United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 5, 1998 Decided September 18, 1998
No. 97-5132
Association of Bituminous Contractors, Inc.,
Appellant
v.
Kenneth S. Apfel,
Commissioner of the Social Security Administration, et al.,
Appellees
Appeal from the United States District Court
for the District of Columbia
(93cv2304)
William H. Howe argued the cause for appellant, with
whom Richard A. Steyer and Mary Lou Smith were on the
briefs.
Sushma Soni, Attorney, United States Department of Jus-
tice, argued the cause for the federal appellee, with whom,
Frank W. Hunger, Assistant Attorney General, Mary Lou
Leary, United States Attorney at the time the brief was filed,
and Douglas N. Letter, Litigation Counsel, were on the brief.
Peter Buscemi argued the cause for appellees United Mine
Workers of America, et al., with whom David W. Allen and
John R. Mooney were on the brief.
Before: Silberman, Tatel, and Garland, Circuit Judges.
Opinion for the Court filed by Circuit Judge Silberman.
Silberman, Circuit Judge: Appellant Association of Bitumi-
nous Contractors contends that because its members are not
in the "coal industry" as that term is used in the Coal
Industry Retiree Health Benefit Act of 1992, the Commission-
er of the Social Security Administration may not assign
responsibility for coal industry retirees to its member compa-
nies. It further claims that "as applied," the Act violates its
members' Fifth Amendment due process rights. We affirm
the district court's grant of summary judgment in favor of the
Commissioner, but on somewhat different grounds than those
on which it relied.
I.
The Association of Bituminous Contractors (Association) is
a multi-employer association of contractors that specialize in
coal mine construction and related projects.1 The Association
was formed in 1968 for the purpose of negotiating and
entering into collective bargaining agreements with the Unit-
ed Mine Workers of America (mine workers union). Its first
agreement was known as the "Construction Work Addendum
to the National Bituminous Coal Wage Agreement of 1968";
all subsequent agreements have borne the "National Coal
__________
1 The contractors' coal construction work includes subsurface
construction of shafts, slopes, and tunnels, surface construction of
structures, such as roads, preparation plants, storage silos, office
buildings, and bathhouses, and some electrical work. Appellant
acknowledges that "[i]t is that very focus which defines the associa-
tion" but claims its members sometimes work for non-coal industrial
customers as well.
Mine Construction Agreement" label (Construction Agree-
ments). The Bituminous Contractors' coal mining producers
have their own collective bargaining association, the Bitumi-
nous Coal Operators' Association, which has negotiated a
separate series of Coal Wage Agreements (National Bitumi-
nous Coal Wage Agreements) with the mine workers union.
From the Association's inception until mid-1978, employees
and retirees of its member companies were eligible to receive
benefits from plans established pursuant to the National
Bituminous Coal Wage Agreements, including the Welfare
and Retirement Fund of 1950, the 1950 Benefit Plan, and the
1974 Benefit Plan. The Association's members never contrib-
uted to the 1950 Fund or the 1950 Plan, but pursuant to the
1974 and 1978 Construction Agreements, the Association's
members were required to contribute to the 1974 Plan. That
obligation ended on May 31, 1978, when the Association
agreed to transfer all 1974 Plan beneficiaries whose last
employment was with a construction contractor that was a
signatory to the 1974 Construction Agreement to the newly
established Retired Construction Workers' Benefit Trust (the
Construction Trust). Those construction retirees who were
eligible to draw benefits from the 1950 Plan (workers who
retired before 1976), however, were left behind; 2 those retir-
ees' benefits were funded by signatories to the National
Bituminous Coal Wage Agreements--the coal producers--
and not the Association's member companies even after 1978.
By the late 1980s, the continuing viability of the 1950 and
1974 Plans was in serious doubt, and this led to labor unrest.
The various causes of the health benefit funding crisis which
precipitated the Coal Act have been described before, see,
e.g., Carbon Fuel Co. v. USX Corp., 100 F.3d 1124, 1127-29
(4th Cir. 1996); Davon, Inc. v. Shalala, 75 F.3d 1114, 1117-20
(7th Cir. 1996); The Secretary of Labor's Advisory Commis-
sion on United Mine Workers of America Retiree Health
Benefits, Coal Commission Report: A Report to the Secre-
tary of Labor and the American People (1990), and we see no
__________
2 The Association estimated that there were 130 such eligible 1950
Plan beneficiaries as of 1993.
need to repeat them here. Suffice it to say that the Congress
found it "necessary to modify the current private health care
benefit plan structure for retirees in the coal industry to
identify persons most responsible for plan liabilities in order
to stabilize plan funding and allow for the provision of health
care benefits to such retirees." Coal Industry Retiree Health
Benefit Act of 1992, Pub. L. No. 102-486, s 19142(a)(2), 106
Stat. 3036, 3037 (1992) (codified at 26 U.S.C. s 9701 note
(1994)).
The Coal Act was intended to remedy problems with the
provision and funding of health care benefits to retirees in the
coal industry. The Act established the Combined Benefit
Fund as a new source of benefits for coal industry retiree
beneficiaries who were eligible under the 1950 and 1974
Plans, see 26 U.S.C. s 9703(f), and a Board of Trustees to
administer the Combined Funds, see 26 U.S.C. s 9702. It
also directed that the 1950 and 1974 Plans be merged into the
Combined Fund, see 26 U.S.C. s 9702(a)(2), and further
required that monies be transferred to the Combined Fund
from the 1950 Plan and certain other funds, see 26 U.S.C.
s 9705; 30 U.S.C. s 1232(h) (1994). The Combined Fund is
to be financed on an ongoing basis by annual premium
payments from "assigned operator[s]." 26 U.S.C. s 9704(a).
