Opposition Brief — A. T. Massey Coal Co. v. Barnhart

MAR 24 2003

ARCO TEEE AR ELE STEAL TEL INIT NS IEA OLB IIB ENE ALE SBR NR RN

No. 02-956 i

Jn the Supreme Court of the Unlited States

A.T. MASSEY COAL COMPANY, INC., ET AL.,

PETITIONERS

V.

JO ANNE B. BARNHART,

COMMISSIONER OF SOCIAL SECURITY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT

IN OPPOSITION

THEODORE B. OLSON

Solicitor General

Counsel of Record

ROBERT D. MCCALLUM, JR.

Assistant Attorney General

MARK B. STERN

SHARON SWINGLE

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTION PRESENTED

Whether the Commissioner of Social Security was

constitutionally required under Eastern Enterprises v.

Apfel, 524 U.S. 498 (1998), to void assignments to peti-

tioners of liability for retired miners’ benefits under the

Coal Industry Retiree Health Benefit Act of 1992, 26

U.S.C. 9701 et seqg., even though, when that Act was

passed, petitioners were members of a commonly con-

trolled group of corporations that both employed the

miners and promised to provide them lifetime health

benefits.

(I)

TABLE OF CONTENTS

Page

Opinions below .......ssssssssessssesssessneessneesssesssneesnsccsnnecsnsennnsennncesnesssess 1

JUrvisdiction ................cccscccsscssssssssssecsscesossseserssessassesessessvesessssenresees 1

Statement ...........cccccssccsscsssssssssssessssessscsssecssenessssssscessscsscssossonenseneess 2

AYQUMENL ....csssssssssssecsseecsseesneesnnecssesssscsneeesecenscssnecgnscenscaneccsscesnsssess 10

CONCIUBION. ..0c.cerecccscosccevcscsoresvscssescessocsscereseesesosssvenesesesensonsesocsosesseees 17

TABLE OF AUTHORITIES

Cases:

A.T. Massey Coal Co. v. International Union,

799 F.2d 142 (4th Cir. 1986), cert. denied,

481 U.S. 1033 (1987) .....scscccscossscscccssossssesesessressesssessesosecsssesoers 7

Anker Energy Corp. v. Consolidation Coal Co.,

177 F.3d 161 (3d Cir.), cert. denied, 528 U.S.

1008 (1999) .......c.cccccrcssssssscsssserreceseservserssssssssssssssssscssesesessesesrers 16

Association of Bituminous Contractors, Inc. v.

Apfel, 156 F.3d 1246 (D.C. Cir. 1998) .....sseessesesnserneerneeenns 15

Barnhart v. Walton, 122 S. Ct. 1265 (2002) ........seseeeeeees 13

Berwind Corp. v. Commissioner, 307 F.3d 222

(3d Cir. 2002), petition for cert. pending, No. 02-995

(filed Dec. 24, 2002) ......ssccssssssssssssessesesenessenenenessensnsssessenesenenees 15

Concrete Pipe & Prods. of Cal., Inc. v. Construction

Laborers Pension Trust for S. Cal., 508 U.S. 602

ORI 5sincsevacsosisessnsevinsaceosenntnsannessoerwonoevsqnenenomeneesnssesesecssoovonneete 14

Connolly v. Pension Benefit Guar. Corp.,

A7T5 U.S. 211 (1986) .......cscscssssssssccscssssssversecsesescerersenssererseesnsees 14

Eastern Enters. v. Apfel, 524 U.S. 498 (1998) ....-:-ssessee0 2.3,

5, 6, 11, 12

Pension Benefit Guar. Corp. v. R.A. Gray & Co.,

ABT U.S. 717 (1984) ...cccccscsssssscesscessssssccesececnceseserssnssesersssensnsees 14

Shenango Inc. v. Apfe!, 307 F.3d 174 (8d Cir. 2002) ....... 15

Unity Real Estate Co. v. Hudson, 178 F.3d 649

(3d Cir.), cert. denied, 528 U.S. 963 (1999) .........-sse+ 8, 15-16

(III)

IV

Constitution, statutes and rule:

U.S. Const.:

Amend. V:

OE OIE CII. sccctecnssrencenssneninresenssnnnnininensinpsenesiabiniions

Just Compensation Clause ..............c.cer-seccsssssecssssessssvenese

Energy Policy Act of 1992, Pub. L. No. 102-486,

Title XIX, § 1G14R, 10S Stat. BOGE ...cnceccccecscovesecsereseseossess

Coal Industry Retiree Health Benefit Act of 1992,

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In the Supreme Court of the Gnited States

No. 02-956

A.T. MASSEY COAL COMPANY, INC., ET AL.,

PETITIONERS

Vv.

