Holland, Michael v. Williams Mtn Coal Co

                  United States Court of Appeals

               FOR THE DISTRICT OF COLUMBIA CIRCUIT

         Argued April 6, 2001      Decided July 31, 2001 

                           No. 00-7072

                   Michael H. Holland, et al., 
                            Appellants

                                v.

    Williams Mountain Coal Company, d/b/a Naoma Coal Company, 
                  and Augusta Processing, Inc., 
                            Appellees

          Appeal from the United States District Court 
                  for the District of Columbia 
                         (No. 96cv01405)

     Peter Buscemi argued the cause for appellants.  With him 
on the briefs were Stanley F. Lechner, David W. Allen and 
John R. Mooney.  Charles P. Groppe entered an appearance.

     Gregory B. Robertson argued the cause for appellees.  
With him on the brief were Susan F. Wiltsie, Mary Lou 
Smith and Charles L. Woody.

     Before:  Williams, Sentelle and Henderson, Circuit 
Judges.

     Opinion for the Court filed by Circuit Judge Williams.

     Concurring opinion filed by Circuit Judge Sentelle.

     Williams, Circuit Judge:  Under the Coal Industry Retiree 
Health Benefit Act of 1992 (the "Coal Act" or "Act"), 26 
U.S.C. ss 9701-9722 (1994), the duty of paying premiums for 
the health benefits of certain retired miners falls on the "last 
signatory operator."  Id. s 9711(a).  For the six miners 
whose benefits are involved here, it is undisputed that To-
ney's Branch Coal Company was that operator.  But Toney's 
Branch is bankrupt.  The Act also imposes the duty on any 
"successor in interest" of the last signatory operator.  Id. 
s 9711(g)(1).  Defendant firms Augusta Processing and 
Williams Mountain never employed any of the six miners, but 
right after the withdrawal of Toney's Branch they successive-
ly operated Shumate Eagle mine (where Toney's Branch had 
employed the six miners), using other miners who had 
worked at Shumate Eagle for Toney's Branch, and equipment 
previously used by Toney's Branch at the mine.  The sole 
issue before us is whether Augusta and Williams Mountain 
can on that account be held liable as "successors in interest" 
of Toney's Branch.

                              * * *

     From 1991 until September 1994 Toney's Branch, a "con-
tract mining" firm, mined coal from Shumate Eagle under 
contract with the mine's owner.  In September 1994 the mine 
owner terminated the contract with Toney's Branch and sold 
the mine.  The new owner contracted with Augusta to oper-
ate the mine, which it did until October 1995.  Augusta used 
equipment that it had purchased, in an arm's length transac-
tion, from an affiliate of Toney's Branch.  In October 1995 
Williams Mountain bought the mining equipment from Au-
gusta and took up the mining operation.  Neither Augusta 
nor Williams Mountain ever held an ownership interest in 
Toney's Branch, or vice versa.  Meanwhile, Toney's Branch 
continued mining operations elsewhere, until its demise in 
bankruptcy.

     Plaintiffs are trustees of the 1992 United Mine Workers of 
America ("UMWA") Benefit Plan ("1992 Plan").  The Plan 
was established under the Act, as part of Congress's response 
to the failure of certain coal companies to pay the health 
benefits they promised their miners.  Under successive Na-
tional Bituminous Coal Wage Agreements ("NBCWAs") be-
tween the coal operators and the UMWA, companies had 
agreed to pay benefits not only for their workers but also for 
workers whose employers had failed to meet their obligations 
under the agreement, so-called orphaned workers.  R.G. 
Johnson Co. v. Apfel, 172 F.3d 890, 892 (D.C. Cir. 1999).  A 
considerable number of operators responded by withdrawing 
from the Agreement, either to continue mining with non-
union employees or to leave the coal business altogether.  See 
Eastern Enters. v. Apfel, 524 U.S. 498, 511 (1998).  The result 
was a spiral of increasing obligations for the remaining 
signatories, and increasing withdrawal.  Id.  In response, 
Congress sought to assign health care liability in a form that 
would be free from such unraveling.  Id. at 513-14.

