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New Bill Could Help Black Lung Widows/Survivors

U.S. Sen. Joe Manchin announced legislation meant to help survivors of miners who died after suffering from black lung.

According to a news release, the Relief for Survivors of Miners Act would ease the “bureaucratic proof requirements” currently needed in order to secure benefits.

Survivors of miners with black lung are entitled to monthly benefits. The installments were part of the Black Lung Benefits Act which passed in 1972. The money comes from coal companies or the Black Lung Disability Trust Fund.

But currently, survivors must prove their loved one died from black lung. There are frequent complications that come from black lung that ultimately bring miners to the end of their life so proving this can be difficult.

The bill focuses on making it easier for survivors to access those benefits by allowing proof of disability if they cannot prove the miner’s death was due to or hastened by black lung.

If passed, miners and their families would also have better access to legal representation for such cases. The bill would also establish a payment program for attorneys’ fees and other medical expenses incurred while establishing the claimant’s case. The program would be to prevent survivors of miners from being turned away because of income.

Bob Murray, Who Fought Against Black Lung Regulations As A Coal Operator, Has Filed For Black Lung Benefits

Robert E. Murray, the former CEO and president of the now-bankrupt Murray Energy, has filed an application with the U.S. Department of Labor for black lung benefits. For years, Murray and his company fought against federal mine safety regulations aimed at reducing the debilitating disease.

“I founded the company and created 8,000 jobs there until the move to end coal use. I am still chairman of the board,” he wrote on a Labor Department form that initiated his claim obtained by the Ohio Valley ReSource. “We’re in bankruptcy, and due to my health could not handle the president and CEO job any longer.”

According to sources, Murray’s claim is still in the initial stages and is being evaluated to determine the party potentially responsible for paying out the associated benefits. The Labor Department is required to determine a liable party before an initial ruling can be made on entitlement to benefits. If Murray’s claim were to go before an administrative law judge, some aspects of the claim would become a matter of public record.

The Ohio Valley ReSource confirmed the authenticity of Murray’s claim documents by inputting associated information — including his last name, birthdate and a case ID number — into an online portal maintained by the Labor Department.

In his claim, Murray, who is now 80 years old, writes that he is heavily dependent on the oxygen tank he is frequently seen using, and is “near death.”

North American Coal Corporation is named as one potentially liable party in Murray’s claim for the benefits. According to documents associated with his claim, he states that he was employed by the company from May 1957 to October 1987 — where he ascended through its ranks, first as a miner before taking on the role of president.

Later, he served as president and operator of Ohio Valley Resources, Inc. and a subsidiary from 1988 to 2001. He founded Murray Energy in 1988.

He states in his claim for benefits that he worked underground while supervising operations throughout the years.

“During my 63 years working in underground coal mines, I worked 16 years every day at the mining face underground and went underground every week until I was age 75,” Murray wrote in his claim.

Reached by phone, Murray declined an on-the-record interview for this story. Murray said he has black lung from working in underground mines and is entitled to benefits. Additionally, he disputed that he ever fought against regulations to quell the disease or fought miners from receiving benefits.

Murray also threatened to file a lawsuit if a story was published that indicated he had fought federal regulations and benefits.

But Murray told NPR in October 2019 that he had a lung disease that was not caused by working underground in mines.

“It’s idiopathic pulmonary fibrosis. IPF, and it is not related to my work in the industry. They’ve checked for that,” Murray told NPR. “And it’s not — has anything to do with working in the coal mines, which I did for 17 years underground every day. And until I was 76, I went underground twice a week.”

History Of Fighting Safety Rules

Like other coal operators, Murray’s companies have disputed the claims made by miners who seek black lung benefits. The coal magnate, who for decades ran the largest privately owned underground coal mining company in the United States, has also been at the forefront of combatting federal regulations that attempt to reduce black lung, an incurable and ultimately fatal lung disease caused by exposure to coal and rock dust.

