Opposition Brief — Robert Coal Co. v. Holland

No. 98-1311

In the Supreme Court of the Gnited States

OCTOBER TERM, 1998

ROBERT COAL COMPANY, ET AL., PETITIONERS

Vv.

MICHAEL HOLLAND, ET AL.

ON PETITION FOR A WRIT OF CERTIORAR!

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

SETH P. WAXMAN

Solicitor General

Counsel of Record

DAVID W. OGDEN

Acting Assistant Attorney

General

DOUGLAS N. LETTER

MARK B. STERN

KATHLEEN MORIARTY MUELLER

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

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Sao oe RRR RATES

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(Fr

QUESTIONS PRESENTED

1. Whether the provisions of the Coal Industry

Retiree Health Benefit Act of 1992 (Coal Act), 26

U.S.C. 9701 et seq., that assign responsibility for fund-

ing the health-care benefits of retired coal miners and

their dependents to the coal mine operators that

previously employed the miners pursuant to collective

bargaining agreements that promised miners health-

care benefits for life, violate the Due Process or Just

Compensation Clause of the Fifth Amendment.

2. Whether those provisions of the Coal Act, as

applied to this case, violate the doctrine of separation of

powers because, before the Coal Act was enacted,

petitioner Robert Coal Company entered into a settle-

ment agreement with a union, embodied in a final

judgment of a federal district court, limiting its finan-

cial exposure for its former employees’ health-care

benefits.

3. Whether the provisions of the Coal Act establish-

ing a private entity to assess premiums and to

administer a health benefit plan for retired coal miners

and their dependents, and authorizing that entity to sue

to compel compliance with the Act’s financing provi-

sions, is consistent with the Appointments Clause of the

Constitution.

(I)

TABLE OF CONTENTS

Page

a la l

RARER NEE SCR RSRES et ae ot JE Ac a l

SESS ETRONICS ESM ases Oa! Oa pa tS SNe NCE 2

SII hinhieehila ela i a 1]

aU ITNT Sines tceiclocincetneibduicheetinsbiicigucksneadeacdbiciistbidech ceisaisciuiesin 21

TABLE OF AUTHORITIES

Cases:

Association of Bituminous Contractors, Inc. v.

Apfel, 156 F.3d 1246 (D.C. Cir. 1998) ....c.ccccessecssesees 9, 10,14

Auffmordt v. Hedden, 137 U.S. 310 (1890) ...ccccccccccossseseeee 20

Buckley v. Valeo, 424 U.S. 1 (1976) ..ccccccsccessseccecsvessnssneesees 19

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

cert. denied, 516 U.S. 913 (1995) ....cccccccccceceseee ‘ieee 2-3

Connolly v. Pension Benefit Guar. Corp.,

neg Lt ROR CSISS AE SST x

Eastern Enters. v. Apfel, 118 8. Ct. 2131 (1998) ........ passim

Marks v. United States, 430 U.S. 188 (1977) cccccccccsecee 14, 15

Mary Helen Coal Corp. v. Hudson, 164 F.3d 624

SR SERS TGR SIL NAS SO Ne a 16

Plaut v. Spendthrift Farm, Inc., 514 U.S. 211

SAUTE snssesivalasiotuhiediiasinavesbnsiihesashuesesbabbicbunsisilesiuiinscetinewssesene 17, 18

United States v. Germaine, 99 U.S. 508 (1878) occcc.cc... ins 20

United States v. Hartwell, 73 U.S. (6 Wall.) 385

EIU ARR oe SR Accs 2 OV fe SPR PR 20, 21

Unity Real Estate Co. v. Hudson, No. 97-3234,

1999 WL 167765 (3d Cir. Mar. 29, 1999) .....cc.ccccccccsssessessee 14

(IIT)

IV

Constitution and statutes: Page

U.S. Const.:

