A.J. Taft Coal Co., Inc. v. Barnhart, No. CV 03-P-1390-S.

CourtUnited States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
Writing for the CourtProctor
Citation291 F.Supp.2d 1290
PartiesA.J. TAFT COAL COMPANY, INC., et al., Plaintiffs, v. Jo Anne B. BARNHART, Commissioner of Social Security; Michael H. Holland, et al., Trustees of the United Mine Workers of America Combined Benefit Fund, Defendants.
Docket NumberNo. CV 03-P-1390-S.
Decision Date14 November 2003
291 F.Supp.2d 1290
A.J. TAFT COAL COMPANY, INC., et al., Plaintiffs,
v.
Jo Anne B. BARNHART, Commissioner of Social Security; Michael H. Holland, et al., Trustees of the United Mine Workers of America Combined Benefit Fund, Defendants.
No. CV 03-P-1390-S.
United States District Court, N.D. Alabama, Southern Division.
November 14, 2003.

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James C Pennington, Brian R Bostick, Christopher A Mixon, Ogletree Deakins Nash Smoak & Stewart PC, Birmingham, AL, John R Woodrum, Margaret Lopez, Ogletree Deakins Nash Smoak & Stewart PC, Washington, DC, for plaintiffs.

Alice H Martin, U.S. Attorney, James G Gann, III, U.S. Attorney's Office, Birmingham, AL, Brian G Kennedy, Richard Lepley, U.S. Dept of Justice, Civil Division, Federal Programs Branch, Peter D Keisler, U.S. Department of Justice-Civil Division, for Anne B Barnhart, Defendant.

Stephen J Pollak, Howard R Rubin, John Townsend Rich, Jeffrey D Fox, Shea & Gardner, Washington, DC, Patrick K Nakamura, Nakamura Quinn & Walls LLP, Birmingham, AL, for Michael H Holland, as Trustees of the United Mine Workers of America Combined Benefit Fund, William P Hobgood, as Trustees of UMWA Combined Benefit Fund, Marty D Hudson, as Trustees of UMWA Combined Benefit Fund, Thomas O S Rand, as Trustees of UMWA Combined Benefit Fund, Elliot A Segal, as Trustees of UMWA Combined Benefit Fund, Carl E Van Horn, as Trustees of UMWA Combined Benefit Fund, Gail R Wilensky, as Trustee of UMWA Combined Benefit Fund, Defendants.

MEMORANDUM OPINION

PROCTOR, District Judge.


This case represents one chapter in a long-running dispute between coal operators, the Commissioner of the Social Security Administration ("Commissioner"), and the Trustees of the United Mine Workers of America Combined Benefit Fund (the "Trustees" and the "Combined Fund," respectively). The dispute centers on the meaning of "reimbursements" in the calculation of the premium formula under § 9704(b)(2) of The Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701-9722; 30 U.S.C. § 1232(h) ("Coal Act"). The dispositive issue in this case, and in several cases pending in other districts, is simply a question of statutory interpretation. As discussed below, the Eleventh Circuit, in affirming a decision of The Honorable James H. Hancock from this District, has already decided that issue for this Circuit. See National Coal Association v. Chater, 81 F.3d 1077 (11th Cir.1996).

This case is before the court on the following motions and application: (1) Motion to Transfer to the United States District Court for the District of Columbia (Doc # 17) filed by Defendant Trustees on July 1, 2003; (2) Motion to Dismiss, or, in the Alternative, to Transfer (Doc # 31) filed by Defendant Commissioner on July 28, 2001; (3) Motion to Dismiss, or, in the Alternative, to Transfer (Doc # 38) filed by Defendant Trustees on August 12, 2003; (4) Application for Preliminary Injunction (Doc # 47) filed by Plaintiffs on September

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30, 2003; and (5) Motion to Intervene as Plaintiffs (Doc # 50) filed October 3, 2003.

For the reasons stated below, the court makes the following determinations. Venue over the Commissioner is proper in this court pursuant to 28 U.S.C. § 1391(e)(3) because at least one plaintiff who resides in this District had a justiciable claim at the time of filing. However, the court finds that the claims of the plaintiffs in this case who reside in the Eleventh Circuit are now moot. The court agrees with the defendants that transfer of this case is appropriate under 28 U.S.C. § 1404(a), but disagrees that the District of Columbia should be the transferee court. The court instead finds it appropriate under § 1404(a) to transfer this case to District of Maryland.

