Holland v. Pardee Coal Co.
| Decision Date | 25 January 2001 |
| Docket Number | No. 00-1770,00-1770 |
| Citation | 269 F.3d 424 |
| Parties | (4th Cir. 2001) MICHAEL H. HOLLAND, Trustee of the United Mine Workers of America Combined Benefit Fund; MARTY D. HUDSON, Trustee of the United Mine Workers of America Combined Benefit Fund; ELLIOT A. SEGAL, Trustee of the United Mine Workers of America Combined Benefit Fund; THOMAS O. S. RAND, Trustee of the United Mine Workers of America Combined Benefit Fund; WILLIAM P. HOBGOOD, Trustee of the United Mine Workers of America Combined Benefit Fund; GAIL R. WILENSKY, Trustee of the United Mine Workers of America Combined Benefit Fund; CARL E. VAN HORN, Trustee of the United Mine Workers of America Combined Benefit Fund, Plaintiffs-Appellants, v. PARDEE COAL COMPANY; HUMPHREYS ENTERPRISES, INCORPORATED; RIVER RESOURCES, INCORPORATED; GREATER WISE, INCORPORATED; RED RIVER COAL COMPANY, INCORPORATED, Defendants-Appellees. UNITED STATES OF AMERICA, Amicus Curiae. Argued: |
| Court | U.S. Court of Appeals — Fourth Circuit |
Appeal from the United States District Court for the Western District of Virginia, at Abingdon. Glen M. Williams, Senior District Judge.
COUNSEL ARGUED: Peter Buscemi, MORGAN, LEWIS & BOCKIUS, L.L.P., Washington, D.C., for Appellants. Jeffrey A. Clair, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Amicus Curiae. Mary Lou Smith, HOWE, ANDERSON & STEYER, P.C., Washington, D.C., for Appellees. ON BRIEF: David W. Allen, Office of the General Counsel, UMWA HEALTH & RETIREMENT FUNDS, Washington, D.C.; John R. Mooney, MOONEY, GREEN, GLEASON, BAKER, GIBSON & SAINDON, P.C., Washington, D.C., for Appellants. David W. Ogden, Assistant Attorney General, Robert P. Crouch, Jr., United States Attorney, Mark B. Stern, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Amicus Curiae. Daniel R. Bieger, COPELAND, MOLINARY & BIEGER, P.C., Abingdon, Virginia, for Appellees.
Before NIEMEYER and KING, Circuit Judges, and Gerald Bruce LEE, United States District Judge for the Eastern District of Virginia, sitting by designation.
Reversed and remanded by published opinion. Judge King wrote the majority opinion, in which Judge Lee joined. Judge Niemeyer wrote a dissenting opinion.
This proceeding requires us to construe certain provisions of the Coal Industry Retiree Health Benefit Act of 1992 (the "Coal Act" or "Act"), 26 U.S.C. SS 9701-9722. Appellants, the Trustees ("Trustees") of the United Mine Workers of America Combined Benefit Fund ("Combined Fund"), brought this suit in the Western District of Virginia against Pardee Coal Company and four other current and former coal operators (collectively, "Pardee "). The Trustees seek to collect payment of health care premiums for which, they claim, Pardee is liable pursuant to the Coal Act.1
Pardee denied its liability for the health care premiums to the extent they arose from beneficiary assignments made by the Social Security Administration ("SSA") on or after October 1, 1993. The district court adopted Pardee's position, concluding, inter alia, that October 1, 1993, was a firm statutory deadline and that Pardee was not liable for beneficiary assignments made after that date. See Holland v. Pardee Coal Co., 93 F. Supp. 2d 706 (W.D. Va. 2000). Having carefully considered the Act and the relevant precedent, we find ourselves at odds with the district court's conclusion, and we accordingly reverse and remand.
Enacted in 1992, the Coal Act was designed to address and "remedy problems with the provision and funding of health care benefits with respect to the beneficiaries of multiemployer benefit plans that provide health care benefits to retirees in the coal industry." 26 U.S.C.A. S 9701 (note) (West Supp. 2001). 2 Since 1947, medical and pension benefits for retired coal miners and their families have been provided through a series of multiemployer health plans established pursuant to successive collective bargaining agreements known as National Bituminous Coal Wage Agreements ("NBCWAs "). Beginning in 1951, the NBCWAs were negotiated by the United Mine Workers of America ("UMWA"), on behalf of coal miners, and the Bituminous Coal Operators' Association, Inc. ("BCOA"), on behalf of coal operators. Pursuant to the NBCWAs, a series of multiemployer trusts were established (collectively, the "Benefit Plans"), funded by per-ton royalties levied on the coal produced by contributing operators, providing for coverage of the nonpension benefits -including health care benefits -of both active and retired miners.3 Under the Benefit Plans, coverage was provided not only for retired employees of active coal operators, but also extended to "orphan" retirees, i.e., those retired miners whose employers had gone out of business or ceased contributing to the Benefit Plans.
