Coal Industry Wants Legislature's Help To Recruit And Train Miners

Hamilton said Senate Bill 157 could help do that, by funding the Coalfield Community Development Office.

The West Virginia coal industry’s top lobbyist says mine companies are having trouble finding workers, and he’d like lawmakers to help recruit and train them.

Chris Hamilton, president of the West Virginia Coal Association, told members of the Senate Energy, Industry and Mining Committee on Tuesday that West Virginia coal mines could hire several hundred workers, if it could find them.

“You know, we ought to be recruiting people from around the country, bringing them here and providing them land and opportunities within our industrial sector,” he said.

Hamilton said Senate Bill 157 could help do that, by funding the Coalfield Community Development Office. That office has been dormant for at least a decade, Hamilton said.

The state employs about 13,000 full-time mine workers. Coal production has been up in the past year, but the industry has been limited by its ability to find new workers.

The committee approved the bill and sent it to the Finance Committee.

The funds would come from coal severance taxes, which have increased with the demand for coal and higher prices per ton.

Blackjewel Coal Moves To Liquidate, Leaving Millions Unpaid To Workers And Regulators

The convoluted bankruptcy of coal company Blackjewel has hit another turn of events as the company’s former CEO moved to liquidate the company. A federal judge is considering a motion submitted last week to convert the bankruptcy from Chapter 11 to Chapter 7.

That would mean that instead of exiting bankruptcy as a new company with less debt, Blackjewel L.L.C. would effectively cease to exist.

Former Blackewel CEO Jeff Hoops, who is currently under investigation for mismanagement of the company, said in a filing that Blackjewel had only $146,000 in unrestricted funds, and could not pay millions in back taxes, reclamation fees and employee healthcare expenses.

“Given [Blackjewel’s] lack of operating assets, permanent, negative net cash flow, and continuing financial losses, there is no reason to continue this proceeding as a Chapter 11 and incur the substantial and unnecessary administrative expenses attendant to doing so,” Hoops and other filers said in the November 25 motion.

“It’s pretty common for companies to shift from a Chapter 11 to a Chapter 7 when they’re struggling like Blackjewel is,” said University of Chicago School of Law assistant professor Joshua Macey, a coal bankruptcy expert. “Given how long this bankruptcy has dragged on, how poor conditions for coal are right now, how speculative and unprofitable Blackjewel’s assets have been, it isn’t surprising that it’s moving to a liquidation.”

Still, Macey said, the move is another recognition by the coal industry’s major players that mining it is rarely profitable.

According to court filings, virtually all of Blackjewel’s assets have been sold, and the company’s only remaining assets are $146,243 in unrestricted cash and existing claims against Hoops, his wife and children, and a handful of other parties.

Attorneys for Blackjewel attempted to sell Blackjewel’s equipment and mining permits in Kentucky, West Virginia, Virginia and Wyoming soon after the company filed for Chapter 11 bankruptcy protection in July last year. Some permits were successfully sold, but others did not sell, due in large part to the declining market for “steam” coal, which is used to generate electricity. The assets that did sell were recouped for far less than their value: Blackjewel sold an estimated $357 million worth of assets for just $44 million.

Blackjewel accrued $80 million in administrative and other expenses from July 1, 2019, through October 31, 2020.

According to court filings, Blackjewel also has multiple outstanding permit violations, an unknown amount of outstanding environmental reclamation liabilities, unpaid taxes totaling $3.2 million, tax liabilities of untold amounts, $14.9 million in unpaid employee healthcare claims, unfunded pension obligations totaling $11.9 million, and tens of millions due to the legal teams that have administered the bankruptcy.

It is not clear how much of those debts will be repaid, but given the Blackjewel estate’s dire financial straits and the proposed conversion to a Chapter 7 plan, it seems that a significant portion of those debts will not be recovered.

The Chapter 7 petition comes nearly a year and a half after Blackjewel abruptly filed for bankruptcy last July, leaving hundreds of Appalachian coal miners out of work and unpaid, and spawning one of the largest labor protests in the region in decades.

