Barnhart v. Sigmon Coal Co. - Oral Argument
Transcript:
ORAL ARGUMENT OF PAUL R.Q. WOLFSON ON BEHALF OF THE PETITIONER
Chief Justice Rehnquist: We'll hear argument next in No. 00-1307, Larry Massanari, Acting Commissioner of Social Security v. the Sigmon Coal Company.
Mr. Wolfson.
Mr. Wolfson: Mr. Chief Justice, and may it please the Court:
Congress enacted the Coal Act to prevent the collapse of a multi-employer, private health care system that had promised health care benefits to retired coal miners.
Miners were in danger of losing their benefits as coal operators were selling their operations and dissolving and going out of business and shifting responsibility for their employees to other employers that were in the multi-employer health care system.
Congress enacted the Coal Act to stop this downward spiral.
It wanted to ensure that a retired miner's benefits would be the responsibility of the operator that employed the miner, if possible, or if that operator was defunct, with one of that operator's related persons.
Section 9701(c)(2) of the Coal Act effectuates this policy.
That section sets forth the related persons who may be assigned responsibility for a miner's... for an operator's employees.
Under a straightforward reading of that statutory language in section 9701(c)(2), the commissioner may assign a miner to the direct successor in interest of a signatory operator.
Unidentified Justice: Well--
--Mr. Wolfson, even the dissenting judge in the court of appeals didn't buy that.
Mr. Wolfson: Well, it is true that he did not agree with us, Mr. Chief Justice, that the plain text of the statute did not support our reading, but I have to respectfully disagree with the dissenting judge because it is our position that it does.
Unidentified Justice: Well, it depends on the meaning you give to the word described--
Mr. Wolfson: It depends on--
Unidentified Justice: --in section 9701(c)(2).
Mr. Wolfson: --It depends on the meaning that you give to the word to describe.
It also depends, Justice O'Connor, on the way one reads the subclauses of 9701(c)(2).
Now, our... now--
Unidentified Justice: Well, you have to decide whether described in... somehow includes a reference to as opposed to a description of.
Mr. Wolfson: --Well, there are two possible approaches to this question, Justice O'Connor.
Certainly one meaning of describe is to set out or to refer to, and that is an established common usage of the meaning describe.
It's a dictionary definition, and it's also true that the signatory operator is set out in and expressed in each of the subclauses (1), (2), and (3).
But I would also submit... and that is one theory under which we think that the plain text of the language supports our position.
I would also submit, however, that even if described has a more kind of... a different sense, nonetheless, a signatory operator may be found within those... those clauses (1), (2), and (3) because a signatory operator is, by definition--
Unidentified Justice: Mr. Wolfson, can I interrupt you for a second on... just on the word described?
Does the word described have any meaning other than simply refer to... insofar as it refers to any of the... any of the entities described in subparagraphs (i), (ii), and (iii)?
Does it do anything other than, in fact, identify each?
Mr. Wolfson: --It refers to... well, it points back to--
Unidentified Justice: And it doesn't give you a definition, for example, of a controlled group.
It doesn't describe what a controlled group is.
It doesn't describe what a joint venture is.
All it does is say there are those animals out there.
Mr. Wolfson: --That is right.
Now... but... and--
Unidentified Justice: So that the only meaning that can logically be given to the word described in the context of this statute is the one you give to it.
Mr. Wolfson: --That is... that is our position, Justice Stevens.
Unidentified Justice: You think there's no... no difference between a provision which says a member of the controlled group of corporations which includes the signatory operation, or a more detailed description, any other person who is identified as having a partnership interest or joint venture with a signatory operator, et cetera, et cetera.
You want to equate with those descriptions the words signatory operator.
Mr. Wolfson: Justice Scalia--
Unidentified Justice: In the prologue.
A person shall be considered to be a related person to a signatory operator if that person is... and then it goes (i), (ii), (iii).
And you say signatory operator is one of the persons described in (A).
I want to be very precise here because it's not necessary to refer to the prologue.
After all, the... the end, the flush paragraph says a related person shall also include a successor in interest of any person described in the clauses, not described in the prologue.
So, our... so, it's not necessary to go to the prologue.
All that is necessary is to go to the clauses.
And a signatory operator... first of all, it is literally described and set forth in those clauses.
Second, it is... a signatory operator is a member of a family that includes a signatory operator.
In that sense, even in a broader sense or a different sense of described, it is... (A) is a member of the group that... that includes (A), (B), and (C).
Now, even if... I think that I can concede that the contrary reading is a permissible one of the statute even if picking up the statute and... and reading it for the first time without any reference to the context of the Coal Act.
But--
--And it is... as I understand it, there hasn't been any court that has accepted your reading so that courts, whether the person was writing in dissent or in the majority, have rejected your reading as an impermissible one.
Am I right about that?
Mr. Wolfson: --Well, they... they, in the end, agreed with us that that... Judge Murnaghan below and the D.C. Circuit in the R.G. Johnson case agreed with us in the end that the statute should be given this meaning because--
Unidentified Justice: But not on the basis of what the text says.
In both cases they said Congress could not have meant what they wrote, but as to the literal interpretation of the statute, they all agreed... they all rejected the notion that Congress had, in fact, enumerated a successor of a signatory as... within the... the text of the statute.
Mr. Wolfson: --That is correct.
Now, it's our position, though, we disagree with those holdings, and we... and it's our position that it is at minimum a permissible reading of the statute.
Unidentified Justice: Do you know any other statute that's ever been interpreted that way where it, you know, describes certain people--
Mr. Wolfson: Well--
Unidentified Justice: --in certain clauses in a later provision and says any person described in such and it includes a reference to signatory?
Mr. Wolfson: --Well, of course--
Unidentified Justice: I would have thought there would be something, you know, at least close to this.
Do you have any--
Mr. Wolfson: --Well--
Unidentified Justice: --What's the closest example you can think of?
Mr. Wolfson: --Well, I don't know about describe.
I do know about include certainly is not... is not a word that is ordinarily meant to give an exclusionary reading; that is, it is... it's not... include is... is a non-exhaustive list.
