Opposition Brief — Anker Energy Corp. v. United Mine Workers of America Combined Benefit Fund

No. 99-262 -t-

Jn the Supreme Court of the United States

ANKER ENERGY CORPORATION, ET AL., PETITIONERS

Vv.

UNITED MINE WORKERS OF AMERICA

COMBINED BENEFIT FUND, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

BRIEF FOR THE COMMISSIONER

OF SOCIAL SECURITY IN OPPOSITION

SETH P. WAXMAN

Solicitor General

Counsel of Record

DAVID W. OGDEN

Acting Assistant Attorney

General

DOUGLAS N. LETTER

Attorney

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTION PRESENTED

Whethe. the provisions of the Coal Industry Retiree

Health ’senefit Act of 1992, 26 U.S.C. 9701 et seq., that

assigy. responsibility for funding the health-care bene-

fits of retired coal miners and their dependents to the

ceal mine operators that previously employed the

.niners pursuant to collective bargaining agreements

that promised the miners health-care benefits for life

violate the Due Process or Just Compensation Clause of

the Fifth Amendment.

(1)

TABLE OF CONTENTS

Page

Opinions below 1

Jurisdiction ....... = 1

Statement = 2

Sear TTTTTIIITID shasicertninee tes eesseeoevesetctienesenmentininiedeinabectemsccamanestuninnieinces 13

Conclusion sagnanenirnene 21

TABLE OF AUTHORITIES

Cases:

Association of Bituminous Contractors, Inc. v.

Apfel, 156 F.3d 1246 (D.C. Cir. 1998) ........... 11, 12, 14, 15, 20

Chateaugay Corp., In re, 53 F.3d 478 (2d Cir.),

Cert. denied, 516 U.S. 913 (1995) ..........cvcceccesserecsesescessesacees 3

Connolly v. Pension Benefit Guar. Corp., 475 U.S.

211 (1986) . _ 16

Eastern Enters. v. Apfel, 524 U.S. 498 (1998) ............ passim

Holland v. Robert Coal Co., 172 F.3d 919 (D.C.

Cir. 1998), cert. denied, 119 S. Ct. 1803 (1999) oo... 14

Marks v. United States, 430 U.S. 188 (1977) c.ccccccececoee 18, 19

Unity Real Estate Co. v. Hudson, 178 F.3d

649 (3d Cir. 1999), petition for cert. pending,

No. 99-12 10, 11, 14, 15, 16, 17, 18, 19

Constitution and statutes:

U.S. Const. Amend. V:

Due Process Clause 8, 13, 20

Just Compensation Clause 8, 13

Coal Industry Retiree Health Benefit Act of 1992,

I creat passim

26 U.S.C. 9701(b)(1) 5

26 U.S.C. 9701(c)(1) 5

26 U.S.C. 9701(c)(2)(A) 5

ah Ce ee 5

(IIT)

IV

Statutes—Continued: Page

SD EE. DR cntrneenntateineeniimniienni 5-6

BS Cis DRED eneciciminmimnmntiinn 5

BD TER. Ge crcetnictetentecseernentsemnenseeminnein 5

RE Re 5

ee 5

Rk ee 5

Employee Retirement Income Security Act of 1974,

29 U.S.C. 1001 et seq.:

IE om : | 6

5 rr ee 6

Labor Management Relations Act of 1947, 29 U.S.C.

| ee 6

Miscellaneous:

138 Cong. Rec. 5331 (1992) ....... saheasiseeinnpeneneddaimaimiinvincneaatinniets 4

Jn the Supreme Court of the United States

No. 99-262

ANKER ENERGY CORPORATION, ET AL., PETITIONERS

Vv.

UNITED MINE WORKERS OF AMERICA

COMBINED BENEFIT FUND, ET AL.

4

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

BRIEF FOR THE COMMISSIONER

OF SOCIAL SECURITY IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-40a)

is reported at 177 F.3d 161. The opinions of the district

court (Pet. App. 41a-50a, 51a-73a) are unreported.

JURISDICTION

The judgment of the court of appeals was entered on

May 14, 1999. The petition for a writ of certiorari was

filed on August 12, 1999. The jurisdiction of this Court

is invoked under 28 U.S.C. 1254(1).

(1)

STATEMENT

1. Congress enacted the Coal Industry Retiree

Health Benefit Act of 1992 (Coal Act or Act), 26 U.S.C.

