Holland v. Keenan Trucking Co.
Decision Date | 17 December 1996 |
Docket Number | No. 96-1262,96-1262 |
Citation | 102 F.3d 736 |
Parties | Michael H. HOLLAND; Marty D. Hudson; Thomas F. Connors; Robert T. Wallace, as Trustees of the Plaintiff United Mine Workers of America 1992 Benefit Plan; United Mine Workers Of America 1992 Benefit Plan, Plaintiffs-Appellees, United States of America, Intervenor, v. KEENAN TRUCKING COMPANY, a corporation; Eastern Energy Investments, a corporation; Cedar Trucking Company, a corporation; Darrell Keenan, individually, Defendants-Appellants. |
Court | U.S. Court of Appeals — Fourth Circuit |
ARGUED: Walter Scott Evans, Holroyd & Yost, Charleston, WV, for Appellants. Peter Buscemi, Morgan, Lewis & Bockius, L.L.P., Washington, DC, for Appellees. Sushma Soni, Appellate Staff, Civil Division, United States Department Of Justice, Washington, DC, for Intervenor. ON BRIEF: Frederick P. Holroyd, II, Holroyd & Yost, Charleston, WV, for Appellants. David W. Allen, Office of the General Counsel, UMWA Health And Retirement Funds, Washington, DC; John R. Mooney, Marilyn L. Baker, Mooney, Green, Baker, Gibson & Saindon, P.C., Washington, DC, for Appellees. Frank W. Hunger, Assistant Attorney General, Rebecca Aline Betts, United States Attorney, Douglas N. Letter, Appellate Staff, Civil Division, United States Department Of Justice, Washington, DC, for Intervenor.
Before WILKINSON, Chief Judge, and WIDENER and WILKINS, Circuit Judges.
Affirmed by published opinion. Chief Judge Wilkinson wrote the opinion, in which Judge Widener and Judge Wilkins joined.
Appellants, Darrell Keenan and various businesses owned by him and his wife Janet, appeal the district court's grant of summary judgment to the Trustees of the United Mine Workers of America Combined Benefit Fund ("1992 Plan") in a suit brought to collect unpaid premiums. Appellants contest their liability to the 1992 Plan on several grounds. Initially, appellants argue that the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701-22 ("Coal Act"), violates their right to due process under the Fifth Amendment. Appellants Keenan Trucking and Darrell Keenan also argue that the Trustees of the 1992 Plan are estopped from bringing suit against them due to a prior settlement. Lastly, appellants Keenan Trucking and Cedar Trucking contend that they are not proper parties to this suit because they are not "related parties" to the coal operator who originally owed premiums to the 1992 Plan. See 26 U.S.C. § 9701(c)(2). We hold that the Coal Act is constitutional and find appellants' other contentions to be meritless. We thus affirm the judgment of the district court.
The provision of health benefits for retired coal mine workers and their dependents has been a divisive issue in the history of labor-management relations in the coal industry. In 1946, the United Mine Workers of America ("UMWA") instituted a nationwide strike over the coal operators' refusal to create a fund to provide miners with health and retirement benefits. The effects of the strike on the national economy led President Truman to nationalize the coal mines and order the Secretary of Labor to negotiate an agreement that would return the miners to work.
The mines reverted to private control in 1947. The terms and conditions of miner health and retirement benefits were thereafter determined in a series of National Bituminous Coal Wage Agreements ("NBCWAs") between the UMWA, members of the Bituminous Coal Operators' Association, and other coal operators who agreed to be bound by the national wage agreements. The 1950 NBCWA was particularly significant because it established the United Mine Workers Welfare and Retirement Fund of 1950 ("1950 UMWA Plan"), a private multiemployer benefit plan funded by signatory coal operators who agreed to contribute on a per-ton royalty basis at rates specified in successive NBCWAs or amendments.
In the years that followed, the 1950 UMWA Plan and the subsequently created 1974 UMWA Plan greatly expanded the scope of medical benefits and other services available to retired miners. The Plans began to show signs of financial distress, however, due to a combination of demographic and economic changes in the late 1970s. Plan revenues dropped substantially as many coal operators went out of business or switched to non-union labor. At the same time, health care costs rose dramatically. The problem was further exacerbated by the aging of the beneficiary population.