So, by saying it is a member of the controlled group that includes a signatory operator, it doesn't necessarily mean... it seems to me that the respondents would essentially say a member of the controlled group of corporation, which includes the signatory operator but not the signatory operator itself and--
Unidentified Justice: I believe what we'd like is a... an... a canon, for example, that says something like it is permissible for a court to accept an absurdly literal meaning... reading of a statute where necessary to avoid an absurd result.
Mr. Wolfson: --Well, the... the Court has done that.
I mean--
Unidentified Justice: Where?
That's what we want.
The example where it's done that.
Mr. Wolfson: --Right.
The Court has done that.
The Court has done that.
I think--
Unidentified Justice: Heck, we've ignored the statute entirely to--
[Laughter]
No, no.
Mr. Wolfson: --The Court has done that.
Unidentified Justice: --seems like a better result--
Mr. Wolfson: Just... just last term in a case called Cornell Johnson--
Unidentified Justice: --Did I write that?
[Laughter]
Mr. Wolfson: --Cornell Johnson v. United States, the Court was presented with two meanings of the word revoke.
And... and the Court... and that was a criminal case where the rule of lenity operates, of course.
And the Court said, well, one meaning of the word revoke, even though less common certainly and perhaps strained, was the only one that could really make any sense out of the statute and the other one--
Unidentified Justice: Is that cited in your brief?
Mr. Wolfson: --It is cited in the brief, Your Honor.
And it's... and another case that comes to mind that's similar is Field v. Mans, and that is a also relevant case because there the Court was faced with kind of a negative pregnant argument; that is, well, here's one language that appears in one part of the statute, but that language that we would hope for doesn't appear here.
And the Court said--
Unidentified Justice: I'm more likely to think that Congress meant what it says, and... and I... why do you assert that it is... it is unbelievable that Congress would have meant what it said here?
It is certainly the case that the... that the persons who would have been most affected by the interpretation of this language that you... you... that you propose would have been the very coal mine operators who were lobbying Congress to get this thing passed.
It seems to me not at all inexplicable that they were willing to have successors in interest of other people down the line held liable so long as they themselves would not be regarded as the successor in interest to somebody who preceded them, you know, saddling them with liability.
I don't find that a... an unbelievable scenario at all.
It seems to me a quite plausible one.
Mr. Wolfson: --Well, several things.
Unidentified Justice: It... it may not be a good policy result.
Mr. Wolfson: Well, it's not just a... a question of not being a good policy result.
It's also is this anything that Congress could have conceivably wanted to promote in the language of the act.
And Congress was aware, to the contrary of... of the premise of your question, that it was exactly the problem of selling coal operations and then the original coal operator disappearing and not being available--
Unidentified Justice: And Congress had... had addressed that problem, as I understand it, in just the way you feel we should address it in... in some of the bills in predecessor sessions of... of the Congress in which they specifically did include successors to the signatories.
So that it seems, if... if you want to look at the... the broader record on what's believable and what isn't believable, at an earlier time, Congress tried, though it not... or some people in Congress tried, though they didn't get their bills passed, to do just what you want us to say they did here.
And yet, here they didn't.
Isn't that a fact?
Isn't that contrast something that we should take into consideration in deciding what is credible or not?
Mr. Wolfson: --Justice Souter, there's no evidence in the background to the adoption of the Coal Act that Congress ever deliberately left behind--
Unidentified Justice: You mean this particular statute in this session of Congress.
Mr. Wolfson: --This particular statute that Congress ever deliberately left behind a provision for--
Unidentified Justice: Sure.
You're right.
Mr. Wolfson: --Right.
And... and there were many contentious issues involved in the framing of the Coal Act.
This was not one of them.
And the entire Coal Commission which was in considerable disagreement about what the Congress should do addressed the issue this way, and this unanimous on... on their part.
The ability of an employer to renege on its commitments to its retirees and dump liability on the funds disrupts any effective long-range solution, and then there is some further language, and then it says, the commission believes that this situation is intolerable and must be stopped.
There is no disagreement on that as being the... the core problem or one of the core problems that led Congress to enact the Coal Act.
And there's... and there's simply no... I would submit there's simply no reason to think that Congress would have deliberately chosen to say we are going to place liability on these what I would call the nephew corporations, that is, the successors in interest of the subsidiaries or the... or the corporate brothers and sisters and not on the direct successors who were the very people to whom the original coal operator had sold their operations.
Unidentified Justice: I'll give you a very good reason... a very good reason.
It's the best we could do.
They couldn't have gotten the legislation otherwise.
Sure, I could design better legislation, but better designed legislation is useless if it is not enacted.
And the scenario I... I give you is... is one in which the coal operators did not want themselves to be tagged as successor corporations to somebody who... from whom they had previously bought the assets.
Mr. Wolfson: Well--
Unidentified Justice: And they were the major players in... in this.
Now--
Mr. Wolfson: --Well, first of all, I mean, it's important to remember--
Unidentified Justice: --That's why Congress did it.
It's the best they could do.
It may not be the best statute in the world, but it's a statute.
It... it did some good anyway.
Mr. Wolfson: --Well, first, it's important to remember that the coal operators were getting very significant relief from the Coal Act, which is to say that the... the members of the Bituminous Coal... Coal Operators Association who were at that time being forced to shoulder the costs of the... of the... the retirees of the employers who had already gone out of business, they received a great deal of benefit from the Coal Act because... because the Coal Act adopted the... the approach of going back in time and reaching some of those people who had disappeared, and the problem was that they had disappeared and shifted... disappeared and nobody had been there to... to pick up the... the cost.
And that... that was... that was the very problem.
Unidentified Justice: No.
You may be right.
I mean, I... you know, I can't prove my scenario.
You can't prove your scenario.
But it seems to me the burden is on the Government to give us a very good reason for ignoring what seems to me the... the only reasonable reading of this language.
And... and your reason for ignoring it is it is inconceivable that this is what Congress could have intended, and I think it is entirely conceivable.
I'm... I'm not sure that that's the answer.
You have to be very careful about generalizing what is conceivable for Congress.