I. Background and Procedural History of this Case

The Coal Act requires present and former coal operators, such as the plaintiffs in this case, to pay for the health benefits of coal industry retirees and their dependents. 26 U.S.C. §§ 9702, 9704. Congress passed the Coal Act in 1992 to ensure that retired coal miners and their dependents and widows continue to receive the lifetime health benefits guaranteed by earlier collective bargaining agreements with coal operators. Before the Coal Act was passed, the two multi-employer health care plans that provided benefits to retired miners (the "Plans") were operating at a deficit. The financial instability of the Plans led to a breakdown in labor relations, the cessation of operator contributions to the Plans, and an eleven-month strike by mine workers. National Coal Association v. Chater, 81 F.3d 1077, 1078-79 (11th Cir.1996). In an effort to remedy the funding problems yet maintain a privately financed program, Congress consolidated the Plans into the Combined Fund with financing primarily provided by coal operators.

A. "Reimbursements" under the Coal Act

The amount operators must pay to the Combined Fund depends in part on the "per beneficiary premium" calculated by the Commissioner and adjusted annually for inflation. 26 U.S.C. § 9704(b)(2)(B). Once the Commissioner calculates the formula, the Trustees, as fiduciaries, bill and collect the premiums from the coal operators. 26 U.S.C. § 9704(b)(2)(B).

The premium formula is based on the costs incurred by the Plans in the last year before they were consolidated into the Combined Fund ("the Base Year"). Because the Plans contracted with the Medicare program for many years before consolidation, Congress decided that reimbursements received from Medicare should be subtracted from the Base Year costs. Thus, the baseline rate for the premium is the "aggregate payments ... for health benefits (less reimbursements but including administrative costs)" made by the Plans during a base year beginning on July 1, 1991. 26 U.S.C. § 9704(b)(2)(A) (emphasis added).

The dispute in this case concerns the calculation of "reimbursements" received by the Combined Fund's predecessors. As the Eleventh Circuit explained:

.... [Beginning in the base year, HHS] paid a predetermined amount per plan member per month, without regard to the amount of money that the [predecessor] plans actually spent for Medicare-covered services.

.... [I]n the base year, the [predecessor] plans spent $156.8 million on Medicare Part B and related administrative expenses [and] received $182.3 million in risk-capitation payments for Medicare Part B services and related administrative costs, an amount that exceeded actual costs by $25.5 million.

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National Coal Association, 81 F.3d at 1079-80 (footnote omitted and emphasis added).

The interpretation of the word "reimbursements" as it related to the initial surplus of $25.5 million was the impetus for the litigation leading up to this case. The Secretary of Health and Human Services ("the Secretary")1 initially determined that the $25.5 million received in the base year should not be counted as reimbursements in the calculation of the baseline premium rate which determined all future years' premiums. See National Coal Association, 81 F.3d at 1080. As a result, the premiums paid by operators were approximately 10% higher ("the higher premium") than they would have been had the Secretary determined that the term "reimbursements" included the additional $25.5 million and set-off the baseline premium rate by that amount.

B. The NCA Litigation

In April 1994, eight coal operators and the National Coal Association2 brought suit against the Commissioner before The Honorable James H. Hancock in the Northern District of Alabama challenging the Secretary's interpretation of reimbursements. National Coal Association v. Chater, 1995 WL 1052240, No. CV-94-H-780-S (N.D.Ala.1994) ("NCA"). The Trustees were not parties to that lawsuit. Judge Hancock determined that the Secretary's methodology was flawed because the plain language of the Coal Act required the extra $25.5 million to be included in the calculation of reimbursements and ordered the Commissioner to recompute the baseline premium and all subsequent premiums accordingly ("the lower premium"). The Eleventh Circuit affirmed. National Coal Association, 81 F.3d at 1081-82.

C. The Commissioner's 1995 Recalculation

In response to NCA, the Commissioner, who had by then succeeded to the responsibility for determining the per-beneficiary rate, applied the lower premium to all operators nationwide, not merely those operators who were either parties to the NCA litigation or residents of states within the Eleventh Circuit.

D. The Holland I Litigation

In 1996, the Trustees filed suit in the United States District Court for the District of Columbia challenging the Commissioner's 1995 recalculation. Holland v. Apfel, 23 F.Supp.2d 21 (D.D.C.1998)("Holland I"). Subsequently, the National Mining Association (purportedly a successor of the National Coal Association) and seven of the eight NCA plaintiffs intervened as defendants. The District of Columbia District Court determined in February 2000 that the Secretary's original calculation was correct and ordered the Commissioner to reinstate the higher premium rate. (Trustees' July 1, 2003, Brief in Support of Transfer, at 11 and Exs. 13-14, 17, 19-20 thereto.)

