1999 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-14-1999

Anker Energy Corp v. Consol Coal Co

Precedential or Non-Precedential:

Docket 98-3451

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Recommended Citation

"Anker Energy Corp v. Consol Coal Co" (1999). 1999 Decisions. Paper 128.

http://digitalcommons.law.villanova.edu/thirdcircuit_1999/128
Filed May 14, 1999 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 98-3451 

ANKER ENERGY CORPORATION, AND KING 

KNOB COAL COMPANY, INC., 

 Appellants 

v. 

CONSOLIDATION COAL COMPANY; UNITED MINE 

WORKERS OF AMERICA COMBINED BENEFIT FUND; 

MARTY D. HUDSON, TRUSTEE; MICHAEL H. HOLLAND, 

TRUSTEE; THOMAS O.S. RAND, TRUSTEE; ELLIOTT A. 

SEGAL, TRUSTEE; CARLTON R. SICKLES, TRUSTEE; 

GAIL R. WILENSKY, TRUSTEE; WILLIAM P. HOBGOOD, 

TRUSTEE; KENNETH S. APFEL, COMMISSIONER OF THE 

SOCIAL SECURITY ADMINISTRATION* 

On Appeal from the United States District Court 

for the Western District of Pennsylvania 

District Judge: Honorable William L. Standish 

(D.C. Civ. No. 96-01938) 

Argued March 25, 1999 

BEFORE: GREENBERG, ROTH, and ROSENN, 

Circuit Judges 

(Filed: May 14, 1999) 

_________________________________________________________________ 

*Kenneth F. Apfel is substituted as a defendant for Shirley Sears Chater 

as Commissioner, pursuant to Fed. R. Civ. P. 25(d) (i) and Fed. R. App. 

P. 43(c). 
 Paul A. Manion (argued) 

 Robert D. Finkel 

 Manion McDonough & Lucas 

 600 Grant Street, Suite 882 

 Pittsburgh, PA 15219 

 Charles L. Woody 

 Paula Durst Gillis 

 Spilman Thomas & Battle 

 P.O. Box 273 

 Charleston, WV 25321-0273 

 James A. Walls 

 General Counsel 

 Anker Energy Corporation 

 2708 Cranberry Square 

 Morgantown, WV 26505 

 Attorneys for Appellants 

 Edwin J. Strassburger (argued) 

 David A. Strassburger 

 Strassburger McKenna Gutnick 

 & Potter 

 322 Boulevard of the Allies, 

 Suite 700 

 Pittsburgh, PA 15222 

 Robert M. Vukas 

 General Counsel 

 Consol, Inc. 

 Consol Plaza 

 1800 Washington Road 

 Pittsburgh, PA 15241-1421 

 Attorneys for Appellee 

 Consolidation Coal Company 

 Peter Buscemi (argued) 

 Morgan, Lewis & Bockius 

 1800 M Street, N.W. 

 Washington, DC 20036 

 2 
 John R. Mooney 

 Elizabeth A. Saindon 

 Mark J. Murphy 

 Mooney, Green, Baker, Gibson, 

 and Saindon 

 700 14th Street, N.W., Suite 1100 

 Washington, DC 20005 

 David W. Allen 

 Christopher Clarke 

 Office of the General Counsel 

 UMWA Health and Retirement 

 Funds 

 4455 Connecticut Avenue, N.W. 

 Washington, DC 20008 

 Attorneys for Appellees 

 UMWA Combined Benefit Fund and 

 Its Trustees 

 Frank W. Hunger 

 Assistant Attorney General 

 Harry Litman 

 United States Attorney 

 Douglas N. Letter 

 Edward R. Cohen (argued) 

 Attorneys, Appellate Staff 

 Civil Division, Room 9014 

 U.S. Department of Justice 

 601 D Street, N.W. 

 Washington, DC 20530 

 Frieda S. Colfelt 

 Department of Health and Human 

 Services 

 Office of General Counsel 

 6401 Security Boulevard 

 Altmeyer Building 

 Baltimore, MD 21235 

 Attorneys for Appellee 

 Commissioner of Social Security 

 3 
OPINION OF THE COURT 

GREENBERG, Circuit Judge. 

I. INTRODUCTION 

In 1992, Congress enacted the Coal Industry Retiree

Health Benefits Act ("Coal Act"), 26 U.S.C.S 9701-9722, to 

ensure that retired coal miners and their dependents would 

continue to receive the health and death benefits they had 

been receiving since the 1940s pursuant to a series of 

collective bargaining agreements. By the late 1980s, 

problems had arisen that caused serious under-funding to 

the two benefit plans funding the miners' benefits. Fearing 

that the miners and their families would be left with no 

health or death benefits, Congress stepped in and passed 

the Coal Act, which provided a new funding mechanism 

under which the Commissioner of Social Security 

("Commissioner") would assign miners to a coal industry 

employer based on the recency and longevity of a miner's 

employment. That employer then would be responsible for 

providing the funds for those miners' benefits. 

The Coal Act has led to a flood of litigation challenging 

the Commissioner's assignments of liability under the Act, 

as well as Takings and Due Process challenges to the 

constitutional validity of the Act's imposition of retroactive 

liability. Following this legal trend, Anker Energy Corp. 

("Anker") filed this action in the United States District Court 

for the Western District of Pennsylvania seeking declaratory 

and injunctive relief that the Commissioner improperly 

assigned it responsibility for funding certain miners' 

benefits and that these assignments violated the Takings 

and Due Process Clauses of the Fifth Amendment to the 

United States Constitution. Anker also asserted that 

appellee Consolidation Coal Co. ("Consol") had agreed to 

assume liability for any payments due for miners' benefits 

and to reimburse Anker for any such payments Anker 

made, and thus was liable to it for the monies attributable 

to the assignments. 

 4 
The district court dismissed all of these claims at the 

pleadings and summary judgment stages of litigation. First, 

the court granted Consol's motion for judgment on the 

pleadings pursuant to Fed. R. Civ. P. 12(c) on Anker's 

claims that the Commissioner should have assigned the 

miners to Consol, and that Consol had agreed to indemnify 

Anker for any liability it incurred for the payment of miners' 

benefits. See Anker Energy Corp. v. Consolidation Coal Co., 

Civ. No. 96-1938 (W.D. Pa. July 25, 1997) (Anker I). 

Subsequently, the district court upheld the constitutionality 

of the application of the Coal Act to Anker on a motion for 

summary judgment. See Anker Energy Corp. v. 

Consolidation Coal Co., Civ. No. 96-1938 (W.D. Pa. Mar. 11, 

1998) (Anker II). Finally, inasmuch as it had affirmed the 

imposition of liability against Anker and had determined 

that Anker was delinquent in its payments under the Act, 

the district court entered a judgment of $1,180,489.06 

against Anker for annual premiums, interest, liquidated 

damages, attorney's fees, and costs. See Anker Energy Corp. 

v. Consolidation Coal Co., Civ. No. 96-1938 (W.D. Pa. July 

21, 1998) (Anker III). This appeal followed. 

II. FACTUAL AND PROCEDURAL HISTORY 

A. Factual History 

The courts have well-chronicled the history of the coal 

industry's struggles to provide retirement and health 

benefits to miners. See, e.g., Unity Real Estate Co. v. 

Hudson, ___ F.3d ___, 1999 WL 167765, at *2-*4 (3d Cir. 

Mar. 29, 1999); Eastern Enters. v. Apfel, 524 U.S. 498, ___, 

118 S.Ct. 2131, 2137-42 (1998) (plurality opinion).

Therefore, we only briefly will summarize this chronology 

and outline the parties' roles within that larger story. 