[Laughter]
Mr. Wolfson: Mr. Chief Justice, if there had been some indication in the legislative background that this was a contentious issue and that there was attempt to, as the respondents have said, reclaim what was given away in the compromise, then... then there might be some substance at that point.
But there... but there isn't.
And--
Unidentified Justice: Horse trading has got to be explicit.
Mr. Wolfson: --Well, it's... it's not that you have to be explicit.
It's that one would certainly have thought this would have been an issue that had surfaced somewhere in... in the background of the Coal Act, and it... it hadn't in this sense.
I mean, all of the Coal Commission was... was on board on this particular issue which is the... the problem was that coal operators had gone out of business and that the... and that the chain of succession hadn't been there.
Unidentified Justice: The oddity that you're relying on an illogic between the related people and their... and their successors count and not the successors of the... the operator... we're told that there has not been, in the history of the operation of this act, any case where liability has been imposed on a successor of... of a related entity.
Mr. Wolfson: That... that's not right.
I've checked that.
It's not in the record in this case, but there have been instances in which Social Security has assigned liability to a successor of a related person.
Unidentified Justice: But you would... not in many cases.
Would you agree to that?
Mr. Wolfson: I can't... I can't state how many because there are 16,000 assignments and they are not organized this way.
Unidentified Justice: Well, my point is if this was a minimal likelihood, the other was a much more substantial risk for the coal companies.
One could easily see that the coal companies want to protect themselves, and... and the other didn't mean a whole lot to anybody.
So, it stayed in.
Mr. Wolfson: Justice Ginsburg, I think that to adopt that view, one... one would have to know for certain that related persons were necessarily not coal... not also coal companies.
But there are coal companies that are also related to other coal companies.
There are... I mean, that is a... that is a... a form of organization that exists in the coal industry, which is that coal companies are... and... and the Coal Commission documented this.
That is, the coal... the coal industry is characterized by interlocking networks of parents and subsidiaries and corporate brother and sister corporations, and they do that for some valid business reasons, to take advantage of limited liability laws, and other reasons as well involving closing... the need to close coal mines and start up elsewhere.
But the... the point is it's not necessarily the case that the... the successors of the related persons are not coal companies.
There may be some that are not coal companies.
Certainly they're not... certainly if they're related persons, they will on some occasion include not coal companies... other than coal companies, but they also will include coal companies.
And Congress was addressing the situation more generally, and given that... given the fact that Congress knew that coal companies were organized in... in interlocking corporate forms, I don't think I can agree that these other people, these successors of related companies, would have been strangers to the legislative process that Congress would have found it easy to pick on, which I have to say is... I'm not aware that the Court has adopted a theory of statutory construction which is that the statute should be construed where... you know, because one people were the ins and the other the outs.
And the only reason that... that we can make sense of the statute is that, you know, Congress decided that the outs were an easy target.
I mean, that's... that's--
Unidentified Justice: But there's something else.
If... once you concede that you... on the text you lose, then if you would agree that it would be a much larger class to stick in... that is, successors of the... the signatories would be a much larger class than successors of related companies... if you... if you agree with that, then for the Court to say we're going to cure this defect in the statute by including a large group because there's a smaller group that's there, usually when the Court is faced with that choice, it will say, well, then... then the others, the small group, shouldn't have been included.
Mr. Wolfson: --Well, first, I would not agree that we lose on the plain language of the statute.
I think our reading is certainly a permissible one.
But to the contrary I would say Congress must have included what I will hypothesize is the small group for a legitimate policy reason, and it would be very odd that Congress would not also include the large group who are more... more directly... at least more directly related to the problem at hand.
I'd like to reserve the remainder of my time, if I may.
Unidentified Justice: Very well, Mr. Wolfson.
Mr. Buscemi, we'll hear from you.
ORAL ARGUMENT OF PETER BUSCEMI ON BEHALF OF THE UNITED MINE WORKERS OF AMERICA COMBINED BENEFIT FUND, AS AMICUS CURIAE
Mr. Buscemi: Thank you, Mr. Chief Justice, and may it please the Court:
There are several things that are not in dispute in this case, and I think it's worth reminding the Court of some of what they are.
First of all, Congress did not say that the successors of signatory operators are excluded from liability.
Congress could have said that.
It did not.
Secondly, Congress did seek to assign as many Combined Fund beneficiaries as possible to specific signatory operators, and to keep the unassigned beneficiaries to an absolute minimum.
Thirdly, as Mr. Wolfson said, the coal industry was characterized by shifting forms of corporate organization.
This was one of the very problems that Congress was trying to address, that you had miner... mining companies selling assets, other mining companies coming in apparently indistinguishable to the outside observer.
The mine looked the same.
The people working there were the same.
The equipment was the same.
And yet, the company that did own the assets at one time sought to walk away, and the other... and the company coming in said, well, I'm not responsible.
Fourthly, the statute includes very broad provisions defining related person, far broader than the ordinary circumstances in which parent and subsidiary liability for each other's debts or obligations would be found.
And finally, also undisputed is that it's not only that the successors in interest of related persons are liable for the Combined Fund obligations, but it's also that the successors in interest of the signatory operators themselves are liable for the individual employer plans, section 9711, which involved very substantial obligations, and for the '92 plan.
All of that is undisputed.
Unidentified Justice: How... how do we know that?
Mr. Buscemi: 9711(g)(1) explicitly says that successors in interest to signatory operators are liable for the individual employer plans and for the '92 plan.
Unidentified Justice: I'm not sure that helps you.
Yes.
Why doesn't it cut against you?
Mr. Buscemi: Well, I... well, I readily acknowledge that you can make both arguments, but I think the better argument is that it helps us because it adds to the incongruity that our opponents are trying to argue for here.
It adds to the oddity of the result.
It says that Congress wanted to make successors in interest of related persons liable for the Combined Fund.
It wanted to make successors in interest to the signatory operators liable for the individual employer plan and for the '92 plan.
And yet, Congress wanted to carve out a little segment there for signatory... successors of signatory operators and the Combined Fund.
Unidentified Justice: But it's not a little segment because if your opponent is right, everybody would have a motive to sell out right away.
