Opposition Brief — Blue Diamond Coal Co. v. Barnhart

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BLUE DIAMOND COAL COMPANY, PETITIONER

LARRY MASSANARI, ACTING COMMISSIONER OF

SOCIAL SECURITY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT

IN OPPOSITION

THEODORE B. OLSON

Solicitor General

Counsel of Record

ROBERT D. MCCALLUM, JR.

Assistant Attorney General

DOUGLAS N. LETTER

JEFFREY CLAIR

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

(

+)

QUESTION PRESENTED

The Coal Industry Retiree Health Benefit Act of

1992, 26 U.S.C. 9701 et seq., obligated certain coal mine

operators to finance the health-care benefits of retired

miners who had formerly been their employees,

through contributions to the United Mine Workers of

America Combined Benefit Fund (Combined Fund).

Petitioner made payments to the Combined Fund, and

also brought a constitutional challenge to that statutory

obligation, which was rejected by the lower federal

courts. After final judgment was entered in petitioner’s

ease, this Court held the statute unconstitutional as

applied to a similarly situated litigant in Eastern Enter-

prises v. Apfel, 524 U.S. 498 (1998). In light of the

Eastern decision, the Commissioner of Social Security

voided petitioner’s obligation to make payments to the

Combined Fund prospectively. Petitioner then sought

retroactive relief (including reimbursement of monies it

had previously paid to the Combined Fund) by moving

to reopen the final judgment rejecting its constitutional

challenge under Federal Rule of Civil Procedure

60(b)(6).

The question presented is whether Rule 60(b)(6)

authorized the district court to reopen its final judg-

ment in light of the intervening decision in Eastern

Knterprises in order to grant petitioner retroactive

relief.

(I)

TABLE OF CONTENTS

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TABLE OF AUTHORITIES

Cases:

Ackermann v. United States, 340 U.S. 193

SITS i Sasilnan alate cacetatnsdacdbicdensdadinbanlbaeeiniietdaniatesesiseninntantee

Adams v. Merrill Lynch Pierce Fenner & Smith,

ar aes ie Cte CE. BD ccccsisnnsinncsosancnascccsencsscocacsccsse

Agostini v. Felton, 521 U.S. 203 (1997) ......cccccccesecseeesseesees

Bailey v. Ryan Stevedoring Co., 894 F.2d 157

(5th Cir.), cert. denied, 498 U.S. 829 (1990) oo...

Batts v. Tow-Motor Forklift Co., 66 F.3d 743

(5th Cir. 1995), cert. denied, 517 U.S. 1221

Berryhill v. United States, 199 F.2d 217 (6th Cir.

SITTING dst clicietsitadelabdaiigibaladeninbalaea ans ibibiahisaieansienseanennteabiibinns

Biggins v. Hazen Paper Co., 111 F.3d 205 (1st Cir.),

UE, CE, Ge UF, Se CIGD eaccecccicntatcncccccncsccsensncccesenss

Blue Diamond Coal Co., In re, 79 F.3d 516 (6th Cir.

1996), cert. denied, 519 U.S. 1055 (1997) ..ccescsssseeccsssseeees

Chicot County Drainage Dist. v. Baxter State

By Fe Re. FEB CII sersnsnscereenicncresconesensennscesnnnnsonn

Cincinnati Ins. Co. v. Flanders Elec. Motor Serv.,

Pee, BR Fe Oe CI CAD. BOT) crsieccscnncccncscccccccccsscscecsnecs

Collins v. City of Wichita, 254 F.2d 837 (10th Cir.

Tiida Ni ccdei iced aideshdaatiiaddbenlidheibinnntiteesndinnceetnenesonetnenon

Coltec Indus., Inc. v. Hobgood, 184 F.R.D. 60

(W.D. Pa. 1999), appeals pending, Nos. 00-2458

and 00-4385 (3d Cir. argued Sept. 19, 2001) ........ceeeeee:

(IIL)

10

15, 16

11

1]

12

12

12

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12, 14

12

11,15

13

IV

Cases—Continued: Page

DeWeerth v. Baldinger, 38 F.3d 1266 (2d Cir.),

cert. denied, 513 U.S. 1001 (1994) 0... ccccsscessnsesnees 12

Dowell v. State Farm Fire & Cas. Auto. Ins.

