No. 00-1307 

In the Supreme Court of the United States 

LARRY G. MASSANARI, ACTING COMMISSIONER 
OF SOCIAL SECURITY, PETITIONER 

v. 

SIGMON COAL COMPANY, INC., AND 
JERICOL MINING, INC. 

ON WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE FOURTH CIRCUIT 

BRIEF FOR THE PETITIONER 

THEODORE B. OLSON 
Solicitor General 

Counsel of Record 

STUART E. SCHIFFER 

Acting Assistant Attorney 

General 

EDWIN S. KNEEDLER 

Deputy Solicitor General 

PAUL R.Q. WOLFSON 

Assistant to the Solicitor 

General 

MARK B. STERN 
JEFFREY CLAIR 

Attorneys 

Department of Justice 
Washington, D.C. 20530-0001 
(202) 514-2217 

QUESTION PRESENTED 

The Coal Industry Retiree Health Benefit Act of 1992 
(Coal Act), 26 U.S.C. 9701 et seq., established the United 
Mine Workers of America Combined Benefit Fund (Com- 
bined Fund) to ensure the continued provision of health-care 
benefits to retired miners (and the dependents of miners) 
who worked under collective bargaining agreements that 
promised lifetime health-care benefits. For the purpose of 
calculating premiums to be paid to the Fund to finance those 
health-care benefits, the Coal Act directs the Commissioner 
of Social Security to assign responsibility for beneficiaries of 
the Fund to the “signatory operator” or “related person” of 
the signatory operator that formerly employed the miners, if 
that signatory operator (or related person) is still “in 
business.” 26 U.S.C. 9706(a). 

The question presented is whether the Coal Act permits 
the Commissioner to assign beneficiaries to the successor in 
interest of a signatory operator that is no longer in business. 

(I) 

TABLE OF CONTENTS 

Page 

Opinions below ............................................................................... 
1 

Jurisdiction ...................................................................................... 1 

Statutory provision involved ....................................................... 
2 

Statement ........................................................................................ 2 

Summary of argument .................................................................. 
17 

Argument: 

The Commissioner properly determined that 

responsibility for the employees of a signatory 

operator may be assigned to the direct successor 

in interest of that operator ................................................... 

20 

A. The Coal Act provides that a direct successor 

in interest of a signatory operator may be made 

responsible for the health-care premiums for 

the operator’s retired employees ................................. 

22 

1. The text of the Coal Act ......................................... 
23 

2. The background, legislative history, and 

purposes of the Coal Act ........................................ 

26 

3. Background principles of successorship 

informing the text ................................................... 

36 

B. Even if the Coal Act did not itself affirmatively 

provide that responsibility for Combined Fund 

premiums may be imposed on a signatory’s direct 

successor, the Commissioner’s determination 

that successors may be responsible for Combined 

Fund premiums would be reasonable ......................... 
40 

1. The Commissioner’s authority under the 

Act .............................................................................. 40 

2. The reasonableness of the Commissioner’s 

determination ........................................................... 44 

Conclusion ....................................................................................... 49 

Appendix ......................................................................................... 1a 

(III) 

IV 

TABLE OF AUTHORITIES 

Cases: Page 

Adventure Res., Inc. v. Holland, 137 F.3d 786 (4th 

Cir.), cert. denied, 525 U.S. 962 (1998) ............................... 

14-15 

Aloe Energy Corp. v. Apfel, 225 F.3d 648 (3d Cir. 

2000), petition for cert. pending, No. 00-725 .................... 

31 

Bates v. Pacific Mar. Ass’n, 744 F.2d 705 (9th Cir. 

1984) ......................................................................................... 39 

Cedric Kushner Promotions, Ltd. v. King, No. 00-549 

(June 11, 2001) ........................................................................ 

43 

Chateaugay Corp., In re, 53 F.3d 478 (4th Cir.), 

cert. denied, 516 U.S. 913 (1995) ......................................... 

14 

Chevron U.S.A. Inc. v. Natural Res. Def. Council, 

Inc., 467 U.S. 837 (1984) ...................................................... 

45 

Chicago Truck Drivers Union (Indep.) Pension Fund 

v. Tasemkin, Inc., 59 F.3d 48 (7th Cir. 1995) ................. 

38 

Criswell v. Delta Air Lines, Inc., 868 F.2d 1093 

(9th Cir.), cert. denied, 489 U.S. 1066 (1989) .................... 

39 

Eastern Enters. v. Apfel, 524 U.S. 498 (1998) .................. 

3, 5, 

7, 14, 20 

EEOC v. MacMillan Bloedel Containers, Inc., 
503 F.2d 1086 (6th Cir. 1974) ............................................... 

39 

EEOC v. Vucitech, 842 F.2d 936 (7th Cir. 1988) .............. 

39 

Fall River Dyeing & Finishing Corp. v. NLRB, 

482 U.S. 27 (1987)................................................................ 

37, 45 

FEC v. Massachusetts Citizens for Life, Inc., 769 

F.2d 13 (1st Cir. 1985), aff ’d, 479 U.S. 238 (1986) ............ 

41 

Federal Land Bank of St. Paul 
v. Bismarck 

Lumber Co., 314 U.S. 95 (1941) .......................................... 

41 

Field v. Mans, 516 U.S. 59 (1995) ....................................... 

43, 44 

Golden State Bottling Co. v. NLRB, 414 U.S. 168 

(1973) ........................................................................................ 37 

Hawaii Carpenters Trust Funds v. Waiola Car- 
penter Shop, Inc., 823 F.2d 289 (9th Cir. 1987) ............... 

38 

Helvering v. Morgan’s, Inc., 293 U.S. 121 

(1934) ........................................................................................ 41 

V 

Cases—Continued: Page 

Howard Johnson Co. v. Detroit Local Joint Execu- 
tive Bd., 417 U.S. 249 (1974) ............................................... 

38 

John Wiley & Sons, Inc. v. Livingston, 376 U.S. 

543 (1964) ................................................................................. 

37 

Johnson v. United States, 529 U.S. 694 (2000) ................. 

30 

Leckie Smokeless Coal Co., In re, 99 F.3d 573 (4th 

Cir. 1996), cert. denied, 520 U.S. 1118 (1997) ................... 

13 

Musikiwamba v. ESSI, Inc., 760 F.2d 740 (7th Cir. 

1985) ......................................................................................... 39 

NLRB v. Burns Int’l Sec. Servs., Inc., 406 U.S. 

272 (1972) ................................................................................. 

37, 38 

NationsBank of N.C., N.A. v. Variable Annuity 

Life Ins. Co., 513 U.S. 251 (1995) ....................................... 

45 

North Haven Bd. of Educ. v. Bell, 456 U.S. 512 

(1982) ........................................................................................ 28 

Pfizer Inc. v. Government of India, 434 U.S. 308 

(1978) ........................................................................................ 41 

Pittston Co. v. United States, 199 F.3d 694 (4th 

Cir. 1999) ................................................................................. 

13 

Puerto Rico Mar. Shipping Auth. v. ICC, 645 F.2d 

1102 (D.C. Cir. 1981) ............................................................. 

41 

R.G. Johnson Co. v. Apfel, 172 F.3d 890 (D.C. Cir. 

1999) .......................................................................... 

16, 25, 31, 34 

Steinbach v. Hubbard, 51 F.3d 843 (9th Cir. 1995) .......... 

39 

Things Remembered, Inc. v. Petrarca, 516 U.S. 

124 (1995) ................................................................................. 

32 

United States v. Bestfoods, 524 U.S. 51 (1998) ................. 

43 

United States v. Brown, 333 U.S. 18 (1948) ...................... 

32 

United States v. Butler, 297 U.S. 1 (1936) ......................... 

14 

United States v. Heirs of Boisdore, 49 U.S. (8 How.) 

113 (1849) ................................................................................. 

30 

United States v. La Franca, 282 U.S. 568 (1931) ............. 

14 

United States v. Mead Corp., No. 99-1434 (June 18, 

2001) ......................................................................................... 45 

United States v. New York Tel. Co., 434 U.S. 159 

(1977) ........................................................................................ 42 

VI 

Cases—Continued: Page 

United States v. Reorganized CF&I Fabricators of 

Utah, Inc., 518 U.S. 213 (1996) ........................................... 

15 

United States v. Wells, 519 U.S. 482 (1997) ...................... 

39 

United States v. X-Citement Video, Inc., 513 U.S. 

64 (1994) ................................................................................... 

32 

United States Nat’l Bank of Or. v. Independent Ins. 

Agents of Am., Inc., 508 U.S. 439 (1993) .......................... 

30 

Upholsterers’ Int’l Union Pension Fund v. Artistic 

Furniture of Pontiac, 920 F.2d 1323 (7th Cir. 

1990) ......................................................................................... 38 

Statutes: 

Administrative Procedure Act, 5 U.S.C. 701 et seq. ........... 

13 

5 U.S.C. 704 ............................................................................. 

14 

Anti-Injunction Act, 26 U.S.C. 7421(a) (1994 & Supp. 

V 1999) ..................................................................................... 

13 

Coal Industry Retiree Health Benefit Act of 1992, 

26 U.S.C. 9701 et seq. ............................................................. 

2 

26 U.S.C. 9701 ................................................................... 

42 

26 U.S.C. 9701(b)(1) ......................................................... 

6 

26 U.S.C. 9701(c)(1) .......................................................... 

6, 42 

26 U.S.C. 9701(c)(2)(A) .............................................. 

passim 

26 U.S.C. 9701(c)(2)(A)(i) .................... 

15, 23, 24, 25, 26, 40 

26 U.S.C. 9701(c)(2)(A)(ii) ........................ 

15, 23, 25, 26, 40 

26 U.S.C. 9701(c)(2)(A)(iii) ....................... 

15, 23, 25, 26, 41 

26 U.S.C. 9701(c)(2)(B) .................................................... 

35 

26 U.S.C. 9701(c)(7) .......................................................... 

7 

26 U.S.C. 9702(a) .............................................................. 

5 

26 U.S.C. 9702(a)(2) ......................................................... 

6 

26 U.S.C. 9702(a)(3)(C) .................................................. 

38-39 

26 U.S.C. 9703(a) .............................................................. 

6 

26 U.S.C. 9703(f) ............................................................... 

6 

26 U.S.C. 9704 ................................................................... 

6 

26 U.S.C. 9704(a) .......................................................... 10, 21 

VII 

Statutes—Continued: Page 

26 U.S.C. 9704(a)(3) ......................................................... 

8 

26 U.S.C. 9704(d) .............................................................. 

8 

26 U.S.C. 9705(b) .............................................................. 

8 

26 U.S.C. 9706(a) ............................................... 

6, 21, 23, 33 

26 U.S.C. 9706(a)(1) ......................................................... 

6 

26 U.S.C. 9706(a)(2) ......................................................... 

7 

26 U.S.C. 9706(a)(3) ......................................................... 

7, 34 

26 U.S.C. 9706(b)(1)(A) ................................................... 

25 

26 U.S.C. 9706(e)(2) ......................................................... 

11 

26 U.S.C. 9706(f ) .............................................................. 

13 

26 U.S.C. 9706(f )(1) ......................................................... 

11 

26 U.S.C. 9706(f )(2) ......................................................... 
11 

26 U.S.C. 9706(f )(3)(A) .................................................... 
12 

26 U.S.C. 9706(f )(3)(B) .................................................... 
12 

26 U.S.C. 9706(f )(5) ......................................................... 
14 

26 U.S.C. 9711(g)(1) .......................................................... 
34 

26 U.S.C. 9712(b) .............................................................. 
5 

26 U.S.C. 9721 ................................................................... 
39 

Declaratory Judgment Act, 28 U.S.C. 2201(a) .................... 
13 

Dictionary Act, 1 U.S.C. 5 ....................................................... 
36 

Employee Retirement Income Security Act of 1974, 
29 U.S.C. 1451 (§ 4301) ......................................................... 
39 

Energy Policy Act of 1992, Pub. L. No. 102-486, 
106 Stat. 2776 .......................................................................... 
35 

§ 19142, 106 Stat. 3037 ..................................................... 
5 

§ 19142(a)(2), 106 Stat. 3037 ....................................... 
28, 48 

§ 19142(b)(3), 106 Stat. 3037 ........................................... 
28 

Social Security Independence and Program Improve- 
ments Act of 1994, Pub. L. No. 103-296, § 108(h)(9)(A), 
108 Stat. 1487 .......................................................................... 
6 

26 U.S.C. 52(a) ................................................................ 
24, 25, 34 

26 U.S.C. 414(b) .................................................................... 
33, 34 

26 U.S.C. 1563(a) ...................................................................... 
34 

28 U.S.C. 1331 ........................................................................... 
14 

28 U.S.C. 1346(a)(1) ................................................................. 
14 

42 U.S.C. 1981 ........................................................................... 39 

VIII 

Miscellaneous: Page 

Black’s Law Dictionary (6th ed. 1990) ................................. 
26 

Coal Commission Report on Health Benefits of Retired 

Coal Miners: Hearing Before the Subcomm. on 
Medicare and Long-Term Care of the Senate Comm. 
on Finance, 102 Cong., 1st Sess. (1991) ....................... 
3, 4, 5 

Fletcher Cyclopedia of the Law of Private Corporations 
(West 1999) ............................................................................. 
43 

Bryan A. Garner, A Dictionary of Modern Legal 

Usage (2d ed. 1995) ................................................................ 