In 2014, Murray Energy spearheaded a lawsuit against the Obama administration over a federal rule that strengthened control of coal dust in mines.

The Obama-era standard reduced the acceptable amount of coal dust exposure for miners, increased the frequency of dust sampling, and required coal operators to take immediate action when dust levels are high.

The reforms were the first in more than four decades to tighten exposure standards to coal dust and came at a time that evidence was mounting that Appalachia was seeing a deadly resurgence in the most severe form of black lung, after reaching historic lows in the 1990s.

“It’s ironic that Murray’s company fought hard to block the 2014 respirable coal dust rule we put in place to prevent the black lung disease,” said Joe Main, who served as assistant secretary of the Mine Safety and Health Administration under President Barack Obama.

MSHA, as it is known, is the agency within the Labor Department tasked with implementing and enforcing mine safety rules, including those aimed at reducing black lung.

Murray Energy’s lawsuit claimed that adhering to the new rule would have been virtually unachievable with available technology and would cost the industry billions. Murray’s suit failed, but Bob Murray tried again to block implementation of the dust rule, this time by influencing the incoming administration of President Donald Trump.

Murray, a staunch Trump supporter, has been a major player in shaping the current administration’s energy policy agenda and has funded groups that deny the existence of climate change. Early in Trump’s term, the coal magnate delivered a detailed action plan aimed at helping the declining industry. Among the requests: overhaul the “bloated” MSHA and “revise the arbitrary coal mine dust regulation” which Murray claimed would cost the industry “thousands of jobs.”

The coal industry’s biggest players and lobbyists, including the National Mining Association, have fought tighter regulations. Wes Addington, executive director of the Appalachian Citizens’ Law Center, a nonprofit law firm that has for years represented miners in black lung benefits cases, said Murray was at the forefront of that fight.

“Today, in 2020, we’re seeing more miners with more advanced black lung than the country has ever seen. And yet, the industry over the past 10 to 20 years, has consistently fought against any regulation that would try to limit the amount of dust that miners breathe,” Addington said. “Murray Energy has been part of that fight, along with a number of the largest coal companies in the country.”

Black Lung Claims Process

To qualify for black lung benefits, miners must prove both that they have the debilitating disease and that they are totally disabled due at least in part to a breathing impairment caused by black lung.

The diagnosis is usually done through X-rays and other tests and certified by a medical professional. To get federal benefits, a miner will first assemble and submit a claim to the Labor Department. The agency will review the claim and make a determination as to whether there is substantial evidence to prove both the presence of the disease and that it has disabled the miner. If the claim is approved, the federal government will begin paying out medical benefits, also called interim benefits, from the Black Lung Disability Trust Fund, a federal pot of money that pays for some benefits and is funded by a tax on each ton of coal mined.

Then the Labor Department turns to the coal company deemed to be responsible for the miner’s disease to pay for the benefits. Advocates that work on black lung benefits say, more often than not, the coal company or its insurance carrier will fight the claim, which often pits miners against their former employers in court.

“You often see doctors who testify for coal companies raise an argument about, perhaps the miner was overweight. Perhaps the miner has been exposed to animal manure if he grew up on a farm, and perhaps that is causing his breathing trouble today — after working for 15 or 20 or 30 years in the mines,” said Sam Petsonk, a West Virginia-based attorney who has represented former Murray miners seeking black lung claims.

Petsonk, who is also the Democratic candidate for West Virginia Attorney General, said litigation involving claims for black lung benefits can drag out often for many years and in some cases for decades. In some documented cases, miners have died before their claims were settled.

Davitt McAteer, former MSHA assistant secretary, said the tactic of attorneys representing mining companies named in black lung claims is to slow down or stall the process.

“If you’ve black lung, you’re dying. There’s no two ways about it. And you may live for a while, but you’re going to die soon,” he said. “And all I have to do is — if I’m the lawyer on the other side — wait around, wait him out and they’ll die. And they did. And then, the claimant goes to the widow and you wait her out, too.”