Co., 903 F.2d 46 (4th Cir. 1908) ....ccccccccccscccccsassessees apis 12

Kastern Enters. v. Apfel, 524 U.S. 498 (1998) 2,5

Federated Dep't Stores, Ine. v. Moirtie, 452 U.S.

oS ee eae |e ted 10, 12

First Am. Nat'l Bank v. Bonded Elevator, Inc.,

RR eer Bs ROD dashnsccachenciccenvanncconetesnanesenenss 14

Gondeck v. Pan Am. World Airways, Inc.,

ee CREE cicetintdinachdtacghiignanSinsaedbadonkenatacnnatiens 14

Holland v. Virginia Lee Co., 188 F.R.D. 241 (W.D.

is I Sauhthccudeiini eae Ss So ete cee 13

James B. Beam Distilling Co. v. Georgia, 501 U.S.

ae 14.15

Liljeberg v. Health Servs Acquisition Corp.,

Oe ies Se CI ssvastsictiensns es taeciesssiesiescincstetcencpiacapeaitinsiontsidians 10

Lindsey Coal Mining Co. Liquidating Trust v. Apfel,

No. 94-143 (W.D. Pa. Aug. 4, 1908) .........cccccccccccsessscsssssennses 13

Marskall v. Board of Educ., 575 F.2d 417 (3d Cir.

SEE united dicscinhttialnious arial ater oibedam le ct likedeuaels 11,13

Miller v. French, 5380 U.S. 327 (2000) ..0....... sakiaadaaaas 1]

National League of Cities v. Usery, 426 U.S. 833

ein ACEO ha AL aot eee ve RE I 1

Norman v. Nichiro Gyogyo Kaisha, Ltd., 761 P.2d

Pr ie aa reef

Pierce v. Cook & Co., 518 F.2d 720 (0th Cir. i

1975), cert. denied, 423 U.S. 1079 (1976) ooo. 14, 15, 16

Shearson/American Express, Inc. v. MeMahon,

I re ee eins thtii occu icisetemenaenhaceans sacesaapeaae 16

T% mpleton Coal Co. v. Apfel, No. TH-93-15s-

Ce Tre Ge, ER, Us TT, BOD oivivssstiscetrcdsrertemetdsertcvroncee 13

Travelers Indem. Co. v. Sarkisian, 794 F.2d 754

(2d Cir.), cert. denied, 479 U.S. 885 (1986) ooo... 11

een

V

Constitution, statutes and rule: Page

U.S. Const. Amend. I (Establishment Clause) ..........00...... 2-13

Coal Industry Retiree Health Benefit Act of 1992,

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Social Security Independence and Program Improve-

ments Act of 1994, Pub. L. No. 103-296, § 108(h)(9)(A),

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Department of the Interior and Related Agencies

Appropriation Act, 2001, Pub. L. No. 106-291,

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In the Supreme Court of the Gnited States

No. 01-184

BLUE DIAMOND COAL COMPANY, PETITIONER

vU.

LARRY MASSANARI, ACTING COMMISSIONER OF

SOCIAL SECURITY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT

IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-18a)

is reported at 249 F.3d 519. The opinion of the district

court vacating its prior judgment (Pet. App. 19a-29a) is

unreported. The prior decision of the district court

rejecting petitioner’s constitutional claim on the merits

(Pet. App. 30a-48a) is reported at 174 B.R. 722. The

prior decision of the court of appeals rejecting that

claim is reported at 79 F.3d 516. This Court’s order

denying certiorari is reported at 519 U.S. 1055.

(1)

JURISDICTION

The judgment of the court of appeals was entered on

May 3, 2001. The petition for a writ of certiorari was

filed on July 30, 2001. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(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., in response to a crisis that threatened to

deprive more than 100,000 retired coal miners and their

dependents of promised lifetime health-care benefits.

From 1950 until the enactment of the Coal Act, the

health-care benefits of many retired coal miners were

financed through multi-employer trusts established by

collective bargaining agreements, known as National

Bituminous Coal Wage Agreements (NBCWAs), be-

tween the United Mine Workers of America (UMWA)

and the Bituminous Coal Operators Association

(BCOA). The NBCWAs adopted in 1974 and after-

wards provided that retired miners would receive

health-care benefits for their entire lifetimes. See

generally Eastern Enters. v. Apfel, 524 U.S. 498, 505-

511 (1998) (plurality opinion).

In the 1980s and 1990s, the financial stability of the

trusts established under the NBCWA system was

seriously threatened. After extensive consideration of

recommendations for ensuring that retired miners

would receive lifetime health-care benefits, Congress

enacted the Coal Act, which established the United

Mine Workers of America Combined Benefit Fund

(Combined Fund or Fund) as a private multi-employer

health benefit plan. The Combined Fund provides

health-care benefits to beneficiaries who, at the time of

passage of the Act, were eligible to receive, and were

receiving, benefits from the preexisting trusts. See 26

U.S.C. 9702, 9703(f).

