Holland v. Big River Minerals

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
MICHAEL H. HOLLAND; MARTY D.
HUDSON; ELLIOT A. SEGAL; A. FRANK
DUNHAM, as Trustees of the UNITED
MINE WORKERS OF AMERICA 1992
BENEFIT PLAN,
Plaintiffs-Appellees,
v.
BIG RIVER MINERALS CORPORATION;
BIG RIVER COAL CORPORATION; PEA
RIDGE IRON ORE COMPANY,
INCORPORATED; OXIDE SERVICES
CORPORATION; CASTLE ROCK MINING
COMPANY; CASTLE ROCK COAL
CORPORATION; LONG BRANCH ENERGY
CORPORATION; PINNACLE ROCK COAL
No. 98-2353
CORPORATION; PANTHER BRANCH
COAL COMPANY, d/b/a Long Branch
Energy; BIRCHFIELD MINING,
INCORPORATED; DAVIDSON MINING,
INCORPORATED; M.A.E.-WEST,
INCORPORATED,
Defendants-Appellants,
v.
MICHAEL H. HOLLAND; MICHAEL O.
MCKOWN; DONALD E. PIERCE, JR.;
ELLIOT A. SEGAL, Trustees of the
United Mine Workers of America
1993 Benefit Plan,
Third Party Defendants-
Appellees.
Appeal from the United States District Court
for the Southern District of West Virginia, at Charleston.
Dennis Raymond Knapp, Senior District Judge.
(CA-97-138-2)
Argued: April 7, 1999
Decided: June 23, 1999
Before WIDENER, MURNAGHAN, and WILKINS, Circuit Judges.
_________________________________________________________________
Affirmed in part and reversed in part by published opinion. Judge
Wilkins wrote the opinion, in which Judge Widener and Judge
Murnaghan joined.
_________________________________________________________________
COUNSEL
ARGUED: Charles Leslie Woody, SPILMAN, THOMAS & BAT-
TLE, P.L.L.C., Charleston, West Virginia; David J. Laurent, POLITO
& SMOCK, P.C., Pittsburgh, Pennsylvania, for Appellants. Marilyn
Louise Baker, MOONEY, GREEN, BAKER, GIBSON & SAIN-
DON, P.C., Washington, D.C., for Appellees. ON BRIEF: Elizabeth
A. Saindon, Joseph R. House, MOONEY, GREEN, BAKER, GIB-
SON & SAINDON, P.C., Washington, D.C.; Peter Buscemi, MOR-
GAN, LEWIS & BOCKIUS, L.L.P., Washington, D.C.; David W.
Allen, Brian H. Benjet, Office of the General Counsel, UMWA
HEALTH AND RETIREMENT FUNDS, Washington, D.C., for
Appellees.
_________________________________________________________________
OPINION
WILKINS, Circuit Judge:
The Trustees of the United Mine Workers of America 1992 Benefit
2
Plan (the "Trustees") brought this action against Coal Companies1
under the Coal Industry Retiree Health Benefit Act of 1992 (the Coal
Act), see 26 U.S.C.A. §§ 9701-22 (West Supp. 1999), claiming that
they were liable for the health benefits of 11 former miners who
retired due to disabilities as well as the health benefits of their depen-
dents. The district court granted summary judgment in favor of the
Trustees. The court subsequently entered a judgment directing Coal
Companies to fund the health benefits in the future and to reimburse
the Trustees for health benefits previously provided by the 1992
UMWA Benefit Plan, awarding attorney's fees to the Trustees, and
imposing an increased prefunding requirement on Coal Companies.
