UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-1352
WILLIAM L. CRADDOCK; JOHN W. DARLINGTON, JR.;
HARRY L. MARCUM; JAMES C. ROBINSON; DENNIS
BEARD,
Plaintiffs - Appellees,
and
LANDMARK CORPORATION,
Plaintiff,
versus
APOGEE COAL COMPANY,
Defendant - Appellant,
and
TRUSTEES OF THE UNITED MINE WORKERS HEALTH &
RETIREMENT FUNDS; UNITED MINE WORKERS OF
AMERICA 1993 BENEFIT PLAN; MICHAEL H. HOLLAND;
MARTY D. HUDSON; ELLIOT A. SEGAL; A. FRANK
DUNHAM, Trustees of the UMWA 1993 Benefit
Plan,
Defendants.
Appeal from the United States District Court for the Southern
District of West Virginia, at Charleston. Joseph Robert Goodwin,
District Judge. (CA-01-1009-2)
Argued: November 30, 2005 Decided: February 9, 2006
Before WILKINS, Chief Judge, and LUTTIG and WILLIAMS, Circuit
Judges.
Affirmed by unpublished per curiam opinion.
ARGUED: Albert F. Sebok, JACKSON KELLY, P.L.L.C., Charleston, West
Virginia, for Appellant. Bradley James Pyles, PYLES, HAVILAND,
TURNER & SMITH, L.L.P., Logan, West Virginia; Charles Peter Groppe,
MORGAN, LEWIS & BOCKIUS, L.L.P., Washington, D.C., for Appellees.
ON BRIEF: John Philip Melick, Brian J. Moore, JACKSON KELLY,
P.L.L.C., Charleston, West Virginia, for Appellant. Stanley F.
Lechner, MORGAN, LEWIS & BOCKIUS, L.L.P., Washington, D.C.; John R.
Mooney, Douglas L. Parker, MOONEY, GREEN, BAKER & SAINDON, P.C.,
Washington, D.C., for Appellee UMWA 1993 Benefit Plan.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
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PER CURIAM:
This appeal arises from a dispute over liability for
plaintiffs’ retirement health benefits. The district court held
that defendant-appellant Apogee Coal Company is liable for the
benefits under a contract it entered into with Landmark
Corporation, plaintiffs’ previous employer. For the reasons that
follow, we affirm.
I.
The original plaintiff in this action was Landmark
Corporation, a coal company that has ceased business operations and
declared bankruptcy. In 1993, Landmark agreed to do reclamation
work for Apogee Coal Company, and the two companies entered into a
contract that provided that Landmark would hire workers from a
panel of laid-off Apogee employees. During contract negotiations,
an issue arose regarding liability for the post-employment benefits
of the laid-off Apogee employees hired by Landmark. This issue
arose because the National Bituminous Coal Wage Agreement of 1993
(“NBCWA”), a collective-bargaining agreement to which both Landmark
and Apogee are signatories, requires an employee’s last signatory
employer to provide the employee’s lifetime health benefits.
Seeking to avoid the liabilities it would incur under NBCWA by
virtue of becoming the last signatory employer of the laid-off
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Apogee employees, Landmark negotiated the following provision,
which became section 16.5 of the contract:
Post Employment Liabilities. [Apogee] agrees to be
responsible for post-employment liabilities for the first
20 employees hired by [Landmark] for the purpose of
performing reclamation work under this Agreement.
J.A. 36.
When employees covered by this provision began to retire,
there was a dispute between Apogee and Landmark as to whether
Apogee had assumed responsibility for retirement health benefits
when it agreed to be responsible for “post-employment liabilities.”
Apogee claimed it had not, and Landmark brought suit in a West
Virginia court. The West Virginia court ruled for Landmark,
concluding that the contract language was “clear and unambiguous in
its meaning, namely that [Apogee] is responsible for the retirement
and health care benefits” of the covered employees. Id. at 88.
The court issued a permanent injunction ordering Apogee to pay all
of Landmark’s post-employment liabilities to the covered employees,
including its liability for retirement health benefits. Id. at 89.
Until early 2000, Landmark provided retirement health benefits
to the covered employees and submitted invoices for reimbursement
to Apogee. In March 2000, however, when Landmark ceased business
operations and filed for bankruptcy, it ceased providing benefits
to the employees. Apogee, which had stopped receiving invoices,
thereafter refused to provide benefits to the employees.
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In 2001, plaintiffs in this action -- employees covered by the
contract -- moved to intervene in the West Virginia action in order
to enforce the court’s permanent injunction. The court granted
plaintiffs’ motion to intervene, whereupon Apogee removed the case
to federal court. Plaintiffs then filed a motion to remand the
case to state court. The district court denied the motion to
remand, concluding that there was federal question jurisdiction
because plaintiffs’ claim was preempted by federal labor law. Id.
at 116. The district court then substituted plaintiffs for
Landmark as the real parties in interest and dismissed Landmark
from the case. Id. at 121-22.
