PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

CARBON FUEL COMPANY, a West

Virginia corporation,

Plaintiff-Appellant,

v.

USX CORPORATION, a Delaware

corporation; U. S. STEEL MINING

CO., INC., a Delaware corporation,

No. 95-2471

Defendants-Appellees,

v.

ARCH MINERAL CORPORATION; ARCH

MINERALS OF KENTUCKY;

CONSOLIDATION COAL COMPANY; OLD

BEN COAL COMPANY,

Third Party Defendants.
CARBON FUEL COMPANY, a West

Virginia corporation,

Plaintiff-Appellee,

v.

USX CORPORATION, a Delaware

corporation; U. S. STEEL MINING

CO., INC., a Delaware corporation,

Defendants-Appellants,

No. 95-2496

v.

ARCH MINERAL CORPORATION;

CONSOLIDATION COAL COMPANY; OLD

BEN COAL COMPANY,

Third Party Defendants-Appellees,

and

ARCH MINERALS OF KENTUCKY,

Third Party Defendant.

 2
CARBON FUEL COMPANY, a West

Virginia corporation,

Plaintiff-Appellee,

v.

USX CORPORATION, a Delaware

corporation; U. S. STEEL MINING

CO., INC., a Delaware corporation,

Defendants-Appellees,

No. 95-2522

v.

ARCH MINERAL CORPORATION; OLD

BEN COAL COMPANY,

Third Party Defendants-Appellants,

and

ARCH MINERALS OF KENTUCKY;

CONSOLIDATION COAL COMPANY,

Third Party Defendants.

 3
CARBON FUEL COMPANY, a West

Virginia corporation,

Plaintiff-Appellee,

v.

USX CORPORATION, a Delaware

corporation; U. S. STEEL MINING

CO., INC., a Delaware corporation,

Defendants-Appellees,

No. 95-2523

v.

CONSOLIDATION COAL COMPANY,

Third Party Defendant-Appellant,

and

ARCH MINERAL CORPORATION; ARCH

MINERALS OF KENTUCKY; OLD BEN

COAL COMPANY,

Third Party Defendants.

Appeals from the United States District Court

for the Southern District of West Virginia, at Charleston.

Charles H. Haden II, Chief District Judge.

(CA-93-1073-2)

Argued: June 3, 1996

Decided: November 18, 1996

Before MURNAGHAN and WILLIAMS, Circuit Judges, and

MACKENZIE, Senior United States District Judge for the Eastern

District of Virginia, sitting by designation.

_________________________________________________________________

Affirmed in part and remanded in part by published opinion. Judge

Murnaghan wrote the opinion, in which Senior Judge MacKenzie

joined. Judge Williams wrote an opinion concurring in the judgment.

 4
COUNSEL

ARGUED: James Knight Brown, Sr., JACKSON & KELLY,

Charleston, West Virginia, for Appellant. James Michael Jarboe, USX

CORPORATION, Pittsburgh, Pennsylvania; Anthony J. Polito,

POLITO & SMOCK, P.C., Pittsburgh, Pennsylvania; John Allen

Lucas, HUNTON & WILLIAMS, Richmond, Virginia, for Appellees.

ON BRIEF: W. Henry Jernigan, Jr., JACKSON & KELLY, Charleston, West Virginia; Larry L. Roller, CARBON FUEL COMPANY,

Chesapeake, West Virginia, for Appellant. Gregory B. Robertson,

Bruin S. Richardson, III, HUNTON & WILLIAMS, Richmond, Virginia; Charles L. Woody, SPILMAN, THOMAS & BATTLE,

Charleston, West Virginia, for Appellees.

_________________________________________________________________

OPINION

MURNAGHAN, Circuit Judge:

The instant appeal and cross-appeal concern the financial responsibility for premiums assessed against coal mine operators under the

Coal Industry Retiree Health Benefits Act of 1992 ("the Coal Act" or

"the Act"), 26 U.S.C. §§ 9701-9722, to finance health care for retired

United Mine Workers of America ("UMWA") miners and their

dependents. Plaintiff-Appellant Carbon Fuel Company ("Carbon")

filed a lawsuit against USX Corporation and U.S. Steel Mining Co.

("USX") seeking a decree that under a settlement agreement and lease

between the two companies, USX was required to pay for certain of

Carbon's Coal Act premiums. USX filed a counterclaim against Carbon seeking a declaration of all the parties' rights and obligations

under the Coal Act and initiated a third-party lawsuit against Arch

Minerals Corporation ("Arch"), Old Ben Coal Company ("Old Ben"),

and Consolidation Coal Company ("Consol"), contending that, under

sales agreements with those companies, they were all liable to pay for

certain of USX's Coal Act premiums. On cross motions for summary

judgment, the district court held that the Coal Act abrogated all preAct contracts transferring obligations to finance health care for retired

miners. Carbon Fuel Co. v. USX Corp., 891 F. Supp. 1186 (S.D.W.

Va. 1995). Alternatively, the district court stated that if the agree-

 5
ments were applied, they would not transfer any Coal Act obligations

or allow for indemnification. For the following reasons, we affirm in

part. We remand so that the district court may determine whether

USX must reimburse Arch, Consol, and Old Ben for attorney's fees.

I

All five mining companies involved in this lawsuit were parties to

pre-Act commercial transactions involving the sale or lease of coal

mines. Supporting agreements and contracts in those transactions contained provisions regarding the assumption of liabilities imposed by

collective-bargaining agreements with the United Mine Workers of

America ("UMWA") and cross-indemnification clauses. In particular,

those agreements transferred liability to funds established through

collective bargaining to provide UMWA retirees health benefits. Subsequent to the execution of the agreements, the United States Congress, however, enacted the 1992 Coal Act which created a new

mechanism for allocating the costs of health benefits for UMWA

retirees. We are confronted with the question of whether the various

agreements obligate parties to them to reimburse other parties for

assessed premiums under the Coal Act. In addressing that question,

we find that it is helpful to have a reference framework, which

includes some details of the events leading up to the Coal Act, the Act

itself, and the agreements.

A. 1992 Coal Act's Predecessors

In 1946, the members of UMWA went on a nationwide strike over

health and retirement benefits. The crisis led to the nationalization of

the coal mines by President Truman, and eventually a collectivebargaining agreement establishing health and retirement benefits

funded by an industry-wide royalty on tons of coal produced for use

or sale. When the coal mines were returned to their owners in 1947,

UMWA and the Bituminous Coal Operators Association, Inc.

("BCOA") agreed upon the first in a series of National Bituminous

Coal Wage Agreements ("NBCWAs"). The 1950 NBCWA established a multiemployer fund to provide welfare and retirement benefits to active and retired miners and their dependents.1 The 1950 Fund

_________________________________________________________________

1 Multiemployer plans are characteristically maintained to fulfill the

terms of collective-bargaining agreements. A group of employers makes

 6
was established as an irrevocable trust to be financed on a pay-asyou-go basis. Each mining company's contributions were calculated

based on tons of coal mined. The basic contours of that agreement

continued through subsequent NBCWAs until the early 1970s.

In the early 1970s, UMWA and BCOA realized that their system

of funding the welfare and retirement fund needed an overhaul in

light of the Employment Retirement Income Security Act of 1974

("ERISA"), 29 U.S.C. §§ 1001-1461, and changing demographics.

The 1974 NBCWA, therefore, divided the 1950 Plan into several separate multiemployer plans. It established a 1950 Pension Plan and

Benefit Plan and a 1974 Pension Plan and Benefit Plan. The 1950

Benefit Plan provided health-care benefits to miners who retired prior

to January 1, 1976, and their dependents. The 1974 Benefit Plan provided health-care benefits to miners who were active, or who retired

on or after January 1, 1976, and their dependents. Importantly, the

1974 NBCWA provided that the benefits would be guaranteed for the

life of the covered retirees. Mining companies who signed the 1974

agreement agreed to fund both the multiemployer 1950 and 1974

Benefit Plans based on cumulative hours worked as opposed to tons

of coal mined.

