A T Massey Coal Co v. Massanari, Acting , 305 F.3d 226 ( 2002 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
A. T. MASSEY COAL COMPANY, INC.; 
MASSEY COAL SERVICES,
INCORPORATED; PEERLESS EAGLE COAL
COMPANY; TENNESSEE CONSOLIDATED
COAL COMPANY; RAWL SALES AND
PROCESSING COMPANY; OMAR MINING
COMPANY; PM CHARLES COAL
COMPANY; ROCKY HOLLOW COAL CO;
SPROUSE CREEK PROCESSING
COMPANY; BIG BEAR MINING
COMPANY; DEHUE COAL COMPANY;
DOUGLAS POCAHONTAS COAL
CORPORATION; HOPKINS CREEK COAL;
JOBONER COAL COMPANY; MAJESTIC
MINING, INCORPORATED; PERFORMANCE
COAL COMPANY; VANTAGE MINING
 No. 01-2155
COMPANY; RUSSELL FORK COAL
COMPANY; VESTA MINING COMPANY,
Plaintiffs and Counterclaim
Defendants-Appellants,
and
BELFRY COAL CORPORATION,
Plaintiff,
v.
LARRY G. MASSANARI, ACTING
COMMISSIONER OF SOCIAL SECURITY
ADMINISTRATION; MICHAEL H.
HOLLAND; WILLIAM P. HOBGOOD;

2 A. T. MASSEY COAL CO. v. MASSANARI
MARTY D. HUDSON; THOMAS O. S. 
RAND; ELLIOTT A. SEGAL; CARL E.
VAN HORN; GAIL R. WILENSKY,
Trustees of the United Mine
Workers of America Combined
Benefit Fund; UNITED MINE
WORKERS OF AMERICA COMBINED
BENEFIT FUND,
Defendants-Appellees,
and 
TRACE FORK COAL COMPANY; GOALS
COAL COMPANY; GREEN VALLEY
COAL COMPANY; LICK BRANCH COAL
COMPANY; EAGLE ENERGY,
INCORPORATED; POWER MOUNTAIN
COAL COMPANY; WILLIAMS MOUNTAIN
COAL COMPANY,
Defendants.

Appeal from the United States District Court
for the Eastern District of Virginia, at Richmond.
Robert E. Payne, District Judge.
(CA-99-83)
Argued: April 3, 2002
Decided: September 18, 2002
Before NIEMEYER, KING, and GREGORY, Circuit Judges.
Affirmed by published opinion. Judge King wrote the opinion, in
which Judge Gregory joined. Judge Niemeyer wrote an opinion con-
curring in part in the judgment and dissenting in part.
A. T. MASSEY COAL CO. v. MASSANARI 3
COUNSEL
ARGUED: John Ray Woodrum, HEENAN, ALTHEN & ROLES,
L.L.P., Washington, D.C., for Appellants. Peter Buscemi, MORGAN,
LEWIS & BOCKIUS, L.L.P., Washington, D.C.; Sharon Swingle,
Appellate Staff, Civil Division, UNITED STATES DEPARTMENT
OF JUSTICE, Washington, D.C., for Appellees. ON BRIEF: Marga-
ret S. Lopez, HEENAN, ALTHEN & ROLES, L.L.P., Washington,
D.C.; John M. Poma, A.T. MASSEY COAL COMPANY, INC.,
Richmond, Virginia, for Appellants. Stanley F. Lechner, Charles P.
Groppe, MORGAN, LEWIS & BOCKIUS, L.L.P., Washington,
D.C.; Samuel M. Brock, III, TROUTMAN, SANDERS, MAYS &
VALENTINE, Richmond, Virginia; John R. Mooney, Marilyn A.
Baker, MOONEY, GREEN, BAKER & SAINDON, P.C., Washing-
ton, D.C.; David W. Allen, Office of the General Counsel, UMWA
HEALTH AND RETIREMENT FUNDS, Washington, D.C., for
Appellees Trustees. Robert D. McCallum, Jr., Assistant Attorney
General, Paul J. McNulty, United States Attorney, Mark B. Stern,
Appellate Staff, Civil Division, UNITED STATES DEPARTMENT
OF JUSTICE, Washington, D.C., for Federal Appellees.
OPINION
KING, Circuit Judge:
A.T. Massey Coal Company, Massey Coal Services, Peerless Eagle
Coal Company, and Tennessee Consolidated Coal Company (the
"Massey Plaintiffs") appeal the decision of the district court that ren-
dered them liable for the benefits of certain beneficiaries under the
Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701-
9722 (the "Coal Act" or the "Act"). The Massey Plaintiffs maintain
that their assignments of liability are unconstitutional under the
Supreme Court’s decision in Eastern Enterprises v. Apfel, 524 U.S.
498 (1998), and they assert that the assignments also violate the
Administrative Procedure Act, 5 U.S.C. § 701 et seq. (the "APA").
For the reasons explained below, we conclude that these contentions
are without merit, and we affirm the district court.
4 A. T. MASSEY COAL CO. v. MASSANARI
I.
This proceeding arises from the efforts of Congress to alleviate a
crisis in the funding of retiree health benefits that engulfed the coal
industry in the late 1980s. In the wake of spiraling health care costs
and declining numbers of coal operators, Congress enacted the Coal
Act in 1992 to ensure that retired coal miners and their dependents
(the "Beneficiaries") would receive death benefits and adequate health
care (the "Benefits"). In order to pay for the Benefits, the Act estab-
lished a multiemployer benefit plan known as the United Mine Work-
ers of America Combined Benefit Fund (the "Combined Fund"). The
Combined Fund is financed by annual premiums assessed against cur-
rent and former coal operators. It utilizes a complex administrative
process to assign liability for Benefits to the operator most clearly
connected to a coal miner’s employment in the coal industry. The Act
places the responsibility for administering this assignment process
with the Commissioner of Social Security (the "Commissioner"), and
it places the responsibility for administering the Combined Fund with
the Fund’s Trustees. Pursuant to his statutory authority, the Commis-
sioner made multiple assignments of liability. Among those assign-
ments were several made to the Massey Plaintiffs, including the
assignments at issue in this appeal.
