In the Supreme Court of the United States
Jo Anne B. Barnhart, Commissioner of
Social Security, petitioner
v.
Peabody Coal Company, et al.
Michael H. Holland, et al., petitioners
v.
Bellaire Corporation, et al.
ON WRITS OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE sixth CIRCUIT
JOINT APPENDIX
Theodore B. Olson
Solicitor General
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
Counsel of Record for
Petitioner Commissioner
of Social Security
Peter Buscemi
Morgan, Lewis & Bockius
1800 M Street, N.W.
Washington, D.C. 20036
(202) 467-7190
Counsel of Record for
Petitioners Trustees of
UMWA Combined Benefit
Fund
John G. Roberts
Hogan & Hartson, L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004
(202) 637-5810
Counsel of Record for
Respondents Peabody
Coal Co., et al.
Jeffrey S. Sutton
Jones, Day, Reavis & Pogue
1900 Huntington Center
41 South High Street
Columbus, Ohio 43215
(614) 469-3855
Counsel of Record for
Respondents Bellaire
Corporation, et al.
UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF KENTUCKY (OWENSBORO)
Civil Docket for Case #: 99-CV-201
Peabody Coal Company; Eastern Associated Coal Corporation, plaintiffs
v.
Commissioner of Social Security,
Kenneth S. Apfel, defendant
RELEVANT DOCKET ENTRIES
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
9/30/99 1 COMPLAINT filed and (Summons(es)) issued) filing fee pd - receipt # 6619 (pmay) [Entry date 10/01/99]
9/30/99 2 ORDER eboc - case referred to Mag Judge E. R. Goebel for submission of findings of fact and conclusions of law and recommendations to the Court; answer and transcript due within 60 days after service of complaint; plaintiff granted 30 days thereafter to file statement of errors with fact and law summary; defendant
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
has 45 days thereafter to respond and file counter statement of fact and law; any request for oral argument should be incorporated in statement of specific errors; parties to comply as otherwise set forth; Case ready for submission 2/12/00 Ccs: counsel and Magistrate Judge. [Entry Date: 10/1/99] (pmay) [Entry date 10/01/99]
12/30/99 3 ORDER by Judge Joseph H. McKinley Jr. vacating [2-1] social security order (cc: all counsel) [Entry Date: 12/30/99] (phay)
2/8/00 8 STIPULATION of dismissal with respect to Counts I, II, and III of plas' complaint as settled (phay)
2/8/00 8 ORDER by Judge Joseph H. McKinley Jr. granting stipuation of dismissal with respect to Counts I, II, and III of plas' complaint [8-1] (cc: all counsel) [Entry Date: 2/8/00] (phay) [Edit date 02/08/00]
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
2/11/00 10 MOTION by plaintiff Eastern Associated, plaintiff Peabody Coal Company for partial summary judgment; Memorandum in Support; order tendered (phay) [Entry date 02/14/00]
2/29/00 12 RESPONSE (OBJECTION) by Defendant to motion for partial summary judgment (10-1); order tendered (phay) [Entry date 03/02/00] [Edit date 03/14/00]
3/1/00 13 ANSWER by defendant CSS to Counts IV-VI of plas' complaint [1-1] (phay) [Entry date 03/02/00]
3/14/00 15 ORDER by Judge Joseph H. McKinley Jr. granting motion for partial summary judgment [10-1] and declared that all initial assignments the Commissioner made to Peabody Coal and Eastern Associated after 9/30/93 are null and void; Commissioner is enjoined from making any initial assignments to Peabody Coal and Eastern Associated in the
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
future; and ordered that Commissioner shall notify UMWA Combined Benefit Fund within 45 days of entry of this order of the identity of each beneficiary assignment to Peabody Coal and Eastern
Associated from the Social Security Administration subject to this order, and inform the Combined Fund that said assignments are void and have been withdrawn terminating case (cc: all counsel) [Entry Date: 3/14/00] (eski)
3/21/00 16 MOTION by plaintiff Eastern Associated, plaintiff Peabody Coal Company to voluntarily dismiss Count VI of their Complaint; Memorandum in Support; order tendered (phay)
4/10/00 17 RESPONSE (OBJECTION) by defendant CSS to motion to voluntarily dismiss Count VI of their Complaint [16-1]; order tendered (phay) [Entry date 04/13/00]
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
4/13/00 18 ORDER by Judge Joseph H. McKinley Jr. granting motion to voluntarily dismiss Count VI of their Complaint WITH PREJUDICE [16-1] (cc: all counsel) [Entry Date: 4/13/00] (seal)
5/31/00 19 MOTION by defendant CSS for entry of judgment; Memorandum in Support; order tendered (phay)
6/19/00 20 RESPONSE (OBJECTION) by plaintiff Eastern Associated, plaintiff Peabody Coal Company to motion for entry of judgment [19-1]; order tendered (phay)
6/30/00 21 REPLY by defendant CSS to response to motion for entry of judgment [19-1] (phay) [Entry date 07/03/00]
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
7/11/00 22 FINAL JUDGMENT by Judge Joseph H. McKinley Jr. granting dft's motion for entry of judgment [19-1] dismissing case (cc: all counsel) [Entry Date: 7/11/00] (phay)
9/8/00 23 NOTICE OF APPEAL by defendant CSS to USCA re final judgment [22-2] (cc: all counsel) (phay) [Entry date 09/11/00]
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
Docket No. 00-6239
Peabody Coal Company; Eastern Associated Coal Corporation, plaintiffs-appellees
v.
Commissioner of Social Security,
Kenneth S. Apfel, defendant-appellant
RELEVANT DOCKET ENTRIES
________________________________________________
DATE PROCEEDINGS
________________________________________________
9/18/00 Civil Case Docketed. Notice filed by Appellant Comm Social Security. Transcript needed: n q (jmb)
10/6/00 TENDERED: petition for hearing en banc from Jeffrey Clair for Appellant Comm Social Security [00-6239] (blh)
10/24/00 PETITION for en banc hearing filed by Jeffrey Clair for Appellant Comm Social Security. Certificate of service date 10/5/00. [00-6239] (blh)
12/6/00 ORDER filed denying petition for en banc hearing [2243347-1] filed by Jeffrey Clair [00-6239]. Entered by order of the court. (blh)
________________________________________________
DATE PROCEEDINGS
________________________________________________
1/30/01 PROOF BRIEF filed by Jeffrey Clair for Appellant Comm Social Security. Certificate of service date 1/29/01 Number of Pages: 35. [00-6239] q (lak)
2/16/01 PROOF BRIEF filed by John R. Woodrum for Appellee Eastern Assoc Coal, Appellee Peabody Coal Co, Gross C. Lindsayfor Appellee Eastern Assoc Coal, Appellee Peabody Coal Co. Certificate of service date 2/12/01. Number of Pages: 32. [00-6239] q (lak)
3/2/01 FINAL BRIEF filed by Jeffrey Clair for Appellant Comm Social Security. Copies: 7. Certificate of service date 3/1/01 Number of Pages: 35. [00-6239] (lak)
3/2/01 TENDERED: final reply brief from Jeffrey Clair for Appellant Comm Social Security [00-6239] (lak)
3/2/01 FINAL REPLY BRIEF filed by Jeffrey Clair for Appellant Comm Social Security.
Copies: 7 Certificate of service date 3/1/01 Number of Pages: 21. [00-6239] (lak)
3/6/01 FINAL BRIEF filed by John R. Woodrum, Gross C. Lindsay for Appellee Eastern Assoc Coal, Appellee Peabody Coal Co. Copies: 7. Certificate of service date 3/5/01. Number of Pages: 32. [00-6239] (lak)
________________________________________________
DATE PROCEEDINGS
________________________________________________
4/12/01 CAUSE SUBMITTED on briefs to panel consisting of Judges Martin, Norris, Quist sitting on 6/13/01. [00-6239] (srw)
6/21/01 Per Curiam OPINION filed: AFFIRMED, decision not for publication pursuant to local rule 28(g) [00-6239]. Boyce F. Martin, Chief Judge, Alan E. Norris, Circuit Judge, Gordon J. Quist, District Judge. (jmb)
8/16/01 MANDATE ISSUED with no cost taxed [00-6239] (lak)
10/15/01 U.S. Supreme Court letter filed: extension ot [sic] time within which to file a petition for a writ of certiorari granted to and including 11-18-01 [2438864-1]. [00-6239] (swh)
11/27/01 U.S. Supreme Court notice filed regarding petition for writ of certiorari filed by Appellant Comm Social Security. Filed in the Supreme Court on 11-19-01, Supreme Ct. case number: 01-705. [00-6239] (swh)
1/30/02 U.S. Supreme Court letter filed granting petition for writ of certiorari [2462048-1] filed by Comm Social Security [00-6239]. Filed in the Supreme Court on 01-22-02. (swh)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF KENTUCKY
OWENSBORO DIVISION
Civil Action No. 4:99CV-201(M)
Peabody Coal Company and Eastern Associated Coal Corp., plainitiffs
v.
Kenneth S. Apfel, Commissioner, Social Security Administration, defendant
[Filed: Sept. 30, 1999]
COMPLAINT
Plaintiffs, Peabody Coal Company and Eastern Associated Coal Corp., seek an order vacating the assignment to Plaintiffs of certain UMWA Combined Benefit Fund ("Combined Fund") beneficiaries by Defendant, Kenneth S. Apfel, the Commissioner of Social Security ("Commissioner") and certain injunctive relief.
THE PARTIES
1. Plaintiff, Peabody Coal Company ("Peabody Coal"), a corporation duly organized and existing under the laws of the State of Delaware, maintains its principal place of business at 701 Market Street, St. Louis, MO 63101. Peabody Coal is a wholly-owned subsidiary of Peabody Holding Company, Inc.
2. Plaintiff, Eastern Associated Coal Corp. ("EACC") is a West Virginia corporation with its principal place of business at 800 Laidley Tower, Charleston, WV 25324. EACC is a wholly-owned subsidiary of Peabody Holding Company, Inc. Pursuant to section 9704(a) of the Coal Act, Peabody Coal and EACC are jointly and severally liable for the others' Combined Fund beneficiaries.
3. Defendant, Kenneth S. Apfel, maintains his principal office at 6401 Security Boulevard, Baltimore, MD 21235 where, as Commissioner, he presides over the Social Security Administration ("SSA"), a federal agency that administers and enforces various programs and performs functions throughout the United States. The Commissioner is responsible under the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701-9722, ("Coal Act" or "Act") for assigning Combined Fund beneficiaries to signatory operators (and their related persons) in accordance with section 9706 of the Act and for calculating health benefit premiums covering assigned beneficiaries. The Commissioner has delegated his responsibilities for making beneficiary assignments to administrators at SSA's regional service centers.
JURISDICTION AND VENUE
4. Subject matter jurisdiction is proper pursuant to 28 U.S.C. §§ 1331, 2201; 26 U.S.C. §§ 9706(f), 9721; and 5 U.S.C. §§ 701-706.
5. Venue is proper pursuant to 28 U.S.C. § 1391(e). Peabody Coal maintains an office at 1951 Barrett Court, Henderson, Kentucky 42420-1990 within this judicial district which through 1995 served as its corporate headquarters, has conducted and continues to conduct mining operations in this district, and substantial activities relating to SSA's assignment of beneficiaries to Peabody Coal occurred in this district.
THE COAL ACT
6. The Coal Act required the Commissioner to assign certain coal industry retirees to signatory operators, or, where the signatory operator was no longer in business to the signatory operator's related person. 26 U.S.C. § 9706(a). Each such signatory operator is required to pay annual per-beneficiary health and death premiums to the Combined Fund for each beneficiary assigned to it by SSA. 26 U.S.C. § 9704(a).
7. A signatory operator is statutorily defined to include a person which is or was a signatory to a National Bituminous Coal Wage Agreement ("NBCWA"). 26 U.S.C. § 9701(c)(1).
8. A related person refers to, among other things, a person who is a member of a controlled group of corporations that includes a signatory operator, a trade or business under common control with such signatory operator, a partner (other than a limited partner) or joint venturer with such signatory operator, or is a successor in interest to a related person of such signatory operator. 26 U.S.C. § 9701(c)(2)(A).
9. The date for determining related person status is the date immediately proceeding the date the signatory operator ceased to be in business, or July 20, 1992, whichever occurred first. 26 U.S.C. § 9701(c)(2)(B).
10. Each Plaintiff herein is a signatory operator within the meaning of the Coal Act.
11. A signatory operator is considered in business if it conducts or derives revenue from any business activity. 26 U.S.C. § 9701(c)(7).
