                                                                                                                           Opinions of the United
1994 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


11-15-1994

Bethenergy Mines v. Off. Wrkrs' Comp. Prog. et al.
Precedential or Non-Precedential:

Docket 94-3247




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          UNITED STATES COURT OF APPEALS
              FOR THE THIRD CIRCUIT


                     No. 94-3247


              BETHENERGY MINES INC.,

                                   Petitioner

                         v.

 DIRECTOR, OFFICE OF WORKERS' COMPENSATION
PROGRAMS, United States Department of Labor;
        and EVA VROBEL, widow/John,

                                   Respondents


        On Petition for Review of an
     Order of the Benefits Review Board
           (BRB. No. 89-2387 BLA)


 Submitted under Third Circuit LAR 34.1(a)
              October 31, 1994

BEFORE:    GREENBERG and MCKEE, Circuit Judges,
           and POLLAK, District Judge*

           (Filed:    November 15, 1994)


                          John J. Bagnato
                          Spence, Custer, Saylor,
                          Wolfe & Rose
                          400 United States National
                          Bank Building
                          P.O. Box 280
                          Johnstown, PA 15907

                               Attorneys for Petitioner

                          Thomas S. Williamson, Jr.
                          Solicitor of Labor
                          Donald S. Shire
                          Associate Solicitor
                          Patricia M. Nece
* Honorable Louis H. Pollak, Senior United States District Judge
for the Eastern District of Pennsylvania, sitting by
designation.

                                Gary K. Stearman
                                United States Department
                                of Labor
                                Office of the Solicitor
                                200 Constitution Ave., N.W.
                                Washington, D.C. 20210

                                     Attorneys for Respondent
                                     Director, Office of
                                     Workers' Compensation
                                     Programs

                                Robert J. Bilonick
                                Pawlowski, Tulowitzki,
                                Bilonick & Walter
                                603 North Julian Street
                                P.O. Box 658
                                Ebensburg, PA 15931

                                     Attorneys for Respondent
                                     Eva Vrobel




                      OPINION OF THE COURT


GREENBERG, Circuit Judge.


          I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

          The matter is before the court on a petition for review

brought by BethEnergy Mines, Inc. arising from an application

filed on March 9, 1978, by John Vrobel under the Black Lung

Benefits Act, as amended, 30 U.S.C. §§ 901 et seq.    The petition

seeks review of an April 6, 1994 order of the Benefits Review

Board ("the Board") denying BethEnergy's motion for
reconsideration of a Decision and Order of the Board dated

December 29, 1992.   Vrobel was a coal miner who for approximately

34 years worked underground.   In large part Vrobel worked for

BethEnergy which last employed him on or about September 26,

1977.   Vrobel died in 1985 and his widow, Eva Vrobel, has been

substituted as a party in this case.   Thus, Eva Vrobel and the

Director, Office of Workers' Compensation Programs ("Director"),

are the respondents.

           The Department of Labor initially awarded benefits to

Vrobel but BethEnergy denied liability and accordingly the claim

was submitted as a contested matter.   There was a formal hearing

before an Administrative Law Judge ("ALJ") on December 18, 1986.

In February 1987, BethEnergy submitted a closing statement which

contended that the evidence was insufficient to invoke the

interim presumption of total disability provided in 20 C.F.R. §

727.203(a)(1).1   Alternatively, BethEnergy argued that even if

1
 . The Department of Labor has promulgated regulations
establishing an interim presumption of total disability,
applicable in this case, providing that a person who worked at
least 10 years as a coal miner is presumed to be totally disabled
by pneumoconiosis and entitled to benefits under the Act if any
of the following five requirements can be met: (1) an x-ray
reading establishes the existence of pneumoconiosis; (2)
ventilatory study measurements establish the presumption of a
chronic respiratory or pulmonary disease as numerically defined;
(3) blood gas studies reveal impairment of the flow of oxygen,
again as defined numerically; (4) other medical evidence,
including the documented opinion of a physician exercising
reasoned medical judgment establishes the presence of a total
impairment; or (5) where a miner is deceased and no medical
evidence is available, an affidavit of the survivor of the miner
or other persons with knowledge of the miner's physical
condition, demonstrates the presence of a totally disabling
respiratory or pulmonary impairment. 20 C.F.R. § 727.203(a)(1)
(1994).
the interim presumption was invoked, the evidence established

that it had been rebutted.

