the Department determined that Smith had worked at the Partnership from December 10, 1973 through August 31, 1974, and at Frontier-Kemper from August 2005 to November 2005—a cumulative period of just over one year. Accordingly, the Department issued a proposed order awarding benefits and designating Frontier-Kemper as the operator responsible for Smith's benefits.

Frontier-Kemper objected and requested a hearing before an ALJ, who awarded Smith benefits. At the hearing, Smith testified that although he could not recall exactly when he began working for the Partnership, it was probably in early December 1973. Smith noted that he had been working for at least a week when his wife's uncle died in a mining accident on December 17, 1973. The ALJ also considered Smith's deposition testimony, his answers to interrogatories and questions from the Department, pay stubs, W-2s, employment records, and wage records.

Like the Department, the ALJ determined that Frontier-Kemper was a successor operator to the Partnership based on the 1982 reorganization. He also found that Smith's cumulative employment with the Partnership and Frontier-Kemper exceeded a year. On that issue, the ALJ credited Smith's testimony, his previous statements to the Department, and his wage records to find that Smith worked for the Partnership for the last three weeks of December 1973 and for the first eight months of 1974. And based on Frontier-Kemper's employment records, the ALJ found that Smith worked for the company for three months and two weeks in 2005.

Frontier-Kemper appealed the ALJ's decision to the Benefits Review Board. The company argued that the Partnership was not a coal mine operator during Smith's employment because it did not meet the definition of "operator" under the version of the BLBA in effect in 1973–74. Frontier-Kemper asserted that applying the current definition of "operator" would be impermissibly retroactive—thus, a determination that Frontier-Kemper was a successor operator would likewise be improper.

The Board held that the Partnership was an operator at the time of its 1982 reorganization, and that Frontier-Kemper was therefore properly considered a successor operator. The Board explained that applying the expanded definition of "operator" to Smith's 1973–74 employment was not impermissibly retroactive because Smith's claim was filed long after the new definition took effect, giving Frontier-Kemper ample opportunity to protect its interests accordingly.

The Board also agreed with the ALJ that Smith cumulatively worked for at least one year for the companies, notwithstanding minor mistakes in the ALJ's calculation. Accordingly, the Board affirmed the ALJ's decision and order awarding benefits. Frontier-Kemper's petition to this court followed.

II.

The issues before us are whether the Partnership can properly be considered an "operator" and thus Frontier-Kemper its "successor operator," and if so, whether the ALJ correctly found that Smith's cumulative employment with the two companies totaled at least one year.

We review the Board's and the ALJ's conclusions of law de novo. Westmoreland Coal Co. v. Cox , 602 F.3d 276, 282 (4th Cir. 2010). We will not overturn an ALJ's factual findings so long as they are supported by substantial evidence. Hobet Mining, LLC v. Epling , 783 F.3d 498, 504 (4th Cir. 2015). "To determine whether this standard has been met, we consider ‘whether all of the relevant evidence has been analyzed and whether the ALJ has sufficiently explained his rationale in crediting certain evidence.’ " Id. (quoting Mingo Logan Coal Co. v. Owens , 724 F.3d 550, 557 (4th Cir. 2013) ). We defer to the ALJ to make credibility determinations and resolve inconsistencies or conflicts in the evidence. Id.

A.

Frontier-Kemper maintains that applying the expanded definition of "operator" adopted by Congress in 1977 to Smith's employment predating the 1977 amendments would have an impermissible retroactive effect. Frontier-Kemper says that an operator cannot be a successor operator under the BLBA unless the prior entity was itself an operator. Because the statutory definition of "operator" in 1973–74 did not include coal mine construction companies like the Partnership, Frontier-Kemper argues that it cannot be liable for Smith's benefits on a successor operator theory. Doing so, in its view, impermissibly attaches new legal consequences to events that occurred before the enactment of the 1977 amendments—namely, Smith's 1973–74 employment with the Partnership. Central to Frontier-Kemper's argument is the notion that this earlier employment, not Smith's later work for Frontier-Kemper, is what matters for assessing its liability.

The Department frames the successor operator analysis differently. It argues that because the Partnership was clearly an "operator" by the time it reorganized in 1982 (five years after the 1977 amendments to the BLBA), Frontier-Kemper is indisputably a...