12. The Commissioner was required to prioritize eligible beneficiaries when making Coal Act assignments. The Commissioner was to assign an eligible coal industry retiree first to a signatory operator (or its active related person) that signed the 1978 NBCWA and was the most recent signatory operator to employ the coal industry retiree in the coal industry for at least two years ("Priority One"). 26 U.S.C. § 9706(a)(1).
13. If an assignment was not possible under Priority One, the Commissioner was to assign the retiree to an operator (or its active related person) that signed the 1978 NBCWA and was the most recent signatory operator to employ the retiree in the coal industry ("Priority Two"). 26 U.S.C. § 9706(a)(2).
14. If the beneficiary could not be assigned under Priority One or Priority Two, the Commissioner was required to assign the retiree to the pre-1978 signatory operator (or its active related person) that employed the retiree in the coal industry for the longest period of time prior to the effective date of the 1978 NBCWA ("Priority Three"). 26 U.S.C. § 9706(a)(3).
EASTERN ENTERPRISES V. APFEL
15. In Eastern Enterprises v. Apfel, 118 S. Ct. 2131 (1998), the Supreme Court held that Priority Three assignments were unconstitutional as violative of the Fifth Amendment of the U.S. Constitution as applied to Eastern Enterprises ("Eastern"). A four Justice plurality held that the Act violated the Takings Clause, id. at 2144-53, while a fifth Justice, Justice Kennedy, concurred in the judgment of the Court and wrote a separate opinion (dissenting in part), which found that the Coal Act violated the Due Process Clause.
16. The plurality and Justice Kennedy both based their holdings on the fact Eastern ceased its coal mining operations in 1965-years before the first promise of lifetime benefits to miners was made in the 1974 NBCWA and subsequent NCBWAs. Id. at 2150, 2159.
17. After the Supreme Court issued its judgment in Eastern in June 1998, the Commissioner voided the assignments of beneficiaries under the Coal Act to numerous former coal operators which had previously been assigned beneficiaries under Priority Three and were similarly situated to Eastern.
COUNT I
(Peabody Coal)
Request for Declaratory Judgment that Peabody Coal is not a Related Person to Tecumseh
18. Peabody Coal restates and herein incorporates by reference Paragraphs 1 through 17 of the Complaint.
19. By various letters in 1993 and 1995, the Commissioner assigned beneficiaries to Peabody Coal who had actually worked for Tecumseh Coal Company ("Tecumseh"), the latter a signatory operator through 1965 that still remains in business within the meaning of section 9701(c)(7) of the Act.
20. The Commissioner assigned the Tecumseh retirees (and their eligible dependents) (collectively the "Tecumseh Beneficiaries") to Peabody Coal because SSA erroneously determined Peabody Coal is a related person to Tecumseh within the meaning of section 9701(c)(2) of the Coal Act. (The Tecumseh Beneficiaries are listed on Attachment A).
21. As of July 20, 1992, Peabody Coal owned only 50% of Tecumseh's outstanding shares, and therefore,
(i) was not in a controlled group of corporations with Tecumseh; (ii) was not a trade or business under common control with Tecumseh; (iii) was not a partner of nor a joint venturer with Tecumseh; and, (iv) was not a successor in interest to an entity that was a related person to Tecumseh.
22. Peabody Coal is not a related person to Tecumseh as that term is defined in the Coal Act.
23. On February 3, 1999, Peabody Coal requested the Commissioner to withdraw his assignment of the Tecumseh Beneficiaries to Peabody Coal because Peabody Coal is not a related person to Tecumseh, and because the assignments violate the Fifth Amendment as set forth in Eastern. The Commissioner has failed or refused to withdraw the assignment of the Tecumseh Beneficiaries to Peabody Coal.
24. SSA's assignments of the Tecumseh Beneficiaries to Peabody Coal are void and must be vacated and reversed because Peabody Coal is not a related person to Tecumseh and such assignments exceed SSA's authority under the Coal Act and are erroneous as a matter of law.
COUNT II
(Peabody Coal)
Request for a Declaratory Judgment that the Assignment of the Tecumseh Beneficiaries to Peabody Coal Violates the Fifth Amendment
25. Peabody Coal restates and herein incorporates by reference Paragraphs 1 through 24 of the Complaint.
26. With respect to the Tecumseh Beneficiaries, the Supreme Court's decision in Eastern compels the conclusion that the Coal Act is unconstitutional as applied to Peabody Coal. Constitutionally, Tecumseh's factual situation is indistinguishable from that which the Supreme Court considered in Eastern. Like Eastern, Tecumseh ceased employing UMWA-represented miners in 1965. Like the beneficiaries assigned to Eastern, the Tecumseh Beneficiaries were assigned under Priority Three.
27. Inasmuch as the Commissioner's assignment of the Tecumseh Beneficiaries to Peabody Coal is indistinguishable from the Commissioner's assignments to Eastern, such assignments violate Peabody Coal's rights in violation of the Fifth Amendment.
COUNT III
(Peabody Coal)
Request for Declaratory Judgment that
the Commissioner's Refusal to Withdraw the
Tecumseh Beneficiaries Violates the Administrative Procedure Act
28. Peabody Coal restates and herein incorporates by reference Paragraphs 1 through 27 of the Complaint.
29. By letter dated February 3, 1999, Peabody Coal requested the Commissioner to void the assignment of the Tecumseh Beneficiaries as required by the Supreme Court's decision in Eastern.
30. The Commissioner has failed and refused to respond to Peabody Coal's request and has failed and refused to withdraw the assignment to Peabody Coal of the Tecumseh Beneficiaries.
31. Pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 et seq., the Commissioner's decision to adopt the Court's rationale in Eastern and to apply it to similarly situated assigned operators, but not to Peabody Coal, is arbitrary and capricious, an abuse of discretion, and not in accordance with law.
COUNT IV
(Peabody Coal and EACC)
Request for Declaratory Judgment Invalidating Beneficiary Assignments Made
to Peabody Coal and EACC after September 30, 1993
32. Plaintiffs restate and herein incorporate by reference Paragraphs 1 through 31.
33. Section 9706(a) of the Coal Act required the Commissioner to assign Combined Fund beneficiaries to a signatory operator (or its active related person) before October 1, 1993.
34. Where the Commissioner could not assign a beneficiary to a signatory operator (or its active related person) by October 1, 1993, such beneficiary was to be placed in the unassigned beneficiary pool ("Unassigned Pool").
35. Premiums for beneficiaries in the Unassigned Pool are paid from transfer payments made to the Combined Fund from the 1950 UMWA Pension Plan
(26 U.S.C. § 9705(a)), or from the Abandoned Mine Land Reclamation Fund managed by the Secretary of the Department of Interior (26 U.S.C. § 9705(b), 30 U.S.C. § 1242(h)). Should such transfers prove inadequate, the cost of providing benefits to beneficiaries in the Unassigned Pool is to be shared pro rata by all assigned operators (26 U.S.C. § 9704(d)).
36. The Commissioner, in violation of his authority under section 9706(a), assigned Coal Act beneficiaries to Peabody Coal and EACC from the Unassigned Pool after September 30, 1993.
37. The Commissioner's assignment to Plaintiffs of beneficiaries from the Unassigned Pool after September 30, 1993 violates the Sixth Circuit Court of Appeals' decision in the case of Dixie Fuel Co. v. Apfel, 171 F.3d 1052 (6th Cir. 1999), which held that the Commissioner is without authority to assign beneficiaries from the Unassigned Pool after September 30, 1993.
38. Plaintiffs, for purposes of the instant action, are similarly situated to Dixie Fuel.
39. The Commissioner has failed or refused to apply the Court's ruling in Dixie Fuel to Plaintiffs.
40. The Commissioner's decision to not withdraw beneficiaries assigned to Plaintiffs from the Unassigned Pool after September 30, 1993 violates section 9706(a) of the Coal Act, and also sections 702 and 706(2)(C) of the APA because it is not in accordance with law, and constitutes an abuse of discretion.
COUNT V
(Peabody Coal and EACC)
Request for Injunctive Relief Barring Future Assignments from the Unassigned
Pool
41. Plaintiffs restate and herein incorporate by reference the allegations of Paragraphs 1 through 40 of the Complaint.
42. The Commissioner's assignment to Peabody Coal and EACC of beneficiaries from the Unassigned Pool after September 30, 1993 exceeds the scope of his statutory authority and violates the Sixth Circuits Court of Appeals' decision in Dixie Fuel Co. v. Apfel.
43. Notwithstanding his existing violations of the statutory mandate barring assignments from the Unassigned Pool, upon information and belief, the Commissioner intends in the near future to continue making Coal Act assignments to Plaintiffs.
44. Continued assignments from the Unassigned Pool violate the APA, the Coal Act and binding Sixth Circuit precedent and sanction the use of injunctive powers to permanently bar the Commissioner from making such assignments to Peabody Coal and EACC in the future.
COUNT VI
(Peabody Coal and EACC)
Declaration Invalidating the Coal Act Assignments of George Weaver, Bude
Jarvis, William Barnett,
Jewell Peterson, Jack Callor, Jarrett Shrewsbury, Michael Restic and Lovell
Kelley
45. Plaintiffs restate and herein incorporate by reference the allegations of Paragraphs 1 through 44 of the Complaint.
46. The Coal Act's assignment hierarchy requires the Commissioner to first assign UMWA retirees to a coal operator (or its related person) that signed the 1978 NBCWA and was the most recent signatory operator to employ the coal industry retiree in the coal industry for at least two years (Priority One). 26 U.S.C. § 9706(a)(1). Only where the Commissioner is unable to identify such an operator may an assignment be made under Priority Two to a signatory to the 1978 NBCWA that employed the miner for less than two years. 26 U.S.C. § 9706(a)(2).
47. The Commissioner assigned George Weaver and Bude Jarvis to EACC and William Barnett to Peabody Coal under Priority Two. Plaintiffs filed timely reconsideration requests providing documentary evidence establishing these miners were properly assignable under Priority One to unrelated signatory operators (or their active related persons) that signed the 1978 NBCWA and were the most recent signatory operators to have employed them for at least two years.
48. This notwithstanding, by final decision letters respectively dated June 17, 1996, April 14, 1997, and April 2, 1997 the Commissioner refused to withdraw the assignments of Messrs. Weaver, Jarvis and Barnett.
49. The Commissioner assigned Jarrett Shrewsbury to EACC and Jewell Peterson and Jack Callor to Peabody Coal under Priority One. EACC and Peabody Coal filed timely reconsideration requests establishing that they were properly assigned under Priority One to an unrelated signatory operator that subsequently employed them for more than two years.
50. This notwithstanding, by final decision letters respectively dated June 17, 1996, July 11, 1995 and May 29, 1995 the Commissioner refused to withdraw the assignment of Messrs. Shrewsbury, Peterson and Callor.
51. Messrs. Weaver, Jarvis, Barnette [sic], Shrewsbury, Peterson and Callor would not have been assigned to Plaintiffs if the Commissioner had followed the assignment priority scheme mandated by the Coal Act, and their assignment to Peabody Coal and EACC therefore violates section 9706 of the Coal Act.
52. In applying the Coal Act assignment hierarchy the Commissioner was not permitted to take into account time worked in supervisory jobs or other tasks not covered under applicable NBCWAs.
53. The Commissioner assigned Michael Restic and Virgil Kelley to EACC which timely filed reconsideration requests along with documentary evidence establishing Mr. Restic never performed classified work for EACC and Mr. Kelley retired from the coal industry a year before he received the $18 payment prompting the Commissioner's assignment.
54. This notwithstanding, by final decision letter dated June 17, 1996, the Commissioner refused to withdraw the assignments of Messrs. Restic and Kelley.
55. The Commissioner's final determinations affirming the assignments to Peabody and EACC of the coal industry retirees referenced in Paragraphs 47-54 above violate the Coal Act and the APA; they fail to follow the assignment scheme mandated by the Coal Act, impermissibly shift the burden of persuasion, are arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, plainly erroneous and contain errors apparent from the face of the Commissioner's own records and/or from other information he was required to consider.
56. The Commissioner's final determinations have caused Peabody Coal and EACC to incur Combined Fund premium obligations and other expenses and harm that they would not have incurred had the Commissioner properly performed his duties under the Coal Act.
PRAYER FOR RELIEF
wherefore, Plaintiffs demand judgment against Defendant and pray for the following relief:
1. An Order that declares that Peabody Coal (or any other entity or person related to, or affiliated with Peabody Coal) is not a related person to Tecumseh within the meaning of section 9701(c)(2), and that the assignment of the Tecumseh Beneficiaries listed on Attachment A violates the Coal Act.
2. An Order that declares that the Coal Act, as applied to the assignment of the Tecumseh Beneficiaries to Peabody Coal, violates the Fifth Amendment of the U.S. Constitution.
