LONE STAR STEEL COMPANY v. United Mine Workers of America

• Decision Date: 21 February 1986
• Docket Number: 79-36-C.,No. 75-92-C,75-92-C
• Citation: 691 F. Supp. 1280
• Parties: LONE STAR STEEL COMPANY, Plaintiff, v. UNITED MINE WORKERS OF AMERICA, and its Local Union No. 9313, Defendants.
• Court: U.S. District Court — Eastern District of Oklahoma

691 F. Supp. 1280

LONE STAR STEEL COMPANY, Plaintiff, v. UNITED MINE WORKERS OF AMERICA, and its Local Union No. 9313, Defendants.

Nos. 75-92-C, 79-36-C.

United States District Court, E.D. Oklahoma.

February 21, 1986.

COPYRIGHT MATERIAL OMITTED

Lynn Mattson and Michael K. Huggins, Tulsa, Okl., for plaintiff.

Michael Holland, Maynard I. Ungerman, Tulsa, Okl., Earl Brown, Jr., A. Randal Vehar and Harrison Combs, United Mine Workers of America, Washington, D.C., for defendants.

ORDER

H. DALE COOK, Chief Judge.

Now before the Court for disposition on issues of liability are the consolidated cases, Nos. 75-92-C and 79-36-C, brought by plaintiff, Lone Star Steel Company, against defendants, the United Mine Workers of America and Local 9313 of the United Mine Workers of America.

In Number 75-92-C, Lone Star seeks damages pursuant to § 303 of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. § 187 (1982). Lone Star alleges that the defendants, contrary to §§ 8(b)(4)(i), (ii)(A) of the National Labor Relations Act ("the Act") (as amended, 29 U.S.C. § 158(b)(4)(i), (ii)(A) (1982)), induced Lone Star's employees to engage in a strike with an object of forcing Lone Star to agree to certain provisions of the 1974 National Bituminous Coal Wage Agreement which allegedly violate § 8(e) of the Act (29 U.S.C. § 158(e) (1982)).

In Number 79-36-C, Lone Star seeks treble damages pursuant to the Sherman and Clayton Antitrust Acts, as amended, 15 U.S.C. §§ 1, et seq. (1982). Lone Star contends that the defendants' conduct in inducing a strike to obtain allegedly illegal collective bargaining provisions constitutes a per se violation of the antitrust laws.

The defendants assert that the work stoppage engaged in by Lone Star's employees was at all times a lawful, economic, unfair labor practice strike which was not motivated by illegal objectives. Defendants further assert that, as labor organizations, they are immune from antitrust liability under the statutory labor exemption to the antitrust laws, 15 U.S.C. § 6 (1982).

An evidentiary hearing on this matter was held before this Court on March 13, 1984. In addition to the testimony adduced in that hearing, the parties have submitted for the Court's consideration transcripts of testimony taken in parallel proceedings before the Honorable Joseph W. Morris in Youngblood v. UMWA, Nos. 75-71-C and 75-72-C (E.D.Okla. April 11, 1975), and before a National Labor Relations Board Administrative Law Judge in The Matter of United Mine Workers of America, Respondent, and Surface Industries, Inc. and Lone Star Steel Company, Charging Parties, Nos. 16-CB-924, 16-CC-517, 16-CC-518 (October 21, 1975).

After considering the pleadings, the testimony and exhibits admitted at the evidentiary hearing, the submitted records of parallel proceedings, all of the briefs and arguments presented by counsel for the parties, and being fully advised in the premises, the Court enters the following Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

1. These consolidated cases arise in their entirety under federal law, 29 U.S.C. § 187; 15 U.S.C. § 1 et seq. (1982). Jurisdiction over the subject matter is appropriately vested in this Court pursuant to 28 U.S.C. §§ 1331, 1337 (1982).

2. The plaintiff, Lone Star Steel Company (Lone Star), is a Texas-based manufacturer of steel products. When these cases arose, Lone Star's principal product was steel pipe for use in the oil and gas industry. In connection with its business, Lone Star used 36,000 to 40,000 tons of coal per month to produce coke, which in turn was used in the steel-making process. Lone Star obtained its coal both from outside suppliers and from coal lands owned or leased by it.

3. In early 1972, Lone Star acquired the coal-producing property known as the Starlight Mine, located near McCurtain, Oklahoma. From the time of Lone Star's acquisition of Starlight until April 1, 1973, the mine was operated under subcontract by the River Corporation. On April 1, 1973, Lone Star assumed operational capacity over the mine.

4. The defendant, the United Mine Workers of America (the Union), is a labor organization which represents underground and surface coal miners throughout the United States and Canada.

