Last week, the U.S. Court of Appeals for the Eleventh Circuit issued an unpublished, per curiam opinion (decision here) concerning “responsible operator” designation. On September 30, 2014, the court (made up of a panel of Chief Judge Carnes, and Circuit Judges Tjoflat and Jordan) held that the Department of Labor performed an adequate investigation and properly named Fleetwood Trucking Company as the entity responsible for paying benefits—that is, the “responsible operator.” The main takeaway from the case is to confirm that a potential responsible operator must contest its liability within 30 days of receiving the Schedule.
James Gary Warren drove coal trucks for a variety of employers. One of these was Fleetwood Trucking Company. After working for Fleetwood Trucking, Warren was self-employed as a truck driver for approximately six years.
Warren filed a claim for black lung benefits in October 2009. The Department of Labor’s claims examiner collected Warren’s employment history from him and performed an investigation as required under 20 C.F.R. § 725.407(a).
In January 12, 2010, the claims examiner sent a letter and notice of claim to Fleetwood Trucking informing it that might be the responsible operator. Fleetwood Trucking did not respond. In August 31, 2010, the claims examiner issued a “Schedule for Submission of Additional Evidence” naming Fleetwood Trucking as the responsible operator and giving it until September 30, 2010 to accept or reject the designation. Approximately three weeks after the deadline, Fleetwood Trucking responded via telephone, contesting its designation. A written statement followed a few weeks later, arguing that Warren only hauled “some coal” and that he was not exposed to coal-mine dust. On November 30, 2010, the claims examiner issued her “Proposed Decision & Order,” naming Fleetwood Trucking as the responsible operator and determining that the untimely evidence could not be considered.
Because the claims examiner concluded that Warren was not entitled to benefits, Warren sought a formal hearing before an administrative law judge. Judge Romano (decision here) concluded that Warren was entitled to benefits and that Fleetwood Trucking waived its right to contest its designation as the responsible operator—but that even if he considered the evidence, it would not change the outcome. The Benefits Review Board (decision here) affirmed the ALJ’s decision.
Before the Eleventh Circuit, Fleetwood Trucking argued that the Department of Labor’s designation of it as the responsible operator was in violation of due process because the Department of Labor did not perform an adequate investigation, which it argued is required under the regulations.
The Eleventh Circuit affirmed the award of benefits. The court first noted that the regulations do not specify what specific steps a claims examiner must take as a part of his or her investigation. The court concluded though that the claims examiner’s investigation was “thorough.” The court explained:
She interviewed Warren on several occasions to determine the nature of his work while he was self-employed and while he was working for Fleetwood. She asked Warren whether he had a supervisor while he was working as an independent contractor. The examiner also corroborated Warren’s employment history by reviewing his social security earnings record. That record confirmed that Fleetwood had been Warren’s last employer before he became self-employed. Finally, the claims examiner also sought information directly from Fleetwood to determine whether it was the responsible operator. Fleetwood never responded to that request for information. In light of all the evidence, the DOL did not fail to comply with its own regulations and it sufficiently investigated whether Fleetwood was the liable operator for Warren’s claims.
(internal citation omitted).
Because the claims examiner’s process was basically the Department of Labor’s standard process (perhaps apart from the additional steps of the claims examiner’s multiple interviews with Warren), this decision means that the DOL complies with due process in designating a potential responsible operator and that an operator who fails to respond by the deadline waives its right to contest its designation. This conclusion is consistent with the regulations which say “If the responsible operator designated by the district director does not file a timely response, it shall be deemed to have accepted the district director’s designation with respect to its liability, and to have waived its right to contest its liability in any further proceeding conducted with respect to the claim.” 20 C.F.R. § 725.412(a)(2).
Congratulations to Abigail Van Alstyne for her success on behalf of Mr. Warren and the Department of Labor’s Solicitor’s Office (Helen Cox, Rae Ellen James, & Gary Stearman) for their success on behalf of the DOL.