International Union, United Mine Workers of America et al v. Consol Energy, Inc. et al

RESPONSE

S.D.W. Va.August 1, 2018

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA Bluefield Division ________________________________________________ ) INTERNATIONAL UNION, UNITED MINE ) WORKERS OF AMERICA, et al., ) ) Plaintiffs, ) ) v. ) Civil Action No. 16:12506 ) CONSOL ENERGY INC. (n.k.a. CNX Resources ) Corporation), et al., ) ) Defendants. ) ________________________________________________) COAL COMPANY DEFENDANTS’ REPLY TO PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS SECOND AMENDED COMPLAINT Co-Defendants Helvetia Coal Company, Island Creek Coal Company, Laurel Run Mining Company and CONSOL Amonate, LLC (collectively, the “Coal Companies”) submit their Reply to Plaintiffs’ Response in Opposition to the Coal Companies’ Motion to Dismiss Plaintiffs’ Second Amended Complaint (hereafter “Opp. Br.”) (ECF No. 101). INTRODUCTION Plaintiff UMWA has filed an action against the Coal Companies and CONSOL Energy Inc., seeking to confirm ROD No. 11-0143, a Resolution of Dispute issued by the Trustees of the UMWA 1993 Benefit Plan in Washington, D.C., on October 31, 2017 (“ROD Opinion” or “arbitration decision”). The UMWA relies on the 2011 NBCWA (“CBA”), and the health benefit plan incorporated by reference therein, as the contractual predicate for its LMRA Section 301 confirmation claim. The nonresident Coal Companies --not CONSOL Energy-- were the former coal producers that were signatories to the CBA, and are therefore the proper Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 1 of 21 PageID #: 2325 2 parties to the Union’s action to confirm the ROD Opinion (assuming the underlying dispute is arbitrable). As the Coal Companies established in their brief in support of their Motion to Dismiss (ECF No. 98) (hereafter “Opening Brief”), the Union could have established jurisdiction and venue for its confirmation action in the District of Columbia (where the ROD decision was made), or the Western District of Pennsylvania (recognized by this Court previously as the “nerve center” for all five nonresident Defendants and where the Employer Benefit Plan is administered). What the Union cannot do, however, is to bring suit to confirm the ROD Opinion against the Coal Companies in this Judicial District. This Court previously determined that the UMWA failed to meet its burden of establishing that this Court had either specific or general in personam jurisdiction over the Coal Companies. That determination is the law of the case. Plaintiffs’ Opposition Brief supplies no compelling justification for departing from this Court’s 2017 order of dismissal, an order for which the Union never sought reconsideration or review. As the Coal Companies also previously established in their Opening Brief, venue is improperly laid. Section 301(a) of the LMRA restricts venue to federal district courts “having jurisdiction of the parties.” 29 U.S.C. § 185(a). Since this Court does not have personal jurisdiction over the Coal Companies, Plaintiffs have failed to meet their threshold burden of establishing that venue is properly laid in this District under the LMRA. While this Judicial District is plainly Plaintiffs’ chosen forum, it is most definitely not a forum where a substantial part of the events giving rise to the UMWA’s LMRA confirmation claim occurred. The Union attempts to finesse this conundrum by leveraging Section 502(a)(3) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132(a)(3) (“ERISA”), an Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 2 of 21 PageID #: 2326 3 entirely different federal law, to manufacture jurisdiction over the Coal Companies in a court where LMRA jurisdiction has been held not to exist. According to the Union, the Retiree-Plaintiffs’ ERISA fiduciary breach claim in Count II of the Second Amended Complaint (“SAC”) cures every deficiency in the Union’s Section 301 claim: service of process, jurisdiction and venue. So how does that work? As Defendants understand it, the Union’s logic is twofold. First, it can bring an action against the Coal Companies for breach of fiduciary duty (which ERISA Section 502 says may be brought by a plan “participant,” “beneficiary,” “fiduciary” or by “the Secretary [of Labor]”) because a union has associational standing. Concerned, perhaps, that being an association does not actually establish a sufficient legal basis to bring an ERISA claim against the Coal Companies (who indisputably owe no fiduciary duty to the UMWA), the Union also posits that the mere fact other plaintiffs in this case are plan participants imbues the Union’s LMRA Section 301 claim with all of the “liberal” service and jurisdiction provisions Congress afforded to ERISA plan participants. Consequently, what should be a fast-moving proceeding for judicial review of an October 2017 arbitration decision made in the District of Columbia, threatens to be mired in unnecessary and time-consuming pretrial proceedings. Arguendo, if Plaintiffs’ convoluted reasoning were correct as a