41 

H.R. Conf. Rep. No. 461, 102d Cong., 2d Sess. (1992) .... 
33, 34 

138 Cong. Rec. (1992): 
pp. 20,117-20,122 .................................................................... 
28 

pp. 20,161-20,167 .................................................................... 
28 

p. 34,001 ................................................................................... 
28 

p. 34,002 ......................................................................... 
28, 29, 47 

p. 34,003 ................................................................................... 
8, 44 

p. 34,004 ................................................................................... 
5 

p. 34,033 ................................................................................... 
28 

2A Norman J. Singer, Statutes and Statutory Const- 
ruction (rev. ed. 2000) ....................................................... 41, 42 

In the Supreme Court of the United States 

No. 00-1307 

LARRY G. MASSANARI, ACTING COMMISSIONER 
OF SOCIAL SECURITY, PETITIONER 

v. 

SIGMON COAL COMPANY, INC., AND 
JERICOL MINING, INC. 

ON WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE FOURTH CIRCUIT 

BRIEF FOR THE PETITIONER 

OPINIONS BELOW 

The opinion of the court of appeals (Pet. App. 1a-44a) is 
reported at 226 F.3d 291. The opinion and order of the 
district court (Pet. App. 63a-64a, 65a-78a) are reported at 33 
F. Supp. 2d 505. The order of the district court denying the 
government’s motion for reconsideration (Pet. App. 79a-80a) 
is unreported. Orders of the Social Security Administration 
affirming the assignment of responsibility for various indi- 
viduals to respondents (Pet. App. 45a-62a) are unreported. 

JURISDICTION 

The judgment of the court of appeals was entered on 
August 29, 2000. A petition for rehearing was denied on 

(1) 

2 

November 15, 2000 (Pet. App. 81a-82a). The petition for a 
writ of certiorari was filed on February 13, 2001, and was 
granted on April 23, 2001. The jurisdiction of this Court 
rests on 28 U.S.C. 1254(1). 

STATUTORY PROVISION INVOLVED 

The pertinent provision of the Coal Industry Retiree 
Health Benefit Act of 1992, 26 U.S.C. 9701(c)(2)(A), is re- 
printed in an appendix to this brief (App., infra, 1a), and at p. 
9, infra. 

STATEMENT 

1. a. Congress enacted the Coal Industry Retiree Health 
Benefit Act of 1992 (Coal Act or Act), 26 U.S.C. 9701 et seq., 
in response to a crisis that threatened to deprive more than 
100,000 retired coal miners and their dependents of promised 
lifetime health-care benefits. Before enactment of the Coal 
Act, the health-care benefits of many retired coal miners 
were financed through multiemployer trusts established by 
collective bargaining agreements, known as National Bitumi- 
nous Coal Wage Agreements (NBCWAs), between the 
United Mine Workers of America (UMWA) and the Bitumi- 
nous Coal Operators Association (BCOA). The NBCWA 
executed in 1974 provided that the health-care benefits of all 
active miners and those who retired in 1976 or later would be 
provided through the multiemployer UMWA 1974 Benefit 
Plan and Trust (1974 Benefit Plan), and the benefits of 
miners who retired before 1976 would be provided through 
the UMWA 1950 Benefit Plan and Trust (1950 Benefit Plan). 
The NBCWA executed in 1978 altered this arrangement; 
under the 1978 NBCWA, coal mine operators who were 
signatories to the NBCWAs (known as “signatory opera- 
tors”) individually provided for the health-care benefits of 
their own active and retired employees, while the 1974 
Benefit Plan thenceforth covered those retirees whose 
employers were no longer in business. See generally 

3 

Eastern Enters. v. Apfel, 524 U.S. 498, 504-511 (1998) (plu- 
rality opinion).1 

In the 1980s and 1990s, the financial stability of the trusts 
was seriously threatened. A principal cause of the peril was 
that many coal operators were withdrawing from unionized 
operations and the coverage of the NBCWAs, or were going 
out of business altogether. “As more and more coal opera- 
tors abandoned the Benefit Plans, the remaining signatories 
were forced to absorb the increasing cost of covering 
retirees left behind by exiting employers. A spiral soon 
developed, with the rising cost of participation leading more 
employers to withdraw from the Benefit Plans, resulting in 
more onerous obligations for those that remained.” Eastern, 
524 U.S. at 511. 

After a protracted strike at the Pittston Coal Company in 
1989, in which health-care benefits were a principal issue, the 
Secretary of Labor established an advisory commission (the 
Coal Commission) to report on the causes of the financial 
crises in the Benefit Plans and to suggest solutions. The 
Coal Commission reported that a principal problem facing 
the Plans was how to finance the health-care benefits of 
“orphaned retirees,” i.e., those retired miners whose former 
employers had gone out of business or had ceased contribut- 
ing to the Benefit Plans, thus “dumping” responsibility for 
the orphans onto the signatory operators who remained in 
the NBCWA system. See Coal Commission Report on 
Health Benefits of Retired Coal Miners: Hearing Before the 
Subcomm. on Medicare and Long-Term Care of the Senate 
Comm. on Finance, 102 Cong., 1st Sess. 145 (1991). The 
Coal Commission was unable to reach a consensus on the 
mechanism for resolving the financial crisis; some members 
preferred a financial obligation imposed on the entire coal 

1 Unless otherwise indicated, all references in this brief to the Eastern 
decision are to Justice O’Connor’s plurality opinion. 

4 

industry (including operators who were never members of 
the BCOA), whereas others preferred that any obligation be 
confined to those who had participated in the NBCWA 
system. Compare id. at 226-232 with id. at 236-239. Both 
groups, however, recognized that much of the problem was 
caused by the fact that coal mine operators who had 
previously participated in the NBCWA system had avoided 
their obligations and shifted responsibility for their retirees 
onto other signatory operators by going out of business and 
transferring their assets to other entities. Professor Henry 
H. Perritt, who was Vice Chairman of the Coal Commission 
and favored an industry-wide solution, thus observed: 

Contract operations are a strong phenomenon in coal 
mining, as are thinly capitalized subsidiaries. It is not 
uncommon for a contract operator or a thinly capitalized 
subsidiary or joint venture to walk away from obligations 
to finance retiree health care. Frequently entities who 
now appear not to have had any historic involvement 
with the [UMWA] Funds were in fact involved as 
contributors of capital, as participants in joint ventures 
or as purchasers of contract coal. It is difficult to know 
whose hands are clean. 

Id. at 229. Other members of the Commission agreed with 
Professor Perritt’s understanding of the causes of the Bene- 
fit Plans’ financial problems (although they nonetheless 
opposed an industry-wide tax): 

The record shows that reprehensible practices as 
regards successorship exist in this industry. Thinly 
capitalized operators, often the sham invention of larger 
firms, come and go in a fashion that appears to exist only 
to avoid the risk of being held as a party to the collec- 
tively bargained agreement regarding pension and wel- 
fare benefits. 

5 

Id. at 237. 

b. After extensive consideration, Congress decided not 
to impose an industry-wide tax to shore up the financial 
stability of the Benefit Plans, but decided instead to ensure 
that the obligations of operators who had participated in the 
NBCWA system to their retirees were not avoided through 
the kinds of practices decried by the Coal Commission.2 
Congress’s objectives in enacting the Coal Act were to 
“identify persons most responsible for plan liabilities in 
order to stabilize plan funding and allow for the provision of 
health care benefits to [coal industry] retirees,” to “allow for 
sufficient operating assets for [coal industry retiree health- 
care benefit] plans,” and to “provide for the continuation of a 
privately financed self-sufficient program for the delivery of 
health care benefits to the beneficiaries of such plans.” 
Energy Policy Act of 1992, Pub. L. No. 102-486, § 19142, 106 
Stat. 3037. 

In furtherance of those ends, the Coal Act established the 
United Mine Workers of America Combined Benefit Fund 
(Combined Fund or Fund) as a private multiemployer health 
benefit plan.3 See 26 U.S.C. 9702(a). The Combined Fund 

2 Both Houses of Congress initially passed a bill that would have 
provided for orphan retirees’ benefits through taxes on coal production 
and imports. The President vetoed that bill, however, and the financing 
provisions of the Coal Act eventually took a different form. See Eastern, 
524 U.S. at 513-514; pp. 33-34 n.11, infra. 

3 The Coal Act also established another private fund, the 1992 UMWA 
Benefit Plan (1992 Plan), which is not at issue here. The 1992 UMWA 
Benefit Plan is intended to provide health-care benefits for retired miners 
who would have met the age and service requirements under the 1950 and 
1974 Plans as of February 1, 1993, who retired between July 21, 1992, and 
September 30, 1994, and whose last signatory operator did not provide the 
health-care benefits promised under a 1978 or later NBCWA. See 
26 U.S.C. 9712(b); 138 Cong. Rec. 34,004 (1992) (explanation by Sen. 
Wallop). 

6 

provides health-care benefits to beneficiaries who, at the 
time of passage of the Act, were receiving, or were eligible 
to receive, benefits from the 1950 or 1974 Benefit Plan. See 
26 U.S.C. 9702(a)(2), 9703(a) and (f ). The Combined Fund is 
financed by premiums to be paid by the “signatory 
operator[s]” (or “related person[s]” of those signatory 
operators) that formerly employed the beneficiaries and that 
remain “in business.” 26 U.S.C. 9704, 9706(a). The Act 
generally defines “signatory operator” as “a person which is 
or was a signatory to a coal wage agreement,” 26 U.S.C. 
9701(c)(1), including the NBCWAs negotiated between the 
UMWA and the BCOA, 26 U.S.C. 9701(b)(1). 

The Act vests in the Commissioner of Social Security 
(Commissioner)4 the responsibility for assigning eligible 
Combined Fund beneficiaries (miners and their surviving 
spouses and dependents) to signatory operators or related 
persons. 26 U.S.C. 9706(a). Assignments are made accord- 
ing to a three-tiered hierarchy: 

First, the Commissioner must seek to assign a beneficiary 
to the “signatory operator” (or “related person”) that re- 
mains “in business,” signed a collective bargaining agree- 
ment with the UMWA in 1978 or later, and was the most 
recent signatory operator to employ the miner in the coal 
industry for at least two years. 26 U.S.C. 9706(a)(1). The 
Act specifies that “a person shall be considered to be in 
business if such person conducts or derives revenue from 

4 Many references in the legislative record are to the Department of 
Health and Human Services, which at the time included the Social Secu- 
rity Administration. In 1995, the Social Security Administration became 
an independent agency within the Executive Branch, and the Commis- 
sioner of Social Security assumed the duties of the Secretary of Health 
and Human Services under the Coal Act. See Social Security Indepen- 
dence and Program Improvements Act of 1994, Pub. L. No. 103-296, 
§ 108(h)(9)(A), 108 Stat. 1487. 

7 

any business activity, whether or not in the coal industry.” 
26 U.S.C. 9701(c)(7). 

Second, if an assignment of a particular beneficiary cannot 
be made under the first tier, the Commissioner must 
attempt to assign the beneficiary to the signatory operator 
(or related person) that remains in business, signed a 
collective bargaining agreement with the UMWA in 1978 or 
later, and was the most recent signatory operator to employ 
the miner in the coal industry for any period of time. 
26 U.S.C. 9706(a)(2). 

Third, if an assignment cannot be made under the first or 
second tier, the Commissioner must seek to assign the 
beneficiary to the signatory operator (or related person) that 
remains in business and employed the miner in the coal 
industry for a longer period of time than any other signatory 
operator prior to the effective date of the 1978 collective 
bargaining agreement. 26 U.S.C. 9706(a)(3).5 

5 In our petition for a writ of certiorari (at 6 n.2), we stated that this 
case does not involve assignments made under the third tier of Section 
9706(a)(3). As respondents have pointed out (Br. in Opp. 4 n.3), that is 
incorrect; the assignments were in fact made under the third tier. See, 

e.g., Pet. App. 61a. In Eastern, this Court held unconstitutional an 
application of the Coal Act’s third tier, under which the Commissioner had 
assigned a beneficiary to a coal mine operator that had not signed a 
collective bargaining agreement with the UMWA in 1974 or later. The 
Court stressed that the NBCWAs before 1974, unlike those in 1974 and 
later, did not expressly promise miners health-care benefits for life. See 
524 U.S. at 530-531 (plurality opinion); id. at 550 (Kennedy, J., concurring 
in the judgment and dissenting in part). 