Correction: This story was edited on Dec. 3 to make clear that the judge has not yet approved the Chapter 7 conversion proposal.

Blackjewel Miners Could Get More Money From Proposed Settlement

A proposed $17.3 million settlement of a class action lawsuit would provide additional payment for hundreds of Appalachian coal miners who were suddenly left jobless by the abrupt bankruptcy of the Blackjewel mining company. 

The settlement must be approved by the judge overseeing the complicated Blackjewel bankruptcy case. Although it is not yet final, attorneys for the miners call the agreement a “major victory” in bankruptcy court, a venue that is often not favorable to workers’ claims. 

Blackjewel miners made national headlines last summer with a nearly two-month protest that blocked a load of coal on railroad tracks in eastern Kentucky. The company’s sudden and chaotic bankruptcy left about 1,700 miners in Kentucky, Virginia, West Virginia and Wyoming out of work. Many of them found that their last paychecks had been “clawed back,” or removed from bank accounts.

The combination of protests, legal action, and intervention by the U.S. Department of Labor finally got most of the miners the pay they were owed. The proposed settlement filed Tuesday with the federal bankruptcy court would get each miner an additional payment — the equivalent of 44 days of pay — from the Blackjewel estate for penalties for violating a federal law known as the WARN Act. 

“What our settlement focused on was penalties for the late payment of those wages and severance pay,” said Sam Petsonk, one of the lawyers representing the Blackjewel miners. 

Credit Courtesy of Ned Pillersdorf / Ohio Valley Resource
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Ohio Valley Resource
An attorney briefs miners attending the Blackjewel bankruptcy hearing.

“If we recover the full $17 million, that is almost unheard of in bankruptcy,” Petsonk said. “Even securing this [agreement] is a major victory for miners in bankruptcy court.”

Stern WARNing

The class action lawsuit Petsonk and other attorneys filed had sought penalties under the Worker Adjustment and Retraining Notification Act of 1988, known as the WARN Act. That law requires large employers to provide their workers with 60 days of advance notice before a plant closure or mass layoffs that would affect more than 50 people. 

The WARN Act, first proposed by Ohio Democratic Sen. Howard Metzenbaum, is intended to give workers and their families time to prepare for the loss of a job, and it was viewed as an important labor victory in an era of growing global competition and declining employment in U.S. manufacturing. (One telling historical footnote: The bill became law without President Ronald Reagan’s signature.)

“This is probably the most flagrant WARN Act violation in history,” said Ned Pillersdorf, an attorney in Kentucky representing the former Blackjewel miners. “No notice, and they clawed back paychecks,” he said.

Petsonk, who is also the Democratic nominee seeking the attorney general’s office in West Virginia, said the WARN Act has become more important for coal-dependent communities as the industry declines.

“It is a powerful law and we use it a lot,” he said. Those cases have included instances where the mining company was the largest employer in a small town. A few of the WARN suits were against mines belonging to the family of West Virginia Gov. Jim Justice.  

Credit Tiller Press / Ohio Valley Resource
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Ohio Valley Resource
This story is part of a series revisiting themes, places and people in the new Ohio Valley ReSource book, “Appalachian Fall.”

“The WARN Act provides some cushion, it allows people to pivot,” by pursuing job training or education, Petsonk said. “When we use our laws we can really protect our people.” 

Blackjewel’s Multifaceted Bankruptcy   

The settlement agreement now awaits a hearing in federal bankruptcy court and then a ruling by the judge assigned to the Blackjewel bankruptcy case, Benjamin Kahn. The outcome is far from certain.

“It’s probably one of the most complicated bankruptcies,” Pillersdorf said. The court docket reflects hundreds of claims from vendors and other companies seeking millions of dollars in payment, and government agencies seeking millions more for unpaid royalties and environmental damage left behind by mining.  

Several creditors in the case allege that former Blackjewel CEO, Jeff Hoops, drained company revenue into other accounts and activities. The settlement agreement includes a $125,000 payment from Hoops, his son, and another company associated with his family, Lexington Coal Company. 

