District 17, Dist. 29, Local Union 7113, and Local Union 6023, United Mine Workers of America v. Allied Corp.

• Decision Date: 01 July 1985
• Docket Number: Nos. 83-1117,s. 83-1117
• Citation: 765 F.2d 412
• Parties: 118 L.R.R.M. (BNA) 2728, 102 Lab.Cas. P 11,361, 6 Employee Benefits Ca 1823 DISTRICT 17, DISTRICT 29, LOCAL UNION 7113, AND LOCAL UNION 6023, UNITED MINE WORKERS OF AMERICA; and John Ramey and Joseph McCardle on behalf of themselves and others similarly situated, Appellees, v. ALLIED CORPORATION, Appellant and Armco, Inc.; Shannon Pocahontas Coal Co., corporations; and the United Mine Workers of America 1974 Benefit Plan and Trust, Defendants. DISTRICT 17, DISTRICT 29, LOCAL UNION 7113, AND LOCAL UNION 6023, UNITED MINE WORKERS OF AMERICA; John Ramey and Joseph McCardle on behalf of themselves and others similarly situated, Appellees, v. ARMCO, INC., Appellant, and Allied Corporation; Shannon Pocahontas Coal Co., corporations and the United Mine Workers of America 1974 Benefit Plan and Trust, Defendants. DISTRICT 17, DISTRICT 29, LOCAL UNION 7113 AND LOCAL UNION 6023, UNITED MINE WORKERS OF AMERICA; John Ramey and Joseph McCardle, on behalf of themselves and others similarly situated, Appellees, v. SHANNON POCAHONTAS COAL CO., Appellant, and Allied Corporation, Armco, Inc., corporations and the United Mine Workers of America 1974 Benefit Plan and Trust, Defendants. DISTRICT 17, DISTRICT 29, LOCAL UNION 7113 AND LOCAL UNION 6023, UNITED MINE WORKERS OF AMERICA; John Ramey and Joseph McCardle on behalf of themselves and others similarly situated, Appellants, v. ALLIED CORPORATIONS, Armco, Inc., Shannon Pocahontas Coal Co., corporations and the United Mine Workers of America 1974 Benefit Plan and Trust, Appellees. (L), 83-1210 to 83-1212.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 412

765 F.2d 412

118 L.R.R.M. (BNA) 2728, 102 Lab.Cas. P 11,361,

6 Employee Benefits Ca 1823

DISTRICT 17, DISTRICT 29, LOCAL UNION 7113, AND LOCAL UNION

6023, UNITED MINE WORKERS OF AMERICA; and John

Ramey and Joseph McCardle on behalf of

themselves and others

similarly situated, Appellees, v. ALLIED CORPORATION, Appellant and Armco, Inc.; Shannon Pocahontas Coal Co., corporations; and the United Mine Workers of America 1974

Benefit Plan and Trust, Defendants.

DISTRICT 17, DISTRICT 29, LOCAL UNION 7113, AND LOCAL UNION

6023, UNITED MINE WORKERS OF AMERICA; John Ramey

and Joseph McCardle on behalf of

themselves and others

similarly situated, Appellees, v. ARMCO, INC., Appellant, and Allied Corporation; Shannon Pocahontas Coal Co.,

corporations and the United Mine Workers of

America 1974 Benefit Plan and Trust, Defendants.

DISTRICT 17, DISTRICT 29, LOCAL UNION 7113 AND LOCAL UNION

6023, UNITED MINE WORKERS OF AMERICA; John Ramey

and Joseph McCardle, on behalf of

themselves and others

similarly situated, Appellees, v. SHANNON POCAHONTAS COAL CO., Appellant, and Allied Corporation, Armco, Inc., corporations and the United

Mine Workers of America 1974 Benefit Plan and

Trust, Defendants.