Certain entities challenged the efforts of the Commissioner and the
Combined Fund to impose liability on them for Benefits due under
the Coal Act. In 1998, the Supreme Court overturned the Commis-
sioner’s assignments of liability to one former operator, Eastern
Enterprises ("Eastern"). Eastern Enters. v. Apfel, 524 U.S. 498(1998). The Court, however, was unable to agree upon the rationale
for its ruling: a four-justice plurality voted to invalidate the assign-
ments on one constitutional theory, while Justice Kennedy voted to
invalidate the assignments on an alternate constitutional basis.
Following the decision in Eastern Enterprises, the Commissioner
voided several assignments to coal operators that he deemed to be
similarly situated to Eastern. The Commissioner did not find the Mas-
sey Plaintiffs to be similarly situated, however, and he declined to
void the assignments he had earlier made to them. The Massey Plain-
tiffs then formally requested that certain of their assignments (the
A. T. MASSEY COAL CO. v. MASSANARI 5
"Massey Assignments") be voided, but the Commissioner denied their
requests.
In January 1999, the Massey Plaintiffs initiated this suit in the East-
ern District of Virginia against the Commissioner, the Combined
Fund, and the Fund’s Trustees. They contended that the Massey
Assignments violate the Takings and Due Process Clauses of the Fifth
Amendment, as well as certain provisions of the APA. On cross-
motions for summary judgment, the district court, on July 19, 2001,
ruled in favor of the defendants, concluding that the Massey Assign-
ments did not contravene the Court’s holding in Eastern Enterprises.
A.T. Massey Coal Co., Inc. v. Massanari, 153 F. Supp. 2d 813 (E.D.
Va. 2001).
II.
The events leading to the enactment of the Coal Act have been well
chronicled by this and several other courts. See generally Eastern
Enters. v. Apfel, 524 U.S. 498, 504-16 (1998); Sigmon Coal Co., Inc.
v. Apfel, 226 F.3d 291, 294-96 (4th Cir. 2000), aff’d sub nom. Barn-
hart v. Sigmon Coal Co., Inc., 534 U.S. 438 (2002); Holland v. Big
River Minerals Corp., 181 F.3d 597, 600-02 (4th Cir. 1999); Anker
Energy Corp. v. Consolidation Coal Co., 177 F.3d 161, 164-65 (3d
Cir. 1999); Carbon Fuel Co. v. USX Corp., 100 F.3d 1124, 1127-28
(4th Cir. 1996). We therefore only briefly summarize the Act’s his-
tory.
A.
In 1946, the United Mine Workers of America (the "UMWA")
staged a nationwide strike in an effort to secure better health and
retirement benefits for its membership. In response, President Truman
nationalized the coal mines, and his Secretary of the Interior entered
into negotiations with UMWA President John L. Lewis. These negoti-
ations culminated in the historic Krug-Lewis Agreement, which
ended the strike and led to the creation of benefit trusts. These benefit
trusts were financed by coal production royalties and by payroll
deductions. They provided death, disability, retirement, and health
benefits for coal miners and their dependents.
6 A. T. MASSEY COAL CO. v. MASSANARI
Shortly after the Krug-Lewis Agreement, the coal mines were
returned to private control, and the UMWA and a multiemployer
group of coal operators entered into the National Bituminous Coal
Wage Agreement of 1947 (the "1947 NBCWA"). The 1947 NBCWA
established the United Mine Workers of America Welfare and Retire-
ment Fund (the "1947 Fund"), which was modeled on the Krug-Lewis
benefit trusts. The 1947 Fund was financed exclusively by royalties
from coal production, and it provided both pension and health bene-
fits to coal miners and their dependents. The 1947 NBCWA failed to
guarantee coal miners any specific benefits, leaving the determination
of benefit levels to three trustees of the 1947 Fund.
The acrimony between the UMWA and the coal operators over
benefits persisted, however, and in 1950 the UMWA and the coal
operators executed a new agreement (the "1950 NBCWA"). The 1950
NBCWA replaced the 1947 Fund with a new fund financed by a per-
ton royalty on coal production (the "1950 Fund"). The 1950 Fund
mirrored the 1947 Fund in that it failed to guarantee coal miners any
vested benefits, instead leaving the power to adjust or even terminate
benefits with the Fund’s trustees. Like its predecessor, the 1950 Fund
operated on a pay-as-you-go basis, with the trustees adjusting benefit
levels to fit budgetary constraints. As such, the 1950 NBCWA pro-
vided no guarantee of lifetime benefits to miners.
Although the 1950 NBCWA was amended several times, its struc-
ture remained essentially unchanged until 1974. A combination of
demographic trends, which had increased the cost of benefits, and the
passage of the Employee Retirement Income Security Act ("ERISA"),
led in 1974 to the replacement of the 1950 Fund. The UMWA and the
Bituminous Coal Operators’ Association ("BCOA") entered into a
new agreement, the 1974 NBCWA. This agreement replaced the 1950
Fund with four new trusts, financed by a combination of coal produc-
tion royalties and premiums based on hours worked by coal miners.1
Two of these new trusts, the UMWA 1950 Benefit Plan and Trust (the
"1950 Benefit Plan") and the UMWA 1974 Benefit Plan and Trust
1
In 1951, a large number of coal operators organized themselves into
the BCOA, which became the primary representative of coal operators
in negotiations with the UMWA.
A. T. MASSEY COAL CO. v. MASSANARI 7
2
(the "1974 Benefit Plan"), provided health benefits for miners. The
1950 Benefit Plan covered coal miners who were already retired, or
who retired prior to January 1, 1976, as well as their dependents,
while the 1974 Benefit Plan covered coal miners who retired on or
after January 1, 1976, as well as their dependents.