Art. II, § 2, Cl. 2 (Appointments Clause) ......... 7, 9, 18, 19, 20

RAO VY sccikvccnicninsiinisiiichitctdiaiahias . 8

Ded FUCORGE CIGD. cccceccsrsittsenistttemunitiahintianenitinn 7,11

Just Compensation Clause ...........sssssecssssesesesssssessseseees 7,11

Act of Feb. 25, 1791, ch. 10, § 4, 1 Stat. 192-198 .................. 20

Coal Industry Retiree Health Benefit Act of 1992,

BB UI EEAD, GIs OE BE Secsrcsccesiiciiiiosiitinamnetctinmnasioetapteniee passim

26 U.S.C. 9701(¢) ‘ 7

BB UBC. CFR cccecvcmvatanin 4

26 U.S.C. 9711(a) ...... 5

26 U.S.C. 9712(a)(1) ‘ 5, 9, 21

26 U.S.C. 9712(a)(2) 5, 21

26 U.S.C. 9712(b)(2) 14

26 U.S.C. 9712(b)(2)(A) 5

26 U.S.C. 9712(b)(2)(B) 5

26 U.S.C. 9712(d) 5

26 U.S.C. 9712(d)\(3) 14

Employee Retirement Income Security Act of

1974, 29 U.S.C. 1001 et seq.:

29 U.S.C. 1002(1)

29 U.S.C. 1002(37)

Federal Election Campaign Act of 1971, 2 U.S.C.

SEE BUG ss eceenssiishsveschacicscnninteaaiescshanitieitteidiihuaeartpidaiioniiannetie 19

Labor Management Relations Act of 1947, § 302(c)(5),

29 U.S.C. 186(c)(5) 5

12 U.S.C. 1723(b) 20

20

7

20 U.S.C, 1087-2(c)

28 U.S.C. 2403(a)

Miscellaneous:

SEA I, Ce GUD srivainicibin iceitesivcpacsiachibancnisininscdssog

~

Jn the Supreme Court of the United States

OCTOBER TERM, 1998

No. 98-1311

ROBERT COAL COMPANY, ET AL., PETITIONERS

Vv.

MICHAEL HOLLAND, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The decision of the court of appeals (Pet. App. la-3a)

is unpublished, but the disposition is available at 1998

WL 794832. The memorandum opinion of the district

court (Pet. App. 4a-26a) is reported at 986 F. Supp. 621.

JURISDICTION

The judgment of the court of appeals was entered on

October 16, 1998. On January 6, 1999, the Chief Justice

entered an order extending the time for filing a petition

for a writ of certiorari to and including February 15,

1999 (a federal holiday). The petition for a writ of

certiorari was filed on February 16, 1999. The jurisdic-

tion of this Court is invoked under 28 U.S.C. 1254(1).

(1)

2

STATEMENT

1. Congress enacted the Coal Industry Retiree

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

9701 et seqg., 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, 118 S. Ct. 2131, 2137-2139 (1998).

Before 1974, a single multi-employer fund was the

exclusive source of pension and health-care benefits for

United Mine Workers miners, retirees, and their

dependents. See Eastern Enters., 118 S. Ct. at 2138-

2139. 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 provided 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 to miners who retired in 1976 or thereafter.

See Eastern Enters., 118 S. Ct. at 2139. Unlike pre-

vious agreements, the 1974 NBCWA expressly stated

that miners and their spouses would be entitled to

health-care benefits for life. Ibid.; in re Chateaugay

Corp., 538 F.3d 478, 482 (2d Cir.) (quoting 1974

3

Agreement’s provision that “[a]Jny pensioned miner

covered in this Plan will retain his Health Services card

until death, and upon his death his widow will retain a

Health Services card until her death or remarriage”),

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 who were bound by the NBCWA (known as

signatory operators) azreed 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 as an

“orphan” plan designed to provide health-care benefits

to post-1975 retirees whose last employer had gone out

of business. Eastern Enters., 118 S. Ct. at 2140. The

1978 NBCWA, like the previous one, expressly pro-

mised that miners covered by the agreement would

receive health-care benefits for life. 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 practice of coal operators of “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 con-

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

influenced still-contributing signatory operators to

withdraw from the Trusts, thus further shrinking the

4

trust fund contribution base. Hastern Enters., 118 S.

Ct. at 2140. 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. Jbid.

2. In March 1990, the Secretary of Labor established

the Advisory Commission on United Mine Workers of

America Retiree Health Benefits (Coal Commission) to

analyze the financial crisis confronting the Trusts and

to recommend solutions. Eastern Enters., 118 S. Ct. at

2140-2141. 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

2141. The Coal Act was based in large part on that

alternative recommendation by the Coal Commission.

See ibid.; 188 Cong. Rec. 5331 (1992) (statement of Sen.

Wofford).

The Coal Act was designed to provide stable

financing 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 individ-

ual employer plan under the NBCWAs. To that end,

the Coal Act creates two new, private multi-employer

health-care benefit trusts. The first new fund, the

United Mine Workers of America Combined Fund

(Combined Fund), was the trust at issue in Eastern

Enterprises; it is not at issue in this case. The

Combined Fund was created by the statutory merger of

the 1950 and 1974 United Mine Workers Benefit Trusts.