So, it would seem to me the whole industry would get a benefit from... from the other... from your opponent's reading of the statute.
Mr. Buscemi: Well--
Unidentified Justice: Everybody should have just sold out right away.
Mr. Buscemi: --Well, precisely, Your Honor.
I mean, one of the things that I... I'd like to point out is that one of the enormous anomalies of what our opponents are arguing and what the court of appeals has held here is that it essentially says that Congress deliberately put into the statute the seeds of the statute's demise.
Congress created a situation in which anyone who was... on whom liability was imposed under this statute could sell its asset to someone else, distribute the proceeds to its shareholders, dissolve the corporation, and the... and the obligations would be terminated, and yet the operations of the coal mine would continue on as is.
Unidentified Justice: Mr. Buscemi?
But the answer to that--
--I don't follow that because isn't it just standard corporate law that if you sell out your assets and then quit business and there are liabilities out there, that your shareholders will be stuck with that liability up to the amount that they gained from the asset sale?
Isn't that just standard corporate law?
Mr. Buscemi: Well, I suspect, Your Honor, that the argument would be made that that's also not in the statute and that, therefore, you can't import that into the statute.
No one has denied... when we've said that this is a potential result of the argument that's been made here, no one has said it is not because the shareholders would take on that liability.
Unidentified Justice: But isn't that... why would that State law be displaced?
The standard provision for a company that sells its assets and then goes out of business, for there to be shareholder liability.
Mr. Buscemi: Well, Your Honor, it may very well not be displaced.
But I could respond to that with the argument that nor should the successorship preexisting law be displaced; that is, Congress acted against the background of preexisting law, both judicial interpretation of the statute and the normal rules of statutory construction written into title 1.
Unidentified Justice: If it... if it did that, it wouldn't have had to have the last... the last clause of... of section 9701(c)(2), which says a related person shall also include a successor in interest.
If it was appealing to the general rule that successors in interest are always covered, that would have been unnecessary, as well as the provision that you mentioned earlier where... where they specifically said as to some matters... as to some matters, the successors in interest of... of the... of the current coal companies would be... would be covered.
Mr. Buscemi: Well, you're absolutely right, Justice Scalia, but that doesn't mean that Congress, therefore, should be penalized for including some more specific provisions.
There's nothing that... if Congress wanted to jettison title 1 and the normal rule that a successor of a corporation is liable for that corporation's obligations, then Congress should have said so.
Unidentified Justice: But that... but that meaning would be... make the successor equal to the... the signatory corporation, and that's not what you're urging, and that's not what Mr. Wolfson suggested the statute means.
You're saying that the... that the successor has successor secondary liability.
And then you're looking at the dictionary act.
It says successors are the same.
So, I don't think that that 101... section 1 works for you because it would mean it's... the successor's liability is not a second category of liability, but it would be up there in the top tier with the signer itself.
Mr. Buscemi: Your Honor, as a matter of discretion, the commissioner, in assigning the beneficiaries, could elect which of several possible assigned persons it was going to make the assignment to, and I think that's all the commissioner has done here.
The... the fact of the matter is if... if we want to do an absolute, literal reading of the language, I think that the signatory operators are included there.
I think what the... our opponents are doing is they're saying we want it one way because we want the natural reading, but we don't want the really absolutely literal reading.
This Court said--
Unidentified Justice: Well, that... that also I don't understand because I'm not sure that the... the... when... when the title 1 defines successor, it is talking about the person who buys assets.
I thought it was talking about and the business goes on.
I thought that in the meaning of that section, it arises from a merger or an acquisition and not an asset sale where the company goes out of business.
Mr. Buscemi: --Well, that may be, and that's what our opponents argue, but that issue is not before the Court right now.
That issue was not reached by the court of appeals.
The issue before the Court is whether this statute can be read to cover successors of signatory operators or successors in interest of signatory operators, however that may be defined.
And as I... as I think the... the Court has said in... in other decisions, sometimes one needs to depart from the ordinary or most natural meaning in order to adopt a meaning that is consistent with the overall intention and policy of the statute, which is--
Unidentified Justice: That's Holy Trinity, isn't it?
Mr. Buscemi: --Well, I think in Holy Trinity--
Unidentified Justice: Do we not have to go that far?
Mr. Buscemi: --they were talking about the spirit of the statute, Your Honor.
We weren't going that far.
Unidentified Justice: Going back to your argument that the... the other side's position is simply an... an immediate inducement to sell, isn't one answer to that that if that's what the... the signatory does, it's going to be the signatory's brother/sister corporations or parent corporations that are, in effect, going to... probably going to be penalized, as it were, with liability?
And isn't that the reason why the inducement that you refer to does not operate in such an automatic way?
Mr. Buscemi: Well, not necessarily, Your Honor.
It would depend on what the nature of the corporate family is.
Are there multiple corporations?
Are there brother and sister--
Unidentified Justice: Well, it would depend on how... yes, it would depend on how control is exerted, but presumably in some of these relationships, there would be a sufficient degree of control to exert that would... would prevent this untoward result.
Mr. Buscemi: --We're not saying it would happen in each and every case, Your Honor, but I think certainly you... you would see a lot of smaller companies using a transaction like this in the future to escape this liability.
Unidentified Justice: Does the act impose potential liability on related persons of successors in interest to signatory operators?
Mr. Buscemi: Well, Your Honor, again, it doesn't specifically go down that line and I'm not aware of any case in which you've taken the... the SSA has taken a successor to a related person and then--
Unidentified Justice: Is that what Sigmon Coal is, one of the respondents here?
A related person to a successor to a signatory?
Mr. Buscemi: --Yes.
It's a related person to Jericol, which is the successor.
Yes, Your Honor.
Unidentified Justice: And you can't point to anything in the act that would cover that.
Mr. Buscemi: Well, Your Honor, I... I think that if... if Jericol is liable, then Sigmon would be liable as a related person to Jericol.
I don't understand our opponents to be challenging that.
I think they're only challenging whether Jericol is liable.
Thank you, Your Honor.
Unidentified Justice: Very well, Mr. Buscemi.
Mr. Woodrum.
