On Petition for Review of a Final Order of the Benefits Review Board, United States Department of Labor.
Weis, Becker and Hunter, Circuit Judges. Weis, Circuit Judge, concurring. Hunter, Circuit Judge, joining and concurring.
Under the Black Lung Benefits Act, disability claims ultimately come before an Administrative Law Judge (ALJ) who must, inter alia, determine the reliability of medical evidence submitted to prove that the claimant is totally disabled. The regulations promulgated by the Secretary of Labor provide that the ALJ may find a miner totally disabled on the basis of a physician's judgment if the judgment is "reasoned" and based on medically acceptable evidence. 20 C.F.R. § 718.204(c). In this case, we must decide whether the Secretary has limited the ALJ's discretion under § 718.204(c) by providing that a judgment contained in a medical report "alone" may support a finding of total disability only if the report is in "substantial compliance" with a quality standard set out at 20 C.F.R. § 718.104. That section mandates that a report include a medical and employment history, describe certain test results and certain symptoms. The Secretary's designate, the Director of the Office of Workers' Compensation Programs (OWCP) advocates this view.
The Benefits Review Board (BRB) rejected the Director's contention. Following one of its prior decisions based both on construction of the regulations and statutory grounds, the BRB held that the regulation's quality standards, of which the medical report standard is only one, do not preclude ALJ's from relying on noncomplying evidence. In the BRB's view, the quality standards have a mandatory effect only on the OWCP's internal decisionmaking not on ALJ's, who adjudicate claims only after the OWCP has denied them. The BRB therefore affirmed an ALJ's decision granting benefits to respondent August Mangifest despite the ALJ's primary reliance on a medical judgment contained in an apparently noncomplying report.
The Director now petitions for review. On the basis of our own interpretation of the regulations, but for different reasons than those of the BRB, we agree with the BRB that an ALJ may find a miner totally disabled in reliance upon a medical judgment in a noncomplying report so long as the judgment is reasoned and based on medically acceptable evidence as required by § 718.204(c)(4). We believe that the ALJ must make this decision "in accordance with" § 718.104, but only in the sense that that section should serve as a guide: it identifies the kinds of information ALJ's should expect a physician to rely on in finding total disability, and it instructs the hearing officer to examine the evidence in determining whether the physician's diagnosis was reasoned. Such a rule is consistent with the Black Lung statutes and the APA.
We ground our decision on "our own interpretation" notwithstanding the deference normally required to an interpretation of the Director because we find ambiguities and inconsistencies in the Director's interpretation of the regulations that are sufficiently great to preclude deference in this case. However, we also believe that our result is ultimately consistent with the views of the Director: the test the Director suggests for evaluating a report's substantial compliance with the quality standards of § 718.104 requires the ALJ to engage in the same analysis of the documentation and reasoning of the report's medical judgment that we find required by § 718.204(c)(4).
Although we reject a rigid approach to the quality standard regulation, we grant the petition for review and remand this case for further proceedings. The ALJ did not use the quality standard as a guideline in determining whether the medical judgments he relied on were documented and reasoned. The ALJ also failed specifically to find the medical judgment documented and reasoned or to explain that finding. Clear articulation was necessary because the medical report apparently deviated substantially from the quality standard.
Disability claims filed after March 31, 1980 are evaluated under the criteria established by Part 718 of the permanent black lung regulations. See 20 C.F.R. § 718.2, 725.4(a) (1987). Under Part 718, the miner must prove that he has pneumoconiosis, that he contracted it through his coal mine employment, and that he is totally disabled due to the disease. See 20 C.F.R. §§ 718.201-.204 (1987).
Subpart C of the Part 718 regulations, 20 C.F.R. §§ 718.201-.206, establishes criteria for finding these three elements necessary to a black lung claim. At issue in this case are the criteria for finding total disability set out in § 718.204. Subsection (b) of that section defines total disability: a miner is totally disabled if he is incapable of performing his usual coal mine work and if he cannot engage in gainful employment in the immediate area of his residence requiring skills comparable to those he used in his mine employment. See also 30 U.S.C. § 902(f)(1)(A). Subsection 718.204(c) then sets out medical criteria for determining whether a miner meets this standard. It provides that an ALJ must find total disability, in the absence of contrary evidence, if pulmonary function or arterial blood gas tests produce certain results, § 718.204(c)(1-2), or if the medical evidence demonstrates that the miner has cor pulmonale with right sided congestive heart failure, § 718.204(c)(3). In addition, paragraph 718.204(c)(4),*fn1 the paragraph most directly relevant to this case, provides that an ALJ "may" find total disability if a physician "exercising reasoned medical judgment, based on medically acceptable clinical and laboratory diagnostic techniques concludes that a miner's respiratory or pulmonary conditions prevents or prevented the miner from engaging in employment" as defined by subsection (b).*fn2
This case concerns the relationship between the criteria in § 718.204(c)(4) and § 718.104 in subpart B of the Part 718 regulations. Subpart B generally sets out quality standards for most kinds of medical evidence relevant to Black Lung claims, including X-rays, pulmonary function studies, arterial blood-gas studies, and autopsies and biopsies.*fn3 Section 718.104, which we set out fully below,*fn4 provides the standard for medical reports. It requires that a report "of any physician examination conducted in connection with a claim" use either a form supplied by the OWCP or contain "substantially the same information." The information required includes the miner's medical and employment history, the results of medical tests, and all manifestations and symptoms of chronic respiratory or heart disease.