In 1978, the NBCWA shifted away from the multiemployer funded

plans to a decentralized system under which each mining company

financed its own health benefit plan through individual employer

plans ("IEPs"). The 1978 NBCWA provided that miners and their

dependents who retired prior to January 1, 1976, would still receive

benefits from the 1950 Benefit Plan. A miner retiring on or after January 1, 1976, however, would receive health-care benefits from an IEP

operated by his or her last employer. Signatory coal companies to the

1974 Benefit Plan would continue to fund the 1974 Plan in order to

provide benefits for those miners retiring on or after January 1, 1976,

who were "orphaned" because their last employer was no longer in

the coal mining business or participating in the Plan. Very signifi-

_________________________________________________________________

contributions to a multiemployer plan. The plan pools those funds into

a general fund available to pay any benefit obligation of the plan.

Concrete Pipe & Prods. of Cal., Inc. v. Construction Laborers Pension

Trust for S. Cal., 508 U.S. 602, 605 (1993).

 7
cantly, the 1978 NBCWA also contained an "evergreen clause" which

imposed a perpetual obligation on mining companies to continue their

contributions to the 1950 and 1974 Benefit Plans. See UMWA 1974

Pension v. Pittston Co., 984 F.2d 469, 471-76 (D.C. Cir. 1993), cert.

denied, 509 U.S. 924 (1993).

The Benefit Plans came under great strain in the 1980s. Numerous

mining companies left the mining business, leaving their "orphaned"

retirees to be covered by the 1974 Benefit Plan. Other mining companies who failed to sign successor NBCWAs were able to discontinue

their IEPs and shift the responsibility for paying"orphaned" retirees'

benefits to the 1974 Benefit Plan. A shrinking number of signatories

to the NBCWAs thus came to carry the responsibility for an increasing number of orphan retirees. That problem was exacerbated by

increasing costs of health care in the 1980s, thereby creating a financial crisis in the Benefit Plans.

In 1989, the threat of insolvency in the 1950 and 1974 Benefit

Plans led to a multi-month coal strike by the UMWA at the Pittston

Coal Company, which was only settled after the intervention of the

Secretary of Labor. That settlement resulted in the creation of an

Advisory Coal Commission on UMWA retiree health benefits. The

Coal Commission found that UMWA members had received a commitment of health-care benefits for life and had traded lower pensions

over the years for better health-care benefits, but that the funds to

finance those benefits were in grave danger of insolvency absent legislative action. It further found that collective bargaining was no longer capable of solving the problem of financing the Benefit Plans and

recommended a legislative solution. See Coal Commission Report: A

Report to the Secretary of Labor and the American People vii-viii, 1-

5, 58-60 (Nov. 1990).2

_________________________________________________________________

2 Further details regarding the events leading up to the enactment of the

Coal Act are recounted elsewhere. See, e.g., Blue Diamond Coal Co. v.

Shalala (In re Blue Diamond Coal Co.), 79 F.3d 516, 518-20 (6th Cir.

1996); Davon, Inc. v. Shalala, 75 F.3d 1114, 1117-18 (7th Cir. 1996),

pets. for cert. filed, 64 U.S.L.W. 3741, 3742 (Apr. 22 & 23, 1996); LTV

Steel Co. v. Shalala (In re Chateaugay Corp.), 53 F.3d 478, 481-86 (2d

Cir.), cert denied, ___ U.S. ___, 116 S. Ct. 298 (1995); Templeton Coal

Co. v. Shalala, 882 F. Supp. 799, 806-09 (S.D. Ind. 1995), aff'd, 75 F.3d

 8
B. 1992 Coal Act

The Commission's report helped spur Congressional investigation

of UMWA's retiree benefits and the enactment of the 1992 Coal Act,

Pub. L. No. 102-486, 106 Stat. 2776, 3036-56 (codified at 26 U.S.C.

§§ 9701-9722). The Act sought to remedy the problems with the provision and funding of health-care benefits to UMWA retirees by placing funding responsibility on the "persons most responsible for plan

liabilities." Coal Act, 106 Stat. 3037 § 19142.

To effect its purpose, the Act established a new funding mechanism for health-care benefits for those who received benefits from the

1950 and 1974 Benefit Plans by creating a new Combined Fund,

which merged both the 1950 and 1974 Benefit Plans' funds. 26

U.S.C. § 9702. In order to ensure its sound financial health, the Act

changed the basic method of funding from an operation-based formula (e.g., calculated according to tons of coal produced or hours

worked) to one where specific beneficiaries would be assigned to

mining companies which they had worked for in the past--"signatory

operators" that "remain[ ] in business." Id. § 9706.3"A signatory operator" is a company that was a signatory to a coal wage agreement. Id.

§ 9701(c)(1). Signatory operators are considered to be "in business"

if they conduct business and derive revenues from any business activity, regardless of whether that activity is in the coal industry. Id.

§ 9701(c)(7). Orphaned employees are apportioned among the signatory operators. Id. § 9704(d).

The Act provides that the Commissioner of Social Security ("the

Commissioner") will make all assignments. Id. § 9706.4 The Act pro-

_________________________________________________________________

1114 (7th Cir. 1996), pets. for cert. filed, 64 USLW 3741, 3742 (April

22 & 23, 1996); UMWA v. Nobel, 720 F. Supp. 1169, 1173-78 (W.D. Pa.

1989), aff'd, 902 F.2d 1558 (3d Cir. 1990), cert. denied, 499 U.S. 904

(1991).

3 The Act also continued the IEPs established in the 1978 NBCWA and

created a new 1992 UMWA Benefit Fund. Those financing mechanisms

are not relevant to the instant lawsuit.

4 Effective March 31, 1995, Pub. L. 103-296, Title I, §§ 108(h)(9)(B),

110(a), August 15, 1994, 108 Stat. 1487, 1490, amended 26 U.S.C.

§ 9706, by replacing the Secretary of Health and Human Services ("the

Secretary") with the Commissioner of Social Security. The assignments

contested here were made by the Secretary.

 9
vides that the Commissioner shall assign each retiree covered by the

Combined Fund to a signatory operator in the following order: (1)

first, to the signatory operator which was a signatory to the 1978

NBCWA and the most recent signatory operator to employ the retiree

in the coal industry for at least two years; (2) second, to the signatory

operator which was a signatory to the 1978 NBCWA and was the

most recent signatory operator to employ the retiree in the coal industry; and (3) third, to the signatory operator which employed the retiree

in the coal industry for a longer period of time than any other signatory operator prior to the effective date of the 1978 NBCWA. Id.

§ 9706(a).

By holding all signatory operators to NBCWAs--which the Coal

Commission found had fostered an expectation of life benefits and

benefitted from UMWA concessions in exchange for better healthcare benefits--the Act placed responsibility on the "persons most

responsible for plan liabilities." In order to do that, the Conference

Report expressed Congress's view that it would "reach back" to those

operators who "had bargained out of their funding obligations." 138

Cong. Rec. S17566-01, 17603.

The Act also provides that assignment of eligible beneficiaries can

be transferred to successors of assigned operators"after the enactment

date" provided that the assigned operator who transferred the beneficiary assignment remains the guarantor of the benefits provided to

that beneficiary under the Act. 26 U.S.C. § 9706(b)(2) (emphasis

added). Thus, the Act allows post-Act contracts to reallocate assignments under the Act, although it requires that ultimate financial

responsibility not be reallocated. The Act contains no similar provision regarding pre-Act contracts, which is not surprising given that

Congress expressly intended to "reach back" and impose obligations

on signatories to the NBCWAs notwithstanding that many companies

had "bargained out of their funding obligations." 138 Cong.Rec.

S17566-01, S17603.5

_________________________________________________________________

5 Additionally, in § 9706, the Act includes a provision for private civil

actions that can be brought against another person for responsibility for

assigned premiums, notwithstanding any prior decision by the Commissioner. 26 U.S.C. § 9706(f)(6).

 10
The Act mandates that as of February 1, 1993, "[a]ll liability for

contributions to the Combined Fund shall be determined exclusively

under [the Act], including all liability for contributions to the 1950

UMWA Benefit Plan and the 1974 UMWA Benefit Plan." 26 U.S.C.

