U.S. Pipe & Foundry Co. v. Holland (In re U.S. Pipe & Foundry Co.)

• Decision Date: 03 May 2022
• Docket Number: 20-13832
• Citation: 32 F.4th 1324
• Parties: IN RE: UNITED STATES PIPE & FOUNDRY CO., Debtor. United States Pipe and Foundry Company, LLC, JW Aluminum Company, JW Window Components LLC, Plaintiffs-Appellants, v. Michael H. Holland, as Trustee of the United Mine Workers of America 1992 Benefit Plan, Michael McKown, as Trustee of the United Mine Workers of America 1992 Benefit Plan, Joseph R. Reschini, as Trustee of the United Mine Workers of America 1992 Benefit Plan, Carlo Tarley, as Trustee of the United Mine Workers of America 1992 Benefit Plan, Michael H. Holland, as Trustee of the United Mine Workers of America Combined Benefit Fund, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

32 F.4th 1324

IN RE: UNITED STATES PIPE & FOUNDRY CO., Debtor.United States Pipe and Foundry Company, LLC, JW Aluminum Company, JW Window Components LLC, Plaintiffs-Appellants,

v.Michael H. Holland, as Trustee of the United Mine Workers of America 1992 Benefit Plan, Michael McKown, as Trustee of the United Mine Workers of America 1992 Benefit Plan, Joseph R. Reschini, as Trustee of the United Mine Workers of America 1992 Benefit Plan, Carlo Tarley, as Trustee of the United Mine Workers of America 1992 Benefit Plan, Michael H. Holland, as Trustee of the United Mine Workers of America Combined Benefit Fund, et al., Defendants-Appellees.

No. 20-13832

United States Court of Appeals, Eleventh Circuit.

Filed: May 3, 2022

Matthew Walter Moran, Counsel, Marc Aaron Fuller, Counsel, Thomas S. Leatherbury, Counsel, Vinson & Elkins, LLP, Dallas, TX, Scott Alan Stichter, Stichter Riedel Blain & Postler, PA, Tampa, FL, for Plaintiff-Appellant United States Pipe and Foundry Company, LLC.

Ashley C. Parrish, King & Spalding, LLP, Washington, DC, Mark M. Maloney, Kevin Jordan O'Brien, Sarah Primrose, King & Spalding, LLP, Atlanta, GA, Scott Alan Stichter, Stichter Riedel Blain & Postler, PA, Tampa, FL, for Plaintiff-Appellant JW Aluminum Company.

David Joseph Laurent, Buchanan Ingersoll & Rooney, PC, Pittsburgh, PA, for Plaintiff-Appellant JW Window Components LLC.

Paul A. Green, Mooney Green Saindon Murphy & Welch, Washington, DC, Stephanie Crane Lieb, Trenam Law, Tampa, FL, Matthew C. Ziegler, Morgan Lewis & Bockius, LLP, Philadelphia, PA, for Defendant-Appellee Michael H. Holland.

Paul A. Green, Mooney Green Saindon Murphy & Welch, Washington, DC, Bryan Michael Killian, Stephanie Schuster, Morgan Lewis & Bockius, LLP, Washington, DC, Stephanie Crane Lieb, Trenam Law, Tampa, FL, Matthew C. Ziegler, Morgan Lewis & Bockius, LLP, Philadelphia, PA, for Defendant-Appellee Michael McKown.

John C. Goodchild, III, Matthew C. Ziegler, Morgan Lewis & Bockius, LLP, Philadelphia, PA, Paul A. Green, Mooney Green Saindon Murphy & Welch, Washington, DC, Bryan Michael Killian, Stephanie Schuster, Morgan Lewis & Bockius, LLP, Washington, DC, Stephanie Crane Lieb, Trenam Law, Tampa, FL, for Defendant-Appellee Joseph R. Reschini.

John C. Goodchild, III, Matthew C. Ziegler, Morgan Lewis & Bockius, LLP, Philadelphia, PA, John Robert Mooney, Paul A. Green, Mooney Green Saindon Murphy & Welch, Washington, DC, Bryan Michael Killian, Stephanie Schuster, Morgan Lewis & Bockius, LLP, Washington, DC, Stephanie Crane Lieb, Trenam Law, Tampa, FL, Marie Tomassi, Trenam Law, Saint Petersburg, FL, for Defendants-Appellees Carlo Tarley, Michael H. Holland.

Before William Pryor, Chief Judge, Grant, and Anderson, Circuit Judges.

William Pryor, Chief Judge:

This appeal requires us to decide whether a bankruptcy plan of reorganization confirmed in 1995 discharged the obligation of three debtor companies to provide future health-care benefits to retired employees of a coal company that was once part of the same corporate family. In 2016, after the coal company's future obligations to the retirees were discharged, the trustees of two health-care benefit funds sued to compel the related companies to pay for the benefits. The bankruptcy court and district court ruled that the 1995 plan of reorganization did not discharge the claims for future benefits. We disagree. The Bankruptcy Code defines a "claim" as a "right to payment, whether or not such right is ... unliquidated," "contingent," "unmatured," or "equitable," and as a "right to an equitable remedy for breach of performance if such breach gives rise to a right to payment." 11 U.S.C. § 101(5). And with exceptions not relevant here, a plan of reorganization discharges a debtor from all claims "that arose before" the "order confirming the plan" unless the plan itself excludes those claims. Id. § 1141(d)(1), (1)(A). Because the companies’ obligations to provide health-care benefits were fixed before the bankruptcy court confirmed the plan of reorganization, the Trustees’ claims for future retiree benefits were discharged in 1995. So, we reverse and remand for further proceedings.

