Holland v. National Mining Ass'n

Decision Date08 November 2002
Docket NumberNo. 01-5070.,No. 01-5069.,01-5069.,01-5070.
PartiesMichael H. HOLLAND, et al., Appellees, v. NATIONAL MINING ASSOCIATION, et al., Appellees. Jo Anne B. Barnhart, Commissioner, Social Security Administration, Appellant.
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeals from the United States District Court for the District of Columbia (No. 96cv01744).

Jeffrey Clair, Attorney, United States Department of Justice, argued the cause for federal appellant. With him on the briefs were Roscoe C. Howard, Jr., United States Attorney, and Douglas N. Letter, Litigation Counsel, United States Department of Justice.

John R. Woodrum argued the cause for appellants National Mining Association, et al. With him on the briefs was Margaret S. Lopez. William I. Althen entered an appearance.

Stephen J. Pollak argued the cause for appellees Holland, et al., and amicus curiae United Mine Workers of America. With him on the briefs were John Townsend Rich, Howard R. Rubin, and Paul A. Green. Grant F. Crandall entered an appearance.

Before: EDWARDS and ROGERS, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.

HARRY T. EDWARDS, Circuit Judge:

The Coal Industry Retiree Health Benefit Act of 1992 ("Coal Act"), 26 U.S.C. §§ 9701-9722, requires certain coal operators to pay annual premiums for retired coal miners' health benefits to the United Mine Workers of America Combined Benefit Fund ("Fund"). 26 U.S.C. § 9704(a). Under the Coal Act, the Commissioner of the Social Security Administration ("Commissioner") must calculate, according to a specified formula, the premiums that coal operators must pay. 26 U.S.C. § 9704(b)(2). Calculating the premiums requires the Commissioner to interpret the word "reimbursements" in § 9704(b)(2)(A)(i) of the Coal Act. In 1995, several coal companies filed suit in the District Court in the Northern District of Alabama and successfully challenged the Commissioner's interpretation of the word "reimbursements." See Nat'l Coal Ass'n v. Chater, No. CV94-H-780-S, 1995 WL 1052240 (N.D.Ala. July 20, 1995). The Eleventh Circuit affirmed the District Court's judgment enjoining the Commissioner to recalculate the premiums according to an interpretation of "reimbursements" different from the one that the Commissioner had been using. Nat'l Coal Ass'n v. Chater, 81 F.3d 1077, 1082 (11th Cir.1996). The Commissioner recalculated the premiums according to the Eleventh Circuit's interpretation of "reimbursements" and then applied this revised interpretation and resulting premium recalculation nationwide, including with respect to coal operators who were not parties in the Eleventh Circuit litigation.

The instant case arose in 1996 when the appellees, the Trustees of the Fund, filed suit in the District Court challenging the Commissioner's nationwide implementation of the revised interpretation of the Coal Act. The Trustees alleged that the Commissioner violated the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(2)(A), in applying § 9704(b)(2)(A) of the Coal Act in a manner "not in accordance with law." The District Court denied the appellants' motions to dismiss, see Holland v. Apfel, 23 F.Supp.2d 21, 29 (D.D.C.1998), and granted summary judgment in favor of the Trustees, see Holland v. Apfel, No. 96-01744, Mem. Op. (D.D.C. Feb. 25, 2000) ("Mem. Op."), reprinted in Joint Appendix ("J.A.") at 202, 214. The District Court ordered the Commissioner to recalculate the premium in accordance with the Commissioner's initial, pre-Eleventh Circuit interpretation of "reimbursements," but stayed its injunction pending appeals.

Appellant Commissioner contends that the agency's nationwide implementation of the revised interpretation of "reimbursements" in the Coal Act is in "accordance with law," because the interpretation was mandated by the Eleventh Circuit injunction. The Commissioner also claims that the District Court abused its discretion in granting injunctive relief, because the relief is inherently at odds with the judgment of the Eleventh Circuit. Intervenors/Appellants National Mining Association and various coal companies (collectively "NMA") contend that res judicata bars this suit. They also argue that this court should follow the Eleventh Circuit's interpretation of "reimbursements," because it comports with the plain meaning of the statute; alternatively, NMA claimed during oral argument that, if the statute is ambiguous, the agency's revised interpretation is entitled to deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Trustees, in turn, argue that the statute unambiguously supports the Commissioner's original interpretation of "reimbursements."

