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E. Enters. v. Apfel

Supreme Court of the United States

March 4, 1998, Argued ; June 25, 1998, Decided

No. 97-42


 [*503]  [***459]  [**2137]    JUSTICE O'CONNOR announced the judgment of the Court and delivered an opinion, in which THE CHIEF JUSTICE, JUSTICE SCALIA, and JUSTICE THOMAS join.

In this case, the Court considers a challenge under the Due Process and Takings Clauses of the Constitution to the Coal  [*504]  Industry Retiree Health Benefit Act of 1992 (Coal Act), 26 U.S.C. §§ 9701-9722 (1994 ed. and Supp. II), which establishes a mechanism for funding health care benefits for retirees from the coal industry and their dependents. We conclude that the Coal Act, as applied to petitioner Eastern Enterprises, effects an unconstitutional taking.

For a good part of this century, employers in the coal industry have been involved in negotiations with the United Mine Workers of America (UMWA or Union) regarding the provision of employee benefits to coal miners. When petitioner Eastern Enterprises (Eastern) was formed in 1929, coal operators provided health care to their employees through [****14]  a prepayment system funded by payroll deductions. Because of the rural location of most mines, medical facilities were frequently substandard, and many of the medical professionals willing to work in mining areas were "company doctors," often selected by the coal operators for reasons other than their skills or training. The health care available to coal miners and their families was deficient in many respects. In addition, the cost of company-provided services, such as housing and medical care, often consumed the bulk of miners' compensation. See generally U.S. Dept. of Interior, Report of the Coal Mines Administration, A Medical Survey of the Bituminous-Coal Industry (1947) (Boone Report); Report of United States Coal Commission, S. Doc. No. 195, 68th Cong., 2d Sess. (1925).

 In the late 1930's, the UMWA began to demand changes in the manner in which essential services were provided to miners, and by 1946, the subject of miners' health care had become a critical issue in collective bargaining negotiations between the Union and bituminous coal companies. When a breakdown in those negotiations resulted in a nationwide  [*505]  strike, President Truman issued an Executive order directing Secretary [****15]  of the Interior Julius Krug to take possession of all bituminous coal mines and to negotiate "appropriate changes in the terms and conditions of employment" of miners with the UMWA. 11 Fed. Reg. 5593 (1946). A week of negotiations between Secretary Krug and UMWA President [***460]  John L. Lewis produced the historic Krug-Lewis Agreement that ended the strike. See App. in No. 96-1947 (CA1), p. 610 (hereinafter App. (CA1)).

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524 U.S. 498 *; 118 S. Ct. 2131 **; 141 L. Ed. 2d 451 ***; 1998 U.S. LEXIS 4213 ****; 66 U.S.L.W. 4566; 98 Cal. Daily Op. Service 5036; 98 Daily Journal DAR 6937; 22 Employee Benefits Cas. (BNA) 1225; 1998 Colo. J. C.A.R. 3281; 11 Fla. L. Weekly Fed. S 755



Disposition: 110 F.3d 150, reversed and remanded.


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