Peabody Holding Company, LLC et al v. United Mine Workers of America, International Union, No. 1:2009cv01043 - Document 32 (E.D. Va. 2010)
Court Description: MEMORANDUM OPINION: For the reasons stated above and from the bench, plaintiffs' Motion for Summary Judgment 22 has been DENIED and defendant's Motion for Summary Judgment 19 has been GRANTED, although a final judgment was not entered until this opinion issued. Accordingly, an appropriate order will issue with this opinion.Signed by District Judge Leonie M. Brinkema on 09/07/10. (yguy)
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Peabody Holding Company, LLC et al v. United Mine Workers of America, International Union Doc. 32 on IN THE UNITED STATES EASTERN DISTRICT DISTRICT Alexandria PEABODY et HOLDING COMPANY, COURT FOR SEP-7 THE OF VIRGINIA Division LLC, al. Plaintiffs, 1:09CV1043(LMB/IDD) v. UNITED MINE WORKS OF AMERICA, INTERNATIONAL UNION, Defendant. MEMORANDUM OPINION Plaintiffs Peabody Holding Company, Beauty Coal Company, LLC Mine Workers of America, LLC ("Black Beauty") ("PHC") and Black have sued the United International Union ("UMWA") seeking a declaratory judgment that they are not bound by a 2007 jobs contract to which plaintiffs were non-signatory parties. the Court are the plaintiffs' Summary Judgment the plaintiffs' [19] [22, Motion was granted. reasons for that 19]. Before and the defendant's Motions for After the Court held oral argument, [22] was denied and the defendant's Motion This memorandum opinion expands upon the decision. Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Corp. v. Catrett, 477 U.S. 317, motion for summary judgment, of the nonmovant, Fed. R. 322-23 Civ. P. (1985). 56 (c) ; Celotex In ruling on a a court should accept the evidence and all justifiable inferences must be drawn in Dockets.Justia.com his favor. (1986). Anderson v. The parties dispute and that Liberty concede Lobby, that their motions there Inc., are 477 U.S. 242, no material exclusively raise 255 facts matters of in legal interpretation and analysis. I. Plaintiffs PHC and Black Beauty are Energy Corporation is BACKGROUND ("Peabody Energy"}. a labor organization within Management Relations Periodically, Operators' Act. The defendant, the meaning of U.S.C. ยงยง 141, of Peabody the UMWA, the Labor et seq. the UMWA negotiates with the Bituminous Association, bargaining group, 29 subsidiaries Inc. ("BCOA"), Coal a multi-employer resulting in labor agreements known as National Bituminous Coal Wage Agreements. Peabody Coal Company ("PCC"}, which was the employer arm of plaintiff PHC,! has participated in such negotiations since 1993, when the UMWA and the BCOA first agreed to a job preference agreement known as Understanding Regarding Jobs Opportunities the Memorandum of (the "MOU"). Subsequent identical agreements were signed in 1998, 2007. The 2007 MOU, the agreement at Coal Company, which became issue in this LLC, effective January 1, litigation, Signatory Employer, In early 2007, PCC, which was also the parent a member of was 2002, and 2007 and is signed by "Peabody [As Limited Agent for BCOA, was owned by company of various coal mining PHC, operation subsidiaries, including Black Beauty. PCC was the PHC subsidiary that employed the coal miners who worked at the PHC coal mining operation subsidiaries. Parent Corporation and Subsidiaries]." (2007 The of purpose opportunities and active its Jobs the the MOU 2007 for work of miners of Nonsignatory a at miners to fill MOU is bound by (Id. signatory Employer [sic] ^1). the PHC, listed and to for work of a coal mining subsidiaries of appendix in detail (PCC) with an experienced pool to the appendix includes plaintiff Black Beauty. MOU describes certain laid-off signatory company's parent, and the bituminous 2007 job The non-signatory companies plaintiff PHC, in an to [sic] new job openings at the agreement are which are "to provide classified nature available classified nature." Mining 5). provide the nonsignatory Companies of Coal 2007 (Id. MOU. The at Appx. A). The the preferential hiring rights to be given to PCC employees by the non-signatory coal mining operations, and provides effect until 11:59pm, Under the 2007 that the agreement December 31, 2011." "shall remain in (IcL. at H 11). MOU the parties agreed to submit to binding arbitration to resolve any disputes arising under the MOU. 14 (Id. ("the UMWA and the nonsignatory Companies subject to this MOU agree that the impartial Jobs Monitor jointly selected by the UMWA and BCOA.... shall serve as the monitor under this MOU... and investigate any violations herein")). breach arises, the Jobs Monitor can conduct hearings, If any allegation of a (hereinafter, take evidence, the "arbitrator") request briefing, and take rtl "reasonably necessary" In the fall mining operations companies of steps 2007, to resolve Peabody in the Eastern United States. That divestiture As a result of itself of its These divested involved PCC and all of the October 31, (Id.). Patriot Coal Corporation signatory subsidiaries except Black Beauty. 