Int'l Union, United Mine Workers of Am. v. Consol Energy, Inc.

Decision Date04 June 2020
Docket NumberCIVIL ACTION NO. 1:16-cv-12506
Citation465 F.Supp.3d 556
Parties INTERNATIONAL UNION, UNITED MINE WORKERS OF AMERICA, et al., Plaintiffs, v. CONSOL ENERGY, INC., et al., Defendants.
CourtU.S. District Court — Southern District of West Virginia

Jan L. Fox, Steptoe & Johnson, Charleston, WV, Rodger L. Puz, Dickie McCamey & Chilcote, Pittsburgh, PA, John R. Woodrum, Pro Hac Vice, Ogletree Deakins Nash Smoak & Stewart, Washington, DC, for Plaintiffs.

Arthur Traynor, Pro Hac Vice, United Mine Workers of America, Triangle, VA, Charles F. Donnelly, Charleston, WV, Megan M. Block, Michael J. Healey, Healey & Hornack, Pittsburgh, PA, for Defendants.

MEMORANDUM OPINION AND ORDER

David A. Faber, Senior United States District Judge Pending before the court are defendant CONSOL Energy, Inc.'s motion to dismiss the Second Amended Complaint, (ECF No. 79); defendants Amonate Facility, LLC, Helvetia Coal Company, Island Creek Coal Company, and Laurel Run Mining Company's (collectively "the Subsidiaries") motion to dismiss the Second Amended Complaint, (ECF No. 98); and the United Mine Workers of America and six individual retirees' (collectively "plaintiffs") motion to consolidate cases. (ECF No. 97.) Also pending is the Subsidiaries' second motion to dismiss Count II of the Second Amended Complaint and to transfer Count I. (ECF No. 111.)

For the following reasons, CONSOL Energy, Inc.'s motion to dismiss is GRANTED IN PART and DENIED IN PART , the Subsidiaries' first motion to dismiss is GRANTED IN PART and DENIED IN PART , the Subsidiaries' second motion to dismiss Count II is GRANTED , plaintiffs' motion to consolidate is GRANTED , and the Subsidiaries' motion to transfer Count I is GRANTED .

I. Factual and Procedural Background

Defendant CONSOL Energy, Inc. ("CONSOL") is a publicly owned energy company engaged in the operation of mines and facilities related to the production of coal, which it sells worldwide to electricity generators and steelmakers. CONSOL maintains its corporate headquarters near Pittsburgh, Pennsylvania. Plaintiff International Union, United Mine Workers of America ("UMWA") is a labor organization that represents coal miners. The UMWA maintains its principal place of business in Triangle, Virginia, and has offices within the Southern District of West Virginia ("SDWVa") at Beckley, Charleston, and Chapmanville. The six individual retirees ("Retiree-Plaintiffs") are residents of the SDWVa, and are retired coal miners and participants in and beneficiaries of the group health insurance plan at issue in this case.

The UMWA periodically negotiates labor agreements, called National Bituminous Coal Wage Agreements ("NBCWA"), with the Bituminous Coal Operators' Association ("BCOA"), a multi-employer bargaining group which acts on behalf of member employers. In 2011, the BCOA and the UMWA agreed to a new NBCWA, which governed the terms and conditions of employment of UMWA-represented miners employed by CONSOL and its subsidiaries. (ECF No. 78, ¶ 17.) CONSOL's CEO Nicholas J. DeIuliis led the BCOA Negotiating Committee in 2011, and he personally signed for the BCOA in portions of the 2011 NBCWA. (Id. ¶ 23.)

The Subsidiaries in this action were among the signatory companies to the 2011 NBCWA. (Id. ¶ 22.) The Subsidiaries were also signatories to the Employer Plan, an employee welfare benefit plan governed by ERISA,1 and CONSOL acted as Plan Administrator of the Employer Plan. Each signatory to the 2011 NBCWA is required to establish an Employer Plan, which is then incorporated into the 2011 NBCWA. (Id. ¶ 17.)

On October 31, 2016, the Subsidiaries informed the UMWA of their intent to terminate the 2011 NBCWA when it expired on December 31, 2016. (Id. ¶ 31.) The Subsidiaries met with the UMWA on multiple occasions in 2016 to negotiate changes to the Employer Plan to be implemented following the 2011 NBCWA's expiration. (Id. ¶¶ 28-33.) CONSOL also sent five pieces of correspondence directly to retirees relating to these proposed changes: one dated March 15, 2016; one dated May 6, 2016; two dated January 3, 2017; and one dated January 12, 2017 (collectively "Retiree Letters"). (See id. ¶¶ 26, 39-41.) In those communications, CONSOL stated that it planned to exit the coal industry and intended to terminate the defined health benefits provided through group insurance under the Plan.2 (Id. )

A. Initiation of the ROD Arbitration

The UMWA rejected certain proposed changes to the Employer Plan, which led the UMWA to invoke the resolution of dispute ("ROD") mechanism of the Employer Plan on November 10, 2016. The 2011 NBCWA contained a dispute resolution provision specifying that the Trustees of the UMWA Health and Retirement Funds ("Trustees") will resolve any disputes as to application of the Employer Plan provisions under the 2011 NBCWA. (ECF No. 8, Ex. 8 at p.76.) The ROD form, No. 11-0143, was filed by a UMWA official and named one individual miner receiving benefits under the Employer Plan. However, the UMWA indicated in that form that the dispute covered all beneficiaries of the Employer Plan. The ROD filing specifically requested an order from the Trustees that "CONSOL must notify its retirees that it cannot make any changes in their benefits without the agreement of the UMWA." (Id., Ex. 21.) On December 22, 2016, the UMWA transmitted a letter to CONSOL asking that it take no further action pending a decision by the Trustees on the ROD filing. (Id., Ex. 28.)