     The plaintiff trustees are obligated to provide benefits for 
retirees who are entitled to benefits under s 9711 (including 
the six involved here) but who are not receiving them.  26 
U.S.C. s 9712(b)(2)(B).  If they cannot compel payment by 
the last signatory operator, a related person, or a "successor 
in interest," they can adjust the premiums they charge em-
ployers obliged to contribute to the 1992 Plan.  Id. 
s 9712(d)(2)(B).  Thus there is no chance of the miners being 
denied their benefits.  The only issue is whether the expenses 
will be borne by defendants or by the broad class of coal 
operators obliged to fund the 1992 Plan.  The trustees con-
tend that defendants Augusta and Williams Mountain are 
"successors in interest" within the meaning of s 9711(g)(1) 
and therefore responsible for the charges.  The district court 
disagreed and granted summary judgment for defendants.  
We affirm.

                              * * *

     The trustees urge a broad definition of successors in inter-
est, namely the "substantial continuity of operations test."  

This is a multi-factor inquiry that examines, among other 
things, the ability of the predecessor to provide relief;  wheth-
er the new employer had notice of potential liability;  whether 
he uses the same plant, equipment and workforce;  and 
whether he produces the same product.  See, e.g., Secretary 
of Labor v. Mullins, 888 F.2d 1448, 1453-54 (D.C. Cir. 1989).  
Under this standard, the companies may well be successors in 
interest to Toney's Branch:  Toney's Branch is now bankrupt, 
the Act is familiar to all coal operators, and the companies 
seamlessly took over operations at Shumate Eagle.

     Against this the companies urge narrower definitions, 
drawn both from general corporate law and from federal tax 
law (noting that the Act is in fact embedded in Title 26, the 
Internal Revenue Code ("I.R.C.")).  Black's Law Dictionary 
(6th ed. 1990), for example, provides the standard corporate 
law definition:

     In order to be a "successor in interest", a party must 
     continue to retain the same rights as original owner 
     without change in ownership and there must be change 
     in form only and not in substance, and transferee is not a 
     "successor in interest."  ... In case of corporations, the 
     term ordinarily indicates statutory succession as, for 
     instance, when corporation changes its name but retains 
     same property.
     
Id. at 1283-84 (citations omitted).  In the alternative, the 
companies suggest a definition from the I.R.C. that shares 
with the corporate law definition the element of commingled 
ownership.  See 26 CFR s 1.1503-2A(c)(3)(vii)(B);  26 U.S.C. 
s 381.  Under both of these definitions the "successor in 
interest" is a successor to the wealth of the predecessor, 
typically through a corporate reorganization.  A party simply 
acquiring property of a firm in an arm's length transaction, 
and taking up its business activity, does not become the 
selling firm's "successor in interest."  Under both definitions 
the companies are plainly not successors in interest of To-
ney's Branch, and we need not here wrestle with which of 
them is to be preferred in the event of a clash.

     Because both sides assume that federal law controls the 
meaning of "successor in interest," we do the same.  See 
generally Atchison Topeka & Santa Fe Ry. v. Brown & 
Bryant, Inc., 159 F.3d 358, 362-64 (9th Cir. 1998).

     At the outset the trustees' proposed reading of s 9711(g)(1) 
encounters difficulty from the adjacent statutory language.  
While s 9711(g)(1) mandates that "successors in interest" 
share liability with last signatory operators, s 9711(g)(2) per-
mits "successors" to assume by contract liability for health 
benefits owed to retirees.  The natural reading is that Con-
gress intended "successors" in subsection (g)(2) to include a 
broad class of persons, e.g., firms that take over mining 
operations from others, and are not liable as a matter of law, 
but assume liability by contract with the seller to suit the 
mutual convenience and risk-allocation preferences of the 
contracting firms.  If s 9711(g)(1) imposed liability by law on 
virtually all potential candidates for the (g)(2) transaction, the 
latter would, for the most part, be surplusage.  See Holland 
v. New Era Coal Co., 179 F.3d 397, 403 (6th Cir. 1999).

     The trustees respond that, because the section heading for 
s 9711(g)(1) is "Successor," Congress intended the terms 
"successor" and "successor in interest" to be used inter-
changeably.  For them the only role of s 9711(g)(2), as 
against subsection (g)(1), is to allow successors to contract for 
primary responsibility.  But, quite apart from the customary 
reluctance to give great weight to statutory headings, see, 
e.g., Bhd. of R.R. Trainmen v. Baltimore & Ohio R.R. Co., 
331 U.S. 519, 528-29 (1947), it seems very odd to use a 
heading, which normally is a kind of shorthand, to justify 
stripping the actual text of two words, "in interest," that were 
obviously included deliberately.