Under the Coal Act, financial responsibility for the

health-care benefits of a retired miner and his depen-

dents is assigned to a coal mine operator (known as a

“signatory operator”) that signed a NBCWA or similar

agreement, employed the retired miner, and remains in

business. See 26 U.S.C. 9701(c)(1), 9704, 9706(a).

Although the Commissioner of Social Security (Com-

missioner) assigns eligible beneficiaries to signatory

operators, the assigned operators thereafter pay their

premiums directly to the Combined Fund.' The Com-

missioner makes assignments based on a review of

employment records. 26 U.S.C. 9706(a). Assignments

are made according to a three-tiered hierarchy:

First, the Commissioner must seek to assign a

beneficiary to the “signatory operator” that remains “in

business,” signed a collective bargaining agreement

with the UMWA in 1978 or later, and was the most

recent signatory operator to employ the miner in the

coal industry for at least two years. 26 U.S.C.

9706(a)(1).

Second, if an assignment of a particular beneficiary

cannot be made under the first tier, the Commissioner

must attempt to assign the beneficiary to the signatory

operator that remains in business, signed a collective

' Many references in the legislative record are to the Depart-

ment of Health and Human Services, which at the time included

the Social Security Administration. In 1995, the Social Security

Administration became an independent agency within the Execu-

tive Branch, and the Commissioner of Social Security assumed the

duties of the Secretary of Health and Human Services under the

Coal Act. See Social Security Independence and Program Im-

provements Act of 1994, Pub. L. No. 108-296, § 108(h)(9)(A), 108

Stat. 1487.

PS Sa son

bargaining agreement with the UMWA in 1978 or later,

and was the most recent signatory operator to employ

the miner in the coal industry for any period of time.

26 U.S.C. 9706(a)(2).

Third, if an assignment cannot be made under the

first or second tier, the Commissioner must seek to

assign the beneficiary to the signatory operator that

remains in business and employed the miner in the coal

industry for a longer period of time than any other

signatory operator prior to the effective date of the

1978 collective bargaining agreement. 26 U.S.C.

9706(a)(3).

Finally, if an assignment cannot be made under any

of the three tiers, then the beneficiary is considered

“unassigned.” In that event, the beneficiary’s health-

care benefits are financed with funds transferred from

interest earned on the Department of the Interior’s

Abandoned Mine Land Reclamation Fund (AML Fund),

26 U.S.C. 9705(b), or, if that source of funds is ex-

hausted or unavailable, from an additional premium

assessed against all assigned s_gnatory operators on a

pro rata basis, 26 U.S.C. 9704(d).

2. Petitioner is a coal mining company located in

Knoxville, Tennessee. Pet. App. 4a. Petitioner has

been in the business of mining and selling bituminous

coal since 1946. It initially employed UMWA labor and

signed the NBCWAs that required employer contribu-

tions to multi-employer trusts financing miners’ retire-

ment and health-care benefits. In 1964, petitioner

ceased employing union miners and terminated pay-

ments into the trusts. Since that time, it has continued

to mine coal with non-union labor and has declined to

participate in UMWA collective bargaining agree-

ments. Jbid.; see also In re Blue Diamond Coal Co.,

5

79 F.3d 516, 520 (6th Cir. 1996), cert. denied, 519 U.S.

1055 (1987).

The Commissicner determined that financial respon-

sibility for the health-care benefits of approximately

1,400 beneficiaries of the Combined Fund. should be

assigned to petitioner under the third tier of the Coal

A«.’s assignment scheme. Pet. App. 4a. Petitioner

challenged the constitutionality of those assignments in

district court, contending that the Coal Act’s imposition

of premium obligations on it violated substantive due

process and constituted an unconstitutional taking of its

property without just compensation. Petitioner con-

tended that the Coal Act’s retroactive imposition of

liability on it for lifetime health-care benefits was

unconstitutional because, at the time it employed

miners under the NBCWA system (before 1974), no

agreement expressly promised those miners lifetime

health-care benefits. Petitioner sought declaratory and

equitable relief against the statute’s application to it.

The district court rejected that challenge in a final

judgment entered on November 9, 1994. Pet. App. 32a-

47a. The court of appeals affirmed, and this Court de-

_ nied petitioner’s petition for a writ of certiorari (which

presented only the taking issue). In re Blue Diamond

Coal Co., 79 F.3d 516 (6th Cir. 1996), cert. denied, 519

U.S. 1055 (1997); see Pet. 9 n.6.