9701 et seq., to address a crisis in the funding of two

multi-employer welfare benefit plans that paid for the

health-care benefits of coal miners, retired miners, and

their dependents. Those multi-employer plans, the

United Mine Workers of America 1950 Benefit Plan and

Trust (1950 Benefit Trust) and the United Mine

Workers of America 1974 Benefit Plan and Trust (1974

Benefit Trust), were created and funded through a

series of national collective bargaining agreements,

known as National Bituminous Coal Wage Agreements

(NBCWAs), between the United Mine Workers of

America (UMWA) and the Bituminous Coal Operators

Association (BCOA). See generally Eastern Enters. v.

Apfel, 524 U.S. 498, 505-509 (1998) (plurality opinion).

The NBCWAs covered members of the BCOA that

employed miners, as well as other coal mine operators

who, although not members of the BCOA, nonetheless

agreed to be bound by the terms of the NBCWAs in

“me too agreements.” See Pet. App. 10a.

Before 1974, a single multi-employer fund was the ex-

clusive source of pension and health-care benefits for

UMWA miners, retirees, and their dependents. See

Eastern, 524 U.S. at 505-506 (plurality opinion). In the

1974 NBCWA, the UMWA and the BCOA agreed to

separate that fund into two multi-employer pension

funds and two multi-employer welfare benefit funds.

Under the 1974 NBCWA, the 1950 Benefit Trust pro-

vided health-care benefits to miners who retired before

1976, and the 1974 Benefit Trust provided health-care

benefits to both the active work force and miners who

retired in 1976 or thereafter. Jd. at 509 (plurality

3

opinion). Unlike previous agreements, the 1974

NBCWA expressly stated that miners and their

spouses would be entitled to health-care benefits for

life. Jd. at 510 (plurality opinion); see also Pet. App. 6a;

In re Chateaugay Corp., 53 F.3d 478, 482 (2d Cir.), cert.

denied, 516 U.S. 913 (1995).

The structure of the 1950 and 1974 Benefit Trusts

was changed in the 1978 NBCWA. In that agreement,

employers that were bound by the NBCWA agreed to

provide benefits to their active employees and future

retirees through individual employer health plans,

rather than the 1974 Benefit Trust. The 1974 Benefit

Trust was retained to provide health-care benefits to

post-1975 “orphaned” retirees, whose last employer had

gone out of business. See Eastern, 524 U.S. at 510

(plurality opinion). The 1950 Benefit Trust for miners

who retired before 1976 (and their dependents) was also

retained. See id. at 511 {plurality opinion). The 1978

NBCWA, like the previous one, expressly promised

that miners covered by the agreement would receive

health-care benefits for life. See Chateaugay, 53 F.3d

at 482.

In the 1980s, the financial stability of the 1950 and

1974 Benefit Trusts was plagued by spiraling health-

care costs, the phenomenon of coal operators “dumping”

their retirees into the 1974 Benefit Trust by terminat-

ing their individual welfare benefit plans or leaving the

coal business, and judicial decisions maintaining the

trusts’ beneficiary population without corresponding

increases in coal operator contributions. The with-

drawal of coal operators from the 1950 and 1974 Benefit

Trusts forced the remaining participating employers to

shoulder increasingly large contribution obligations to

pay for not only their own retirees, but also newly

“orphaned” retirees whose employers had ceased

4

contributing to the Trusts. Those rising costs, in turn,

influenced some still-contributing signatory operators

to withdraw from the Trusts, thus further shrinking the

trust fund contribution base. See Eastern, 524 U.S. at

511 (plurality opinion). The Trusts’ ability to provide

health-care benefits was jeopardized, and the issue of

retiree health-care benefits contributed to a protracted

strike at the Pittston Coal Company. J/bid. (plurality

opinion).

2. In 1990, the Secretary of Labor established the

Advisory Commission on United Mine Workers of

America Retiree Health Benefits (Coal Commission) to

examine the financial crisis confronting the Trusts and

to recommend solutions. See Kastern, 524 U.S. at 511-

512 (plurality opinion). As relevant here, the Coal

Commission recommended, as one alternative solution,

that current and past signatories to the NBCWAs

should bear the cost of providing health-care benefits to

“orphaned” retirees whose former employers were no

longer in the coal business, as well as to their own

retirees. See id. at 512-513 (plurality opinion). The

Coal Act was based in large part on that alternative

recommendation by the Coal Commission. See id. at

513-514 (plurality opinion); 138 Cong. Rec. 5331 (1992)

(statement of Sen. Wofford).

The Coal Act was designed to provide stable financ-

ing for the health-care benefits of all retired coal miners

and their dependents who were covered by either the

1950 or 1974 Benefit Trust, or by an individual em-

ployer plan under the NBCWAs. To that end, the Coal

Act created two new, private multi-employer health-

care benefit trusts. The first new fund, the United

Mine Workers of America Combined Fund (Combined

Fund), the trust at issue in Eastern, was created by the

étatutory merger of the 1950 and 1974 Benefit Trusts.

