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Byrge v. Premium Coal Co., Inc.

United States District Court, E.D. Tennessee, Knoxville

March 31, 2017

PHILLIS S. BYRGE, on behalf of the Estate of REDDIN BYRGE, Plaintiff,
v.
PREMIUM COAL CO. INC. et al., Defendants.

          MEMORANDUM OPINION

          C. Clifford Shirley, Jr. United States Magistrate Judge.

         This case is before the undersigned pursuant to 28 U.S.C. § 636(c), Rule 73(b) of the Federal Rules of Civil Procedure, and the consent of the parties, for all further proceedings, including entry of judgment [Doc. 16].

         Now before the Court is the Plaintiff's Motion for Summary Judgment [Doc. 17]. The Defendants filed a Response [Doc. 19], and the Plaintiff filed a Reply [Doc. 22]. The parties have also filed a number of supplemental notices [Docs. 27, 29, 30], which the Court has considered. The parties appeared before the Court on March 2, 2017, for a motion hearing. Attorney Evan Smith appeared on behalf of the Plaintiff. Attorneys Mark Solomons, Laura M. Klaus, and Richard Solomons appeared on behalf of the Defendants. Accordingly, and for the reasons more fully explained below, the Court hereby GRANTS the Plaintiff's Motion for Summary Judgment [Doc. 17].

         I. BACKGROUND

         As an initial matter, the Court notes that the Plaintiff's Motion contains a section of material facts. [Doc. 17 at 2]. The Defendants did not specifically respond to the Plaintiff's statement of material facts, but it appears to the Court that there is no dispute regarding the administrative procedural history of this case. Thus, the following facts are taken from the Plaintiff's statement of material facts, unless otherwise noted.

         The Plaintiff, filing on behalf of the estate, is the widow of Reddin Byrge, who worked for Defendant Premium Coal Company, Inc., (“Premium Coal”) in Campbell and Anderson Counties in Tennessee. In June 2010, Mr. Byrge filed a claim for benefits pursuant to the Black Lung Benefits Act with the United States Department of Labor. The Director of the Office of Workers' Compensation Program administers the program. On April 15, 2011, the district director's office found that Mr. Byrge was entitled to black lung benefits. The Defendants sought a formal hearing before an administrative law judge (“ALJ”).

         The Defendants did not begin payment of Mr. Byrge's monthly benefits while the appeal was pending with the ALJ. As a result, the Department of Labor's Black Lung Disability Trust Fund (“Trust Fund”) made interim payments to Mr. Byrge. On January 16, 2013, following a formal hearing, the ALJ awarded benefits to Mr. Byrge dating back to June 2010. The ALJ's Order was received by the district director on February 14, 2013. [Doc. 17-1].

         In a letter dated March 4, 2013, to Defendant Premium Coal, the Office of Workers' Compensation stated, in relevant part, as follows:

In accordance with the Decision and Order - Awarding Benefits issued by Daniel F. Solomon dated January 16, 2013[, ] Premium Coal Company, Inc. shall provide monthly benefits to the claimant beginning February 2013 (check to be issued March 15, 2013) at the rate of $938.30. The operator shall reimburse the Black Lung Disability Trust Fund the sum of $21, 580.90 for interim benefits paid to the claimant from April 2011 through February 2013.
. . .
Premium Coal Company, Inc. shall also pay the claimant retroactive benefits from June 2010 through March 2011, in the amount of $9, 383.00.
. . .
Please be advised that by failing to initiate benefits and reimburse the Black Lung Disability Trust Fund within 10 days of the date payment is due, the employer may be subject to a penalty of up to 20% of the amount due. (In a footnote, the letter continues: See 20 CFR 725.607 and Section 14(f) of the Longshoremen's and Harbor Workers' Compensation Act as incorporated by Section 422(a) of the Black Lung Benefits Act. Such benefits are due within the 30 day period following the date of the decision in this case). Further, failure to pay benefits as ordered may result in enforcement of the final award in Federal District Court (20 CFR 725.604). An appeal does not stay this penalty unless an Order staying payments has been issued by the Board or Court.