According to Murray’s claim for benefits, his wife Brenda is listed as a dependent. If Murray’s claim for benefits is approved, his wife would receive the benefits for the rest of her life, regardless of whether the claim is approved before or after his death.

If a coal company goes bankrupt or if no responsible party is determined, benefits may be paid from the Black Lung Disability Trust Fund, which currently covers expenses for some 25,000 miners and their dependents. A recent report from the Government Accountability Office found the trust fund is expected to be $15 billion in debt by 2050.

Bankruptcy

Murray Energy’s bankruptcy last year added to the burdened fund. In October 2019, the coal operator filed for Chapter 11 bankruptcy protection. The company cited billions of dollars in liabilities and a weak and struggling market for coal.

“Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long-term success,” then-CEO Murray said in a release issued at the time.

The proceedings, which concluded in September, provided a rare glimpse into the private company. Creditors argued Murray and his nephew and now CEO of the company, Robert Moore, viewed the mining company as a “family piggy bank” and cited a “disturbing pattern of self dealing and abuse of corporate resources.”

They documented multi-million dollar cash bonuses for both Murray and Moore, as well as the use of the company’s aircraft for personal purposes among other allegations. Murray Energy denied those claims.

According to court filings, Murray Energy could be responsible for as much as $155 million under the Black Lung Act and general workers’ compensation, but testimony from the Government Accountability Office shows that the company only offered $1.1 million in collateral.

As is common in coal bankruptcies, Murray and its successor company were relieved of any obligation to pay existing black lung benefits by the bankruptcy court. Those benefits are now being paid by the federal Black Lung Disability Trust Fund.

Under the final bankruptcy agreement, Murray has been removed from company leadership, although he remains on the board.

Other Violations

Murray mining operations have also had a number of high-profile mine safety incidents over the years, including the disastrous collapse of a mine in 2007.

In August 2007, nine miners and rescuers died after the Murray-owned Crandall Canyon mine in Utah collapsed. The Labor Department fined the company $1.85 million for violating federal mine safety law. In 2012, the agency settled with Murray for a reduced amount. The settlement included acknowledgement by Murray Energy for its “responsibility for the failures that led to the tragedy.”

Murray later told NPR “this settlement is not an admission of any contribution to the August 2007 accidents.”

Murray was also sued by the Labor Department after miners complained the CEO personally told workers in a meeting in late 2013 to stop making complaints to federal regulators. Under federal law, miners have the right to speak anonymously to government inspectors about mine safety concerns. In 2019, Murray lost an appeal in the case. The court upheld a decision that Murray must personally apologize.

This story was edited and produced by the Ohio Valley ReSource.

How W.Va. Miners With Black Lung Disease Are Navigating The Pandemic

Jerry Coleman, a third-generation coal miner, worked for 37 years, mostly underground, near Cabin Creek, West Virginia. But at 68 years old, he has complicated black lung disease, meaning, his lungs are permanently and irreversibly scarred by coal dust.

“Black lung, it doesn’t get better, it gets worse,” Coleman said.

Black lung is in a way, a death sentence — the lungs gradually deteriorate until the person can no longer breathe.

And in the middle of a pandemic, it is only more complicated, Coleman said. He is also the president for the Kanawha County Black Lung Association.

“You gotta wear a mask, and with your breathin’ problems and stuff, it’s hard to walk around and breath through the mask. It’s like sucking in hot air,” he said. “But I don’t have no choice, with the condition of my lungs and stuff, I can’t take a chance.”

COVID-19 is classified as a respiratory virus. It can affect and even be deadly to the healthiest of people, but the most vulnerable are those with high-risk conditions, such as lung disease and old age — which represent much of West Virginia’s former coal miner population.

