SIDNEY COAL COMPANY, INC., et al., Plaintiffs-Appellees, v. SOCIAL SECURITY ADMINISTRATION, Defendant-Appellant (04-6286), MICHAEL H. HOLLAND, et al., Intervenors Defendants-Appellants (04-6291).
Nos. 04-6286/6291
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
October 19, 2005
05a0418p.06
SILER and DAUGHTREY, Circuit Judges; MARBLEY, District Judge.
Appeal from the United States District Court for the Eastern District of Kentucky at Pikeville. No. 01-00076—Danny C. Reeves, District Judge. Argued: July 28, 2005.
COUNSEL
OPINION
ALGENON L. MARBLEY, District Judge. In 1992, Congress enacted the Coal Industry Retiree Health Benefit Act,
FACTUAL AND PROCEDURAL BACKGROUND
I. The Coal Act
In 1947, the Bituminous Coal Operators’ Association and the United Mine Workers of America negotiated the National Bituminous Coal Wage Agreement (“NBCWA“), which created a trust fund to provide pension plans and medical benefits to retired coal miners and their families. This 1947 NBCWA resulted from a workers’ movement to bring employee benefits to miners. Eastern Enterprises v. Apfel, 524 U.S. 498, 504 (1998). Prior to this agreement, miners received largely substandard health care from sometimes unskilled “company doctors.” Id. Moreover, the cost of this company-provided care posed a substantial financial burden on individual miners. Id. The 1947 NBCWA, managed by three appointed trustees, funded the workers’ pensions and medical benefits with the “the proceeds of a royalty on coal production.” Id. at 505-06. In 1950, a new agreement made this trust fund a multiemployer one, which coal operators contributed to based on their production amounts. Under the 1950 NBCWA, the miners and their dependents were not promised specific benefits; rather, the coal operators paid a fixed amount of royalties into a central fund, and the trustees charged with distributing benefits were required to remain within a budget. Id. at 506-07. As a result, the level of benefits provided was less than consistent. Id. at 508.
In 1974, a successive agreement created four separate trusts and, for the first time, explicitly referenced benefits for retirees and their dependents. Prior to this 1974 NBCWA, retirees had never been expressly included in the group of eligible beneficiaries. Because of the expanded number of eligible beneficiaries, these trust funds began experiencing financial difficulties,
The Coal Act created a new multiemployer trust fund, the United Mine Workers of America Combined Benefit Fund (the “Combined Fund“), which is still in effect today. It assessed annual premiums against any coal operator that both (1) had previously signed an NBCWA (“signatory operator“) and (2) remained in business.
[T]he Commissioner of Social Security shall . . . assign each coal industry retiree who is an eligible beneficiary to a signatory operator which (or any related person with respect to which) remains in business in the following order:
(1) First, to the signatory operator which--
(A) was a signatory to the 1978 coal wage agreement or any subsequent coal wage agreement, and (B) was the most recent signatory operator to employ the coal industry retiree in the coal industry for at least 2 years.
(2) Second, if the retiree is not assigned under paragraph (1), to the signatory operator which--
(A) was a signatory to the 1978 coal wage agreement or any subsequent coal wage agreement, and (B) was the most recent signatory operator to employ the coal industry retiree in the coal industry.
(3) Third, if the retiree is not assigned under paragraph (1) or (2), to the signatory operator which employed the coal
industry retiree in the coal industry for a longer period of time than any other signatory operator prior to the effective date of the 1978 coal wage agreement.
Under the statute, then, the SSA must first try to assign a retiree to the coal operator that signed the 1978 or any later NBCWA and was the most recent operator to have employed the retiree for at least two years.
If the SSA cannot identify a signatory operator or related person still in business, as required by
II. The Supreme Court Decision in Eastern Enterprises
The Supreme Court, in Eastern Enterprises v. Apfel, 524 U.S. 498, 537 (1998), altered the Coal Act‘s application by voiding all assignments the SSA had made pursuant to the statute‘s third prong.
