Unity Real Estate Co. v. Hudson

we are satisfied agreements THE OPINION OF COURT signed by in 1978 and there- BECKER, Chief Judge. promised after that miners and their de- In Eastern Enterprises Apfel, 524 pendents v. would receive lifetime benefits 141 L.Ed.2d 451 funds, from the that, benefit and at all (1998), the Supreme Court held events, unconstitu- agreements these informed reason- tional portion of the 1992 Coal Indus- expectations able that the benefits would (Coal try Act), Retiree Health Benefit Act continue for Similarly, life. we conclude (1994 §§ 26 U.S.C. II), Supp. 9701-9722 & it was reasonable for to required former coal operators mine conclude plaintiffs’ withdrawal to for health benefits for retired min- from the funds contributed to the funds’ ers and their dependents, applied to a financial instability, though agree- operator former who last signed a coal ments permitted themselves withdrawal. industry benefit agreement in 1964. history The of coal mining in country this case, this we are apply asked to Eastern to supports also Congress’s step decision to former coal operators mine sig- who were in when the provided funds that health natories to industry coal agreements in benefits to retired miners to began falter. 1978 and thereafter. was Eastern decided question we must then answer is by a sharply Court, divided parties and the whether congressional those judgments disagree what, as to if any, principles com- provide enough of a rationale for closing manded a majority. gap between the contracts and the plaintiffs, (“Uni- Unity Real Estate needs of the benefit through funds ty”) (“B and T”), Barnes & Tucker & Co. mechanism of the Coal Act. Consistent challenge the Coal Act as applied to them with our process due jurisprudence, we as both a violation pro- substantive due ask whether the Coal Act awas rational cess and an unconstitutional uncompensat- response to problems Congress identi- taking. ed Although it is exceedingly fied, taking into account the Act’s retroac- question, close and we highly sympa- tivity, which highly disfavored in our thetic plaintiffs’ to situation, unfortunate in legal culture. In light Congress’s find- which retroactively imposed liability oper- ings and in the context of extensive gov- ates to bind them to commitments they ernment regulation of the industry, coal had thought satisfied when they left the we hold that it was not fundamentally un- coal industry, we conclude that the Act is unjust fair or for Congress to conclude constitutional applied plaintiffs. to these that the former coal companies should be Accordingly, their recourse must be to responsible paying benefits, for such Congress rather than to the courts. if they even were longer no contractually First, conclude, albeit with substan- obligated to pay into the benefit funds. hesitation, tial that the Coal Act does not The scope enactment, retroactive of this violate process. due Our process in- due especially as applied plaintiff Unity quiry proceeds (eleven parts. two We acknowl- years), approaches edge per- edge at the outset gap there a action, missible legislative but we cannot between what the contracts between the say that the beyond law is legislative union and the mining companies required power. levy per ton financed fund retirement compensable find also decline We producers. by signatory mined will on coal Act that the ground on the

taking to receive designed Fund business, The 1950 because out put use the contributions employer major of a reasoning contrary to it is y current benefits health provide Eastern. funds Supreme Court it cases, (and, certain miners retired whenever Moreover, relief granting members). more Several family that would credibly argue plaintiff two the next over signed were NBCWAs regulation of business out be driven this basic altered of them None decades. in evaluat difficulties major create format, beginning although much modern constitutionality of ing giv- and the BCOA were the UMWA to con 1971 decline therefore We legislation. provid- of benefits levels power over the “categor en as a burden regulatory this strue Fund, removing discre- destruc ed under the total analogous taking” ical Trustees of formerly vested of real tion specific piece aof of the value tion Corp., 53 F.3d Chateaugay In re Fund. See property. Cirl995). (2d 478, 482 History Procedural I.Facts Agreement The 2. 1971 Act the Coal History A of had changes that 1974, demographic In In- Coal in the Agreements Early 1. benefits, along with cost of the increased dustry Retirement Employee the passage of the (“ERISA”), has 29 U.S.C. Act Security the Coal Act history behind Income The the restructuring the pages of a of led to seq., § et discussed 1001 been often See, 118 1974 the NBCWA e.g., place, In its Fund. reporters. federal multiemployer the Briefly, separate (plurality). four at 2137-42 established and coal pension The benefits covering follows: are as two plans, facts relevant The benefits. particu- nonpension of a dealing series with has witnessed two industry past 1950 Benefit the over were disputes entities nonpension vitriolic labor larly benefits principal- health Plan, provided motivated half-century. In which 1976, and health before decent retired demands for workers who by miners’ coal ly those Plan, Mine benefits, which covered United Benefit the 1974 retirement and (“UMWA”) 1976. January called or after retired on of America who Workers guaranteed explicitly industrial NBCWA To forestall strike. nationwide The dependents nationalized miners and Truman paralysis, President of cards—which the execution services Following their health mines. coal retain benefits— Krug-Lewis to Plan health known them access gave came what had warranty relinquished express No such government life.” “for Agreement, We agreement. and the any earlier The UMWA appeared the mines. of control in more detail changes Association Operators’ these discuss Coal will Bituminous coal III. group of Part (“BCOA”), multiemployer below. infra first National executed the then producers, Agreement The 1978 Agreement 3. Wage Bituminous specified (“NBCWA”). The 1947 NBCWA labor unrest to continued response employment and conditions terms benefits, the concerns over unresolved and things, extended and, other among mines new provi- incorporated NBCWA by providing Agreement Krug-Lewis “orphaned” care assuring health sion miners. pension and health employers (that is, miners whose miners industry or either the abandoned had provided in 1950 signed new NBCWA A complementary UMWA), together concessions, union that, exchange for provisions. “evergreen” “guarantee” a welfare create BCOA would “guarantee” obligated clause signato- report in late Congress’s response ries to make sufficient contributions to to the suggestions commission’s took the maintain benefits at negotiated levels form of the Coal Act. The Act folded the during period agreement, whereas 1950 and 1974 Plans into a single UMWA- before there promise had been no to main- (the sponsored Fund) entity Combined tain any particular benefit level. The “ev- wove an elaborate tapestry designed to ergreen” required clause signatories who ensure that all retirees who eligible were to mine continued coal to making continue to receive health preex- benefits from the benefit contributions for as long as such isting Plans would obtain them from the required contributions were by future Combined Fund. The Act also created the NBCWAs, regardless of partic- whether a Plan, designed provide operator ular actually signed those subse- eligible benefits to retirees and their de- quent NBCWAs. Additionally, the 1978 pendents who were not beneficiaries NBCWA for the specific first time defined Combined Fund and who were not receiv- health benefits covered, that would be ing health care coverage directly from for- practice that continued in agree- later mer employers. ments. Finally, for leaving miners cov- linchpin statutory scheme is ered service or after January contained in Act, section 9706 of the Coal primary responsibility for retiree health which directs assignment by the Social care coverage was shifted from the Security every Commissioner of eligible UMWA multiemployer system to individu- beneficiary ato “signatory operator” who al coal companies, with the Plan re- is still “in business.” The signatory opera- tained an “orphan” plan for retirees (“SO”) tor must signed have at least one whose former went out busi- NBCWA and must pay premiums to the ness. Combined Fund sufficient to defray the estimated annualized health care costs for The Coal Commission J. assigned its beneficiaries. See 26 U.S.C. problems economic that prompted § 9704.1 A retired assigned first, miner is the remedial measures in the 1974 and possible, if to the SO that both signed the 1978 NBCWAs continued plague to the (or any 1978 subsequent) NBCWA and industry. particular, the cost of health also employed him for at years least two care rose steeply throughout 1980s, recently more than any other SO. See id. orphaned number of miners increased dra- 9706(a)(1). § If no fits that descrip- SO matically as more and more left tion, the retired miner is assigned to the the industry, and aging an population (or 1978 any subsequent) SO that em- swelled the retired miners’ By ranks. ployed him most recently for length of 1990, contributions from a shrinking num- 9706(a)(2). time. § See id. If the retired ber of producers proved coal insufficient to miner never worked for 1978 or subse- fund the four plans, benefit and those quent SO that business, still in he is plans were awash in red ink. assigned to the SO employed for him The UMWA struck the Pittston Coal longest period of time. id. See Company nearly for 11 months in 1989-90. 9706(a)(3). § The Secretary of intervened, Labor bro- kered a rapprochement, and, part of the B. The Parties negotiated settlement, set up a commission 1. Unity to study the industry’s problems and rec- ommend ways of rejuvenating the Unity benefit corporation is a owned by mem- plans. The Coal Commission issued its bers of the family. Jamison Unity is cov- 1. provides also law SOs must parently an proven necessary assign to SOs amount, proportional additional responsibility to num- orphaned retirees because assignments, ber of initial provide coverage availability funding of other sources. orphaned However, ap- retirees. it has 118 (plurality). at 2142 n. 3

655 are not representations These rupted. person” “related as a Coal Act by the ered Trustees. by disputed members companies several —formed ultimate- were family' the Jamison —that One, Un- South 2. B&T Unity. into absorbed ly since coal mining ion-PA, been had 1544 Combined assigned B&T amend- and 1947 NBCWA signed and twenty 1992 and some Fund beneficiaries Un- South through 1961. thereto ments been, from had B&T Plan beneficiaries. when mining ion-WVA, up took pro- coal large scale on, engaged 1974, off, signed left Union-PA South opera- mining its last closing until duction NBCWAs, a bank- although 1978, and agreement terminated 1986. It tion reject it leave granted court ruptcy January effective mine manage Jami- another in 1981. Yet 1981 NBCWA oper- mining coal of its peak At the 1987. Co., & Coke company, Stewart son 1980s, B&T 1970s to from the ations from benefit funds UMWA into the paid UMWA-rep- approximately employed operations, 1968; it ceased when party to awas B&T miners. resented funds, but into benefit stopped paying NBCWAs and to receive continued employees former its opera- membership through its related Other Funds. from the it withdrew Although tors’ association. into paid and NBCWAs signed companies the 1984 prior the association from times various funds at benefit UMWA bound to be NBCWA, agreed it later 1970s.2 through the the 1960s from basis, adher- a “me-too” NBCWA commer- a small currently owns Unity Its requirements. Agreement’s ing in Greens- lot parking building cial terminated NBCWA participation indi- two employs Pennsylvania burg, time, discontinued At that B&T earns who viduals, officer corporate its retirees plan and employer individual annual janitor. Its per year and $7,000 Benefit by the 1974 covered to be were left $50,000 approximately are revenues gross (the plan). “orphan” Plan $85,000. approximately worth its net currently confined B T’s activities & 74 beneficiaries assigned Unity was reserves, work- paying its coal leasing Fund, Fund and owed Combined claims, lung black and compensation ers’ $440,000 in un- 30, 1995, over September its from drainage mine treating acid and addition, Unity was premiums. paid if it is claims B&T mines. closed Plan the 1992 of beneficiaries assigned Act lia- Coal its paying continue forced 31, 1996, owed and, January of be consumed will bilities, assets all of its was assignment $18,000. The Fund over and this years, two than less of 63 employment Unity’s prior upon based dispute. its Unity and for miners, had worked who for ten average, on companies, related History Procedural C. Act its Coal Unity represents years.3 the constitution- challenge plaintiffs total assets its six over times are liabilities to them applies it Act as ality bank- it will be that, pay, if forced and Union-WVA's South carryover from loss lia- from itself attempting to distance While 2. events, never Unity has bankruptcy. At all ignored have owners Unity and its bility, challenge "related relationships. legal corporate presented of close the benefits Act, its hence and suggest that acted provision Although persons” we do not repaid regardless the Jami- faith, Unity fall or note stand bad must obligations $230,000 promissory from family over beneficiaries. assigned the Unity son notes was how Coke, which & by Stewart Coal given $150,000 (over Unily in 1969 merged with compa- worked for had Thirty miners 1993), and and in 1992 paid approached, many multiemployer pension was unconstitutional: Compensation for plans in precarious were position, and so the taking would be return the of sums Congress MPPAA, enacted the which im- required paid to by be Act. the Although posed a payment obligation upon any em- the law not work invasion, did a physical ployer withdrawing from such plans. The the plurality noted that economic regula- obligation depended on employer’s the tion can constitute a taking. Eastern, See share plan’s the unfunded vested bene- 118 S.Ct. at 2146 (plurality). The plurality fits. looked to three factors particular signifi-

