they are funded by a mix of federal dollars and by premiums that are assessed on coal companies as long as those companies remain in business and then he asked congress in through the act impose a number of restrictions to prevent coal companies from getting out of those obligations and the decision below the bankruptcy court held that notwithstanding the special statutory protections in the coal act that it may permanently eliminate all of a coal companies obligations under the act before it goes out of business in reaching that conclusion the  that were decided against my clients by the th circuit in the water case understand it and correct me if i'm wrong the coal miners are getting their money their benefits regardless and so this is really about whether the companies are going to continue to contribute the bankrupt entities or if they don't the shortfall is going to be picked up by the federal government is that that's active say the th circuit say th circuit says of in the decision it's eighty the miners are still going to get their money just the taxpayers and have to pay more and there is a limit to which the taxpayers are on the hook we're not at that limit yet the abandoned mine reclamation fund is where much of the federal dollars come from that fund is being depleted as mines are being reclaimed and over time my clients government to submit its views because one its tax dollars are at issue in two or time or two federal statutes that are arguably in conflict in the federal government might have a view about which one prevails to my knowledge no one has as solicit position from the government on this and you don't know that we're taking a big deal well or any other no i don't know him i don't know i would have to speculate that the federal government would rather that the companies pay than that they pay but but there's obviously more interest at stake i'd like to start it is just cause i know there are two statutes at issue in this case three really if you throw the any injunction act i'd like to start with what i think is the cleanest and simplest path to a reversal which is has to do with the question of modification only of negotiable obligations the th circuit held that in its decision when it ruled against us and westmoreland pages thirty four and thirty five of its brief says explicitly that it agrees that only negotiable obligations may be modified has no power to order a modification unless the authorized representative refuses to enter into an agreement without good cause so in other words if there is good cause to reject modification then the court may not enter that these obligations may not be negotiated and i point the court to section nine thousand seven hundred and twenty two which specifically forbids any transaction any transaction if a principal purpose of that transaction is to evade or ovoid liability under this chapter and is so i that that provision asked the court just imagine if an authorized representative agrees with the coal company you know what you don't have to pay what the act requires that would be a transaction the principal a principal purpose of which it doesn't have to be a principal purpose of which is to invade earth void colac liability and so the act would nullify that agreement that was entered into between  show that is what we're saying judge david just as the banks and the court can't tell an operating debt or you know what for the next five months you don't have to pay social security taxes because it's going to be too onerous on your you're a state to pay the costs that you incur congress wrote the call that so that these premium obligations are contingent on operation and so we're dealing here in the chapter eleven dollars with an operating debtor in possession and while that debtor continues to operate it continues to be assessed and incur on a monthly basis premiums under the combined fund and under the one thousand nine hundred and ninety two plan and so yes congress did go a step further judge davis and made these these statutory obligations extra specially protected because it forbids these someone if you can't be a great writer and then it's the company's obvious that the table and yet no one from the federal government at the negotiating table even though they're the ones that most directly impacted other than this modification us trustee who may be involved in the case now that the department justice or u s attorney's office they don't have a claim that these other five even say we're going to negotiate away all these obligations to the federal government and that's and that's to us the absurdity of this whole negotiation process because if if the agreement that is reached between the authorized representative and the coal company could take place well then it's always going to reduce the payments to see because the feds are always going to until we reach this limit they're going to they're going to provide a dollar for dollar substitution and so it becomes an immediate turn off of paying the premiums that congress said you have to pay and that's why i focus the court on this the way one thousand one hundred and fourteen f and g are set up because if there is good cause for the representative to say no then the court never gets to enter and say no the banks the court can enter that order the th circuit agreed with us on all this and just disagreed alternately on the negotiable any of collective obligations and i respectfully believe that the th circuit fundamentally misunderstood what was going on in the in the single example that the th circuit cited was this bethlehem steel settlement that the trustees entered into in the early two thousand that was a settlement in a bankruptcy and if the court reads the decision of the bank to court there a page start to it's unpublished the court know that bethlehem steel had already gone out of business at the time of the settlement meaning it had stopped accruing collect obligations on a monthly basis because that's how congress writes the coal act soon as you go out of business you don't  accrue continuing obligations and so the settlement the key settlement that the th circuit focused on was a purely retrospective settlement and your honour's in our view that's similar to when the i r s enters into a settlement with the taxpayer and the taxpayer has accrued a tax liability say fo thousand then is unable to pay well of course you could negotiate over that distinct claim that cause of action you could take into account of villainy to pay whether the tax was properly assessed those are appropriate settlements of statutory benefits during bankruptcy