Smitty Baker Coal Co., Inc. v. United Mine Workers of America

• Decision Date: 11 April 1980
• Docket Number: 78-1815,Nos. 78-1814,s. 78-1814
• Citation: 620 F.2d 416
• Parties: 104 L.R.R.M. (BNA) 2029, 88 Lab.Cas. P 12,062, 1980-1 Trade Cases 63,286 SMITTY BAKER COAL COMPANY, INC., Appellant, v. UNITED MINE WORKERS OF AMERICA, Appellee. SMITTY BAKER COAL COMPANY, INC., Appellee, v. UNITED MINE WORKERS OF AMERICA, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 416

620 F.2d 416

104 L.R.R.M. (BNA) 2029, 88 Lab.Cas. P 12,062,

1980-1 Trade Cases 63,286

SMITTY BAKER COAL COMPANY, INC., Appellant, v. UNITED MINE WORKERS OF AMERICA, Appellee.

SMITTY BAKER COAL COMPANY, INC., Appellee, v. UNITED MINE WORKERS OF AMERICA, Appellant.

Nos. 78-1814, 78-1815.

United States Court of Appeals, Fourth Circuit.

Argued June 4, 1979.

Decided April 11, 1980.

Claude K. Robertson, J. Edward Ingram, Knoxville, Tenn. (Fowler, Rowntree, Fowler & Robertson, Knoxville, Tenn., Joseph E. Wolfe, Earls, Wolf & Farmer, Norton, Va., on brief), for appellant in No. 78-1814 and for appellee in No. 78-1815.

Stuart B. Campbell, Jr., Wytheville, Va., E. H. Rayson, Knoxville, Tenn. (Harrison Combs, Washington, D. C., on brief), for appellee in No. 78-1814 and for appellant in No. 78-1815.

Before HAYNSWORTH, Chief Judge, BRYAN, Senior Circuit Judge, and RUSSELL, Circuit Judge.

DONALD RUSSELL, Circuit Judge:

This is an action by the plaintiff Smitty Baker Coal Company, Inc. (Smitty Baker) charging a conspiracy by the defendant United Mine Workers (UMW) violative of the antitrust laws, ¹ to which it joined an action under the National Labor Management Relations Act. The action under the National Labor Management Relations Act was abandoned, and the cause proceeded solely under the antitrust claim. At trial the plaintiff recovered a verdict against the defendant for $1,250,000. ² After trial defendant moved for judgment notwithstanding the verdict or in the alternative for a new trial. Following submission of briefs and full oral argument, the district court, in a carefully reasoned memorandum opinion, ³ denied defendant's motion for a new trial and granted the motion for judgment notwithstanding the verdict. In its opinion granting the motion it concluded that, while there was sufficient evidence from which the jury might infer a conspiracy under the Sherman Act, the plaintiff had failed to produce any facts to support its contention that it had suffered damages as a result of the conspiracy. The plaintiff appeals from the judgment notwithstanding the verdict in favor of the defendant and the dismissal of its action; the defendant cross-appeals from the finding of conspiracy.

So far as pertinent to our decision, the significant facts in this case are as follows: In 1969 Ralph Baker, who had worked about mines most of his adult life, approached a representative of Peabody Coal Company, the owner of considerable coal lands in Lee County, Virginia, with a request for a lease of certain of such lands. Peabody granted the request. The lease dated August 1, 1969, however, was not taken in Ralph Baker's name but in the name of a corporation, which Ralph Baker had had chartered and which is the plaintiff in this action. The sole stockholder of this corporation was Ralph Baker's nineteen-year-old son, Smitty Baker, then a student at Lincoln Memorial University. The capital of the corporation consisted of 100 shares, issued for a consideration of one dollar per share, thus giving the corporation a capital of exactly one hundred dollars. No additional stock was ever issued and no other contributions to capital made. The actual payment to the corporation for the stock issued was made by Ralph Baker from his funds. Throughout the life of the corporation the complete control and management of the corporation were always exercised by Ralph Baker; so far as the record indicates, Smitty Baker never took any significant part in such management.