12}. dispute. Energy divested formed a separate entity, ("Patriot"). the 2007 PHC's (Klingl Decl. divestiture, non- at U 9- Black Beauty and PHC no longer had any common ownership connection to PCC (which had been renamed Patriot-owned entity. (Id.). "Heritage Coal") or to any other After the spinoff, Patriot entered into the 2007 MOU in its own right and agreed to be bound by it going forward. In 2008, operator, Black Beauty contracted with United Minerals LLC, a private mine to perform some its property located in Warrick County, surface mining at Indiana. United Minerals has no relationship to PCC/Heritage or any of the other Patriot companies. On November 20, 2008, the UMWA wrote to PHC requesting that it require Black Beauty to comply with the 2007 MOU when making job offers. "make Specifically, the UMWA directed the plaintiffs to the requisite job offers" to PCC classified employees, "keep the Union informed of such mining operations as they develop," process to and "give the required notice of the job selection the Jobs Monitor." (PL's Mot. For Summ. J, Ex. 6). On December 8, 2008, PHC responded through counsel that "once the prerequisite corporate relationship between PHC and PCC was severed (as of October 31, also were severed. UMWA members... represented Company." not subsidiary On February 9, For 2009, designated arbitrator.3 for Summ. J. Ex. survive to Mot. written positions obligations under the Jobs MOU An obligation to secure does (Def.'s 2007}, a conveyance third party Summ. J., (See id. , 10, of the such as Ex. Ex. 11), 6). for UMWA- Patriot Coal 5).2 the UMWA submitted the dispute from the parties, 9, job opportunities The to the arbitrator received (see id., Ex. and on July 31, 2009, 7, PL's Mot determined that the UMWA's claim was arbitrable and that he had authority to decide the issue. He did not resolve (Decision of Jobs Monitor). the substantive issue, hold awaiting this and the arbitration proceedings are on Court's decision. PHC and Black Beauty brought this declaratory judgment action seeking a declaration that they are not required to submit ! The UMWA concedes that the plaintiffs cannot be required to give hiring preferences to PCC employees who joined the employment roster after the October 31, 2007 spinoff. However, the UMWA contends that the plaintiffs have an obligation to PCC employees who were in the PCC bargaining unit before the spinoff, specifically arguing that these miners must be given the preferential hiring rights required under the 2007 MOU. Steven Goldberg was assigned as the jobs monitor ("arbitrator") under the Jobs MOU. His qualifications include graduating cum laude from Harvard University with a Bachelor of Laws and currently serving as Northwestern University. a Professor of Law Emeritus at to arbitration and that preferences 2007 MOU, which compels for active and laid off employees companies on the basis unenforceable. which it the The of union membership, UMWA has filed an Answer is job of now unrelated unlawful and and Counterclaim in seeks a declaratory judgment ordering the plaintiffs comply with the decision of to the jobs monitor and proceed to arbitration with the arbitrator Goldberg. II. A. DISCUSSION Arbitrability of Defendant's Claims The first issue before the Court properly determined that he has is whether the arbitrator jurisdiction over the UMWA's claim against the plaintiffs.1 The plaintiffs argue that the issue of whether two parties agreed to arbitrate a particular dispute is an issue for the courts, decide. America, AT&T Technologies, 475 U.S. 643, 649 Inc. v. not the arbitrator, to Communications Workers of (1986)(holding that "the question of arbitrability- whether a collective-bargaining agreement creates a duty for the parties to arbitrate the particular grievance- is undeniably an issue for judicial determination"). counters that the rule in AT&T does The UMWA not apply here because the issue in that case was whether a company which was not a party to the agreement was obligated to arbitrate particular issues. Act, 'Because neither party has cited the Federal Arbitration the Court will not conduct any review under that statute. The plaintiffs cited this same correctly distinguished AT&T and "the reason that the court question of arbitrability case to the arbitrator, its progeny on the basis rather than [in those the cases] arbitrator was not believed that only it could decide the question, function of the objecting party's refusal who that decided the that the court but was rather a to proceed to arbitration in the absence of a court order compelling it to do so." (Decision of Unlike parties Jobs in AT&T, it Monitor at is undisputed that to the 2007 MOU, arbitration clause. applicability of the scope of with which Moreover, included a mandatory binding the plaintiffs do not challenge the the clause itself. the jobs Nevertheless, In fact, the plaintiffs actually as evidenced by their filing position monitor. in this action, enforceability of all of the grounds of the plaintiffs were the arbitration clause to their dispute based on submitted to arbitration, papers 8). the plaintiffs challenge the their obligations under the 2007 MOU, on the severance of their relationship with the signatory employer, PCC. Given that argument, from the United States Supreme Court destroys a recent opinion the plaintiff's claim that the arbitrator lacked the