               Reversed by Supreme Court, June 15, 2006




                           PUBLISHED

UNITED STATES COURT OF APPEALS
               FOR THE FOURTH CIRCUIT


In Re: HOWARD DELIVERY SERVICE,        
INCORPORATED,
                          Debtor.


HOWARD DELIVERY SERVICE,
INCORPORATED,
                 Debtor-Appellee,
                v.
ZURICH AMERICAN INSURANCE                        No. 04-1136
COMPANY,
                Movant-Appellant.


AMERICAN HOME ASSURANCE
COMPANY; HARTFORD FIRE INSURANCE
COMPANY; THE TRAVELERS INDEMNITY
COMPANY,
       Amici Supporting Appellant.
                                       
           Appeal from the United States District Court
    for the Northern District of West Virginia, at Martinsburg.
              Frederick P. Stamp, Jr., District Judge.
                   (CA-03-61-3; BK-02-30289)

                     Argued: October 28, 2004

                     Decided: March 24, 2005

     Before NIEMEYER, KING, and SHEDD, Circuit Judges.
2                 IN RE: HOWARD DELIVERY SERVICE
Reversed and remanded by published per curiam opinion. Judge King
wrote an opinion concurring in the judgment, Judge Shedd wrote an
opinion concurring in the judgment, and Judge Niemeyer wrote an
opinion dissenting from the judgment.


                            COUNSEL

ARGUED: Margaret Mary Anderson, LORD, BISSELL & BROOK,
Chicago, Illinois, for Appellant. Richard McMaster Francis,
BOWLES, RICE, MCDAVID, GRAFF & LOVE, P.L.L.C., Charles-
ton, West Virginia, for Appellee. G. Eric Brunstad, Jr., BINGHAM
MCCUTCHEN, L.L.P., for Amici Supporting Appellant. ON
BRIEF: Hugh S. Balsam, Timothy S. McFadden, LORD, BISSELL
& BROOK, Chicago, Illinois, for Appellant. Heather G. Harlan,
BOWLES, RICE, MCDAVID, GRAFF & LOVE, P.L.L.C., Charles-
ton, West Virginia, for Appellee.


                             OPINION

PER CURIAM:

   This appeal presents the question of whether the claim made by
Zurich American Insurance Company against the estate of the debtor,
Howard Delivery Service, Inc., for unpaid workers’ compensation
insurance premiums is to be given priority by reason of § 507(a)(4)
of the Bankruptcy Code.

   The court holds that Zurich’s claim is entitled to priority under
§ 507(a)(4) and therefore reverses the decision of the district court
and remands the case for such further proceedings as may be appro-
priate.

                                     REVERSED AND REMANDED

KING, Circuit Judge, concurring in the judgment:

  In this appeal by Zurich American Insurance Company ("Zurich"),
we are called upon to decide whether a claim by Zurich for unpaid
                   IN RE: HOWARD DELIVERY SERVICE                     3
workers’ compensation insurance premiums is entitled to priority sta-
tus under § 507(a)(4) of the Bankruptcy Code. Zurich maintains that
its claim is so entitled, asserting that such premiums constitute, under
the applicable statutory provision, "contributions to an employee ben-
efit plan arising from services rendered." 11 U.S.C. § 507(a)(4). Both
the bankruptcy court and the district court disagreed with Zurich, rele-
gating its claim to the status of a general unsecured creditor of the
bankrupt Howard Delivery Service, Inc. ("Howard"). As explained
below, I conclude, on this question of first impression, that Zurich’s
claim is entitled to § 507(a)(4) priority status.

                                   I.

   Under West Virginia law, employers in the state are required to
"subscribe to and pay premium taxes into the [state’s] workers’ com-
pensation fund for the protection of their employees." W. Va. Code
§ 23-2-1(a). In the alternative, an employer may self-insure by,
among other requirements, demonstrating its financial ability to cover
any workers’ compensation claims that may arise. Id. at § 23-2-9.
Howard, an over-the-road freight carrier operating in West Virginia,
fulfilled its obligations under West Virginia law to become "self-
insured" and purchased workers’ compensation insurance coverage
from Zurich (the "Policy").1 The Policy became effective on July 1,
1997, and remained in effect until January 22, 2002, when it was can-
celled by Howard. Upon cancellation, Howard owed Zurich thou-
sands of dollars in unpaid premiums for coverage afforded by the
Policy.2

   On January 30, 2002, Howard filed a Chapter 11 bankruptcy peti-
tion in the bankruptcy court for the Northern District of West Vir-
ginia, seeking court protection in the reorganization of its business
operations. On May 9, 2002, Zurich filed an unliquidated and unse-
  1
     Although not relevant to this appeal, Howard also purchased employ-
er’s liability and automobile liability policies from Zurich.
   2
     The Policy provided coverage to Howard on a "claims incurred"
basis; that is, claims incurred while the Policy was in effect were cov-
ered, regardless of when such claims might be made. The Policy was a
high-deductible insurance plan, requiring Howard to reimburse Zurich
for all losses up to $250,000.
4                      IN RE: HOWARD DELIVERY SERVICE
cured creditor’s claim in that proceeding, seeking priority status from
the bankruptcy court for its claim for the unpaid premiums owed on
the Policy.3 On March 28, 2003, Zurich filed an amended proof of
claim, specifically asserting that its claim was entitled to priority sta-
tus under § 507(a)(4) of the Bankruptcy Code (the "Statute"), for con-
tributions to an employee benefit plan in the sum of $410,215 (the
"Zurich Claim").4 Pursuant to the Statute, a creditor of a Chapter 11
debtor is authorized to recover on a fourth-level priority basis as fol-
lows:

        (a) The following expenses and claims have priority in the
            following order:

             ....

             (4) Fourth, allowed unsecured claims for contribu-
                 tions to an employee benefit plan —

                    (A) arising from services rendered within 180
                        days before the date of the filing of the peti-
                        tion or the date of the cessation of the debt-
                        or’s business, whichever occurs first . . . .

11 U.S.C. § 507(a)(4).5 On June 12, 2003, Howard filed an objection
    3
     Zurich filed another claim in Howard’s bankruptcy proceeding on
May 9, 2002 — an unliquidated, unsecured, and nonpriority claim —
which is not relevant to this appeal.
   4
     The amount of the Zurich Claim is premised on an actuarial analysis
of Zurich’s exposure to liability for claims incurred while the Policy was
in effect. The Zurich Claim was admittedly slightly overstated, because
it included a small amount owed under the automobile liability policy
and covered a time period slightly in excess of 180 days.
   5
     Creditors holding valid claims of fourth-level priority may recover
from the general assets of a bankrupt’s estate following, first, secured
creditors, and second, unsecured creditors with claims qualifying under
the first three levels of priority established by § 507(a). See In re: Feder-
al’s Inc., 553 F.2d 509, 518 (6th Cir. 1977). The first three levels of pri-
ority are: (1) administrative expenses and fees of the estate, (2) claims
arising from the ordinary course of business, and (3) wages and salaries
up to $4,925. See 11 U.S.C. § 507(a)(1)-(9) (creating nine priority
levels).
                    IN RE: HOWARD DELIVERY SERVICE                         5
to the amount of the Zurich Claim, and specifically to Zurich’s asser-
tion that the Claim was entitled to priority status.

