Lewis v. Pennington

• Decision Date: 09 December 1968
• Docket Number: No. 17445-17453.,17445-17453.
• Citation: 400 F.2d 806
• Parties: John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. James M. PENNINGTON et al., Defendants, Cross Plaintiffs-Appellants, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellee. John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. James M. PENNINGTON, et al., Defendants, Cross Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant. John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. Harry P. STANSBERRY, Individually and t/a Stansberry Coal Company, Defendants, Cross Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant. John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. Jesse C. FESLER and Nola Fesler, Individually and t/a Fesler Coal Company, Defendants, Cross Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant. John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. U. R. ARNOLD and Mrs. U. R. Arnold, Individually and t/a Arnold Strip Mining Company, a Partnership, and The Arnold Coal Company, Inc., Defendants, Cross Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant. John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. TENNCO, INCORPORATED, Defendant, Cross Plaintiff-Appellee, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant. John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. E. C. McPHERSON, Individually and t/a E. C. McPherson Coal Company, M. W. Norquest and E. C. McPherson, Individually and t/a McPherson Coal Company, Defendants, Cross Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant. DEAN COAL COMPANY, Plaintiff-Appellee, v. UNITED MINE WORKERS OF AMERICA, Defendant-Appellant. W. R. PARTON d/b/a W. R. Parton Coal Company, Plaintiff-Appellee, v. UNITED MINE WORKERS OF AMERICA, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

400 F.2d 806 (1968)

John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. James M. PENNINGTON et al., Defendants, Cross Plaintiffs-Appellants, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellee.

John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. James M. PENNINGTON, et al., Defendants, Cross Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant.

John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. Harry P. STANSBERRY, Individually and t/a Stansberry Coal Company, Defendants, Cross Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant.

John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. Jesse C. FESLER and Nola Fesler, Individually and t/a Fesler Coal Company, Defendants, Cross Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant.

John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. U. R. ARNOLD and Mrs. U. R. Arnold, Individually and t/a Arnold Strip Mining Company, a Partnership, and The Arnold Coal Company, Inc., Defendants, Cross Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant.

John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. TENNCO, INCORPORATED, Defendant, Cross Plaintiff-Appellee, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant.

John L. LEWIS, Josephine Roche and Henry G. Schmidt, As Trustees of the United Mine Workers of America Welfare and Retirement Fund, Plaintiffs, v. E. C. McPHERSON, Individually and t/a E. C. McPherson Coal Company, M. W. Norquest and E. C. McPherson, Individually and t/a McPherson Coal Company, Defendants, Cross Plaintiffs-Appellees, v. UNITED MINE WORKERS OF AMERICA, Cross Defendant-Appellant.

DEAN COAL COMPANY, Plaintiff-Appellee, v. UNITED MINE WORKERS OF AMERICA, Defendant-Appellant.

W. R. PARTON d/b/a W. R. Parton Coal Company, Plaintiff-Appellee, v. UNITED MINE WORKERS OF AMERICA, Defendant-Appellant.

Nos. 17445-17453.

United States Court of Appeals Sixth Circuit.

September 11, 1968.

Certiorari Denied December 9, 1968.

COPYRIGHT MATERIAL OMITTED

John A. Rowntree, Knoxville, Tenn., for Dean Coal Co. and W. R. Parton; Robert S. Young, Jr., Knoxville, Tenn., on the brief; Fowler, Rowntree, Fowler & Robertson, McCampbell, Young & Bartlett, Knoxville, Tenn., of counsel.

Harrison Combs, Washington, D. C., Edward L. Carey, Willard Owens, Washington, D. C., E. H. Rayson, Knoxville, Tenn. and M. E. Boiarsky, Charleston, W. Va., for United Mine Workers of America.

Before EDWARDS, PECK and COMBS, Circuit Judges.

Certiorari Denied December 9, 1968. See 89 S.Ct. 450.

No. 17445

PECK, Circuit Judge.

The complicated factual pattern of this case and its protracted history in the courts are fully reported in an opinion in this Court on a previous appeal¹, in the opinion of the Supreme Court² reversing our earlier determination and remanding the cause, and with even greater precision and detail in the exhaustive opinion of Chief Judge Robert E. Taylor of the United States District Court for the Eastern District of Tennessee in his opinion following trial on the remand³. The case is again in this court on appeal from an order entered by the District Court following that remand. Because of the availability of full statements of the facts in those opinions they will be here presented in abbreviated form. This case and its companion cases were succinctly described by Judge Taylor in this manner:

"These cases are the last chapter in a spate of litigation between coal operators in Scott, Anderson and Campbell Counties, Tennessee, and United Mine Workers of America * * * resulting from labor disputes that arose in 1955 and continued intermittently through 1959." (257 F.Supp. at 817.)

