Carbon Fuel Co. v. USX Corp., Civ. A. No. 2:93-1073.

Decision Date05 July 1995
Docket NumberCiv. A. No. 2:93-1073.
Citation891 F. Supp. 1186
CourtU.S. District Court — Southern District of West Virginia
PartiesCARBON FUEL COMPANY, Plaintiff, v. USX CORPORATION, et al., Defendants, Third-Party Plaintiffs, and Counterclaimants.

James K. Brown, Jackson & Kelly, Charleston, WV, Larry L. Roller, Chesapeake, WV, for Carbon Fuel Co., a corporation.

Charles L. Woody, Paula Durst Gillis, Spilman, Thomas & Battle, Charleston, WV, J. Michael Jarboe, Jared Meyer, USX Corp., Law Dept., Pittsburgh, PA, for USX Corp., a corporation, and U.S. Steel Mining Co., Inc., a corporation.

Robert B. King, Stephen B. Farmer, King, Allen & Arnold, Charleston, WV, Anthony J. Polito, Polito & Smock, Pittsburgh, PA, for Consolidation Coal Co.

E. Forrest Jones, Jr., Albertson & Jones, Charleston, WV, Gregory B. Robertson, Matthew J. Calvert, Hunton & Williams, Richmond, VA, John A. Lucas, Hunton & Williams, Knoxville, TN, for Arch Mineral Corp., Arch Minerals of Kentucky, Old Ben Coal Co.


HADEN, Chief Judge.

Pending are eight motions for summary judgment.1 Defendants USX Corporation and U.S. Steel Mining Co. (collectively "USX") filed four motions for summary judgment.2 Plaintiff Carbon Fuel Co. ("Carbon Fuel"), and Third-Party Defendants Consolidation Coal Co. ("Consol"), Old Ben Coal Co. ("Old Ben"), and Arch Mineral Corp. and Arch of Kentucky (collectively "Arch") have each filed one motion for summary judgment. For reasons set forth below, the motion of USX against Carbon Fuel is GRANTED. Further, the motions of Arch, Consol, and Old Ben against USX are also GRANTED. The remaining motions for summary judgment are DENIED. This case is DISMISSED from the docket of the Court.

This complicated dispute centers on the application of the Coal Industry Retiree Health Benefit Act of 1992 ("Coal Act"), Pub.L. No. 102-486, § 9701 et seq., 106 Stat. 2776, 3036-3056, codified at 26 U.S.C. § 9701 et seq., to several sales of mines and mining operations among the parties. The controversy concerns how the Coal Act affects certain health benefit funding provisions in the settlement agreements executed as required by the National Bituminous Coal Wage Agreement (NBCWA) in effect at the time of each sale. This case also concerns how the Coal Act affects indemnity provisions appearing in each settlement agreement. The issues are matters of first impression.3


A principal purpose of summary judgment is to isolate and dispose of meritless litigation. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The standard used to determine whether a motion for summary judgment should be granted or denied was stated recently by our Court of Appeals:

A moving party is entitled to summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.Pro. 56(c). See Charbonnages de France v. Smith, 597 F.2d 406 (4th Cir.1979).
A genuine issue exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). In considering a motion for summary judgment, the court is required to view the facts and draw reasonable inferences in a light most favorable to the nonmoving party. Id. at 255, 106 S.Ct. at 2514. The plaintiff is entitled to have the credibility of all his evidence presumed. Miller v. Leathers, 913 F.2d 1085, 1087 (4th Cir.1990), cert. denied, 498 U.S. 1109, 111 S.Ct. 1018, 112 L.Ed.2d 1100 (1991). The party seeking summary judgment has the initial burden to show absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). The opposing party must demonstrate that a triable issue of fact exists; he may not rest upon mere allegations or denials. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. A mere scintilla of evidence supporting the case is insufficient. Id.

Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir. 1994), cert. denied, ___ U.S. ___, 115 S.Ct. 67, 130 L.Ed.2d 24, and cert. denied, ___ U.S. ___, 115 S.Ct. 68, 130 L.Ed.2d 24 (1994). Accord Patterson v. McLean Credit Union, 39 F.3d 515, 518 (4th Cir.1994); Vienna Family Medical Assoc., Inc. v. Allstate Ins. Co., 872 F.Supp. 1509, 1511 (S.D.W.Va. 1995); Sayre v. General Nutrition Corporation, 867 F.Supp. 431, 432 (S.D.W.Va.1994); Ambrose v. Knotts, 865 F.Supp. 342, 343 (S.D.W.Va.1994).


