USX Corp v. Comm Social Security

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
12-23-2004
USX Corp v. Comm Social Security
Precedential or Non-Precedential: Precedential
Docket No. 04-1247
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-1247
USX CORPORATION and
U.S. STEEL MINING COM PANY, INC.,
Appellants
v.
JO ANNE B. BARNHART, Commissioner of Social Security
On Appeal from the United States District Court
for the Western District of Pennsylvania
(Dist. Ct. No. 99-1058)
District Judges: Hon. Donald E. Ziegler, Hon. Robert J. Cindrich
Argued November 18, 2004
Before: SCIRICA, Chief Judge, and McKEE and CHERTOFF,
Circuit Judges.
(Filed December 23, 2004)
J. MICHAEL JARBOE
JAMES T. CARNEY
United States Steel Corporation
Law Department
U.S. Steel Tower
600 Grant Street, Room 1500
Pittsburgh, Pennsylvania 15219-4776
DAVID J. LAURENT (Argued)
Babst, Calland, Clements and Zomnir, P.C.
Two Gateway Center
Pittsburgh, Pennsylvania 15222
Attorneys for Appellants
JEFFREY CLAIR (Argued)
Attorney, Civil Division
Department of Justice, Room 9536
601 D Street, NW
Washington, D.C. 20530-0001
Attorney for Appellee
OPINION OF THE COURT
CHERTOFF, Circuit Judge.
Appellants USX Corporation (USX) and U.S. Steel Mining
Company, Inc. (USSM),1 plaintiffs below, challenge several
decisions by the District Court granting summary judgment for the
Commissioner on the majority of appellants’ claims. We will
affirm.
I
In 1970, USX purchased the assets of the Grapevine No. 8
Mine, the last significant coal mine owned by Crystal Block, which
ceased to operate coal mines after that sale. In 1981, USX in turn
sold those same assets to Old Ben Coal Company, which was still
operating when appellants filed their complaint. Pursuant to the
1
USSM is a subsidiary of USX.
2
Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C.
§§ 9701-9722 (the “Coal Act”), 2 on September 28 and October 7
and 8, 1993, the Social Security Administration (SSA) assigned
USX health benefit premium responsibility for sixty-seven retired
miners (and their dependents) who had been employed by Crystal
Block. In the letters notifying appellants of the assignments, SSA
informed them that they had the right to request the miners’ earning
records and bases for the assignments within thirty days, and then
to seek administrative review within thirty days of receipt of that
information.
On June 30, 1995, the Commissioner assigned additional
miners employed by Crystal Block to USX on the ground that USX
was related to the signatory operator. By letter dated August 1,
1995, USX requested the earnings records of those miners, as well
as the bases for the assignments. On September 5, 1995, SSA
denied USX’s request for information on the ground that the
request was untimely. Despite denying this request, SSA
nevertheless provided USX with the Crystal Block miners’
earnings records. On May 14, 1996, USX requested additional
information and a ninety-day extension of time to appeal the
assignments.
By letter dated June 10, 1996, SSA supplied USX with the
names of the originally assigned coal operators. In a separate letter
on that same day, however, it informed USX that it had erroneously
provided the information regarding the beneficiaries assigned on
June 30, 1995 and that it could not review those assignments
because USX’s request had been untimely. On August 12, 1996,
USX requested that SSA revoke the Crystal Block beneficiary
assignments because they were improper. SSA denied review of
the June 30, 1995 assignments on September 4, 1997, informing
USX on September 23, 1997 that its decision was final.
Appellants commenced this action on July 2, 1999, alleging
that the Commissioner had improperly assigned to appellants the
health benefit premium responsibilities for a significant number of
2
The purpose and history of the Coal Act are set forth in detail in
Eastern Enterprises v. Apfel, 524 U.S. 498, 504-15 (1998), and Unity Real
Estate Co. v. Hudson, 178 F.3d 649, 653-54 (3d Cir. 1999).
3
coal miners. Appellants also claimed that the Commissioner had
refused to provide the earnings records upon request, as required
by the Coal Act, and that the Commissioner had improperly refused
to review many of the allegedly erroneous assignments.
Appellants’ Second Amended Complaint contained thirteen counts,
which the District Court disposed of on summary judgment in a
series of opinions and orders. The District Court entered a final
judgment on November 5, 2003. The court then denied appellants’
motion to amend the judgment on January 6, 2004 and appellants
timely appealed.
