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FAWN MINING CORP. v. HUDSON

February 23, 1995

FAWN MINING CORPORATION, Plaintiff,
v.
MARTY D. HUDSON, et al., Defendant.


James Robertson, United States District Judge


The opinion of the court was delivered by: JAMES ROBERTSON

 FACTS

 In May 1990, plaintiff Fawn Mining Corporation (Fawn) began coal mining operations in and around Saxonburg, Pennsylvania. Fawn employed UMWA-represented mine workers and established a health benefit plan for them. Only nine months later, in February 1991, Fawn closed down its mining operations. A year after that, in February 1992, Fawn stopped providing health benefits. At that point, some 40 Fawn retirees -- mine workers and their dependents -- turned for coverage to an "orphan fund" maintained by the UMWA. That fund, called the UMWA 1974 Benefit Plan and Trust (1974 Fund), provided health care benefits to UMWA retirees whose former employers were "no longer in business." The 1974 Fund declined to provide coverage for the Fawn retirees. It took the position that Fawn should continue to provide coverage because its corporate parent was solvent -- that the "no longer in business" clause should not permit Fawn to escape the obligation it had undertaken through a collective bargaining agreement to continue paying for health and pension benefits.

 After the 1974 Fund's refusal to provide coverage to the Fawn retirees, the UMWA brought suit in United States District Court for the Western District of Pennsylvania, No. 92-0305, seeking to compel the 1974 Plan to provide coverage. On October 1, 1992, the UMWA, the UMWA Health and Retirement Funds, and representative retirees resolved the dispute by consent: the parties agreed to a preliminary injunction directing that Fawn retirees would be covered by the 1974 Fund. *fn1" In compliance with that injunction, the 1974 Fund then paid or made reimbursement for medical services rendered to Fawn retirees, including services rendered before the critical date of July 20, 1992.

 The July 20, 1992 date is significant within the context of the Coal Industry Retiree Health Benefits Act (CIRHBA). CIRHBA was enacted on October 24, 1992, in response to a crisis in the funding of UMWA retiree health benefits. In order to deal with deficits in existing plans, ensure sufficient operating assets and provide for continuation of a privately funded, self-sufficient benefit program, Congress mandated the creation of two new trust funds. The first was formed by merging the 1974 Fund with an earlier UMWA plan, the 1950 UMWA Benefit Plan. The merged fund, called the UMWA Combined Benefit Fund (Combined Fund), was to provide health care benefits to every "eligible beneficiary." 26 U.S.C. § 9703(b)(1). "Eligible beneficiary" was defined by 26 U.S.C. § 9703(f):

 
For purposes of this subchapter, the term "eligible beneficiary" means an individual who --
 
(1) is a coal industry retiree who, on July 20, 1992, was eligible to receive, and receiving, benefits from the 1950 UMWA Benefit Plan or the 1974 UMWA Benefit Plan, or
 
(2) on such date was eligible to receive, and receiving, benefits in either such plan by reason of a relationship to such retiree.

 The second new fund, called the 1992 Plan, was established to provide benefits to eligible retirees who were not beneficiaries of the Combined Fund and who were not receiving health care coverage directly from their employers. 26 U.S.C. § 9712(b)(2).

 Fawn's complaint filed on October 29, 1993, seeks a declaration that Fawn is not liable to the 1992 Plan for premiums because its retirees are entitled to coverage by the Combined Fund. BethEnergy, Inc., which sold the Saxonburg mining operation to Fawn, has intervened to assert the opposite view; BethEnergy would be liable to pay most of the premiums if Fawn were to prevail here.

 DISCUSSION

 In a case that turns upon the meaning of statutory language, the court's task is "to give effect to the will of Congress, and where its will has been expressed in reasonably plain terms, that language must ordinarily be regarded as conclusive." Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, ...


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