     This conclusion accords with the structure of the Act.  
Section 9711 specifies two groups that share liability with last 
signatory operators:  related parties and successors in inter-
est.  Related persons, defined in s 9701(c)(2)(A), encompass 
members of a controlled group of corporations including the 
signatory operator in question, a business under common 
control with the signatory operator, and a person in a part-

nership or joint venture with the signatory operator in the 
coal business.  A common feature of all such entities is that 
they share ownership or comparable economic interests with 
the signatory operator.  Understanding successor in interest 
as embodying the standard corporate concept gives it a 
closely congruent meaning.

     We note that the Internal Revenue Service has promulgat-
ed definitions of "successor in interest" for various specific 
purposes.  See, e.g., 26 CFR s 1.1503-2A(c)(3)(vii)(B);  id. 
s 301.6110-2(l);  id. s 302.1-1(e).  See also In re Leckie 
Smokeless Coal Co., 99 F.3d 573, 585 n.14 (4th Cir. 1996).  
Because of the variety of definitions we question whether the 
term can be said to have received the sort of consistent 
treatment that led the Supreme Court in Commissioner v. 
Keystone Consolidated Industries, Inc., 508 U.S. 152 (1993), 
to infer, for the phrase "sale or exchange," an intent to 
incorporate a previously "settled" meaning.  Id. at 159.  But 
we also note that the trustees do not claim that any of the 
definitions chosen by the IRS in other contexts is broad 
enough to sweep in the two coal companies here.

     In sum, then, the text and structure of s 9711 point 
powerfully toward the two companies' position.  The trustees, 
however, brush aside this textual analysis and offer three 
arguments to support a broad definition of successors in 
interest.  First, they contend that the Act is a remedial 
statute and therefore should be liberally construed.  This is 
meaningless.  All statutes seek to remedy some problem, so 
the maxim does nothing to identify what statutes should be 
"liberally construed" (assuming that phrase to have a discrete 
meaning).  E. Bay Mun. Util. Dist. v. U.S. Dep't of Com-
merce, 142 F.3d 479, 484 (D.C. Cir. 1998);  Ober United 
Travel Agency, Inc. v. U.S. Dep't of Labor, 135 F.3d 822, 825 
(D.C. Cir. 1998).

     Second, trustees argue that broad successor liability fits 
Congress's stated intent to assign the duty of paying premi-
ums "to persons most responsible for plan liabilities."  26 
U.S.C. s 9701 note (Findings and Declaration of Policy) 
(quoting s 19142 of Pub. L. No. 102-486).  For our purposes 

Congress here selected the last signatory operator, Toney's 
Branch, the last firm to receive benefits from the six miners' 
labor.  After that the Act assigns liability to related persons, 
s 9711(b), and to successors in interest, s 9711(g)(1).  What 
the trustees fail to explain is why companies such as the two 
here--whose only link to the six miners is to have started 
mining operations with equipment bought from Toney's 
Branch, after the six retired, at the mine where the six had 
formerly worked--are in any material respect more "respon-
sible" for plan liabilities for the six than is the broad class of 
firms funding the 1992 Plan.  The defendants' arm's length 
purchase of mining equipment at the Shumate Eagle mine 
seems to tie them to the six miners no more than would any 
firm's purchase of any assets (office equipment, real property, 
etc.) from Toney's Branch.  The set of operators that would 
bear the premiums for the six miners' benefits under the 1992 
Plan, however, are all signatories to the 1988 NBCWA, 
whereby they have promised to fund the benefits of orphan 
retirees.  The Secretary of Labor's Advisory Commission on 
United Mine Workers of America Retiree Health Benefits, 
Coal Commission Report 27 (Nov. 1990).  The Coal Act 
merely enforces these promises.  26 U.S.C. s 9712(d).

     Even if Congress's purpose were recast in more general 
terms--securing health benefits for retired miners, see, e.g., 
26 U.S.C. s 9701 note (Findings and Declaration of Policy)--
broad successor liability is hardly essential to that goal.  The 
six miners will receive benefits regardless of whether the 
defendants are billed for them.  To address the concern that 
in the absence of successor liability the scheme set up by the 
Act might collapse as last signatory operators sold off assets, 
pocketed the money, and declared bankruptcy, the Act itself 
expressly denies effect to any transaction of which a "princi-
pal purpose ... is to evade or avoid liability."  26 U.S.C. 
s 9722.  The bankruptcy laws similarly provide relief against 
fraudulent transfers.  See, e.g., 11 U.S.C. s 548.  Nor is it 
the case that lack of successor liability would discourage some 
conduct Congress sought to encourage;  this contrasts (for 
instance) with the Multiemployer Pension Plan Amendments 
Act ("MPPAA") of 1980, where courts have been concerned 

