524 U.S. 498, 557-58 (1998)
Eastern Enterprises was organized as a Massachusetts business trust in 1929 under the name Eastern Gas and Fuel Associates.1 Until 1965, Eastern conducted extensive coal mining operations centered in West Virginia and Pennsylvania.2 As a signatory to each National Bituminous Coal Wage Agreement executed between 1947 and 1964, Eastern made contributions of over $60 million to the 1947 and 1950 Welfare and Retirement Funds.3
In 1963, Eastern decided to transfer its coal-related operations to a subsidiary, Eastern Associated Coal Corp. The transfer was completed by the end of 1965.4 It was described in Eastern's federal income tax return as an agreement by EACC to assume all of Eastern's liabilities arising out of coal mining and marketing operations in exchange for Eastern's receipt of EACC's stock.5 Eastern retained its stock interest in EACC through a subsidiary corporation, Coal Properties Corp., until 1987. It received dividends of more than $100 million from EACC during that period.6 In 1987, Eastern sold its interest in Coal Properties Corp. to Peabody Holding Company, Inc.7
Following enactment of the Coal Industry Retiree Health Benefit Act of 1992, the Commissioner of Social Security assigned to Eastern the obligation for Combined Fund premiums respecting over 1,000 retired miners who had worked for the company before 1966.8 The assignment rested on Eastern's status as the pre-1978 signatory operator for whom the miners had worked for the longest period of time.9 Eastern's premium for a 12-month period exceeded $5 million.10
Eastern responded by suing the Commissioner, as well as the Combined Fund and its trustees, in the United States District Court for the District of Massachusetts.11 Eastern asserted that the Coal Act, either on its face or as applied, violates substantive due process and constitutes a taking of its property in violation of the Fifth Amendment.12 The District Court granted summary judgment for respondents on all claims.13 The Court of Appeals for the First Circuit affirmed.14 The Supreme Court granted certiorari.15
Whether Eastern's takings claim seeking declaratory and injunctive relief was properly filed in federal district court rather than the United States Court of Federal Claims?16
The Tucker Act grants the Court of Federal Claims exclusive jurisdiction over claims against the United States for money damages exceeding $10,000 founded upon the Constitution.17 When the challenged statute requires a direct transfer of funds mandated by the Government to a private party, the presumption of Tucker Act availability must be reversed.18 A claim for declaratory and injunctive relief may be brought in federal district court.19
Yes. Eastern does not seek compensation from the Government. Instead, Eastern requests a declaratory judgment that the Coal Act violates the Constitution and a corresponding injunction against the Commissioner's enforcement of the Act as to Eastern.20 The payments mandated by the Coal Act are paid to the privately operated Combined Fund.21
Congress could not have contemplated that the Treasury would compensate coal operators for their liability under the Act.22 Therefore, the presumption of Tucker Act availability is reversed, and the district court properly exercised jurisdiction over Eastern's equitable claim.23
Eastern's takings claim was properly filed in federal district court.24
Whether the Coal Industry Retiree Health Benefit Act of 1992, as applied to Eastern, effects an unconstitutional taking under the Fifth Amendment?25
The Takings Clause of the Fifth Amendment prohibits the government from taking private property for public use without just compensation.26 In evaluating regulatory takings claims, courts consider the economic impact of the regulation, the extent to which it interferes with reasonable investment-backed expectations, and the character of the governmental action.27
Yes. The Coal Act imposes a severe economic impact on Eastern by assigning it responsibility for premiums exceeding $5 million annually for over 1,000 retirees based on employment that ended in 1965.28 This liability substantially interferes with Eastern's reasonable investment-backed expectations because when Eastern left the coal industry in 1965, the 1950 Fund did not promise lifetime benefits and Eastern had no reason to anticipate such liability decades later.29 The character of the governmental action is a permanent and severe economic burden imposed on a narrow class of parties.30
This burden is based on conduct from 30 to 50 years earlier without any rational connection to Eastern's past actions that would make the liability proportionate or fair.31
The Coal Act, as applied to Eastern, effects an unconstitutional taking.32
Related opinions on this issue
Justice Thomas concurred in the judgment.33 He agreed that the Coal Act, as applied to Eastern, effects an unconstitutional taking.34 He wrote separately to emphasize that the retroactive application of the Act is particularly problematic under the Takings Clause.35
The Clause protects against government action that takes private property for public use without just compensation.36 The imposition of liability here is the functional equivalent of a taking.37
Justice Kennedy concurred in the judgment but dissented in part from the plurality's analysis. He argued that the proper framework is the Due Process Clause rather than the Takings Clause. The Coal Act imposes a severe and unexpected retroactive liability on Eastern that is arbitrary and irrational.38
It fails rational basis review under the Due Process Clause because it does not bear a rational relationship to a legitimate governmental interest as applied to Eastern.39 Eastern's conduct decades earlier bears no rational relationship to the problems the Act was designed to solve.40 The plurality's takings analysis expands the scope of the Takings Clause beyond its traditional boundaries.41
The Takings Clause is not the proper vehicle for analyzing economic legislation of this type.42
Joined by Justice Souter, Justice Ginsburg, And Justice Breyer
Justice Stevens dissented. He contended that the Coal Act is constitutional.43 The Court's decision today is a departure from established precedent regarding economic legislation.44
Congress has broad authority to legislate in the area of employee benefits and to address problems in the coal industry.45 The problems in the coal industry benefit funds were caused in significant part by the coal operators, including Eastern.46 The operators' past conduct in negotiating agreements that did not adequately fund future benefits contributed to the crisis that led to the enactment of the Coal Act.47
The Act is a rational response to a serious problem. It spreads the cost of providing health benefits to retired coal miners among those who profited from their labor.48 The Takings Clause is not implicated here.
This is not a taking of private property. It is an ordinary economic regulation that adjusts the burdens and benefits of economic life.49
Joined by Justice Souter, Justice Ginsburg, And Justice Stevens
Justice Breyer dissented. He argued that the Coal Act represents a legitimate exercise of Congress's authority to regulate in the area of employee benefits and to solve a national problem in the coal industry. The Act was passed to address a crisis in the funding of health benefits for retired coal miners.
That crisis threatened to leave hundreds of thousands of retirees without health care.50 Congress acted rationally in spreading the cost among those who had benefited from the miners' labor.51 The plurality and Justice Kennedy's opinions impose an overly rigid barrier to retroactive legislation.
Retroactive legislation is sometimes necessary to address problems that develop over time. The fact that the liability reaches back in time does not make it unconstitutional.52 The Takings Clause is not violated because there is no taking of a specific property interest.
The obligation to pay money is not a taking.53