   By an opinion filed on July 15, 2003, the bankruptcy court denied
the Zurich Claim priority status, concluding that unpaid workers’
compensation premiums are not "bargained-for, wage-substitute-type
benefits," relying on materials it identified in the legislative history of
the Statute. In re: Howard Delivery Serv., Inc., BK No. 02-30289, at
*5 (Bankr. N.D. W. Va.) (the "Bankruptcy Opinion") (observing also
that three courts of appeals had so ruled while only one had deter-
mined otherwise). Zurich appealed the Bankruptcy Opinion to the dis-
trict court, which affirmed, on December 22, 2003, on similar
grounds. Howard Delivery Serv., Inc. v. Zurich Am. Home Ins. Co. (In
re: Howard Delivery Serv., Inc.), No. 3:03CV61, at *11 (N.D. W.
VA.) (the "District Opinion"). Zurich has now appealed to this Court,
contending that the Zurich Claim is entitled to priority status because
the unpaid insurance premiums embodied therein constitute "contri-
butions to an employee benefit plan arising from services rendered"
under the Statute. We possess jurisdiction to consider Zurich’s appeal
because, in these circumstances, the District Opinion and the corre-
sponding Judgment in a Civil Case, filed on December 22, 2003, con-
stitute a final decision of the district court under 28 U.S.C. § 158(d).6
  6
    Subsection (d) of § 158 provides jurisdiction in the courts of appeals
"from all final decisions, judgments, orders, and decrees [by a district
court] entered under subsection (a)." It is generally acknowledged that
the "finality" requirement of § 158(d) is to be interpreted in light of the
special circumstances of bankruptcy proceedings. See Comm. of Dalkan
Shield Claimants v. A.H. Robins Co., Inc., 828 F.2d 239, 241 (4th Cir.
1987). And, as explained by Justice Breyer (then serving on the First Cir-
cuit) in a seminal decision on § 158(d) jurisdictional issues, In re: Saco
Local Development Corp., a district court’s ruling in a priority dispute
is typically an appealable ruling. 711 F.2d 441, 445 (1st Cir. 1983) ("[A]
‘final judgment, order, or decree’ . . . includes an order that conclusively
determines a separable dispute over a creditor’s claim or priority.")
(emphasis added).
   The district court’s ruling that the Zurich Claim was not entitled to pri-
ority effectively concluded the dispute between Zurich and Howard
because the Zurich Claim was then rendered valueless. If the Zurich
Claim is not now accorded priority status, Zurich becomes another gen-
eral unsecured creditor of Howard, and it is agreed that Zurich would
then receive nothing from Howard’s bankrupt estate. Furthermore, if it
loses this appeal, Zurich has agreed to withdraw the Zurich Claim.
6                   IN RE: HOWARD DELIVERY SERVICE
                                    II.

   Zurich’s appeal concerns the meaning and application of the Stat-
ute, which constitutes a question of law that we review de novo. See
Loudon Leasing Dev. Co. v. Ford Motor Credit Co., 128 F.3d 203,
206 (4th Cir. 1997). In construing the meaning of a statutory provi-
sion, we are obliged to utilize the well-settled two-step process
explained in a long series of decisions, including Newport News Ship-
building & Dry Dock Co. v. Brown. 376 F.3d 245, 248 (4th Cir.
2004). First, we must ascertain whether the language of the statutory
provision is plain or ambiguous. If the provision is drawn in plain and
unambiguous terms, we simply apply the statute’s plain meaning.
Alternatively, if the language of the statutory provision is ambiguous,
we proceed to the second step in the process and seek to ascertain the
meaning intended by Congress when the provision was enacted. In
the context of the Bankruptcy Code, it is presumed that a debtor’s
resources should be equally distributed among the creditors, and stat-
utory priorities are therefore to be narrowly construed. See In re:
Merry-Go-Round Enter., Inc., 180 F.3d 149, 157 (4th Cir. 1999)
(observing general "presumption in bankruptcy cases that all of a
debtor’s limited resources will be equally distributed among credi-
tors").

                                    III.

   In assessing whether the Zurich Claim is entitled to priority status
under the Statute, I first briefly review the split of authority in the fed-
eral courts as to whether claims for unpaid insurance premiums are
so entitled. As explained below, I am of the view that the pertinent
statutory terms — "contributions," "employee benefit plan," and "ser-
vices rendered" — are plain and unambiguous. I am therefore obliged
to apply the Statute to the Zurich Claim and, in so doing, conclude
that it is entitled to priority status thereunder.

                                    A.

   The issue presented by Zurich has been previously considered by
several other courts, and they disagree on whether a debtor’s unpaid
premiums for workers’ compensation insurance constitute "contribu-
tions to an employee benefit plan arising from services rendered," and
                   IN RE: HOWARD DELIVERY SERVICE                        7
on whether a bankruptcy claim for such premiums is thereby entitled
to fourth-level priority status under the Statute. Compare Travelers
Prop. Cas. Corp. v. Birmingham-Nashville Express, Inc. (In re:
Birmingham-Nashville Express, Inc.), 224 F.3d 511 (6th Cir. 2000)
(denying priority status), State Ins. Fund v. S. Star Foods, Inc. (In re:
S. Star Foods, Inc.), 144 F.3d 712 (10th Cir. 1998) (same), and
Employers Ins. of Wausau, Inc. v. HLM Corp. (In re: HLM Corp.),
62 F.3d 224 (8th Cir. 1995) (same), with Employers Ins. of Wausau
v. Plaid Pantries, Inc., 10 F.3d 605 (9th Cir. 1993) (affording priority
status). This disagreement among the courts rests upon opposing con-
structions of the Statute: the Ninth Circuit (and various district and
bankruptcy courts) deeming the Statute to be unambiguous and
affording priority to such claims; while the Sixth, Tenth, and Eighth
Circuits (as well as several district and bankruptcy courts) have con-
cluded that the Statute’s legislative history precludes priority status
being accorded to such claims. These divergent views deserve some
further examination.

                                    1.

   The first line of decisions addressing bankruptcy claims for unpaid
insurance premiums, including the Ninth Circuit’s decision in Plaid
Pantries, has found the Statute to be unambiguous, and thus reasoned
that legislative history need not be considered. Relying on the Stat-
ute’s plain meaning, those courts have concluded that the Statute
accords priority status to such claims as "contributions to an
employee benefit plan arising from services rendered" under the Stat-
ute. See Plaid Pantries, 10 F.3d at 607 (according priority status to
claim for unpaid workers’ compensation premiums); Saco, 711 F.3d
at 449 (according priority status to claim for unpaid employee group
life, health, and disability insurance premiums); Ivey v. Great W. Life
& Annuity Ins. Co., 308 B.R. 752 (M.D.N.C. 2004), appeal docketed,
No. 04-1576 (4th Cir. 2004) (according priority status to claim for
unpaid health insurance premiums); Principal Mut. Life Ins. Co. v.
Joint Comm. of Unsecured Creditors (In re: CirrusCorp), 196 B.R.
76 (S.D. Tex. 1996) (same); Allegheny Int’l, Inc. v. Metro. Life Ins.
Co., 145 B.R. 820 (W.D. Pa. 1992) (according priority status to claim
for unpaid life insurance premiums); Official Labor Creditors Comm.
v. Jet Fla. Sys., Inc. (In re: Jet Fla. Sys., Inc.), 80 B.R. 544 (S.D. Fla.
1987) (according priority status to claim for unpaid reimbursements
8                  IN RE: HOWARD DELIVERY SERVICE
for covered medical expenses); In re: Integrated Health Servs., Inc.,
291 B.R. 611 (Bankr. D. Del. 2003) (according priority status to claim
for unpaid workers’ compensation insurance premiums); In re: A.B.C.
Fabrics of Tampa, Inc., 259 B.R. 759 (Bankr. M.D. Fla. 2001)
(according priority status to claim for unpaid reimbursements for cov-
ered medical expenses); In re: Braniff, Inc., 218 B.R. 628 (Bankr.
M.D. Fla. 1998) (according priority status to claim for unpaid health
and life insurance premiums); Official Creditors’ Comm. of Lummus
Indus., Inc. v. Blue Cross & Blue Shield of Ga., Inc. (In re: Lummus
Indus., Inc.), 193 B.R. 615 (Bankr. M.D. Ga. 1996) (according prior-
ity status to claim for unpaid health insurance premiums); see also
Perlstein v. Rockwood Ins. Co. (In re: AOV Indus., Inc.), 85 B.R. 183
(Bankr. D.D.C. 1988) (noting, albeit in dicta, that unpaid workers’
compensation premiums are entitled to priority status).