that without broad successor liability firms would be discour-
aged from joining pre-existing multi-employer pension agree-
ments.  See Upholsterers' Int'l Union Pension Fund v. Ar-
tistic Furniture of Pontiac, 920 F.2d 1323, 1329 (7th Cir. 
1990).  Here the classes of both beneficiaries and ultimate 
obligors is substantially fixed.  Not only does the Act apply 
solely to miners who retired by September 30, 1994, 26 U.S.C. 
s 9712(b)(2), but it legally obligates their employers, if they 
have signed a 1988 NBCWA, to provide benefits, id. 
ss 9712(d), 9701(c)(3).

     The trustees' final argument is that courts have often used 
the substantial continuity test to determine successor liability 
in federal statutes (particularly those adopted for the protec-
tion of employees), even when those statutes include no 
language directly supporting liability for successors of any 
kind.  Because statutory interpretation proceeds on the as-
sumption that Congress's choice of words reflects a familiari-
ty with judicial treatment of comparable language, Traynor v. 
Turnage, 485 U.S. 535, 545-46 (1988), we cannot say, without 
some consideration of the cases using substantial continuity, 
that the trustees' claim is a priori wrong.  In reality, howev-
er, courts have adopted that standard only in the presence of 
certain factors, the most notable of which, at least, is palpably 
missing here.

     Before presenting our core objections to the trustees' argu-
ment, we review, for context, the origins of the substantial 
continuity test.  Under the traditional rule on corporate 
successorship liability, a corporation that acquires manufac-
turing assets from another corporation does not thereby 
assume the liabilities of the seller.  The rule admits four 
exceptions:  (1) when the successor expressly or impliedly 
assumed those liabilities;  (2) when the transaction may be 
construed a de facto merger;  (3) when the successor may be 
considered a "mere continuation" of the predecessor;  and (4) 
when the transaction was fraudulent.  See Mozingo v. Correct 
Mfg. Corp., 752 F.2d 168, 174 (5th Cir. 1985) (citing 15 
William Meade Fletcher, Fletcher Cyclopedia of the Law of 
Private Corporations, s 7122 (Perm. ed. 1983)).  Most rele-
vant for our purposes is the "mere continuation" exception.  

Traditionally, this applies when, after the transfer of assets, 
there is an identity of stock, stockholders, and directors 
between the purchasing and selling corporations.  See, e.g., 
Weaver v. Nash Int'l, Inc., 730 F.2d 547, 548 (8th Cir. 1984).  
Thus the "mere continuation" exception appears to closely 
parallel the basic "successor in interest" concept invoked by 
Augusta and Williams Mountain.

     As the Third Circuit has observed, the traditional rule 
concerning the liability that attaches to asset sales was "de-
signed for the corporate contractual world," and "protects 
creditors and dissenting shareholders, and facilitates determi-
nation of tax responsibilities, while promoting free alienability 
of business assets."  Polius v. Clark Equipment Co., 802 F.2d 
75, 78 (3rd Cir. 1986).  But it is also generally applied in 
cases involving tort plaintiffs, see, e.g., id. at 82-83;  Travis v. 
Harris Corp., 565 F.2d 443, 446 (7th Cir. 1977), and the 
beneficiaries of federal statutes, see, e.g., Atchison Topeka & 
Santa Fe Ry., 159 F.3d at 364 (Comprehensive Environmen-
tal Response, Compensation and Liability Act ("CERCLA")), 
even though such parties may have had no real opportunity to 
protect their interests by contract with the predecessor cor-
poration.  For their protection some courts have stretched 
the "mere continuation" test into the substantial continuity of 
operations test advocated by the trustees, see Polius, 802 
F.2d at 78 (noting cases);  Cyr v. B. Offen & Co., 501 F.2d 
1145, 1152-54 (1st Cir. 1974).  The majority, however, still 
follow the traditional rule in tort cases, see Polius, 802 F.2d 
at 80 (products liability);  Restatement (Third) of Torts:  
Products Liability s 12 cmts. a, b (1997), and in cases 
involving federal statutes such as CERCLA, see Atchison, 
Topeka & Santa Fe Ry., 159 F.3d at 364.