JO ANNE B. BARNHART,

COMMISSIONER OF SOCIAL SECURITY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT

IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. Al-

A27) is reported at 305 F.3d 226. The opinion of the

district court (Pet. App. B1-B42) is reported at 153 F’.

Supp. 2d 813. The order of the district court amending

its judgment (Pet. App. C1-C2) is unreported.

JURISDICTION

The judgment of the court of appeals was entered on

September 18, 2002. The petition for a writ of certiorari

was filed on December 17, 2002. The jurisdiction of this

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

(1)

2

STATEMENT

1. a. Congress enacted the Coal Industry Retiree

Health Benefit Act of 1992 (Coal Act), 26 U.S.C. 9701 et

seq., in response to a financial crisis that threatened to

deprive more than 100,000 retired coal miners and their

dependents of health-care benefits. Those benefits had

been promised to retired coal miners in a series of

collective bargaining agreements known as National

Bituminous Coal Wage Agreements (NBCWAs) negoti-

ated between the United Mine Workers of America

(UMWA) and the Bituminous Coal Operators’ Associa-

tion (BCOA), a multi-employer bargaining association.

See Eastern Enterprises v. Apfel, 524 U.S. 498, 504-514

(1998) (plurality opinion); Pet. App. A6-A9.

In the 1930s, as the UMWA organized workers in the

coal industry, heath-care benefits became an important

issue in collective bargaining. In 1947, the UMWA and

several coal operators entered into a NBCWA in which

the operators agreed to provide health-care benefits to

miners and their dependents. The 1947 NBCWA did

not, however, promise specific benefits or guarantee

lifetime benefits. The UMWA and the BCOA entered

into similar agreements in subsequent years. See East-

ern Enterprises, 524 U.S. at 504-509 (plurality opinion);

Pet. App. A7.

In 1974, the UMWA and the BCOA entered into a

NBCWA that, for the first time, explicitly promised

lifetime health benefits to miners and their dependents.

In 1978, the UMWA and the BCOA entered into a new

NBCWA in which signatory operators agreed to

provide lifetime benefits for their own active and re-

tired employees as well as for “orphaned” miners whose

employers had ceased coal operations or withdrawn

from the NBCWAs. Signatory employers were re-

3

quired to contribute enough to pay for the promised

benefits and to remain liable as long as they remained

in the coal industry. See Eastern Enterprises, 524 U.S.

at 509-511 (plurality opinion); Pet. App. A7-A9.

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

private multi-employer plans that had been established

to finance those benefits was undermined by increasing

health-care costs and the termination of coal operators’

contribution obligations as operators switched to non-

union employees or left the coal industry altogether.

As more coal operators withdrew from the plans, the

remaining operators were forced to bear more of the

costs, which in turn led to even more defections and

created a downward spiral. See Eastern Enterprises,

524 U.S. at 511-514 (plurality opinion); Pet. App. A9.

Congress’s objectives in enacting the Coal Act were

to “identify persons most responsible for plan liabilities

in order to stabilize plan funding and allow for the

provision of health care benefits to * * * retirees,” to

“allow for sufficient operating assets for such plans,”

and to “provide for the continuation of a privately fi-

nanced self-sufficient program for the delivery of health

care benefits to the beneficiaries of such plans.”

Energy Policy Act of 1992, Pub. L. No. 102-486, Title

XIX, § 19142, 106 Stat. 3037. In furtherance of those

ends, the Coal Act established a private multi-employer

plan known as the United Mine Workers of America

Combined Benefit Fund (Combined Fund). The Com-

bined Fund provides health-care benefits to individuals

who, at the time that the Coal Act was enacted, were

receiving benefits from the multi-employer plans. See

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

The Combined Fund is financed principally by premi-

ums paid by the “signatory operator[s]”—or “related

person{s]” of those operators—that formerly employed

4

the retired miners who are beneficiaries of the

Combined Fund. 26 U.S.C. 9704, 9706(a). The Coal Act

defines a “signatory operator” as “a person which is or

was a signatory to a coal wage agreement.” 26 U.S.C.