Thereafter, the district court denied a motion by Defendants Pea
Ridge Iron Ore Company, Inc. (Pea Ridge) and Oxide Services Cor-
poration (Oxide) for reconsideration, see Fed. R. Civ. P. 59, which
relied on Eastern Enterprises v. Apfel, 118 S. Ct. 2131 (1998), to
argue that 26 U.S.C.A. § 9712(d)(4) of the Coal Act was unconstitu-
tional under the Fifth Amendment as applied to them. Because we
conclude that the district court correctly determined that the disabled
retirees are eligible beneficiaries under the Coal Act, that Pea Ridge
and Oxide waived their constitutional challenge to the Coal Act, and
that the award of attorney's fees was appropriate, we affirm the rul-
ings of the district court on these issues. However, we hold that the
district court erred in imposing the increased prefunding requirement.
We therefore vacate that portion of the judgment.
_________________________________________________________________
1 We refer to Defendants collectively as "Coal Companies." There are
two groups of Coal Companies involved as defendants. The first group--
Birchfield Mining, Inc., Davidson Mining, Inc., and M.A.E.-West, Inc.--
were signatories to collective bargaining agreements providing health
benefits for the retired miners at issue. The remaining Coal Companies--
Big River Minerals Corporation, Big River Coal Corporation, Pea Ridge
Iron Ore Company, Inc., Oxide Services Corporation, Castle Rock Min-
ing Company, Castle Rock Coal Corporation, Long Branch Energy Cor-
poration, Pinnacle Rock Coal Corporation, and Panther Branch Coal
Company--are related to the signatory companies and thus are jointly
and severally liable for any amounts required to be paid by the signatory
company under the Coal Act. See 26 U.S.C.A.§ 9712(d)(4) (West Supp.
1999).
3
I.
The issue of health care benefits for retired coal industry workers
and their dependents has a protracted history. See generally Eastern
Enters., 118 S. Ct. at 2137-42 (plurality opinion) (discussing history
leading to the enactment of the Coal Act); id. at 2165-66 (Breyer, J.,
dissenting) (same); Holland v. Keenan Trucking Co., 102 F.3d 736,
738-39 (4th Cir. 1996) (same). Disputes concerning health care for
miners date back to the time early in this century when such care was
funded with a prepayment plan through payroll deductions and was
supplied by company doctors. In the 1930s and 1940s the United
Mine Workers of America (UMWA) and coal industry employers
sought changes in the method of providing essential services to min-
ers, and from the late 1940s through the early 1970s pension and
medical benefits were provided by several UMWA funds created
under a series of National Bituminous Coal Wage Agreements
(NBCWAs), including a 1950 and a 1974 UMWA Benefit Plan. The
funding for these benefits was supplied in part by a royalty on each
ton of coal mined and by payroll deductions. As benefits improved
under UMWA plans and the number of beneficiaries increased, other
factors such as a decrease in the amount of coal produced and a rapid
increase in health care costs conspired to produce financial problems
for the funds. In response to these financial pressures, the 1978
NBCWA allocated to signatory employers responsibility for the
health care costs of their active and retired miners. The 1974 UMWA
Benefit Plan remained in place, but was responsible for providing
benefits only to "orphaned" retired miners--those whose former
employers were no longer in business. Additionally, signatory opera-
tors under the 1978 NBCWA became liable for defined benefits to
miners rather than merely for specified contributions of royalties.
Despite this restructuring, the benefit plans continued to suffer
financially, and by the late 1980s they were facing insolvency. Unrest
concerning this situation led to an 11-month strike beginning in 1989
by mine workers against the Pittston Coal Company, which ended
only after the Secretary of Labor intervened and negotiated a settle-
ment. Thereafter, the Secretary established the Advisory Commission
on United Mine Workers of America Retiree Health Benefits (the
"Coal Commission"), a bipartisan commission formed to assess the
financial outlook of the UMWA health benefit plans and to devise
4
possible plans to guarantee their long-term viability. The Coal Com-
mission concluded that retired miners were entitled to the health bene-
fits that had been promised them and that such commitments must be
honored; that a statutory obligation to fund the benefits should be
imposed on current and former signatories to NBCWAs; and that
some means of funding benefits for orphaned miners must be devel-
oped. After conducting hearings on the Coal Commission's recom-
mendations, Congress enacted the Coal Act. Congress found:
[I]n order to secure the stability of interstate commerce, it
is necessary to modify the current private health care benefit
plan structure for retirees in the coal industry to identify per-
sons most responsible for plan liabilities in order to stabilize
plan funding and allow for the provision of health care bene-
fits to such retirees.
