Peabody Holding Co. v. United Mine Workers International Union

41 F. Supp. 3d 494, 200 L.R.R.M. (BNA) 3566, 2014 U.S. Dist. LEXIS 121217, 2014 WL 4258087
CourtDistrict Court, E.D. Virginia
DecidedAugust 28, 2014
DocketNo. 1:13cv458 (LMB/IDD)
StatusPublished
Cited by2 cases

This text of 41 F. Supp. 3d 494 (Peabody Holding Co. v. United Mine Workers International Union) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peabody Holding Co. v. United Mine Workers International Union, 41 F. Supp. 3d 494, 200 L.R.R.M. (BNA) 3566, 2014 U.S. Dist. LEXIS 121217, 2014 WL 4258087 (E.D. Va. 2014).

Opinion

MEMORANDUM OPINION

LEONIE M. BRINKEMA, District Judge.

Before the Court are plaintiffs’ Motion for Summary Judgment and defendant’s Motion to Dismiss or, in the Alternative, for Summary Judgment. For the reasons that follow, plaintiffs’ Motion will be denied, as will defendant’s Motion to Dismiss; however, defendant’s Motion for Summary Judgment will be granted.

I. BACKGROUND

Only a brief recitation of the facts is required in this opinion, as they have already been extensively discussed in two previous opinions. See generally Peabody Holding Co., LLC v. United Mine Works of Am., No. I:09cv1043, 2010 WL 3564274 (E.D.Va. Sept.’ 7, 2010), aff'd sub nom., Peabody Holding Co., LLC v. United Mine Workers of Am., Int’l Union, 665 F.3d 96 (4th Cir.2012). Plaintiffs Peabody Holding Company, LLC (“PHC”) and Black Beauty Coal Company, LLC (“Black Beauty”) are mining companies, the latter a subsidiary of the former. Both companies are ultimately owned by Peabody Energy Corporation (“PE”), which at one point owned several other mining companies that operated in the eastern United States, including Peabody Coal Company (“PCC”). Defendant United Mine Workers of America (the “UMWA” or “Union”) is a labor organization whose members were employed by plaintiffs.

In January 2007, PCC entered into a labor agreement with the Union on behalf of itself (as a “signatory” company) and as a limited agent of its immediate parent, PHC, and fellow subsidiaries (all “nonsignatory” companies), Black Beauty among them. The agreement, known generally as the National Bituminous Coal Wage Agreement (“NBCWA” or ‘Wage Agreement”), included a Memorandum of Understanding Regarding Job Opportunities (“2007 MOU”).1 The purpose of the 2007 MOU was to “provide job opportunities for work of a classified nature to certain laid-off and active miners” by requiring nonunion mining companies within PHC’s corporate family to offer three out of every five new classified job openings to miners who were either working for or laid off by PCC, the signatory employer. The 2007 MOU applied only to “existing, new, or newly acquired nonsignatory bituminous coal mining operations of the nonsignatory [497]*497[companies,” and it “[did] not constitute a covenant running with the land and [did] not apply to the sale of nonsignatory coal lands, coal reserves or coal operations (either asset sales or stock sales) of the non-signatory [c]ompanies.” Moreover, nothing in the 2007 MOU “encumber[ed] or limit[ed] in any way the rights of the non-signatory [companies to sell, exchange, release, or otherwise similarly convey ... any of their nonsignatory coal lands, coal reserves or coal operations to third parties.” The parties agreed that their obligations under the 2007 MOU would terminate at 11:59 p.m. on December 31, 2011.

Importantly for present purposes, the 2007 MOU also contained an arbitration clause, which extended dispute-resolution authority to a “Jobs Monitor”:

In order to effectuate the implementation of these job opportunity provisions, the [Union] and the non-signatory [c]ompanies subject to this [MOU] agree that the impartial Jobs Monitor ... shall serve as the monitor under this [MOU]. The monitor shall review the job selections pursuant to these provisions and investigate any alleged violations herein. The monitor shall have the authority to request such information which may be reasonably necessary in order to secure compliance with the job selection provisions. The parties have the obligation to comply with such requests.

The Jobs Monitor’s decisions were to be “final and binding on all parties” subject to the limitation that the Jobs Monitor could not “alter, amend, modify, add to or subtract from, or change in any way the provisions” of the contract.

In October 2007, less than a year after the parties had renewed the NBCWA and accompanying MOU, PE initiated a significant spinoff of its mining operations in the eastern United States. The spinoff gave birth to a new publicly-traded entity, Patriot Coal Corporation (“Patriot”), which gained control over PCC and the rest of PHC’s former subsidiaries, with the notable exception of Black Beauty. In addition to retaining ownership of Black Beauty,2 PE also remained the parent company of PHC. As a result, PHC and Black Beauty have not had any common ownership or operational connection to PCC or to any other Patriot-owned entity since the spinoff.3 PCC thereafter entered into a substantively identical job-preference agreement with the Union as a limited agent of Patriot, which agreed to be bound by its terms going forward.

In early 2008, Black Beauty contracted with a private mine operator, United Minerals, LLC (“United Minerals”), to conduct surface mining operations at its property located in Warrick County, Indiana. (United Minerals has no ownership relationship to PCC or any of the other Patriot companies.) In November 2008, the Union wrote to PE to state its expectation that PHC and Black Beauty would continue to comply with the 2007 MOU. Specifically, the Union directed both companies to “make the requisite job offers” to PCC’s classified employees, “keep the Union informed of such mining operations as they develop,” and “give the required notice of the job selection process to the Jobs Monitor.” The companies responded that “once the prerequisite corporate relationship between PHC and PCC was severed (as of [498]*498October 31, 2007), obligations under the Jobs MOU also were severed. An obligation to secure job opportunities for UMWA members ... does not survive conveyance of the UMWA-represented subsidiary to a third party such as Patriot Coal Company.” The parties’ opposing views of their post-spinoff obligations form the core of this litigation.

Disputing the assertion that PHC and Black Beauty were no longer bound by the 2007 MOU, the Union submitted its grievance to the Jobs Monitor. Each of the parties provided the Jobs Monitor with materials supporting their respective arguments, though PHC and Black Beauty maintained that they did not “accept or acquiesce to consideration by the Job [sic] Monitor of claims asserted under the [2007 MOU], as that instrument no longer applied]” to them. After ruling that the parties had agreed to arbitrate arbitrability under the 2007 MOU, the Jobs Monitor found that the dispute was arbitrable but deferred a final resolution on the merits until further argument could take place.

PHC and Black Beauty responded by filing a declaratory judgment action before this Court, in which they asked for a declaration that the Union’s claim was not arbitrable. The Union, for its part, filed a counterclaim seeking a declaration that the Jobs Monitor’s decision was enforceable and that the companies must comply with the decision and proceed to a hearing on the merits. The Court entered judgment in favor of the Union, holding that the Jobs Monitor properly determined the arbitrability of the dispute. Peabody, 2010 WL 3564274, at *5-*6. The Court further held that the dispute was arbitrable in any event — that is, even if the arbitrator lacked authority to decide the question. Id. at *6.

PHC and Black Beauty appealed, and the Fourth Circuit affirmed on the ultimate question of arbitrability. Peabody, 665 F.3d 96.

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41 F. Supp. 3d 494, 200 L.R.R.M. (BNA) 3566, 2014 U.S. Dist. LEXIS 121217, 2014 WL 4258087, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peabody-holding-co-v-united-mine-workers-international-union-vaed-2014.