3. An Order that directs the Commissioner to withdraw the assignment of all Tecumseh Beneficiaries to Peabody Coal and that directs the Commissioner to inform the Combined Fund that such assignments have been withdrawn.
4. An Order declaring the Commissioner's assignments to Peabody Coal and EACC from the Unassigned Pool after September 30, 1993 are void and in violation of section 9706(a) of the Coal Act.
5. An Order enjoining the Commissioner from making any future Coal Act assignments from the Unassigned Pool to Peabody Coal and EACC (or any other entity or person related to, or affiliated with either Plaintiff.)
6. An Order declaring that the Commissioner's decision not to withdraw assignments made to Peabody Coal and EACC from the Unassigned Pool after September 30, 1993 violates section 702 of the APA.
7. An Order declaring that the Commissioner's policy of making assignments from the Unassigned Pool to Peabody Coal and EACC after September 30, 1993 is in excess of his statutory jurisdiction and properly set aside pursuant to section 706(2)(C) of the APA.
8. An Order that requires the Commissioner to inform the Combined Fund that the assignments to Peabody Coal and EACC from the Unassigned Pool have been withdrawn.
9. An Order that declares that the Commissioner's assignment of Messrs. Barnett, Peterson and Callor to Peabody Coal and Messrs. Weaver, Jarvis, Shrewsbury, Restic, and Kelley to EACC violates section 9706(a) of the Coal Act and the APA.
10. Such additional relief as this Court deems equitable and just.
Respectfully submitted,
illegible signature
Gross Lindsay
Trimble, Lindsay & Shea
P.O. Box 19
Henderson, KY 42419-0019
(270) 827-9824
John R. Woodrum
W. Gregory Mott
Heenan, Althen & Roles
1110 Vermont Avenue, N.W.
Suite 400
Washington, D.C. 20005
Dated: September 30, 1999
1 Pursuant to the parties' joint Stipulation of Dismissal Without Prejudice, the Court dismissed Counts I-III of plaintiffs' complaint by order dated February 8, 2000.
Attachment A
Tecumseh Beneficiaries
Matthews, Hobeart
Matthews, Mildred
Wilson, Frank H.
Wilson, Etta
Osborne, James P.
Osborne, Myrtle
Eifler, Theodore R.
Eifler, Mabel
Boyer, Charles R.
Boyer, Margaret
Baker, Gilbert M.
Baker, Lorean
Scheucher, Thomas E.
Scheucher, Hattie
Garrison, Harold L.
Garrison, Leona
Hart, Walter
Hart, Evelyn H.
Gentry, Lloyd B.
Madden, Charles B.
Madden, Jewel M.
Gentry, Burless
Gentry, Geneva
Clinton, Chumbley T.
Brown, Willie L.
Brown, Ruth E.
Speicher, Raymond
Speicher, Sarah F.
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF KENTUCKY
Owensboro Division
Civil Action No. 4:99CV-201-M
Peabody Coal Company, et al., plaintiffs
v.
Kenneth S. Apfel, Commissioner, Social Security Administration, defendant
AFFIDAVIT OF DANNY R. MORIARTY
I, Danny R. Moriarty, after being duly sworn, state:
1. I am the DirectorCost Containment for the Peabody Group. My office address is Peabody Holding Co., Inc., 701 Market Street, Suite 700, St. Louis, MO 63101-1826.
2. As the DirectorCost Containment, my responsibilites include overseeing the processing of assignments made by the Commissioner of Social Security ("Commissioner") to Peabody Coal Company ("Peabody") and Eastern Associated Coal Corp. ("EACC"), under the Coal Industry Retiree Health Benefit Act of 1992 (the "Coal Act"), 26 U.S.C. §§ 9701-9722.
3. Following the Sixth Circuit Court of Appeal's ruling in Dixie Fuel Co. v. Apfel, 171 F.3d 1052 (6th Cir. 1999), I mailed letters dated May 25, 1999, to the Social Security Administration ("SSA") to establish whether the Commissioner had made initial Coal Act assignments to Peabody and EACC after September 30, 1993 from SSA'S unassigned pool in a manner materially indistinguishable from the assignments invalidated by the Court in Dixie Fuel. SSA's response to my letters are set forth below.
4. I received a letter dated June 15, 1999 from Darrell Blevins, SSA's Freedom of Information Officer, confirming that SSA's Northeastern regional service center had made sixty-seven (67) assignments to Peabody from the unassigned pool. (A true and correct copy of such letter is attached hereto as Exhibit 1.)
5. I received a letter dated June 17, 1999 from Mr. Blevins confirming that SSA's Northeastern regional service center had made four (4) assignments to EACC from SSA's unassigned pool. (A true and correct copy of such letter is attached as Exhibit 2).
6. I received a separate letter dated June 17, 1999 from Mr. Blevins confirming that SSA's Southeastern regional service center had made one hundred ninety seven (197) assignments to Peabody Coal Company from SSA's unassigned pool. (A true and correct copy of said letter is attached as Exhibit 3.)
7. I received a letter dated June 17, 1999 from Mr. Blevins, confirming, that SSA's Southeastern regional service center had made seven (7) assignments to EACC from SSA's unassigned pool. (A true and correct copy of said letter is attached hereto as Exhibit 4.)
8. More recently, I received a separate letter dated January 3, 2000 from Mr. Blevins, confirming that SSA's Great Lakes regional service center had made fifty-five (55) assignments to Peabody from SSA's unassigned pool. (A true and correct copy of said letter is attached as Exhibit 5.)
9. Upon information and belief there may be additional assignments to Peabody and EACC from SSA's unassigned pool.
10. The documentation and information provided in the Exhibit are true and accurate to my best information, knowledge and belief.
Further this affiant saith not.
/s/ Danny R. Moriarty
Danny R. Moriarty
My Commission Expires: 12-22-02
[Seal Omitted]
SOCIAL SECURITY
Refer to: TASC-NY 5451
June 17, 1999
Mr. Danny R. Moriarty
Peabody Group
701 Market Street, Suite 700
St. Louis, MO 63101-1826
RE: Peabody Coal Company
Dear Mr. Moriarty:
I am writing in response to your letter of May 25, 1999 to the Southeastern Program Service Center (PSC) requesting information under the Coal Industry Retiree Heath Benefit Act of 1992 (the Coal Act). Your letter was transferred to me because of my responsibilities under the Freedom of Information Act.
You enclosed with your letter listings of retired miners who were assigned to Peabody Coal Company by Southeastern PSC and Western PSC after October, 1993, and you asked for the name of the company to which the miners were previously assigned. I have enclosed 10 pages containing this information, as well as two pages containing the names of those miners included in the lists you sent who are no longer assigned to Peabody Coal Company.
You also asked for the same information about three miners assigned by Western PSC, Donald J. Dugger, Gabriele Fiaoni, and William A. Simmons. All of these miners were assigned to Peabody Coal Company in the initial round of assignments. The fourth miner on this list, Charlie Roberts, was assigned by Northeastern PSC in the initial round of assignments. None of these miners has ever been assigned to another company.
Sincerely,
/s/ Darrell Blevins
Darrell Blevins
Freedom of Information Officer
Enclosure
EIN: 13-2606920 Page 1 of 12
SEPSC/WNPSC Miners No Longer Assigned to
Peabody Coal Company
Miner
Thomas, Billy T.
Lewis, Harding
Polk, James C.
Myers, Thomas S.
Ausbine, Roy R.
McNeely, Arnold E.
Martin, Floyd
Hawk, Bill
Jordan, Oliver J.
Perry, Willie C.
Smith, J.
Cotton, Arvil
Martin, James P.
Wright, Lucas L.
Cross, Arvel
Wilson, Carlie
Strunk, Delmus E.
McKinney, Eugene G.
Owens, Willie B.
Roberts, Ed
Pennington, James
Johnson, Edgar H.
Daugherty, Fred F.
Marcum, Fred B.
Hatmaker, Floyd O.
Huffman, Erby, F.
Boggess, Pete M.
Gilbert, Clarence A.
Lowe, Lon L.
Collingsworth, Bayless L.
Hatmaker, Marion
Nighbert, Lloyd E.
Thompson, Millard G.
Beach, Charles F.
Ellis, Milford E.
Phillips, Richard E.
Wright, Claude R.
Hatmaker, Leon
Sexton, Eamer
Smith, Lindsay K.
Hatmaker, Fred
Childress, Dewey
Adkins, Floyd
Wright, Ed
Cross, Marion T.
Pressnel, Roy
McLin, George D.
EIN: 13-2606920 Page 2 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by SEPSC Letter Dated 06/30/95
PREVIOUSLY
MINER ASSIGNED OPERATOR
Phillips, J. Island Creek Coal Co.
Denson, Marion P. Floyd Mining Co., Inc.
Ford, Edward D. Island Creek Coal Co.
Steele, Roy B. Mid-Continent Coal & Coke Co.
Hooker, Sidney Harlan Wallins Coal Corp.
EIN: 13-2606920 Page 3 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by WNPSC Letter Dated 06/30/95
PREVIOUSLY
MINER ASSIGNED OPERATOR
Edwards, James O. Floyd Mining Co., Inc.
Wheeler, John J. General Motors Corp.
Engle, Arthur Templeton Coal Co.
Slover, John F. Templeton Coal Co.
Pigford, Matthew Mid-Continent Coal & Coke Co.
Lawson, Malcolm Yocum Creek Coal Co.
Dotson, Thelmer J. Harlan Wallins Coal Corp.
EIN: 13-2606920 Page 4 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by SEPSC Letter Dated 09/20/95
PREVIOUSLY
MINER ASSIGNED OPERATOR
Brooks, Clyde M. Not previously assigned
Nickell, Crowder N. Not previously assigned
EIN: 13-2606920 Page 5 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by WNPSC Letter Dated 09/20/95
PREVIOUSLY
MINER ASSIGNED OPERATOR
Raney, Stanley Inland Steel Co.
Barnett, William Westmoreland Coal Co.
Teague, Craig G. Four Leaf Coal Co.
EIN: 13-2606920 Page 6 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by SEPSC Letter Dated 09/16/96
PREVIOUSLY
MINER ASSIGNED OPERATOR
Timko, Henry M. Not previously assigned
Ippolito, John A. Not previously assigned
Broutin, Alfred Not previously assigned
Urbon, Carl Not previously assigned
Barwick, John M. Consolidation Coal Co.
Webb, Lloyd T. Not previously assigned
Metz, Elmer Not previously assigned
Berta, Charles Not previously assigned
Germann, Lewis J. Not previously assigned
Zara, James Not previously assigned
Dove, Sethie L. Not previously assigned
McEnary, John E. Not previously assigned
Middleton, Woodrow Not previously assigned
Franklin, Otis Drummond Coal Sales, Inc.
Ryder, John D. Not previously assigned
Farris, Thomas R. Not previously assigned
Miles, Robert P. Not previously assigned
Olson, Lavern A. Not previously assigned
Ainscough, Otis Not previously assigned
Brown, Harold P. Not previously assigned
Leek, Carl H. Consolidation Coal Co.
Vineyard, Hoyt H. Not previously assigned
Overbay, Claude Not previously assigned
Brown, Roscoe W. Not previously assigned
Vaughn, Zeather D. Not previously assigned
Sturdivant, Joseph Not previously assigned
Bailey, Claude A. Not previously assigned
King, Carl B. Not previously assigned
Wood, John F. Not previously assigned
Anthony, Foley D. Not previously assigned
Haga, James F. Not previously assigned
Anthony, Avery F. Not previously assigned
Reed, Haven Not previously assigned
McBride, Clownie A. Not previously assigned
Harp, Richard Eastern Enterprises
Clover, E. A. Not previously assigned
Gentry, Russell Not previously assigned
Norton, James L. Not previously assigned
Griffin, Earl G. Not previously assigned
Euriga, Mike Not previously assigned
Archer, Cecil S. Consolidation Coal Co.
Peck, Arthur Not previously assigned
Davis, Robert L. Not previously assigned
Smith, George Not previously assigned
EIN: 13-2606920 Page 7 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by SEPSC Letter Dated 09/16/96 (cont.)
PREVIOUSLY
MINER ASSIGNED OPERATOR
Parks, Homer D. Not previously assigned
Lievens, Peter F. Not previously assigned
Preston, Clarence J. Not previously assigned
Gilbert, Buford Not previously assigned
Miracle, V. Not previously assigned
Wagner, Dan Not previously assigned
Ellis, Norman Not previously assigned
Elliott, John Not previously assigned
Lane, Henlin Not previously assigned
Stewart, Wiley P. Harlan Wallins Coal Corp.