In 1947, the United Mine Workers of America ("UMWA") 

and the Bituminous Coal Operators' Association ("BCOA") 

agreed upon the first of a series of National Bituminous 

Wage Agreements ("NBCWA" or "wage agreement"), which 

specified the terms and conditions of employment and 

provided health and pension benefits for miners. The 1947 

NBCWA established the United Mine Workers of America 

Welfare and Retirement Fund, which used the proceeds of 

 5 
a royalty on coal production to provide pension and medical 

benefits for miners and their families. The 1947 NBCWA did 

not specify the benefits to which miners and their families 

were entitled, instead leaving this task to three trustees in 

charge of the Fund. In 1950 the union and the industry 

association agreed upon a new NBCWA that created a new 

Fund financed by a per ton levy on coal mined by signatory 

operators. Like the 1947 Fund, the 1950 version did not 

promise specific benefits, and the benefits were always 

subject to cancellation or change. 

This system did not change significantly until 1974

when, to comply with the newly enacted ERISA, the UMWA 

and the BCOA negotiated a new wage agreement that 

created four trusts funded by royalties on coal production 

and premiums based on hours worked by miners. Under

the new agreement, the 1950 Benefit Plan covered miners 

who retired before January 1, 1976, and their dependents, 

while the 1974 Benefit Plan covered miners who retired 

after 1975 and their dependents. Both Plans provided nonpension benefits, including medical benefits. 

The 1974 NBCWA explained that it was amending the 

previous system to provide health benefits for retired 

miners "for life," and to their widows until death or 

remarriage. Because of this broadened coverage the number 

of eligible benefit recipients increased dramatically, and the 

Plans began losing money. 

In response, the 1978 NBCWA assigned responsibility to 

signatory employers for the health care of their own active 

and retired employees. The 1978 agreement also restricted 

the 1974 Plan so that it would provide health benefits only 

for "orphaned" retirees, those whose last employer had gone 

out of business or otherwise ceased contributing to the 

Plans. To ensure the Plans' solvency, the 1978 NBCWA 

included a "guarantee" clause that obligated signatories to 

make sufficient contributions to maintain benefits during 

that agreement, and the union and operators amended the 

Plans to include "evergreen clauses" that required 

signatories to contribute to the Plans if they remained in 

the coal business even if they never signed another wage 

agreement. 

 6 
Despite the 1978 NBCWA and subsequent attempts to 

improve the Plans, they continued to lose money because of 

the increase in beneficiaries, the escalating costs of health 

care, and the flood of signatory companies abandoning the 

Plans. In 1992 Congress responded by passing the Coal 

Act. The Act merged the 1950 and 1974 Benefit Plans into 

a new multi-employer plan called the United Mine Workers 

of America Combined Benefit Fund ("Combined Fund"). The 

Combined Fund provides "substantially the same" health 

benefits to retirees and their dependents that the 1950 and 

1974 Plans provided. 26 U.S.C. S 9703(b)(1), (f). However, 

Congress altered the funding mechanism, an action that 

has led to the overflow of litigation. 

The Act finances the Combined Fund with annual 

premiums assessed against signatory operators, which are 

companies that were or are signatories to a "coal wage 

agreement." 26 U.S.C. S 9701(c)(1). The Act defines a "coal 

wage agreement" as an NBCWA, or "any other agreement 

entered into between an employer in the coal industry and 

the United Mine Workers of America that required" the 

provision of health benefits to its retirees or contributions 

to the 1950, 1974 or any prior Benefit Plan. 26 U.S.C. 

S 9701(b)(1)(A), (B). Any signatory operator who "conducts 

or derives revenue from any business activity, whether or 

not in the coal industry," may be required to contribute to 

the Combined Fund. 26 U.S.C. SS 9701(c)(7), 9706(a). 

Where a signatory operator is no longer involved in any 

business activity, premiums may be assessed against

"related person[s]" including "successors in interest and 

businesses or corporations under common control." Eastern 

Enters., 524 U.S. at ___, 118 S.Ct. at 2142 (discussing 26 

U.S.C. SS 9701(c)(2)(A), 9706(a)). 

The Commissioner of Social Security assigns retirees to 

particular signatory operators, and calculates premiums 

according to these assignments based on the following 

formula: 

 (a) In general. -- For purposes of this chapter, the 

 Commissioner of Social Security shall . . . assign each 

 coal industry retiree who is an eligible beneficiary to a 

 signatory operator which (or any related person with 

 7 
 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. 

26 U.S.C. S 9706(a). 

The surge of litigation attacking the Coal Act began 

shortly after the Commissioner began assigning retirees to 

signatory operators. In Lindsey Coal Mining Co. v. Chater, 

90 F.3d 688 (3d Cir. 1996), we held the Act constitutional 

as applied to a coal company to which the Commissioner 

had assigned retirees through section 9706(a)(3) concerning 

those signatory operators who had not signed the 1978 

agreement. See id. at 695. However, the Supreme Court's 

decision in Eastern Enterprises, 524 U.S. 498, 118 S.Ct. 

2131, calls the continuing vitality of Lindsey Coal Mining 

into question, as the Court found the Act unconstitutional 

as applied to a coal company that had ceased mining in 

1965 and never signed the 1974 or subsequent wage 

 8 
agreements. Id. at 2153 (plurality opinion); id. at 2154 

(Kennedy, J., concurring in judgment). 

We recently have had the opportunity to apply the 

fragmented Eastern Enterprises decision to facts similar to 

those here. In Unity Real Estate, 1999 WL 167765, we 

upheld the Commissioner's assessment of liability against 

two companies that had signed the 1974 and 1978 wage 

agreements and later NBCWAs as constitutional in the face 

of takings and due process challenges. Id. at *25, *29. 

B. Procedural History 

The seeds of discontent that led to this suit were sown on 

March 30, 1994, when the Commissioner informed Anker 

that she was assigning it liability for certain retired miners, 

surviving spouses and dependents, and several orphaned 

miners due to its relationship with King Knob Coal Co. 

("King Knob") which no longer was in business. From 1967 

until 1982, Consol had contracted with King Knob for it to 

extract coal on certain of Consol's properties. As part of 

these contracts, King Knob agreed that "its employees shall 

be members of the United Mine Workers of America and it 

shall be a signatory to the then current National 

Bituminous Coal Wage Agreement." App. at 75. 

To achieve this end, King Knob signed "me too" 

agreements during the 1970s and 1980s, the last in 1984. 

See app. at 8. Anker characterizes a "me too" agreement as 

an agreement between an employer who was not a member 

of the BCOA nor an NBCWA signatory yet who agreed by 

separate instrument with the UMWA to "be bound by the 

terms of the NBCWAs." App. at 8. 

An affiliate of Anker acquired King Knob in 1975. The 

parties' relationship continued uneventfully until Consol 

canceled its contracts with King Knob following which they 

entered into a settlement agreement on July 23, 1982. 

Paragraph 4(b) of the settlement required Consol to

 promptly reimburse King Knob for all subsequent 

 payments due to the UMWA Fund or any successor 

 fund attributable to (i) tonnage of coal produced under 

 the contracts, (ii) hours worked at the mine operated 

 under the Robinson Run contract on or before August 

 9 
 31, 1982, and (iii) hours worked at the mines operated 

 under the Booth contract on or before June 30, 1982. 

App. at 17, 97. 

In 1994 and 1995, the Commissioner informed Anker 

that it was a related person to King Knob and was being 

assigned liability for a number of beneficiaries under the 

Coal Act. Arguing that Consol was the proper signatory 

operator responsible for some of these retirees under the 

Act as they worked at Consol's properties and Consol was 

responsible for them, Anker protested this assignment. The 

Commissioner responded that Anker's liability was based 

upon the fact that King Knob (not Consol) was the signatory 

employer of the eligible retirees. Moreover, the 

Commissioner determined that she was not authorized to 

assign Anker's premiums to Consol despite the parties' 

possible contractual agreement for reimbursement of future 

benefits because the Social Security Administration "is not 

bound by any private agreements made between 

companies, nor does the Coal Act allow for pro-ration of 

premium payments between companies." App. at 33. 