9701(¢c)(1).

b. The Coal Act vests the Commissioner of Social

Security (Commissioner) with the task of assigning

retired miners who are eligible for benefits from the

Combined Fund to signatory operators or related

persons of those operators. 26 U.S.C. 9706(a). The Coal

Act provides for assignments to be based on how long

and how recently a miner worked for a particular em-

ployer and on whether the employer signed a NBCWA

in 1978 or thereafter. See 26 U.S.C. 9701(b)(1) and

(c)(1), 9706(a). Any signatory operator that receives

business revenue, “whether or not in the coal industry,”

may be assigned beneficiaries under the Coal Act. 26

U.S.C. 9701(¢)(7), 9706(a).

The Coal Act also imposes shared responsibility on a

signatory operator’s “related persons,” which are de-

fined to include members of a commonly controlled

group of corporations that includes the signatory opera-

tor, businesses under common control with the signa-

tory operator, and successors in interest to a related

person. 26 U.S.C. 9701(c)(2)(A). Related persons may

be directly assigned liability for premiums for a retired

miner and his dependents. See 26 U.S.C. 9706(a). In

addition, related persons are jointly and severally liable

for the premiums of the assigned operator. See 26

U.S.C. 9704(a). For assignment purposes, “[aJny em-

ployment of a coal industry retiree in the coal industry

by a signatory operator shall be treated as employment

by any related persons to such operator.” 26 U.S.C.

9706(b)(1)(A).

5

If a retired miner cannot be assigned to any coal

operator or related person that remains in business, the

miner is considered “unassigned.” See 26 U.S.C.

9704(a)(3) and (d). The Coal Act provides several

sources of funding for the benefits of unassigned

beneficiaries, including transfers from the Department

of the Interior’s Abandoned Mine Land Reclamation

Fund (AML Fund) and, if necessary, assessments of an

“unassigned beneficiary premium” from coal operators

and related persons that have been assigned retired

miners. See 26 U.S.C. 9704(a), 9705(a) and (b).'

ce. In Eastern Enterprises, this Court invalidated

the Commissioner’s assignment to Eastern of respon-

sibility for the Combined Fund premiums of more than

1000 retired miners and their beneficiaries that were

estimated to total between $50 million and $100 million.

The Commissioner had made those assignments under

26 U.S.C. 9706(a)(3), the third tier of the Coal Act’s

assignment hierarchy, because Eastern had employed

the miners and had signed NBCWAs in the 1960s.”

1 The AML Fund was established by the Surface Mining Con-

trol and Reclamation Act of 1977, 30 U.S.C. 1201 et seq., for the

purpose or reclaiming and restoring land and water resources

adversely affected by past coal mining. See 30 U.S.C. 1231(c). The

AML Fund is financed by fees assessed on coal operators for each

ton of coal produced. See 30 U.S.C. 1232(a). To date, AML Fund

transfers have been sufficient to avoid the assessment of an

unassigned beneficiary premium.

2 Although Eastern had a subsidiary, Eastern Associated Coal

Corporation (EACC), that had signed NBCWAs in 1974 and there-

after, Eastern sold all of its interest in EACC in 1987. 524 U.S. at

516 (plurality opinion); see 26 U.S.C. 9701(c)(2)(B) (related person

status is determined as of July 20, 1992, unless coal operator went

out of business earlier). Because EACC was not a “related person”

to Eastern within the meaning of the Coal Act, the Commissioner

Onna east.

6

A plurality of the Court concluded that the chal-

lenged assignments violated the Just Compensation

Clause of the Fifth Amendment. The plurality rea-

soned that the Coal Act “place[d] a severe, dispro-

porticnate, and extremely retroactive burden on East-

ern.” 524 U.S. at 538. The plurality emphasized that

Eastern had not engaged in coal mining since 1965, had

employed the assigned miners “some 30 to 50 years

before” the enactment of the Coal Act, and had not

signed “the 1974, 1978, or subsequent NBCWA’s,”

which the plurality described as the “agreements that

first suggest an industry commitment to the funding of

lifetime health benefits.” Jd. at 530-531. The plurality

noted that, under the earlier NBCWAs that Eastern

had signed, a coal operator’s obligation was limited to a

fixed royalty, withdrawal was permitted, and miners

were provided with “far less extensive” benefits that

“were fully subject to alteration or termination.” Jd. at

531; see zd. at 535-536.