The 1974 NBCWA constituted a significant break from the past in
that it was the first agreement between the UMWA and the BCOA to
provide lifetime health benefits for retirees and their widows (unless
a widow remarried). As such, the 1974 NBCWA vastly expanded
benefit costs. That increase in payable benefits, combined with other
factors (e.g., a decline in coal production, a rise in miner retirements,
and the growth of health care costs) caused the 1950 and 1974 Benefit
Plans to encounter financial problems. These problems led to the cre-
ation of the 1978 NBCWA, which rendered each employer who
signed the agreement individually responsible for providing health
care benefits for its own active and retired employees. The 1950 and
1974 Benefit Plans, which were to be financed by the coal operators
who were party to the 1978 NBCWA, thereafter covered only "or-
phaned retirees," i.e., retired miners whose employers either had
ceased coal mining operations or were no longer party to the NBCWAs.3
The 1978 NBCWA represented a shift in coal operator liability from
a "defined contribution" obligation, under which operators were
responsible for the payment of production royalties, to a "defined ben-
efit" obligation, under which such operators were obliged to provide
sufficient monies to maintain specific benefits.
Despite the changes wrought by the 1978 NBCWA, the 1950 and
1974 Benefit Plans continued to encounter financial problems as costs
increased and operators continued to leave the coal mining business.
Although additional NBCWAs were agreed to and executed during
the 1980s in attempts to address these financial difficulties, they
failed to render the 1950 and 1974 Benefit Plans financially viable.
2
The 1950 Benefit Plan and 1974 Benefit Plan did not cover pension
benefits. The 1974 NBCWA established a separate funding plan for pen-
sions.
3
Put simply, orphaned retirees were miners whose employers had left
the unionized coal mining industry, either because they no longer mined
coal or because they had commenced non-union coal mining operations.
8 A. T. MASSEY COAL CO. v. MASSANARI
In 1989, the threat of insolvency in the 1950 and 1974 Benefit Plans
led the UMWA to call a contentious and lengthy strike against the
Pittston Coal Company, which was settled only after the Secretary of
Labor intervened. As part of that settlement, the federal government
formed the Advisory Commission on United Mine Workers of Amer-
ica Retiree Health Benefits. This Commission prepared a report that
formulated multiple legislative solutions to the financial problems
racking the 1950 and 1974 Benefit Plans, and its recommendations
formed the basis for the Coal Act.
B.
Under the Coal Act, the 1950 and 1974 Benefit Plans were merged
into the newly created Combined Fund.4 26 U.S.C. § 9702(a). The
Combined Fund was designed to provide health and death benefits to
certain miners and their dependents (i.e., the Beneficiaries) who, prior
to July 20, 1992, had been receiving or were eligible to receive bene-
fits under the 1950 and 1974 Benefit Plans.5 26 U.S.C. §§ 9703(a),
(b), (c), & (f). The Combined Fund is financed by annual premiums
assessed against "signatory operators," i.e., coal operators who have
signed a coal wage agreement,6 including those signatory operators
who are no longer in the coal business. 26 U.S.C. §§ 9701(b)(1),
(b)(3), & (c)(1). Those premiums are calculated on the basis of the
number of eligible Beneficiaries assigned to a particular operator. 26
U.S.C. §§ 9703(f) & 9704. As we have noted, the responsibility for
the assignment of Beneficiaries rests with the Commissioner of Social
Security. 26 U.S.C. § 9706(a).7
4
The Coal Act also established the 1992 UMWA Benefit Plan, which
covers certain coal miners and their dependents who are not eligible for
benefits from the Combined Fund. 26 U.S.C. § 9712(b). In addition, the
Act mandates the continuation of the individual health plans maintained
by signatory operators to the 1978 and subsequent NBCWAs. 26 U.S.C.
§ 9711. These provisions are not at issue in this appeal.
5
As such, the Combined Fund provides Benefits only for retired miners
who worked under an NBCWA and for those miners’ eligible depen-
dents.
6
A coal wage agreement is either an NBCWA or another agreement
that bound the operator to the terms of a prevailing NBCWA.
7
The assignment provision of the Coal Act, found at § 9706(a) of Title
26, provides in relevant part as follows:
A. T. MASSEY COAL CO. v. MASSANARI 9
The Coal Act contemplates the possibility that, by engaging in cre-
ative corporate restructuring, a signatory operator might avoid its lia-
bility. See 138 Cong. Rec. S17604 (daily ed. Oct. 8, 1992)
(Conference Committee Report). In order to preclude such avoidance,
the Act designates certain closely related entities as "related persons,"
and it treats those entities for purposes of Combined Fund liability as
though they were a single employer. See 26 U.S.C. § 9706(b)(1)(A).
Furthermore, the Coal Act subjects related persons to joint and sev-
eral liability for a signatory operator’s premiums. 26 U.S.C.
§ 9704(a).
Under the Act, "[a] person shall be considered to be a related per-
son to a signatory operator if that person is . . . a member of the con-
trolled group of corporations . . . which includes such signatory
operator; . . . [or] a successor in interest to any [such] person." 26
U.S.C. § 9701(c)(2). The Act spells out three types of corporate rela-
[T]he Commissioner of Social Security shall . . . assign each coal
industry retiree who is an eligible beneficiary to a signatory
operator which (or related person with respect to which) remains
in business in the following order:
(1) First, to the signatory operator which —
(A) was a signatory to the 1978 coal wage agreement or
any subsequent coal wage agreement, and
(B) was the most recent signatory operator to employ the
coal industry retiree in the coal industry for at least 2 years.
(2) Second, if the retiree is not assigned under paragraph (1),
to the signatory operator which —
(A) was a signatory to the 1978 coal wage agreement or any
subsequent coal wage agreement, and
(B) was the most recent signatory operator to employ the
coal industry retiree in the coal industry.
(3) Third, if the retiree is not assigned under paragraph (1) or
(2), to the signatory operator which employed the coal
industry retiree in the coal industry for a longer period of
time than any other signatory operator prior to the effective
date of the 1978 coal wage agreement.
10 A. T. MASSEY COAL CO. v. MASSANARI
tionships that constitute a "controlled group of corporations." The rel-
evant relationship for our purposes is known as a "parent-subsidiary
controlled group." 26 U.S.C. § 1563(a)(1).8 Whether a corporate
entity is a "related person" to a signatory operator is determined by
that entity’s relationship to the signatory operator as of July 20, 1992.