Mink, George Not previously assigned
Carter, Clevis Not previously assigned
Vanover, Homer Not previously assigned
Brock, Farmer Not previously assigned
Jones, John H. Not previously assigned
Saylor, Otis Not previously assigned
Lawson, Lawrence J. Not previously assigned
Collett, Blevins Not previously assigned
Elliott, Simon Not previously assigned
Silcox, Paul Not previously assigned
Nix, Thurman Not previously assigned
Davis, Chalmer Not previously assigned
Cickie, Frank Not previously assigned
Bays, R. Not previously assigned
Collins, James O. Not previously assigned
Stamper, Everett Rocket Coal Co., Inc.
Knuckles, Albert Not previously assigned
Peace, Tom Not previously assigned
Douglas, Floyd W. Not previously assigned
Marlow, Duff Not previously assigned
Douglas, Spencer Not previously assigned
Chadwell, James L. Not previously assigned
Petrey, Clefton E. Not previously assigned
Queener, Francis C. Not previously assigned
Austin, John M. Not previously assigned
Davis, George F. Not previously assigned
Gordon , Robert Not previously assigned
Bob Ruthaford Not previously assigned
Gibson, Claude Not previously assigned
Davis, Theodore L. Not previously assigned
Queener, Arthur C. Not previously assigned
Rutherford, Noah S. Not previously assigned
Leach, William E. Not previously assigned
Cuel, Frank A. Not previously assigned
EIN: 13-2606920 Page 8 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by SEPSC Letter Dated 09/16/96 (cont.)
PREVIOUSLY
MINER ASSIGNED OPERATOR
Albertini, Pete Not previously assigned
Ridenour, Millard Not previously assigned
Thomas, Clyde Not previously assigned
King, Everett Not previously assigned
Douglas, Charles F. Not previously assigned
Weaver, Hersul Not previously assigned
Morris, James B. Not previously assigned
EIN: 13-2606920 Page 9 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by WNPSC Letter Dated 09/16/96
PREVIOUSLY
MINER SSN ASSIGNED OPERATOR
Bragg, Viven D. Not previously assigned
Lorenzini, John Not previously assigned
Beadle, Ernest E. Not previously assigned
Walter, Clarence Not previously assigned
Atmore, Henry L. Not previously assigned
Simpson, Walter Not previously assigned
Smiley, Carl Not previously assigned
Palulis, Stanley Not previously assigned
Sincavage, Joe Not previously assigned
Matulevich, Bernard Not previously assigned
Segers, Laurel W. Not previously assigned
Jeter, Kenneson J. Not previously assigned
Puckett, Carl Not previously assigned
Mann, Elmer J. Not previously assigned
Lampley, Earl Not previously assigned
Furlow, N. L. Peabody Coal Co.*
(*Miner was assigned to Peabody under incomplete EIN 13-260920; computer letter dated 9/28/93 was incomplete and undeliverable. WNPSC added Round 1 miner to Round 4 notice.)
Willhouse, Ben F. Not previously assigned
Bovinet, Othal D. Not previously assigned
Pattarozzi, Andrew Not previously assigned
Halburnt, Henry Not previously assigned
George, Frank E. Not previously assigned
Reed, Raymond W. Blue Diamond Coal Co.
Eskins, Virgil Not previously assigned
Carr, Arthur Not previously assigned
McMillen, Ted Not previously assigned
Bodart, Frank Not previously assigned
Pataki, Elmer A. Not previously assigned
Hornberger, Robert L. Not previously assigned
Barrington, James Not previously assigned
Hall, M. Not previously assigned
Schanuel, John F. Not previously assigned
Rurode, Walter H. Not previously assigned
Neff, Bud Not previously assigned
Noe, William H. Blue Diamond Coal Co.
Pendleton, Joseph E. Not previously assigned
Halsey, Paul K. Latrobe Construction Co.
Phelps, Marion E. Not previously assigned
Grizzel, Robert S. Not previously assigned
Clark, Joseph Not previously assigned
White, Paul Not previously assigned
Hartwell, Charles W. Not previously assigned
EIN: 13-2606920 Page 10 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by WNPSC Letter Dated 09/16/96 (cont.)
Billings, William R. Eastern Associated Coal Corp.
Dalton, Luther W. Not previously assigned
Goad, Guy O. Not previously assigned
Ashworth, Cloyse H. Not previously assigned
Scott, G. Island Creek Coal Co.
Clark, Bennie E. Not previously assigned
Barnhart, John A. Davon, Inc.
Taylor, Cyrus Not previously assigned
Weaver, Clayton E. Not previously assigned
Mussatto, Dominick Not previously assigned
Wells, Wilson Not previously assigned
Quinn, Harlan E. Not previously assigned
Story, Melvin Not previously assigned
Frischman, John M. Not previously assigned
Hickman, John E. Not previously assigned
Pizzola, William M. Not previously assigned
Gore, Roy M. Not previously assigned
Tucker, Clifton E. Not previously assigned
Hammond, James H. Not previously assigned
Lindley, Lance D. Not previously assigned
Valentine, Aust Not previously assigned
Willey, Harold M. Zeigler Coal Co.
Chubb, Jack L.* Peabody Coal Co.
(*WNPSC assigned Chubb to Peabody in Round 1, in letter dated 10/08/93. Upon review, WNPSC determined that assignment to Peabody was correct but assignment basis was incorrect. Instead of correcting assignment basis, WNPSC sent new assignment letter in Round 4, 09/16/96.)
Heil, Henry L. Not previously assigned
Salmond, Robert J. Not previously assigned
Saylor, Cecil Not previously assigned
Manes, J. Not previously assigned
Stewart, Wesley J. Not previously assigned
Davis, Solmon Not previously assigned
Petree, Simon Not previously assigned
Bennett, Vernon Not previously assigned
Henderson, Floyd Blue Diamond Coal Co.
Wilson, Woodrow Not previously assigned
Jessee, Thomas E. Not previously assigned
Roark, Woodrow Not previously assigned
Powers, George Not previously assigned
Huddleston, Arthur S. Blue Diamond Coal Co.
Parker, Ernest E. Not previously assigned
Jackson, George L. Not previously assigned
EIN: 13-2606920 Page 11 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by WNPSC Letter Dated 09/16/96 (cont.)
Jackson, George L. Not previously assigned
Chitwood, James E. Not previously assigned
Hicks, Roy Not previously assigned
Walker, Coble Not previously assigned
Asher, Melvin Not previously assigned
Patterson, Oscar Not previously assigned
Collett, Finley Not previously assigned
Carter, Hesper Not previously assigned
Murray, Jessie E. Not previously assigned
Evans, Edward S. Not previously assigned
Asher, Asberry Not previously assigned
Botkins, George E. Not previously assigned
Hibbard, Willie Not previously assigned
Wilson, Clabe C. Not previously assigned
Monday, Dewey C. Not previously assigned
Williamson, Robert W. Not previously assigned
Weaver, Virgil C. Not previously assigned
Tippitt, Edison Not previously assigned
King, George W. Not previously assigned
Campbell, Jessie L. Not previously assigned
Hurst, Sterling S. Not previously assigned
Hamblin, John E. Not previously assigned
Douglas, Marshall H. Not previously assigned
McNealy, Elmer Not previously assigned
Brown, Elmer* Not previously assigned
(*Incorrectly shown as Emmer Grown in prior correspondence)
Massey, Wade Not previously assigned
Weaver, Judd Not previously assigned
Hatfield, James M. Blue Diamond Coal Co.
Sharp, James W. Not previously assigned
Gilburth, Charles Not previously assigned
Ellison, Ulysses H. Not previously assigned
Byrge, Deles Not previously assigned
Bean, Charles H. Not previously assigned
Hatmaker, Edd M. Not previously assigned
Perkins, Elbert Not previously assigned
Lovett, Grance Not previously assigned
Jorman, Joseph J. Not previously assigned
Hawkins, Walter M. Not previously assigned
Keathley, Rufus Blue Diamond Coal Co.
Silcox, Forster Blue Diamond Coal Co.
Maffioli, Frank Not previously assigned
EIN: 13-2606920 Page 12 of 12
Previously Assigned Coal Operators
for Miners Assigned to Peabody Coal Co.
by SEPSC Letter Dated 09/22/97
PREVIOUSLY
MINER SSN ASSIGNED OPERATOR
Knight, Fred A. Consolidation Coal Co.
Dudley, Edd Consolidation Coal Co.
Baird, J.W. Blue Diamond Coal Co.
Henry, Walter G. Consolidation Coal Co.
Ball, John Yocum Creek Coal Co.
Blue Diamond Coal Co.
Haviland, Albert M. L.G. Wasson Coal Mining Corp.
Penman, James Princeton Mining Co.
Lovitt, W.C. Blue Diamond Coal Co.
McDonald, Louis M. Consolidation Coal Co.
Simpson, Charlie L. Blue Diamond Coal Co.
Rowe, Virgil G. Blue Diamond Coal Co.
Goodman, Lawrence M. Blue Diamond Coal Co.
Cooper, Talmage Blue Diamond Coal Co.
Brown, General Blue Diamond Coal Co.
Barnes, John Not previously assigned
Walp. Earl Blue Diamond Coal Co.
Elmore, J. Blue Diamond Coal Co.
Baird, Zeb D. Consolidation Coal Co.
Cordell, Hugh Blue Diamond Coal Co.
McGhee, Odis A. Blue Diamond Coal Co.
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT OWENSBORO
Civil Action #4:99CV-201(M)
Peabody Coal Company, et al., plaintiffs
v.
Kenneth S. Apfel, Commissioner, Social Security, defendant
DEFENDANT'S ANSWER TO COUNTS IV-VI OF PLAINTIFFS' COMPLAINT
Defendant, Kenneth S. Apfel, Commissioner of the Social Security Administration, answers the Complaint for Declaratory and Injunctive Relief of Plaintiffs, Peabody Coal Company and Eastern ("EACC") as follows:
First Defense
Plaintiffs have failed to join parties needed for just adjudication under Rule 19.
Second Defense
Plaintiffs' claim is barred in part by the doctrine of laches.
Third Defense
In response to the numbered paragraphs of the Complaint, Defendant states as follows:
THE PARTIES
1. Defendant is without knowledge or information sufficient to form a belief as to the allegations contained in this paragraph.
2. Defendant is without knowledge or information sufficient to form a belief as to the allegations contained in this paragraph.
3. Defendant admits the allegations contained in paragraph 3.
JURISDICTION AND VENUE
4. Paragraph four contains plaintiffs' legal conclusions, to which no response is required.
5. The first sentence of paragraph five contains plaintiffs' legal conclusion to which no response is required. With respect to the second sentence of paragraph five, defendant is without knowledge or information sufficient to form a belief as to the allegations.
THE COAL ACT
6. Paragraph six contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Industry Retiree Health Benefit Act of 1992 ("The Coal Act"), the statute speaks for itself.
7. Paragraph seven contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
8. Paragraph eight contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
9. Paragraph nine contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
10. Paragraph ten contains plaintiffs' legal conclusions to which no response is required.
11. Paragraph eleven contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
12. Paragraph twelve contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
13. Paragraph thirteen contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
14. Paragraph fourteen contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
EASTERN ENTERPRISES V. APFEL
15. Paragraph fifteen contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the Supreme Court's decision in Eastern Enterprises v. Apfel, 118 S. Ct. 2131 (1998), the Supreme Court's decisions speaks for itself.
16. Paragraph sixteen contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the Supreme Court's decision in Eastern Enterprises v. Apfel, 118 S. Ct. 2131 (1998), the Supreme Court's decision speaks for itself.
17. Defendant admits that he voided assignments of beneficiaries to assignees who were similarly situated to Eastern Enterprises. Defendant otherwise denies the allegations in this paragraph.
COUNT IV
(Peabody Coal and EACC)
Request for Declaratory Judgment Invalidating Beneficiary Assignments Made
to Peabody Coal and EACC after Septebmer 30, 1993
32. See Defendant's Answer ¶¶ 1-17 supra.
33. Paragraph thirty three contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
34. Paragraph thirty four contains plaintiffs' legal conclusions to which no response is required. To the extent a response is required, defendant denies the allegations in this paragraph.
35. Paragraph thirty five contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
36. Paragraph thirty six contains plaintiffs' legal conclusions to which no response is required. To the extent a response is required, defendant denies the allegations in this paragraph.
37. Paragraph thirty seven contains plaintiffs' legal conclusions to which no response is required. To the extent that plaintiffs refer to the decision in Dixie Fuel Co. v. Apfel, 171 F.3d 1052 (6th Cir. 1999), the opinion speaks for itself.