ORAL ARGUMENT OF JOHN R. WOODRUM ON BEHALF OF THE RESPONDENTS
Mr. Woodrum: Mr. Chief Justice, and may it please the Court:
Before the Eastern Enterprises case came to this Court in 1998, the lower courts were required to address the question presented by Eastern as to whether its retirees should be assigned to its successor.
The commissioner responded in that case that the Coal Act did not provide for successor liability.
The commissioner's argument is set forth at pages 1a through 8a of the appendix to the amicus brief filed by R.G. Johnson.
In that case... or in that argument, the commissioner stated... and I quote... that Congress omitted successor companies from the Coal Act's assignment provision cannot be attributed to mere legislative inadvertence or neglect.
That particular sentence is at page 3a.
And he further stated at that page, given that the Coal Act refers to successors in several other Coal Act sections, Congress' omission of successors from both the requirements of the assignment hierarchy and the definition of signatory operators was clearly intentional.
While it is the case that the Secretary was promoting at that time a policy of nevertheless assigning beneficiaries to successors where the operator was out of business and there were no related persons, that was never rooted in any notion that there was something in the definition of related person that made the successor a related person.
It was simply a manifestation of the commissioner's assumption of what Congress would have wanted the commissioner to do.
Unidentified Justice: What do you think the strongest policy reason would be for imposing liabilities on successors in interest to related parties but not on successors in interest to signatory operators?
Mr. Woodrum: I don't know that there is any policy reason for imposing them on--
Unidentified Justice: Why would Congress make that choice?
Mr. Woodrum: --I think Congress made that choice because, as Justice Scalia has... has noted, this was a statute that came... came together very quickly under great pressure.
It was worked out by a number of groups.
They were facing a strike at the end of the year, and they had had a veto of the earlier statute by President Bush in, I believe it was, April... March or April, and they were left with a short period of time to get it done, and they simply got it done.
Those words appear there.
What they mean is not before the Court.
The words successor in interest of related persons.
Unidentified Justice: So, if it's inadvertent... if it's inadvertent, I think we should try, as hard as possible, to get the interpretation they would have wanted.
You think it's just inadvertent.
Mr. Woodrum: I don't know, Justice Breyer--
Unidentified Justice: What other possible explanation could there be?
Mr. Woodrum: --Well--
Unidentified Justice: It makes no sense.
You agree to that.
Mr. Woodrum: --It... it--
Unidentified Justice: And so, what possible explanation could there be other than a legislative mistake?
Mr. Woodrum: --The... the... one possible reason why that is there is that it was never intended to have the broad meaning which the commissioner has given it, which is--
Unidentified Justice: I know, but I mean, why?
What... what... you said there is no reason that you can think of.
I can think of none.
Any policy it could serve to have the... the nephews related but not the direct descendant makes no sense to me, and you can't make any sense out of it either, I... I gather.
Now, that being so, what... why... why was it written that way?
And we can think of one answer.
It was inadvertent.
Is there any other possibility?
Mr. Woodrum: --The... I don't know why it's there.
We have no legislative history as to why that phrase was there.
Unidentified Justice: Well, we do have some legislative history.
We're asking you to speculate.
If there's no conceivable reason, I'm... I'm inclined to say, yes, maybe... you know, maybe it was a mistake--
Mr. Woodrum: Well--
Unidentified Justice: --and we should... we should regard it as a scrivener's error.
You... you cannot conceive of any reason, is that what you're saying, why... why that... why it came out that way?
Mr. Woodrum: --I think it came out that way because when you look at the parallelism of the earlier draft of the statute, there had been provisions that were parallel.
Although they referred to successor, there was a... in the... in the immediately earlier draft that's appended to... again, to the R.G. Johnson amicus brief, there was a provision that did define a... a signatory operator to include a successor, which is--
Unidentified Justice: Which would make you think that this was intentional, but you... you tell us--
Mr. Woodrum: --Exactly.
Unidentified Justice: --You tell us you cannot conceive of any reason why somebody would do that intentionally.
Mr. Woodrum: To put in... Justice Breyer's question was why might there be a reference to successor in interest of a related person and not such a reference to--
Unidentified Justice: Right.
Mr. Woodrum: --a successor in interest of the direct signatory.
And that is because between the... the couple of days between the draft that had successor liability for signatory operators and the enactment, the version that actually was hammered out and agreed to, the successor language was ripped out of the definition of successor... of signatory operator.
It seems clear there that there was a--
Unidentified Justice: Well, was it ripped out or was it never put in?
Mr. Woodrum: --Well, it was--
Unidentified Justice: In this particular bill, it was never put in.
Mr. Woodrum: --It was not put in.
Unidentified Justice: All right.
Mr. Woodrum: It was the from the earlier draft.
Unidentified Justice: Okay.
So, they didn't have to do any ripping to the text with which they started here.
Mr. Woodrum: Not this text, that's correct.
Unidentified Justice: Let me just go one step further than Justice Scalia's question and... and ask you this.
I... I take it it's... it's correct that at no time in this litigation has your side either represented to the court or tried to offer any evidence to any court that this was the result of a... in effect, a deliberate political agreement.
You know, we'll withdraw our opposition if you'll take that out kind of a agreement.
Mr. Woodrum: No.
We've not taken the position that there was a... a... some sort of a tradeoff of taking it out of the one section and yet leaving it in the other.
Unidentified Justice: Then that really does leave it as kind of unexplained inadvertence.
I mean, that's the only way we can look at it, isn't it?
Mr. Woodrum: It would be... if it's unexplained inadvertence, it would be in leaving in language that speaks to successor in interest of the related person.
Unidentified Justice: Oh, I see.
It is a mistake, but you don't know which mistake it is, whether it is--
Mr. Woodrum: Well, no, I think--
Unidentified Justice: --it is failing to include the... the original owners or including the... the later--
Mr. Woodrum: --No.
It... it would seem clear--
Unidentified Justice: --So, maybe we should ignore the later language instead of ignoring this language.
That's a real puzzlement which language we should ignore.
