Fox v. Elk Run Coal Co., No. 12-2387; 12-2402

Decided: January 3, 2014

The Fourth Circuit concluded that a coal miner’s wife was not entitled to benefits under the Black Lung Benefits Act (“BLBA”) dating back to 1997 because the Elk Run Coal Company did not commit fraud on the court by failing to disclose advantageous evidence to a coal miner at his 1997 BLBA benefits proceedings.

Gary Fox worked as a coal miner at the Elk Run Coal Company (“Elk Run”) in West Virginia for more than 30 years before dying from pneumoconiosis (also known as Black Lung Disease) in 2009. In 1997, x-rays revealed that Fox had an unidentified mass in his right lung. In 1998, a pathologist obtained surgical samples of the mass. Fox filed for benefits under the BLBA, asserting that the mass in his right lung was pneumoconiosis he sustained from working in mines. The Director of the United States Department of Labor’s Office of Workers’ Compensation (“Director”) determined that Fox was entitled to benefits under the BLBA. Elk Run then moved for an evidentiary hearing before an Administrative Law Judge (“ALJ”) to contest the Director’s finding. Elk Run solicited opinions from numerous pathologists, two of which determined that Fox likely suffered from pneumoconiosis. At the evidentiary hearing before the ALJ, Elk Run presented findings of several pathologists, but did not provide the two reports favorable to Fox. Fox appeared pro se at the hearing, only presenting his personal testimony in support of his case. The ALJ denied benefits. Fox did not appeal.

In 2006, Fox retained counsel and filed a new claim under the BLBA. Once again, the Director found that Fox was entitled to benefits under the BLBA and Elk Run requested an evidentiary hearing before an ALJ. This time, Fox’s attorney conducted intensive discovery. Elk Run admitted liability for Fox’s 2006 claims and disclosed numerous documents, including the pathology reports supporting Fox’s 1997 claim. Fox then moved to set aside the previous judgment, arguing that Elk Run committed fraud on the court that justified awarding benefits dating back to Fox’s original 1997 petition for benefits. The ALJ agreed and awarded benefits dating back to January 1997. On appeal, the Benefits Review Board disagreed, finding that Elk Run’s failure to disclose the reports did not rise to the level of fraud on the court. Fox then appealed to the Fourth Circuit.

The Fourth Circuit affirmed, holding that Elk Run’s conduct did not constitute fraud on the court. The court emphasized that fraud on the court was a high bar that required showing conduct on one party’s “deliberately planned and carefully executed scheme that severely undermined the integrity of the judicial process.” Such a finding requires more than ordinary fraud, such as “bribery of a judge or juror, or improper influence exerted on the court by an attorney, in which the integrity of the court and its ability to function impartially is directly impinged.” In the present case, Fox had the opportunity at the first ALJ hearing to cross-examine witnesses and present his own evidence, yet he declined to do so. He did not hire counsel to represent him in the first proceeding, even though the ALJ advised Fox of the desirability of doing so and the BLBA’s allowed for the recovery of attorneys’ fees. In the subsequent proceeding, Fox’s attorney easily discovered the favorable pathology report. While Fox most likely would have won with proper counsel, Elk Run was under no obligation to present unfavorable evidence at the ALJ hearing. Thus, the Fourth Circuit held that Elk Run’s decision not to disclose the unfavorable reports at the first proceeding did not rise to the level of fraud on the court.

Full Opinion

– Wesley B. Lambert

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