Supremes Trash Mine Workers Health Care- Scary Precedent on "Takings"

Nathan Newman nnewman at
Thu Jun 25 09:39:07 PDT 1998


A bunch of Supreme Court decisions today will get a lot of attention (Vince Foster and attorney privilege, line item veto, HIV as disability) but possibly the most important is the decision striking down liability of former mining companies for the health care of former mining employees. A 1992 law had required that such companies cover lifetime health care for former miners, even if the companies were no longer in the industry. By a 5-4 vote, the law was declared unconstitutional for such former mining companies with four of the majority justice citing the "takings" clause.

The idea that the takings clause can be used to bar the government from holding companies liable for past actions or for any public purpose is a direct assault on a whole range of regulatory and taxing powers of the government. It is the holy grail of conservatives to expand the takings clause into a wrecking ball against regulation of corporate power.

With this decision, not only will miners suffer but conservatives have significantly advanced this legal weapon, with four of the Justices supporting it. (Judge Kennedy weasled and just cited "due process" concerns). One more rightwing judge willing to support the "takings" doctrine and you will see a wholesale assault by the courts on every restriction on corporate power we have on the books.

Attached is the AP story

--Nathan Newman ------

June 25, 1998

Court Rules for Mining Companies


Filed at 11:58 a.m. EDT

By The Associated Press

WASHINGTON (AP) -- Companies formerly involved in coal mining cannot be forced retroactively to help pay lifetime health care for retired miners and their families, a splintered Supreme Court ruled today. The decision will save those companies hundreds of millions ofdollars.

The 5-4 ruling struck down as unconstitutional part of a 1992 federal law, the Coal Industry Retiree Health Benefit Act. But the court's majority did not agree on why the law is unconstitutional.

Nearly 100,000 people -- retired miners and dependents of deceased miners -- are the beneficiaries,and about 7,000 of them receive benefits from companies no longer in the coal business.

The law was challenged by a Massachusetts-based company that had abandoned the coal mining business years before the federal law made it liable for benefits for about 1,500 people. Eastern Enterprises contended that the law violated its due-process rights and resulted in an unlawful taking of private property for a public purpose.

Eastern mined coal in West Virginia, Pennsylvania and Kentucky from 1946 to 1965. Then it transferred its coal operations to a subsidiary, Eastern Associated Coal Corp., which it sold in 1987.

Since the mid-1940s, health benefits had been promised by various contracts between coal mine operators and the United Mine Workers union. In 1978, an agreement promised lifetime health benefits for all retired miners, including those whose employer had gone out of business.

By the 1990s, benefit plans for miners and their families had severe deficits. To ensure continued funding of the promised health benefits, Congress enacted the 1992 law. Under it, benefits were to be funded mainly by companies that signed agreements in 1978 or later, but also by companies like Eastern that had signed earlier benefit agreements.

Eastern was assigned as beneficiaries retired miners who once had worked for it, and the spouses or children of the retired miners.

Because the law requires that Eastern be assessed annual premiums for the life of each assigned beneficiary, its projected liability exceeds $100 million. The company already has been assessed more than $17 million.

A federal judge in Massachusetts and the 1st U.S. Circuit Court of Appeals rejected Eastern's legal challenge, upholding the law and subsequent assessments.

Today, the Supreme Court said the lower courts were wrong.

Four of the court's members -- Chief Justice William H. Rehnquist and Justices Sandra Day O'Connor, Antonin Scalia and Clarence Thomas -- concluded that the economic regulation required by law violates the Fifth Amendment's ban on ``taking'' private property for public use without paying just compensation.

Justice Anthony M. Kennedy provided the crucial fifth vote by concluding that the law violates the coal companies' due-process rights.

Justices John Paul Stevens, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer dissented.

The case is Eastern Enterprises vs. Apfel, 97-42.

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