Before beginning operations at its leased site, the plaintiff entered into a collective bargaining agreement with the defendant UMW. Ralph Baker testified he did this because he was told when given the lease by Peabody that he "would have to sign an United Mine Workers Agreement." This demand, it is alleged, was made because of the Coal Lands Clause in the 1968 agreement, of which Peabody was a signatory. ⁴ The labor agreement accepted by the plaintiff under these circumstances was the standard 1968 contract negotiated between the UMW and a multi-employer bargaining group of mining employers. The negotiation of this contract followed a practice long established in the coal industry, whereby a group of the larger operators would join together as a multi-employer bargaining unit known as the Bituminous Coal Operators Association (BCOA) to negotiate on their behalf a labor contract with the negotiating council of the Union. The contract so negotiated bound all the operator-members of the unit. Non-member operators, however, became bound by the contract only if they thereafter agreed to do so. ⁵

The plaintiff was not in a position to begin mining operations until about October 1969. From the outset these operations were successful. Its efforts at selling its coal resulted in a contract with Tennessee Valley Authority (TVA) for the supply to the latter of 2,000 tons of coal a week. The plaintiff was actually offered later a contract for 2,000 more tons by TVA, but it refused the offer. Experiencing no difficulty in its mining operations or in the marketing of its productions, it had a pre-tax profit of $20,985 and an after-tax profit of $9,968.12 for the year ending December 31, 1970, on its hundred dollar capital investment. Despite the fact that its operations ceased on October 1 of the year following due to the strike to which we later refer, 1971 was similarly a profitable year, showing after-tax profits of $36,104.38 and a net worth of $57,657.15 at the end of that year.

The relations between the plaintiff and the UMW as the representative of the former's employees were apparently cordial and cooperative during the period of the 1968 labor contract. However, the 1968 collective bargaining contract was, by its terms, terminable by either party on September 30, 1971, provided sixty days' notice of such termination was given the other party. The required sixty-day notice of termination was concededly given by the UMW to the multi-employer group with whom the contract had been negotiated initially, but Baker testified his company was not personally given such notice. In any event, though, Baker admitted he knew that the contract was being terminated on October 1st, and he attempted to make plans to counter any effect of the strike on the corporation's business. Accordingly, on September 30, the date fixed for the contract's termination, Baker called together the local officers of the UMW Union and proposed to them that, if the local would not strike and its members would continue working after September 30, he would stipulate on behalf of the plaintiff to pay retroactive to October 1, the wages as fixed in the contract which might later be negotiated between the multi-employer group and the Union. This proposal was refused; and, when the local UMW joined the general strike by UMW members, following the traditional UMW practice of "no contract no work," the plaintiff's mines were forced to close. No particular discussions between Baker and the UMW took place thereafter until November 16, 1971.

On November 14, 1971, the UMW and the multi-employer bargaining group reached an agreement on a new collective bargaining agreement. Considerable publicity, particularly in the coal field, was given this development. Baker testified, though, that he did not hear of the agreement until two days later. In the meantime, on November 15, 1971, Baker testified he was called to the mines to "sign a contract." At the mines he met a representative of the Southern Labor Union (SLU), a rival labor organization of the UMW. The SLU representative was accompanied by some employees of the plaintiff. He produced 10 signed cards. Three of these cards were signed by supervisors in the plaintiff's mines, three by employees of the plaintiff, and four by individuals not previously employed by the plaintiff. Within the hour Baker signed the agreement submitted to him by SLU as the collective bargaining representative of the plaintiff's employees.

The next day, November 16, a representative of the UMW visited Baker and requested him to sign a stipulation agreeing to the terms of the new contract which the UMW had negotiated with the multi-employer group. Baker refused, offering as the only reason for not signing that he had just signed a contract with the SLU and he "didn't think (he) could sign two contracts." The UMW representative reacted to this statement by declaring that in his opinion Baker in negotiating and executing a contract with the SLU had committed an unfair labor practice. ⁶ The meeting terminated with the UMW representative stating that he intended to take the matter to the National Labor Relations Board, which he did. An investigation of the charges of the UMW by the Board began in December, but before the investigation was concluded, the SLU elected not to contest the charges and abandoned its claim to represent plaintiff's employees. The UMW then withdrew its charges, assuming that it was agreed that it was the legal representative of a majority of plaintiff's employees in the bargaining unit.

While the NLRB charges were pending there were no communications between the defendant UMW and the plaintiff. On December 13, however, Baker's wife was told in a telephone call from the NLRB that the charges filed by the UMW against the plaintiff had been dropped. Baker told a representative of Peabody the next day that the charges had been dismissed, and expressed a desire to talk about a renewal of the corporation's lease. The representative of Peabody replied that he and a representative of the UMW would call on him (Baker) the next day. On December 15 the representatives of Peabody and the UMW visited Baker. The UMW representative presented Baker with the new contract and asked him to sign it. Baker took no exception to the contract or any of its provisions and expressed a willingness to sign the contract when he was formally advised in writing by the NLRB that the charges had been...