   In this series of decisions, the courts that have assessed the priority
status of claims premised on unpaid workers’ compensation premi-
ums have found such claims to be indistinguishable from claims of
priority status involving other types of employer-provided insurance
benefits, e.g., health, disability, or life insurance. See Plaid Pantries,
10 F.3d at 607; Integrated Health Servs., 291 B.R. at 613. Indeed, the
Statute fails to distinguish between an "employee benefit plan" that
an employer is statutorily required to provide to its employees, i.e.,
workers’ compensation, and a benefit plan that an employer voluntar-
ily decides to provide. The courts adopting the plain meaning view of
the Statute have thus concluded that bankruptcy claims for unpaid
workers’ compensation premiums, like those for unpaid health, dis-
ability, and life insurance premiums, are entitled to priority status
under the Statute.

                                    2.

   On the other hand, three of our sister circuits, as well as several of
the lower courts, have turned to and relied on aspects of the Statute’s
legislative history in concluding that claims for unpaid workers’ com-
pensation premiums are somehow different from claims for premiums
to voluntarily provided benefit plans, and that claims for unpaid
workers’ compensation premiums are not entitled to priority status as
"contributions to an employee benefit plan" under the Statute. See
Birmingham-Nashville, 224 F.3d at 517 (holding unpaid workers’
                   IN RE: HOWARD DELIVERY SERVICE                        9
compensation premiums are not entitled to priority status); S. Star
Foods, 144 F.3d at 715-17 (same); HLM Corp., 62 F.3d at 225
(same); In re: Allentown Moving & Storage, 214 B.R. 761 (E.D. Pa.
1997) (same); Edward W. Minte Co. v. Franey & Parr (In re: Edward
W. Minte Co.), 286 B.R. 1, 8-13 (Bankr. D.D.C. 2002) (same); In re:
Perk Dev. Corp. Brambury Assocs., 246 B.R. 753 (Bankr. W.D.N.Y.
2000) (same); In re: Arrow Carrier Corp., 154 B.R. 642 (Bankr.
D.N.J. 1993) (same); see also In re: Aer-Aerotron, Inc., 182 B.R. 725
(Bankr. E.D.N.C. 1995) (denying priority status to claim for unpaid
life insurance premiums).

   Congress enacted the Statute in 1978 in an effort to abrogate two
Supreme Court decisions which had construed the terms "wages" and
"commissions" of the priority provision of the predecessor statute, the
Bankruptcy Act of 1898. Joint Indus. Bd. of Elec. Indus. v. United
States, 391 U.S. 224 (1968); United States v. Embassy Rest., Inc., 359
U.S. 29 (1959). In those decisions, the Court had held that the wage
priority provision of the 1898 Act failed to afford priority status to
claims for contributions to bargained-for, union-operated welfare and
annuity funds. Joint Indus., 39 U.S. at 228; Embassy Rest., 359 U.S.
at 33. Congress, in enacting the Statute, sought to ensure that the
employees of bankrupt employers received priority on claims not just
for their wages, but also for wage substitutes provided through "em-
ployee benefit plan[s]". S. Star Foods, 144 F.3d at 715-16 (relying on
H.R. Rep. No. 95-595, at 187, 357 (1978), reprinted in 1978
U.S.C.C.A.N. 5963, 6313 and S. Rep. No. 95-989, at 69 (1978),
reprinted in 1978 U.S.C.C.A.N. 5787, 5855)).

  The line of decisions relying on the Statute’s legislative history
have generally concluded that a workers’ compensation plan does not
constitute a wage substitute and is not an "employee benefit plan"
under the Statute, because workers’ compensation is statutorily man-
dated.7 See HLM Corp., 62 F.3d at 225; S. Star Foods, 144 F.3d at
  7
    None of the decisions taking this view has held that an "employee
benefit plan" under the Statute must have resulted from collective bar-
gaining. Indeed, the Sixth Circuit specifically rejected such an assertion,
agreeing with the First Circuit’s decision in Saco, stating: "we do not
hold that to qualify for priority under § 507(a)(4) the wage substitute
must actually be the product of collective bargaining." Birmingham-
Nashville, 224 F.3d at 517 (relying on Saco, 711 F.3d at 449).
10                 IN RE: HOWARD DELIVERY SERVICE
715; Birmingham-Nashville, 224 F.3d at 517. For example, the Sixth
Circuit observed that: "[w]orkers’ compensation is not a wage substi-
tute; rather, it is an award arising out of a work-related injury owed
by an employer." Birmingham-Nashville, 224 F.3d at 517 (emphasis
added). More specifically, because workers’ compensation coverage
is statutorily mandated, an employer cannot offer its employees
higher wages as a substitute for those benefits. HLM Corp., 62 F.3d
at 226. Because employees are, in that circumstance, entitled to work-
ers’ compensation benefits under law, the Eighth Circuit observed
that, "even if the employer were illegally uninsured, the employers’
participation in a workers’ compensation insurance fund cannot be
understood as a true benefit." Id.

                                  B.

   In order to ascertain which of these competing views to adopt, I
must, pursuant to the applicable principles of statutory construction,
first decide whether the Statute has a plain and unambiguous mean-
ing. Newport News Shipbldg., 376 F.3d at 248; see Hartford Under-
writers Ins. Co. v. Union Planters Bank, 530 U.S. 1, 7 (2000)
(admonishing that "when the statute’s language is plain, the sole func-
tion of the courts — at least where the disposition required by the text
is not absurd — is to enforce it according to its terms") (citations
omitted). In enacting the Statute, Congress failed to define the terms
"contributions," "employee benefit plan," or "services rendered," as
they are used therein, nor has the Supreme Court construed those
terms. Where, as here, a statutory provision fails to expressly define
the terms to be assessed, we are obliged to construe them in accor-
dance with their ordinary or natural meaning. FDIC v. Meyer, 510
U.S. 471, 476 (1994).

   In these circumstances, in order to ascertain whether the Statute is
plain or ambiguous, I will assess separately the ordinary and natural
meanings of the pertinent statutory terms, i.e., "contributions," "em-
ployee benefit plan," and "services rendered." As explained below,
although I am sensitive to the principle that bankruptcy priorities are
to be interpreted narrowly, see In re: Merry-Go-Round Enter., Inc.,
180 F.3d 149, 157 (4th Cir. 1999), each of those terms is plain and
unambiguous, and the Zurich Claim is therefore entitled to priority
status under the Statute.
                   IN RE: HOWARD DELIVERY SERVICE                      11
                                    1.

