Usx Corp. v. Barnhart

• Decision Date: 23 December 2004
• Docket Number: No. 04-1247.,04-1247.
• Citation: 395 F.3d 161
• Parties: USX CORPORATION and U.S. Steel Mining Company, Inc., Appellants v. Jo Anne B. BARNHART, Commissioner of Social Security.
• Court: U.S. Court of Appeals — Third Circuit

395 F.3d 161

USX CORPORATION and U.S. Steel Mining Company, Inc., Appellants v. Jo Anne B. BARNHART, Commissioner of Social Security.

No. 04-1247.

United States Court of Appeals, Third Circuit.

Argued November 18, 2004.

Filed December 23, 2004.

COPYRIGHT MATERIAL OMITTED

J. Michael Jarboe, James T. Carney, United States Steel Corporation, Law Department, Pittsburgh, David J. Laurent (Argued), Babst, Calland, Clements and Zomnir, P.C., Pittsburgh, for Appellants.

Jeffrey Clair (Argued), Attorney, Civil Division, Washington, for Appellee.

Before SCIRICA, Chief Judge, and McKEE and CHERTOFF, Circuit Judges.

OPINION OF THE COURT

CHERTOFF, Circuit Judge.

Appellants USX Corporation (USX) and U.S. Steel Mining Company, Inc. (USSM),¹ plaintiffs below, challenge several decisions by the District Court granting summary judgment for the Commissioner on the majority of appellants' claims. We will affirm.

I

In 1970, USX purchased the assets of the Grapevine No. 8 Mine, the last significant coal mine owned by Crystal Block, which ceased to operate coal mines after that sale. In 1981, USX in turn sold those same assets to Old Ben Coal Company, which was still operating when appellants filed their complaint. Pursuant to the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701-9722 (the "Coal Act"),² on September 28 and October 7 and 8, 1993, the Social Security Administration (SSA) assigned USX health benefit premium responsibility for sixty-seven retired miners (and their dependents) who had been employed by Crystal Block. In the letters notifying appellants of the assignments, SSA informed them that they had the right to request the miners' earning records and bases for the assignments within thirty days, and then to seek administrative review within thirty days of receipt of that information.

On June 30, 1995, the Commissioner assigned additional miners employed by Crystal Block to USX on the ground that USX was related to the signatory operator. By letter dated August 1, 1995, USX requested the earnings records of those miners, as well as the bases for the assignments. On September 5, 1995, SSA denied USX's request for information on the ground that the request was untimely. Despite denying this request, SSA nevertheless provided USX with the Crystal Block miners' earnings records. On May 14, 1996, USX requested additional information and a ninety-day extension of time to appeal the assignments.

By letter dated June 10, 1996, SSA supplied USX with the names of the originally assigned coal operators. In a separate letter on that same day, however, it informed USX that it had erroneously provided the information regarding the beneficiaries assigned on June 30, 1995 and that it could not review those assignments because USX's request had been untimely. On August 12, 1996, USX requested that SSA revoke the Crystal Block beneficiary assignments because they were improper. SSA denied review of the June 30, 1995 assignments on September 4, 1997, informing USX on September 23, 1997 that its decision was final.

Appellants commenced this action on July 2, 1999, alleging that the Commissioner had improperly assigned to appellants the health benefit premium responsibilities for a significant number of coal miners. Appellants also claimed that the Commissioner had refused to provide the earnings records upon request, as required by the Coal Act, and that the Commissioner had improperly refused to review many of the allegedly erroneous assignments. Appellants' Second Amended Complaint contained thirteen counts, which the District Court disposed of on summary judgment in a series of opinions and orders. The District Court entered a final judgment on November 5, 2003. The court then denied appellants' motion to amend the judgment on January 6, 2004 and appellants timely appealed.

II

Our review of a District Court's grant of summary judgment is plenary. See Fed. Home Loan Mortgage Corp. v. Scottsdale Ins. Co., 316 F.3d 431, 443 (3d Cir.2003). We assess the record using the same summary judgment standard that guides district courts. See Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir.2000). To prevail on a motion for summary judgment, the moving party must demonstrate "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

A

The Coal Act directs the Commissioner to assign health benefit premium responsibilities to a "related person" where the beneficiary's pertinent signatory operator is no longer in business. 26 U.S.C. §§ 9701(c)(2), 9706(a). The Commissioner initially construed this provision as authorizing assignments to the direct successor-in-interest of the employing, signatory operator when the signatory operator was no longer in business. Appellants claimed below that the Commissioner lacked statutory authority to make assignments under this successorship theory.