§ 9708 (emphasis added). The Act cautions, however, that the Act

shall have no effect on claims, obligations, or subrogation rights arising in connection with the 1950 and 1974 Benefit Plans as of February 1, 1993. Id.6

C. Lease and Sales Contracts

In question here is the liability to the Combined Fund for the pre1976 retirees assigned to USX and to Carbon by the Secretary. Carbon and USX both contend that certain lease or sales contracts and

accompanying agreements may impact their liability to the Combined

Fund or allow indemnification for their payments to the Fund. The

relevant provisions of those agreements are as follows.

1. USX and Carbon Fuel's Agreements

In a 1982 Settlement Agreement, dated June 11, and a Lease and

Sublease, dated June 12, Carbon sold its mining equipment to USX

and leased or subleased all of its coal properties to USX for a 15-year

_________________________________________________________________

6 Section 9708 in its entirety provides:

All liability for contributions to the Combined Fund that arises

on or after February 1, 1993, shall be determined exclusively

under this chapter, including all liability for contributions to the

1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan

for coal production on and after February 1, 1993. However,

nothing in this chapter is intended to have any effect on any

claims or obligations arising in connection with the 1950

UMWA Benefit Plan and the 1974 UMWA Benefit Plan as of

February 1, 1993, including claims or obligations based on the

"evergreen" clause found in the language of the 1950 UMWA

Benefit Plan and the 1974 UMWA Benefit Plan. This chapter

shall not be construed to affect any rights of subrogation of any

1988 agreement operator with respect to contributions due to the

1950 UMWA Benefit Plan or the 1974 UMWA Benefit Plan as

of February 1, 1993.

 11
term.7 All coal mine employees were transferred to USX as well. As

required by a successorship clause in the 1981 NBCWA, the Settlement Agreement provided:

9.9(a) Effective at the Closing, [USX] hereby assumes the

National Bituminous Coal Wage Agreement of 1981, effective, June 8, 1981, (the "UMW Agreement") applicable to

the operations which are the subject of this Agreement or

the Coal Lease ("Covered Operations"), and[USX] will

assume and agree to perform, pay and discharge Carbon's

obligations under such collective bargaining agreement to

the extent such obligations arose with respect to any period

after the Closing. . . . Pursuant to [USX's] assumption of the

UMW Agreement as provided elsewhere herein, and in

accordance with the requirements of the 1950 Plan and the

1974 Plan, [USX] agrees that on and after the Closing Date

it shall, with respect to the Covered Operations, be a signatory to the UMW Agreement and succeed to Carbon's obligations under the UMW Agreement to make contributions

to the 1950 Plan and to the 1974 Plan in the amount and at

the rate required by the UMW Agreement for the duration

thereof.

The 1982 settlement agreement also provided that USX agreed to

assume and perform all of Carbon's contractual obligations which

relate to Carbon's performance of a 1974 agreement between Carbon

and USX. That included USX's agreeing to pay certain unbilled costs

such as "[p]ayments of health and medical benefits for bargaining and

non-bargaining employees and related administrative costs." Thus,

USX assumed Carbon's obligations under the NBCWAs to make all

contributions arising after closing to the 1950 and 1974 Benefit Plans

and to pay health and medical costs insofar as they related to the performance of a 1974 agreement between Carbon and USX.

Disagreements between USX and Carbon resulted in a subsequent

settlement agreement in 1987, which terminated the lease and sublease. The 1987 agreement provided that "all remaining or continuing

_________________________________________________________________

7 The agreement resulted from disputes arising out of a prior 15-year

contract in which Carbon had agreed to supply USX with coal.

 12
obligations" under the 1982 settlement agreement"shall remain in full

force and effect." Carbon, however, did not resume its mining operations on the land previously leased to USX. Despite Carbon's failure

to re-open the covered operations and notwithstanding the terms of its

settlement agreements, the Secretary assigned to Carbon UMWA

retirees who had worked at the "covered operations" as Carbon's

employees and retired prior to 1976.8

_________________________________________________________________

8 Carbon and USX also included several indemnification provisions in

their agreements. Carbon agreed to indemnify USX,

its officers, stockholders and directors against, and hold each of

them harmless from, any and all claims . . . resulting from or

arising out of the operation, administration and funding of Carbon's employee benefit plans by Carbon prior to the Closing

date, including but not limited to any taxes, penalties, liens or

liabilities imposed or assessed by any governmental authority, or

agency, under any statute, rule or regulation applicable to the

operation, administration and funding of such plans.

USX agreed to indemnify Carbon,

its stockholders and directors against, and hold each of them

harmless from, any and all claims . . . resulting from or arising

out of the operation, administration and funding of[USX's]

employee benefit plans by USX for all periods on and after the

Closing Date.

USX also agreed more generally to indemnify Carbon

from and against any claim, loss, damage, cost, or expense of

any kind or character arising out of or resulting from . . . any

claims, causes of action, debts, liabilities and obligations,

incurred in connection with the assets . . . and arising out of

[USX's] operation, ownership or leasehold of such assets on or

after the Closing Date.

Carbon, in turn, agreed to indemnify USX

from and against any claims, loss, damages, cost or expense of

any kind or character arising out of or resulting from . . . any

debts, liabilities and obligations incurred or which may be

incurred with respect to any of the Excluded Assets . . . [and] any

debts . . . being identified as being for the account of Carbon.

Another indemnification clause provided for cross-indemnification

relating to claims for the "death of, disease incurred by or injury to persons or destruction or damage to property," any public or private nuisance, and restoration, repair or reclamation of any area, required by law

or as provided in the Agreements.

 13
2. USX and Other Companies' Agreements

In the early 1980s, USX sold off a large portion of its mining operations to Arch, Old Ben, and Consol. USX had contributed to both the

1950 and 1974 Benefit Plans based on the operations in the mines it

sold. Evergreen clauses in the NBCWAs required that each new buyer

covenant to provide funding to the 1950 and 1974 Benefits Plans.

Thus, under their sales agreements, each purchasing company agreed

in some fashion to assume USX's duties under the then existing

NBCWA to contribute to the 1950 and 1974 Trusts. 9 And, in fact,

_________________________________________________________________

9 The Arch Sales Agreement with USX provides:

A[rch] will assume US[X]'s obligations under the collective bargaining agreement dated June 7, 1981, then in effect between

US[X] and the UMWA applicable to such employees. A[rch]

will discharge all of US[X]'s obligations under such collective

bargaining agreement to the extent that such obligations arise

with respect to the period after Closing.

The Consol Sales Agreement with USX provides:

Consol will assume as of Closing US[X]'s obligations under the

collective bargaining agreement dated June 7, 1981, then in

effect between US[X] and the UMWA applicable to such

employees. Subject to Article IV(b), Consol will discharge all of

US[X]'s . . . obligations under such collective bargaining agreement to the extent that such obligations arise with respect to

events occurring in the period after Closing . . . it being the

intention of the Parties that Consol have no liability or responsibility for any benefits due or that may become due in the future

to employees of US[X] . . . who have retired prior to Closing,

unless and until any such retired employee may be subsequently

employed by Consol at its discretion outside its obligations pursuant to this Agreement.

The Old Ben Sales Agreement with USX provides:

[Old Ben] will assume the collective bargaining agreements then

in effect, if any, between [USX] and the UMWA applicable to

these bargaining units. [Old Ben] will discharge all of [USX]'s

obligations under such collective bargaining agreements, including obligations to make contributions to the 1950 Pension Plan,

the 1950 Benefit Plan, the 1974 Pension Plan, and the 1974 Ben-

 14
each company made its obligatory contributions to the Plans until the

enactment of the Coal Act's new funding system. 10

Each of the sales agreements also contained cross indemnification

provisions very similar, if not identical, to that included in the Old

Ben agreement:

Buyers expressly assume and agree in due course to pay,

perform, fulfill and discharge and to indemnify and hold

harmless [USX], its officers, directors and shareholders, and

their successors, heirs, administrators and assigns, from and

against any claim, loss, damage, cost, or expense of any

kind or character arising out of or resulting from:

(i) Any claims, causes of action, debts, liabilities

and obligations incurred in connection with the

Acquired Assets or arising out of the ownership or

operation of the Acquired Assets on or after the

Business Closing, or from acts, omissions or activities of Buyers in the ownership or operation of the

Acquired Assets on or after the Business Closing.