The Act defines "assigned operator[s]" as "the signatory
operator[s] to which liability ... is assigned under section
9706." 26 U.S.C. s 9701(c)(5). Section 9706 directs the
Commissioner of the Social Security Administration to "as-
sign each [eligible] coal industry retiree ... to a signatory
operator which ... remains in business." 26 U.S.C.
s 9706(a). It also binds the Commissioner to a particular
assignment scheme. Beneficiaries are to be assigned to their
most recent employer of at least two years, so long as that
employer was a signatory to a 1978 or later "coal wage
agreement"; if none, to the most recent 1978 or subsequent
agreement signatory employer, without regard to the term of
employment; and last, to the pre-1978 signatory operator
still in business which employed the retiree for the longest
period. 26 U.S.C. s 9706(a)(1)-(3). All assigned operators
must be signatory operators, which the statute defines as
"person[s] which [are] or [were] signator[ies] to a coal wage
agreement." 26 U.S.C. s 9701(c)(1). "Coal wage agree-
ment," in turn, is defined as the National Bituminous Coal
Wage Agreement, 26 U.S.C. s 9701(b)(1)(A), or "any other
agreement entered into between an employer in the coal
industry and the United Mine Workers of America that
required or requires ... contributions to the 1950 [ ] Plan or
the 1974 [ ] Plan, or any predecessor thereof," 26 U.S.C.
s 9701(b)(1)(B)(ii).
In October 1993, the Social Security Administration began
assigning coal industry retiree beneficiaries to the Associa-
tion's members. Soon after, the Combined Fund Trustees
sought to collect premium payments from the Association's
members on the basis of the Commissioner's assignments.
Within a month of the Commissioner's action, the Association
brought suit in the district court seeking a declaration that
the Act did not apply to its members and, in the alternative,
that the Act as applied to its members violated the substan-
tive due process component of the Fifth Amendment to the
United States Constitution. The gravamen of appellant's
statutory argument, which we describe more completely be-
low, was that the coal contractors were not "employer[s] in
the coal industry," as section 9701 of the Coal Act requires,
but were rather employers in the construction industry. The
district court, however, thought it clear that "coal industry"
included coal contractors and implied that the Coal Act
required the Commissioner to assign beneficiaries to the
Association's member companies.
Appellant's "as applied" constitutional challenge is prem-
ised on its view that its members had made a clean break
from the Benefit Plans in 1978, when the Construction Trust,
which remains viable today, was established. The Association
claims that its members had done all the mine workers union
asked it to do by transferring all beneficiaries who practicably
could be identified with its member companies from the 1974
Plan to the Construction Trust. To require its members to
contribute to the Combined Fund would force them to solve
problems that they were not responsible for creating. The
district court, however, concluded that, because appellant's
member companies participated in and benefitted from the
Benefit Plans, for a time without contributing to their fund-
ing, they could be made part of the solution to the problem of
their underfunding without offending the Constitution. For
these reasons, the district court entered summary judgment
in favor of the Commissioner and the Combined Fund Trust-
ees.
II.
The Association renews its statutory and constitutional
arguments on appeal. The Association claims that the Coal
Act unambiguously excludes coal construction companies
from the term "coal industry." And, it claims that even if the
statute is ambiguous, the Commissioner's interpretation of
the Coal Act is not entitled to deference because Congress
has not delegated him policymaking authority and because his
interpretation was not clearly set forth prior to this litigation.
The Association also contends that the Commissioner's inter-
pretation is not reasonable, and that the Commissioner arbi-
trarily and capriciously relied on lists provided by the Com-
bined Fund Trustees in making his assignments.
We begin with appellant's primary claim, that its members
cannot be "assigned operators" by the Coal Act's own terms.
The argument flows as follows: Section 9701(c)(5) provides
that assigned operators must be signatory operators, which
section 9701(c)(1) defines as current or former signatories to
a coal wage agreement. Section 9701(b)(1)(A) identifies the
National Bituminous Coal Wage Agreement as a "coal wage
agreement," but neither the Association nor its members are
parties to that Agreement, see s 9701(b)(3) (defining the
National Bituminous Coal Wage Agreement as a collective
bargaining agreement negotiated by the coal operators asso-
ciation and the mine workers union), a claim appellees do not
dispute. To be sure, section 9701(b)(1)(B) provides that "any
other agreement entered into between an employer in the
coal industry and the United Mine Workers of America that
required or requires ... the provision of health benefits to
retirees of such employer ... or contributions to the 1950 [ ]
Plan or the 1974 [ ] Plan, or any predecessor thereof" may
also be a "coal wage agreement." But because the Associa-
tion's members are employers in the construction industry,
not the coal industry, the Association contends that it escapes
section 97101(b)(1)(B)'s coverage as well. (Appellant does not
dispute that its members were required to make contributions
to the 1974 Plan by the 1974 Construction Agreement, and for
a few additional months by the 1978 Construction Agree-
ment.)
The Association's argument, in essence, turns on the proper
construction of the phrase "employer in the coal industry."