authority to determine whether the plaintiffs were bound under the 2007 MOU to arbitrate the dispute raised by the UMWA. Jackson, In Rent-A-Center. West, Inc. v. the Court emphasized the distinction between a party's refusal to arbitrate because arbitration clause is because S.Ct. it claims 2772 court, Because The Court "a party's or arbitrator, to the the held challenge contract contract that a as a to only 130 to the another provision of whole," can be Id. 2007 divestiture of the 2007 MOU, the addressed by an Id. in Rent-A-Center challenged at 2778. the the arbitrator, had the authority to determine the arbitrability. Center, to arbitrate a whole. challenge enforceability of the agreement as a whole, submit as as that clause remains enforceable. the plaintiff the court, the an arbitration provision must be addressed by a while contract, that illegal and a party's refusal invalidity of {2010). validity of the party claims "gateway" not issue of The plaintiffs here claim that the October PCC released them from all obligations including but not to arbitration. limited to the obligation to On the basis it is clear that under of reasoning in Rent-A- the arbitrator correctly determined that he had the authority to decide the issue of arbitrability. (Decision of Jobs Monitor at No party disputes 8). that at the inception of plaintiffs were bound by the arbitration clause. the 2007 MOU, the As the Fourth Circuit recently recognized in a case where former coal miners sought to enforce the arbitration decision of a board of trustees regarding their retirement benefits, "[t]he 'reasons for insulating arbitral decisions from judicial review are grounded in the federal which, statutes regulating labor-management relations,' 'reflect a decided preference labor disputes.'" F.3d 177, Union v. fits Parsons v. 186 (4th Cir. Misco, Inc., 484 arbitrator pointed out, mill." Power Mountain Coal U.S. 29, class 36 (1987)). Company. The of disputes and, at issue in this case contract interpretation, (Decision of Jobs Monitor at finds that settlement of 2010)(citing United Paperworkers' squarely within this question of for private grist 8). Int'l UMWA's as 604 claim the "is a classic for the arbitration The Court agrees, and the arbitrator did have the authority to decide he had jurisdiction. Even if the court, the arbitrator erred in finding that had authority to decide whether required to arbitrate their dispute, he, rather than the parties were this Court would have concluded that the UMWA's claim against the plaintiffs must be submitted to arbitration. The plaintiffs remain bound to arbitrate all disputes arising under the 2007 MOU, because there is no question that the plaintiffs were initially bound to the 2007 MOU by and through their agent, states that PCC is PCC. Peabody Holding Company, MOU, 2007 MOU's preamble "solely for purposes of negotiating and executing this MOU and no other purposes, subsidiaries." The the limited agent of LLC and its nonsignatory coal mining (2007 MOU at 1). On the final page of PCC signed "as limited agent the 2007 for Parent Corporation," which was plaintiff Subsidiaries," Coal Company, PHC, and which "its Nonsignatory Coal Mining included Black Beauty. LLC... as limited agent (Id. at 6 ("Peabody for Parent Corporation and its Nonsignatory Coal Mining Subsidiaries")).5 A list of all nonsignatory Companies Beauty, was covered by the 2007 HOU, attached to the contract. (Id., which included Black Appx. A). Plaintiffs argue that all of their obligations under the 2007 MOU were terminated on October divestiture occurred. Plaintiffs 31, to is no such "condition precedent" clause the enforceability of (and PHC) simply because the as a the agreement. PCC "condition However, there written in the 2007 MOU and no in the 2007 MOU explicitly releases obligations when essentially describe common ownership between PCC and Black Beauty precedent" 2007 any party from its it or another obligee has been divested from the signatory company. Indeed, the 2007 MOU expresses flexibility about the scope of coverage by providing that "job opportunities... shall be at existing, new, or newly- acquired nonsignatory bituminous coal mining operations of the nonsignatory companies." (IcL 11 1 (emphasis added)). The plaintiffs have characterized this "limited agency" being limited to the time during which the plaintiffs and PCC shared a common owner. any change However, in the parties' nothing in the as 2007 MOU mentions obligations should the limited agent no longer be an agent for the parties. Lastly, no one disputes that the agency PCC held at the execution of the MOU was valid and the plaintiffs, as principals, cannot escape obligations the agent bound them to during the agency relationship simply because that agency relationship was later 10 severed. The plaintiffs rest part of the 2007 MOU, which states that their argument on paragraph 9 of "nothing herein shall encumber or limit in any way the rights of the nonsignatory Companies sell, exchange, release or their nonsignatory coal to third parties." otherwise lands, (IcL. fl 9). to similarly convey... any of coal reserves or coal operations This clause does not help the plaintiffs because neither of them sold