   First of all, an accepted and ordinary meaning of the term "contri-
butions" is that they include sums "paid by an employer to [a] group-
insurance fund . . . for employees." Webster’s Third New Interna-
tional Dictionary 496 (reprint 1993) (1981). Importantly, a contribu-
tion need not be a payment that is voluntarily made. Birmingham-
Nashville, 224 F.3d at 516 (observing that "employer’s statutorily
mandated payment to an employee benefit plan . . . is no less of a
‘contribution’ to such a fund simply because it is mandated by stat-
ute"). Applying this meaning of the term "contributions" to these cir-
cumstances, Howard’s unpaid premiums on the Policy constitute
sums to be paid by an employer to a group insurance fund for work-
ers’ compensation insurance, and constitute "contributions" within the
meaning of the Statute.8

                                    2.

   Second, the insurance coverage provided by the Policy for How-
ard’s workers’ compensation liabilities constitutes an "employee ben-
efit plan" as that term is used in the Statute. As explained below, I
reach this conclusion because a workers’ compensation plan consti-
tutes an "employee benefit plan" under the Statute, and because the
  8
    In concluding that the unpaid insurance premiums owed to Zurich are
contributions, I necessarily reject the view that a contribution does not
include the unilateral purchase of such a product or service, because a
contribution, as defined by Random House, means inter alia, giving
"along with others." Birmingham-Nashville, 224 F.3d at 515 (quoting
Random House Dictionary of the English Language 308 (1981) (empha-
sis added)). Because the bankrupt employer in the Birmingham-Nashville
proceeding was, like Howard, the sole purchaser of an insurance policy,
its unpaid premiums were deemed not to constitute contributions. Id. I
see this as an overly narrow interpretation of the term "contributions,"
precluding the existence of a sole contributor and denying priority status
to claims for unpaid life, health, and disability insurance premiums.
Claims for such unpaid insurance premiums have been accorded priority
status by the First Circuit in Saco, and by multiple district and bank-
ruptcy courts. See Saco, 711 F.2d at 441; see also supra Part III.A.1.
12                  IN RE: HOWARD DELIVERY SERVICE
insurance coverage purchased by an employer to cover such a plan is
also an "employee benefit plan."9

                                     a.

   A workers’ compensation insurance program constitutes a detailed
contractual arrangement enabling an employer to provide health, dis-
ability, lost-wage, and death benefits to employees who are injured in
the course of their employment. As the bankruptcy and district courts
recognized in this case, the benefits of workers’ compensation cover-
age plainly inure to those employees who receive payments thereun-
der. See Bankruptcy Opinion at *5 (workers’ compensation is
"unarguably a benefit for employees"); District Opinion at *11 (work-
ers’ compensation is "of great benefit to employees"). Next, a "bene-
fit" is, inter alia, "a cash payment provided for under an . . . insurance
plan," or "financial help in time of sickness, old age, or unemploy-
ment." Webster’s Third 204. Under West Virginia workers’ compen-
sation law, employees receive benefits from an insurance plan, such
as that provided by the Policy, to assist them when work-related inju-
ries result in sickness or unemployment. See Repass v. Workers’
Comp. Division, 569 S.E.2d 162, 168-69 (W. Va. 2002) ("The Act is
designed to compensate injured workers . . . in order that injured
workers and those who depend upon them for support shall not be left
destitute during a period of disability."). Finally, a "plan" constitutes,
inter alia, "a detailed and systematic formulation of a large-scale
campaign or program of action." Webster’s Third 1729. Applying that
  9
   Certain bankruptcy courts have found the ERISA definition of "em-
ployee benefit plan" to be useful in construing the meaning of the Stat-
ute, because, under ERISA, workers’ compensation is identified as an
"employee benefit plan." See 29 U.S.C. §§ 1002(1)-(3), 1003(b); see,
e.g., Allegheny Int’l, Inc. v. Metro. Life Ins. Co. (In re: Allegheny Int’l,
Inc.), 138 B.R. 171, 173-74 (Bankr. W.D. Pa. 1992), aff’d, 145 B.R. 820
(W.D. Pa. 1992). However, "[m]ost federal courts . . . have rejected this
reasoning." Birmingham-Nashville, 224 F.3d at 517. Importantly, the
Supreme Court has held that, for purposes of construing terms found in
the Bankruptcy Code, it is inappropriate to incorporate characterizations
of a term in another statute absent some congressional indication that this
was intended. United States v. Reorganized CF&I Fabricators of Utah,
Inc., 518 U.S. 213, 225 (1996). I therefore decline to rely upon the
ERISA definition.
                   IN RE: HOWARD DELIVERY SERVICE                       13
definition, workers’ compensation insurance, as a detailed arrange-
ment between employees and employers, readily constitutes such a
"plan." Workers’ compensation insurance is thus an "employee bene-
fit plan" within the plain meaning of that statutory term.

   I acknowledge, and respectfully so, that three of the four courts of
appeals to face this question have disagreed, taking the view that
workers’ compensation insurance coverage does not constitute an
"employee benefit plan." We are unable to decide such an issue by a
poll of the courts, however, and I view the contrary reasoning of those
courts as unpersuasive. See McMellon v. United States, 387 F.3d 329
(4th Cir. 2004) (en banc) (Luttig, J., dissenting) ("Judicial interpreta-
tion is not an exercise in poll-taking.") The courts adopting the con-
trary view have relied on aspects of the Statute’s legislative history
to interpret the term "employee benefit plan," and they have consis-
tently done so without first deciding that the statutory term is ambigu-
ous. Indeed, the Eighth Circuit concluded that the plain meaning of
the term "employee benefit plan" militated against affording priority
based upon the legislative history of the Statute. HLM Corp., 62 F.3d
at 225 (observing that since Bankruptcy Code did not define term,
"the legislative history is instructive and illuminating" without
addressing term’s plain meaning). The Tenth Circuit simply con-
cluded that a split in the circuits was sufficient evidence that the statu-
tory provision was ambiguous. S. Star Foods, 144 F.3d at 715 ("The
split in the circuits is, in itself, evidence of the ambiguity of the
phrase ‘contributions to an employee benefit plan’ . . . .").10 And the
Sixth Circuit reasoned that the term "employee benefit plan" is
ambiguous by first looking, inappropriately, to the Statute’s legisla-
tive history. Birmingham-Nashville, 224 F.3d at 517 (holding that "it
is not at all clear" what "employee benefit plan" means and citing
Embassy Restaurant decision for authority that term is limited to
"wage substitutes," without addressing plain meaning). In our view,
these decisions fail to heed the Court’s admonishment that "when the
[Bankruptcy Code’s] language is plain, the sole function of the courts
  10
     I see this point as unpersuasive. As Justice Thomas has aptly
observed, "[a] mere disagreement among litigants over the meaning of a
statute does not itself prove ambiguity; it usually means that one of the
litigants is simply wrong." Bank of A. Nat’l Trust & Sav. Ass’n v. 203
N. LaSalle St. P’ship, 526 U.S. 434, 461 (1991) (Thomas, J., concurring).
14                 IN RE: HOWARD DELIVERY SERVICE
— at least where the disposition required by the text is not absurd —
is to enforce it according to its terms." Hartford Underwriters, 530
U.S. at 7 (citations omitted).

