Wake Forest Law Review

By: Kristina Wilson

On Friday, November 18, 2016, the Fourth Circuit issued a published opinion in the civil case RB&F Coal, Inc. v. Mullins. The Fourth Circuit affirmed the U.S. Department of Labor’s Benefits Review Board’s finding that a coal miner, Turl Mullins, and his wife, Deloris Mullins, were entitled to employment and survivors’ benefits under 30 USC § 901 et seq (Black Lung Benefits Act). While the parties agreed that the Mullinses should be compensated, on appeal, the parties disputed whether RB&F Coal, Inc. should be responsible for paying the benefits.

The Statutory Scheme

The Fourth Circuit’s analysis was governed by the Black Lung Benefits Act (“BLBA”) and Virginia’s Guaranty Act. Under the BLBA, a mine operator that employs a miner who becomes disabled by pneumoconiosis is responsible for compensating the miner. 30 USC §§ 901(a), 922(a), 932(b), 932(c). Where multiple coal companies employ a miner, the most recent company to employ the miner is liable for the payments, as long as the company qualifies as a “potentially liable operator.” 20 C.F.R. § 725.495(a)(1). To be a “potentially liable operator,” the coal company and/or its insurer must be financially capable of assuming liability. Id. § 725.494(e).

Virginia’s legislature established the Virginia Property and Casualty Insurance Guaranty Association (VPCIGA), a state chartered non-profit association that provides payment of “covered claims” resulting from insolvent insurers. Va. Code Ann. § 38.2-1603. Virginia state laws require all insurance companies conducting business in Virginia to join the VPCIGA. Id. §§ 38.2-1604. The VPCIGA is only responsible for the claims of an insolvent insurer that are “covered claims,” as defined in the Guaranty Act. Id. § 38.2-1606(A)(1). “Covered claims” include “. . . any claim filed with the VPCIGA after the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer.” Id. § 38.2-1606(A)(1)(b).

Facts and Procedural History

Between 1985 and 1988, Turl Mullins worked for several different coal companies, including RB&F Coal, Inc. (“RB&F”) and Wilder Coal (“Wilder”). Mullins developed pneumoconiosis in 2009 and filed a Black Lung Benefits Act (“BLBA”) claim in that same year. At the time of filing, Mullins’s most recent employer, Wilder, was out of business and its insurer declared insolvent. Therefore, the Department of Labor district director imposed liability on RB&F for payments to the Mullinses. RB&F challenged the finding and transferred the case to an Administrative Law Judge.

The Administrative Law Judge affirmed the Department of Labor’s finding because RB&F failed to prove that Wilder Coal was capable of financially assuming the liability. RB&F appealed the Administrative Law Judge’s finding with the Department of Labor’s Benefits Review Board, but the Benefits Review Board affirmed. This appeal followed.

Wilder Is Not a “Responsible Operator” under the BLBA

On appeal, RB&F first argued that Wilder qualified as a “responsible operator” because Wilder’s claims are still “otherwise guaranteed,” under Virginia’s Guaranty Act. However, Virginia’s Guaranty Act excluded claims filed after the final date set by a court for claims against an insolvent insurer. Va. Code Ann. § 38.2-1606(A)(1)(b). The final date set by a court for claims against Wilder’s insurer was August 26, 1992. Mullins did not file his claim until 2009. Therefore, Mullins’ claim was not “otherwise guaranteed.”

The BLBA Does Not Preempt the Guaranty Act

RB&F next argued that the BLBA preempted the Guaranty Act’s limitation of liability for black lung claims. In so arguing, RB&F assumed that the VPCIGA was an insurer under the BLBA. The Department of Labor regulations implementing the BLBA provide that an insurer is any fund, including a State fund, that is authorized under a state’s workers’ compensation laws to insure employers’ liability. 20 C.F.R. § 725.101(a)(18). However, Virginia’s workers’ compensation laws prevented the VPCIGA from covering Wilder’s insurer’s claims past a certain date. In fact, the Guaranty Act precluded the VPCIGA from providing full coverage of all the claims of an insolvent insurer. Thus, the VPCIGA is not an insurer under the BLBA, and as such, the BLBA does not preempt the Guaranty Act.

Disposition

Therefore, because RB&F established neither that Wilder was a “responsible operator” nor that the BLBA preempted the Guaranty Act, the Fourth Circuit affirmed the Benefits Review Board’s imposition of liability on RB&F.

 

 

 

By Evelyn Norton

Today, in Demetres v. East Construction, Inc., the Fourth Circuit affirmed a decision by the U.S. District Court for the Eastern District of Virginia dismissing a personal injury suit for lack of subject matter jurisdiction.