II
Our review of a District Court’s grant of summary judgment
is plenary. See Fed. Home Loan M ortgage Corp. v. Scottsdale Ins.
Co., 316 F.3d 431, 443 (3d Cir. 2003). We assess the record using
the same summary judgment standard that guides district courts.
See Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir.
2000). To prevail on a motion for summary judgment, the moving
party must demonstrate “that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as
a matter of law.” Fed. R. Civ. P. 56(c).
A
The Coal Act directs the Commissioner to assign health
benefit premium responsibilities to a “related person” where the
beneficiary’s pertinent signatory operator is no longer in business.
26 U.S.C. §§ 9701(c)(2), 9706(a). The Commissioner initially
construed this provision as authorizing assignments to the direct
successor-in-interest of the employing, signatory operator when the
signatory operator was no longer in business. Appellants claimed
below that the Commissioner lacked statutory authority to make
assignments under this successorship theory.
The District Court initially rejected this contention and
granted partial summary judgment to the Commissioner.
Appellants moved for reconsideration and, while that motion was
pending, the Supreme Court held in Barnhart v. Sigmon Coal Co.,
534 U.S. 438 (2002), that the Commissioner lacked statutory
4
authority to assign miners to the direct successor of a signatory
operator. Appellants in this case then argued that Sigmon Coal
compelled the court to grant their pending motion for
reconsideration and grant them judgment on their challenges to the
successorship theory in Counts I and II of their Second Amended
Complaint. Appellants also argued that they should be permitted
to amend their complaint for the third time so as to challenge
additional miner assignments that, though not identified in any of
the prior complaints, were also allegedly based on the
successorship theory rejected by Sigmon Coal.
The District Court reversed its holding and granted summary
judgment for appellants with respect to the successorship-based
miner assignments identified in the Second Amended Complaint.
However, it denied appellants leave to file a third amended
complaint insofar as the amendment would add a challenge to
successorship-based miner assignments appellants had not
previously identified.
1
Appellants first argue that the District Court violated
Federal Rule of Civil Procedure 54(c) when it refused to order the
Commissioner to rescind all of the assignments she had made
under the successorship theory invalidated in Sigmon Coal,
including those assignments not identified in Counts I and II of the
Second Amended Complaint. The argument is meritless.
Rule 54(c) provides, in pertinent part, that “every final
judgment shall grant the relief to which the party in whose favor it
is rendered is entitled, even if the party has not demanded such
relief in the party’s pleadings.” Fed. R. Civ. P. 54(c). This rule
“requires that a court ascertain whether the plaintiffs are entitled to
any remedy. As long as the plaintiffs have stated a claim for relief,
it is the court’s obligation to grant the relief to which the prevailing
party is entitled whether it has been specifically demanded or not.”
Kirby v. United States Gov’t, 745 F.2d 204, 207 (3d Cir. 1984)
(emphasis omitted).
Appellants misconstrue the benefit afforded plaintiffs by
Rule 54(c). The rule was meant to protect a plaintiff from clumsy
pleading, which, through technical oversight, might deprive it of a
5
deserved recovery. “The [rule’s] most common usage is when the
amount of the award varies from the demand for relief.” 10
Charles Alan Wright, Arthur R. M iller & Mary Kay Kane, Federal
Practice and Procedure § 2664, at 183 (3d ed. 1998). The rule has
also been used to allow for the award of attorney’s fees and costs
even though none was demanded, or for recovering interest on a
claim as damages. Id. at 185-86. As the Advisory Committee
explains, it “makes clear that a judgment should give the relief to
which a party is entitled, regardless of whether it is legal or
equitable or both.” Fed. R. Civ. P. 54 advisory committee’s note
to 1937 adoption. In other words, Rule 54(c) addresses and cures
a limited formal problem. It is not designed to allow plaintiffs to
recover for claims they never alleged.