38. Defendant admits that some initial assignments were made to plaintiffs after September 30, 1993. Defendant otherwise denies the allegations in this paragraph.
39. Defendant admits that he has not applied the Dixie Fuel decision to plaintiffs. Defendant otherwise denies the allegations in this paragraph.
40. Paragraph forty contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
COUNT V
(Peabody Coal and EACC)
Request for Injunctive Relief Barring Future Assignments from the Unassigned
Pool
41. See Defendant's Answer ¶¶ 1-17, 32-40 supra.
42. Paragraph forty two contains plaintiffs' legal conclusions to which no response is required.
43. Defendant denies the allegations in this paragraph.
44. Paragraph forty four contains plaintiffs' legal conclusions to which no response is required.
COUNT VI
(Peabody Coal and EACC)
Declaration Invalidating the Coal Act Assignments of George Weaver, Bude
Jarvis, William Barnett,
Jewell Patterson, Jack Callor, Jarrett Shrewsbury, Michael Restic and Lovell
Kelly
45. See Defendant's Answer ¶¶ 1-17, 32-44 supra.
46. Paragraph forty six contains plaintiffs' legal conclusions to which no response is required. To the extent plaintiffs refer to the text of the Coal Act, the statute speaks for itself.
47. Defendant admits the allegations in the first sentence of paragraph forty seven. Defendant denies the allegations in the second sentence of paragraph forty seven.
48. Defendant admits that by letter decisions he refused to withdraw the assignments of George Weaver and Bude Jarvis to EACC and William Barnett to Peabody. The letters speak for themselves. Otherwise, defendant denies the allegations in this paragraph.
49. Defendant admits the allegations in the first sentence of paragraph forty nine. Defendant denies the allegations in the second sentence of paragraph forty nine.
50. Defendant admits that by letter decisions he refused to withdraw the assignments of Jarrett Shrewsbury to EACC and Jack Callor to Peabody. The letters speak for themselves. Otherwise, defendant denies the allegations in this paragraph.
51. Paragraph fifty one contains plaintiffs' legal conclusions to which no response is required. To the extent a response is required, defendant denies the allegations in this paragraph.
52. Paragraph fifty two contains plaintiffs' legal conclusions to which no response is required. To the extent a response is required, defendant denies the allegations in this paragraph.
53. Defendant denies the allegations contained in this paragraph.
54. Defendant admits that by letter decision he refused to withdraw the assignments of Michael Restic and Virgil Kelley to EACC. The letter speaks for itself. Defendant otherwise denies the allegations in this paragraph.
55. Paragraph fifty five contains plaintiffs' legal conclusions to which no response is required. To the extent a response is required, defendant denies the allegations in this paragraph.
56. Paragraph fifty six contains plaintiffs' legal conclusions to which no response is required.
The rest of the Complaint contains Plaintiffs' Prayer for Relief, to which no response is required. If a response is required, Defendant denies that Plaintiffs are entitled to the relief requested.
Defendant denies each and every allegation not heretofore expressly admitted, qualified, or denied by this Answer.
WHEREFORE, Defendant respectfully requests that this action be dismissed with prejudice.
Respectfully submitted,
DAVID W. OGDEN
Acting Assistant Attorney General
STEVE REED
United States Attorney
JOHN E. KUHN, JR.
Assistant United States Attorney
/s/ Benjamin P. Cooper
RICHARD LEPLEY
BENJAMIN P. COOPER
Attorneys
United States Department of
Justice
Civil Division
P.O. Box 883, Room 946
Washington, D.C. 20044
Telephone: (202) 514-1285
Attorneys for Defendant
Dated: February 29, 2000
UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF OHIO (COLUMBUS)
No. 99-CV-532
Bellaire Corporation, et al., plaintiff
v.
Apfel, et al., defendant
RELEVANT DOCKET ENTRIES
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
6/4/99 1 COMPLAINT (referred to Mag Judge Norah M King) (no. pgs: 27 + exhibits A through NNN) (wh) [Entry date 06/10/99]
11/8/99 8 MOTION by UMWA Combined Bene to intervene (no pgs: 11 + exhibits) (wh) [Entry date 11/09/99]
11/29/99 10 MEMO IN OPPO by plaintiff to motion to intervene [8-1] (no pgs: 14) (wh) [Entry date 11/30/99]
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
11/30/99 11 ANSWER by defendant (no pgs: 23) (wh) [Entry date 12/02/99]
12/13/99 12 REPLY by UMWA Benefit Plan, UMWA Combined Bene, Bellaire Corporation to response to motion to intervene [8-1] (no pgs: 8) (wh) [Entry date 12/15/99]
4/5/00 14 MOTION by plaintiffs for preliminary injunction, for permanent injunction, for partial summary judgment, and for judgment (no pgs: 14 + exh) (pl) [Entry date 04/06/00]
4/7/00 15 OPINION AND ORDER: by Senior Judge Joseph P. Kinneary granting motion to intervene [8-1] Trustees of UMWA (cc: all counsel) (no pgs: 8) (pl) [Entry date 04/07/00]
4/7/00 16 ANSWER by intervenor-defendant Trustees of UMWA (no pgs: 3) (pl) [Entry date 04/07/00]
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
5/1/00 17 RESPONSE by defendant Kenneth S Apfel to motion for preliminary injunction [14-1], motion for partial summary judgment [14-3], motion for judgment [14-4] (no pgs: 19 + exh) (pl) [Entry date 05/02/00]
5/9/00 18 MOTION by plaintiff Bellaire Corporation, plaintiff NACCO Industries Inc for preliminary injunction, for permanent injunction, for partial summary judgment and final judgment against intervenor dft Trustees of the UMWA combined benefit fund (no pgs: 5) (sm) [Entry date 05/10/00]
5/12/00 19 REPLY by plaintiff Bellaire Corporation, plaintiff NACCO Industries Inc, plaintiff North American Coal to response to motion for preliminary injunction [14-1], motion for permanent injunction [14-2], motion for partial summary judgment [14-3], motion for judgment [14-4] (no pgs: 10) (pl) [Entry date 05/15/00]
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
6/2/00 20 RESPONSE by intervenor-defendant Trustees of UMWA to motion for preliminary injunction [18-1], motion for permanent injunction [18-2], motion for partial summary
judgment and final judgment [18-3] (no pgs: 14 + exh) (pl) [Entry date 06/05/00]
6/16/00 21 REPLY by plaintiff to response to motion for preliminary injunction [18-1], motion for permanent injunction [18-2], motion for partial summary judgment and final judgment [18-3] (no pgs: 7) (gk) [Entry date 06/19/00]
6/30/00 31 OPINION AND ORDER: by Senior Judge Joseph P. Kinneary granting motion for preliminary injunction [18-1], granting motion for permanent injunction [18-2], granting motion for partial summary judgment and final judgment [18-3], granting motion for preliminary injunction [14-1], granting motion for permanent
________________________________________________
DOCKET
DATE NUMBER PROCEEDINGS
________________________________________________
injunction [14-2], granting motion for partial summary
judgment [14-3], granting motion for judgment [14-4] as to Count IV; Clerk to enter Final Judgment as to Count IV of the Complaint (cc: all counsel) (no pgs: 14) (pl) [Entry date 06/30/00] [Edit date 06/30/00]
6/30/00 32 JUDGMENT: entered granting partial summary judgment and injunction as to Count IV of the Complaint in favor of the Bellaire Groups (cc: all counsel) (no pgs: 1) (pl) [Entry date 06/30/00] [Edit date 06/30/00]
8/25/00 37 NOTICE OF APPEAL by defendant Kenneth S Apfel from Dist. Court decision [32-1] of 06/30/00 (no pgs: 3) (slh) [Entry date 08/28/00]
8/25/00 38 NOTICE OF APPEAL by intervenor-defendant Trustees of UMWA from Dist. Court decision [32-1] of 06/30/00 (no pgs: 3) (slh) [Entry date 08/28/00]
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
No. 00-4082
Bellaire Corporation; NACCO Industries, Inc.;
North American Coal Corporation, plaintiffs-appellees
v.
Kenneth S. Apfel, Commissioner of Social Security; defendant
Michael H. Holland; William P. Hobgood; Marty D. Hudson; Thomas O.S. Rand; Elliot A. Segal; Carl E. Van Horn; Gail R. Wilensky, as the Trustees of the UMWA Combined Benefit Fund intervening defendants-appellants
RELEVANT DOCKET ENTRIES
________________________________________________
DATE PROCEEDINGS
________________________________________________
8/30/00 Civil Case Docketed. Notice filed by Appellant Michael H. Holland, Appellant William P. Hobgood, Appellant Marty D. Hudson, Appellant Thomas O.S. Rand, Appellant Elliot A. Segal, Appellant Carl E. Van Horn, Appellant Gail R. Wilensky. Transcript needed: n q (cf)
10/24/00 PETITION for en banc hearing filed by Jeffrey Clair for Appellant Kenneth S. Apfel. Certificate of service date 10/5/00. {00-4080, 00-4082] (blh)
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DATE PROCEEDINGS
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11/3/00 PETITION for en banc hearing filed by Peter Buscemi for Appellants Gail R. Wilensky, Carl E. Van Horn, Elliot A. Segal, Thomas O.S. Rand, Marty D. Hudson, William P. Hobgood, Michael H. Holland. Certificate of service date 11/1/00. [00-4080, 00-4082] (blh)
12/6/00 ORDER filed denying petition for en banc hearing [2250528-1] filed by Peter Buscemi and petition for en banc hearing [2243349-1] filed by Jeffrey Clair [00-4080, 00-4082]. Entered by order of the court. (blh)
2/16/01 PROOF BRIEF filed by John R. Mooney for Appellant Gail R. Wilensky, Appellant Carl E. Van Horn, Appellant Elliot A. Segal, Appellant Thomas O.S. Rand, Appellant Marty D. Hudson, Appellant William P. Hobgood, Appellant Michael H. Holland, Peter Buscemi for Appellant Gail R. Wilensky, Appellant Carl E. Van Horn, Appellant Elliot A. Segal, Appellant Thomas O.S. Rand, Appellant Marty D. Hudson, Appellant William P. Hobgood, Appellant Michael H. Holland. Certificate of service date 2/12/01. Number of Pages: 46. [00-4082] q (vf)
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DATE PROCEEDINGS
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3/6/01 PROOF BRIEF filed by Brian G. Selden and Jeffrey S. Sutton for Appellee N Amer Coal Corp, Appellee Nacco Indust, Appellee Bellaire Corp. Certificate of service date 3/5/01. Number of Pages: 33. [00-4080, 00-4082] _ (vf)
3/14/01 REPLY BRIEF filed by John R. Mooney for Appellant Gail R. Wilensky, Appellant Carl E. Van Horn, Appellant Elliot A. Segal, Appellant Thomas O.S. Rand, Appellant Marty D. Hudson, Appellant William P. Hobgood, Appellant Michael H. Holland, Peter Buscemi for Appellant Gail R. Wilensky, Appellant Carl E. Van Horn, Appellant Elliot A. Segal, Appellant Thomas O.S. Rand, Appellant Marty D. Hudson, Appellant William P. Hobgood, Appellant Michael H. Holland. Copies: 7. Certificate of service date 3/12/01. [00-4082] (vf)
4/12/01 CAUSE SUBMITTED on briefs to panel consisting of Judges Martin, Norris, Quist sitting on 6/13/01. [00-4080, 00-4082] (srw)
6/22/01 Per Curiam OPINION filed: AFFIRMED [00-4080, 00-4082], decision not for publication pursuant to local rule 28(g) [00-4080, 00-4082]. Boyce F. Martin, Jr., Chief Judge, Alan E. Norris, Circuit Judge, Gordon J. Quist, District Judge. (cf)
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DATE PROCEEDINGS
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11/28/01 U.S. Supreme Court notice filed regarding petition for writ of certiorari, filed by William A. Halter, Comm. SS in the Supreme Court on 11//19/01, Supreme Ct. case number: 01-705. [00-4082] (swh)
1/24/02 MANDATE ISSUED with no cost taxed [00-4082] (dac)
1/30/02 U.S. Supreme Court letter filed denying [sic] petition for writ of certiorari
[2462687-1] filed by William A. Halter [00-4082]. Filed in the Supreme Court on 01-20-02. (swh)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
Civil Action No. C2-99 532
Judge Kinneary
Magistrate Judge King
Bellaire Corporation, NACCO Industries, Inc.
and The North American Coal Corporation, plaintiffs
v.