It provides benefits to beneficiaries who were receiving

(or were eligible to receive) benefits from those trusts

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

5

The second fund, the 1992 United Mine Workers

Benefit Plan (1992 Plan), is an entirely new entity, and

is the fund at issue in this case. The 1992 Plan is

designed to provide lifetime health-care benefits to

individuals who should receive coverage under an

individual employer plan but do not. See 26 U.S.C.

9712(b)(2)(B).' To provide financing for benefits under

the 1992 Plan, the Coal Act assigns responsibility for

funding the health-care benefits of a miner and his

dependents to the signatory employer that most

recently employed the miner. See 26 U.S.C. 9712(d).

The Coal Act directed the UMWA and the BCOA to

create the 1992 Plan as a private multi-employer bene-

fit plan and to appoint its trustees. 26 U.S.C. 9712(a)(1).

The Coal Act further provides that the 1992 Plan has

the same legal status as any other private multi-

employer welfare benefit plan under the Employee

Retirement Income Security Act of 1974 (ERISA) and

the Labor Management Relations Act of 1947. 26

U.S.C. 9712(a)(2); see 29 U.S.C. 186(c)(5), 1002(1),

1002(87).

1 The Coal Act elsewhere requires a mine operator who was

providing health-care benefits to a miner or miner’s dependents

under an individual employer plan maintained under a 1978 or sub-

sequent NBCWA, as of February 1, 1993, to continue to provide

such benefits for as long as the operator remains in business. 26

U.S.C. 9711(a). If such an operator goes out of business or does not

provide such benefits, a miner eligible to receive benefits from the

operator’s individual employer plan will receive benefits from the

1992 Plan. See 26 U.S.C. 9712(b)(2)(B). The 1992 Plan also pro-

vides health benefits to individuals who, but for the enactment of

the Coal Act, would have been eligible to receive benefits under

the 1950 or 1974 Benefit Trusts as of February 1993. See 26 U.S.C.

9712(b\(2)(A).

6

3. From the mid-1970s until 1984, petitioner Robert

Coal Company managed and supervised the construc-

tion and operation of coal mines in Kentucky that were

owned by Leslie Coal Mining Company and McInnes

Coal Mining Company. During that period, Robert

Coal employed all of the employees at the Leslie and

McInnes mines. Some of those employees were miners

who were members of, and represented by, the

UMWA. Robert Coal Company became a signatory to

the 1974, 1978, and 1981 NBCWAs. Pet. App. 9a.

In 1984, the assets of the Leslie and McInnes mines

were sold to the Sidney Coal Company. In October

1984, the UMWA filed suit in the United States District

Court for the Eastern District of Kentucky against

several defendants, including Robert Coal, alleging that

the sale of the Leslie and McInnes Mines to Sidney

failed to comply with the successorship provisions of

the applicable NBCWA. Pet. App. 9a. In May 1988,

Robert Coal and the UMWA entered into a settlement

agreement, by which Robert Coal agreed to continue

providing health-care coverage to its retired miners

and other beneficiaries from the Leslie and McInnes

Mines until January 31, 1993. Jd. at 42a-43a. The

settlement agreement also stated that Robert Coal

would have no responsibility for providing health-care

benefits to those former employees after that date. Jd.

at 44a. The district court approved the settlement and

entered an order dismissing the case with prejudice.

Id. at 38a-40a.

From May 1988 through January 1993, Robert Coal

provided health-care benefits to approximately 75 per-

sons under the settlement agreement. Robert Coal

ceased providing coverage in February 1993. Since

that time, the 1992 Plan has provided health benefits to

those persons who previously had received such

benefits from Robert Coal. Pet. App. 10a.

4. After the enactment of the Coal Act, the Trustees

of the 1992 Plan requested, pursuant to the Act, that

Robert Coal pay the premiums for the benefits of its

retired employees and other beneficiaries covered

under the NBCWAs. When Robert Coa: refused to pay

those premiums required under the Act, the Trustees

filed this action in the United States District Court for

the District of Columbia against Robert Coal and the

other petitioners (who are “related persons” to Robert

Coal within the meaning of the Coal Act, see 26 U.S.C.

