Sigmon Coil Co. v. Apfel

• Decision Date: 26 October 1999
• Docket Number: No. 99-1219,CA-96-148-2,99-1219
• Citation: 226 F.3d 291
• Parties: (4th Cir. 2000) SIGMON COAL COMPANY, INCORPORATED; JERICOL MINING, INCORPORATED, Plaintiffs-Appellees, v. KENNETH S. APFEL, COMMISSIONER OF SOCIAL SECURITY, Defendant-Appellant. TRUSTEES OF THE UNITED MINE WORKERS OF AMERICA COMBINED BENEFIT FUND, Amicus Curiae. (). . Argued:
• Court: U.S. Court of Appeals — Fourth Circuit

Page 291

226 F.3d 291 (4th Cir. 2000)

SIGMON COAL COMPANY, INCORPORATED; JERICOL MINING, INCORPORATED, Plaintiffs-Appellees, v. KENNETH S. APFEL, COMMISSIONER OF SOCIAL SECURITY, Defendant-Appellant. TRUSTEES OF THE UNITED MINE WORKERS OF AMERICA COMBINED BENEFIT FUND, Amicus Curiae.

No. 99-1219 (CA-96-148-2).

UNITED STATES COURT OF APPEALS, FOR THE FOURTH CIRCUIT.

Argued: October 26, 1999.

Decided: August 29, 2000.

Appeal from the United States District Court for the Western District of Virginia, at Big Stone Gap.

Glen M. Williams, Senior District Judge.

[Copyrighted Material Omitted] COUNSEL ARGUED: Kathleen Moriarty Mueller, Appellate Staff, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant. Peter Buscemi, MORGAN, LEWIS & BOCK-IUS, L.L.P., Washington, D.C., for Amicus Curiae. John Ray Woodrum, HEENAN, ALTHEN & ROLES, Washington, D.C., for Appellees. ON BRIEF: David W. Ogden, Acting Assistant Attorney General, Robert P. Crouch, Jr., United States Attorney, Mark B. Stern, Appellate Staff, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant. Margaret S. Izzo, MORGAN, LEWIS & BOCKIUS, L.L.P., Washington, D.C.; John R. Mooney, MOONEY, GREEN, BAKER, GIBSON & SAINDON, P.C., Washington, D.C.; David W. Allen, Jonathan Sokolow, UMWA HEALTH & RETIREMENT FUNDS, Washington, D.C., for Amicus Curiae. W. Gregory Mott, HEENAN, ALTHEN & ROLES, Washington, D.C.; H. Ronnie Montgomery, MONTGOMERY LAW OFFICE, Jonesville, Virginia, for Appellees.

Before MURNAGHAN, WILKINS, and TRAXLER, Circuit Judges.

Affirmed by published opinion. Judge Traxler wrote the majority opinion, in which Judge Wilkins joined. Judge Murnaghan wrote a dissenting opinion.

OPINION

TRAXLER, Circuit Judge:

Under the Coal Industry Retiree Health Benefit Act of 1992 (the Coal Act), see 26 U.S.C.A. §§ 9701-9722 (West Supp. 1998), the Commissioner of the Social Security Administration ("Commissioner") assigns fiscal responsibility for a retired coal miner's health benefits to the most appropriate coal mining company which employed the retired miner or, if the assigned coal operator is no longer in business, to an entity or individual that qualifies as a "related person" to the defunct coal company. See 26 U.S.C.A. § 9706(a). In 1993, the Commissioner assigned eighty-six retired coal miners to the Jericol Mining Company ("Jericol") on the basis that Jericol was a successor in interest to, and therefore a "related person" to, an out-ofbusiness mining company that had employed the retired miners. The district court determined, based on a literal reading of the statutory text, that a successor in interest to a defunct signatory operator cannot be held accountable under the Coal Act as a "related person" and voided the Commissioner's assignments. See Sigmon Coal Co. v. Apfel, 33 F. Supp.2d 505, 508-11 (W.D. Va. 1998). The Commissioner appeals, contending that the district court's literal reading of the statute frustrates congressional intent to provide broad coverage for retired coal miners by identifying the "most responsible" employers, and that, in light of the general congressional purpose and various snippets of legislative history, we should read the statutory definition of "related person" to include a successor in interest to a signatory operator.

We decline the Commissioner's invitation to rewrite the Coal Act. The statute is clear and unambiguous, and we are bound to read it exactly as it is written. Accordingly, we affirm the decision of the district court.

I.

A.

The Coal Act of 1992 was passed in an effort to remedy a faltering system of healthcare benefits for the nation's retired coal miners. See Eastern Enterprises v. Apfel, 524 U.S. 498, 504-15 (1998). On a handful of occasions, this court has carefully detailed the history of the coal industry's attempt to establish, through collective bargaining, an adequate system of health and retirement benefits for coal miners and the resulting labor unrest and financial instability which led to the Coal Act of 1992. See Holland v. Big River Minerals Corp., 181 F.3d 597, 600-01 (4th Cir. 1999), cert. denied, 120 S. Ct. 936 (2000); Holland v. Keenan Trucking Co., 102 F.3d 736, 738-39 (4th Cir. 1996); Carbon Fuel Co. v. USX Corp., 100 F.3d 1124, 1127-29 (4th Cir. 1996). We need not recount the full history of the coal miners' health and retirement benefits system. Nevertheless, since the Coal Act incorporates specific benefit plans established by the coal wage agreements, consideration of the statutory scheme at issue requires at least a rudimentary understanding of these plans.