          In a decision issued on April 30, 1987, the ALJ found

that Vrobel demonstrated that the interim presumption should be

invoked under 20 C.F.R. §727.203(a)(1) on the basis of x-ray

evidence establishing the existence of pneumoconiosis.   The ALJ

further found that BethEnergy failed to establish rebuttal of the

presumption under 20 C.F.R. § 727.203 (b)(1), (b)(3) or (b)(4).2
(..continued)

          The party opposing entitlement may then rebut the
interim presumption in four different ways. 20 C.F.R. §
727.203(b)(1)-(4). The two methods of rebuttal which are most
relevant to this case are as follows:
            (b) Rebuttal of interim presumption. In
          adjudicating a claim under this subpart, all
          relevant medical evidence shall be
          considered. The presumption in paragraph (a)
          of this section shall be rebutted if:
                              . . .

                  (2) In light of all relevant
                evidence it is established that the
                individual is able to do his usual
                coal mine work or comparable
                gainful work ...; or
                  (3) The evidence establishes
                that the total disability or death
                of the miner did not arise in whole
                or in part out of coal mine
                employment.
2
 .    In invoking the interim presumption based on the evidence
of several positive x-ray readings, the ALJ applied a now-
discredited theory which allowed invocation of the interim
presumption to be based upon a single piece of qualifying
evidence, with contrary evidence being weighed only on rebuttal.
Stapleton v. Westmoreland Coal Co., 785 F.2d 424 (4th Cir. 1986),
rev'd sub nom. Mullins Coal Co. v. Director, OWCP, 484 U.S. 135,
108 S.Ct. 427 (1987). The Supreme Court in Mullins rejected this
theory which we had followed in Revak v. National Mines Corp.,
808 F.2d 996 (3d Cir. 1986), as the Court held that all relevant
evidence, including conflicting evidence, must be weighed when
However, the ALJ found that BethEnergy could establish rebuttal

under (b)(2) because from a pulmonary standpoint Vrobel could

perform his usual coal mine employment or comparable gainful

work.   In addition, the ALJ determined that an opinion of a Dr.

McQuillan that Vrobel did not have a totally disabling

respiratory impairment was supported by the opinions of two other

doctors who examined Vrobel.   App. at 152.    As a result, the ALJ

denied Vrobel benefits.

           Eva Vrobel then appealed to the Board, arguing that

Vrobel's pulmonary impairment prevented him from working and,

accordingly, the ALJ erroneously had found that BethEnergy

established (b)(2) rebuttal.   In its answering brief BethEnergy

argued that even if the Board found that in view of Kertesz v.

Crescent Hills Coal Co., 788 F.2d 158 (3d Cir. 1986), the ALJ's

initial finding of rebuttal was inappropriate, the evidence

nevertheless demonstrated that Vrobel's disability was unrelated

to coal mine employment, thereby establishing (b)(3) rebuttal.

App. at 122-23.   Kertesz held that the causation of a miner's

total disability is not relevant in determining whether there was

rebuttal under (b)(2).    Id. at 162 n.5.   Instead, a finding of

any totally disabling contention will preclude (b)(2) rebuttal.



(..continued)
deciding to invoke the presumption in the first place. Mullins,
484 U.S. at 148-150, 108 S.Ct. at 433-36. The ALJ later refused
a request by BethEnergy to reexamine the invocation of the (a)(1)
presumption under the post-Mullins standard. Nevertheless, we
need not address this issue because BethEnergy does not challenge
the ALJ's refusal in this appeal.
          As BethEnergy anticipated, the Board remanded the case

on December 30, 1988, for the ALJ to reconsider rebuttal under

(b)(2) pursuant to Kertesz, and it also instructed the ALJ to

reconsider rebuttal under (b)(3) pursuant to Bernardo v.

Director, OWCP, 790 F.2d 351 (3d Cir. 1986).    App. at 113.      In

Bernardo, we determined that rebuttal under (b)(3) solely relates

to the source of the miner's total disability, and not the degree

of disability.   Thus, the pneumoconiosis need not be the

exclusive source of the disability.

