Docket Number: 20121129-6523-1

EMPLOYEE: [Name Deleted]

CLAIMANT: [Name Deleted]

FILE NUMBER: [Number Deleted]

DOCKET NUMBER: 20121129-6523-1

DECISION DATE: April 10, 2013

NOTICE OF FINAL DECISION FOLLOWING

A REVIEW OF THE WRITTEN RECORD

 

This is the decision of the Final Adjudication Branch (FAB) concerning the above claim under Part E of the Energy Employees Occupational Illness Compensation Program Act of 2000, as amended (EEOICPA), 42 U.S.C. § 7384 et seq. For the reasons stated below, the claim for benefits under Part E for chronic beryllium disease (CBD) is denied.

 

STATEMENT OF THE CASE

 

On February 29, 2012, FAB issued a final decision accepting the claimant’s initial claim under Part B of EEOICPA for CBD. In that final decision, FAB determined that the claimant was a covered beryllium employee and awarded him a lump-sum payment of $150,000.00 based on evidence establishing that he was employed at the Beryllium Corporation of America facility in Hazelton, Pennsylvania, for the period from September 9, 1957 through December 31, 1979. The Manhattan Engineer District and the Atomic Energy Commission (AEC) contracted with the Beryllium Corporation of America for the production of beryllium metal, beryllium oxide and beryllium powder, and for the refining and fabrication of beryllium at the Hazelton Plant. That facility also produced beryllium blanks for the Y-12 Plant in Oak Ridge, Tennessee, and the Rocky Flats Plant in Golden, Colorado, which are Department of Energy (DOE) facilities. The Beryllium Corporation of America facility in Hazelton is designated as a beryllium vendor facility for the period 1957 through 1979.[1]

 

Subsequent to the issuance of the February 29, 2012 final decision, the claimant’s authorized representative sent a March 26, 2012 letter to the Cleveland district office of the Division of Energy Employees Occupational Illness Compensation (DEEOIC), asking that DEEOIC designate the Hazleton Plant as a DOE facility.[2] In his letter to the district office, the authorized representative argued that the Hazleton Plant meets the definition of a DOE facility due to the nature of the contractual relationship between the Beryllium Corporation of America and the AEC. In support of this argument, the representative submitted several documents that he believed demonstrate DOE’s proprietary interest in the Hazleton Plant and/or its retention of management and operational control of the Plant. Those documents included:

 

• Copies of AEC internal memoranda from its New York Operations Office indicating that the AEC provided industrial hygiene consultation services and recommended exposure tolerance levels to all beryllium vendors, and that such services were considered stopgap measures until such time as these responsibilities could be transferred to the beryllium vendors.

 

• A copy of the September 1, 1956 contract between the AEC and the Beryllium Corporation of America, (identified as Contract No. AT (11-1)465), in which the Beryllium Corporation of America agreed to supply the AEC with 500,000 pounds of beryllium at a set price, and to “furnish all facilities, equipment, raw materials, supplies and services necessary” to produce and deliver the agreed upon amount of beryllium at its Hazleton Plant. The Beryllium Corporation of America also agreed that the AEC had the right to provide government-owned beryl ore in lieu of beryl ore it might otherwise want to purchase from a private source to produce the beryllium it was entering into a contract to deliver to the AEC.

 

• Memoranda dated August 10, 1960 and September 16, 1960, in which AEC staff reviewed the health clauses of the 1956 contract with the Beryllium Corporation of America (and the similar contract with the Brush Beryllium Company), noted that the AEC had the primary responsibility for determining that health standards were being met, and concluded that the AEC had the right (but not an obligation), in the event the Beryllium Corporation of America failed to comply with health standards in the contract, to either temporarily waive those standards or to shut operations down, and criticized this approach as inconsistent with “the philosophy of lump sum supply contracting.”

 

• A memorandum to the members of the AEC, dated September 22, 1960, noting that the AEC was currently allowing the Beryllium Corporation of America to continue operating its Hazleton Plant while the tolerance levels for beryllium set out in its health regulations were being exceeded. The justification was that retooling the plant to bring it in line with the standards would both increase the cost tenfold and require the plant to be shut down and rebuilt, which would be unacceptable given the immediate need for the material.

 

• A March 8, 1961 status report on Contract No. AT(11-1)-465 (and the AEC’s similar contract with the Brush Beryllium Company) to the AEC’s General Counsel, reaffirming the ability of the AEC to refrain from enforcing the health provisions under the contract. The memorandum also noted that in 1958 the contract was partially terminated and that under a settlement the Beryllium Corporation of America received $2,377,000 rather than $1,680,000 for amortization.