     In the context of federal statutes whose primary beneficia-
ries are employees, however, it appears that most courts 
invoke the substantial continuity test.  This departure from 
the traditional rule was sparked by four Supreme Court 
cases, two involving disputes under the National Labor Rela-
tions Act ("NLRA"), Golden State Bottling Co. v. NLRB, 414 
U.S. 168 (1973);  NLRB v. Burns Int'l Security Servs., Inc., 
406 U.S. 272 (1972), and two the Labor Management Rela-

tions Act ("LMRA"), Howard Johnson Co. v. Detroit Local 
Joint Executive Bd., Hotel & Rest. Employees & Bartenders 
Int'l Union, 417 U.S. 249 (1974);  John Wiley & Sons, Inc. v. 
Livingston, 376 U.S. 543 (1964).  Neither statute mentions 
successors, let alone successors in interest.  Steinbach v. 
Hubbard, 51 F.3d 843, 845 (5th Cir. 1995).  Yet, proceeding 
under principles of equity, the Court in each case addressed 
the extent to which successors to the originally liable firm's 
operations could be lawfully burdened with promises entered 
or statutory torts committed by their predecessors.  The 
Court weighed congressional interest in the policy promoted 
by the statute, and the extent to which successor liability 
would promote it, against the cost and inequity to the succes-
sor of imposing liability.  See, e.g., Golden State, 414 U.S. at 
184;  Burns Int'l, 406 U.S. at 287-88.

     Although the four cases concerned the core labor relations 
statutes, the reasoning has been used to find broad successor 
liability under other statutes that govern employees' rights 
whether they explicitly address successor liability, Leib v. 
Georgia-Pacific Corp., 925 F.2d 240, 244-45 (8th Cir. 1991) 
(Vietnam Era Veterans' Readjustment Assistance Act of 1974 
("VEVRAA"));  Vanderhoof v. Life Extension Inst., 988 F. 
Supp. 507, 512-13 (D.N.J. 1997) (Family Medical Leave Act) 
(relying on NLRA and Title VII case law), or not, Wheeler v. 
Snyder Buick, Inc., 794 F.2d 1228, 1235-36 (7th Cir. 1986) 
(Title VII);  Musikiwamba v. ESSI, Inc., 760 F.2d 740, 745-
46 (7th Cir. 1985) (Civil Rights Act of 1866).  In none of these 
cases, however, did the text and structure of the underlying 
legislation point firmly against successor liability based on 
substantial continuity of operations.  The four Supreme 
Court cases that provide authority for these cases, for exam-
ple, interpreted a pair of statutes that, unlike the statute 
before us, failed to give guidance on successor liability one 
way or the other.  Moreover, even pursuing this line of cases 
would leave our conclusion unchanged.

     A key factor motivating courts to extend successor liability 
beyond the textual bounds of a statute is that the victim of 
the predecessor's behavior may be left without a remedy 
unless recourse against the successor is allowed.  Musiki-

wamba, 760 F.2d at 746.  (This is, of course, ordinarily an 
aspect of Congress's intent.)  The relief sought under the 
statutes involved in the Howard Johnson-Golden State line of 
cases is typically "nonmonetary and can be effective only if 
directed against the workers' current employer."  EEOC v. 
G-K-G, Inc., 39 F.3d 740, 748 (7th Cir. 1994) (Age Discrimi-
nation in Employment Act ("ADEA"));  see, e.g., Harter 
Tomato Prods. Co. v. NLRB, 133 F.3d 934, 936-37 (D.C. Cir. 
1998) (successor's duty under NLRA to bargain with union 
for predecessor's employees);  Leib, 925 F.2d at 247 (succes-
sor's duty under VEVRAA to rehire predecessor's employee);  
Criswell v. Delta Air Lines, Inc., 868 F.2d 1093, 1094 (9th 
Cir. 1989) (successor's duty under ADEA to rehire predeces-
sor's worker and change mandatory retirement policy);  Bates 
v. Pac. Marine Mkt. Ass'n, 744 F.2d 705, 710-11 (9th Cir. 
1984) (successor's duty to obey Title VII consent decree 
requiring a certain level of representation of blacks among 
workforce at a harbor).  Even if the remedy sought by the 
plaintiff in a particular case is simply damages, the possibility 
that other plaintiffs suing under the same statute may seek 
injunctive relief supports successor liability under that stat-
ute.  G-K-G, 39 F.3d at 748.  But the Coal Act contemplates 
no specific performance remedies.  26 U.S.C. s 9711(a);  see 
also id. ss 9704(a), 9712(d).  Because (1) only pure money 
cases may be brought, (2) the "successor in interest" standard 
of corporate law allows the beneficiary (or the 1992 Plan 
trustees) to pursue the wealth of the last signatory operator, 
and (3) the Coal Act as a whole assures protection for the 
beneficiary without his incurring the costs and risks of pursu-
ing a departed past employer, there is no warrant whatever 
for broad successor liability.