. . .

In return, USX agreed to indemnify Buyers.

[USX] expressly assumes and agrees in due course to pay,

perform, fulfill and discharge and to indemnify and hold

harmless BUYERS, their officers, directors and sharehold-

_________________________________________________________________

efit Plan, to the extent that such obligations arose with respect to

a period after the Business Closing. Except as otherwise provided in this Agreement, [USX]'s obligation to make contributions to the above employee benefit plans shall be limited to the

obligations set forth in the 1978 National Bituminous Coal Wage

Agreement or its successor to make contributions for hours

worked or tons of coal mined prior to the Business Closing.

10 Employees at the mines sold who retired after January 1, 1976,

received and continued to receive health benefits directly from USX

under an IEP.

 15
ers, and their successors, heirs, administrators and assigns,

from and against any claim, loss, damages, cost or expense

of any kind or character arising out of or resulting from the

following:

(i) Any claims or causes of action against or

debts, liabilities and obligations of [USX] incurred

in connections with the Acquired Assets or arising

out of the ownership or operation of the Acquired

Assets prior to the Business Closing, or from the

acts, omissions, or activities of [USX] in the ownership and operation of the Acquired Assets prior

to the Business Closing;

***

(iii) Any claims, causes of action, debts, obligations and liabilities of any kind or character

(including, but not limited to workers' compensation claims) and any related cost or expenses, to

employees of [USX], former employees of [USX],

actual or potential applicants for employment at

[USX], any beneficiaries of the above or any other

person asserting a claim on their behalf, arising out

of or resulting from any incident or event which

occurs prior to the Business Closing or any claim

for employee benefits related to an employee's or

former employee's period of service with [USX]

prior to the Business Closing.

Thus, USX agreed to indemnify Buyers for liability arising out of the

operation of the mines prior to closing and the Buyers agreed to

indemnify USX for liabilities arising on or after closing.

The Secretary assigned to USX a number of UMWA retirees who

worked for USX at the operations transferred to Old Ben, Consol, and

Arch and retired prior to 1976.

D. Lawsuit

In the spring of 1994, Carbon filed a lawsuit in federal court based

on diversity jurisdiction which sought declaratory and injunctive

 16
relief against USX. Carbon sought to hold USX liable based on the

1982 settlement agreement for the assigned retirees who had worked

at the operations which were covered by the lease. Carbon specifically relied on the provisions where USX agreed to assume Carbon's

obligations under the 1981 NBCWA collective-bargaining agreement

and successor agreements and where USX agreed to assume unbilled

medical costs arising out of Carbon's performance of the 1974 agreement.

USX filed a counterclaim against Carbon seeking"a declaration of

the rights and obligations of the parties . . . under the [Coal Act]" and

initiated a third party complaint against Arch, Consol, and Old Ben

("counterdefendants"). USX argued that, under Carbon's interpretation of the Coal Act, Arch, Consol, and Old Ben should pay for, reimburse, or indemnify it for the retirees who worked at the operations

sold to those companies. USX relied on the provisions where those

companies agreed to assume all liability arising under the collectivebargaining agreements which arose after closing. USX also relied on

the indemnification provisions in those agreements. The counterdefendants filed a counterclaim seeking indemnification from USX for

any liabilities imposed upon them or, alternatively, if no liabilities

were imposed, attorney's fees and costs under the indemnification

provisions in their sales contracts.

Each party filed a motion for summary judgment. After briefing

and oral argument, the district court ruled that the 1992 Coal Act, in

providing that, as of February 1, 1993, all contributions to the Combined Fund "shall be determined exclusively" under the Act, explicitly abrogated all pre-Act private party agreements as to financial

responsibilities for pre-1976 UMWA retirees. The district court further found that the private agreements at issue would provide for the

same result because they would not allow transfer of the obligations

or allow for indemnification as to any of the contested assignments.

Carbon has appealed. USX has cross-appealed. The crossdefendants have appealed the district court's failure to grant them

attorney's fees under the cross-indemnification provisions in the sales

agreements.

 17
II

A. Standard of Review

We review a district court's summary judgment ruling under a de

novo standard of review. Henson v. Liggett Group, Inc., 61 F.3d 270,

274 (4th Cir. 1995); Jackson v. Kimel, 992 F.2d 1318, 1322 (4th Cir.

1993). Under Rule 56(c) of the Federal Rules of Civil Procedure,

summary judgment is appropriate only where there are no genuine

issues of material fact. In conducting our analysis, we review the

record in the light most favorable to the nonmoving party.

B. Coal Act's Impact on Pre-Act Contractual Agreements

Carbon and USX argue that the Coal Act does not abrogate their

pre-Act contracts reallocating their obligations to the pre-Act Benefit

Plans. They contend that the Act recognizes and incorporates their

pre-Act contracts. They also contend that the Coal Act's Combined

Fund is essentially a codification of their obligations to the pre-Act

Benefit Plans. Therefore, they argue that they may bring a civil action

based on their pre-Act agreements for reimbursement or indemnification for their contributions to the Combined Fund which are based on

assignments of retirees who worked at the mining operations they

sold or leased to others. We disagree. As explained below, the Coal

Act established a new funding method for financing UMWA retirees'

health-care benefits that expressly created new obligations on Carbon

and USX to a new and distinct fund--the Combined Fund--

notwithstanding their prior contracts. Under the Act "ALL" liability is

determined by the Act, regardless of prior private agreements. Furthermore, we agree with the district court that, in any event, the contracts relied upon do not require reimbursement for Coal Act

premiums paid to the Combined Fund.

Under the most basic canon of statutory construction, we begin

interpreting a statute by examining the literal and plain language of

the statute. William v. United States Merit Sys. Protection Bd., 15

F.3d 46, 49 (4th Cir. 1994); United States v. Allen, 2 F.3d 538, 539

(4th Cir. 1993). Absent explicit legislative intent to the contrary, the

statute should be construed according to its plain and ordinary meaning. Id.

 18
The Coal Act changed the entire mechanism for funding retirement

benefits and required that "[a]ll liability for contributions to the Combined Fund that arises on and after February 1, 1993, . . . be determined exclusively under [the Coal Act], including all liability for

contributions to the 1950 UMWA Benefit Plan and the 1974 UMWA

Benefit Plan for coal production on and after February 1, 1993." 26

U.S.C. § 9708 (emphasis added). While the Act made clear that obligations, claims, and subrogation rights arising in relation to the 1950

and 1974 Benefit Plans as of February 1, 1993, were not affected, the

Act's new method became the exclusive method for determining liability to the Combined Fund on and after February 1, 1993. Id. Only

liabilities imposed after February 1, 1993, to the Combined Fund are

the subject of this lawsuit.

In providing that all liability for contributions to the Combined

Fund, including all liability to the 1950 and 1974 Benefit Plans be

determined exclusively under the Coal Act, Congress "upset[ ] otherwise settled expectations," and "impose[d] a new duty or liability

based on past acts" for some coal operators. LTV Steel Co. v. Shalala

(In re Chateaugay Corp.), 53 F.3d 478, 489 (2d Cir.) (citation omitted), cert denied, ___ U.S. ___, 116 S. Ct. 298 (1995). While the Coal

Act maintained similar benefits to those provided previously, it

entirely changed the mechanism for funding those benefits by imposing what we have termed a tax. See 1992 UMWA Benefit Plan v.

