RENDERED:
JULY 15, 2016; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
Austin Powder Company APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-12-01516
BILLY KEITH STACY; HON. R. ROLAND
CASE, ADMINISTRATIVE LAW JUDGE;
and WORKERS’
COMPENSATION BOARD APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: COMBS, DIXON AND STUMBO, JUDGES.
COMBS, JUDGE: Appellant, Austin
Powder Company (Austin Powder) seeks review of a Workers’ Compensation Board (Board)
decision affirming the ALJ’s award of 50% disability to Appellee, Billy Keith
Stacy (Stacy), in this Coal Workers’ Pneumoconiosis (CWP) claim. We affirm for the reasons set forth
below.
We refer to the record only
as relevant to the issue on appeal. On
November 1, 2012, Stacy filed an Application for Resolution of CWP claim,
alleging that he became affected on April 16, 2012. He subsequently amended his claim to include
a pulmonary impairment. The medical
evidence is conflicting. The January
14, 2015, Benefit Review Conference (BRC) Memorandum and Order reflects that the only issues preserved for
further proceedings were notice, credit for Stacy’s injury award, and the
income benefits for CWP that are governed by KRS[1]
342.732. In its Brief to the ALJ, Austin
Powder argued that Stacy did not have a compensable claim for
pneumoconiosis. In the alternative, it
argues that any award should be limited to 25% pursuant to KRS 342.732 (1)(b)1,
which provides that there shall be an irrebuttable presumption that the
employee has a disability rating of twenty-five percent (25%) resulting from
exposure to coal dust:
If an
employee has a radiographic classification of category 1/0, 1/1, or 1/2 [CWP]
and respiratory impairment evidenced by spirometric test values of fifty-five
percent (55%) or more but less than eighty percent (80%) of the predicted
normal values . . . .
In his Opinion, Award and
Order rendered June 15, 2015, the ALJ explained that he was persuaded by Dr.
Westerfield, who was independently selected by the Department of Workers’ Claims
to evaluate Stacy. Furthermore, he
stated as follows:
Pursuant
to KRS 342.732(2),[[2]]
the [ALJ] must use either the highest FVC value or highest FEV1 value
determined from the totality of all spirometric testing. See Watkins v. Ampak Mining Inc., 834
SW2d 699 (Ky. App. 1992). Additionally pursuant
to Fields v. Carbon Coal Company, 920 SW2d 880 (Ky. App. 1996), the
[ALJ] does not have the discretion to choose between pre-bronchodilator or
post-bronchodilator testing, but must accept the highest. Therefore, consistent with the above, the
[ALJ] must accept the post-bronchodilator study performed by Dr. Westerfield
indicating an FVC of 81%
and a
FEV1 of 54%. The [ALJ] can rely on
either the highest FVC or highest FEV1.
The
ALJ found that Stacy had established the presence of CWP Category 1/0 and
respiratory impairment evidenced by a FEV1 less than 55%; that his impairment
was due at least in part to coal mining; and that it was, therefore, compensable. The ALJ awarded benefits for 50% disability
pursuant to KRS 342.732(1)(c), which
provides that there shall be an irrebuttable presumption that the employee has
a disability rating of fifty percent (50%) resulting from exposure to coal dust
if:
.
. . it is determined that an employee has a radiographic classification of
category 1/0, 1/1, or 1/2, and respiratory impairment resulting from exposure
to coal dust as evidenced by spirometric test values of less than
fifty-five
percent (55%) of the predicted normal values . . .
Austin Powder petitioned for
reconsideration and argued, inter alia,
that “if one takes the highest FVC of eighty-one (81%) percent [Stacy] would
then just be entitled to a twenty-five (25%) percent impairment.” Austin Powder requested additional findings of
fact as to why the ALJ “chose the FEV1 as opposed to the FVC.” By Order of July 22, 2015, the ALJ denied
the Petition. He noted that pursuant to Watkins v. Ampak Mining, he had the discretion
to use either the FVC or the FEV1. He
explained that he had used the FEV1 because it was abnormal and the doctors
indicated Stacy had a respiratory impairment.
The FVC was above 80% or normal.
Austin Powder appealed to
the Board and argued, at page 7 of its Brief, that:
The ALJ’s findings of a fifty (50%)
percent are correct under [KRS 342.732].
However, what about Vision Mining…? Vision
Mining, supra, basically held that it was unconstitutional to differentiate
between the different types of pneumoconiosis claims in terms of determining
entitlement to benefits. Therefore,
special rules concerning determination of entitlement for CWP in Newberg v. Chumley, [824
S.W.2d 413 (Ky. 1992)], Watkins v. Ampak
Mining, Inc., Ky. App. 834 S.W.2d 699 (1992) and KRS 342.732 are
unconstitutional.