B. Procedural Beginnings of the Instant Suit

On December 23, 2016, the UMWA and the Retiree-Plaintiffs together filed a Complaint in this court against CONSOL, seeking a preliminary injunction in aid of labor arbitration. (ECF No. 1.) CONSOL filed a motion to dismiss the Complaint on January 20, 2017, claiming that this court lacked subject matter jurisdiction because it was the Subsidiaries, and not CONSOL, who were parties to the 2011 NBCWA and the Employer Plan at issue. (ECF No. 13.) CONSOL made no arguments regarding personal jurisdiction in this motion to dismiss. (See ECF No. 14.)

On January 24, 2017, plaintiffs amended the Complaint to join the Subsidiaries as co-defendants. (ECF No. 16.) This First Amended Complaint did not allege a violation of ERISA nor did it seek to compel any defendant to arbitrate under the LMRA.3 Rather, like the initial Complaint, it sought injunctive relief preventing "(1) any unilateral action by Defendants to terminate and/or replace the Employer Plan; and (2) any further communication from Defendants to participants and beneficiaries of the Employer Plan informing them of any changes to the Employer Plan," until the Trustees had issued a final and binding decision on the ROD filing. (ECF No. 16, at 21.)

After briefing and a hearing, this court issued an interlocutory order and memorandum opinion on the merits of plaintiffs' First Amendment Complaint on March 17, 2017. Int'l Union, UMWA v. Consol Energy, Inc., 243 F. Supp. 3d 755 (S.D.W. Va. 2017), appeal mooted , No. 17-1378 (4th Cir. Nov. 27, 2017). The court concluded the ROD grievance was arbitrable by the Trustees and granted a preliminary injunction against CONSOL (and its agents and assigns), but dismissed the Subsidiaries for lack of personal jurisdiction. See id.

C. The ROD Decision and the Second Amended Complaint

On October 31, 2017, the Trustees issued their decision in favor of the UMWA, concluding that CONSOL is not permitted to make modifications or changes to the retiree health benefit plan unilaterally, and that the proposed changes described will not provide the level of health benefits as mandated in the 2011 NBCWA or Employer Plan. (See ECF No. 78-1.)

That same day, plaintiffs moved for leave to amend their complaint to rejoin the Subsidiaries as co-defendants, and to add two new causes of action: 1) a LMRA claim to confirm ROD No. 11-0143 under LMRA § 301; and 2) an ERISA claim seeking a declaration by this court that defendants may not change the Employer Plan benefits without agreement from the UMWA. (ECF No. 67.) This court granted plaintiffs' motion to amend the complaint on May 21, 2018, see Int'l Union, UMWA v. CONSOL Energy, Inc., 2018 WL 2328028 (S.D.W. Va. May 21, 2018), and plaintiffs filed the Second Amended Complaint ("SAC") on May 23, 2018. (ECF No. 78.)

D. The First WDPa Suit

On January 2, 2017, the Subsidiaries commenced an action in the Western District of Pennsylvania ("WDPa"). See Helvetia Coal Co. v. UMWA, No. 17-00002 (W.D. Pa. filed Jan. 2, 2017) (hereinafter "First WDPa Suit"). The Subsidiaries sought: (1) a declaration that ROD No. 11-0143 is not arbitrable and an order enjoining its arbitration; (2) a declaration that the ROD process is not applicable to retiree health benefits disputes that arise after the 2011 NBCWA expired on December 31, 2016, and an order enjoining arbitration of ROD No. 11-0143; and (3) a declaration that the proposed changes do not breach the requirements of the Employer Plan. See id., at ECF No. 1. Basing its decision on the first-to-file rule,4 the WDPa court ordered that this First WDPa Suit be transferred to this court. Helvetia Coal Co. et al. v. UMWA, 2017 WL 3669415 at *4 (W.D. Pa. Aug. 23, 2017). After the First WDPa Suit was transferred and docketed in this court as No. 1:17-cv-03876, the Subsidiaries voluntarily dismissed the action. See First WDPa Suit, No. 1:17-cv-03876 (S.D.W. Va. filed Jan. 2, 2017), ECF No. 42.

E. The Second WDPa Suit

On October 31, 2017 – the same day as the Trustees' ROD decision – the Subsidiaries filed a second action in the WDPa. See Helvetia Coal Co. v. UMWA, No. 17-01417 (W.D. Pa. filed Oct. 31, 2017) (hereinafter "Second WDPa Suit"). The Subsidiaries requested that the court: "(1) vacate the October 31, 2017 decision in ROD No. 11-0143; (2) declare that the negotiated exhaustion of remedies requirement and Resolution of Disputes process provided in the relevant section of the expired 2011 NBCWA, and 2011 employee benefit plan, is inapplicable to post-termination retiree health...

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