Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-18-07159/USCOURTS-caDC-18-07159-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 19, 2019 Decided January 17, 2020

No. 18-7159

MICHAEL H. HOLLAND, AS TRUSTEE OF THE UMWA 1992

BENEFIT PLAN, ET AL.,

APPELLEES

v.

ARCH COAL, INC.,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 1:17-cv-00300)

John R. Woodrum argued the cause and filed the briefs for 

appellant. 

Stephanie Schuster argued the cause for appellees. With 

her on the brief were John R. Mooney, Paul A. Green, John C. 

Goodchild, III, Bryan Killian, and Stanley F. Lechner. Diana 

M. Bardes entered an appearance. 

Before: TATEL and SRINIVASAN, Circuit Judges, and 

GINSBURG, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge 

GINSBURG.

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GINSBURG, Senior Circuit Judge: The Coal Industry Retiree 

Health Benefit Act of 1992 (Coal Act) created the United Mine 

Workers of America 1992 Benefit Plan (1992 Plan) to provide 

benefits to retirees of coal companies that had signed retiree 

benefits agreements with the Union. Certain of those 

companies, referred to here as “1988 last signatory operators,” 

or LSOs for short, are responsible for financing the benefits 

provided by the 1992 Plan. The Trustees of the 1992 Plan seek 

to compel Arch Coal to provide security pursuant to the Coal 

Act as a person related to an LSO. Arch Coal argues the Coal 

Act does not require related persons to provide security – as 

opposed to financing benefits – or alternatively that the security 

previously provided on behalf of Arch Coal’s former 

subsidiaries (or the proceeds thereof) already satisfied the 

requirement. 

We hold the Coal Act requires Arch Coal, as a person 

related to an LSO, to provide security and that the security 

previously provided on behalf of Arch Coal’s former 

subsidiaries does not satisfy that requirement. We therefore 

affirm the judgment of the district court.

I. Background

Starting in 1947, the Union and the operators negotiated a 

series of National Bituminous Coal Wage Agreements 

(“NBCWAs”), E. Enters. v. Apfel, 524 U.S. 498, 505–11

(1998), under which the operators “agreed to pay benefits not 

only for their workers but also for workers whose employers 

had failed to meet their obligations under the agreement, socalled orphaned workers,” Holland v. Williams Mountain Coal 

Co., 256 F.3d 819, 821 (D.C. Cir. 2001). Over time “more and 

more coal operators abandoned the Benefit Plans” created by 

these NBCWAs, forcing “the remaining signatories . . . to 

absorb the increasing cost of covering retirees left behind by 

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exiting employers.” E. Enters., 524 U.S. at 511. The result was 

“a maelstrom of contract negotiations, litigation, [and] strike 

threats” that culminated in passage of the Coal Act. Barnhart v. 

Sigmon Coal Co., 534 U.S. 438, 445–46 (2002). The Coal Act 

created “the UMWA 1992 Benefit Plan to pay health care 

benefits and collect premiums from former employers and their 

successors.” Holland v. Bibeau Const. Co., 774 F.3d 8, 11 

(D.C. Cir. 2014). 

The Coal Act provides health benefits to coal industry 

retirees in three ways. First, it combined two trust funds 

created by the 1950 and 1974 NBCWAs into a new Combined 

Fund that offers benefits to eligible beneficiaries who were 

receiving benefits as of July 20, 1992. 26 U.S.C. § 9703(e). 

Second, it requires operators still offering independent 

employer plans to continue doing so. 26 U.S.C. § 9711. Third, 

it created the 1992 Plan, which provides health care benefits to 

all eligible beneficiaries not covered by either of the two 

aforementioned provisions. 26 U.S.C. § 9712(b). 

In passing the Coal Act, the Congress found it necessary 

“to identify persons most responsible for plan liabilities in 

order to stabilize plan funding.” Pub. L. No. 102-486, § 19142,

106 Stat. 2776, 3037 (1992). For the 1992 Plan, those persons 

the Congress identified as responsible for the financing were 

primarily operators that had signed the 1988 NBCWA, referred 

to as LSOs, § 9712(d)(6), and “related persons,” such as 

businesses that were under common control with an LSO as of 

July 20, 1992. 26 U.S.C. § 9701(c)(2); Williams Mountain, 256 

F.3d at 821.