Kenneth S. Apfel, Commissioner of Social Security, defendant
[Filed: Jun 4, 1999]
COMPLAINT
Plaintiffs, Bellaire Corporation ("Bellaire"), NACCO Industries, Inc. ("NACCO") and The North American Coal Corporation ("North American") through their undersigned counsel, hereby file the following Complaint against the Defendant, Kenneth S. Apfel, Commissioner of Social Security ("Commissioner"):
INTRODUCTION
1. This case involves several different challenges to the Commissioner's actions under the Coal Industry Retiree Health Benefit Act of 1992 ("Coal Act"), 26 U.S.C. Section 9701 et seq. The Commissioner has made the majority of the contested assignments to Bellaire under EIN 34-0431290 and a lesser number to each of NACCO under EIN 34-1505819 and North American under EIN 34-1554846. Of the three, only Bellaire is a signatory operator as defined in the Coal Act. NACCO and North American are merely related persons, within the meaning of the Coal Act, to Bellaire. Neither NACCO or North American ever employed any miner assignable under the Coal Act. Bellaire has prepared and filed all the administrative appeals referenced herein, regardless of which company received the assignment from the Commissioner. Hereafter all three companies are referred to as the Bellaire Group, unless specific reference is made to one of the individual companies.
2. Counts I and II of the Complaint concern the Commissioner's wrongful assignment of miners (and their dependents) to the Bellaire Group under Sections 9706(a) of the Coal Act, that never worked for or had any relationship with the Bellaire Group and, instead, worked for Independent Coal & Coke Company ("ICC") or Cambria Mining Company ("Cambria"). These assignments were arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, plainly erroneous, and contained errors apparent from the face of the Social Security Administration's ("SSA") own records and/or from other information available to SSA because, among other things, the basis on which the Commissioner assigned the miners (and their dependents) to the Bellaire Groupthat it was ICC's and Cambria's successoris not a permissible basis for assigning miners and dependents under Section 9706(a) of the Coal Act as a matter of law.
3. Count III of the Complaint concerns the Commissioner's wrongful failure to void the assignment of the ICC and Cambria miners (and their dependents) to the Bellaire Group based on the Supreme Court's decision in Eastern Enterprises v. Apfel, 118 S. Ct. 2131 (1998). In Eastern, the Supreme Court ruled that the assignment of miners to an operator that last signed a Coal Wage Agreement in 1964 was unconstitutional. Based on Eastern, the Commissioner subsequently voided several thousand assignments to 124 operators that last signed Coal Wage Agreements before 1974. Here, ICC last signed a Coal Wage Agreement in 1966 and Cambria last signed a Coal Wage Agreement in 1954. Therefore, ICC and Cambria are materially indistinguishable from Eastern Enterprises in regards to the Coal Act and, had the ICC and Cambria miners (and their dependents) been assigned directly to these companies, the Commissioner would have voided them based on Eastern. As a result, the assignments to the Bellaire Group of ICC and Cambria miners (and their dependents) equally should have been voided based on Eastern, and the Commissioner's refusal to do so was arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, and plainly erroneous.
4. Count IV of the Complaint concerns the Commissioner's unlawful making of original assignments to the Bellaire Group after September 30, 1993. The Coal Act authorizes the Commissioner to make original assignments only "before October 1, 1993." 26 U.S.C. § 9706(a). After September 30, 1993, the Commissioner's making of any additional original assignments to the Bellaire Group was arbitrary, capricious, an abuse of discretion, not in accordance with law and plainly erroneous, because it was contrary to the express language of the Coal Act.
5. Count V of the Complaint concerns the Commissioner's wrongful refusal to revoke various individual assignments of miners (and their dependents) to the Bellaire Group. The assignments which are the subject of each of this Count were erroneous for the reasons set forth in the Bellaire Group's administrative appeals, which the Commissioner wrongly denied. These assignments and the Commissioner's refusal to revoke each of them, therefore, were arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, and plainly erroneous.
6. Count VI of the Complaint concerns the Commissioner's unlawful reassignment of miners and dependents among members of the Bellaire group. The liability of Bellaire and other members of the Bellaire Group, including North American and NACCO, is joint and several under the Coal Act, but is exclusively premised upon prior employment relationships which only Bellaire ever had with any retired miners or asset acquisitions to which only Bellaire was a party. Therefore, no member of the Bellaire Group can have any basis of liability different than Bellaire itself has; either all members are equally liable or no member is liable. Thus, whenever an assignment of a miner and/or his dependent is revoked by the Commissioner as to any member of the Bellaire Group, whether Bellaire itself, North American or NACCO, that final decision precludes reassignment of the same miner and/or dependents to another member of the Bellaire Group. Such reassignments constitute "double jeopardy" and undermine the finality of administrative decisions previously rendered by the Commissioner. Therefore, all such reassignments within the Bellaire Group are arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, plainly erroneous and invalid as a matter of law.
PARTIES
7. Plaintiff Bellaire is a corporation organized under the laws of the state of Ohio with its principal place of business located at Signature Place II, 14785 Preston Road, Suite 1100, Dallas, Texas 75240-7891, but maintains an office at 155 Highway 7, Powhatan Point, Ohio 43942. Bellaire formerly operated bituminous coal mines and associated facilities located in Belmont County, Ohio, and in other locations.
8. Plaintiff NACCO is a corporation organized under the laws of the state of Delaware, with its principal place of business located at 5875 Landerbrook, Suite 300, Mayfield Heights, Ohio 44124. NACCO is the parent corporation of Bellaire.
9. Plaintiff North American is a corporation organized under the laws of the state of Delaware, with its principal place of business located at Signature Place II, 14785 Preston Road, Suite 1100, Dallas, Texas 75240-7891, but maintains an office at 155 Highway 7, Powhatan Point, Ohio 43942. North American is a subsidiary of NACCO.
10. Defendant Kenneth S. Apfel is the Commissioner of Social Security. The Commissioner maintains his principal office at Room 900, Altmeyer Building, 6401 Security Boulevard, Baltimore, Maryland 21235. The Commissioner is responsible for the oversight of the SSA.
JURISDICTION AND VENUE
11. Jurisdiction over this action arises under 28 U.S.C. Sections 1331, 1346, and 1361, as well as 5 U.S.C. Section 702.
12. Venue lies in this District under 28 U.S.C. § 1391.
THE ASSIGNMENT PROCESS UNDER
THE COAL ACT
13. Section 9706(a) of the Coal Act, 26 U.S.C. Section 9706(a), requires the Commissioner to assign certain retired coal miners and their dependents to "signatory operators" who "remain in business," and if the signatory operator" is no longer "in business," to that signatory operator's "related persons." Thereafter, pursuant to Section 9704(a) of the Coal Act, 26 U.S.C. Section 9704(a), the United Mine Workers of America Combined Benefit Fund charges that signatory operator (or related person) a specified annual premium for each assigned beneficiary.
14. The formula the Commissioner uses to assign miners under Section 9706(a) of the Coal Act, 26 U.S.C. Section 9706(a), provides as follows:
(a) In general. For purposes of this chapter, the Commissioner of Social Security shall, before October 1, 1993, assign each coal industry retiree who is an eligible beneficiary to a signatory operator which (or any related person with 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.
(b) Rules relating to employment and reassignment upon purchase.
For purposes of subsection (a)
(1) Aggregation rules.
(A) Related person. Any 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.
(B) Certain employment disregarded. Employment with(i) a person which is (and all related person with respect to which are) no longer in business. . . .
15. For purposes of Section 9706 of the Coal Act, the term "signatory operator" is defined in Section 9701(c)(1) of the Coal Act, 26 U.S.C. Section 9701(c)(1), to mean "a person which is or was a signatory to a coal wage agreement." Additionally, the term "in business" is defined in Section 9701(c)(7) of the Coal Act, 26 U.S.C. Section 9701(c)(7), to mean that "a person shall be considered to be in business if such person conducts or derives revenue from any business activity, whether or not in the coal industry."
16. For purposes of Section 9706 of the Coal Act, the term "coal wage agreement" is defined, by Section 9701(b)(1) of the Coal Act, 26 U.S.C. Section 9701(b)(1), to mean either (a) the National Bituminous Coal Wage Agreement, or (b) any other agreement entered into between an employer in the coal industry and the United States Mine Workers of America that required or requires one or both of the following:
(i) the provision of health benefits to retirees of such employer, eligibility for which is based on years of service credited under a plan established by the settlors and described in Section 404(c) or a continuation of such plan; or
(ii) contributions to the 1950 UMWA Benefit Plan or the 1974 UMWA Benefit Plan, or any predecessor thereof.
17. For purposes of Section 9706 of the Coal Act, 26 U.S.C. Section 9706, the term "related person" is defined by Section 9701(c)(2), 26 U.S.C. Section 9701(c)(2), as including:
(A) In General. A person shall be considered to be a related person to a signatory operator if that person is
(i) a member of the controlled group of corporations (within the meaning of Section 52(a)) which includes the signatory operator;
(ii) a trade or business which is under common control with such signatory operator (as determined under Section 52(b));
(iii) any other person who is identified as having a partnership interest or joint venture with a signatory operator in a business within the coal industry, but only if such business employed eligible beneficiaries, except that this clause shall not apply to a person whose only interest is as a limited partner.
A related person shall also include a successor in interest of any person described in clause (i), (ii), or (iii).
(B) Time for determination. The relationships described in clauses (i), (ii), and (iii) of subparagraph (A) shall be determined as of July 20, 1992, except that if, on July 20, 1992, a signatory operator is no longer in business, the relationships shall be determined as of the time immediately before such operator ceased to be in business.
COUNT I
18. The Bellaire Group hereby incorporates the averments set forth in paragraphs 1 through 17, above.
19. The Commissioner has issued Internal Guidelines for handling assignments under the Coal Act. In these Guidelines the Commissioner has concluded that, among other things, if the signatory operator that employed a miner and its related persons is no longer in business, then the miner (and his dependents) can be assigned to the signatory operator's successor(s) under Section 9706(a) of the Coal Act. The Commissioner reasons that, in these circumstances, the successor is one of the signatory operator's "related persons" under Section 9702(c)(2) of the Coal Act.
20. The Commissioner has assigned numerous ICC miners (and their dependents) to the Bellaire Group on the basis that it is a successor to ICC. The Bellaire Group administratively appealed each such assignment, most of which the Commissioner refused to revoke in a series of final decisions. The specific ICC miners and dependents, the date of the Bellaire Group appeals and the date of the Commissioner's final negative administrative decisions are set forth in a chart attached hereto and incorporated herein as Exhibit A.
21. The Commissioner assigned the ICC miners and their dependents to the Bellaire Group because (a) he determined that the signatory operator that had employed the miners under a Coal Wage Agreement ICCwould have received the assignments, but it was no longer in business, (b) none of ICC's "related persons" were still in business, and (c) the Bellaire Group was ICC's successor with respect to these miners because, in 1968, a member of the Bellaire Group acquired the coal mining assets which ICC formerly had owned and operated.
22. The Bellaire Group never shared any common ownership with ICC, nor were they partners of any sort. Therefore, the Bellaire Group was never a "related person" to ICC under Section 9702(c)(2) of the Coal Act.
23. The Bellaire Group's sole contact with ICC was that in 1968 a member of the Group purchased the coal mining assets that ICC had owned and operated. A copy of the acquisition documents was provided to the Commissioner in support of the Bellaire Group's appeal of the assignments to it of each of the ICC miners referenced on Exhibit A. A copy of the acquisition documents is attached hereto as Exhibit A-1.
24. Regulations issued at 20 C.F.R. Section 422.604, provide that once the Commissioner notifies an operator that it has been assigned miners, the operator may, within thirty (30) days, request additional information concerning the work histories of the miners and the basis for the assignments.
25. The Bellaire Group timely requested information concerning each of the ICC miners referenced on Exhibit A.
26. The Bellaire Group appealed the assignments to it of each of the ICC miners referenced on Exhibit A. Each such appeal was timely made, including the appeal relating to ICC miner Martin A. Vuksinick, SSN [redacted], who the Bellaire Group reasonably believed to be deceased and therefore did not initially appeal. Upon learning that Mr. Vuksinick was not deceased, the Bellaire Group promptly and timely, measured from the date it gained such knowledge, administratively appealed as to Mr. Vuksinick as well.
27. By several letters dated June 6, 1994; November 28, 1994; April 3, 1996; August 15, 1996; August 16, 1996; September 11, 1996; June 27, 1997; July 8, 1998; and August 13, 1998, the Bellaire Group provided information in support of its requests for review of the ICC miner assignments. In each such letter, the Bellaire Group showed that the assignments of ICC miners appealed in the particular letter were improper because the Coal Act did not permit the Commissioner to assign miners to successors, such as the Bellaire Group, as a matter of law. Copies of the appeal letters relating to the ICC miners referred to on Exhibit A are attached hereto as Exhibits D, E, F, H, J, L, N, O, Q, S, U, W and MMM.