We hold that res judicata does not bar the Trustees' action in the D.C. Circuit. The Trustees were not a party in the litigation in the Eleventh Circuit, so they are not bound by that judgment. Nor does the Eleventh Circuit judgment purport to bind the Commissioner with respect to coal operators who were not party to that litigation. The Trustees' action in the D.C. Circuit can result in a viable remedy covering coal operators who were not covered by the injunctive relief granted in the Eleventh Circuit. Therefore, the Commissioner is not potentially subject to two conflicting orders as a result of the instant litigation.

We further hold that the agency's nationwide application of the Eleventh Circuit's interpretation of "reimbursements" is not insulated from APA review by virtue of having been undertaken in response to the Eleventh Circuit injunction. The Commissioner was not in fact bound to recalculate the premium for coal operators who were not party to the Eleventh Circuit litigation. There is thus no reason why we cannot review the agency's decision to apply the Eleventh Circuit's interpretation to coal operators who were not party to the litigation.

APA review in this case is ultimately a matter of statutory interpretation of the word "reimbursements." However, on the record that is now before the court, it is impossible to determine whether this case falls within the category of cases to which Chevron deference applies. In particular, it is unclear whether the agency, in applying the Eleventh Circuit's interpretation of the Coal Act, believed that it was compelled to implement the interpretation nationwide, or, rather, reasonably and voluntarily "acquiesced" in the interpretation. If the agency felt effectively "coerced" into adopting the interpretation nationwide, then the agency would not be entitled to deference under Chevron. Indeed, Chevron would not apply at all, because the adoption would not represent the agency's reasoned judgment on statutory meaning. But if the agency voluntarily acquiesced, choosing to implement the Eleventh Circuit's interpretation nationwide based on the agency's own reasoning about statutory meaning, then Chevron deference might be due. Since the answer to the question whether the agency acquiesced or was coerced is not clear from the record before us, we remand this case to the District Court with instructions to remand the case to the agency for clarification of the agency's position.

I. BACKGROUND
A. The Coal Act

In 1992, Congress enacted the Coal Act, 26 U.S.C. §§ 9701-9722, to ensure adequate funding for the provision of health care benefits to retired coal miners. Previously, miners' health benefits had been provided through benefit plans established by collective bargaining agreements between the United Mine Workers of America ("UMWA") and the Bituminous Coal Operators' Association, an association of coal industry employers. The Coal Act merged two such former benefit plans, the 1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan ("Plans"), into a new multi-employer plan called the UMWA Combined Benefit Fund ("Fund"), which is financed by annual premiums assessed against signatory coal operators. See E. Enters. v. Apfel, 524 U.S. 498, 514, 118 S.Ct. 2131, 2141-42, 141 L.Ed.2d 451 (1998) (citing 26 U.S.C. §§ 9702(a)(1), (2) and 26 U.S.C. §§ 9701(b)(1), (b)(3), (c)(1)). The Coal Act gives the Trustees of the Fund the authority to collect premiums, spend money for health care, and administer the Fund's benefit program. See 26 U.S.C. §§ 9702-9704.

One of the responsibilities that the Coal Act assigns the Commissioner is that of calculating the per-beneficiary premiums that coal companies are required to pay each year. See 26 U.S.C. § 9704(b). The Coal Act provides that the per-beneficiary premium for each plan year shall be equal to:

(A) the amount determined by dividing —

(i) the aggregate amount of payments from the 1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan for health benefits (less reimbursements but including administrative costs) for the plan year beginning July 1, 1991, for all individuals covered under such plans for such plan year, by

(ii) the number of such individuals....

26 U.S.C. § 9704(b)(2)(A). Under this detailed formula, signatory coal operators must pay to the Fund a per-beneficiary premium that equals the average cost to the Plans of providing health benefits during the "base year" beginning July 1, 1991, minus "reimbursements" by Medicare or other federal sources.

Prior to 1990, the Plans paid health care providers for services directly, and then sought reasonable cost-based reimbursement from the Health Care Financing Administration ("HCFA"), the agency within the Social Security Administration that administers Medicare. This arrangement of negotiating cost-based Medicare reimbursements led to longstanding disputes between HCFA and the Plans. In 1990, HCFA and the Plans thus entered a "risk capitation" agreement, under which HCFA agreed to pay the Plans a monthly flat fee (rather than the cost-based amount) to cover Medicare responsibilities, based on the...

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