Here, by contrast, appellants are not seeking to vary relief
but to add judgments based on new claims of additional improper
beneficiary assignments. By trying to invoke Rule 54(c),
appellants confuse the demand for relief with the claims on which
that demand is based. While “[i]nasmuch as the demand for relief
does not constitute part of the pleader’s claim for relief, a failure to
demand the appropriate relief will not result in a dismissal,” the
converse is not true. Wright et al., supra, § 2664, at 180. That is,
“the court cannot provide a remedy, even if one is demanded, when
plaintiff has failed to set out a claim for relief.” Id. at 179; see also
10 James W m. Moore et al., Moore’s Federal Practice § 54.72(2),
at 54-137 (3d ed. 2004) (“The Rule permits relief not demanded
only when the party affirmatively shows an entitlement to the relief
and is inapplicable when the pleader fails to demonstrate the proper
substantive grounds for relief.”). That is precisely what appellants
seek here.
Moreover, simply entering judgment against the
Commissioner on numerous additional assignments of unidentified
miners would prejudice the SSA. There may be other issues that
need to be litigated to determine whether an assignment was
improper. Had the District Court simply granted judgment for
appellants on the unspecified assignments, the Commissioner
would be foreclosed from litigating those issues. Under any
reading of Rule 54(c), it cannot be deployed to pretermit the
Commissioner from raising additional defenses to hitherto
unlitigated claims. Wright et al., supra, § 2664, at 173-79 (noting
6
that relief should not be amended under Rule 54(c) if failure to
include in the demand has prejudiced adversary). For these
reasons, the District Court did not err.
2
As an alternative, appellants also moved in the District
Court to file a third amended complaint listing the additional
miners that had allegedly been improperly assigned in light of
Sigmon Coal. The District Court denied leave on two grounds: (1)
that amendment would be futile as the new claims were barred by
the statute of limitations, and (2) unreasonable delay. We will
uphold the District Court’s decision on the ground of unreasonable
delay.
Federal Rule of Civil Procedure 15(a) provides, in pertinent
part, that after a responsive pleading, a party may amend its
pleading “only by leave of court or by written consent of the
adverse party; and leave shall be freely given when justice so
requires.” In the absence of substantial or undue prejudice to the
nonmoving party—which “is the touchstone for the denial of an
amendment”—“denial instead must be based on bad faith or
dilatory motives, truly undue or unexplained delay, repeated
failures to cure the deficiency by amendments previously allowed,
or futility of amendment.” Lorenz v. CSX Corp., 1 F.3d 1406,
1413-14 (3d Cir. 1993) (quotation marks omitted) (citing Foman v.
Davis, 371 U.S. 178, 182 (1962)).
Turning first to futility of amendment, a six-year statute of
limitations applies to civil actions brought against the United States
for review of decisions by administrative agencies. 28 U.S.C.
§ 2401(a). Appellants concede that the proposed amendment
would be outside this limitations period. However, they argue that
the amendment would not be futile because it would relate back to
the date of the original complaint, which was within the limitations
period.
Federal Rule of Civil Procedure 15(c)(2) provides, in
relevant part, “An amendment of a pleading relates back to the date
of the original pleading when . . . the claim or defense asserted in
the amended pleading arose out of the conduct, transaction, or
7
occurrence set forth or attempted to be set forth in the original
pleading . . . .”
[A]mendments that restate the original claim with
greater particularity or amplify the factual
circumstances surrounding the pertinent conduct,
transaction or occurrence in the preceding pleading
fall within Rule 15(c). In essence, application of
Rule 15(c) involves a search for a common core of
operative facts in the two pleadings. As such, the
court looks to whether the opposing party has had
fair notice of the general fact situation and legal
theory upon which the amending party proceeds.
Bensel v. Allied Pilots Ass’n, 387 F.3d 298, 310 (3d Cir. 2004)
(citations omitted).
Appellants argue that the language of the original
complaint—specifically, that “[t]he Commissioner cannot, as a
matter of law, assign miners to successors under Section 9706(a)
of the Coal Act” (App. 162; see also App. 165 (same))—is broad
enough for Rule 15(c) purposes to capture the listing of additional
miners. Appellants cite FDIC v. Conner, 20 F.3d 1376 (5th Cir.
1994). There, the FDIC filed suit against the directors of a failed
bank, alleging that they had acted negligently in approving twenty-
one specified loans to specified borrowers. Id. at 1378. The FDIC
later sought leave to amend its complaint to add several more loans
that had not been identified in the original complaint. Id. at 1385.