Leckie Smokeless, No. 96-1708, Slip op. at 19-20, ___ F.3d ___, ___

(4th Cir. Oct. 29, 1996). That tax rejected the previous methods for

funding health-care benefits based on operational formulas (e.g., tons

of coal mined, hours worked) achieved through collective bargaining

in favor of statutory assessments which in certain instances "reached

back" to companies that had left the coal business or bargained out

of their prior obligations.11 Those companies were the ones that

_________________________________________________________________

11 "The essence of the Conference Agreement [wa]s that those companies which employed the retirees in question, and thereby benefitted

from their services, will be assigned responsibility for providing the

health care benefits promised in their various collective bargaining

agreements." 138 Cong.Rec. S17566-01, 17603. The Conference Report

expressed the intent of Congress to "reach back" to those companies who

"had bargained out of their funding obligations." Congress believed that

"an equitable solution . . . require[d] that such companies remain obligated to help fund the benefit program which covers retired persons who

worked for those companies." Id.

 19
entered into the collective bargaining agreements and promised the

UMWA members life benefits. Those companies were the ones that

had benefitted from the retirees' work and efforts. Those companies

were the ones that had achieved concessions from the miners in

exchange for better health benefits. Those companies that bargained

out of their obligations and left the mining business helped, in part,

to cause near financial collapse of the Benefit Plans by causing a

small number of signatory companies to shoulder the entire burden.

Thus, Congress reasoned that an equitable solution would permit

reaching back to place responsibility on those companies which the

miners had worked for, notwithstanding their bargaining out of their

obligations.

Thus, to characterize the Act, as Carbon and USX do,"as merely

an `adjustment' to signatory operators' existing or pre-existing contractual obligations to fund health care benefits for UMWA miners

and retirees," see Templeton Coal, 882 F. Supp. at 815, is not entirely

accurate. While the Coal Act continued signatory operators' preexisting contractual obligations to provide health-care benefits, it also

"reached back" to impose new obligations on companies that had bargained out of their obligations and, in doing so, fundamentally

changed the method for funding UMWA retirees' health benefits. For

those reasons, we find that the Coal Act was not a mere codification

of pre-existing NBCWAs as Carbon and USX claim, but rather an

imposition of new obligations on certain NBCWA signatory operators.

Carbon and USX argue, however, that the Coal Act allows for their

pre-Act contracts to be enforced.12 Carbon and USX assert that 26

U.S.C. § 9706(f)(6), which provides for private civil actions to

enforce responsibility of assigned premiums notwithstanding the Secretary's assignment, recognizes their ability to enforce pre-Act contracts assigning liability to the 1950 and 1974 Benefit Plans.13 We

disagree for the reasons that follow.

_________________________________________________________________

12 The dissent also contends that the pre-Act contracts transferring obligations to the 1950 and 1974 Benefit Plans allow for private civil lawsuits to seek reimbursement for premiums paid to the Coal Act.

13 Section 9706(f)(6) 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.

 20
First, the express language of the statute requires that "All liability

for contributions to the Combined Fund that arises on and after February 1, 1993, . . . be determined exclusively under [the Coal Act]." 26

U.S.C. § 9708 (emphasis added). We interpret Congress to mean precisely what it said--that "All liability" to the Combined Fund be

determined by the Coal Act and not prior private agreements unless

expressly provided for in the Act. The Act contains no provisions that

expressly provide for the enforcement of pre-Act agreements.

Second, the private agreements USX and Carbon seek to enforce

were based upon and entered into under a system of funding benefits

that Congress expressly abrogated because of, in part, the signatory

operators' ability to contract out of their funding obligations. Congress intended the Coal Act to reach back and impose liability on the

signatory operators who had contracted out of their obligations to

fund retiree benefits. Allowing the enforcement of those contracts

expressly undermines the intent and purpose of the Coal Act as

expressed in the Conference Agreement "that those companies which

employed the retirees in question, and thereby benefitted from their

services . . . be assigned responsibility for providing the health care

benefits promised." 138 Cong.Rec. S17566-01, 17603. While the Act

expressly recognizes that post-Act contracts may be entered into in

order to transfer that liability as long as the original assignee remains

the guarantor of the premiums, the Act contains no similar provisions

for pre-Act contracts.

Third, we do not read § 9706 as Carbon, USX, and the dissent read

it, to allow for private enforcement of pre-Act contracts. To do so

would allow those companies who had contracted out of their funding

obligations to, in effect, avoid their obligations, notwithstanding any

sort of primary liability to the Combined Fund. Instead, we read the

private action provision, as the district court did, to refer to an earlier

subsection of § 9706 which provides that post-Act private agreements

and contracts can reallocate responsibility for assigned retirees' benefits to the Combined Fund to successor operators of mines, provided

that the operator transferring the assignment remains a guarantor of

the payments to the Fund.14

_________________________________________________________________

14 Section 9706(b)(2) states:

 21
Carbon and USX argue, however, that disallowing pre-Act contracts renders the section allowing for private contracts superfluous.

We do not think so. In allowing for reassignment under post-Act contracts, the statute states that the assigned operators shall notify the

Trustees of the Combined Fund of the change in assignment. 26

U.S.C. § 9706(b)(2). The change is not made through the Commissioner. In the event of a problem, § 9706(b)(2) does not state how the

problem is to be resolved. The operator who transferred its assignment remains ultimately liable as the guarantor to the trustees of the

Fund. Id. All assignments by the Commissioner within a certain time

limit, or, if a request for review is filed within the time limit, after his

or her reconsideration, are final--they are not subject to judicial

review. Id. at 9706(f). Thus, recourse may not be had with the Commissioner. The private action section makes clear that the assignor in

the post-Act contract may bring a private civil action seeking reimbursement for the premiums it has paid. Id.§ 9706(f)(6).15

_________________________________________________________________

If a person becomes a successor of an assigned operator after the

enactment date, the assigned operator may transfer the assignment of an eligible beneficiary under subsection (a) to such successor, and such successor shall be treated as the assigned

operator with respect to such eligible beneficiary for purposes of

[the Coal Act]. Notwithstanding the preceding sentence, the

assigned operator transferring such assignment (and any related

person) shall remain the guarantor of the benefits provided to the

eligible beneficiary under [the Coal Act]. An assigned operator

shall notify the trustees of the Combined Fund of a transfer

described in this paragraph.

(emphasis added).

15 Carbon and USX also rely on the Conference Report's description of

the private action section. The Conference Report states that:

The section on private actions provides that if parties have commercial contracts relate[d] to acquisition or disposition of coal

bearing properties or facilities which delineate their respective

responsibilities concerning the obligation of retiree health care,

the parties may enter into private litigation to enforce such contracts for indemnification or any other form of payment allocation as may be appropriate under their private contract.

Otherwise, this language does not create new private rights of

 22
The dissent argues that the private agreements reallocating responsibility to the Benefit Funds may be litigated by drawing a distinction

between primary responsibility to the Combined Fund and secondary

liability under a private agreement to reimburse those primarily liable

to the Combined Fund. Again, we must disagree. Congress expressly

stated that "All liability" should be determined as provided for by the

Act. Congress made no distinction between primary and secondary

liability. And, contrary to the dissent's assertion that "[i]t is not surprising . . . that a statute enacted in 1992 fails to authorize parties to

enter into contracts prior to 1992," Congress was well aware that signatory operators had "bargained out of their funding obligations." 138

Cong.Rec. S17566-01, 17603. If Congress had intended signatory

operators to continue to be able to enforce some type of secondary liability under the private agreements it could have so stated. Indeed,

Congress did allow for "a type of" secondary liability with respect to

post-Act contracts. However, Congress did not provide for any liability other than that created by the Act. And Congress made clear that

the Act would "expressly" determine all liability. The failure to allow

for secondary liability based on pre-Act private contracts is not surprising given Congress' expressed intent to "reach back" and impose

the obligation to fund retirement benefits on those signatory operators

who had "bargained out of their funding obligations." 138 Cong.Rec.

S17566-01, 17603.

C. Agreements and Contracts

In any event, as the district court recognized, the agreements and

contracts USX and Carbon rely upon would not allow reimbursement.

_________________________________________________________________

action where they would not exist in the absence of this provision.

