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International Union v. Consol Energy, Inc.

United States District Court, S.D. West Virginia, Bluefield

May 21, 2018



          David A. Faber Senior United States District Judge.

         The dust has settled after a preliminary injunction was entered, an arbitration decision rendered, and this court's preliminary injunction order appealed. Now, International Union, United Mine Workers of America (“UMWA”) and retired coal miners (collectively “Plaintiffs”)[1] seek to amend their complaint for a second time. ECF No. 67-3. For good cause shown, the court GRANTS Plaintiffs' motion for leave to file a Second Amended Complaint.

         I. BACKGROUND

         A. Factual History

         The dispute centers on whether the defendant, CONSOL Energy, Inc., can unilaterally change the health care benefits contractually negotiated with UMWA under the 2011 National Bituminous Coal Wage Agreement (“NBCWA”). This 2011 NBCWA, like its predecessor agreements, included an “Employer Plan” guaranteeing lifetime health care benefits for its eligible retirees. ECF No. 16 at ¶¶ 20-30. In order to ensure uniformity and resolve disputes, the parties to the 2011 NCBWA (and earlier NCWBAs) established a Resolution of Dispute procedure. This Resolution of Dispute procedure conferred power upon four Trustees to issue opinions arising from disputes that are binding upon the parties. Id.

         In March and May 2016, CONSOL transmitted three (3) letters to retiree participants in the Employer Plan, indicating its intent to no longer offer lifetime health care benefits. Id. at ¶¶ 35-38. Each of these letters was written on CONSOL letterhead. CONSOL later announced that it would offer to fund health savings accounts for retiree participants instead. See id. at ¶ 3.

         In November 2016, UMWA filed a Resolution of Dispute on behalf of a retiree. In its complaint, the UMWA requested a determination as to whether CONSOL may “implement any unilateral changes or modifications of the benefits provided by its plan, either during the term of the 2011 NBCWA or following its termination.” See ECF No. 1, Ex. D. UMWA also requested that the opinion of the Trustees require CONSOL to “notify its retirees that it cannot make any changes in their benefits without the agreement of the UMWA.” See id. CONSOL and UMWA also engaged in communications after the retirees' receipt of CONSOL's letters, but the parties were unable to reach an agreement. Id.

         B. Procedural History

         On December 23, 2016, Plaintiffs filed a Complaint for Injunctive Relief against CONSOL Energy, Inc., requesting injunctive relief under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a). ECF No. 1. Less than a month later, Plaintiffs filed a motion for preliminary injunction, seeking to enjoin CONSOL from taking action to change the benefits available under the Employer Plan until the completion of the Resolution of Dispute process. ECF No. 8.

         Before a hearing on the motion for a preliminary injunction, CONSOL filed a motion to dismiss for lack of jurisdiction. ECF No. 13. In an effort to circumvent this jurisdictional argument, Plaintiffs filed an Amended Complaint naming as defendants four (4) CONSOL subsidiaries: Helvetia Coal Company, Island Creek Coal Company, Laurel Run Mining Company, and CONSOL Amonate Facility, LLC (collectively “CONSOL's Subsidiaries”). See ECF No. 16.

         On February 1, 2017, the court heard oral argument on Plaintiffs' motion for a preliminary injunction. Among other arguments, Defendants alleged a lack of personal jurisdiction over CONSOL's Subsidiaries. In the midst of the parties' post-hearing briefs, Plaintiffs again sought leave of court to file a Second Amended Complaint to correct these jurisdictional defects. ECF No. 44. Specifically, Plaintiffs attempted to add three (3) causes of action for alleged violations of the Employer Retirement Income Security Act of 1974 (“ERISA”), § 2 et seq., 29 U.S.C. § 1001 et seq., because the statute provides for nationwide service of process. See 29 U.S.C. 1132(e)(2). Defendants opposed the amendment for essentially the same reasons as stated in the instant motion. See ECF No. 48.

         On March 17, 2017, the court granted Plaintiffs' motion for a preliminary injunction, enjoining and prohibiting CONSOL:

(1) From terminating, changing or replacing the 2011 [NCWBA Employer Plan], which is presently providing health care coverage to retired miners, pending the results of the arbitration now underway and the further order of this court; and (2) From communicating further in any way with participants and beneficiaries of the Employer Plan informing them of termination, replacement or changes to the Employer Plan.

ECF No. 51.[2] The court also concluded that even though CONSOL's Subsidiaries were signatories to the 2011 NBCWA,

CONSOL Energy is the corporate parent . . . the agent of Defendant subsidiaries, none of which have employees or other personnel to make any significant operational or administrative decisions or exercise control over the Employer plan independent of Defendant CONSOL . . . As such, the court concludes that Defendant CONSOL Energy is the real party in interest and is subject to the court's power to issue an injunction.

ECF No. 50 at p.11. With this in mind, the court determined that CONSOL was bound by the 2011 NCBWA and subject to the pending Resolution of Dispute. See ECF No. 51.

         As to CONSOL's jurisdictional defenses, the court concluded that it had personal jurisdiction over CONSOL. ECF No. 50, at p.9. On the other hand, the court determined that there was no personal jurisdiction over CONSOL's Subsidiaries because there existed only attenuated contacts with West Virginia and the Southern District of West Virginia. Id. at p.10. Accordingly, the court dismissed CONSOL's Subsidiaries from the action.[3] Id. at p.25.

         On October 31, 2017, the Resolution of Dispute Opinion was issued in favor of Plaintiffs. ECF No. 67-1. Jurisdictionally, the Opinion determined that CONSOL was bound by the 2011 NBCWA. Id. at p.9. On the merits, the Opinion held that CONSOL may not modify or change the existing Employer Plan, unless by joint agreement with the UMWA. Id. Therefore, because “[n]o agreement with the [UMWA] has been reached for replacing the [Employee Benefits Plan] with Health Reimbursement Accounts], ” CONSOL has no authority to make such changes unilaterally. Id. at pp. 6-7.

         On the same day and with this favorable Opinion in hand, Plaintiffs returned to this court seeking to file a ...

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