     Thus we reject the trustees' claim that s 9711(g)(1) adopts 
the "substantial continuity of operations" test.  As we ob-
served before, the two companies prevail here under either of 
their candidates--the general corporate definition or one of 
the special tax definitions, see, e.g., 26 CFR s 1.1503-
2A(c)(3)(vii)(B);  26 U.S.C. s 381.  Accordingly we may leave 
to another day the resolution of any differences in detail 
between these and possibly other candidates.

     The judgment of the district court is

                                                                                Affirmed.

     Sentelle, Circuit Judge, concurring:  I concur completely 
in the result reached by the majority and its basic textual 
analysis of the Coal Industry Retiree Health Benefit Act of 
1992 ("Coal Act"), 26 U.S.C. ss 9701-22.  This analysis alone 
is sufficient to support the outcome reached by the majority;  
the remainder of the opinion is obiter dicta.  I write separate-
ly because I fear the majority's discussion of the trustees' 
final argument--that we should adopt a broad substantial 
continuity test--may be misleading.  The cases from our 
sister circuits that have "extend[ed] successor liability beyond 
the textual bounds of a statute" are in no way relevant to our 
analysis in this case.  Opinion at 10.  While it is fashionable 
in some legal circles to deride "hyper-technical reliance upon 
statutory provisions," Palm Beach County Canvassing Bd. v. 
Harris, 772 So. 2d 1220, 1227 (Fla.), vacated, 531 U.S. 70 
(2000), this Court does not--and should not--move in them.

     The majority cites the Supreme Court's decision in Tray-
nor v. Turnage, 485 U.S. 535, 545-46 (1988), for the proposi-
tion that we must assume that "Congress's choice of words 
reflects a familiarity with judicial treatment of comparable 
language."  Opinion at 8.  In fact, the Traynor Court as-
sumed that by using a specific term in a veterans' benefits 
statute, Congress "intended that the term receive the same 
meaning for purposes of that statute as it had received for 
purposes of other veterans' benefits statutes."  485 U.S. at 
546.  In other words, the Court stated that statutory terms 
should be interpreted in the same way in statutes covering 
similar topics--not in any statute covering any topic.  Cf. Del 
Commercial Props., Inc. v. Commissioner, 251 F.3d 210, 218 
(D.C. Cir. 2001).

     In the present case, this maxim of statutory interpretation 
suggests that the term "successor in interest" in the Coal Act 
should be interpreted consistently throughout the Internal 
Revenue Code, see Commissioner v. Keystone Consol. Indus., 
508 U.S. 152, 159 (1993), and that Congress was aware of how 
the term had been interpreted in that context, see Traynor, 
485 U.S. at 546.  Treasury Regulations define "successor in 
interest" as "an acquiring corporation that succeeds to the tax 
attributes of an acquired corporation" through the following 
transactions:  the liquidation of a subsidiary, a merger or 

consolidation, the sale of "substantially all of the properties of 
another corporation" for voting stock, 26 U.S.C. s 381, or the 
mere change of identity.  26 C.F.R. s 1.1503-2A(c)(3)(vii)(B).  
Relatedly, state business association law historically has been 
used to determine the tax liability of "a successor corporation 
for the debts of its predecessors."  15 Mertens Law of 
Federal Income Taxation s 61.17, at 47 (2000);  see also 
United States v. First Dakota Nat'l Bank, 137 F.3d 1077, 
1079-80 (8th Cir. 1998);  Atlas Tool Co. v. Commissioner, 614 
F.2d 860, 870 (3d Cir. 1980);  George v. Commissioner, 2000 
WL 1545066 (T.C. Oct. 19, 2000) (mem.).  In West Virginia, 
where both the defendant companies are incorporated, a 
corporation that purchases the assets of another corporation 
is not liable for the debts of the seller unless:  (1) the 
purchaser expressly or impliedly assumes the liability, (2) the 
transaction was fraudulent, (3) "some element of the transac-
tion was not made in good faith," (4) the purchase effected a 
consolidation or merger, or (5) "the successor corporation is a 
mere continuation or reincarnation of its predecessor."  Jor-
dan v. Ravenswood Aluminum Corp., 455 S.E.2d 561, 563 
(W. Va. 1995);  see also West Texas Ref. & Dev. Co. v. 
Commissioner, 68 F.2d 77, 80 (10th Cir. 1933) (applying the 
same factors in a tax dispute).  Under either of these formu-
lations, the defendant companies would not be liable under 
the Coal Act.  This analysis is sufficient to affirm the district 
court's decision in this case.