In a plurality opinion, the Supreme Court held unconstitutional the assignments to Eastern Enterprises and any other company in a similar situation, i.e., those that had not signed the 1974 NBCWA or any subsequent NBCWA (“Eastern-type” companies). The Supreme Court reasoned that because these companies had not participated in any agreement promising lifetime medical benefits to retirees, they should neither be held to such a promise nor forced to contribute to the Combined Fund.3 Id. at 535 (“Not
In fall 1998, pursuant to Eastern Enterprises, the SSA invalidated all assignments it had made to any Eastern-type company since the Combined Fund‘s inception on February 1, 1993, and temporarily designated these so-called “Eastern beneficiaries” as “unassigned.” In fall 1999, the SSA assigned approximately 1,500 Eastern beneficiaries to coal operators, like Plaintiffs-Appellees, that had employed the retired miners for the longest period and to whom it was constitutional to make assignments under § 9706, i.e., only those coal operators that had signed a 1974 NBCWA or later agreement and that remained in business.4 Of these 1,500 Eastern beneficiaries, the SSA assigned eighteen beneficiaries and their dependents to Plaintiffs-Appellees.
III. Procedural History
Plaintiffs-Appellees brought suit in the Eastern District of Kentucky challenging the SSA‘s authority to reassign those beneficiaries whose initial assignments were invalidated by Eastern Enterprises. Plaintiffs-Appellees asked the district court both to vacate the challenged assignments and enjoin the SSA from making such assignments in the future. In May 2001, the Trustees moved to intervene as Defendants. The district court granted the Trustees’ motion, holding that “the Trustees have a substantial legal interest in ensuring that the beneficiaries maintain their current assignments.” The parties then filed cross-motions for summary judgment. Additionally, the SSA moved to transfer the case, arguing that Massey, the parent company, had manufactured venue in Kentucky to take advantage of favorable Sixth Circuit precedent.5
Turning to the reassignment of Eastern beneficiaries, the district court acknowledged that the Coal Act failed to address explicitly the post-Eastern Enterprises landscape, but concluded that the SSA‘s construction was impermissible because it contravened the statute‘s plain and unambiguous language. The district court rejected the SSA‘s argument that its interpretation effectuated congressional intent by assigning the beneficiaries to the most responsible operators, reasoning that Eastern beneficiaries should simply be designated as unassigned.6 Accordingly, the district court declared all reassignments to Plaintiffs-Appellees to be null and void.
Following this ruling, Defendants-Appellants appealed to this Court, which, on April 1, 2004, sua sponte dismissed the appeal for lack of jurisdiction, stating that the district court had failed to provide a sufficient explanation for its certification of issues for appeal. Upon remand to the district court, Defendants-Appellants requested that the district court reconsider its decision in light of contrary subsequent authority from the Fourth Circuit and the District Court of the District of Columbia, which favored Defendants-Appellants’ position regarding post Eastern Enterprises assignments.7 Although the district court issued an order acknowledging the non-binding decisions of Pittson and Nell Jean, it reaffirmed its initial determination that the SSA acted ultra vires, and entered final judgment in favor of Plaintiffs-Appellees. Defendants-Appellants now appeal from this judgment.
I. Standard of Review
Because the district court granted summary judgment on undisputed facts, this Court reviews the questions of law de novo. Herman v. Collis Foods, Inc., 176 F.3d 912, 916 (6th Cir. 1999).
II. Venue
The SSA argues that venue is not proper in the Eastern District of Kentucky because only four of eight subsidiary-plaintiffs reside in Kentucky, not one of which actually received a post Eastern Enterprises assignment.8 These Kentucky subsidiaries, the SSA emphasizes, are merely jointly and severally liable should a non-resident Plaintiff default.
The relevant statutory provision is
A civil action in which a defendant is an officer or employee of the United States or any agency thereof acting in his official capacity or under color of legal authority, or an agency of the United States, or the United States, may, except as otherwise provided by law, be brought in any judicial district in which
(1) a defendant in the action resides, (2) a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) the plaintiff resides if no real property is involved in the action.
The statute‘s legislative history and the plethora of case law interpreting the statute, taken together, persuade this Court that
The purpose of this bill is to make it possible to bring actions against Government officials and agencies in U.S. district courts outside the District of Columbia, which because of certain existing limitations on jurisdiction and venue, may now be brought only in the U.S. District Court for the District of Columbia.
