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Entire Site Poverty Law Library Clearinghouse Review

The U.S. Supreme Court held that initial assignments made under the Coal Industry Retiree Health Benefit Act of 1992 (Coal Act) after October 1, 1993, were valid despite their untimeliness. The Coal Act required the commissioner of social security, by October 1, 1993, to assign each coal industry retiree eligible for benefits under the Act to an extant operating company—a signatory operator—to be responsible for funding the beneficiary’s benefits. Assignment to a signatory operator binds the operator to pay an annual premium to the United Mine Workers of America Combined Fund, which administers the benefits. The premium has up to three components: health and death benefit premiums and a premium for retirees who are not assigned to a particular operator but whose benefits are paid from the Combined Fund as if they were assigned. The Coal Act was to provide a stable funding for the health benefits of such “orphan retirees.” Although signatory operators are required to pay an unassigned-beneficiary premium only if funding from the United Mine Workers of America 1950 Pension Plan and the Abandoned Mine Land Reclamation Fund runs out, each signatory operator’s unassigned-beneficiary premium is based on the number of its assigned beneficiaries such that the signatory with the most assigned retirees would be required to cover the greatest share of the benefits payable to unassigned beneficiaries. In two separate actions in different district courts, respondents claimed that October 1, 1993, set a time limit on the commissioner’s assignment power so that a beneficiary not assigned on that date must be left unassigned for life. If the challenged assignments are void, the corresponding benefits must be financed by transfers from the named funds and, if necessary, unassigned-beneficiary premiums paid by signatory operators to whom timely assignments were made. The companies obtained summary judgments, and the Sixth Circuit affirmed. Reversing the Sixth Circuit, the Supreme Court rejected the companies’ contention that commissioner’s failure was “jurisdictional.” The Court held that Section 9704(f)(1) of the Coal Act, which provided that the calculation of an operator’s contribution for the benefit of the unassigned be based on assignments made as of October 1, 1993, did not mean that an assigned operator’s percentage of potential liability for the benefit of the unassigned was fixed according to the assignments made on that date. Finding that the Coal Act was designed to allocate the greatest number of beneficiaries to a prior responsible operator, the Court held that the way to reach the Act’s objective was to read the statutory date as a spur to prompt action, not as a bar to tardy completion of the business of ensuring that benefits were funded, as much as possible, by those principally responsible.