I. BACKGROUND

Several decades ago, the coal industry signed a series of wage agreements ensuring that retired employees and their immediate families would receive health benefits for the rest of their lives. United Mine Works of Am. Combined Benefit Fund v. Toffel (In re Walter Energy, Inc. ), 911 F.3d 1121, 1127–28 (11th Cir. 2018). Industry conditions then changed and threatened the coal industry's continued viability. Coal companies that failed or chose not to renew their wage agreements stopped contributing to the funds even though their workers continued to receive benefits as "orphaned retirees." Id. at 1128. As a result, the retiree funds "were on the brink of insolvency," and worker strikes followed. Id. at 1129. In response to the threatened vitality of the funds, Congress converted the "contractual obligation to provide health care benefits ... into a statutory requirement" by enacting the Coal Industry Retiree Health Benefit Act of 1992. Pub. L. No. 102-486, 106 Stat. 3036 ; see In re Walter Energy , 911 F.3d at 1130.

The Coal Act sought to ensure the longevity of the retiree funds through two primary means. First, it required companies to continue to provide benefits. See 26 U.S.C. §§ 9704(a), 9711(a), 9712(d)(1), (3). Second, it made all "related person[s]"—which is defined broadly to include a company under common control of a specified coal company and a company that is "member of [a] controlled group of corporations" that includes a specified coal company—jointly and severally liable for all required payments under the Coal Act. See id. §§ 9701(c)(2)(A), 9704(a), 9711(c)(1), 9712(d)(4). These provisions addressed the problems caused by coal companies that stopped paying for benefits when they chose not to renew their wage agreements or went out of business.

Whether an entity is a related person under the Coal Act was fixed on July 20, 1992. That is, entities that were related persons in 1992 but are no longer related persons are still related persons, and entities that are now related to a coal company, but were not in 1992, are not. Id. § 9701(c)(2)(B). On July 20, 1992, the companies in this appeal were owned by a common parent company, now known as Walter Energy, Inc., that also owned a coal company, Jim Walter Resources, Inc., so the companies are "related persons" under the Coal Act. See id. § 9701(c)(2)(A)(i)–(ii), (c)(2)(B).

The Coal Act imposes three kinds of obligations on covered entities. First, covered entities must pay premiums to the Combined Benefit Fund, id. § 9704(a), which was formed from the funds established by earlier wage agreements, id. § 9702(a)(2); In re Walter Energy , 911 F.3d at 1127 & n.3. The Combined Fund provides benefits to workers who were "eligible to receive, and [were] receiving, benefits from" industry funds on July 20, 1992. 26 U.S.C. § 9703(a), (f). The covered entities pay an annual premium that is calculated by the Commissioner of Social Security and is based on the number of beneficiaries assigned to the coal company and the Combined Fund's estimated costs. Id. § 9704(a), (b) – (d). When a covered coal company and all related persons are no longer in business, the premium amount becomes zero. See id. § 9704(b)(2), (c) – (d), (f)(1), (f)(2)(B). An entity remains in business so long as it "conducts ... any business activity" or "derives revenue from any business activity, whether or not in the coal industry." Id. § 9701(c)(7). Second, the Coal Act requires signatories of the 1978 wage agreement and later agreements to continue providing health-care benefits to workers, as the signatories were doing through individual employer plans under the wage agreements. Id. § 9711(a) – (b). Benefits are provided directly to the retired coal miners, and the obligation lasts "for as long as the [specified coal company] (and any related person) remains in business." Id. § 9711(a). Finally, some covered entities must pay premiums to the 1992 United Mineworkers of America Benefit Plan. Id. § 9712(d)(1).

The 1992 Plan is a benefit fund which was established by the Coal Act. Id. § 9712(a)(1). As relevant here, the 1992 Plan provides benefits to miners who are owed, but are not receiving, benefits under section 9711. Id. § 9712(b)(2)(B). Covered entities that fail to provide health-care benefits to their assigned retirees under section 9711 are required to pay monthly premiums to the 1992 Plan. Id. § 9712(d).

In 1989, the Jim Walter companies, their parent company, and its other subsidiaries filed petitions for bankruptcy, which were administratively consolidated. In 1995, the bankruptcy court confirmed a consensual plan of reorganization. The Trustees did not file a proof of claim for future Coal Act obligations and did not object to the plan. The Trustees did file a proof of claim in the individual bankruptcy proceeding of Jim Walter Resources. That proof of claim included past-due payments owed under the wage agreements and argued that Coal Act premiums that came due during the pendency of the bankruptcy proceedings were entitled to administrative priority.

The plan of reorganization discharged all "[c]laims" against the companies that "arose at any time before the [e]ffective [d]ate" unless those claims were included in the plan. Walter Energy expressly assumed the obligations to fund retiree health benefits, and the order approving the plan "authorized and directed" Walter Energy "to fund retiree health benefits." Several years after the bankruptcy court confirmed the plan, the companies disassociated themselves from Walter Energy and the coal industry.

In 2015, Walter Energy again filed a petition for bankruptcy. See Voluntary Petition, In re Walter Energy, Inc. , No. 15-02741-TOM11 (Bankr. N.D. Ala. Jul. 15, 2015) (ECF No. 1). "The bankruptcy court entered an order ... terminating [Walter Energy's]...