Background
In the nineteen nineties, miners worked for Apogee Coal Company, a subsidiary of Arch Resources, Inc. Arch self-insured Apogee against black-lung claims rather than purchasing commercial insurance. In two thousand and five, Arch sold Apogee and its black-lung liabilities to Magnum Coal. Three years later, Patriot Coal acquired Magnum and its subsidiaries. In two thousand and fifteen, Patriot went bankrupt, creating a risk that black-lung liabilities would shift to the federal government. The Department of Labor instructed its district directors to hold Arch liable as the responsible insurer for claims accrued while it owned and self-insured Apogee. Miners applied for benefits between two thousand and fifteen and two thousand and seventeen. Administrative law judges and the Benefits Review Board affirmed the district directors’ decisions, and Arch petitioned the Sixth Circuit for review.
The court’s reasoning
The court reviewed the Board’s legal conclusions de novo. Petitioners argued that the Board erred in holding Arch liable for benefits owed by Apogee. However, Arch and Apogee conceded that they were making the same arguments based on materially identical facts that the court had rejected in a published decision two years prior. The court noted that the prior decision binds it. Consequently, the court denied the petitions for review.
What it means going forward
The ruling confirms that a parent corporation remains liable for black-lung benefits accrued during its ownership and self-insurance of a subsidiary, even after selling the subsidiary, when the arguments against such liability have already been settled by binding precedent.