The Fifth Circuit held that the amendment related back to the date
of the original complaint because it simply identified “additional
sources of damages that were caused by the same pattern of
conduct identified in the original complaint.” Id. at 1386.
The Commissioner responds that appellants fail to account
for factual and procedural issues that may bear on the validity of
each individual assignment, such as whether the successorship
theory was actually the basis for the assignment, whether appellants
exhausted administrative remedies, and whether a miner’s work
history affords a basis for sustaining the assignment on other
grounds. These arguments—while meritorious in rebuffing
appellants’ effort to invoke Rule 54(c)—are misplaced in the
context of a request to amend a pleading. The Commissioner is not
8
foreclosed from defending the assignments once the complaint is
amended.
While the assignment of each miner was itself a separate
transaction or occurrence, the conduct of the Commissioner in
relying on the (now-invalidated) successorship doctrine was
common to all of the assignments. In this way, the Commissioner
had notice of the problem in its assignments and had notice that any
assignments based on that theory were in jeopardy. Furthermore,
the Commissioner could still argue that some or all of the added
assignments were not based on the successorship doctrine and that
those specific assignments should not relate back. She would also
have various substantive and procedural arguments at her disposal
to defend the assignments that do relate back. Allowing relation
back under Rule 15(c) also comports with “the general presumption
in favor of allowing a party to amend pleadings.” Boileau v.
Bethlehem Steel Corp., 730 F.2d 929, 938 (3d Cir. 1984) (per
curiam) (citing Foman, 371 U.S. at 182).
That being said, however, we conclude that the District
Court did not abuse its discretion in denying leave to amend based
on appellants’ “undue delay.” Foman, 371 U.S. at 182. We have
held that “[t]he mere passage of time does not require that a motion
to amend a complaint be denied on grounds of delay”; “delay alone
is an insufficient ground to deny leave to amend.” Cureton v.
NCAA, 252 F.3d 267, 273 (3d Cir. 2001). At some point,
however, “delay will become ‘undue,’ placing an unwarranted
burden on the court, or will become ‘prejudicial,’ placing an unfair
burden on the opposing party.” Id. (quotation marks omitted).
Significantly, “[d]elay may become undue when a movant has had
previous opportunities to amend a complaint.” Id. Interests in
judicial economy and finality of litigation become “particularly
compelling” when “a party delays making a motion to amend until
after summary judgment has been granted to the adverse party.” Id.We must therefore “focus on the movant’s reasons for not
amending sooner” in analyzing the question of undue delay. Id.Appellants originally explained their delay in seeking an
amendment (or challenging the additional assignments at all) on the
ground that they did not have notice of these assignments when
they filed their original complaint. In support of that explanation,
they submitted the affidavit of a vice president of USSM stating
9
that when he assumed responsibility for the Coal Act assignments
in December 1995, he did not have personal knowledge of the
assignments now sought to be included because the letters were not
in the files he received when he took charge. He first learned of
these assignments when he reviewed the administrative record
sometime after May 15, 2001.
As that administrative record reflects, SSA sent assignment
letters to appellants on September 28, 1993 and June 30, 1995. The
District Court correctly concluded that, based on these letters to
appellant corporations, the vice president’s personal knowledge
was irrelevant. Appellants had notice and in fact belatedly
challenged the June 30, 1995 assignments on August 21, 1995.
Appellants’ plea that one official—out of a large organization—did
not have personal notice is therefore no justification.
Appellants offer no other excuse for failing to include these
assignments in their original complaint. Rather, the thrust of their
argument is as follows: The District Court originally denied their
successorship argument. Until the Supreme Court decided Sigmon
Coal, they had no reason to believe that amending their complaint
to include the additional assignments would have been worthwhile.
Therefore, that delay, and the failure to list the additional
assignments in their first and second amendments, should not be
held against them. Cf. Boileau, 730 F.2d at 938 (not charging
plaintiff with delay where district court proceedings had been
stayed).
Even accepting the legal premise, appellants’ argument is
belied by the facts. The Magistrate Judge issued her report
recommending summary judgment for the Commissioner on
Counts I and II—on the later-rejected successorship ground—on
August 30, 2000. The District Court adopted that report on
September 29, 2000. Appellants first amended complaint,
however, was filed on November 3, 1999.3 Therefore, at the time
of their first amendment—and for almost a year thereafter—
appellants had no reason to believe that listing the additional
assignments would be futile.
