Bituminous Coal Operators' Ass'n, Inc. v. Connors, 87-7171
| Decision Date | 23 February 1989 |
| Docket Number | No. 87-7171,87-7171 |
| Citation | 867 F.2d 625,276 U.S.App. D.C. 9 |
| Parties | , 57 USLW 2508, 110 Lab.Cas. P 10,931, 10 Employee Benefits Ca 1833 BITUMINOUS COAL OPERATORS' ASSOCIATION, INC. v. Joseph P. CONNORS, Sr., et al. Appeal of ASSOCIATED ELECTRIC COOPERATIVES, INC. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeal from the United States District Court for the District of Columbia (Civil Action No. 87-01205).
John M. Wood, Washington, D.C., for appellant.
William J. Bethune, with whom James J. Bierbower, Mark B. Bierbower and Israel Goldowitz, Washington, D.C., were on the brief, for appellees.
Hugh J. Beins, John R. Mooney, Paul A. Green and Michael H. Holland, Washington, D.C., were on the brief for amicus curiae, United Mine Workers of America, urging affirmance.
Before MIKVA and D.H. GINSBURG, Circuit Judges, and JACKSON *, District Judge.
Opinion for the Court filed by Circuit Judge D.H. GINSBURG.
The issue in this case is whether a collective bargaining agreement between Associated Electric Cooperative, Inc. (AEC) and the United Mine Workers of America (UMW) required AEC to continue making contributions to the UMW 1950 Pension Trust (the Trust) after the Trust became "fully funded" under federal tax law. In this action brought by the Trustees, the district court held that AEC must continue to make contributions regardless of the funding status of the Trust, and AEC appeals. We affirm.
Until 1984, AEC was a member of the Bituminous Coal Operators' Association (BCOA), a multi-employer bargaining association that represents member coal operators in collective bargaining with the UMW. In January 1984, AEC notified the Union that it had resigned its membership in the BCOA and that it wanted to negotiate its own collective bargaining agreement with the UMW when the 1981 agreement between the BCOA and the UMW expired later that year. Shortly thereafter, AEC and the UMW entered into a "Letter of Intent," agreeing in advance that they would later enter into a so-called "me too" agreement identical to the National Bituminous Coal Wage Agreement, the collective bargaining agreement that was then being negotiated between the UMW and the BCOA. (Unless otherwise noted, the national and the me too agreements are referred to collectively and interchangeably as "the Agreement.")
This they did in October 1974. Article XX(d)(1) of the Agreement provides that AEC shall contribute "[i]nto the 1950 Pension Trust ... for the period beginning October 1, 1984, and ending when this Agreement is terminated [on January 31, 1988], $1.11 per ton on each [ton of bituminous coal it produces]."
In January 1987, the Trustees notified all contributing employers that, according to their actuarial calculations, contributions for the plan year ending June 30, 1987 would exceed the Trust's full funding limitation by almost $60 million. Under federal tax law (then, as now) an employer's contributions to a pension fund are, in general, currently deductible only until the fund reaches its "full funding limitation" (or becomes "fully funded"), 26 U.S.C. Sec. 404(a)(1)(A), which occurs when its assets equal its accrued liabilities. 26 U.S.C. Sec. 412(c)(7). Contributions in excess of the full funding limitation may be currently deducted, however, if they are promptly (i.e., within 2 1/2 months of the end of the taxable year) used to fund a current increase in pension benefits. 26 U.S.C. Sec. 412(c)(8); 29 U.S.C. Sec. 1082(c)(8). Excess contributions may also be carried forward and deducted in a subsequent year in which the employer's contribution does not exceed the full funding limitation. 26 U.S.C. Sec. 404(a)(1)(E).
On February 3, 1987, the President of the BCOA notified the Trustees that many of its members believed that they were not required by the Agreement to make further contributions once the Trust had become fully funded and that they intended to cease making contributions when that level was reached. The Trustees, in turn, advised the contributing employers that they interpreted the Agreement to require the $1.11 per ton contribution regardless of whether the Trust was fully funded. AEC thereupon informed the Trustees that it did not consider itself obligated to contribute beyond the full funding limitation and that it would "act accordingly."