9701(c)) to collect premium payments due the 1992 Plan

under the Coal Act. Petitioners contended, in response,

that the statutory obligation of coal mine operators to

finance the 1992 Plan cannot be constitutionally applied

to them because of the 1988 order terminating the

Kentucky litigation. Petitioners also contended that

the Coal Act violated the Due Process and Just Com-

pensation Clauses of the Fifth Amendment and the

Appointments Clause. The United States intervened to

defend the constitutionality of the Act, pursuant to 28

U.S.C. 2403(a).

On November 17, 1997 (before this Court decided

Eastern Enterprises), the district court rejected peti-

tioners’ constitutional challenges and granted summary

jadgment for respondents. The district court first

rejected petitioners’ argument that the Coal Act

unconstitutionally disturbed the 1988 settlement and

order terminating the Kentucky litigation. The court

noted that “the Coal Act does not reimpose on Robert

Coal the same obligation that it already satisfied

through the settlement of the Kentucky lawsuit.

Instead, the Coal Act creates future statutory liability

and imposes a new and separate obligation on Robert

8

Coal.” Pet. App. 14a. The court explained that “[t]he

fact that the statutory obligations under the Coal Act

are similar to or modeled on obligations created by

earlier collective bargaining agreements does not mean

they are ‘arising out of’ such earlier agreements, as the

settlement agreement provides. By Robert Coal’s

logic, any entity operating in a highly regulated, na-

tional industry would be able to forever insulate itself

from future Congressional regulation by settling a

contract dispute in federal court.” Jbid. The court

therefore concluded that it need not deal at length with

Robert Coal’s argument that the Coal Act violates

separation of powers principles by interfering with

judicial power; because the Coal Act does not disturb

the 1988 Kentucky judgment, the court reasoned, there

has been no legislative interference with judicial

powers. /d. at 13a-15a.

The district court also concluded that the liability

imposed on petitioners by the Coal Act does not

contravene the Fifth Amendment. The court observed

that economic legislation “satisfies the requirements of

due process so long as it is rationally related to a

legitimate government purpose.” Pet. App. 16a. It

noted that Robert Coal “contributed to a reasonable

expectation of lifetime health benefits” on behalf of its

retired employees, id. at 18a-19a, and rejected peti-

tioners’ argument that the settlement agreement ter-

minating the Kentucky litigation made their situation

unique and conferred on them a constitutional im-

munity from the application of the Coal Act, id. at 19a.

As for petitioners’ claim that the Coal Act effected an

uncompensated taking, the court sustained the Act

under this Court’s three-factor test, set forth in Con-

nolly v. Pension Bencfit Guaranty Corp., 475 U.S. 211,

225 (1986), for determining whether a regulatory mea-

9

sure gives rise to a taking. The court noted in

particular that petitioners’ obligations to the 1992 Plan

are “reasonable and directly proportional to its liability

under the previous funds,” Pet. App. 21a, that Robert

Coal had signed several NBCWAs which promised

miners health benefits for life, id. at 21a-22a, and that

the Coal Act does not appropriate private property to

the benefit of the government itself, but rather

readjusts private economic benefits and burdens, id. at

23a.

Finally, the district court rejected petitioners’ chal-

lenge under the Appointments Clause of the Consti-

tution, Art. II, § 2, Cl. 2, to the composition of the Board

of trustees of the 1992 Plan. The court ruled that the

trustees of the 1992 Plan are not “Officers of the United

States” subject to the Appointments Clause because

they hold no office or employment relationship with the

federal government. Rather, the trustees are private

individuals, and the Coal Act expressly provides the

1992 Plan is a “private plan.” Pet. App. 25a; see 26

U.S.C. 9712(a)(1). “The 1992 Plan operates like any

other private multiemployer benefit plan, differing only

in that the obligation imposed on signatory operators to

contribute stems from a statutory as opposed to

contractual obligation.” Pet. App. 25a. Although the

trustees exercise significant authority, “what is rele-

vant is that they do not exercise significant govern-

mental authority.” Ibid.

5. In an unpublished decision, the court of appeals

affirmed “substantially for the reasons stated in the

district court’s memorandum opinion.” Pet. App. la.

The court of appeals further noted (id. at 2a) that its

recent decision in Association of Bituminous Con-

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

(ABC), “provides further support for the district

10

court’s holding.” In the ABC case, the court of appeals

rejected a due process challenge brought by companies

that had been signatories to the 1974 and 1978

NBCWAs to their statutory obligation under the Coal

Act to contribute to the Combined Fund, see ABC, 156

F.3d at 1255-1258, and held that the structure of the

Combined Fund “constituted a rational legislative

scheme to ensure that the cost of providing health

benefits be placed on the operators that had created the

expectation of those benefits.” Pet. App. 2a. In this

case, the court found “no constitutionally significant

difference between the Combined Fund and the 1992

Benefit Plan.” Ibid.