“Each different lung disease kind of takes away some of your lung function,” said Carl Werntz, an occupational medical specialist in southern West Virginia.

Werntz administers black lung exams, a crucial step to apply for federal black lung benefits.

“So that person if they get COVID it bothers their lungs,” he said. “They’re going to run out of usable lung much faster than somebody who starts out with healthy lungs.”

Since the pandemic began, Werntz said black lung exams were put on hold at the clinic he works at in Cabin Creek. Exams slowly resumed in July, but at half capacity.

Typically, he sees six to eight patients a day, but with new COVID protocols, Werntz said he sees three to four — creating a backlog of patients waiting for their black lung exam.

“The longer you wait to do the testing to show that they really have the disease, the longer it is until they can get the benefits, including, you know, potentially medical care if they don’t have some other way to pay for their breathing care,” Werntz said.

Federal black lung benefits include monthly payments and medical coverage for lung treatment – medical care that is expensive, said Jerry Coleman, the former coal miner with black lung.

The fight for benefits can be long even without a pandemic. Coleman said he fought for seven years to receive his benefits.

“Until you get awarded it, anything that pertains to you breathing, you have to pay for everything,” he said. “And you’re not going to, you know, spend exactly what you have to spend, because you don’t have the money to waste. You know? It’s a shame to say but that’s the way it is.”

With COVID severely limiting the number of patients who can come in for their black lung exams, the wait to get benefits keeps growing for some miners.

Mickey Pettry, who is 63 years old, worked in the coal mines much of his life. Although his personal doctors have diagnosed him with black lung, he has fought in the courts for his federal benefits for three years, and he fears the pandemic will only draw out this process.

“But the entire focus is on the battle going on up in DC. So, there’s very little attention being paid to anything else,” Pettry said.

In fact, the coal excise tax, which is the primary money for the Black Lung Disability Trust Fund, is set to expire at the end of this year. This means funds for black lung benefits could dry up quickly.

This issue is a priority for black lung advocacy associations, said Coleman. He and other members from local associations went to Washington D.C. last year and helped secure the funding through 2020. But with COVID, Coleman said it is harder for the associations to hold meetings and to advocate for the renewal of the legislation.

“Because our voice is what’s gotta be heard, you know,” Coleman said. “If we don’t speak out, it’s gonna be forgotten.”

In the meantime, things are a lot less social for those with black lung disease. Coleman said he has spent most of his spring and summer at home, trying to social distance.

Pettry added that not being able to go to the monthly black lung association meetings takes a mental toll. Many of the members are his neighbors, friends or former coworkers. There is a therapeutic aspect.

But now, even going to the store is a risk Pettry said.

“I don’t have a lot of tolerance for people now. There’s so many people that think wearing a mask is a joke. It’s highly, highly stressful,” Pettry said. “People have a right to their opinion, but we can’t afford to say that it’s not real. When they infringe upon our protection, you know I get really upset.”

Pettry does not know what the future holds for him as someone with black lung disease during a pandemic, but he said he is making do with what he has — mowing the lawn, grilling meat on his back porch and occasionally putting on a mask and getting a hot chicken sandwich from Chick-fil-A.

Appalachia Health News is a project of West Virginia Public Broadcasting, with support from Marshall Health and Charleston Area Medical Center.

This story is part of West Virginia Public Broadcasting’s Southern Coalfields Reporting Project which is supported by a grant from the National Coal Heritage Area Authority.

Book Details Coal Miners’ Fight For Black Lung Benefits

A 1969 federal law, following the Farmington Mine Disaster, was supposed to improve working conditions in the coal mines, which have long been connected to black lung disease. But, 51 years later, the rate of those with black lung is higher than ever.

The law also created the federal benefits program to compensate those affected, but many miners haven’t received a dime.

In author Chris Hamby’s new book “Soul Full of Coal Dust: The True Story of an Epic Battle for Justice,” he looks at the black lung benefits program through the eyes of West Virginia miners, detailing their fight for benefits in a system that’s stacked against them.