138 Cong.Rec. S17566-01, S17605-06. We read "have" as ambiguous as

to whether it relates to post- or pre-Act contracts. Thus, we do not view

this section of the legislative history as dispositive or as expressing a

clear intent to allow private pre-Act contracts. In light of the express language of the Act stating that all contributions shall be determined exclusively under the Act and the legislative history indicating that the Coal

Act was intended to correct the problem of operators contracting out of

their obligations to the 1950 and 1974 Benefit Plans, we find that the

ambiguous "have" in the legislative history is not strong enough to create

an enforcement right for pre-Act contracts.

 23
Under the Carbon/USX settlement agreement, USX agreed to "assume and . . . to perform, pay and discharge Carbon's obligations

under [the NBCWA of 1981] collective bargaining agreement [--

which included the 1950 and 1974 Benefit Plans contributions--] to

the extent such obligations arose with respect to any period after the

Closing." (Emphasis added). Arch, Old Ben, and Consol also all

agreed to assume under their sales agreements with USX all of USX's

"obligations under [the NBCWA of 1981] collective bargaining

agreement [--which included the 1950 and 1974 Benefit Plans

contributions--] to the extent that such obligations arise with respect

to the period after Closing." (Emphasis added).

Those provisions are inapplicable to the assignments by the Secretary or Commissioner for several reasons. First, while the obligation

to assume all collective-bargaining agreements, including health-care

benefits guaranteed in those agreements under the 1950 and 1974

Benefit Plans, was transferred to the successor interests, the Coal Act

is not a collectively bargained agreement. Rather, it is a legislatively

imposed tax. Furthermore, as explained previously, the obligations

assumed under the collective-bargaining agreements are not coextensive with those imposed by the Coal Act.

Second, the obligations imposed under the 1992 Coal Act do not

arise from the acquired assets in and of themselves or from events on

or after the date of closing of each agreement. Although the Combined Fund and the obligations thereunder did not exist prior to the

enactment of the Coal Act in 1992, the obligations the Act imposes

are based on events that occurred prior to the closing date in all the

transactions at issue. The new liability created by"the Coal Act links

operator liability to previous employment relationships," i.e. the hiring and firing of workers, the signing of NBCWAs, the promise of

lifetime benefits, and the benefits and concessions the companies

received from those workers in the past. In re Chateaugay Corp., 53

F.3d at 489; cf. Davon, Inc. v. Shalala, 75 F.3d at 1114, 1126 (7th Cir.

1996) (discussing retroactive aspects of tax imposed under the Coal

Act). Significantly, USX must have interpreted the agreements in this

same fashion for some time because it did not seek to avoid its assessments under the 1992 Coal Act until Carbon sued it.

In addition to assuming liability under the NBCWA collectivebargaining agreements, the sales agreements USX entered into with

 24
Old Ben, Consol, and Arch all contained cross-indemnification provisions. Each of the Buyers agreed to assume and hold harmless USX

for all claims and the like arising in connection with the Acquired

Assets "on or after the Business Closing." USX in turn agreed to

assume and hold harmless the Buyers from all claims and the like

arising in connection with the Acquired Assets "prior to Business

Closing" and to assume all claims and the like"to employees of

[USX] [and] former employees of [USX] . . . arising out of or resulting from any incident or event which occurs prior to the Business

Closing or any claim for employee benefits related to any employee's

or former employee's period of service with [USX] prior to the Business Closing." (Emphasis added).

While the Coal Act's obligations are new ones, they are based on

and arise from employment relations that were initiated and ended

long before the closing in any of the sales agreements. Thus, in no

sense can the Buyers be held liable under the indemnification provision for the Coal Act's obligations.

Furthermore, USX agreed to hold harmless Buyers from any claim

for employee benefits related to any employee's or former employee's period of service with USX prior to the closing. USX argues that

this provision only relates to claims for employee benefits by employees themselves. However, we do not read the relevant contract clause

in that fashion. We read USX as agreeing to hold harmless all claims,

costs, or expenses "to former employees of [USX], . . . or any claim

for employee benefits related to an employee's or former employee's

period of service with [USX] prior to the Business Closing." We read

the "or" as being disjunctive. We therefore read the last clause of the

sentence to apply to all claims for employee benefits related to an

employee's or former employee's period of service with USX prior

to the closing.

The Secretary's assignments under the Coal Act are claims for

employee benefits related to former employees' periods of service

with USX prior to the closing. We read USX as agreeing to hold

harmless Arch, Old Ben, and Consol for all such employee benefits--

excluding those imposed through the NBCWA collective bargaining

process. Thus, under the indemnification clauses, for that reason as

 25
well, Arch, Old Ben, and Consol are not obligated to indemnify USX

for the Secretary's assessments under the Coal Act.

Similarly, indemnification provisions in the USX/Carbon Agreements do not require that USX reimburse Carbon for its Coal Act premium assessments. Indeed, in the Carbon/USX agreement Carbon

expressly agreed to indemnify USX for any "claims. . . resulting from

or arising out of the operation, administration and funding of Carbon's employee benefit plans by Carbon prior to the Closing Date,

including but not limited to any taxes . . . imposed or assessed by any

governmental authority, or agency, under any statute, rule or regulation applicable to the operation, administration and funding of such

plans." As explained previously, the Coal Act premiums are taxes

imposed under the Coal Act based upon Carbon's operation, administration and funding of its employee benefit plan prior to the Closing

Date. Thus, we disagree with the dissent's assertion that if we permitted Carbon and USX to proceed with their lawsuit based on the contracts, remand would be necessary. The contracts are in the record.

We have reviewed the contracts, the district court's findings and the

parties' arguments, and conclude that the contracts do not allow for

the reimbursement sought. Remand would therefore be unwarranted

in any event.

D. Constitutionality

We recognize that USX and Carbon both likely understood when

they entered into the relevant agreements that they were negotiating

out of any obligations to fund health-care benefits for pre-1976

UMWA retirees. Thus, we briefly address the constitutionality of the

Coal Act imposing new duties on Carbon and USX based on past

acts, thereby upsetting settled transactions and settled expectations. In

re Chateaugay, 53 F.3d at 489.

The Supreme Court has expressly held that private contracts do not

present a due process bar to otherwise legitimate Congressional

action. Concrete Pipe & Prods. of Cal., Inc. v. Construction Laborers

Pension Trust for S. Cal., 508 U.S. 602, 639-41 (1993); Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 733 (1984).

"[F]ederal economic legislation, which is not subject to the constraints coextensive with those imposed upon the States by the Con-

 26
tract Clause of Art. I, § 10, of the Federal Constitution . . . , is subject

to due process review only for rationality." Concrete Pipe, 508 U.S.

at 640-41 (citations omitted); see also Connolly v. Pension Benefit

Guar. Corp., 475 U.S. 211, 223-224 (1986) ("Contracts, however

express, cannot fetter the constitutional authority of Congress. Contracts may create rights of property, but when contracts deal with a

subject matter which lies within the control of Congress, they have a

congenital infirmity. Parties cannot remove their transactions from the

reach of dominant constitutional power by making contracts about

them."); Gray, 467 U.S. at 732-33 ("We have never held, however,

that the principles embodied in the Fifth Amendment's Due Process

Clause are coextensive with prohibitions existing against state impairments of pre-existing contracts.").

All economic legislation can be said to upset settled economic

expectations of someone. "[L]egislation readjusting rights and burdens is not unlawful solely because it upsets otherwise settled expectations." Usery v. Turner Elkhorn Mining Co. , 428 U.S. 1, 16 (1976).

That principle holds true "even though the effect of the legislation is

to impose a new duty or liability based on past acts." Id.

The Coal Act burdens no fundamental rights. It is"`a classic example of an economic regulation' and is subject only to the minimum

scrutiny rational basis test." In re Chateaugay, 53 F.3d at 486 (quoting Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S.

59, 83 (1978)); see also Davon, 75 F.3d at 1121 (reaching same conclusion as to level of scrutiny applicable to due process challenge to

Coal Act). We therefore accord Congress's directives under the Coal

Act strong deference as economic legislation and review it only for

having a rational basis. Carbon and USX bear a difficult and heavy

burden to demonstrate that a piece of economic legislation is not

rational. See, e.g., Davon, 75 F.3d at 1121-22.