[Doc. 17-2]. On February 11, 2013, the Defendants appealed the ALJ's award to the Department of Labor's Benefits Review Board. During this appeal, the Defendants did not pay Mr. Bryge's benefits and did not receive or request a stay.[1] The Trust Fund continued to make interim payments to Mr. Byrge.

         On February 24, 2014, the Benefits Review Board affirmed the ALJ's award of benefits. The Defendants sought reconsideration, but the Board denied on May 28, 2014. Later, on July 23, 2014, the Defendants petitioned the United States Sixth Circuit Court of Appeals. On February 23, 2015, while the claim was still pending, Mr. Byrge passed away. Subsequently, on July 22, 2015, the Sixth Circuit affirmed Mr. Byrge's award of benefits. The Sixth Circuit issued its mandate on September 11, 2015.

         The Office of Workers' Compensation sent Defendant Premium Coal a letter dated October 28, 2015, stating that “in accordance with the Decision and Order - Awarding Benefits issued by the Court of Appeals dated July 22, 2015, the operator shall also reimburse the Black Lung Disability Trust Fund the sum of $52, 676.50 for interim benefits paid to the claimant from June 2010 through January 2015.” [Doc. 17-3]. The letter continues:

Please be advised that by failing to initial benefits and reimburse the Black Lung Disability Trust Fund within 10 days of the date payment is due, the employer may be subject to a penalty of up to 20% of the amount due. (In a footnote, the letter continues: See 20 CFR 725.607 and Section 14(f) of the Longshoremen's and Harbor Workers' Compensation Act as incorporated by Section 422(a) of the Black Lung Benefits Act. Such benefits are due within the 30 day period following the date of the decision in this case). Further, failure to pay benefits as ordered may result in enforcement of the final award in Federal District Court (20 CFR 725.604). An appeal does not stay this penalty unless an Order staying payments has been issued by the Board or Court.

         The Defendants state that they repaid $52, 676.50 within the ten days of their receipt of the October 28, 2015 letter.

         On March 21, 2016, the Plaintiff initiated [Doc.1] the instant action. The Plaintiff alleges that the Defendants refused to pay Mr. Byrge's benefits while the appeal was pending even though the Defendants did not receive a stay of the ALJ's Order pending appeal. The Plaintiff states that the Trust Fund stepped in and made interim payments to Mr. Byrge. The Plaintiff alleges that from February 2013 until February 2015, the Defendants did not pay Mr. Byrge his benefits within 10 days of being due. The Plaintiff requests 20% additional compensation on the unpaid benefits, which results in $10, 535.30 (20% of $52, 675.50). Further, the Plaintiff argues that the Defendants owe interest on the $10, 535.30.

         The Plaintiff has now moved for summary judgment.

         II. POSITIONS OF THE PARTIES

         The Plaintiff argues that the Defendants failed to pay Mr. Byrge his benefits within ten days of being due from February 2013, when the ALJ's Order became effective, until February 2015, when Mr. Byrge passed away. The Plaintiff asserts that the ALJ's Order became effective when it was filed with the District Director on February 14, 2013. The Plaintiff submits that despite the Defendants' appeals, an order can become “effective” before it becomes “final.” Because the Defendants missed twenty-five payments from February 2013 to February 2015 and the lump sum payment for back benefits that was due on April 3, 2013, the Plaintiff submits that they are responsible for an additional 20% compensation on the missed payments. In support of its argument, the Plaintiff cites to 33 U.S.C. § 914(f) and 20 C.F.R. §§ 725.607(a) and 725.530(a). The Plaintiff contends that although the Trust Fund made interim payments while the case was on appeal, this does not affect the Defendants' legal responsibility to pay the 20% additional compensation. The Plaintiff asserts that she is entitled to 20% of $52, 676.50 or $10, 535.30. In addition, the Plaintiff contends that pursuant to 20 C.F.R. § 725.608(a)(3), the Defendants owe interest on the additional compensation, which began to accrue on March 25, 2013. In addition, the Plaintiff asserts, “A lump-sum reimbursement was due on April 3, 2013. . . . Interest on that payment began to accrue on April 13, 2013.” [Doc. 17 at 16].

