ISSUE: Landmark Cases, Part Two

I have a second case to nominate as a “landmark” U.S. Supreme Court Longshore Act case (see the discussion of Northeast Marine Terminals Co., Inc. et al. v. Caputo, et al. from last time).

My second landmark case is Director, Office of Workers’ Compensation Programs v. Greenwich Collieries, 512 U.S. 267 (1994).  This decision actually consolidated two separate appeals from the federal Third Circuit Court of Appeals, one involving a claim for benefits under the Black Lung Benefits Act (Andrew Ondecko) (BLBA) and the other involving a claim under the Longshore Act by the widow of an employee of Maher Terminals (Pasqualina Santoro).

The Third Circuit had reversed the U.S. Department of Labor’s Benefits Review Board’s (BRB) decisions in both cases.  The BRB had affirmed decisions by Administrative Law Judges (ALJ) which awarded benefits and which had relied on the “true doubt” rule.

The true doubt rule was an evidentiary rule governing the weight of the evidence.  “True doubt” arises when there is equally balanced probative but contradictory evidence presented by both sides to a dispute.  Under the true doubt rule, if the evidence is evenly balanced then the benefits claimant wins.  In other words, when true doubt exists in the mind of the fact finder the doubt must be resolved in the claimant’s favor.

As stated by the dissenting opinion at the Supreme Court (Greenwich Collieries was decided by a 6 to 3 vote):

“For more than 50 years, in adjudicating benefit claims under the LHWCA, and for more than 15 years under the BLBA, the Department of Labor has applied the ‘true doubt’ rule, providing that when the evidence submitted by a claimant and by a party opposing the award is equal the claimant wins.  The rule thus places risk of non-persuasion on the opponent of the benefits claim.  Today, the Court strikes the (true doubt) rule down ….”

The problem was section 7(c) of the Administrative Procedures Act (5 U.S.C. 556(d)) (APA), passed by Congress in 1946 in order to impose some uniformity on the regulatory and adjudicatory activities of the expanding government agencies.

Section 7(c) states, “Except as otherwise provided by statute, the proponent of a rule or order has the burden of proof”.

Section 19(d) of the Longshore Act (33 U.S.C. 919(d)) as amended in 1972 states, “Notwithstanding any other provisions of this chapter, any hearings held under this chapter shall be conducted in accordance with (the APA)”.

The term “burden of proof” is not defined in the APA.  The Court in Greenwich  Collieries had to “ascertain the ordinary meaning of ‘burden of proof’ in 1946, the year the APA was enacted”. Once the Supreme Court resolved any ambiguity as to the definition of the phrase “burden of proof” in the APA the contradictory relationship between the APA and the true doubt rule was clear.

Note:  The Court resolved the ambiguity by construing “burden of proof” to mean burden of persuasion by a preponderance of the evidence rather than the burden of production, or merely coming forth with evidence (such as the burden of production involved in producing substantial evidence to rebut the Longshore Act’s section 20 presumptions).

The Third Circuit reversed the BRB’s award of benefits in the Longshore case holding that section 7(c) of the APA prohibits application of the true doubt rule to cases involving benefits under the Act because, 1) under the APA the claimant bears the ultimate burden of persuasion by a preponderance of the evidence, and (2) the true doubt rule allows a claimant to prevail despite failure to prove entitlement by a preponderance of the evidence.

Put succinctly by the Third Circuit, “Under the Department’s true doubt rule, when the evidence is evenly balanced the claimant wins.  Under section 7(c) of the APA, however, when the evidence is evenly balanced the benefits claimant must lose.  Accordingly, we hold that the true doubt rule violates section 7(c)”.

On appeal, the Supreme Court stated the issue as follows:  “In adjudicating benefits and claims under the LHWCA and the BLBA the Department of Labor has long applied a ‘true doubt’ rule, under which doubts on factual issues are resolved in favor of a claimant when the evidence is otherwise in equipoise.  The question in these cases is whether use of the ‘true doubt’ rule contravenes the Department’s own regulations or section 7(c) of the APA”.

The holding of the Supreme Court:

  1. Section 7(c)’s burden of proof provision applies to adjudications under the LHWCA and the BLBA, each of which contains a section incorporating the APA;
  2. The true doubt rule is not consistent with section 7(c);
  3. In 1946, the year the APA was enacted, the ordinary meaning of section 7(c)’s ‘burden of proof’ phrase was burden of persuasion (i.e., the obligation to persuade the trier of fact of the truth of a proposition) not simply burden of production (i.e., the obligation to come forward with evidence).

That was the end of the “true doubt” rule.

COMMENT:  I remember when this decision was announced.  The euphoria in some quarters of the employer/carrier/defense community was, I thought, out of proportion.  The true doubt rule, in fact, had decided a relatively very few Longshore cases, but this decision was considered to be a great win for employers.

Post script – Following remand of the Santoro case following the Supreme Court’s decision, the BRB eventually affirmed an ALJ’s decision finding that, at best, the evidence was in equipoise and such a finding was enough to defeat the widow’s claim (Santoro v. Maher Terminals, Inc., 30 BRBS 171 (1996).  When the evidence is evenly balanced, the claimant loses.

Note:  The decision in Greenwich Collieries does not affect application of the Longshore Act’s section 20 presumptions.  The presumptions shift the burden of production of evidence, but they do not shift the ultimate burden of persuasion by a preponderance of the evidence away from the claimant.

So that’s Number Two on my personal list of landmark Longshore Act cases at the U.S. Supreme Court.

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation.  Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.