We find that the Coal Act was a rational congressional response to

a serious problem. NBCWA signatory operators through the 1970s

created and fostered an expectation of lifetime health-care benefits.

Templeton Coal, 882 F. Supp. at 816-17; Coal Commission Report,

at vii, 1. While perhaps not the fairest scheme, the one selected by

Congress for ensuring that those benefits are delivered is not irrational. The "Coal Act's financing scheme is one of proportionality. Sig-

 27
natory operators bear the financial responsibility for the health care

costs of assigned Combined Fund beneficiaries and their pro rata

share of any `orphaned' beneficiaries." Id. at 819. The Supreme Court

has upheld retroactive cost-spreading statutes where a rational connection exists between a legitimate legislative purpose and the means

chosen by Congress on a number of occasions. Concrete Pipe, 508

U.S. at 636-41; Gray, 467 U.S. at 730; Turner Elkhorn, 428 U.S. at

18-19. In doing so, the Court has opined that "the imposition of liability for effects of disabilities bred in the past is justified as a rational

measure to spread the costs of the employees' disabilities to those

who have profited from the fruits of their labor--the operators and the

coal consumers." Turner Elkhorn, 428 U.S. at 18 (upholding statute

addressing black lung benefits). Likewise, the imposition of liability

for promised health-care benefits on those who made the promises in

the past and where the current carriers of the burden can no longer

sustain the benefits, is a rational measure to spread the costs on those

who benefited from the labor and concessions given in return for the

promised benefits.

Numerous courts considering the constitutionality of the Coal Act

have upheld it under rational Due Process review. See, e.g., Davon,

75 F.3d at 1121-26 (upholding "reach back" provisions of Coal Act

under rational review analysis); In re Chateaugay, 53 F. 3d at 486-91

(same); Templeton Coal, 882 F. Supp. at 811-21 (same). As the Second Circuit reasoned in In re Chateaugay as to one coal company

who left the coal mining business, and challenged the constitutionality

of the Act's application to itself, that coal company

might well have expected that other coal operators would be

required to pay for [the benefits of its retirees, but the company] also could reasonably have anticipated that the 1950

and 1974 Benefit [Plans] would not be able to support the

financial burdens imposed upon them as a result of escalating health care costs, the aging of the beneficiary population

and the "dumping" of beneficiaries into the 1974 Benefit

[Plan].

53 F.3d at 490-91. We find that Congress's solution, which seeks to

reach back and impose the obligations to fund retirees' benefits on

those who benefited from the retirees' work and who made the prom-

 28
ises of lifetime benefits as signatories to the NBCWAs, is rationally

related to its purpose of assuring health-care benefits to those retirees

who were given a promise of life-time benefits."It is surely proper

for Congress to legislate retrospectively to ensure that costs of a program are borne by the entire class of persons that Congress rationally

believes should bear them." United States v. Sperry Corp., 493 U.S.

52, 65 (1989). Furthermore, evidence indicated that mandatory contributions from all NBCWA signatory operators were necessary to

secure adequate financing for the Combined Fund. Davon, 75 F.3d at

1125-26.

For those same reasons, we reject USX and Carbon's contention

that the Coal Act's disparate treatment of pre-Act and post-Act contracts violates their constitutional due process and equal protection

rights. Congress had rational reasons for rearranging the financing

scheme for UMWA retirees' health-care benefits. It had rational reasons for imposing new obligations on coal operators who had contracted out of their obligations to the 1950 and 1974 Benefit Plans

because those operators had helped foster the expectation of life-time

benefits and by imposing the burden of orphan employees on a smaller and smaller number of coal operators helped jeopardize the financial health of the Benefit Plans. Under the Coal Act, those operators

remain the guarantors for those life-time benefits even if they enter

into post-Act contracts with successors. The Coal Act enables a "fresh

start" on funding UMWA retirees' benefits. Thus, we do not find it

irrational that Congress decided to allow post-Act contracts, but not

pre-Act contracts.

E. Attorney's Fees

One final matter remains--the counterdefendants' motion for attorney's fees. The counterdefendants argue that the indemnification provisions in their asset sales agreements require that USX reimburse

them for their attorney's fees in this lawsuit. The district court did not

specifically address attorney's fees. The district court merely dismissed all pending motions as moot when it entered its summary

judgment order.

Counterdefendants Old Ben, Arch, and Consol filed counterclaims

seeking indemnification from USX from any and all costs and attor-

 29
ney's fees they incurred in the defense of USX's counterclaim. USX

failed to respond to the counterclaims on time. The district court

denied USX's motion to enter an untimely answer. Thus, the clerk of

the court entered a default judgment against USX on April 28, 1995.

It therefore appears that the district court's failure to award attorney's

fees is an oversight. If not an oversight, the district court's reasons for

not awarding fees after the entry of a default judgment are unclear to

us. We therefore remand solely on the question of the counterdefendants' attorney's fees.

Accordingly, we

AFFIRM IN PART AND REMAND IN PART.

WILLIAMS, Circuit Judge, concurring in the judgment:

I agree that "the agreements and contracts USX and Carbon rely

upon would not allow reimbursement." Majority Op. at 23. Because

the agreements and contracts of Carbon and USX do not allow for

reimbursement or indemnification, we need not reach in Part II.B. the

question of whether the Coal Act precludes the enforcement of such

contracts. The majority's holding on this issue is simply dictum. See

Bettius & Sanderson, P.C. v. Nat'l Union Fire Ins. Co., 839 F.2d

1009, 1019 n.3 (4th Cir. 1988) (Murnaghan, J., concurring in part and

dissenting in part) (stating that "[t]o reach out and decide what need

not be decided is frequently denigrated as dictum."). Furthermore, I

disagree with the majority's dictum that pre-Act contracts cannot be

enforced to indemnify or reimburse a party for its liability under the

Act for payments to the Combined Fund. See Majority Op. at 18-23.

Because I believe that the Act does not preclude the enforcement of

such contracts, I limit my participation in the majority opinion to concurring in the judgment.

I.

I agree with the majority that the "Coal Act established a new funding method for financing UMWA retirees' health-care benefits that

expressly created new obligations on Carbon and USX . . . notwithstanding their prior contracts." Majority Op. at 18. Under the Act,

 30
Congress provided that all liability for contributions to the Combined

Fund shall be determined exclusively under the Act through a statutory assessment imposed on signatory operators by the Commissioner. See id. at 19. I also agree that Congress intended that these

statutory assessments would "reach back" to companies that had left

the coal business or bargained out of their prior obligations. See id.

at 19-20 & n.11.

The express language of the Act states that "[a]ll liability for contributions to the Combined Fund . . . shall be determined exclusively

under [the Coal Act]." 26 U.S.C.A. § 9708 (West Supp. 1996). The

majority interprets this provision as abrogating all"prior private

agreements unless expressly provided for in the Act." Majority Op. at

21. However, nothing in the statute warrants this interpretation.

Indeed, while I agree that "`[a]ll liability' to the Combined Fund

[must] be determined by the Coal Act," id. (emphasis supplied), I cannot find anything in the Act abrogating the liabilities of parties to

each other under an agreement for reimbursement, indemnification,

or the like, regardless of the date of the agreement. Nowhere does the

Act preclude the enforcement of pre-Act contracts. Cf. id. at 21 ("The

Act contains no provisions that expressly provide for the enforcement

of pre-Act agreements."). As a result, while I agree that the Coal Act

imposes new duties and liabilities on Carbon and USX, I disagree

with the majority's conclusion that the companies' pre-Act contracts

are abrogated by the Act, and cannot be enforced to indemnify or

reimburse them for their liability for payments to the Combined Fund.

See id. at 20-23.