DISTRICT 17, DISTRICT 29, LOCAL UNION 7113 AND LOCAL UNION

6023, UNITED MINE WORKERS OF AMERICA; John Ramey

and Joseph McCardle on behalf of

themselves and others

similarly situated, Appellants, v. ALLIED CORPORATIONS, Armco, Inc., Shannon Pocahontas Coal

Co., corporations and the United Mine Workers of

America 1974 Benefit Plan and Trust, Appellees.

Nos. 83-1117(L), 83-1210 to 83-1212.

United States Court of Appeals Fourth Circuit.

Argued Oct. 2, 1984.

Decided Feb. 11, 1985.

Certiorari Denied July 1, 1985.

See 105 S.Ct. 3527.

Willis J. Goldsmith, Washington, D.C. (Deborah Crandall, Seyfarth, Shaw, Fairweather & Geraldson, Washington, D.C., Charles L. Woody, Spilman, Thomas, Battle & Klostermeyer, Charleston, W. Va, Paul M. Thompson, Gregory B. Robertson, Richmond, Va., Hunton & Williams, Washington, D.C., on brief), for appellants.

Daniel B. Edelman, Washington, D.C. (Yablonski, Both & Edelman, Washington D.C., Michael H. Holland, Deborah Stern, Washington, D.C., Webster J. Arceneaux, III, Grant Crandall, Crandall, Pyles & Crandall, Charleston, W.Va., on brief) and William F. Hanrahan, Gen. Counsel, Washington, D.C. (Mary Anne Gibbons, Associate Counsel, Washington, D.C., on brief) for appellees.

Before WINTER, Chief Judge, and WIDENER, HALL, PHILLIPS, MURNAGHAN, SPROUSE, ERVIN, CHAPMAN and WILKINSON, Circuit Judges. ^*

SPROUSE, Circuit Judge:

The defendants, Allied Corporation, Armco, Inc., and Shannon Pocahontas Coal Company appeal the district court's injunction requiring Allied to provide health and other non-pension benefits (benefits) to some 190 of its retired coal miners unless and until Allied can negotiate the provision of these benefits by Armco and Shannon Pocahontas, the corporations that acquired from Allied the coal mines that employed the miners prior to their retirement. The plaintiffs, District 17, District 29, Local Union 7113, and Local Union 6023 of the United Mine Workers of America (UMWA), and John Ramey and Joseph McCardle ¹ appeal that part of the district court's judgment which found that the fourth defendant, the miners' 1974 Benefit Plan & Trust (1974 Benefit Trust), was not responsible for the payment of benefits to the retired miners.

A three-judge panel of this court, in a divided opinion reversing the district court, absolved Allied of any liability and held that the 1974 Benefit Trust was responsible for the payments to the retirees. ² After an en banc hearing, we now affirm the district court's decision that Allied must provide the benefits to the retirees, and that the 1974 Benefit Trust is not responsible for such benefits.

I.

The UMWA and many American coal mine owners have operated for many years under a master collective bargaining agreement such as the one involved in this dispute. The union and the Bituminous Coal Operators Association (BCOA) renegotiate it every three years. The three defendant corporate mine owners have been parties to several of these contracts; this suit focuses on obligations arising out of the 1978 agreement.

These collective bargaining agreements, for many years prior to 1974, have contained provisions for payment of benefits to active and retired miners. ³ The 1974 agreement created the 1974 Benefit Trust to provide such benefits to union miners receiving benefits under the 1974 pension plan or, in some cases, under any successor plans. The owners paid into the Trust a royalty on each ton of coal produced and on each hour's wage paid to a union employee. From this Trust the Trustees paid medical, hospitalization, and other expenses on behalf of retired miners.

A protracted strike occurred in 1977 when the 1974 agreement expired. BCOA's insistence that the 1974 Benefit Trust be abolished was a principal issue. The bargaining parties finally resolved that difference in 1978 by agreeing to an alternative: each signatory employer would provide, through its own insurance carrier, health and other non-pension benefits for its own union employees. They further agreed that the last signatory employer, or its successor, of a retired miner would provide the benefits to the retiree. Absent such employer or successor, the 1974 Benefit Trust would furnish the benefits. ⁴ The collective bargaining agreements of 1981 and 1984 continued the 1974 Benefit Trust under essentially the same terms.