Id. at 539-40 (quoting H.R. Rep. No. 1936, 86th Cong., 2d Sess., 3-4 (1960)). The Supreme Court explained that prior to 1962, only courts in the District of Columbia were constitutionally permitted to issue writs of mandamus against government agencies and officials, forcing litigants seeking mandamus relief against government entities to incur “significant expense and inconvenience in bringing suits for enforcement of claimed rights.” Stafford, 444 U.S. at 534. Section 1391(e) aimed to make it more convenient for an aggrieved person to file suit against a federal entity. Thus, interpreting the phrase “the plaintiff” to mean “all plaintiffs” or “each plaintiff” would substantially limit the statute‘s breadth and undermine congressional intent.11
Each court faced with the same issue has interpreted “the plaintiff” to mean “any plaintiff,” finding that Congress intended to broaden the number of districts in which suits could be brought against
“courts have read the statute as if the change had been made and have held that only one plaintiff need satisfy the residency requirement.“).
In sum, the case law and legislative history compel this Court to hold that the
III. Assignment of Eastern Beneficiaries
Where a statute addresses clearly “‘the precise question at issue,‘” we “‘must give effect to the unambiguously expressed intent of Congress.‘” Barnhart v. Walton, 535 U.S. 212, 217 (2002) (citing Chevron, U.S.A, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984)). In this case, the Coal Act contains no language as to how the SSA should have handled the precise question raised by the Eastern Enterprises holding. Without explicit guidance, the SSA, working with a newly narrowed group of qualified coal operators, assigned each Eastern beneficiary to the coal operator that had employed that beneficiary for the longest time prior to the effective date of the 1978 NBCWA, but who had also signed a 1974 or later NBCWA. The question becomes, then, whether the SSA, in its effort to comply with Eastern Enterprises, permissibly construed the statute. See Pittston Co. v. United States, 368 F.3d 385, 402 (4th Cir. 2004) (“Because Congress provided no explicit instructions, the question presented is whether the Commissioner‘s reassignments under § 9706(a) are ‘based on a permissible construction of the statute.‘“) (citing Chevron, 467 U.S. at 843).
To determine whether the SSA permissibly construed the statute, the rules of statutory construction tell us to determine “(1) whether the statute unambiguously forbids the Agency‘s interpretation, and, if not, (2) whether the interpretation, for other reasons, exceeds the bounds of the permissible.” Walton, 535 U.S. at 218. Plaintiffs-Appellees argue that in assigning eighteen Eastern beneficiaries and their dependents to Massey and its subsidiaries, the SSA impermissibly interpreted the Coal Act, asserting that all Eastern beneficiaries should have been designated permanently as “unassigned.” We disagree. For the reasons stated below, we hold that the SSA permissibly construed the Coal Act when it assigned the Eastern beneficiaries to Plaintiffs-Appellees.
Plaintiffs-Appellees assert that the statute‘s plain language unambiguously forbids the SSA‘s post-Eastern Enterprises assignments because, first, the Coal Act provides for assignment to “one – and only one” coal operator, emphasizing that
[I]f the retiree is not assigned under paragraph (1) or (2), to the signatory operator which employed the coal industry retiree in the coal industry for a longer period of time than any other signatory operator prior to the effective date of the 1978 coal wage agreement.
In this case, “the signatory operator which employed the [miners at issue] in
the coal industry for a longer period of time than any other signatory operator prior the
effective date of the 1978 coal wage agreement” and which “remains in business” is indisputably Eastern (or Blue Diamond or Alabama Power). That they can not be made to pay for miners Congress allocated to them by no means elevates Appellees into liability. . . . Congress made no provision in the Act for a next most responsible operator.
Plaintiffs-Appellees then argue that the statute unambiguously states that only two types of employment can be disregarded under the statute: employment with a coal operator no longer in business and employment with a coal operator during a period when that operator “was not a signatory to a coal wage agreement.”