     If Congress had sought to adopt something similar to the 
trustees' articulation of the substantial continuity of opera-
tions test it likely would have done so explicitly.  For exam-
ple, the Black Lung Benefits Act holds companies liable for 
benefit payments to coal-mining employees when the compa-
nies are successive operators of a coal mine or acquire 
substantially all of the assets of the previous operator.  See 
30 U.S.C. s 932(i)(1).  Of course, in the Coal Act, Congress 
did not adopt this approach.

     The majority's lengthy discussion of cases employing the 
substantial continuity of interest test does not clarify "judicial 
treatment of comparable language."  Opinion at 8.  As the 
majority recognizes, courts largely have adopted this test in 

cases when the statute at issue does not address successor-
ship, much less use the term "successor in interest."  See, 
e.g., Wheeler v. Snyder Buick, Inc., 794 F.2d 1228 (7th Cir. 
1986).

     The majority rightly traces this analysis to four Supreme 
Court decisions.  Two of these decisions dealt with claims 
brought under the Labor Management Relations Act 
(LMRA), and two arose from decisions issued by the National 
Labor Relations Board (NLRB) pursuant to the National 
Labor Relations Act (NLRA).  In the first of the LMRA 
decisions, John Wiley & Sons, Inc. v. Livingston, 376 U.S. 
543, 544 (1964), the Supreme Court addressed whether a 
successor company was required to comply with an arbitra-
tion clause in a collective bargaining agreement between a 
union and the predecessor company.  Significantly, the prede-
cessor corporation had merged with the successor corpora-
tion, and the Court was confronted with a question of "con-
tractual origin"--and therefore did not interpret or apply any 
statute.  See id. at 545, 546, 550-51.  Construing the contract 
and noting the "substantial continuity of identity in the 
business enterprise" following the merger, the Court held 
that the successor corporation was required to comply with 
the arbitration clause.  Id. at 551.  Later, the Court ex-
plained that the Wiley "holding dealt with a merger occurring 
against a backdrop of state law that embodied the general 
rule that in merger situations the surviving corporation is 
liable for the obligations of the disappearing corporation."  
NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272, 286 
(1972).

     In the second LMRA case, Howard Johnson Co. v. Detroit 
Local Joint Executive Board, 417 U.S. 249, 251-52 (1974), a 
franchiser bought all of the personal property associated with 
a franchisee's business operation, but did not retain the 
franchisee's employees.  The employees' union claimed that 
the franchiser was required to "arbitrate the extent of its 
obligations" to the employees under the collective bargaining 
agreement between the franchisee and union.  Id. at 253.  
The Court held that the franchiser was not bound by the 
agreement because it did not have a "substantial continuity of 

identity" with the franchisee.  Id. at 264.  The Howard 
Johnson Court contrasted the circumstances of the case with 
Wiley, emphasizing that Wiley "involved a merger, as a result 
of which the initial employing entity disappeared."  Id. at 257.  
In Howard Johnson, however, "the initial employers remain 
in existence as viable corporate entities."  Id.  Significantly, 
in neither Wiley nor Howard Johnson did the Supreme Court 
purport to interpret the LMRA--or any statute--to encom-
pass any successorship doctrine.

     Unlike Wiley and Howard Johnson, the Court in Golden 
State Bottling Co. v. NLRB, 414 U.S. 168, 171-72 (1973), and 
NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S. at 277, 
reviewed the Board's interpretation of its organic statute.  
When reviewing such decisions, the Court employs a deferen-
tial standard, upholding the Board's interpretation of the 
NLRA as long as it "adopts a rule that is rational and 
consistent with the Act."  Fall River Dyeing and Finishing 
Corp. v. NLRB, 482 U.S. 27, 42 (1987);  see Golden State 
Bottling Co., 414 U.S. at 181 (considering "whether the Board 
properly exercised its discretion" in ordering a bona fide 
purchaser of a business to reinstate employees with backpay 
when the predecessor corporation had engaged in unfair labor 
practices);  Burns Int'l Sec. Servs., 406 U.S. at 278-79 (hold-
ing that "it was not unreasonable" for the NLRB to hold that 
the successor employer is required to bargain with an exist-
ing certified union).  Indeed, "[i]n Burns [the Supreme 
Court] approved the approach taken by the Board and accept-
ed by the courts with respect to determining whether a new 
company was indeed the successor to the old."  Fall River, 
482 U.S. at 43.  That approach, as the majority explains, is 
the broad totality of the circumstances test that the trustees 
now advocate.  See id.