3. Subsequently, in Eastern Enterprises v. Apfel,

524 U.S. 498 (1998), this Court ruled that the Coal Act’s

provision for assignment of financial responsibility for

retired coal miners’ benefits under the third tier was

unconstitutional in the case of a signatory operator

that, like petitioner, did not sign a NBCWA in 1974 or

later. The Court was divided as to its reasoning. Four

Justices concluded that the assignment was an uncon-

stitutional taking without compensation. See id. at 504

6

(plurality opinion). Justice Kennedy concluded that the

Coal Act’s provision for assignment of financial liability

was not an unconstitutional taking—a conclusion with

which the four Justices in the dissent agreed (see id. at

554 (Breyer, J., dissenting)—but that the provision vio-

lated substantive due process as applied to the coal

mine operator before the Court. See id. at 539 (opinion

of Kennedy, J., concurring in the judgment and dis-

senting in part). i

In response to the Fastern Enterprises decision, the

Commissioner determined that the assignments of

miners previously made to petitioner were “void,” and

informed petitioner that it was relieved of any further

obligation to pay premiums to the Combined Fund

based on those assignments. See C.A. App. 63. The

Commissioner did not, however, address premium

payments petitioner had already made to the Combined

Fund in accordance with the final judgment that had

sustained the validity of the Coal Act assignments.

4. In an effort to recover payments that it made to

the Combined Fund before the Eastern Enterprises

decision, petitioner moved in the district court for relief

from the final judgment under Federal Rule of Civil

Procedure 60(b)(6).- The district court granted the

motion, vacated its final judgment, and restored the

case to its active docket for further proceedings. Pet.

App. 21a-29a.

Although the district court acknowledged “the chaos

that would ensue if otherwise final judgments were

reopened every time there was a change in the judicial

= Rue 60(b) provides, in pertinent part: “On motion and upon

such terms as are just, the court may relieve a party * * * froma

final judgment * * * for * * *_(6) any other reason justifying

relief from the operation of the judgment.”

7

view of applicable law,” it found that concern inapplica-

ble here because (it stated) “there was no controlling

judicial interpretatiom ef the chablenged provision” at

the time it had entered its final judgment. Pet. App.

26a. The court noted that some courts have granted

relief from a final judgment when the failure to do so

would result in divergent judgments arising out of the

same accident or contractual transaction. Jd. at 27a. It

reasoned that the imposition of Coal Act liability under

the third tier of the statutory assignment scheme on

companies that had not signed an NBCWA in 1974 or

later could be regarded as a single transaction requiring

similar uniformity in court judgments. Jd. at 27a-28a.

The court also stated that it would be unfair to allow

the final judgment to stand in light of the facts that

petitioner had made $14 million in payments to the

Combined Fund before the Eastern Enterprises deci-

sion, similarly situated companies had declined to pay

the Combined Fund and had thus avoided liability, and

the Coal Act in certain other circumstances directs the

Combined Fund to repay premiums paid under certain

assignments that are later determined to be erroneous.

Id. at 28a.

5. On appeal pursuant to 28 U.S.C. 1292(b), the court

of appeals reversed. The court concluded that this

Court’s decision in Eastern Enterprises did not provide

a reason for retrospectively vacating the final judgment

establishing petitioner’s liability to the Combined Fund

for the period before that decision. Pet. App. la-18a.

The court observed, first, that a change in decisional

law ordinarily is not regarded as a sufficient circum-

stance to warrant relief from a final judgment under

Rule 60(b)(6), even when the statute on which the

final judgment rested is subsequently held to be

unconstitutional. Pet. App. 8a. The court then rejected

8

the submission that petitioner’s situation is similar to

other cases in which courts have granted relief from

final judgments in order to harmonize divergent judg-

ments arising out of the “same transaction.” J/d. at 9a-

lla. The court noted that several of those cases turned

on a special concern about diversity jurisdiction,

namely, that the federal courts’ application of state law

should be consistent with state court rulings in litiga-

tion arising out of the same transaction. Jd. at lla. It

also stressed that, in any event, those cases “involve

transactions with a much tighter nexus of common

activity, common rights, and common liability than a

law passed by Congress to regulate the payment of

medical health benefits to the retirees of an entire

industry.” Jbid. Although the court observed that

third-tier Coal Act assignments to companies that

employed UMWA miners only before 1974 do “define a

fixed and identifiable universe of affected parties,”

nonetheless “the nature and extent of the liability”

imposed on such companies “varies with each particular

company’s involvement with the several health benefit

funds which preceded the Combined Fund,” zbid., which

in turn was “establiShed over the course of several

decades in a series of discrete and separate collective

bargaining negotiations.” /d. at 12a. Thus, the court

concluded, third-tier liability under the Coal Act “is not

a common transaction similar to a car accident or a

shareholders agreement” that would warrant relief

from final judgment in order to harmonize divergent

judgments. /d. at 13a.

