## Facts

- Congress enacted the Coal Industry Retiree Health Benefit Act of 1992 (Coal Act) to stabilize funding for retired coal miners’ health benefits by creating a Combined Benefit Fund and financing it through annual premiums assessed on “signatory operators” and related entities.
- The Coal Act assigned each eligible retiree to a responsible operator using a tiered allocation system, including a “third-tier” rule assigning liability to the operator that employed the retiree the longest before 1978 when no later responsible operator could be identified.
- Eastern Enterprises had been a major coal operator and a signatory to earlier National Bituminous Coal Wage Agreements (NBCWAs), contributing to multiemployer benefit funds while it operated coal mines.
- Eastern exited the coal industry in 1965, before later NBCWAs (including 1974 and 1978 agreements) that more clearly linked employment to continuing retiree health benefit obligations while operators remained in business.
- Under the Coal Act’s allocation rules, Eastern was assigned responsibility for more than 1,000 retirees based largely on pre-1966 employment, resulting in multi-million-dollar annual premium obligations of indefinite duration.
- Eastern challenged the assessments as unconstitutional under the Fifth Amendment.
- The district court upheld the statute on summary judgment for the government, and the First Circuit affirmed.

## Issues

1. Whether imposing substantial, retroactive, and open-ended Coal Act premium obligations on Eastern constituted an unconstitutional taking under the Fifth Amendment as applied to Eastern.
2. Whether the Coal Act’s retroactive imposition of liability on Eastern was arbitrary and irrational, violating substantive due process.
3. Whether Eastern could seek injunctive and declaratory relief in federal district court against the assessments.

## Decision

- The Supreme Court reversed and remanded, holding the Coal Act unconstitutional as applied to Eastern.
- A four-Justice plurality concluded the statute’s application to Eastern effected an unconstitutional regulatory taking because it imposed a severe, targeted, retroactive financial burden disconnected from Eastern’s commitments and long after it left the industry.
- Justice Kennedy concurred in the judgment, agreeing the statute was unconstitutional as applied, but reasoning that the proper analysis was substantive due process because the assessments imposed a general monetary obligation rather than appropriating a specific property interest.
- Four Justices dissented, concluding the Coal Act was a rational economic measure and did not violate either the Takings Clause or substantive due process.
- No single rationale commanded a majority, but a majority agreed Eastern could not constitutionally be subjected to the Coal Act assessments on these facts.

## Legal Principles

- Severe, targeted retroactive economic burdens may be unconstitutional as applied when imposed long after the relevant conduct and lacking a sufficient connection to the party’s commitments or responsibility for the problem addressed.
- A plurality treated a statute imposing a large, individualized, retroactive payment obligation as a regulatory taking under the Fifth Amendment, applying factors associated with regulatory takings analysis.
- A separate controlling vote rejected the Takings Clause as the proper framework for general payment obligations and instead evaluated extreme retroactive liability under substantive due process rationality constraints.
- Fragmented reasoning limits the decision’s use as a broad rule on whether monetary liabilities are “takings,” but it supports heightened constitutional concern with unusually harsh, retroactive, and narrowly assigned liabilities.

## Conclusion

The Court held that the Coal Act’s assignment of ongoing retiree health benefit premiums to Eastern, a company that left coal mining decades before the asserted long-term benefit commitments arose, was unconstitutional as applied, though the Justices split on whether the violation sounded in the Takings Clause or substantive due process.


Eastern Enters. v. Apfel, 524 U.S. 498 (1998)