{\rtf1\ansi\deff0\deftab720{\fonttbl{\f0\fswiss MS Sans Serif;}{\f1\fdecor\fcharset2 Symbol;}{\f2\fswiss MS Sans Serif;}} {\colortbl\red0\green0\blue0;} \deflang1033\pard\plain\f2\fs17 No. 94-1938 \par \par In The Supreme Court of The United States \par \par OCTOBER TERM, 1995 \par \par BARRICK GOLD EXPLORATION, INC., ET AL., \par PETITIONERS \par \par v. \par \par MARTY D. HUDSON, ET AL. \par \par ON PETITION FOR A WRIT OF CERTIORARI \par TO THE UNITED STATES COURT OF APPEALS \par FOR THE SIXTH CIRCUIT \par \par BRIEF FOR THE UNITED STATES IN OPPOSITION \par \par DREW S. DAYS, III \par Solicitor General \par \par FRANK W. HUNGER \par Assistant Attorney General \par \par DOUGLAS N. LETTER \par SCOTT R. MC INTOSH \par Attorneys \par \par Department of Justice \par Washington, D.C. 20530 \par (202)514-2217 \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par QUESTION PRESENTED \par \par Whether the Coal Industry Retiree Health Benefit \par Act of 1992, 26 U.S.C. 9701 et seq., as applied to \par petitioners, violates the Due Process Clause of the \par Fifth Amendment. \par \par (I) \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par TABLE OF CONTENTS \par \par Page \par \par Opinions below . . . . 1 \par Jurisdiction . . . . 1 \par Statement . . . . 2 \par Argument . . . . 9 \par Conclusion . . . . 15 \par \par TABLE OF AUTHORITIES \par \par Cases: \par \par Chateaugay Corp., In re, 945 F.2d 1205 (2d Cir. 1991), \par cert. denied, 502 U.S. 1093(1992) . . . . 4 \par Collins v. City of Harker Heights, 503 U.S. 115(1992) . . . . 9 \par Concrete Pipe & Prods. of California, Inc. v. Construc- \par tion Laborers Pension Trust, 113 S. Ct. 2264 (1993) . . . . 10 \par Connolly v. Pension Benefit Guaranty Corp., 475 U.S. \par 211 (1986) . . . . 11, 12 \par District 29, United Mine Workers v. Royal Coal Co., \par 768 F.2d 588 (4th Cir. 1985) . . . . 4 \par FCC v. Beach Communications, Inc., 113 S. Ct. 2096 \par (1993) . . . . 13 \par McGlothlin v. Connors, 142 F.R.D. 626 (W.D. Va. \par 1992) . . . . 3, 14 \par Pension Benefit Guaranty Corp. v. R.A. Gray & Co., \par 467 U. S. 717 (1984) . . . . 10, 12 \par United Mine Workers of Am. 1974 Pension v. Pittston \par CO., 984 F.2d 469 (D. C. Cir.), cert. denied, 113 S. Ct. \par 3039(1993) . . . . 3 \par United States v. Sperry Corp., 493 U. S. 52(1989) . . . . 13 \par Usery v. Turner Elkhorn Mining Co., 428 U.S. 1 \par (1976) . . . . 10, 13 \par \par Constitution and statutes: \par \par U.S. Const. Amend. V: \par Due Process Clause . . . . 8, 9, 10, 11, 12 \par Just Compensation Clause . . . . 12 \par \par (III) \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par IV \par \par Statutes-Continued \par \par Page \par \par Coal Industry Retiree Health Benefit Act of 1992, \par 26 U.S.C. 9701 et seq . . . . 2 \par 26 U.S.C. 9702(a) . . . . 6 \par 26 U.S.C. 9702(a)(2) . . . . 14 \par 26 U.S.C. 9703(e) . . . . 6 \par 26 U.S.C. 9704(a) . . . . 6 \par 26 U.S.C. 9704(b) . . . . 6 \par 26 U.S.C. 9704(d) . . . . 6 \par 26 U.S.C. 9704(i)(1)(A) . . . . 7 \par 26 U.S.C. 9706(a) . . . . 6 \par 26 U. S. C. 9711(a) . . . . 6 \par 26 U.S.C. 9712(b)(2) . . . . 7 \par 26 U.S.C. 9712(d)(1) . . . . 6 \par 26 U.S.C. 9712(d)(1)(A) . . . . 7 \par 26 U.S.C. 9712(d)(1)(B) . . . . 7 \par 26 U.S.C. 9712(d)(1)(C) . . . . 7 \par 26 U.S.C. 9712(d)(3) . . . . 7 \par Energy Policy Act of 1992, Pub. L. No. 102486, \par Tit. XIX, Subtit. C, 106 Stat. 2776: \par 19142(a)(2), 106 Stat. 3037 . . . . 5 \par 19142(b)(3), 106 Stat. 3037 . . . . 5 \par Multiemployer Pension Plan Amendments Act of 1980, \par Pub. L. No. 96-364,94 Stat. 1208 . . . . 11 \par "Social Security Independence and Program Improve- \par ments Act of 1994; Pub. L. No. 103-296, 108 Stat. 1472 \par 105(a)(2)(A), 108 Stat. 1472 . . . . 7 \par 108(h)(9)(A), 108 Stat. 1487-1488 . . . . 7 \par 28 U.S.C. 2403 . . . . 2 \par 29 U.S.C. 1381-1461 [1988& Supp. V 1993) . . . . 12 \par \par Miscellaneous: \par \par Coal Commission Report on Health Benefits of Retired \par Coal Miners: Hearing Before the Subcomm. on \par Medicare and Long-Term Care of the Senate \par Finance Comm., 102d Cong., 1st Sess. (1991) . . . . 