The court also concluded that the amount of money

that petitioner had paid under the prior judgment was

not by itself a sufficient basis for granting relief from

judgment. Pet. App. 15a-l6a, The court noted that it

had previously held that a duty to pay money under a

9

judgment is not an excessive burden or hardship of the

sort that warrants relief under Rule 60(b)(6), and that it

would be difficult to establish rules for determining the

amount of monetary liability that might justify relief.

Ibid.

Finally, the court stated that the Combined Fund had

substantial reliance interests in the final judgment that

militated against granting relief. Pet. App. 16a-17a.

The court noted that four years had elapsed between

the district court’s prior judgment and its subsequent

grant of post-judgment relief, and that the Combined

Fund had in the interim used the premiums that ~

petitioner had paid under the prior judgment to cover

the health benefits of numerous retirees. /d. at 17a.

“Given the public policy in favor of the finality of judg-

mentis], and the length of time between final judgment

and Rule 60(b)(6) relief,” the court concluded, “equity

clearly favors adhering to the district court’s final

judgment.” Jbid.

ARGUMENT

The decision of the court of appeals is correct and

does not conflict with any decision of this Court or any

other court of appeals. The decision properly applies

the well-settled rule that a change in decisional law

ordinarily does not, without more, warrant relief from a

final judgment under Rule 60(b)(6). In addition, signifi-

cant reliance interests in this case flowing from the final

judgment weigh against reopening of the judgment.

Further review is therefore not warranted.

1. a. Rule 60(b)(6) grants federal courts authority to

relieve a party from a final judgment “upon such terms

as are just, provided that the motion is made within a

reasonable time.” Liljeberg v. Health Servs. Acquisi-

tion Corp., 486 U.S. 847, 863 (1988). Rule 60(b)(6) rec-

10

ognizes the courts’ authority to grant relief from judg-

ment for reasons not specified in other clauses of Rule

60(b) (such as fraud or mistake). Rule 60(b)(6) does not,

however, afford a district court unbridled authority to

disturb the finality of prior judgments or to unsettle the

expectations of those who have relied on them. See,

e.g., Ackermann v. United States, 340 U.S. 193, 198-200

(1950). To the contrary, the courts’ discretii ‘o set

aside a prior judgment under Rule 60(b)(6) is cireum-

scribed by the strong public policy favoring finality of

judgments and termination of litigation. Cf. Federated

Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 401 (1981)

(“Public policy dictates that there be an end of litiga-

tion; that those who have contested an issue shall be

bound by the result of the contest, and that matters

once tried shall be considered forever settled as be-

tween the parties.”). Accordingly, this Court has made

clear that, when a litigant does not have a basis for

seeking relief from a judgment because of fraud, mis-

take, or one of the other grounds specifically enumer-

ated in Rule 60(b), a court may authorize relief under

Rule 60(b)(6) only in “extraordinary circumstances.”

Liljeberg, 486 U.S. at 863-864; see Ackermann, 340 U.S.

at 200.

The court of appeals correctly concluded in this case

that this Court’s decision in Eastern Enterprises was

not an “extraordinary circumstance| |” warranting vaca-

tur of the final judgment that had definitively deter-

mined that petitioner was liable in past years to make

contributions to the Combined Fund. Although this

Court’s decision in Eastern Enterprises established

that the lower courts’ previous resolution of petitioner's

constitutional claims had been incorrect, that point by

itself does not justify reopening this litigation. Lower

courts often reach divergent results about legal issues

1]

before they are definitively settled by this Court, and

yet the Court has never suggested that long-termi-

nated litigation should be revived merely because some

lower courts had resolved those cases based on what

was later revealed to be an erroneous view of the law.

To the contrary, the Court has made clear that “{iJnter-

vening developments in the law by themselves rarely

constitute the extraordinary circumstances required for

relief under Rule 60(b)(6).” Agostini v. Felton, 521 U.S.