         Finally, the Plaintiff argues that its claims are both ripe and timely. The Plaintiff asserts that she is under no obligation to exhaust any administrative remedy and that § 921(d) of the Longshore Act provides a freestanding right of action for claimants to enforce a final award of benefits, including the 20% additional compensation. In addition, the Plaintiff asserts that she does not need to seek a supplementary order from the district director prior to bringing suit under § 921(d). The Plaintiff asserts that the claim is not barred by any statute of limitations.

         The Defendants assert that Plaintiff requests the Court to impose a Longshore penalty provision on the adjudication of a black lung claim, which as applied here, punishes the Defendants for litigating this claim. The Defendants assert that 33 U.S.C. § 914(f) has no proper place when applied in the adjudication of a black lung claim and that it is punitive for no reason. The Defendants assert that the Plaintiff's request is time-barred or that no penalty is due. The Defendants explain that a plaintiff may seek to enforce an award through the district court by two avenues: 33 U.S.C. § 918 or § 921. The Defendants argue that § 918 has a one-year window, which would bar the instant suit. The Defendants asserts that under § 921, the compensation order was not final until September 11, 2015, when the Sixth Circuit issued its mandate. Thus, the Defendants assert that the Plaintiff does not seek to enforce a final order.

         Further, the Defendants argue that the Department of Labor's departure from 33 U.S.C. § 914(f) is unlawful. The Defendants explain that 20 C.F.R. § 725.607 is an unauthorized departure from the Longshore Act and the Black Lung Benefits Act. The Defendants argue that the provision is arbitrary and capricious. The Defendants reason that Congress created the Trust Fund to pay benefits when a specific employer declined to do so in order to exercise an employer's right to contest a claim. The Defendants argue that imposing a penalty on them for exercising the right to litigate and to decline to immediately pay benefits on a disputed claim is unconstitutional. Finally, in a footnote, the Defendants assert that the Plaintiff “arguably lacks standing.”

         The Plaintiff filed a Reply [Doc. 22] starting that the Defendants do not contest that there is a genuine dispute as to any material fact and that 33 U.S.C. § 914(f) is one of the incorporated provisions from the Longshore Act. Further, the Plaintiff asserts that the Defendants' argument with respect to standing is incorrect. The Plaintiff argues that she is seeking its statutory compensation traceable to Defendants' failure to pay Mr. Byrge in a timely fashion. Moreover, the Plaintiff argues that the Defendants failed to challenge the statute, 33 U.S.C. § 914(f), but instead argue that the regulation, 20 C.F.R. § 725.607, is unconstitutional. The Plaintiff asserts that the Defendants did not request a stay and that the 20% additional compensation provision only comes into play if the employer loses a claim. The Plaintiff asserts that it is not a penalty but an acknowledgement that the beneficiary deserves interim benefits and that the employers should avoid shifting the risk to the Trust Fund. Further, the Plaintiff argues that the 20% additional compensation is no different than many other litigation costs. With respect to the Defendants' due process concerns, the Plaintiff submits that their arguments are factually and legally wrong. The Plaintiff asserts that the claim is not time-barred and that the Plaintiff is entitled to interest under 20 C.F.R. § 725.608.

         The Defendants filed a Notice of Supplemental Authorities [Doc. 24]. In the Notice, the Defendants submit that the United States Supreme Court granted certiorari in a case involving the rule of lenity or its companion canon of strict construction of penal statutes. Further, the Defendants assert that since they first raised the issue of standing, the Sixth Circuit issued an unpublished opinion, adopting an expansive view of the standing in the aftermath of Spokeo Inc., v. Robins, 136 S.Ct. 1540 (2016). After the hearing, both parties filed supplemental notices [Docs. 27, 29, 30].

         III. ...


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