has to be put into your confirm plan and stick with you after bankruptcy and so when you put these two things together one thousand one hundred and fourteen dollars is about permanently in prospect of the changing obligations you're saying all these settlements are apparently been a number of settlements they're all retrospective looking at aspen if it's that of well i have my understanding the one the only one that's been cited to get to us is the one that involves bethlehem steel but my understanding in control of my client is that they tend to deal with these settlements about assess claims at the end of a bankruptcy as just happened they have not to our knowledge entered into a prospect of agreement that says you know congress said you have to pay for this amount of money on a monthly basis for the rest of your existence we're going to cut that fifty percent because we don't want transaction with the principal purpose of evading collect liability we can't see how you could reach a conclusion that these are negotiable benefits if the court did however that would present a very difficult question under the any injunction  because every court except the th circuit has held that the coal act obligations are taxes that are protected by the anti injunction and many of those decisions post date the and if i'd be just walter your honor and so all the ones are pre exaction is very important in applying the any injunction act we're not saying that the label is irrelevant but what we are saying is that there's more than just the label tax that is protected by the any injunction act and that's because congress wrote  not to apply simply to an exaction that is labeled tax it says any tax which would include exactions that are taxes but not called taxes and even n f i b recognize that when it said that there are some penalties exactions called penalties in the tax code that are in fact treated as taxes for the any injunction act purpose and similarly we've cited to the court cases from the early part of the th century like liberty versus letter where there were exactions that were labeled tax in the statute in the supreme court said no those are actually penalties and you can bring a challenge to those under the consistent with the any injunction act the question is ultimately what is the label that congress chose and what does that indicate about congress intent most of these cases deal with an exaction that's called tax in exaction that's called penalty but in between those extremes there's a range of other labels and what we're dealing with here is a premium and in our view premium has the same effect of meaning as a tax it's an additional sum that is charged upon an individual that is a tax it's involuntary and the purpose of this is to raise revenue contrast that with the penalty the purpose of a penalty is not to raise revenue the purpose of a penalty is to shape behavior  stop people from taking some action and so a successful penalty raises no revenue whereas a successful tax and a successful premium raise revenue on a regular basis the coal companies that pay these premiums obtain the benefit in exchange for the payments and so you couldn't call it just like it a fee transaction fee of some kind it is absolute and it's unavoidable just a tax except when the business decides to go out of business well that's the same as a real estate taxes soon as you dispose of real property you no longer pay the real estate taxes on that property and so you do have some broad control but as long as you have a continued obligation you continue doing her the premiums of the collecting just as you would incur real estate tax it's  that if a coal company disagrees about its premium payments it can bring a tax refund action that's the pits in case and so yes these cases predated n f i b but n f i b was dealing with the difference between tax and penalty it told us to look at the words congress you used and then decide is this supposed to be any tax and a premium as i've just tried to describe is a tax in the posture of this case was came up in a locker tory there was no no deal had been made or out these injunction act and so it was in the context of saying you can't do that that we said the any injunction act x is a prohibition on what would be the motion that gets filed later on your initial time has expired i see that your honor i'll reserve the thank you your honor and may please the court section one thousand one hundred and fourteen of the bankruptcy code was enacted to give bankruptcy courts tightly circumscribed authority to modify retiree health care benefits during chapter eleven proceedings the bankruptcy court here properly exercised that limited authority when it approved an agreement to modify debtors koel act obligations thereby preventing liquidation of the companies and preserving thousands of jobs in the even that extremely modest agreed upon modification instead the company must liquidate the mines must close and every single job must be lost that cannot be the law unfortunately as every single court to address the issue has concluded it is not the law and i'd like to start where my my friend on the other side began in their brief which is whether these are even retirement benefits to begin with and i think that is answered by this cour decision in re rogers which says that it is a fundamental canon of statutory construction that in the absence of a statutory definition we give terms their ordinary meaning and here we start with the text meeting under multiple definition definitions in dictionaries is to bear the expense of furnish the means for subsistence support preserve the failure or decline it is the ordinary meaning and it applies foursquare here so security would be more like a pension obligation that wouldn't fall under to begin with but number two both social security and medicare they go into the general treasury fund there's not up plan or program  segue into what i think is now the main argument by the trustees even though as the nd argument in their brief which is this idea about statutory obligations being completely outside the purview of  fourteen eat the debtor shall not modify any retiree benefits except the court may order a modification of such benefits or the authorized representative may agree to a modification of such benefits  benefits that a retiree benefits but they are somehow not subject to the rest of one thousand one hundred and fourteen dollars now there's a nd in perhaps even more fundamental reason why this idea that because it's a statutory obligation it's completely beyond the purview of one thousand one hundred and