U.S. Steel Corp. v. Astrue

• Decision Date: 15 August 2007
• Docket Number: No. 06-15255.,06-15255.
• Citation: 495 F.3d 1272
• Parties: UNITED STATES STEEL CORPORATION, U.S. Steel Mining Company, LLC, Plaintiffs-Appellants, v. Michael J. ASTRUE,<SMALL><SUP>*</SUP></SMALL> Commissioner of Social Security Administration, Defendant-Appellee, Michael H. Holland, Elliot A. Segal, William P. Hobgood, et al., Intervenors.
• Court: U.S. Court of Appeals — Eleventh Circuit

495 F.3d 1272

UNITED STATES STEEL CORPORATION, U.S. Steel Mining Company, LLC, Plaintiffs-Appellants, v. Michael J. ASTRUE,^* Commissioner of Social Security Administration, Defendant-Appellee, Michael H. Holland, Elliot A. Segal, William P. Hobgood, et al., Intervenors.

No. 06-15255.

United States Court of Appeals, Eleventh Circuit.

August 15, 2007.

Michael Lee Lucas, Burr & Foreman, LLP, Birmingham, AL, James T. Carney, USX Corp., Pittsburgh, PA, for Plaintiffs-Appellants.

Mark A. Totten, Jeffrey Clair, U.S. Dept. of Justice, Civ. Div., App. Staff, Washington, DC, for Defendant-Appellee.

Christopher F. Clarke, UMWA Health & Retirement Funds, Washington, DC, for Intervenors.

Appeal from the United States District Court for the Northern District of Alabama.

Before DUBINA and BLACK, Circuit Judges, and RESTANI,^** Judge.

RESTANI, Judge:

United States Steel Corporation ("USS") and its subsidiary, United States Steel Mining Company ("USSM") (collectively "Appellants"), brought this action against the Commissioner of the Social Security Administration ("SSA"), under the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701-08, 9711-12, 9721-22 ("Coal Act"), challenging the SSA's assignment of various United Mine Workers of America ("UMWA") retirees to them for health care premium payments. The district court granted summary judgment against Appellants on all claims. On appeal, Appellants argue that the SSA improperly withheld requested earnings records for certain miners, incorrectly found that another responsible coal operator was not "in business" for purposes of the Coal Act, incorrectly applied a rebuttable presumption in assigning three miners to Appellants, and improperly assigned to Appellants miners who had become unassigned following the Supreme Court's holding in Eastern Enterprises v. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998). We AFFIRM the district court's order with respect to the request for earnings records, the assignment of two of the three miners to Appellants based upon a rebuttable presumption, and the assignment of miners who became unassigned following Eastern Enterprises. We REVERSE the district court's judgment upholding the assignment of one of the three miners, Lee Jones, to Appellants based upon a rebuttable presumption, and with respect to eleven of the fifteen miners assigned to Appellants based upon a finding that another responsible coal operator was not "in business" for purposes of the Coal Act. We REMAND with respect to four of the fifteen miners whose employment with the other responsible coal operator is contested.

BACKGROUND

I. The Coal Act

The Coal Act of 1992 was "the culmination of a long history involving bituminous coal companies ..., the United Mine Workers of America ..., and collective bargaining agreements between them." Pittston Co. v. United States, 368 F.3d 385, 390 (4th Cir.2004). In 1947, the Bituminous Coal Operators' Association ("BCOA") and the UMWA negotiated the first National Bituminous Coal Wage Agreement ("NBCWA"), creating a trust fund to provide pension plans and medical benefits to retired coal miners and their families. Sidney Coal Co. v. SSA, 427 F.3d 336, 338 (6th Cir.2005). In 1950, the trust fund became a multi-employer trust which was "funded by coal operators with royalties paid in proportion to the operators' coal production." Pittston, 368 F.3d at 390. The trust did not provide a consistent level of benefits. Sidney, 427 F.3d at 338.

As a result, in 1974, the UMWA and the BCOA entered into another NBCWA, replacing the prior trust fund with four separate trusts which were "funded by royalties on coal production and premiums based on employee hours." Pittston, 368 F.3d at 391. The 1974 NBCWA was "the first agreement between the UMWA and the BCOA to expressly reference health benefits for retirees." E. Enters., 524 U.S. at 509, 118 S.Ct. 2131. The trust funds, however, began to experience financial difficulties and thus, in 1978, another agreement was made "assign[ing] responsibility to signatory coal operators for the health-care of all of their own current and former employees." Pittston, 368 F.3d at 391. Despite such actions, the trust funds continued to experience financial difficulties and were modified again in 1988. Id.