   The language of the Statute is plain and unambiguous — it does
not require that compensation received by an employee be a "wage
substitute," nor does it exclude an employee benefit plan that is statu-
torily mandated.11 Put simply, we are not entitled to require an
employee benefit plan to qualify as a wage substitute or to require that
participation in such a plan be voluntary, thereby engrafting limita-
tions on statutory provisions in order to "achieve that which Congress
is perceived to have failed to do." United States v. Locke, 471 U.S.
84, 95 (1985); see also Pavelic & LeFlore v. Marvel Entm’t Group,
493 U.S. 120, 126 (1989) ("our task is to apply the text, not improve
on it"). In sum, the plain language of the Statute accords priority to
contributions made to an "employee benefit plan" and, applying the
relevant statutory provisions, workers’ compensation insurance cover-
age constitutes such a plan.

                                   b.

    Turning next to the question of whether this particular Policy con-
stitutes an "employee benefit plan," within the meaning of the Statute,
I conclude that it does. The Policy constitutes such a "plan," in that
it is a "detailed and systematic formulation of a large-scale . . . pro-
gram of action." Webster’s Third 1729. The district court concluded
otherwise, finding that the Policy failed to benefit Howard’s employ-
ees, and that it benefitted Howard only, because "the insurance is
designed to shield Howard from the liability of providing workers’
compensation benefits." District Opinion at *10.

   Notwithstanding the benefits accruing to Howard under the Policy,
the insurance coverage provided thereunder plainly inured to the ben-
efit of Howard’s employees. Zurich was obliged to pay Howard’s
workers’ compensation claims and be partially reimbursed by Howard
  11
    See also In re: Integrated Health Servs., Inc., 291 B.R. 611 (Bankr.
D. Del. 2003) (making comprehensive analysis of statute and pertinent
legislative history, and according priority status to claim for unpaid
workers’ compensation insurance premiums).
                    IN RE: HOWARD DELIVERY SERVICE                        15
pursuant to the Policy’s provisions. As a result, the Policy directly
benefitted the Howard employees who received compensation. See
Ivey v. Great W. Life & Annuity Ins. Co. (In re: Ivey), 308 B.R. 752,
757 (M.D.N.C. 2004) ("the plain language of the statute . . . include[s]
priority for an insurance company which has expended its own funds
to make the plan work"). That the Policy may also have benefitted
Howard is not controlling, because it unquestionably provided an
"employee benefit" under the plain and unambiguous meaning of that
term.

   Nearly all the courts addressing the issue have ruled that claims for
unpaid health, disability, and life insurance premiums are entitled to
priority status under the Statute, and that those types of insurance con-
stitute a benefit to employees.12 See supra Part III.A.1. And of import
here, the coverage provided by workers’ compensation insurance is
indistinguishable, under the Statute, from those other types of insur-
ance. As Justice Breyer aptly observed in Saco: "[t]o allow the insurer
to obtain its premiums through priority would seem the surest way to
provide employees with the policy benefits to which they are enti-
tled." 711 F.2d at 449. As with health, disability, and life insurance,
workers’ compensation coverage conveys a benefit to employees, and
the Zurich Claim arises from an "employee benefit plan."

                                     3.

  Finally, Howard asserts that the meaning of the term "services ren-
dered," as found in the Statute, is limited to those services rendered
by its employees and does not include services rendered by an insurer
such as Zurich. See Edward W. Minte Co. v. Franey & Parr (In re:
  12
    In resolving this issue I am impressed with the reasoning of the
recent decision of the Middle District of North Carolina on the question
of whether a claim for unpaid insurance premiums is entitled to priority
status. Ivey, 308 B.R. at 755-57. That court makes a comprehensive anal-
ysis of this issue, concluding that such a claim is entitled to priority sta-
tus under the Statute. Id. at 756 (observing that statutory language
"appears to allow priority for insurers or any other parties who make
contributions to the plan"). Because the court deemed the "plain lan-
guage" of the Statute to be unambiguous, it had no reason to "look
beyond the text of the statute to the legislative history." Id. at 757.
16                 IN RE: HOWARD DELIVERY SERVICE
Edward W. Minte Co.), 286 B.R. 1, 8-13 (Bankr. D.D.C. 2002).13 It
contends that, because the Zurich Claim arises from the provision of
insurance coverage by Zurich, rather than from services rendered by
Howard’s employees, the Claim does not fall within the plain mean-
ing of "services rendered" under the Statute. Id.

   I reject Howard’s contention on this point because it seeks to inap-
propriately limit the breadth of the relevant term. I am again content
to follow Justice Breyer’s guidance in Saco that insurers may be enti-
tled to priority under the Statute. 711 F.2d at 449. Regardless of
whether the term "services rendered" refers to the provision of insur-
ance or is limited to employees’ services, the Zurich Claim satisfies
this aspect of the Statute. It is only because workers were employed
by Howard (and providing services to it) prior to the bankruptcy filing
that Howard’s obligation to provide insurance and pay the necessary
premiums arises. The Zurich Claim thus arises from "services ren-
dered" by Howard’s employees, i.e., their services occasioned How-
ard’s obligation to purchase workers’ compensation insurance, and by
Zurich as well, i.e., providing insurance.14

                                  IV.

   Pursuant to the foregoing, the Zurich Claim is entitled to priority
under the Statute. I therefore concur in the judgment to reverse the
decision of the district court and remand for such further proceedings
as may be appropriate.

  13
      Under the Minte decision, on which Howard relies for this conten-
tion, only employees or administrators of employee benefit plans who
represent employee interests may recover under the Statute. 286 B.R. at
10.
   14
      Because the language of the Statute is plain and unambiguous, I
decline Howard’s invitation to examine its legislative history. Conduct-
ing such an analysis "would require a radical abandonment of our long-
standing precedents that permit resort to legislative history only when
necessary to interpret ambiguous statutory text." Bedroc Ltd., LLC v.
United States, 541 U.S. 176, 124 S.Ct. 1587, 1595 (2004).
                   IN RE: HOWARD DELIVERY SERVICE                    17
SHEDD, Circuit Judge, concurring:

   While I appreciate Judge King’s well-crafted opinion and concur
in its result, I base my opinion on a different rationale. Our paths
diverge on the issue of whether the phrase "employee benefit plan"
in § 507(a)(4) is ambiguous. Judge King finds the individual words
of this phrase to be unambiguous, but I find the phrase as a whole to
be ambiguous. In ascertaining the meaning of this ambiguous phrase,
I rely on specific evidence in the statute’s legislative history showing
that Congress likely intended to import the definition of the term "em-
ployee benefit plan" from ERISA to this particular bankruptcy prior-
ity provision. Under ERISA, "employee benefit plan" includes
workers’ compensation benefit plans. Thus, when Congress enacted
§ 507(a)(4), it granted priority protection to contributions to workers’
compensation plans.

   The "first step in interpreting a statute is to determine whether the
language at issue has a plain and unambiguous meaning with regard
to the particular dispute in the case." Robinson v. Shell Oil Co., 519
U.S. 337, 340 (1997) (holding that the term "employee" in Title VII
is ambiguous in its context). In determining whether a statute is plain
or ambiguous, a court must consider the specific language employed,
the specific context of that language, and the broader context of the
statute as a whole. Id. at 341. A statute is ambiguous if its language
is susceptible to more than one reasonable interpretation. Newport
News Shipbuilding & Dry Dock Co. v. Brown, 376 F.3d 245, 248 (4th
Cir. 2004). "If the statutory language is clear and unambiguous, our
inquiry ends there." Faircloth v. Lundy Packing Co., 91 F.3d 648, 653
(4th Cir. 1996). If, however, a statute is ambiguous, resort to legisla-
tive history is appropriate. Bedroc Ltd. v. United States, 541 U.S. 176,
___, 124 S.Ct. 1587, 1595 (2004).