The assignments at issue in this case were made to a company, respon- 
dent Jericol Mining, Inc., that did sign the 1974 NBCWA, which promised 
miners lifetime benefits. See Pet. App. 11a. Respondents nonetheless 
alleged, in a “supplemental” complaint, that those assignments were also 
unconstitutional under Eastern because, while the assignee Jericol was a 
1974 signatory, Shackleford, the operator that employed the beneficiaries, 
to whom Jericol was found by the Commissioner to be a successor, was not 

8 

Finally, if an assignment cannot be made under any of the 
three tiers, then the beneficiary is considered “unassigned.” 
See 26 U.S.C. 9704(a)(3) and (d). The health-care benefits of 
unassigned miners are financed with funds transferred from 
interest earned on the Department of the Interior’s Aban- 
doned Mine Reclamation Fund, 26 U.S.C. 9705(b), or, if that 
source of funds is exhausted or unavailable, from an addi- 
tional premium imposed on all assigned signatory operators 
in a pro rata fashion, 26 U.S.C. 9704(d). Congress under- 
stood, however, that a principal cause of the crisis in the 
prior NBCWA system was the cost of financing benefits for 
“orphan” retirees whose employers had terminated their 
contribution obligations, and so it intended that the number 
of unassigned beneficiaries under the Coal Act be kept to “an 
absolute minimum.” 138 Cong. Rec. 34,003 (1992) (explana- 
tion by Sen. Wallop). 

Because the Commissioner must determine whether a 
beneficiary can be assigned to either a signatory operator or 

a 1974 signatory. See J.A. 13-14. The lower courts did not reach that con- 
stitutional question; they ruled rather that the assignments to Jericol 
were inconsistent with the statute. Pet. App. 73a-78a, 23a-36a. Eastern 
thus is not relevant to the question presented here, which is confined to an 
issue of statutory construction. 

Respondents have recognized (Br. in Opp. 4 n.3) that any constitutional 
implications under Eastern from the third-tier assignment in this case are 
not properly before this Court, because the lower courts resolved this case 
solely on statutory-interpretation grounds. Respondents, moreover, did 
not argue in their brief in opposition that the Court should deny certiorari 
because the judgment below was independently sustainable on constitu- 
tional grounds. Any further litigation of constitutional issues, therefore, 
should await a remand of this case to the court of appeals. If this Court 
reverses the court of appeals’ ruling and holds that, under the Coal Act, 
responsibility for a signatory operator’s employee may be placed on the 
direct successor in interest of that operator, then respondents may be able 
to pursue their Eastern claim on remand, provided that the Eastern claim 
was properly preserved in the lower courts. 

9 

any related person to a signatory operator under one of the 
tiers before proceeding to the next tier, the concept of 
“related person” is central to the operation of the Act. The 
Act provides an expansive definition of “related person”: 

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 corpora- 
tions (within the meaning of [26 U.S.C.] 52(a)) which 
includes such signatory operator; 

(ii) a trade or business which is under common 
control (as determined under [26 U.S.C.] 52(b)) with 
such signatory operator; or 

(iii) any other person who is identified as having 
a partnership interest or joint venture with a signa- 
tory operator in a business within the coal industry, 
but only if such business employed eligible bene- 
ficiaries, 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). 

26 U.S.C. 9701(c)(2)(A). This definition of “related person” 
ensures that a signatory operator’s beneficiaries are not 
dumped into the unassigned pool merely because the signa- 
tory dissolved its corporate form or drained away its assets. 
It accomplishes that objective by making affiliates (“related 
persons”) of a signatory operator responsible for Coal 
Act premiums for a Combined Fund beneficiary if, for some 
reason, the entity that was the signatory operator itself is 
unable to pay. 

Congress also expressly provided, in the final sentence of 
Section 9701(c)(2)(A) quoted above, that assignments could 

10 

be made to the successor in interest of a “related person” to 
the signatory operator. The statute does not state in haec 
verba that an assignment may be made to a direct successor 
in interest of the entity that was the signatory operator 
itself. The Commissioner has concluded, however, that in 
light of the text, structure, and purposes of the Coal Act, 
such direct successors in interest are included within the 
liability scheme of the statute as well, and should be respon- 
sible for a signatory operator’s Combined Fund premiums if 
the signatory operator itself is defunct and if there is no 
other “related person” to that operator that is still in 
business. See Social Security Administration Supplemental 
Coal Act Review Instructions No. 4 (July 1995), Pet. App. 
83a-94a. The Commissioner has also concluded that a 
business should be deemed a successor in interest of a 
signatory operator or other related person if it has, through 
purchase, merger, or other transaction, acquired substantial 
assets from the signatory or its related person, if it continues 
running the same operation in the same location, and if it 
uses many of the same employees who worked for the 
former owner. Id. at 86a. 

2. a. This case involves financial responsibility for the 
health-care benefits of 86 beneficiaries of the Combined 
Fund who were assigned to respondent Jericol Mining Cor- 
poration on the ground that Jericol was the successor in 
interest of the pertinent employer that was a signatory 
operator.6 Those 86 beneficiaries are miners (or widows or 
dependents of miners) who had worked for the Shackleford 

6 None of the pertinent assignments was made to respondent Sigmon 
Coal Company. The district court stated that Sigmon joined Jericol as a 
plaintiff in this case because Sigmon is in turn a “related person” to Jericol 
and thus is jointly and severally liable for premiums owed by Jericol. Pet. 
App. 66a; see also 26 U.S.C. 9704(a) (“Any related person with respect to 
an assigned operator shall be jointly and severally liable for any premium 
required to be paid by such operator.”). 

11 

Coal Company, a family-owned coal mining company located 
in Kentucky. In 1973, Irdell Mining, Inc., bought Shackle- 
ford’s coal mining assets. Pet. App. 10a. The sales contract 
provided that Irdell would assume responsibility for 
Shackleford’s outstanding contracts, including its collective 
bargaining agreement with the UMWA. Ibid.; J.A. 23, 26. 
Irdell also acquired the right to use the Shackleford name. 
J.A. 16. Shortly thereafter, the original Shackleford went 
out of business. Irdell, however, continued to operate 
Shackleford’s mines under the existing collective bargaining 
agreement, using the name of Shackleford and using many of 
the original Shackleford’s former employees. Pet. App. 10a- 
11a. While it was using the Shackleford name, Irdell signed 
the 1974 NBCWA with the UMWA. Id. at 11a. 

Irdell eventually adopted the name Jericol Mining Com- 
pany. Pet. App. 11a. Jericol continued the coal mining 
operations that it had conducted under the Shackleford cor- 
porate name (ibid.) and retained the Employer Identification 
Number it had used to pay Social Security taxes for its 
employees under the Shackleford name. Id. at 48a. 

b. In a series of decisions, the Social Security Admini- 
stration assigned to Jericol 86 Combined Fund beneficiaries 
who were employed by (or who are widows or dependents of 
miners employed by) Shackleford. Pet. App. 11a. Jericol 
filed administrative appeals of those assignment decisions, 
and the Commissioner denied those appeals on the ground 
that Jericol is the successor in interest of Shackleford.7 See 

7 When the Commissioner assigns a Combined Fund beneficiary to a 
signatory operator or related person, he so notifies the assigned operator, 
26 U.S.C. 9706(e)(2), which then has 30 days to request “detailed infor- 
mation as to the work history of the beneficiary and the basis of the 
assignment,” 26 U.S.C. 9706(f )(1). After receiving that information, the 
assigned operator has an additional 30 days to request review of the 
assignment decision. 26 U.S.C. 9706(f )(2). If, on review, the Commis- 
sioner determines that an assignment was incorrect, he rescinds the 

12 

id. at 45a-62a. In a representative decision, the agency 
explained: 

The sales contract [Jericol] submitted shows that Irdell 
Mining purchased the assets of Shackleford Coal, that 
Shackleford Coal was required to maintain the goodwill 
of its customers, allowed Irdell to use the name of 
Shackleford after the purchase, transferred responsibil- 
ity for all outstanding contracts and agreements, and 
required that non-compete agreements be signed and 
submitted at the time of closing. You have also advised 
us that Irdell did conduct business under the Shackleford 
name and subsequently changed the company’s name to 
Jericol Mining. 

Id. at 48a-49a. The agency therefore concluded that Jericol 
is responsible for the Combined Fund premiums for retirees 
who worked for Shackleford and for their dependents. Id. at 
49a. 

c. Respondents challenged the Commissioner’s final ad- 
ministrative decisions in district court. Respondents ac- 
knowledged that the Coal Act authorizes the Commissioner 
to assign responsibility for a Combined Fund beneficiary to a 
“related person” of the original signatory operator (such as a 
corporate affiliate of the signatory operator) and also 
authorizes the Commissioner to assign responsibility to a 
successor in interest of such a corporate affiliate of a 
signatory operator. Respondents argued, however, that the 
Coal Act does not permit the Commissioner to assign 
responsibility for a beneficiary to the direct successor in 
interest of a signatory operator itself. The district court 

assignment and reviews the beneficiary’s record to determine whether the 
beneficiary should be assigned to another operator. 26 U.S.C. 
9706(f ) (3)(A). 

If the Commissioner determines that there was no error in 

the assignment, he so notifies the assigned operator. 26 U.S.C. 
9706(f )(3)(B). 

13 

agreed, and granted respondents’ motion for summary 
judgment. Pet. App. 65a-78a. 

d. The Commissioner appealed, and a divided panel of 
the court of appeals affirmed. Pet. App. 1a-44a. 

The majority, after determining that the district court had 
subject-matter jurisdiction over respondents’ claims for eq- 
uitable relief,8 concluded that the Coal Act did not authorize 

8 In In re Leckie Smokeless Coal Co., 99 F.3d 573, 583 (1996), cert. 
denied, 520 U.S. 1118 (1997), the Fourth Circuit held that Coal Act 
premiums are “taxes” within the meaning of the Anti-Injunction Act, 
26 U.S.C. 7421(a) (1994 & Supp. V 1999), and the tax-exclusion provision of 
the Declaratory Judgment Act, 28 U.S.C. 2201(a), which generally bar 
district court jurisdiction over suits seeking declaratory or equitable relief 
against the collection of “taxes.” The Fourth Circuit nonetheless ruled in 
Leckie that a signatory operator in bankruptcy proceedings that had been 
assigned responsibility for the health-care costs of beneficiaries of the 
Combined Fund and 1992 Plan could maintain a suit for a declaration that 
a prospective purchaser of the signatory operator’s assets would not be 
jointly and severally liable for the signatory’s obligations to the Combined 
Fund and 1992 Plan. The Fourth Circuit concluded that the signatory 
operator would have no other means of obtaining a judicial resolution of 
that question. See Leckie, 99 F.3d at 584-585; see also Pittston Co. v. 
United States, 199 F.3d 694, 701-704 (4th Cir. 1999) (relying on Leckie’s 
holding that Coal Act premiums are “taxes” to conclude that a party that 
has paid Coal Act premiums to the Combined Fund may maintain tax- 
refund suit against United States to recover those premiums). 

In this case, the court of appeals ruled that, although Leckie had held 
that Combined Fund premiums are “taxes,” nonetheless the Anti-Injunc- 
tion Act and Declaratory Judgment Act did not bar respondents’ claims 
for equitable relief against the collection of Coal Act premiums. Pet. App. 
17a-23a. The court reasoned (ibid.) that the Coal Act establishes proce- 
dures specifically intended to permit judicial review under the Admin- 
istrative Procedure Act (APA), 5 U.S.C. 701 et seq., of claims that the 
Commissioner’s assignments of beneficiaries under the Coal Act are 
invalid (see 26 U.S.C. 9706(f )), and that those specific statutory judicial- 
review provisions prevail over the more general restraints against 
declaratory and equitable relief set forth in the Anti-Injunction Act and 
the Declaratory Judgment Act. 

14 

We agree that the district court had subject-matter jurisdiction over 
respondents’ claims, but not for the reasons relied on by the court of 
appeals. In our view, Coal Act premiums are not “taxes” within the 
meaning of the tax-refund statute, 28 U.S.C. 1346(a)(1), or the bars to 
declaratory and equitable relief set forth in the Anti-Injunction Act and 
the Declaratory Judgment Act. Coal Act premiums are not compelled 
contributions for the support of the government; rather, they are assessed 
and paid to finance the operations of the UMWA Combined Benefit Fund, 
a private entity, not those of the United States. See United States v. 
Butler, 297 U.S. 1, 61 (1936) (“A tax, in the general understanding of the 
term, * * * signifies an exaction for the support of the Government. The 
word has never been thought to connote the expropriation of money from 
one group for the benefit of another.”); United States v. La Franca, 282 
U.S. 568, 572 (1931) (“A tax is an enforced contribution to provide for the 
support of government.”); see also Eastern, 524 U.S. at 521 (observing 
that “[t]he payments mandated by the Coal Act, although calculated by a 
Government agency, are paid to the privately operated Combined Fund,” 
and so in a taking claim, “Congress could not have contemplated that the 
Treasury would compensate coal operators for their liability under the 
Act”). 