Justice Kennedy concurred in the judgment. 524

U.S. at 539-550. Justice Kennedy disagreed with the

plurality’s takings analysis, but concluded that the

challenged assignments violated the Due Process

Clause. Justice Kennedy reasoned that the Commis-

sioner’s assignments to Eastern based on “events which

occurred 35 years ago” had “a retroactive effect of

unprecedented scope” that could not be justified as

“remedial,” because those assignments were designed

to satisfy a promise to provide lifetime health benefits

“made long after Eastern left the coal business.” Jd. at

549-550.

had not made assignments to Eastern based on its relationship to

EACC. See 524 US. at 530 (plurality opinion).

7

3. Petitioner A.T. Massey Coal Company, Inc.

(Massey) is a holding company that has numerous

wholly owned subsidiaries, many of which have en-

gaged or are engaging in coal mining operations. C.A.

App. 24, 26-28, 161-162. Massey and its affiliates “func-

tion[] as a single production entity with sales, trans-

portation and distribution coordinated from Massey’s

Richmond headquarters.” A.7T. Massey Coal Co. v.

International Union, 799 F.2d 142, 144 (4th Cir. 1986),

cert. denied, 481 U.S. 1033 (1987). Massey and three of

its subsidiaries, petitioners here, have stipulated that

they are members of a “controlled group of corpora-

tions” within the meaning of the Coal Act. Pet. App.

Al2, B22.

a. The Commissioner assigned petitioners respon-

sibility under the Coal Act for the health-care premi-

ums of 333 retired miners and their dependents. After

Eastern Enterprises, petitioners asked the Commis-

sioner to void their assignments, arguing that they did

not themselves sign NBCWAs in 1974 or thereafter,

and thus were similarly situated to Eastern. The

Commissioner declined to void petitioners’ assignments

because other wholly owned Massey subsidiaries, which

are petitioners’ “related persons” under the Coal Act,

signed the 1974 NBCWA or subsequent NBCWAs

promising to provide lifetime health-care benefits to all

retired miners. C.A. App. 523-525."

b. Petitioners brought suit against the Commis-

sioner and the trustees of the Combined Fund, con-

tending that their assignments were invalid under

Eastern Enterprises. The district court granted sum-

3 The Commissioner voided assignments to other coal operators

and related persons that were determined to be similarly situated

to Eastern. See Pet. App. A16.

8

mary judgment in favor of the Commissioner. Pet.

App. B1-B42.

The district court observed that other courts pre-

sented with such challenges have “unanimously” con-

cluded that the “splintered decision in Eastern

Enterprises,” in which no single rationale commanded

the support of five Justices, “mandates judgment for

the plaintiffs only if they stand in a substantially

identical position to Eastern Enterprises with respect

to both the plurality and Justice Kennedy’s concur-

rence.” Pet. App. B28 (quoting Unity Real Estate Co.

v. Hudson, 178 F.3d 649, 659 (3d Cir.), cert. denied, 528

U.S. 963 (1999)). The court found that standard was not

satisfied here. The court explained that petitioners,

unlike Eastern, were “related persons” to coal opera-

tors that signed the 1974 NBCWA or subsequent

NBCWAs that explicitly promised lifetime health-care

benefits. See id. at B29. The court concluded that “a

~ company that is assigned liability for premiums under

the Coal Act based cn its status as a ‘related person’ to

a 1974 or subsequent NBCWA signatory is not sub-

stantially identical to Eastern because Eastern Enter-

prises did not address related person liability.” Jd. at

B38.

ce. The court of appeals affirmed. Pet. App. A1-A26.

The court of appeals identified the “single issue”

raised by petitioners on appeal as “whether [their]

assignments are unconstitutional under Eastern Enter-

prises.” Pet. App. 418. The court of appeals, like the

district court, held that Eastern Enterprises would

require the invalidation of the challenged assignments

only if petitioners are in a “substantially identical”

position to that of Eastern. Jd. at Al9. The court

observed that both the plurality opinion and the

concurring opinion in Hastern Enterprises treated as

9

critical the fact that Eastern had not signed the 1974

NBCWA or any subsequent NBCWA promising

lifetime health-care benefits. Jd. at A20. Accordingly,

the court concluded that “a coal operator stands in a

position ‘substantially identical’ to that of Eastern if

it had no connection to the 1974 or subsequent

NBCWAs.” Ibid.