The Coal Act requires LSOs to contribute to financing the 

1992 Plan in three ways. 26 U.S.C. § 9712(d)(1)(A)–(C). They 

must: (A) pay a premium for each of their retirees who is 

enrolled in the 1992 Plan; (B) provide “security (in the form of 

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a bond, letter of credit, or cash escrow) in an amount equal to a 

portion” (to be determined by the Trustees) of their retirees’ 

future health care costs; and (C) pay a backstop premium to 

help cover the cost of providing benefits to orphaned retirees if 

contributions from the Abandoned Mine Reclamation Fund, 

30 U.S.C. § 1232, created in 1977 by the Surface Mining 

Control and Reclamation Act, Pub. L. No. 95-87, § 401, 91 

Stat. 445, 456 (1977), are insufficient to do so. In addition, the 

Act makes persons related to an LSO “jointly and severally 

liable . . . for any amount required to be paid . . . under this 

section.” 26 U.S.C. § 9712(d)(4). It is the parties’ conflicting 

interpretations of the last provision that gives rise to this case. 

In 1992, Arch Coal owned several coal companies that 

were LSOs. Arch Coal is therefore a person related to those 

operators. Accordingly, Arch Coal initially provided security 

to fulfill its subsidiaries’ obligations under § 9712(d)(1)(B). In 

2005, Arch Coal sold its LSO subsidiaries to the Magnum Coal 

Company and, in the course of the transaction, Magnum 

substituted its own security for that previously provided by 

Arch. In 2008, the Patriot Coal Corporation acquired Magnum 

and replaced Magnum’s security on behalf of Arch Coal’s 

former subsidiaries by adding Arch Coal’s former subsidiaries 

to a letter of credit previously issued by Fifth Third Bank for 

the account of Patriot’s other LSO subsidiaries. The letter of 

credit allowed the 1992 Plan to draw down the security if 

Patriot ceased to provide benefits under § 9711 or if the 1992 

Plan later enrolled its retirees. Arch Coal was not a party to the 

letter of credit.

In May 2015, Patriot and its subsidiaries, including Arch 

Coal’s former subsidiaries, filed for bankruptcy, pursuant to 

which the Coal Act obligations of Arch Coal’s former 

subsidiaries were terminated in October 2015. That same 

month, Arch Coal notified the 1992 Plan that, as a related 

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person, it would provide health care benefits to retirees of its 

former subsidiaries. In November 2015, Arch Coal began

providing benefits to retirees of its former subsidiaries per

§ 9711, and paying premiums to the 1992 Plan per

§ 9712(d)(1)(A). It did not, however, provide security pursuant 

to § 9712(d)(1)(B). In December 2015, the 1992 Plan drew 

down Patriot’s $8,608,392 letter of credit, with which Patriot 

had fulfilled the obligations to provide security for the benefit 

of Arch’s former subsidiaries. 

In March 2016 the 1992 Plan first informed Arch Coal it 

was obligated as a related person to provide security pursuant 

to § 9712(d)(1)(B). Arch Coal refused, arguing Patriot’s letter 

of credit not only satisfied its obligation under that provision

but in fact over-secured the obligations of Arch Coal’s former

subsidiaries. 

The Trustees of the 1992 Plan sued under the Coal Act and 

the Employee Retirement Income Security Act (ERISA) to 

compel Arch Coal to provide security. Arch Coal 

counterclaimed to recover the $447,672 in excess security

provided by the letter of credit.

The district court held that, as a related person, Arch Coal 

was required to provide the security demanded by the Trustees. 