Appellant attributes great significance to the omission of any
reference to coal construction, the Association, or the Con-
struction Agreements from the text of the Act. Congressional
silence, appellant argues, is pregnant. Had Congress wanted
to create payment liability for construction companies under
the Act, it explicitly would have said so. The Association
contends that the "coal industry" language has a "restrictive"
meaning designed only to ensure that the Coal Act extended
to all coal production employers. (Congress, it is claimed,
was aware that some coal production companies had entered
into specialized agreements with the mine workers union and
therefore were not signatories to the National Bituminous
Coal Wage Agreement.) The Association buttresses its tex-
tual argument with the legislative history of the Coal Act,
which the Association maintains provides clear evidence that
Congress never contemplated including coal construction
companies within the Coal Act's reach. And, the Association
maintains that Congress could not possibly have thought the
Association's members to be a cause of the underfunding
problem, and accordingly could not have intended to make its
members part of the solution, because at least ten years
before legislation was even proposed, the Association's mem-
bers had established the Construction Trust, through which
they claim to have taken on all of the liabilities that they
were then asked to assume from the National Bituminous
Coal Wage Agreements. Appellees, on the other hand, argue
from the same statutory text, legislative history, and legisla-
tive purpose that Congress intended the term "coal industry"
to include coal construction companies such as the Associa-
tion's members.
In determining whether appellant's or the Commissioner's
interpretation of the statutory provision should control, we
apply the familiar two-step analysis of Chevron U.S.A. Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
We ask first whether the statute has a clear meaning, and
begin that inquiry with the text. Unfortunately for appellant,
the Coal Act never defines the phrase "employer in the coal
industry." The Association's claim that the omission of any
reference to construction or related terms makes it clear that
Congress did not consider its members to be part of the coal
industry is rather far-fetched. Granted, Congress in its
"Findings and Declaration of Policy" referred only to compa-
nies that produce, transport, or use coal and made no mention
of coal construction companies. See 26 U.S.C. s 9701. But
since the congressional finding in no way purports to define
"coal industry," we do not see how it, standing alone, can
supply a clear meaning of the term. Similarly, the notion
that "coal industry" should be read to exclude coal construc-
tion companies because Congress' stated policy was to save
the benefit fund agreements to which the Association's mem-
bers were not signatories is a complete non-starter. That
coal construction companies were not signatories to the
agreements creating the jeopardized funds does not mean
that Congress could not have intended to make them part of
the solution (especially when those companies were required
to contribute to those funds pursuant to separate agree-
ments). Nor does appellant direct us to anything in the
legislative history that supports its explanation for why Con-
gress used the term "coal industry."
We do not think that appellees, for their part, have been
able to show that the term "coal industry" clearly includes
coal construction companies either. Many of the Trustee-
appellee's and the federal appellee's arguments are nothing
but mirror images of appellant's arguments. Both sides labor
ineffectually to place a clear meaning on statutory silence.
Nor do appellees advance their case by asserting that coal
construction must be included within "coal industry" because
construction is an indispensable part of the mining and pro-
duction of coal. After all, as appellant rightly points out,
under that logic construction companies would be a part of
every industry for which they construct. The district court
thought to resolve the statutory construction issue on the
basis of a description of the Association in the Keystone
Manual. But it is Congress' intent, not the Keystone Manu-
al's, with which we are concerned. And although the district
court may well be right that it is "disingenuous" for the
Association to argue that its members are not part of the coal
industry in light of its apparent self-description to that effect
in the minutes of a committee meeting, we are aware of no
doctrine of statutory interpretation estoppel that would pre-
clude the Association from arguing differently before this
court. Again, the relevant question is Congress' intent, not
the Association's pattern of consistency in self-description.
We think the only thing "clear" about the term "coal
industry" is that the term is ambiguous with respect to coal
construction companies. And when a statute that does not
have a clear meaning is entrusted to agency administration,
we defer to the agency's interpretation of that statute, if
reasonable, under the second step of our Chevron analysis.
Chevron, 467 U.S. at 843. The Association would have us
refuse to defer because it contends that Congress did not
delegate to the Commissioner the authority to interpret the
term "coal industry." That term is used (although not de-
fined) in Subchapter A of the Coal Act ("Definitions of
General Applicability"), and Congress, it is asserted, did not
delegate to the Commissioner any authority over that Sub-
chapter. But, as appellant concedes, the Commissioner is
explicitly charged with assigning eligible beneficiaries to sig-
natory operators by section 9706 of Subchapter B. Implicit
in that direction is a delegation to the Commissioner to
determine who are the signatory operators, and the Commis-
sioner must interpret the statute--including definitions of
general applicability--to perform that task. See Chevron,
467 U.S. at 843-44 (noting that deference is appropriate as to
both express and implied delegations); Kansas City v. De-
partment of Housing & Urban Dev., 923 F.2d 188, 191-92
(D.C. Cir. 1991) (same). After all, the definitions in question
are definitions of "general applicability" that explicitly extend
to the entire chapter--not, as appellant implies, to Subchap-
ter A alone.3
The Association also claims that the Commissioner's inter-
pretation is not entitled to deference because it was not
promulgated in a rule issued pursuant to notice and comment,
and because the Administration's internal guidelines do not
consistently define the term to reach coal contractors. But
an agency need not promulgate a legislative rule setting forth
its interpretation of a statutory term for that interpretation to
be entitled to deference--the Supreme Court has said that it
is appropriate to defer to an agency's interpretation so long
as it represents the agency's "fair and considered judgment
on the matter." Auer v. Robbins, 117 S. Ct. 905, 912 (1997).