Although the underlying history is quite elaborate, the material facts are undisputed. Intricate, but undisputed facts, do not bar summary judgment. Carpenter v. Harris, Upham & Co., Inc., 594 F.2d 388, 395 (4th Cir.1979), cert. denied, 444 U.S. 868, 100 S.Ct. 143, 62 L.Ed.2d 93 (1979). The Court will recount material facts of the case as briefly as possible. Some discussion, however, also must be devoted to the history of retired coal miners' health benefits, the development of the NBCWAs, and the rationale of the Coal Act.4


Coal miners represented by the United Mine Workers of America ("UMWA") have been provided health care benefits through multiemployer plans since 1946, after President Truman ordered the Secretary of the Interior to seize the mines. That seizure, pursuant to the War Labor Disputes Act, was precipitated when the UMWA launched a strike over the issue of health and pension benefits. The Secretary and the UMWA subsequently executed the National Coal Wage Agreement, which temporarily addressed the UMWA's demands and provided welfare funds. That agreement created an unprecedented system for providing health and pension benefits to miners through two separate, industry-wide funds: a "Welfare and Retirement Fund" and a "Medical and Hospital Fund".

In 1947, mine owners began negotiations with the UMWA in anticipation of the return of the mine properties to the owners. These negotiations concluded with the execution of the National Bituminous Coal Wage Agreement of 1947, which merged the two earlier funds into the "United Mine Workers of America Welfare and Retirement Fund".

Labor unrest, however, continued until 1950 when the UMWA and the newly-formed, multi-employer Bituminous Coal Operators Association ("BCOA") negotiated a successor NBCWA. In exchange for the UMWA's acquiescence to mechanization of the mines, the signatories to the 1950 NBCWA established the United Mine Workers Welfare and Retirement Fund of 1950 as an irrevocable trust to be funded on a pay-as-you-go basis, calculable on tons of coal mined. This mechanism continued untouched through successor NBCWAs until 1971.

The negotiations for the 1974 NBCWA generated the first major overhaul of the miners' health and benefits scheme. Because of changes in the population of active and retired miners and the enactment of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., the UMWA and the BCOA determined changes were needed. Consequently, the 1974 NBCWA first divided the 1950 Welfare and Retirement Fund into the 1950 Benefit Plan and Trust ("1950 Benefit Plan"), which provided nonpension health care benefits for miners retired prior to January 1, 1976, and the 1950 Pension Trust, which continued the pension obligations of the 1950 Welfare and Retirement Fund. Second, the 1974 NBCWA established 1974 Benefit Plan and Trust ("1974 Benefit Plan"), which provided health care benefits for miners retiring after January 1, 1976.5 The BCOA members and non-members who signed the 1974 NBCWA agreed to fund the multi-employer 1950 and 1974 Benefit Plans based on cumulative hours worked, rather than tons of coal mined.6 Additionally, and significantly, the 1974 NBCWA provided the health care benefits for retired miners, their spouses, and certain dependents would continue for the life of the covered retirees.

In 1978, the UMWA and the BCOA negotiated a slightly different NBCWA. The new agreement partially dismantled the system developed in 1974. The union and operators agreed to shift from a centralized multi-employer benefit trust to a decentralized scheme in which each signatory operator established and financed its own individual health benefit delivery plan or Individual Employer Plan ("IEP"). Under the new NBCWA, pre-1976 retirees would be covered by the multiemployer 1950 Benefit Plan, and post-1975 retirees would be assigned to a single-employer plan operated by his or her last employer. The 1974 Benefit Plan then would cover only post-1974 retirees whose last employer had gone out of the coal business. Thus, the multi-employer 1974 Benefit Plan would cover "orphaned"7 post-1974 retired miners as an industry-wide responsibility.

The 1978 NBCWA also contained a clause that fully guaranteed the funding of the benefit and pension funds. In that agreement BCOA members were allowed to increase their contributions to the funds, but they could not decrease them. Further, the 1978 NBCWA incorporated an "evergreen" clause, which has been construed as imposing a perpetual obligation on operators to contribute to the 1950 Benefit Plan. UMWA 1974 Pension v. Pittston Co., 984 F.2d 469 (D.C.Cir. 1993). The structure of the 1978 NBCWA has been maintained by all subsequent NBCWAs, including the 1988 NBCWA.

During the decade of the 1980s many problems arose within the funding scheme provided by the NBCWAs. Numerous employers left the business, leaving retirees to be covered by the 1974 Benefit Plan. Additionally, if an operator continued mining but did not sign a successor NBCWA, it could discontinue its individual employer health plan and shift the cost of its retired miners to the 1974 Benefit Trust. Thus, responsibility for an increasing number of orphan retirees fell on a decreasing number of signatories to the...

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