On appeal, the District of Columbia Circuit reversed the district court's judgment upholding the Commissioner's original higher premium interpretation. Holland v. National Mining Ass'n, 309 F.3d 808, 819 (D.C.Cir.2002). The court further held that the District of Columbia federal courts were not "authorize[d] ... to lift

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the existing Eleventh Circuit injunction as to the coal companies who were parties in the prior litigation," id. at 815, and "vacated the District Court's injunction insofar as it purport[ed] to bind the Commissioner with respect to coal companies who had the benefit of the Eleventh Circuit judgment," id. at 819.

The D.C. Circuit also vacated...

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44 practice notes
  • Sidney Coal Co., Inc. v. Social Sec. Admin., No. 04-6286.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • October 19, 2005
    ...such narrow construction. There is no requirement that all plaintiffs reside in the forum district."); A.J. Taft Coal Co. v. Barnhart, 291 F.Supp.2d 1290, 1302 (N.D.Ala.2003) (noting that both the SSA and the Trustees conceded at oral argument that "they could not identify a single case dec......
  • United Mine Workers of Am. Combined Benefit Fund v. Walter Energy, Inc., Case No.: 2:16-cv-00064-RDP
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • March 8, 2016
    ...consolidated the Plans into the Combined Fund with financing primarily provided by coal operators.AJ Taft Coal Co., Inc. v. Barnhart , 291 F.Supp.2d 1290, 1295 (N.D.Ala.2003). In addition to the Combined Fund, the Coal Act established the 1992 Plan (together the “Coal Act Funds”). 26 U.S.C.......
  • Int'l Union, United Mine Workers of Am. v. Consol Energy, Inc., CIVIL ACTION NO. 1:16-cv-12506
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • June 4, 2020
    ...within the forum chosen by the Plaintiff, the choice of forum is entitled to less consideration." A.J. Taft Coal Co. v. Barnhart, 291 F. Supp. 2d 1290, 1310 (N.D. Ala. 2003). The facts underlying the LMRA claim in Count I occurred not here in West Virginia, but as part of the ROD proceeding......
  • United Mine Workers of Am. 1974 Pension Plan & Trust v. Walter Energy, Inc., Case No.: 2:16-cv-00057-RDP
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • May 18, 2016
    ...consolidated the Plans into the Combined Fund with financing primarily provided by coal operators. AJ Taft Coal Co., Inc. v. Barnhart , 291 F.Supp.2d 1290, 1295 (N.D.Ala.2003). In addition to the Combined Fund, the Coal Act established the 1992 Plan (together the "Coal Act Funds"). 26 U.S.C......
  • Request a trial to view additional results
44 cases
  • Sidney Coal Co., Inc. v. Social Sec. Admin., No. 04-6286.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • October 19, 2005
    ...such narrow construction. There is no requirement that all plaintiffs reside in the forum district."); A.J. Taft Coal Co. v. Barnhart, 291 F.Supp.2d 1290, 1302 (N.D.Ala.2003) (noting that both the SSA and the Trustees conceded at oral argument that "they could not identify a single case dec......
  • United Mine Workers of Am. Combined Benefit Fund v. Walter Energy, Inc., Case No.: 2:16-cv-00064-RDP
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • March 8, 2016
    ...consolidated the Plans into the Combined Fund with financing primarily provided by coal operators.AJ Taft Coal Co., Inc. v. Barnhart , 291 F.Supp.2d 1290, 1295 (N.D.Ala.2003). In addition to the Combined Fund, the Coal Act established the 1992 Plan (together the “Coal Act Funds”). 26 U.S.C.......
  • Int'l Union, United Mine Workers of Am. v. Consol Energy, Inc., CIVIL ACTION NO. 1:16-cv-12506
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • June 4, 2020
    ...within the forum chosen by the Plaintiff, the choice of forum is entitled to less consideration." A.J. Taft Coal Co. v. Barnhart, 291 F. Supp. 2d 1290, 1310 (N.D. Ala. 2003). The facts underlying the LMRA claim in Count I occurred not here in West Virginia, but as part of the ROD proceeding......
  • United Mine Workers of Am. 1974 Pension Plan & Trust v. Walter Energy, Inc., Case No.: 2:16-cv-00057-RDP
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • May 18, 2016
    ...consolidated the Plans into the Combined Fund with financing primarily provided by coal operators. AJ Taft Coal Co., Inc. v. Barnhart , 291 F.Supp.2d 1290, 1295 (N.D.Ala.2003). In addition to the Combined Fund, the Coal Act established the 1992 Plan (together the "Coal Act Funds"). 26 U.S.C......
  • Request a trial to view additional results

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