26 U.S.C.A. § 9701 note.
Toward these goals, the Coal Act legislated three significant
changes in health benefits for retired coal workers. First, it consoli-
dated the 1950 and 1974 UMWA Benefit Plans into the United Mine
Workers of America Combined Benefit Fund (the "Combined Fund").
See 26 U.S.C.A. § 9702(a)(2). The Combined Fund provides health
and death benefits to coal industry retirees who, as of July 20, 1992,
were eligible to receive and were receiving benefits from the 1950 or
1974 UMWA Benefit Plans and to those receiving or eligible to
receive such benefits as of such date by virtue of a relationship to
such a retiree. See 26 U.S.C.A. § 9703. Second, the Coal Act man-
dated the continuance of individual employer plans maintained by
signatories to the 1978 (and subsequent) NBCWAs; these plans pro-
vide health coverage for retirees who were receiving or were eligible
to receive retiree benefits as of February 1, 1993 and retired on or
before September 30, 1994 and their survivors and dependents. See 26
U.S.C.A. § 9711(a)-(b). Third, the Coal Act established the 1992
UMWA Benefit Plan to provide health benefits to retirees who were
eligible for but not receiving benefits under the 1950 or 1974 UMWA
Benefit Plans and to retirees who, although eligible for coverage
under § 9711(b), are not receiving benefits from an individual
employer plan. See 26 U.S.C.A. § 9712. Benefits paid by the 1992
UMWA Benefit Plan are funded through premiums paid by the "1988
5
last signatory operators." Id. § 9712(d)(1). The term "1988 last signa-
tory operator," generally speaking, refers to a coal operator who
signed the 1988 NBCWA and was the most recent coal industry
employer of a coal industry retiree. 26 U.S.C.A.§§ 9701(c)(1), (3),
(4), 9712(d)(6). Each affected coal operator is required to pay annual
and monthly premiums to the 1992 UMWA Benefit Plan and to pro-
vide security for the projected cost of covering eligible beneficiaries.
See 26 U.S.C.A. § 9712(d)(1).
In order to ensure that coal operators would not be able to avoid
their obligations to the 1992 UMWA Benefit Plan, Congress provided
that "any related person" to an operator obligated to make payments
to the 1992 UMWA Benefit Plan would be jointly and severally liable
for those obligations. 26 U.S.C.A. § 9712(d)(4). The term "related
person" is defined broadly to include a coal operator's individual part-
ners and corporate affiliates and other trades or businesses controlled
by a coal operator's principal shareholder or corporate parent. 26
U.S.C.A. § 9701(c)(2); see also 26 U.S.C.A. §§ 52, 1563(a) (West
Supp. 1999).
Section 9712(b) establishes the coverage requirements for the 1992
UMWA Benefit Plan. It provides in pertinent part:
Eligible beneficiary.--For purposes of this section, the term
"eligible beneficiary" means an individual who--
(A) but for the enactment of this chapter, would
be eligible to receive benefits from the 1950
UMWA Benefit Plan or the 1974 UMWA Benefit
Plan, based upon age and service earned as of Feb-
ruary 1, 1993; or
(B) with respect to whom coverage is required
to be provided under section 9711, but who does
not receive such coverage from the applicable last
signatory operator or any related person,
and any individual who is eligible for benefits by reason of
a relationship to an individual described in subparagraph (A)
6
or (B). In no event shall the 1992 UMWA Benefit Plan pro-
vide health benefits coverage to any eligible beneficiary
who is a coal industry retiree who retired from the coal
industry after September 30, 1994, or any beneficiary of
such individual.