Hamby spoke with Eric Douglas about the newly released book.

This interview has been lightly edited for clarity.

Douglas: Tell me how you first jumped into black lung reporting in West Virginia.

Hamby: I was a cub reporter at the Center for Public Integrity. And we had gotten a report about the Upper Big Branch mine disaster. We got turned on to this one page that was almost a sidebar. It said that of the victims, 24 had enough lung tissue to where they could be examined during autopsy and, of those, 17 had black lung. These included miners who were surprisingly young, had surprisingly little experience.

We eventually decided that it warranted a deeper look at why this was happening. Why all these years after we enacted a law in 1969 that was supposed to virtually eradicate this disease, we’re in a situation where it’s in a resurgence. And new research has shown that levels of severe disease are now at the highest that they’ve ever been in recorded.

Douglas: Tell me about John Cline, about his work from being a local organizer all the way up to being an attorney who did a David and Goliath type of undertaking.

Hamby: John is the kind of person that you almost don’t believe that people like that exist in the real world. He starts working at this rural medical clinic, which is one of a few that are funded by the federal government to treat and diagnose black lung. He works as a benefits counselor and it’s there that he starts to see this pattern of what he believes is manipulating and withholding evidence by Jackson Kelly, the largest law firm that represents employers in a majority of these cases.

(Hamby reached out to Jackson Kelly for a response to his book and received the following message:

“The firm received your recent inquiries for interviews on topics covering many years of the firm’s history for your soon-to-be-released book. Given the unambiguous slant in your previously published articles, the summary of your book as already posted on Amazon, and the nature of the questions posed in your emails, we do not believe there is an opportunity for an objective, fair discussion. Jackson Kelly has proudly represented thousands of clients and been engaged in a broad spectrum of important legal issues. Our clients know us for advocacy, excellence, and value.”)

Obviously, he wasn’t the only person who did this, but his work has literally changed the way a miner applies for benefits and the legal fight that they go through. I don’t want to imply that everything is perfect now in the black lung system by any means. There are still certainly problems and unfairness and inequities. But the change has been remarkable.

John was pushing reforms that he thought needed to happen when he was starting to represent miners as a lay representative in the early and mid-1990s. And there were certain things that he thought needed to be done to restore basic fairness to the system. It’s remarkable that 20 years later his proposal is essentially the law of the land.

Douglas: Gary Fox was a key case. It ended up being read into the federal record. It is normally a dry recitation of facts, but the Labor Department intentionally included his story.

Hamby: When John gave me the basic details about what happened to Gary Fox, that’s when I decided if I can even determine that what happened to Gary is actually what happened, and if this happened on a larger scale, this is a story that I just have to tell. I’ve spent the many years since trying to understand Gary’s life, and piece together exactly what happened to him. In a lot of ways, it is both tragic and inspiring.

He was an incredibly hard worker by all accounts. He was a roof bolter. He filed a federal black lung benefits case and got his examination by the doctor, legendary Dr. Don Rasmussen in Beckley. They found that he did have severe black lung disease. So, he was initially awarded benefits, but then the law firm Jackson Kelly contested the case and provided quite a bit of evidence to the contrary.

What plays out over the course of the book is, and I don’t think it’s any secret here, is that they withheld multiple very critical pieces of evidence that would have shown exactly how serious Gary was. That involved their own doctors who usually do not find black lung.

Douglas: I remember you saying in the book several times that Gary himself and then his family, his wife, and then even after he died the children said “No, keep fighting this fight. This is important. This is what Gary would have wanted.”

Hamby: It was really about what’s fair and what’s right. When you describe the way the system was functioning before, it’s so obvious that it wasn’t fair and it wasn’t right. It was hurting people and that was really just the most amazing thing about what John and Gary and this small group of advocates and other miners did.