As for the internal guidelines, we think it plain that they were
not agency utterances "that can be thought of as an authori-
tative departmental position." Paralyzed Veterans of Am. v.
D.C. Arena L.P., 117 F.3d 579, 587 (D.C. Cir. 1997) (quoting
Auer), cert. denied sub nom. Pollin v. Paralyzed Veterans of
Am., 118 S. Ct. 1184 (1998); cf. Appalachian Regional
Healthcare v. Shalala, 131 F.3d 1050, 1053 n.4 (D.C. Cir.
1997) (a statement by counsel in the course of an internal
quasi-adjudicatory proceeding was not a "fair and considered
judgment"). The truth of the matter is that the Commission-
er had not, prior to this litigation, carefully explained why he
believes that coal contractors may be assigned responsibility
under the statute. Yet the Commissioner has consistently
made assignments to coal construction companies under the
Coal Act, and in doing so must have interpreted the Coal Act
to allow that. This litigation offers the Commissioner his
first opportunity to explain his decision. We defer to coun-
__________
3 Appellant cites our decision in Department of Treasury v.
FLRA, 837 F.2d 1163 (D.C. Cir. 1988), as authority for its assertion
that an agency's interpretation is not entitled to deference if it is an
interpretation of a "statutory provision not within the agency's
enabling statute." We do not think that Subchapter A can be
viewed as such a discrete statute, especially since Subchapter A
explicitly references the entire Act.
sel's explanation because it represents the agency's "fair and
considered judgment." Auer, 117 S. Ct. at 912; see also Tax
Analysts v. IRS, 117 F.3d 607, 613 (D.C. Cir. 1997) (deferring
to appellate counsel's explanation when letters of the IRS's
Assistant Chief Counsel denying the appellant's FOIA admin-
istrative appeals were conclusory); Church of Scientology v.
IRS, 792 F.2d 153, 164-67 (D.C. Cir. 1986) (en banc) (Silber-
man, J., concurring). Nor is counsel's explanation the kind of
post-hoc rationalization to which we do not defer. See, e.g.,
City of Kansas City, Mo. v. HUD, 923 F.2d 188, 192 (D.C.
Cir. 1991). The explanation offered by counsel would seem to
be the same rationale the Commissioner implicitly adopted
when making prior assignments to coal construction compa-
nies. It is not offered as an alternative or supplemental
explanation for an agency action, such as an adjudication,
previously justified on other grounds. See SEC v. Chenery
Corp., 318 U.S. 80, 87 (1943).
Appellant understandably makes many of the same argu-
ments it advanced in contending that the statute had a clear
meaning in arguing that the Commissioner's interpretation is
unreasonable. But we are not persuaded. The Administra-
tion's counsel explains that the Commissioner interpreted
"coal industry" to cover coal contractors because the Associa-
tion's members specialize in coal mine construction, which
"directly makes coal mining possible," and because some
construction retirees were left in the 1950 Plan after the
Construction Trust was established. These notions seem
consistent with the statutory structure. Moreover, as the
Trustees' counsel points out, the Association does not bargain
with labor groups other than the mine workers union. In
addition, we note that the statutorily mandated assignment
preference scheme set forth in section 9706(a) ensures that
the construction contractors are assigned only those retirees
whom they actually employed. If an assignee disputes the
Commissioner's determination, an administrative review pro-
cess is available by statute and provided for in the Commis-
sioner's regulations. See 26 U.S.C. s 9706(f); 20 C.F.R.
s 422.605 (1998). We think that procedure further under-
scores the reasonableness of the Commissioner's inclusion of
coal construction companies within the "coal industry" in that
it protects the Association's members against erroneous as-
signment of liability for retirees whom they never employed.4
III.
We turn to appellant's "as applied" constitutional challenge.
Appellant argued in its initial brief that the imposition of
retroactive liability on its members under the Coal Act vio-
lates their Fifth Amendment substantive due process rights
because they have assumed all the liabilities from the benefit
plans that they were asked to assume in 1978, and because
they continue to provide the health care benefits of the
agreed-upon beneficiaries through the Construction Trust
without event. The Supreme Court last Term considered
whether the application of the contribution provision of the
Coal Act to a company that had sold its coal producing
__________
4 Appellant's final attack on the reasonableness of the Commis-
sioner's assignments to its members is that he arbitrarily relied
upon lists provided by the Trustees, without critical examination of
whether a company on that list was actually in the "coal industry."
That claim is contradicted by the record. A declaration by the
Deputy Associate Commissioner for Retirement and Survivors In-
surance, Supplemental Security Income Programs, states that the
Commissioner used the Trustees' lists, but also used "other infor-
mation available to SSA including: employer wage reports; coal
industry sources ...; the Keystone Coal Industry Manual; coal
company filings in court; and statements at a Congressional Hear-
ing on the Coal Act." That declaration also asserts that the Social
Security Administration "searched its employment records back to
1946," extracted earning reports "from microfilm and electronic
records," and "checked its records of employers who had filed Form
W-2 wage reports for the past two years." The Association pres-
ents no evidence to back its claim that the Commissioner blindly
and inappropriately relied upon the Trustees' lists. Be that as it
may, the Coal Act seems to contemplate a cooperative assignment
process, directing that the Trustees "shall fully and promptly
cooperate with the Commissioner in furnishing, or assisting the
Commissioner to obtain, any information the Commissioner needs
to carry out the Commissioner's responsibilities...." 26 U.S.C.
s 9706(d)(3) (1994).
business in 1965 violated the Due Process and Takings Claus-
es of the Constitution. See Eastern Enters. v. Apfel, 118 S.