          On March 13, 1989, the ALJ in his Decision and Order on

Remand awarded benefits to Vrobel.    App. at 108.    The ALJ found

that BethEnergy failed to establish rebuttal under (b)(2) as

Vrobel had a shoulder condition that could have been totally

disabling.   App. at 108.   In addition, the ALJ determined that

BethEnergy failed to establish (b)(3) rebuttal because the

medical evidence in the record supported a finding that Vrobel's

total disability at least partly was associated with his coal

mine employment.   Consequently, BethEnergy failed to establish

that there was no significant relationship between the total

disability and coal mine employment.    App. at 109.

          On April 11, 1989, BethEnergy filed a motion for

reconsideration, arguing that the ALJ's finding in the initial

Decision and Order under (b)(2), i.e. that Vrobel was not totally

disabled due to a respiratory or pulmonary impairment, was

sufficient to establish rebuttal under (b)(3).3      BethEnergy

3
 .    In other words, BethEnergy claimed that inasmuch as the ALJ
initially found that Vrobel's total disability was unrelated to a
further asserted that (b)(2) rebuttal was satisfied because the

evidence had failed to establish that Vrobel was totally disabled

as a result of any condition.    App. at 74.    In addition,

BethEnergy alleged for the first time that changes in the

interpretation of (b)(2) and (b)(3) had affected adversely its

defense of the claim and it requested an opportunity to submit

additional evidence.4   App. at 68.    On reconsideration, in a

Decision and Order of July 5, 1989, the ALJ rejected BethEnergy's

argument concerning total disability under (b)(2) and reiterated

that BethEnergy failed to establish that Vrobel was not totally

disabled from any condition.    However, the ALJ determined that

(b)(3) rebuttal was established.      In reaching this conclusion,

the ALJ applied Marcum v. Director, OWCP, 11 Black Lung Rep. (MB)

(..continued)
respiratory or pulmonary impairment, (b)(3) rebuttal could be
established because the absence of any significant pulmonary or
respiratory impairment precludes pneumoconiosis as a cause of
total disability. App. at 75. Thus, in BethEnergy's view, there
was no significant relationship between the total disability and
coal mine employment.
4
 .    In particular, BethEnergy asserts that Kertesz, which we
decided on April 14, 1986, changed the legal standard for
establishing rebuttal under (b)(2). BethEnergy argues that it
developed its medical evidence according to the pre-Kertesz
standards, which required a showing that the claimant left work
because of a respiratory related problem. As such, BethEnergy
claims that it was unnecessary to develop further evidence
regarding (b)(3) rebuttal because "the pre-Kertesz rule obviated
the need to prove that disabling conditions that were not
respiratory in origin did not 'arise in whole or part out of coal
mine employment.'" (Quoting (b)(3)). Brief at 14. Since
BethEnergy apparently had developed evidence tending to
illustrate that Vrobel's total disability was non-respiratory in
nature, it argues that it should be permitted to develop
additional evidence addressing the post-Kertesz standards
affecting (b)(2) and (b)(3) rebuttal.
1-23 (1987).   Construing Marcum, the ALJ stated that (b)(3)

rebuttal could be invoked "if the weight of the evidence

establishes that the Claimant did not have a totally disabling

pulmonary or respiratory impairment."5    App. at 58.   The ALJ then

adopted his finding in the initial decision that there was no

medical evidence which established a totally disabling

respiratory impairment.   App. at 58.    Consequently the ALJ

determined that application of the Marcum standard precluded a

recovery of benefits.

          Vrobel appealed to the Board, claiming that the ALJ's

finding that BethEnergy established (b)(3) rebuttal was erroneous

because he incorrectly applied the (b)(3) rebuttal standard.

Vrobel further argued that proper application of Bernardo would

illustrate that BethEnergy could not establish (b)(3) rebuttal,

just as the ALJ previously determined when he applied the correct

standard in the Decision and Order on remand.     On April 11, 1990,

BethEnergy responded, asserting that the ALJ's (b)(3) rebuttal

finding on reconsideration was correct because the physicians'

opinions contained in the record ruled out any relationship

between coal dust exposure and disability, thereby addressing the

source of the miner's disability.   App. at 45-47.