5

It provides benefits to beneficiaries who were receiving

(and were eligible to receive) benefits from those

Trusts as of July 1992. See 26 U.S.C. 9702.'

The Coal Act provides that health-care benefits from

the Combined Fund shall be financed through annual

premiums paid by “signatory operators.” The Act

defines a “signatory operator” to be a person “which is

or was a signatory to a coal wage agreement.” 26

U.S.C. 9701(c)(1). The term “coal wage agreement” in-

cludes both the NBCWAs and the “me too agree-

ments.” See 26 U.S.C. 9701(b)(1). Any “related person”

to a signatory operator is jointly and severally liable for

the signatory operator’s premiums. See 26 U.S.C.

9701(¢)(2)(A), 9704(a).

The amount of the premiums is determined by the

Commissioner of Social Security under a three-tier

formula established by the Coal Act. 26 U.S.C. 9706(a).

Under that formula, the Commissioner is to assign

responsibility for the benefits of a retired miner, if

possible, to a signatory operator that “employ[ed]” the

retiree in the coal industry under a 1978 or subsequent

wage agreement (or any related person to such a

signatory operator). See 26 U.S.C. 9706(a)(1)(B) and

(2)(B).

The Coal Act directs the creation of the Combined

Fund as a private multi-employer benefit plan, and

the appointment of its trustees. 26 U.S.C. 9702(a). The

Act further provides that the Combined Fund shall

have the same legal status as any other private multi-

employer welfare benefit plan under the Labor Man-

agement Relations Act of 1947 and the Employee

Retirement Income Security Act of 1974. 26 U.S.C.

! The Coal Act also established another fund, the 1992 UMWA

Benefit Plan, which is not at issue here. See 26 U.S.C. 9712.

9702(a)(3); see 29 U.S.C. 186(¢)(5); 29 U.S.C. 1002(1) and

(37).

From 1967 until 1982, petitioner King Knob Coal

Co. and Consolidation Coal Company’ were parties to a

series of contracts under which King Knob agreed to

extract coal on properties owned or controlled by Con-

solidation. Pet. App. 9a. In those contracts, King Knob

agreed that “all parties working for it in connection

with the undertaking covered by this Agreement shall

be its [King Knob’s] employees.” /d. at 28a. King Knob

also agreed that “its employees shall be members of the

United Mine Workers of America and it shall be a

signatory to the then current [NBCWA\].” Jd. at 9a-10a.

King Knob signed “me too” agreements during the

1970s and early 1980s; the last collective bargaining

agreement executed by King Knob was a “me too”

agreement in 1984. /d. at 10a.

During the course of the contractual relationship

between King Knob and Consolidation, King Knob was

acquired by an affiliate of petitioner Anker Energy

Corporation in 1975. Pet. App. 10a. Thereafter, in

1982, the contract mining agreements between Con-

solidation and King Knob were terminated, and a

settlement agreement between Consolidation and King

Knob provided that Consolidation would reimburse

King Knob for certain subsequent payments “due to the

- Consolidation Coal Company was a defendant in the district

court and appellee in the court of appeals. Although the decision of

the court of appeals was in part adverse to Consolidation (see Pet.

App. 33a-34a), Consolidation has not filed a petition for a writ of

certiorari seeking review of any part of the court of appeals’

decision. Petitioners have informed the Court that Consolidation

does not intend to participate in the proceedings in this Court. See

Pet. ii.

7

UMWA Fund or any successor fund” to finance miners’

health-care benefits. /bid.

In 1994 and 1995, the Commissioner of Social Secur-

ity notified petitioner Anker Energy Corporation that

it had been assigned liability for a number of bene-

ficiaries under the Coal Act as a “related person” to

King Knob. Pet. App. 10a. Anker objected to those

assignments on the ground that they should have been

made to Consolidation because Consolidation owned the

mine where King Knob’s employees worked, had made

payments to the Benefit Trusts to cover the health-care

expenses of King Knob’s employees, and had agreed in

the 1982 settlement agreement to assume continued

financial liability for the health-care expenses of those

employees. The Commissioner rejected those objec-

tions, emphasizing that the retired miners in question

were employed by King Knob:

Under the Coal Act, ownership of a mine is im-

material to assignment decisions. Assignments are

made solely on the basis of the signatory employer

who employed the eligible retiree. In the case

involving King Knob, an affiliate of Anker Energy,

the signatory that employed the retirees was King

Knob, not Consolfidation]. Also, for Coal Act

purposes, SSA is not bound by any private agree-

ments made between companies, nor does the Coal

Act allow for pro-ration of premium payments be-

tween companies. In light of the foregoing, no

assignments that were made to Anker on the basis

of its relationship to King Knob Coal can be

reassigned to Consol[idation].