cance determining whether a taking had The MPPAA applied retroactively occurred: the economic impact of the reg- withdrawals within the five preced- months ulation, its interference with reasonable ing its enactment. The Eastern plurality investment-backed expectations, and the explained that upheld the Court the retroactive character of the government MPPAA because liability retroactive pre- action. See (plurality). id. vented employers from taking advantage reiterated its made a difference with- tract by process legislative lengthy

of a taking long as as there was no holding that law. the Congress revised drawing before not generally employer’s liability would an plu- Eastern Gray, retroactivity the The “ experience proportion to its ‘out of short, limited emphasized, was rality ” 645, 113 S.Ct. 2264 Id. at plan.’ with the delays in- generated the needs at Connolly, (quoting U.S. See process. legislative herent 1018). lia- employer’s Although S.Ct. Eastern, (plurality). at 118 S.Ct. exceeded the MPPAA bility under Connolly v. reviewed then plurality The liabili- cap on withdrawal original ERISA’s Guaranty Corp., Pension Benefit found “no basis ty, the reasonable Court (1986), 89 L.Ed.2d 106 S.Ct. legal ceiling that expect [ERISA’s] issue, this again at was the MPPAA where at 113 S.Ct. Id. never be lifted.” takings challenge. subject of a time as voluntarily negotiat- employer The 2264. that Connol- explained Court The Eastern making scope, within ERISA’s plan ed a employers’ despite the upheld law ly un- the MPPAA neither under its burden not have they would expectations that 646-47, 113 id. unjust. nor at fair See not unlawful “legislation because pay, 2264. S.Ct. settled upsets it otherwise solely because this plurality summarized The Eastern Eastern, at 2148 118 S.Ct. expectations.” cases follows: line of employers though Even (plurality). Elkhom, Con- in Turner opinions Our ex- agreements contractual Connolly had make clear Pipe [ ] nolly, and Concrete their contributions limiting pressly leeway has considerable held plan, Court pension including legislation, fashion economic impair Con- contracts not express commit- affect power to contractual Connolly, 475 U.S. authority. See gress’s Con- private parties. ments between Connolly 223-24, 1018. 106 S.Ct. at liabili- impose retroactive may also gress not work MPPAA did noted that the Court where particularly degree, ty to some the econom- Although invasion. physical periods to short and limited is “confined substantial, the was impact of the law ic produc- practicalities required previ- related to directly was amount decisions, Our legislation.” ing national employer relationship between ous possibility however, open the left have the eco- and therefore pension plan, be unconstitutional might legislation not establish impact factor did nomic liability severe retroactive imposes if it 225, 106 at See id. taking occurred. had that could parties class of a limited Moreover, inter- was no there 1018. S.Ct. liability, and anticipated the have investment-backed ference with reasonable substantially liability extent time the at because expectations, experi- parties’ disproportionate enacted, prudent was MPPAA ence. regu- plans were pension had notice that (cita- trigger might 2149 (plurality) withdrawal at

lated and that omitted). id. held that the obligations. plurality additional financial tion Eastern, presented 227,106 Act, applied case. such extreme charm for The third time impact factor the economic Pipe On in Concrete challengers the MPPAA’s “no doubt test, plurality the found takings Products, Laborers v. Construction Inc. & a considerable Act has forced that the Coal Trust, 113 S.Ct. 508 U.S. Pension Eastern,” between (1993). upon burden In that financial 124 L.Ed.2d The million. Id. (plurality). and $100 fact that case, $50 on the focused employer the requir- cases previous plurality referred pension to its commitment contractual par- to a liability proportional be liability. ing withdrawal impose plan did not the chai- object of with the experience ty’s the con- the claim rejected The Court lenged legislation. pension plan In the strike the law down applied to Eastern. cases, parties voluntarily had negotiat- He takings analysis found inapplicable: pension plans, ed and maintained at least “The Act imposes Coal a staggering finan- while, consequently statuto- cial petitioner burden on the ... but it rily imposed liability was linked to their regulates the former mine owner without own conduct. See id. 118 S.Ct. at 2149-50 regard to property. It operate does not (plurality). participate Eastern did not in upon or alter an identified property inter- negotiations for the 1974 or subse- est, and it applicable is not to or measured NBCWAs, quent agree nor it did to make (Ken- by a property Id. interest.” at 2154 contributions “[The thereunder. J., nedy, Instead, concurring). empha- he subsequent agreements] first sized the law’s distaste for retroactivity suggest an industry commitment and found that the Coal Act’s extreme funding of lifetime health benefits for both retroactivity process due ap- violated family retirees and their members.” Id. at (Ken- plied to Eastern. id. at See 2158-59 (plurality). J., nedy, concurring). When the Court upheld retroactive legislation past, in the plurality The then concluded that noted, he at statutes issue were “reme- Act substantially interfered with dial, designed impose actual, measur- Eastern’s reasonable investment-backed able cost employer’s] expectations. [the business id. at (plurality). employer had been able to It reasoned that avoid retroactivity generally past.” law, J., Id. at (Kennedy, disfavored and that the length (citation period concurring) quotation and internal retroactivity and the ex- omitted) (alteration marks liability tent Eastern’s in original). raised substan- questions Justice Kennedy tial of fairness. See id. at 2152 concluded that “[statutes (plurality). Finally, may plurality process found invalidated due grounds government nature of the under the egregious action to be most of circum- unusual, quite stances. liability represents because im- This case one of the posed substantial, based on rare conduct instances per- which even such a thirty fifty years past, and unre- missive standard has been violated.” Id. lated J., commitment Eastern made (Kennedy, or concurring).

injury it caused. (plurali- See id. at 2153 dissented, Four Justices finding neither ty). a taking nor a process due violation. plurality declined to reach Eastern’s B. process Drawing substantive due argument, al- Instruction Eastern: from though it noted that takings pro- Does It Control due This Case? analyses cess are often correlated. See id. splintered nature of the Court (plurality); see Connolly, also at makes it difficult princi a guiding distill 223,106 S.Ct. plurality 1018. The reiterat- ple from Eastern. There are five votes past ed Court’s concerns about using against the plurality’s Takings Clause “vague contours” process of the due However, analysis. Justice Kennedy’s to nullify clause laws. process substantive due reasoning is not a (citation omitted). 2153 (plurality) Jus- ground “narrower” might that we take to tice agreed Thomas with the plurality’s constitute the controlling holding. There Takings analysis Clause but sepa- wrote is a conceptual fundamental difference be rately to reaffirm his belief that Ex takings tween a claim and a substantive Post Facto apply Clause would also process due claim. government If the predicament. Eastern’s See id. at 2154 pays just compensation, may prop take (Thomas, J., concurring). erty public Takings use under the Justice Kennedy in concurred the judg- Clause. process protections, Due by con ment, providing trast, the critical fifth vote to define what government may not

659 expectations that funda- suggesting rence all. It is the party at private of require a supports 1974 our mentally changed after liability rule and between difference Eastern, A. & 118 S.Ct. at Calabresi conclusion. rule. See Guido property Rules, (“[The 1974, 1978, Melamed, Liabil- and Property (plurality) subse- Douglas Rules, suggest View first indus- Inalienability: agreements] quent and One ity funding Harv. L.Rev. of lifetime try commitment the Cathedral their, Merrill, (1972); Econom- retirees and Thomas W. both health benefits Use, members.”); (Kennedy, L.Rev. at family Cornell id. ics Public (Ste- (1986). sure, the result J., in this case at 2161 concurring); To be see also id. be- be the same vens, J., claims would min- dissenting) (stating two impo- only potential taking is “implicit agreement operators’ cause ers’ and 1974”). but neither monetary obligation, sition of a explicit Although was made limited is a more ground present- constitutional not recognize Court of the other. post-1978 version focused on argument ed with had may and thus not have signatories sub- Amici, companies, other former evidence about it all the available before is that holding of Eastern mit contracts, very com- distinction later is legislation funding employee benefits that Eastern is not pels the conclusion imposes substantial if it unconstitutional before us. fours the case all with employers, liability on selected retroactive injuries is unrelated to liability if that Eastern To the embodies extent employ- promises made those or caused capable application, principles of broader reasonably accu- may be this ers. While en- process analysis that due we believe sense, provide it does general rate in a concerns. We compasses the relevant determining how substantial guidance with which identify calipers must set of the fit be- tight how too substantial or is of the challenged provisions to evaluate the liability acts and parties’ past tween Act, the relevant we believe that Coal must be. does on them Nor imposed be- gap extent of the is the measurement sub- an intersection help define between companies’ contractual the coal tween law, as takings process due stantive require- the Funds and promises to being here is word “unconstitutional” our making Act. In ments of the sins, cover, if not a multitude used to decision, deference to Con- give we first least two. to be problem gress’s determination therefore, Eastern, judgment mandates addressed, Con- and then ask whether in a if stand only for the with comports fundamen- solution gress’s position to Eastern identical substantially process. of due principles tal plu- Enterprises respect to both Kennedy’s concurrence. rality and Justice Due Retroactivity and Process III. Bituminous Contrac- See Association of Review A. The Standard of 1246, 1254-55 tors, 156 F.3d Apfel, v. Inc. (D.C.Cir.1998) [ABC, (reaching Inc.] when standard of review Eastern). In addi- conclusion about same alleged violation process due substantive tion, the five-four bound to follow we are arbitrary and it bars forgiving; Eastern, takings claim against the vote action. At congressional irrational “cate- plaintiffs’ although we will consider long has a time, legal system our same claim, presented takings” gorical ret well-justified distaste for standing and Part IV. detail greater laws, heightened infra of their because roactive See, e.g., East unfairness. potential for NBCWAs plaintiffs signed Because J., (Kennedy, con ern, at 2158 thereafter, factually they are 1974 and distrust “singular our curring) (discussing Enterprises. Eastern from distinguishable statutes”); George- Bowen v. retroactive concur- and the plurality Language 204, 208, end, Hosp., adopted town Univ. 488 U.S. sures for that lest we in- (1988). 468, 102 S.Ct. L.Ed.2d 493 fringe on legislative authority traditional predictive judgments to make when en- unlike that in The situation is not faced acting regulatory policy. nationwide Broadcasting System, Turner Inc. v. Fed- Commission, eral Communications (citations omitted). Id. 117 S.Ct. 137 L.Ed.2d 369 applying While are not a First (1997). Turner, involving case a First claim, process Amendment test to this due challenge Congress’s Amendment regu- we consider Turner instructive a situa systems, lation of applied cable the Court this, tion such as where both careful scruti scrutiny required intermediate sub- ny retroactivity of the involved and defer stantial evidence justifying Congress’s con- legislature’s ence to the judgments about that regulation necessary, clusion but cognizable appropriate harms and reme emphasized importance nonetheless are in dies order. We must wheth decide Congress: deference to er support sufficient evidence exists that, obligation Our sole is “to assure Congress’s judgment post-1978 signa formulating judgments, Congress has justly tories of NBCWAs could charged drawn reasonable inferences based on responsibility for retirees’ health ben substantial evidence.” ... [Substan- efits, promises they based on the made to tiality is to be measured in this context coal miners and on the effects of their by a standard more deferential than we departure industry from the on the Funds. judgments accord to of an administra- Pipe, See also Concrete 508 U.S. at tive agency. Congress’ We owe findings 113 S.Ct. 2264 (Congress’s judgment re in part deference because the institution ceives deference even when its retroactive “is far equipped judicia- better than the problem solution to a has some weakness ry to ‘amass and evaluate the vast es). We will then evaluate whether it was bearing upon” amounts of data’ legisla- Congress rational for legislate to close questions. tive principle This spe- has gap between companies’ prom the coal cases, cial significance one, like this ises and their contractual obligations, tak involving congressional judgments con- into ing retroactivity account the cerning regulatory schemes of inherent law. complexity and assessments about the