26 U.S.C.A. § 9712(b)(2). Section 9711(b) in turn provides in perti-
nent part:
The last signatory operator of any individual who, as of Feb-
ruary 1, 1993, is not receiving retiree health benefits under
the individual employer plan maintained by the last signa-
tory operator pursuant to a 1978 or subsequent coal wage
agreement, but has met the age and service requirements for
eligibility to receive benefits under such plan as of such
date, shall, at such time as such individual becomes eligible
to receive benefits under such plan, provide health benefits
coverage to such individual and the individual's eligible
beneficiaries which is described in paragraph (2). This para-
graph shall not apply to any individual who retired from the
coal industry after September 30, 1994, or any eligible bene-
ficiary of such individual.
26 U.S.C.A. § 9711(b)(1).
The Trustees brought this action claiming that Coal Companies are
liable to fund health benefits under § 9711 or§ 9712 for a group of
11 miners, who retired due to disabilities, and their dependents. Coal
Companies, on the other hand, asserted that miners who have retired
due to a disability are not individuals who have"met the age and ser-
vice requirements for eligibility to receive" retirement benefits under
an individual employer plan maintained by the last signatory operator
of a 1978 or subsequent NBCWA, 26 U.S.C.A. § 9711(b)(1), and do
not fit the definition of an "eligible beneficiary" because their eligibil-
ity to receive benefits from the 1950 or 1974 UMWA Benefit Plan is
not "based upon age and service" requirements, 26 U.S.C.A.
§ 9712(b)(2). Alternatively, Coal Companies maintained that even
assuming the 11 miners in question met the age and service require-
ments, they nevertheless were not entitled to benefits because they did
7
not apply for retirement benefits prior to September 30, 1994 and thus
had not retired by that date.
II.
A.
The first question presented is whether Coal Companies are liable
under § 9711(b)(1) and § 9712(b)(2) for health benefits of coal work-
ers who meet the eligibility requirements for benefits under individual
employer plans created pursuant to 1978 or subsequent NBCWAs or
the 1950 or 1974 UMWA Benefit Plans only by reason of their dis-
ability. Coal Companies contend that disability retirees are not cov-
ered because they neither (1) qualify as individuals who are eligible
to receive benefits under 1978 or subsequent NBCWA agreements
because they "met the age and service requirements for eligibility to
receive benefits under such plan," 26 U.S.C.A.§ 9711(b)(1), nor (2)
satisfy the definition of "[e]ligible beneficiar[ies]" in that they did not
become eligible for benefits "based upon age and service earned as
of February 1, 1993," 26 U.S.C.A. § 9712(b)(2)(A).
Statutory interpretation necessarily begins with an analysis of the
language of the statute. See Landreth Timber Co. v. Landreth, 471
U.S. 681, 685 (1985). And, in analyzing the meaning of a statute, we
must first "determine whether the language at issue has a plain and
unambiguous meaning." Robinson v. Shell Oil Co., 519 U.S. 337, 340
(1997). Our determination of whether a statute is ambiguous is guided
"by reference to the language itself, the specific context in which that
language is used, and the broader context of the statute as a whole."
Id. at 341. If the language is plain and "the statutory scheme is coher-
ent and consistent," we need not inquire further. United States v. Ron
Pair Enters., Inc., 489 U.S. 235, 240-41 (1989)."[T]he sole function
of the courts is to enforce [the statute] according to its terms."
Caminetti v. United States, 242 U.S. 470, 485 (1917).2 If the statutory
_________________________________________________________________
2 Therefore, courts should venture beyond the plain meaning of the stat-
ute only in those rare instances in which there is"a clearly expressed leg-
islative intent to the contrary," Russello v. United States, 464 U.S. 16, 20
(1983) (internal quotation marks omitted), in which a literal application
of the statute would thwart its obvious purpose, see Griffin v. Oceanic
Contractors, Inc., 458 U.S. 564, 571 (1982), or in which a literal applica-
tion of the statute would produce an absurd result, see United States v.
American Trucking Ass'ns, 310 U.S. 534, 543 (1940).