In Budash v. Bethlehem Mines Corp., 9 Black Lung Rep. 1-48 (en banc), aff'd on reconsideration en banc, 9 Black Lung Rep. 1-104 (1986), the BRB considered the question whether a medical report not in compliance with the quality standard at § 718.104 may nevertheless justify a finding of total disability under § 718.204(c)(4). Rejecting the Director's contention, the BRB held that it could. The BRB did not dispute the authority of the Labor Secretary generally to establish criteria and other reasonable rules that bind the ALJ's consideration of claims. See 30 U.S.C. § 902(f)(1), § 936. The BRB believed, however, that the exclusion of non-complying reports would violate the statutory requirement set out at 30 U.S.C. § 923(b) that claims decisions be based on "all relevant evidence." The BRB also believed that section 7 of the Administrative Procedure Act, 5 U.S.C. § 556(c), requires consideration of all relevant evidence and required rejection of the Director's position. Finally the BRB felt that the regulations themselves do not require the exclusion of non-complying evidence.
The BRB accordingly held that § 718.104 has a mandatory effect only on the OWCP's internal decision whether to grant or deny claims.*fn5 While ALJ's "may" consider the quality standard, the BRB believed, those standards are not binding upon them. 9 Black Lung Rep. at 1-50 to 1-51.*fn6
II. Facts and Procedural History
Respondent August Mangifest is a seventy-two year old resident of Vandergrift in Western Pennsylvania. From 1929 until 1941, Mangifest worked in underground coal mines as a loader, driller and weighman. Following this coal mine experience, Mangifest worked in a variety of jobs, most recently as a part-time janitor and as a restaurant supply salesman. On April 8, 1980, Mangifest filed a claim for benefits under the Black Lung Benefits Act as amended, 30 U.S.C. §§ 901-45. (1982). The OWCP denied the claim and Mangifest requested a formal hearing before an ALJ.
All parties agree that Mangifest has penumoconiosis and that he contracted it through his employment as a coal miner. The Director of OWCP and Mangifest dispute, however, whether Mangifest is "totally disabled." Because the Director offered no information to the ALJ to show that Mangifest is not disabled, the dispute pertains entirely to the adequacy of Mangifest's proofs.
Taken alone, neither Mangifest's pulmonary functions studies nor arterial blood-gas tests established total disability under §§ 718.204(c)(1) or (2). Nor does Mangifest suffer from cor pulmonale, which may establish total disability under § 718.204(c)(3). To prove total disability, Mangifest therefore submitted the reports of four physicians. Although all agreed that Mangifest suffered from pneumoconiosis, the reports differed in their comprehensiveness and in their conclusions bearing on Mangifest's degree of disability.
Mangifest submitted two reports which carefully listed symptoms and test results, one from Dr. Arthur E. Barnes and one from Dr. J. D. Silverman. Dr. Barnes's report offered no assessment of the degree of disability. Dr. Silverman's report concluded that Mangifest suffered from anthracosilicosis and "should not be permitted to return to work in any dusty atmosphere." (A. at 106) The Director contends that neither of these reports can establish total disability because neither found total disability. According to the Director, Dr. Silverman's finding that Mangifest "should not be permitted to return" to a dusty environment was not a finding that Mangifest is totally disabled.
In addition, Mangifest submitted reports from two members of the Russellton Medical Group clinic. Dr. Thomas B. Connelly's report stated that Mangifest "is totally and permanently disabled" and that he "would be unable to do coal mining work." But Dr. Connelly's report was a mere one page letter. It listed no medical results other than Mangifest's statement of symptoms and an X-ray.*fn7 Dr. Jeffrey M. Wolff, found by the ALJ to be Mangifest's treating physician, provided a similar one page report. It stated that Mangifest is "totally and permanently disabled" and "is unable to do any further coal mining work." Although it listed more symptoms and test results than Dr. Connelly's letter, the report failed to mention ventilatory function studies or several other pieces of information required by the form.
The Director claims that neither Dr. Connelly's nor Dr. Wolff's report may support a finding of total disability because neither was in "substantial compliance" with § 718.104. Because of their brevity, there seems little dispute that the reports in and of themselves fail to satisfy the requirements of § 718.104. Despite the facial inadequacy of their reports, however, both Drs. Connelly and Wolff may have based their judgments on the wide range of evidence required by the medical report standard. The record establishes that Mangifest had been seen at the Russellton clinic for over one year, and that objective tests, medical histories, and other examinations had been conducted at the clinic. Mangifest submitted many of those results to the ALJ separately.
