Holland et al v. Consol Energy Inc.

REPLY

S.D.W. Va.November 3, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA CHARLESTON DIVISION __________________________________________ ) MICHAEL H. HOLLAND, JOSEPH R. ) RESCHINI and CARLO TARLEY as Trustees, ) of the UNITED MINE WORKERS OF ) AMERICA 1992 BENEFIT PLAN, ) ) Plaintiffs, ) ) Civil Action No. 2:17-cv-02091 v. ) ) ) CONSOL ENERGY INC., ) ) Defendant. ) ) _________________________________________ ) DEFENDANT CONSOL ENERGY INC.’S REPLY IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT Plaintiffs at times seem confused as to what they are actually complaining about. When summarizing purported deficiencies in CONSOL Energy’s Coal Act Plan they initially set out “six key areas” in which they assert the Plan does not measure up to what existed in 1992. Plaintiffs’ Opp. Mem. at 3 (“Pltfs’ Opp. Mem.”), ECF No. 33. Of course, the relevant measuring stick is the 2011 UMWA-BCOA Model Coal Act Plan (“Model Coal Act Plan”) CONSOL was administering prior to adopting the October 1, 2016 Plan that Plaintiffs challenge in this case. Moving between the plan in effect in 1992 and the 2011 Model Coal Act Plan obfuscates the legal issues and the factual context of this case. The Trustees admit that the Model Coal Act Plan CONSOL administered during the term of the 2011 NBCWA is unquestionably compliant with the “substantially the same” standard in Section 9711 of the Act. See Plaintiffs’ Response to Defendant’s First Request for Admissions, Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 1 of 19 PageID #: 1055 -2- Response No. 1, appended as Exhibit A to Defendants Motion for Summary Judgment, ECF No. 29-1. Yet, confusingly, when referring to the 2011 Model Coal Act Plan the Trustees also say “which CONSOL claims the Trustees acknowledge is Coal Act-compliant.” Pltfs’ Opp. Mem. at 4. This is not a matter of CONSOL “claiming,” it is a matter of fact – – a fact which Plaintiffs have already acknowledged. To reset the issue in this case1 (as Defendant understands Plaintiffs’ claims), the following points comprise the framework for analysis: 1. Last signatory operators and their “related persons” subject to Section 9711 of Coal Act are required to sponsor an ERISA health benefit plan for their eligible Coal Act retirees. They are not required to obtain approval of their Coal Act plan from the Trustees of the UMWA 1992 Plan, or from the UMWA. 2. The statutory standard is that the “health benefits coverage” a Section 9711 plan sponsor provides its Section 9711 retirees must be “substantially the same” as the beneficiaries were previously receiving. 2 1 The most fundamental issue in this case is that the Trustees of the UMWA 1992 Benefit Plan have supplied this Court with no legal basis for their assertion that the Court has subject-matter jurisdiction to hear their claims. This argument has been developed in Defendant’s Motion to Dismiss, ECF No. 8, and Defendant’s Memorandum in Support of Motion for Summary Judgment, ECF No. 30, and amplified briefly at pages 13-16, infra. This threshold jurisdictional issue must be addressed before the Court can even consider the Plaintiffs’ substantive claim that CONSOL Energy’s Coal Act Plan violates the Coal Act. 2 Nor can Plaintiffs override the text of Section 9711 based on comments in a “proposed” Conference Report or post-passage remarks supplied by a “principal sponsor.” See Barnhart v. Sigmon Coal Co., 534 U.S. 438, 458 & n. 15 (2002) (“Floor statements from two Senators cannot amend the clear and unambiguous language of a statute. We see no reason to give greater weight to the views of two senators than to the collective votes of both Houses, which are memorialized in the unambiguous text.”). Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 2 of 19 PageID #: 1056 -3- 3. Section 9711(d) provides a safe harbor which, if utilized by a sponsor of a Coal Act plan, insulates the sponsor from any claim by a beneficiary that the health benefits coverage provided by the plan does not satisfy the requirements of Section 9711. 4. From 1993 until October 2016 CONSOL Energy administered benefits for its Section 9711 retirees pursuant to the UMWA-BCOA Model Coal Act Plan then in effect. The Model Plan qualified as a safe harbor plan under Section 9711(d). By operation of statute, the 2011 Model Coal Act Plan provided substantially the same health benefits coverage as the beneficiaries were receiving in 1992.3 5. The Model Coal Act Plan included prescription drug formularies and preferred provider networks, and provided for financial penalties if a beneficiary used providers or obtained prescription drugs that were not part of the approval network. 