Request By:
Gemma M. Harding
Deputy General Counsel for Appeals
Department of Labor
801 West Jefferson Street
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; Martin Glazer, Assistant Attorney General
You seek an opinion of this office concerning who should represent the Coal Miner's Pneumoconiosis Fund (hereafter CMPF) where there is a conflict with its interest and that of the Special Fund (hereafter SF). The problem appears to be as much administrative as it is legal.
You point out that at the present time, the SF and the CMPF are both represented by the same attorney employed by the Department of Labor. Usually, their interests are identical.
Under KRS 342.317, when an employee has worked for more than one coal mine (which is 90% of the cases) an award is split 20% to all the employers, 40% to the SF, and 40% to CMPF.
Where an employee is totally disabled both from an injury and from silicosis, the injury claim is paid first. While the SF may have liability in an injury award, the CMPF's liability only results from pneumoconiosis. If the SF is able to convince the board to reduce the injury claim, the liability for the occupational disease is increased. In such instance, the SF and the CMPF's interests are divergent and in conflict. The same attorney cannot represent clients having conflicting interests. He must drop one of them.
KRS 342.122 sets up the SF and subsection 3 provides in part that the "[Special] fund shall be used only for the payment of awards of compensation made by the board and chargeable against said fund, expenses of legal representation thereof, . . ." (emphasis supplied.) So, technically, under present procedure the SF is paying attorneys for representing both itself and another entity, contrary to the language of the statute, unless part of that attorney's salary is borne out of the general fund budget of the Department of Labor.
KRS 342.317 creates the CMPF, which is administered both by the Department of Labor and the Department of Finance. Subsection 2 of that statute provides: "Money in this fund shall be used only for the payment of Workmen's Compensation awards made by the board and authorized by this section."
So, under that statute only awards can be paid out of the CMPF. The cost of attorney representation must come from another source.
If the Department of Labor paid for both SF and CMPF attorneys in a conflicting case, it would be subsidizing competing interests, even though costs of such representation came from different funds (SF and General Funds budgeted to the Department of Labor).
Should the Attorney General represent the CMPF? He, too, may have a conflict. He represents the Uninsured Employer's Fund (KRS 342.760) and in many cases, including pneumoconiosis, some of the coal mine employers are uninsured and the Attorney General would be called upon to represent that entity.
Thus, the only logical entity for representing the CMPF is the Department of Finance, which is the co-administrator of the CMPF. Where there is a conflicting case, the Department of Finance should employ counsel pursuant to KRS 12.210 to represent the CMPF. Since the cost of representation cannot be borne out of the CMPF under the present language of KRS 342.317, such cost must come from the Department of Finance's regular budget. Where this may be a burden, statutory changes should be considered in 1980 to allow the CMPF to pay for its necessary administrative costs, including attorney fees.