fourteen doesn't work and that is that whatever you might think of statutory obligations in the ordinary course everything is different in bankruptcy bankruptcy piece in bankruptcy proceedings are numerous decisions from courts of appeals that hold that statutory obligations can be modified or overridden or disregarded in bankruptcy proceedings because of the books of those i'll give you some examples the nd circuit's a nd circuit even referred to this as obligations arising out of public regulation and it said the bankruptcy code quote is intended to override many provisions of law that would apply in the absence of bankruptcy if the code creates limits on the extent of environmental cleanup efforts as the e p a had argued the remedy is for congress to make exceptions to the code or to achieve other objectives that congress chooses to reach rather than for courts to restrict the meaning of across the board legislation like a bankruptcy law in order to promote objective evidence and other statutes now the rd circuit in the trump case this is a case involving the national labor relations act under the n statutorily prohibits an employer from unilaterally changing the terms of a collective bargaining agreement after a sex for a ship it creates a statutory obligation on employers to continue those terms of the expired c v a until a new one when the employers statutory obligations to maintain the status quo under the terms of an expired c v a will undermine the debtors ability to reorganize and remain in business statutory obligation  to quote extinguish coal act successor liability because of course under the coal act it is a statutory requirement the statutory obligation that anyone who is a successor to one of these companies so if a choir they purchased it what have you asked to pick up the liabilities the statutory obligation but the th circuit said in the bankruptcy court may quote order the sale of the debtors assets free and clear of the debtors whole act obligations and in fact the funds argued in that case that to reach that holding it would grant purchasers and bankruptcy settings a windfall because such purchasers might have been liable for those collect obligations if the sales had not occurred in the bankruptcy setting and the th circuit said we reject that argument finding that it is our duty to enforce the statutory scheme that congress has erected so i go through all these cases just to underscore that statutory obligations whatever the case may be outside of the bankruptcy context and we think that in this context for the reasons we've already stated it doesn't work anyway but once you're inside that back at the bankruptcy proceeding world for all the reasons that these other courts of appeals have explained statutory obligations most certainly can be modified and disregarded and i think the most important takeaway perhaps is that that's happening in this case in this case there was a section three  sale to a purchaser now under the cole act there should be successor liability for that purchaser but because of the four circuits decision in re leckie that statutory obligation between the donor and cities and the the retiree's get some representatives to be at the table as well which of those parties has any strong interest to protect or continue colac contributions  retirees because as you said at the beginning pretty much everyone oh it's great let's keep the mines running and of course that's that's what a lot of people would want so why isn't there the incentive is always going to line up and let's eliminate the contributions of the government  here i don't know what the particular you know back and forth of these negotiations is but i do know that the negotiations don't just result in you know hey have anything you want i mean this is a perfect example in this case the companies i believe came in with their initial proposal was just to terminate everything and then what ended up happening after the bankruptcy court had to determine whether it had the authority in just a you know do whatever you want there were actually there was as as is undisputed there was a good faith give and take and there were things given up and the companies actually you know provided that was not the sort of the original proposal so you know i don't know what they're the nuances of all the other negotiations and ben but at least for purposes of this case it shows that it's not just a blank check and it's not just a sort of hey you know let's just give it all give it all away of equities so this this is you know there is rigorous court oversight of this entire process and it's not something where in the party and i think if any bankruptcy court thought that there was some sort of collusion going on or something where everyone was trying to kind of offload this the bankruptcy court would have something to say about it but no court ever has every court that has looked at this has given it the close scrutiny that the statute requires  applies to a sham transaction and a principal purpose of the relevant transaction has to be to avoid the whole act liability here i don't even think there's been sort of an identification of what the relevant transaction what it is they don't seem to argue that it was the filing of the bankruptcy petition and they don't argue that it was the sale of the company although you would think that that's actually you know if there was any take place in this case until you know after the process that gave rise to this appeal but putting that aside i struggle to understand how a a motion filed in a court is you know a transaction in the sense that any of us would think of a transaction you know i don't know if the guy gets the counter parties would be the debtors in the court but even then you know a principal purpose of that i don't think in any sense is evading coal act liability affiliate in the came in and then you know sends money over here and so therefore you somehow got out out of paying your your obligations i don't think it has any relation to a congressionally authorized mechanism in ch eleven bankruptcy proceedings which is section one thousand one hundred and fourteen and if i can now just turn very briefly to the anti injunction act we provide a number of reasons in our brief why we don't think that the act even appl at the outset and that even if it did that it would fall under the reagan exception because there's really no there's really no way to have an alternative means for obtaining relief here but since my friend focused on just the question of whether these are even taxes in the st place and really focused attention on n