6. The CONSOL Energy Coal Act Plan is effectively a Medicare Supplement Plan because 90% of all participants are Medicare eligible and that percentage will continue to increase over time. 7. The only claim Plaintiffs can therefore assert in this case is that differences between CONSOL Energy’s Coal Act Plan and the 2011 Model Coal Act Plan are so substantial that they single handedly cause Defendant’s Coal Act Plan to no longer 3 Plaintiffs aver that “the Model Coal Act Plan is not required to be “substantially the same” as the program of benefits, in place on January 1, 1992…” Pltfs’ Opp. Mem. at 6, ECF No. 33. This mischaracterizes Section 9711(d), which states: “The last signatory operator shall not be treated as failing to meet the requirements of subsection (a) or (b) if benefits are provided to eligible beneficiaries under managed care and cost containment rules and procedures…agreed to by the last signatory operator and the United Mine Workers of America”. The thrust of this language is that such a plan is deemed to be a plan that provides substantially the same health benefits coverage as the plan that was in effect during the term of the 1988 NBCWA. Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 3 of 19 PageID #: 1057 -4- provide substantially the same health benefits coverage as the 2011 Model Coal Act Plan. 8. The burden is on the Trustees to prove that Defendant’s Coal Act Plan does not provide health benefits coverage that is substantially the same as the health benefits coverage available under the 2011 Model Plan. We examine these differences below, and demonstrate why Plaintiffs’ assertions are nothing more than speculation and alarmist exaggerations. A. No Provision in CONSOL’s Coal Act Plan Substantially Increases Participants’ Costs or Substantially Decreases Benefits Plaintiffs claim that CONSOL has “implement[ed] a New Plan that substantially increases cost to participants and substantially decreases benefits…” Pltfs’ Opp. Mem. at 3, ECF No. 33. Plaintiffs organize the changes they deem violative of Federal law into six areas. 1. Changes to beneficiaries’ out-of-pocket costs. The Trustees acknowledge that the CONSOL Plan maintains the same $5 co-payment and $100 out-of-pocket per family maximum that was in effect under the 2011 Model Plan, and indeed was applicable 25 years ago under the benefit plan in effect during the term of the 1988 NBCWA. (Had CONSOL adjusted these out-of-pocket contributions for inflation, they would today be $36 and $720, respectively.) Third Declaration of Deborah J. Lackovic at ¶ 17, appended as Exhibit B to Defendant’s Opposition to Plaintiffs’ Motion for Summary Judgment, ECF No. 29-2. (“Lackovic Dec.”). The Trustees begrudgingly acknowledge that the 2011 Model Coal Act Plan provided economic incentives for beneficiaries to utilize in-network physicians and out-patient services. Indeed, as Ms. Lackovic, Defendant’s Director of Benefits pointed out in her Declaration, ECF No. 29-2 at ¶ 14, 18, if a health plan does not impose a cost on beneficiaries for using out-of-network providers it would be futile to negotiate with providers to accept lower fees to be Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 4 of 19 PageID #: 1058 -5- in the plan’s network, because providers are only incented to accept lower fees for greater volume and exclusivity. So, the takeaway here is that the CONSOL Plan imposes no additional cost at all on any beneficiary who uses network providers. Moreover, the charges a non-complying beneficiary incurs is only a matter of degree; it was 10% for out-of-network physician’s visits and out-patient services under the Model Plan and 30% under the CONSOL Plan. In the Plan Administrator’s judgment, this is the level of co-insurance that is necessary to incentivize beneficiaries to utilize the previously approved provider networks that are in place. Plaintiffs also complain that the out-of-pocket maximums are too large. Again, the out-of-pocket maximum is the same $100 it has been for the past 25 years for services obtained from network providers. Moreover, under the Model Coal Act Plan there was no cap on a beneficiary’s out-of-pocket costs, so the maximum implemented under the CONSOL Plan actually caps a previously uncapped exposure. Plaintiffs also complain that the CONSOL Coal Act Plan “implements a restricted provider network.” Pltfs’ Opp. Mem. at 3, ECF No. 33. Again, their complaint misses the mark. First, by its very nature, a network is necessarily restrictive, because