Shortly thereafter, the district court sua sponte joined the
United Mine Workers of America 1993 Benefit Plan (“the Plan”) as a
necessary party (under NBCWA, the Plan is required to provide
benefits to employees whose employer ceases all business operations
and is unable to pay). Id. at 124-26. The district court then
ordered plaintiffs to file a new complaint setting forth their
causes of action against both Apogee and the Plan. Id. at 124.
Plaintiffs filed a complaint asserting their state-law contract
claim against Apogee and their alternative claim for relief against
the Plan under federal law. R. 39.
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Upon conclusion of an arbitration between plaintiffs and the
Plan,1 the parties filed cross-motions for summary judgment, with
plaintiffs and the Plan asserting that Apogee is responsible for
the benefits and Apogee asserting that the Plan is. The district
court concluded that Apogee was liable for the benefits pursuant to
its contract with Landmark. It thus granted plaintiffs’ motion for
summary judgment, denied Apogee’s motion for summary judgment, and
ordered Apogee to provide plaintiffs with retirement health
benefits. Id. at 250. Apogee noted a timely appeal.
II.
We review the district court’s grant of plaintiffs’ motion for
summary judgment de novo. United States v. Ringley, 985 F.2d 185,
186 (4th Cir. 1993). Summary judgment is appropriate only where
there is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. Id. Apogee argues that
the district court committed errors of law in applying the doctrine
of res judicata, in concluding that plaintiffs have standing to
1
The arbitrator found that the Plan was required to provide
benefits to plaintiffs pursuant to NBCWA because Landmark had
ceased all mining operations and was unable to pay. J.A. 138-39.
However, the arbitrator resolved only the dispute between
plaintiffs and the Plan under NBCWA, not the dispute between
plaintiffs and Apogee under the commercial contract. He
specifically noted that if at some future time a court found that
Apogee was responsible for the benefits under its commercial
contract with Landmark, then the Plan’s obligations would be offset
by the amount that Apogee was required to pay. Id. at 138.
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enforce the contract, and in not holding plaintiffs’ suit preempted
by federal labor and employment law. We consider each of these
arguments in turn.
A.
The district court concluded that the doctrine of res judicata
barred it from reconsidering the issue -- decided by the state
court -- of whether Apogee agreed by contract to be responsible for
Landmark’s obligation to pay plaintiffs’ retirement health
benefits. J.A. 245. Apogee argues that this was error because res
judicata applies only where the parties in the two suits are the
same, and here they are not: Landmark was the plaintiff in the
original case; plaintiffs here are employees covered by the
contract. Plaintiffs respond that res judicata applies because
they are privies of Landmark and that even if res judicata does not
apply, the district court was nonetheless barred from reconsidering
the issue by the doctrine of collateral estoppel.
We do not find it necessary to resolve these arguments. Even
if neither res judicata nor collateral estoppel prevented us from
reconsidering the state court’s interpretation of the contract, we
would reach the same conclusion as the state court. The contract
language clearly and unambiguously states that Apogee agrees to pay
Landmark’s post-employment liabilities to the covered employees,
and there is no indication that Landmark’s liability for retirement
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health benefits -- a post-employment liability -- is excluded. The
contract plainly requires Apogee to pay Landmark’s liabilities for
plaintiffs’ retirement health benefits.
To conclude that the contract requires Apogee to pay
Landmark’s liabilities for plaintiffs’ retirement health benefits
is not, however, to resolve the current dispute between plaintiffs
and Apogee. The key issue in this dispute -- which was not
addressed by the state court -- is whether Landmark’s obligation
under NBCWA to provide plaintiffs with retirement health benefits
survives its bankruptcy. If Landmark’s bankruptcy extinguished its
obligations under NBCWA, then Apogee would have no obligation to
plaintiffs for retirement health benefits because Apogee is liable
only to the extent that Landmark is liable for those benefits.
Again, we do not find it necessary to resolve the issue
whether Landmark’s obligation under NBCWA to provide plaintiffs
with retirement health benefits survives its bankruptcy. Apogee
conceded below that it does. See J.A. 249 (“Both plaintiffs and
the Plan argue at length that Landmark is obliged to plaintiffs and
its other retirees ‘for life,’ and that this obligation survives
notwithstanding Landmark’s cessation of business and inability to
pay. Apogee acknowledges that Landmark has such an obligation.”).2
2
The district court similarly did not find it necessary to
address this issue. It simply noted that Apogee’s concession was
consistent with its resolution of the same issue in a previous
case, District 17, United Mine Workers of America v. Brunty
Trucking Co., 269 F. Supp. 2d 702 (S.D. W. Va. 2003). See J.A. 250
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Because Apogee acknowledges that Landmark has a continuing
obligation to provide plaintiffs with retirement health benefits,
and because Apogee agreed by contract to pay Landmark’s liabilities
for plaintiffs’ retirement health benefits, it follows that Apogee
is liable under the contract for plaintiffs’ retirement health
benefits.