These changes again produced intense labor-management strife over the issue of retiree benefits, culminating in a 111-day strike in 1978. Negotiations led to the 1978 NBCWA, which made several significant changes in the administration of the UMWA benefit plans. For example, the 1978 NBCWA provided that the responsibility for funding benefits for "orphaned" retirees--retirees whose last employer went out of business or otherwise ceased contributing to the UMWA benefit plans--would remain with the 1974 UMWA Plan. The orphaned retiree problem greatly increased the financial strain on the 1974 UMWA Plan. As more coal operators went out of business, the 1974 UMWA Plan was left with more orphaned retirees and a smaller funding base to provide for those beneficiaries.
By the late 1980s, the UMWA Plans were facing insolvency, and once again the issue of continued, stable funding for retiree benefits contributed to protracted labor unrest. In 1989, mine workers went on an eleven-month strike against the Pittston Coal Company, which ended only after the Secretary of Labor intervened and brokered a settlement of the dispute. In an effort to preempt future problems like the one at Pittston, the Secretary established the Advisory Commission on Mine Workers Retiree Health Benefits ("Coal Commission"), a bipartisan commission charged with assessing the financial prospects of the UMWA health benefit plans and formulating recommendations to ensure their long term viability. The Coal Commission concluded:
(1) that retired miners are entitled to health care benefits that were promised them and that such commitments must be honored; (2) that a statutory obligation to contribute to the trusts should be imposed on current and former signatories to NBCWAs; and (3) that mechanisms should be enacted to prevent the future dumping of retiree health care costs on the UMWA Trusts.
Davon, Inc. v. Shalala, 75 F.3d 1114, 1118 (7th Cir.1996). After holding hearings to consider the Coal Commission's recommendations, Congress enacted the Coal Industry Retiree Health Benefit Act of 1992, Pub.L.No. 102-486, 106 Stat. 3036 (1992) (codified at 26 U.S.C. §§ 9701-9722).
The provisions of the Coal Act reflect Congress' finding that, "in order to secure the stability of interstate commerce, it is necessary to modify the current private health care benefit plan structure for retirees in the coal industry to identify persons most responsible for plan liabilities in order to stabilize plan funding and allow for the provision of health care benefits to such retirees." 26 U.S.C. § 9701 note. Among the provisions of the Act was the establishment of the 1992 Plan to provide health benefits to retirees who were eligible but not yet covered under previous UMWA benefit plans, and who were not receiving benefits directly from their former employers. 26 U.S.C. § 9712.
Benefits paid by the 1992 Plan are funded through premiums paid by "1988 last signatory operators." A "1988 last signatory operator" is a coal operator who signed the 1988 NBCWA and was the most recent coal industry employer of an eligible beneficiary. 26 U.S.C. §§ 9701(c)(1), (3), (4); 26 U.S.C. § 9712(d)(6). Each affected coal operator is required to pay annual and monthly premiums to the Plan and to provide security for the projected cost of covering eligible beneficiaries. See 26 U.S.C. § 9712(d)(1)(A)-(C).
In order to ensure that coal operators would not be able to avoid their obligations to the 1992 Plan, Congress provided that "any related person" to an operator obligated to make payments to the Plan would be jointly and severally liable for those obligations. 26 U.S.C. § 9712(d)(4). The term "related persons" is broadly defined to include a coal operator's individual partners and corporate affiliates, or other trades or businesses controlled by a coal operator's principal shareholder or corporate parent. 26 U.S.C. § 9701(c)(2).
On December 21, 1993, the Trustees of the 1992 Plan brought a civil enforcement action to collect premiums owed to the Plan by West Virginia coal operator First Big Mountain. Because First Big Mountain was in bankruptcy proceedings, the Trustees filed suit against several West Virginia corporations owned by the president and 100 percent owner of First Big Mountain, Darrell Keenan, and his wife, Janet Keenan. The Trustees alleged that these corporations were "related persons" under the Coal Act and were therefore jointly and severally liable for premiums owed by First Big Mountain to the Plan.
In ruling for the Trustees, the district court declined to accept the defendants' various objections to the payment of premiums. Specifically, the district court upheld the constitutionality of the Coal Act, held that the defendants were all "related persons" to First Big Mountain under that Act, and rejected the argument that Darrell Keenan and Keenan Trucking were released from liability under the Act by a previous settlement with the old UMWA plans. The court found that the Trustees were entitled to interest, liquidated damages, reasonable attorneys fees, and costs in addition to an award of annual prefunding and monthly per beneficiary premiums owed to the 1992 Plan. This appeal followed.
We turn first to appellants' contention that the Coal Act violates the Fifth Amendment. It is difficult to exaggerate the burden that appellants must overcome to carry the day on this argument. Congress enacted the Coal Act in response to a history of labor disputes...
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