When the protesting Blackjewel miners were on the tracks last summer, Pillersdorf warned them that bankruptcy court was a bit like a funeral home. No one leaves happy.

Credit Sydney Boles / Ohio Valley Resource
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Ohio Valley Resource
Felicia Cress on the first day of the miners’ protest.

“The general rule is with wage earners in bankruptcy court, you get screwed,” he said. He is hopeful, however, that the settlement agreement will give miners a better chance. “This settlement, I think, is fair. The problem has always been figuring out what is left in the Blackjewel estate.”

This story is part of a series revisiting themes, places and people in the new Ohio Valley ReSource book, “Appalachian Fall.”

 

As Unemployment Soars W.Va. Receives Federal Aid For Coal Miners, Airports

West Virginia has received two federal grants to help with infrastructure and workforce projects in the state.

More than $2 million was awarded to Workforce West Virginia through the National Dislocated Worker Grant for programs to help out-of-work coal miners.

This grant comes at a time when unemployment claims in West Virginia are 18 times higher than normal. According to a press release, the money will help 192 West Virginia coal workers and employers through dislocated worker training and employment programs.

The state has received more than $15 million total through the grant since 2012 to help offset an increase in coal industry layoffs. 

West Virginia received a separate grant of nearly $10 million from the Federal Aviation Administration. The money is part of the recent CARES act passed by Congress in response to the ongoing pandemic.

The grant will help 23 West Virginia airports that have lost money during the COVID-19 pandemic. The Yeager Charleston Airport will receive over half of the $10 million, with smaller airports in the state receiving between $20,000 and $30,000. 

Black Lung Benefits Drop For Kentucky Coal Miners After Controversial Law Change

Lynn Estel Stanley was the kind of coal mine foreman who wanted to know if there was a safety problem, and would always be the one to go fix it himself. He was also the kind of miner who refused to slow down, even when his men told him he was overexerting himself. But when he was 69, his doctor told him it was time to stop for good.

Stanley wasn’t surprised. He knew he was getting sick. “It kept getting progressively worse and harder to breathe to the point where I just couldn’t do my job, I didn’t have enough oxygen,” he said.

He had watched coal-miner relatives die of black lung, a form of lung disease caused by breathing in coal and rock dust. Particulates lodge in the lungs, causing the tissue to harden and restrict the amount of oxygen that can enter the bloodstream.

Stanley also knew that if he could prove to a judge that he had the disease, he would be entitled to financial benefits.

Credit Sydney Boles / Ohio Valley ReSource
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Ohio Valley ReSource
Lynn Stanley, left, is caught up in changes to the law that may make it more difficult for him to win black lung benefits. On right, his attorney Tom Moak.

So he got a chest X-ray, and was diagnosed with progressive massive fibrosis, the most serious form of black lung disease, by a radiologist named Brandon Crum. Over the next few months, three more physicians would tell Stanley he had a serious case of the disease.

But in court, none of that would matter.

As the epidemic of black lung disease continues in Appalachian coal country, Stanley is one of many Kentucky miners caught up in changes to state law limiting who can diagnose black lung.

Two years ago, Kentucky lawmakers made a controversial change to the rules for black lung benefits. Now, state records show that since that change, the percent of Kentucky miners diagnosed by state-approved experts as having the disease fell from 54 percent before the law change to just 26 percent. An analysis of state data by the Ohio Valley ReSource also suggests that the doctors now making decisions on claims more often side with coal companies than with coal miners.

For Stanley that change means that the opinion of one pulmonologist will hold more weight than three other physicians, potentially costing him benefits he’ll need to live with his disease.

A Difficult Diagnosis

In order to be awarded benefits for black lung in Kentucky, a miner or a family member of a miner applies for benefits with the state’s Labor Cabinet. The application includes a blood gas analysis indicating breathing impairment, and an X-ray demonstrating that the impairment is caused at least in part by black lung disease. Pulmonologists typically perform the blood gas study, and radiologists typically diagnose the disease by reading the X-ray.