 

• An internal AEC memorandum dated July 14, 1966, addressing concerns raised by the Beryllium Corporation of America (and other beryllium vendors) that the AEC would start performing in-house beryllium work for other government agencies at a lower cost, thereby depriving the vendors of work, and suggesting a response to anticipated congressional concern that the AEC was purchasing beryllium at a higher price from private industry than it would cost to produce at its own facilities.

 

• A December 9, 1983 report from DOE’s Office of Strategic Planning and Analysis, presenting a historical review of beryllium production in the United States, in which it was noted that the Beryllium Corporation of America and the Brush Beryllium Company both built plants “with AEC capital backing based on ‘projected government needs.”

The authorized representative also referenced EEOICPA Fin. Dec. No. 10043931-2006 (Dep’t of Labor, March 10, 2008), in which FAB defined the term “proprietary interest” for the purposes of determining whether a facility qualifies as a DOE facility under EEOICPA. In this final decision, FAB explained that to establish that DOE or one of its predecessor agencies had a propriety interest in a facility, the evidence must show that DOE had rights of “ownership, use or control” of the buildings in which the employees worked. The representative argued that under this test, the AEC held a proprietary interest in the Hazleton Plant, since the documents cited above show that the AEC “acted as if it were an owner or contractor,” and that it had a contractual right of surrender of the facility in case of default.

The district office referred the representative’s request for reclassification to the DEEOIC Policy Branch for review. In a memorandum dated September 13, 2012, the Branch Chief determined that while the evidence showed that the Hazleton Plant did conduct operations on behalf of the AEC, the evidence did not support a finding that the AEC held a propriety interest in the Plant, or that the AEC had entered into a contract with the Beryllium Corporation of American for management and operation of the Hazelton Plant. Therefore, he determined that the evidence did not establish that the Hazleton Plant was a DOE facility as defined under EEOICPA. This determination was based on a September 10, 2012 legal opinion from the Counsel for Energy Employees Compensation, who reviewed the arguments and supporting documentation to determine whether they would support a finding that the Hazelton Plant was a DOE facility, as that term is defined in the statute.

 

On November 28, 2012, the district office issued a recommended decision to deny this claim for CBD under Part E. The basis for the recommended decision was that the evidence did not establish that the Beryllium Corporation of America facility in Hazleton was a DOE facility as defined under EEOICPA, and therefore the claimant was not a covered DOE contractor employee due to his employment at the Hazleton facility.

 

OBJECTIONS

 

In a January 25, 2013 letter, the claimant’s authorized representative objected to the Cleveland district office’s recommended decision. In that objection letter, the representative disagreed with the recommended finding that the Hazleton Plant did not meet the statutory definition of a DOE facility, arguing that it improperly relied on the legal opinion of the Counsel without independently considering or commenting on the specific legal arguments or supporting exhibits offered in support of his client’s claim.

 

On review of the objections submitted by the authorized representative, I note that although the district office’s recommended decision did not specifically enumerate the arguments and exhibits offered in support of the request for reclassification of the Hazleton Plant, these legal and factual arguments were fully addressed in the Counsel’s September 10, 2012 legal opinion, which is part of the record. I further note that the authorized representative has not presented any additional evidence or arguments concerning the facility designation that were not already addressed in the Counsel’s legal opinion.

 

In his legal opinion, the Counsel noted that under EEOICPA, a beryllium vendor facility such as the Hazleton Plant may also be designated as a DOE facility if it meets the definition of that term as set forth in EEOICPA, which requires a showing that the facility is one in which: (A) operations are, or have been, conducted by, or on behalf of, DOE (or its predecessor agencies); and (B) with regard to which DOE has or had either (i) a proprietary interest, or (ii) entered into a contract with an entity to provide management and operation, management and integration, environmental remediation services, construction, or maintenance services. See 42 U.S.C. § 7384l(12).

 

Applying this two-prong test, the Counsel noted that pursuant to the terms of Contract No. AT(11-1)-465 between the Beryllium Corporation of America and the AEC, the Beryllium Corporation of America agreed to construct the plant and facilities at the Hazleton location that would be needed to produce and deliver to the AEC 500,000 pounds of beryllium over a five-year period, and to actually produce and deliver the beryllium in accordance with those terms. Under Article II, section 4 of the contract, the AEC had the right to allocate and divert the beryllium produced under the contract to other purchasers, but only for government use or for the fabrication of items to be supplied to the government. Therefore, the Counsel opined that the contract constituted sufficient evidence that operations by or on behalf of the AEC occurred at the Hazleton Plant so as to meet the first “prong” of the “DOE facility” definition at 42 U.S.C. § 7384l(12)(A).