Id. at 26a (citation omitted).

4. Petitioners initiated this action in district court

against the Commissioner, the Combined Fund, and

on ae ae

Consolidation to contest Anker’s liability for the bene-

ficiaries assigned to it as a related person to King Knob.

Petitioners contended that the assignments should

have been made to Consolidation, that Consolidation

was contractually obligated to reimburse them for any

liability to the Combined Fund, and that the assign-

ment of beneficiaries to Anker violated the Due Process

and Just Compensation Clauses of the Fifth Amend-

ment. Pet. App. Ila.

In July 1997, the district court granted Consolidation

judgment on the pleadings, dismissing petitioners’

claim that the assignments should have been made to

Consolidation, Pet. App. 67a, as well as their claim that

Consolidation was required to ,eimburse Anker for

payments to the Combined Fund, 7d. at 68a. In March

1998, before this Court decided Eastern, the district

court rejected petitioners’ constitutional challenges,

and granted summary judgment for respondents. Jd. at

45a. In July 1998, the court entered judgment for

respondents Combined Fund and its Trustees on their

counterclaims seeking premiums, interest, liquidated

damages, attorney’s fees, and costs. /d. at 18a.

5. While this case was still before the district court,

a divided Court held in Kastern Enterprises v. Apfel

that the Coal Act was unconstitutional as applied to a

coal mine operator that signed NBCWAs in effect

between 1947 and 1964, but ceased coal mining opera-

tions in 1965. See 524 U.S. at 516-517 (plurality opinion)

(recounting history of Eastern’s involvement in the coal

business). The Coal Act obligated Eastern to pay

premiums to the Combined Fund to cover the health

benefits of more than 1000 retired miners or their

dependents who had worked for the company before

1966. Jd. at 517 (plurality opinion). Eastern contended

that the Coal Act violated substantive due process as

9

applied to it and effected an unconstitutional taking of

its property without just compensation by retroactively

creating an obligation to finance the benefits of miners

who, when employed by Eastern, had no expectation

that they would receive open-ended health-care bene-

fits at Eastern’s expense.

The plurality concluded that the application of the

Coal Act to Eastern effected an unconstitutional taking

without just compensation. See Eastern, 524 U.S. at

924-527. Applying the Court’s three-factor test for

analyzing regulatory taking claims (id. at 523-524), the

plurality found a constitutional problem as to each

factor. In particular, the plurality found it significant

that the Coal Act imposed liability on Eastern for

lifetime health-care benefits even though Eastern had

withdrawn from the coal industry before any of the

NBCWAs had promised lifetime benefits to the miners.

See id. at 532 (with respect to the burden placed on

Fastern, noting that Eastern “had no control over the

activities of its former employees subsequent to its

departure from the coal industry in 1965”); ibid. (with

respect to investment-backed expectations, stressing

that Eastern never participated in an industry-wide

agreement creating expectations of lifetime benefits);

id. at 537 (with respect to the nature of the govern-

mental action at stake, stating that “Eastern cannot be

forced to bear the expense of lifetime health benefits

for miners based on its activities decades before those

benefits were promised”).

Justice Kennedy, concurring in the judgment and dis-

senting in part, disagreed with the plurality’s con-

clusion that the Coal Act should be analyzed as a

taking, see Hastern, 524 U.S. at 539-547, but concluded

that the application of the Coal Act to Eastern violated

“lalecepted principles” of substantive due process in-

10)

hibiting the operation of severely retroactive laws, id.

at 547- 550. Justice Kennedy noted that “the imposition

of liability on former employers based on past em-

ployment relationships” may be upheld under due

process principles as remedial legislation designed to

allocate properly the costs of the employer’s business.

Id. at 549. He concluded, however, that the Coal Act

did not serve that purpose as applied to Eastern be-

cause, although “Eastern was once in the coal business

and employed many of the beneficiaries, * * * it was

not responsible for their expectation of lifetime health

benefits or for the perilous financial condition of the

1950 and 1974 plans which put the benefits in jeopardy.

(T]he expectation was created by promises and

agreements made long after Eastern left the coal

business.” /d. at 550.

