WASHINGTON – The Supreme Court agreed Monday to decide whether some companies can be required to pay lifetime health benefits promised to retired coal miners.
The court said it will hear the Bush administration's argument that companies can be required to pay such benefits if they took over another coal company that is no longer in business.
A 1974 coal miners' contract promised lifetime health benefits for all retired miners, including those whose employer had gone out of business.
Benefit plans began showing severe deficits, and in 1992 Congress enacted the Coal Industry Retiree Health Benefit Act to ensure funding of health benefits promised to about 100,000 retired miners and their families. The benefits are to be funded by companies that signed coal wage agreements, or the companies' affiliates.
The 1992 law says miners' benefits must be paid by the coal company that employed them, or by "related" companies: a joint-venture partner or a firm that shares common ownership.
A firm that takes over a "related" company also can be required to pay for benefits. But the law does not say that a firm that took over the coal company itself must pay for benefits.
If no company can be found to pay miners' benefits, other firms must pay for their benefits through a combined fund.
Monday's case involves the Jericol Mining Corp., which took over the former Shackleford Coal Co. in Kentucky.
Shackleford had signed the 1974 coal-wage agreement, and during the mid-1990s federal officials assigned Jericol to pay lifetime health benefits for 86 Shackleford beneficiaries.
Jericol and an affiliated company, Sigmon Coal Co., challenged the assignment in federal court. A federal judge and the 4th U.S. Circuit Court of Appeals ruled for the companies, saying the law did not allow the government to force them to pay benefits.
Another federal appeals court later issued a conflicting ruling in another case.
In the appeal granted Supreme Court review Monday, Justice Department lawyers said Congress intended that "financial responsibility for miners' benefits be placed on those entities most responsible for plan liabilities."
Lawyers for Jericol and Sigmon said courts must interpret the law as written and leave any changes to Congress.
The case is Halter v. Sigmon Coal Co., 00-1307.