The court then noted petitioners’ argument that “the

trustees of the 1992 Benefit Plan are essentially tax

assessors and currently exercise their functions in

violation of the Appointments Clause.” Pet. App. 2a.

The court suggested that the “core” of this argument,

“as elaborated at oral argument, is that the Congress

cannot delegate its taxing power to a private entity.”

Ibid. The court declined to address that argument,

because it concluded that “the parties did not raise or

argue the non-delegation doctrine in this appeal.” Ibid.

Finally, the court rejected petitioners’ claim that the

Coal Act effected an unconstitutional taking. Pet. App.

3a. The court stated that, in Hastern Enterprises, “five

justices determined that the Takings Clause was not

the proper paradigm for analyzing the Act’s retroactive

effects on coal operators.” Ibid. (citing Eastern Enters.,

118 S. Ct. at 2155-2158 (Kennedy, J., concurring in the

judgment and dissenting in part); id. at 2161-2164

(Breyer, J., dissenting)).

11

ARGUMENT

1. Petitioners contend (Pet. 10-16) that the obliga-

tions imposed on them under the Coal Act to finance

the nealth-care benefits of their former employees (and

the employees’ dependents) violate the Due Process

and Just Compensation Clauses of the Fifth Amend-

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

appeals improperly refused to follow Eastern Enter-

prises v. Apfel, 118 S. Ct. 2131 (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

fundamentally different from the position of the coal

operator before the Court in Eastern Enterprises,

because, unlike that operator, petitioner Robert Coal

Company signed collective bargaining agreements that

expressly promised its employees health-care benefits

for life. The decision below therefore creates no incon-

sistency with Eastern Enterprises. The result reached

by the courts below is also correct under well-settled

just compensation and due process principles, and it

does not conflict with any decision of any other court of

appeals. Further review is therefore not warranted.

a. In Eastern Enterprises, a divided Court held 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 operations in

1965. See Eastern Enters., 118 S. Ct. at 2142-2143

(plurality opinion) (recounting the history of Eastern’s

involvement in the coal business). The Coal Act obli-

gated Eastern to pay premiums to the Combined Fund

to cover the health benefits of more than 1000 retired

miners who had worked for the company before 1966,

and their dependents. /d. at 2143 (plurality opinion).

12

Eastern alleged that the Coal Act violated substantive

due process as applied to it and effected an uncon-

stitutional taking of its property without just compen-

sation 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 benefits at Eastern’s expense. bid.

The plurality concluded that the application of the

Coal Act to Eastern effected an unconstitutional taking

without just compensation. See 118 S. Ct. at 2146-2153.

Applying the Court’s three-factor test for analyzing

regulatory taking claims (id. at 2149-2153), 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 fr lifetime

health-care benefits even though Easter.’ *»#d with-

drawn from the coal industry before any of the

NBCWAs had promised lifetime benefits to the miners.

See id. at 2150 (with respect to the burden placed on

Eastern, noting that Eastern “had no control over the

activities of its former employees subsequent to

its departure from the coal industry in 1965”); id. at

2152 (with respect to investment-backed expectations,

stressing that Eastern never participated in an

industry-wide agreement creating expectations of

lifetime benefits); id. at 2152-2153 (with respect to the

nature of the governmental action at stake, stating that

“Eastern cannot be forced to bear the expense of

lifetime health benefits for miners based on its activi-

ties decades before those benefits were promised”).

Justice Kennedy, concurring in the judgment and

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

clusion that the Coal Act should be analyzed as a

taking, see 118 S. Ct. at 2154-2158, but concluded that

the application of the Coal Act to Eastern violated

—————EEE

13

“accepted principles” of substantive due process inhibit-

ing the operation of severely retroactive laws, id. at

2158-2160. Justice Kennedy noted that “the imposition

of liability on former employers based on past employ-

ment relationships” may be upheld under due process

principles as remedial legislation designed to allocate

properly the costs of the employer’s business. /d. at

2159. He concluded, however, that the Coal Act did not

serve that purpose as applied to Eastern because,

although “Eastern was once in the coal business and

employed many of the beneficiaries, but it was not

responsible for their expectation of lifetime health

benefits or for the perilous financial condition of the

1950 and 1964 Plans which put the benefits in jeopardy.