Four Justices dissented, concluding that the Coal

Act, as applied to Eastern, was not unconstitutional

under either due process or taking principles. Eastern,

524 U.S. at 553-568. The four dissenting Justices

agreed with Justice Kennedy that the Coal Act should

not be analyzed as a taking at all. /d. at 554-557.

6. After this Court’s decision in Fastern, the court of

appeals affirmed the judgment of the district court in

part and reversed in part. Pet. App. la-40a. The court

held that the Coal Act is constitutional as applied to

petitioners. /d. at 25a. In reaching that decision, the

court followed in large part its analysis in Unity Real

Estate Co. v. Hudson, 178 F.3d 649 (3d Cir. 1999), peti-

tion for cert. pending, No. 99-12, in which the same con-

stitutional claims were rejected. See Pet. App. 9a, 17a,

22a-25a.

First, the court observed that the concurrence in

Eastern did not rest on a “narrower” ground of decision

than that of the plurality opinion, and so neither de-

1]

cision could be taken as constituting the “controlling

holding” of Eastern. Pet. App. 17a. Therefore, the

court concluded, Kastern requires “a finding that the

Coal Act is unconstitutional as applied to [petitioners]

* * * only if [petitioners] stand[] in a substantially

identical position to Eastern Enterprises with respect

to both the plurality and Justice Kennedy’s concur-

rence.” /bid. (internal quotation marks omitted).

The court then noted that Eastern involved a mine

operator that had not signed either the 1974 or a

subsequent NBCWA, whereas King Knob, the signa-

tory operator in this case, had agreed to be bound by

NBCWAs in 1974 and afterwards. Pet. App. 17a.

“(The] plurality and concurrence [in Eastern] both

found significant the fact that Eastern Enterprises was

not a signatory to either the 1974 or 1978 NBCWAs,

and thus it did not contemplate either being responsible

for or contributing to the miners’ expectation of lifetime

benefits.” Jbid. In light of both the taking analysis

applied by the plurality in Eastern and the due process

analysis undertaken by Justice Kennedy in that case,

the court concluded, “a majority of the Court would find

the Act unconstitutional when applied to an employer

that did not agree to the 1974 or subsequent NBCWAs,

while application of the Act to a signatory to the 1974 or

a subsequent wage agreement would be an entirely

different matter.” Jd. at 2la. Following its earlier

decision in Unity as well as the D.C. Circuit’s decision

in Association of Bituminous Contractors, Inc. v.

Apfel, 156 F.3d 1246 (1998), the court then held the Coal

Act’s application to Anker constitutional. Pet. App.

21a-22a.

The court also explained that its opinion in Unity

directed it “to apply an additional level of due process

analysis designed to measure the extent of the gap

12

between the coal companies’ contractual promises to

the Funds and the requirements of the Coal Act.” Pet.

App. 22a (internal quotation marks omitted). Under

that analysis, the court concluded that the duration of

the Coal Act’s retroactive operation does not render its

application to Anker violative of due process. Jd. at

23a. The court observed that the extent of the retro-

active application of the Act in this case is no greater

than it was in Unity (there, 11 years). /bid. Further,

Anker’s liability under the Coal Act is proportional to

the experience of King Knob (its related party) with the

earlier system of financing coal miners’ benefits, be-

cause King Knob was a signatory to the 1978 and

subsequent NBCWAs and therefore bears some of the

responsibility for creating miners’ reasonable expecta-

tion of lifetime health-care benefits as well as the

problems of underfunding that the Coal Act redresses.

Id. at 24a- 25a. Concluding finally that “nothing ger-

mane to our holding in [Unity] distinguishes Anker

from the plaintiffs in [Unity],” the court held the Act

constitutional as applied to petitioners “because of the

factual distinction that makes Eastern Enterprises

inapplicable, and because the case falls squarely under

[the] analysis and holding in [Unity].” Id. at 25a.°

The court reversed, however, the district court’s de-

cision to dismiss Consolidation as a defendant to peti-

tioners’ suit, and remanded for further proceedings on

petitioners’ claims against Consolidation. Pet. App.

29a-35a. The court concluded that the district court had

erred in ruling on the pleadings that the settlement

The court also affirmed the district court’s decisions uphold-

ing the assignment of beneficiaries to Anker, Pet. App. 25a-29a,

and the award of interest, liquidated damages, attorney’s fees, and

costs to the Combined Fund, id. at 35a-36a.

13

agreement between King Knob and Consolidation could

not have obligated Consolidation to reimburse peti-

tioners for their financial liability to the Combined

Fund. /d. at 3la-32a. The court also rejected the

district court’s conclusion that the Coal Act voided

private contractual arrangements for indemnification or

reimbursement of liability for health-care benefits

entered into before the Act was passed. /d. at 32a-34a.