8
language is ambiguous, we "look beyond the language of the statute
to the legislative history for guidance." Stiltner v.Beretta U.S.A.
Corp., 74 F.3d 1473, 1482 (4th Cir. 1996) (en banc). If congressional
intent is not apparent from an examination of "the legislative history,
we apply the traditional tools of statutory construction." Id.Coal Companies first maintain that disability retirees satisfy the
requirements of neither § 9711(b)(1) nor § 9712(b)(2) because these
statutes require eligibility for benefits to be based upon "age and ser-
vice" earned rather than a disability. In support of this contention,
Coal Companies argue that § 9711(b)(1) applies only to individuals
who are eligible for benefits under an individual employer plan cre-
ated by a 1978 or subsequent NBCWA when those individuals have
"met the age and service requirements for eligibility." Further, Coal
Companies assert that the statutory definition of an"eligible benefi-
ciary" in § 9712(b)(2) requires that a retiree's eligibility to receive
benefits from the 1950 or 1974 UMWA Benefit Plans be"based
upon" his having satisfied age and service requirements. The Trust-
ees, on the other hand, assert that Coal Companies' reading of the
statutes is too strict. The Trustees contend that the references to age
and service earned as of February 1, 1993 in § 9711(b)(1) and
§ 9712(b)(2) were meant to establish only the date after which retirees
would not qualify for Coal Act benefits. The reference to age and ser-
vice requirements does not disqualify disabled retirees, according to
the Trustees, because retirees who were disabled prior to February 1,
1993 met all age and service requirements that applied to them, i.e.,
none.
In our view, the statutory language is reasonably susceptible to
either of these two interpretations. See Robinson, 519 U.S. at 342(holding statute is ambiguous where it "could just as easily be read
to" have one meaning as another); Adler v. Commissioner, 86 F.3d
378, 380 (4th Cir. 1996) (holding statute ambiguous because it was
reasonably susceptible to multiple meanings). And, having deter-
mined that these provisions are ambiguous, we look to the purpose of
the Coal Act, as revealed in the legislative history, to resolve their
meaning. See id. at 380-81 (explaining "that we best implement the
intent of Congress by construing the statute in a way that gives effect
to its purpose"); Andrews v. Riggs Nat'l Bank of Washington, D.C. (In
re Andrews), 80 F.3d 906, 909 (4th Cir. 1996) (recognizing that if
9
statutory language is ambiguous, this court will"give it the meaning
most consistent with the statute's purpose"). The historical back-
ground leading to the enactment of the Coal Act makes clear that
Congress intended to provide coal industry retirees with the lifetime
benefits they had been promised. Since coal workers had been prom-
ised health benefits in the event of their retirement, whether that
retirement resulted from a disability or was based solely on their satis-
faction of age and service requirements, we conclude that Congress
intended that coal industry workers who retired as a result of a dis-
ability would be eligible for benefits under § 9711(b)(1) and
§ 9712(b)(2). See Eastern Enters., 118 S. Ct. at 2140-42 (plurality
opinion) (discussing legislative history); id. at 2166 (Breyer, J., dis-
senting) (same).
B.
Coal Companies contend alternatively that even if disability retir-
ees may be eligible for benefits under § 9711(b)(1) and § 9712(b)(2),
those provisions limit benefits to coal workers who actually filed an
application for pension benefits by September 30, 1994. See 26
U.S.C.A. § 9711(b)(1) ("This paragraph shall not apply to any indi-
vidual who retired from the coal industry after September 30, 1994,
or any eligible beneficiary of such an individual."); 26 U.S.C.A.
§ 9712(b)(2) ("In no event shall the 1992 UMWA Benefit Plan pro-
vide health benefits coverage to any eligible beneficiary who is a coal
industry retiree who retired from the coal industry after September 30,
1994, or any beneficiary of such individual"). Since the 11 miners at
issue here did not file an application for pension benefits before Sep-
tember 30, 1994, Coal Companies argue, the miners are not entitled
to benefits. We disagree.