likely interaction of undergo- industries ing rapid economic and technological B. Does Support the Evidence Congress’s change. Though in degree, different the Conclusion that Companies deference to respect one Responsible Should Be Held ? akin to deference owed to administrative 1. The Relationship Between Benefits agencies because expertise. of their by Work Miners Performed matter, This is not the sum of the how- Before we problems ever. address the occa- Congress’ We owe findings an departure sioned the mass additional measure of of coal com- deference out of respect panies industry from the authority for its the 1980s and exercise the legislative power. expectations NBCWAs, Even in the realm created First questions dispose Amendment we must first plaintiffs’ where Con- ar- gress must upon gument base its unjustified conclusions Coal Act is evidence, substantial deference because it charges must be them with financial re- findings accorded to its sponsibility as to the harm non-coal-mining-related to be avoided and to the remedial problems.4 mea- health plaintiffs argue dependents further there is no even if the miners worked relationship poten- reasonable day. argument between their for them a fact, This is skewed. In liability tial employment and the former rela- the miners for which the are tionships; responsible responsible plaintiffs, for the miners' worked for the on aver-

661 negotiations with companies promises and liability that their plaintiffs submit The miners, the responsi- especially since NBCWAs the to their actual disproportionate is companies’ for just necessary to to the they required were as bility because dig- all health con- or operations blasting and for as dependents continued miners’ work. ditions, mining however unrelated ging. conclude,

Thus, liability their does they the Funds’ Responsibility 2. Insta- for way on benefits in rational depend bility in the the miners’ work received from they that B & and argue T’s defendants respon- company may be That the mines. proportion- Unity’s liability to the Funds is family does not miner’s entire sible for a in experience the coal general al to their past unrelated to bene- the burden make have been industry. companies min- fits, true that a While is however. the miners liability assessed based on to do with his virility may have little er’s miners’ de- actually employed, and those post-1978 agreements the productivity, plurality The Eastern consid- pendents. family coverage; when clearly provided for relationship employment the former ered compa- the signed, were agreements those because the alone insufficient reli- with some actuarial predict, nies could benefits, lifetime at least promised had not family for responsibilities ability, their after Eastern the years until left was Coverage dependents for benefits. at 2150 industry. See companies peace, and the of labor price the Eastern, however, Uni- (plurality). Unlike promise the of that a benefit from received T, members, at some ty and B & as BCOA Nobel, F.Supp. coverage. See and points negotiated for adhered time that the require does not Proportionality very agreements the established injured physically have parties burdened Like em- the benefit funds issue. law. The of retroactive beneficiaries Pipe Connolly, ployers Concrete plurality relied on a concatenation Eastern voluntary is linked to their liability propor- circumstances to find lack plan, though a benefit even negotiation of First, not re- tionality: the benefits were the costs retroactively increased second, and, injuries, to work-related lated Eastern, 118 S.Ct. negotiation. of that See anything were not related the benefits (plurality). at 2149-50 promised. Enterprises ever Eastern Moreover, be contended credibly it can case, only Usery, lung the black benefit companies departure such law present the first factor was helped T and B & Unity’s subsidiaries proportional, while Con- upheld plans crisis create the financial present the second factor was nolly only B & to the Act. When ultimately led upheld. Those cases and the law was also T, employers, left several other along with necessary propor- demonstrate ensued. See litigation Unit industry, type, and there tionality may be of either Nobel, F.Supp. v. ed Mine Workers present. The for both to be need no (W.D.Pa.1989), aff'd, 902 F.2d contrary the coal limits argument Cir.1990). (3d consequence, the As a ac- past for their responsibility companies’ B T benefits became funded & retirees’ It makes more physical events. tions miners. orphaned After the 1974 Plan for recognize the relevance sense years industry or be twenty disabled for many years. evidence in age, There no qualify employment hypo- suggest plaintiffs' course that the record to 9703(f); occurred; instead, § In Cha- 26 U.S.C. re benefits. the evidence ever thetical with teaugay, at 489. In combination F.3d Congress correctly found that indicates assigning statutory beneficia- scheme to benefits many were entitled beneficiaries a covered miner SO for whom ries to long years of service on miners' based particular companies. require- Furthermore, eligibility longest, day this initial worked one disquieting against result guards ment qualify a for benefits miner of work would statute, plaintiffs. posited work since a miner must under events, became, profitable had mining these the Plan to borrow funds which amounts remaining employers required were to to an taking.” disagree, “erosion We since simply takings increase their contribution rates to make this is a variant of the total up Similarly, reject the shortfall. when claim that South below. The law does bankruptcy, it require plaintiffs stay Union-WVA declared in- not the to business, longer formed the Funds that it was no a necessary element provide business and longer prior taking” would no of all the “erosion cases. See, health benefits for e.g., its retirees. As Mr. Brooks-Scanlon v.Co. Railroad Comm’n, contemplated 396, 399, 183, Jamison when he notified 251 U.S. 40 S.Ct. (1920) the that Trustees South Union-WVA had L.Ed. 323 (legislature cannot re- down, shut at quire company see J.A. the 1974 Fund to doing continue busi- ness, responsibility though may require was forced to take for those it company retirees. v. fulfill legal obligations United Mine its if it chooses Schifano Trust, Instead, operations). Workers Plan & 655 continue the Coal 1971 Benefit (N.D.W.Va.1987) F.Supp. (litigation merely recognizes Act that all acts have arising out of South Union-WVA’s consequences, bank- and that sometimes it Thus, ruptcy). plaintiffs’ permissible acts in- a company simply for to walk Fund, creased the on the away, leaving burden contrib- employees former state, uting to its overstressed at least lurch. degree.

