Warren faces scrutiny over LTV Steel legal work
Mass. Senate candidate says coal miners were never at risk of losing health benefits
U.S. Senator Scott Brown has attacked Elizabeth Warren in recent days for her legal work on behalf of Travelers Insurance in an asbestos case, asserting that it undermines her reputation as a consumer advocate. But Travelers is not the only large corporation Warren has represented.
Warren also helped write a petition to the U.S. Supreme Court for LTV Steel in the 1990s, assisting the former industrial conglomerate in its fight against a congressional requirement that it pay millions of dollars into a fund for its retired coal miners’ health care.
Her advocacy on behalf of a large corporation, opposing a mandate to pay for the health benefits of blue-collar retirees and their families, would seem to undercut her image as a middle-class champion, the central message of the Democrat’s Senate campaign against Brown, the Republican.
But Warren’s campaign argues that the retirees’ benefits were not in danger, even if LTV had won its legal battle. And it argues that she was fighting for a principle that could protect less powerful people who have claims against bankrupt companies. Warren had a small role, the campaign said, making about $10,000 to write a Supreme Court petition. Warren, through her campaign, declined an interview request.
“Elizabeth is a bankruptcy expert and has fought for years for a strong bankruptcy system that makes sure retirees, employees, victims, and others can demand payment from insolvent companies and get a fair shake,’’ spokeswoman Alethea Harney said. “In the LTV steel case, there was never any question that coal miners and their surviving spouses would receive their full benefits under the Coal Act. This case involved bankruptcy principles and who would pay what into the fund.’’
Warren did not argue the coal case in two lower courts, where LTV lost. Instead, she is listed on a petition to urge the Supreme Court to review the case, which the court rejected.
The Coal Act was passed in 1992, to finance a fund for the long-term health care of retired mine workers and their families.
The case involved the question of whether LTV, which was emerging from bankruptcy when the Coal Act took effect in 1993, could be forced to pay out more money after its bankruptcy was completed. Warren argued that the company’s obligations under the Coal Act should have been addressed as part of the bankruptcy.
Warren worried that in the future, similar claims would also have to be put off until the bankruptcy procedure ended, her campaign said. That could imperil victims of companies that shut down completely instead of reorganizing as LTV did, her campaign said.
But opponents, including the Clinton administration, argued that LTV and other companies challenging the statute were trying to take advantage of the bankruptcy laws to avoid their responsibility. And mine workers and their advocates also argued that if LTV or any other company tried to avoid paying into the Coal Act fund, the entire fund could collapse, jeopardizing health care for more than 100,000 retired coal miners and their dependents.
“No exception should be made to this act,’’ Richard Trumka, then president of the United Mine Workers, told a congressional panel in 1993. “When it unravels, you will have roughly 200,000 miners and beneficiaries out there that will lose their health care.’’
Senator John D. Rockefeller IV, of West Virginia, made a similar argument, telling the panel that retirees, whose average age was 77, could be left “out in the cold’’ if companies won any exemptions from the law.
Trumka, now president of the national AFL-CIO and a major supporter of Warren who campaigned with her in Boston Monday, said in a recent interview that “I said what I said’’ in 1993. But he argued that Warren would be a far better advocate for workers than Brown, who he said voted for a budget proposal that cut funding for mine safety and several other measures that would hurt workers and labor unions.
Brown’s campaign said Monday that the budget cut was less than 1 percent and added that Brown has been a popular and strong advocate for union members because of his support for low taxes and less government spending.
Spokesman Colin Reed said Brown “is also the only card-carrying union member in this race,’’ pointing to the former model’s membership in the Screen Actor’s Guild and American Federation of Television and Radio Artists, which have since merged.
For coal miners, the guarantee of long-term health care has long been a priority, given the risks they face both in the mines and after they retire.
The coal industry paid for these guarantees through a series of industrywide union contracts that created large health care funds.
But companies that stopped actively mining coal could discontinue paying into the funds, leaving other companies to pay their retirees’ health costs.
And the funds, known as benefit trusts, were at risk as health costs rose and coal companies began leaving the industry or declaring bankruptcy.
LTV got out of the coal business in the early 1980s and reorganized under bankruptcy laws in 1986.
The situation reached a crisis in the late 1980s, leading to lawsuits among coal companies and a 10 1/2-month strike against Pittston Coal Company in 1989.
In response, Congress passed the Coal Industry Retiree Health Benefit Act, known as the Coal Act, which President George H.W. Bush signed in 1992.