Between 1950 and 1978, a series of National Bituminous Coal Wage Agreements ("coal wage agreements") between the United Mine Workers of America ("UMWA") and the Bituminous Coal Operators Association ("BCOA") produced a number of multiemployer benefit plans. The 1950 coal wage agreement established a multiemployer fund to furnish health and retirement benefits for both coal miners and their dependents. See Carbon Fuel, 100 F.3d at 1127. Benefits under this fund, however, were determined at the discretion of the trustees of the fund and were subject to reduction according to the fund's budget. See Eastern Enterprises, 524 U.S. at 506-08. Thus, the miners were not guaranteed specific benefits.

In 1974, the UMWA and the BCOA entered into a coal wage agreement that expanded the benefits available under the 1950 coal wage agreement, creating four multiemployer plans to replace the 1950 fund:

The 1974 [coal wage agreement] . . . divided the 1950 Plan into several separate multiemployer plans. It established a 1950 Pension Plan and Benefit Plan and a 1974 Pension Plan and Benefit Plan. The 1950 Benefit Plan provided health-care benefits to miners who retired prior to January 1, 1976, and their dependents. The 1974 Benefit Plan provided health-care benefits to miners who were active, or who retired on or after January 1, 1976, and their dependents.

Carbon Fuel, 100 F.3d at 1127. Significantly, the 1974 coal wage agreement promised, in contrast to the prior agreements, lifetime benefits. Signatory coal operators to the 1974 coal wage agreement pledged to finance both the 1950 Benefit Plan and the 1974 Benefit Plan, but their obligation to do so did not extend beyond the effective dates of the agreement. See Eastern Enterprises , 524 U.S. at 509-10.

In 1978, the UMWA and the BCOA again reorganized the healthcare benefit system for coal miners, this time moving toward decentralization. Under the 1978 coal wage agreement, a coal miner retiring on or after January 1, 1976, would be provided benefits by his last employer pursuant to an individual employer plan. The 1974 Benefit Plan continued to exist, but only to cover miners, known as "orphans," who had retired on or after January 1, 1976, and whose last employer was no longer participating in the multiemployer plans or had gone out of business. Likewise, the 1950 Benefit Plan would continue to afford benefits to miners who had retired prior to January 1, 1976 and their dependents. See Carbon Fuel, 100 F.3d at 1127. There were two other noteworthy features of the 1978 coal wage agreement. First, the agreement required signatory operators to provide defined benefits rather than defined contributions as under previous agreements. See Holland, 181 F.3d at 600-01. Second, the agreement included an "evergreen" clause requiring signatories to continue contributing even if they did not sign a subsequent agreement, as long as they remained in the coal industry. See Eastern Enterprises, 524 U.S. at 510.

The series of coal wage agreements and the numerous restructurings to the coal miners' health benefit system effected by the coal wage agreements occurred against a backdrop of severe financial distress. By the latter part of the 1980s, the 1950 and 1974 Benefit Plans were facing the possibility of insolvency as many signatories to the 1978 coal wage agreement left the coal mining business, sending their retirees -now newly orphaned -back into the multiemployer 1974 Benefit Plan. An increasingly small number of signatories shouldered the burden of funding the plan, which was providing healthcare benefits -the cost of which were rising -for a growing number of orphaned retirees. See id. at 511; Carbon Fuel, 100 F.3d at 1127. These factors, among others, created a vortex which simultaneously decreased funds and increased beneficiaries, and threatened to undo the whole system.

The dire financial state of the 1950 and 1974 Benefit Plans ultimately spurred a lengthy strike in 1989 at the Pittston Coal Company, which, in turn, prompted the creation of the Advisory Commission on United Mine Workers of America Retiree Health Benefits ("Coal Commission") to devise a solution to the problem of health benefits for retired miners. Following the submission of recommendations by the Coal Commission, Congress passed the Coal Act of 1992.

B.

The Coal Act of 1992 established two new multiemployer health benefit funds. The first of these, the United Mine Workers of America Combined Benefit Fund ("the Combined Fund"), resulted from the merger of the 1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan. See 26 U.S.C.A. § 9702(a)(2). In general terms, the Combined Fund provides health benefits to retired miners (or their dependents) who were eligible to receive benefits from the 1950 or the 1974 Plan and were receiving benefits as of July 20, 1992. See 26 U.S.C.A. § 9703; see also Eastern Enterprises, 524 U.S. at 514; Holland, 181 F.3d at 601. The second fund established by the Coal Act, the UMWA 1992 Benefit Plan, provides health benefits"to any eligible beneficiary who is not eligible for benefits under the Combined Fund." 26 U.S.C.A. § 9712(b)(1).¹ We are concerned here only with the Combined Fund.²

The Coal Act charges the Commissioner with assigning responsibility under the Combined Fund for each eligible retiree to an...