 

With respect to the second prong of the test, however, the Counsel advised DEEOIC that Contract No. AT(11-1)-465 did not convey any ownership interest, right of use or control of the Hazleton Plant, and the remainder of the contract did not reflect an intent by the AEC to exercise ownership rights over the Plant while the contract with the Beryllium Corporation of America was in effect. Further, after evaluating the terms of the AEC’s beryllium supply contract and the related documents submitted by the claimant’s authorized representative, the Counsel concluded that the evidence did not show that the Beryllium Corporation of America conveyed to the AEC any right of ownership, use or control of the Hazleton Plant. Thus, the Counsel concluded that the AEC did not have a proprietary interest in the Hazelton Plant.

 

Lastly, the Counsel evaluated the evidence with respect to whether the AEC had entered into a contract with the Beryllium Corporation of America “to provide management and operation” for the Hazleton Plant. Counsel’s legal opinion was that neither Contract No. AT(11-1)-465, nor any of the other supporting documents cited by the representative, were consistent with the description of “management and operation” contracts in DOE’s Acquisition Guide (October 2007),[3] which usually are contracts by which a private entity both manages and operates a government-owned facility. Further, he explained that even if the terms “management and operation” could be construed to encompass contractual arrangements under which the AEC assumed management and operation of a facility that was not owned by the government, the AEC’s obligations under its contract with the Beryllium Corporation of America did not amount to “management and operation” responsibilities.

 

After reviewing the claimant’s authorized representative’s March 26, 2012 letter requesting reclassification of the Hazleton Plant and supporting exhibits, the Counsel’s September 10, 2010 legal opinion, the objections to the recommended decision, and all the evidence of record, I both concur with and adopt the conclusions reached by the Counsel in his legal opinion. Accordingly, I find that the evidence is not sufficient to establish that the Hazleton Plant meets the statutory definition of a DOE facility.

 

FINDINGS OF FACT

 

1. The claimant worked at the Beryllium Corporation of America’s Hazelton Plant from September 9, 1957 to December 31, 1979.

 

2. The Hazelton Plant was a statutory beryllium vendor facility pursuant to 42 U.S.C. § 7384l(6)(E).

 

3. On February 29, 2012, FAB issued a final decision finding that the claimant was a “covered beryllium employee” who had contracted CBD and awarded him $150,000.00 under Part B.

 

4. The claimant subsequently filed a claim for benefits under Part E and argued that the Hazelton Plant was a DOE facility.

 

CONCLUSIONS OF LAW

 

A claimant who receives a recommended denial from the district office is entitled to file objections to the decision. 20 C.F.R. § 30.310 (2013). In reviewing any objections submitted, FAB will review the written record, to include any additional evidence or argument submitted by the claimant, and conduct any additional investigation determined to be warranted in the case. I have reviewed the record in this case and conclude that no further investigation is warranted. 20 C.F.R. § 30.313.

 

To be afforded coverage under Part E of EEOICPA, the evidence must establish that the claimant is a covered DOE contractor employee whose exposure to a toxic substance at a DOE facility was “at least as likely as not” a significant factor in causing, contributing to, or aggravating the claimed condition. 42 U.S.C. § 7385s-4.

 

The statute defines the term “Department of Energy contractor employee” as an individual who is or was employed at a DOE facility by—(i) an entity that contracted with DOE to provide management and operating, management and integration, or environmental remediation at the facility; or (ii) a contractor or subcontractor that provided services, including construction and maintenance, at the facility. 42 U.S.C. § 7384l(11). And the statutory definition of a DOE facility has already been set out above. Taken altogether, and with respect to this particular claim, eligibility for Part E benefits is limited to DOE contractor/subcontractor employees who worked at DOE facilities. If the only employment on which a claim is based is at a beryllium vendor facility, there is no entitlement to compensation under Part E.

 

In this case, the evidence shows that the claimant was employed at the Beryllium Corporation of America’s Hazelton Plant, which is designated as a beryllium vendor facility. For the reasons outlined in the Counsel’s legal opinion, which I both concur with and have adopted in this final decision, I conclude that the evidence in the case file is not sufficient to establish that DOE (or its predecessor agencies) had a proprietary interest in the Hazleton Plant, or that it entered into a contract with an entity to provide management and operation of the Hazleton Plant. Therefore, I conclude that the evidence presented to me does not establish that the Hazleton Plant is a DOE facility as defined under EEOICPA and as a result, the claimant does not qualify as a covered DOE contractor employee.

 

For these reasons, this claim under Part E of EEOICPA for CBD is herby denied.

 

Cleveland, Ohio

 

 

 

Greg Knapp

Hearing Representative

Final Adjudication Branch