     In previous cases, this Court has affirmed the use of the 
substantial continuity of interest standard to determine the 
obligations of successor corporations--but only when review-
ing an agency decision that had employed it.  For example, in 
Harter Tomato Prods. Co. v. NLRB, 133 F.3d 934, 938 (D.C. 
Cir. 1998), we upheld the NLRB's conclusion that a company 
that merely leased assets from a predecessor company could 

still be a successor required to bargain with an existing union 
if it met the broad substantial continuity test.  See also Pa. 
Transformer Tech., Inc. v. NLRB, No. 00-1388, slip op. at 4-5 
(D.C. Cir. June 29, 2001).  Our decision was based on the 
deference we accord to NLRB rules that are "rational and 
consistent" with the NLRA.  Harter Tomato, 133 F.3d at 937 
(internal quotation omitted).  Similarly, we deferred to the 
Federal Mine Safety and Health Review Commission when it 
used the test to determine successor liability under the Mine 
Safety and Health Act.  See Secretary of Labor v. Mullins, 
888 F.2d 1448, 1451 n.10, 1453-54 & n.15 (D.C. Cir. 1989).  
Our deference to reasonable statutory interpretations made 
by agencies to which Congress has specifically delegated 
authority should not be confused with an adoption of those 
interpretations or a belief that they are correct.  We have 
never interpreted a statute de novo and concluded that 
liability under the statute is determined based on a substan-
tial continuity of interest.

     In contrast, some courts have adopted the substantial 
continuity standard when interpreting statutes de novo.  In 
doing so, they have relied on the four Supreme Court deci-
sions discussed above--even though the cases before them 
did not review an agency decision, did not focus on labor 
contracts, and did not even deal with statutes that mention 
successorship.  This reliance is mistaken.

     The Supreme Court has never adopted any amorphous 
totality-of-the-circumstances test in cases raising successor-
ship questions not arising in a context requiring deference to 
an agency.  Instead, it has stated that there must be a 
"substantial continuity of identity in the business enterprise," 
which "necessarily includes ... a substantial continuity in the 
identity of the work force across the change in ownership."  
Howard Johnson Co., 417 U.S. at 263 (citation omitted).  
Even if this language could be read with the breadth some of 
our sister circuits suggest, the Supreme Court has only 
applied it in cases dealing with current employees seeking to 
establish a company's obligations under an existing collective 
bargaining agreement, and then only has found such a conti-
nuity when two companies have merged, one of those compa-

nies has been extinguished, and all of the predecessor's 
employees have been retained by the successor company.  
Furthermore, nothing in either Howard Johnson or Wiley 
can be read to extend the reach of their holdings beyond their 
"contractual origin," much less beyond statutes governing 
labor-management relations.

     The courts that have morphed the substantial continuity 
standard of Howard Johnson and Wiley into a sweeping 
totality-of-the-circumstances standard have allowed rules 
adopted by the NLRB pursuant to its authority under the 
National Labor Relations Act, see, e.g., Fall River, 482 U.S. 
at 43, to serve as the law for other statutes well outside the 
NLRB's reach.  See, e.g., Musikiwamba v. ESSI, Inc., 760 
F.2d 740, 750 (7th Cir. 1985).  It is the role of Congress, not 
the judiciary, to establish when successors should be held 
liable for the statutory violations of predecessor companies 
and whether successors have obligations to their predeces-
sor's former employees.  See Wheeler v. Snyder Buick, Inc., 
794 F.2d 1228, 1237 (7th Cir. 1986).  Courts simply should not 
extend liability "to a variety of statutory contexts when the 
equities have so dictated" no matter how "important" the 
policy they seek to fulfill.  Upholsterers' Int'l Union Pension 
Fund v. Arctic Furniture of Pontiac, 920 F.2d 1323, 1327 (7th 
Cir. 1990).  When Congress seeks to establish broad rules of 
successor liability, it will do so on its own.  See, e.g., 30 U.S.C. 
s 932(i)(1).  Under the Coal Act, it did not.  Insofar as the 
majority's opinion by discussion of the "factor[s] motivating 
courts to extend successor liability beyond the textual 
bounds" of statutes suggests any legitimacy for that ap-
proach, I wish to make plain that that is not the holding of 
this case, nor the analysis that commands my concurrence.