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The court reasoned that the cash proceeds the Plan received 

from Patriot’s letter of credit did not satisfy Arch Coal’s 

obligation to provide security because they were not in a form

acceptable under the Coal Act, to wit, a bond, a letter of credit, 

or a cash escrow. Further, the court rejected Arch Coal’s 

alternative contention that the 1992 Plan was obligated to use 

the proceeds of the letter of credit to provide security on behalf 

of Arch Coal’s former subsidiaries or to provide benefits solely 

for retirees of those former subsidiaries. The district court 

therefore granted the Trustees’ motion for summary judgment 

and ordered Arch Coal to provide security pursuant to 

§ 9712(d)(1)(B). Notwithstanding the apparent anomaly of the 

1992 Plan receiving security from Arch Coal after drawing 

down the $8,608,392 from Patriot’s letter of credit to cover the 

very same retirees, we are constrained by the Coal Act to affirm 

the judgment of the district court. 

II. Analysis

On appeal, Arch Coal argues first that the Coal Act does 

not require a related person to provide security to the 1992 

Plan. Second, and more narrowly, Arch Coal contends the 

requirement to provide security was satisfied by the letter of 

credit provided by Patriot on behalf of Arch Coal’s former 

subsidiaries, with which Arch Coal is jointly liable. More 

narrowly still, Arch Coal argues the 1992 Plan is required to 

use the proceeds of Patriot’s letter of credit to fund benefits for 

retirees of Arch Coal’s former subsidiaries, thereby relieving 

Arch Coal of at least some of its obligations under the Coal 

Act, including the obligation to provide security. Notably, 

however, Arch Coal does not pursue its counterclaim nor 

otherwise take issue with the Trustees’ decision to draw down 

the letter of credit.

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A. Obligation of related persons to provide security

As in any case involving a question of statutory 

interpretation, “we begin with the language of the statute.” 

Sigmon Coal, 534 U.S. at 450. Because Arch Coal agrees it is 

a person related to an LSO, the question before the court is 

whether the provision ofsecurity in § 9712(d)(1)(B) is included 

in a related person’s joint and several liability for “any amount 

required to be paid” in § 9712(d)(4). As the term “‘any amount 

required to be paid’ is not defined in the Coal Act [it] thus takes 

on its ordinary meaning.” Holland v. Arch Coal, Inc., 346 F. 

Supp. 3d 99, 105–06 (D.D.C. 2018) (citing Taniguchi v. Kan 

Pac. Saipan, Ltd., 566 U.S. 560, 566 (2012)). A plain reading

of the Coal Act supports reading each of the three different 

“financing . . . requirements” detailed in § 9712(d)(1) as an 

“amount required to be paid” by related persons pursuant to

§ 9712(d)(4).

The Coal Act imposes three obligations on the companies 

contributing to the financing of the 1992 Plan, as set out in 

§ 9712(d)(1) and (4) (emphases added):

(1) In general

All 1988 last signatory operators shall be 

responsible for financing the benefits described 

in subsection (c) by meeting the following 

requirements in accordance with the 

contribution requirements established in the 

1992 UMWA Benefit Plan:

(A) The payment of a monthly per beneficiary 

premium by each 1988 last signatory operator 

for each eligible beneficiary of such operator 

who is described in subsection (b)(2) and who 

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is receiving benefits under the 1992 UMWA 

Benefit Plan.

(B) The provision of a 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.

(C) If the amounts transferred under subsection 

(a)(3) are less than the amounts required to be 

transferred to the 1992 UMWA Benefit Plan 

under subsections (h) and (i) of section 402 of 

the Surface Mining Control and Reclamation 

Act of 1977 (30 U.S.C. 1232), the payment of 

an additional backstop premium by each 1988 

last signatory operator which is equal to such 

operator's share of the amounts required to be so 

transferred but which were not so transferred, 

determined on the basis of the number of 

eligible and potentially eligible beneficiaries 

attributable to the operator.

. . . 

(4) Joint and several liability

A 1988 last signatory operator . . . and any 

related person to any such operator, shall be 

jointly and severally liable with such operator 

for any amount required to be paid by such 

operator under this section. The provisions of 

section 9711(c)(2) shall apply to any last 

signatory operator described in such section 

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(without regard to whether security is provided 

under such section, a payment is made under 

section 9704(j), or both) and if security meeting 

the requirements of section 9711(c)(3) is 

provided, the common parent described in 

section 9711(c)(2)(B) shall be exclusively 

responsible for any liability for premiums under 

this section which, but for this sentence, would 

be required to be paid by the last signatory 

operator or any related person.

