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Constitutional Law Keyed to Choper
Eastern Enterprises v. Apfel
Citation:
524 U.S. 498 (1998)Facts
Eastern Enterprises was formed in 1929 and conducted coal mining operations until 1965, when it transferred its coal business to a subsidiary. During its time in the coal industry, Eastern signed collective bargaining agreements with the United Mine Workers of America (UMWA) and contributed over $60 million to the 1947 and 1950 Welfare and Retirement Funds. These funds operated on a pay-as-you-go basis, with benefits subject to change at the trustees’ discretion. No specific promise of lifetime health benefits existed during Eastern’s time in the coal industry. In 1974, after Eastern had left the industry, new agreements between the UMWA and coal operators first explicitly promised lifetime health benefits to retirees. By the 1990s, the benefit funds faced financial difficulties as companies left the coal industry. Congress responded by passing the Coal Act in 1992, which assigned liability for retirees’ health benefits to their former employers, including Eastern, which was assigned responsibility for over 1,000 retired miners who had worked for the company before 1966. Eastern’s premium for a 12-month period exceeded $5 million, with potential total liability between $50-100 million.
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