Credit Alexandra Kanik / Ohio Valley ReSource
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Ohio Valley ReSource

Once the claim is filed, the miner’s most recent employer’s insurance company can request to have an X-ray read by a physician of their choosing, and the judge overseeing the case can require a third reading from a “designated evaluator,” whose analysis is presumed to be correct unless there is overwhelming evidence to the contrary.

In 2018 Kentucky lawmakers overhauled many aspects of the state’s workers’ compensation system in legislation known as House Bill 2. One provision of that bill prevented radiologists, whose expertise is in analyzing X-rays, from serving as designated evaluators in state claims, and said only certain pulmonologists could serve in that role. Only two pulmonologists in the state opted to serve in the new system: Dr. Bruce Broudy and Dr. Byron Westerfield. Both have reputations for being more sympathetic to industry.

The designated evaluator who read Stanley’s X-ray, Dr. Broudy of the Lexington Clinic, disagreed with the three other physicians involved in Stanley’s case. Dr. Broudy said the miner had a simpler form of the disease, and would therefore be entitled to less money.

“Unfortunately, that’s not uncommon in these cases,” said Tom Moak, a Prestonsburg attorney representing Stanley in his benefits case. “Somebody like Dr. Broudy, who has a history of working for coal companies, generally is considered more conservative. He almost always finds that somebody doesn’t have any black lung, or has one of the lower levels of black lung.”

Data from Kentucky’s Department of Workers’ Claims showed that taken together, Drs. Broudy and Westerfield disagreed with the initial diagnosis in 85.5 percent of cases they examined. Both pulmonologists declined to be interviewed for this story.

Credit Alexandra Kanik / Ohio Valley ReSource
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Ohio Valley ReSource

Dr. Broudy told Moak in a recent deposition that in his 40 years of work in black lung cases, 90 to 95 percent of the time he had been working for coal companies or their insurance firms.

The changes to state law have not resulted in a backlog of cases, as opponents had feared. But state records indicate that the restrictions have had an impact on the share of miners who win their claims. The ReSource found that 161 benefits claims were filed but only 16 coal miners were awarded black lung benefits in 2019. That’s the lowest ratio of claims awarded to claims dismissed in the past seven years. (It is important to note, though, that not all claims are resolved in the same calendar year in which they’re filed.)

Physicians’ Protest

Black lung disease can be difficult to diagnose because it can manifest in a number of different ways, said Virginia-based radiologist Kathy DePonte, a nationally recognized expert in diagnosing black lung. “But you can look at the radiograph and, with enough experience, make a fairly confident diagnosis.”

DePonte looks for what are called opacities on the X-ray. “What’s the size, shape, density of those opacities? Are they symmetric, are they asymmetric?” Multiple small opacities may masquerade as one large one; thinning edges of an opacity may make it appear smaller than it really is. Black lung is easy to misdiagnose as other diseases because it can look so many different ways in an image.

“When you’re looking at a radiograph, it’s what do you expect to see, what do you want to see,” DePonte said.

The combination of the skill it takes to look for a “polar bear in a snow storm” and the perspective an individual reader takes toward black lung means that over time, physicians develop a reputation for reading more or less liberally. But with the right training, DePonte said, both pulmonologists and radiologists can and do adequately diagnose black lung.

DePonte was baffled by Kentucky lawmakers’ decision in 2018 to block radiologists from reading X-rays. “My first thought is maybe it was a political decision.”

Introduced by state Rep. Adam Koenig, a Kenton Co. Republican, the black lung provisions in HB 2 made Kentucky the only state to prevent radiologists from reading X-rays in state claims.

Republican state Sen. Phillip Wheeler, a lawyer who represents black lung claimants, alleged the bill was intended to limit the number of miners who won benefits. He referred to the new law as the “Brandon Crum Exclusion Bill.”

A radiologist based in Pikeville, Crum is certified by the National Institute for Occupational Safety and Health to diagnose black lung. In 2016, Crum alerted researchers at NIOSH to the extraordinary levels of complicated black lung, or PMF, he was identifying in his clinic. He later worked with NIOSH on a 2016 study confirming a cluster of black lung in central Appalachian coal communities. Follow-up research found that one in five experienced central Appalachian coal miners would develop some form of the disease.