5 \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par In the Supreme Court of the united States \par \par OCTOBER TERM, 1995 \par \par No. 94-1938 \par \par 13 BARRICK GOLD EXPLORATION, INC., PETITIONERS \par \par v. \par \par MARTY D. HUDSON, ET AL. \par \par ON PETITION FOR A WRIT OF CERTIORARI \par TO THE UNITED STATES' COURT OF APPEALS \par FOR THE SIXTH CIRCUIT \par \par BRIEF FOR THE UNITED STATES IN OPPOSITION \par \par OPINIONS BELOW \par \par The opinion of the court of appeals (Pet. App. 1-27) \par is reported at 47 F.3d 832. The opinion of the district \par court (Pet. App. 28-75) is reported at 823 F. Supp. \par 1395. \par \par JURISDICTION \par \par The judgment of the court of appeals was entered on \par February 24, 1995. The petition for a writ of \par certiorari was filed on May 25, 1995. The jurisdiction \par of this Court is invoked under 28 U.S.C. 1254(1). \par \par (1) \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 2 \par \par STATEMENT \par \par This case involves a constitutional challenge to \par certain provisions of the Coal Industry Retiree \par Health Benefit Act of 1992, 26 U.S.C. 9701 et seq. \par (Coal Act or Act). The United States intervened, \par pursuant, to 28 U.S.C. 2403, to defend the constitu- \par tionality of the Act. \par 1. The Coal Act was enacted in 1992 in response to \par a crisis in health care costs in the coal industry. A \par brief review of the industry's preexisting health \par benefits system is necessary to an understanding of \par the Act. \par For more than 40 years, the United Mine Workers \par of America and bituminous coal mine operators have \par executed a series of national collective bargaining \par agreements known as National Bituminous Coal \par Wage Agreements (NBCWAs). Those agreements \par have governed the terms and conditions of \par employment in coal mines operated by members of the \par Bituminous Coal Operators Association (Association) \par and by "me too" operators, like petitioners, who were \par not members of the Association but who agreed to be \par bound by the terms of the agreements. Pet. App. 30. \par Successive NBCWAs established a multi-employer \par benefit fund that provided lifetime health benefits for \par active and retired miners,... The fund was financed by \par contributions from Association members and "me \par too" operators, based on tons of coal mined during the \par term of each agreement. In 1974, the original fund \par was divided into four separate multi-employer funds, \par two of which are involved in this case: the UMWA \par 1950 Benefit Plan and Trust ("1950 Plan") and the \par UMWA 1974 Benefit Plan and Trust ("1974 Plan"). \par The 1950 Plan provided health benefits to miners who \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 3 \par \par retired before January 1, 1976, and their dependents. \par The 1974 Plan provided health benefits to miners who \par retired on or after January 1, 1976, their dependents, \par and active miners. Pet. App. 30-31. \par In 1978, the United Mine Workers and the Associa- \par tion, established a new structure for funding retiree \par health benefits. The new structure was incorporated \par into successor NBCWAs, including the 1988 NBCWA, \par that petitioners signed. Under the new system, the \par 1950 Plan continued to provide health benefits to \par miners who retired before 1976, but the 1974 Plan was \par restricted to cover only "orphan" post-1975 retirees, \par i.e., those whose last employer was no longer in \par business. All other post-1975 retirees were there- \par after to receive benefits from individual coal mine \par operators' employer plans, which were to be \par established and financed by the signatory coal mine \par operators. Pet. App. 32.1 \par In 1988, the United Mine Workers and signatory \par operators negotiated a new NBCWA containing, for \par the first time, a withdrawal liability clause. That \par clause provided that, if a signatory operator ceased to \par \par ___________________(footnotes) \par \par 1 The 1978 NBCWA and each successor agreement also con- \par tained "guarantee clauses," which provided that "the Employ- \par ers hereby agree to fully guarantee" the health benefits pro- \par vided by the 1950 and 1974 Plans. See McGlothlin v. Connors, \par 142 F.R.D. 626, 631 (W.D. Va. 1992). In addition, the 1950 and \par 1974 Plans, which were incorporated by reference into the \par NBCWAs, contained "evergreen clauses" which required each \par signatory coal operator who ever made contributions to the \par Plans to continue to make contributions at the rate specified in \par the current NBCWA, whether or not the operator signed that \par agreement. See Pet. App. 58; United Mine Workers of Am. \par 1974 Pension v. Pittston Co., 984 F.2d 469 (D.C. Cir.), cert. \par denied, 113 S. Ct. 3039 (1993). \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 4 \par \par have an obligation to contribute to the 1950 and 1974 \par Plans, the operator had to pay a specified withdrawal \par liability to each plan. Pet. App. 3,53-54. Although the \par withdrawal liability clause was intended to insure \par against the adverse economic consequences to retir- \par ees' health benefits of a signatory's withdrawal, the \par payments required by the clause "represented only \par five years of contributions to the Plans, not the actual \par cost of funding lifetime health benefits for a with- \par drawing employer's retirees." Id. at 54. \par 2. By the late- 1980s, the financial stability of the \par retiree health benefit structure established in the \par 1978 NBCWA and successor agreements had been \par seriously undermined by several developments. \par First, "[s]ome employers successfully contended in \par the courts that their obligation to provide health \par benefits ceased with the expiration of the last \par NBCWA they signed, and that the 1974 Plan became \par responsible for their retirees' medical benefits." Pet. \par App. 33; see, e.g., In re Chateaugay Corp., 945 F.2d \par 1205, 1208-1209 (2d Cir. 1991), cert. denied, 502 U.S. \par 1093 (1992); District 29, United Mine Workers v. \par Royal Coal Co., 468 F.2d 588 (4th Cir. 1985). Second, \par escalating health care costs increased the financial \par burden of providing benefits to the beneficiaries of the \par Plans. Third, structural changes in the coal industry \par caused substantial reductions in both the number of \par mine operators that were signatories to the NBCWAs \par and the number of active miners employed by \par signatory operators. As a result, a smaller number of \par signatory operators and active miners were forced to \par bear the growing costs of providing benefits to an \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 5 \par \par increasing number of beneficiaries of the 1950 and \par 1974 Plans. Pet. App. 32-33. 2. \par After a protracted strike against the Pittston Coal \par Company, in which health benefits were a major \par issue, and other labor unrest in the bituminous coal \par industry, the Secretary of Labor appointed a Coal \par Commission to make recommendations about the \par future of funding for retirees' health benefits. After \par the Coal Commission issued its report, Congress held \par hearings to `consider the Commission's findings and \par recommendations. Pet. App. 34-35. Those hearings \par led to enactment of the Coal Act. \par In the Coal Act, Congress sought to "provide for \par the continuation of a privately financed self-sufficient \par program for the delivery of health care benefits to the \par beneficiaries of such plans." Energy Policy Act of \par 1992, Pub. L. No. 102-486, Tit. XIX, Subtit. C, \par 19142(b)(3), 106 Stat. 3037. Congress also found that \par the existing private health care benefit plan \par structure for coal miner retirees should be modified \par to "identify persons most responsible for plan \par liabilities in order to stabilize plan funding and allow \par for the provision of health care benefits to such \par retirees." 19142(a)(2), 106 Stat. 3037. \par \par ___________________(footnotes) \par \par 2 By 1990, only 25% of the beneficiaries under the 1950 and \par 1974 Plans were retirees of NBCWA signatories that were still \par contributing to the Plans. Approximately 60% of the bene- \par ficiaries were "orphans" whose former employers were no \par longer in business, and about 15% had last worked for mine \par operators that were still in business but no longer contributing \par to the Plans. See Coal Commission Report on Health Benefits \par of Retired Coal Miners: Hearing Before the Subcomm. on \par Medicare and Long-Term Care of the Senate Finance Comm., \par 102d Gong., 1st Sess. 44-45 (1991) (testimony of Michael K. \par Reilly, Chairman, Bituminous Coal Operators Association). \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 6 \par \par The Coal Act addresses two separate, but related,\ \ problems in financing benefits for coal industry retir- \par ees. First, it ensures future funding for benefits \par under individual employers' plans, such as peti- \par tioners' plans established pursuant to the 1988 \par NBCWA, by requiring the last signatory employer of \par retirees receiving benefits under those plans to \par continue to provide health benefits to those retirees \par for as long as the signatory operator, or any related \par person, remains in business. 