It is therefore the position of the United States that the limitations on 
declaratory and equitable relief concerning tax liability in the Anti- 
Injunction Act and the Declaratory Judgment Act (as well as the statu- 
tory provisions for tax-refund suits against the United States at issue in 
Pittston) have no application to Coal Act premiums. Rather, respondents’ 
challenge to the Commissioner’s assignment decisions, which concern the 
construction of a federal statute, falls squarely within the district court’s 
federal-question jurisdiction under 28 U.S.C. 1331, and is cognizable under 
the APA, 5 U.S.C. 704, as a suit for judicial review of final agency action. 
See also 26 U.S.C. 9706(f )(5) (contemplating “review” of Commissioner’s 
assignment decisions “by a court”). The district court therefore had the 
attendant authority to issue appropriate equitable relief, without regard 
to the restrictions imposed by the Anti-Injunction Act and the Declara- 
tory Judgment Act. 

The Fourth Circuit’s decision in Leckie to the effect that Coal Act 
premiums are “taxes” relied on the decision of the Second Circuit in In re 
Chateaugay Corp., 53 F.3d 478, 498, cert. denied, 516 U.S. 913 (1995), 
which held that Coal Act premiums are “taxes” entitled to administrative 
priority in bankruptcy. See also Adventure Res., Inc. v. Holland, 137 F.3d 

15 

the Commissioner to assign Fund beneficiaries to the direct 
successor in interest of a signatory operator that is no longer 
in business. The majority first rejected (Pet. App. 24a-26a) 
the Commissioner’s position that the text of the Coal Act 
permits assignment to the direct successor of an original 
signatory. The Commissioner had pointed out that Section 
9701(c)(2)(A) expressly authorizes assignments to the 
successor in interest of “any person described” in clause (i), 
(ii), or (iii) of 26 U.S.C. 9701(c)(2)(A), and had argued that the 
original signatory operator itself is one of the persons 
“described” in those clauses because each of the pertinent 
clauses in turn describes a group or family of related 
companies that includes the signatory operator itself. The 
majority rejected that construction and concluded that the 
clauses defining “related person” identify only classes of 
persons that have a relationship to the signatory operator 
and do not “describe” the signatory operator itself. Pet. 
App. 24a-25a. Thus, the majority ruled that, although the 
text of the Coal Act does expressly authorize an assignment 

786, 794 (4th Cir.) (adopting same ruling, based on Leckie and 
Chateaugay), cert. denied, 525 U.S. 962 (1998). In our view, however, the 
question whether certain obligatory payments owed to a private party are 
entitled to priority in the bankruptcy system as “taxes” is quite different 
from the question whether (as in Pittston) a refund suit will lie against the 
United States to recover payments made to a private party or whether (as 
in this case) a district court has authority under the APA to adjudicate 
issues concerning the administrative assignment of beneficiaries that 
gives rise to the obligation to make those payments. Accordingly, 
although we believe that Coal Act premiums are not “taxes” under the tax 
refund statute, the Anti-Injunction Act, or the Declaratory Judgment Act, 
that does not in our view control the substantive legal question whether 
those premiums would be entitled to priority in bankruptcy. Cf. United 
States v. Reorganized CF&I Fabricators of Utah, Inc., 518 U.S. 213, 220- 
224 (1996) (Internal Revenue Code’s characterization of a liability as a 
“tax” does not control whether liability is a “tax” for bankruptcy priority 
purposes). 

16 

to the successor in interest of a person related to a signatory 
operator, it does not expressly provide for an assignment to 
the direct successor in interest of the signatory operator 
itself. Id. at 25a-26a. 

Second, the majority, expressly disagreeing with the 
decision in R.G. Johnson Co. v. Apfel, 172 F.3d 890 (D.C. Cir. 
1999), rejected the submission that the Coal Act should be 
construed to permit assignments to direct successors in 
interest in order to avoid results that would be plainly incon- 
sistent with Congress’s objectives in enacting the statute. 
Pet. App. 26a-31a. In R.G. Johnson, the District of Columbia 
Circuit sustained assignments to the direct successor in 
interest of a signatory operator after concluding that the fail- 
ure to permit such assignments would frustrate Congress’s 
intent to stabilize the financing of the Fund and to place 
liability for that financing on the businesses most responsible 
for plan liabilities. See 172 F.3d at 895. The panel majority 
in the court below, by contrast, concluded that Congress 
might reasonably have decided to promote sales of coal 
companies by shielding a direct purchaser of the signatory 
operator’s assets from additional liabilities not contemplated 
in the original transaction. Pet. App. 33a-34a. 

The majority acknowledged that it is anomalous to 
interpret the statute to permit liability to attach to the 
successor of a person “related” to the original signatory 
while shielding from liability the direct successor of the 
original signatory itself. Pet. App. 34a. The majority also 
acknowledged the legislative history supporting the Com- 
missioner’s construction. Id. at 30a-31a. But, the court con- 
cluded, “we are not simply free to ignore unambiguous lan- 
guage because we can imagine a preferable version.” Id. at 
34a. 

Judge Murnaghan dissented. Pet. App. 37a-44a. He 
agreed with the D.C. Circuit’s decision in R.G. Johnson that 
a literal construction of the Coal Act to exempt direct suc- 

17 

cessors in interest of the signatory operator, from liability 
would conflict with Congress’s clear purposes in enacting the 
statute. Id. at 41a. Judge Murnaghan stressed that a princi- 
pal objective of the Coal Act was to ensure that a signatory 
operator’s responsibility for its retired miners’ health-care 
benefits was not shifted to other companies that had partici- 
pated in the NBCWA system but had had no relationship 
with those retired miners, and that that purpose would be 
frustrated if the obligation to pay Combined Fund premiums 
for a signatory operator’s retirees could not be placed on the 
direct successor of the signatory. Id. at 42a-43a. Indeed, he 
noted that the majority’s suggestion that Congress might 
have wanted to promote the sale of coal companies by 
freeing the purchaser from responsibility for retirees’ health 
benefits was contrary to the very premise of the Coal Act, 
for “[t]he widespread dumping of retirees by signatory 
operators leaving the coal industry was the principal cause of 
the coal industry’s crisis. * * * In light of this history, it is 
unimaginable that Congress could have intended to promote 
the sale of coal companies to successors who would not be 
liable for Fund benefits.” Id. at 42a. He therefore concluded 
that “[e]xcluding successors in interest to signatory opera- 
tors from liability for Fund benefits is plainly inconsistent 
with Congress’s intent in enacting the Coal Act.” Id. at 44a. 

SUMMARY OF ARGUMENT 

A. The Coal Act provides that financial responsibility for 
the health-care costs of the employees of a signatory opera- 
tor that signed a National Bituminous Coal Wage Agree- 
ment may be placed on the direct successor in interest of the 
signatory operator, if the operator is no longer in business. 
Under the Coal Act, the Commissioner of Social Security is 
to assign responsibility to the signatory operator or to any 
“related person,” and the definition of “related person” 
includes any successor in interest. The pertinent provision, 

18 

26 U.S.C. 9701(c)(2)(A), after identifying in three clauses 
who shall be “considered” to be a related person to a 
signatory operator, further provides that a “related person” 
shall also “include” any successor in interest of a person 
“described” in any of those three clauses. The signatory 
operator is expressly referred to—and thus “described”—in 
each of the three clauses. Accordingly, under the express 
terms of the final sentence of Section 9701(c)(2)(A), a 
successor in interest of the signatory operator is a “related 
person” that the Commissioner may determine is responsbile 
for the signatory’s retiree health-benefit liability under the 
Act. 

This construction of the statute is far more consistent with 
the background, legislative history, and purposes of the Coal 
Act than is the contrary definition of “related person” 
adopted by the court of appeals, which excludes the direct 
successor in interest of the signatory operator. Congress 
enacted the Coal Act to respond to a crisis in the financial 
situation of multiemployer plans that were supposed to 
continue providing health-care benefits to retired miners. A 
principal cause of that crisis—as explained by the advisory 
commission that recommended legislative solutions to it— 
was the common industry practice of operators going out of 
business, selling their operations, or withdrawing from the 
NBCWA system, thus dumping responsibility for their 
retirees onto the operators remaining within the system. 
The legislative history of the Coal Act makes clear that 
Congress sought to avoid a recurrence of that crisis, and also 
to avoid placing responsibility for retired miners’ health-care 
costs on the public fisc, by adopting a broad definition of the 
“related persons” that would be individually responsible for 
particular beneficiaries’ health-care costs. Interpreting 
“related person” to include a direct successor in interest of a 
signatory operator advances that objective, because it en- 
sures that signatory operators could not dump responsibility 

19 

for their retirees onto the other operators in the NBCWA 
system or the public by selling their operations to another 
entity or changing their corporate forms. By contrast, the 
court of appeals’ construction rewards that very practice. 
The lower court’s construction also leads to the highly 
peculiar result that a direct successor in interest that 
assumed the coal mining operations of the signatory opera- 
tor using the signatory’s employees cannot be made respon- 
sible for the retirement health benefits of the signatory’s 
employees, while a more peripherally related successor to a 
corporate affiliate of the signatory, in an entirely different 
line of business, may be made responsible. There is no rea- 
son to believe Congress intended such a strange outcome. 

This construction is also consistent with background 
principles of successorship that this Court and the courts of 
appeals have adopted in other labor, employment, and 
benefits statutes. In cases arising under the National Labor 
Relations Act (NLRA), this Court has held that the National 
Labor Relations Board (NLRB) may require a successor 
corporation to adhere to some of the labor-law obligations 
assumed by its predecessor, even though the NLRA does 
not specifically speak to the issue of successor liability. 
Lower courts have similarly concluded, under other employ- 
ment and benefits statutes, including these governing em- 
ployers’ withdrawal liability to multiemployer benefit plans 
like the Combined Fund, that successors in interest may be 
liable for their predecessors’ obligations. These principles 
were settled in the case law at the time Congress enacted 
the Coal Act, and Congress is presumed to have been aware 
of that well-developed law. 

B. Even if the Coal Act itself does not in terms provide 
that a direct successor of a signatory operator is a “related 
person” under Section 9701(c)(2)(A), it authorized the Com- 
missioner to determine that a direct successor may be liable 
for a signatory operator’s employees. The entities that are 

20 

expressly “includ[ed]” as successors under the Act are not an 
exclusive category, and so the Commissioner may deem 
other entities as well to be successors that may be liable for 
a signatory’s employees, if to do so would be reasonable and 
consistent with the design of the statute. The 
Commissioner’s determination that direct successors may be 
responsible for the employees of a signatory is reasonable 
and consistent with the Coal Act. That determination 
advances Congress’s objectives of ensuring that individual 
entities with connections to employees be made responsible 
for those employees’ retirement health-care costs, and that 
those costs not be made the collective responsibility of other 
operators in the NBCWA system with no relation to such 
employees, or of the public. And in light of the factors that 
the Commissioner has set forth to govern whether an entity 
will be considered a successor of a signatory operator, the 
Commissioner’s determination is reasonable, for it limits 
such liability to entities that effectively continued the coal 
mining operations of the signatory operator. The Com- 
missioner’s administration of the Coal Act to include direct 
successors of signatory operators therefore should be 
upheld. 

ARGUMENT 

THE COMMISSIONER PROPERLY DETERMINED 

THAT RESPONSIBILITY FOR THE EMPLOYEES OF A 
SIGNATORY OPERATOR MAY BE ASSIGNED TO THE 
DIRECT SUCCESSOR IN INTEREST OF THAT 
OPERATOR 

In the Coal Act, Congress sought “to identify persons 
most responsible” for the liabilities of the 1950 and 1974 
Benefit Plans “in order to stabilize plan funding” and to 
“allow for the provision of health care benefits” to retired 
miners and their dependents. Eastern, 524 U.S. at 514. To 
that end, Congress imposed principal financial responsibility 

21 

for payment of premiums to the Combined Fund on the 
signatory operators that signed the NBCWAs that had 
required employer contributions to the 1950 and 1974 
UMWA Benefit Plans. 

See 26 U.S.C. 9704(a), 9706(a). 

