## Facts

- Unity Real Estate Co. and Barnes & Tucker Co. were coal operators that signed collective-bargaining agreements in the coal industry, including the 1978 National Bituminous Coal Wage Agreement and later agreements promising lifetime health benefits to miners and spouses.
- Congress enacted the Coal Industry Retiree Health Benefit Act of 1992 (Coal Act), creating the United Mine Workers of America Combined Benefit Fund and financing it through annual premiums assessed on signatory operators and certain related persons.
- Although Unity and Barnes & Tucker had exited the coal industry and believed their retiree health-benefit obligations had ended, the Coal Act assigned them premium liability to fund benefits for retirees and dependents.
- The companies challenged the Coal Act as imposing unconstitutional retroactive liability, asserting violations of (1) substantive due process and (2) the Fifth Amendment Takings Clause.
- The district court initially granted a preliminary injunction on takings grounds but later entered summary judgment for defendants, rejecting the constitutional claims.
- Unity and Barnes & Tucker appealed; the Third Circuit consolidated the cases.

## Issues

1. Whether the Coal Act’s retroactive imposition of premium obligations on former coal operators violated the Fifth Amendment’s Due Process Clause as arbitrary or irrational economic legislation.
2. Whether mandatory payment of Coal Act premiums constituted a taking of property without just compensation under the Fifth Amendment.

## Decision

- The Third Circuit affirmed summary judgment for the defendants and upheld the Coal Act as applied to Unity and Barnes & Tucker.
- The court held the Coal Act did not violate substantive due process because it was rationally related to Congress’s legitimate objective of stabilizing retiree health-benefit funding and allocating responsibility to operators connected to the benefit promises and ensuing shortfall.
- The court held the Coal Act did not effect a compensable taking because the premium obligation did not appropriate or destroy a specific, identifiable property interest, but instead imposed a generally applicable monetary liability.

## Legal Principles

- Retroactive economic legislation satisfies substantive due process if it is rationally related to a legitimate legislative purpose and is not arbitrary or irrational in a constitutional sense.
- In assessing retroactivity, a court may consider whether the regulated parties participated in the historical arrangements that produced the problem Congress sought to remedy.
- A statutory obligation to pay money, without targeting or appropriating a specific, identifiable property interest, is generally analyzed under due process principles and ordinarily does not constitute a compensable taking.
- The Coal Act’s assignment of retiree health-benefit funding responsibility to operators who signed post-1974 wage agreements promising lifetime benefits is a permissible legislative allocation of costs to address a funding crisis.

## Conclusion

The Third Circuit held that applying the Coal Act’s premium scheme to Unity Real Estate and Barnes & Tucker was constitutional because the retroactive cost allocation was rationally tied to Congress’s goal of preserving promised retiree health benefits and did not take a specific property interest requiring just compensation.


Unity Real Estate Co. v. Hudson, 178 F.3d 649 (3d Cir. 1999)