26 U.S.C. § 9701(c)(2)(B).
Thus, under the "related person" provision of the Coal Act, corpo-
rations that have never signed an NBCWA, as well as those that have
never taken part in the mining industry, may be liable for Benefits.
In effect, the Coal Act treats the corporate family as a single employer
for the purpose of assigning liability for Benefits. In fact, the Act spe-
cifically provides, in 26 U.S.C. § 9706(b)(1)(A), that "[a]ny employ-
ment of a coal industry retiree in the coal industry by a signatory
operator shall be treated as employment by any related persons to
such operator."
C.
The lead plaintiff here, A.T. Massey Coal Company ("A.T. Mas-
sey") is the parent of several wholly owned corporate subsidiaries,
including the other Massey Plaintiffs,9 that are engaged in coal mining
8
Section 1563(a)(1) of Title 26 defines the parent-subsidiary controlled
group as follows:
(1) Parent-subsidiary controlled group. — One or more chains
of corporations are connected through stock ownership with a
common parent corporation if —
(A) stock possessing at least 80 percent of the total com-
bined voting power of all classes of stock entitled to vote or at
least 80 percent of the total value of shares of all classes of stock
of each of the corporations, except for the common parent corpo-
ration, is owned . . . by one or more of the other corporations;
and
(B) the common parent corporation owns . . . stock possess-
ing at least 80 percent of the total combined voting power of all
classes of stock entitled to vote or at least 80 percent of the total
value of shares of all classes of stock of at least one of the other
corporations . . . .
9
The other three Massey Plaintiffs are: Massey Coal Services, Inc.
("Massey Coal Services"), Peerless Eagle Coal Company ("Peerless
Eagle"), and Tennessee Consolidated Coal Company ("Tennessee Con-
solidated").
A. T. MASSEY COAL CO. v. MASSANARI 11
operations. See A.T. Massey Coal Co. v. Int’l Union, UMWA, 799
F.2d 142, 144 (4th Cir. 1986) (observing that A.T. Massey and its
affiliates function as "a single production entity with sales, transporta-
tion and distribution coordinated from Massey’s Richmond headquar-
ters"). The Massey Plaintiffs have stipulated that the Massey
corporate family (the "Massey Group"), of which they are a part, con-
stitutes a "controlled group of corporations" within the meaning of the
Coal Act, and that the corporations within the Massey Group are
therefore "related persons." Thus, each Massey Plaintiff is a "related
person" with respect to each of the other three Plaintiffs, as well as
to a host of other coal operators within the Massey Group, such as
Omar Mining Company ("Omar Mining"), Sprouse Creek Processing
Company ("Sprouse Creek"), and Big Bear Mining Company ("Big
Bear").10
Pursuant to the assignment provisions of the Coal Act, specifically
26 U.S.C. § 9706(a)(3), the Commissioner made the Massey Assign-
ments under challenge here. The Commissioner assigned A.T. Mas-
sey liability for eighty-two retired coal miners, based on its
relationship as the parent of Ben Creek Coal Company ("Ben Creek")
and Ben Creek’s corporate predecessors (Merrill Coal Company, Gay
Mining Company, and Massey Coal Mining Company). The Commis-
sioner similarly assigned Massey Coal Services liability for two
retired coal miners, based on its relationship to Ben Creek. Peerless
Eagle was assigned liability for a total of forty-five retired coal min-
ers who had worked for Peters Creek Coal Company, which merged
with Peerless Eagle in 1962. Finally, the Commissioner assigned lia-
bility to Tennessee Consolidated for 204 retired coal miners that it
had directly employed.11
10
In addition to Omar Mining, Sprouse Creek, and Big Bear, other
members of the Massey Group include appellants PM Charles Coal
Company; Rocky Hollow Coal Company; Dehue Coal Company; Doug-
las Pocahontas Coal Corporation; Hopkins Creek Coal Company;
Joboner Coal Company; Majestic Mining, Incorporated; Performance
Coal Company; Vantage Mining Company; Russell Fork Coal Company;
and Vesta Mining Company.
11
In many instances, the Commissioner assigned liability to the Massey
Plaintiffs for the Benefits of coal miners who were deceased when the
Combined Fund began providing benefits in February 1993. In such
12 A. T. MASSEY COAL CO. v. MASSANARI
Among the Massey Plaintiffs, only Tennessee Consolidated has
signed an NBCWA, last doing so in 1960. Other members of the Mas-
sey Group, however, signed the 1974 or subsequent NBCWAs, such
as Omar Mining (which signed the 1974, 1978, 1981, and 1984 NBC-
WAs), Sprouse Creek (which signed the 1974, 1978, and 1981 NBC-
WAs), and Big Bear (which signed the 1978 and 1981 NBCWAs).
D.
After its enactment, the Coal Act was challenged in various judicial
proceedings. Although many of these legal assaults were unsuccess-
ful, a notable exception was a lawsuit brought by Eastern Enterprises
("Eastern") in the District of Massachusetts. In Eastern Enterprises v.
Apfel, 524 U.S. 498 (1998), the Supreme Court held that the Coal Act,
as applied to Eastern, was unconstitutional.
Eastern was a coal operator that had been in the coal mining busi-
ness from 1929 until 1965. It had signed every NBCWA between
1947 and 1964. In 1965, Eastern transferred its coal mining opera-
tions to a wholly owned subsidiary, Eastern Associated Coal Corpora-
tion ("EACC"), and it then withdrew from active involvement in the
coal industry. EACC thereafter signed several subsequent NBCWAs,
including the 1974, 1978, and 1988 agreements. In 1987, Eastern sold
its interest in EACC, and it thereafter had no connection to the coal
mining industry. After enactment of the Coal Act, the Commissioner,
pursuant to 26 U.S.C. § 9706(a)(3), assigned liability to Eastern for
over a thousand retired miners whom it had employed prior to its
departure from the coal mining industry in 1965. These assignments
made Eastern liable for payments to the Combined Fund of more than
cases, no premiums were assessed against the Massey Plaintiffs; those
assignments were made to demonstrate the basis on which a coal miner’s
eligible dependents were assigned to the Massey Plaintiffs. Moreover,
the number of beneficiaries for whom premiums have been assessed has
declined due to mortalities occurring since 1993. Thus, by 1999 — the
most recent plan year for which the parties have provided data — A.T.
