United States District Court, District of Columbia
D. BATES, United States District Judge
Office of Workers' Compensation Programs within the
Department of Labor is charged with determining the
“Responsible Operator” liable for a worker's
black lung benefits claim. The process has several steps, the
first of which is the District Director's initial
determination of the Responsible Operator. The Department
issued a guidance document- Bulletin No. 16-01-instructing
District Directors to make an initial determination that Arch
Coal, Inc. (the plaintiff), is the Responsible Operator for
certain miners who previously were employees of three
subsidiaries that were once owned by Arch Coal but later were
sold to a now-bankrupt company, Patriot Coal.
Coal argues that this Bulletin is unlawful because it
contradicts the Black Lung Benefits Act's liability
rules, 30 U.S.C. § 932(i), because it is a rule that the
Department did not promulgate in accordance with the
Administrative Procedure Act, 5 U.S.C. § 553(b), because
it violates the APA's prohibition on retroactive
rulemaking, and because the Department has acted arbitrarily
and capriciously by not following its own self-insurance
regulations. The Department, on the other hand, maintains
that this Court has no jurisdiction because Congress has
created an exclusive administrative adjudication process that
can only be appealed to the circuit court. Alternately, it
argues that Arch Coal has failed to state a claim because
there is not yet a final agency action. The Court will
grant the Department's motion to dismiss for lack of
jurisdiction and will not reach the Department's failure
to state a claim argument.
Statutory and Regulatory Background
Black Lung Benefits Act, 30 U.S.C. § 901 et
seq., “provid[es] benefits to coal miners who are
totally disabled by pneumoconiosis, also known as black lung
disease, and to the surviving dependents of miners who died
of the disease.” Nat'l Mining Ass'n v.
Dep't of Labor, 292 F.3d 849, 854 (D.C. Cir. 2002)
(per curiam). Black lung disease is a “severe, and
frequently crippling, chronic respiratory impairment . . .
caused by long-term inhalation of coal dust.” Usery
v. Turner Elkhorn Mining Co., 428 U.S. 1, 6 (1976).
a miner's most recent employer is responsible for paying
claims to miners who become disabled or died due to
employment in that operator's mine. See 20
C.F.R. § 725.494. The miner must have been employed by
that operator for at least one year, and the operator must be
capable of paying the claim. See id. §§
725.494(c), (e), 725.495. The Department imposes various
obligations on mine operators to ensure that they are able to
pay these claims. An operator may choose to qualify as a
self-insurer or it may purchase commercial insurance.
See 30 U.S.C. §§ 932(b), 933(a). For a
mine to self-insure, it must obtain Departmental approval and
meet the Department's requirements-including posting a
surety bond or other security-to guarantee that the mine
operator can pay future liability. See id.; 20
C.F.R. §§ 725.606(a), 726.109, 726.115. When there
is no operator able to pay the claim, or if the Responsible
Operator fails to pay, the Black Lung Disability Trust Fund
provides payment. 26 U.S.C. § 9501(d)(1); 30 U.S.C.
§ 934(b)(1)(A)-(B); see also Regulations
Implementing the Federal Coal Mine Health & Safety Act of
1969, as Amended 65 Fed. Reg. 79, 920, 79, 924 (Dec. 20,
2000). The Trust Fund is administered by the Department, and
financed by an excise tax on coal. See 26 U.S.C.
§§ 4121, 9501.
lays out a process for adjudicating miners' claims and
determining the Responsible Operator. This adjudication
process largely adopts the procedures outlined in the
Longshore and Harbor Workers' Compensation Act, 33 U.S.C.
§§ 901-950. See 30 U.S.C. § 932(a)
(incorporating provisions of the Longshore Act into the
BLBA). To seek benefits, a worker files a claim with the
applicable District Director for the Office of Workers'
Compensation Programs. See 33 U.S.C. § 919; 20
C.F.R. § 725.401. The District Director then
investigates the claim and makes a preliminary determination
of the miner's eligibility and of the Responsible
Operator. See 20 C.F.R. §§ 725.401-23.