28. By several letters dated June 28, 1995; July 10, 1995; March 27, 1997; June 19, 1997; November 25, 1997; February 12, 1998; February 20, 1998; July 17, 1998; September 1, 1998; and April 19, 1999, the Commissioner issued final decisions in which he notified the Bellaire Group that he would not revoke the assignment of any of the ICC miners referred to on Exhibit A. Copies of the final decisions relating to the ICC miners are attached as Exhibits G, I, K, M, P, R, T, V, X and NNN.
29. The Commissioner's final decisions that are referenced in the foregoing paragraph were arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, plainly erroneous, and contained errors apparent from the face of the Commissioner's own records and/or from other information available to the Commissioner for reasons including, but not limited to, the following:
(a) The Commissioner cannot, as a matter of law, assign miners to successors under Section 9706(a) of the Coal Act; and
(b) The Bellaire Group's inadvertent delay in appealing the assignment of the ICC miner Martin A. Vuksinick, SSN [redacted], to the Bellaire Group was harmless error and, therefore, is not a legitimate basis upon which the Commissioner can refuse to review the assignment, particularly given the extent to which the Commissioner routinely gives extensions and his own delays in processing requests for information and review.
30. The Commissioner's improper assignments of the ICC miners (and their dependents) to the Bellaire Group, and his improper failure to review (in one case) and revoke (in all cases) the same, has caused the Bellaire Group to incur premium obligations and other expenses and harm that it would not have incurred if the Commissioner has properly performed his duties under Section 9706 of the Coal Act.
COUNT II
31. The Bellaire Group hereby incorporates the averments set forth in paragraphs 1 through 30, above.
32. The Commissioner has issued Internal Guidelines for handling assignments under the Coal Act. In these Guidelines, the Commissioner has concluded that, among other things, if the signatory operator that employed a miner and its related persons is no longer in business, then the miner (and his dependents) can be assigned to the signatory operator's successor(s) under Section 9706(a) of the Coal Act. The Commissioner reasons that, in these circumstances, the successor is one of the signatory operator's "related persons" under Section 9702(c)(2) of the Coal Act.
33. The Commissioner has assigned numerous Cambria miners (and their dependents) to the Bellaire Group on the basis that it is a successor to Cambria. The Bellaire Group administratively appealed each such assignment, all of which the Commissioner refused to revoke in a series of final decisions. The specific Cambria miners and dependents, the date of the Bellaire Group's appeals and the date of the Commissioner's final negative administrative decisions are set forth in a chart attached hereto and incorporated herein as Exhibit B.
34. The Commissioner assigned the Cambria miners and their dependents to the Bellaire Group because (a) he determined that the signatory operator that had employed the miners under a Coal Wage Agreement Cambriawould have received the assignments, but it was no longer in business, (b) none of Cambria's "related persons" were still in business, and (c) the Bellaire Group was Cambria's successor with respect to these miners because, in 1954, a member of the Bellaire Group acquired the coal mining assets which Cambria formerly had owned and operated.
35. The Bellaire Group never shared any common ownership with Cambria, nor were they partners of any sort. Therefore, the Bellaire Group was never a "related person" to Cambria under Section 9702(c)(2) of the Coal Act.
36. The Bellaire Group's sole contact with Cambria was that in 1954 a member of the Group purchased the coal mining assets that Cambria had owned and operated. A copy of the acquisition document was provided to the Commissioner in support of the Bellaire Group's appeal of the assignment to it of each of the Cambria miners referenced on Exhibit B. A copy of the acquisition document is attached hereto as Exhibit B-1.
37. Regulations issued at 20 C.F.R. Section 422.604, provide that once the Commissioner notifies an operator that it has been assigned miners, the operator may, within thirty (30) days, request additional information concerning the work histories of the miners and the basis for the assignments.
38. The Bellaire Group timely requested information concerning each of the Cambria miners referenced on Exhibit B.
39. The Bellaire Group appealed the assignments to it of each of the Cambria miners referenced on Exhibit B. Each such appeal was timely made.
40. By several letters dated June 6, 1994; November 21, 1994; November 28, 1994; August 15, 1996; August 16, 1996; and June 27, 1997, the Bellaire Group provided information in support of its request for review of the Cambria miner assignments. In each such letter, the Bellaire Group showed that the assignments of Cambria miners appealed in the particular letter were improper because the Coal Act did not permit the Commissioner to assign miners to successors, such as the Bellaire Group, as a matter of law. Copies of the appeal letters relating to the Cambria miners referred to on Exhibit B are attached as Exhibits D, H, J, N, U, W, Y and DD.
41. By several letters dated June 28, 1995; July 10, 1995; August 19, 1996; March 27, 1997; May 14, 1997; November 25, 1997; February 12, 1998; April 1, 1998 and September 1, 1998, the Commissioner issued final decisions in which he notified the Bellaire Group that he would not revoke the assignment of any of the Cambria miners referred to herein. Copies of the final decisions relating to the Cambria miners referred to on Exhibit B are attached hereto as Exhibits G, I, K, P, V, X, Z and EE.
42. The Commissioner's final decisions that are referenced in the foregoing paragraph were arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, plainly erroneous, and contained errors apparent from the face of the Commissioner's own records and/or from other information available to the Commissioner for reasons including, but not limited to, the following:
(a) The Commissioner cannot, as a matter of law, assign miners to successors under Section 9706(a) of the Coal Act.
43. The Commissioner's improper assignments of the Cambria miners (and their dependents) to the Bellaire Group, and his improper failure to revoke the same, has caused the Bellaire Group to incur premium obligations and other expenses and harm that it would not have incurred if the Commissioner has properly performed his duties under Section 9706 of the Coal Act.
COUNT III
44. The Bellaire Group hereby incorporates the averments of paragraphs 1 through 43, above.
45. In Eastern Enterprises v. Apfel, 118 S. Ct. 2131 (1998), the Supreme Court held that the Coal Act was unconstitutional as applied to a signatory operator that last signed the National Bituminous Coal Wage Agreement of 1964.
46. Following the Supreme Court's decision in Eastern, the Commissioner voided assignments to at least 124 signatory operators on the basis that the assignments were unconstitutional because, like Eastern Enterprises, those operators had last signed Coal Wage Agreements before 1974. Upon information and belief, a number of the 124 companies so relieved had not requested relief pursuant to Eastern.
47. ICC last signed the National Bituminous Coal Wage Agreement of 1966.
48. Cambria last signed the National Bituminous Coal Wage Agreement of 1950.
49. In several instances, the Commissioner has taken the position that assignments under Section 9706(a) of the Coal Act are based on the signatory status of the company that employed the miner, not the signatory status of any allegedly related company.
50. If ICC was still in business when the assignments at issue here were made, then the assignments referred to on Exhibit A would have been made directly to ICC and the Commissioner would have voided them under the Commissioner's application of Eastern.
51. If Cambria was still in business when the assignments at issue here were made, then the assignments referred to on Exhibit B would have been made directly to Cambria and the Commissioner would have voided them under the Commissioner's application of Eastern.
52. Nonetheless, the Commissioner did not void the assignments of the ICC and Cambria miners (and their dependents) to the Bellaire Group.
53. The Commissioner's disparate treatment of the Bellaire Group in failing to void the ICC and Cambria assignments to the Bellaire Group while he sua sponte applied Eastern to others was arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, plainly erroneous, and contained errors apparent from the face of the Commissioner's own records and/or from other information available to the Commissioner for reasons including, but not limited to:
(a) ICC and Cambria are materially indistinguishable from Eastern Enterprises and, as a result, there is no legitimate basis for not voiding the assignments of the ICC and Cambria miners; and
(b) The Commissioner's decision to ignore the signatory status of related persons for assignment purposes necessarily means that the Bellaire Group's signatory status is equally irrelevant to the constitutionality of the assignments of the ICC and Cambria miners (and dependents), i.e., only ICC's and Cambria's signatory status is material to that analysis, and that status required the Commissioner to include these assignments with those he voided based on the decision in Eastern.
54. The Commissioner's improper refusal to void the assignments to the Bellaire Group of the ICC and Cambria miners (and their dependents) has caused the Bellaire Group to incur attorney's fees, costs, premium obligations and other expenses and harm that it would not have incurred if the Commissioner had properly performed his duties under Section 9706 of the Coal Act.
COUNT IV
55. The Bellaire Group hereby incorporates the averments of paragraphs 1 through 54, above.
56. The Coal Act requires the Commissioner to have completed the original assignment process "before October 1, 1993." 26 U.S.C. § 9706(a).
57. The Coal Act does not authorize the Commissioner to make any original assignments after September 30, 1993.
58. The Coal Act does authorize the Commissioner to reassign after September 30, 1993 miners and their dependents who originally were assigned to a signatory operator before October 1, 1993, but who were the subject of a successful administrative appeal by the originally assigned signatory operator.
59. Upon information and belief, the Commissioner did not make any reassignments until an unknown date in 1995, at the earliest.
60. The Bellaire Group avers on the basis of information and belief that the Commissioner made original assignments to the Bellaire Group after September 30, 1993 and in violation of the Coal Act's express terms on a number of occasions. The specific miners and dependents presently believed to have been the subject of original assignments after September 30, 1993 and the dates of their respective assignments to the Bellaire Group are set forth in a chart attached hereto and incorporated herein as Exhibit C. The Commissioner's presently known unlawful original assignments to the Bellaire Group referred to in this paragraph were made in several letters dated after September 30, 1993. Copies of these assignment letters referred to on Exhibit C are attached hereto as Exhibits PP through YY.
61. In addition to the miners and dependents referenced in paragraph 60 above, the Bellaire Group believes that the Commissioner may have made other original assignments to it in 1995 and later, but cannot presently identify those additional unlawful assignments because the Commissioner does not disclose at the time an assignment is made whether it is an original assignment or a reassignment.
62. The Commissioner's making of original assignments after September 30, 1993 presents a pure question of law as to which a request for administrative review would have been futile, because the Commissioner had already predetermined the issue against all signatory operators and related persons, including the members of the Bellaire Group.
63. The Commissioner's original assignments made to the Bellaire Group after September 30, 1993, were arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, plainly erroneous and contained errors apparent from the face of the Commissioner's own records and/or from other information available to the Commissioner.
64. The Commissioner's unlawful original assignments of miners and their dependents to the Bellaire Group after September 30, 1993 has caused the Bellaire Group to incur premium obligations and other expenses and harm that it would not have incurred if the Commissioner had properly performed his duties under Section 9706 of the Coal Act.
COUNT V
65. The Bellaire Group hereby incorporates the averments in paragraphs 1 through 64, above.
66. The Commissioner has assigned numerous individual miners (and their dependents) to the Bellaire Group on the basis that the Bellaire Group has the highest assignment priority under Section 9706(a) of the Coal Act with respect to such miners. The Bellaire Group administratively appealed a number of such assignments on the basis that some other employer not related to the Bellaire Group in fact had a higher assignment priority and that the other employer or a related person remained in business and should receive the assignment. This Count concerns the Bellaire Group's appeals of such assignments which the Commissioner wrongly refused to revoke in a series of final decisions. The specific wrongly assigned individual miners and dependents, the date of the Bellaire Group's appeals and the date of the Commissioner's final administrative decisions are set forth in a chart attached hereto and incorporated herein as Exhibit AA.
67. Regulations issued at 20 C.F.R. Section 422.604, provide that once the Commissioner notifies an operator that it has been assigned miners, the operator may, within thirty (30) days, request additional information concerning the work histories of the miners and the basis for the assignments.
68. The Bellaire Group timely requested information concerning each of the individual miners referenced on Exhibit AA.
69. The Bellaire Group appealed the assignments to it of each of the individual miners referenced on Exhibit AA. Each such appeal was timely made.
70. By several letters dated June 6, 1994; November 21, 1994; November 28, 1994; August 15, 1996; August 16, 1996; June 27, 1997; July 3, 1997; August 11, 1997; and July 8, 1998, the Bellaire Group provided information in support of its request for review of the individual miner assignments. In each such letter, the Bellaire Group showed that the assignments of the individual miners appealed in the particular letter were improper because the Coal Act required the Commissioner to assign the miners to other employers which had a higher assignment priority under the Coal Act with respect to the particular miners in question than did the Bellaire Group. Copies of the appeal letters relating to the individual miners referred to on Exhibit AA are attached as Exhibits D, E, H, J, N, Q, U, W, Y, DD, FF, HH, JJ, LL and MMM.