203, 239 (1997). That is especially so with respect to a

final judgment that disposes of monetary claims based

on past conduct or liability. See Miller v. French, 530

U.S. 327, 343-345 (200).

Consistent with that principle, the great weight of

authority in the courts of appeals holds that a change in

decisional law (including decisions of this Court) casting

doubt on the law on which a final judgment was predi-

cated is not by itself an “extraordinary circumstance[]”

warranting relief from judgment under Rule 60(b)(6).

See Bailey v. Ryan Stevedoring Co., 894 F.2d 157 (5th

Cir.) (this Court’s decision construing attorney’s-fee

statutes did not warrant reopening final judgment

denying fees to plaintiff in employment-discrimination

case based on arguably incorrect view of the law), cert.

denied, 498 U.S. 829 (1990); Travelers Indem. Co. v.

Sarkisian, 794 F.2d 754, 756-757 (2d Cir.) (this Court’s

decision construing RICO statute did not warrant

reopening final judgment predicated on contrary view),

cert. denied, 479 U.S. 885 (1986); Marshall v. Board of

Educ., 575 F.2d 417, 425 (3d Cir. 1978) (this Court’s

decision in National League of Cities v. Usery, 426 U.S.

833 (1976), did not justify reopening final judgment

holding school board liable for overtime in past years);

Collins v. City of Wichita, 254 F.2d 837, 839 (10th Cir.

1958) (this Court’s decision invalidating Kansas statute

12

relating to condemnation proceedings did not warrant

reopening final judgment upholding statute against

challenge brought by different party); Berryhill v.

United States, 199 F.2d 217, 218-219 (6th Cir. 1952) (this

Court’s decision construing National Service Life In-

surance Act did not warrant reopening final judgment

arguably predicated on contrary view); see also Cin-

cinnati Ins. Co. v. Flanders Elec. Motor Serv., Inc., 131

F.3d 625, 628-630 (7th Cir. 1997) (subsequent change in

state courts’ decisional law does not warrant reopening

of final judgment by federal court sitting in diversity);

Batts v. Tow-Motor Forklift Co., 66 F.3d_743, 748-749

(5th Cir. 1995) (same), cert. denied, 517 U.S. 1221

(1996); DeWeerth v. Baldinger, 38 F.3d 1266, 1272-1273

(2d Cir.) (same), cert. denied, 513 U.S. 1001 (1994);

Dowell v. State Farm Fire & Cas. Auto. Ins. Co., 993

F.2d 46, 48 (4th Cir. 1993) (same); Biggins v. Hazen

Paper Co., 111 F.3d 205, 211 (ist Cir.) (change in state

law did not warrant reopening state-law contract

claim), cert. denied, 522 U.S. 952 (1997).

b. Petitioner argues (Pet. 10, 13-14) that a different

result is warranted when this Court issues a constitu-

tional ruling that casts doubt on a lower court decision

that had rested on a contrary view of the Constitution.

Neither this Court nor the lower courts, however, have

recognized any “constitutional law” exception to the

principles of finality underlying Rule 60(b). Cf. Moitie,

452 U.S. at 400-401 (rejecting “public policy” exception

to res judicata); Chicot County Drainage Dist. v. Bax-

ter State Bank, 308 U.S. 371, 374 (1940) (rejecting con-

tention that final judgment based on unconstitutional

law could not be res judicata). Indeed, this Court’s ob-

servation in Agostini that a change in decisional law

ordinarily will not warrant relief from final judgment

was made in a constitutional case involving the Estab-

13

lishment Clause. The Third Circuit’s decision in Mar-

shall v. Board of Education, supra, and the Tenth

Circuit’s decision in Collins v. City of Wichita, supra,

expressly declined to reopen final judgments based on

subsequent constitutional decisions of this Court. And

all the other lower courts that have addressed the

precise issue presented by this case have agreed that

this Court’s decision in Kastern Knterprises did not

warrant reopening final judgments to relieve coal

operators retroactively from their obligations to the

Combined Fund in past years.*

Petitioner maintains (Pet. 13), however, that, once

this Court declares a statute unconstitutional, the

statute is stripped of all legal effect, both before and

after the Court’s decision. But in Chicot County

Drainage District, this Court rejected that basis for the

very similar contention that a judgment based on an

unconstitutional law could not be res judicata:

[Sluch broad statements as to the effect of a

determination of unconstitutionality must be taken

with qualifications. The actual existence of a

statute, prior to such a determination, is an opera-

tive fact and may have consequences which cannot

justly be ignored. The past cannot always be erased

by a new judicial declaration.

