A.T. Massey Coal Co., Inc. v. Massanari

• Decision Date: 18 September 2002
• Docket Number: No. 01-2155.,01-2155.
• Citation: 305 F.3d 226
• Parties: A.T. MASSEY COAL COMPANY, INC.; Massey Coal Services, Incorporated; Peerless Eagle Coal Company; Tennessee Consolidated Coal Company; Rawl Sales and Processing Company; Omar Mining Company; PM Charles Coal Company; Rocky Hollow Coal Co; Sprouse Creek Processing Company; Big Bear Mining Company; Dehue Coal Company; Douglas Pocahontas Coal Corporation; Hopkins Creek Coal; Joboner Coal Company; Majestic Mining, Incorporated; Performance Coal Company; Vantage Mining Company; Russell Fork Coal Company; Vesta Mining Company, Plaintiffs and Counterclaim Defendant-Appellants, and Belfry Coal Corporation, Plaintiff, v. Larry G. MASSANARI, Acting Commissioner of Social Security Administration; Michael H. Holland; William P. Hobgood; Marty D. Hudson; Thomas O.S. Rand; Elliott A. Segal; Carl E. Van Horn; Gail R. Wilensky, Trustees of the United Mine Workers of America Combined Benefit Fund; United Mine Workers of America Combined Benefit Fund, Defendants-Appellees, and Trace Fork Coal Company; Goals Coal Company; Green Valley Coal Company; Lick Branch Coal Company; Eagle Energy, Incorporated; Power Mountain Coal Company; Williams Mountain Coal Company, Defendants.
• Court: U.S. Court of Appeals — Fourth Circuit

305 F.3d 226

A.T. MASSEY COAL COMPANY, INC.; Massey Coal Services, Incorporated; Peerless Eagle Coal Company; Tennessee Consolidated Coal Company; Rawl Sales and Processing Company; Omar Mining Company; PM Charles Coal Company; Rocky Hollow Coal Co; Sprouse Creek Processing Company; Big Bear Mining Company; Dehue Coal Company; Douglas Pocahontas Coal Corporation; Hopkins Creek Coal; Joboner Coal Company; Majestic Mining, Incorporated; Performance Coal Company; Vantage Mining Company; Russell Fork Coal Company; Vesta Mining Company, Plaintiffs and Counterclaim Defendant-Appellants, and Belfry Coal Corporation, Plaintiff, v. Larry G. MASSANARI, Acting Commissioner of Social Security Administration; Michael H. Holland; William P. Hobgood; Marty D. Hudson; Thomas O.S. Rand; Elliott A. Segal; Carl E. Van Horn; Gail R. Wilensky, Trustees of the United Mine Workers of America Combined Benefit Fund; United Mine Workers of America Combined Benefit Fund, Defendants-Appellees, and Trace Fork Coal Company; Goals Coal Company; Green Valley Coal Company; Lick Branch Coal Company; Eagle Energy, Incorporated; Power Mountain Coal Company; Williams Mountain Coal Company, Defendants.

No. 01-2155.

United States Court of Appeals, Fourth Circuit.

Argued April 3, 2002.

Decided September 18, 2002.

COPYRIGHT MATERIAL OMITTED

ARGUED: John Ray Woodrum, Heenan, Althen & Roles, L.L.P., Washington, D.C., for Plaintiffs and Counterclaim Defendants-Appellants. Peter Buscemi, Morgan, Lewis & Bockius, L.L.P., Washington, D.C.; Sharon Swingle, Appellate Staff, Civil Division, United States Department of Justice, Washington, D.C., for Defendants-Appellees. ON BRIEF: Margaret S. Lopez, Heenan, Althen & Roles, L.L.P., Washington, D.C.; John M. Poma, A.T. Massey Coal Company, Inc., Richmond, Virginia, for Plaintiffs and Counterclaim Defendants-Appellants. Stanley F. Lechner, Charles P. Groppe, Morgan, Lewis & Bockius, L.L.P., Washington, D.C.; Samuel M. Brock, III, Troutman, Sanders, Mays & Valentine, Richmond, Virginia; John R. Mooney, Marilyn A. Baker, Mooney, Green, Baker & Saindon, P.C., Washington, D.C.; David W. Allen, Office of the General, UMWA Health and Retirement Funds, Washington, D.C., for Defendants-Appellees Trustees. Robert D. McCallum, Jr., Assistant Attorney General, Paul J. McNulty, United States Attorney, Mark B. Stern, Appellate Staff, Civil Division, United States Department of Justice, Washington, D.C., for Federal Defendants-Appellees.

Before NIEMEYER, KING, and GREGORY, Circuit Judges.

Affirmed by published opinion. Judge KING wrote the opinion, in which Judge GREGORY joined. Judge NIEMEYER wrote an opinion concurring in part in the judgment and dissenting in part.

OPINION

KING, Circuit Judge:

A.T. Massey Coal Company, Massey Coal Services, Peerless Eagle Coal Company, and Tennessee Consolidated Coal Company (the "Massey Plaintiffs") appeal the decision of the district court that rendered them liable for the benefits of certain beneficiaries under the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701-9722 (the "Coal Act" or the "Act"). The Massey Plaintiffs maintain that their assignments of liability are unconstitutional under the Supreme Court's decision in Eastern Enterprises v. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998), and they assert that the assignments also violate the Administrative Procedure Act, 5 U.S.C. § 701 et seq. (the "APA"). For the reasons explained below, we conclude that these contentions are without merit, and we affirm the district court.

I.