some ABC, Inc., Appeals the Court of Although may, plaintiffs the Fund heavily D.C. Circuit relied on the dis- argue, financially have been pre-1974 stable when tinction between participation plaintiffs industry, industry left the post-1974 partic- was sure- the coal ly departures ipation. foreseeable The court that found the distinction lead instability, given relevant for two post-1974 the benefit reasons: funding agreements began explicit promises structure under the NBCWAs. While the benefits, lifetime plaintiffs up contend matter we take be- the benefit funds low, funding and also created a plaintiffs became structure unstable after the (or induced) even companies allowed industry left the changes and there were industry slough to leave the off the required contribution levels from burden of their retirees’ benefits on the operators who remained in the indus- remaining companies. Before a com- try, it was also foreseeable that those con- pany that industry left the did not create tribution levels could change, and it was any obligations part on the compa- other plaintiffs NBCWAs -to which the ad- nies to increase contributions to the bene- hered that initially system created a vul- funds, fit but after 1974 that changed. nerable to such changes. It was thus ra- Judge Silberman persuasively: reasoned operators tional to conclude that in this position surely [I]t is rational for the responsibility should bear some expect companies’ for the member legislation. costs of the corrective failure to contribute “It while their retir- surely proper for Congress legis- ees received benefits contributed to retrospectively late to ensure that costs of underlying plans crisis that faced a program are borne the entire class of in the late Although 1980s. the coal persons rationally that Congress believes may contractors not have been the should bear them.” Sper- United States v. dominant underfunding, cause of that ry 52, 65, Corp., 493 U.S. 110 S.Ct. (1989). legislation need not burden the most 107 L.Ed.2d 290 responsible party to survive rational argue holding them basis review. responsible for the benefit funds’ financial ABC, Inc., 156 F.3d at 1255-56. instability because left the coal indus- try ABC, would obligate every operator to re- Inc. also found that Justice Ken- main in industry no matter nedy’s how un- additional concern im- liability Congress may reasonably problem. employment rela- past on a based posed acts, taken parties all of the whose was satisfied include be “remedial” tionship should problem, even if who, rise to together, gave with- unlike employers contributions of each the 1974 the individual industry after from the drew Filbum, v. 317 U.S. “withdrew small. Wickard Such agreements. Cf. 127-28, Ill, 87 L.Ed. 122 to contribute commitment prior from their (1942) reasoning to (applying in time the same precisely point the funds power). Clause obligation Congress’s dramat- Commerce ... at which the benefit ‘contributed expanded, and therefore ically Background 3. The Government condition of the perilous financial Regulation plans put which the benefits and 1974 1950 govern- of background consider the We ” (quoting at 1257 East- jeopardy.’ in Id. significant as well. regulation ment J., ern, con- (Kennedy, 118 S.Ct. at heavily regulated industry has been coal curring)). decades, including government-im- the for T, B Unity and & Unlike posed Krug-Lewis Agreement, members, nego- participated BCOA structure. the basic health benefits created funding post-1978 the tiations that created expecta- companies had no reasonable from the They benefited structure. expand government that the would tion Al- peace. by obtaining labor NBCWAs in the coal of health benefits regulation companies the the contract allowed though history of labor unrest industry, the given to the retirees obligations their to unload See 136 intervention. government Trustees, reasonably they the should onto 27, (daily ed. Oct. Cong. Rec. S17814 strategy anticipated that such Glenn) have 1990) (statement (containing of Sen. might Funds and well threaten the would on report Congressional Research Service response. We prompt congressional interven- the extensive of federal history irrational for Con- say that was cannot and benefits of tion into the health status miners’ former em- charge the gress labor relations workers and into coal benefits, the costs of their ployers with industry generally).5 more for ben- qualified the miners lifetime when operators were also aware The coal because of their from the Trustees efits re- government number of growing (we on this employment expand former paid, that vested benefits quirements employers’ departure infra) and the point employer an was contractu- whether or not prob- to the industry contributed from them, in- as the ally obligated Trustees. confronting the lem indicated. response to ERISA dustry’s to those analogous thus they The situation is Unity urge T that B & and in which Pipe, Connolly and Concrete most of the burden responsible that, history light of However, a Court found B & T was the Funds. pension regulation, federal departure from employer, whose large after 1978 reasonably assume could not a thousand beneficia industry added over funds obligations pension indi that their “orphans,” and its to the Funds’ ries specific terms of exceed would never significant. therefore impact vidual was contracts, at Connolly, 475 U.S. see addition, partially Unity may be held 1018, 227, they reason- nor could because, though its individual responsible not in- Congress small, that ably assume problem was to the contribution with- statutory cap on ERISA crease the parallel effects of its actions aggregate Pipe, liability, see Concrete drawal companies contributed by actions other 30, 1986) (bill Indeed, July discussed target (daily specific ed. amicus LTV was Glenn, Heinz, Dole, Durenberger, Byrd, Sens. that it continue at least one bill to mandate Aug. (daily Specter); at E2714 ed. & id. miners for its retired to fund health benefits Rahall). 1986) (statement Rep. Cong. early Rec. S9879 as 1986. See parties only through 113 S.Ct. 2264. The of benefits lasted the term of agreement. Additionally, pension plans aware that could UMWA were well negotiator testified in the course of other subject employers liability to retroactive litigation everything up for rene- underfunding, and could have cases gotiation at the end of a contract and Congress might similarly act foreseen parties agreed have to eliminate respect to health benefits. entirely. See District UMWA Language The Contractual Jf. (4th Corp., v. Allied 735 F.2d Turning expectations created vacated, (4th Cir.1984), 765 F.2d 412 Cir. contracts, question the threshold is 1985). distinguish whether we need to between funding It is true contribution explicit implicit promises of lifetime requirements were limited the life of the Although benefits. concen- agreement, “ending Agreement when this explicit promises, trate on an issue on terminated,” in subsequent 1978 and position strong, which their we think arguments NBCWAs. Yet all of these explicit promises necessary are not weakness, have the same fundamental justify congressional order to action. The which is that togo the contract and question expectations what reasonable expectations not to the reasonable companies’ the coal actions created. While might by have been created the contract. expectation an cannot be reasonable with- negotiator’s The testimony UMWA is a world, out some foundation in the real an particularly strong example of this: explicit representation companies that the parties agreed could have to eliminate provide would lifetime benefits is not re- any given negotiation, benefits but there quired, expectations since may reasonable no realistic chance that would. arise from a consistent course conduct The not dispute defendants do as well. provide payments contracts did not for the argue Plaintiffs and amici that the coal by mandated Act. If Coal the con- companies any promises, never made im- provided, tracts had so Act would plicit explicit, expectations or any unnecessary. or raised have been plaintiffs’ They of lifetime dissection of the point benefits. first contracts is brilliant exercise, NBCWAs, and were we deciding the text of the which case on did not principles labor and contract law the out- require companies the coal .themselves would come be clear their favor.6 But provide lifetime benefits under all circum- this is not brought an action for contractu- They stances. dissect the various contrac- al violations. We focus our attention in- provisions tual and characterize im- their stead on what Congress might conclusions (1) port as follows: the health card that rationally parties’ draw about the relations miners received for “for benefits life” did expectations, might fairly and and what it (2) benefits; guarantee not any specific gap do to close the between the contractu- “evergreen” clauses referred to al obligations companies of the coal employer commitment to continue fund- the Funds’ actual liabilities. benefits, ing did promise anything but not (3) benefits; scope about the of those The NBCWAs did not in themselves “evergreen” only applied opera- clauses guarantee companies that the coal (4) business; stayed tors who in the coal pay for lifetime benefits for retirees and the contracts allowed to be dependents. sus- There thus is a tenable (5) reduced; pended guarantee argument or that the NBCWAs did not obli- However, arguments agreement not all of these the health card sections of the did persuasive even as a matter of contractual not rescribe the other sections contract below, interpretation. As we discuss after specifications does not mean that those were specified 1978 health benefits were in the without effect. contract, evergreen and that the clause provisions, accompanied by contractual pay- the Funds to the Trustees of gate benefits, practice and understand- the evolution of well-established because lifetime expectations can create reasonable indisputably ings, not structure did the benefit Indeed, beyond the four corners of a guarantee. extending culminate in lifetime may be unable to companies Though have a number contract. courts former coal expectations, Congress is not peo- and reasonable enforce those strong arguments, posi- Congress’s so constrained. We believe that our disagree could well about ple reading them. tion is bolstered a careful impose liability None- choice theless, plurality opinion, did not could Eastern which we conclude (that is, suggest implicit promise that an reasonably have reached the conclusions it contract) clearly one found in the expectation of lifetime bene- did about the companies’ respon- the coal would be insufficient to sustain the Coal fits and about if that promise the Act had reasonable basis sibility for the situation which cre- changes practice penumbra after the actual or Funds found themselves Instead, promises. ated contractual 1970s and 1980s. of the plurality found no evidence of Clarity a. Contractual implied promise. lifetime Kennedy, (plurality). Justice submit Eastern likewise, clarity on the focused not the relevant turned on the fact contract but on the lack of a connection pro- provisions clearly did NBCWA pre-1978 operators and re- between We believe that for lifetime benefits. vide expectations and tired miners’ reasonable “spin” on significant is a subtle but this structure. See id. instability in the benefit view, found that the plurality’s J., (Kennedy, concurring). at 2159 were un- obligations imposed on Eastern obligations. The related to its contractual b. Lifetime Benefits that, during par- Eastern’s plurality noted plaintiffs that the industry, argue NBCWAs ticipation in the retirement benefits,” and promised far extensive never “lifetime health benefits were less became; expecta- reasonable only were that the miners’ than later the benefits Furthermore, the NBCWAs would have tion based on not vested. benefits also remained in any operators who subject to or termination been were alteration sign industry and continued to than those later the with far fewer constraints their benefits agreements the of control from the imposed shift perspective, indefinitely. From that Trustees to the BCOA and the UMWA. a ser- fact, pro- retroactively Act transformed categories of beneficiaries Coal entire commitments into four-year not ies of three or under the Coal Act were vided for NBCWAs, decades-long obligation. open-ended, an and “Eastern part of the older contemplated liability for could not have agreements plaintiffs’ reading of the to the provision of lifetime benefits has is too crabbed. The NBCWA of deceased miners.” widows to health ser- separate thirteen references All these (plurality). at 2150 “until death.” “for life” or vice cards was no rational facts meant there simply this referred Plaintiffs submit that past acts relationship between Eastern’s no one would ever a health card that obligations. Act-imposed and its Coal reduced to a that could be away take but force, any at time. piece paper worthless any as we Connolly If retains However, the 1978 NBCWA does, did contractual clarity think it references to cover- separate sixteen dispositive. have provisions far from Connol- death,” it also refers “for life” or “until age whose limits ly itself involved a contract health bene- an to receive “entitle[ment] as those were at least as clear in at least one section. until death” crystalline Even fits contracts at issue here. most, NBCWA, XX, portability. At plain- ensuring at tion of Art. 116. The possession a health plaintiffs argue, inextri- that this reference was tiffs submit merely card entitles a retiree to whatever to the references to health cably linked benefits, if any, but think that were available under agree, service cards. We in- plaintiffs health cards NBCWA then effect. The slippage between lifetime that, terpret simply “lifetime” mean if lifetime health counsels plaintiffs’ position: place, The life- an NBCWA were miners could against the period not lose their benefits after a fixed may just easily time health card be seen (a problem of time that had' arisen as a shorthand reference to lifetime bene- fits, parties past when the Trustees cut off retired may why which did (in carefully negotiated years con- miners after five or some other fixed correct this tract) period). the reference to until “benefits language, synonymous This death.”7 reading This a strained of the terms appears re- language, the health card death,” life” and “until refer to “for bargaining parties’ understanding flect the (the persons dependents) miners and their provision that the lifetime of health bene- and not to the continued existence of requirement any fits was an absolute Furthermore, argument NBCWA. this Nobel, F.Supp. contract. See much, plaintiffs does not aid the (finding operators that the coal understood through pas NBCWAs were effect language benefit was crucial lifetime Act sage day, and even to this to the ratification of contract and that although no longer signa therefore abandoned its at- BCOA tories to them. There is no real-world tempt language). to remove such guarantee difference between lifetime guarantee do not rest our decision and a while

We on refer- lasts NBCWAs death”; rather, exist, especially guaran ence to “benefits until it is continue to as the supporting depend any particular a datum the overall conclusion tee did not em expected that the health card was guar- ployer’s continued adherence antee benefits for life. The 1981 and 1984 The fact that con NBCWAs. NBCWAs NBCWAs continue in the same vein with tinue is evidence that it was reasonable to continue, coverage expect them sixteen references “for life” or and thus that appreciate expect “until death.” While we the was reasonable to that a “lifetime” plaintiffs’ arguments guarantee, force of the even one that could theoretical contrary, persuaded are that it if ly expire system we the entire NBCWA collapsed, in expect reality guaran have been reasonable for miners to a lifetime York, actually that the “lifetime” health City card tee. D’Amico v. New 132 Cf (2d 145, 151 Cir.1998) pro- (reasoning meant that lifetime benefits would be F.3d that in anyone possession vided to of a health the occurrence of an event is evidence that justified predicting card. a decisionmaker was event). that ap- Plaintiffs argue nonetheless the pearance phrases plaintiffs point of the “for life” “un- further out that the subsequent language til death” in the 1974 and 1950 and 1974 Plans contained that, insufficient, agreements imply any does not commit- if stating assets became provide suspended ment to lifetime benefits. Accord- benefits could or reduced. them, 1974, ing incorporated we should understand the The Plans were into the 1978, 1981, doing by lifetime health card as no more than and 1984 refer- NBCWAs Moreover, serving plaintiffs func- valuable administrative ence. note that However, plaintiffs point provision 7. The also note that the “benefits of the was that language appears provision until death” dur- beneficiaries were entitled to benefits discussing ing any period they restrictions on benefits whenever did not exceed the beneficiary earnings earnings exceeded the limit. limits until death.