* * * [T]he expectation was created by promises and

agreements made long after Eastern left the coal

business.” Ibid.

Four Justices dissented, and concluded that the Coal

Act, as applied to Eastern, was not unconstitutional

under either due process principles or just compen-

sation principles. Eastern Enters., 118 8. Ct. at 2161-

2168. The four dissenters also agreed with Justice

Kennedy that the Coal Act should not be analyzed as a

taking at all. Jd. at 2161-2164.

b. Although the Court in Eastern Enterprises did

not arrive at a single rationale for finding the Coal Act

unconstitutional 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 expec-

tation of lifetime health-care benefits. This case, by

contrast, presents a factual situation in which the coal

operator signed NBCWAs promising its employees

lifetime benefits. The result reached by the Court in

Eastern Enterprises therefore does not govern here.

14

To the contrary, as the court of appeals observed in its

earlier decision in Association of Bituminous Con-

tractors v. Apfel, 156 F.3d 1246 (D.C. Cir. 1998), both

the plurality and Justice Kennedy accepted in Eastern

Enterprises that the 1974 and subsequent NBCWAs

“created an expectation of lifetime benefits that the

employers who participated in those agreements were

responsible for creating.” 156 F.3d at 1256. Thus, “the

clear implication of each opinion in Eastern Enterprises

is that employer participation in the 1974 and 1978

agreements represents a sufficient amount of past

conduct to justify the retroactive imposition of Coal Act

liability.” Id. at 1257; see also Unity Real Estate Co. v.

Hudson, No. 97-3234, 1999 WL 167765, at *9 (3d Cir.

Mar. 29, 1999), (“Language in the plurality and the con-

currence [in Eastern] suggest[s] that expectations

fundamentally changed after 1974.”).’

Petitioners are incorrect in contending (Pet. 13-14)

that the court of appeals’ reliance on the plurality opin-

ion and Justice Kennedy’s opinion in Eastern Enter-

prises to reject their due process challenge is incon-

sistent with Marks v. United States, 430 U.S. 188

(1977). Marks addresses the situation where a con-

curring 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,

2 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 Act requires Robert Coal to finance (through

premiums to the 1992 Plan) the health benefits of retirees who

were covered by that company through January 31, 1993. See p. 6,

supra; 26 U.S.C. 9712(b)(2) and (d)(3); cf. Eastern Enters., 118 S.

Ct. at 2150-2151.

15

because the lower court may conclude that a majority of

this Court agrees with the narrower position reached

by the concurrence. Id. at 193. To the extent that

Marks provides any guidance here, it supports the

court of appeals’ rejection of petitioners’ due pro¢éess

challenge. Even though the plurality and concurrence

in Eastern Enterprises analyzed that case under differ-

ent legal frameworks, those opinions agreed on the

constitutional significance of a particular fact, namely,

that Eastern left the coal indusry before 1974, when the

NBCW4As began expressly stating that retired miners

would receive health benefits for life. Both the plural-

ity and Justice Kennedy concluded that the crucial

constitutional problem in Eastern Enterprises 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. 11-13, supra.

Petitioners argue further (Pet. 13-15) that Marks

does not support the court of appeals’ rejection of its

challenge to the application of the Coal Act as a taking

without just compensation. They argue that, even

though Justice Kennedy and the four dissenting

Justices in Eastern Enterprises agreed that the Coal

Act should not be analyzed as a taking at all, Marks

does not permit a lower court to combine a concurrence

and a dissent into a controlling majority of this Court.

This case, however, does not present an appropriate

circumstance for the Court to decide whether a

concurrence and a dissent in a decision without a single

opinion joined by a majority of the Court may be

combined to form a “Marks majority.” For the reasons

given above, petitioners’ taking claim fails under the

reasoning of the plurality opinion in Hastern Enter-

16

prises, which emphasized that Eastern—unlike the 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.

On the question of a taking, therefore, the plurality

opinion and Justice Kennedy’s concurrence form a

“Marks majority” sufficient to reject petitioners’ claim,

and it is not necessary to rely on the dissenting opinion

in Eastern Enterprises.’

2. Petitioners contend (Pet. 16-20) that the Coal Act

as applied to them violates the doctrine of separation of

powers because it supposedly nullifies a district court

judgment entered after petitioners settled private

litigation against the UMWA concerning health-care

benefits for its employees. That contention is without

merit.