There were so many setbacks, so many losses, it would have been so easy to quit at so many points. And they were going through incredible physical suffering at the same time as well as economic hardship because they weren’t awarded benefits. And they pressed on and were able to achieve a really remarkable change.

Author Chris Hamby won a Pulitzer Prize in 2014 for his reporting about the complicated process of getting black lung benefits.

This story is part of a series of interviews with authors from, or writing about, Appalachia.

“Lax Oversight” Threatens Health Fund for Miners With Black Lung, Watchdog Finds

Just three bankruptcies of American coal companies have added more than $800 million in costs to a federal government program that funds health care for disabled coal miners, the Government Accountability said in a report released Wednesday.

The report comes after a 2018 analysis by the same agency which found the Black Lung Disability Trust Fund faced significant financial challenges, and had borrowed taxpayer money to cover necessary expenses nearly every year since 1979. This new research shows that coal company bankruptcies have been a significant factor contributing to the fund’s financial debt, and lax oversight from the Department of Labor is partly to blame.

The report is “completely consistent with the strategy coal companies have used to evade pension, retirement, and environmental obligations,” said Josh Macey, a Cornell University visiting assistant professor and researcher of coal bankruptcies.

The Black Lung Disability Trust Fund provides monthly benefits and health care coverage for disabled miners whose own employer cannot cover the cost. Coal companies pay into the fund via a per-ton tax on coal. A coal company’s liability to the trust fund is the total cost of care for the lifetime of each miner disabled by black lung due to work in the company’s mine. If a company doesn’t have enough insurance or hasn’t put up enough collateral to cover those liabilities when it goes bankrupt, the cost of care falls on the trust fund.

Of the eight companies that declared bankruptcy between 2014 and 2016, three companies, Alpha Natural Resources, James River Coal, and Patriot Coal transferred $865 million in liability onto the fund. Alpha Natural Resources alone transferred $494 million in benefit liability onto the fund, making it the largest contributor to the problem.

“The GAO’s report details a decades-long failure by the Department of Labor to fulfill its duty to protect the solvency of Black Lung Disability Trust Fund,” said Rep. Bobby Scott, a Democrat of Virginia. Scott chairs the House Committee on Education and Labor, which conducted a hearing on the matter Wednesday. “The Department’s lax oversight allowed coal mine executives to shift the cost of paying black lung benefits onto the shoulders of the taxpayers to the tune of nearly a billion dollars, while those same coal executives rewarded themselves with tens of millions of dollars in salaries and bonuses.”

“Lax Oversight”

The companies that transferred liability onto the fund were self-insured, which means that instead of purchasing insurance, the company posted a small amount of collateral and promised it was good for the rest. The practice is falling out of fashion at the state and federal level as coal company bankruptcies reveal many self-insured companies cannot meet their obligations.

In the case of Alpha Natural Resources, for example, the GAO found that the company had posted collateral of $12 million at the time of the company’s bankruptcy, which was just 2.4 percent of the company’s total liability.

The GAO hammered the Department of Labor for its “limited oversight” of how or whether companies were sufficiently insured, even after July 2019 updates to agency policy. In addition to an incomplete review process, the GAO found that companies were still underfunding their liabilities.

“Once the coal industry really started to struggle, regulators found themselves in a hard position,” Macey said. “They had faced pressure not to force companies to fully fund all sorts of regulatory obligations. And then once the industry is in financial distress, they have an extremely difficult choice to make. Because if they force the company to pay out, they [the companies] face the prospect of liquidation.”

The Labor Dept. has taken steps to strengthen its oversight, the GAO said, including requiring companies to post more collateral depending on their risk of collapse. But significant lapses in oversight remain: The DOL also failed to track whether or not coal operators had commercial insurance. “We found six operators (parent or subsidiary) that were not insured for the entire 3 year period from 2016 through 2018, according to our review of DOL data,” the GAO said in the report. “When we discussed our findings with DOL, agency officials had to research each operator individually and in some cases contact the operator or their insurer to find out whether or not they had been covered.”