5
 .    This standard is incorrect as Bernardo v. Director, OWCP,
790 F.2d at 353, set forth the controlling law with respect to
(b)(3) rebuttal at the time the ALJ decided this case. Bernardo
establishes that (b)(3) is concerned with the source of
disability and not the degree. Id. In other words, Bernardo
requires an inquiry into the causation of the disability. It
should be noted, however, that the ALJ properly cited and applied
Bernardo in his Decision and Order on Remand in which he awarded
benefits to Vrobel. App. at 113.
           On December 29, 1992, the Board determined that the ALJ

applied the wrong standard when he concluded that rebuttal was

established under (b)(3).   The Board reasoned that inasmuch as

the ALJ found that Vrobel had a respiratory impairment arising

out of coal mine employment, app. at 109, 153, the issue to

decide, in accordance with Carozza v. United States Steel Corp.,

727 F.2d 74, 78 (3d Cir. 1984), was whether this respiratory

impairment was a contributing cause of the miner's total

disability or whether it aggravated his total disability.6    App.

at 37.   As we explained in Kline v. Director, OWCP, 877 F.2d

1175, 1179 (3d Cir. 1989), for rebuttal under (b)(3) "it is

necessary to 'rule out' a possible causal connection between a

miner's disability and his coal mine employment."

           The Board then stated that the ALJ properly had

considered (b)(3) rebuttal in his initial Decision and Order on

Remand, in which he awarded benefits.   The Board indicated that

in the ALJ's decision on reconsideration he had applied the wrong

test when he held that (b)(3) rebuttal was established since

Vrobel did not have a totally disabling pulmonary or respiratory

impairment.   Furthermore, the Board noted that the ALJ credited

the medical opinions that Vrobel had a pulmonary impairment

arising out of his coal mine employment, thereby justifying a

determination that BethEnergy failed to show that there was "no

6
 .    As we discussed earlier, Bernardo requires an inquiry into
the source of the miner's total disability. See note 5, supra.
Carozza, in combination with Bernardo, requires that a party
opposing entitlement must demonstrate that pneumoconiosis is not
a contributing or aggravating cause of the disability.
significant relationship" between disability and coal mine

employment.   Id. at 37.   The Board also concluded that because

BethEnergy failed to meet the "no significant relationship" test,

which it regarded as less stringent and more easily met than the

Carozza no "contribution standard," the ALJ's initial finding

precluded rebuttal under Carozza.    Therefore, the Board reversed

the ALJ's finding of (b)(3) rebuttal and awarded benefits.

          On January 25, 1993, BethEnergy requested that the

Board reconsider its award of benefits to Vrobel.     It premised

this request on two arguments: (1) due process and fundamental

fairness require that BethEnergy be given an opportunity to

develop new evidence to address the standard for establishing

(b)(2) and (b)(3) rebuttal, which allegedly changed during the

litigation of Vrobel's claim; and (2) the Supreme Court's

decision in Mullins Coal Co. v. Director, OWCP, 484 U.S. 135, 108

S.Ct. 427 (1987), concerning the invocation of the interim

presumption of total disability under C.F.R. § 727.203(a)(1)

warranted reconsideration by the ALJ.     App. at 31-32.   The Board

denied BethEnergy's motion on April 6, 1994.     App. at 25.

          On this petition, BethEnergy challenges the Board's

denial of its motion for reconsideration.     In particular,

BethEnergy asserts that it never has been granted an opportunity

to have the medical evidence which it has developed interpreted

to satisfy the proper burdens for establishing rebuttal under

(b)(2) and (b)(3).


                           II.   DISCUSSION
                    A.    The Standard of Review

          We review the decisions of the Board for errors of law

and to assure that it has adhered to its own standard of review.

Director, OWCP v. Barnes and Tucker Co., 969 F.2d 1524, 1526-27

(3d Cir. 1992).   Thus, our inquiry is limited to a determination

of whether the Board acted in conformity with applicable law and

within its proper scope of review.    Kertesz v. Crescent Hills

Coal Co., 788 F.2d at 162-63.    Our review of the Board's legal

determinations is plenary.    Barnes and Tucker Co., 969 F.2d at

1526-27; Carozza v. United States Steel Corp., 727 F.2d at 77.