26 U.S.C. 9711(a). \par Second, the Coal Act broadly addresses the crisis in \par funding of benefits under the 1950 and 1974 multi- \par employer plans by requiring all signatories to the \par 1988 NBCWA to bear the cost of providing benefits to \par their own retirees and to share in the overall cost of' \par providing benefits to "orphans" whose former em- \par ployers are no longer in business. See 26 U.S.C. \par 9712(d)(1). \par To the latter end, the Act required the merger, as \par of February 1, 1993 (the last day the 1988 NBCWA \par was in effect), of the 1950 and 1974 Plans into the new \par United Mine Workers of America Combined Benefit \par Fund (Combined Fund), a statutorily created private \par trust fund providing health care benefits to persons \par who were receiving benefits from the 1950 and 1974 \par Plans. 26 U.S.C. 9702(a), 9703(e). The Act also \par directed the Secretary of Health and Human Services \par to match the Combined Fund beneficiaries with \par operators that employed them. 26 U.S.C. 9706(a).3 \par \par ___________________(footnotes) \par \par 3 The responsibilities of the Secretary of Health and \par Human Services under the Coal Act have since been \par transferred to the Commissioner of Social Security. See Social \par Security Independence and Program Improvements Act of \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 7 \par \par After completion of the match, each operator must \par pay an annual premium to the Combined Fund, equal \par to the cost of providing benefits to its own assigned \par beneficiaries and its pro rata share of all the un- \par assigned, or "orphan," beneficiaries. 26 U.S.C. \par 9704(a), (b), and (d). Because the matching process \par could not be completed at once, the Coal Act provided \par that, during the first plan "year" (the eight-month \par period beginning February 1, 1993), the cost of \par administering and paying benefits from the Combined \par Fund would be paid by all the operators who, like \par petitioners, signed the 1988 multi-employer collective \par bargaining agreement. 26 U.S.C. 9704 (i)(1)(A).4 \par 3. Petitioners are coal operators that signed the \par 1988 NBCWA and prior national collective bargaining \par agreements. During the term of the 1988 NBCWA, \par petitioners ceased covered operations and withdrew \par from the 1950 and 1974 Plans. Petitioner Barrick \par Gold Exploration, Inc,, ceased covered operations in \par October 1988, and petitioner Creighton Hills Coal Co. \par ceased covered operations in March 1992. See Pet. 14- \par \par ___________________(footnotes) \par \par 1994, Pub. L. No. 103-296, 105(a)(2)(A), 108(h)(9)(A), 108 \par Stat. 1472, 1487-1488. \par \par 4 The Act also establishes another multi-employer plan, the \par United Mine Workers of America 1992 Benefit Plan, as a safety \par net to provide health benefits to persons who should receive \par coverage under an individual employer plan but do not. See 26 \par U.S.C. 9712(b)(2). Every operator who signed the 1988 \par NBCWA must pay an annual premium and provide security to \par the 1992 Benefit Plan to cover the estimated cost of provid- \par ing the benefits attributable to that operator. 26 U.S.C. \par 9712(d)(l)(A) and (C). Operators must also pay a monthly \par premium for each of their beneficiaries who actually receives \par benefits from the 1992 Benefit Plan. 26 U.S.C. 9712(d)(l)(B) \par and (3). \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 8 \par \par 15. Upon terminating their participation in the 1950 \par and 1974 Plans, petitioners became obligated to make \par the contractual withdrawal liability payments speci- \par fied in the 1988 NBCWA, which were made. \par As signatories of the 1988 NBCWA, petitioners are \par subject to the funding obligations of the Coal Act, \par including the requirement that they bear part of the \par cost of administering and paying benefits under the \par Combined Fund, the successor to the 1950 and 1974 \par Plans, Petitioners brought suit for declaratory and \par injunctive relief in 1993, asserting a variety of con- \par stitutional objections to the operation of the Coal \par Act. Over the course of the litigation, petitioners \par abandoned all but one of their original constitutional \par claims. They now claim only that the Act as applied \par to them violates the substantive component of the \par Due Process Clause of the Fifth Amendment, because \par it obligates them to participate in the' funding of the \par Combined Fund without providing an offsetting \par "credit" for the amounts they paid to satisfy their \par contractual withdrawal liability under the 1988 \par NBCWA to the Combined Fund's predecessors. \par After consolidating preliminary injunction pro- \par ceedings with