In response to the allegations in the report, Labor officials said it agreed that further action was necessary. The Office of Workers’ Compensation Programs, which oversees the trust fund, “agrees with the GAO on the importance of improving oversight of coal mine operator insurance, and, as GAO acknowledges, has made major oversight improvements in recent years. OWCP… is committed to ensuring effective oversight of coal mine operator insurance.”

Taxpayer Subsidies

Coal companies have long argued the per-ton tax they pay into the fund has been an undue burden, especially as the demand for coal declines. In 2018, Congress cut the fee by more than half. As a result, there was significantly less revenue going into the fund, even as thousands more miners’ liabilities are being transferred onto it. The GAO warned that would push the fund billions of dollars further into debt. At the end of 2019, Congress restored the old tax rate, but only for one year, leaving the fund’s long-term fiscal future in question. That risk is compounded by the growing number of black lung cases amid an epidemic of the disease in central Appalachia.

Bills pending in both the House and the Senate would raise the per-ton rate companies pay into the trust fund for the next 10 years.

The GAO said the fund has borrowed from the Treasury’s tax-payer funded general fund to make its expenses nearly every year since 1979, and borrowed about $1.9 billion from the general fund in 2019.

Rebecca Shelton, Coordinator of Policy and Organizing at the Appalachian Citizens’ Law Center, which represents coal miners in black lung benefits cases, noted that major coal companies Arch and Peabody did not directly shed liability onto the fund. But, the spokesperson noted, “Patriot Coal was a company made up of troubled assets from these two companies. Black lung liabilities from Arch and Peabody were transferred to Patriot which, as many predicted, subsequently went bankrupt.

The GAO report shows that Patriot shed $230 million onto the trust fund while Arch and Peabody continue to operate. “Congress should act to change the code that governs bankruptcy processes so that bankruptcy protects people, not coal company executives,” Shelton said.

Law professor Macey said the behavior fits a larger pattern in the coal industry. In a 2019 article in the Stanford Law Review, Macey argued coal companies masterfully use the bankruptcy process to spin off debts onto new companies loaded with poorly performing assets, increasing the likelihood that the environmental and employee-health obligations never get paid. “We allow coal companies to basically invoke bankruptcy as a way to externalize regulatory obligations,” Macey said.

“OWCP is wide awake,” said Julia Hearthway, the director of the Labor Department’s Office of Workers’ Compensation Programs, which administers the trust fund. “The self-insurance approval process for coal mine operators has been completely revamped. The process today is robust, it’s financially sound, and it’s designed to protect the trust fund. I also want to stress at the outset that no miner is at risk for not receiving the benefits they deserve.”

The Impact

Alice Hayes is the widow of a coal miner, Douglas Hayes, whose black lung disease made him too sick to work at the age of 43. Hayes has been receiving Douglas’ monthly check from the trust fund, about $650, since his death last October. “I think it’s bizarre that there is not something in place to oversee that that money is going in there for the purpose of the miners,” she said.

Hayes said the cost of her husband’s month-long hospital stays and at-home care could run into the hundreds of thousands of dollars, and the trust fund helped her cover those costs. “When you’re sick, the last thing you want to do is be jerked around and have to fight for something that you shouldn’t have to be fighting for.”

Black Lung Trust Fund Likely Burdened By Murray Bankruptcy

The recent bankruptcy of Murray Energy is likely to significantly increase the debt of a struggling federal trust fund that supports disabled miners’ health care expenses.

That means the struggling fund will likely have to take on at least some of that liability.

The federal fund was established in 1978 to provide monthly stipends and health care coverage for miners disabled by black lung, a preventable and progressive workplace disease. The fund, which is supported by a per-ton tax on coal companies, currently covers expenses for some 25,000 miners and their dependents, and is expected to be $15 billion in debt by 2050. Last year, Congress failed to extend a higher per-ton tax rate, increasing the strain on the fund.

