Int'l Union v. Consol Energy Inc.

• Decision Date: 30 September 2021
• Docket Number: Civil Action 1:20-cv-01475 (CJN)
• Parties: INTERNATIONAL UNION, UNITED MINE WORKERS OF AMERICA, et al., Plaintiffs, v. CONSOL ENERGY INC., et al., Defendants.
• Court: U.S. District Court — District of Columbia

INTERNATIONAL UNION, UNITED MINE WORKERS OF AMERICA, et al., Plaintiffs,
v.
CONSOL ENERGY INC., et al., Defendants.

Civil Action No. 1:20-cv-01475 (CJN)

United States District Court, District of Columbia

September 30, 2021

MEMORANDUM OPINION

CARL J. NICHOLS UNITED STATES DISTRICT JUDGE

In June 2020, the Southern District of West Virginia transferred two consolidated cases to this District. See Mem. Op. and Order (“Transfer Op.”), ECF No. 119. In the first, International Union, United Mine Workers of America sought to enforce a 2017 arbitration award in its favor. See generally 2d Am. Compl., ECF No. 78. In the second, former subsidiaries of a company formerly known as CONSOL (now CNX Resources Corporation) sought to vacate the arbitration award. See generally Helvetia Coal Co. v. United Mine Workers of Am., Int'l Union, No. 1:20-cv-01476, Am. Compl., ECF No. 25. Once the cases were transferred here, the Court permitted the Union to amend its own complaint for a third time to add the former subsidiaries as defendants (in addition to CNX), and in the case brought by the subsidiaries, allowed the Union to counterclaim to compel enforcement of the award. See Mem. Op. and Order, ECF No. 144, 145.

Pending before the Court are several motions. The Union moves for summary judgment, seeking to enforce the arbitration award against CNX and the former subsidiaries and to reject the subsidiaries' claims seeking to vacate the award. See Pls.'s Mot. for Summ. J., ECF No. 153; Pls.'s Mem. in Opp'n to Defs.'s Cross-Mot. for Summ. J., ECF No. 158; Defs.'s Answer to 3d

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Am. Compl. (“Defs.'s Answer”), ECF No. 149 at 20. The subsidiaries seek to vacate the award, contending that the arbitration panel exceeded its authority under the plain language of the bargaining agreement, such that the award should be vacated and not enforced. See Defs.'s Cross-Mot. for Summ. J., ECF No. 155; Pl.'s Mem. in Opp'n to Defs.'s Cross-Mot. for Summ. J., ECF No. 158; Defs.'s Answer at 20. And CNX moves to dismiss for lack of jurisdiction, arguing that the Union has failed to plead a cognizable, actual controversy against it. See Def's Mot. to Dismiss, ECF No. 154. After hearing argument on the motions and for the reasons explained below, the Court grants CNX's motion to dismiss for lack of jurisdiction and denies the cross-motions for summary judgment, pending the additional briefing ordered below.

I. Background

International Union, United Mine Workers of America (the Union for short) and a multiemployer bargaining association called the Bituminous Coal Operators' Association, which acts on behalf of member employers, came to terms on a collective bargaining agreement in the summer of 2011. Defs.'s Answer, ECF No. 151 at ¶ 10. By its express terms, the bargaining agreement would expire at the end of 2016. Id. The bargaining agreement governed the terms and conditions of employment for the Union-represented miners who work or had worked for signatory employers. See Transfer Op. at 2-3. It also includes several specific provisions pertinent to this case.

The first set of relevant provisions committed each signatory to provide health care benefits to plan participants and retirees. Article XX(c)(3)(i) states in relevant part:

“Each signatory Employer shall establish and maintain an Employee benefit plan to provide . . . health and other non-pension benefits for its Employees covered by this agreement . . . . The benefits provided by the Employer to its eligible participants pursuant to such plan shall be guaranteed during the term of this Agreement at levels set forth in such plan. The plans established pursuant to this subsection are incorporated by reference and made a part of this Agreement, and

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the terms and conditions under which the health and other non-pension benefits will be provided under such plans are as to be set forth in such plans.” See The CBA ECF No. 1-1 at 18

The second set of provisions establish the arbitration panel's jurisdiction to entertain disputes arising under the bargaining agreement. The Parties refer to this as the Resolution of Disputes (or ROD) process. Article XX(e)(5) provides in part that:

“Disputes arising out of this Agreement with regard to the Employer benefit plan established in (c)(3) above shall be referred to the Trustees. The Trustees shall develop procedures for the resolution of such disputes. In the event the trustees decide such dispute, such decision of the Trustees shall be final and binding on the parties.” Id. at 36.