5. The defendant, Local 9313 of the United Mine Workers of America (the Local), is a local affiliate of the United Mine Workers of America which at all times pertinent herein was the recognized collective bargaining representative for a unit of Lone Star's employees at the Starlight Mine.

6. One of the Union's primary functions is to periodically negotiate collective bargaining agreements on behalf of its members regarding wages, hours, and other terms and conditions of employment.

7. For many years the Union has engaged in collective bargaining with a multi-employer bargaining group, the Bituminous Coal Operators Association (the BCOA). The collective bargaining agreements negotiated between the Union and the BCOA are known as National Bituminous Coal Wage Agreements (NBCWAs), and are referred to individually by the year a particular agreement was entered.

8. Lone Star, at all times relevant to the events giving rise to these cases, was not a member of the BCOA.

9. The River Corporation, Lone Star's predecessor at the Starlight Mine, was a signatory to the 1971 NBCWA. Although some terms in the 1971 NBCWA were changed by addendum, Lone Star adopted the agreement when it began operating the Starlight Mine in April of 1973.

10. The expiration date of the 1971 NBCWA was November 12, 1974. In anticipation of this date, the Union notified Lone Star by letter of September 9, 1974, that it wished to negotiate a new agreement with the BCOA. The Union requested Lone Star to sign a letter of intent to be bound by the new agreement that would be reached with the BCOA.

11. In a letter dated September 30, 1974, Lone Star, through Howard Jensen, its Vice President and General Counsel, declined the Union's request to agree in advance to the national agreement. However, Jensen did state that Lone Star was willing to meet and bargain with the Union on an individual basis.

12. On November 4, 1974, the Union sent Lone Star a gray-bound volume of proposals for a new collective bargaining agreement (the Gray Book). Since the 1971 NBCWA was due to expire on the twelfth, the Union asked Lone Star to respond to the proposals by the eighth of November.

13. Lone Star did not respond to the proposals contained in the Gray Book. No further communication took place between the parties until mid-December, 1974.

14. The Union and the BCOA failed to come to terms on a new national agreement by the November 12, 1974, expiration date of the 1971 NBCWA. A national coal miners strike began on November 12, 1974. Lone Star's Union employees at the Starlight Mine (the members of Local 9313) joined their national brethren in the walk out.

15. On December 5, 1974, the Union reached accord with the BCOA on a new national agreement (the 1974 NBCWA). Lone Star was not a signatory to the new agreement, and its employees, still without a contract, remained on strike.

16. The first negotiation session between Lone Star and the Union took place at Union headquarters in Washington, D.C. on December 13, 1974. Lone Star's objections to certain provisions contained in the 1974 NBCWA constituted the focal points of discussion.

Howard Jensen, negotiating on behalf of Lone Star, voiced Lone Star's opposition to the cost-of-living wage escalators embodied in the national agreement. He further stated that Lone Star had "very serious reservations about the `Successorship' Clause,<sup>1</sup> and the `Accretion' Clause"² (hereafter referred to as the "Coal Lands clause"). JCT 14-16; JBT 24-25. In addition, Jensen indicated that he had "difficulties accepting the language of the contract" with respect to the provision requiring Lone Star to make royalty payments to Union trust funds on purchases of non-Union coal³ (hereafter referred to as the "Royalty clause"). Finally, Jensen expressed Lone Star's desire to implement a contract termination clause which would require the Union to bargain with Lone Star over the terms of a new collective bargaining agreement prior to the expiration of the present agreement. JCT 14-16.

In response to Lone Star's objection to the Coal Lands clause, Richard Bank, the Union's representative, explained the Union's interpretation of the clause in the following manner: "this is a provision which states that should the UMWA after signing an employee up at a specific mine site such as Starlight subsequently be recognized as a bargaining agent by the Employer or be certified by the NLRB both in compliance with the Act, then the Company would agree to honor the UMWA national contract in force at Starlight." BBT 601-23. The basis of Jensen's objection to the clause was that he understood it as imposing an illegal obligation on Lone Star to apply the contract entered into with the miners at Starlight to all other coal lands owned by Lone Star or its affiliates, regardless of whether the Union was the recognized bargaining agent of the employees working on those lands. Bank clarified the Union's interpretation of the clause many times during the course of the meeting in an effort to dispel Jensen's incorrect understanding of it. Bank advised Jensen that he had obtained opinions from the Union's general counsel which informed him that the clause could only be legally enforcible if it was understood to mean that, prior to its operation, the Union must first become the recognized bargaining representative of the employees on the signatory's (or its affilitates') properties. BBT 601-23.

17. After the meeting of December 13, 1974, ended without resolution of the parties' differences, Jensen and Bank exchanged correspondence through which a substitute cost-of-living wage escalator provision was agreed to.

18. By letter dated December 19, 1974, Lone Star...