Of course, the Board must accept an ALJ's findings of fact if

they are supported by substantial evidence in the record

considered as a whole.    33 U.S.C. § 921(b)(3); Oravitz v.

Director, OWCP, 843 F.2d 738, 739 (3d Cir. 1988).

                     B.    BethEnergy's Claims

          BethEnergy argues that it is entitled to a new hearing

to respond to a change in the law that invalidated its rebuttal

proof.   It bases this assertion on two arguments.   First, it

claims that the Board violated its statutory authority by

engaging in de novo fact finding.    Second, it asserts that its

due process rights were violated when the Board refused to reopen

the record to afford it an opportunity to develop evidence to

address new standards of proof regarding rebuttal under (b)(2)

and (b)(3).   Both arguments lack merit.

                     1.   De Novo Fact Finding

          BethEnergy asserts that the Board overstepped its

statutory authority by making factual findings regarding (b)(2)
and (b)(3) rebuttal.     In particular, it claims that because the

ALJ found that Vrobel retained the pulmonary capacity to perform

his usual coal mine work or comparable and gainful work, it had

established (b)(2) rebuttal.    Brief at 12.   It then asserts that

the Board engaged in fact finding in rejecting (b)(2) rebuttal.

We reject this argument as it has no factual or legal support in

the record.

            As the Director points out, the ALJ found that

BethEnergy established (b)(2) rebuttal only in his initial

Decision and Order.     However, as the Director also notes, he

reached this conclusion by applying the wrong rebuttal standard.

After the Board remanded the case with instructions to apply the

proper (b)(2) rebuttal standard in accordance with Kertesz, the

ALJ specifically found that (b)(2) rebuttal was not established.

App. at 58, 108.    Furthermore, the Board never upset the finding

by the ALJ concerning BethEnergy's lack of proof to establish

(b)(2) rebuttal under the proper standard.

            BethEnergy also claims that the Board engaged in de

novo fact finding when it reversed the ALJ's finding that

BethEnergy established (b)(3) rebuttal.    The argument is that

once the Board determined that the ALJ applied the wrong standard

on reconsideration the Board should have remanded the case to the

ALJ with instructions to review the evidence under the correct

standard.     BethEnergy claims that the Board instead weighed the

evidence de novo, and concluded that BethEnergy did not establish
rebuttal under the post-Kertesz standards.     In BethEnergy's view,
these actions were beyond the Board's statutory powers, and, as

such, warrant a remand of the case.

           The Director argues that the Board did not engage in de

novo fact finding, but only reinstated the ALJ's initial findings

made on remand.   In particular, the Director claims that (b)(3)

rebuttal was precluded because BethEnergy failed to establish

that there was no significant relationship between the total

disability and Vrobel's coal mine employment.    App. at 109.

           In view of the parties' contentions we consider whether

the Board engaged in de novo fact finding when it reversed the

ALJ's decision regarding (b)(3) rebuttal.    The Board's power to

hear disputes concerning claims under the Black Lung Benefits Act

is derived from 33 U.S.C. § 921(b)(3), which provides:

           The Board shall be authorized to hear and

           determine appeals raising a substantial

           question of law or fact taken by any party in

           interest from decisions with respect to

           claims of employees under this chapter and

           the extensions thereof.    (Emphasis supplied.)

The statutory language has been interpreted to prohibit the Board

from making a de novo factual review, Oravitz v. Director, OWCP,
738 F.2d at 739, instead requiring it to accept an ALJ's findings

unless they are contrary to law, irrational, or unsupported by

substantial evidence in the record.    King v. Director, OWCP, 904

F.2d 17, 18 (9th Cir. 1990); Rochester & Pittsburgh Coal Co. v.
Krecota, 868 F.2d 600, 603 (3d Cir. 1989).    See also 20 C.F.R §

802.301.
            The proper (b)(3) rebuttal standard requires that the

party opposing entitlement demonstrate that the miner's

respiratory impairment was not a contributing cause of his total

disability or did not aggravate his total disability.    Carozza,

727 F.2d at 78.    The Board determined that BethEnergy did not

meet this standard.