Arch Coal argues § 9712(d)(4) makes related persons 

liable for payment of premiums under paragraphs (A) and (C) 

but not for the provision of security under paragraph (B). In 

drawing this distinction, Arch Coal leans heavily upon the 

difference between the words “payment” in paragraphs (A) and 

(C) and “security” in paragraph (B) to argue the “provision of 

security” is not an “amount required to be paid” within the 

meaning of § 9712(d)(4). Arch Coal correctly urges the court 

to consider dictionaries to discern the ordinary meaning of the

term “payment,” particularly Black’s Law Dictionary at 1129

(6th ed. 1990), which defines a payment as “[t]he fulfillment of 

a promise, or the performance of an agreement” including “a 

delivery of money or its equivalent.” We agree, however, with 

the district court that the definition of the word “payment” cited 

by Arch Coal “encompass[es] the provision of security.” 346 

F. Supp. 3d at 106. As the Trustees point out, liability for “any

amount required to be paid” plainly includes payments LSOs 

are required to make to banks to provide security as well as 

payments made to the 1992 Plan as premiums. Id.

Arch Coal cites two prior cases to argue liability under the 

Coal Act should be interpreted narrowly: Barnhart v. Sigmon 

Coal Co., 534 U.S. at 450–52, in which the Supreme Court 

determined the Coal Act imposed liability upon only certain 

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successors in interest, not all successors in interest; and 

Holland v. Williams Mountain, 256 F.3d at 823, in which we 

upheld a similarly narrow interpretation of which companies 

were liable as successors in interest to an LSO. 

The Court in Sigmon Coal, however, came to its 

conclusion not by following some principle of narrow 

interpretation but by a straightforward reading of the statutory 

text, refusing either to read “differing language” in two 

subsections as having “the same meaning in each” or to

“ascribe the difference to a simple mistake in draftsmanship.” 

534 U.S. at 452–54. As the Trustees argue, applying the 

reasoning in Sigmon Coal to the portions of the Act at issue 

here supports reading the term “any amount required to be 

paid” as imposing upon related persons joint liability for the 

provision of security as well as for premiums – rather than joint 

liability for premiums alone. The statute elsewhere refers 

specifically to liability for premiums and premiums alone, 

indeed twice, in the section of the Act creating the 1992 Plan: 

The statute uses the word “premium” in the second sentence of

§ 9712(d)(4) to refer specifically to liability for premiums, and

uses the word “premium” once again in § 9712(d)(3) to impose 

liability for premiums under § 9712(d)(1)(A) but not for the 

other obligations in § 9712(d)(1). In contrast to these 

provisions specifically singling out liability for premiums, the 

first sentence in § 9712(d)(4) makes related persons jointly

liable for “any amount required to be paid.” The phrase “any 

amount required to be paid” is necessarily broader than 

premiums, and is naturally read to include all the obligations 

borne by LSOs under § 9712(d)(1), including the provision of 

security under § 9712(d)(1)(B). 

Arch Coal argues the word “premiums” in the second 

sentence of § 9712(d)(4) cannot inform the meaning of 

§ 9712(d)(1) because it was added by a 2006 amendment to 

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give a controlled group of companies a way to extinguish 

certain related person liabilities. But, as the Trustees point out, 

the argument that a 2006 amendment could not be used to 

interpret the pre-amendment text impermissibly implies that 

“the legislature was ignorant of the meaning of the language it 

employed.” BedRoc Ltd., LLC v. United States, 541 U.S. 176, 

186–87 (2004) (plurality opinion) (quoting Inhabitants of 

Montclair Twp. v. Ramsdell, 107 U.S. 147, 152 (1883)). To the 

extent Arch Coal argues the wording of the original Coal Act 

is a better guide to interpreting the meaning of the phrase “any 

amount required to be paid” in § 9712(d)(4), it is worth noting 

the original text allowed operators to pay “an annual 

prefunding premium” in lieu of providing security. 26 U.S.C. 