B.
Apogee next argues that the district court erred in
determining that plaintiffs have standing to enforce the contract
as creditor-beneficiaries of the contract. Under West Virginia
law, a person is a creditor-beneficiary of a contract “if no
intention to make a gift appears from the terms of the promise, and
performance of the promise will satisfy an actual [or supposed] or
asserted duty of the promisee to the beneficiary.” Pettus v. Olga
Coal Co., 72 S.E.2d 881, 884 (W. Va. 1952). Here, no intention to
make a gift appears in the contract, and performance of the promise
(Apogee’s payment of Landmark’s post-employment liabilities)
satisfies a duty of the promisee to the beneficiary (Landmark’s
duty to provide retirement health benefits to plaintiffs).
Plaintiffs are therefore creditor-beneficiaries of the contract,
and creditor-beneficiaries can maintain a suit in equity to enforce
(“[A]s I discussed in Brunty, a coal operator’s obligations to
former employees under the 1993 NBCWA do not end merely because the
operator ceases business activities.”).
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a contract in West Virginia. See Hartmann v. Windsor Hotel Co., 52
S.E.2d 48, 48 (W. Va. 1949). The district court did not err in
concluding that plaintiffs have standing to enforce the contract as
creditor-beneficiaries of the contract.
C.
Finally, Apogee argues that plaintiffs’ state-law suit to
enforce the contract is preempted by the Labor Management Relations
Act (“LMRA”) and by the Employee Retirement Income Security Act
(“ERISA”). We conclude that Apogee’s preemption arguments are
without merit.
Apogee first argues that section 301 of the LMRA preempts
plaintiffs’ contract claim because the claim’s resolution “depends
substantially upon the analysis of a collective-bargaining
agreement’s terms.” See Davis v. Bell Atlantic-West Virginia,
Inc., 110 F.3d 245, 247 (4th Cir. 1997). This is so, Apogee
contends, because the extent of Landmark’s, and therefore Apogee’s,
liability for plaintiffs’ retirement health benefits depends upon
the proper construction of NBCWA, a collective-bargaining
agreement. However, because both parties agree that NBCWA imposes
a lifelong obligation on Landmark regardless of its bankruptcy, we
do not need to analyze NBCWA to resolve this suit. Plaintiffs’
claim is thus not preempted by section 301. See Livadas v.
Bradshaw, 512 U.S. 107, 124 (1994) (“[W]hen the meaning of
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[collective-bargaining agreement] terms is not the subject of
dispute, the bare fact that a collective-bargaining agreement will
be consulted in the course of state-law litigation plainly does not
require the claim to be extinguished.”).
Apogee next argues that because the practical effect of
enforcing the contract will be that Apogee will add plaintiffs to
its ERISA-covered benefit plan, plaintiffs’ suit is preempted by
ERISA. See 29 U.S.C. § 1144(a) (stating that ERISA preempts “any
and all State laws insofar as they may now or hereafter relate to
any employee benefit plan” covered by ERISA). To determine whether
a state law “relates to” an ERISA-covered plan, and is therefore
preempted by ERISA, the Supreme Court has stated that courts “must
go beyond the unhelpful text [of § 1144(a)] and the frustrating
difficulty of defining its key term, and look instead to the
objectives of the ERISA statute as a guide to the scope of the
state law that Congress understood would survive.” New York State
Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co.,
514 U.S. 645, 656 (1995). The Court has explained that Congress’
intent in preempting state law was “to avoid a multiplicity of
regulation in order to permit the nationally uniform administration
of employee benefit plans.” Id. at 657. Plaintiffs’ contract
claim does not implicate this concern. Enforcing the contract
between Apogee and Landmark will not create a multiplicity of
regulation that would frustrate the nationally uniform
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administration of employee benefit plans. Accordingly, we conclude
that Apogee’s ERISA preemption claim, like its LMRA preemption
claim, is without merit.3 Cf. Operating Eng’rs Health and Welfare
Trust Fund v. JWJ Contracting Co., 135 F.3d 671, 679 (9th Cir.
1998) (concluding that a contract transferring the obligation for
employment benefits from an employer to an insurance company was
not preempted by ERISA because the contract did “not expand the
remedies provided or contemplated by ERISA,” but “merely
substitute[d] obligors”).
CONCLUSION
For the foregoing reasons, the judgment of the district court
is affirmed.
AFFIRMED
3
The fact that neither the LMRA nor ERISA preempts plaintiffs’
claim means that there was no federal question jurisdiction over
this case at the time it was removed, and plaintiffs’ motion for
remand should thus have been granted. However, after the motion to
remand was denied, plaintiffs filed a new complaint. The new
complaint raises federal questions because it asserts claims under
a collective-bargaining agreement against the Plan. Plaintiffs’
state-law claim against Apogee is properly supplemental to their
federal-law claim against the Plan. See 28 U.S.C. § 1367(a).
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