Massey was responsible for 30 beneficiaries, Massey Coal Services for
2 beneficiaries, Peerless Eagle for 22 beneficiaries, and Tennessee Con-
solidated for 80 beneficiaries.
A. T. MASSEY COAL CO. v. MASSANARI 13
fifty million dollars. Eastern brought suit against the Commissioner,
challenging these assignments and contending that they violated the
Takings and Due Process Clauses of the Fifth Amendment.
Although a majority of the Court upheld Eastern’s challenge to the
assignments, the Court offered no unified rationale for its holding.
Justice O’Connor, writing for herself, Chief Justice Rehnquist, and
Justices Scalia and Thomas, concluded that the Coal Act’s assign-
ments of liability to Eastern represented an unconstitutional taking.
Eastern Enters., 524 U.S. at 537-38. This plurality of the Court
observed that economic legislation may be unconstitutional if "it
imposes severe retroactive liability on a limited class of parties that
could not have anticipated the liability, and the extent of that liability
is substantially disproportionate to the parties’ experience." Id. at 528-
29. The plurality opinion observed that the Coal Act required Eastern
to pay premiums to ensure that beneficiaries possessed benefits for
life, and that such lifetime benefits were not part of any coal wage
agreements prior to the 1974 NBCWA. Id. at 535. Because Eastern
had left the coal mining business in 1965, the plurality concluded that
the Act imposed "such a disproportionate and severely retroactive
burden upon Eastern," that its assignments were unconstitutional
under the Takings Clause. Id. at 536-38.
Justice Kennedy, who provided the fifth vote for invalidation of the
Eastern assignments, explicitly rejected the plurality’s Takings Clause
analysis, and he instead concluded that the Coal Act, as applied to
Eastern, violated the Due Process Clause. Id. at 546-50 (Kennedy, J.,
concurring in the judgment and dissenting in part). Justice Kennedy
maintained that "retroactive laws of great severity" could contravene
due process, and that such retroactive legislation is particularly prob-
lematic when it is not being used to remedy a past wrong. Id. at 549.
He observed that the assignments to Eastern had a "retroactive effect
of unprecedented scope," in that they reached back over thirty years.
Id. According to Justice Kennedy, Eastern’s departure from the coal
mining industry prior to the 1974 NBCWA meant that it had played
no role in the fiscal crisis that engulfed the industry in the 1970s and
1980s. Id. As such, he concluded that the Commissioner’s assign-
ments of liability to Eastern could in no way be viewed as a remedy
14 A. T. MASSEY COAL CO. v. MASSANARI
for Eastern’s past conduct, and that the assignments thus contravened
due process.12 Id.E.
In the wake of the Eastern Enterprises decision, the Commissioner
voided several assignments to coal operators that he deemed "simi-
larly situated" to Eastern. He declined, however, to void the Massey
Assignments, even though those assignments were for coal miners
who had worked, prior to the 1974 NBCWA, for coal operators who
had not signed the 1974 or any subsequent NBCWA. The Commis-
sioner concluded that the Massey Assignments were proper because
the Massey Plaintiffs are part of a "controlled group" of corporations,
as defined in 26 U.S.C. § 1563(a)(1), that include several signatories
to the 1974 NBCWA or subsequent NBCWAs.
In January 1999, the Massey Plaintiffs brought suit against the
Commissioner, the Combined Fund, and the Fund’s Trustees, con-
tending that the Massey Assignments violated both the Constitution
— specifically the Takings and Due Process Clauses of the Fifth
Amendment — and the APA.13 By their complaint, the Massey Plain-
tiffs sought a refund from the Combined Fund of the premiums they
12
The four dissenting Justices, with Justice Breyer authoring the pri-
mary dissenting opinion, concluded that Eastern’s assignments did not
violate any Fifth Amendment guarantees. Eastern Enters., 524 U.S. at
565-67 (Breyer, J., dissenting). Like Justice Kennedy, the dissenters
expressly rejected the plurality’s Takings Clause analysis. Id. at 554.
Thus, the Court voted five-four that the Eastern assignments were not an
unconstitutional taking. However, the four dissenters also expressly
rejected Justice Kennedy’s conclusion that the assignments violated due
process. Hence, with the plurality declining to address that issue, only
one Justice (Justice Kennedy) subscribed to the notion that the Eastern
assignments violated due process. As a result, there was no single consti-
tutional theory under which a majority of the Justices agreed that the
Eastern assignments were unconstitutional.
13
A fifth Massey company, Belfry Coal Corporation ("Belfry"), was
also a plaintiff in the district court. On April 28, 2000, the Commissioner
declared void the assignments challenged by Belfry. Belfry’s claims
against the Commissioner and the Combined Fund are therefore moot,
and Belfry is not a party to this appeal.
A. T. MASSEY COAL CO. v. MASSANARI 15
had paid as a result of the Massey Assignments. In response, the
Combined Fund and its Trustees filed counterclaims against the Mas-
sey Plaintiffs and other members of the Massey Group, i.e., other
companies under the common ownership or control of A.T. Massey.14
The counterclaimants sought a declaratory judgment that the Coal
Act, as applied to the Massey Plaintiffs and the other counterclaim
defendants, violates neither the Takings nor Due Process Clause; and
they sought an injunction requiring the counterclaim defendants to
pay the premiums due the Combined Fund under the Act.
By its opinion of July 19, 2001, the district court awarded summary
judgment to the Commissioner, the Combined Fund, and the Fund’s
Trustees, concluding that the Massey Assignments did not contravene
the Court’s holding in Eastern Enterprises. A.T. Massey Coal Co.,
Inc. v. Massanari, 153 F. Supp. 2d 813 (E.D. Va. 2001). The district
court, however, denied the counterclaims of the Combined Fund and
its Trustees.15 The Massey Plaintiffs and the other counterclaim
defendants have appealed, and we possess jurisdiction pursuant to 28
U.S.C. § 1291.