Anker and King Knob responded by filing this action

seeking declaratory and injunctive relief that Consol is 

liable for any premiums due the Combined Fund, and that 

the Commissioner's assessment of liability to the Combined 

Fund under the Coal Act violates the Due Process and 

Takings Clauses of the Fifth Amendment to the United 

States Constitution. As a matter of convenience we usually 

refer to Anker alone as the plaintiff and appellant. Besides 

Consol, Anker named the UMWA Combined Fund, its 

Trustees and the Commissioner as defendants. 

In an unpublished disposition, the district court granted 

Consol's motion for judgment on the pleadings pursuant to 

Fed. R. Civ. P. 12(c) as to Counts One and Two of Anker's 

complaint. Anker I at 2. In Count One, Anker alleged that 

Consol had agreed with King Knob and the UMWA that it 

would pay the premiums owed to the 1950 and 1974 Plans 

based upon the amount of coal produced and the hours 

worked by King Knob's employees. Id. at 13. Anker 

contended that because of these agreements, Consol 

became the signatory operator responsible for King Knob's 

 10 
employees' benefits under the 1950 and 1974 Plans, and 

thus was the proper party to which the Commissioner

should assign King Knob's retirees. Id. at 14. 

The district court held that Anker could not support this 

claim and granted Consol judgment as a matter of law on 

Count One. Id. The court recognized that "it is undisputed 

that King Knob was a signatory to one or more coal wage 

agreements covering its employees at Consol's Booth and 

Robinson Run properties, and that Anker is a `related 

person' to King Knob as defined in the Coal Act." Id. at 15. 

King Knob was also clearly the employer of the miners. Id. 

at 20. Thus, the Commissioner's assignment of 

beneficiaries and liability under the Act to Anker as a 

related person to King Knob was correct. Id. at 21.

Moreover, the court refuted Anker's argument that Consol 

had agreed in 1982 to be responsible for any future

contributions owed to a subsequent benefit plan, and 

agreed with the Commissioner that the Coal Act does not 

allow for the assessment of liability based upon private 

contracts. Id. at 15-16. 

The court also granted Consol's motion for judgment on 

the pleadings on Count Two, which alleged that pursuant 

to their settlement agreement Consol was liable to Anker for 

all premiums for which Anker is responsible under the Act. 

Id. at 21. The court rejected Anker's argument that

paragraph 4(b) of the settlement agreement bound Consol 

to reimburse King Knob, and thus Anker, for its liability 

under the Coal Act, reasoning that premiums under the Act 

are not 

 `attributable to' the tonnage of coal produced and the 

 number of hours worked under the contract mining 

 agreements, and the Combined Fund is not a 

 successor fund which requires premium payments 

 based on the tonnage of coal produced or the number 

 of hours worked by a signatory operator's employees. 

 Rather, under the Coal Act, health benefits are funded 

 by the imposition of what is, in essence, a tax. 

Id. at 22-23. Finally, the court relied upon Carbon Fuel Co. 

v. USX Corp., 100 F.3d 1124 (4th Cir. 1996), when it held 

that even if Anker was entitled to reimbursement under its 

 11 
contract with Consol, Consol still would be entitled to 

judgment as a matter of law because "the Coal Act 

abrogated pre-act contracts reallocating mining companies' 

obligations to pre-Act benefit plans." Id. at 24 n.17. Next 

the district court upheld the constitutionality of the 

application of the Coal Act to Anker in a second 

unpublished decision, and, relying upon our holding in 

Lindsey Coal Mining, 90 F.3d 688, granted summary 

judgment in favor of the Combined Fund, its Trustees, and 

the Commissioner on Count Three which sought a finding 

of unconstitutionality. Anker II at 6. 

Finally, on July 21, 1998, the district court granted 

summary judgment on the Combined Fund's counterclaim 

for entry of a judgment against Anker and King Knob for 

annual premiums, interest, liquidated damages, attorney's 

fees, and costs. Anker III at 10-11. Anker did not contest 

the assessment of annual premiums. Id. at 6 n.3. 

Considering this fact and Congress's clear intent to provide 

for liquidated damages, interest, attorney's fees, and costs 

if an employer fails to make timely payments, the court 

entered judgment for $1,180,489.06 against Anker and 

King Knob in a third unpublished disposition. Id. at 11. 

Anker and King Knob then appealed. 

III. DISCUSSION 

Anker argues that the Coal Act is unconstitutional as 

applied to it according to the Supreme Court's decision in 

Eastern Enterprises, 524 U.S. 498, 118 S.Ct. 2131. 

Appellants' Brief at 19-26. Alternatively, Anker urges us to 

reverse the district court's grant of judgment on the 

pleadings against it on Counts One and Two of its 

complaint. Id. at 26-37. Anker repeats its position

concerning Count One that the Commissioner should have 

assigned the miners at issue to Consol. As to Count Two, 

Anker contends that the district court erroneously found 

paragraph 4(b) of the settlement agreement between King 

Knob and Consol clear and unambiguous. Consequently, 

Anker believes that the district court erred in not

considering its parol evidence, and that under our 

precedent, parol evidence is essential to interpreting the 

parties' intent correctly. Moreover, Anker argues that the 

 12 
district court's interpretation of paragraph 4(b) of the 

settlement agreement was simply wrong. Id. at 28-37. 

Finally, Anker contests the district court's awarding the 

Combined Fund interest, liquidated damages, attorney's 

fees, and costs, arguing that the Act does not provide for 

the assessment of these items. Id. at 37-48. 

We will affirm the district court's decisions regarding the 

constitutionality of the Act, the correctness of the 

Commissioner's assignments, and the award of interest, 

liquidated damages, fees and costs against Anker. However, 

we will reverse the court's order granting judgment on the 

pleadings on Count Two, Anker's contract claim for 

reimbursement from Consol, and will remand to the district 

court for further proceedings on that count.1 

A. Standard of Review 

In reviewing the district court's order, we examine the 

Commissioner's action under the same standard of review 

properly applied by the district court. See Florida Power & 

Light Co. v. Lorion, 470 U.S. 729, 744, 105 S.Ct. 1598, 

1607 (1985). Thus, we review the Commissioner's decision 

as a final agency action brought under the Administrative 

Procedure Act. See Lindsey Coal Mining, 90 F.3d at 691; 5 

U.S.C. S 704. Accordingly, the issue is whether the

administrative determination was "arbitrary, capricious, an 

abuse of discretion, or otherwise not in accordance with 

law." 5 U.S.C. S 706(2)(A).2 See C.K. v. New Jersey Dep't of 

Health and Human Servs., 92 F.3d 172, 182 (3d Cir. 1996). 

_________________________________________________________________ 

1. The district court had federal question jurisdiction pursuant to 28 

U.S.C. S 1331 because the case arises under the Constitution of the 

United States and the Coal Industry Retiree Health Benefits Act of 1992, 

26 U.S.C. S 9701-9722, and had supplemental jurisdiction over Anker's 

breach of contract claim pursuant to 28 U.S.C. S 1367. We have 

jurisdiction pursuant to 28 U.S.C. S 1291. 

2. The district court appears to have reviewed the Commissioner's 

decision de novo, as was also the case in Lindsey Coal Mining, 90 F.3d 

at 691 n.3. However, as we noted there, inasmuch as we "come to the 

same decision as the district court in affirming the Commissioner's 

decision, any application of a different standard of review on its part 

was 

harmless." Id. 

 13 
We review the district court's decision as to the 

constitutionality of the Coal Act as applied to Anker de 

novo. See Dyszel v. Marks, 6 F.3d 116, 123 (3d Cir. 1993). 