We have carefully reviewed Vision Mining, Inc. v. Gardner, 364
S.W.3d 455 (Ky. 2011), in light of Austin Powder’s argument. Vision
Mining involved an equal protection challenge to KRS 342.316, which set
forth the evidentiary procedure and standard for CWP claims. The Court explained as follows:
In the first instance, KRS 342.316(3) requires
a two-step “consensus” procedure for evaluating X-ray evidence of [CWP] … [The]
claimant must submit an X-ray, along with an interpretation of that X-ray. KRS 342.316(3)(b)1. The employer may then submit its own X-ray and
interpretation. KRS 342.316(3)(b)4.d. If the two interpretations do not agree, the
highest quality X-ray is sent to a panel consisting of three individual “B”
readers, chosen at random, who issue their own interpretation. KRS 342.316(3)(b)4.e. If a consensus is not reached by the panel,
the ALJ renders a decision based on the evidence submitted. If . . . there is a consensus, copies
of the report are considered as evidence. For all practical purposes, this consensus is
the only evidence controlling the result.
…
Secondly,
once a consensus is reached by at least two of the three chest X-ray
interpreters, it is presumptively correct “unless overcome by clear and
convincing evidence.” KRS 342.316(13).
Id. at 458-59 (citations and
footnotes omitted).
By contrast, workers with non-coal-related pneumoconiosis do not
undergo the consensus procedure; they are only required to undergo a University
Evaluation and are not required to produce “clear and convincing evidence” to
rebut it. Id. at 460. The Court
discerned “no rational basis or substantial and justifiable reason … [for]
differing standard of proof requirements for the same disease.” Id. at 472 (italics original). The Court held that the consensus
procedure and “clear and convincing” evidentiary standard were
unconstitutional, and it considered the dual standard of classification of CWP
claimants “to be arbitrary in regard to the more stringent proof or procedures
required . . . .” Id. at 473.
By Opinion rendered on November
20, 2015, the Board affirmed the ALJ in the following language:
On appeal, Austin Powder concedes that under KRS 342.732(2)
and the prior decision in Newberg v. Chumley, 824 S.W.2d
413 (Ky. [1992]), the ALJ’s finding of a 50% disability is correct. However, it argues that the holding in Vision Mining requires
that CWP claims be decided in the same manner as other claims involving
pneumoconiosis. It contends the special
rules concerning entitlement for CWP benefits enunciated in Newberg v. Chumley, Watkins v. Ampak Mining, Inc. and KRS 342.732 are unconstitutional
in light of the holding in Vision Mining. According to Austin Powder’s reading of these
cases, the ALJ is required to follow the American Medical Association, Guides to the Evaluation of Permanent Impairment, 5th Edition and to conclude the FVC is the
only relevant measurement of entitlement to disability. It contends the FEV1 cannot be used because it
measures an obstructive defect as opposed to a restrictive defect caused by
CWP.
The
constitutionality issue is not properly preserved. Constitutionality of the statute was not
listed as a contested issue in the January 14, 2015 Benefit Review Conference
Order. … Austin Powder’s brief before the ALJ did not address the issue. In fact, it first raised the issue in its
petition for reconsideration.[[3]]
Finally, we note KRS 418.075 requires that notice be provided to the Attorney
General in any proceeding which involves the constitutionality of a statute. After reviewing the record, we can find no
indication notice was ever given to the Attorney General.
Furthermore,
as an administrative tribunal, this Board has no jurisdiction to determine the
constitutionality of a statute …. Likewise, an Administrative Law Judge lacks …
jurisdiction ….
Austin
Powder’s appeal is not merely a request to apply the holding in Vision
Mining to the facts of this case, but rather a request to have KRS 342.732
declared unconstitutional. In Vision
Mining, the Supreme Court found an equal protection violation where
claimants alleging CWP were held to a standard of proof different than
claimants alleging any other type of pneumoconiosis. …
The Court [in Vision Mining] did not address the disability classes for CWP
established in KRS 342.732, nor did it address KRS 342.732(2) .…
Austin Powder now seeks to
persuade us that “the Board erred in construing that [it was] contesting the
constitutionality of KRS 342.732[.]” We
disagree. At page 7 of its Brief to the
Board, Austin Powder argued as follows:
Vision Mining . . . basically held that it was
unconstitutional to differentiate between the different types of pneumoconiosis
claims in terms of determining entitlement to benefits. Therefore the special rules concerning
determination of entitlement for CWP in
Newberg v. Chumley,…Watkins v. Ampak
Mining, Inc.,
. . . and KRS 342.732, are unconstitutional.
(Emphasis added.)
Now, at pages 4-5 of its
Petition for Review on Appeal to this Court, Austin Powder refines that
original argument and changes its wording as follows:
Vision Mining, … basically held that it was
unconstitutional to differentiate between the different types of pneumoconiosis
claims in terms of determining entitlement to benefits. In other words, special dispensation cannot
be given to one pneumoconiosis disease over another. …
Therefore, the special rules concerning the determination of entitlement
for CWP set out in Newberg v. Chumley, …
and Watkins v. Ampak Mining, Inc., allowing
either the use of an FVC or FEV1 finding in CWP, have been overruled.
(Emphasis
added.)