III.
The parties agree that the material facts of this case are not in dis-
pute. They also agree that this appeal involves only questions of law.
Under controlling authority, we review the district court’s award of
summary judgment de novo. Holland v. Pardee Coal Co., 269 F.3d
424, 430 (4th Cir. 2001).
14
The Commissioner filed a separate answer to the complaint, and he
did not assert any counterclaims.
15
In light of the district court’s decision, the parties entered into a stip-
ulation, dated August 22, 2001, under which the Massey Plaintiffs agreed
to pay all premiums assessed by the Combined Fund plus interest, while
the Combined Fund agreed to issue an appropriate refund if the Massey
Plaintiffs prevailed at a later date. The district court then amended its
opinion to account for the stipulation. A.T. Massey Coal Co., Inc. v. Mas-
sanari, CA No. 3:99cv83, Order (E.D. Va. Aug. 28, 2001).
16 A. T. MASSEY COAL CO. v. MASSANARI
IV.
Although the Massey Plaintiffs assert that the Massey Assignments
violate both the Constitution and the APA, their appeal turns on a sin-
gle issue — whether those assignments are unconstitutional under
Eastern Enterprises.16 Before we can evaluate this question, however,
we must first ascertain the holding of Eastern Enterprises.
A.
It is well established, under Marks v. United States, 430 U.S. 188(1977), that when a decision of the Court lacks a majority opinion, the
opinion of the Justices concurring in the judgment on the "narrowest
grounds" is to be regarded as the Court’s holding. 430 U.S. 188, 193
(1977). The Marks rule does not apply, however, unless "the narro-
west opinion represents a ‘common denominator of the Court’s rea-
soning’ and ‘embod[ies] a position implicitly approved by at least five
Justices who support the judgment.’" Association of Bituminous Con-
tractors, Inc. v. Apfel, 156 F.3d 1246, 1254 (D.C. Cir. 1998) (quoting
King v. Palmer, 950 F.2d 771, 781 (D.C. Cir. 1991)). In Eastern
Enterprises, Justice Kennedy specifically rejected the plurality opin-
ion’s reliance on Takings Clause jurisprudence, and he instead based
his conclusion on a due process theory that the plurality expressly
declined to address. Compare Eastern Enters. v. Apfel, 524 U.S. 498,
537-38 (1998) ("Because we have determined that the [Coal Act] vio-
lates the Takings Clause as applied to Eastern, we need not address
Eastern’s due process claim."), with id. at 539 (Kennedy, J., concur-
ring in the judgment and dissenting in part) ("I concur in the judgment
16
As a final agency decision, the Commissioner’s assignment of bene-
ficiaries is governed by the APA. Sigmon Coal Co., Inc. v. Apfel, 226
F.3d 291, 301 (4th Cir. 2000), aff’d sub nom. Barnhart v. Sigmon Coal
Co., Inc., 534 U.S. 438 (2002). Under § 706 of the APA, the Commis-
sioner’s decision may be set aside only if it was either "arbitrary, capri-
cious, an abuse of discretion, or otherwise not in accordance with law"
or "contrary to constitutional right, power, privilege, or immunity." In
this case, the Massey Plaintiffs contend that the Massey Assignments
must be set aside because those assignments are contrary to the Court’s
holding in Eastern Enterprises. Therefore, in deciding the constitutional
issue, we also dispose of the Massey Plaintiffs’ APA claim.
A. T. MASSEY COAL CO. v. MASSANARI 17
holding the Coal Act unconstitutional but disagree with the plurality’s
Takings Clause analysis, which, it is submitted, is incorrect."). Our
analysis of the two opinions finds no theoretical overlap between the
rationales employed by the plurality and Justice Kennedy; as such,
"Justice Kennedy’s substantive due process reasoning is not a ‘nar-
rower’ ground that we might take to constitute the controlling hold-
ing." Unity Real Estate Co. v. Hudson, 178 F.3d 649, 658 (3d Cir.
1999); see also Association of Bituminous Contractors, 156 F.3d at
1254-55. Thus, consistent with the other courts that have analyzed
this question, we conclude that Eastern Enterprises "mandates judg-
ment for . . . plaintiffs only if they stand in a substantially identical
position to Eastern Enterprises with respect to both the plurality and
Justice Kennedy’s concurrence."17 Unity Real Estate, 178 F.3d at 659;
see also Association of Bituminous Contractors, 156 F.3d at 1254-55.
Therefore, in order to determine whether the Massey Plaintiffs may
constitutionally be subjected to liability for the Massey Assignments,
we must determine what it means to be in a position "substantially
identical" to that of Eastern. In so doing, we must identify and exam-
ine the factors that were critical to both the plurality and Justice Ken-
nedy in their respective determinations that the Commissioner’s
assignments to Eastern were unconstitutional. The Massey Plaintiffs
are only entitled to succeed here if their position, with respect to
every critical factor, is substantially identical to that of Eastern. As
explained below, our assessment of the plurality opinion of Justice
17
We note that Eastern Enterprises does not stand for the legal propo-
sition that the Eastern assignments under the Coal Act contravene the
Takings Clause. As the district court properly observed, "it is clear that
[a] majority of the Court [in Eastern Enterprises, i.e., Justice Kennedy
and the four dissenters] believed that the Coal Act, and its assessment of
premiums, did not constitute a taking within the ambit of the Fifth
Amendment." A.T. Massey Coal Co., Inc. v. Massanari, 153 F. Supp. 2d
813, 825 (E.D. Va. 2001); see also Unity Real Estate, 178 F.3d at 659("[W]e are bound to follow the five-four vote against the takings claim
in Eastern."). Nor can Eastern stand for the proposition that the Eastern
assignments are unconstitutional under the Due Process Clause, because
only Justice Kennedy arrived at such a conclusion. It is this absence of
consensus on the part of the Court that prompts us to apply Eastern
Enterprises only to coal operators that stand in a position substantially
identical to that of Eastern.