Similarly, our review of the district court's granting of 

judgment on the pleadings and summary judgment where 

the district court was not reviewing the Commissioner's 

decisions is plenary. See Smith v. National Collegiate 

Athletic Ass'n, 139 F.3d 180, 183 (3d Cir. 1998), rev'd on 

other grounds, 119 S.Ct. 924 (1999); Petruzzi's IGA

Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 

1230 (3d Cir. 1993). 

B. Takings and Due Process Challenges 

Our discussion of Anker's constitutional challenge begins 

with Eastern Enterprises, 524 U.S. 498, 118 S.Ct. 2131, 

where a fragmented Supreme Court considered the 

constitutionality of the Coal Act as applied to a company 

whose coal operations had ceased in 1965. Id. at ___, 118 

S.Ct. at 2143. A majority of the Court struck down the law 

as applied to Eastern Enterprises by relying on two distinct 

theories. The four-justice plurality held that application of 

the Coal Act to Eastern Enterprises violated the Fifth 

Amendment as an unconstitutional taking. Id. at ___, 118 

S.Ct. at 2149. Justice Kennedy, who provided thefifth vote 

striking down the application of the Act, disagreed with the 

plurality's takings reasoning, but found that the Act's 

retroactivity violated due process. Id. at ___, 118 S.Ct. at 

2154 (Kennedy, J., concurring in judgment and dissenting 

in part). The four dissenting justices agreed with Justice 

Kennedy that application of the statute did not violate the 

Takings Clause, yet disagreed with his opinion that the Act 

violated due process. Id. at ___, 118 S.Ct. at 2161 (Breyer, 

J., dissenting). 

To consider Anker's takings and due process claims, we 

first must decide what, if any, holding in Eastern 

Enterprises binds our decision. "When a fragmented Court 

decides a case and no single rationale explaining the result 

enjoys the assent of five Justices, `the holding of the Court 

may be viewed as that position taken by those Members 

who concurred in the judgment on the narrowest 

grounds.' " Marks v. United States, 430 U.S. 188, 193, 97 

S.Ct. 990, 993 (1977) (quoting Gregg v. Georgia, 428 U.S. 

 14 
153, 169 n.15, 96 S.Ct. 2909, 2923 n.15 (1976)). However, 

as we recognized in Rappa v. New Castle County , 18 F.3d 

1043 (3d Cir. 1994), and reaffirmed in Unity Real Estate, 

1999 WL 167765, at *9, the Marks rule is applicable only 

where "one opinion can be meaningfully regarded as 

`narrower' than another" and can "represent a common 

denominator of the Court's reasoning." Rappa, 18 F.3d at 

1057 (quoting King v. Palmer, 950 F.2d 771, 781 (D.C. Cir. 

1991) (en banc)). Thus, in cases where approaches differ, 

no particular standard is binding on an inferior court 

because none has received the support of a majority of the 

Supreme Court. Id. at 1058. 

As to the immediate situation, we recognized in Unity 

Real Estate that "Justice Kennedy's substantive due

process reasoning is not a `narrower' ground that we might 

take to constitute the controlling holding." 1999 WL 

167765, at *9. In such a case, then, the only binding aspect 

of a splintered decision is its specific result, in Eastern 

Enterprises the Court's "holding the Coal Act 

unconstitutional as applied to Eastern Enterprises." 

Association of Bituminous Contractors, Inc. v. Apfel, 156 

F.3d 1246, 1255 (D.C. Cir. 1998). Eastern Enterprises 

requires a finding that the Coal Act is unconstitutional as 

applied to Anker, then, only if Anker "stand[s] in a 

substantially identical position to Eastern Enterprises with 

respect to both the plurality and Justice Kennedy's

concurrence." Unity Real Estate, 1999 WL 167765, at *9.3 

_________________________________________________________________ 

3. We also recognized in Unity Real Estate that in light of Eastern 

Enterprises' concurrence and dissent, we are "bound to follow the fivefour vote against the takings claim. . . ." Unity Real Estate, 1999 WL 

167765, at *9. See Eastern Enters., 524 U.S. at ___, 118 S.Ct. 2156 

(Kennedy, J., concurring) ("The Coal Act neither targets a specific 

property interest nor depends upon any particular property for the 

operation of its statutory mechanisms."); id. at ___, 118 S.Ct. at 2161 

(Breyer, J., dissenting) ("The `private property' upon which the Clause 

traditionally has focused is a specific interest in physical or 

intellectual 

property."); also Association of Bituminous Contractors, 156 F.3d at 1254 

n.5 ("The only conceivable change in takings jurisprudence brought 

about by Eastern Enterprises is that thefive dissenting justices . . . 

apparently believe that the imposition of liability alone is not a taking 

of 

property under the Fifth Amendment."). 

 15 
Applying Eastern Enterprises in accordance with the

foregoing methodology is not difficult inasmuch as its 

plurality and concurrence both found significant the fact 

that Eastern Enterprises was not a signatory to either the 

1974 or 1978 NBCWAs, and thus it did not contemplate 

either being responsible for or contributing to the miners' 

expectation of lifetime benefits. The plurality recognized 

that while the takings inquiry is "essentially ad hoc and 

fact intensive" the Court, in prior decisions, had identified 

three factors that are particularly significant: " `the 

economic impact of the regulation, its interference with 

reasonable investment backed expectations, and the 

character of the governmental action.' " 524 U.S. at ___, 118 

S.Ct. at 2146 (quoting Kaiser Aetna v. United States, 444 

U.S. 164, 175, 100 S.Ct. 383, 390 (1979)). The plurality 

then summarized its takings case law as follows: 

 Our opinions . . . make clear that Congress has 

 considerable leeway to fashion economic legislation, 

 including the power to affect contractual commitments 

 between private parties. Congress also may impose 

 retroactive liability to some degree particularly where it 

 is `confined to short and limited periods required by the 

 practicalities of producing national legislation.' Our 

 decisions, however, have left open the possibility that 

 legislation might 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 ___, 118 S.Ct. at 2149 (quoting Pension Benefit Guar. 

Corp. v. R.A. Gray & Co., 476 U.S. 717, 731, 104 S.Ct. 

2709, 2719 (1984)) (internal quotation marks omitted) 

(emphasis added) (citation omitted). 

Applying these precepts, the plurality held that the Coal 

Act placed a "considerable financial burden" upon Eastern 

Enterprises, which was liable for between $50 and $100 

million in cumulative payments. Id. at ___,118 S.Ct. at 

2149. The plurality acknowledged that this type offinancial 

burden was not a per se taking -- "a permanent physical 

occupation of . . . property" -- yet noted that the Court's 

decisions upholding the Multiemployer Pension 

 16 
Amendments Act of 1980 to supplement ERISA suggested 

that "an employer's statutory liability for multiemployer 

plan benefits should reflect some `proportion[ality] to its 

experience with the plan.' " Id. at ___, 118 S.Ct. at 2149 

(quoting Concrete Pipe & Prods. of Cal., Inc. v. Construction 

Laborers Pension Trust for S. Cal., 508 U.S. 602, 645, 113 

S.Ct. 2264, 2291 (1993)). The plurality found this 

proportionality lacking because "while Eastern contributed 

to the 1947 and 1950 W&R Funds, it ceased its coal mining 

operations in 1965 and neither participated in negotiations 

nor agreed to make contributions in connection with the 

Benefit Plans under the 1974, 1978, or subsequent 

NBCWA's." Id. at ___, 118 S.Ct. at 2150 (emphasis added). 