This proceeding arises from the efforts of Congress to alleviate a crisis in the funding of retiree health benefits that engulfed the coal industry in the late 1980s. In the wake of spiraling health care costs and declining numbers of coal operators, Congress enacted the Coal Act in 1992 to ensure that retired coal miners and their dependents (the "Beneficiaries") would receive death benefits and adequate health care (the "Benefits"). In order to pay for the Benefits, the Act established a multi-employer benefit plan known as the United Mine Workers of America Combined Benefit Fund (the "Combined Fund"). The Combined Fund is financed by annual premiums assessed against current and former coal operators. It utilizes a complex administrative process to assign liability for Benefits to the operator most clearly connected to a coal miner's employment in the coal industry. The Act places the responsibility for administering this assignment process with the Commissioner of Social Security (the "Commissioner"), and it places the responsibility for administering the Combined Fund with the Fund's Trustees. Pursuant to his statutory authority, the Commissioner made multiple assignments of liability. Among those assignments were several made to the Massey Plaintiffs, including the assignments at issue in this appeal.

Certain entities challenged the efforts of the Commissioner and the Combined Fund to impose liability on them for Benefits due under the Coal Act. In 1998, the Supreme Court overturned the Commissioner's assignments of liability to one former operator, Eastern Enterprises ("Eastern"). Eastern Enters. v. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998). The Court, however, was unable to agree upon the rationale for its ruling: a four-justice plurality voted to invalidate the assignments on one constitutional theory, while Justice Kennedy voted to invalidate the assignments on an alternate constitutional basis.

Following the decision in Eastern Enterprises, the Commissioner voided several assignments to coal operators that he deemed to be similarly situated to Eastern. The Commissioner did not find the Massey Plaintiffs to be similarly situated, however, and he declined to void the assignments he had earlier made to them. The Massey Plaintiffs then formally requested that certain of their assignments (the "Massey Assignments") be voided, but the Commissioner denied their requests.

In January 1999, the Massey Plaintiffs initiated this suit in the Eastern District of Virginia against the Commissioner, the Combined Fund, and the Fund's Trustees. They contended that the Massey Assignments violate the Takings and Due Process Clauses of the Fifth Amendment, as well as certain provisions of the APA. On cross-motions for summary judgment, the district court, on July 19, 2001, ruled in favor of the defendants, concluding that the Massey Assignments did not contravene the Court's holding in Eastern Enterprises. A.T. Massey Coal Co., Inc. v. Massanari, 153 F.Supp.2d 813 (E.D.Va. 2001).

II.

The events leading to the enactment of the Coal Act have been well chronicled by this and several other courts. See generally Eastern Enters. v. Apfel, 524 U.S. 498, 504-16, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998); Sigmon Coal Co., Inc. v. Apfel, 226 F.3d 291, 294-96 (4th Cir.2000), aff'd sub nom. Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002); Holland v. Big River Minerals Corp., 181 F.3d 597, 600-02 (4th Cir.1999); Anker Energy Corp. v. Consolidation Coal Co., 177 F.3d 161, 164-65 (3d Cir.1999); Carbon Fuel Co. v. USX Corp., 100 F.3d 1124, 1127-28 (4th Cir.1996). We therefore only briefly summarize the Act's history.

A.

In 1946, the United Mine Workers of America (the "UMWA") staged a nationwide strike in an effort to secure better health and retirement benefits for its membership. In response, President Truman nationalized the coal mines, and his Secretary of the Interior entered into negotiations with UMWA President John L. Lewis. These negotiations culminated in the historic Krug-Lewis Agreement, which ended the strike and led to the creation of benefit trusts. These benefit trusts were financed by coal production royalties and by payroll deductions. They provided death, disability, retirement, and health benefits for coal miners and their dependents.

Shortly after the Krug-Lewis Agreement, the coal mines were returned to private control, and the UMWA and a multiemployer group of coal operators entered into the National Bituminous Coal Wage Agreement of 1947 (the "1947 NBCWA"). The 1947 NBCWA established the United Mine Workers of America Welfare and Retirement Fund (the "1947 Fund"), which was modeled on the Krug-Lewis benefit trusts. The 1947 Fund was financed exclusively by royalties from coal production, and it provided both pension and health benefits to coal miners and their dependents. The 1947 NBCWA failed to guarantee coal miners any specific benefits, leaving the determination of benefit levels to three trustees of the 1947 Fund.

The acrimony between the UMWA and the coal operators over benefits persisted, however, and in 1950 the UMWA and the coal operators executed a new agreement (the "1950 NBCWA"). The 1950 NBCWA replaced the 1947 Fund with a new fund financed by a perton royalty on coal production (the "1950 Fund"). The 1950 Fund mirrored the 1947 Fund in that it failed to guarantee coal miners any vested benefits, instead leaving the power to adjust or even terminate benefits with the Fund's trustees. Like its predecessor, the 1950 Fund operated on a pay-as-you-go basis, with the trustees adjusting benefit levels to fit budgetary constraints. As such, the 1950 NBCWA provided no guarantee of lifetime benefits to miners.

Although the 1950 NBCWA was amended several times, its structure remained essentially unchanged until 1974. A combination of demographic trends, which had increased the cost of benefits, and the passage of the Employee Retirement Income Security Act ("ERISA"), led in 1974 to the replacement of the 1950 Fund. The UMWA and the Bituminous Coal Operators' Association ("BCOA") entered into a new agreement, the 1974 NBCWA. This agreement replaced the 1950 Fund with four new trusts, financed by a combination of coal production royalties and premiums based on hours worked by coal miners.¹ Two of these new trusts, the UMWA 1950 Benefit Plan and Trust (the ...