Ct. 2131 (1998). Four Justices (O'Connor, joined by Chief
Justice Rehnquist, and Justices Scalia and Thomas) thought
that the Coal Act as applied to Eastern Enterprises effected
an unconstitutional taking, but expressly declined to decide
Eastern's due process claim. See id. at 2137-53. Justice
Kennedy's concurrence in the judgment provided the fifth
vote to hold the Coal Act unconstitutional, but he thought
that the Act violated due process, and dissented from the
plurality's takings analysis. See id. at 2154-60 (Kennedy, J.,
concurring in the judgment and dissenting in part) (reasoning
that general imposition of liability unrelated to a specific
interest in property cannot constitute a taking). The four
remaining dissenting Justices (Breyer, joined by Stevens,
Souter, and Ginsburg) agreed with Justice Kennedy's rejec-
tion of the plurality's takings analysis, but concluded that the
Coal Act as applied to Eastern Enterprises satisfied substan-
tive due process. See id. at 2161-68 (Breyer, J., dissenting).
At the parties' request, we ordered supplemental briefing on
the Association's substantive due process challenge in light of
the Eastern Enterprises decision.
Appellant argues in its supplemental brief that Eastern
Enterprises "compels" the conclusion that the Coal Act is
unconstitutional as applied to its member companies. It
contends that Eastern Enterprises stands for the broad prop-
osition that the Coal Act is unconstitutional in situations
where it imposes severe retroactive liability on a limited class
of parties that could not have anticipated the liability, and the
extent of that liability is substantially disproportionate to the
parties' experience. Its members, we are told, are in precise-
ly such a situation; it points to the severity of the Coal Act's
economic impact on its members relative to the extent of their
participation in the benefit plans, the alleged impossibility
that its members might have expected the kind of liability
that the Coal Act eventually imposed, and the retroactive
(and thus fundamentally unfair) nature of the governmental
action involved.
We begin our analysis with a bedrock principle of constitu-
tional adjudication--a principle which appellant either does
not accept or is attempting to obscure. The Constitution
prohibits certain governmental action through specific claus-
es--clauses that, with Supreme Court interpretation, have
given rise to various and sometimes rather complex doctrines
of constitutional law. Courts do not adjudicate generalized
claims of unconstitutionality, but rather resolve constitutional
questions by applying these settled doctrines to specific con-
stitutional claims asserted under specific constitutional claus-
es. Appellant's supplemental brief ignores this notion and
asserts that, because the Coal Act was held "unconstitutional"
in Eastern Enterprises, it must be "unconstitutional" here
too. Seemingly abandoning its prior due process challenge to
the statute, appellant puts forth an unidentified constitutional
claim of right, supported by an analysis that, so far as we can
tell, tracks the three-factor "test" ordinarily used to evaluate
challenges under the Takings Clause of the Fifth Amend-
ment. See Eastern Enter., 118 S. Ct. at 2148, 2149-53
(analyzing the Coal Act pursuant to the three factors--
economic impact, interference with investment-backed expec-
tations, and the character of the governmental action--set
forth in Connolly v. Pension Benefit Guar. Corp., 475 U.S.
211 (1986)). But the Association has never asserted a claim
under the Takings Clause in this litigation, either in the
district court or on appeal. Even if appellant had attempted,
in light of Eastern Enterprises, to switch strategies and
specifically to assert for the first time in its supplemental
brief that the Coal Act's assignment provision constitutes an
unconstitutional taking of its members' property, we would in
all likelihood have deemed the claim waived and declined to
address it. See Singleton v. Wulff, 428 U.S. 106, 120 (1976).5
__________
5 Nor would appellant have been able to come within the super-
vening-change-in-law exception to our ordinary waiver principle.
See, e.g., Roosevelt v. E.I. Du Pont de Nemours, 958 F.2d 416, 419
(D.C. Cir. 1992). The Eastern Enterprises plurality applied settled
takings principles to the petitioner's challenge, and did not purport
to alter the state of the law in any way. The only conceivable
change in takings jurisprudence brought about by Eastern Enter-
prises is that the five dissenting justices (Justice Kennedy dissented
from the takings portion of the plurality opinion) apparently believe
We certainly will not apply a takings analysis to resolve a due
process challenge or engage in a free-wheeling, non-textual
examination of the "constitutionality" of the Coal Act.
Nevertheless, we are still obliged to determine just how the
decision in Eastern Enterprises affects the one and only
constitutional question properly before this court: namely,
whether the Coal Act as applied to the Association's members
violates the Due Process Clause. But far from controlling
the due process challenge in this case, as appellant contends,
the plurality opinion in Eastern Enterprises expressly de-
clined to rule on the petitioner's due process challenge,
reasoning that resolution of the takings question made such a
ruling unnecessary. See Eastern Enters., 118 S. Ct. at 2153.
And although the plurality noted that "analysis of legislation
under the Takings and Due Process Clauses is correlated to
some extent," id. (citing Connolly, 475 U.S. at 223), a correla-
tion is not an equivalency. The plurality's conclusion that the
Coal Act effected an unconstitutional taking therefore does
not answer the question whether the Act, as applied in
analogous circumstances, also violates the Due Process
Clause.