The plain meaning of the word "retired" is"withdrawn from or no
longer occupied with one's business or profession." The Random
House College Dictionary 1127 (rev. ed. 1980). The plain meaning
of the word "retired," therefore, does not encompass only those indi-
viduals who receive, or have applied for, pension benefits. Thus, we
reject Coal Companies' argument that only those individuals who
filed applications for retirement benefits as of September 30, 1994 are
eligible for coverage under § 9711(b)(1) and§ 9712(b)(2).
10
C.
In sum, we find § 9711(b)(1) and § 9712(b)(2) to be ambiguous
and construe them to have a meaning consistent with the purpose of
the Coal Act--to provide lifetime health benefits for retiring miners
who had been promised such benefits under the prior labor agree-
ments. Therefore, we conclude that disabled retirees are included
among the individuals covered under § 9711(b)(1) and § 9712(b)(2).
In addition, we hold that not only those individuals who have filed
applications for retirement benefits by September 30, 1994 are eligi-
ble for coverage under § 9711(b)(1) and § 9712(b)(2).
III.
Pea Ridge and Oxide, two "related" coal companies--i.e., ones that
were not signatories to a prior agreement establishing a benefit plan
but that are members of the control group of a signatory company--
claim that holding them responsible for contributions to the 1992
UMWA Benefit Plan constitutes a violation of due process and a tak-
ing in violation of the Fifth Amendment because they never employed
covered miners and were not within the control group when the min-
ers were employed.
As a threshold matter, we must determine whether this issue is
properly before the court. Generally, issues that were not raised in the
district court will not be addressed on appeal. See Singleton v. Wulff,
428 U.S. 106, 120 (1976); Muth v. United States , 1 F.3d 246, 250 (4th
Cir. 1993) (explaining that issues not raised in district court will not
be considered on appeal unless the "refusal to consider the newly-
raised issue would be plain error or would result in a fundamental
miscarriage of justice"); United States v. One 1971 Mercedes Benz 2-
Door Coupe, 542 F.2d 912, 915 (4th Cir. 1976) (explaining that the
failure to raise and preserve issue in district court waives consider-
ation of that issue on appeal absent exceptional circumstances); see
also United States v. Dickerson, 166 F.3d at 667, 683 (4th Cir. 1999)
(recognizing that this court may address issue not raised below in
exceptional circumstances). And, an issue presented for the first time
in a motion pursuant to Federal Rule of Civil Procedure 59(e) gener-
ally is not timely raised; accordingly, such an issue is not preserved
for appellate review unless the district court exercises its discretion to
11
excuse the party's lack of timeliness and consider the issue. See Quest
Med., Inc. v. Apprill, 90 F.3d 1080, 1087 (5th Cir. 1996) (noting that
although courts generally look with disfavor on arguments presented
for first time post-trial, district court possesses the discretion to enter-
tain such arguments and if it excuses the default and addresses the
merits, the issue is properly preserved for appellate review); see also
Pittston Co. Ultramar Am. Ltd. v. Allianz Ins. Co. , 124 F.3d 508, 519
n.12 (3d Cir. 1997) (declining to consider on appeal issue raised for
first time in party's Rule 59(e) motion); Jorge Rivera Surillo & Co.
v. Falconer Glass Indus., 37 F.3d 25, 29 (1st Cir. 1994) (dismissing
arguments raised for first time in Rule 59(e) motion and not addressed
on merits by district court as not properly before the appellate court);
Havoco of Am., Ltd. v. Sumitomo Corp. of Am., 971 F.2d 1332, 1336
(7th Cir. 1992) (stating that arguments that could and should have
been made prior to judgment may not be raised for first time in Rule
59(e) motion); cf. 389 Orange St. Partners v. Arnold, 170 F.3d 1200,
1207 (9th Cir. 1999) (explaining that a district court does not abuse
its discretion in "declining to address an issue raised for the first time
in a motion for reconsideration"). But cf. Lawson v. Singletary, 85
F.3d 502, 507 (11th Cir. 1996) (per curiam) (concluding that district
court abused its discretion in failing to consider issue raised for first
time in Rule 59(e) motion).
