Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 543.0

524US2

Unit: $U94

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498

OCTOBER TERM, 1997

Syllabus

EASTERN ENTERPRISES v. APFEL, COMMISSIONER
OF SOCIAL SECURITY, et al.

certiorari to the united states court of appeals for
the first circuit

No. 97–42. Argued March 4, 1998—Decided June 25, 1998

In 1946, a historic labor agreement between coal operators and the United
Mine Workers of America (UMWA) led to the creation of beneﬁt funds
that provided for the medical expenses of miners and their dependents,
with the precise beneﬁts determined by UMWA-appointed trustees.
Those trusts served as the model for the United Mine Workers of
America Welfare and Retirement Fund (1947 W&R Fund), which was
established by the National Bituminous Coal Wage Agreement of 1947
(1947 NBCWA). The Fund used proceeds of a royalty on coal produc-
tion to provide beneﬁts to miners and their families, and trustees deter-
mined beneﬁt levels and other matters. The 1950 NBCWA created a
new fund (1950 W&R Fund), which used a ﬁxed amount of royalties for
beneﬁts, gave trustees the authority to establish and adjust beneﬁt lev-
els so as to remain within the budgetary restraints, and did not guaran-
tee lifetime health beneﬁts for retirees and their dependents. The 1950
W&R Fund continued to operate with beneﬁt levels subject to revision
until the Employee Retirement Income Security Act of 1974 (ERISA)
introduced speciﬁc funding and vesting requirements for pension plans.
To comply with ERISA, the UMWA and the Bituminous Coal Operators’
Association entered into the 1974 NBCWA, which created four new
trusts.
It was the ﬁrst agreement to expressly reference health bene-
ﬁts for retirees, but it did not alter the employers’ obligation to contrib-
ute a ﬁxed amount of royalties. The new agreement did not extend the
employers’ liability beyond the term of the agreement. Miners who
retired before 1976 were covered by the 1950 Beneﬁt Plan and Trust
(1950 Beneﬁt Plan), and those retiring after 1975 were covered by the
1974 Beneﬁt Plan and Trust (1974 Beneﬁt Plan). The increase in bene-
ﬁts and other factors—the decline in coal production, the retirement of
a generation of miners, and rapid acceleration in health care costs—
quickly caused ﬁnancial problems for the 1950 and 1974 Beneﬁt Plans.
To ensure the Plans’ solvency, the 1978 NBCWA obligated signatories
to make sufﬁcient contributions to maintain beneﬁts as long as they
were in the coal business. As the Plans continued to suffer ﬁnancially,
employers began to withdraw, leaving the remaining signatories to ab-
sorb the increasing cost of covering retirees left behind.