f i b you know with all respect i just don't think that you can read and if i be in that manner and i don't think that this court has read and if i  says that there has to be a quote compelling reason to ignore congress choice of label well in this particular context in the coal act congress used the word premium eighty seven  used and aside from that it did use the word tax a few times so this is this is not just a situation where it chose to use the word premium eighty seven dollars times it also used the word tax showing that it knew how to use the word tax private fund it does not go to the government it does not go through the government it goes directly to a private fund and i think that's you know just another reason why at the very outset that the empty injunction act really has no at the ability here because you know this is not a situation where the money is going to to the government this is not a situation in the typical anti injunction activist you've got a party that's coming into court saying i'm not going to i'm not going to pay that because i think it's you know totally unsubstantiated by the law and i don't think this case maps on to that at all we don't have a suit for the purpose of restraining collection of any tax this is not a situation where somebody has gone in and then it kind of bring everything back to the reagan exception if it's one thousand one hundred and fourteen warrants available because of the anti injunction this clear he said look it's not about whether you can do it or not you just can't do it now you have to do it later well in this case there's no later there really isn't a time or place that that the debtors could bankruptcy court but also by the way they would have liquidated by that point there wouldn't be anyone left so you know when you're thinking in terms about whether any injunction act even applies in the st place you know whether you want to look at it from the front door because this is not a suit for the for the restraining of the collection of any tax or if you want to look at it from the back door which is the reagan exception because there is no alternative means of obtaining relief i think it simply doesn't apply in the st place but even if it did congress used the word premium eighty seven times and that's an awfully strong indication that it meant that it was a premium not a tax if there are no further questions  forbids that it would be a transaction whose principal purpose is to evade liability and the collect and in fact that is how the collect obligations ultimately were terminated in this case after judge jones appointed a committee of three individuals none of whom were actually beneficiaries of the collect funds they entered an agreement with the debtor that agreement provided that the liabilities would be completely eliminated except for the seventy five thousand dollar fund that is going to reserved for whether we win or lose on this appeal the court did not oversee that they did not ever get to the one thousand one hundred and fourteen dollars g point of meeting a motion for a court ordered modification because the three person committee said you know what we're good with getting this down the zero and that's the problem that's the transaction that nine thousand seven hundred and twenty two forbids us congress and titled that provision sham transactions but the text is what controls it's not the title and the text is any transaction and if you can't get over that hump you never for purposes of a discharge and claims as the court probably knows have to deal with when an issue arose when did the right to a payment come into existence and yeah and circle of the courts have held that the right to payment came into existence at the time of the pollution or the  and eighty s but cases after chateau gay have gone on and said but just because but circle is kind of a different beast you can't get a exemption in bankruptcy to allow you to pollute however you want  the you know you're dealing with something truly retrospective when you're dealing with what is the definition of a claim our case deals with those prospect of obligations the coal act says periodically every month or every year you will be assessed premiums as long as you remain in business that's the same continuing obligation that the environmental laws impose on polluters it's the same continuing obligation that the entire discrimination laws impose on employers and just because an employer may have discriminated against an employee ten years ago and that employee has a claim in the bankruptcy does not mean that the bank should be court can for ever immunize that debtor from discrimination liability in the future and that is fundamentally what this case in this issue is about can a bank be court forever immunize the debtor from having to pay collect obligations prospectively it happens to be in this case that westmoreland went out of business but not every call company is going to go out of business and on the courts the banks the court eleven service a private fund it is a typical nowadays for taxes to be paid to private individuals but historically the injunction act was adopted after the civil war in the s there were things like taxes tolls that were collected by private individuals under  authority of the law and that's comparable to what's going on here th point mr hicks said everything is different in bankruptcy that is a broad generalization in our view the only things that are different are the things that the banks the code specifically says are different and so it's not a safe assumption to put the burden on us to show why things should be the same it's the burden on him to show why things are different and finally mr hicks let off by identifying claiming that this is a very high stakes case that the whole company may very well have faltered if it obligations the effect of the settlement here was to relieve the company of four months of paying their premiums which is about two million dollars in other words had we prevailed the companies would have gone out of business four months later my clients would have been able to assess four additional months of premiums for two million dollars the westmorland sold its mines for more than one billion dollars there is no way rationally that thousands of jobs are on the line over the two million dollars that this case is ultimately about and so we haven't i haven't been able to address all of the issues today unless the court has questions about the other topics that we ask that for any one of the three reasons we've given the brief the banks the court's decision should be reversed