The original plaintiffs (not parties to this appeal), hereinafter referred to as "Trustees" (John L. Lewis, Henry G. Schmidt and Josephine Roche, Trustees of the United Mine Workers of America Welfare and Retirement Fund) brought this action against the cross-plaintiffs-appellants, hereinafter referred to as the "plaintiffs-appellants" or as "Phillips"; the individual plaintiffs-appellants are James M. Pennington, Raymond E. Phillips and Bruce Phillips⁴, and they were named individually and as trading as Phillips Brothers Coal Company, a Partnership. Sought in the action was the sum of $55,982.62 allegedly due as royalty payments under a trust provision in a wage agreement entered into between the United Mine Workers of America (hereinafter "UMW" or the "Union") and Phillips. The agreement referred to is the National Bituminous Coal Wage Agreement of 1950, as amended September 29, 1952, hereinafter the "National Agreement." This agreement was executed by Phillips and UMW October 1, 1953, and reexecuted with amendments September 8, 1955, and October 22, 1956. Responsive to the complaint, Phillips filed an answer and a cross-claim against UMW praying for actual damages in the amount of $100,000 and for punitive damages, alleging that Trustees, the UMW and certain large coal operators had conspired to restrain and monopolize interstate commerce in violation of Sections 1 and 2 of the Sherman Anti-Trust Act, as amended, 26 Stat. 209, 15 U.S.C. §§ 1, 2 (1958 ed.).

In the answer it is alleged that Phillips entered into the National Agreement, the execution of which is not contested, by reason of duress in the form of a program of terrorism instigated by the UMW in the area of Phillips' mine. It is alleged that the agreement, and its amendments, were executed because otherwise Phillips would not have been permitted to operate their coal mine. It is the contention of the answer that for these reasons the contract is illegal and that no liability for royalties exists under it. However, it was held by this court that regardless of the factual contentions of the plaintiffs-appellants under these defenses, the Trustees were entitled to recover the royalties contracted for which were based on the tonnage mined during the period of time involved. 325 F.2d 804. Certiorari was denied (381 U.S. 949, 85 S.Ct. 1796, 14 L.Ed.2d 723 (1965)), judgment was entered for the Trustees, and no issue in this regard is presented under the present appeal.

In the cross-claim it is alleged that prior to the National Agreement questions concerning wages, the welfare fund and the UMW's efforts to control working hours had resulted in controversy, but that the National Agreement had resulted in relative peace. Overproduction of coal was alleged to be the critical problem of the industry and the elimination of the smaller operators and consequent placing of control of the market in the larger companies was stated to be the agreed solution. The cross-claim states that the UMW abandoned its efforts to control working hours, agreed not to oppose rapid mechanization of the mines, on the contrary to help finance such mechanization, and to impose the terms of the National Agreement on all operators. The UMW was allegedly to benefit from increased wages as mechanization increased productivity, but the smaller companies were to be required to pay the increased wages whether mechanized or not. Welfare fund payments were to be proportionately increased and other steps prohibiting the marketing, production and sale of nonunion coal were alleged to have been agreed to by the UMW and large companies. They obtained a minimum wage for employees of operators selling coal to the Tennessee Valley Authority under the provisions of the Walsh-Healey Act, as amended, 49 Stat. 2036, 41 U.S.C. § 35 et seq. Four of the larger companies subsequently are claimed to have waged a destructive and collusive price-cutting campaign in the TVA coal market, in two of which the UMW is alleged to have held a sufficient interest to make control possible.

This Court affirmed the judgment against the UMW entered on the jury verdict holding that the UMW was not exempt from liability under the Sherman Act, found that trial judge's instructions to the jury adequate and held the evidence generally sufficient to support the verdict. 325 F.2d 804. Certiorari was granted (377 U.S. 929, 84 S.Ct. 1333, 12 L.Ed.2d 294 (1964)),⁵ and as previously noted the Supreme Court reversed and remanded the cause. 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626. That decision of the Supreme Court will herein be referred to as "Pennington."

The principal issues in this action find their genesis in Sections 1 and 2 of the Sherman Anti-Trust Act. Section 1 prohibits "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce * * *." Only unreasonable or undue restraints fall within the proscription of this section, as determined by application of what the Supreme Court has referred to as "the rule of reason." E. g., Standard Oil of New Jersey v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619 (1911). Under this standard, each restraint is evaluated in light of the particular facts of that case, considering the peculiarities of the industry, the conditions in the industry before and after the inception of the restraint, the nature of the restraint and its effect, the problem to which the restraint was directed, and the end or purpose sought by reason of the restraint. The test is whether "the restraint imposed, is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition."...