   In deciding that § 507(a)(4) is unambiguous, Judge King picks and
chooses from accepted dictionary definitions of the words "benefit"
and "plan" and concludes that an "employee benefit plan" is any "cash
payment provided for under an . . . insurance plan" or "financial help
in time of sickness, old age, or unemployment" to an employee that
is paid according to "a detailed and systematic formulation of a large-
scale campaign or program of action." Although this definition might
be one reasonable interpretation of these words, it is not the only rea-
18                 IN RE: HOWARD DELIVERY SERVICE
sonable interpretation. For instance, in common usage the phrase
"employee benefit plan" can refer to a package of "fringe benefits,"
which may or may not include workers’ compensation benefits. See,
e.g., 29 C.F.R. § 1625.10(b) (2005) (stating that, for purposes of the
Age Discrimination in Employment Act, an "employee benefit plan"
is a plan that "provides employees with what are frequently referred
to as ‘fringe benefits’"); Employee Fringe Benefits: Tax Policy Issues,
Management Matters, Sept. 1, 1992 (listing the four most common
"fringe benefits" as pensions, health insurance, life insurance, and
flexible benefit programs). Moreover, the context of the statute sug-
gests that Congress could have intended the phrase "employee benefit
plan" to be a term of art having a specific meaning different from the
sum of what these three words mean individually. Accordingly,
because the term "employee benefit plan" is susceptible to more than
one reasonable interpretation, it is appropriate to consider the legisla-
tive history of § 507(a)(4) to determine what Congress intended by
using this particular language. See Bedroc, 124 S. Ct. at 1595.

   As originally introduced in 1975, the new priority for "employee
benefit plans" included "allowed claims for contributions to pension,
insurance, or similar employee benefit plans . . . ." H.R. 31, 94th Con-
gress (1975) (emphasis added). In hearings before the Judiciary Com-
mittee of the United States House of Representatives, one important
witness — a union official representing more than a dozen affiliated
unions and several million tradesmen — suggested that the legislation
could be interpreted too narrowly and should therefore be amended
"so as not inadvertently to exclude certain other types of plans."
Bankruptcy Act Revision: Hearings on H.R. 31 and H.R. 32 Before
the Subcommittee on Civil and Constitutional Rights of the House
Committee on the Judiciary, 94th Cong. 2452 (1976). To broaden the
coverage of the priority, this witness urged Congress to delete the
words "pension, insurance, or similar" and instead parallel the lan-
guage of ERISA. Id. Thus, "[t]he contributions for which priority
treatment should be granted should be any contributions to an
employee benefit plan as defined in ERISA § 3(3)." Id. at 2455.
(emphasis added).

   The priority was enacted into law two years later as part of the
Bankruptcy Reform Act of 1978, Pub. L. 95-598, 92 Stat. 2549 (codi-
fied at 11 U.S.C. § 507(a)(4)). Congress enacted the exact wording
                   IN RE: HOWARD DELIVERY SERVICE                       19
proposed in the House Judiciary Committee hearing two years earlier,
so that the priority applies to "allowed unsecured claims for contribu-
tions to an employee benefit plan." 11 U.S.C. § 507(a)(4).

   In this particular instance, the best evidence as to what Congress
intended by incorporating the term "employee benefit plan" comes not
from attempting to ascertain the overriding purposes and aims of the
legislation.1 Instead, we have a direct indication from the legislative
history that Congress intended to give this particular term the same
meaning that it had given to that same term just four years earlier
when it enacted ERISA. See Employee Retirement Income Security
Act of 1974, Pub. L. 93-406, 88 Stat. 829. Accordingly, I conclude
that Congress intended the phrase "employee benefit plan" in the
bankruptcy priority provision to have the same meaning that it has in
ERISA.2

  ERISA § 3(3) defines the term "employee benefit plan" to mean
"an employee welfare benefit plan or an employee pension benefit
  1
     I note, however, that my approach is also consistent with the Congres-
sional purpose and aim of the legislation. Language in the House Com-
mittee Report explaining the purpose of the new priority provision
suggests that workers’ compensation plans are entitled to priority. That
Report states that the new priority will cover contributions and payments
to plans including "health insurance programs, life insurance plans, pen-
sion funds, and all other forms of employee compensation that is not in
the form of wages." H.R. Rep. No. 95-595, at 6148 (1977). Under this
very broad language, workers’ compensation would qualify as "em-
ployee compensation that is not in the form of wages."
   2
     Relying on United States v. Reorganized CF & I Fabricators of Utah,
Inc., 518 U.S. 213 (1996), Judge King rejects the ERISA definition
because it is "inappropriate to incorporate characterizations of a term in
another statute absent some congressional indication that this was
intended." This contention ignores the indication of Congress’s intent in
the legislative history. The plain facts that (1) Congress was urged to
make § 507(a)(4) consistent with ERISA and (2) Congress subsequently
amended the provision to employ the very same term that is used in
ERISA provides "some congressional indication" that "employee benefit
plan" should have the same meaning in both statutes. Simply, Congress
used a special term it had used in the recent past with knowledge of what
that term meant.
20                    IN RE: HOWARD DELIVERY SERVICE
plan . . . ." 29 U.S.C. § 1002(3) (emphasis added). An "employee wel-
fare benefit plan" is:

      any plan, fund, or program . . . established or maintained by
      an employer . . . to the extent that such plan, fund, or pro-
      gram was established or is maintained for the purpose of
      providing for its participants or their beneficiaries, through
      the purchase of insurance or otherwise, . . . medical, surgi-
      cal, or hospital care or benefits, or benefits in the event of
      sickness, accident, disability, death or unemployment . . . .

29 U.S.C. § 1002(1). Based on these definitions, the workers’ com-
pensation insurance plan at issue in this case qualifies as an "em-
ployee benefit plan." The plan at issue was established by Howard
Delivery Service through the purchase of insurance and was main-
tained for the purpose of providing benefits in the event of sickness,
accident, disability or death of the employees.3

   Because Congress enacted an ambiguous statute, we must ascertain
from the statute’s legislative history which types of plans Congress
meant to include in this new bankruptcy priority. In my view, the best
evidence reveals that Congress intended the term "employee benefit
  3
   ERISA § 4(b)(3) further confirms that the term "employee benefit
plan" includes workers’ compensation plans. This code section provides:
      (b)    The provisions of this subchapter shall not apply to any
             employee benefit plan if—
      ...
              (3) such plan is maintained solely for the purpose of
            complying with applicable workmen’s compensation laws
            ....
29 U.S.C. § 1003(b)(3) (emphasis added). In other words, all workers’
compensation plans are "employee benefit plans" under ERISA’s defini-
tion, but ERISA does not govern all "employee benefit plans," including
some workers’ compensation plans. See PPG Indus. Pension Plan v.
Crews, 902 F.2d 1148, 1151 (4th Cir. 1990) (deciding that ERISA
applies to company’s employee benefit plan providing workers’ compen-
sation benefits because it was not maintained solely for the purpose of
complying with West Virginia’s workers’ compensation laws).
                   IN RE: HOWARD DELIVERY SERVICE                     21
plan" in § 507 (a)(4) to share the same meaning as "employee benefit
plan" under ERISA. A workers’ compensation insurance plan is an
"employee benefit plan" under ERISA, and it necessarily follows that
a workers’ compensation plan qualifies as an "employee benefit plan"
under § 507 (a)(4) of the Bankruptcy Code. Accordingly, I concur
with Judge King that the Zurich Claim is entitled to priority and that
the judgment of the district court should be reversed.