18 A. T. MASSEY COAL CO. v. MASSANARI
O’Connor and the separate concurring opinion of Justice Kennedy
leads us to conclude that a coal operator stands in a position "substan-
tially identical" to that of Eastern if it had no connection to the 1974
or subsequent NBCWAs. See Unity Real Estate, 178 F.3d at 659(observing that "[l]anguage in the plurality and the concurrence sug-
gesting that expectations fundamentally changed after 1974" indicates
that connection to 1974 and subsequent NBCWAs is a critical factor).
1.
Justice O’Connor’s plurality opinion emphasized that the magni-
tude of Eastern’s retroactive liability was severely disproportionate to
the conduct giving rise to that liability. The plurality observed that,
while Congress has "considerable leeway to fashion economic legisla-
tion," and that it may impose retroactive liability under certain cir-
cumstances, an economic regulation may nonetheless constitute an
impermissible taking "if it imposes severe retroactive liability on a
limited class of parties that could not have anticipated the liability,
and the extent of the liability is substantially disproportionate to the
parties’ experience." Eastern Enters., 524 U.S. at 528-29. Applying
that observation to Eastern, the plurality noted that it was the 1974
NBCWA that "first suggest[ed] an industry commitment to the fund-
ing of lifetime health benefits for both retirees and their family mem-
bers." Id. at 530-31. Accordingly, "[n]ot until 1974 . . . could lifetime
medical benefits under the multiemployer agreement have been
viewed as promised." Id. at 535.
Eastern, though, had left the coal industry in 1965, and it had been
party only to NBCWAs that promised unvested benefits, fully subject
to later alteration and termination. Id. at 529-32. The plurality dis-
missed as irrelevant the fact that Eastern’s wholly owned subsidiary,
EACC, was party to the 1974 expanded benefits regime, and that
EACC continued mining coal until 1987. The plurality maintained
that "Eastern’s liability under the Act bears no relationship to its own-
ership of EACC." Id. at 530. "[T]he Act assigns Eastern responsibility
for benefits relating to miners that Eastern itself, not EACC,
employed." Id. Because the Act grounded Eastern’s liability exclu-
sively in Eastern’s own conduct, the plurality assessed the constitu-
tionality of Eastern’s liability on the same terms. Given Eastern’s
particular, pre-1974 experience and its expectations in the coal mining
A. T. MASSEY COAL CO. v. MASSANARI 19
industry, the plurality reasoned that the retroactive liability to which
Eastern had been subjected was unconstitutionally disproportionate.
Id. at 536-38.
2.
Justice Kennedy’s separate opinion similarly relies on the fact that
Eastern left the coal mining industry prior to the pivotal 1974
NBCWA. Justice Kennedy, though, emphasized the unfairness of
holding Eastern retroactively liable for a benefits crisis that it had not
helped to precipitate. He observed that our legal tradition has long
disfavored retroactive economic legislation, because such legislation
"can destroy the reasonable certainty and security which are the very
objects of property ownership." Id. at 548 (Kennedy, J., concurring in
the judgment and dissenting in part). He therefore concluded that "due
process protection must be understood to incorporate our settled tradi-
tion against retroactive laws of great severity." Id. at 549. In defining
"retroactive laws of great severity," Justice Kennedy focused on both
(1) the degree of retroactive effect, i.e., how much time had passed
since the conduct that gave rise to liability, and (2) whether the liabil-
ity in question was remedial, in that it imposed "an actual, measurable
cost of the employer’s business which the employer had been able to
avoid in the past." Id. (quotation and citation omitted).
Justice Kennedy determined that the assignments to Eastern, by
creating liability for Eastern’s conduct in the 1950s and 1960s, had
"a retroactive effect of unprecedented scope." Id. at 549-50. Because
such retroactive liability could be justified only if it served a remedial
purpose, only those coal operators who "were responsible for [the]
expectation of lifetime health benefits or for the perilous financial
condition of the 1950 and 1974 benefit plans [created by the 1974
NBCWA]" could reasonably be held responsible for providing life-
time benefits. Id. at 550. Since Eastern had neither promised lifetime
benefits nor precipitated the funding crises of the 1970s and 1980s,
Justice Kennedy concluded that the Coal Act, as applied to Eastern,
represented "one of those rare instances in which even [the] permis-
sive standard [of the Due Process Clause] has been violated." Id.
3.
In sum, Eastern’s pre-1974 departure from the coal industry and its
status as a nonparty to the 1974 and subsequent NBCWAs were criti-
20 A. T. MASSEY COAL CO. v. MASSANARI
cal both to the plurality and to Justice Kennedy in their respective
determinations that the Commissioner’s assignments to Eastern were
unconstitutional. Consequently, the Massey Plaintiffs stand in a posi-
tion "substantially identical" to that of Eastern only if they neither
signed nor operated under the 1974 or subsequent NBCWAs.
B.
Having assessed what it means to be in a position "substantially
identical" to that of Eastern, we turn to the question of whether the
Massey Plaintiffs are so situated. As explained below, we conclude
that they are not.
Under Eastern Enterprises, a coal operator cannot be assessed Coal
Act premiums if it signed and operated only under pre-1974 NBC-
WAs. As such, it would initially seem that our inquiry is simply
whether any of the Massey Plaintiffs signed or operated under the
1974 or subsequent NBCWAs. Because it is clear that they did not,
it might appear at first glance that the experiences of the Massey
Plaintiffs in the coal mining industry are "substantially identical" to
those of Eastern.
Under the Coal Act, however, we are not to view the experiences
of the Massey Plaintiffs in isolation; any such examination would be
at odds with the Coal Act’s concepts of "related persons" and "con-
trolled groups." As discussed above, the Act provides that "[a]ny
employment of a coal industry retiree in the coal industry by a signa-
tory operator shall be treated as employment by any related persons
to such operator." 26 U.S.C. § 9706(b)(1)(A). Under this provision,
each member of a controlled group of corporations, such as the Mas-
sey Group, is treated for Combined Fund liability purposes as though
it had employed every miner who worked for any member of the group.18
Looking beyond the terms of the statute, we find further evidence
of Congress’s plain intent to aggregate the members of a corporate
family into a single entity for the purpose of assigning Combined
18
The Act further emphasizes the statutory unity of the members of a
controlled group by holding the members jointly and severally liable for
each other’s obligations under the Coal Act. 26 U.S.C. § 9704(a).
