of a tax on the coal industry, as defendants do, is a rational means of achieving that end.
Because the substantive component of the Due Process Clause thus guarantees nothing but this slightest of checks on federal legislation affecting economic activity, no further analysis is required. See also United States v. Carlton, 129 L. Ed. 2d at 34-35 (Scalia, J., concurring in the judgment, stating that the Due Process Clause guarantees no substantive rights).
The Takings C1ause
states that private property shall not "be taken for public use, without just compensation." See Dolan v. City of Tigard, 129 L. Ed. 2d 304, 315, 114 S. Ct. 2309 (1994). The Coal Act by its terms benefits only those coal miners and their beneficiaries who have been held to be already entitled to lifetime benefits under the NBCWAs. The UMWA and current members of the BCOA are therefore the real beneficiaries of the Coal Act, since the cost of benefits to the benefit plans established by the UMWA and BCOA is transferred in part to entities like Unity that have long since ceased to have any contractual obligation under or receive any contractual benefit from a NBCWA. That Congress has legislated for the benefit of a favored few is no constitutional infirmity, since Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 81 L. Ed. 2d 186, 104 S. Ct. 2321 (1984), essentially renders the question of what is a public use a nonjusticiable political question.
What is constitutionally significant is the manner in which burdens are assigned, because a principal purpose of the Takings Clause is "to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Dolan v. City of Tigard, 129 L. Ed. 2d at 316, quoting Armstrong v. United States, 364 U.S. 40, 49, 4 L. Ed. 2d 1554, 80 S. Ct. 1563 (1960). Determining whether a particular statutory scheme results in a taking depends on an ad hoc assessment of (1) the economic impact of the statute on the burdened party; (2) the extent of the statute's interference with distinct investment-backed expectations; and (3) the character of the governmental action. See Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 224-25, 89 L. Ed. 2d 166, 106 S. Ct. 1018 (1986).
The Blue Diamond court analyzed the economic impact factor in terms of the gross effect of the Coal Act on the company's balance sheet. As seen from the factual recitation in this case, Unity Real Estate will be utterly liquidated within the first several months of payments under the Act. That is not dispositive, however, since Connolly counsels an examination of the "relationship between the employer and the plan to which it had made contributions," i.e., an examination of the economic nexus between the burden and the party burdened by the statute. 475 U.S. at 225-26
Even this finer analysis weighs against the Coal Act, however, since liability is being imposed on Unity (without the benefit of any predeprivation process) for as little as an allegation of one day's employment of an employee covered by the Act, even if that employment took place, and the company ceased to do any business in the coal industry, more than ten years before the Coal Act.
Character of the government action
Whatever the congressional motive in spreading liability from the sector of the mining industry already best able to protect itself -- the UMWA and the current members of the BCOA -- to a small unsophisticated former coal operator like Unity, the legislation itself is a social welfare measure within Congress' responsibility for interstate commerce and receives the strongest presumption of constitutionality.
Effect on investment-backed expectations
The best analysis of this factor was provided by Judge Hull in Blue Diamond:
It was reasonably foreseeable that Congress would take action to ensure that the UMWA benefit trust would remain solvent... . But it was a good deal less foreseeable that the legislation chosen to solve the problem would reach back to conduct which occurred almost 30 years ago to enforce a "promise" Blue Diamond never actually made. slip. op. at 12.
The argument in favor of the Coal Act is roughly this: those operators who withdrew from the unionized coal industry before the NBCWAs were interpreted in cases such as UMWA v. Nobel and UMWA 1974 Pension v. Pittston Co., 299 U.S. App. D.C. 339, 984 F.2d 469 (D.C.Cir. 1993) to impose perpetual obligations to contribute to the 1950 Pension Plan and the 1974 Pension Plan did not incur the same costs as the coal industry currently does. This disparity results from the incorporation (by judicial decisions) into the cost of doing business of the externality of the social cost of health benefits to miners and their beneficiaries. The Coal Act merely extends that incorporation of externalities to operators who left the industry.