The court of appeals held that petitioners were not

“substantially identical” to Eastern in that critical

respect. Pet. App. A23-A26. The court explained that,

although petitioners themselves had not signed the

197. NBCWA or subsequent NBCWAs, they are part

of a controlled group of corporations that had done so.

The court noted that the Coal Act treats employment

by any member of a controlled group as employment by

all members of the group. /d. at A23 (citing 26 U.S.C.

9706(b}{1)(A)). The court also observed that treating all

members of a controlled group as “a single entity” is

consistent with the statutory purpose of assuring that

benefit obligations would not be affected by changes in

corporate form. Jd. at A24.

The court of appeals rejected the argument that

petitioners are in a “substantially identical” position to

Eastern because Eastern had a wholly owned sub-

sidiary, Eastern Associated Coal Corporation (EACC),

that signed NBCWAs in 1974 and thereafter. The court

explained that Eastern and EACC were not “related

persons” within the meaning of the Coal Act because

Eastern had sold EACC before July 20, 1992, the date

on which the Coal Act was passed and the date as of

which “relaced person” status is determined under 26

U.S.C. 9701(c)(2)(B). Accordingly, Eastern’s liability

for Coal Act premiums could not have been based on its

relationship to EACC. Pet. App. A24-A25. The court,

“tak[ing] the parties as the Act defines them,” recog-

10

nized that Eastern, by virtue of its pre-Act sale of

EACC, was “a discrete entity,” whereas petitioners, by

virtue of their continuing relationship, are “gather[ed]

* * * together with the other members of the Massey

Group for purposes of determining Combined Fund

liability.” Jd. at A25.

Judge Niemeyer concurred in part in the judgment

and dissented in part, expressing the view that the Coal

Act assignments to three of the four petitioners “are

unconstitutional by virtue of the Supreme Court’s

holding in Kastern Enterprises.” Pet. App. A27.

ARGUMENT

Petitioners contend that the Commissioner was

required to void their Coal Act assignments in light of

Eastern Enterprises because “[t]he facts here are

substantially identical to Eastern’s in all material

respects.” Pet. 17. The court of appeals rejected that

contention on the ground that petitioners’ liability for

Coal Act premiums, unlike Eastern’s, was justified by

their membership, at the time that the Coal Act was

passed, in a commonly controlled group of corporations

that both employed the particular retirees assigned to

petitioners and promised lifetime health benefits to all

retirees. That decision is correct, is consistent with the

decisions of other courts of appeals, and presents no

question of continuing importance. This Court’s review

is, therefore, not warranted.

1. Petitioners do not dispute that the court of

appeals articulated the proper standard for determining

whether Eastern Enterprises requires that their

assignments be voided—namely, whether petitioners

are in a “substantially identical” position to Eastern

with respect to “the critical facts the plurality and

Justice Kennedy relied on in reaching their respective

11

conclusions.” Pet. 15, 16. They merely contend that the

court of appeals misapplied that standard in this case.

This Court ordinarily does not grant certiorari “when

the asserted error consists of * * * the misapplication

of a properly stated rule of law.” Sup. Ct. R. 10. In any

event, the court of appeals correctly held that peti-

tioners are not similarly situated to the former coal

operator in Eastern Enterprises so as to require

invalidation of their assignments under the holding of

that case.

a. In concluding that the assignments in Eastern

Enterprises were unconstitutional, the plurality and

concurring opinions emphasized that Eastern had not

signed the 1974 NBCWA, which was the first to make

an explicit promise of lifetime health-care benefits, or

any subsequent NBCWA, and thus could not reason-

ably have contemplated being held responsible for

providing such benefits. See 524 U.S. at 530 (plurality

opinion) (explaining that Eastern had not “participated

in negotiations nor agreed to make contributions” to

satisfy the “industry commitment to the funding of

lifetime -health benefits” made in the 1974 and later

NBCWAs); zd. at 550 (Kennedy, J., concurring in the

judgment) (reasoning that Eastern was “not responsi-

ble for [retired miners’] expectation of lifetime health

benefits” because it did not sign NBCWAs in 1974 or

thereafter).

Here, in contrast, petitioners could reasonably have

anticipated that they would be required to provide

lifetime health-care benefits for their retirees. That is

because petitioners are (and at all relevant times have

been) members of a commonly controlled group of cor-

porations, other members of which signed the 1974 and

subsequent NBCWAs promising lifetime benefits not

only to their own retirees, but also to other retirees

12

who were “orphaned” by their employers. See Pet.

