MHC v. INTERN. UNION, UNITED MINE WKRS. OF AMERICA

• Decision Date: 02 March 1988
• Docket Number: Civ. A. No. 85-296.
• Citation: MHC v. INTERN. UNION, UNITED MINE WKRS. OF AMERICA, 685 F.Supp. 1370 (E.D. Ky. 1988)
• Parties: MHC, INC. and Samoyed Energy Company, Inc., Plaintiffs, v. INTERNATIONAL UNION, UNITED MINE WORKERS OF AMERICA, et al., Defendants/Third Party Plaintiffs, v. MHC, INC., Samoyed Energy Company, Inc., et al., Third Party Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

685 F. Supp. 1370

MHC, INC. and Samoyed Energy Company, Inc., Plaintiffs, v. INTERNATIONAL UNION, UNITED MINE WORKERS OF AMERICA, et al., Defendants/Third Party Plaintiffs, v. MHC, INC., Samoyed Energy Company, Inc., et al., Third Party Defendants.

Civ. A. No. 85-296.

United States District Court, E.D. Kentucky, at Pikeville.

March 2, 1988.

COPYRIGHT MATERIAL OMITTED

Forrest H. Roles, Anna M. Norton, Smith, Heenan & Althen, Charleston, W.Va., William I. Althen, Smith, Heenan & Althen, Washington, D.C., Donald H. Combs, Combs & Combs, PSC, Pikeville, Ky., Shelby C. Kinkead, Jr., Bulleit, Kinkead, Irvin & Reinhardt, Lexington, Ky., for plaintiffs.

Sherry Brashear, Goss, Chappel & Brashear, Harlan, Ky., for Donald Tackett.

Earl Brown, Washington, D.C., Michael J. Passino, Jane P. North, Nashville, Tenn., Michael Holland, United Mine Workers of America, Washington, D.C., for Intern. Union, UMWA, Local 2496, UMWA.

James R. Hampton, Hazard, Ky., for Intern. UMWA, Local 2496, James Scott and Donnie Thornsbury.

Bernard Pafunda, Pikeville, Ky., for Dist. 30, UMWA, Ernie Justice.

Eugene Goss, Mark David Goss, Goss, Chappel & Brashear, Harlan, Ky., for Local 2496, UMWA.

Marcia Milby Ridings, Hamm, Milby & Ridings, London, Ky., W. David Kiser, Ackerson, Ackerson, Blandford & Kiser, Louisville, Ky., for third party defendant Storm Sec. Systems, Inc.

John A. West, Patrick A. Nepute, Greenebaum, Doll & McDonald, Lexington, Ky., Richard S. Cleary, Janet P. Jakubowicz, Greenebaum, Doll & McDonald, Louisville, Ky., for third party defendants Ashland Coal, Inc. and P.C. Holding, Inc.

Forrest H. Roles, Mark A. Carter, Smith, Heenan & Althen, Charleston, W.Va., Donald H. Combs, Pikeville, Ky., for third party defendants, Charles Carlton, William J. Higginbotham Clifford Ed Marenko, William Joseph Gwinn Keith Andrew Elkins.

Grover C. Potts, Jr., Wyatt, Tarrant & Combs, Louisville, Ky., George J. Miller, Wyatt, Tarrant & Combs, Lexington, Ky., for Sharondale Corp.

MEMORANDUM OPINION AND ORDER

WILHOIT, District Judge.

This matter is presently before the Court on numerous motions for dismissal or, in the alternative for summary judgment. The plaintiffs, two coal companies, have instituted this action pursuant to 18 U.S.C. § 1964(c), the so-called civil RICO action, alleging a conspiracy to deprive them of property rights through illegal picketing and acts of violence constituting felonies and that such activities affected interstate commerce. The defendants, by counterclaim and a third party complaint, also assert a § 1964(c) claim and certain pendant state claims alleging that there was a conspiracy to deprive the union members of their contract rights and several predicate acts of violence of the same nature as those alleged in the plaintiffs' claim.

FACTS

In December of 1980, Brinco, Ltd. (BRINCO), a Canadian corporation, acting through its wholly owned U.S. subsidiary, Sharondale Corporation (SHARONDALE), purchased the mining assets of the Loftis Coal Company, including the mineral properties, coal preparation plant, and mining equipment (hereinafter the "LOFTIS MINE"). At the time of the purchase, the LOFTIS MINE employed 86 non-union miners; by 1982, the mine work force had grown to approximately 150.

After an election in 1982, the United Mine Workers of America (UMW) was certified by the National Labor Relations Board (NLRB) as the collective bargaining agent at the LOFTIS MINE. In October of 1982, SHARONDALE signed the 1981 National Bituminous Coal Wage Agreement (NBCWA) with the UMW.

SHARONDALE shut down the LOFTIS MINE in October of 1983 and laid off the work force. Prior to the shut down, SHARONDALE supposedly informed the miners that if certain production targets were met, the LOFTIS MINE would remain in operation. It is alleged that the production targets were met by the miners.