These determinations are explained in a “proposed
decision and order.” Id. § 725.418. The
claimant and Responsible Operator may then acquiesce to the
proposed decision, or may request a hearing before an
Administrative Law Judge. See id. § 725.419; 33
U.S.C. § 919(c), (d); see also 20 C.F.R.
§§ 725.450-83 (detailing hearing procedures before
the ALJ). If the parties request a hearing, the ALJ makes a
de novo determination of the Responsible Operator's
liability. See 20 C.F.R. § 725.455(a); Pyro
Mining Co. v. Slaton, 879 F.2d 187, 190 (6th Cir. 1989).
In that hearing, the District Director “bears the
burden of proof that the responsible operator is potentially
liable.” Ark. Coals, Inc. v. Lawson, 739 F.3d
309, 313 (6th Cir. 2014) (citing 20 C.F.R. § 725.495(b),
parties may then seek review of the ALJ's decision by a
panel of the Benefits Review Board. 33 U.S.C. § 921(b).
The panel's decision can then be appealed to the Board
en banc, or to a federal court of appeals. See
id. §§ 921(b)(5), (c); 20 C.F.R. 802.407(b).
Factual and Procedural Background
Coal is a mining corporation that was formed in 1997. Compl.
[ECF No. 1] ¶ 26. It received the Department's
authorization to self-insure against its future black lung
benefits liability. Id. ¶ 25, 28. Arch
Coal's self-insurance covered the future liability of
three wholly-owned subsidiaries: Hobet Mining, Inc., Apogee
Coal Company, and Catenary Coal Company. See id.
¶¶ 28-29. In 2005, Arch Coal sold the three
subsidiaries to Magnum Coal Company. Id. ¶ 29.
According to Arch Coal, the purchase agreement stated that
Magnum would assume all liability for the three subsidiaries.
Id. ¶ 30. In 2008, another mining company,
Patriot Coal, acquired the three subsidiaries, along with
their liability for future black lung benefits claims.
See id. ¶ 32. The Department approved Patriot
Coal's self-insurance plan. Id. ¶¶
2015, Patriot Coal declared bankruptcy (for the second time).
Id. ¶¶ 36-37. The bankruptcy court
approved the sale of the three subsidiaries to other
companies in October 2015, but that sale did not transfer
Patriot Coal's black lung benefits liability to the
purchasers. See Id. ¶¶ 38-40.
November 2015, the Department issued Bulletin No. 16-01 to
“provide guidance for district office staff in
adjudicating claims in which the miner's last coal-mine
employment of at least one year was with one of the 50
subsidiary companies that have been affected by the Patriot
Coal Corporation bankruptcy.” Bulletin No. 16-01 [ECF
No. 10-2] at 1. The 50 subsidiaries include the three at
issue here. See id. at 2-3. The Bulletin explains
that the purchasers of Patriot Coal's mining operations
are not liable for future claims, “except for those
miners who continue to work for” the purchasers.
Id. at 1. The Bulletin notes that “Patriot was
authorized to self-insure its federal black lung liabilities
as well as the liabilities of its subsidiaries” in
certain states, and also carried some commercial insurance.
Id. at 1. The Bulletin therefore outlines
“[p]rocedures for handling newly filed claims.”
Id. at 2. In relevant part, it states that, for the
three subsidiaries at issue here, staff must
“[d]etermine whether the claim is covered by Arch
Coal's self-insurance or an Arch Coal commercial
insurance policy.” Id. at 3. “If
commercial coverage can be identified, ” notice of the
claim must be sent “to the appropriate carrier.”
Id. Where “no commercial insurance can be
identified, and the miner's employment falls within a
period of Arch Coal's self-insurance, ” which
“generally requires that the miner last worked for the
subsidiary before January 1, 2006, ” notice of the
claim must be sent to Arch Coal. Id.
to the Bulletin, District Directors around the country made
preliminary determinations that Arch Coal was the Responsible
Operator for numerous claims. Compl. ¶¶ 56- 57. At
the time the complaint was filed in April 2016, this was 70
claims; at oral argument in January 2017, Arch Coal updated
this number to 175 claims. See id. ¶ 57. The
District Directors' determinations required Arch Coal to
appear in administrative proceedings to object to this
designation and defend against ...