The 1988 resolution of the Kentucky litigation deter-

mined the extent of Robert Coal Company’s contractu-

ally based responsibility under its collective bargaining

agreements with the UMWA. The union had sued

Robert Coal and others, alleging that the sale of the

assets of the Leslie and McInnes Mines had violated

successorship clauses in the 1981 and 1984 collective

bargaining agreements. See Pet. App. 9a. Robert Coal

and the other defendants in that action did not admit

any liability, but they settled the dispute by agreeing to

pay for health benefits for certain retired miners

3 Because this case is materially different from Eastern Enter-

prises, there is no merit to petitioners’ contention (Pet. 15) that the

court of appeals’ decision conflicts with Mary Helen Coal Corp. v.

Hudson, 164 F.3d 624 (4th Cir. 1998) (Table). In that case, the

Fourth Circuit ruled, in an unpublished decision, that the Coal Act

was unconstitutional as applied to a company that was “materially

indistinguishable from Eastern.” Mary Helen Coal Corp. v.

Hudson, No. 97-2331, 1998 WL 708687, at *1 (Sept. 24, 1998).

17

through January 1993. See id. at 9a, 42a-47a. In

particular, the settlement agreement released Robert

Coal from any duty to provide further benefits “arising

out of any Wage Agreement.” Jd. at 44a. The district

court in Kentucky then approved the settlement and

dismissed the case with prejudice. See id. at 40a.

The Coal Act does not “nullify” or alter the effect of

the settlement agreement entered in the Kentucky

litigation, for it “does not reimpose on Robert Coal the

same obligation that it already satisfied through the

settlement of the Kentucky lawsuit. Instead the Coal

Act creates future statutory liability and imposes a new

and separate obligation on Robert Coal.” Pet. App. 14a.

As the district court explained (ibid.): “There is no

question that the settlement agreement terminated

Robert Coal’s contractual obligation to contribute to

the [United Mine Workers] 1950 and 1974 Benefit Plans

as of January 1993. The Coal Act, however, imposes a

statutory obligation on Robert Coal to contribute to the

new Combined Fund [sic: 1992 plan] as of February

1993.”

The crucial difference between contractual and statu-

tory obligations explains why Plaut v. Spendthrift

Farm, Inc., 514 U.S. 211 (1995), on which petitioners

rely (see Pet. 17-20), does not govern this case. Plaut

involved an amendment to the securities laws passed by

Congress to require the federal courts to reinstate

private securities actions that had previously been dis-

missed as time-barred based on this Court’s interpre-

tation of the applicable statute of limitations. This

Court held in Plaut that Congress’s direction to the

federal courts to reopen and rehear cases that had been

litigated to final judgment violated the doctrine of

separation of powers because “it does no more and no

less than reverse a determination once made, in a

18

particular case.” 514 U.S. at 225 (internal quotation

marks omitted). The Court explained that “Congress

may not declare by retroactive legislation that the law

applicable to that very case was something other than

what the courts said it was.” Jd. at 227.

The Coal Act’s application to petitioners does not

implicate the constitutional concerns expressed in

Plaut. Congress did not compel any court to reopen,

readjudicate, or otherwise disturb the Kentucky settle-

ment or judgment. Nor did Congress require the

federal courts to apply different law in the Kentucky

litigation between Robert Coal and the UMWA than

the law that the courts had previously applied. Indeed,

the Coal Act does not concern the law applied in the

Kentucky litigation at al!. Rather, Congress enacted an

entirely new statutory scheme that imposed a new form

of liability on petitioners.‘ Moreover, petitioners’ fund-

ing obligation under the Coal Act runs not to the

UMWA, which was the plaintiff in the Kentucky

litigation, but to a different entity, the 1992 Plan. That

funding obligation therefore does not offend the

separation of powers.

3. Petitioners argue (Pet. 20-24) that the trustees of

the 1992 Plan were appointed in violation of the

Appointments Clause of the Constitution (Art. II, § 2,

Cl. 2). The court of appeals declined to address that

issue, for it concluded that the Appointments Clause

‘ Contrary to petitioners’ assertions (Pet. 1), the fact that

Robert Coal’s statutory obligations under the Coal Act are similar

to its obligations under the previous collective bargaining agree-

ments and court-approved settlement agreement is irrelevant. As

the district court recognized, that logic, if adopted, would allow

“any entity operating in a highly regulated, national industry” to

“forever insulate itself from future Congressional regulation by

settling a contract dispute in federal court.” Pet. App. 14a.