providers will not agree to lower rates in the absence of exclusivity. Second, the provider network for pre-Medicare retirees is the same under CONSOL’s Coal Act Plan as it was under the Model Plan. Third, the provider network under CONSOL’s Plan also remains the same for all Medicare beneficiaries who reside in a Medicare “Extended Service Area” (which is determined by CMS), which applies to 58% of the Medicare beneficiaries in the Plan. The remaining 42% are covered by Aetna’s network of providers, which also has to be pre-approved by CMS. Lackovic Dec. ¶ 11, 14. If a Medicare Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 5 of 19 PageID #: 1059 -6- beneficiary subject to the Aetna network believes there is not a network option available, the beneficiary can contact HealthScope to address the problem. Id. at ¶ 12. 2. Balance billing. Balance billing is another red herring. CONSOL’s Coal Act Plan is a 90% Medicare supplement plan. Medicare eligible beneficiaries use providers who have agreed to accept Medicare rates, and therefore the question of balance billing should never arise. Moreover, in-network providers have also agreed to accept negotiated rates, so balance billing should never arise in this situation either. Thus, the only situation in which it could present an issue is when a beneficiary utilizes an out-of-network provider. Even then, as Ms. Lackovic describes in her Declaration, HealthScope’s experience is that 80% of the time out-of-network providers will agree to accept the Medicare rate. Lackovic Dec. ¶ 18. 3. Eligibility cut-off date for after-acquired dependents. Plaintiffs claim the fact the Plan will not provide benefits to an individual who first became a dependent after December 31, 2016, violates Section 9711. Section 9711 requires last signatory operators to provide benefits to UMWA retirees who establish eligibility by September 30, 1994, “and the individual’s eligible beneficiaries.” Section 9711(f) defines “eligible beneficiary” to mean “any person who is eligible for health benefits under a plan described in subsection (a) or (b) by reason of the individual’s relationship with the retiree described in such subsection…”. This definition does not indicate whether it pertains to individuals who had established their dependent eligibility as of the September 30, 1994 cut-off date for the retiree to establish his or her Coal Act eligibility, or whether it pertained to persons who might at some later time become a dependent of a retiree, without regard to the fact the individual had no connection to Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 6 of 19 PageID #: 1060 -7- the retiree as of the September 30, 1994 cut-off date.4 In any event, CONSOL Energy’s Coal Act Plan permitted eligible retirees to enroll their “after-acquired” dependents for 25 years after enactment. This policy greatly extended the duration of what was intended to be a Plan of limited duration, as well as the long-term liability of the Plan. The CONSOL Coal Act Plan has not terminated coverage for any dependent who was in the Plan as of December 31, 2016, and the Plan will enroll any person who can demonstrate they established dependent eligibility status prior to January 1, 2017. Lackovic Dec. ¶ 7. However, to address potential abuses, the Plan will no longer enroll individuals who had no relationship to a retiree on or before December 31, 2016. This is consistent with the understanding of Congress that the Act was freezing the eligible retiree population, and the numbers would decline over time due to mortality. See, e.g., 104-3 House Committee on Ways and Means, Development and Implementation of the Coal Industry Retiree Health Benefit Act of 1992, 104th Cong., 1st Sess., 34 (“The number of beneficiaries can be expected to rise somewhat before it begins to decline as a result of mortality.”) See also Holland v. Williams Mtn. Coal Co., 256 F.3d 819, 824 (D.C. Cir. 2001) (recognizing Coal Act provided for a fixed pool of retirees “who retired by September 30, 1994”). As Ms. Lackovic noted in her Declaration, the previous open-ended rule on dependent eligibility meant that retirees could force the Plan to accept decades of additional liability for after-acquired spouses who in some cases are dramatically younger than the retiree. Actual examples include retirees in CONSOL’s Plan who have after-acquired spouses with age differences of 39 years, 24 years, 20 years and 16 years. Lackovic Dec. ¶ 7. Although an after-acquired dependent who is not Medicare eligible can create substantial long-term liability 4 Under the 1988 NBCWA certain spouses were eligible for benefits for life. Of course, “for life” only meant dependents were eligible for benefits from the retiree’s employer during the term of the NBCWA, because benefits for the retiree and his or her dependents could be terminated after the labor contract expired. Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 7 of 19 PageID #: 1061 -8- for the Plan, this has been a closed, retiree-only plan since its inception 25 years ago, so this provision has a de minimus impact on the participant group. 4. Mail Order Program for long-term maintenance medications. To be clear, under the CONSOL Energy Plan a participant may fill prescriptions for regular drugs at every drug store that was permitted under the Model Plan. Lackovic Dec. ¶ 26. However, Plaintiffs complain about a mail order program for long-term maintenance drugs, which include medications for chronic illness such as diabetes, high cholesterol and high blood pressure. The mail order program has no impact on the specific medication a beneficiary’s physician prescribes for his or her condition. As a practical matter, receiving such medications via mail not only imposes no cost on a beneficiary, it is actually a convenience because beneficiaries do not even need to leave their home to obtain needed prescription medications. Furthermore, for those individuals who prefer to go to a retail pharmacy to fill their prescriptions, a beneficiary may continue to do this at any CVS Pharmacy, Long Drugs, or Navarro Discount Pharmacy retail location. The key takeaway here is that, as with the other complaints lodged by the Trustees, beneficiaries incur no additional charge for obtaining every prescription drug prescribed by their physician if they utilize the program. The only participants potentially affected by any change under the CONSOL Plan are individuals who refuse to accept delivery of their long-term medications via U.S. Mail, or who insist on filling their maintenance medications through a non-network retail pharmacy. These participants are required to absorb a portion of the extra cost to the Plan of their unilateral decision to refuse to utilize the Plan’s extensive program for acquiring maintenance medications. Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 8 of 19 PageID #: 1062 -9- 5. Prescription drug formularies. Plaintiffs complain that the specific formulary of prescription drugs available through the Plan’s Pharmacy Benefit Managers (CVS and SilverScript) constitutes a per se violation of the Section 9711 directive that the CONSOL Coal Act Plan must provide substantially the same health benefits coverage as the 2011 Model Coal Act Plan. Ironically, the Trustees do not base this assertion on any factual evidence that the formulary for Medicare beneficiaries or pre-Medicare beneficiaries is an inferior formulary in any way. Nor could they, since each formulary is national in scope, covers millions of participants in many many ERISA health plans, must meet stringent CMS requirements, and is reviewed by CMS annually. See Lackovic Dec. ¶ 10 for a detailed discussion of the formularies. It seems that Plaintiffs only reason for asserting that the formularies no longer provide beneficiaries substantially the same health benefits has nothing to do with the formulary and everything to do with the fact the United Mine Workers of America did not bless it. But that ignores the fact that CONSOL had previously utilized Section 9711(d)’s safe harbor to obtain UMWA approval to include a formulary as part of its Section 9711 Plan, and that there is nothing for the Union to “approve.” Just as under the Model Plan, the formulary is developed by CONSOL’s Pharmacy Benefit Managers as the result of its negotiations with drug manufacturers and distributors. Lackovic Dec. ¶ 10. The formulary is certified by CMS and it is required to include one or more therapeutically equivalent medications to treat each medical condition. By definition, the formulary prescription medications provide substantially the same health benefits coverage as the beneficiaries have always enjoyed, and much better benefits when one considers that many of the formulary drugs were not even available in 1992. 