a trial on the merits, the district court \par entered judgment. for respondents. Pet. App. 28-75. \par The district court rejected all of petitioners' consti- \par tutional claims, including their due process claim \par based on the Act's failure to credit their withdrawal \par liability payments. The district court concluded that \par "Congress rationally found that the practice of \par operators withdrawing from the industry or other- \par wise terminating their obligation under the NBCWA \par * * * substantially contributed to the underfunding \par problems experienced by [the 1974] Plan" and that \par "[t]hese problem were not adequately addressed \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 9 \par \par by the contractual withdrawal liability payments \par required under the NBCWA." Id. at 54-55. \par The court of appeals affirmed. Pet. App. 1-27. The \par court acknowledged that the Due Process Clause \par "has a substantive component as well as a procedural \par one," and that substantive due process "clearly \par remains viable in the [Supreme] Court's thinking \par today." Id. at 6 n.4. The court further observed, \par however, that modern substantive due process review \par of social and economic legislation is highly deferen- \par tial, even when that legislation "upsets otherwise \par settled expectations" or "impose[s] a new duty or \par liability based on past acts." Id. at 14-15. Applying a \par deferential standard of review, the court found no \par reason why Congress was constitutionally obligated \par to credit petitioners for their contractual withdrawal \par liability payments, and it found this case similar to \par others in which this Court upheld "requirement[s] \par * * * that companies withdrawing from multi- \par employer pension plans make payments to reduce the \par unfunded vested liabilities of the plans." Id. at 18. \par \par ARGUMENT \par \par Petitioners renew their contention that the Coal \par Act violates substantive due process because it \par requires operators that signed the 1988 NBCWA and \par made withdrawal liability payments to the 1950 and \par 1974 Plans under that agreement to share in the \par financing of the Combined Fund, the Plans' succes- \par sor, without receiving any credit for the earlier \par withdrawal liability payments. The court of appeals \par correctly rejected that contention, and its decision \par does not conflict with any decision of this Court or \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 10 \par \par any other court of appeals. Further review is \par therefore unwarranted. 5. \par 1. "In passing the Coal Act, Congress removed the \par subject of health benefits for * * * retirees from the \par collective bargaining process and dealt with it legis- \par latively instead." Pet. App. 7. That legislation \par "come[s] to the Court with a presumption of consti- \par tutionality, and * * * the burden is on one \par complaining of a due process violation to establish \par that the legislature has acted in an arbitrary and \par irrational way." Usery v. Turner Elkhorn Mining \par Co,, 428 U.S. 1, 15 (1976). As long as a "statute is \par supported by a legitimate legislative purpose \par furthered by rational means, judgments about the \par wisdom of such legislation remain within the exclu- \par sive province of the legislative and executive bran- \par ches." Pension Benefit Guaranty Corp. v. R.A. \par Gray & Co., 467 U.S. 717,729 (1984); Turner Elkhorn, \par 428 U.S. at 15-16.. Moreover, "there is no need for \par mathematical precision in the fit between justifi- \par cation and means" chosen by the legislature. \par Concrete Pipe & Prods. of California, Inc. v. \par \par ___________________(footnotes) \par \par 5 Petitioners urge the Court to grant certiorari to decide \par whether the Due Process Clause imposes substantive, as well as \par procedural, limitations on government action. Pet. i, 20-26. \par That issue does not require this Court's review; the Court, \par recently reiterated that the Due Process Clause contains a \par "substantive component * * * that protects individual liberty \par against `certain government actions regardless of the fairness \par of the procedures used to implement them.' " Collins v. City of \par Harker Heights, 503 U.S. 115, 125 (1992). The court of appeals \par also recognized that "[t]he concept of substantive due process \par clearly remains viable" and that "courts may invalidate \par legislation that deprives persons of life, liberty, or property on \par a basis found to be arbitrary and