19

claim had not been adequately preserved on appeal.

Pet. App. 2a. Petitioners argue that they did properly

preserve their Appointments Clause claim. The claim

in any event does not warrant further review, for the

district court correctly ruled that the Coal Act is

consistent with that Clause. Jd. at 24a-25a.

Petitioners’ argument that the trustees must be

appointed pursuant to the Appointmentz Clause is

based on a misreading of the Court’s statement in

Buckley v. Valeo, 424 U.S. 1, 126 (1976) (per curiam),

that “any appointee exercising significant authority

pursuant to the laws of the United States is an ‘Officer

of the United States,’ and must, therefore, be appointed

in the manner prescribed by [the Appointments

Clause.}” Petitioners note that the Coal Act authorizes

the trustees to administer the 1992 Plan and to sue to

recover on coal operators’ obligations to the 1992 Plan

under the Coal Act; they assert that such responsibili-

ties constitute the exercise of “significant government

authority” that may be exercised only by properly

appointed Officers of the United States. Pet. 22. That

argument fails because the Appointments Clause does

not address Congress’s power to assign functions to

private entities or the manner in which officers of such

entites may be selected. The Clause governs only the

manner of selection of “Officers of the United States.”

U.S. Const. Art. II, § 2, Cl. 2 (emphasis added).

In Buckley, the Court invalidated provisions of the

Federal Election Campaign Act of 1971 (FECA),

2 U.S.C. 431 et seq., that provided for congressional ap-

pointment of members of the Federal Election Com-

mission, a federal agency with responsibility for

administering and enforcing the FECA. See 424 U.S.

at 109-143. But Buckley does not stand for the pro-

position that every individual who exercises significant

20

authority within a legal framework created by Con-

gress is transformed into an “Officer of the United

States” within the meaning of the Appointments

Clause. Rather, an “Officer of the United States” is one

who exercises significant authority on behalf of the

United States government and who has a continuing

and formalized relationship of employment with the

United States Government. See Auffmordt v. Hedden,

137 U.S. 310, 327 (1890) (merchant appraiser was not an

“Officer” for purposes of the Appointments Clause

because his position was without tenure, duration,

continuing emolument, or continuous duties); United

States v. Germaine, 99 U.S. 508, 511-512 (1878) (sur-

geon appointed by Commissioner of Pensions was not

an “Officer” because his duties were not continuing and

permanent); United States v. Hartwell, 73 U.S. (6 Wall.)

385, 393 (1868) (“An office is a public station, or employ-

ment, conferred by the appointment of government.

The term embraces the ideas of tenure, duration,

emolument, and duties. The employment of the defen-

dant was in the public service of the United States.”).

And Congress has frequently created private entities

with significant responsibilities under federal statutes,

such as government-sponsored private corporations,

without requiring that officers and directors of those

entities be appointed pursuant to the Appointments

Clause. See, e.g., 12 U.S.C. 1723(b) (14 of 18 directors of

Federal National Mortgage Association elected by

common stockholders); 20 U.S.C. 1087-2(c) (similar;

Student Loan Marketing Association); see also Act of

Feb. 25, 1791, ch. 10, § 4, 1 Stat. 192-193 (providing for

election of directors of Bank of the United States by

stockholders).

The trustees of the 1992 Plan do not fall within the

Appointments Clause because they do not hold any

21

office or employment relationship with the United

States Government. The Coal Act expressly provides

that the 1992 Plan is a “private plan.” 26 U.S.C.

9712(a)(1). The Act further provides that the 1992 Plan

has the sam? legal status as any other private multi-

employer welfare benefit plan under the Employee

Retirement Income Security Act and the Labor

Management Relations Act. 26 U.S.C. 9712(a)(2). Once

established, the 1992 Plan operates like any other

private multi-employer benefit plan; it substantively

differs from other plans only in that the obligation of

signatory operators to contribute derives from statu-

tory command rather than contractual agreement.

Thus, the Coal Act does not create a “public station” or

“employment” (Hartwell, 73 U.S. (6 Wall.) at 393), and

the trustees do not hold federal office any more than do

the trustees of any other private multi-employer

benefit plan.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

SETH P. WAXMAN

Solicitor General

DAVID W. OGDEN

Acting Assistant Attorney

General

DOUGLAS N. LETTER

MARK B. STERN

KATHLEEN MORIARTY MUELLER

Attorneys

APRIL 1999