667 reasonably required or be seen as subject to modification the Plans were amendment, benefits to all retirees and provisions were lifetime and there dependents possession of a health the event of “[i]n that would take effect card; the had the effect contractual terms plain- Plan.” The of the 1950 termination binding the Trustees to lifetime com- that when miners re- tiffs also contend mitment, although they did not of them- cards, specifically they health were ceived companies the coal to the same selves bind subject were their benefits told commitment.8 or time.” amendment termination “at course, Report. Annual Of later Despite plaintiffs’ contention that designed to limit NBCWAs were cases that “for life” holding numerous so, defining authority to do Trustees’ wrongly de- means lifetime benefits were by establishing provided, the benefits to be cided, unpersuaded that those cases card, a health eligibility lifetime See, support for their lacked conclusion. ability to alter eliminating the Trustees’ e.g., Chateaugay Corp., In re 945 F.2d union without the consent of the benefits (2d Cir.1991); District and the BCOA after 1971. Plan & UMWA v. UMWA 197%Benefit (4th Trust, Cir.1987); 826 F.2d 282-83 always But the stated clearly NBCWAs F.Supp. v. Grubbs for limited terms. UMWA they were effect (W.D.Ark.1989); Nobel, F.Supp. at employer plans for health The individual that, all assert 1178.9 under the benefits that were established events, cases into throws these Eastern NBCWA, the 1950 and 1974 like Supreme disagree, doubt. because the We Plans, purpose providing had the stated nothing Court said about Trustees’ Agree- the term of this “during benefits obligations, up nor did the take Court plaintiffs conflate the issue of ment.” The posN1978 contracts at all. companies’ contribution whether the coal “lifetime,” they Furthermore, were requirements to the submis- contrary contract, clearly were not under the plaintiffs, lower court sion of the these provid- whether the contracts provisions the issue of analyze cases did contract, The life- health recognizing ed the Trustees benefits. lifetime put intended to provide time health card was obligated were benefits pre-1974 practices just “during agreement,” end to the Trustees’ the term of this cutting companies only required off if their former em- beneficiaries as the were during the term of contract. ployers delinquent paying were into contribute temporal lan- ignoring if received for Rather than this Funds or had Thus, that other lan- guage, the decisions found period time. the Trustees set Funds v. Robin- argue Health & Retirement plaintiffs also that the Trustees UMWA 8. The son, 562, 102 S.Ct. 71 L.Ed.2d 455 U.S. that were limited to understood benefits (1982), benefits. also refers to "lifetime” agreement. When the 1974 term of the argue plaintiffs that See id. at 565-66. The 6, 1977, expired on December NBCWA place were in at all times relevant NBCWAs stopped providing health benefits to Trustees Robinson, provides no and so that case to miners, subsequently negotiat- and the retired suggesting would be basis for that benefits prohibited retroactive fund- ed 1978 NBCWA the absence of an NBCWA. available in but, significant, ing This is of such benefits. However, argument actually favors the this given funds were fundamen- that the benefit that we are not We reiterate defendants. tally reconfigured at the same time to focus deciding what construing the contract but employers, it would have been on individual generate. expectations might it In reasonable few with those months retro- difficult deal persisted analysis, the fact that NBCWAs that re- actively during the transition to the new decades, always possible although was for it delay gap by gime. The short necessitated defendants, expire, favors the during negotiating a new contract bitter long renegotia- history of NBCWA since the disprove general strife does not labor expectation tion makes promise in the future. of lifetime benefits more reasonable. would continue contract, certainly possessed credible Congress combined with testi- in the guage obligated expected that miners those bene- mony negotiators, from the evidence Commission, example, lifetime benefits. See provide Trustees to fits. The Coal 29, UMWA, F.2d at 282. reported Congress in 1990 that District may contain contradic- That the contracts legitímate Retired coal miners have ex- not, tory language does health care benefits for pectations of contend, re- amici make construction life; promise they received was unreasonable;- in- quiring lifetime benefits during working lives and that stead, in both pointing there evidence was they planned their' retirement how it was not unreason- directions. Just as hon- years. That commitment should be that the con- able for courts conclude ored. benefits, provided it was not tracts lifetime its con- Id. at vii. The Commission based Congress rely on simi- unreasonable for evidence, including clusions on substantial evidence, Congress could though lar even industry participants testimony many from fact, reasonably disagreed. also have on both sides of the issue. Even a dissent- judicial deci- .we could even consider such Commission, ing member of who was sions, were refer- the earliest of which president company, of a coal acknowl- Report, enced the Coal Commission post-1978 agreements that the cre- edged Congress’s data conclusion that justifying promise ated a of lifetime benefits. See id. promised, since Con- lifetime benefits were (statement Commissioner Hol- reasonably findings gress may look sten).10 Although statutory the Coal Act’s aof coordinate branch. See Coal Comm’n years, proposed scheme was nine and two 3, 28, 47, Report at 55-56. respectively, Unity after and B & T ceased then, is not whether the question, NBCWA, and that is be bound truly health benefits are “for life” but time, certainly significant period companies whether the former coal can say beyond pale cannot that it is justly promises be associated lifetime nature light commit- lifetime benefits that contract run ment at issue. against argument the Trustees. The acceptable, by virtue of the c. Other Contractual Provisions limitations, companies to contractual negotiations place of the 1970s took away walk and leave the Trustees and the context, companies changing legal as the Coal remaining industry in the coal report recog- underlying Congress the tab. And it is this Commission’s made clear that Congress claim that we think could ration- nized. ERISA ally reject. regard, promised pension going In this we reiterate who benefits were them, parties what obligation give our is to determine to have to and when the Congress reasonably negotiated agreements, have found. the 1974 and later Ives, legislative process. 10. The of the Coal See J. Atwood conclusions Commission Eastern; Report suspect by Clearing Congres- are not rendered Federal Document House although plurality Kennedy Testimony, Ways and Justice sional House & Means Over- Benefits, reasonably sight, 22, concluded that could not Coal Workers June Retirement pre-1978 signatories respon- findings decide that were 1995. The Coal Commission's creating expectations persuasive sible for efits, ben- evidence which Con- lifetime remain from gress signatory operators is notable that Coal Commission could conclude that it the "super remaining industry proposed provi- never the in the coal 1978 cre- reachback” after Eastern, challenged expectation a sion in Eastern. See ated reasonable of lifetime ben- (plurality); among at 2141 miners and their families. See Coal Comm'n Re- efits 61, 420, S5081, port Supp.App. Cong. (daily at at 422. also 138 Rec. S5082 ed. The (refer- 1992) (statement Boren) proposal provided liability Apr. Commission's of Sen. 9706(a)(1) ring expectations by § under what became and created the 1978 Dole) 9706(a)(2), (statement only apply post-1978 agreement); (same). § which id. of Sen. 9706(a)(3) signatories, § while was added late contract, replaced by in More- certainly mind. another and then that idea was another, another, over, agreements in the new and then with at least starting benefits, if comparable industry discretion to set even the removed the Trustees’ all, participants and eligibility changed. and standards. After benefit levels place past at 24. that is what had taken for the Report Comm’n See Coal fifty years: steady expansion the slow but intensified, and the By anxiety had NBCWAs, they of benefits. The argue, over, nearly four miners struck for months negotiated were in a context where the things, health benefit issues. among other that, wage miners in return for believed government The federal intervened set- concessions, employment they and intro- agreement tle the strike. The 1978 guarantee be able to futures. “evergreen” “guarantee” the duced fact, above, as noted the NBCWAs have rearranged clauses and the benefit funds endured for after the changes decades in id. at The ever- major ways. See 1970s, evidencing the reasonableness companies only applied clause green a that agreements of belief would con- industry. in stayed mining the coal tinue. such, bearing plain- no on these As has except expresses insofar as it an in- tiffs ignore plaintiffs’ history We do not negotiators keep health tent industry, many which extended for funded, expected benefits miners thirty years decades and ended over after be, growing them to the context Enterprises industry. Eastern left the coal operators. burdens on NBCWA coal Unity years mined coal for 58 and B & T companies Unity for 80. Coal such as clause, guarantee signatory Under B T steady & received benefits from the employers committed to make the contri- expansion of health and retirement bene- necessary butions to maintain the contrac- fits, including wage concessions and union specified throughout benefits tually mechanization, agreement during term of the even if that re- agreement, period. participation long-term Their quired increase the contribution particularly made it understandable that specified rates outset of the contract expect companies’ miners would essentially term. This was shift “from promises of lifetime adherence obligation, defined contribution under would be honored. NBCWAs responsible only which were employers predetermined royalties, amount of to a 5. Conclusion obligation, form of defined benefit under suggests Our review of the evidence specific were to fund ben- interpretations plausible there are several (plurali- efits.” 118 S.Ct. at 2140 up Act. It leading of the events to the Coal ty). evergreen represented clause the case that former coal could well be bargaining parties effort similar responsible are not the most companies protect funding ongoing base for of the health of parties the deterioration coverage. health funds, the benefit but could also companies every- rationally significant find that bore The coal contend that, setting up a structure that recognized responsibility one when the contract ended, operators mining invited to abandon the benefits would end. caring for retirees on guarantee guaranteed clause benefits and shunt the burden Similarly, it be that provided parties. contribution if nec- other for increased this did not create a lifetime ben- essary only “during the term of the contracts Trustees, part of respond obligation The defendants efit on the Agreement.” evidence to yet Congress that the “end of of benefits” had substantial contract/end Congress’s defer to They contrary. We will equation story. is not the end of the problem min- on the nature of the argue judgments that it was reasonable for the it, causa- including judgments about expect ers to that the contract would be before B T years, B T because & was The & four expectations. and reasonable tion until 1988. by the 1984 NBCWA therefore, bound whether Con- is question, next substantially gap less time than the This is prob- of the evaluations gress’s reasonable exit from the coal busi- between Eastern’s measures justified lem the corrective Act, of the and the enactment Coal ness Act. in the mandated Coal Unity, quite it is still although, at least for Response a Rational Is the Act C. Coal degree We conclude this long.12 to the Problem Identified? retroactivity not so extensive as to vio- is support to that evidence exists Given standard, Kennedy’s although late Justice history interpretation of Congress’s Unity a close case.13 offers NBCWAs, industry and the the coal solely length on the relying Instead of enough that evidence is must ask whether retroactivity, we assess the relation- scope. a retroactive law of this justify retroactively imposed liability ship of the reasons, we conclude following For governmental interests asserted retroactivity does not that the Act’s Eastern, 118 at 2159 defense. See pro- of due render it irrational violation (retroactive rem- (Kennedy, J.,-concurring) cess. legitimate “a relation to edies must bear Length Retroactivity 1. The the interest which the Government asserts statute”); (Breyer, id. at 2163 supports the retroactivity analysis heart of The (“[A] J., law fundamen- dissenting) that is evaluation of the extent of the burden is an retroactivity tally unfair because of its is in relation to imposed by a retroactive law basically arbitrary.”). which is law parties’ prior acts. We note the burdened length of the an initial matter that the retroactivity plaintiffs argue The retroactivity dispositive in this alone is upheld in three situations: has been retroactivity less significantly (1) The case. employer oper- where the continues to that in Eastern. We evalu extensive than industry after the regulated ate (2) retroactivity law; not from the time the ate enactment of a retroactive when signed industry agree first plaintiffs otherwise be able to take employers would ment, right nor from the time the miners’ delays of the inherent advantage (3) accrued, from the legislative process; to benefits but rather where a work- or plaintiffs’ injury end of the contractual obli er’s or illness related his pay categorization benefits.11 For her This is unsatis- gations such work. factory. category adequate and for The first lacks Unity, period years, is eleven addition, part). concurring in the Com- expiration 11. We choose the of NBCWA obli- because, although gations Response, covered retirees prehensive Environmental Com- working plaintiffs may stopped (CERCLA), for the have pensation, Liability Act dates, obligated those the contracts 9601-9657, before plaintiffs §§ has an unlimited retro- U.S.C. paying benefits until to continue reach, yet spective temporal which has and, expired after 1978's ev- those contracts ergreen by any invalidated court to consider the issue. clause, plaintiffs left the in- until the See, Co., e.g., v. United States Monsanto dustry. This was true of the relevant (4th Cir.1988). F.2d 173-74 Thus, retroactivity contracts in Eastern. date miners' re- extends not from the of the Kennedy's explication 13.We focus on Justice during period tirement but from the principles process due because of the relevant were free of contractual ob- pro- plurality did not reach Eastern's due ligation for benefits. County, Rappa v. New Castle cess claim. See (3d Cir.1994) (where 18 F.3d 1058-61 retroactivity Usery approved 12. single approach can be to have the "no said actually greater much in some circumstances. Court,” majority support of a then "no lung black law was enacted in 1969 and particular constitutes the law of standard began imposing liability are bound land” and lower courts given Yet benefits were to miners who 1973. applied "substantially Useiy, result as identical” early left mine work as J., cases). (Powell, 428 U.S. at 40 n. 96 S.Ct. 2882 million, truly If a law is issue was between analytical foundation. $50 $100 retroactive, completed to conduct applying here the total whereas cost is well under enacted, was it would seem before law million date Unity to for and around $1 only marginally employer T, that an per year relevant million Bfor & an amount $2.5 before, doing been kept doing what had that will continue to decrease as beneficia- liability past would be based on Therefore, for ries die. are not acts, acts; the continu- post-enactment situation same as Eastern Enter- ation in the old business would not seem prises. If it justify retroactivity.

