Holland v. Robert Coal Company
| Decision Date | 17 November 1997 |
| Docket Number | No. CIV. A. 93-2608(GK).,CIV. A. 93-2608(GK). |
| Citation | 986 F.Supp. 621 |
| Parties | Michael H. HOLLAND, et al., as Trustees of the United Mine Workers of America 1992 Benefit Plan, Plaintiffs, and United States of America, Department of Justice, Intervenor, v. ROBERT COAL COMPANY, et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
John R. Mooney, Beins, Axelrod, Osborne, Mooney & Green, P.C., Washington, DC, Peter Buscemi, Dean C. Beryy, Morgan, Lewis & Bockius, Washington, DC, Stacey Michelle Blumer, United Mine Workers of America, Health and Retirement Funds, Office of the General Counsel, Washington, DC, for Plaintiffs.
Deborah J. Andrews, King & Spaulding, Washington, DC, Anthony J. Polito, Polito & Smock, P.C., for Defendant.
Plaintiffs Trustees of the United Mine Workers of America 1992 Benefit Plan ("1992 Plan") bring this action to recover premium payments allegedly owed by Defendants to the 1992 Plan under the Coal Industry Retiree Health Benefits Act of 1992 ("Coal Act"), 26 U.S.C. §§ 9701, et seq. (1989 & Supp. 1997).1 The Coal Act requires coal operators to contribute to the 1992 Plan to provide health coverage to retired workers.
Defendants contend that the Coal Act does not apply to them or, in the alternative, that it is unconstitutional. (Defs.' Mem. Summ. J. at 10.) They argue that the settlement of a 1988 civil action2 between Defendants and the United Mine Workers of America ("UMWA") extinguished their liability to the 1992 Plan.
This matter is before the Court on Parties' Cross-Motions for Summary Judgment [# 36, # 38]. Upon consideration of the Motions, Oppositions, Replies, Memorandum of Intervenor United States in Opposition to Defendants' Motion, the numerous supplemental pleadings filed by the parties, and the entire record herein, for the reasons discussed below, Plaintiffs' Motion for Summary Judgment is hereby granted, and Defendants' Motion for Summary Judgment is hereby denied.
The Coal Act's history has been well-documented by other courts. See, e.g., Eastern Enterprises v. Chater, 110 F.3d 150, 152-154 (1st Cir.1997); In re Blue Diamond Coal Co., 79 F.3d 516, 518-520 (6th Cir.1996); and In re Chateaugay Corp., 53 F.3d 478, 491 (2d Cir.1995). This Court will thus only briefly summarize those facts it deems necessary to an understanding of this case.
Miners have received benefits since 1946 under a series of collective bargaining agreements between UMWA and a group of coal producers, the Bituminous Coal Operators' Association, Inc. ("BCOA"). In these National Bituminous Coal Wage Agreements ("NBCWAs"), the signatory coal producers agreed to contribute to various funds in order to provide miners and their families different types of benefits. Robert Coal Company ("Robert Coal") was a signatory to the 1974, 1978, and 1981 agreements.
Courts have concluded that the language of the NBCWAs, beginning with the NBCWA of 1974, provided that pensioners would be entitled to health services for life.4 The 1978 NBCWA, as well as all subsequent NBCWAs required signatory operators to perpetually contribute to the trusts created by those agreements. These provisions, called "evergreen clauses", required each signatory operator to continue making contributions to the trusts at the amount specified in future NBCWAs, regardless of whether the operator signed the future NBCWA.5
The funds that provided such benefits became financially unstable in the mid- and late-1980s. As coal operators terminated their participation in the trusts and health care costs escalated, the trusts experienced a financial crisis that threatened their continued existence. This crisis threatened to disrupt coal production and interstate commerce, cripple the economies of several coal-producing states, and deprive over 100,000 retired miners and their dependents of promised health benefits. To remedy the shortfall in funding, Congress enacted the Coal Act of 1992.
The Coal Act consolidated the existing funds and created the UMWA Combined Benefit Fund ("Combined Benefit Fund"). 26 U.S.C. § 9702. The Combined Fund provides health benefits to beneficiaries who, as of July 1992, were receiving benefits from the earlier trusts. Id. at § 9702(a).