Plaintiffs-Appellees’ arguments concerning the statute‘s express limitations on the SSA‘s authority ignore the retroactive nature of Eastern Enterprises, which held that all assignments to Eastern-type companies since February 1, 1993 had been unconstitutionally imposed. See Rivers v. Roadway Express, Inc., 511 U.S. 298, 311-12 (1994) (holding a “judicial construction of a statute is an authoritative statement of what the statute meant before as well as after the decision of the case giving rise to that construction“). In other words, Eastern Enterprises held that the SSA “should never have assigned the retirees to Eastern in the first place.” Pittston Co., 368 F.3d at 403. After determining that its Eastern-type assignments were “invalid from the beginning,” the SSA began anew, assigning beneficiaries “to comport with the terms of the statute as well as the Constitution.” Id.
By assigning each Eastern beneficiary to the operator to whom they should have been assigned in 1993, i.e., only those operators that had signed a 1974 NBCWA or later agreement, the SSA applied the criteria in a manner that allowed the Act to “function effectively and serve [its] purpose even after the invalid application has been excised.” Carnival Cruise Lines, Inc. v. United States, 200 F.3d 1361, 1367 (Fed. Cir. 2000).15 Furthermore, Plaintiffs-Appellees’
Sigmon Coal is misplaced. There, the Supreme Court analyzed a statutory provision of the Coal Act in which there was no constitutional infirmity, holding that the SSA had interpreted a provision in contravention of the provision‘s unambiguous meaning. Sigmon Coal Co., 534 U.S. at 461-62 (“When the words of a statute are unambiguous, then . . . ‘judicial inquiry is complete.‘“) (citing Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253-254 (1992)). In this case, however, the SSA had to respond to an unforeseen situation resulting from a Supreme Court ruling that declared a statutory application unconstitutional. This situation, unlike the one presented in Sigmon Coal, was neither addressed nor contemplated by the statute‘s plain language.
To the extent that Plaintiffs-Appellees argue that the SSA‘s decision to disregard consideration of Eastern-type employment impermissibly broadens
In finding the SSA‘s interpretation of the statute permissible, we are guided by the Coal Act‘s legislative history. Congress‘s primary purpose in enacting the Coal Act was to “identify persons most responsible for plan liabilities” and to “provide for the continuation of a privately financed self-sufficient program for the delivery of health care benefits.” Energy Policy Act of 1992, Pub. L. 102-486, § 19142, 106 Stat. 3037 (1992). Congress also intended to keep the number of unassigned beneficiaries to a minimum by reserving that category for those miners whose former employers were no longer in business.
The Supreme Court‘s opinion in Barnhart v. Peabody Coal Co., 537 U.S. 149 (2003), is instructive. There, coal operators objected to any assignments made by the Commissioner of SSA after October 1, 1993, because the plain language of
In the words of Senator Wallop‘s report delivered shortly before enactment, the statute is “designed to allocate the greatest number of beneficiaries in the Plans to a prior responsible operator. For this reason, definitions are intended by the drafters to be given broad interpretation to accomplish this goal.” 138 Cong. Rec. 34001 (1992). To accept the companies’ argument that the specified date for action is jurisdictional would be to read the Act so as to allocate not the greatest, but the least, number of beneficiaries to a responsible operator. The way to reach the congressional objective, however, is to read the statutory date as a spur to prompt action, not as a bar to tardy completion of the business of ensuring that benefits are funded, as much as possible, by those identified by Congress as principally responsible.
Id. at 171-172 (footnote omitted). Moreover, the Supreme Court concluded that failing to assign a beneficiary to the responsible coal operator would shift an unintended number of beneficiaries to the “unassigned” category, which Congress intended to reserve for those
On October 8, 1992, on the heels of the Conference Committee Report on the Act and just before the vote in the Senate adopting the Act, Senator Wallop gave a detailed explanation of the Coal Act‘s provisions for unassigned beneficiaries, which assumed that the “unassigned” would be true orphans:
“As a practical matter, not all beneficiaries can be assigned to a specific last signatory operator, related person or assigned operator for payment purposes. This is because in some instances, none of those persons remain in business, even as defined to include non-mining related businesses. Thus, provisions are made for unassigned beneficiary premiums.” 138 Cong. Rec. 34003 (1992).