Until March 1980, Allied owned and operated, among its many corporate enterprises, the Harewood and Shannon Branch coal mines in West Virginia. It was a signatory to the 1978 collective bargaining agreement which was due to expire on March 27, 1981. In early 1980, however, it withdrew from the business of mining coal and sold both mines--its Harewood mine to Armco and its Shannon Branch mine to Vera Mining Company, now called Shannon Pocahontas. ⁵ Both purchasing companies, like Allied, were signatories to the 1978 agreement; ⁶ and both Armco and Shannon Pocahontas, in later years, signed the 1981 collective bargaining agreements. Because Allied was no longer in the coal business, it was a party to neither the 1981 nor 1984 contracts.

The transfer agreements between Allied and Armco and Shannon Pocahontas provided that the corporate buyers would not assume any of Allied's obligations except those specifically provided for in those agreements. ⁷ Allied did not require Armco and Shannon Pocahontas to assume its obligations under Article XX of the 1978 contract to provide benefits to the retired miners involved in the instant case. Instead, Allied continued to provide the benefits to the retirees for almost sixteen months after the execution of the 1981 collective bargaining contract by Armco, Shannon Pocahontas and other members of the BCOA, specifically until September 29, 1982. ⁸

In August 1982 the retired miners requested from the Trustees of the 1974 Benefit Trust a determination as to whether they were eligible to receive health benefits from the Trust. The Trustees ruled that Article XX defined beneficiaries of the 1974 Benefit Trust as only those retirees whose last employer and its successor, if any, were no longer in business. Although the Trustees found that Allied was "no longer in business," they determined that Armco and Shannon were "successors" still in business. Therefore, the 1974 Benefit Trust could not pay benefits to the retired miners.

The parties contend below and on appeal as follows. Allied, Armco, and Shannon Pocahontas argue that Allied is not responsible for providing the benefits after the expiration of the 1978 agreement on March 27, 1981 and that neither Armco nor Shannon Pocahontas is responsible because each specifically contracted with Allied not to assume these obligations. All three companies urge that the 1974 Benefit Trust should pay the benefits directly to the retired miners who are parties to this action. The Trust, of course, denies liability and contends that Allied is responsible for the retirees' benefits. The union and the retirees contend that each of the companies is liable and, alternatively, that the 1974 Benefit Trust is liable.

The district court held that the 1974 Benefit Trust was not responsible but that the companies, under several theories, were responsible for payment of the benefits. The district court issued an injunction requiring Allied to provide the benefits unless and until Allied secures the agreement of Armco and Shannon Pocahontas to provide them. We first consider whether the Trustees of the 1974 Benefit Trust were wrong in refusing to provide benefits to the retired miners.

II

The 1974 Benefit Trust's purpose is to provide health and other non-pension benefits to pensioners who retired under the 1974 pension plan, or any successor plan, and whose last known employer, including any successor, is no longer in the coal-mining business. Article XX of the 1978 collective bargaining agreement provides in pertinent part:

(c)(3)(iii) The 1974 Benefit Plan and Trust shall continue after May 31, 1978, for the sole purpose of providing health and other non-pension benefits, during the term of this Agreement, to any retired miner under the 1974 Pension Plan or any successor plan(s) thereto who would otherwise cease to receive the health and other non-pension benefits provided herein because the signatory Employer (including successors and assigns) from which he retired is no longer in business.

The 1974 Benefit Trust empowers the Trustees to interpret the provisions of the Trust. ⁹ Pursuant to that authority, the Trustees in July 1978, more than three years prior to this suit, defined the terms "no longer in business" and "successor"--definitions critical to the resolution of this dispute. Essentially, they ruled that a company is no "longer in business" when it "has not received income from the production or...