Pea Ridge and Oxide recognize that they failed to raise their consti-
tutional arguments until their Rule 59(e) motion for reconsideration
following the final decision in district court. Nevertheless, they assert
that their failure to pursue the issue timely does not constitute a
waiver of the constitutional argument because they satisfy an excep-
tion to the general rule of waiver. Such an exception exists, they cor-
rectly explain, when there has been an intervening change in the law
recognizing an issue that was not previously available. See Curtis
Publ'g Co. v. Butts, 388 U.S. 130, 142-45 (1967) (plurality opinion);
Holzsager v. Valley Hosp., 646 F.2d 792, 796 (2d Cir. 1981); see also
Pacific Ins. Co. v. American Nat'l Fire Ins. Co., 148 F.3d 396, 403
(4th Cir. 1998) (explaining that although a Rule 59(e) motion may be
granted based on, inter alia, "an intervening change in controlling
law," such "motions may not be used ... to raise arguments which
could have been raised prior to the issuance of the judgment ... [or]
to argue a case under a novel legal theory that the party had the ability
to address in the first instance"), cert. denied, 119 S. Ct. 869 (1999).
12
The intervening law exception to the general rule that the failure to
raise an issue timely in the district court waives review of that issue
on appeal applies when "there was strong precedent" prior to the
change, Curtis Publ'g Co., 388 U.S. at 143 (plurality opinion), such
that the failure to raise the issue was not unreasonable and the oppos-
ing party was not prejudiced by the failure to raise the issue sooner,
id. at 145. Pea Ridge and Oxide maintain that prior to the Supreme
Court decision in Eastern Enterprises v. Apfel , 118 S. Ct. 2131(1998), this court had rejected constitutional challenges to the Coal
Act and that Eastern Enterprises changed the law, permitting them to
raise the constitutional issue at this juncture. We disagree.
First, Eastern Enterprises cannot be viewed as effecting a change
in the law of Fifth Amendment takings jurisprudence sufficient to
excuse the failure to raise a takings challenge earlier. Eastern
Enterprises, decided by a 4-1-4 vote, involved a challenge to the con-
stitutionality of 26 U.S.C.A. § 9706, a provision of the Coal Act dif-
ferent from the one at issue here; that provision imposed retroactive
liability for funding the Combined Fund on pre-1978 NBCWA signa-
tories. Four Justices concluded that § 9706 effected an unconstitu-
tional taking. See id. at 2146-53. The remaining five justices rejected
the conclusion that an unconstitutional taking was effected, reasoning
that the constitutionality of the financial burden on the company
imposed by the Coal Act must be considered as a question of substan-
tive due process rather than as a takings question because no identifi-
able property interest was infringed by the legislation. See id. at 2154-
58 (Kennedy, J., concurring in the judgment and dissenting in part);
id. at 2161-63 (Breyer, J., dissenting). Consequently, to the extent
Eastern Enterprises worked any change with respect to takings juris-
prudence, that change was not favorable to Pea Ridge and Oxide's
position and therefore does not excuse their failure to raise their tak-
ings claim in a timely fashion.