The Coal Act also created a second fund, the 1992 UMWA Benefit Plan. Id. at § 9712. That Plan (whose Trustees are the Plaintiffs in this action) provides health benefits to people who should receive coverage under an individual employer plan but do not. Id. at § 9712(b)(2)(B). Beneficiaries are assigned, or attributed, to the coal mine operator that most recently employed them and was a signatory to the NBCWAs of 1978 or later. 26 U.S.C. § 9706(a)(2). Premium payments for beneficiaries of the 1992 UMWA Benefit Plan are the responsibility of the beneficiaries' most recent signatory employers. Id. at § 9712(d).
It is Robert Coal's alleged responsibility for making payments to the 1992 UMWA Benefit Plan that is at issue in the instant action.
Defendants Robert Coal and Cliffs Mining Company ("Cliffs Mining") are wholly-owned subsidiaries of Defendant Cleveland-Cliffs, Inc. ("Cleveland-Cliffs"). The three Defendants are "related persons" within the meaning of section 9701(c) of the Coal Act, 26 U.S.C. § 9701(c).6
The 1992 Plan has assigned a number of Plan-beneficiaries to Robert Coal. Plaintiffs assert that Defendants are liable to the 1992 Plan for the payment of monthly premiums for each beneficiary who is receiving health benefits from the 1992 Plan and who is "attributable" to Robert Coal under 26 U.S.C. § 9712(d)(3). The Plan seeks to collect premiums for the employees attributable to Robert Coal for the period February 1993 to April 1994.7
Defendants' argument centers around the 1988 settlement of the Kentucky lawsuit. Defendants claim that the federal District Court's approval of the settlement agreement, and its subsequent dismissal with prejudice of the lawsuit, constitutes a final judgment. That judgment, Defendants contend, may not be disturbed by obligations imposed by subsequent legislation — here, the 1992 Coal Act. (Defs.' Mem. Summ. J. at 11-16.)
The Court will briefly discuss the Kentucky lawsuit and resulting settlement agreement, as they form the basis of Defendants' Motion in the instant action.
Robert Coal managed and supervised the construction and operation of two mines in Pike County, Kentucky, pursuant to management agreements with two coal mining companies. Robert Coal entered into the first agreement with Leslie Coal Mining Co. ("Leslie") in 1974, and the second with McInnes Coal Mining Co. ("McInnes") in 1976. Robert Coal employed all of the workers at the two mines from the dates of the respective management agreements until 1984. Robert Coal's employees during that period included classified workers who were members of and represented by UMWA.
The assets of the two mines were sold in 1984. Shortly thereafter, UMWA alleged that the sales violated the successorship clause of the NBCWAs because they were made without first securing the purchaser's consent that it would assume obligations under the NBCWAs. UMWA subsequently brought suit against several defendants, including Robert Coal, in the United States Court for the Eastern District of Kentucky.
In 1988, UMWA, Cliffs Mining (then known as Pickands Mather & Co. ("PM")), and Robert Coal entered into a settlement agreement in the Kentucky lawsuit. Under the agreement, Robert Coal agreed to provide health and other benefits to a group of its former employees from the Leslie and McInnes mines, and to their surviving spouses and dependents, through January 1993. In return, UMWA released Robert Coal and Cliffs Mining "from any and all claims ... which the Union now has or ever had against the PM Group" arising out of its dealings with the Leslie or McInnes mines. (Stip. Ex. A at 5.)
After approving the agreement, the District Court entered an order dismissing the Kentucky suit with prejudice. (Stip. Ex. B.) No appeal was taken from that dismissal.
Robert Coal provided benefits, as required by the settlement agreement, from May 1988 through January 1993. Thereafter, the 1992 Plan provided health benefits to those persons who had previously received such benefits from Robert Coal.
Plaintiffs bring this action to collect premium payments for which they allege Defendants are jointly and severally liable under the 1992 Plan. Plaintiffs seek declaratory relief, a judgment for $240,542.28, plus interest and liquidated damages as well as attorneys fees and costs.8 Both Defendants and Plaintiffs have moved for Summary Judgment and Intervenor United States has filed a Memorandum in Opposition to Defendants' Motion.
The Federal Rules of Civil Procedure state that:
A party against whom a claim ... is asserted ... may, at any time, move with or without supporting affidavits for a summary judgment in the party's favor as to all or any part thereof ... The judgment sought shall be rendered forthwith 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 any material fact and that the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(b)-(c). The party seeking summary judgment bears the initial burden of demonstrating an absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).
In the instant case, Plaintiffs, Defendants and Intervenor United States agree that there are no genuine issues as to any material fact. The parties have also submitted a Stipulation of Facts. The Court thus proceeds to the legal issues before it.
Defendants argue that the Coal Act was not intended by Congr...
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