to would be process We will not find a due fundamentally unfair to make a business regulation violation if the proportional acts, pay long-past for its it would seem legitimately the harm by addressed put unfair equally business to legislature. proportionality Yet re leaving choice established business quirement only applied will be when the paying long-past or for its acts. harm government inflicted is sub posit a different We standard: enough stantial to raise an issue as to reasonably acts to re Where process whether a violation of due has injury dress an caused or to enforce an occurred. As the total absolute burden expectation by party, created it can do so increases, imposed by a statute it becomes and MPPAA retroactively. ERISA simpler for court to determine that the Congress may eases establish that retroac legislature has exceeded the bounds of ra tively employers bar from their em giving tionality, whereas a smaller burden means ployees pensions multiemployer vested error, Congress’s if any, likely is less plans leaving plans and then those to col justify the extreme sanction of invalida lapse. Those did not examine cases process tion on due grounds. oper whether the continued to If, example, Congress imposed for ate the same kind of business as did one-dollar burden on each member of some employees’ pensions when their former be industry, and we concluded that five cents categorization came vested. Our also rec was the amount that linked ognizes that workers can be harmed not justification asserted Congress’s just by late-appearing physical conse burden, we would still be disinclined to jobs quences but also em statute; strike down the the fact that the ployer’s up long-term failure to live to a imposed twenty burden times the ac- promise part that formed of the worker’s tual cost would be determinative. As expectations job. reasonable on the Both decreases, the actual amount of the burden promise job-related of benefits and a errors in its calculation increase in relative illness have a nexus to the worker’s em magnitude, leeway given but Con- ployment, as we supra discussed Subsec gress enacting leg- social and economic tion III.B.l. islation mandates we look absolute 2. The the Burden Size of magnitudes, rather than relative so that (other operators) The amici former coal our review is limited to those laws that call our attention to the size of the burden disruptions work of set- the most severe that, imposed, arguing because the East- expectations. tled plurality paying ern found that lifetime reasons, imposed a “considerable” burden For similar we doubt that a Enterprises, by company on Eastern former would have a credible definition required same is true for all other entities claim burden if it were of “considerable” Act, only responsible benefits under the since a small number of Act, if payment per beneficiary the amount of the beneficiaries under the even every part company is the same of the law. was in such dire financial straits under Eastern, however, liability push amount at it over the the total acts, by contractual lan- signalled traetual aggregate cost— It is the edge. economic beyond language, that guage going but imposed the burden total size of the —and that bridge decision to justify Congress’s signifi- that per-beneficiary the cost not fall into extracontractual acts gap. The jurisprudence. process due cant under our of instability the general categories: two certainly in this case is the burden While funding pre-Coal Act benefit structure substantial, carefully thus we will and companies coal con- which the former Act, is not the burden scrutinize the Coal tributed, lifetime expectation of acknowledge that in itself. dispositive We language by contractual benefits created particular put will these the Coal Act prac- parties’ with the consistent combined business, that fact is of but plaintiffs out explained, As have we consider tices. we burden, not ab- of relative again a matter justification for the these reasons sufficient and, not does solute burden because liability imposed by the Coal Act. issue, we re- process due determine the our of this consideration serve discussion it, put the NBCWAs As defendants takings plaintiffs’ analysis for our of the provide long-term a commitment to made Part IV. challenge only a short-term health-care benefits but infra Congress’s Proportionality S. funding.14 contractual commitment Contracts Ability Beyond To Go Private persuasively arrange- that this They argue suicidal, silly, would even for the ment be above, proportionality weAs stated miners and the funds were it not made impact. The proper test of economic industry the context of a belief that parties may imposed regulated burden pretty continue on much as it had found heavy, Connolly but the Court this, decades. past been for the few Given is not unconstitutional large that burden reasonably we think that could imposed is not out liability actually if the. that it would be fair to hold the conclude expe- proportion prior to the claimant’s of implicit companies part of their coal object legislation. of the rience with the they left the indus- promise, because when 226, 106 Connolly, 475 U.S. at See part meaning. lost its try explicit 1018; at 2150- see also ABC, Inc., 156 F.3d at 1255-57. justifications (plurality) (discussing the part analy- imposing liability plurality reject did not The Eastern factor). impact Prior sis of the economic government may that Connolly principle conduct experience can consist of private parties to require do more than expectations about creates reasonable up live to their contracts: object legislation of the or conduct [Contracts, express, however cannot impelled problems creates the authority of fetter the constitutional act. that the situa- legislature to Given may Congress. rights Contracts create impelled Congress to enact the tion that property, but when contracts deal both, Act contained elements of subject matter which lies within necessary proportionality believe that the Congress, the control of have exists. infirmity. cannot re- congenital Parties move their transactions from the reach bridges Act between the gap

The Coal power by of dominant constitutional promises companies contractual making contracts about them. funding required full extent of the regulatory If the statute is otherwise provide miners with lifetime health retired powers Congress, there- govern- The Trustees and the within benefits. fore, application may not be defeated argue companies’ ment that the extracon- attempt disposes plaintiffs’ an to insure that the Trustees contention that This guarantee up obligations, attempt clause of 1978 would have been live to their superfluous already a if there were lifetime ultimately failed. guarantee guarantee clause of benefits. The provisions. For were broad by private enough contractual to sustain the Funds, reason, legislation promises the fact that the same the Funds destroys disregards existing or contrac- would part benefits —made as always rights negotiations tual does transform BCOA-union broad. —were illegal into an This regulation taking.... is a reasonable reading of the NBCWAs, [H]ere, particularly the United States has taken given that the 1974 use, only nothing for its own has NBCWA removed the Trustees’ discretion provision limiting change nullified a contractual to benefit levels without the bar- liability by imposing gaining parties’ permission an additional obli- and that gation pow- that is otherwise within the began practice 1978 NBCWA enu- Congress impose. merating er of the exact health benefits to be Nobel, provided. F.Supp. 720 at 1180 223-24, Connolly, 475 at 106 Cf. S.Ct. (holding that benefits could not be reduced (citation omitted); Eastern, 1018 see also by despite or discontinued the Trustees (plurality). at 2148 S.Ct. Trust). the financial burden on the a Connolly, contract limited the em- operators’ The Coal Act extended if ployers’ obligations even contributions contractual obligations responsi- to include proved provide promised insufficient to bility expectations for the generated and challenged legislation benefits. The con- invited Essentially, contracts. obligation verted that defined contribution Congress’s attempt Act is equity. to do to a broader defined obligation. benefit agree ABC, Inc., We with the court in Congress enacted the law so that retirees which wrote: they could receive the vested benefits had constitutionally significant The feature promised they been and that legitimately about these later agreements is that expected. The found a Court reasonable they made it reasonable for relation the employers’ between acts and expect a state-imposed duty, similar ERISA-imposed liability, though even duty, thus rendered such a when employers could not have foreseen a de- eventually imposed, unfairly retroac- fined obligation benefit from the face of tive. appellants That could have suc- Here, the contract. the signatory opera- cessfully defended a breach of contract tors created a benefit fund with a legal suit seeking lifetime benefits under the obligation pay opera- out more than the agreement consequence. is of no in, required pay just tors were as in Connolly, Congress’s and the Coal Act was ABC, Inc., 156 F.3d at 1258.

attempt funding to close that gap. plaintiffs The argue implausible that it is plaintiffs distinguish

The Connolly by operators industry “very that in an with arguing problem high that the in that employers,” case was turnover of Connors v. (D.C.Cir. Co., companies that promises had made broad Link Coal 970 F.2d pension 1992), they perpetual funds to which con- a agreed would have pay pensions, tributed would but obli- funding obligation enforceable even gated contractually pay operators themselves against who left the coal indus- pension try entirely, much smaller amount to those whether for economic reasons that, costs, funds. (high competition The claim in this from labor other case, like) fuels, promises that the B T Funds would and the as & did or be- narrow, agree benefits were because those cause were out of coal. We unlikely companies benefits be reduced or eliminated at that the coal time, any obligations funding and the contractual intended to create this exact structure, period during although employment were broad of their exis- modern above, post-retirement tence. As we have discussed how- often include relations ever, Congress though promises may prove decided that even burdensome companies’ employer. the coal contractual when for an obligations change conditions specific targets Act neither however, “The Coal is whether question, crucial depends upon actions, interest nor through property the BCOA companies’ operation of its property the un- particular negotiations through which conducted, statutory created reasonable mechanisms.” ions were J., concurring). (Kennedy, and estab- at 2156 expectations about require vulnerable the dissent would funding Similarly, structure lished companies specific left “a when identification of “dumping” retirees governmental so, pre- proper- is not physical If or intellectual industry. interest the harms taking. to redress acting compensable from to find a ty” cluded in order J., dissenting). this situation. (Breyer, caused Id. five reasoning of these Justices Conclusion J. regulation costs any governmental against Act the Coal have evaluated We taking a if money could become business proportionality our traditional standards prevailed, plurality’s standards into retroactivity, taking and distaste for result. unacceptable that this would be on the account our deference J., concurring); (Kennedy, at See id. 2155 law. by the Ulti- to be addressed evils J., This (Breyer, dissenting). id. at 2162 close, we the issue is mately, although character- unaffected reasoning is targeted Act is conclude that the Coal taking burden as a “total” ization of the re- problem of insufficient address particular all of a it consumes because and that funds sources the benefit Moreover, even the company’s resources. who, in on those Con- puts the burden that it would gave no indication plurality bear judgment, should gress’s reasonable takings approach categorical extend retroactivity troubling, yet law’s it. The regulations of real outside the context commitments given the nature property. lia- relationship of Coal Act issue and industry, we past bilities to acts was not con Because the Eastern Court pro- due say that the Act violates cannot situation, however, we with this fronted cess. rejecting it forth our reasons for must set date, categorical To greater detail. Takings Categorical IV. prop has been used real approach maintain Unity and B & T also cases as Lucas v. South Car erty such Act is an unconstitutional the Coal 2886, olina, 1003, 112 S.Ct. 505 U.S. They applied to them. ask us taking as (1992). cases, L.Ed.2d 798 those approach be apply categorical takings of value re concept of “total destruction” claim, cause, will be they their businesses total assets but fers not to the owner’s they if have to ben entirely destroyed In property interest. some identifiable argu Act. In efits under the deed, eli a multi-billionaire be even drive the the Coal Act would ment categorical under a gible for an award entirely not of business plaintiff out small, if distinct takings approach some Court, plain and so the presented to the holdings were condemned or parcel of his takings retain a viable argue tiffs through regulation. rendered worthless claim. Therefore, language “total destruction” Justices, however, concerning property real should rejected the idea of cases Five mechanically applied to the situa not imposed only a financial that a law States, Branch v. United tion at bar. See identifying particular burden without (Fed.Cir.1995) (“Be 1571, 1576-77 a tak- 69 F.3d constitute property right ever traditionally high de cause of ‘the State’s particular fact that in a case ing. The dealings,’ the of commercial gree all of a of control might consume financial burden apply to real takings law that principles not seem entity’s assets would particular manner apply the same Kennedy’s analysis: property do change Justice (1916); imposing monetary liability.” to statutes L.Ed. 493 Flint v. Stone Tracy Lucas, 1027, Co., (quoting 107, 168-169, 505 U.S. at 220 U.S. 31 S.Ct. 2886)). (1911). 55 L.Ed. 389 Supreme has re- repeatedly Court City Pittsburgh Parking v. Corp., Alco jected argument that a tax—even a tax 369, 373-74, on a small set of may violate (1974). L.Ed.2d 132 businesses-— note in We this re process due or taking simply constitute a we, gard that along with other Courts of it may because force some of the regulated Appeals, have held that Coal Act obli entities out of business: gations are taxes. Lindsey Coal Min particular