NIEMEYER, Circuit Judge, dissenting:

   The sole question in this appeal is whether the claim of Zurich
American Insurance Company filed against the estate of Howard
Delivery Service, Inc., the debtor in bankruptcy, for unpaid workers’
compensation insurance premiums is given priority by § 507(a)(4) of
the Bankruptcy Code. Because such premiums are plainly not — as
the statute requires they must be — "contributions to an employee
benefit plan arising from services rendered," 11 U.S.C. § 507(a)(4),
I would affirm the judgment of the district court denying priority for
Zurich’s claim.

   In holding that claims for unpaid workers’ compensation insurance
premiums enjoy the same priority as claims for unpaid employee
fringe benefits, the judgment of the majority widens a split among the
circuits, joining the Ninth Circuit as the only circuit that has so held.
See Employers Ins. of Wausau v. Plaid Pantries, Inc., 10 F.3d 605
(9th Cir. 1993). The other three circuits that have considered this
issue have held that claims for unpaid workers’ compensation insur-
ance premiums do not fall within the statutory language of
§ 507(a)(4) and therefore do not enjoy the priority afforded by that
section. See Travelers Prop. Cas. Corp. v. Birmingham-Nashville
Express, Inc. (In re: Birmingham-Nashville Express, Inc.), 224 F.3d
511 (6th Cir. 2000); State Ins. Fund v. Southern Star Foods, Inc. (In
re: Southern Star Foods, Inc.), 144 F.3d 712 (10th Cir. 1998);
Employers Ins. of Wausau, Inc. v. HLM Corp. (In re: HLM Corp.),
62 F.3d 224 (8th Cir. 1995). Because I believe that the decisions of
these three circuits better capture the plain meaning of § 507(a)(4), I
would join them.

                                    I

   When construing a statutory provision, we begin with an analysis
of the statute’s language. See, e.g., Landreth Timber Co. v. Landreth,
22                 IN RE: HOWARD DELIVERY SERVICE
471 U.S. 681, 685 (1985). If the language is unambiguous and "the
statutory scheme is coherent and consistent," we apply the statute as
written. Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997) (quoting
United States v. Ron Pair Enterprises, 489 U.S. 235, 240 (1989))
(internal quotation marks omitted). "The plainness or ambiguity of
statutory language is determined by reference to the language itself,
the specific context in which that language is used, and the broader
context of the statute as a whole." 519 U.S. at 341.

   Moreover, in construing provisions of the Bankruptcy Code, we
keep in mind its overriding objective of providing to creditors equal
distribution of a debtor’s limited resources. See Isaac v. Temex
Energy, Inc. (In re Amarex, Inc.), 853 F.2d 1526, 1530 (10th Cir.
1988). Because of this broad equitable purpose, statutory priorities
must be narrowly construed. See Travelers Prop. Cas. Corp., 224
F.3d at 517; New Neighborhoods, Inc. v. W. Va. Workers’ Comp.
Fund, 886 F.2d 714, 719 (4th Cir. 1989); Isaac, 853 F.2d at 1530.
Stating this principle as a rule of statutory construction, the claims of
a class of creditors may receive preferential or priority treatment from
bankruptcy courts only when authorized by Congress in clear and
unequivocal terms. See United States v. Embassy Restaurant, Inc.,
359 U.S. 29, 31, 33 (1959). It follows that if a particular type of unse-
cured claim is not clearly and unequivocally listed in 11 U.S.C.
§ 507(a), which enumerates the Bankruptcy Code’s priorities, then
Congress had no intention of giving the claim priority, see Nathanson
v. NLRB, 344 U.S. 25, 29 (1952); Employee Transfer Corp. v.
Grigsby (In re White Motor Corp.), 831 F.2d 106, 110 (6th Cir.
1987), and we would not be free to create a new priority, see Cami-
netti v. United States, 242 U.S. 470, 485 (1917).

                                   II

   In this case, we consider whether 11 U.S.C. § 507(a)(4) clearly
grants priority to claims for unpaid workers’ compensation insurance
premiums. Before turning to the specific language of § 507(a)(4), it
is useful to give context to the enactment of that section, see Robin-
son, 519 U.S. at 341, which in this case provides substantial assis-
tance in understanding the statutory language employed by Congress.

  Congress enacted § 507(a)(4) in 1978 specifically to overrule the
holdings in two Supreme Court cases: United States v. Embassy Res-
                   IN RE: HOWARD DELIVERY SERVICE                      23
taurant, Inc., 359 U.S. 29 (1959), and Joint Industry Board v. United
States, 391 U.S. 224 (1968). In Embassy Restaurant, the Court con-
strued the predecessor to § 507(a), 11 U.S.C. § 104(a)(2) (repealed
1978), which established a priority in bankruptcy for claims of
"wages . . . due to workmen," and held that a claim for contributions
by an employer to a union welfare plan owed under the terms of a col-
lective bargaining agreement did not constitute "wages . . . due to
workmen." 359 U.S. at 30-31. Trustees of the welfare plan, which had
been formed to maintain life insurance, weekly sick benefits, hospital
benefits, and other advantages for union members, id. at 30, argued
that "since unions bargain for these contributions as though they were
wages and industry likewise considers them as an integral part of the
wage package, they must in law be considered wages," id. at 33
(internal quotation marks omitted). Rejecting this argument, the
Supreme Court held that fringe benefits payable through a plan "can-
not be treated as being within the clear, unequivocal language of
‘wages . . . due to workmen.’" Id.

   Likewise, in Joint Industry Board, the Supreme Court, following
its decision and rationale in Embassy Restaurant, held that a claim for
an employer’s unpaid contributions to an employees’ annuity plan
established by a collective bargaining agreement was not a claim for
"wages . . . due to workmen" under 11 U.S.C. § 104(a)(2) (repealed
1978). See 391 U.S. at 226-28.

   In response to these two decisions, Congress enacted § 507(a)(4) to
give priority status to claims for such fringe benefits — the "contribu-
tions" to employee benefit plans referred to in Embassy Restaurant
and Joint Industry Board. As Congress explained:

    Paragraph (4) overrules United States v. Embassy Restau-
    rant, which held that fringe benefits were not entitled to
    wage priority status. The bill recognizes the realities of labor
    contract negotiations, under which wage demands are often
    reduced if adequate fringe benefits are substituted. The pri-
    ority granted is limited to claims for contributions to
    employee benefit plans such as pension plans, health or life
    insurance plans, and others, arising from services rendered.
24                IN RE: HOWARD DELIVERY SERVICE
H.R. Rep. No. 95-595, at 357 (1977), reprinted in 1978 U.S.C.C.A.N.
5963, 6313 (internal citation omitted). That purpose is now captured
in the text of § 507(a)(4), which reads:

     (a) The following expenses and claims have priority in the
     following order:

                            *     *     *

     (4) Fourth, allowed unsecured claims for contributions to
     an employee benefit plan arising from services rendered
     within 180 days [of the filing of a petition] . . . .

