Court Opinion

ID: 9439140
Source: CourtListenerOpinion
Date Created: 2023-08-03 06:23:14.778561+00
Date Added: 2024-06-11T17:26:11.274677
License: Public Domain

RANDOLPH, Circuit Judge,
dissenting:
The definition of “related persons” in the Coal Industry Retiree Health Benefit Act excludes successors in interest to signatory operators, and thereby exempts them from liability for the signatory operator’s Fund beneficiaries. See 26 U.S.C. §§ 9701(c)(2)(A), 9706(a). My colleagues recognize as much. But they believe exempting successors in interest such as ap-pellee would frustrate Congress’s “clear intent.” And so they treat the words “related persons” as if they covered successors although they do not. Given the nature of the judicial process, this mode of judicial analysis embodies some severe theoretical difficulties. My problem with the majority decision is more practical. In detecting the “real” intent of Congress, my colleagues first eye the Act’s general purpose “to identify [those] persons most responsible for plan liabilities.” Maj. op. at 894-95. With this firmly in mind, they find it implausible for Congress “to impose liability for the beneficiaries on, for example, a successor in interest to a Coca-Cola bottling company under common control with a signatory coal mine operator while exempting a coal-mining successor in interest to that operator.” Id. I find this not in the least bit implausible. Exempting successors in interest to signatory operators from liability for the signatory operator’s Fund beneficiaries benefits miners because it facilitates the sale of coal companies. Without the exemption, prospective purchasers can never be sure of their risks. Their liability would depend on whether, sometime in the future, the seller — that is, the signatory operator — ceases to “remain[ ] in business,” a matter wholly outside their control. See 26 U.S.C. § 9706(a). (A person is in “business” within the meaning of the statute “if such person conducts or derives revenue from any business activity, whether or not in the coal industry.” See 26 U.S.C. § 9701(c)(7).) My colleagues say, in response, that Congress could have gone further and exempted successors in interest to related coal mining companies from liability, thus facilitating the sale of these companies as well. Perhaps so, but Congress rarely has to go as far as its logic would take it. The point remains that construing the statute as it was written does not render it inscrutable.
One further observation is in order. The quandary my colleagues confront here is of the Social Security Commissioner’s own making. The problem stems from the Commissioner’s version of what constitutes “business activity.” See id. Borrowing from an inapposite IRS regulation, the Commissioner determined that the signatory operator — “Old Johnson” — no longer engaged in “business activity” after the sale because it now derived its income from securities and real estate. See 26 C.F.R. § 1.355-3(b)(2)(iv). Old Johnson was, according to the Commissioner, therefore out of business. Even though Old Johnson still existed, having merely exchanged its physical assets for cash, the Commissioner no longer held it financially responsible for its Fund beneficiaries. See 26 U.S.C. §§ 9706(a), 9701(c)(7). The Commissioner was thus left groping for a “related person” to whom Old Johnson’s liabilities could be assigned. See 26 U.S.C. § 9701(c)(2)(A). Had the Commissioner adopted a definition of “business activity” which permitted assignment to signatory operators still in existence and earning income, the entire problem would have disappeared and I presume my colleagues would have read the Act as it was written.