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R.G. JOHNSON CO. v. APFEL COMM'R FOR SOC. SEC.

February 11, 1998

R.G. JOHNSON COMPANY, INC., Plaintiff,
v.
KENNETH S. APFEL Commissioner for Social Security, et al., Defendants.



The opinion of the court was delivered by: KENNEDY

 Before the court are cross motions for summary judgment filed by the plaintiff, R. G. Johnson Company, Inc. and the defendants, the Commissioner for Social Security ("Commissioner") and the Trustees of the United Mine Workers of America Combined Benefit Fund ("Trustees"). Upon consideration of the motions, the oppositions thereto, the replies, supplemental filings, and the record of the case, the court concludes that the plaintiff's motion should be granted because there are no material facts in dispute and the plaintiff is entitled to judgment as a matter of law.

 I. BACKGROUND

 R. G. Johnson Company, Inc. ("New Johnson"), seeks a declaration that it is not obligated to make health-care premium payments for certain beneficiaries to the United Mine Workers of America Combined Benefit Fund ("the Combined Fund") and seeks an injunction restraining the Commissioner from assigning these beneficiaries to it and from pursuing payment of premiums on their behalf. The Combined Fund is a statutory health-care trust created by Congress under the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C.A. § 9701 et seq. (West Supp. 1997) ("the statute" or "the Coal Act"). Under the statute, the Social Security Administration ("SSA") is charged with the responsibility of assigning individual Combined Fund beneficiaries to specific former employers ("signatory operators") under the statutory criteria set forth in 26 U.S.C.A. § 9706 (West Supp. 1997). The assigned operators are then required to pay health-care premiums to the Combined Fund to finance the cost of benefits for their assigned beneficiaries. 26 U.S.C.A. § 9704 (West Supp. 1997). When a signatory operator is no longer in business, a "related person" of the signatory operator is required to pay the health care premiums. 26 U.S.C.A. § 9706(a) (West Supp. 1997).

 II. STANDARD OF REVIEW

 Administrative Review Under the Chevron Framework

 The plaintiff seeks judicial review of the SSA's determination that it is liable for payments on behalf of certain beneficiaries. This court may set aside SSA's determination if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C.A. § 706(2)(A) (West 1996). In reviewing an agency action which is based on the agency's interpretation of a statute entrusted to its care, the court must undertake a two-step inquiry, known as the Chevron framework. Eastern Enterprises v. Chater, 110 F.3d 150, 154 (1st Cir. 1997) (citing Chevron USA Inc. v. Natural Resources Defense Council, 467 U.S. 837, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984)).

 
Under this analysis, the court must first exhaust the traditional tools of statutory construction to determine whether Congress has spoken to the precise question at issue. . . . If the court can determine congressional intent. then that interpretation must be given effect. . . . If, on the other hand, the statute is silent or ambiguous with respect to the specific issue, then the court will defer to a permissible agency construction of the statute.

 Halverson v. Slater, 327 U.S. App. D.C. 97, 129 F.3d 180, 184 (D.C. Cir. 1997), (quoting Natural Resources Defense Council, Inc. v. Browner, 313 U.S. App. D.C. 37, 57 F.3d 1122, 1125 (D.C. Cir. 1995)).

 This Chevron analysis, as recently interpreted by the D.C. Circuit Court in Halverson v. Slater, governs our interpretation of the statute at issue in this case. More so than previous case law, the Halverson decision emphasizes the first prong of the analysis--that the court must first attempt to determine the intent of Congress by using traditional tools of statutory construction. The Halverson court reversed the lower court, finding that it "erred by failing to 'exhaust the traditional tools of statutory construction' . . ." Id. (citation omitted).

 III. DISCUSSION

 Under the Coal Act, the SSA must assign each Combined Fund beneficiary to a "signatory operator which (or any related person with respect to which) remains in business," in a certain order of preference. 26 U.S.C.A. § 9706(a) (West Supp. 1997). The statute authorizes the assignment of liability to a "related person" to a signatory operator, when the signatory operator, who would otherwise be the assigned operator, is no longer in business.

 
[A] person shall be considered to be a related person to a signatory operator if that person is--
 
(i) a member of the controlled group of corporations (within the meaning of [IRC] section 52 (a)) which includes such signatory operator;
 
(ii) a trade or business which is under common control (as determined under [IRC] section 52 (b)) with such signatory operator; or
 
(iii) any other person who is identified as having a partnership interest or joint venture with a signatory operator in a business within the coal industry, but only if such business employed eligible beneficiaries, except that this clause shall not apply to a person whose only interest is as a limited partner.
 
A related person shall also include a successor in interest of any person described in clause (i), (ii), or (iii).

 The defendants claim that New Johnson is liable to pay into the Combined Fund on behalf of certain beneficiaries because it is a successor company to Old Johnson. Old Johnson would have been the assigned "signatory operator" responsible for these payments if it were still in business. New Johnson rejoins that a successor company is not a "related person" to a signatory operator, and therefore may not be held liable.

 Statutory Language

 Employing the first step of the Chevron analysis, we must use traditional tools of statutory construction to determine if the statute evidences a clear expression of Congress' intent as to the liability of a successor company. The first place to look for the answer to this question is in the language of the statute. The first tenet of statutory construction is that the "plain meaning of legislation should be conclusive, except in the rare cases [in which] the literal application of a statute will produce a result demonstrably at odds with the intentions of its drafters." United States v. Ron Pair Enterprises, 489 U.S. 235, 242, 103 L. Ed. 2d 290, 109 S. Ct. 1026 (1989). "In such cases, the intention of the drafters, rather than the strict language, controls." Id. "Where, . . . the plain language of the statute is clear, the court generally will not inquire further into its meaning, at least in the absence of a clearly expressed legislative intent to the contrary." Qi-Zhuo v. Meissner, 315 U.S. App. D.C. 35, 70 F.3d 136, 140 (D.C. Cir. 1995). However, "in ...


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