We also agree with the government that Justice Kennedy's
concurrence in the judgment is of no help in appellant's
__________
that the imposition of liability alone is not a taking of property
under the Fifth Amendment. See Eastern Enters., 118 S. Ct. at
2154-58 (Kennedy, J., concurring in the judgment and dissenting in
part); id. at 2161-63 (Breyer, J., dissenting). But even if this
development constitutes a "change" in the law (which we doubt
given that dissenting votes have no precedential authority), it would
not be a change that could possibly explain appellant's failure to
raise a takings claim below. After all, Eastern Enterprises at most
renders takings claims less attractive to litigants than they once
were because of the possibility that the five dissenters on the
takings issue could form a majority in a later case. In addition, so
obvious was the applicability of the Takings Clause to appellant's
case prior to Eastern Enterprises that the three other plaintiffs
with whom the appellant's case was consolidated below each assert-
ed a takings claim; appellant alone rested its constitutional case
exclusively on the Due Process Clause.
efforts to cobble together a due process holding from Eastern
Enterprises ' fragmented parts. We have previously held
that the rule of Marks v. United States, 430 U.S. 188 (1977),
under which the opinion of the Justices concurring in the
judgment on the "narrowest grounds" is to be regarded as
the Court's holding, does not apply unless the narrowest
opinion represents a "common denominator of the Court's
reasoning" and "embod[ies] a position implicitly approved by
at least five Justices who support the judgment." King v.
Palmer, 950 F.2d 771, 781 (D.C. Cir. 1991). Justice Kenne-
dy's due process analysis clearly does not meet this standard
because he alone was willing to invalidate economic legislation
on the ground that it violated the Due Process Clause. And,
as should be obvious, Justice Kennedy's due process reason-
ing can in no sense be thought a logical subset of the
plurality's takings analysis. In short, the government is
correct in stating that the only binding aspect of Eastern
Enterprises is its specific result--holding the Coal Act uncon-
stitutional as applied to Eastern Enterprises.
Thus, our basic inquiry in resolving appellant's due process
challenge remains the same after Eastern Enterprises as it
was before: 6 namely, we accord economic legislation a "pre-
sumption of constitutionality" that can be overcome only if the
challenger establishes that the legislature acted in an arbi-
trary and irrational way. Usery v. Turner Elkhorn Mining
Co., 428 U.S. 1, 15 (1976). The challenged legislation, more-
over, is to be upheld if there is any conceivable rational basis
supporting it, whether or not the Congress had that particu-
lar basis in mind when the legislation was enacted. See FCC
v. Beach Communications, 508 U.S. 307, 315 (1993). Even
legislation with a retroactive effect may satisfy due process if
the "retroactive application of the legislation is itself justified
by a rational legislative purpose." Pension Benefit Guar.
Corp. v. R.A. Gray & Co., 467 U.S. 717, 729-30 (1984). We
think that the Coal Act, as applied to the Association's
members, passes this test for many of the same reasons that
__________
6 That is not to say that Eastern Enterprises is irrelevant to this
case. We discuss its relevance below.
our sister circuits have articulated in upholding the Coal Act
against "as applied" due process challenges raised by various
other "coal industry" members. See, e.g., Eastern Enters. v.
Chater, 110 F.3d 150 (1st Cir. 1997), rev'd on other grounds,
118 S. Ct. 2131 (1998); Holland v. Keenan Trucking Co., 102
F.3d 736 (4th Cir. 1996); Lindsey Coal Mining Co. v. Chater,
90 F.3d 688 (3d Cir. 1996); In re Blue Diamond Coal Co., 79
F.3d 516 (6th Cir. 1996); Davon, Inc. v. Shalala, 75 F.3d 1114
(7th Cir. 1996); In re Chateaugay Corp., 53 F.3d 478 (2d Cir.
1995). Congress enacted the Coal Act to remedy the health
care benefit funding crisis with respect to coal industry
retirees, a step it thought necessary given its finding that coal
production was important to the national economic interest
and that the collapse of the retirement benefit system could
jeopardize the stability of interstate commerce. Especially in
light of the labor unrest that predated the legislation's enact-
ment, we do not doubt that the Congress had a legitimate
purpose in passing the Coal Act.