            In reversing the ALJ, the Board acted within the scope

of its delegated powers to make legal determinations because the

decision of the ALJ on reconsideration on remand that BethEnergy

established (b)(3) rebuttal as Vrobel did not have a totally

disabling pulmonary or respiratory impairment was clearly

contrary to law.     BethEnergy argues that the case should have

been remanded to the ALJ for a proper application of the Carozza

standard.    While the Board could have remanded the matter, we

hardly can fault it for bringing these protracted proceedings to

a close.    Indeed, we followed a similar course in Sulyma v.

Director, OWCP, 827 F.2d 922, 924 (3d Cir. 1987).     In that case

the Director conceded on appeal in this court that the claimant

was entitled to the interim presumption of total disability

denied in the administrative proceedings.    However, the Director

sought a remand of the case for consideration of whether the

presumption had been rebutted.    But we would not remand the case.

Rather, "in consideration of the age of" the case, we relied on

our own view of the record and concluded that the presumption had

not been rebutted.    Here, the Board took even less intrusive

action as, rather than drawing factual conclusions, it accepted
and applied the ALJ's previous factual finding, made under the

correct legal standard.

            When the Board reversed the ALJ's determination that

(b)(3) rebuttal had been established, it recognized that

BethEnergy could not satisfy the Carozza requirement for (b)(3)

rebuttal.    It based this conclusion on the reasoning that because

the ALJ determined that BethEnergy could not establish that there

was "no significant relationship" between Vrobel's total

disability and his coal mine employment, BethEnergy could not

establish that the miner's pneumoconiosis was not a "contributing

cause" of disability.    App. at 37.   We regard the Board's

conclusion as logically unassailable.     Indeed, the Board believed

that it is easier to establish that there is no significant

relationship between the total disability and the employment than

it is to establish that pneumoconisis is not a contributing cause

to the disability.

            We acknowledge that evaluation of medical evidence is

entrusted to the ALJ.     As we noted in Caprini v. Director, OWCP,

824 F.2d 283, 285 (3d Cir. 1987):
          [t]he ALJ should first have the opportunity
          to consider the evidence, make his ruling,
          and state his reasons. The Board may then
          consider the matter if the aggrieved party
          wishes to appeal.


But the proceeding in this case fully comported with Caprini as

the ALJ made the critical factual determinations on the basis of

the record.    Thus, a remand was not necessary as ". . . the

record [was] so clear that under the correct standard the result
[was] foreordained."      Id.   See also Drummond Coal Co. v. Freeman,

17 F.3d 361 (11th Cir. 1994) (court of appeals may reinstate

findings of ALJ overturned by Board); Sykes v. Director, OWCP,

812 F.2d 890 (4th Cir. 1987) (same).       In order to justify a

remand the Board would had to have concluded that the ALJ might

deviate from his prior finding.       The Board had no reason to reach

such a conclusion.

                     2.   The Due Process Argument

           BethEnergy asserts that due process of law requires

that it be afforded an opportunity to develop evidence to address

new standards of proof regarding rebuttal under (b)(2) and

(b)(3).   In this regard BethEnergy claims that our opinion in

Kertesz on April 14, 1986, effectively changed the legal standard

for establishing rebuttal under (b)(2) but that BethEnergy

developed its medical evidence in 1983.

          We see no need for an extended discussion on this point

as BethEnergy clearly had an opportunity to develop evidence

under the Kertesz standard for we decided that case on April 14,

1986, and the initial hearing before the ALJ in this matter was

on December 18, 1986.      Furthermore, BethEnergy could have sought

even more time under 20 C.F.R. § 725.454 to prepare its case but

it did not do so.    In these circumstances BethEnergy's due

process argument is insubstantial.

           In reaching this conclusion we have not overlooked Marx
v. Director, OWCP, 870 F.2d 114 (3d Cir. 1989), on which

BethEnergy relies.     But Marx is not helpful to BethEnergy.      That

case involved a situation in which a party presented her case in
conformity with practice existing at the time of the hearing.

However, following the hearing there was a change in the

applicable law.   In those circumstances we held that the claimant

was entitled to a remand to "have the opportunity to introduce

evidence which satisfies [the new] standard."   Thus, Marx does

not support an argument that a litigant should be entitled to a

remand to meet standards established before a hearing.


                         III.   CONCLUSION

          For the aforementioned reasons, the petition for review

is denied.