6. Excluding the Trustees as the arbiter of disputes. Plaintiffs claim that the failure to designate the Trustees as the arbiter of disputes arising under Defendant’s Coal Act Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 9 of 19 PageID #: 1063 -10- Plan constitutes a per se violation of the Coal Act. The Trustees’ continued vigorous assertion that the ROD process is a “health benefit” tests their credulity, because there is no statutory basis whatsoever for the claim. Their insistence on maintaining control over CONSOL’s benefit plan via their ROD process exemplifies the Trustees’ gratuitous intrusion into Defendant’s administration of its Coal Act Plan. First, the Trustees’ only support for their claim that their ROD process must be part of every Section 9711 Plan is that it was included in the collectively bargained health plan that was in effect during the term of the 1988 NBCWA. The fact that the UMWA and the BCOA retained the ROD process in their Model Plan does not even provide bootstrap support for their assertion that CONSOL Energy violates the Act by not retaining it in its current Coal Act Plan. Second, the fact the Trustees have never attempted to compel other sponsors of Section 9711 plans to include the ROD process as an essential component of their health plan for Coal Act retirees directly contradicts their assertion here. Third, even the token “evidence” they proffer for their claim that the ROD process is “health benefits coverage” does not support their position. Plaintiffs point to the Patient Protection and Affordable Care Act which “mandates ten categories of essential health benefits that all applicable health insurance plans must cover” as support for their assertion that the ROD process is a health benefit. Pltfs’ Opp. Mem. at 14, ECF No. 33. The problem with their claim is, of course, that an appeal process is not one of the ten essential categories of health benefits mentioned in the ACA. Rather, Plaintiffs cite to a provision of the ACA that merely “specifically requires particular appeal procedures for such plans.” Id. CONSOL’s Coal Act Plan contains an ERISA-compliant appeal procedure, and Plaintiffs have not claimed otherwise. Notwithstanding that there is no ACA support for the proposition that an appeal process is an Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 10 of 19 PageID #: 1064 -11- integral part of health benefits coverage, Plaintiffs nevertheless assert that their flawed ACA analysis demonstrates that “the right to appeal the denial of medical coverage is as much a health benefit as the right to coverage for certain medical services.” Id. This is not only a bridge too far, it is a bridge that does not even exist. 7. Plaintiffs offer several complaints they purportedly heard from participants in CONSOL’s Coal Act Plan as “evidence” that the Plan violates Section 9711. For many reasons, none of these complaints – which are nothing more than hearsay – prove anything of the kind. In the first instance, the individuals who made the complaints are participants in CONSOL’s Plan, and are authorized to pursue any claimed denial of their benefits through the comparable administrative review and appeal process in CONSOL’s Plan. These vague assertions cannot be verified or investigated by HealthScope, the entity the Plan utilizes to investigate and resolve claims unless the beneficiary contacts HealthScope directly. See Lackovic Dec. ¶ 29. Moreover, in every case, the complaint reported by Plaintiffs appears to involve a beneficiary who failed to follow Plan rules concerning utilization of the approved formulary prescription drug or physicians in the network. The fact a few individuals may incur a cost known to them beforehand because they self-select a non-network provider sheds no insight on whether the Plan itself provides substantially the same health benefits coverage. It is self-evident that any plan – –including the Model Plan – – will result in co-pays or surcharges if beneficiaries use out-of-network providers. And, finally, the number of unverified complaints referenced in Plaintiffs’ brief are de minimus in the context of a Plan that covers more than 2,300 beneficiaries. Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 11 of 19 PageID #: 1065 -12- B. The Safe Harbor Provisions of Section 9711(d) are not Relevant to Plaintiffs’ Allegations in this Case As noted above, there is no dispute that the 2011 Model Coal Act Plan provides health benefits coverage that is substantially the same as required by Section 9711, because the Model Plan qualifies as a Section 9711(d) safe harbor plan. Thus, the only issue presented is whether differences between the Model Plan and the CONSOL Plan render the latter violative of the Act. Plaintiffs’ premise is that the changes aren’t protected by the safe harbor because they were not blessed by the UMWA. This argument is irrelevant. Plaintiffs misperceive CONSOL’s position because Defendant is not asserting that the Section 9711(d) safe harbor