3
Appellants’ second amended complaint was filed on April 16, 2001.
10
Finally, appellants assert that “between September 29, 2000
and February 2002, [they] did not have any reason to believe that
the Court would permit [them] to amend the dismissed Counts to
expand [their] claim for relief.” (Appellants Br. at 27.) This
excuse is strikingly similar to that rejected in Cureton, where “the
only real reason advanced by plaintiffs for the substantial lapse in
time was plaintiffs’ misplaced confidence in their original disparate
impact theory.” 252 F.3d at 274.
In Cureton, denial of leave was not an abuse of discretion
where the motion was filed three years after the complaint was
filed, the facts underlying the amendment were known almost two-
and-one-half years before plaintiffs sought leave to amend, judicial
efficiency would be damaged, and the interest in finality would be
compromised. Id. Similarly, in Lorenz, despite no finding of
prejudice to defendants, leave to amend was properly denied where
it was requested three years after the action was filed and nearly
two years after the complaint was amended for the second time, all
of the facts were available to plaintiff before she amended her
complaint (and most were known before she filed her original
complaint), and she had numerous opportunities to correct any
deficiencies. 1 F.3d at 1414. The facts in this case fit comfortably
within Cureton and Lorenz. Appellants waited over three years to
amend to contest these assignments and had notice of the
assignments prior to filing both the original complaint and the first
amended complaint. It was not an abuse of discretion for the
District Court to deny leave to amend.
B
The District Court granted summary judgment for the
Commissioner on appellants’ claim that the Commissioner
improperly refused to review the June 30, 1995 assignments on
timeliness grounds. Conceding that they requested the miners’
earning records “a few days late” (Appellants Br. at 28), appellants
argue that SSA nonetheless provided those records and appellants,
in turn, requested review within thirty days of receiving those
records. Appellants conclude that their request was therefore
timely. Alternatively, appellants contend that the Commissioner
violated a number of regulations and internal operating procedures,
11
rendering her refusal arbitrary and capricious. These arguments are
meritless.
1
The Coal Act provides as follows, in pertinent part:
(f) Reconsideration by Commissioner.—
(1) In general.— Any assigned operator
receiving a notice under subsection (e)(2) with
respect to an eligible beneficiary may, within
30 days of receipt of such notice, request from
the Commissioner . . . detailed information as
to the work history of the beneficiary and the
basis of the assignment.
(2) Review.—An assigned operator may,
within 30 days of receipt of the information
under paragraph (1), request review of the
assignment. The Commissioner . . . shall
conduct such review if the Commissioner
finds the operator provided evidence with the
request constituting a prima facie case of
error.
26 U.S.C. § 9706.
Though appellants argue that § 9706(f)(2) provides an
independent right to review within thirty days of receiving
additional information, the structure of the section precludes such
a reading. Specifically, subsection (2) provides that an operator
may request review within thirty days of receipt of the information
“under paragraph (1).” A proper request under subsection (1),
however, is made within thirty days of notice of the assignments.
As appellants’ request for information was untimely under
subsection (1), they cannot benefit from the additional thirty days
provided for by subsection (2).4
4
For similar reasons, appellants’ contention that the Commissioner
violated her own regulations, specifically 20 C.F.R. § 422.605, is also
meritless.
12
2
Appellants next contend that the Commissioner violated her
own internal operating procedures, specifically the Supplemental
Coal Act Instruction No. 3, issued December 1994, which
provided, in pertinent part:
Use the following guidelines to process a request for
review received after the timeframe for requesting
the review has expired.
Review the assignment (regardless of whether the
assignee submitted evidence).
1. If your review decision concludes that the
assignment(s) should be reversed:
Then revise the assignments, and send the
assignee the appropriate review response.
2. If your review decision affirms the
assignment(s);
Then notify the assignee that the request for
review has been denied because it was not
timely filed.
(App. 482.)
Appellants’ argument fails for two reasons. First, we held
in Lindsey Coal Mining Co. v. Chater that the Commissioner’s
internal Coal Act guidelines “lack the force of law,” and
“[t]herefore, the agency is not bound to follow them and [coal
operators are] not entitled to rely on them.” 90 F.3d 688, 693 (3d
Cir. 1996). The cases cited by appellants are not to the contrary, as
they hold only that an agency must provide an explanation when
failing to follow its prior, established precedent. See Borough of
Columbia v. Surface Transp. Bd., 342 F.3d 222, 229 (3d Cir.