This was significant because the 1974 and subsequent 

agreements "first suggest[ed] an industry commitment to 

the funding of lifetime health benefits for both retirees and 

their family members." Id. at ___, 118 S.Ct. at 2150. Thus, 

because Eastern Enterprises never had contemplated 

liability nor contributed to the miners' expectation of 

lifetime benefits, the plurality held that "the correlation 

between Eastern and its liability to the Combined Fund is 

tenuous, and the amount assessed against Eastern 

resembles a calculation `made in a vacuum.' " Id. at ___, 

118 S.Ct. at 2150 (quoting Connolly v. Pension Benefit 

Guar. Corp., 475 U.S. 211, 225, 106 S.Ct. 1018, 1026 

(1986)). 

The plurality also found the lack of proportionality 

significant in its analysis of whether the Coal Act

substantially interfered with Eastern Enterprises' 

reasonable investment backed expectations, and whether 

the nature of the governmental action was unusual. The 

plurality found that the Act's "substantial and particularly 

far reaching" retroactive effect interfered with Eastern 

Enterprises' reasonable investment backed expectations. Id. 

at ___, 118 S.Ct. at 2152. It noted that inasmuch as an 

employer in the coal industry could not have contemplated 

that it was promising lifetime benefits until 1974 when 

ERISA forced revisions to the 1950 Fund, the Coal Act's 

"scheme for allocation of Combined Fund premiums is not 

calibrated either to Eastern's past actions or to any 

agreement--implicit or otherwise--by the company." Id. at 

___, 118 S.Ct. at 2152. Likewise, the plurality reasoned that 

 17 
the governmental action was highly unusual and implicated 

fundamental principles of fairness because it "single[d] out 

certain employers to bear a burden that is substantial in 

amount, based on the employers' conduct far in the past, 

and unrelated to any commitment that the employers made 

or to any injury they caused. . . ." Id. at ___, 118 S.Ct. at 

2153 (emphasis added). Therefore, each factor suggesting 

that the application of the Coal Act was an unconstitutional 

taking depended upon the fact that Eastern Enterprises 

had left the coal industry in 1965 and had not agreed to 

the 1974, 1978, or subsequent wage agreements. 

Justice Kennedy, in finding the Coal Act's application to 

Eastern Enterprises violated substantive due process, also 

relied upon the fact that Eastern Enterprises had not 

signed the 1974 or following agreements. Justice Kennedy 

held that "[a]ccepted principles forbidding retroactive 

legislation" dictated that the application of the Act to 

Eastern Enterprises violates the Due Process Clause. Id. at 

___, 118 S.Ct. at 2158 (Kennedy, J., concurring in 

judgment and dissenting in part). Applying an "arbitrary 

and irrational" standard of review, Justice Kennedy pointed 

out that the assessment of liability against Eastern 

Enterprises bore no legitimate relation to the government's 

asserted interest in holding responsible those coal

companies that created an expectation of lifetime benefits 

and then abandoned the industry to avoid this 

commitment: 

 As the plurality opinion discusses in detail, the 

 expectation was created by promises and agreements 

 made long after Eastern left the coal business. Eastern 

 was not responsible for the resulting chaos in the 

 funding mechanism caused by other coal companies 

 leaving the framework of the National Bituminous 

 Wage Agreement. This case is far outside the bounds of 

 retroactivity permissible under our law. 

Id. at ___, 118 S.Ct. at 2159 (citation omitted) (Kennedy, J., 

concurring in judgment and dissenting in part). 

Thus, analysis of the decisions in Eastern Enterprises 

leads us to the conclusion that a majority of the Court 

would find the Act unconstitutional when applied to an 

 18 
employer that did not agree to the 1974 or subsequent 

NBCWAs, while application of the Act to a signatory to the 

1974 or a subsequent wage agreement would be an entirely 

different matter. 

We believe the fact that Anker was a signatory to"me 

too" agreements from the 1970s until 1984 factually

distinguishes Anker's situation from that of Eastern 

Enterprises and compels a finding that the Act is 

constitutional in this instance.4 This was, in fact, the Court 

of Appeals for the District of Columbia Circuit's reasoning 

in Association of Bituminous Contractors, 156 F.3d 1246, in 

upholding the application of the Act to operators similarly 

situated to plaintiffs here. Faced with signatory operators of 

the 1974 and subsequent agreements by incorporation by 

reference in related agreements, the court noted that "the 

crucial fact upon which the Eastern Enterprises plurality 

and Justice Kennedy relied in concluding that Eastern's 

Coal Act liability was disproportionate to its past conduct 

and thus unfairly retroactive--namely, Eastern's departure 

from the coal industry in 1965--is absent in this case." Id. 

at 1256. The court continued: "The clear implication of 

each opinion in Eastern Enterprises is that employer 

participation in the 1974 and 1978 agreements represents 

a sufficient amount of past conduct to justify the 

retroactive imposition of Coal Act liability (for the dissenting 

justices, of course, such participation is not even

necessary)." Id. at 1257. See also Unity Real Estate, 1999 

WL 167765, at *29 (Aldisert, J., concurring) ("The decisive 

material facts in Eastern Enterprises are that the company 

_________________________________________________________________ 

4. The difference between a member of the BCOA and a "me too" 

signatory to a NBCWA is of no consequence to this case despite Anker's 

contrary assertions. See, e.g., Connors v. Link Coal Co., 970 F.2d 902, 

903 (D.C. Cir. 1992) (" `Me too' agreements have terms identical to the 

terms of the national agreement, and thus there is no distinction among 

them concerning employers' contractual rights and obligations."); Arizona 

Laborers, Teamster and Cement Masons Trust Fund v. Conquer Cartage 

Co., 753 F.2d 1512, 1518 (9th Cir. 1985) (defining a "me too" agreement 

as an agreement by which a smaller employer can obtain all the benefits 

of the master collective bargaining agreement without joining the 

industry association and incurring the costs of participating in industry 

negotiations or negotiating independently with the union). 

 19 
(1) left the coal industry in 1965 and (2) was never a party 

to the 1974 and later Wage Agreements that first suggested 

the commitment to lifetime benefits for retirees and family 

members."). Thus, it appears that this case falls outside the 

specific holding of Eastern Enterprises, and we therefore 

find the Coal Act's application to Anker constitutional. 

However, our opinion in Unity Real Estate directs us to 

apply an additional level of due process analysis designed 

to measure "the extent of the gap between the coal 

companies' contractual promises to the Funds and the 

requirements of the Coal Act." Id. at *10. We noted there 

that the proper standard of review for a due process 

analysis is whether Congress's action was arbitrary or 

irrational. Id. We concluded that Congress's determination 

that the coal industry acted in a way that created the 

miners' reasonable expectation of lifetime benefits, and that 

its finding that the coal companies were the most 

responsible parties for the deterioration of the Benefit Plans 

were "reasonable evaluations of the problem." Id. at *20. 

We then held that the Act's retroactivity did not render it 

irrational in violation of due process. Id. We recognized that 

the "heart of retroactivity analysis is an evaluation of the 

extent of the burden imposed by a retroactive law in 

relation to the burdened parties' prior acts" and announced 

that "[w]here Congress acts reasonably to redress an injury 

caused or to enforce an expectation created by a party, it 

can do so retroactively." Id. at *20-*21. 

In the first step of a retroactivity analysis, we measured 

the length of time of the retroactivity from the date the coal 

company's contractual obligations ceased to the passing of 

the Act, and held that Unity Real Estate's 11 years was not 

so extensive as to violate Justice Kennedy's standard, 

although we admitted that it was a "close case." Id. at *21. 

We, however, recognized that the burden the Coal Act 

imposes upon parties assessed liability is substantial. Id. at 

*22. Finally, turning to the proportionality issue, we found 

that the Coal Act imposes a burden justified by both the 

industry's conduct that created reasonable expectations of 

lifetime benefits -- creating a benefit fund legally obligated 

to pay out more funds than the operators were required to 

provide -- and conduct that created the problem of under 

 20 
funding -- the same initial flaws in the funding mechanism 

compounded by the mass exodus of operators from the

industry to avoid making further contributions to the 

funds. Id. at *25. This analysis led us to conclude that the 

Coal Act did not violate the Due Process Clause because 

Congress was entitled to redress the problems caused by 

"the companies' actions, through the BCOA through which 

negotiations with the unions were conducted, [which] 

created reasonable expectations about benefits and 

established a funding structure vulnerable to `dumping' 

retirees when companies left the industry." Id. 