71. By several letters dated June 28, 1995; July 10, 1995; September 1, 1995; August 19, 1996; January 31, 1997; March 27, 1997; November 25, 1997; February 12, 1998; February 20, 1998; April 1, 1998; May 21, 1998; September 1, 1998; September 2, 1998; September 16, 1998; November 3, 1998; and April 19, 1999, the Commissioner issued final decisions in which he notified the Bellaire Group that he would not revoke the assignment of any of the individual miners referenced in Exhibit AA. Copies of the final decisions relating to the individual miners referred to on Exhibit AA are attached hereto as Exhibits G, I, K, P, R, V, X, Z, BB, CC, EE, GG, II, KK, MM and NNN.
72. In issuing his final decisions with respect to a number of the Bellaire Group's administrative appeals, the Commissioner has wrongly refused to revoke certain individual assignments, referenced in Exhibit AA, at times reaching inconsistent results in appeals which presented identical factual and legal issues. The specific factual and legal issues inconsistently decided, the dates of the Bellaire Group's appeals on those miners, the dates of the Commissioner's final administrative decisions and the result reached are set forth in a chart attached hereto and incorporated herein as Exhibit NN. The Bellaire Group's appeal letters relating to inconsistent decisions are referenced in paragraph 70 above, except for a September 2, 1994 letter attached hereto as Exhibit 00. The Commissioner's inconsistent final decisions are referenced in paragraph 71, except for a November 27, 1995 decision attached hereto as Exhibit ZZ.
73. The Commissioner's assignments made to the Bellaire Group of the miners and dependents referred to in paragraph 66 and the Commissioner's inconsistent decisions referred to in paragraph 72, were arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, plainly erroneous and contained errors apparent from the face of the Commissioner's own records and/or from other information available to the Commissioner.
74. The Commissioner's unlawful assignments of miners and their dependents to the Bellaire Group and inconsistent final decisions on identical factual and legal issues has caused the Bellaire Group to incur premium obligations and other expenses and harm that it would not have incurred if the Commissioner had properly performed his duties under Section 9706 of the Coal Act.
COUNT VI
75. The Bellaire Group hereby incorporates the averments in paragraphs 1 through 74, above.
76. The Commissioner has unlawfully reassigned miners and dependents among members of the Bellaire group [sic] because the liability of Bellaire and other members of the Bellaire Group, including North American and NACCO, is joint and several under the Coal Act, but is exclusively premised upon prior employment relationships which only Bellaire ever had with any retired miners or asset acquisitions to which only Bellaire was a party. Therefore, no member of the Bellaire Group can have any basis of liability different than Bellaire itself has; either all members are equally liable or no member is liable.
77. Whenever an assignment of a miner and/or his dependent was revoked by the Commissioner as to any member of the Bellaire Group, whether Bellaire itself, North American or NACCO, that final decision precluded reassignment of the same miner and/or dependents to another member of the Bellaire Group. Such reassignments constitute "double jeopardy" and undermine the finality of administrative decisions previously rendered by the Commissioner. The specific miners and dependents who have been the subject of assignment, appeal, revocation and subsequent unlawful reassignment within the Bellaire Group and the dates of their respective appeals, revocations and reassignments are set forth in a chart attached hereto and incorporated herein as Exhibit AAA.
78. By several letters dated June 4, 1994; July 27, 1994; September 23, 1994; and January 9, 1995 various members of the Bellaire Group appealed the assignment of certain miners and dependents. Copies of the appeal letters are attached hereto as Exhibits BBB, DDD, FFF and JJJ.
79. By several letters dated August 15, 1995; September 1, 1995; January 11, 1996; and August 2, 1996, the Commissioner issued final affirmative decisions revoking the assignments referred to on Exhibit AAA. Copies of the affirmative final decisions are attached hereto as Exhibits CCC, EEE, GGG and KKK.
80. Subsequently, the Commissioner reassigned each of the miners referred to on Exhibit AAA to another member of the Bellaire Group, which other member of the Group appealed again by several letters dated August 16, 1996; June 27, 1997; and July 3, 1997. Copies of the second appeal letters are attached hereto as Exhibits Q, U, W, HHH and LLL.
81. By several letters dated March 27, 1997; February 20, 1998; and September 1, 1998, the Commissioner issued further final decisions, some negative and some affirmative, concerning some of these same miners. Copies of the second final decisions are attached hereto as Exhibits R, V, X and III. The second appeal attached hereto as Exhibit LLL remains pending with the Commissioner.
82. The Commissioner's unlawful reassignments among members of the Bellaire Group were arbitrary, capricious, an abuse of discretion, not in accordance with law, unwarranted by the facts, unsupported by the evidence, plainly erroneous and contained errors apparent from the face of the Commissioner's own records and/or from other information available to the Commissioner.
83. The Commissioner's unlawful reassignments of miners and their dependents among members of the Bellaire Group has caused the Bellaire Group to incur premium obligations and other expenses and harm that it would not have incurred if the Commissioner had properly performed his duties under Section 9706 of the Coal Act.
WHEREFORE, the Bellaire Group respectfully requests that this Court (a) reverse the Commissioner's assignments and final decisions identified in Counts I - VI, above, and revoke or direct the Commissioner to correctly review the assignment to Bellaire of all of the miners (and their dependents) covered by those assignments and final decisions, (b) rescind any original assignment made by the Commissioner on or after October 1, 1993, (c) rescind all reassignment made by the Commissioner among members of the Bellaire Group, and (d) award the Bellaire Group costs of this
action, counsel fees, and any other relief which this Court deems just and proper.
Respectfully submitted,
JONES, DAY, REAVIS & POGUE
/s/ By John W. Edwards
John W. Edwards
Ohio Supreme Court
No. 0010437
Trial Counsel
1900 Huntington Center
Columbus, Ohio 43215
614-469-3939
POLITO & SMOCK, P.C.
/s/ By THOMAS A. SMOCK
Thomas A. Smock
Pa. ID #20203
Of Counsel
/s/ By Michael D. Glass
Michael D. Glass
Pa. ID #34431
Of Counsel
Four Gateway Center, Suite 400
444 Liberty Avenue
Pittsburgh, Pennsylvania 15222
(412) 394-3333
Counsel for Bellaire Corporation,
NACCO Industries, Inc. and
The North American Coal
Corporation
Date: June 4, 1999
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
Civil Action No. 99-1035
Shenango Incorporated, et al., plaintiffs
v.
Kenneth S. Apfel, et al., defendants
DECLARATION OF CARL F. TENNILLE
Carl F. Tennille, being duly sworn, declares and states as follows:
1. I am an employee of the UMWA Combined Benefit Fund (the "Combined Fund"). The Combined Fund is jointly administered with several other ERISA plans, commonly known as the UMWA Health & Retirement Funds (the "Funds"). I am employed as the Funds' Comptroller.
2. I am responsible for the operation and guidance of the Comptroller's Division, which includes, among other things, overall supervision of accounting and financial reporting, collection of statutory premiums and contractual contributions, credit hours compliance, field audit, withdrawal liability and financial analysis for each of the Funds, including the Combined Fund. I am also responsible for ensuring that the Funds have adequate internal accounting controls and that the accounting conforms with GAAP, federal regulations, and Funds' policies.
3. In addition to my other responsibilities, I receive periodic notice from the Social Security Administration ("SSA") of assignments made by SSA pursuant to Section 9706 of the Coal Industry Retiree Health Benefit Act of 1992 (the "Coal Act"). I oversee the process of billing operators to which beneficiaries have been assigned by SSA.
4. After the United States Court of Appeals for the Sixth Circuit issued its decision in Dixie Fuel v. Apfel, 171 F.3d 1052 (6th Cir. 1999), SSA provided the Combined Fund with information regarding beneficiaries assigned to operators for the first time after September 30, 1993. Based on the information provided by SSA, the Combined Fund has determined that the decision in Dixie Fuel has the potential to affect the assignments of 9,927 beneficiaries, if it were applied on a national basis. The numbers decline from year to year after the first plan year primarily due to mortality.
5. The 9,927 beneficiaries whose assignments could be affected by Dixie Fuel are assigned to 247 operators. These 247 operators have been assessed approximately $112 million for these beneficiaries and the Combined Fund's overall collection rate is more than 95%. Therefore, under the Dixie Fuel decision, approximately $105 million in premiums paid by these operators would be put in jeopardy. If these premiums are lost, the Combined Fund would be required to bill $48 million to the remaining assigned operators. In addition, the Combined Fund would bill the Abandoned Mine Reclamation Fund ("AML Fund") for the health benefit expenses for these newly unassigned beneficiaries for the years beginning October 1, 1995. If the Combined Fund were to obtain payments from the AML Fund for these beneficiaries, it would require an estimated $60 and $80 million to cover the periods through September 30, 1999. Additional amounts would be billed to the AML Fund for the current plan year and for all succeeding plan years as long as any beneficiaries remained and as long as there was interest from the AML Fund available for this purpose.
6. The additional amounts that could potentially be billed to the interest earned on the AML Fund as a result of the Dixie Fuel decision would virtually eliminate the availability of that interest for other purposes both retroactively and prospectively.
I declare under penalty of perjury that the foregoing is true and correct this 18th day of November, 1999 at Washington, D.C.
/s/ Carl F. TennIlle
Carl F. Tennille
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
Civil Action No. C2-99-532
Judge Kinneary
Magistrate Judge King
Bellaire Corporation, Nacco Industries, Inc. and The North American Coal Corporation, plaintiffs
v.
Kenneth S. Apfel, Commissioner of Social Security, defendant
AFFIDAVIT OF DANIEL J. ROLLING
Before me, the undersigned authority, appeared Daniel J. Rolling who, being duly sworn, deposed and stated as follows:
1. I am the Property Manager of Bellaire Corporation ("Bellaire") and am authorized by it to make this Affidavit on its behalf. I am also authorized to make this Affidavit on behalf of NACCO Industries, Inc. and The North American Coal Corporation (collectively, with Bellaire, the "Bellaire Group").
2. I have reviewed the Commissioner of Social Security's answer to the Bellaire Group's interrogatory number 19 in the above captioned matter and compared the information contained in that interrogatory answer with the billing statements received from the UMWA Combined Benefit Fund by members of the Bellaire Group for the plan year beginning October 1, 1999 and concluding September 30, 2000. A copy of the Commissioner's pertinent interrogatory answer is attached hereto as Exhibit A and copies of the current plan year Combined Benefit Fund billing statements directed to any member of the Bellaire Group which include any individual referenced on Exhibit A are attached hereto as Exhibits B and C.
3. Exhibit A identifies a total of 270 miners who were unassigned before October 1, 1993 and later became the subject of an original assignment on or after October 1, 1993 (referred to by the Commissioner in the interrogatory answer as "DIXIE-LIKE MINERS").
4. All 270 of the "DIXIE-LIKE MINERS" identified in Exhibit A are presently assigned to a member of the Bellaire Group. The 270 "DIXIE-LIKE MINERS", as well as any covered dependents, are included among the beneficiaries listed on Exhibits B and C, which show for each such beneficiary the number of plan years for which premiums have been assessed against a member of the Bellaire Group and the amount of such premiums.
5. I prepared two computer printouts detailing the financial impact of the unlawful assignments of the 270 "DIXIE-LIKE MINERS" and their dependents upon members of the Bellaire Group, which printouts are attached hereto as Exhibits D (Bellaire) and Exhibit E (The North American Coal Corporation).
6. The Bellaire Group has been assessed a total of $4,324,312.39 of excessive premiums by the Combined Benefit Fund as a result of the unlawful assignments of "DIXIE-LIKE MINERS" discussed herein, representing a total of 2122 beneficiary-year's worth of unlawful premiums.
7. Of the $4,324,312.39 total assessed against the Bellaire Group as a result of the unlawful assignment
of "DIXIE-LIKE MINERS" and their dependents, $3,841,222.81 was assessed against and paid by the Bellaire Group between February 1, 1993 and September 30, 1999 and $483,090.58 was assessed for the current plan year, which runs from October 1, 1999 to September 30, 2000. The current plan year premium assessment attributable to the 270 "DIXIE-LIKE MINERS" and their dependents is payable in twelve equal installments of $40,257.55, due on the 25th day of each month. The Bellaire Group has paid, as of the date of this Affidavit, $201,287.75 of the current year assessment for the 270 "DIXIE-LIKE MINERS" and their dependents.
8. Unless the 270 unlawful assignments of "DIXIE-LIKE MINERS" and their dependents are revoked, the Bellaire Group will continue to be assessed excessive premiums by the Combined Benefit Fund as long as any of the 270 "DIXIE-LIKE MINERS" and their dependents live.
/s/ Daniel J. Rolling
Daniel J. Rolling
IN THE UNITED STATES DISTRICT COURT
FOR THE