§ 9712(d)(1)(C) (1994). That the original legislation provided 

a way to satisfy the obligation to provide security with an 

alternative premium payment would seem to undermine the 

Company’s attempt to differentiate the provision of security in 

§ 9712(d)(1)(B) from the payment of premiums called for in

§ 9712(d)(1)(A) and (C). 

Requiring related persons to provide security is consistent 

with the purpose and design of the Coal Act to hold coal 

companies “responsible for financing the benefits” to be 

provided by the 1992 Plan. 26 U.S.C. § 9712(d)(1). As the 

district court said and the Trustees reiterated, a statutory 

provision “must be read in [its] context and with a view to [its] 

place in the overall statutory scheme.” 346 F. Supp. 3d at 107 

(quoting Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809 

(1989)). The scheme of the Coal Act places upon LSOs 

responsibility for financing the 1992 Plan in three ways and

holds persons related to an LSO responsible for “any amount 

required to be paid” under that scheme. Arch Coal’s 

interpretation of the Act instead would make one of those three 

requirements into an exception that is neither express in the text 

nor consistent with the rest of the Act. 

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Arch Coal also argues that reading the Coal Act to require

related persons to provide security would be “surplusage,” by 

which it means duplicative, because the original LSO already 

would have provided the security. That might be so if the 

provision of security were a one-time obligation meant to 

cushion the blow to the 1992 Plan when an operator goes out 

of business without a related person to step in and provide 

benefits. In fact, however, the obligation is a continuing one. 

As the Trustees explain, LSOs are required to meet this 

obligation “in accordance with the contribution requirements 

established in the 1992 UMWA Benefit Plan,” that is, the trust 

document created to govern the 1992 Plan. 26 

U.S.C. § 9712(d)(1). That document sets the amount of 

security that must be provided each year under § 9712(d)(1)(B) 

at the projected cost of providing one year of health benefits 

for all beneficiaries attributable to a particular operator. 

Because the cost of health care and the number of beneficiaries 

change over time, the amount of security required is updated 

annually. Given the nature of this requirement, the provision 

of some amount of security by an LSO at one time does not 

satisfy the continuing requirement for a successor LSO or its 

related person to provide an amount of security that changes 

each year. 

Arch Coal’s interpretation would extinguish the liability 

for related persons to provide security once a predecessor LSO

or another related person has done so. As the Trustees point 

out, that would be in tension with §§ 9711(c)(2) and 9712(d)(4)

of the Coal Act, in which the Congress expressly allowed 

related persons to extinguish some of their Coal Act liabilities

by providing additional security. 26 U.S.C. § 9711(c)(2) 

(allowing LSOs and related persons that provide additional 

security to make “the common parent of the controlled group 

of corporations . . . (and no other person) . . . liable for the 

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provision of health care under” § 9711); id. § 9712(d)(4) 

(allowing LSOs and related persons that provide the required 

security to make their “common parent . . . exclusively 

responsible for any liability for premiums under this section 

which” would otherwise be paid by the LSO or any related 

person). Section 9712(d)(1)(B), in contrast, does not include 

an express allowance for an LSO or a related person to 

extinguish its liability in exchange for the provision of security. 

Arch Coal’s interpretation would treat a related person’s 

liability under § 9712(d)(1)(B) the same as a related person’s 

liabilities under the provisions that extinguish related person 

liability, despite the difference between the wording of

§ 9712(d)(1)(B) and of §§ 9711(c)(2) and 9712(d)(4). We will 

not “ascribe this difference to a simple mistake in 

draftsmanship” rather than to a difference in the intended 

effect. Sigmon Coal, 534 U.S. at 454. 

Although the term “any amount required to be paid” is not 

defined, the term is used again in § 9721, which provides for 

enforcement of any claim “arising out of an obligation to pay 

any amount required to be paid” under the Coal Act. 26 U.S.C. 

§ 9721. Arch Coal claims this wording is merely the product 

of “parallelism.” As the Trustees point out, interpreting the

provision of security under § 9712(d)(1)(B) as something other 

than an “amount required to be paid,” as Arch Coal urges, 

would leave the 1992 Plan without any way to enforce the 

requirement for LSOs to provide security. Giving the 1992 

Plan the authority to enforce two contribution requirements 

under § 9712(d)(1) but not the third is just the type of absurd 

result courts should avoid. See Mova Pharm. Corp. v. Shalala, 

140 F.3d 1060, 1068 (D.C. Cir. 1998) (applying the canon 

against absurd results if a “result is contrary to common 

sense”). 