Applying Unity Real Estate's retroactivity analysis

compels us to reach a similar conclusion here. The length 

of time since King Knob last agreed in a "me too" contract 

to abide by an NBCWA was eight years, and the length of 

time since King Knob agreed to an NBCWA in a contract 

with Consol was 11 years before Congress passed the Coal 

Act. We found 11 years to be acceptable, although a"close 

case," in Unity Real Estate. Id. at *21. Moreover, our 

proportionality analysis in Unity Real Estate applies full 

force here because King Knob was a signatory to the 1978 

and subsequent NBCWAs, and thus bears the same 

responsibility as the plaintiffs in Unity Real Estate for 

creating the reasonable expectations and the problem of 

under-funding that the Coal Act redresses. Id. at *25. 

While some language in Unity Real Estate suggests that 

we rested our holding on the operators' membership in the 

BCOA which had negotiated the agreements that created 

the miners' expectation of benefits, id. at *16-*18, we will 

not read this language to allow "me too" signatures to avoid 

the application of the Act. King Knob agreed to abide by 

those same NBCWAs that the plaintiffs in Unity Real Estate 

negotiated.5 Similarly, Anker's argument that its liability 

fails Unity Real Estate's proportionality test since King 

Knob was "never" responsible for contributing to the benefit 

funds misses the mark. Anker fails to realize that while 

Consol may have agreed to assume King Knob's payments 

to the benefit funds in its contract-mining agreements 

_________________________________________________________________ 

5. One of the plaintiffs in Unity Real Estate, was a "me too" signatory to 

the 1984 NBCWA after dropping out of the BCOA. Id. at *4. 

 21 
spanning 1967 to 1982, King Knob, as a "me too" signatory 

to the NBCWAs was responsible in the first instance for the 

provision of these payments. King Knob's ability to have 

Consol assume this obligation is simply irrelevent to the 

fact that by agreeing to the NBCWAs King Knob was a party 

to the agreements that created the miners' expectation of 

lifetime benefits. King Knob benefitted as much as Consol 

from having the NBCWAs as those agreements kept a 

consistent work force in place in part by promising the 

provision of health and death benefits for the rest of the 

miners' lives. 

Overall, inasmuch as nothing germane to our holding in 

Unity Real Estate distinguishes Anker from the plaintiffs in 

Unity Real Estate, application of that case's due process 

analysis leads us once again to conclude that the Act does 

not violate constitutional norms, this time as applied to the 

Anker. Thus, we find the Act constitutional as applied to 

Anker because of the factual distinction that makes Eastern 

Enterprises inapplicable, and because the case falls 

squarely under our analysis and holding in Unity Real 

Estate. 

C. The Commissioner's Assignment of Beneficiaries to 

Anker 

In reviewing the Commissioner's decision to assign 

beneficiaries to Anker, we decide whether her action was 

"arbitrary, capricious, an abuse of discretion, or otherwise 

not in accordance with law." 5 U.S.C. S 706(2)(A). The 

Commissioner rejected Anker's arguments that Consol was 

the entity responsible for providing the miners' benefits. 

Anker had argued to the Social Security Administration 

 that assignments made [because of Anker's affiliation 

 with King Knob] should be reassigned to Consolidation 

 Coal Co. because King Knob operated as an 

 independent contractor mining lands owned or leased 

 by Consol with no ownership rights in the minerals; 

 that amounts paid by Consol to the UMWA plans were 

 not deducted or credited against the amounts paid to 

 King Knob for the mined coal; that upon termination of 

 the agreement in 1982 Consol accepted responsibility 

 for current and subsequent payments to the UMWA 

 22 
 Welfare and Retirement Fund or any successor fund 

 based on hours worked prior to the summer of 1982; 

 [and] that for miners employed by King Knob after 

 1982, responsibility should be pro-rated. . . . 

App. at 33. The Commissioner instead determined that 

 Under the Coal Act, ownership of a mine is immaterial 

 to assignment decisions. Assignments are made solely 

 on the basis of the signatory employer who employed 

 the eligible retiree. In the case involving King Knob, an 

 affiliate of Anker Energy, the signatory that employed 

 the retirees was King Knob, not Consol. Also, for Coal 

 Act purposes, SSA is not bound by any private 

 agreements made between companies, nor does the 

 Coal Act allow for pro-ration of premium payments 

 between companies. In light of the foregoing, no 

 assignments that were made to Anker on the basis of 

 its relationship to King Knob Coal can be reassigned to 

 Consol. 

App. at 33. We will affirm the district court's grant of 

judgment on the pleadings on Count One upholding the 

Commissioner's assignment of beneficiaries to Anker, 

because we find that her decision was not "arbitrary, 

capricious, an abuse of discretion, or otherwise not in 

accordance with law." 5 U.S.C. S 706(2)(A). 

Anker contends that King Knob was merely the "nominal" 

employer of the miners, while Consol was a signatory 

operator in its own right under the Act that had received 

"the entire economic benefit which those miners created," 

and was "the entity which had responsibility for all 

payments required to be made to the UMWA Benefit 

Funds." Appellants' Brief at 26. We find these contentions 

to be without merit. 

The Coal Act directs the Commissioner to assign each 

eligible beneficiary to a "signatory operator" who employed 

the beneficiary. 26 U.S.C. S 9706(a). Section 9706(a) also 

attempts to ensure that the specific assignment of a 

beneficiary is to the most recent and significant employer 

still in business. The Act defines a "signatory operator" as 

"a person which is or was a signatory to a coal wage 

agreement." 26 U.S.C. S 9701(c)(1). The term "coal wage 

 23 
agreement" includes "the National Bituminous Coal Wage 

Agreement," as well as "any other agreement entered into 

between an employer in the coal industry and the United 

Mine Workers of America that required . . . the provision of 

health benefits to retirees of such employer . . . or 

contributions to the 1950 UMWA Benefit Plan or the 1974 

UMWA Benefit Plan, or any predecessor thereof." 26 U.S.C. 

S 9701(b)(1). Finally, the Act provides that "employment 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." 26 U.S.C. S 9706(b)(1)(A). 

Applying these terms here, we uphold the 

Commissioner's conclusion that Anker is a related person 

to King Knob who was responsible for the provision of 

health benefits to the 1950 or 1974 Plans. First, King Knob 

was clearly a signatory operator under the Act. Anker 

admits that King Knob was a "me too" signatory to the 

1974, 1978, 1981 and 1984 NBCWAs. App. at 8. Although 

it did not negotiate these agreements, as a "me too" 

signatory King Knob agreed to each of these NBCWAs, and 

agreed to contribute to the benefit funds. As such, King 

Knob falls under the Act. 26 U.S.C. S 9701. 

Moreover, Anker does not contest the Commissioner's

determination that it is a "related person" to King Knob 

under the Act, and we find that King Knob was without 

question the miners' employer. See Appellants' Brief at 26. 

Anker's pleadings and the record reveal as much. As an 

independent contractor, King Knob agreed in its contracts 

with Consol that 

 all parties working for it in connection with the 

 undertaking covered by this Agreement shall be its 

 employees subject only to its orders and supervision. 

 . . . Neither Consol nor any of its agents, servants or 

 employees shall have the right to direct, supervise or 

 control the manner or method in which the work is to 

 be performed. 