In 1992, Congress enacted the Coal Act to preserve benefits for UMWA retirees. E. Enters., 524 U.S. at 511-14, 118 S.Ct. 2131. Specifically, the Coal Act created the United Mine Workers of America Combined Benefit Fund ("Combined Fund"), which provided lifetime health benefits to retirees and their dependents. Id. at 514, 118 S.Ct. 2131. The Combined Fund is financed by annual premiums assessed against coal operators who had signed "any NBCWA or any other agreement requiring contributions to the 1950 or 1974 Benefit Plans." Id. (citing 26 U.S.C. § 9701(b)(1), (3), § 9701(c)(1)). "The amount owed in premiums depended on the number of retirees and dependents for which each signatory operator was responsible." Sidney, 427 F.3d at 339 (citing 26 U.S.C. § 9704(a)(1)-(3)). Any of these signatory coal operators "who `conducts or derives revenue from any business activity, whether or not in the coal industry,' may be liable for those premiums." E. Enters., 524 U.S. at 514, 118 S.Ct. 2131 (citing 26 U.S.C. §§ 9706(a), 9701(c)(7)). If "a signatory is no longer involved in any business activity, premiums may be levied against `related person[s],' including successors in interest and businesses or corporations under common control." Id. (citing 26 U.S.C. §§ 9706(a), 9701(c)(2)(A)).

The Act instructs the SSA to assign retirees to operators using the following formula:

1) to the operator which "was a signatory to the 1978 coal wage agreement or any subsequent coal wage agreement," and which "was the most recent signatory operator to employ the coal industry retiree ... for at least two years;"

2) if unassignable under the first step, then to the operator which "was a signatory to the 1978 coal wage agreement or any subsequent coal wage agreement," and which "was the most recent signatory operator to employ the coal industry retiree in the coal industry;" and

3) if unassignable under the first two steps, then "to the signatory operator which employed the coal industry retiree in the coal industry for a longer period of time than any other signatory operator prior to the effective date of the 1978 coal wage agreement." 26 U.S.C. § 9706(a).

If an eligible beneficiary cannot be assigned under any of these steps, the beneficiary is considered "unassigned," and his benefits are funded through asset transfers from the 1950 National Bituminous Coal Wage Agreement Fund or the Abandoned Mine Land Reclamation Fund. Sidney, 427 F.3d at 340 (citing 26 U.S.C. § 9705(a)-(b)). If the asset transfers are insufficient, then the unassigned miners' benefits are funded though premiums assessed against all assigned operators. 26 U.S.C. §§ 9704(d).

II. The Supreme Court's Decision in Eastern Enterprises

In Eastern Enterprises, the Supreme Court held that the third step of § 9706, assigning retirees to operators which had signed wage agreements prior to 1974 but had not signed the 1974 NBCWA or a subsequent coal wage agreement promising lifetime benefits, was unconstitutional.¹ E. Enters., 524 U.S. at 530, 537, 118 S.Ct. 2131. A majority of the Court concluded that such assignments were unconstitutional because they retroactively required premium payments from coal operators that had not signed any agreements promising lifetime benefits for their employees, and because such operators did not have sufficient notice that lifetime benefits would be required later. Id. at 535-36, 118 S.Ct. 2131. A plurality of the court concluded that such assignments amounted to an unconstitutional taking because they "forced [such operators] to bear the expense of lifetime health benefits for miners based on [their] activities decades before those benefits were promised." Id. at 537, 118 S.Ct. 2131.

After the Supreme Court's decision, the SSA invalidated all assignments to coal operators that had not signed the 1974 NBCWA or a later agreement. Sidney, 427 F.3d at 341. The SSA then assigned those miners to operators "that had employed the retired miners for the longest period and to whom it was constitutional to make assignments under § 9706, i.e., only those coal operators that had signed a 1974 NBCWA or later agreement and that remained in business." Id.

III. Factual & Procedural Background²

The current case arises from various assignments of miners to Appellants by the SSA.

1993 Assignments

On September 28 and October 7, 8, 15, 16, and 18, 1993, SSA service centers sent letters to Appellants assigning miners to them under the Coal Act. Each letter stated that operators had thirty days upon receipt of the letter to either request further information about the assigned miners or to request a review. The letters also stated that if an operator requested further information about the miners, it would have thirty days from receipt of those records to request a review of the assignment.

On October 8, 1993, Darrell Lilly ("Lilly"), the human resources manager for USSM, sent letters to the SSA requesting the earnings records of, and the basis of assignments for, miners assigned on September 28th. On October 26, 1993, Lilly sent similar letters to the SSA requesting similar information concerning the October 7th and 8th assignments. The letters from Lilly were written on USSM letterhead and indicated that USSM was a subsidiary of USS, then referred to as USX, but did not mention any specific miners or assignments made to USS or USSM. In response, in letters dated February 7, 23, and 28, and March 1 and 2, 1994, the SSA sent Lilly the earnings records for various miners assigned to Appellants.

On March 15, 1994, Lilly sent letters to the SSA stating that "we are asking you to review the assignment per the attached list. We...