Island Fork Construction v. Bowling, No. 16-4319 (STRANCH, Moore, Donald).

Island Fork Construction v. Bowling, No. 16-4319 (STRANCH, Moore, Donald).

Bowling worked as a coal miner for over 29 years, and applied for benefits under the Black Lung Benefits Act. His most recent employer denied that it was responsible for paying the benefits, and the matter went before an administrative law judge. At that point, the employer informed the judge that it and its insurer were both insolvent. There is no mechanism by which an ALJ can designate a different responsible operator, so the question before the ALJ was whether the Benefits Act Trust Find or the Kentucky Insurance Guaranty Association (KIGA) should be responsible for paying the benefits. The ALJ held that KIGA was responsible, and a Review Board agreed. KIGA appealed.

KIGA’s argument was that Benefits Act was authorized by the Longshore and Harborworkers Act, and should therefore be considered “ocean marine insurance,” which is excluded under the Guaranty Act, which created KIGA and defines the insurance KIGA must guarantee. Alternatively, KIGA argued that the Benefits Act Trust Fund acts as a guarantor of benefits, and therefore KIGA should not be responsible under another Guaranty Act exception for insurance “guaranteed by . . . governmental agencies.”

The Sixth Circuit affirmed that KIGA is responsible for paying the benefits. The Court held that the Benefits Act was not authorized by the Longshore Act, and there is no logic in finding the two statutes similar because the Longshore Act directly involves traditional maritime activities. The Court also held that there were no contracts between the Trust Fund and any insurance companies to make the Trust Fund a guaranty under Kentucky law. Because no exception to the Guaranty Act applies, KIGA must guarantee the insurance agreement between Island Fork and its insurer.