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For the foregoing reasons, we hold the Coal Act

unambiguously requires persons related to an LSO, such as 

Arch Coal, to provide security in accordance with

§ 9712(d)(1)(B). 

B. Proceeds of the letter of credit as security

Arch Coal argues that, even if it is obligated to provide 

security as a related person, that requirement was met in 2008

through 2015, when Patriot last updated the letter of credit 

provided on behalf of Arch’s former subsidiaries. As the 

Trustees argue and the district court held, however, that letter 

of credit is no longer in force and the proceeds that the Trustees 

drew from it do not satisfy the requirement that Arch Coal 

provide security in one of the three ways allowed by the statute

– a bond, a letter of credit, or a cash escrow. 26 U.S.C. 

§ 9712(d)(1); 346 F. Supp. 3d at 108. In addition, the Act

requires Arch Coal to make contributions in accord with the 

1992 Plan requirements, which lay out specific terms for each 

of the types of security allowed by the statute, and are likewise 

not satisfied by the proceeds from Patriot’s letter of credit. 26 

U.S.C. § 9712(d)(1). Arch Coal is foreclosed from arguing the 

1992 Plan should have left Patriot’s letter of credit to serve as

security because Arch Coal does not contest the Plan’s decision 

to draw down Patriot’s letter of credit. See Arch Coal, 346 F. 

Supp. 3d at 108. Patriot’s letter of credit is no longer providing 

security; therefore Arch Coal must replace it.

Finally, Arch Coal argues the Trustees are demanding it 

provide a “duplicate” provision of security because Arch

Coal’s liability is joint with that of its former subsidiaries and 

was already satisfied on their behalf by Patriot. According to 

Arch Coal, this means that if an obligation has been satisfied

by or on behalf of one of the jointly liable parties, then it cannot 

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be demanded from another. See, e.g., Kaplowitz v. Kay, 70 

F.2d 782 (D.C. Cir. 1934).

As the Trustees pointed out at oral argument, however, the 

“unusual scenario” in this case is “one of Arch’s own making.” 

When a related person is stepping in to meet the Coal Act 

obligations of an LSO, the related person ordinarily will at the 

same time “arrange to either replace or take over the existing 

security” provided by or for that LSO. Arch Coal was familiar

with the process by which one company steps in to take over 

the provision of security from another company; when 

Magnum bought Arch Coal’s subsidiaries in 2005, Magnum 

replaced Arch’s letter of credit with its own. Arch Coal, 346 

F. Supp. 3d at 103. Beginning on November 1, 2015, when

Arch Coal stepped in to provide retiree benefits on behalf of its 

former subsidiaries, it could have, at the same time, either 

engaged with Patriot about taking over Patriot’s letter of credit

or provided its own, but Arch Coal did neither at that time and 

for more than a month thereafter. Id. at 104. Only on 

December 10 did the Trustees act to draw down Patriot’s letter 

of credit. Id. They were not obligated to forego the proceeds 

from a letter of credit simply because of the possibility another 

related person would fulfill the obligation to provide security 

at some point in the future. 

C. Use of the proceeds of the letter of credit 

Lastly, Arch Coal argues the Trustees must use the 

proceeds from drawing down Patriot’s letter of credit to 

provide benefits to Arch’s retirees rather than treat the proceeds

as a general asset of the Plan. The Company points out that the

security required of an LSO is “an amount equal to a portion of 

the projected future cost to the 1992” Plan of providing benefits 

“for eligible and potentially eligible beneficiaries attributable 

to” that operator. § 9712(d)(1)(B). Arch Coal argues this 

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clause suggests the proceeds from the security should be used 

for the provision of benefits to that operator’s attributable 

retirees. 