Congress was aware, however, that a principal cause of 
the financial crisis in the Benefit Plans was the common 
industry practice of operators “dumping” responsibility for 
their retired employees by leaving the coal business or 
dissolving. See pp. 3-4, supra. Congress was also deter- 
mined to prevent a recurrence of that crisis, in which 
operators remaining in the NBCWA system that had no 
relationship to retired miners were forced to shoulder those 
miners’ health-care costs as the original signatory operators 
that employed those miners left the system. To minimize the 
problem of financing benefits for such “orphan” or 
unassigned retirees under the Coal Act, Congress provided 
that responsibility for an operator’s employees should be 
assumed by the operator’s “related” entities, if the operator 
that employed the miners was no longer in a position to 
finance the Combined Fund premiums for its employees. 
26 U.S.C. 9701(c)(2)(A), 9706(a). The design of this related- 
person liability provision—and a central purpose of the Coal 
Act—is that responsibility for a miner’s health-care costs 
should remain, whenever possible, with the particular en- 
tities that have a connection, through the original signatory 
operator, to the individual miner, and not be shifted to the 
collective responsibility of all other operators who were in 
the NBCWA system, or to the public. 

Congress, moreover, did not legislate in a vacuum. When 
Congress enacted the Coal Act in 1992, it acted against a 
background of well-developed case law in which the courts, 
including this Court, had addressed issues of liability and 
responsibility under federal labor, employment, and benefits 
statutes when a corporation leaves a line of business or dis- 
solves and transfers its operations to a successor entity. As 

22 

we explain below (pp. 36-39, infra), the courts—starting with 
this Court’s decisions recognizing successor responsibility 
under the National Labor Relations Act—had concluded 
that, in the closely regulated and worker-protective fields of 
labor, employment, and benefits law, obligations imposed on 
an employer by statute may properly devolve upon the 
employer’s direct successor as well. The courts reached 
those conclusions, moreover, even in the absence of statu- 
tory language expressly providing for such successor respon- 
sibility. Given that settled legal background—and given the 
overarching purpose of the Coal Act to ensure that a 
signatory operator’s obligations to the Combined Fund for 
its retirees are not foisted onto other entities with no 
historical tie to the signatory operator—Congress had every 
reason to expect that, if a signatory operator was defunct 
and no other related person could be found, the operator’s 
direct successor in interest would become responsible for the 
operator’s retired employees’ health-care costs, and those 
costs would therefore not be transferred to other, unrelated 
operators, or to the public. At a minimum, nothing in the 
Coal Act prevented the Commissioner from drawing on 
those background principles of successorship law to deter- 
mine that direct successors are appropriately made responsi- 
ble for a signatory’s Combined Fund premiums when no 
other related person is available. At the very least, the 
Commissioner’s interpretation and application of the Act in 
these circumstances is reasonable and should be sustained 
by this Court. 

A. The Coal Act Provides That A Direct Successor In 

Interest Of A Signatory Operator May Be Made 

Responsible For The Health-Care Premiums For The 

Operator’s Retired Employees 

The court of appeals, in concluding that a direct successor 
in interest cannot be made responsible for the Combined 

23 

Fund premiums for a signatory employer’s retired miners, 
did not doubt either that the courts have endorsed succes- 
sorship responsibility in various contexts (see Pet. App. 35a 

n.7; pp. 36-39 infra), or that Congress had intended to 
prevent a shifting of responsibility for retired miners’ 
health-care costs away from entities with a connection to the 
signatory operator to unrelated entities and the public fisc 
(Pet. App. 33a; pp. 29-30, infra), or that it would be at least 
“somewhat anomalous” to permit liability to be placed on the 
direct successor in interest of a related person to the 
signatory operator (which all agree may be done under the 
Coal Act), but not the direct successor of the operator itself 
(Pet. App. 34a; pp. 30-31, infra). Nonetheless, the court of 
appeals concluded that Congress had not in exact words 
made direct successors in interest of signatory operators 
responsible for their predecessor operators’ Combined Fund 
premiums, and so, no matter how compelling such respon- 
sibility might be as a matter of congressional design, con- 
sistency with other principles of law, or logic, it could not be 
adopted. As we now show, the court of appeals’ reading of 
the statute is flawed. Direct successor responsibility is 
consistent with the statutory language, and is far more in 
harmony with both the overall congressional design and 
background principles of successorship in the law than is the 
strange result reached by the court of appeals. 

1. The Text Of The Coal Act 

a. The text of the “related person” provision of the Coal 
Act, 26 U.S.C. 9701(c)(2)(A), provides that responsibility for 
Coal Act premiums may be placed on direct successors in 
interest of signatory operators. Section 9706(a) provides 
that any Combined Fund beneficiary for which a signatory 
operator would be responsible may be assigned by the Com- 
missioner to a “related person” to the signatory operator. 
Clauses (i), (ii), and (iii) of Section 9701(c)(2)(A) in turn set 

24 

forth three categories of persons and entities that “shall be 
considered to be a related person.” One of those categories, 
for example, reaches any “member of the controlled group of 
corporations * * * which includes [the] signatory 
operator,” 26 U.S.C. 9701(c)(2)(A)(i), and incorporates by 
reference the definition of “controlled group of corporations” 
in 26 U.S.C. 52(a). The last sentence of Section 9701(c)(2)(A) 
further provides that “[a] related person shall also include a 
successor in interest of any person described in clause (i), (ii), 
or (iii).” 26 U.S.C. 9701(c)(2)(A). The referenced clauses (i), 
(ii) and (iii) all “describe” a family of businesses that are 
considered related to one another by an element of common 
ownership or control, and all expressly refer to the 
“signatory operator” as among the family. 

A straightforward reading of these provisions leads to the 
conclusion that a “related person” includes a successor in 
interest of the signatory operator itself. As noted, the last 
sentence of Section 9701(c)(2)(A) states that the term 
“related person” “include[s]” a successor in interest of “any 
person described in clause (i), (ii), or (iii).” Clause (i) defines 
a “related person” to include any entity that is a member of 
the controlled group of corporations that includes the “signa- 
tory operator” itself. The signatory operator itself is thus 
“described” in clause (i) by virtue of that express reference 
alone. In addition, the signatory operator is necessarily a 
member of a controlled group of corporations that includes 
itself. That conclusion follows as a matter of logic: Corpora- 
tion A is a member of the controlled group that includes 
corporations A, B, and C. Thus, “a successor in interest” of 
any entity described as a member of the group of corpora- 
tions A, B, and C, includes a successor in interest of 
corporation A. 

That reading of Section 9701(c)(2)(A) is bolstered by the 
treatment of “controlled group of corporations” in Section 
52(a), to which Section 9701(c)(2)(A) refers. Section 52(a) 

25 

provides that, for certain purposes, “all employees of all 
corporations which are members of the same controlled 
group of corporations shall be treated as employed by a 
single employer.” Section 52(a) is not intended merely to 
provide that (to use the example above) employees of 
corporation A may be treated as employees of B and C. As 
its expansive language demonstrates, it is fully consistent 
with treating employees of A as employees of A, should such 
treatment be appropriate in the particular context. See also 
26 U.S.C. 9706(b)(1)(A) (“Any employment of a coal industry 
retiree in the coal industry by a signatory operator shall be 
treated as employment by any related person to such 
operator.”). 

b. The panel majority believed that the signatory opera- 
tor itself cannot be one of the entities “described” in clauses 
(i), (ii), and (iii) of Section 9701(c)(2)(A), and therefore a 
successor in interest to the signatory operator cannot qualify 
under the final sentence of Section 9701(c)(2)(A). The panel 
reasoned (Pet. App. 24a-25a) that a signatory operator 
cannot be “described” in one of those three clauses because 
the purpose of those clauses is to define who may be a 
“related person to a signatory operator.” Thus, the panel 
stated, “[b]ecause the persons described in those clauses are 
described in terms of their relationship to the signatory 
operator, it would seem evident that they cannot include the 
signatory itself. To suggest otherwise is tantamount to 
saying ‘I am related to me.’ ” 
Id. at 25a (quoting R.G. 

Johnson, 172 F.3d at 894). 

Contrary to the panel’s conclusion, the “description” of 
persons in Section 9701(c)(2)(A) does not exclude the signa- 
tory operator itself. Rather, the signatory operator is 
expressly mentioned in all three clauses of that Section. 
While it is true that the general purpose of Section 
9701(c)(2)(A) is to identify entities other than the signatory 
operator that may be responsible for the health-care benefits 

26 

of the operator’s employees, the Section accomplishes that 
purpose by describing broad, related groups of entities that 
specifically include the signatory operator itself, as well as 
successors in interest to each of those entities. Section 
9701(c)(2)(A) does not (as the court of appeals suggested) 
simply state that “A is related to A”; rather it provides that 
the persons that are related to one another include A and (if 
such exist) B and C, as well as any successors in interest of 
A, B, and C. 

Nor was the court of appeals justified in concluding that 
the statute’s reference to any person that is “described” in 
the separately enumerated clauses of Section 9701(c)(2)(A) 
somehow excludes the signatory operator. The word “de- 
scribe” means, among other things, “express” or “set forth.” 
Black’s Law Dictionary 445 (6th ed. 1990). The term “signa- 
tory operator” is plainly “expressed” or “set forth” in each of 
the three enumerated clauses of Section 9701(c)(2)(A). 
Moreover, as we have explained, a signatory operator by 
definition is “a member of the controlled group of 
corporations * * * which includes such signatory operator,” 
26 U.S.C. 9701(c)(2)(A)(i). The original signatory is similarly 
among the entities “described” in clauses (ii) and (iii) of 26 
U.S.C. 9701(c)(2)(A). It therefore follows that the last 
sentence of Section 9701(c)(2)(A), by authorizing assign- 
ments to successors in interest to the corporations thus “de- 
scribed,” authorizes assignments to the signatory operator’s 
own successor in interest. 

2. The Background, Legislative History, And Pur- 
poses Of The Coal Act 

a. The background, legislative history, and purposes of 
the Coal Act confirm that Congress intended that liability 
for a signatory operator’s employees could be placed on the 
direct successor in interest of the signatory. As we have 
noted (pp. 3-4, supra), members of the Coal Commission 

27 

established by the Secretary of Labor to formulate recom- 
mendations for redressing the funding crisis in the 1950 and 
1974 Benefit Plans observed, in the Commission’s report to 
the Secretary, that the financial crisis facing the Plans had 
been caused in part by an industry practice of using 
corporate sales, mergers, and other similar transactions to 
avoid contractual obligations to finance retiree health care. 

To ensure that such corporate transactions would not 
shield companies from statutory liability under the Coal Act, 
Congress imposed premium obligations on a purposefully 
broad and expansive class of persons “related” to the original 
signatory. An explanation of the legislation placed in the 
Congressional Record by Senator Wallop, one of the Coal 
Act’s sponsors, made that point clear: 

[B]ecause of complex corporate structures which are 
often found in the coal industry, the number of entities 
made jointly and severally liable for a signatory opera- 
tor’s obligations under the definition of related persons is 
intentionally very broad. 

In this regard, the term “related person” is defined 
broadly to include companies related to the signatory 
operator. The Conference Agreement makes each such 
related person fully responsible for the signatory opera- 
tor’s obligation to provide benefits under the Act should 
the signatory no longer be in business, or otherwise fail 
to fulfill its obligations under the Act. Thus, the statute 
provides that related persons—meaning (i) those within 
the controlled group of corporations including the signa- 
tory operator, using a 50% common ownership test, (ii) a 
trade or business under common control with a signatory 
operator, (iii) one with a partnership interest or joint 
venture with the signatory operator, or (iv) in specific 
instances successors to the collective bargaining agree- 
ment obligations of a signatory operator—are equally 

28 

obligated with the signatory operator to pay for con- 
tinuing health care coverage. 

138 Cong. Rec. at 34,002 (emphasis added). In similar 
fashion, Senator Rockefeller, the principal sponsor of the 
Coal Act, explained on the floor of the Senate that the term 
“signatory operator” includes “a successor in interest of such 
operator.” Id. at 34,033.9 The views of these sponsors of the 
Coal Act are entitled to special weight (see, e.g., North 
Haven Bd. of Educ. v. Bell, 456 U.S. 512, 526-527 (1982)) and 
in this case confirm that the Act was intended to reach a 
broad range of entities, including a company that, like 
respondent Jericol, is the direct successor of a signatory 
operator that employed the pertinent beneficiaries. 

On the other hand, to construe the related-person pro- 
vision to exclude a signatory’s direct successor in interest 
would be contrary to Congress’s stated purposes of ensuring 
that each Combined Fund beneficiary’s health-care costs is 
borne (if possible) by the person with the most direct 
responsibility for the beneficiary, and not by other signatory 
operators that had no connection with the beneficiary, or by 
the public fisc. 

10 As Senator Wallop explained, the related- 

9 The provisions that became the Coal Act were added to energy 
legislation pending in the Senate as a floor amendment offered by Senator 
Rockefeller. See 138 Cong. Rec. at 20,117-20,122, 20,161-20,167. The 
ultimate version of the Coal Act was unchanged from that Rockefeller 
amendment. 