A spokesperson for Senate Majority Leader Mitch McConnell of Kentucky said in an email to the ReSource, “While the temporary, higher tax expired last year, current benefits for our impacted miners and their families have been maintained. Senator McConnell will continue to ensure these important benefits are maintained. Additionally he will continue working on the many ways to help coal miners and the clinics that serve them across Kentucky.”

If the fund becomes insolvent, it may be bailed out by the Treasury’s general fund, effectively transferring the burden of caring for disabled miners from the industry that caused the illnesses to American taxpayers.

“History shows that miners and their families will be forced to pay the price in the form of reduced eligibility for benefits if Congress allows the Black Lung Disability Trust Fund to sink deeper into debt,” Rep. Bobby Scott, chairman of the House Ed and Labor committee, said in a hearing this summer. “Given the recent rise in the most severe form of black lung disease, Congress must take action to secure future benefits and health care for disabled miners.”

A spokesperson for Murray Energy did not respond to a request for comment for this article, but in court filings, newly appointed Chief Executive Officer of Holdings Robert Moore said, “Although Murray has been able to outlast many of its competitors, mounting debt and legacy liability expenses have become too heavy of a burden to sustain under current industry conditions.”

According to recent testimony from the Government Accountability Office, there were 22 self-insured active coal operators as of June 2019. Only 10 of those had provided estimates for their total unfunded liability to the trust fund — that is, the potential debt that could be transferred to the federal government if the company filed for bankruptcy.

“An estimated black lung liability of over $310 million has been transferred to the trust fund from insolvent coal operators,” said GAO Director of Education, Workforce and Income Security Cindy Brown Barnes. “In addition to those liabilities being transferred, there’s also the beneficiaries that have come along with that. There’s been over 1500 beneficiaries that have been transferred to the trust fund as a result of the companies that we looked at from 2014 to 2016.”

Brown Barnes could not confirm how much, if any, liability from Murray Energy would be transferred to the fund.

“Just because a company is bankrupt, it doesn’t necessarily mean that the liabilities are going to be transferred to the trust fund,” Brown Barnes cautioned. “There’s one liability at the time of bankruptcy and then another liability that gets transferred to the fund. It’s not a one-to-one.”

A report further detailing that unfunded liability, and its implications for the solvency of the trust fund, is expected early next year.

A Larger Pattern

As of October 29, Murray reported approximately $2.7 billion in funded debt and over $8 billion in actual or potential legacy liability obligations under pension and benefit plans, including the black lung trust fund. As Murray’s numerous secured creditors vie to recoup as much of their debts as they can, it is likely that there won’t be money left over to pay back environmental, retiree and health care debts.

“When you have this pattern of a large company spinning off its least productive assets and loading those assets with obligations that it obviously doesn’t want to pay, it seems to look like it’s a strategy,” said Josh Macey, an assistant visiting professor at Cornell University.

Macey is a co-author of a recent article in the Stanford Law Review titled, “Bankruptcy as Bailout: Coal Company Insolvency and the Erosion of Federal Law.” In that paper, Macey and his co-author found that since 2012, four of the nation’s largest coal producers used bankruptcy to discharge roughly $3.2 billion in retiree benefits and $1.9 billion in environmental debts, as well as $5.2 billion in other regulatory obligations. Those numbers were current as of April 2019, before the high-profile bankruptcies of Blackjewel, Blackhawk, and Murray Energy.

Macey said Murray took a slightly different tack than other companies in similar positions. Rather than spinning off unprofitable assets into new companies that were designed to fail, Macey said, “Murray went about snatching [assets] up at a pretty frenzied pace, because it was able to in that way pledge more assets as collateral and give its own creditors tons and tons of collateral that ensured they, too, would be paid before miners and the environment.”