The Senator‘s report says that the transfer to the Combined Fund from the UMWA Pension Plan and AML Fund would be made because “unassigned beneficiaries were not employed by the assigned operators at the time of their retirement.... [I]f no operator remains in business under the formulations described above, that retiree becomes an unassigned beneficiary . . . . [The Coal Act‘s] purpose is to assure that any beneficiary, once assigned, remains the responsibility of a particular operator, and that the number of unassigned beneficiaries is kept to an absolute minimum.”
In this case, the analysis in Barnhart holds firm. Invalidating the SSA‘s reassignments would undermine Congress‘s stated intent to “identify persons most responsible for plan liabilities.” Energy Policy Act of 1992, Pub. L. 102-486, § 19142, 106 Stat. 3037 (1992). If these operators’ former employees simply fall into the unassigned category, the costs of those retirees’ benefits will be borne by coal operators that never employed the retirees despite a former employer‘s solvency. See Nell Jean Indus. v. Barnhart, 224 F. Supp. 2d 10, 24 (D.D.C. 2002) (“By providing an elaborate set of assignment criteria and control group liability, Congress cast a wide net to capture as many responsible parties as possible to hold accountable for retiree benefits. Only those retirees whose former employers (and their related persons) no longer exist are left unassigned.“).
Given Congress‘s stated purpose in enacting the Coal Act—to identify persons most responsible for plan liabilities—the SSA‘s construction of the statute post-Eastern Enterprises effectuated this intent by reassigning the Eastern beneficiaries to the most responsible operator, as opposed to stretching the unassigned category to cover non-“orphaned” beneficiaries. Other courts have found similarly. See Pittston Co. v. United States, 368 F.3d 385, 404-05 (4th Cir. 2004) (considering the “legislative intent expressed by Congress to minimize the number of unassigned beneficiaries by assigning each retiree to a coal operator most responsible for providing benefits,” and holding that the reassignment of Eastern beneficiaries to Pittston, the company that had employed them the longest, was a permissible action on the Commissioner‘s part because doing so fulfilled this legislative intent); see also Elgin Nat‘l Indus., Inc. v. Barnhart, Nos. 04-5243 and 04-7094, 2005 U.S. App. LEXIS 7361, at *1 (D.C. Cir. Apr. 27, 2005) (unpublished) (“Elgin‘s argument pertaining to the reassignment of beneficiaries after Eastern Enterprises is rejected for the reasons set forth in Pittston Co. v. United States, 368 F.3d 385, 401-05 (4th Cir. 2004).“); Wheeling Pittsburgh Steel Corp. v. Barnhart, 229 F. Supp. 2d 539, 554 (N.D. W.Va. 2002) (“[T]he Commissioner had the authority to
In sum, the SSA permissibly construed the statute when it assigned Eastern beneficiaries to Massey and its subsidiaries on the grounds that these coal operators had employed the retirees for the longest period of time and had signed the requisite NBCWA‘s. The Supreme Court‘s ruling in Eastern Enterprises left an unprovided for situation in its wake, and the SSA‘s actions in response thereto effectuated the Coal Act‘s intent: to assign as many beneficiaries as possible to the most responsible coal operator. Because at least one of these beneficiaries’ employers is still in operation (Massey and/or a subsidiary), they are not “true orphans” and thus should not be classified as “unassigned beneficiaries.” A contrary holding would allow Plaintiffs-Appellees to shirk their responsibility and would directly contravene the Coal Act‘s stated purpose. The Coal Act‘s plain language does not forbid the SSA‘s construction thereof, and the statute‘s legislative intent, as well as the retroactive nature of the Eastern Enterprises decision itself, supports a conclusion that the SSA‘s interpretation was a permissible one.
CONCLUSION AND RECOMMENDATION
We AFFIRM the district court‘s denial of the SSA‘s motion to transfer venue and agree with the district court that venue was properly in the Eastern District of Kentucky. The district court‘s judgment with regard to the Coal Act is hereby REVERSED.