App. Al4 (identifying three such related companies); 7d.

at B24 (identifying additional related companies). To be

sure, petitioners might have hoped to avoid ever having

to share in the obligations that their subsidiaries (in the

case of petitioner Massey) or affiliates (in the case of

the other petitioners) assumed by signing those

NBCWAs. Petitioners could not, however, have had a

“reasonable investment-backed expectation,” Eastern

Enterprises, 524 U.S. at 532 (plurality opinion), that

they would never be required to provide the very bene-

fits to their own retirees that their related companies

had promised to all retirees.

b. Petitioners contend that they cannot meaningfully

be distinguished from Eastern because, like petitioners,

Eastern had an affiliate, EACC, that signed the 1974

and subsequent NBCWAs. See Pet. 20-24. As the plu-

rality explicitly recognized in Eastern Enterprises,

Eastern had sold EACC in 1987, five years before the

enactment of the Coal Act and the date as of which the

Coal Act determines “related person” status, so that

“Bastern’s liability under the Act [could] bear[] no

relationship to its ownership of EACC.” 524 U.S. at

516, 530; see 26 U.S.C. 9701(c)(2)(B). Accordingly, the

Court had no occasion in Eastern Enterprises to con-

sider whether the Constitution would bar assignment of

responsibility to one member of a group of corporations

that remained under common control on the date that

the Coal Act was passed—and the date as of which

“related person” status is determined—where other

members of the group had promised lifetime benefits to

all retired miners. See Pet. App. A25 (observing that

“the Eastern Enterprises plurality expressly deferred

to the delineation of entities that Congress chose to

make in the Coal Act” and thus “examined Eastern’s

13

experience in isolation” from EACC’s). Here, in con-

trast, petitioners remain affiliated with the numerous

“related persons” that promised lifetime health benefits

to coal miners. The Coal Act permitted the Commis-

sioner to take those “related persons” into account in

ascertaining petitioners’ liability.‘

Nor is there anything unfair about treating all mem-

bers of a commonly controlled group of corporations—

indeed, one whose members operate as “a single pro-

duction entity with sales, transportation and distribu-

tion coordinated from Massey’s Richmond head-

quarters” (Pet. App. Al2)—as a single entity for pur-

poses of imposing liability for retirees’ benefits under

the Coal Act. It is reasonable to presume that the

entire controlled group profited from the services

4 Petitioners dispute that their Coal Act liability is based in

part on their membership in a controlled group of corporations that

signed the 1974 NBCWA or later NBCWAs. See Pet. 19 & n.10.

As the court of appeals recognized, however, the Commissioner

sustained petitioners’ assignments after Eastern Enterprises on

that basis. See Pet. App. A16.

Petitioners also contend that the Commissioner lacked author-

ity to maintain their assignments based on whether the controlled

group, as a whole, employed the miners at issue and signed 1974 or

later NBCWAs. See Pet. 22. That contention was not addressed

by the court of appeals. It is, in any event, incorrect. The Coal Act

repeatedly provides that formal distinctions among related com-

panies may be disregarded. See 26 U.S.C. 9706(b)(1)(A) (coal

miner’s employment is attributable not only to the coal operator

that directly employed him but also to any “related persons”); 26

U.S.C. 9704(a) (providing for assignment not only to the coal

operator that employed a miner but also to related persons); 26

U.S.C. 9706(a) (providing that related persons are jointly and

severally liable). The Commissioner’s approach in this case con-

stitutes a reasonable application of a statute that she is charged

with implementing, and thus is entitled to judicial deference. See,

e.g., Barnhart v. Walton, 122 S. Ct. 1265, 1271-1272 (2002).

14

rendered by its employees in return for its promises of

lifetime benefits. That may well be why petitioner

Massey allowed its subsidiaries to continue to make

those promises throughout the 1970s and into the 1980s.

Moreover, Congress’s choice in the Coal Act to permit

liability to be imposed not only on the direct employer

but also on all sufficiently “related persons” was

particularly justified given the evidence before it that

coal operators’ use of nominally separate companies had

contributed substantially to the funding crisis that the

Coal Act was intended to solve. See C.A. App. 408-409,

423, 431; see generally Pension Benefit Guar. Corp. Vv.