An explanatory note found in Article XX Section 10 adds that:

“The Trustees of the UMWA Health and Retirement Funds shall resolve any disputes . . . to assure consistent application of the health plan provisions in the Employer Benefit Plans and of the managed care programs authorized by this Agreement.” Id. at 76.

And Article XX Section (e)(5) states that:

“The Trustees shall develop procedures for the resolution of such disputes. In the event the trustees decide such dispute, such decision of the Trustees shall be final and binding on the parties.” Id. at 35.

The third set of provisions provide the process for changing health benefits under the plans.

Article XX Section (c) provides that:

“The benefits and benefit levels provided by the Employer under its Employer Plan are established for the term of this Agreement only, and may be jointly amended or modified in any manner at any time after the expiration or termination of this Agreement.” Id. at 43.

The coal industry came under severe financial pressure soon after the bargaining agreement took effect. As a result of the dire economic situation, CONSOL initiated a comprehensive-cost-reduction initiative. See Defs.'s Statement of Undisputed Material Facts (“Defs.'s SUMF”), ECF No. 155-1 at ¶ 25. In 2016, CONSOL, speaking on behalf of signatory subsidiaries (including the

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signatories that are parties in this case), met with Union officials to discuss potential changes to the health benefit plans. Id. ¶ 28. CONSOL and the subsidiaries proposed “transitioning the approximately 2, 000 Medicare-eligible retirees and dependents to individualized Medicare Supplement plans whose premiums would be paid from Health Reimbursement Accounts.” Id. ¶ 29.

Later in 2016, CONSOL sent a letter to Union retirees referencing the initiation of benefit discussions with the Union. Id. ¶ 32. The letter stated that CONSOL and the subsidiaries had “initiated discussions with the [Union] regarding new options for providing healthcare benefits, ” and promised that “[i]n all events, we will continue to communicate with you in the coming months about this very important matter before any changes are implemented.” Compl., ECF No. 1-2 at 2. In a follow-up letter sent a couple months later, CONSOL stated that “changes to the healthcare programs provided by CONSOL's subsidiaries under the [agreement]” were under consideration given the dire economic circumstances the coal industry found itself in. Compl., ECF No. 1-3 at 1. The letter added that CONSOL and the subsidiaries had “recently provided a proposal to [Union] leadership that details such a plan, and we look forward to discussing these options with them so that we can continue to provide access to quality healthcare despite the harsh realities that confront our industry.” Id. at 2.

Soon after receiving the second letter, Richard Fink, a retired coal miner and a participant in the subsidiaries' health plan, submitted to the arbitration panel, with the aid of the Union, ROD No. 11-0143. See Defs.'s SUMF ¶¶ 42, 44. Fink's ROD stated: “CONSOL sent a letter to its [] retirees reflecting its intention to modify their benefits upon the termination of the 2011” bargaining agreement. See Fink's ROD, ECF No. 147-2 at 2. The letter also noted that the bargaining agreement provided that post-termination modifications of benefits “may only be

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implemented by agreement with the” Union. Id. And it requested an order from the arbitration panel forcing CONSOL to “notify its retirees that it cannot make any changes in their benefits without the agreement of the [Union].” Id.

The arbitration panel issued its decision roughly a year later. See Op. for ROD No. 11-0143, ECF No. 147-1 at 2. The panel first concluded that it possessed jurisdiction over the ROD because “it involves a dispute arising under the [bargaining agreement] and a dispute that concerns provisions of the [agreement] that apply after [its] expiration.” Id. at 7. It next decided that neither CONSOL nor the subsidiaries could “make [] changes unilaterally” to the retirees' health plans. Id. at 9. Instead, “any modification or changes [] must be made only upon joint agreement.” Id. at 11. The panel acknowledged that no employer had made changes to any plan. Id. Yet it concluded that the proposed changes described in the letter would “not provide the level of health benefits as mandated in the 2011 [agreement].” Id.

Soon after the panel released its decision, CONSOL spun-off its coal business, cutting ties with many of its subsidiaries, to form a new publicly traded company. See Defs.'s SUMF ¶ 57. Under the name CNX, the newly formed company concentrates on oil and gas exploration, development, and distribution rather than on coal excavation. Id. ¶ 58. CNX has never employed Union-represented-coal miners, has never made contributions to any retirees' health benefit plan, and has never served as an administrator of any health plan. Id. ¶¶ 58-62.

In late October 2017, the Union sought to confirm the arbitration award in a pending lawsuit filed in the Southern District of West Virginia. See Transfer Op. at 6-10. The subsidiaries responded to the arbitration decision in two ways: first, they moved to dismiss the Union's Second Amended Complaint for lack of jurisdiction, See Subsidiaries' Mot. to Dismiss Pls.' 2d Am. Compl., ECF...