10 See Energy Policy Act, Pub. L. No. 102-486, § 19142(a)(2), 106 Stat. 
3037 (congressional finding that “it is necessary * * * to identify persons 
most responsible for plan liabilities”), § 19142(b)(3), 106 Stat. 3037 
(statement of congressional policy that benefits should be provided 
through “a privately financed self-sufficient program”); 138 Cong. Rec. at 
34,001 (explanation by Sen. Wallop) (stating that conference committee 
had “rejected” the approach of a “government fund to administer the 
payment of benefits” and provided instead for “a privately financed and 
administered benefit plan structure”). 

29 

person provision is intended “to insure that every reasonable 
effort is made to locate a responsible party to provide the 
benefits before the cost is passed to other signatory com- 
panies which have never had any connection to the 
individual,” and its “overriding purpose is to find and 
designate a specific obligor for as many beneficiaries in the 
Plans as possible.” 138 Cong. Rec. at 34,002. But in this 
case, if respondents were deemed not to be responsible for 
the retiree health-benefit obligations of Shackleford, the 
signatory operator, then responsibility for financing the 
health costs of Shackleford’s former employees might fall on 
the public, because the beneficiaries’ health-care costs would 
be financed by transfers from interest earned on the 
Department of the Interior’s Abandoned Mine Reclamation 
Fund. See p. 8, supra. If transfers from that source are 
exhausted or for some other reason not available, then the 
beneficiaries’ health-care costs would become the collective 
responsibility of all the other signatory operators, including 
those operators that had no relation to any entity that ever 
employed them. See ibid. 

The exclusion of direct successors from liability would 
therefore create a statutory lacuna in which no specific 
company may be held responsible for a beneficiary’s health- 
care costs, even in instances where the Commissioner deter- 
mines that there is a coal mining company that substantially 
continued the signatory’s coal operations, used the signa- 
tory’s name and good will, assumed its obligations under the 
collective bargaining agreement, and retained many of its 
employees. As a result, successors would be relieved of 
statutory liability whenever they engaged in the very con- 
duct Congress sought to remedy in the Coal Act: the pur- 
chase of coal mining assets through private contractual 
arrangements that dumped health-care costs on other 
parties while purporting to relieve both the original signa- 
tory and its succeeding purchaser of any obligation to fund 

30 

the benefits promised to the employees covered by the 
collective bargaining agreement. 

b. The court of appeals declined to read the related- 
person provision to reach direct successors because it 
believed that the statutory language in Section 9701(c)(2)(A) 
clearly excluded such direct successors. See Pet. App. 31a. 
But as we have explained (pp. 23-26, supra), that language is 
at a minimum reasonably susceptible of an interpretation 
that comprises direct successors of signatory operators, even 
if, in isolation, it might also be read differently to reach only 
successors of other related persons, and not successors of the 
signatories themselves. The Court should therefore choose, 
from among permissible readings of the Coal Act’s related- 
person provisions, the construction that effectuates Con- 
gress’s “overriding purpose” (p. 29, supra) of avoiding a 
recurrence of the “orphan” retiree catastrophe of the last 
days of the Benefit Plans, which was caused in large part by 
operators avoiding responsibility for their beneficiaries by 
changing their corporate structures, selling assets, or 
ceasing operations. As this Court has stressed on numerous 
occasions, “in expounding a statute, [the Court] must not be 
guided by a single sentence or member of a sentence, but 
look to the provisions of the whole law, and to its object and 
policy.” United States Nat’l Bank of Or. v. Independent Ins. 
Agents of Am., Inc., 508 U.S. 439, 455 (1993); see also United 
States v. Heirs of Boisdore, 49 U.S. (8 How.) 113, 122 (1849). 
Quite recently, the Court reiterated that the object and 
purposes of a statute must inform its construction, especially 
when the language of the statute is amenable to more than 
one interpretation; even if the textual reading that more 
accurately captures congressional intent is the less common 
or natural one, it should nonetheless be preferred to a highly 
literal interpretation that contradicts “clear congressional 
policy.” Johnson v. United States, 529 U.S. 694, 706 n.9 
(2000). And the court of appeals’ reading of Section 

31 

9701(c)(2)(A) has little to recommend it when evaluated 
against the fundamental objective of effectuating congres- 
sional intent. 

Indeed, the court of appeals’ construction of Section 
9701(c)(2)(A) leads to the highly counter-intuitive result that 
a direct successor in interest of a signatory may not be made 
responsible for a signatory’s beneficiaries—even though 
such successor liability would be supported by background 
principles of successorship (see pp. 36-39, infra)—while a 
more distantly related successor in interest of a corporate 
affiliate of a signatory operator may be made responsible for 
the signatory’s beneficiaries—even though such liability is a 
substantial departure from traditional principles. For 
example, the court of appeals’ reading of the statute would 
permit premiums to be imposed on the successor of a food 
processing company under common control with a sister 
company that mined coal and was a signatory operator; but 
at the same time, no liability would attach to a coal company 
that purchased all of the signatory’s mining operations, used 
the signatory’s name and employees, and assumed the 
signatory’s collective bargaining obligations with the 
UMWA. There is no reason to believe that Congress could 
have intended to create such a strange distinction. Precisely 
because that result would be so unmoored from all indica- 
tions of the congressional purpose underlying the Coal Act, 
the District of Columbia and Third Circuits rejected that 
reading and concluded that direct successors of signatory 
operators are to be considered related persons under the 
statute. See R.G. Johnson, 172 F.3d at 895; Aloe Energy 
Corp. v. Apfel, 225 F.3d 648 (3d Cir. 2000) (Table) (reprinted 
at 00-725 Pet. App. at 7a-8a), petition for cert. pending, No. 
00-725. 

The court of appeals in this case nonetheless stated that, 
although “[t]he Commissioner’s reading of the statute may 
be appealing in terms of its logic, * * * we cannot adopt it 

32 

as our own without trespassing on a function reserved for 
the legislative branch.” Pet. App. 35a. Respect for Con- 
gress’s legislative function, however, does not require the 
Court to hew to a construction of the statute that yields 
peculiar results at odds with every other manifestation of 
congressional intent. See United States v. X-Citement 
Video, Inc., 513 U.S. 64, 70-71 (1994) (rejecting the “most 
grammatical reading” of the statute, where it would lead to 
anomalous results); United States v. Brown, 333 U.S. 18, 27 
(1948) (“No rule of construction necessitates our acceptance 
of an interpretation resulting in patently absurd conse- 
quences.”); see also Things Remembered, Inc. v. Petrarca, 
516 U.S. 124, 135 (1995) (Ginsburg, J., concurring) (“It would 
show little respect for the legislature were courts to suppose 
that the lawmakers meant to enact an irrational scheme.”). 

The court of appeals also hazarded that Congress might 
have decided to exempt direct successors of signatory 
operators from responsibility for Coal Act premiums, even 
while making successors to related persons responsible, 
because “[a] major complaint lodged by the coal operators” 
during the last days of the Benefit Plans “was that they were 
being required to pay benefits for retired miners who never 
worked for them or maintained any other relationship with 
them.” Pet. App. 33a. Thus, the court of appeals remarked, 
Congress might have believed that direct successors would 
similarly object to being responsible for their predecessor 
signatories’ employees, and would not have supported the 
Coal Act if they had faced such responsibility. Id. at 33a- 
34a. 

The court of appeals’ suggestion, however, is the direct 
opposite of what was actually Congress’s design in the Coal 
Act. Congress did indeed seek to prevent, to the extent 
possible, responsibility for a signatory’s employees from 
being placed on coal operators that were totally unrelated to 
that signatory. Thus, Congress erected the three-tier struc- 

33 

ture in Section 9706(a) to ensure that any signatory operator 
that had employed a miner (or any related person to such a 
signatory operator) that remained in business would be 
assigned the miner before that miner was made the collec- 
tive responsibility of all the remaining operators that had 
participated in the NBCWA system. See pp. 7-9, supra. But 
Congress did not perceive direct successors in interest to be 
“unrelated” to the original signatory operator—and there- 
fore deserving of protection from liability under the Coal 
Act—just as it did not perceive other related persons and 
direct successors of related persons to be deserving of such 
protection. To the contrary, Congress deliberately defined 
“related person” very expansively, precisely so that other 
entities that had never had any affiliation or successorship 
relation with a signatory operator would not be made 
responsible for that signatory’s employees. 

11 

11 The Coal Act’s provision for related-person liability to the Combined 
Fund is broader than the analogous provision in the earlier version of the 
legislation that was vetoed by the President. See p. 5, note 2, supra; H.R. 
Conf. Rep. No. 461, 102d Cong., 2d Sess. 270-296 (1992). That earlier 
version would have imposed liability for a particular retiree’s health-care 
costs on the “last signatory operator” that had signed a 1978 or later 
NBCWA, had been the last employer of the retiree, and remained in 
business, and would have relied on an industry-wide tax on coal pro- 
duction to finance collectively the health-care benefits of “orphan” 
retirees. See id. at 274-275 (proposed § 9704(g)(1) would have imposed 
premium on bituminous coal produced and imported; proposed 
§ 9704(g)(1)(C) would have required premium for individual employees 
from “each last signatory operator”); id. at 286 (proposed § 9714(a) would 
have obligated “last signatory operator” to remain liable for any retiree 
then receiving health-care benefits, either though individual plan or new 
combined-fund plan, as long as it remained in business); id. at 294-295 
(proposed § 9723(6)(A) defining “last signatory operator”). 

The earlier version of the legislation had a provision for “controlled 
group liability” with respect to any last signatory operator, which incor- 
porated the “controlled group” principles of 26 U.S.C. 414(b). See H.R. 
Conf. Rep. No. 461, supra, at 288 (proposed § 9714(d) would have adopted 

34 

The court of appeals further suggested (Pet. App. 32a), 
based on Judge Randolph’s dissent in R.G. Johnson, 172 
F.3d at 895, that Congress might have wanted to facilitate 
the sale of coal companies to successors, and that, without an 

controlled-group liability); id. at 294 (proposed § 9723(5)(B) would have 
used “controlled group” principles of Section 414(b)). When Congress 
abandoned the approach of a bituminous coal tax to finance orphan 
retirees’ benefits, it at the same time expanded the responsibility of 
individual operators to finance the benefits of individual retirees, in part 
by adding the expansive related-person provision of Section 9701(c)(2)(A) 
(and also, in the third tier of Section 9706(a)(3), by extending liability to 
include signatory operators that had only signed NBCWAs executed 
before 1978). The related-person provision in Section 9701(c)(2)(A) as 
eventually enacted incorporates the broader controlled-group rules of 
26 U.S.C. 52(a), which requires only 50% common stock ownership among 
corporations, not 80%, as does Section 414(b) (which incorporates by 
reference 26 U.S.C. 1563(a)). Thus, the rules for entities that may be 
deemed within the controlled group—and thus made responsible for an 
individual beneficiary’s health-care costs—in the version of the Coal Act 
that was ultimately enacted are significantly broader than were the rules 
in the earlier, vetoed version. 

It is also noteworthy that the earlier version of the legislation con- 
tained a definition of “last signatory operator” that specifically included 
“any successor” of a last signatory operator that was no longer in 
business. H.R. Conf. Rep. No. 461, supra, at 294-295 (proposed 
§ 9723(6)(A)(i)(III)). Nothing in the background or legislative history of 
the Coal Act suggests that Congress intended, in the version that was 
ultimately enacted, to draw back from this direct-successor liability. To 
the contrary, as we have explained in this footnote, the version that was 
ultimately enacted made the rules for individual company responsibility to 
the Combined Fund significantly broader than in the vetoed version. As 
we have also explained in the text, Section 9701(c)(2)(A), properly 
construed, specifically includes the successor in interest of the signatory 
itself among the successors and related persons that are responsible for 
the signatory’s retiree health-benefits liability. See also 26 U.S.C. 
9711(g)(1) (defining “last signatory operator” to include successors for 
purposes of continuing contractual liability to individual employer plans 
and statutory liability to 1992 Plan). 

35 

exemption from responsibility for successors of signatories, 
prospective purchasers could never be sure of their potential 
liability for Combined Fund premiums. As an initial matter, 
however, it is difficult to see what any congressional policy 
(even if such existed, which it did not, see pp. 35-36, infra) of 
promoting the sale of coal companies in the future could have 
to do with determining whether a direct successor might be 
made responsible for the employees of a signatory operator 
that had already gone out of business. The Commissioner’s 
“related party” determinations are based on relationships 
among entities as of July 20, 1992, or earlier—before the 
Coal Act was enacted. See 26 U.S.C. 9701(c)(2)(B). Thus, 
any purchase and sale that were supposedly to be promoted 
by the Coal Act would have already occurred when that 
statute became law. 

Moreover, as Judge Murnaghan pointed out in dissent, the 
majority’s speculation about Congress’s purpose cannot be 
sustained in any event because it “presumes that Congress 
intended to promote the exact practice that necessitated 
legislative action in the first place.” Pet. App. 42a. It was in 
large part signatories’ practice of selling their operations to 
other companies that were not parties to the NBCWAs that 
led to the financial crisis that plagued the pre-Coal Act 
Benefit Plans. 