We agree with the Trustees and the district court that 

§ 9712(d)(1)(B) provides only the basis upon which to 

determine the amount of security required; it is not a limit upon

the use of the proceeds from that security. 346 F. Supp. 3d at 

108 (citing Mertens v. Hewitt Assocs., 508 U.S. 248, 261 

(1993) (“[V]ague notions of a statute’s ‘basic purpose’ are . . . 

inadequate to overcome the words of its text.”)). Moreover, we 

note the phrase in § 9712(d)(1)(B) to which Arch Coal points 

as providing a limited purpose for the use of the proceedstracks

the phrase apportioning liability for backstop premiums in the 

neighboring paragraph, § 9712(d)(1)(C) (setting the amount of 

backstop premiums to be paid based upon “each operator’s 

share . . . determined on the basis of the number of eligible and 

potentially eligible beneficiaries attributable to the operator”). 

The backstop premiums are provided to fund benefits for 

orphaned retirees, “for whom no monthly per beneficiary 

premium is paid.” § 9712(a)(3)(B). This suggests that in both 

paragraphs the Congress used the number of “eligible and 

potentially eligible beneficiaries” as a way to apportion liability 

for premiums among LSOs, not as a way to limit the use of 

those funds. 

We also agree with the district court and the Trustees that, 

to the extent the use of the proceeds of Patriot’s letter of credit 

are limited, it is by “the fiduciary obligations ERISA imposes” 

upon the Trustees of the 1992 Plan. Arch Coal, 346 F. Supp. 

3d at 108 (describing the 1992 Plan as “an employee welfare 

benefit plan” under 29 U.S.C. § 1002(1) and “a multiemployer 

plan” under 29 U.S.C. § 1002(37)). Under ERISA, the 

Trustees have a fiduciary obligation to act “solely in the 

interest” of the plan beneficiaries, “for the exclusive purpose” 

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of “providing benefits” and “defraying reasonable expenses of 

administering the plan.” 29 U.S.C. § 1104(a)(1). Arch Coal 

argues the proceeds of Patriot’s letter of credit should be used 

either to satisfy its requirement to provide security – an 

argument we have already dispatched – or to fund benefits for 

retirees of Arch Coal’s former subsidiaries, in either case 

serving to reduce Arch Coal’s obligations as a related person.

Again, however, as the Trustees argue and the district court 

held, for the 1992 Plan to dedicate the proceeds of Patriot’s

letter of credit in this way would run afoul of the clear 

injunction in ERISA that the “assets of a plan shall never inure 

to the benefit of any employer.” 29 U.S.C. § 1103(c)(1). 

Nothing in the Coal Act, therefore, requires the 1992 Plan to 

set aside the proceeds of Patriot’s letter of credit for the sole 

benefit of the retirees attributable to Arch Coal’s former 

subsidiaries. 

Arch Coal argues that because the 1992 Plan document 

itself allows the drawdown of security “in the event that [an 

LSO] fails to meet its obligation to provide benefits required

under section 9711,” the proceeds of Patriot’s letter of credit 

cannot become assets of the 1992 Plan before the Plan steps in 

to provide benefits to Arch Coal’s retirees. Read 

straightforwardly, however, the 1992 Plan does not restrict the 

use of the proceeds of the security, but instead restricts the 

circumstances in which the 1992 Plan may draw upon the

security. And, to reiterate, the 1992 Plan’s drawdown of 

Patriot’s letter of credit was in accordance with the terms of the 

letter of credit and is not challenged by Arch Coal. Arch Coal, 

346 F. Supp. 3d at 108. 

III. Conclusion

We acknowledge that the 1992 Plan has received what the 

district court termed a “windfall” by drawing down Patriot’s

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letter of credit only to have Arch Coal provide additional 

security. 346 F. Supp. 3d at 109. As a person related to LSOs, 

however, Arch Coal was required to provide security 

regardless whether the proceeds of Patriot’s letter of credit 

were paid to the 1992 Plan. To the extent Arch Coal could have 

used Patriot’s letter of credit to fulfill that obligation it was 

Arch Coal’s own failure to provide for a transition of the 

security when it provided for the transition of health benefits 

that precludes its doing so now.

For the reasons set out above, the order of the district court 

granting summary judgment for the Trustees of the 1992 Plan

is 

Affirmed. 

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