The claim that tax is so Chater, ing (3d Co. v. 90 F.3d unreasonably high unduly Cir.1996) burden- (finding that the Act is “essen deny process some as to due is both tially a tax to pro continue a benefits familiar and recurring, but the Court gram”). consistently has either to under- refused plaintiffs respond taxa- these take the task of passing on the “reason- tion all cases prospective, concerned ableness” of a tax that otherwise is with- retrospective, liability, argument but that power of Congress or of state separate conflates two issues. The size of authorities, legislative or to hold that a liability depend does not on whether or tax is unconstitutional because ren- not the obligation retrospective. is If the a unprofitable. ders business argument is that the complete consump- premise .... The that a tax is inval- company’s tion of a is a categorical assets id if so bring excessive as to about the taking, retroactivity irrelevant; would be if business, destruction of a particular a such law would only categorical be a said, Court “uniformly rejected had been retroactive, taking when it was then we furnishing juridical ground no not really discussing are a “categorical” striking taxing [Magnano down a act.” taking. think that retroactivity, We while Hamilton, 40,] 47, Co. v. 292 U.S. 54 crucial process analysis, to our due is not 599, [(1934)]. S.Ct. 78 L.Ed. 1109 properly part considered as a of the cate- (8 Wall.) Fenno, Veazie Bank v. 75 U.S. gorical takings analysis. 533, 548, (1869); 19 L.Ed. McCray 482 The Appeals Court of for the Federal States, 27, v. United 195 U.S. 24 S.Ct. rejected Circuit plaintiffs’ has also ar- 769, (1904); 49 L.Ed. and Alaska 78 gument, with reasoning persua- we find Salting

Fish & By-Products Co. v. sive: Smith, 44, 41 255 U.S. 65 (1921),

L.Ed. 489 the same effect. constitutionality of the assessment Fish, In Alaska a tax on the manufac depend happenstance should not on the products ture of certain fish sus of the financial condition of the assessed tained, id., 48-49, saying, Court bank at the time of the assessment. We S.Ct., 41 at 220: if “Even the tax should any are unaware of of principle takings destroy a it would not be law imposition business made under which an of liabili- compensation invalid or require upon ty per taking is deemed a any se as to that ground alone. party Those who enter that cannot it. It would be upon a business take that perverse risk....” to hold a resulting that statute See also International Haivester Co. v. in a liability million would' be consti- $99 Taxation, Dept. Wisconsin 322 applied U.S. tutional as to any [entity] having 435, 444, 1060, 1065, 64 S.Ct. 88 L.Ed. a net worth than million more $100 (1944); Case, 1373 Labor Tax per Child but unconstitutional se as to 20, 30, 42 S.Ct. 66 L.Ed. having member a net worth than less (1922); Brushaber v. R. Union million. The assessment in both $100 Pacific Co., 1, 24, 236, 244, 240 U.S. 36 S.Ct. cases theory is based on the same limp along, never it could entirely so that con- the same meet liability and should going under. never showing profit a but fate. stitutional appropriate, be arguably That would States, F.3d at 1577.15 v. Branch United threatened for the remedy constitutional regulatory general that recognizes Branch use cred- harm, transferable way that applications laws, particularized unlike otherwise be what would mitigate can typical are the zoning regulations are at is- restrictions zoning when taking usually have challenges, takings targets of City Transp. v.Co. See Penn Central sue. that mutes applicability general kind of York, 438 U.S. Newof jurisprudence. takings behind the concerns (1978). total If it is the 57 L.Ed.2d law, less of a the reach broader converts of the business destruction segment of powerless likely it we taking, perhaps then Act into out to bear unfairly society being singled part of the obli- simply declare should as a whole should society a burden that B T out of busi- drive & that will gation bear.16 Yet approve the rest. taking ness and the dissent As the concurrence further into plunge courts would this practical considerable suggest, Eastern finance. intricacies of business to find were we would arise problems B T because Unity and & Deciding for takings cogni- claim categorical plaintiffs’ bankruptcy by into they will forced have to example, we would For zable. Box open up a Pandora’s Act would justify could point what decide at every eco- question into that would throw Unity grounds. on these relief granting Companies imaginable. regulation is nomic soon as it of business as go will out contrast, adjust accounting practices T, will B & pay. ordered to any particular regulation prove years, when its under two apparently go profitable destroy them enough be the last the Act consume liabilities under would be com- enterprises. problem The until B & we wait Should of its reserves. if, sug- plaintiffs as counsel Unity? pounded position as Would T in the same is we should evalu- argument, at oral bankruptcy gested be away from year a being entity of an without status ate the financial required B T be enough? & Should for tak- corporate at relatives looking its potential “white that there is no show subject to corporation A purposes. ings destruc- rescue it from knight” might that produc- its at some of expensive regulation B reduce & Alternatively, we might tion? of sub- create series tion facilities could a eliminating them instead obligations T’s the reduc- enough to survive other resources dispute Branch court's plaintiffs 15. Lucas, value, relevant to citing which the that was reasoning by tion in because necessary look at Court wrote: was to test. All was that land. Under the at least some cases value of the affected is that It true nothing, get loss will should interpretation, landowner 95% the Court plaintiffs’ total loss will landowner with while the condi- Lucas’s Mr. financial have examined result But that occasional issue, recover in full. regulation at after the before and tion gross disparity strange than no is more categorical not have been and there would premises are the landowner whose between the black. taking Mr. Lucas remained in if full) (who highway recovers in taken takings suggests the difficulties with This property re- is landowner whose and the specific prop- to a analysis that unanchored is by the value duced of its former to 5% erty interest. (who nothing). Takings recovers highway "all-or-nothing” situa- of these law is full own dan- application has its Breadth 16. tions. however, dangers of those and one gers, Lucas, S.Ct. 2886. at n. U.S. large irrationally effects a law have that will Lucas, However, inapposite. Lucas is due regulated Our businesses. substantive on land; strip of beachfront there was a affected developed to ad- jurisprudence has process by regula- value land reduced to zero that tion; n suprain situation, we discuss this dress taking. Court did not awas Section III. had inquire whether the landowners into sidiaries, each of would be insolvent statutory liability.” Connolly, 475 at if comply on its own with a forced 106 S.Ct. 1018. But this did not lead particular set of and claim regulations, to the conclusion there had been a protection against constitutional enforce- taking because nothing “[t]here is to show ment of the regulations, though even the withdrawal liability actually im- corporate configuration posed different would re- on an employer always will be out of solvent.17 main proportion to experience plan, with the and the employer mere fact that the must A decision grounds would also these pay money comply with the Act is but a open the door attempting necessary consequence of the MPPAA’s government regulations choose from which regulatory scheme.” Id. they wanted to be excused. It is notable that B T repeatedly & discusses its other expensive government-imposed obli- gainsay We do not that the liabili gations, which cleaning up polluted involve ty imposed on Unity particular is trou lung mines and out black bene- paying bling. Unity’s tiny, assets its Coal alone, fits. The Act according Coal to B & Act uphold liabilities dwarf them. If we submissions, T’s necessarily put would not position, family defendants’ this small business; B & T out of because business will bankrupted instantly. the environmental black lung obli- But the size of a liability only weighs gations are so large this additional finding favor of a taking insofar as it is out expense T. overwhelms B & There is noth- proportion legitimate obligations in B ing argument & T’s constitutional society may impose on individual entities. about “total takings” distinguishes its And, III, as we have discussed in Part obligations imposed other from those find the proportionality test satisfied in Act, conceptual nor is there a this instance. reason to confine this definition of total takings to retroactive laws. V. Conclusion

We decline to enter into the con We hold that reasonably ceptual morass that engendered would be plaintiffs, determine that along with plaintiffs’ takings theory. operators situations, total other coal in similar regulation That a put particular placed will coal industry retiree the benefit plaintiff out of proof business cannot be jeopardy funds in creating expec- after an taking Instead, that a has occurred. Moreover, the tation of lifetime benefits. deprivation" size of the inflicted a law actions that created the need for the Coal must be evaluated in context of the Act are in past not so far as to make other relevant facts. In Connolly, fundamentally unjust impose liability Court noted that the MPPAA “completely upon plaintiffs, because burden is deprives employer an of proportional whatever amount to their contribution money obligated of it is to pay problem to fulfill its retroactivity and the is not too supporting argument A in terrorem be forced into the dismal business of econom- example, employer difficult to devise. For an prediction. Every regulation ic economic wage could resist an increase minimum litigated case-by-case would have to be on a ground on the that the increased cost would Moloney, Lady basis. See Sheila A. Similarly, many drive it out of business. Review, Tape, Policy Sept./Oct. Red at small-business owners find that anti-discrimi- nation laws (discussing regulations various that threat- generate significant expenses, and viability specific en the financial of busi- might some be out forced of business com- nesses, including safety regulations, OSHA Hudson, pliance costs. See Mike Jobs for rules, franchising accessibility FTC ADA re- Businesses, People: Disabled' Handicapping quirements, Endangered Species develop- Act News, 30, 1995, July Roanoke Times & World restrictions, Superfund ment and EPA clean- at might very FI. While such concerns well costs). up cases, prove overstated in most courts would an suggest that first agreements Unity, sequent deny that do not extensive. We funding industry commitment case. sympathetic presents particular, retirees for both slowly decreased health benefits has lifetime family business This Appel- Id. past family members.” changes their economic and as the size busi- the 1974 and subse- signing it. Yet small act of lants’ have buffeted decades Wage have suffered Bituminous Coal nesses, quent businesses National even (NBCWA and “Wage Agree- of time pressures or eroding Agreements from ment”) from application be immune change, cannot the rote precludes economic simply government regulation to these cases. reasonable Enterprises Eastern harsh effects. regulation has because law; it ideal may not be an Act