is relevant to differences between CONSOL’s Coal Act Plan and the Model Plan.5 The Trustees allege CONSOL’s Plan violates the Act because the UMWA – – a non-party to the CONSOL Plan – – did not first approve any changes from the Model Plan. Initially the Trustees positioned themselves as having standing to prosecute this case because they are self-appointed protectors of beneficiaries in CONSOL’s Coal Act Plan. Now, apparently, they have expanded their representative portfolio to also include pursuing rights assigned to the UMWA, another non-party. Even assuming that somehow the Trustees could demonstrate how they have standing to haul CONSOL Energy into Federal court on this basis, their claim lacks merit. First, Section 9711(d)’s safe harbor is an option, not a requirement. Whether CONSOL’s Coal Act Plan provides substantially the same health benefits coverage is a question for the 5 The Trustees allege that CONSOL reached an agreement with the UMWA in conjunction with making changes to the Model Plan prior to October 2016, and this “demonstrated that it knew it needed the UMWA’s agreement to make such changes…”. Pltfs’ Opp. Mem. at 7, ECF No. 33. This is incorrect. That consultation was done while CONSOL was participating in the Model Plan. The fact consultations with the Union occurred in conjunction with the Model Plan have no bearing on whether the current CONSOL Coal Act Plan complies with Section 9711, because the Union is not a party to the current Plan. Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 12 of 19 PageID #: 1066 -13- Federal courts to decide. Compliance with the safe harbor process simply provides a Section 9711 plan sponsor an absolute defense should a beneficiary claim otherwise. Second, Defendant has in any event already complied with the standard of quality provision in Section 9712(c)(5). As detailed in Ms. Lockovic’s extensive Declaration, ECF No. 29-2 explaining the provisions of CONSOL’s Plan, differences between the health benefits coverage between the two plans are de minimus. Differences between the Model Plan and CONSOL’s Plan that even arguably fall within the scope of Section 9712(c)(5) are adjustments to the managed care system and/or cost containment system already in place, not a new system that requires or that would even benefit from submission to a “medical peer review panel.” They do not affect the quality of care or health benefits coverage the Plan affords to any beneficiary. Thus, the Trustees simply overstate the relevance of these provisions to the CONSOL Plan. C. Plaintiffs Lack Statutory Standing Under the Coal Act to Prosecute Their Suit Finally, this Court has an independent obligation to satisfy itself that it has subject-matter jurisdiction to entertain Plaintiffs’ lawsuit. Plaintiffs’ pleadings to date confirm that they are not asserting subject-matter jurisdiction pursuant to § 502 of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq., or the Labor-Management Relations Act of 1947. This leaves the Coal Act, specifically Section 9721, see 26 U.S.C. § 9721, as the only potential jurisdictional anchor that Plaintiffs have pled. Plaintiffs’ statutory standing hinges on whether they can demonstrate that they have been “adversely affected” by an act or omission they attribute to CONSOL. See 29 U.S.C. § 1451(a)(1). This is underscored by the recent civil enforcement case law from the 1992 Plan’s Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 13 of 19 PageID #: 1067 -14- home forum.6 See, e.g., Holland v. Bibeau Const. Co., 774 F.3d 8 (D.C. Cir. 2014); Holland v. Williams Mtn. Coal Co., 496 F.3d 670, 671 (D.C. Cir. 2006) (Coal Act § 9721 makes ERISA § 1451 “applicable to any claim arising out of an obligation under the Coal Act”). Significantly, the Coal Act’s only civil enforcement provision, 26 U.S.C. § 9721, incorporates certain ERISA enforcement provisions that “impose liability on employers for delinquent contributions to a multiemployer plan, 29 U.S.C. § 1145, and provide for a civil action to recover unpaid contributions, id. § 1451(a).” Bibeau Const., 774 F.3d at 11. Consequently, as the D.C. Circuit recently observed, “[u]nder the Coal Act . . . a plan fiduciary . . . may bring an action for appropriate legal or equitable relief, 29 U.S.C. § 1451(a)(1), to enforce an employer’s ‘obligat[ion[] to make contributions to a multiemployer plan . . . . id. § 1145.” Id. at 16. That is not what Plaintiffs are seeking through this lawsuit. Here, it is undisputed that Plaintiffs are not suing to recover any “unpaid contributions” or otherwise enforce any obligation to make contributions to the 1992 Plan. Since the Coal Act incorporates ERISA § 1451(a)(1), the statutory standing inquiry necessarily turns on whether Plaintiffs can demonstrate that they have been “adversely affected,” within the meaning of § 1451(a)(1) of ERISA. See Williams Mtn., 496 F.3d at 671 (ERISA § 1451(a)(1) “authoriz[es] a plan fiduciary who is adversely affected ‘by an act or omission of any party’ to bring an action for appropriate equitable or legal relief”). Significantly, the Supreme Court has already narrowly construed what it takes for an ERISA plan to be “adversely affected” under § 1451(a)(1). Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp. of California, Inc., 522 U.S. 192, 200-201 (1997) (“[a] plan cannot maintain an action until the 6 The 1992 Plan routinely files enforcement lawsuits in the D.C. Circuit where the Plan is headquartered and administered and where, tellingly, the declarations offered by the Plan’s Director of Operations who is “responsible for all aspects of the day-to-day operations” were executed. Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 14 of 19 PageID #: 1068 -15- employer misses a scheduled withdrawal liability payment.”). See also Bibeau Const., 774 F.3d at 14 (“[l]iability under the Coal Act works in a similar way”). Notably, the Court did so while recognizing that ERISA § 1451(a)(1) “answers . . . a ‘standing’ question --who may sue for a violation of the obligations established by the Act.” Bay Area Laundry, 522 U.S. at 203.7 In Bay Area Laundry, the lower court and the company had both asserted that an ERISA multiemployer plan is “adversely affected” at the point in time in which a contributing employer suffers a precipitous decline in its business operations and withdraws from the plan. Bay Area Laundry, 522 U.S. at 202-203. The Supreme Court disagreed after cautioning that § 1451(a)(1) “does not ‘provide a cause of action in the air for any adverse effect on multiemployer [plans].’” Id. at 203 (emphasis in original). The Court instead instructed that an ERISA plan is “adversely affected” at what is ordinarily a considerably later point in time --only upon the company’s refusal to pay a plan-generated assessment memorializing the company’s statutorily-based “withdrawal liability.” Similarly, in 2014, the D.C. Circuit applied the teachings of Bay Area Laundry to Coal Act obligations. Bibeau Const., 774 F.3d at 14-15. At issue were “unpaid contributions” to defray the healthcare costs of a “related” company’s coal retiree that Plaintiffs enrolled in their Plan in 1995. The Court recognized that the Plan was not adversely affected by Bibeau’s acts or omissions until the “related” company refused to pay the 1992 Plan’s scheduled premium payments in 2005. Id. at 12 & 14-15. It is simply not possible to read Plaintiffs’ own D.C. Circuit enforcement case law (which reference ERISA § 1451(a)(1) and apply Bay Area 7 As an interesting observation relevant to Defendant’s position on the flexibility afforded by the use of “substantially the same” in Section 9711, in Bay Area Laundry the Supreme Court recognized that “Congress’ adoption of a looser ‘as soon as practicable’ requirement . . . bespeaks a deliberative legislative choice to afford some flexibility . . . .” Bay Area Laundry, 522 U.S. at 205 (emphasis added). Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 15 of 19 PageID #: 1069 -16- Laundry) and conclude that Plaintiffs have a ripe cause of action and statutory standing to prosecute the instant case under Section 9721 of the Coal Act.8 Plaintiffs point to nothing that would constitute their (or any beneficiary in their Coal Act plan to whom they owe a fiduciary duty) having been “adversely affected,” within the meaning of ERISA § 1451(a)(1) as incorporated in Coal Act § 9721. Plaintiffs have not enrolled any participant or beneficiary of CONSOL’s Coal Act Plan, or billed CONSOL for such enrollment as they did in Bibeau Construction and other authorized and ripened Coal Act enforcement actions. There are no “unpaid contributions.” Section 9721 does not confer standing in the instant case because like ERISA § 1451(a)(1), the Coal Act does not provide a cause of action in the air for any adverse effect. See Bay Area Laundry, 522 U.S. at 202 (liability does not ripen into a cause of action until “two events transpire” --payment demand followed by payment delinquency). As a matter of law, Plaintiffs have failed to make the requisite showing that they have been “adversely affected,” and therefore cannot establish statutory standing. Ultimately, Plaintiffs raise the specter that Section 9711 Coal Act obligations “would be entirely unenforceable” were the Court (to follow Bay Area Laundry and the D.C. Circuit’s analysis of Section 9721) and refuse to entertain and adjudicate Plaintiffs’ suit. This is unfounded and incorrect. Plaintiffs simply ignore the fact that CONSOL’s Coal Act Plan is an ERISA plan. “ERISA provides that ‘it is hereby declared to be the policy of this Act to protect . . . the interest of participants in employee benefit plans and their beneficiaries . . .by providing for appropriate remedies, sanctions, and ready access to the Federal courts.’” 