Second, no strong precedent prevented Pea Ridge and Oxide from
raising the due process issue earlier. In Holland, we rejected a due
process challenge to the 1992 UMWA Benefit Plan, ruling that Con-
gress did not act arbitrarily in concluding that signatories to
NBCWAs promising lifetime health benefits should be required to
fund those benefits. See Holland, 102 F.3d at 740-42. However, we
did not address any separate argument related to liability of members
13
of a control group of such signatories, and that issue remained an
open question. Furthermore, Eastern Enterprises did not address
whether the Coal Act violated the due process rights of members of
a control group of signatories to NBCWAs promising lifetime health
benefits for retired miners. Rather, Eastern Enterprises can only be
viewed as rendering a decision that Congress acted arbitrarily in
imposing retroactive liability on a signatory to NBCWAs in existence
prior to those that promised lifetime health benefits to retired miners
when that signatory made no promise of lifetime benefits, did not
contribute to the problem that caused the funding shortfall for the
promised lifetime benefits or to the need for such benefits, and was
not put on notice by any governmental action during the relevant time
period that it might be subjected to later liability. See Eastern Enters.,
118 S. Ct. at 2151-53 (plurality opinion); id. at 2159-60 (Kennedy, J.,
concurring in the judgment and dissenting in part). The position of
members of a control group upon whom liability is imposed only by
virtue of that association is different from that of the NBCWA signa-
tory in Eastern Enterprises. And, the considerations bearing upon
whether Congress acted rationally in imposing retroactive liability on
the NBCWA signatory in Eastern Enterprises are different than those
relating to the rationality of imposing liability on members of a con-
trol group of a 1978 or subsequent benefit plan signatory, although
admittedly some of the same arguments can be made with respect to
both issues.
Thus, we conclude that Eastern Enterprises did not constitute a
change in the law permitting Pea Ridge and Oxide to raise their con-
stitutional arguments for the first time in a Rule 59(e) motion. As
such, those constitutional issues are not properly preserved for our
review.3
_________________________________________________________________
3 Although the district court ruled that the constitutional claims raised
by Pea Ridge and Oxide in their Rule 59(e) motion lacked merit, it did
so only as an alternative holding to its principal conclusion that the con-
stitutional issues were not properly before the court because they were
not timely raised. The district court, therefore, did not excuse the default.
14
IV.
The only remaining question is whether the district court erred in
imposing an "additional prefunding premium" on Coal Companies as
a result of its finding that they were liable for the benefits of the dis-
abled miners and their dependents as claimed by Trustees. In the sec-
tion of the Coal Act dealing with the guarantee of benefits, Congress
directed that the contribution requirement for the plan include:
the provision of security (in the form of a bond, letter of
credit or cash escrow) in an amount equal to a portion of the
projected future cost to the 1992 UMWA Benefit Plan of
providing health benefits for eligible and potentially eligible
beneficiaries attributable to the 1988 last signatory operator.
If a 1988 last signatory operator is unable to provide the
security required, the 1992 UMWA Benefit Plan shall
require the operator to pay an annual prefunding premium
that is greater than the premium otherwise applicable.
26 U.S.C.A. § 9712(d)(1)(C) (emphasis added). The 1992 UMWA
Benefit Plan formed by the Trustees established an additional pre-
funding premium of at least five times the annual funding premium.
And, the district court imposed an additional prefunding premium of
ten times the annual funding premium on the coal companies here.
The language of the statute states that the prefunding provision is to
be applied when a company is "unable" to provide the security. Id.The provision does not speak to the situation, like the one at issue
here, when absent any showing that a company was unable to post the
security, it declined to do so because it did not believe that it was lia-
ble. The plain language of the provision, therefore, demonstrates that
an increased funding obligation is not applicable in the present situa-
tion.
V.
Congress intended through the Coal Act to ensure promised life-
time health benefits to coal industry retirees; therefore, we construe
§ 9711(b)(1) and § 9712(b)(2) to cover disabled retirees who retired
before September 30, 1994 and their beneficiaries and affirm the
judgment of the district court imposing liability and awarding attor-
15
ney's fees.4 The additional prefunding premium imposed by the dis-
trict court, however, was erroneous because there was no showing
that the companies were "unable" to provide the appropriate security
--only that they did not provide it. Thus, we affirm in part and
reverse in part.
AFFIRMED IN PART; REVERSED IN PART
_________________________________________________________________
4 Coal Companies' only challenge to the award of attorney's fees rested
on their argument that the district court incorrectly decided that disabled
retirees were included as eligible beneficiaries. Having concluded that
the district court did not err in this regard, we affirm the award of attor-
ney's fees.
16