In May 1987, the BCOA filed a complaint against the Trustees, seeking a declaration that the Agreement did not require additional employer contributions once the Trust had become fully funded. The Trustees counter-claimed against the BCOA and filed a third party complaint against AEC and other non-BCOA contributing employers, requesting a declaratory judgment to the effect that the employers' obligations to contribute to the Trust continued irrespective of the extent to which it was funded.
The Trustees subsequently filed a motion for partial summary judgment, which the district court granted over AEC's opposition on the ground that, "[h]aving offered no proof of reliance on events occurring at the negotiating table, [AEC is] bound by the terms of the written agreements." 676 F.Supp. 1. Finding the Agreement itself to be "clear and unambiguous," the court held that AEC was obligated to pay $1.11 per ton to the pension plan for the duration of the Agreement, regardless of whether the plan was more than fully funded. AEC has appealed this decision, and the UMW has appeared as an amicus curiae in support of the Trustees.
AEC raises four alternative defenses. First, it contends that the Agreement, read as a whole, requires employer contributions only up to the point of full funding. Second, it argues that the Agreement should be interpreted not to require AEC to contribute to the plan beyond the point of full funding because the UMW knew that the agreed-upon contribution rate might result in overfunding but did not share that knowledge with AEC. Third, AEC suggests that, as the result of a mutual mistake, the parties may never have considered the possibility that full funding would be reached and that, now that the Trust has attained that level, the court should fashion a "reasonable term" to govern their rights and responsibilities. Finally, it argues that the district court erred in granting summary judgment without permitting AEC to conduct discovery in order to determine whether the BCOA and the UMW, in choosing $1.11 per ton as the contribution rate, made a mutual mistake of fact, to wit, that the resulting contributions would no more than fully fund the plan.
The Trustees simply deny outright AEC's first argument; they contend that the express terms of the Agreement unambiguously require employer contributions regardless of the funding status of the Trust. The Trustees then point out that AEC's dispute is not with the Union but with them; argue that section 515 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Sec. 1145 (1982), authorizes them to enforce the express terms of the Agreement; and therefrom conclude that, although AEC's other arguments might be availing in a suit between it and the Union, they are irrelevant to this case. Finally, the Trustees contend that, in light of the 1988 agreement that AEC and the UMW reached during the pendency of this appeal, the case is now moot. Since the Trustees' contention of mootness goes to our jurisdiction, we turn first to that issue.
The district court entered its judgment in July 1987. The Agreement was due to expire at the end of January 1988, but in December 1987, AEC signed an "Interim Agreement" that bound it, in advance, to the terms of the 1988 national agreement then being negotiated between the BCOA and the UMW. According to the Trustees, the 1988 agreement, which was put into final form in January of that year, provides that previously made employer contributions in excess of the full funding level are to be used to fund increased pension benefits. Thus, the Trustees argue, by adopting the Interim Agreement, AEC in effect agreed to relinquish the funds that are the subject of this appeal and thereby rendered the appeal moot.
AEC signed the Interim Agreement subject to the written "understanding" that the parties would "in good faith negotiate on the issues outlined in [AEC's] letter to [the UMW] dated November 23, 1987." In that letter, the case now before us was listed as one of the "litigations" that AEC was "open to discuss." It therefore appears that AEC, when it signed the Interim Agreement, specifically reserved the right to pursue this appeal and did not agree to relinquish the funds in dispute (which the district court ordered the Trustees to place in a separate account pending the outcome of this appeal). Accordingly, the case is not moot.
Article XX(d)(1) of the Agreement provides:
During the life of this Agreement, for the periods of time indicated below, each signatory Employer engaged in the production of coal shall contribute to the Trusts referred to in this Article the amounts specified below based on cents per ton on each ton of two thousand (2,000) pounds of bituminous coal produced by such employer for use or sale ...
* * *
* * *
(i) Into the 1950 Pension Trust: for the period beginning October 1, 1984, and ending when this Agreement is terminated, $1.11 per ton on each such ton ...
(Emphases added.) The Agreement again refers to the duration of the employers' obligation to make pension contributions in Article XX(d)(7), which provides in relevant part that each employer's obligation "to make full and prompt payments to the Trusts specified in this Article ... shall be a direct and continuing obligation ... during the life of this Agreement ...." (Emphasis added.) It is undisputed that, as we mentioned above, the Agreement remained in effect until January 31, 1988, well beyond the time when the Trust...
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