12 As Judge Murnaghan observed (ibid.), “it is 
unimaginable that Congress could have intended to promote 
the sale of coal companies to successors who would not be 
liable for Fund benefits.” In addition, the court of appeals’ 
suggestion offers no explanation as to why Congress would 

12 Indeed, Congress anticipated and specifically guarded against the 
possibility that signatories might try to dump their employees while the 
Coal Act was being framed. Thus, in Section 9701(c)(2)(B), Congress 
provided that the “related party” determinations should be made as of 
July 20, 1992 (or earlier, if as of that date the signatory operator was no 
longer then in business)—three months before the Act’s date of enact- 
ment, October 24, 1992 (see 106 Stat. 2776). 

36 

not have had the same concern about successors in interest 
of related persons, who indisputably may be liable for 
Combined Fund premiums under the final sentence of 
Section 9701(c)(2)(A). Thus, the speculation by the panel 
majority fails to provide any persuasive basis for the dis- 
tinction, created by the majority’s reading of Section 
9701(c)(2)(A), between direct successors of signatory opera- 
tors and successors of related persons to signatory opera- 
tors. 

3. Background Principles Of Successorship Inform- 
ing The Text 

The Commissioner’s construction of the Coal Act as 
including successors in interest of signatory operators 
among the entities that may be financially responsible for 
the signatory’s employees is supported by the relevant legal 
background against which Congress legislated—in particu- 
lar, the courts’ (including this Court’s) treatment of suc- 
cessorship issues in other labor, employment, and benefits 
statutes. Before Congress enacted the Coal Act in 1992, the 
courts had ruled in a variety of contexts that a corporate 
entity’s liability under a statutory scheme should be attri- 
buted to the entity’s direct successor in interest, even absent 
language specifically providing for such successorship 
liability. 

13 In light of those background principles, Congress 
had every reason to expect that responsibility for a signa- 
tory operator’s employees under the Coal Act would devolve 
on the signatory’s direct successor in interest, if the signa- 
tory itself was defunct and no other related person could be 

13 That background of judicial endorsement of successorship liability is 
also consistent with Congress’s express directive in the Dictionary Act 
that a statutory reference to a company or association “shall be deemed to 
embrace the words ‘successors and assigns of such company or associa- 
tion,’ in like manner as if these last-named words, or words of similar 
import, were expressed.” 1 U.S.C. 5. 

37 

found. Indeed, that would have been the most sensible 
application of the Coal Act even if Congress had not 
addressed successors in Section 9701(c)(2)(A) at all. 

Before 1992, this Court had held in a series of decisions 
that the National Labor Relations Board was authorized to 
hold a successor responsible for labor-law obligations of its 
predecessor. In Fall River Dyeing & Finishing Corp. v. 
NLRB, 482 U.S. 27, 41 (1987), the Court held that a 
successor employer has a continuing duty to bargain with 
the union certified during the predecessor employer’s opera- 
tion of the workplace, where the majority of the successor’s 
employees were employed by the predecessor. In Golden 
State Bottling Co. v. NLRB, 414 U.S. 168, 181-185 (1973), the 
Court similarly ruled that the National Labor Relations Act, 
the NLRB was authorized to impose a reinstatement and 
back pay order as a remedy for an unfair labor practice on 
the bona fide successor to the employer that had engaged in 
the unfair labor practice, and also held (id. at 182 & n.5) that 
such successorship liability was proper even if (as in this 
case) the successor had purchased the assets of the predeces- 
sor, rather than succeeding to it by formal merger or consoli- 
dation. And in John Wiley & Sons, Inc. v. Livingston, 376 
U.S. 543 (1964), the Court held that the successor in that 
case was bound by the duty to arbitrate assumed by its 
predecessor under a collective bargaining agreement. 

14 

14 In two labor-law cases, this Court has held that a successor was not 
bound by obligations of its predecessor. In NLRB v. Burns International 
Security Services, Inc., 406 U.S. 272 (1972), the Court held that, although 
the successor was bound by the statutory obligation under the NLRA to 
bargain in good faith with the union that had recently been recognized in a 
certification election as the representative of the employees of the 
predecessor corporation (id. at 278), the NLRB could not require the 
successor to be bound by the substantive terms of the collective- 
bargaining agreement signed by its predecessor and the union (id. at 281- 
291). In reaching the latter conclusion, the Court stressed that the NLRB 

38 

The lower courts have reached similar conclusions about 
successor responsibility in construing other labor, employ- 
ment, and benefits statutes that are designed to protect the 
interests of employees. In cases involving successor em- 
ployers’ obligations to make payments to multiemployer 
pension plans, the courts have concluded that a successor 
may be held liable for a predecessor’s contribution obliga- 
tions and withdrawal liability to a plan. 

15 Those precedents 
are especially significant here, for Congress specified in the 
Coal Act that the Combined Fund shall be a multiemployer 
plan within the meaning of the Employee Retirement 
Income Security Act of 1974 (ERISA) (see 26 U.S.C. 

had no authority to dictate the substance of a collective-bargaining 
agreement, and that the NLRA deliberately left to the parties the 
freedom to reach contractual arrangements that they believed to be in 
their own best interest. See id. at 283-287. No such overriding statutory 
policy of freedom of contract is implicated in this case, and this case does 
not in any event involve the imposition of contractual responsibility on a 
successor. We do note, however, that in this case, the successor corpora- 
tion voluntarily assumed the contractual obligations of the signatory 
operator, including those under the collective bargaining agreement. J.A. 
23, 26. 

In Howard Johnson Co. v. Detroit Local Joint Executive Board, 417 
U.S. 249 (1974), the Court ruled that a successor employer was not bound 
by the duty to arbitrate assumed by its predecessor. That ruling, how- 
ever, was based on the conclusion that there was no “substantial continu- 
ity of identity in the business enterprise” before and after the change in 
ownership, id. at 263, and thus that the latter owner was not a true 
successor to the former, such that the former’s obligations could be 
transferred to it. That ruling also has no application to this case, which 
does involve a substantial continuity in business operations between the 
predecessor and successor operators. See p. 12, supra. 

15 See Upholsterers’ Int’l Union Pension Fund v. Artistic Furniture of 
Pontiac, 920 F.2d 1323, 1329 (7th Cir. 1990); Hawaii Carpenters Trust 
Funds v. Waiola Carpenter Shop, Inc., 823 F.2d 289, 293-294 (9th Cir. 
1987); see also Chicago Truck Drivers Union (Indep.) Pension Fund v. 
Tasemkin, Inc., 59 F.3d 48, 49 (7th Cir. 1995). 

39 

9702(a)(3)(C)), and that Section 4301 of ERISA, 29 U.S.C. 
1451, which provides for suits to enforce the multiemployer 
liability provisions of ERISA, “shall apply to any claim 
arising out of an obligation to pay an amount required to be 
paid [under the Coal Act] in the same manner as any claim 
arising out of an obligation to pay withdrawal liability” under 
ERISA (see 26 U.S.C. 9721). Courts have also held, in 
various contexts, that a successor corporation is responsible 
for obligations imposed on the predecessor under Title VII 
of the Civil Rights Act of 1964, 

16 42 U.S.C. 1981, 

17 the Age 

Discrimination in Employment Act of 1967, 
18 and the Fair 

19 

Congress is presumed to have been aware of this 
precedent endorsing successor liability when it enacted the 
Coal Act. See United States v. Wells, 519 U.S. 482, 495 
(1997). The most reasonable construction of the Coal Act, 
therefore, is that Congress fully anticipated that direct 
successors in interest of signatory operators could be held 
responsible for the benefits of the signatories’ own em- 
ployees. Indeed, in light of the courts’ similar treatment of 
successorship in other employment-regulation statutes, that 
would have been true even if Congress had not inserted any 

16 See EEOC v. Vucitech, 842 F.2d 936, 944-946 (7th Cir. 1988) 
(successor liable under Title VII for sex discrimination claim against 
predecessor); EEOC v. MacMillan Bloedel Containers, Inc., 503 F.2d 
1086 (6th Cir. 1974) (similar; race discrimination claim under Title VII); 
see also Bates v. Pacific Mar. Ass’n, 744 F.2d 705, 707-709 (9th Cir. 1984) 
(Kennedy, J.) (successor bound by Title VII consent decree to which 
predecessor had agreed). 

17 See Musikiwamba v. ESSI, Inc., 760 F.2d 740, 745-750 (7th Cir. 
1985). 

18 See Criswell v. Delta Air Lines, Inc., 868 F.2d 1093, 1094 (9th Cir.), 
cert. denied, 489 U.S. 1066 (1989). 

19 See Steinbach v. Hubbard, 51 F.3d 843, 845-846 (9th Cir. 1995). 

Labor Standards Act of 1938. 

40 

language in the Coal Act specifically addressing successor 
liability. 

B. Even If The Coal Act Did Not Itself Affirmatively Pro- 
vide That Responsibility For Combined Fund Premi- 
ums May Be Imposed On A Signatory’s Direct 

Successor, The Commissioner’s Determination That 

Successors May Be Responsible For Combined Fund 

Premiums Would Be Reasonable 

Even if the Court were to conclude that the Coal Act does 
not itself affirmatively provide that a signatory’s direct 
successor may be made responsible for signatory’s retired 
employees, it certainly does not expressly exclude that 
possibility. And in light of the considerations discussed 
above—the financial crisis in the Benefit Plans that led to 
passage of the Coal Act, Congress’s intent to place liability 
for retirees’ premiums on entities connected to the signatory 
that employed the miners rather than the public or the 
collective responsibility of all other signatory operators, and 
the background principles of successorship against which 
Congress legislated—it was reasonable for the Commis- 
sioner to conclude that direct successors of a signatory 
operator should be responsible for the operator’s employees, 
when the operator is defunct and no other related person is 
available. 

1. The Commissioner’s Authority Under The Act 

Section 9701(c)(2)(A) states that, “[i]n general,” the 
Commissioner “shall * * * consider[]” to be related persons 
certain companies under common ownership or control with 
the signatory operator. That Section further provides, in the 
closing sentence, that a related person “shall also include” a 
successor in interest to any person “described” in clauses (i) 
through (iii) of that Section. Even if the Court were to 
conclude, contrary to our submission in Point A, that the 
signatory operator itself is not “described” in clauses (i), (ii), 

41 

and (iii) of Section 9701(c)(2)(A), and thus that the direct 
successor of the signatory is not in terms covered by the 
final sentence of Section 9701(c)(2)(A), the text of Section 
9701(c)(2)(A) nonetheless does not preclude the Commis- 
sioner from assigning beneficiaries to such a successor. 
Section 9701(c)(2)(A) expressly sets forth the entities that 
the Commissioner must “include” as related persons under 
successorship principles, but it does not prohibit the Com- 
missioner from “including” other companies that are also 
connected to the signatory operator by successorship. 

Congress’s use of the word “include” in the last sentence 
of Section 9701(c)(2)(A), introducing the principle of 
successorship, signifies that the entities expressly made 
liable in the statute by successorship principles are not 
exclusive, and that the Commissioner has authority to treat 
as successors other companies not expressly set forth in the 
statutory text. The statutory term “include,” when used in a 
definitional provision, is commonly employed in a non- 
exclusive sense, to “import[] a general class, some of whose 
particular instances are those specified in the definition.” 
Helvering v. Morgan’s, Inc., 293 U.S. 121, 125 n.1 (1934). 

20 

20 See also Pfizer Inc. v. Government of India, 434 U.S. 308, 312 n.9 
(1978); FEC v. Massachusetts Citizens for Life, Inc., 769 F.2d 13, 17 (1st 
Cir. 1985), aff’d, 479 U.S. 238 (1986); 2A Norman J. Singer, Statutes and 
Statutory Construction § 47.07, at 231 (rev. ed. 2000) (“It has been said 
‘the word “includes” is usually a term of enlargement, and not of limita- 
tion. . . . It, therefore, conveys the conclusion that there are other items 

includable, though not specifically enumerated. . . .’ ”). The same is true of 

the close cognate term “including.” “[T]he term ‘including’ is not one of 
all-embracing definition, but connotes simply an illustrative application of 
the general principle.” Federal Land Bank of St. Paul v. Bismarck 
Lumber Co., 314 U.S. 95, 100 (1941); see also Puerto Rico Mar. Shipping 
Auth. v. ICC, 645 F.2d 1102, 1112 n.26 (D.C. Cir. 1981); Bryan A. Garner, 
A Dictionary of Modern Legal Usage 431-432 (2d ed. 1995) (noting that 
the term “including” “should not be used to introduce an exhaustive list, 
for it implies that the list is only partial”). 

42 

That inference is particularly strong when a statute uses 
both “includes” and “means” to express the reach of statu- 
tory terms, as the Coal Act does. 