The District Court initially rejected this contention and granted partial summary judgment to the Commissioner. Appellants moved for reconsideration and, while that motion was pending, the Supreme Court held in Barnhart v. Sigmon Coal Co., 534 U.S. 438, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002), that the Commissioner lacked statutory authority to assign miners to the direct successor of a signatory operator. Appellants in this case then argued that Sigmon Coal compelled the court to grant their pending motion for reconsideration and grant them judgment on their challenges to the successorship theory in Counts I and II of their Second Amended Complaint. Appellants also argued that they should be permitted to amend their complaint for the third time so as to challenge additional miner assignments that, though not identified in any of the prior complaints, were also allegedly based on the successorship theory rejected by Sigmon Coal.

The District Court reversed its holding and granted summary judgment for appellants with respect to the successorship-based miner assignments identified in the Second Amended Complaint. However, it denied appellants leave to file a third amended complaint insofar as the amendment would add a challenge to successorship-based miner assignments appellants had not previously identified.

Appellants first argue that the District Court violated Federal Rule of Civil Procedure 54(c) when it refused to order the Commissioner to rescind all of the assignments she had made under the successorship theory invalidated in Sigmon Coal, including those assignments not identified in Counts I and II of the Second Amended Complaint. The argument is meritless.

Rule 54(c) provides, in pertinent part, that "every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in the party's pleadings." Fed.R.Civ.P. 54(c). This rule "requires that a court ascertain whether the plaintiffs are entitled to any remedy. As long as the plaintiffs have stated a claim for relief, it is the court's obligation to grant the relief to which the prevailing party is entitled whether it has been specifically demanded or not." Kirby v. United States Gov't, 745 F.2d 204, 207 (3d Cir.1984) (emphasis omitted).

Appellants misconstrue the benefit afforded plaintiffs by Rule 54(c). The rule was meant to protect a plaintiff from clumsy pleading, which, through technical oversight, might deprive it of a deserved recovery. "The [rule's] most common usage is when the amount of the award varies from the demand for relief." 10 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2664, at 183 (3d ed.1998). The rule has also been used to allow for the award of attorney's fees and costs even though none was demanded, or for recovering interest on a claim as damages. Id. at 185-86. As the Advisory Committee explains, it "makes clear that a judgment should give the relief to which a party is entitled, regardless of whether it is legal or equitable or both." Fed.R.Civ.P. 54 advisory committee's note to 1937 adoption. In other words, Rule 54(c) addresses and cures a limited formal problem. It is not designed to allow plaintiffs to recover for claims they never alleged.

Here, by contrast, appellants are not seeking to vary relief but to add judgments based on new claims of additional improper beneficiary assignments. By trying to invoke Rule 54(c), appellants confuse the demand for relief with the claims on which that demand is based. While "[i]nasmuch as the demand for relief does not constitute part of the pleader's claim for relief, a failure to demand the appropriate relief will not result in a dismissal," the converse is not true. Wright et al., supra, § 2664, at 180. That is, "the court cannot provide a remedy, even if one is demanded, when plaintiff has failed to set out a claim for relief." Id. at 179; see also 10 James Wm. Moore et al., Moore's Federal Practice § 54.72(2), at 54-137 (3d ed. 2004) ("The Rule permits relief not demanded only when the party affirmatively shows an entitlement to the relief and is inapplicable when the pleader fails to demonstrate the proper substantive grounds for relief."). That is precisely what appellants seek here.

Moreover, simply entering judgment against the Commissioner on numerous additional assignments of unidentified miners would prejudice the SSA. There may be other issues that need to be litigated to determine whether an assignment was improper. Had the District Court simply granted judgment for appellants on the unspecified assignments, the Commissioner would be foreclosed from litigating those issues. Under any reading of Rule 54(c), it cannot be deployed to pretermit the Commissioner from raising additional defenses to hitherto unlitigated claims. Wright et al., supra, § 2664, at 173-79 (noting that relief should not be amended under Rule 54(c) if failure to include in the demand has...