[Laughter]
Mr. Woodrum: --The... the problem is that... and that's why the courts tend to enforce the plain language of the statute as written is because we don't know what happens in those discussions, in those negotiations that lead to the enactment.
Unidentified Justice: You're... you're not saying, are you, that you know for a fact that there was not this... this kind of motive, to simply save the liability of the initial coal owners?
You... you don't know for a fact that that was not why it was eliminated, do you?
Mr. Woodrum: There is nothing in the record that speaks to it one way or the other.
Unidentified Justice: Well, that isn't quite true.
I know Justice Scalia won't look to this part of the record, but there is legislative history that to me strongly suggests there was no such political deal.
You have Senators Wallop and Senator Rockefeller get up and they say this does cover the successor in interest.
In my experience, whenever one Senator says such a thing and that's actually a contested issue, the other side gets a different Senator to get up and say the opposite.
So... so, I would say that it's very contrary to any situation of which I'm aware in which there was a real political fight.
Mr. Woodrum: Well, let me explain each of those... those two comments.
First of all, Senator Rockefeller put some comments into the record on many different points, and so far there have been three circuit courts that have declined to attribute or... or to give plain language the meaning that... that Senator Rockefeller said it should have on three other issues, in addition to this particular issue.
Those cases are noted in... in our brief.
Secondly, as far as Senator Wallop's comment is concerned, it appears that it was simply added in as a technical explanation.
I don't think that--
Unidentified Justice: I agree.
I'm just saying that the fact that they're there is evidence that what you're saying is completely true, that this was not a deal.
If that's evidence of that, I'm not saying how strong it is--
But my... my... what I'd actually like to ask you is, if in fact it's inadvertent or we don't know, then why don't we just do this?
It says the term signatory operator means a person who is a signatory operator.
The first sentence of the U.S. Code, just after it defines lunatic and idiot--
[Laughter]
--says that the word person includes corporations.
Then section 5 says the word company... and it includes corporations, companies, associations.
The word company or association, when used in reference to a corporation shall be deemed to embrace the word successors and assigns as if the words successors and assigns, or words of similar import, were expressed.
And it tells us to read statutes that way unless the context indicates otherwise.
Very well.
What in here indicates otherwise?
Isn't that the issue?
The issue is not the meaning of the... of whether 1, 2, and 3 include assigns.
The issue is whether 1, 2, and 3 preclude the ordinary meaning in the preceding sentence of person to include the successors of a corporation.
Mr. Woodrum: --Justice Breyer, the... the title 1 dictionary act by its terms is to be applied when there is no evidence--
Unidentified Justice: That's right.
Mr. Woodrum: --in the statute.
Unidentified Justice: That's exactly--
Mr. Woodrum: We have ample evidence in this statute that Congress specifically considered both questions of successor and successors in interest because those terms are used throughout the statute.
For example, at section 9711(g), the term, last signatory operator, is defined to include successor in interest.
And the interesting thing about--
Unidentified Justice: --But what you're doing right this minute, you see, which is fine, which I'll let you do and I'd like you to do, but note that what you're doing is not addressing, as I think you're quite right, whether you can shoehorn successors into paragraphs 1, 2, and 3, which is pretty tough to do.
Rather, you're addressing a different question of whether the context shows that the ordinary dictionary act definition should not apply to a preceding sentence.
Now, noting that that's what you're doing, I'd be happy to have you do it.
May I--
--He's doing that because you asked him the question.
[Laughter]
I mean, don't... don't blame it on him.
May I follow up on that--
--Why don't we give him a chance to answer?
--by asking of my role in saying that the dictionary act... the use of the word successor in the dictionary act is not the use of the word... if Justice Breyer was right that successor means successor, but I thought successor, in the meaning of the dictionary act, was not the kind of successor that we're dealing with here... that is, an asset sale... but was the successor corporation when two corporations merge, when one corporation acquires another.
And if that's so, then the dictionary act would not touch at all the asset sale successor.
Mr. Woodrum: --Exactly, Judge Ginsburg, and that's the--
Unidentified Justice: Why is that?
Because what the... what it says is, literally, pretend that the word successor appears in the statute that you're reading.
Okay, I'll pretend it.
So, I now read the word signatory operator means a company and its successors.
What in there says that I can't read this as applying to an asset sale as well as any other kind of transfer?
Mr. Woodrum: --Again, the dictionary act is of general background and relevance to the Court to provide assistance where Congress hasn't spoken to the issue.
But going back, at my peril, to section 9711(g), which does have the words you're looking for or I should say that the commissioner is looking for in section 9701(c)(2), the interesting thing about section 9711(g), it applies to different but brother plans, shall we say, or comparable plans that were also part of this legislation.
And section 9711(g) says, for purposes of these plans, it shall... the last signatory operator shall include a successor in interest.
Unidentified Justice: May I just--
Mr. Woodrum: And that's the only rule.
It says, rules for purposes of these plans, and that is the... the words that go to successor in interest and a subpart that goes to post-enactment successors is the only special rule there, which has to carry the implication--
Unidentified Justice: --Let me just--
Mr. Woodrum: --that there was some certainty to not having that term appear in section 9701(c)(2).
Unidentified Justice: --May I just clarify one point in response to your answer to Justice Ginsburg?
You do agree, do you not, that even though this sale was an asset sale, that we are dealing with a successor in interest of a signatory here, within the meaning of 9701(c)?
Mr. Woodrum: As the commissioner has defined it, that issue as to whether--
Unidentified Justice: So, the term successor, at least in this statute, includes a purchaser at an asset sale as well as a purchaser of stock.
Mr. Woodrum: --No, Your Honor, it doesn't necessarily include that.
That's the way the commissioner... that's the position the commissioner has taken.
Unidentified Justice: But haven't you conceded that you are a... your client is a successor in interest of a signatory operator?
Mr. Woodrum: As... as the commissioner has--
Unidentified Justice: I didn't think you challenged that.
Mr. Woodrum: --Well, the issue is not before the Court.
That issue is reserved below.
If the... if the Court concludes that a successor in interest to a signatory operator is covered, then we would be remanded back to determine whether we, as an asset purchaser, are in fact a successor in interest as that term is used.