Even if the ALJ may consider the reports of Drs. Connelly and Wolff, the Director argues that no finding of total disability is permissible because the reports are not reasoned. The Director contends that the doctors' conclusions of total disability were based entirely on evidence that does not measure the degree of disability.
The ALJ disagreed with the Director. He held that Dr. Wolff's report did not have to meet the quality standards of § 718.104 because the fact that Dr. Wolff was Mangifest's treating physician meant that the report was not prepared in connection with the claim for benefits. According to the ALJ, the report therefore could be a basis for finding total disability under § 718.204(c)(4). The ALJ found the report credible because it was partially corroborated by the opinions of the other doctors. The ALJ concluded that Mangifest was totally disabled due to pneumoconiosis and awarded benefits from April 8, 1980, the date Mangifest filed his application.
The Director appealed to the BRB. The BRB assumed for purposes of its consideration that Dr. Wolff's report was prepared in connection with the claim. The BRB further assumed that the report was not in substantial compliance with the quality standards set out at § 718.104. Relying on Budash, however, the BRB held that the Dr. Wolff's report could support a finding of total disability under § 718.204(c)(4). In response to the Director's claim that Wolff's and Connelly's medical reports were not reasoned, the BRB noted that such a judgment was a matter for the ALJ's discretion. Finally, the BRB found that the ALJ had based his finding of total disability on "substantial evidence" and therefore affirmed.
In this court, the Director renews the arguments he made before the BRB.*fn8 He stresses the need for deference to his position as the delegate of the Secretary of Labor. Three mining or insurance companies, appearing as amici curiae, support Mangifest's contention that a noncomplying medical report can justify a finding of total disability.*fn9 Mangifest, however, has abandoned any contention that Dr. Wolff's report was not prepared in connection with a claim.*fn10 Because of our construction of the regulations, we reach only some of the statutory issues presented to us.
III. The Standard for Dealing with Medical Reports
The Supreme Court has made clear that courts must defer to an agency's consistent interpretation of its own regulation unless it is "plainly erroneous or inconsistent with the regulation." Bowles v. Seminole Rock and Sand Co., 325 U.S. 410, 414, 89 L. Ed. 1700, 65 S. Ct. 1215 (1945); North Haven Bd. of Ed. v. Bell, 456 U.S. 512, 72 L. Ed. 2d 299, 102 S. Ct. 1912 (1982); Revak v. National Mines Corp., 808 F.2d 996 (3d Cir. 1986); see generally R. Weaver, Judicial Interpretation of Administrative Regulations: The Deference Rule, 45 U. Pitt. L. Rev. 587, 620-22 (1984). We owe such deference to the Director, not to the BRB, for the Director is the maker of policy. See Potomac & Electric Power Co. v. Director, OWCP, 449 U.S. 268, 278 n.18, 66 L. Ed. 2d 446, 101 S. Ct. 509 (1980) (requiring deference to Director not to BRB in matters of statutory interpretation); Bethlehem Mines Corp. v. Director, OWCP, 766 F.2d 128, 130 (3d Cir. 1985) (requiring deference to Director not to BRB in construction of regulations).*fn11
We have cautioned, however, that this deference does not permit us to defer to an "interpretation" in an adversary proceeding that strains "the plain and natural meaning of words in a standard to alleviate an unlikely and uncontemplated hazard." Bethlehem Steel v. OSHA, 573 F.2d 157, 161 (3d Cir. 1978). As the Supreme Court in Bowles deferred to the agency's explanation of what a particular phrase in a regulation meant, we defer to a policymaker's plausible explanation of the language in a regulation. That rule, however, does not permit the policymaker, in an adjudicatory proceeding, to imply language that simply does not exist:
The responsibility to promulgate clear and unambiguous standards is upon the Secretary. The test is not what he might possibly have intended, but what he said. If the language is faulty, the Secretary has the means and the obligation to amend.
Bethlehem Steel, 573 F.2d at 161.
Furthermore, we have in the past differentiated between a reasoned interpretation of a regulation's language and a mere position about what the regulations require. See Revak, 808 F.2d at 1003 (refusing to defer to agency view in absence of "any explanation for how [court] might find support for the [agency's] position in the language of the regulation"). Although we must defer to an agency regulation that is not "plainly erroneous," we must understand how the agency connects its position to the language of the regulation in order to evaluate its plausibility.*fn12 If we cannot understand the agency's reasoning, if it is self-contradictory, or if it is ambiguous, we cannot defer to it.
In this case the Director contends that because "the reports of Drs. Wolff and Connelly are not in substantial compliance with [the] regulation, the ALJ could not rely upon either report in determining that Mangifest was totally disabled by pneumoconiosis." Director's Brief at 35. This statement in the Director's brief is consistent with the views of the Director's counsel at oral argument. She contended that an ALJ could not use noncomplying evidence even to tip the scales of a decision that had the support of complying evidence on both ...