Barnhart v. Peabody Coal Company

RESPONDENT: Peabody Coal Company
LOCATION: Dr. Nguyen's Office

DOCKET NO.: 01-705
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Sixth Circuit

CITATION: 537 US 149 (2003)
ARGUED: Oct 08, 2002
DECIDED: Jan 15, 2003

John G. Roberts, Jr. - argued the cause for Peabody Coal Co. et al., respondents in No. 01-705
Barbara B. McDowell - Argued the cause for the petitioner Barnhart
Jeffrey S. Sutton - Argued the cause for the respondents Bellaire Corporation, et al
Peter Buscemi - Argued the cause for the petitioners Holland, et al

Facts of the case

Under the Coal Industry Retiree Health Benefit Act of 1992, the Commissioner of Social Security "shall, before October 1, 1993," assign each coal industry retiree eligible for benefits under the Act to a company, which shall then be responsible for funding the beneficiary's benefits. After October 1, 1993, the Commissioner assigned 600 hundred beneficiaries to various coal companies. The companies challenged the assignments, claiming that the statutory date sets a time limit on the Commissioner's power to assign such that a beneficiary not assigned on October 1, 1993 must be left unassigned for life. Under the companies' argument, the challenged assignments are void and the corresponding benefits must be financed by other pension plans and funds. The companies obtained summary judgments, and the Court of Appeals affirmed.


Is the assignment of beneficiaries, under Coal Industry Retiree Health Benefit Act of 1992, valid if the assignment was made after the Act's October 1, 1993 deadline?

Media for Barnhart v. Peabody Coal Company

Audio Transcription for Oral Argument - October 08, 2002 in Barnhart v. Peabody Coal Company

Audio Transcription for Opinion Announcement - January 15, 2003 in Barnhart v. Peabody Coal Company

William H. Rehnquist:

The opinion of the Court in No. 01-705, Barnhart versus Peabody Coal Company and companion case will be announce by Justice Souter.

David H. Souter:

These cases come to us on writs of certiorari to the United States Court of Appeals for the Sixth Circuit.

The Coal Industry Retiree Health Benefit Act of 1992 established a comprehensive scheme for funding benefits for retired coal industry employees.

The question here goes to the interpretation of the Section of the Coal Act providing that the Commission of Social Security shall, before October 1, 1993, assign such eligible retirees to a particular coal company or an affiliate which will then be responsible for funding the retirees benefits.

Assignment of beneficiaries to a coal company has two relevant consequences: First, each company must pay an annual premium to fund the health and death benefits for its assigned beneficiaries and their eligible dependents; second, the company may have to pay a further premium based on the needs of retirees who are not assigned to particular coal companies.

This so-called unassigned beneficiary premium is calculated based on the number of assigned beneficiaries a company has.

The greater number of assigned beneficiaries to hire the company's unassigned beneficiaries premium.

In these cases, the Commissioner signs several beneficiaries to the respondent companies after the Coal Act's deadline of October 1, 1993.

The companies sued the Commissioner in two separate lawsuits claiming that the assignments were void because they were untimely.

The District Courts granted summary judgment to the company's in both cases, thus holding that an assignment after October 1, 1993 was void.

The Court of Appeals affirmed both judgments based on Circuit precedent.

In an opinion filed today with the Clerk of the Court, we reverse.

Although the statutory date is clearly a mandatory deadline, the use of the word shall combined with a date does not automatically prohibit an agency from completing its duty even in untimely fashion.

Our cases have held since 1986, that the Federal Courts will not impose or sanction for an agency's failure to comply with a statutory filing timing provision if Congress does not provide one and Congress was presumably aware of these cases when it passed the Coal Act in 1992.

Similar uses of the word "shall" combined with dates and other provisions of the Coal Act support our conclusion.

The presence of a system for funding the benefits of unassigned beneficiaries did not mean that Congress meant to leave beneficiaries who are not assigned on time unassigned forever.

Nothing indicates that Congress ever foresaw other possibility that beneficiaries who could be assigned, that is beneficiaries form whom a responsible coal company is still in business would nonetheless not have been assigned by October 1, 1993.

The companies themselves point out that as late as 1995, Congress had reason to believe that the work had been completed on time.

The provision that a coal company's applicable percentage share of the unassigned beneficiaries premium is determined on the basis of assignments as of October 1, 1993 was adopted on the reasonable assumption then that the work would be done on time.

It did not state that if the work was not done on time, it could not be done at all.

The legislative objective of allocating the greatest number of eligible beneficiaries to responsible coal companies is served by treating the deadline as a spur to prompt action by the Commissioner not as a loophole that would let certain fortunate companies go scot free.

Justice Scalia has filed a dissenting opinion in which Justices O'Connor and Thomas join; Justice Thomas has filed a separate dissenting opinion.