2003); Fertilizer Inst. v. Browner, 163 F.3d 774, 778 (3d Cir.
1998); Stardyne, Inc. v. NLRB, 41 F.3d 141, 153 (3d Cir. 1994).
Second, the procedure quoted above was not in effect when,
in 1997, the Commissioner denied appellants’ appeals. Rather, the
procedures in force in 1997 state that “[i]f the request is not timely
filed . . . [d]o not review the request.” (App. 490.) Therefore, the
13
Commissioner’s decision was consistent with the internal
procedures in effect at the time of the disputed decision.5
C
In making assignments, the Commissioner employs a
rebuttable presumption in which she assumes that, absent evidence
to the contrary, a miner who otherwise qualified for benefits under
the Coal Act was “employed in the coal industry” for purposes of
26 U.S.C. § 9706(a) if (1) his employer was a coal mine operator
that signed a national coal wage agreement and (2) his employment
occurred during the employer’s participation in the national coal
wage agreement. Appellants claim that they employed some of
their assigned beneficiaries in the steel industry, not the coal
industry. They argue that the Commissioner’s use of this rebuttable
presumption is arbitrary and capricious. Their argument is both
time-barred and meritless.
1
The District Court held that appellants’ claims were barred
as they had failed to seek administrative review within the required
thirty-day period. Appellants concede this but argue that the thirty
days should be tolled because of false and misleading statements
made by the Commissioner. This argument is meritless.
We will equitably toll a statute of limitations where a
plaintiff shows “active misleading by the defendant and . . . that he
exercised reasonable diligence in attempting to uncover the
relevant facts.” Forbes v. Eagleson, 228 F.3d 471, 487 (3d Cir.
2000) (citation omitted).
5
Appellants final argument on this point—that the Commissioner
waived any timeliness defense she may have had by providing the earnings
records—is belied by the record, which establishes that the Commissioner
mistakenly mailed the earnings records to appellants. Indeed, the
Commissioner explained that she had erred in providing the earnings records
when she formally denied appellants’ appeal. Appellants’ contention is
meritless.
14
Appellants point to various language in letters sent by SSA
that they claim rises to the level of active misleading. Under a
header reading “How We Assign Responsibility,” SSA states, “We
assign responsibility to an operator who our records show
employed the miner in the coal industry under an UMWA
agreement.” (App. 773.) Also, in a “List of Assigned Miners and
Other Beneficiaries,” the SSA states, “Our records show that you
employed the miner in the coal industry under an UMWA
agreement and you are still in business.” (App. 775.) Appellants
contend that, in fact, the records SSA reviewed did not contain the
information that SSA said they did, and that SSA concealed its use
of the presumption by not mentioning it in its notices of
assignment.
However, in the same notices, SSA explicitly states that it
reviewed its “earnings records of retired coal miners identified by
the UMWA benefit plans.” (App. 772.) SSA does not purport to
have reviewed records documenting the industry in which the
miner worked. Furthermore, the agency’s internal guidelines,
which are available to the public, expressly state that “[e]arnings
from a signatory operator posted to SSA’s earnings records for a
miner are assumed to be ‘work in the coal industry.’” (App. 431
(emphasis added).) Finally, appellants—large and sophisticated
businesses—had easy access to information describing the
industries in which their employees worked. Had appellants
exercised elementary due diligence, they could easily have
dispelled any confusion. For these reasons, appellants’ claims are
time-barred.
2
In any event, the Commissioner’s use of the rebuttable
presumption is not arbitrary or capricious. “Presumptions may, of
course, be established both by legislative bodies and by
administrative agencies, but their validity depends as a general rule
upon a rational nexus between the proven facts and the presumed
facts.” United Scenic Artists, Local 829 v. NLRB, 762 F.2d 1027,
1034 (D.C. Cir. 1985); accord NLRB v. Baptist Hosp., Inc., 442
U.S. 773, 787 (1979) (“It is, of course, settled law that a
presumption adopted and applied by the Board must rest on a
15
sound factual connection between the proved and inferred facts.”).