Nor do we think that the Congress employed an irrational
means to achieve its purpose. It sought to have those
responsible for plan liabilities contribute to ensuring that
health benefits would be provided to retirees. Appellant does
not dispute that some construction retirees were not trans-
ferred to the Construction Trust in 1978; it argues only that
it is significant that its members are providing health benefits
for all agreed-upon (the vast majority of their) retirees
through the Construction Trust. Appellant explains that to
the extent that it left liabilities in the 1974 Plan, it was
because a different method of identifying beneficiaries--last
employer prior to retirement, not the Coal Act's statutory
preference scheme--was used in 1978 to move retirees from
the 1974 Plan to the Construction Trust. Whatever the
reason, the truth is that there are coal construction retirees
who are Combined Fund beneficiaries, and it is rational for
Congress to expect the Association's members to help fund
their retirement benefits in light of the declared purpose to
"identify persons most responsible for plan liabilities." The
Association, as it must, concedes that construction retirees
benefitted from the 1950 Plan, and the 1950 Fund before it,
without any contribution from its members. Appellant ex-
plains that its members never assumed an obligation to
contribute to the 1950 Plan and were never asked to remove
beneficiaries from the 1950 Plan when the Construction Trust
was established. But it is surely rational for the Congress to
expect that the member companies' failure to contribute while
their retirees received benefits contributed to the underfund-
ing crisis that the Plans faced in the late 1980s. Although the
coal contractors may not have been the dominant cause of
that underfunding, legislation need not burden the most
responsible party to survive rational basis review. See Hol-
land, 102 F.3d at 742.7
Even though Eastern Enterprises does not control the
result in this case, it is surely relevant to our analysis that
both the plurality opinion and Justice Kennedy's concurrence
focused on the lack of proportionality between the Coal Act's
imposition of retroactive liability and the amount of Eastern's
participation in prior coal benefit agreements.8 Because
__________
7 Nor do we find it significant, for due process purposes, that the
legislative history does not mention the Association's participation
in the benefit plans or the creation of the Construction Trust as a
cause of the financial difficulties of the 1950 and 1974 Plans. After
all, the government can create a rational explanation ex post to
support a statute attacked on due process grounds. That being so,
we can hardly require a showing that Congress specifically identi-
fied the Association's members as a cause of the problem before it
passed the Coal Act in order to sustain the Act under rational basis
review.
8 It is true that the plurality focused on the lack of proportionality
as part of its takings analysis. But the prior cases on which the
plurality relied for its takings analysis also suggest that the Due
Process Clause imposes some minimal requirement of proportionali-
ty between an employer's actual conduct and its ultimate liability
under a multi-employer benefit plan. See Concrete Pipe & Prods.
of Calif., Inc. v. Construction Laborers Pension Trust, 508 U.S. 602,
637-39 (1993); R.A. Gray, 467 U.S. at 733. And although the
plurality did not reach the question whether the identified lack of
proportionality violated due process, that was precisely the ground
Eastern left the coal industry in 1965, the plurality and
Justice Kennedy concluded that the company could not have
been expected to anticipate the obligation to fund lifetime
retiree benefits that the Coal Act eventually imposed. In
their view, an industry commitment to provide lifetime bene-
fits was not evident until the 1974 and 1978 agreements--
agreements which Eastern did not participate in negotiating
and which created benefit funds to which Eastern was not
required to contribute.
If the Association's members were in substantially similar
factual circumstances to Eastern, we would be compelled to
resolve the difficult question, left open by the Eastern Enter-
prises plurality, whether the quality and quantity of retroac-
tive liability identified in Eastern Enterprises also violates
the Due Process Clause. The Association's members, howev-
er, are not in substantially similar factual circumstances to
Eastern. The crucial fact upon which the Eastern Enter-
prises plurality and Justice Kennedy relied in concluding that
Eastern's Coal Act liability was disproportionate to its past
conduct and thus unfairly retroactive--namely, Eastern's de-
parture from the coal industry in 1965--is absent in this
case. See Eastern Enters., 118 S. Ct. at 2151.9 The Associa-
tion's members are still active members of the "coal indus-
try" (under the Commissioner's reasonable interpretation of
that term). More to the point, the 1974 and 1978 Construc-
tion Agreements incorporated by reference the National Bi-
tuminous Coal Wage Agreements of the same years. The
plurality in Eastern Enterprises indicated that the latter
agreements, which greatly expanded benefit provisions and
__________
upon which Justice Kennedy rested his concurrence in the judg-
ment.
9 We agree with appellant, however, that, in light of the Eastern
Enterprises decision, and contrary to the district court's conclusion
below, there can be no question that the Association's members'
Coal Act liability is in fact retroactive given that the Act attaches
new legal consequences to an employment relationship completed
before its enactment. See Eastern Enters., 118 S. Ct. at 2151
(citing Landgraf v. USI Film Prods., 511 U.S. 244, 270 (1994)).
contained provisions designed to maintain the level of contri-
butions during the life of the agreement (the "guarantee"
clause) and to secure contributions from employers who re-
main in the industry but fail to sign a subsequent agreement
(the "evergreen" clause), created an expectation of lifetime
benefits that the employers who participated in those agree-
ments were responsible for creating. See Eastern Enters.,
118 S. Ct. at 2150; id. at 2159 (Kennedy, J., concurring in
the judgment and dissenting in part). And as appellees
point out, the 1974 agreement contained a provision express-
ly providing that pensioners and their dependents would
receive a health benefit card "until death" or "for life."
The clear implication of each opinion in Eastern Enterpris-
es is that employer participation in the 1974 and 1978 agree-
ments represents a sufficient amount of past conduct to
justify the retroactive imposition of Coal Act liability (for the
dissenting justices, of course, such participation is not even
necessary). Justice Kennedy's additional concern that liabili-
ty imposed on past employment relationships be "remedial" is
also satisfied in this case because the Association's members,
unlike Eastern, withdrew from their prior commitment to
contribute to the funds at precisely the point in time (1978) at
which the benefit obligation dramatically expanded, and
therefore "contributed to the perilous financial condition of
the 1950 and 1974 plans which put the benefits in jeopardy,"
Eastern Enters., 118 S. Ct. at 2159 (Kennedy, J., concurring
in the judgment and dissenting in part). Finally, in evaluat-
ing the proportionality between the Association's members'
past conduct and their liability for 1950 Plan beneficiaries
under the Coal Act (the only liability at issue in this case), we
note again that the Association's members never contributed
to the 1950 Plan even though some of its employees were
beneficiaries of that plan. There can be little doubt that
receiving free benefits from a fund (even when a contribution
to that fund is not technically required), together with the
other conduct we have described, establishes the minimal link
between conduct and liability that the Due Process Clause
requires in order to sustain retroactive liability.