The financial viability of the Benefit Plans became precarious as the cost of health care benefits escalated, coal production decreased, and coal operators steadily exited the industry. Coal operators rapidly abandoned the Benefit Plans, leaving an ever-diminishing group of coal operators "to absorb the increasing cost of covering retirees left behind by exiting employers." See Eastern Enters. v. Apfel, 524 U.S. 498, 511 (1998) ().
This funding crisis culminated in 1989 in an eleven-month strike provoked by Pittston Coal Company's refusal to sign the 1988 NBCWA. Secretary of Labor Dole intervened in the dispute, establishing a bipartisan commission ("Coal Commission ") to assess the Benefit Plans' financial status and to recommend"`a solution for ensuring that orphan retirees in the [Benefit Plans] will continue to receive promised medical care.'" See id. (quoting Coal Comm'n Report 2, App. (CA1) 1933). The Coal Commission observed that coal miners had, in their labor negotiations, "`traded lower pensions over the years for better health care benefits[,]'" id. (quoting Coal Comm'n Report, Executive Summary vii, App. (CA1) 1324), and thus were entitled to receive the promised benefits. While there was consensus that "`a statutory obligation to contribute to the plan should be imposed on current and former signatories to the[NBCWA],' the members of the Coal Commission disagreed about `whether the entire [coal] industry should contribute to the resolution of the problem of orphan retirees.'" See id. (quoting Coal Comm'n Report, Executive Summary vii, App. (CA1) 1324).
By its enactment, the Coal Act merged the Benefit Plans into a new multiemployer plan, the Combined Fund, see 26 U.S.C. S 9702(a), which would provide "substantially the same" health benefits to retirees and their dependents as they were receiving under the Benefit Plans. See 26 U.S.C. S 9703(b). The Combined Fund's initial "plan year" was the eight-month period from February 1, 1993, to September 30, 1993, with successive twelve-month plan years to begin on October 1 and end on September 30 of each year following. See 26 U.S.C. S 9702(c). The Act established an interim funding scheme for the first plan year, see 26 U.S.C. SS 9704(i)(1)(A), 9705(a), after which time liability for individual retirees was assigned to specific coal operators according to the criteria set forth in 26 U.S.C. S 9706.
Under this "pay for your own" liability apportionment scheme, Congress required signatory operators (i.e., coal operators that had been signatories to NBCWAs) that were still "in business" and that had employed a particular beneficiary in the past to assume liability for the future medical benefits of that beneficiary. See Pardee Coal, 93 F. Supp. 2d at 712. Congress directed the SSA to, "before October 1, 1993," assign each eligible coal industry retiree to a signatory operator according to specified criteria, see 26 U.S.C. S 9706(a), anticipating that such assignments would serve as the basis for the Combined Fund's first premium assessments (i.e., for the second plan year beginning October 1, 1993).4
The Act also provided financing for the health care benefits of "orphaned retirees," those retired miners whose employers had gone out of business and could not be assigned to any other party under the criteria set forth in 26 U.S.C. S 9706. To subsidize the health care costs of such unassigned beneficiaries, Congress authorized substantial contributions to the Combined Fund from the UMWA 1950 Pension Plan and from the Abandoned Mine Reclamation Fund ("AML Fund"), established under the Surface Mining Control and Reclamation Act of 1977. See 26 U.S.C. S 9705; 30 U.S.C. S 1231.
Specifically, on the first day of each of the Combined Fund's first three plan years, a $70 million transfer was to be made from the UMWA 1950 Pension Plan to the Combined Fund. See 26 U.S.C. S 9705(a). Thereafter, for the plan years beginning on and after October 1, 1995, Congress provided for annual transfers to the Combined Fund of up to $70 million in interest earned by the AML Fund; such transfers are solely dedicated to paying the health care premiums of unassigned beneficiaries. See 30 U.S.C. S 1232(h). To the extent that such transfers are inadequate to cover the expenditures on behalf of unassigned beneficiaries, the Act provides for the excess costs to be borne by assigned operators, according to their proportionate share of the assigned beneficiaries. See 26 U.S.C. SS 9704(a)(3), 9704(d), & 9705(b)(2). To date, however, the transfers have proven sufficient, and assigned coal operators have been spared any responsibility for the premiums of unassigned beneficiaries.
Pursuant to its assignment authority under S 9706, the SSA determined that Pardee was a "signatory operator," and it assigned Pardee liability for the health care premiums of certain retired miners and their spouses. Retired miner Curtis...
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