We review the Commissioner’s presumption both for consistency
with the Coal Act and for rationality, id., but we “may not simply
substitute a different judgment that we might consider preferable,”
Inland Steel Indus., Inc. v. United States, 188 F.3d 1349, 1361
(Fed. Cir. 1999). Appellants bear “the heavy burden of
demonstrating that there is no rational connection between the fact
proved and the ultimate fact to be presumed.” Cole v. U nited
States Dep’t of Agric., 33 F.3d 1263, 1267 (11th Cir. 1994).
Presumptions are permissible
if there is a sound and rational connection between
the proved and inferred facts and when proof of one
fact renders the existence of another fact so probable
that it is sensible and timesaving to assume the truth
of the inferred fact until the adversary disproves
it. . . . [But i]f there is an alternate explanation for
the evidence that is also reasonably likely, then the
presumption is irrational.
Sec’y of Labor v. Keystone Coal Mining Corp., 151 F.3d 1096,
1100-01 (D.C. Cir. 1998) (quotation marks, alteration, and ellipsis
omitted).
In support of their challenge to the presumption, appellants
point to 26 U.S.C. § 9706, which provides, in pertinent part:
(c) Identification of eligible beneficiaries.—The
1950 UMWA Benefit Plan and the 1974 UMWA
Benefit Plan shall . . . provide to the
Commissioner . . . a list of the names and social
security account numbers of each eligible
beneficiary . . . . In addition, the plans shall provide,
where ascertainable from plan records, the names of
all persons described in subsection (a) [i.e., signatory
operators to whom the miners should be assigned]
with respect to an eligible beneficiary . . . .
(d) Cooperation by other agencies and persons.—
(1) Cooperation.—The head of any
department, agency, or instrumentality of the
United States shall cooperate fully and
promptly with the Commissioner . . . in
providing information which will enable the
16
Commissioner to carry out his responsibilities
under this section.
Appellants read this provision as a “Congressional mandate”
and “statutory obligation” that the Commissioner “use the UMWA
Benefit Plans’ employment records” and not make the rebuttable
presumption at issue here. (Appellant Br. at 46-47.) The statute,
however, merely imposes an obligation on the benefit plans and the
heads of other federal agencies to assist the Commissioner in
matching beneficiaries with the appropriate signatory operators.
The quoted provisions require nothing of the Commissioner and
they certainly do not prohibit her from employing the rebuttable
presumption at issue.
The Commissioner’s rebuttable presumption is entirely
reasonable. As appellants note, beneficiaries’ personnel files can
date back fifty to sixty years, and even a miner’s own employer can
have difficulty retrieving them. The Commissioner’s rebuttable
presumption is a sensible response to this problem. See Panduit
Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564, 1581 (Fed.
Cir. 1984) (“Presumptions of fact have been created to assist in
certain circumstances where direct proof of a matter is for one
reason or another rendered difficult.”). As the District Court
observed, “SSA’s presumption that earnings from a signatory
operator (of coal mines), posted to SSA’s earnings records for the
(coal) miner, were for ‘work in the coal industry’ constitutes a
‘reasonable inference’ as contemplated by Congress.” (App. 58.)
Furthermore, though appellants may do business in other industries,
they are (or are related to) signatory operators, i.e., businesses that
signed collective bargaining agreements governing the wages to be
paid UMWA workers by employers in the coal industry. See 26
U.S.C. § 9701(b)(1) & (c). They are therefore in a position to
correct any misapprehensions. The presumption is rebuttable and
therefore avoids problematic mechanical operation. For these
reasons, the Commissioner’s rebuttable presumption is not arbitrary
or capricious.6
6
Appellants also contend that the Commissioner acted arbitrarily and
capriciously in failing to provide the balance of records requested by Darryl
Lilly, USSM’s Manager of Human Resources. We agree with the District
Court that the substance of Lilly’s letters did not convey that he was seeking
17
III
For the foregoing reasons, we will affirm the judgment of
the District Court.
records regarding assignments made to both USSM and USX. As such, we
need not address whether this claim is barred by the statute of limitations.
Finally, appellants contend that the Commissioner acted arbitrarily and
capriciously in refusing to reconsider her denial of four specified requests for
review filed by USSM. We affirm for the reasons discussed by the District
Court.
18