The law change came at a time when struggling coal companies were laying off a record number of workers and when more miners were applying for and winning benefits in state cases. The bill had strong support from the coal industry, including Kentucky’s Coal Association.

“What we’ve seen is a more accurate diagnosis and treatment plan post-House Bill 2,” Coal Association President Tyler White said. “A lung specialist should be diagnosing lung issues. Not radiologists.”

Credit Alexandra Kanik / Ohio Valley ReSource
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Ohio Valley ReSource

The professional associations for both pulmonologists and radiologists disavowed the provision in the 2018 law and have called for its repeal. Speaking on behalf of the American Thoracic Society, which represents over 1,500 pulmonologists, Dr. Robert Cohen of the University of Illinois at Chicago told NPR in 2018 that the Kentucky law was “ill-considered” and a “disservice to miners.”

An Uphill Battle

The issue has caught the attention of Kentucky state Rep. Angie Hatton, a Democrat who represents Letcher Co. in eastern Kentucky. Hatton has introduced a bill in the 2020 legislative session that would essentially undo the provision that excluded Crum, DePonte and other radiologists.

The bill has the support of Kentucky Gov. Andy Beshear, a Democrat, who has called attention to the geographic challenges posed by the restrictions in the 2018 law. “Almost all of our coal miners live in western and eastern Kentucky — the two sides of our state. But in order to get the diagnosis they need to receive treatment for a very difficult disease, guess where they have to go? To Lexington or to Louisville. I think that’s wrong,” Beshear said.

Credit Sydney Boles / Ohio Valley ReSource
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Ohio Valley ReSource
Kentucky Gov. Andy Beshear voiced his support for reform of the black lung law at a February 14 event in Pikeville.

Sen. Wheeler has suggested he may introduce a similar bill in the Senate, but only if Hatton’s bill does well in the House. And that depends on the chair of the House Economic Development & Workforce Investment Committee, Rep. Russell Webber, Republican of Shepherdsville.

“I have spoken with Chairman Webber and with the sponsor of the original reform bill, Representative Koenig. I am presenting them with more evidence every time I speak with them, gathering evidence from the miners themselves, from the health care facilities here, and from the Department of Workers’ Claims,” Hatton said. “And I think that once I give them enough evidence, that they’re going to give me a hearing.”

Rep. Webber has not indicated he will bring Hatton’s bill up for a hearing.

The road ahead looks difficult for coal miner Lynn Stanley, too. He may be working with attorney Tom Moak for years as his state and federal black lung claims wind through parallel systems. (According to the U.S. Department of Labor, 32 percent of Kentucky miners who file black lung claims win benefits in the federal system.) If he wins his case, the insurance company representing his most recent employer might appeal, which could drag the case on even longer.

But Stanley is patient, and he’s understanding.

“I’m not putting the coal companies down, I realize they’re in a fight for survival right now,” he said. But, he added, “If they harm an individual and that individual can prove that he has been harmed by that dust, then he should be compensated for it.”

Us & Them: Three Tales of Coal

For decades, coal was king in West Virginia. It paid good wages, paid the bills for many local services through taxes, and kept small towns alive. But more of our nation’s electricity is starting to come from other sources like wind and solar power. Coal is losing out.

This Us & Them episode brings us three tales of coal and its future in Appalachia. Two of those tales come from men who grew up in the same neighborhood in Charleston, WV and now hold very different perspectives. Andrew Jordan owns mines. Joe Lovett is an environmental lawyer. Our third tale comes from journalist Ken Ward, who has covered the coal industry for decades. He says West Virginia needs to look at another energy player – natural gas – to determine its future.

You also can listen to this episode of Us & Them on WVPB Radio on Thursday, October 24, 2019 at 8 p..m. Tune in to Us & Them on the fourth Thursday of the month at 8 PM, with an encore presentation on the fourth Saturday at 3 PM.

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