A. T. MASSEY COAL CO. v. MASSANARI 21
Fund liability. The Conference Committee Report stated that "because
of the complex corporate structures which are often found in the coal
industry, the number of entities made jointly and severally liable for
a signatory operator’s obligations is intentionally very broad." 138
Cong. Rec. S17604 (daily ed. Oct. 8, 1992) (Conference Committee
Report). In essence, the Act recognizes that coal operators frequently
reorganize their corporate structures and spin off or consolidate sub-
sidiaries. Congress recognized that while those reorganizations alter
corporate relationships, they leave the nature of a coal operator’s
involvement in the industry unchanged. Thus, the Coal Act looks
beyond the corporate form, focusing on the collective experiences of
a "controlled group" rather than on the particular experiences of ever-
shifting member entities.
The Massey Plaintiffs contend that their related person status with
respect to coal operators who signed the 1974 and subsequent NBC-
WAs has no bearing on whether their position is "substantially identi-
cal" to that of Eastern. They observe that Eastern’s wholly owned
subsidiary, EACC, operated in the coal mining business during the
critical post-1974 period, and that it signed the 1974 and subsequent
NBCWAs. They concede that Eastern sold EACC in 1987, and that
because the Coal Act determines related person status as of July 20,
1992, Eastern and EACC are not statutory "related persons." The
Massey Plaintiffs assert, however, that the fact that Eastern had no
statutory "related person" is irrelevant to our constitutional inquiry.
The Massey Plaintiffs point out that the July 20, 1992, statutory date
for the determination of related person status represents an arbitrary
choice by Congress. The key point, the Plaintiffs assert, is that the
corporate relationship between Eastern and EACC in the post-1974
NBCWA period was functionally the same as that between the Mas-
sey Plaintiffs and their related persons (such as Omar Mining and Big
Bear) who, like EACC, signed the 1974 and subsequent NBCWAs.
Accordingly, the Massey Plaintiffs maintain that their experiences in
the coal mining industry are "substantially identical" to those of East-
ern.
The Massey Plaintiffs overlook the fact that the Eastern Enter-
prises plurality expressly deferred to the delineation of entities that
Congress chose to make in the Coal Act. The plurality acknowledged
that, because Eastern sold EACC prior to July 20, 1992, "the Act
22 A. T. MASSEY COAL CO. v. MASSANARI
assign[ed] Eastern responsibility [only] for benefits relating to miners
that Eastern itself, not EACC, employed." Eastern Enters., 524 U.S.
at 530. The plurality thus found that "Eastern’s liability under the Act
bears no relationship to its ownership of EACC." And accordingly,
the plurality examined Eastern’s experience in isolation. Id.Just as the Eastern Court deferred to Congress’s statutory delinea-
tion of entities under the Coal Act, this Court likewise must take the
parties as the Act defines them. The Coal Act designates Eastern, by
virtue of its sale of its coal mining subsidiary prior to July 20, 1992,
as a discrete entity. By contrast, the Act gathers the Massey Plaintiffs
together with the other members of the Massey Group for purposes
of determining Combined Fund liability. Regardless of how members
of the Group might prefer to be viewed, Congress has, for our pur-
poses, effectively designated these "related persons" as a single legal
entity under the Coal Act. Consequently, in evaluating whether the
Massey Plaintiffs’ experiences in the coal industry are substantially
identical to those of Eastern, we may not artificially segregate those
plaintiffs from the other members of the Massey Group. Rather, we
must analyze the experiences of the Massey Group as "related per-
sons," i.e, as a whole.
Looking thus through the lense of the Coal Act’s "related persons"
framework, we find that the Massey Plaintiffs are part of an entity
whose experiences in the coal mining industry are not substantially
identical to those of Eastern. In Eastern Enterprises, the Court deter-
mined that it was unconstitutional to subject a coal operator to fifty
million dollars in retroactive liability when that operator had engaged
exclusively in pre-1974 coal mining activities, and when it had nei-
ther assented to, nor contributed to the foundering of, the expanded,
post-1974 NBCWA retirement benefits regime. Here, we face the
question of whether it is constitutional to subject to substantial liabil-
ity a coal operator — the Massey Group — that has carried on coal
mining activity throughout the crucial post-1974 period, and that has
assented to and participated in the post-1974 NBCWA regime. Unlike
Eastern, several members of the Massey Group (such as Omar Mining
and Big Bear) signed the 1974 and subsequent NBCWAs. Attributing
the employment experiences of those signatory operators to the rest
of the Massey Group — as the Coal Act’s "related person" provisions
require us to do — and mindful that an operator is "substantially iden-
A. T. MASSEY COAL CO. v. MASSANARI 23
tical" to Eastern only if its experiences in the mining industry are con-
fined to the pre-1974 NBCWA era, we find the position of the
Massey Plaintiffs easily distinguishable from that of Eastern. Because
the Massey Plaintiffs do not stand in a position "substantially identi-
cal" to that of Eastern, the Commissioner’s assignments of liability to
the Massey Plaintiffs are not unconstitutional under Eastern Enter-
prises.
V.
For the foregoing reasons, the challenges of the Massey Plaintiffs
to the Massey Assignments are without merit, and we affirm the dis-
trict court.
AFFIRMED
NIEMEYER, Circuit Judge, concurring in part in the judgment and
dissenting in part:
I would find that the assignments of liability for coal workers’ pen-
sions to A.T. Massey Coal Company, Inc., Massey Coal Services,
Inc., and Peerless Eagle Coal Company are unconstitutional by virtue
of the Supreme Court’s holding in Eastern Enterprises v. Apfel, 524
U.S. 498 (1998). With respect to those assignments, I would reverse.
Otherwise, I concur in the judgment.