or otherwise disbursed property to indicates third parties. Plaintiffs that divestiture of the argue that this clause signatory company would likewise release non-signatories not sold therewith from the 2007 MOU. However, the plaintiffs clause, which refers not sale of "coal lands, to ignore coal rather, but release this to the or coal operations." lands would not signatory from the 2007 MOU; to language of the sale of companies, coal reserves, of a non-signatory's the plain The sale the non- the 2007 MOU would not apply the dispossessed properties. Plaintiffs' the critical reliance on case law is not helpful because of factual differences between this case and the facts involved in the cases they cite. KenAmerican Resources v. of America, International Union, in which the D.C. company was not bound by the provision) Plaintiffs rely heavily on United Mine Workers Circuit held that a non-signatory arbitration clause (or by any other of an UMWA MOU because the company was never a party to the contract. 99 F.3d 1161. Although the plaintiffs admit that 11 this case differs insofar as point bound by the contract, Black Beauty and PHC were at they imply that the analysis one is essentially the same because they are no longer bound by the contract and thus plaintiffs 190, 210 should not be required rely on Litton Financial (1991), to arbitrate. Printing v. NLRB, Likewise, 501 U.S. in which the Court held that Litton was not bound by the arbitration agreement in a hiring contract with the NLRB because the contract had expired and there was no evidence the parties had an intent to arbitrate after the expiration of the contract. their view, virtue of Plaintiffs contend that Litton applies because, their obligations under the 2007 MOU have expired by the divestiture. these cases are However, which is present dispute. in Litton, Unlike 2007 MOU has not yet passed, no dispute that the plaintiffs' circular because they assume that longer applies to them, MOU. in analyses of the 2007 MOU no indeed the ultimate issue the termination date of and unlike in KenAmerican, in the the there is the plaintiffs were clearly parties to the 2007 Accordingly, there is no case law nor any language or evidence demonstrating that the plaintiffs are no longer bound by at least the arbitration clause of the 2007 MOU. When parties bargain for arbitration, particularly where the arbitration language is broad and where labor disputes are involved, Parsons, courts are inclined to enforce those agreements. 604 F.3d at 182. The UMWA argues that 12 the issue of See whether "the Jobs divestiture of MOU [PCC], interpretation of presented a Mot. J. Distributor Co. , date was advanced by subject at 14). 832 and thus properly to arbitration." See also (Def. 70 IBT Local F.2d 507{9th Cir. Opp. Interstate v. 1987) (holding an agreement contains a broad arbitration clause disputes concerning the presented a question requiring the Jobs MOU's provisions, dispute For Summ. termination the meaning of terms in the To PL's that where covering all contract, " [d]isputes over termination or expiration must be submitted to arbitration"). to Indeed, the arbitration clause " [alny dispute alleging (emphasis added)). by the a breach of The UMWA's claim that 2007 MOU hiring plan is breach of the 2007 original parties agency, MOU. to the this MOU." U 14 the plaintiffs are bound clearly a dispute alleging a Because the plaintiffs were clearly 2007 MOU, pursuant to PCCs whether the plaintiffs' limited other obligations under the 2007 MOU have been extinguished in light of determination For B. (2007 MOU they remain bound by the broad arbitration clause. Accordingly, favor of in the MOU applies these for the the divestiture is a arbitrator. reasons, summary judgment has been granted in the defendant on the issue of arbitrability. Validity of the In addition to the MOU arbitration issue, the plaintiffs argue that pursuant to the National Labor Relations Act 13 ("NLRA"), the 2007 MOU is invalid as applied to them. determined that arbitration, UMWA's Because the Court has the claim raised by the UMWA must be submitted to it is not appropriate to address the merits of the claim, which is left to the arbitrator for determination. Until he has issued a final and binding decision as to the merits of that claim, As the can this Court has no jurisdiction to hear the issue. Fourth Circuit has succeed in achieving repeatedly acknowledged, [its] goals accorded finality by the judiciary." (citing Richmond, Commc'ns Int'l plaintiffs' Fredericksburcr, Union, 973 F.2d to Parsons, the extent 604 & Potomac R.R. 276, 278 it F.3d at Co. (4th Cir.)). v. is 186 Transp. Accordingly, motion for summary judgment has been denied. III. For only "'arbitration the reasons CONCLUSION stated above and from the bench, plaintiffs Motion for Summary Judgment [22] has been DENIED and defendant's Motion for Summary Judgment [19] has been GRANTED, final judgment was not entered until Accordingly, an appropriate order will Entered this 7JJ^ Alexandria, this opinion day of September, although a issued. issue with this opinion. 2010. Virginia hi , Leonie M. Brinkema United States District Judge 14 ~5
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