21 Unlike the word 
“includes,” the term “means” generally does imply an ex- 
haustive definition. 

22 Congress’s use of “include[s]” in Sec- 
tion 9701(c)(2)(A) to introduce the principle of successorship, 
in close proximity with its use of “means” elsewhere in the 
Coal Act, indicates that the final sentence of Section 
9701(c)(2)(A) does not exhaust the range of entities that the 
Commissioner may reasonably make responsible for a 
signatory’s employees under successorship principles. 

At the same time, Congress may well have expressly 
provided in Section 9701(c)(2)(A) for liability of successors in 
interest of “related persons” to signatory operators (such as 
successors of corporate affiliates) because (unlike the back- 
ground principle of successorship liability discussed at pp. 
36-39, supra), that more remote related-person and suc- 
cessor liability is not firmly established in the case law. 
Indeed, the Coal Act substantially departed from settled 
common law principles by extending liability for signatory 
operators’ employees to other corporate entities that are 
merely related to the signatory operator through common 

21 The related-person provision of Section 9701(c)(2)(A) is one of 
several statutory terms defined in a statutory section entitled “Definitions 
of general applicability” (26 U.S.C. 9701). Most of the other definitions in 
Section 9701 state what a statutory term “means,” indicating a con- 
gressional intent to set forth in the text of the statute a comprehensive 
definition of the term in question. See, e.g., 26 U.S.C. 9701(c)(1) (stating 
that the term “signatory operator” “means a person which is or was a 
signatory to a coal wage agreement”). 

22 See United States v. New York Tel. Co., 434 U.S. 159, 169 & n.15 
(1977); 2A Norman J. Singer, supra, § 47:07, at 231 (“A term whose 
statutory definition declares what it ‘includes’ is more susceptible to 
extension of meaning by construction than where the definition declares 
what a term ‘means.’ ”). 

43 

ownership or control, without any requirement of a showing 
that the related entity either was directly involved in the 
signatory’s operations or was used to perpetrate fraud. 

23 

Given that statutory departure from common law principles, 
the Commissioner and the courts, without express direction 
from Congress, might well have declined to extend liability 
even further, to successors in interest of entities that were 
merely related persons to the signatory operator. But, as we 
have explained, in light of the state of the law at the time the 
Coal Act was enacted, extending liability to the direct 
successor in interest of the signatory operator itself would 
not have involved an innovation in the law. 

Especially against that background, the fact that the 
statute expressly makes successors to other “related per- 
sons” such as affiliate corporations liable for Combined Fund 
premiums does not give rise to a negative inference that any 
other kind of successor is necessarily shielded from liability. 
While it is often true that “an express statutory require- 
ment” in one provision, “contrasted with statutory silence” 
in another provision, “shows an intent to confine the 
requirement to the specified instance” (Field v. Mans, 516 
U.S. 59, 67 (1995)), that “negative pregnant argument should 
not be elevated to the level of interpretive trump card” 
(ibid.) where, as here, it “suggests results strangely at odds 

23 See generally Fletcher Cyclopedia of the Law of Private Corpora- 
tions § 43, at 711-718 (West 1999) (discussing limited circumstances in 
which separate-entity status of parent and subsidiary or affiliate cor- 
porations will be disregarded, and explaining (at 718) that “there can be no 
piercing of the veil without a showing of improper conduct”); see also 
Cedric Kushner Promotions, Ltd. v. King, No. 00-549 (June 11, 2001), slip 
op. 5 (observing that “incorporation’s basic purpose is to create a distinct 
legal entity, with legal rights, obligations, powers, and privileges” sepa- 
rate from those of its creators); United States v. Bestfoods, 524 U.S. 51, 61- 
62 (1998) (discussing “bedrock principle” that a parent corporation is not 
liable for its subsidiary’s acts). 

44 

with other textual pointers” (id. at 75) and would lead to 
results at which “common sense would balk” (id. at 68). In 
this case, mechanical application of a “negative-pregnant” 
rule would indeed yield strange results, for it would shield 
from liability direct successors in interest of a signatory 
operator, while placing responsibility on statutorily enumer- 
ated businesses (successors of entities that were under 
common control with the signatory) that are more distantly 
related to the signatory operator. The more logical reading 
of the statute is that Congress expressly directed that those 
more distantly related successor companies be included, not 
to foreclose reaching other, more proximate successors, but 
rather to ensure that the Commissioner would apply the sort 
of successorship liability that is well settled for direct 
successors of the predecessor corporation itself to situations 
involving successors of corporations that, though not the 
predecessor itself, are within the family of corporations that 
includes the predecessor. Congress thus simply confirmed 
the Commissioner’s power to apply successorship liability 
broadly in light of the overarching objective of keeping the 
number of unassigned beneficiaries to “an absolute mini- 
mum,” 138 Cong. Rec. at 34,003 (explanation by Sen. Wallop) 
without in any way restricting the Commissioner’s authority 
to rely on background principles to place responsbility on the 
direct successors of the signatory operator itself. 

2. The Reasonableness Of The Commissioner’s 

Determination 

The Commissioner’s determination that a direct successor 
of a signatory operator should be responsible for the Com- 
bined Fund premiums of the signatory’s employees when the 
signatory itself (along with all other related persons) is 
defunct, is reasonable and consistent with the purposes and 
design of the Coal Act. That determination should therefore 
be upheld as a reasonable exercise of the Commissioner’s 

45 

authority to construe and administer the statute. See Chev- 
ron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 
837, 843-844 (1984). 

24 

First, as we have explained (pp. 36-39, supra), Congress 
enacted the Coal Act against a background of decisional law 
that had adopted direct-successorship responsibility in a 
broad variety of contexts in labor, employment, and benefits 
statutes, specifically including employer liability to multi- 
employer ERISA plans. Therefore, even if Congress did not 
expressly speak to the matter of direct successorship in the 
final sentence of Section 9701(c)(2)(A), it is reasonable for 
the Commissioner to apply those well-settled background 
principles in the context of the Coal Act. Nothing in the text 
or design of the Coal Act or Congress’s purposes in enacting 
it suggests that Congress would have intended to exclude 
such direct successors from liability or to prevent the Com- 
missioner from employing those principles—just as in Fall 
River Dyeing, this Court found nothing in the text, design, 
or purposes of the NLRA to prevent the NLRB from 
applying those principles of successorship to hold a successor 
employer to the predecessor’s duty to bargain in good faith 
with a duly certified union that retains a presumption of 
majority support. See 482 U.S. at 40-41; pp. 36-37, supra. 

To the contrary, the crisis in the NBCWA system that led 
Congress to enact the Coal Act was precipitated in large 
part by transactions like the one at issue in this case. The 

24 The Coal Act presents a situation, where Congress has “expect[ed] 
the agency to be able to speak with the force of law when it addresses 
ambiguity in the statute or fills a space in the enacted law,” such that 
Chevron deference is appropriate. See United States v. Mead Corp., No. 
99-1434 (June 18, 2001), slip op. 9. The Commissioner’s assignments of 
beneficiaries are similar to other agency adjudications that have 
previously been granted Chevron deference. See id. at 11 (discussing 
NationsBank of N.C., N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251 
(1995)). 

46 

NBCWAs governing the terms of labor in the coal industry 
created in mine workers an expectation that signatory 
employers would contribute to maintaining health-care bene- 
fits for current retirees, and that the Benefit Plans would 
continue to provide comparable health-care benefits for 
current employees when they in turn retired. Many em- 
ployers, however, dissolved their corporate structures and 
transferred their operating assets to other parties without 
making any further provision for the benefits that would 
eventually be claimed by their workers. As a result, the 
increasingly expensive responsibility for those employers’ 
“orphan” retirees was “dumped” on the fewer and fewer 
mine operators that remained in business and remained 
within the NBCWA structure. See pp. 3-4, supra. The Com- 
missioner’s interpretation of the Coal Act liability to include 
a signatory’s direct successor advances Congress’s objective 
of ensuring that that situation is not reenacted, i.e., that 
responsibility for retirees’ health-care benefits is not foisted 
on other businesses with no connection to the retired 
beneficiaries—or on the public. See pp. 5, 27-28, supra. 

Second, the principles adopted by the Commissioner for 
determining who will be considered a successor in interest to 
a signatory operator are reasonable. The Commissioner’s 
Program Instructions emphasize the importance of the em- 
ployment relationship in assigning statutory liability. Those 
Instructions provide that the signatory’s direct successor in 
interest may be assigned premium obligations only as a “last 
resort,” when the employing signatory is defunct, and when 
no affiliated company under common ownership or control 
with the signatory is in existence. See Supplemental Coal 
Act Review Instructions No. 4, § D (2) and (3) (Pet. App. 
86a-87a). Thus, in a third-tier assignment like this one, the 
signatory’s successor is assigned liability only when the 
employing signatory or an affiliated company cannot be 
found, and when the only alternative to imposing liability on 

47 

the signatory’s successor would be to transfer benefit costs 
to the public fisc (the Abandoned Mine Reclamation Fund) or 
the collective responsibility of all other signatory operators, 
none of which had any relationship with the employees. 

Third, the Commissioner’s guidelines vindicate Congress’s 
objective of ensuring that a signatory and its successor not 
be permitted to use private contractual arrangements to 
shield both parties from any further obligation to fund 
retirees’ benefits. Successorship transactions that purported 
to relieve both the seller and the purchaser from any further 
obligation to fund retirement benefits were cited by the Coal 
Commission as a contributing cause of the financial crisis in 
the UMWA Benefit Plans and the resulting need for 
congressional intervention. See pp. 3-4, supra. The legisla- 
tive history accordingly notes that related-person liability 
was to be construed broadly, so as to reach “successors to 
the collective bargaining agreement obligations of a signa- 
tory operator.” 138 Cong. Rec. at 34,002 (explanation by 
Sen. Wallop). In concluding that the direct successor of a 
defunct signatory may be responsible for the signatory’s 
liabilities under the Act, the Commissioner has construed 
the Act to remedy the very industry practice Congress 
intended to redress. 

Fourth, the successorship principles applied by the Com- 
missioner ensure that liability is confined to instances in 
which the successor bears a close nexus to the employment 
relationships and collective bargaining obligations of a now- 
defunct signatory, and may therefore reasonably be deemed 
the most responsible, extant party. The Commissioner 
assigns beneficiaries to a defunct signatory’s successor only 
where the successor acquires substantial assets through pur- 
chase, merger, or similar transaction, where the successor 
continues running the same operation in the same location 
with little or no interruption in business, and where the 
successor uses many of the same employees who worked for 

48 

the former owner. Pet. App. 86a. The Commissioner thus 
applies to each assignment determination interpretive prin- 
ciples that limit liability to instances in which the successor 
has substantially continued the same business operation with 
most of the same employees as the employing signatory. 

The court of appeals reasoned, however, that even those 
criteria were not sufficient to make a successor the party 
“most responsible” for funding the continued provision of 
retirees’ benefits. The court noted that respondent Jericol 
had never actually employed the pertinent miners, and that 
any benefits conferred by the retired miners through their 
labor ran to their employer, the original Shackleford 
company and those in financial partnership with it, and thus 
did not inure to the benefit of an arm’s-length purchaser of 
assets such as Jericol. Pet. App. 29a. The fact that the 
successor is not the actual employer of particular retired 
beneficiaries at issue, however, cannot be dispositive. While 
the employer may indeed bear a closer nexus to the funding 
problems that beset the industry’s multiemployer benefit 
plans, the Coal Act funding scheme was enacted precisely 
because many such employers were out of business and could 
not be reached. Congress, in authorizing the imposition of 
related-person liability on a broad range of companies other 
than the signatory operator, made clear in the Act itself that 
premiums may be imposed on certain companies even if the 
specific assignee never had a direct and immediate employ- 
ment relationship with the pertinent beneficiaries. 

For all the foregoing reasons, the Commissioner’s deter- 
mination that a direct successor of a signatory operator may 
be made responsible for the Combined Fund premium obli- 
gations attributable to the signatory operator’s employees is 
reasonable and consistent with the statute. The court of 
appeals’ contrary ruling should therefore be set aside. 

49 

CONCLUSION 

The judgment of the court of appeals should be reversed. 

Respectfully submitted. 

THEODORE B. OLSON 
Solicitor General 

STUART E. SCHIFFER 

Acting Assistant Attorney 

General 

EDWIN S. KNEEDLER 

Deputy Solicitor General 

PAUL R.Q. WOLFSON 

Assistant to the Solicitor 

General 

MARK B. STERN 
JEFFREY CLAIR 

Attorneys 

JUNE 2001 

APPENDIX 

Section 9701(c) of Title 26, United States Code, provides 
in pertinent part: 

(c) Terms relating to operators 

For purposes of this section–- 
* * * * * 

(2) Related persons 

(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 [26 U.S.C. 
52(a)]) which includes such signatory operator; 

(ii) a trade or business which is under 
common control (as determined under [26 U.S.C. 
52(b)]) with such signatory operator; or 

(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). 

(1a)