This latter argument
clearly was not the same argument that Austin Powder made to the Board. And the Board did not misconstrue what was
being argued. We nonetheless conclude
that the issue was unpreserved for appellate review. It was not listed as a contested issue in the
BRC Memorandum and Order. 803 KAR 25:010
§13(13) provides that: “If at the
conclusion of the benefit review conference the parties have not reached
agreement on all the issues, the administrative law judge shall: (a) Prepare a
summary stipulation of all contested and uncontested issues . . . .” Furthermore, §14 provides that: “Only
contested issues shall be the subject of further proceedings.”
Austin Powder did not
raise the issue either in its Brief to the ALJ or in its Petition for
Reconsideration. It simply requested
that the ALJ make further findings of fact as to why he used the FEV1 instead
of the FVC. Having failed to raise the issue before the
ALJ, Austin Powder is precluded from doing so on appeal. Whittaker
v. Hurst, 39 S.W.3d 819, 822 (Ky. 2001).
However, the fact that
Austin Powder reworded its argument on appeal to this Court does not change its
substance. We agree with the Board that
this appeal is a request to have KRS 342.732 declared
unconstitutional. We affirm the Board --
albeit on somewhat different grounds.
In Scott v. AEP Kentucky Coals, LLC, 196 S.W.3d 24 (Ky. App. 2006),
this Court explained that:
[The
claimant] does raise the challenges to the statutes for the first time in this
appeal; thus, those arguments were not argued before the ALJ or the Board. We believe, nevertheless, that they have been
sufficiently preserved for review in this Court. … [A]dministrative agencies
cannot decide constitutional issues. As
a result, we do not believe [the claimant’s] constitutional argument should be
barred because it was not made before the Board. Furthermore, [the claimant] notified the
Attorney General of the challenge to the constitutionality of a statute by
serving a copy of the brief, as KRS 418.075 requires.
Id. at
26-27 (citations omitted).
KRS
418.075(2) provides that:
In any
appeal to the Kentucky Court of Appeals or Supreme Court or the federal
appellate courts in any forum which involves the constitutional validity of a
statute, the Attorney General shall, before the filing of the appellant's
brief, be served with a copy of the pleading, paper, or other documents which
initiate the appeal in the appellate forum. This notice shall specify the
challenged statute and the nature of the alleged constitutional defect.”
In Homestead Nursing Home v. Parker, 86 S.W.3d 424, 427 (Ky. App.
1999), the employer contended that it had an immediate right to appeal from an
arbitrator’s interlocutory award of TTD and medical benefits. This Court determined that the employer had
failed to preserve for review “certain constitutional issues allegedly implicit
in this contention.” Id. at 427. The Court held that before it “may address a
challenge to the constitutionality of a statute or regulation , . . . the
Attorney General must be notified. CR
24.03; KRS 418.075. [The employer] has failed to give such notice. Our Supreme Court has held that the
notification requirement is mandatory and should be strictly enforced.” Id. at
425, n.1. See Benet v. Com., 253 S.W.3d 528, 532-33 (Ky. 2008). (“[S]trict compliance with the notification
provisions of KRS 418.075 is mandatory . . . . [W]e reject the . . . conclusion
that an appellate court may rule on an “as applied” challenge to a statute's
constitutionality [where a party failed to] comply with KRS 418.075
. . . . KRS 418.075 contains no
exceptions for ‘as applied’ challenges.”)(footnotes omitted).
CR[4]
76.25 governs review of workers’ compensation board decisions in the Court of
Appeals. Subsection (8) provides in
relevant part as follows:
In any
case in which the constitutionality of a statute is questioned, a copy of the
petition and response shall be served on the Attorney General of the
Commonwealth by the party challenging the validity of the statute. The Attorney
General may file an entry of appearance within ten (10) days of the date of
such service. If no entry of appearance is filed, no further pleadings need be
served on the Attorney General.
Austin Powder is
questioning the constitutionality of KRS 342.732 in light of the decision in Vision Mining. The record does not reflect that Austin
Powder complied with the notification requirements of CR 76.25(8) and KRS
418.075(2). Therefore, we must decline
to address the issue.
The November 20, 2015,
Opinion of the Workers’ Compensation Board is affirmed.
all
concur.
BRIEF FOR APPELLANT: Walter E. Harding Louisville, Kentucky |
BRIEF FOR APPELLEE: McKinnley Morgan London, Kentucky |
|
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[1] Kentucky Revised Statutes (KRS).
[2] KRS 342.732(2) provides that “[t]he presence of respiratory impairment resulting from exposure to coal dust shall be established by using the largest forced vital capacity (FVC) value or the largest forced expiratory volume in one second (FEV1) value determined from the totality of all such spirometric testing performed in compliance with accepted medical standards.”
[3]
In fact, our review reveals that Austin Powder did not mention the constitutionality of KRS 342.732 in its
petition for reconsideration. It only asked
for “further findings of fact with regard to the issue of constitutionality of
KRS 342.316(1)(b)(4)(d-f)” with respect to the consensus procedure that was at
issue in Vision Mining.
[4] Kentucky Rules of Civil Procedure (CR).