The court ruled that, while the Coal Act does assign

initial responsibility for Coal Act premiums to the

“signatory operators,” as defined by the Act, it does not

prohibit private contractual agreements whereby those

signatory operators may seek recompense for those

premiums from other entities. Jd. at 34a-35a.

ARGUMENT

1. Petitioners contend (Pet. 17-21) that the obliga-

tions imposed on them under the Coal Act to finance

the health-care benefits of their former employees (and

those employees’ dependents) violate the Due Process

and Just Compensation Clauses of the Fifth Amend-

ment. They contend, in particular, that the court of

appeals’ decision conflicts with Eastern Enterprises v.

Apfel, 524 U.S. 498 (1998), which held the Coal Act

unconstitutional as applied to the coal mine operator

that challenged the Act in that case. Those contentions

are without merit. Petitioners’ situation is funda-

mentally different from the position of the coal operator

before the Court in Eastern. Unlike that operator,

petitioner King Knob (for whom petitioner Anker is

also responsible as a related party) signed collective

bargaining agreements in 1974, 1978, and 1981, that

promised its employees health-care benefits for life.

The decision below therefore creates no inconsistency

with Eastern.

14

The decision of the court of appeals in this case,

following its similar decision in Unity Real Estate v.

Hudson, 178 F.3d 649 (3d Cir. 1999), petition for cert.

pending, No. 99-12, is also correct under well-settled

taking and substantive due process principles, and it

does not conflict with any decision of any other court of

appeals. To the contrary, the only other court of

appeals that has considered a constitutional challenge

to the Coal Act since Fastern by companies that were

bound by the 1974 and 1978 NBCWAs has rejected that

challenge, see Association of Bituminous Contractors,

Inc. v. Apfel, 156 F.3d 1246, 1253-1258 (D.C. Cir. 1998),

based on a reading of the plurality and concurring

opinions in Fastern that largely parallels that of the

Third Circuit in this case and in Unity. Further, this

Court recently denied review in another case from the

District of Columbia Circuit presenting the same chal-

lenges to the Coal Act. See Holland v. Robert Coal Co.,

172 F.3d 919 (D.C. Cir. 1998) (Table), cert. denied, 119

S. Ct. 1808 (1999). There is no basis in this case for a

different result. Further review is therefore not war-

ranted.

a. Although the Court in Eastern did not arrive at a

single rationale for finding the Coal Act unconsti-

tutional as applied to Eastern, both opinions supporting

the judgment in that case emphasized the fact that

Eastern left the coal industry before any collective

bargaining agreement gave miners an expectation of

lifetime health-care benefits. See 524 U.S. at 530-531,

532, 535-536 (plurality opinion); id. at 549-550 (opinion

of Kennedy, J.). This case, by contrast, presents a

factual situation in which the signatory operator agreed

to be bound by NBCWAs promising its employees life-

time benefits. Thus, as the court of appeals concluded,

“the fact that [King Knob] was a signatory to ‘me too’

15

agreements from the 1970s until 1984 distinguishes

|petitioners’] situation from that of Eastern Enter-

prises.” Pet. App. 2la. The result reached by the

Court in Eastern therefore does not govern here. To

the contrary, as the court of appeals observed in Unity,

“{blecause [petitioners] signed NBCWAs in 1974 and

thereafter, they are factually distinguishable from

[Eastern]. Language in the plurality and the concur-

rence suggesting that expectations fundamentally

changed after 1974 supports [that] conclusion.” Un ity,

178 F.3d at 659; see also Association of Bituminous

Contractors, 156 F.3d at 1257 (“the clear implication of

each opinion in Eastern Enterprises is that employer

participation in the 1974 and 1978 agreements repre-

sents a sufficient amount of past conduct to justify the

retroactive imposition of Coal Act liability.”).’

b. Petitioners’ further contention (Pet. 17-20) that

the court of appeals failed to apply the “retroactivity

analysis” supposedly endorsed by five Justices in

Eastern is without merit. Petitioners submit (Pet. 17)

that that analysis requires that “retroactive employee

benefits legislation is unconstitutional if it imposes a

substantial economic burden on employers which is

based on conduct ‘far in the past’ that is ‘unrelated to

any commitment that the employers made or to any

injury they caused.’” Contrary to petitioners’ conten-

tion, the court of appeals, following its retroactivity

analysis in Unity, see Pet. App. 22a- 23a, correctly

' Moreover, while the Coal Act required Eastern to begin

paying premiums to the Combined Fund in 1993, even though the

company had not contributed to the United Mine Workers Benefit

Plans since 1965, the Coal Act requires petitioners to finance the

health benefits of retirees who were covered by King Knob until

1984. See p. 6, supra; ef. Eastern, 524 U.S. at 516 (plurality

opinion).