Unidentified Justice: But there are... there are statutes that define successor in interest to include a kind of an asset sale.
You... successor in interest can mean different things in different statutes.
Mr. Woodrum: Exactly, Judge Ginsburg, and that's why it would be remanded for further determinations, although the Williams Mountain court, the D.C.... the District of Columbia Circuit several months ago in the case of Williams Mountain did define that term to... they didn't give it a specific definition, but they said it's somewhere between a tax code successor and the Black's Law Dictionary common law successor, which does not include asset purchasers.
Unidentified Justice: But, Mr. Woodrum, it seems to me you cannot fairly have it both ways.
You can either concede that a successor within the meaning of this act includes an asset purchaser and then make the argument that using the dictionary act wouldn't... wouldn't produce a sensible statute anyway because, under the dictionary act, successor would not normally be interpreted to include an asset purchaser.
Now, you can make that argument if you concede that under this legislation, successor does include an asset purchaser.
But... but if you are not willing to concede that point, then it seems to me you have to abandon the argument that the dictionary act makes no sense here.
It may well make sense if you accept your definition of successor.
Mr. Woodrum: We would not rely on the dictionary act as having any relevance on remand.
The dictionary act has no applicability to the statute because the statute itself deals with successor liability and successor in interest liability.
This is not a concept that Congress did not have in mind and... and therefore left to the dictionary act--
Unidentified Justice: Except that it deals with successor liability in a way that you've been unable to explain makes any sense whatsoever, that there's no reason to impose successor liability on the successor of a related person, while not imposing it on a successor of a signatory.
Mr. Woodrum: --It... the statute does not impose liability on successors.
Unidentified Justice: Successors of related persons.
Mr. Woodrum: No, sir.
It... it speaks to successors in interest, which is where some of the difficulty in this case arises because the commissioner has just lumped the two together as though they are the same.
So, when we look at the language of the statute, even under the... the reading that the... that the commissioner has attempted to expand to--
Unidentified Justice: You're suggesting there's a difference between successor in interest and successor.
Mr. Woodrum: --Yes, I believe there is a difference.
Unidentified Justice: And what is the difference?
Mr. Woodrum: Well, typically if you look at the Black's Law Dictionary or the common law application of successor in interest, it is statutory succession, merger, name change successors, and so forth.
And in fact, at one point in time, the commissioner even had adopted that definition.
Unidentified Justice: I see, but granting that... assume it only refers to a limited class.
It still... you still have failed to explain whatever that class of successor in interest includes, why should it apply to successors of related persons and not apply to successors of signatories.
I don't think you've given us a reason for that.
Mr. Woodrum: Well, it... it really... I don't know the reason for that.
Congress wrote the act that way.
That's the way it came out.
It doesn't cause any loss of benefits.
It doesn't provide any harm, and whatever the result of that is, it wouldn't be... even if there were some oddity about it, it wouldn't serve as a basis to, if you will, bootstrap liability onto, as one of the Justices indicated before... I believe it was Justice Ginsburg... that the majority, if not the entirety, of the operators that are actually affected by this.
There... other than the... the notation this morning by the Solicitor General, there... we weren't aware that the commissioner had ever made an assignment of liability.
Unidentified Justice: But you're not contesting that that statement in... in your brief was inaccurate.
But that merely emphasizes... that merely emphasizes the incongruity of the statute.
If there... it didn't serve a function there, why would they take the trouble to put it in and not put it in for signatories?
It just... it just doesn't make any sense at all.
In fact, it... it's worse.
It's perverse if your view is correct.
Mr. Woodrum: I don't think so, with all due respect, because what... what happened or what is a plausible scenario is that we have 50 years of retroactivity in commercial transactions that have occurred in the coal industry.
Nobody has disputed that this is a manner of doing business in the coal business, to buy and sell assets.
So, the focus was to avoid the possibility by putting language in the definition of signatory operator that might enable... might inject confusion or interpretation by... by the commissioner, by the Combined Fund, or even by the courts, that that signatory operator meant anything other than the entity that signed the agreement.
And by taking... by ensuring that there is nothing in this act that opens that up, then there... it is clear that what liability has been imposed goes on the signatory operators and the other operators aren't going... such as Jericol in this case, aren't going to be held responsible for beneficiaries they never employed based on transactions that happened 20 or 30 years ago, which were very common.
Unidentified Justice: But if I understand the definition of related persons, it could cover people not even in the coal business at all and their successors in interest.
Mr. Woodrum: It does, but the thing about that definition is and the reason it has some logic to expanding liability is it does encompass entities that have an economic connection with the employer.
Unidentified Justice: I do... I do have one question on... on the basic statutory point, the shoehorning question of whether or not Shackleford is... is described in the statute.
Was Shackleford a member of the... of a controlled group of corporations?
Mr. Woodrum: No, it was not.
It was a family-owned company.
It had no related persons.
Unidentified Justice: So, then Roman I would not apply.
Mr. Woodrum: That's correct.
There are--
Unidentified Justice: Because it seemed to me if Shackleford had been a member of a controlled group of corporations, then it might have been included in the controlled group and then it might have been described.
Mr. Woodrum: --Which is the problem with the commissioner's linguistic gymnastics in trying to say that the... the commissioner's definition in that case would basically mean that there's always a control group because one is always related to himself.
So, we always have a group of one.
But... but linguistically that can't really be the case.
Unidentified Justice: But if it had been a member of a controlled group, not a group of one, that argument would have been slightly more plausible, it seems to me.
Mr. Woodrum: I don't think it would be any more plausible--
Unidentified Justice: You would still be... you would still be related to yourself.
Mr. Woodrum: --Exactly.
You'd still... and the interesting thing about that argument, not to... not to belabor it, but under that argument, you would always make an assignment... the commissioner would always make an assignment to a successor who never employed the individuals even though the act's assignment criteria at 9706 says you make assignments to employers under certain... employers that employed or signatory operators that employed the miners in the coal industry.
Under that interpretation, you would first go to a successor, even though there may be other employers out there who--
Unidentified Justice: But--
Mr. Woodrum: --who actually employed the miner.