   In this context, we now turn to the specific question of whether a
claim for unpaid premiums for workers’ compensation insurance is
clearly and unequivocally a claim for "contributions to an employee
benefit plan arising from services rendered."

                                 III

   In defining the priority granted in § 507(a)(4), Congress used the
language the Supreme Court used to describe fringe benefits in
Embassy Restaurant when it excluded them from "wages . . . due to
workmen." See 359 U.S. at 29-30 (framing the issue as "whether con-
tributions to an employer welfare fund which are required by a collec-
tive bargaining agreement are entitled to priority"). Although
Congress could have used broader terms in defining the priority, it
selected the terms (1) "contributions" to an (2) "employee benefit
plan," and related them to (3) "services rendered" by the employee.
These three phrases taken together connote the very fringe benefits
rejected in Embassy Restaurant and Joint Industry Board. Of course,
this is not surprising, because 11 U.S.C. § 507(a)(4) was enacted spe-
cifically to overrule these two cases.

   The question here is whether a claim for unpaid insurance premi-
ums falls within the class of claims described by Congress as claims
for unpaid "contributions to an employee benefit plan arising from
services rendered." Stated more succinctly, is workers’ compensation
coverage a fringe benefit? Several compelling reasons convince me
                   IN RE: HOWARD DELIVERY SERVICE                    25
that a claim for unpaid insurance premiums is quite distinct from
unpaid "contributions to an employee benefit plan arising from ser-
vices rendered" and thus is not accorded priority status under the stat-
ute.

   First, workers’ compensation liability is an employer’s liability
imposed by statute in lieu of tort liability. See Mandolidis v. Elkins
Indus., Inc., 246 S.E.2d 907, 911 (W. Va. 1978) (noting that West
Virginia’s "Workmen’s Compensation Act was designed to remove
negligently caused industrial accidents from the common law tort sys-
tem") (emphasis omitted); Belcher v. J. H. Fletcher & Co., 498 F.
Supp. 629, 630-31 (S.D. W. Va. 1980) (same). Thus, rather than con-
stituting the payment of a "benefit" to employees, insurance premi-
ums for workers’ compensation are the payments due from an
employer in respect to its statutory liability and its employees’ statu-
tory rights. Such payments are not thought to be "contributions," a
term that involves a notion of voluntariness. See Webster’s Third New
International Dictionary 496 (Merriam Webster Inc. ed., 1993)
(defining a "contribution" as "a sum or thing voluntarily contrib-
uted"). Thus, while payments to a plan for fringe benefits are consid-
ered "contributions," payments made to discharge a statutorily
mandated liability are not.

    Second, the payment of premiums to an insurance company for the
issuance of a workers’ compensation insurance policy is not a contri-
bution "to an employee benefit plan" as that term is used in the stat-
ute. Although it would be correct to categorize some employer-funded
insurance policies as "employee benefit plans," that categorization is
fitting only when the employer voluntarily provides the insurance pol-
icy as a fringe benefit to its employees or when the policy is negoti-
ated between the employer and the employees as part of a collective
bargaining agreement. A plan arrived at through those methods is
quite different from a policy of insurance issued to discharge the sta-
tutorily mandated liability of an employer for workplace injuries.

  Third, the payment of premiums by an employer to an insurance
company for workers’ compensation insurance coverage is not a sur-
rogate for the payment of wages to employees, as is embraced by the
notion of a fringe benefit. See, e.g., Embassy Restaurant, 359 U.S. at
32-33. Section 507(a)(4) gives priority only to contributions that are
26                 IN RE: HOWARD DELIVERY SERVICE
considered fringe benefits in the sense that they arise from the
employees’ "services rendered." The claim for an unpaid insurance
premium is not a claim for a contribution arising from "services ren-
dered." While premiums for workers’ compensation insurance might
be computed by considering the number of employees covered on any
given day, the premium is not linked to the "services rendered" by the
employees as is required to qualify for priority status under
§ 507(a)(4).

   In short, the plain language of § 507(a)(4), which gives priority to
claims for unpaid "contributions to an employee benefit plan arising
from services rendered," does not cover claims for unpaid insurance
premiums charged to cover the statutory liability of the employer to
its employees. The unpaid insurance premium is not an unpaid contri-
bution; it is not an unpaid contribution to an employee benefit plan;
and it does not arise out of an employee’s services rendered in that
it is not a wage surrogate.

   To read § 507(a)(4) as expansively as do the opinions of Judge
King and Judge Shedd not only disregards the explicit language of the
statute, but such a reading also violates the underlying ground rules
for construing priorities under the Bankruptcy Code. "The broad pur-
pose of the Bankruptcy Act is to bring about an equitable distribution
of the bankrupt’s estate," and "if one claimant is to be preferred over
others, the purpose should be clear from the statute." Embassy Res-
taurant, 359 U.S. at 31 (internal quotation marks and citation omit-
ted); see id. at 33 (requiring a priority to be "within the clear,
unequivocal language" of the statute). I submit it is not clear that
§ 507(a)(4) intends to give priority to claims for unpaid insurance pre-
miums and therefore we are not free to create such a priority.

   To make the construction advanced by his concurring opinion
appear reasonable, Judge King has cobbled together selected dictio-
nary definitions and portions of definitions. He has taken the statutory
words out of context to stretch them beyond their plain meaning. This
approach suffers, I respectfully submit, from the same flaw as does
the indiscriminate use of statistics. But even when taking this
approach — an approach that also violates the mandate to construe
bankruptcy priorities narrowly — it is facially irrational to assert that
payments for mandatory workers’ compensation liability fall within
                   IN RE: HOWARD DELIVERY SERVICE                    27
the plain meaning of the term "contributions to an employee benefit
plan arising from services rendered."

   Judge Shedd’s opinion, concurring in the judgment, aptly notes that
Judge King’s opinion "picks and chooses from accepted dictionary
definitions" to arrive at "one reasonable interpretation," but not "the
only reasonable interpretation." But Judge Shedd’s opinion then pro-
ceeds to construe "employee benefit plan" in § 507(a)(4) broadly,
employing the definition given for that phrase in ERISA, 29 U.S.C.
§ 1002(3). Applying that definition out of context, Judge Shedd con-
cludes that insurance for workers’ compensation benefits is an "em-
ployee benefit plan" that enjoys priority under the Bankruptcy Code.

   Judge Shedd’s opinion well notes that ERISA explicitly exempts
from its coverage any plan "maintained solely for the purpose of com-
plying with applicable workmen’s compensation laws." What Judge
Shedd’s opinion fails to address, however, is the analogous limitation
made in the Bankruptcy Code. While § 507(a)(4) gives priority to
claims made against the estate for "contributions to an employee ben-
efit plan," that priority is not afforded with respect to every "em-
ployee benefit plan." The priority is extended only with respect to
contributions to employee benefit plans "arising from services ren-
dered." The phrase "arising from services rendered" indicates that not
all employee benefit plans are given priority, but only those that func-
tion as wage surrogates. This is an especially important phrase in con-
text because Congress enacted the priority to overrule the Supreme
Court’s earlier decisions in Embassy Restaurant and Joint Industry
Board.

   For the reasons given, I would join the three circuits that have con-
strued § 507(a)(4) not to give priority to claims for unpaid workers’
compensation insurance premiums, see Travelers Prop. & Cas. Corp.,
224 F.3d at 517; State Ins. Fund, 144 F.3d at 717; Employers Ins. of
Wausau, 62 F.3d at 226-27, expressing regret that we are now widen-
ing the split among the circuits.
