The U.S. Supreme Court on Monday declined to review a $115 million dispute between the United Mine Workers of America 1974 Pension Plan and Energy West Mining Co. over the company's withdrawal from a multiemployer plan.
The justices without comment let stand a federal appeals court ruling favoring the company. The pension plan asked the Supreme Court in February to overturn the decision.
The UMWA's multiemployer pension plan, Washington, is jointly administered by the union and the Bituminous Coal Operators Association Inc. Federal law requires an employer withdrawing from such a plan to pay its withdrawal liability. The plan had $3.4 billion in assets as of June 30, 2021, according to the latest Form 5500.
Energy West Mining is a subsidiary of utility company PacifiCorp. It withdrew from the union pension plan in 2015 after closing its coal mine in Huntington, Utah, according to court documents.
An arbitrator supported the pension plan actuary's calculations that Energy West owed $115 million for withdrawing.
Energy West sued, but a U.S. District Court in Washington ruled in May 2020 that the actuarial assumptions and calculations were reasonable based on ERISA guidelines.
Energy West appealed, and the U.S. Circuit Court of Appeals for the District of Columbia reversed the lower court's ruling in July 2022.
"To calculate Energy West's withdrawal liability from the pension plan, the actuary was required to base his assumptions on the plan's actual characteristics," the three-judge appeals court panel wrote.
The appeals court said the actuary failed to do so, leading the judges to reverse the pro-union lower court ruling.
"When the actuary calculates Energy West's withdrawal liability, the discount rate assumption must be similar, but need not be identical, to the discount rate assumption used to calculate minimum funding," the appeals court wrote.
The union pension plan asked the Supreme Court to review the dispute because different appeals courts issued different rulings on calculating withdrawal liability in multiemployer pension plans. "Circuit conflicts over the law governing discount rates, therefore, are arguably the most important conflicts affecting withdrawal liability," the pension plan's petition said.