irrational." Pet. App. 6 n.4. \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 11 \par \par Construction Laborers Pension Trust, 113 S. Ct. \par 2264, 2288 (1993). Applying those deferential \par standards to the Coal Act, the court of appeals was \par plainly correct in holding that the Act does not \par violate petitioners' substantive due process rights. \par 2. Petitioners' due process claim has three related \par themes. First, they contend (Pet. 26-27) that their \par contractual withdrawal liability payments, which \par ended their contractual obligations to the 1950 and \par 1974 Plans under the 1988 NBCWA, rendered them \par constitutionally exempt from the imposition of new \par statutory funding obligations under the Coal Act. \par Second, they argue (Pet. 29-32) that, even if Congress \par had the constitutional authority to include them in \par the Coal Act's funding obligations, Congress was \par constitutionally required to give them an offsetting \par credit for the contractual withdrawal payments they \par made before the Act took effect. Third, they contend \par (Pet. 27-28, 33-35) that the Coal Act did give a credit \par to the 97% of 1988 NBCWA signatories that did not \par incur contractual withdrawal liability before enact- \par ment of the Act, and that the Act's failure to provide \par them with a comparable credit is irrational. \par a. With respect to the first of those objections, \par petitioners complain that the Coal Act denied them \par the benefit of their contractual bargain under the \par 1988 NBCWA by imposing obligations beyond those \par that they contracted to assume. See Pet. 37. But \par even assuming that is true as a factual matter, it does \par not establish a constitutional violation under the Due \par Process Clause. The Due Process Clause does not \par prohibit Congress from imposing legal and financial \par obligations on employers beyond those voluntarily \par assumed by contract. To the contrary, Congress may \par override private contractual limits on liability, and it \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 12 \par \par may even do so retroactively, as long as it has a \par rational basis for doing so. \par This Court's decisions in Gray and Connolly v. \par Pension Benefit Guaranty Corp., 475 U.S. 211 [1986), \par are illustrative. Gray and Connolly addressed con- \par stitutional challenges to the Multiemployer Pension \par Plan Amendments Act of 1980 (MPPAA), Pub. L. No. \par 96-364, 94 Stat. 1208 (codified at 29 U.S.C. 1381-1461 \par (1988 & SUPP. V 1993)), which retroactively imposed \par statutory withdrawal liability on employers that had \par withdrawn from multiemployer pension plans prior \par to the statute's enactment. In both cases, affected \par employers contended that the MPPAA was unconsti- \par tutional because, inter alia, it retroactively imposed \par financial obligations beyond those they had assumed \par by contract, thereby defeating their settled contrac-\ \ tual expectations.. \par This Court held that the retroactive expansion of \par financial liability beyond the terms of the parties' \par contracts did not offend either the Due Process \par Clause (Gray) or the Just Compensation Clause \par (Connolly) of the Fifth Amendment: In Gray, the \par Court explained that "legislation readjusting rights \par and burdens is not unlawful solely because it upsets \par otherwise settled expectations," and that "[t]his is \par true even though the effect of the legislation is to \par impose a new duty or liability based on past acts." 467 \par U.S. at 729-730. Similarly, in Connolly, the Court \par explained that "[i]f the regulatory statute is \par otherwise within the powers of Congress, * * * its \par application may not be defeated by private contractual \par \par ___________________(footnotes) \par \par 6 petitioners in this case also challenged the Coal Act below \par under the Just, Compensation Clause, Pet. App. 24-27, but they \par have abandoned that claim in this Court. \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 13 \par \par provisions." 