Key Points

  • A miner may establish one year of employment through 125 working days without a calendar-year employment relationship.
  • The absence of a coverage statement triggered a presumption of financial capability under the court’s reading of the regulations.
  • The court did not decide the successor-operator question.
  • The Fourth Circuit granted the petition and remanded for Trust Fund payment under the governing regulatory framework.

The Court of Appeals for the Fourth Circuit granted Rhino Energy LLC’s petition for review and remanded a dispute over the responsible-operator designation for benefits under the Black Lung Benefits Act. In Rhino Energy, LLC v. DOWCP, No. 24-2212, the court concluded that the administrative proceedings applied an incorrect interpretation of the regulations defining a year of employment and financial capability for a more recent employer.

The opinion concerns the regulatory process for identifying the operator responsible for a miner’s benefits. A potentially liable operator must meet several conditions, including employing the miner for at least one year and having the financial capability to assume liability. The responsible operator ordinarily is the most recent employer satisfying those conditions.

The court said the administrative law judge and the Benefits Review Board erred by treating a shorter-than-calendar-year employment relationship as insufficient, notwithstanding a finding that the miner had completed at least 125 working days. Under the court’s reading of the applicable regulation, a showing of 125 working days in or around a coal mine during a one-year period establishes a year of employment for Black Lung Benefits Act purposes.

The court relied on its recent interpretation of 20 C.F.R. § 725.101(a)(32), which does not require an employment relationship lasting a full calendar year. It concluded that the administrative law judge’s contrary approach led to an erroneous responsible-operator analysis.

The panel also rejected the alternative position that Rhino had to independently establish the more recent employer’s financial capability. The district director had not issued a coverage statement certifying that agency records showed no insurance coverage or authorization to self-insure. Under 20 C.F.R. § 725.495(d), the court held that omission triggered a presumption that the more recent employer could assume liability.

“Given the absence of such a Coverage Statement, Rhino stands entitled to a presumption that Wildcat is financially capable of paying Rule’s benefits.”

The majority treated the presumption as consistent with the regulatory allocation of responsibility to the district director, who investigates potentially liable operators and has access to insurance and self-insurance records. The opinion said that when the director selects an earlier employer, the director must explain the reasons for that designation and address the relevant potentially liable-operator criteria.

The court did not resolve the successor-operator issue. It held that the working-days analysis and the financial-capability presumption independently established that the more recent employer should have been designated in the first instance.

But the court said the regulatory framework does not permit a new operator to be named after the case has proceeded to an administrative law judge. Where the designated operator prevails at that stage, payment responsibility moves to the Black Lung Disability Trust Fund even if the proper operator can be identified. The remand directs the Board to take action consistent with that rule.

For operators and insurers, the decision places emphasis on the district director’s statement of reasons and any coverage statement in the record. A designated operator may rely on the 125-working-day standard to challenge a finding that a later employer lacked a year of employment, and may invoke the financial-capability presumption where the director did not issue a coverage statement.