The Incident

Ashland Construction Co., a North Carolina corporation, hired East West, a Virginia corporation, as subcontractor to prepare a construction site in Virginia Beach.  James Demetres (“Mr. Demetres”), an employee of Ashland Construction Co., was designated as superintendent of the site.  On March 28, 2011, Mr. Demetres sustain significant injuries at the jobsite when a bulldozer operated by an East West employee backed over him.  Following the incident, Mr. Demetres received workers’ compensation benefits through his employment with Ashland Construction Co.

The District Court Dismissed the Personal Injury Suit

On March 27, 2013, Mr. Demetres filed a complaint against East West in the Eastern District of Virginia.  Mr. Demetres alleged negligence and sought $100,000,000 in damages.  East West filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing that the exclusivity provision of the Virginia Workers’ Compensation Act (“VWCA”) barred Mr. Demetres personal injury suit.  The Eastern District of Virginia granted the motion.  Mr. Demetres timely filed an appeal.

The Fourth Circuit Found that the District Court Properly Applied Virginia Law Barring Suit.

The Fourth Circuit reviewed the dismissal for lack of subject matter jurisdiction de novo.

On appeal, Mr. Demetres argued that the district court should have applied North Carolina law in determining whether his suit was barred.  Mr. Demetres reasoned that Supreme Court of Virginia precedent allows the law of the state that paid benefits to apply, even if the injury occurred in Virginia.

However, the Fourth Circuit observed that, as a diversity action, the district court was required to apply the law of the jurisdiction in which it sits–Virginia law.  In Virginia, the applicable substantive law is the law of the jurisdiction in which the injury occurred.  Thus, because Mr. Demetres’ injuries occurred in Virginia Beach, Virginia substantive law must govern.

Furthermore, the Supreme Court of Virginia has interpreted the VWCA to bar suits where injured employees of a general contractor try to sue a subcontractor engaging in the general contractor’s business.  Applying this precedent, the Fourth Circuit found that East West was engaged in the same business as Ashland Construction Co.  Therefore Mr. Demetres, as employee of the general contractor Ashland Construction Co., could not sue the subcontractor East West under the VWCA.   Thus, the VWCA barred the suit.

Holding

The Fourth Circuit held that Virginia is not required to relax its more restrictive workers’ compensation bar to hear Mr. Demetres claim.  Thus, the Fourth Circuit affirmed the district court’s decision to dismiss.

By: Michael Klotz

In Sledge v. Graphic Packaging International Inc., the Fourth Court affirmed the lower court decision awarding summary judgment to the Defendant, a custom packing products manufacturer, on both claims in a wrongful termination lawsuit. Ms. Sledge, a former employee, alleged that the Defendant violated the North Carolina Retaliatory Discrimination Act (“NCRDA”) and the North Carolina Persons with Disabilities Protection Act (“NCPDPA”).

Facts

On March 31, 2012, Ms. Sledge was working as a Sheeter Operator for the Defendant. On this evening, Ms. Sledge was assisting with a project that required running paper thicker than normal through the sheeter. In order to reduce the curl of the paper, which was fed from rolls, Ms. Sledge fed the paper using a different method than she had used before. Attempting to test the tension of the paper being run through the machine, Ms. Sledge touched the paper and her hand was pulled into the sheeter. Ms. Sledge’s hand was badly bruised and swelling, and she received treatment at a hospital. She indicated to her employer that she intended to file a worker’s compensation claim to recover compensation for her injury.

Ms. Sledge was subsequently terminated for violating company policy. A policy document issued by Defendant states that an employee may be immediately terminated for violating a “Safety Absolute” of the company, which is a serious and unsafe act. In this case, putting one’s hand into the sheeter was determined to be a serious and unsafe act. Ms. Sledge subsequently filed this lawsuit.

Reasoning of the District Court

The district court granted summary judgment to the Defendant on both claims. Summary judgment was granted on the NCRDA claim, because the Defendant presented sufficient evidence that she would have been terminated even if she had not filed a worker’s compensation claim. The company cited the fact that all previous employees who had violated a “Safety Absolute” had been terminated, and employees who had been injured without violating company policy had received worker’s compensation and not been terminated. On Ms. Sledge’s second claim, the court concluded that she was not protected under the NCPDPA. The statute protects those persons with a “physical or mental impairment which substantially limits one or more major life activities.” Ms. Sledge alleged in her complaint that she was protected under the statute because the Defendant regarded her as having a mental impairment. However, she presented no evidence to support this assertion, and the only medical evidence she offered were hospital X-rays. As a result, the court granted summary judgment to the Defendant.