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Freeman United Coal Mining Co. v. United Mine Workers of America

May 24, 2007

FREEMAN UNITED COAL MINING COMPANY, PLAINTIFF,
v.
UNITED MINE WORKERS OF AMERICA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Jeanne E. Scott, U.S. District Judge

OPINION

This matter comes before the Court on the Motions to Dismiss or to Transfer Venue (d/e 20, 21, 25) filed by Defendants United Mine Workers of America (UMWA), Bituminous Coal Operators' Association, Inc. (BCOA), United Mine Workers of America 1974 Pension Fund (1974 Pension Fund), and the 1974 Pension Fund's Trustees Michael H. Holland, Micheal W. Bruckner, Steven F. Schaab, and B.V. Hyler (collectively, the Trustees). Beginning in January 2007, Plaintiff Freeman United Coal Mining Company (Freeman) refused to make contributions to the 1974 Pension Fund. Freeman filed this action to seek a declaratory judgment that its decision not to contribute to the 1974 Pension Fund is not a breach of any obligations under the following instruments: its collective bargaining agreement with the UMWA (Freeman Agreement), the 1974 Pension Fund Trust documents (1974 Pension Fund Trust), and the collective bargaining agreement called the National Bituminous Coal Wage Agreement (NBCWA) negotiated between the BCOA and UMWA. In the alternative, if Freeman is obligated to pay the pension contributions, Freeman seeks damages against BCOA because Freeman alleges that BCOA breached its duties as Freeman's agent in negotiating pension contribution rates in the latest version of the NBCWA.

The Defendants move to dismiss for lack of jurisdiction and for failure to state a claim. In the alternative, the Defendants ask the Court to transfer venue to the United States District Court for the District of Columbia. The parties have thoroughly briefed the issues, and thus, oral argument is unnecessary. The requests for oral argument are denied. For the reasons set forth below, the requests to dismiss the action are denied. This Court has subject matter jurisdiction to declare whether Freeman is in breach, and Freeman states a claim for damages.

The request to transfer this matter to the United States District Court for the District of Columbia, however, is granted. The 1974 Pension Fund and the Trustees have filed an action in the District of Columbia to collect the disputed contributions. Memorandum of Points and Authorities in Support of Joint Motion of the United Mine Workers of America 1974 Pension Trust and Michael H. Holland, Micheal W. Buckner, Steven R. Schaab and B.V. Hyler to Dismiss the Complaint or, in the Alternative, Transfer the Case (d/e 25), attached exhibit, Complaint, Holland v. Freeman United Coal Mining Co., U.S. Dist. D.C., Case No. 07-00490 (D.C. Action Complaint). The existence of the two separate actions is inefficient and creates the risk of inconsistent decisions. As explained below, the District of Columbia is the more convenient forum, and is also a proper venue for both actions while this Court is not. The Court, therefore, determines that this matter should be transferred to the District of Columbia.

STATEMENT OF FACTS

In approximately 1950, various coal mining companies formed BCOA as a not-for-profit corporation to negotiate a national multi-employer collective bargaining agreement with the UMWA. Complaint (d/e 1), ¶¶ 12-13. The BCOA and the UMWA negotiated the first NBCWA in 1950 and renegotiated new NBCWAs periodically ever since. The latest NBCWA became effective in January 2007 (2007 NBCWA). Part of those negotiations included the rate of pension contributions for employees covered by the NBCWA. Id., ¶¶ 13-14.

In 1974, Congress enacted the Employee Retirement Income Security Act (ERISA). 29 U.S.C. § 1001 et seq. The BCOA and the UMWA established a new pension fund at that time which became the 1974 Pension Fund. The 1974 Pension Fund covered UMWA member employees who retired after December 30, 1975. Id. The original pension fund became known as the 1950 Pension Fund and covered employees who retired prior to December 31, 1975. See United Mine Workers of America 1950 Ben. Plan and Trust v. Bituminous Coal Operators' Ass'n, Inc., 898 F.2d 177, 178 (D.C. Cir. 1990) (hereinafter UMWA v. BCOA).

At the time that the BCOA and the UMWA negotiated the 1978 NBCWA, the 1974 Pension Fund Trust was amended to include a clause that became known as the "Evergreen Clause." The Evergreen Clause states:

Any employer who employed any participant eligible for coverage under, or who received or receives benefits under, the 1974 Pension Plan, or any Employer who was or is required to make, or who has made or makes contributions to the 1974 Pension Plan and Trust, is obligated and required to comply with the terms and conditions of the 1974 Pension Plan and Trust, as amended from time to time, including, but not limited to, making contributions required under the national Bituminous Coal Wage Agreement of 1978, as amended from time to time, and any successor agreements thereto . . . . Complaint, ¶ 19. The Evergreen Clause was incorporated by reference into the 1978 NBCWA and every NBCWA negotiated thereafter. United Mine Workers of America 1974 Pension v. Pittston Co., 984 F.2d 469, 478-79 (D.C. Cir. 1993) (hereinafter Pittston).

The 1988 NBCWA included a clause called the Guarantee Clause. UMWA v. BCOA, 898 F.2d at 178.*fn1 The Guarantee Clause obligated the coal mine operators to guarantee the benefits provided by the 1950 and 1974 Pension Funds (collectively the Pension Funds) and authorized the BCOA to raise pension contribution rates as necessary to make sure that the Pension Funds were properly funded. Id. The D.C. Circuit Court of Appeals subsequently decided that through the Evergreen Clause and the Guarantee Clause: (1) BCOA obligated itself to set funding rates to ensure that the Pension Funds were properly funded; and (2) the covered coal mine operators obligated themselves perpetually to pay the contributions negotiated by the BCOA, even if the coal operator later left the BCOA and ceased to be a signatory to the then current NBCWA. Pittston, 984 F.2d at 478-79; UMWA v. BCOA, 898 F.2d at 181-82.

Freeman joined the BCOA in 1967 and remained a member until 1997. Since 1997, Freeman has negotiated a separate collective bargaining agreement with the UMWA (Freeman Agreement). Complaint, ¶ 21. The latest Freeman Agreement was negotiated in 2003 (2003 Freeman Agreement). The 2003 Freeman Agreement contains the Guarantee Clause, which provides:

Notwithstanding any other provisions in this Agreement the Employers participating in the 1950 Pension Fund and the 1974 Pension fund hereby agree to fully guarantee the pension benefits provided by these Funds during the term of this Agreement.

In order to fully fund these guaranteed benefits, the BCOA may increase, not decrease (except as provided in Section (d)(1)), the rate of contributions to be made to the 1950 Pension Fund and the 1974 Fund during the term of this Agreement. These contributions, which may be adjusted from time to time, shall be made by Freeman during the term of this Agreement.

Id., ΒΆ 22. The Guarantee Clause in the 2003 Freeman Agreement appears to be the same as the one in the 1988 NBCWA, but the 1988 version of the Clause has not been provided to the Court. At the time that the 2003 Freeman Agreement was negotiated, the contribution rate for the 1974 Pension Fund was $0.00. Id., ...


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