Amici Curiae LTV Corporation and Nacco Industries urge
us to resist this conclusion, contending that participation in
the 1974 and 1978 agreements--contrary to the clear implica-
tion of each opinion in Eastern Enterprises--is not sufficient
to render retroactive liability permissible. Amici argue that
a company that participated in the 1974 and 1978 agreements
is indistinguishable from Eastern in that these agreements,
like the pre-1965 agreements signed by Eastern, do not
explicitly set forth a promise to provide lifetime benefits.
The provision guaranteeing a benefit card for life is, in
amici 's view, simply a guarantee of portable benefits that a
miner could take from employer to employer; the provision
represents no independent guarantee of specific health bene-
fits, and is qualified by the provisions in the agreement
specifying that the signatory's obligation to fund benefits
lasts only for the term of the agreement. Because neither
the 1974 nor the 1978 agreement explicitly obligated signato-
ries to fund benefits for life, amici conclude, employers who
participated in those agreements could not be expected to
anticipate the Coal Act's obligation to fund lifetime benefits
any more than could Eastern, which departed from the
industry in 1965.
Amici 's argument is subtle, but ultimately unpersuasive.
To begin with, amici are wrong when they insist that, if we
conclude that the Association's members are situated exactly
as was Eastern Enterprises, we must find a due process
violation. For the reasons outlined above, we think that such
a reading of Eastern Enterprises is untenable. Amici 's
argument also implies that any act of Congress that imposes
a liability inconsistent with obligations for which employers
specifically contracted is per se disproportionate and thus
violates the Due Process Clause. But it is settled law,
undisturbed by Eastern Enterprises, that "[c]ontracts, howev-
er express, cannot fetter the constitutional authority of Con-
gress" and that "[p]arties cannot remove their transactions
from the reach of dominant constitutional power by making
contracts about them." Connolly, 475 U.S. at 223-24 (quot-
ing Norman v. Baltimore & Ohio R. Co., 294 U.S. 240, 307-08
(1935)). If it were clear, as amici contend, that any partic-
ipation less than an explicit and contractually binding promise
to fund lifetime benefits would render Coal Act liability in
violation of the Due Process Clause, the plurality and Justice
Kennedy certainly would not have pointed to the 1974 and
1978 agreements as important events. Significantly, the plu-
rality viewed the 1974 and 1978 agreements as critical to its
analysis even while explicitly acknowledging that those agree-
ments only required employers to fund benefits for the life of
the respective agreements. See Eastern Enters., 118 S. Ct.
at 2140; id. at 2152.10 The constitutionally significant feature
about these later agreements is that they made it reasonable
for participating employers to expect a similar state-imposed
duty, and thus rendered such a duty, when eventually im-
posed, not unfairly retroactive. That appellants could have
successfully defended a breach of contract suit seeking life-
time benefits under the 1974 agreement is of no consequence.
In rejecting appellant's constitutional challenge, we take
seriously the Eastern Enterprises plurality's cautionary
words about employing the Due Process Clause to invalidate
economic legislation, see Eastern Enters., 118 S. Ct. at 2153,
__________
10 It is true that the plurality rejected the dissent's conclusion
that the participation of the federal government in prior coal
agreements, together with statements from industry members and
members of Congress, demonstrated an implicit industry-wide
promise to fund lifetime benefits. See Eastern Enters., 118 S. Ct.
at 2152. And it was Justice Stevens in dissent who relied upon the
First Circuit's conclusion that, "[f]or purposes of due process re-
view, Congress' determination that a commitment was made need
not rest upon a legally enforceable promise; it is enough that
Congress' conclusions as to the existence and effects of such a
commitment are rational." Id. at 2160 n.4 (Stevens, J., dissenting)
(quoting Eastern Enters., 110 F.3d 150, 157 (1st Cir. 1997)); see
also id. at 2165 (Breyer, J., dissenting). However, we think that
the plurality and the dissenters were in agreement that reasonable
expectations can be formed even in the absence of a binding
contractual promise, and disagreed only on the question whether
Eastern's participation prior to 1965 was sufficient to make reason-
able the expectation of liability under the Coal Act.
and Justice Kennedy's concession (despite his vote to hold
turn the Coal Act unconstitutional on due process grounds)
that "[s]tatutes may be invalidated on due process grounds
only under the most egregious of circumstances," id. at 2159
(Kennedy, J., concurring in the judgment and dissenting in
part). For the reasons outlined above, we think this case
does not measure up to "one of the rare circumstances in
which even such a permissive standard has been violated."
Id. Nor do we think that a remand is appropriate to permit
appellant to expand the record for purposes of demonstrating
the harsh economic effect that the Coal Act allegedly works
on its members. Nothing in Eastern Enterprises altered the
basic method of economic due process analysis. Rationality
is, as it has always been, the touchstone. Appellant has failed
to persuade us that the Coal Act's ends and means, as applied
to its members, are so arbitrary and irrational as to warrant
invalidation under the Due Process Clause.
* * * *
For the foregoing reasons, the judgment of the district
court is
Affirmed.