The Coal I. But its one. be a wise may not even “prom- question process the due On thereof, particular wisdom, lack or to the made “representations” and ises” its constitutionali- determine case does not miners, sustain the constitutionali- I would ty- Appellants applied Act ty of the reasons, judgment foregoing For the before only: The evidence one reason affirmed. will be the District Court basis to be- a rational Congress provided benefits promise of lifetime lieve that a concurring: ALDISERT, Judge, Circuit Congress relied had been made. determina- majority’s I with the agree appendices Report, Coal Commission Industry Retiree that the 1992 Coal tion testimony at the and the Commissioners’ Act, §§ 9701- 26 U.S.C. Benefit Health example, the Coal hearing. For Senate II) (“Coal Act”), (1994 Supp Report stated: Commission Company Unity Real Estate applied to that re- firmly believes The Commission vio- Company does not Tucker Barnes and to the health are entitled tired miners and is not process due late substantive promised and that were care benefits I also taking. agree unconstitutional commit- such guaranteed them Act is scope the retroactive must honored.... ments be legislative power. appropriate beyond ex- legitimate miners have Retired coal contend Appellants vigorously Although care health pectations of to Eastern analogous that their cases life; they received promise that was Apfel, v. Enterprises and that working lives during their (1998), 141 L.Ed.2d 451 retirement planned their how the deci- argument fails because analogical hon- commitment should years. That no of the eases bear facts sive material ored. facts decisive material similarity. The (Secretary of Supp.App. company are that Enterprises Eastern on Advisory United Commission Labor’s (2) (1) 1965 and industry coal left the Health America Retiree Mine Workers of and later party to the 1974 was never (1990)). Benefits, Report Coal Commission suggested Agreements that first Wage findings that were important These were retir- benefits for to lifetime commitment accepted by Congress. Eastern family members. See ees and Report accu- Commission (plurality Whether the at 2150 118 S.Ct. Enterprises, the state of affairs rately portrayed operator coal the former opinion). Unlike the 1974 industry at the time mining coal Appellants re- Enterprises, in Eastern and negotiated was Wage Agreement and industry until 1981 coal mained should irrelevant to what largely signed in ne- participated and respectively, constitu- of the Coal Act’s analysis our Wage be 1974 and later for the gotiations considering question tionality. In emphasized Eastern As Agreements. whom, I do not 1974, promised what and sub- who “It is the Enterprises, appropriate believe it is re- mean large or considerable amount of viewing court to review de history evidence, novo the but rather ‘such relevant evi agreements or to parse their lan- dence as a reasonable mind might accept ” guage. adequate support a conclusion.’ Underwood, 552, Pierce v. 565, 487 U.S. because, say I this paraphrase 2541, (1988) 108 S.Ct. 101 L.Ed.2d 490 Holmes, job.”1 “That’s not our- Once we (quoting Consolidated Edison Co. v. Na get portion beyond of the Due Process Bd., tional Labor 197, Relations 305 U.S. Takings analysis or Clause relating to the (1938)). 59 S.Ct. 83 L.Ed. 126 Coal Act’s financial Appel- effect on the lants, Congress’ ‘We owe findings must deference in address whether there was part because deprivation of the institution property pro- without due is far better equipped than theory judiciary cess of law on the Appel- that the to amass and promised any lants never evaluate beyond the vast amounts of data bearing the lifetime of the Wage Agreements. upon legislative questions.” Turner, Our job is not 195, 117 (internal to examine the materials and to U.S. quota independent make omitted). determination of this tions On the basis of the record issue, a sort of ersatz fact-finding by either before Congress, I would conclude that appellate federal trial or court. there was substantial provide evidence to awith rational basis for believ issue, it, On I job this see our ing that the Coal Act was consistent -with merely to determine whether substantial promises that had been made oper presented evidence was Congress. before ators to employees. their former And I conclude that there was. The Coal Report Commission testimony other before the Senate Committee informed II. “[rjetired Congress that coal miners have Important prudential un- considerations legitimate expectations of health care ben- dergird the judi- Court’s limitations on the life; promise efits for bar, cial role. the case at reasonable received during working lives and persons can differ in evaluating history they planned is how their retirement of the critical Wage Agreements and inter- years. That commitment should be hon- preting provisions. its example, For al- Supp.App. ored.” at 360 (Secretary of La- though the majority has made a thorough Advisory bor’s Commission on United scholarly analysis of these circum- Mine Workers of America Retiree Health stances, my own conclusions would be Benefits, (1990)). Report Commission somewhat rely different. I would not This determination serves as the rational promises representations appar- made

basis legislation. for the ently explicit dehors the language of the that, obligation Our sole is “to assure Wage Agreements. formulating judgments, Congress has drawn reasonable Critical to me Wage Agree- inferences based on is that the sub- stantial expressly evidence.” Turner ments Broadcasting promised limited all of the Sys. Inc. v. Federal retiree Communications health benefits to the term of each Comm’n, 180, 195, agreement. Miners who retired after (1997) (internal 137 L.Ed.2d 369 quotations but whose former were no omitted). business, Substantial evidence “does in longer the coal mining were 1. Learned bye. justice!’ replied: Hand once reminisced: “I remem- Do ... He 'That is not [Holmes]; once I ber was with it was a Satur- my job. My job play game according is to ” day when the Court was to confer. It was jogged Hand, Continuing to the rules.' Learned car, before we had a motor and we Legal Competence Education for Professional along coupe. got in an old When we to the Responsibility, Report and on the Arden Capitol, provoke response, I wanted a so as Conference, (1958). House at 116-123 off, 'Well, sir, he walked good- I said to him: and fields in the 1930s in Lewis United through the benefits promised I no Krug-Lewis Agreement, Benefit America 1974 the 1947 of Mine Workers Plan”). (“1974 East- I perspective. See know unique a and Trust doubt have Plan at 2139-2140. Enterprises, every of coal miner ern mantra first-hand the XX(c)(3)(ii) stated of NBCWA Article picketing: and of strikes through decades 1974 Plan was purpose of that the Contract, “No No.Work.” only health benefits employee provide miner, actual contract con- To the Agreement.” of this the term “during trolled, future expectation of ex- the 1974 Plan Article II of Similarly, the contract agreements. Without plan were if the assets stated that pressly up then- hand, pick would not the miners pro- to continue to “become insufficient” into and descend lamps lamp house had ex- after NBCWA viding benefits pre- under They worked the shafts. suspended or may be benefits pired, “the un- given in a contract language cise which, judg- in the reduced to amounts The sordid representations. der no other Trustees, paid from the can be of the ment that company history of the coal towns a The NBCWA contained net assets.” and the inhumane Carnegie, surrounded promised of ben- Description” all “General the miners and their families treatment of that health ben- expressly stated efits that mines, unionization prior to effective only levels at fixed “guaranteed” efits were require thereafter impelled the miners Agreement.” the term of this “during con- representation of every working that incorporat- are found or provisions Similar forth in clear benefits be set ditions and I can find simply agreements. other ed hard-fought written collec- language in any “promise” of lifetime no evidence of bargaining agreement. tive Agree- any Wage contained benefits on extra-contractual Any ment. reliance gra- is but my discussion foregoing theory of law to a novel “promises” looks interpretation of some of the histo- tuitous eye that turns a blind centuries-old Wage Agreements, ry and contents and to the current law on law contracts of admittedly, may contrary agreements. bargaining collective judicial opinions. most other expressed in limit- the clear suggest language To judges with con- and those of My views Wage the term of the ing benefits to important one trary interpretations “lifetime” trumped Agreement My views and those other respect only: By analogy, one card is a stretch.2 health is rel- totally irrelevant. What judges are of a possession Secu- say Social that on the basis of evidence evant life,” and with- without more rity “for card it, prom- concluded that a before one to disability, entitles any proof out made. had been ise lifetime includ- “evergreen” clauses benefits. The enact- the rational basis for This furnished do not Wage Agreement in the 1978 ed provisions of ing the controversial result: me to reach different persuade Act. of these clauses is My reading only employer funding, not addressed III. employee benefits. underlying scope of the This, too, I said. am conscious must be Pennsylvania— Carnegie, As a native here, that we take of the view light mill town near mining and steel a coal kind the wall that handwriting is on enough to remem- is old Pittsburgh —who eeo- pressure generate will hydraulic L. efforts of John organizational ber the death, widow will upon his death his a "lifetime” for the claim of The basis her Description” of Services card the "General retain Health until card is in health the NBCWA, states: remarriage. death or Appellants’ Supp. Br. at 6-7. Any pensioned miner covered in this Plan card until retain his Health Services will companies nomic disasters whose finan- Unity

cial circumstances are similar to

Barnes Tucker. additional Without

and more realistic Congressional interven-

tion, may phenomenon see a of the man standing,” companies disap-

“last

pear from economic and respon- scene

sibility paying benefits shifts to surviv- companies.

ing If this any example case is come, forerunner things

operation present statutory solution vexing problem health benefit

retirees and dependents may serve

as a full employment program for bank-

ruptcy lawyers companies unable to prescribed

make payments. I Sadly, do argu-

not believe that this statement is an

mentum ad terrorem. join

I judgment of the court. America,

UNITED STATES of

v.

Gerald A. COATES Gerald

Coates, Appellant.

No. 98-1173.

United Appeals, States Court of

Third Circuit.

Submitted Under Third Circuit 34.1(a)

LAR Jan. 1999. May

Filed notes those for years thirteen ten than for more nies $288,000 from income Unity sheltered years. than fifteen more operating of net tax because income federal (§ 9706(a)(1) (2)).& moved pre- Both The plurality examined previous several liminary injunctions to prevent the Trust- cases to set the stage for its analysis. It ees the funds to which the to Usery looked v. Turner Elkhom Min- required pay under the Co., Coal Act ing from 1, 428 U.S. 96 S.Ct. enforcing the Coal against Act them dur- (1976), L.Ed.2d 752 where the Court up- ing the pendency of these cases. B provisions & T held of the Black Lung Benefits withdrew its motion for a preliminary Act, in- required operators coal to com- junction, and the District granted Court pensate miners and their survivors for Unity’s motion for a preliminary injunc- death or disability due to mining-related tion. rejected The court Unity’s Due Pro- lung black disease. The plurality Eastern cess Clause argument granted but the re- explained that Usery upheld that law be- quested interim relief on Takings cause, Clause even though “stricter limits may grounds. See Unity Real Estate v.Co. apply to Congress’ authority legisla- when Hudson, (W.D.Pa.1995). F.Supp. operates tion manner,” a retroactive All parties moved for summary judgment. holding the companies liable for lung black Court, The District reconsidering its views justified benefits was as a rational measure merits, granted the defendants’ mo- to spread the costs of black lung compa- tions for summary judgment and denied profited nies that from the miners’ labor. Unity’s B & T’s motions for summary Eastern, 118 S.Ct. at 2147 (plurality). judgment. Unity and B & T appeal. Next, plurality considered Pension Guaranty Corp. v. R.A. Gray & Benefit II. The Eastern Decision Co., 467 A. The Rationales (1984), L.Ed.2d 601 where the up- Court Eastern Enterprises was involved held the Multiemployer Pension Plan until mining and signed every (MPPAA), Amendments Act which was en- NBCWA from 1947 until 1964. It was acted to supplement ERISA. ERISA had assigned liability for miners, over 1000 created the Pension Benefit Guaranty Cor- based on Eastern’s status as the pre-1978 poration to exercise discretionary authori- signatory for whom the miners ty had to pay benefits when a multiemployer worked for the longest period time; pension plan terminated. Corporation total liability was estimated to be between also had authority require sued, $50 million. $100 Eastern claim- who had plan contributed during the ing that the Coal Act was unconstitutional. years five before its termination an amount proportional to their share of Four Justices concluded that the Act plan contributions to the during that five- was a compensable taking toas Eastern. year period. As ERISA’s effective date In practical terms, this meant that the Act

Case Details

Case Name: Unity Real Estate Co. v. Hudson

Court Name: Court of Appeals for the Third Circuit

Date Published: Mar 29, 1999

Citation: 178 F.3d 649

Docket Number: 97-3234, 97-3236

Court Abbreviation: 3rd Cir.