App. at 66. Anker confuses the matter by stating that King 

Knob was only the miners' "nominal" employer, and that 

Consol had received the entire "economic benefit" from the 

miners' efforts. The Act does not mention the term 

 24 
"nominal" employer, nor does the term have any 

independent meaning in the context here. Likewise, the Act 

does not assess premiums based upon who received the 

"economic benefit" of the miners' work. Moreover, we do not 

accept the accuracy of Anker's denial that King Knob 

benefitted economically from its employees' mining efforts. 

After all, Consol was paying King Knob for its services. 

Furthermore, we find Anker's argument unpersuasive 

that King Knob was not the correct signatory employer 

because it never had made contributions to the benefit fund 

inasmuch as Consol always paid King Knob's premiums

according to their mining agreements. As a "me too"

signatory to the 1974, 1978, 1981 and 1984 NBCWAs, King 

Knob was responsible for making payments for its 

employees to the benefit funds. Even though Consol 

apparently relieved King Knob of this responsibility by 

making all of its payments to the funds, such a contractual 

agreement does not lead us to conclude that King Knob was 

not a signatory operator responsible for making payments 

to the funds. Thus, we cannot say that the Commissioner's 

assignment of beneficiaries to Anker is "arbitrary,

capricious, an abuse of discretion, or otherwise not in 

accordance with law." 5 U.S.C. S 706(2)(A). 

D. Contract for Reimbursement 

In granting Consol's motion for judgment on the 

pleadings on Count Two the district court relied upon 

contract and statutory interpretation in holding that Consol 

is not liable to reimburse Anker for payments made to the 

Combined Fund for the eligible retirees who worked for 

King Knob pursuant to its mining contracts with Consol. 

First, the court held that the language in the settlement 

agreement6 was clear and unambiguous. Anker I at 22. 

_________________________________________________________________ 

6. Once again, the pertinent portion of the settlement agreement states: 

 (b) Consol shall promptly reimburse King Knob for all subsequent 

 payments due to the UMWA Fund or any successor fund 

 attributable to (i) tonnage of coal produced under the Contracts, 

(ii) 

 hours worked at the mine operated under the Robinson Run 

 Contract on or before August 31, 1982, and (iii) hours worked at 

the 

 mines operated under the Booth Contract on or before June 30, 

 1982. 

App. at 17, 97. 

 25 
Next, the court determined that inasmuch as the contract 

provides for reimbursement "attributable to" either the 

tonnage of coal produced or the hours miners worked for 

King Knob under the contracts with Consol, King Knob was 

entitled to reimbursement only if the premiums Anker paid 

to the Combined Fund were "attributable to" either factor. 

Id. Because the Coal Act funds health benefits, according to 

the district court, "by the imposition of what is, in essence, 

a tax," it held that Consol was not obligated to reimburse 

Anker for its payments. Id. at 23. The court also held that 

even if Consol was contractually responsible for 

reimbursing Anker, Anker still could not maintain its action 

against Consol because the Coal Act "abrogated pre-act 

contracts reallocating mining companies' obligations to preAct benefit plans." Id. at 24 n.17. We will reverse the 

district court's order granting judgment on the pleadings in 

favor of Consol on Count Two for reimbursement because 

we reject the district court's conclusions with respect to the 

count. 

 1. Contractual liability 

Anker urges us to reverse based upon the district court's 

refusal to consider extrinsic evidence in light of its holding 

the contractual language clear and unambiguous. 

Appellants' Brief at 28. Under Pennsylvania law, which is 

applicable here, a court can consider parol evidence only if 

the contractual language is ambiguous. See Allegheny Int'l, 

Inc. v. Allegheny Ludlum Steel Corp., 40 F.3d 1416, 1427-28 

(3d Cir. 1994); Langer v. Monarch Life Ins. Co., 879 F.2d 78, 

81 n.8 (3d Cir. 1989). 

We hold that the district court erred in deciding that 

paragraph 4(b) of the settlement agreement is clear and 

unambiguous. The provision states that Consol will 

reimburse King Knob for "all subsequent payments" due to 

the then-current "UMWA Fund" or "any successor fund." 

These payments must be "attributable to" either tonnage of 

coal or hours worked under the contracts. Inasmuch as the 

Coal Act does not assign liability based upon the amount of 

coal mined or hours worked by miners, the court granted 

Consol's motion for judgment on the pleadings. 

 26 
In so doing, the court failed to acknowledge that "tonnage 

of coal" and "hours worked" were the methods used to 

determine an employer's premiums for the 1950 and 1974 

Funds. By placing this language in the agreement, the 

parties could have been agreeing, as Anker contends, that 

Consol would be responsible for any payments owed to 

these Funds or any successor fund arising from the work 

performed pursuant to the mining contracts. The district 

court, then, failed to read the mention of "tonnage of coal" 

and "hours worked" consistently with industry usage. 

In fact, reading the provision to bind Consol to reimburse 

King Knob for any future benefit payments related to the 

work completed under the contracts would be consistent 

with the parties' inclusion of the term "successor fund" in 

the agreement. As Anker pointed out in its brief, inasmuch 

as there was no "successor fund" to the UMWA Fund at the 

time of the settlement agreement, inclusion of this term 

signifies that the parties were contemplating possible 

responsibility for payment of future benefits to a future 

fund. Appellants' Brief at 33. Otherwise, inclusion of this 

language in the contract makes no sense. 

The district court also incorrectly interpreted the contract 

to bar reimbursement because the Coal Act does not assess 

premiums based upon the tonnage of coal and hours 

worked. While the Coal Act does not determine specifically 

the premiums due based upon coal tonnage and hours 

worked, the Act is concerned with operators who had

contributed to the 1950 and 1974 Plans which were funded 

based on coal tonnage and hours worked. The Combined 

Fund, by its very terms, is a successor plan, born on 

February 1, 1993, when the Act mandated that "the settlors 

of the 1950 UMWA Benefit Plan and the 1974 UMWA 

Benefit Plan shall cause such plans to be merged into the 

Combined Fund. . . ." 26 U.S.C. S 9702(a)(2). By 

concentrating on the method of funding and ignoring the 

industry significance of coal tonnage and hours worked, the 

district court incorrectly held that, as a matter of law, 

Consol was not liable to Anker for payments made for King 

Knob's employees under its contracts with Consol. While we 

do not take a position as to Anker's ultimate success in 

proving that Consol is in fact liable to it for the premiums 

 27 
for the miners assigned to it under the Act, we conclude 

that the district court's disposing of the issue on the 

pleadings was premature, and that further proceedings 

with respect to it are necessary.7 

 2. Abrogation of contractual agreements 

The district court followed the decision of a divided panel 

of the Court of Appeals for the Fourth Circuit in Carbon 

Fuel Co. v. USX Corp., 100 F.3d 1124 (4th Cir. 1996), when 

it held that the Coal Act abrogates private contracts for 

indemnification or reimbursement. Anker I at 24 n.17. 

However, considering the Supreme Court's statements in 

Eastern Enterprises concerning the language of the Act, we 

will not follow Carbon Fuel. Instead, we hold that the Coal 

Act does not prohibit indemnification or reimbursement 

pursuant to previous contractual arrangements. 

The Eastern Enterprises plurality stated that "the Act 

preserves Eastern's right to pursue indemnification," 

although it does not grant any new rights, including a right 

to reimbursement. 524 U.S. at ___, 118 S.Ct. at 2150. The 

Court was referring to 26 U.S.C. S 9706(f)(6) which states: 

"Nothing in this section shall preclude the right of any 

person to bring a separate civil action against another 

person for responsibility for assigned premiums, 

notwithstanding any prior decision by the Commissioner." 