Unidentified Justice: --When I talk about Shackleford, I mean the first Shackleford.
Shackleford, the seller, was never a member of a controlled group.
Mr. Woodrum: That's correct.
Unidentified Justice: Because if it had been, I think the commissioner would have had a better argument, and it would have still the problem of being related to yourself.
I understand.
Mr. Woodrum: We would still have all the linguistic problems with... with describing--
Unidentified Justice: Well, I don't think all because it is... the word there is include in 1.
And so, that... you're describing somebody who's included within a controlling group.
But if it's not applicable, then I don't need to... I don't think we need to pursue it.
Mr. Woodrum: --Well, it's not applicable here.
I... I think that we'd still have a problem with... the basic problem that some of these clauses, for example, refer to limited partners.
They're included.
Yet, it's quite clear that they're not to have liability.
So, the fact that they're named or mentioned would still lead you to an unworkability with that kind of definition.
And it also ignores the... the prior draft of the legislation which had those very words in... in the draft, and they didn't appear in the enacted version, as well as the inconsistency with the 9711 language, which does include that language.
Unidentified Justice: I know you've discounted the significance of the legislative history, the Senator's comment and so forth.
If there had been a committee report, which clearly stated that the drafters of the committee report thought that they picked up successors to the signatory, would you say that statute should control or the committee report should control?
Mr. Woodrum: The... the jurisprudence of this Court is that the language of the statute controls when it's clear.
Unidentified Justice: Even if it's perfectly clear Congress intended otherwise.
Mr. Woodrum: Yes.
Unless... if there were a... some kind of a... a very unusual situation, a question of a scrivener's error or something, then... then perhaps it would... it would be relevant.
But, of course, there were no reports at all on--
Unidentified Justice: I guess the answer is that the only way it can be perfectly clear that Congress intended otherwise is for both houses of Congress, not a single committee of one Congress, to have enacted the provision.
Mr. Woodrum: --Exactly.
Unidentified Justice: That would make it perfectly clear that both houses intended otherwise.
It would make it perfectly clear to Justice Scalia.
[Laughter]
Mr. Woodrum: It... it makes... it makes for a... a rational jurisprudence when one tends to enforce the... the language that's actually in the statute.
And let me point out that what we're talking about here is retroactive liability.
This liability is grounded in transactions that occurred decades before enactment of this act.
Unidentified Justice: That's what makes it so anomalous to impose successor liability on successors of related persons who don't have anything to do with the coal industry.
That's what... the troubling thing to me is the extent of the... the successor liability that is included within the statute, and then it does not include people who are still in the coal business.
Mr. Woodrum: But if... but if that question comes to the Court, the Court will have to deal with that question as to whether that is liability that may be enforced and imposed on such distantly related entities for historic transactions under the same criteria that the Court used, for example, in the Eastern Enterprises case.
Unidentified Justice: Of course, these people were distant not only from the transactions in question but also from the negotiations that produced the statute.
Mr. Woodrum: Exactly.
Unidentified Justice: And... and that may well be the explanation of why they got stuck.
Mr. Woodrum: Yes, if they weren't there to represent their interests, then... and they likely weren't since, I don't think, anybody that is that distant... distantly related would have even been aware that there was a problem in funding benefits.
But to... to reflect back on the question of sort of the clear language and this Court's view of how clear Congress must be in enacting these statutes, as the Court said in Lansgraf, since the early days of this Court, we have declined to give retro effect... retroactive effect to statutes burdening private rights unless Congress made clear its intent.
Requiring clear intent assures that Congress itself has affirmatively considered the potential unfairness of retroactive application and determined that it is an acceptable price to pay for the countervailing benefits.
And this... this liability is all retroactive, and we should be looking for a very clear expression of congressional intent to assign it to successors or successor in interest before the commissioner may, in effect, impose large, what are now administrative obligations--
Unidentified Justice: But, of course, here there's no doubt about the fact that whoever is covered... it was intended to be... the statute was intended to have retroactive effect.
Mr. Woodrum: --Yes.
Unidentified Justice: Which is, of course, what Lansgraf was--
Mr. Woodrum: It is... it is retroactive to everyone that is covered.
The final point is that if this language is enforced as written, the benefits are going to be provided to the Shackleford beneficiaries on a pro rata basis by all the operators who are assigned liability, including Jericol, to the extent it otherwise has valid liability for people that it did employ.
And Congress specifically made available the interest from the Abandoned Mine Land Trust Fund to subsidize that liability, and to date all of that liability that... for the orphan beneficiaries who have no... have no employer or related person still in business has been funded by the interest that's been made available.
And there has been no premium assessed on the other operators to pay for the unassigned beneficiaries or these orphan beneficiaries' health care.
So, Congress not only made clear in the way it laid out who's to receive the liability, but it also provided sources of funding and guarantees so that those miners, those retirees who have no last employer still in business will receive their benefits--
Unidentified Justice: --And you say that funding has been adequate thus far.
Mr. Woodrum: --Yes, Your Honor.
That... there has never been a call on the assigned operators to pay any pro rata premium towards the payment of unassigned beneficiaries' health care.
Further questions?
I'll--
Unidentified Justice: Thank you, Mr. Woodrum.
Mr. Wolfson, you have half a minute remaining.
Don't use it all in one--
REBUTTAL ARGUMENT OF PAUL R.Q. WOLFSON ON BEHALF OF THE PETITIONER
Mr. Wolfson: Thank you, Mr. Chief Justice.
Very briefly.
The purpose of section 9701(c)(2) was to reach the signatory operators and the broad group of persons that were related to them by successorship and by the related concept.
And it did that specifically because Congress did not want to go to the Abandoned Mine Fund or to a pro rata exaction on the other signatory operators unless that was necessary as a last resort.
Mr. Woodrum said there's no harm caused by affirming the Fourth Circuit.
But that... even if nobody loses their benefits tomorrow, as a result of affirming, Congress did view that as a less desirable alternative.
Unidentified Justice: Thank you, Mr. Wolfson.
Mr. Woodrum: Thank you.
Chief Justice Rehnquist: The case is submitted.