3 See Holland v. Virginia Lee Co., 188 F.R.D. 241 (W.D. Va.

1999); Coltec Yndus., Inc. v. Hobgood, 184 F.R.D. 60 (W.D. Pa.

1999), appeals pending, Nos. 00-2458 & 00-4385 (3d Cir. argued

Sept. 19, 2001); Lindsey Coal Mining Co. Liquidating Trust v.

Apfel, No. 94-143 (W.D. Pa. Aug. 4, 1999) (Resp. UMWA Combined

Fund Br. in Opp. App. la-3a); Templeton Coal Co. v. Apfel, No.

TH-93-158-C-T/H (S.D. Ind. Nov. 17, 1999) (Resp. UMWA Com-

bined Fund Br. in Opp. App. 4a-32a).

14

308 U.S. at 374. Indeed, petitioner acknowledges in

passing (Pet. 13) that its assertion that the unconsti-

tutional application of the Coal Act can have no legal

effect is subject to the important exception for those

“effects that may be protected by procedural barriers

such as statutes of limitation or final judgments.” This

case, of course, involves precisely the effect of a final

judgment, and so any broad assertion that a declaration

of a statute’s unconstitutionality must be applied fully

retroactively does not apply here. See James B. Beam

Distilling Co. v. Georgia, 501 U.S. 529, 541 (1991)

(opinion of Souter, J.) (“Of course, retroactivity in civil

cases must be limited by the need for finality * * * ;

once suit is barred by res judicata or by statutes of

limitation or repose, a new rule cannot reopen the door

already closed.”) (citation omitted).

c. Petitioner also contends (Pet. 7-8) that this case is

governed by a narrow line of cases in which the courts

have reopened a final judgment denying relief to a

party when a subsequent decision of another court

allowed relief to another party in a separate case

arising out of the same transaction. See Gondeck v.

Pan American World Airways, Inc., 382 U.S. 25 (1965)

(per curiam) (claims arising out of same automobile

accident); Pierce v. Cook & Co., 518 F.2d 720 (10th Cir.

1975) (en banc) (similar), cert. denied, 423 U.S. 1079

(1976); First Am. Nat'l Bank v. Bonded Elevator, Inc.,

111 F.R.D. 74 (W.D. Ky. 1986) (claims arising out of

same promissory note); Norman v. Nichiro Gyogyo

Kaisha, Ltd., 761 P.2d 713 (Alaska 1988) (same corpo-

rate action allegedly breaching same shareholder agree-

ment). As the court of appeals explained (Pet. App.

lla), those cases are inapposite here because they

involve “transactions with a much tighter nexus of

common activity, common rights, and common liability

15

than a law passed by Congress to regulate the payment

of medical health benefits to the retirees of an entire

industry.” Those decisions indicate that ‘matters of

happenstance (such as the timing or forum of litigation)

in different cases arising out of the same incident

ordinarily should not lead to the application of a differ-

ent substantive legal rule. See Pierce, 518 F.2d at 723

(noting that the plaintiffs in that case “were forced into

federal court by [the defendant’s] removal of their state

court actions on diversity grounds”). But the same

principle has no application to broad-based constitu-

tional challenges to an Act of Congress, such as the

Coal Act, that applies to and establishes the liability of

a large number of entities. In that circumstance, it is to

be expected that the application and validity of the law

will be tested by different cases across the country, and

the possibility that courts may reach divergent results

is simply an inevitable consequence of that fact."

Adams v. Merrill Lynch Pierce Fenner and Smith,

888 F.2d 696 (10th Cir. 1989), though not involving di-

vergent judgments arising out of the same transaction

or contractual relationship, is not to the contrary. In

4 Petitioner argues (Pet. 6-7) that it should not be penalized for

being one of the first entities to bring a constitutional challenge to

a law that was eventually held unconstitutional. But as Justice

Souter observed in James B. Beam, “independent interests” in

finality counsel against applying a constitutional decision to “those

who had toiled and failed, but whose claims are now precluded by

res judicata.” 501 U.S. at 542 (opinion of Souter, J.). Although

such litigants may claim that they are not being treated equally

with those who had not brought unsuccessful litigation earlier but

who nonetheless stand to benefit from the Court’s constitutional

ruling, “[flinality must * * * delimit equality in a temporal sense,

and we must accept as a fact that the argument for uniformity

loses force over time.” /bid.