475 U.S. at 224. Those decisions \par foreclose any argument that petitioners' contractual \par obligations under the 1988 NBCWA marked the \par constitutional outer limit of Congress's powers. \par b. Petitioners next argue that, even if Congress \par may subject them to the Coal Act's funding obliga- \par tions, it may not do so unless it also provides them \par with a "refund, credit, or offset" (Pet. 27) for the sums \par they paid as contractual withdrawal liability under \par the 1988 NBCWA. That claim, in essence, is simply a \par complaint that the Coal Act is less fair, as applied to \par petitioners, than it would have been had petitioners \par been granted an offsetting credit. But the Consti- \par tution does not place the courts in the general role of \par second-guessing the substantive fairness of economic \par legislation like the Coal Act. See, e.g., FCC v. Beach \par Communications, Inc., 113 S. Ct. 2096,2101 (1993), In \par choosing a scheme to remedy the complex financial \par problems besetting the retired miners' health \par benefits system, Congress had to reconcile many con- \par cerns and had to choose from among a wide variety of \par options for allocating the costs of medical care for \par coal industry retirees. "[W]hether a broader [or \par narrower] cost-spreading. scheme would have been \par wiser or more practical under the circumstances is \par not a question of constitutional dimension." Turner \par Elkhorn, 428 U.S. at 19. \par Petitioners assert (Pet. 31) that, because they made \par contractual withdrawal liability payments, it was not \par "rational to treat the employees' expectation of \par benefits * * * as [their] responsibility," at least in \par the absence of offsetting credits. But petitioners \par were "responsible" for retirees' benefits under the \par 1950 and 1974 Plans, for they contributed to those \par plans under the various NBCWAs to which they were \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 14 \par \par signatories, and, as the district court pointed out \par (Pet. App. 54), the contractual withdrawal payments \par made by petitioners represented only five years of \par contributions to the Plans, not the actual cost of \par funding lifetime health benefits for a withdrawing \par employer's retirees. Petitioners' withdrawal thus \par contributed to the coal industry's medical care \par funding problems, even after their withdrawal \par liability payments are taken into account, Congress's \par decision to. require petitioners to contribute to the \par amelioration of the Plans' funding crisis was \par therefore constitutional, for "[i]t is surely proper for \par Congress to legislate retrospectively to ensure that \par costs, of a program are borne by the entire class of \par persons that Congress rationally believes should bear \par them." United States v. Sperry Corp., 493 U.S. 52,65 \par (1989). \par c. Finally, petitioners maintain (Pet. 27-28, 33-35) \par that Congress granted other 1988 NBCWA signa- \par tories that did not withdraw from the Plans the same \par credit that it withheld from petitioners. That con- \par tention is incorrect. Petitioners assert that a credit \par to nonwithdrawing signatories was "effectively" \par created (Pet. 28, 33) by 26 U.S.C. 9702(a)(2), which \par provides that the Coal Act's statutory merger of the \par 1950 and 1974 Plans into the Combined Fund shall not \par be treated as an employer withdrawal for purposes of \par the 1988 NBCWA. That provision did not grant \par anyone a credit; instead, it ensured that 1988 signa- \par tories that had not terminated their participation in \par the Plans were not subjected to unintended con- \par tractual withdrawal liability because of a technical \par change (the statutory conversion of the 1950 and 1974 \par Funds into the Combined Fund) over which they had \par no control. \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 15 \par \par Petitioners also overlook the fact that other \par signatories incurred costs that petitioners avoided by \par withdrawing from the 1950 and 1974 Plans. The other \par signatories continued to pay monthly contributions to \par the 1950 and 1974 Plans throughout the full term of \par the 1988 agreement until the Coal Act took effect. \par Moreover, those signatories had to increase their \par contributions to comply with preliminary injunctions \par issued in litigation over the Plans. See, e.g., \par McGlothlin v. Connors, 142 F.R.D. 626,647 (W.D. Va. \par 1992). Thus, even if the financial obligations imposed \par on petitioners by the Coal Act were different than \par those imposed on non-withdrawing operators, Con- \par gress had a rational basis for drawing such a \par distinction. \par \par CONCLUSION \par \par The petition for a writ of certiorari should be \par denied. \par \par Respectfully submitted. \par \par DREW S. DAYS, III \par Solicitor General \par \par FRANK W. HUNGER \par Assistant Attorney General \par \par DOUGLAS N. LETTER \par SCOTT R. McINTOSH \par Attorneys \par \par JULY 1995 \par \par \par }