The foregoing analysis is completely within the constitutional mainstream when applied to externalities actually generated by the nature of the coal industry itself, or even to conditions rationally related to the coal industry. The classic example is Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 16-17, 49 L. Ed. 2d 752, 96 S. Ct. 2882 (1976), where the imposition of liability for black lung disease on coal operators even though they had long since left the industry was held to be constitutional. At the opposite pole is the pension plan held unconstitutional in Railroad Retirement Board v. Alton R. Co., 295 U.S. 330, 79 L. Ed. 1468, 55 S. Ct. 758 (1935), because it imposed responsibility for a pension for former railroad employees on employers solely on the basis that they happened to be in the same industry. The continuing vitality of Railroad Retirement Board has been questioned, see Templeton Coal Co., 855 F. Supp. at 1001, and it is clear that the Supreme Court has become much more deferential in tone and in result to congressional legislation since that decision. Nonetheless, Turner Elkhorn Mining Co. itself relied on the fact that imposing liability for black lung disease satisfied a "specific need created by the dangerous conditions under which the former employee labored," 428 U.S. at 19, and did "not simply  increase or supplement a former employee's salary." Id. At least one member of the Supreme Court expressly continues to "leave open the possibility that the imposition of retroactive liability on employers for the benefit of employees may be arbitrary and irrational in the absence of any connection between the employer's conduct and some detriment to the employee." Connolly 475 U.S. at 229 (concurring opinion of O'Connor, J.).
The opinion of the Court in Carlton on the constitutionality of a retroactive tax increase also indicates some continuing limitation on the scope of Congress' powers. The retrospective elimination of a lucrative tax deduction was upheld by the Court on the basis that it was corrective legislation amending an existing tax, "and its period of retroactive effect is limited " 129 L. Ed. 2d at 31, to the year prior to the year of the enactment of the statute. See also id. at 33 ("A period of retroactivity longer than the year preceding the legislative session in which the law was enacted would raise, in my view, serious constitutional questions.") (opinion of O'Connor, J., concurring in the judgment). Dolan v. City of Tigard also sheds some light on the degree of connection required between the assignment of burdens and externalities. Applying the Takings Clause to a municipal attempt to require dedication of a floodplain easement and bicycle path as a condition of expanding a store, the Court held that there must be a "rough proportionality" between the required dedication and the proposed expansion if the municipal action were not to constitute a taking. 129 L. Ed. 2d at 320. See also Connolly, 475 U.S. 211 at 225, 89 L. Ed. 2d 166, 106 S. Ct. 1018 ("The assessment of liability... directly depends on the relationship between the employer and the plan... .")
The Coal Act, as applied to Unity Real Estate, is far closer to the general and unconnected imposition of liability questioned in Connolly by Justice O'Connor and condemned by both the conservative and liberal justices in Railroad Retirement Board than to the imposition of either limited employment-connected liability upheld in Turner Elkhorn Mining Co. or to the temporally limited retroactive increases in tax liability upheld in Carlton, and in pension liability upheld in Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 81 L. Ed. 2d 601, 104 S. Ct. 2709 (1984) and Connolly. The Coal Act's imposition of liability for general health benefits for miners and their beneficiaries, although it undoubtedly is a good thing that retired miners and their beneficiaries have such benefits, lacks any employment connectedness, and is practically unlimited in time. It is obvious that there can be no "rough proportionality" between the burdens it assigns to Unity and the benefit that Unity receives from the employment relationship. As applied to Unity Real Estate Co., it effects an uncompensated taking, and is therefore unconstitutional
Pursuant to 28 U.S.C.§ 636(b)(1), the parties are given notice that they have ten days to serve and file written objections to this Report and Recommendation.
DATE: 7 December 1994
Keith A. Pesto
United States Magistrate Judge