16

concluded that the retroactive scope of the Act, as

applied to petitioners, is not beyond Congress’s legisla-

tive power. Id. at 23a.

Thus, the court of appeals, following Unity and this

Court’s decisions in Eastern and in Connolly v. Pen-

sion Benefit Guaranty Corp., 475 U.S. 211 (1986),

properly examined the proportionality of the burden

imposed by the Coal Act on petitioners and sustained

that burden as permissible. Pet. App. 24a. As the court

of appeals noted here, in Unity the court “found that

the Coal Act imposes a burden justified by both the

industry’s conduct that created reasonable expectations

of lifetime benefits * * * and conduct that created the

problem of underfunding.” Jd. at 23a. The court then

ruled that the “proportionality analysis in [Unity] ap-

plies full force here because King Knob was a signatory

to the 1978 and subsequent NBCW4As, and thus bears

the same responsibility as the plaintiffs in [Unity] for

creating the reasonable expectations and the problem

of under-funding that the Coal Act redresses.” Jd. at

24a. The imposition of liability on petitioners, there-

fore, can hardly be considered “not related to any

commitment they have ever made” (Pet. 19).’

The court of appeals also correctly concluded that the

extent of retroactivity present in this case is not so

° Nor is it relevant, as petitioners contend (Pet. 19), that Con-

solidation, rather than King Knob, was responsible for making

payments to the Benefit Trusts to finance miners’ health-care

benefits. The crucial point is that King Knob agreed to be bound

by the 1974 and later NBCWAs, including their express promises

of lifetime benefits, and therefore participated in the creation of

the miners’ reasonable expectation of such benefits. Even if Con

solidation was the party responsible for directly paying the Trusts

for the miners’ benefits, that cost was presumably reflected in the

contract price negotiated between King Knob and Consolidation.

17

extreme as to contravene substantive due process. Pet.

App. 24a. The court observed that, in Unity, the court

had found 11 years’ retroactive operation to be “ac-

ceptable.” Jbid. Similarly, the court properly found the

extent of retroactivity here to be acceptable; the Coal

Act took effect only 11 years after King Knob agreed to

be bound by an NBCWA in a contract with Consolida-

tion and only eight years after King Knob signed a “me

too” agreement. Ibid. As the court of appeals noted in

Unity, this Court has held that “Congress may retro-

actively bar employers from giving their employees

vested pensions in multiemployer plans and then

leaving those plans to collapse.” Unity, 178 F.3d at 671.

Furthermore, in contrast to Eastern, petitioners here

participated in the creation of a reasonable expectation

of lifetime benefits and left the benefit plans in a

condition vulnerable to collapse. Accordingly, the

periods of retroactivity applicable to the conduct of

petitioners survive constitutional scrutiny.

Finally, in Unity, the court of appeals properly found

that the Coal Act was an appropriate congressional

response to commitments participated in by petitioners,

and was designed to remedy injuries caused by com-

panies that withdrew from the coal industry, leaving

“orphaned” miners and their dependents without pro-

vision for adequate funding to meet the expectation of

lifetime benefits. 178 F.3d at 674. That particular point

was not expressly addressed in the decision below in

this case, but in any event petitioners’ attempt to rely

on Eastern to counter that conclusion (Pet. 19) is

misplaced. The injuries that the Coal Act is intended to

remedy are not physical harms suffered in “employ-

ment in mines,” ibid.; rather, as the court of appeals

observed in Unity, they are the harms caused by

“dumping” retirees on benefit Funds whose funding

structures were vulnerable to such behavior. 178 F.3d

at O74.

2. Petitioners contend (Pet. 21-25) that the court of

appeals incorrectly applied Marks v. United States, 450

U.S. 188 (1977), by failing to give “import to the points

of agreement between the Hastern plurality and the

concurrence.” Pet. 22. That contention is without

merit.

Marks addresses the situation where a concurring

opinion in this Court reaches the same result as that

reached by a plurality of the Justices, but on narrower

grounds. In that situation, a lower court should follow

the reasoning of the concurring opinion, because the

lower court may conclude that a majority of this Court

agrees with the narrower position reached by the con-

currence. 430 U.S. at 193. To the extent that Marks

provides any guidance here, it supports the court of

appeals’ rejection of petitioners’ due process challenge.