The Act specifically states that post-Act, mine operators may reallocate responsibility for assigned retirees' benefits to the Combined

Fund to successor operators by private agreement or contract, provided that the operator transferring the assignment notifies the trustees of the Combined Fund and remains a guarantor of the payments

to the Fund. See 26 U.S.C.A. § 9706(b)(2) (West Supp. 1996).1 The

majority correctly asserts that § 9706(b)(2) authorizes mine operators

_________________________________________________________________

1 I agree with the majority that no pre-Act agreement is protected by

this provision, but note that parties contracting prior to 1992 could not

have anticipated the Act and thus, absent clairvoyance, would not have

contracted in a way that would meet the requirements of § 9706(b)(2).

 31
to transfer Combined Fund liability to successor operators by contract

after the Act's enactment date, see Majority Op. at 21-22, but then

opines that "[i]f Congress had intended signatory operators to continue to be able to enforce some type of secondary liability under

[pre-Act] private agreements it could have so stated." Id. at 23. It is

not surprising, however, that a statute enacted in 1992 fails to authorize parties to enter into contracts prior to 1992. As Congress surely

realized, mine operators were able to, and did, freely and lawfully

reallocate responsibility for retirees' benefits to successor operators

by private agreement or contract prior to 1992. Indeed, it is precisely

because operators were able to lawfully bargain out of their prior

employee benefit obligations, and because successor operators proceeded to default on the employee benefit obligations they assumed,

that Congress enacted the Coal Act. See id. at 19 (citing legislative

history).

In asserting that all pre-Act contracts are abrogated by the Act, the

majority confuses the status of guarantor operators under § 9706(b)(2)

with that of operators assigned primary liability to the Combined

Fund under § 9706(a) who retain pre-Act contractual rights of

indemnification.2 An operator assigned Coal Act liability by the Com-

_________________________________________________________________

2 The majority confuses the distinction between primary liability to the

Combined Fund (created by the Coal Act), and secondary liability among

parties (created by private contracts) when it argues that because the Act

does not expressly provide an analogue to § 9706(b)(2) for pre-Act contracts, all pre-Act contracts must therefore be abrogated. In making this

argument, the majority makes an analytical leap that is unwarranted. The

Coal Act does not provide a companion to § 9706(b)(2) for pre-Act contracts because the Act is expressly designed to reinstate the primary liability of the assigned operator, unless and until a post-Act transfer of

liability takes place. Obviously, affording a § 9706(b)(2) transfer right to

operators pursuant to their pre-Act contracts would defeat the Act's purpose of assigning primary liability to signatory operators. However, reinstating this primary liability to signatory operators is not inconsistent

with allowing such operators private contractual recourse against the parties with whom they have contracted.

The majority asserts that "Congress made no distinction between primary and secondary liability." Majority Op. at 23. As evidence of this

proposition, the majority chants repeatedly the mantra that "Congress

 32
missioner is primarily liable and must pay into the Combined Fund,

regardless of the operator's private, pre-Act contractual rights. I agree

that under the Act, the Commissioner's assignments of liability to the

Combined Fund are final. See Majority Op. at 22. In contrast, an

assigned operator who has entered into a post-Act assignment of its

primary liability will be liable as a guarantor to the Fund only if the

successor operator does not satisfy the obligation. See § 9706(b)(2).

Additionally, the Act's express preservation of a broad right of

"separate" civil litigation for determining responsibility for assigned

premium payments, see 26 U.S.C.A. § 9706(f)(6) (West Supp. 1996),

undermines the majority's conclusion that pre-Act contracts are abrogated by the Act. Although pre-Act contracts cannot function to transfer primary liability for employee benefit obligations under the Act,

§ 9706(f)(6) preserves the right of private civil action for determining

responsibility for assigned premiums as between contracting parties.

The majority, in order to explain the very existence of § 9706(f)(6),

asserts that in the event of a "problem" with payment by a post-Act

successor, § 9706(b)(2) does not provide a resolution. See Majority

Op. at 22. Section 9706(f)(6) exists, the majority claims, for the sole

purpose of enabling the transferring operator, pursuant to its post-Act

agreement, to seek indemnification (or such other payment allocation

provided in the post-Act agreement) from the successor company. See

id. at 22 ("The private action section [§ 9706(f)(6)] makes clear that

the assignor in the post-Act contract may bring a private civil action

seeking reimbursement for the premiums it has paid.").

I agree that § 9706(f)(6) enables operators who have transferred

their Combined Fund liability via post-Act contractual agreements to

sue for reimbursement or indemnification for the premiums they have

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expressly stated that `All liability' should be determined as provided for

by the Act." Id. at 23; see also id. at 23 ("Congress made clear that the

Act would `expressly' determine all liability."). Again, the majority

looks beyond the mark. Congress did expressly state in the Act that all

liability to the Combined Fund is determined by the Act. Congress, however, said nothing to abrogate the right of parties to enforce pre-Act private contracts for indemnification.

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paid. However, I cannot find anything in § 9706(f)(6) that limits that

section's preservation of private civil litigation to post-Act contracts

only. The specific application of the provision to post-Act reimbursement actions says nothing about the provision's broader implications.

In its entirety, § 9706(f)(6) states:

Private actions. -- 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 my view, the Act preserves the right of parties to engage in private

civil litigation for the purpose of determining responsibility for premium payments, irrespective of whether their agreements were consummated pre-Act or post-Act.3 This reading of the Act differs from

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3 The Conference Report's description of the private action section supports this conclusion:

The section on private actions provides that if parties have commercial contracts related[d] to acquisition or disposition of coal

bearing properties or facilities which delineate their respective

responsibilities concerning the obligation of retiree health care,

the parties may enter into private litigation to enforce such contracts for indemnification or any other form of payment allocation as may be appropriate under their private contract.

Otherwise, this language does not create new private rights of

action where they would not exist in the absence of this provision.

138 Cong. Rec. S17566-01, S17605-06 (1992).

The majority contends that this section of the legislative history is not

persuasive because it is "ambiguous" about whether § 9706(f)(6) relates

to pre- or post-Act contracts. See Majority Op. at 22 n.15. The majority

asserts that

[i]n light of the express language of the Act stating that all contributions shall be determined exclusively under the Act and the

legislative history indicating that the Coal Act was intended to

correct the problem of operators contracting out of their obligations to the 1950 and 1974 Benefit Plans, we find that the ambig-

 34
the majority's only in that it declines to disturb the private contractual

rights of parties with regard to matters beyond the concern of the Coal

Act.

Thus, an operator who has been assigned primary liability by the

Commissioner under the Act for employee benefit premiums to be

paid into the Combined Fund may, pursuant to its pre-Act agreement,

seek indemnification (or such other form of reimbursement payment

as is provided in the agreement) from the successor company, "notwithstanding any prior decision by the Commissioner." § 9706(f)(6).

In such a case, the Combined Fund is assured of payment regardless

of whether the operator bearing primary liability successfully obtains

reimbursement from the successor operator because, under the Act,

the Commissioner's assignments of liability to the Fund are final. See

Majority Op. at 22.

II.

Although the Act does not preclude the enforcement of pre-Act

contracts, I agree with the majority that "the agreements and contracts

USX and Carbon rely upon would not allow reimbursement." Majority Op. at 23. As a result, I agree that the agreements and contracts

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uous . . . legislative history is not strong enough to create an

enforcement right for pre-Act contracts.

Id. at 23 n.15.

In discussing the "express language of the Act," the majority again

confuses the distinction between contributions to the Combined Fund

(which are determined exclusively under the Act), and liabilities owed by

parties to each other (which may be allocated by contract). Despite the

resulting confusion, I agree with the majority that the express language

of § 9706(f)(6) (confused or not), coupled with the legislative history

(ambiguous or otherwise), does not "create new private rights of action

where they would not exist in the absence of" the section. See 138 Cong.

Rec. S17566-01, S17605-06 (1992). However, I find that the right to

engage in private civil litigation to enforce a contract existed prior to and

independent of the passage of the Act, and that nothing in the Act precludes parties like Carbon and USX from engaging in such private litigation to enforce their pre-Act contracts.

 35
in question do not obligate USX, Arch, Consol, and Old Ben to

assume the Combined Fund liability of Carbon and USX. Accordingly, I concur in the judgment of the court.

 36