R.A. Gray & Co., 467 U.S. 717, 729-730 (1984) (recogniz-

ing that Congress ordinarily may impose retroactive

liability on employers to fund employee benefits in

pursuit of “a rational legislative purpose,” such as to

spread the cost of those benefits among all those “who

have profited from the fruits of [the employees’ ]

labors”) (citation omitted); accord, e.g., Concrete Pipe &

Prods. of Cal., Inc. v. Construction Laborers Pension

Trust for S. Cal., 508 U.S. 602, 646 (1993); Connolly v.

Pension Benefit Guar. Corp., 475 U.S. 211, 227 (1986).

In sum, petitioners are not, as they claim, “sub-

stantially identical” to the former coal operator in

Eastern Enterprises with respect to the “critical facts

the plurality and Justice Kennedy relied on in reaching

their respective conclusions.” Pet. 15, 16. Accordingly,

even if petitioners had some other basis on which to

challenge their assignments, petitioners cannot validly

challenge their assignments on the basis of Hastern

Enterprises alone, and that is the only challenge they

have preserved in this case.”

5 As the court of appeals recognized, the “single issue” raised

by petitioners on appeal was “whether [their] assignments are

15

2. The Fourth Circuit’s decision in this case does not

conflict with the decision of any other circuit. Nor do

petitioners contend otherwise.

Indeed, the Third Circuit has held, consistently with

the Fourth Circuit here, that Eastern Enterprises does

not require the invalidation of assignments to em-

ployers that are not themselves signatories of the 1974

NBCWA or a subsequent NBCWA, but that are the

“related persons” of such signatories. See Berwind

Corp. v. Commissioner, 307 F.3d 222, 235-236 (2002)

(concluding that an employer’s position “is materially

different” from Eastern’s when the employer’s related

person signed the 1974 NBCWA or a later NBCWA),

petition for cert. pending, No. 02-995 (filed Dec. 24,

2002); Shenango Inc. v. Apfel, 307 F.3d 174, 186-187

(2002) (same). More generally, the D.C. Circuit has

held that assignments based on participation in the

1974 NBCWA or a subsequent NBCWA distinguish a

case from Eastern Enterprises, without attributing any

significance to whether the NBCWA was signed by the

party to which the assignment was made or by a related

person. Association of Bituminous Contractors, Inc. v.

Apfel, 156 F.3d 1246, 1257 (1998); accord Unity Real

unconstitutional under Eastern Enterprises.” Pet. App. A18. The

court of appeals thus did not consider any other constitutional or

statutory challenge to those assignments. See id. at B25 (district

court characterizes “[t]he dispositive question” in the case as

whether petitioners “are in a substantially identical position to the

plaintiff in Eastern Enterprises such that the decision in Eastern

Enterprises necessitates the conclusion that the Coal Act is uncon-

stitutional as applied to [petitioners]”); id. at B26 (district court

observes that petitioners could not prevail on any independent

takings claim given that five Justices had rejected such a claim in

Eastern Enterprises); id. at B39 n.17 (district court notes that peti-

tioners had not raised any due process claim aside from reliance on

Eastern Enterprises).

16

Estate Co. v. Hudson, 178 F.3d 649, 654-655, 658-674

(3d Cir.), cert. denied, 528 U.S. 963 (1999); Anker

Energy Corp. v. Consolidation Coal Co., 177 F.3d 161,

166-167, 169-174 (3d Cir.), cert. denied, 528 U.S. 1003

(1999).

The consistency of appellate decisions refutes peti-

tioners’ assertion that this Court’s guidance is needed

with respect to how Eastern Enterprises and “other

similarly fragmented decisions” are to be applied. Pet.

16.

3. This Court issued its decision in Eastern Enter-

prises nearly five years ago. The Commissioner has

long since decided which assignments should and should

not be vacated based on the holding in that case. It is

thus unlikely that cases such as this one challenging the

Commissioner’s implementation of Eastern Enterprises

will continue to arise in the future. Moreover, as the

elderly beneficiary population continues to decline as a

result of mortality, petitioners and-other assigned

companies will have to pay premiums for fewer bene-

ficiaries with each passing year. See Pet. App. Al3 n.11

(noting that petitioners were responsible for the

premiums of only 134 beneficiaries by the 1999 plan

year). For these reasons as well, this case presents no

question of continuing importance that warrants the

Court’s review.

17

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

MARK B. STERN

SHARON SWINGLE

Attorneys

MARCH 2003