In November of 1984, more than a year after the LOFTIS MINE was shut down, SHARONDALE sold the mining assets, including the mineral properties, preparation plant, and mining equipment to M.H.C., Inc. (MHC). Thereafter, Samoyed Energy Company (SAMOYED) reopened the LOFTIS MINE as contract miner for MHC and commenced mining operations with its own non-union work force.

Following the commencement of mining operations by SAMOYED, the UMW engaged in various activities, including picketing, which were intended to persuade SAMOYED and MHC to recognize the UMW as the collective bargaining agent for the SAMOYED Miners at the LOFTIS MINE.

On April 4, 1985, the NLRB entered an Order finding that the UMW did not represent the employees of MHC or SAMOYED. The Sixth Circuit Court of Appeals entered a Judgment on May 5, 1985 enforcing the NLRB's April 4th determination that the UMW was not entitled to picket or cause the companies to be picketed where the object was to force or require the companies to recognize or bargain with the UMW as the collective bargaining representative of their employees.

Beginning with the date that the SAMOYED employees reported to work at the LOFTIS MINE and continuing until September of 1985 when an injunction was issued by the Pike County Circuit Court, members of the UMW manned picket shacks near the LOFTIS MINE. The picket facilities were surrounded by sandbags and had high curtains designed to conceal the identities of those present. The picket areas had the appearance of, and functioned as, a fort or bunker.

UMW members located at or near these picket shacks and persons acting in concert with them, on a regular and frequent basis, engaged in the following activities directed against MHC's and SAMOYED's property and employees, and those seeking to do business with them:

1. Carried, brandished, and discharged firearms and sling shots.

2. Threw rocks, bottles, and other objects.

3. Made threats and engaged in similar verbal behavior intended to intimidate employees.

4. Threw nails and spiked boards in front of coal trucks.

5. Threw "Molotov cocktails" destroying company property.

As a result of these activities, a number of company employees and contractors have been injured. One coal truck driver was killed and another wounded when their trucks were "ambushed."¹ In addition, one union member was wounded by gunfire from a passing vehicle while in the picket shack.

As a result of the activities on the part of UMW, SAMOYED was unable to haul coal except on a very limited basis and as a result the company ceased production and coal haulage in July 1985 for a period of time.

The plaintiffs, MHC and SAMOYED, commenced this action alleging violations of Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq. and the common law of tortious interference with business relations of the Commonwealth of Kentucky. The defendants have instituted a counterclaim and third party action also alleging violations of RICO contending that the coal companies fraudulently manipulated corporate form as to evade obligations imposed by collective bargaining agreements. It is also alleged that the third party and counterclaim defendants committed numerous acts of violence, including:

1. Arson—the burning of a building owned by the local union.

2. Kidnapping—restraint of union members at gunpoint while committing arson.

3. Assault with a deadly weapon—fired gunshots at union members on various occasions.

The matter is presently before the Court on numerous motions for dismissal or, in the alternative, for summary judgment. These parties contend that all of their actions were taken in connection with a labor dispute and that the jurisdiction of the Court is preempted by the NLRB. In the alternative, it is claimed that the RICO allegations are insufficient as a matter of law. Various other contentions include: (1) the action is barred by the statute of limitations; (2) that there are no cognizable damages alleged; (3) that the abuse of process claim is premature; and (4) that an individual's claim of violence is barred by KRS 413.140(1).

There is also a motion before the Court by the defendant/third party plaintiffs requesting a reconsideration of its motion to dismiss or, in the alternative, for summary judgment. It is claimed that this is a labor dispute over which the NLRB has jurisdiction and that the RICO claims are insufficient as a matter of law.

DISCUSSION

I. Preemption

The matter before the Court involves the knotty problem of the interrelationship of the National Labor Relations Act (NLRA), 29 U.S.C. §§ 41 et seq., and the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq. It has been alleged that the present action merely involves unfair labor disputes within the parameters of 29 U.S.C. §§ 157 and 158 and, as such, the jurisdiction of the Court is preempted by the exclusive jurisdiction of the National Labor Relations Board (NLRB) to hear matters involving unfair labor claims.

This Court believes that this action involves more than just the mere resolution of unfair labor claims. This action presents the question as to whether a RICO action is preempted by the NLRA when the predicate acts alleged may also be classified as unfair labor practices.

"The constitutional principles of pre-emption, in whatever particular field of law they operate, are designed with a common end in view: to avoid conflicting regulation of conduct by various official bodies which might have some authority over the subject matter." Amalgamated Association of Street, Electric Railway & Motor Coach Employees v. Lockridge, 403 U.S. 274, 285-86, 91 S.Ct. 1909, 1917-18, 29 L.Ed.2d 473 (1971). "A multiplicity of tribunals and a diversity of procedures are quite apt to produce incompatible or conflicting adjudications." Garner v. Teamsters, Union No. 776, 346 U.S. 485, 490-91, 74 S.Ct. 161, 166, 98 L.Ed. 228 (1953). The principle of preemption, as expressed in the NLRA, was born "to delimit state and federal judicial authority over labor disputes in order to preclude, so far as...