In so stating, the Supreme Court (implicitly) disagreed 

with Carbon Fuel, 100 F.3d 1124, where the court of

appeals interpreted the Act to prohibit suits for 

indemnification or reimbursement based upon prior private 

contracts. Id. at 1133. The court of appeals relied on 

section 9708, which states that "[a]ll liability for 

contributions to the Combined Fund that arises on or after 

February 1, 1993, shall be determined exclusively under 

this chapter. . . ." The court also found persuasive excerpts 

from the legislative history stating that Congress "expressly 

_________________________________________________________________ 

7. Consol points out that King Knob retained certain employees after its 

agreements with it were terminated. At this time we do not deal with the 

significance of this fact which was not material to the district court's 

disposition of the reimbursement claim. Of course, paragraph 4(b) of the 

settlement agreement has temporal limits. 

 28 
intended to `reach back' and impose obligations on 

signatories to the NBCWAs notwithstanding that many

companies had `bargained out of their funding 

obligations.' " Carbon Fuel, 100 F.3d at 1129 (quoting 138 

Cong. Rec. S17566-01, S17603). Despite the fact that no 

language in the Act limits the scope of section 9706(f)(6), 

the court of appeals interpreted its preservation of private 

actions to apply only to "post-Act private agreements and 

contracts." Id. at 1134. 

We cannot accept this reasoning. As the concurrence in 

Carbon Fuel pointed out, section 9708's statement that all 

liability will be determined under the Act does not abrogate 

a private party's liability to another private party for 

indemnification. Id. at 1140 (Williams, J., concurring in 

judgment). Instead, this provision provides that"[a]n 

operator assigned Coal Act liability by the Commissioner is 

primarily liable and must pay into the Combined Fund, 

regardless of the operator's private, pre-Act contractual 

rights." Id. Section 9706(f)(6), then, does not provide for the 

reassignment of primary liability for a signatory operator, 

but instead "preserves the right of private civil action for 

determining responsibility for assigned premiums as

between contracting parties." Id. at 1141. 

We agree with this reading of the Act.8 Section 9706(f)(6) 

explicitly preserves a person's right "to bring a separate civil 

action against another person for responsibility for assigned 

premiums. . . ." This provision does not limit itself to postAct contracts, and without an explicit congressional 

statement otherwise, we will not construe the Act to 

contravene the seemingly unambiguous Congressional 

desire to allow for private actions between parties for 

reimbursement or indemnification. 

Moreover, we believe that our reading of the Act is, in 

fact, consistent with the legislative history upon which the 

majority in Carbon Fuel relies. While Congress no doubt 

wanted to "reach back" and ensure that companies could 

_________________________________________________________________ 

8. Even if our reading of section 9706(f)(6) is incorrect, we believe that 

we 

would need a clearer expression of Congress's intent for us to agree with 

Carbon Fuel that the Coal Act abrogates an entire class of private 

contracts. 

 29 
not contract out of their obligations to the Funds, the Coal 

Act solves this problem by making the signatory companies 

responsible in the first instance for premiums. Once the 

Commissioner correctly assigns retirees to an operator, 

liability to the Funds is guaranteed. Allowing for 

indemnification between private parties if a previous 

contractual agreement so provides in no way frustrates this 

goal. Indeed, it may further the goal by providing for an 

additional entity to be liable, albeit on a contractual basis, 

for the payments due the Fund. 

We believe the correct reading of congressional intent is 

that Congress desired the Act to be remedial -- that 

Congress wanted to ensure that miners would receive the 

benefits the industry promised and placed liability on the 

parties responsible for creating the problem in the first 

place. Whether these parties had contracted with other 

private organizations for indemnification in case of future 

liability is irrelevant. In fact, allowing for indemnification 

could provide for more complete funding inasmuch as small 

independent contractors such as King Knob are probably 

more likely to have gone out of business or to have

insufficient funds to pay the sometimes substantial

premiums than companies similar to Consol that owned 

and leased the mines. 

Thus, we will reverse the district court's order granting 

Consol's motion for judgment on the pleadings on Count 

Two for indemnification and remand the count to the

district court for further proceedings. The court erroneously 

found the contractual language clear and unambiguous, 

and erroneously interpreted the Coal Act to prohibit suits 

for indemnification or reimbursement based upon prior 

contractual arrangements. 

E. Interest, liquidated damages, attorney's fees and 

costs 

Finally, Anker contests the district court's assessment of 

interest, liquidated damages, fees and costs for its failure to 

provide the premiums timely by arguing that the Act does 

not provide for the assessment of these costs. Appellants' 

Brief at 38. We, however, will affirm the district court's 

judgment against Anker for these amounts. Anker misreads 

 30 
the Coal Act, as it incorporates the assessment of 

liquidated damages and fees available in ERISA. See

Holland v. Keenan Trucking Co., 102 F.3d 736, 739 (4th 

Cir. 1996) (affirming without comment the district court's 

order awarding liquidated damages, interest, fees and costs 

under the Coal Act); Holland v. Robert Coal Co., 986 F. 

Supp. 621, 633 (D.D.C. 1997) (granting Combined Fund's 

motion for summary judgment assessing liquidated 

damages, interest, fees and costs), aff'd, 1998 WL 794832 

(D.C. Cir. Oct. 16, 1998); Holland v. High-Tech Collieries, 

Inc., 911 F. Supp. 1021, 1031-32 (N.D.W. Va. 1996) (same); 

Holland v. Double G Coal Co., 898 F. Supp. 351, 356

(S.D.W. Va. 1995) (same). 

Section 9721 of the Coal Act states that "[t]he provisions 

of section 4301 of [ERISA] shall apply to any claim arising 

out of an obligation to pay any amount required to be paid 

by [the Coal Act] in the same manner as any claim arising 

out of an obligation to pay withdrawal liability under 

[ERISA]." 26 U.S.C. S 9721. Section 4301(b) of ERISA 

provides that the failure of an employer to make a timely 

withdrawal liability payment should be treated in the same 

manner as delinquent contributions. 29 U.S.C. S 1451(b). 

Finally, section 502 of ERISA requires a district court to 

award interest, liquidated damages, and reasonable 

attorneys' fees and costs when a plan successfully enforces 

a demand for delinquent payments. 29 U.S.C. S 1132(g)(2).9 

Applying this statutory scheme to Anker, the district 

court correctly determined that Anker had not made 

contributions, and thus ERISA's enforcement provisions 

concerning delinquent contributions mandated the 

assessment of the proper fees. Anker III at 10. We find this 

decision clearly correct and uphold the judgment against 

Anker.10 

_________________________________________________________________ 

9. We have held that interest, liquidated damages, fees and costs are 

mandatory charges in withdrawal liability cases under ERISA. See United 

Retail & Wholesale Employees Teamsters Union Local No. 115 Pension 

Plan v. Yahn & McDonnell, Inc., 787 F.2d 128, 134-35 (3d Cir. 1986); see 

also Huber v. Casablanca Indus., Inc., 916 F.2d 85, 191 n.34 (3d Cir. 

1990). 

10. As the district court noted, Anker's reliance on Laborers Health and 

Welfare Trust Fund for N. Cal. v. Advanced Lightweight Concrete Co., 484 

U.S. 539, 108 S.Ct. 830 (1988), is sorely misplaced in light of the fact 

that, unlike the NLRA which was involved there, the Coal Act specifically 

incorporates ERISA's enforcement provisions. Anker III at 9-10. 

 31 
IV. CONCLUSION 

For the foregoing reasons, we will affirm the district 

court's order granting judgment on the pleadings on

Anker's claim on Count One that the Commissioner's 

assignment was erroneous, and will affirm the district 

court's order granting summary judgment on the 

constitutionality of the Act as applied to Anker and King 

Knob on Count Three as well as its award of liquidated 

damages, interest, fees and costs on the counterclaim. 

However, we will reverse the district court's order granting 

judgment on the pleadings on Anker's contractual claim for 

reimbursement on Count Two and will remand the case to 

the district court for further proceedings on that count 

consistent with this opinion. The parties will bear their own 

costs on this appeal. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 32