8 Rather than take on Bay Area Laundry and the recent Coal Act case law applying ERISA § 1451(a)(1) to the 1992 Plan, Plaintiffs continue to rely on dated cases Defendant has previously distinguished. (ECF. No 11 at 3 & n.2). These cases typically involve situations where companies, without the benefit of the latest § 9721 jurisprudence, did not contest statutory standing, promptly entered into a stipulated dismissal, or where the Plan enrolled beneficiaries from a terminated IEP. The instant case, it appears, is a case of first impression. Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 16 of 19 PageID #: 1070 -17- McGlothlin v. Connors, 142 F.R.D. 626, 645 (W.D. Va. 1992) (quoting 29 U.S.C. 1001(b)) (emphasis added). Recent circuit case law similarly underscores that there are a panoply of civil remedies afforded to participants in CONSOL’s Plan under ERISA § 502, 29 U.S.C. § 1132 (not ERISA §§ 1451(a)(1) and 1145 which are incorporated in the Coal Act) to police ERISA plans. See, e.g., Pender v. Bank of America Corp, 788 F.3d 354, 362 (4th Cir. 2015) (detailing ERISA § 502(a) civil enforcement relief when a plan fiduciary breaches ERISA plan terms or “statutorily imposed responsibilities, obligations or duties.”) Given this ample and well-established safety net which pre-dates the Coal Act, Plaintiffs’ invitation to rewrite Section 9721 of the Coal Act in order to entertain Plaintiffs’ surrogacy suit is properly rejected. In sum, just because Plaintiffs are foreclosed from suing under the Coal Act because they cannot demonstrate that their Plan (or its participants) have been “adversely affected” and that they have incurred “injury-in-fact” does not mean that Defendant’s ERISA plan somehow flies under the radar and is immune from scrutiny and enforcement. Plan beneficiaries enjoy a full array of internal and external remedies to enforce their rights, and Congress did not see fit to confer to the Trustees of the 1992 Benefit Plan private-attorney-general status to enforce beneficiary rights under Section 9711 Coal Act plans. CONCLUSION For the foregoing reasons, and for the reasons set forth in Defendant’s Opening Brief, the Court should grant Defendant’s Motion for Summary Judgment and dismiss Plaintiff’s Amended Complaint with prejudice. Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 17 of 19 PageID #: 1071 -18- Dated: November 3, 2017 Respectfully submitted, /s/ Jan L. Fox Jan L. Fox, Esq. (WVSB #1259) Steptoe & Johnson PLLC P.O. Box 1588 Charleston, WV 25326-1588 Tel.: (304) 353-8000 Fax : (304) 353-8180 Jan.Fox@Steptoe-Johnson.com John R. Woodrum, Admitted Pro Hac Vice Ogletree, Deakins, Nash, Smoak & Stewart, P.C. 1909 K Street, N.W., Suite 1000 Washington, D.C. 20006 Tel.: (202) 887-0855 Fax: (202) 887-0866 john.woodrum@ogletree.com Counsel for Defendant Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 18 of 19 PageID #: 1072 CERTIFICATE OF SERVICE This is to certify that on this 3rd day of November 2017, a true and correct copy of the foregoing Defendant CONSOL Energy Inc.’s Reply in Support of its Motion for Summary Judgment was filed using the CM/ECF System which will send notification of such filing to appropriate CM/ECF participants as follows: Glenda S. Finch, General Counsel Larry D. Newsome, Associate General Counsel Clayton M. Creswell, Assistant General Counsel UMWA Health & Retirement Funds Office of the General Counsel 2121 K Street, N.W., Suite 350 Washington, D.C. 20037 Telephone: (202) 521-2238 Email: gfinch@umwafunds.org Email: lnewsome@umwafunds.org Email: ccreswell@umwafunds.org Gary A. Collias, Attorney at Law P.O. Box 70007 122 Capitol Street, Suite 300 Charleston, WV 25301 Telephone: (304) 344-3653 Email: gacollias@colliaslaw.com John R. Mooney Mooney, Green, Saindon, Murphy and Welch P.C. 1920 L Street, N.W. Suite 400 Washington, D.C. 20036 Telephone: (202) 783-0010 Email: jmooney@mooneygreen.com /s/ John R. Woodrum John R. Woodrum 31843818.1 Case 2:17-cv-02091 Document 36 Filed 11/03/17 Page 19 of 19 PageID #: 1073