16

that case, the district court initially held that a contract

clause requiring arbitration of disputes concerning

securities transactions could not validly compel arbitra-

tion of federal securities-law claims. Subsequently, in

Shearson/American Express, Inc. v. McMahon, 482

U.S. 220 (1987), this Court ruled that a similar contract

clause compelling arbitration of the same kinds of

federal securities-law claims was valid and enforceable.

The district court then granted relief from judgment in

light of Shearson and directed arbitration, and the

court of appeals affirmed. Adams, 888 F.2d at 702.

Adams was unusual, however, in that (unlike this case)

the initial order in that case merely denied a request to

compel arbitration and thus did not entail a final

judgment on the merits of the dispute between the

parties. Adams thus did not implicate the interests of

finality and repose that generally flow from entry of a

final judgment that terminates a dispute between

litigants.”

5 The court of avpeals stated in Adams that, “{iJn this circuit, a

change in relevant case law by the United States Supreme Court

warrants relief under Fed.R.Civ.P. 60(b)(6).” 888 F.2d at 702. For

that proposition, however, the Adams court cited the Tenth Cir-

cuit’s earlier decision in Pierce, which (as explained above) in-

volved the narrow “same accident” exception. Moreover, Adams

did not suggest that the Tenth Circuit had overruled “its earlier

decision in Collins, which had declined to reopen a final judgment

notwithstanding a subsequent, contrary constitutional decision of

this Court. Indeed, the Tenth Circuit in Pierce distinguished

Collins on the ground that, in Collins, “the decisional change came

in an unreiated case” (518 F.2d at 723), precisely the circumstance

here. Collins thus remains good law in the Tenth Circuit and

would govern this case in that circuit. Against the background of

Pierce and Collins, the court’s statement in Adams that a change

in law by this Court warrants reopening a final judgment should

not be taken to mean more than such a decision may warrant relief

17

2. The court of appeals also correctly concluded (Pet.

App. 16a-18a) that significant reliance interests weigh

heavily against the réopening of the final judgment in

this case under Rule 60(b)(6). Petitioner paid more

than $14 million in premium payments to the Combined

Fund pursuant to the prior judgment in this case. Pet.

App. 6a. The Coal Act requires the Combined Fund to

use “all available plan resources” to ensure that health-

care benefits, to the maximum extent feasible, are

substantially the same as benefits provided under the

pre-Coal Act benefit plans. See 26 U.S.C. 9703(b)(1).

Consequently, as the court of appeals stated (Pet. App.

7a), the Combined Fund has already used all the

payments required by the prior judgment in this case to

provide benefits- to coal mine retirees and their

dependents.

Permitting petitioner to reopen the final judgment in

order to seek recovery of those revenues from the Com-

bined Fund would create further uncertainty in the

fiscal administration of the health benefits mandated by

the Coal Act and would interfere with the settled

expectations of the Combined Fund, its beneficiaries,

the government, and other parties affected by the

statute. The Combined Fund would have to look to

some other source to make up the shortfall—either to

further transfers from interest earned on the govern-

ment’s AML Fund, if such interest remains available,

or to pro rata contributions required from the other

signatory operators whose former employees are bene-

ficiaries of the Combined Fund. See p. 4, supra. The

government and other signatory operators, however,

were entitled to make plans for their resources based

from judgment if there are other, extraordinary circumstances |

present.

18

on the assumption that the final judgment in this case

had definitively determined that the Combined Fund

was entitled to disburse the money that petitioner had

previously paid to it. That is exactly the kind of

reliance interest that is protected by the principles of

finality in Rule 60(b).°

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

THEODORE B. OLSON

Solicitor General

ROBERT D. MCCALLUM, JR.

Assistant Attorney General

DOUGLAS N. LETTER

JEFFREY CLAIR

Attorneys

NOVEMBER 2001

6 Petitioner has not, however, been wholly denied the benefits

of this Court’s ruling in Eastern Enterprises. As petitioner ac-

knowledges (Pet. 3), the Commissioner voided petitioner’s assign-

ments after Eastern Enterprises, thereby relieving petitioner of

prospective_premium obligations under the statute. Moreover,

Congress enacted legislation that refunded to petitioner (and to

other similarly situated parties) a portion of the premiums it paid

under Coal Act provisions, that, though sustained by prior final

judgments, were later held unconstitutional by Eastern Enter-

prises. See Department of the Interior and Related Agencies Ap-

propriations Acts, 2001, Pub. L. No. 106-291, § 701(a)(2), 114 Stat.

1024. Petitioner has received approximately $1.4 million pursuant

to that legislation. See Pet. 4 n.2.