Even though the plurality and concurrence in astern

analyzed that case under different legal frameworks,

those opinions agreed on the constitutional significance

of a particular fact, namely, that Eastern left the coal

industry before 1974, when the NBCWAs began ex-

pressly stating that retired miners would receive health

benefits for life. As we have explained, both the plural-

ity and Justice Kennedy concluded that the crucial

constitutional problem in Fastern was the Coal Act’s

application to an operator that had never signed a wage

agreement promising lifetime benefits, and both found

that situation distinguishable from the one where an

operator had signed such an agreement. See pp. 8-10,

supra. The court of appeals properly focused on that

point of agreement between the plurality and Justice

Kennedy in Eastern to reject petitioners’ due process

claim.

19

Petitioners also err in arguing (Pet. 23) that the court

of appeals improperly “created a majority out of the

concurrence and dissent and, thus, established as the

law of the case the position taken by the Eastern dis-

sent” to reject their taking claim. That argument

overlooks the reliance of both the plurality in Eastern

and the court of appeals in Unity (and consequently in

this case as well, where the court followed its earlier

decision in Unity) on Connolly, including the three-part

taking analysis of Connolly, in evaluating the consti-

tutionality of the Coal Act as applied to petitioners.

See Kastern, 524 U.S. at 529-532 (plurality opinion):

Unity, 178 F.3d at 657-658, 661, 663-665, 671-673, 677.

Moreover, although in Unity the court of appeals

analyzed this case principally under the rubric of

substantive due process, it observed that “{t]o the ex-

tent that Hastern embodies principles capable of

broader application, * * * due process analysis

encompasses the relevant concerns.” Jd. at 659.

Thus, rather than giving legal effect to the agree-

ment between the concurrence and the dissent, as

petitioners contend (Pet. 22), the court of appeals

effectively applied the analytical scheme of the plurality

in Hastern to the facts of this case. For the reasons

given above, petitioners’ claims fail even under the

reasoning of the plurality opinion in Eastern, which

emphasized that Eastern—unlike petitioners herein and

other coal companies that signed the 1974 and later

NBCWAs--never contributed towards any reasonable

expectation of lifetime health benefits on the part

of coal miners. The plurality opinion and Justice

Kennedy’s concurrence therefore form a majority suffi-

cient to reject petitioners’ taking claim, and it is not

necessary to rely on the dissenting opinion in Eastern

(although it is at least doubtful that Marks even ad-

20

dresses a situation such as the explicit agreement of the

four dissenting Justices in Kastern with a concurring

Justice’s rejection of a particular constitutional claim).

4. Finally, petitioners contend that review is war-

ranted because there is now no “framework” for analyz-

ing retroactive legislation other than the Coal Act. Pet.

23. That contention provides no basis for review in this

case. The plurality and concurring opinions in EKastern

identified the same critical characteristics that distin-

guished the operators that signed NBCWAs in 1974

and afterwards from those that did not, and both

opinions found the connection of the latter group of

operators to miners’ expectation of lifetime benefits and

the financial instability of the funds too attenuated to

sustain the Act as applied to those operators. In view

of that articulation of general agreement on the

principles governing the constitutionality of the Coal

Act in particular—-principles that were followed by the

court of appeals in this case and in the D.C. Circuit’s

decision in Association of Bituminous Contractors,

supra -there is no basis for further review in a Coal

Act case in order to address issues that might arise in

other contexts in the future.

Petitioners incorrectly suggest that the Court’s em-

phasis in Kastern on the fact that retroactivity is

“generally disfavored” (Pet. 24) constitutes a significant

departure from the Court’s previous substantive due

process decisions according a heavy presumption of

constitutionality to legislation (including retroactive

legislation) that adjusts the burdens and benefits of

economic life. To the contrary, the plurality opinion in

Eastern emphasized the Court’s long-standing “con-

cerns about using the Due Process Clause to invalidate

economic legislation,” 524 U.S. at 537, and avoided

resting its decision on the Due Process Clause. Justice

21

Kennedy’s concurrence did rely on due process

principles, but that opinion did not discard the well-

settled presumption of constitutionality for regulatory

statutes; rather, Justice Kennedy found that presump-

tion rebutted on the particular facts of the case in

Eastern, which he considered to be a “rare instance ]”

of “egregious * * * circumstances.” Jd. at 550. For

the reasons we have given, this case presents no com-

parable circumstances.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

SETH P. WAXMAN

’ j ’

Solicitor General

DAVID W. OGDEN

Acting Assistant Attorney

General

DOUGLAS N. LETTER

Attorney

OCTOBER 1999