matter of law (which, as developed below, it is not), the Union’s attempt to hijack ERISA to float its LMRA case in this Court nevertheless fails because the Retiree-Plaintiffs must in the first instance state a claim against the Coal Companies under Section 502(a)(3) of ERISA. At least two factual assertions that are prerequisites to establishing an actionable claim for breach of fiduciary duty are conspicuously absent from Count II: (1) an allegation of injury-in-fact, and (2) an allegation that the Retirees-Plaintiffs have suffered an injury that can only be remedied by equitable relief. The Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 3 of 21 PageID #: 2327 4 Retiree-Plaintiffs cannot allege cognizable harm. Further, they cannot allege a need for equitable relief, because they have a legal remedy—the ROD process. Indeed, the ROD Opinion has already provided them the very remedy for which they seek declaratory relief in Count II. The Retiree-Plaintiffs therefore cannot establish standing to prosecute a claim for an alleged breach of fiduciary duty. Given that the Retiree-Plaintiffs’ ERISA claim cannot survive the pleading stage, the Union’s reliance on it to repair the defects in their Section 301 action to confirm the ROD Opinion is for naught. Any other conclusion would mean that a plaintiff could cure a myriad of procedural and substantive defects in its case by merely throwing in a specious allegation that the defendant violated some other federal statute that authorizes nationwide service of process and several venue options. Since the Union largely relies on ERISA case law to avoid addressing the Coal Companies’ Section 301 arguments, we first demonstrate why Plaintiffs lack standing and have failed to state a claim under ERISA, such that Count II is unavailable to the Union to cure the procedural defects in its LMRA Section 301 action in Count I. ARGUMENT I. NO PLAINTIFF HAS STANDING TO PROSECUTE COUNT II. A. Associational Standing is Not Available to the UMWA in This Case. Plaintiffs concede that they are suing only under Section 502(a)(3) of ERISA. See also ECF No. 78, SAC at 16. Section 502(a)(3) delineates the universe of potential plaintiffs empowered by Congress to bring suit. Only a “participant, beneficiary or a fiduciary” has been conferred statutory standing to sue. The fact labor organizations are not listed is consequential because another ERISA provision, Section 515, unambiguously authorizes unions to bring suit -- but not over issues arising under Section 502. See 29 U.S.C. § 1451(a)(1) (conferring standing to “an employee organization which represents such plan participant or beneficiary for purposes of Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 4 of 21 PageID #: 2328 5 collective bargaining . . . .”); cf. Grand Union Co. v. Food Employer Labor Relations Ass’n, 808 F.2d 66, 176 (D.C. Cir. 1987) (J. Ginsburg) (“Grand Union may not fit a [Section 515] handle to a [Section 502] claim”). See, e.g., Absels v. Titan Int’l Inc., 85 F. Supp. 2d 924, 930 n.2 (S.D. Iowa 2000) (“Congress knew how and when to incorporate unions into the statutory scheme . . . .” and their “conspicuous absence” in 29 U.S.C. § 1132 “strongly suggests” that Congress intended not to grant unions standing.) The UMWA’s fallback contention that “associational standing” conferred by the U.S. Constitution empowers it to sue under ERISA Section 502(a)(3) is equally unpersuasive. The Union fails to cite to a single ruling from this circuit on point and ignores trial court rulings barring labor organizations from suing under Section 502 of ERISA. See, e.g., United Food & Commercial Workers Local 204 v. Harris Teeter Super Markets, Inc., 716 F. Supp. 1551, 1561 (W.D.N.C. 1989) (Rule 12(b)(1) dismissal). According to the D.C. Circuit, associational standing only exists after a union’s members have individually exhausted administrative remedies with their ERISA plan. Commc’ns Workers of Am. v. Am. Tel. & Tel. Co., 40 F.3d 426, 434 n.2 (D.C. Cir. 1994). The SAC does not plead that any Retiree-Plaintiff sought administrative resolution of the dispute they now want to press in federal court. Moreover, the Supreme Court’s dormant Commerce Clause standing case cited by Plaintiffs notes that a prerequisite to establishing associational standing is that the claim asserted and the relief requested do not require the participation of individual members in the lawsuit. (Opp. Br., ECF No. 101 at 11.) Count II alleges breach of fiduciary duty. Since the Coal Companies owe no duty to the Union, it may not bring a breach of fiduciary claim without the participation of individual members who are plan participants. Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 5 of 21 PageID #: 2329 6 In short, the Union’s insistence on tagging along redundantly in a putative representative capacity with ERISA plan “participants” injects a needless issue into the case, and threatens to slow down judicial review of a straightforward LMRA count. “Associational standing” is ultimately of no import where, as developed below, Count II cannot be maintained because it fails to meet the requirements of Rule 12(b). B. Plaintiffs Lack Article III Standing. Assuming, as this Court must at the pleading stage, that the Retiree-Plaintiffs are ERISA plan “participants,” and the UMWA may sue on their behalf now in a representational capacity, Count II is nonetheless facially deficient and properly dismissed under Rule 12(b)(1).1 Neither the Retiree-Plaintiffs nor the UMWA has satisfied their burden of alleging injury-in-fact. This renders their pleading facially insufficient under Supreme Court standing jurisprudence applied this summer by the Fourth Circuit. Hutton v. Nat’l Bd. of Exam’rs in Optometry, Inc., 892 F.3d. 613, 619-20 (4th Cir. 2018). The Hutton plaintiffs all adequately pled an injury-in-fact necessary to establish standing. See Hutton, 892 F.3d at 622 (detailing allegations of actual harm “already suffered” by receiving correspondence). Consequently, the standing element of injury-in-fact was, according to the Fourth Circuit, “sufficiently alleged in the Complaints”, id. at 624, and their suits were held to survive defendant’s motions to dismiss. The SAC’s total absence of harm averments stands in striking contrast to the allegations in Hutton, and even to those in the very case law Plaintiffs 1 The individual Plaintiffs allege they are all participants in the Employer Plan CONSOL Energy administers on behalf of enumerated subsidiary Companies that are required to maintain a benefit plan pursuant to their CBA. However, the SAC does not identify the employer of any Retiree-Plaintiff, and it is highly likely that at least some of the Defendant Coal Companies have no employment relationship with any Retiree-Plaintiff. The SAC does not establish how a Retiree-Plaintiff could maintain that a Defendant Coal Company that has no contractual obligation to provide benefits to such retiree in the first instance could be a fiduciary or breach a fiduciary duty. Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 6 of 21 PageID #: 2330 7 advance in opposing the Coal Companies’ challenge to the legal sufficiency of the SAC. See, e.g., Erickson v. Pardus, 551 U.S. 89, 94 (2007) (“complaint stated [prison physician’s] decision to remove [inmate] from his prescribed hepatitis C medication was endangering [his] life”) (emphasis added). Count II consists of three paragraphs and does not incorporate any other paragraphs of the SAC. The first paragraph alleges that Plaintiffs have been subject to “repeated[]” “misleading statements.” The second paragraph states the naked legal conclusion that “Defendants’ above-described misleading communications violated fiduciary duties owed”. The third paragraph avers that Plaintiffs need a judicial declaration to “remedy the above-described conduct” and lays out the desired “declaration.” (ECF No. 78, SAC ¶ 55.)2 2 Count II provides in its entirety as follows: 53. CONSOL (the parent corporation, for itself and its subsidiaries) has repeatedly communicated to Plaintiffs and other Employer Benefit Plan beneficiaries and participants misleading statements about the Employer Plan, including but not limited to: Plaintiffs and other Employer Plan beneficiaries and participants’ rights under the Employer Plan; the value to them of Defendants’ HRA scheme as compared to the benefits provided under the Employer Plan; Defendants’ legal authority to unilaterally modify benefits pursuant to the Employer Plan; the individually named Plaintiffs and other beneficiaries and participants’ continued eligibility for benefits under the Employer Plan; and, the extent of benefits required under the Employer Plan. 54. Defendants’ above-described misleading communications violate fiduciary duties owed Employer Plan beneficiaries and participants, including the individually named participants and beneficiary Plaintiffs. 55. As a remedy to the above-described conduct, the Employer Plan beneficiaries and participants, including individually named participant and beneficiary Plaintiffs need a declaration from this Court that CONSOL (the parent corporation and subsidiaries) may not change their Employer Benefit Plan without agreement from the UMWA. (ECF No. 78, SAC ¶¶ 53-55.) Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 7 of 21 PageID #: 2331 8 None of the averments in the SAC alleges cognizable injury-in-fact or “actual harm incurred” by any Retiree-Plaintiff.3 Hutton, 892 F.3d 623 n.9. The SAC likewise fails to allege any imminent threat of injury to any Retiree-Plaintiff. See, e.g., Dull v. Energizer Personal Care, LLC, C.A. No. 14-195, 2015 WL 5308871 *4 (S.D. Ohio Sept. 9, 2015) (health benefits termination litigation) (federal judicial power “may be exercised where the complaint alleges that plaintiff is . . . immediately threatened with harm” by the challenged action). “[I]n the absence of a proper case or controversy a plaintiffs’ action for declaratory judgment” is not justiciable. Id. By way of illustration, the trial court in Dull noted: To the extent that Plaintiffs seek a declaration that Defendants may not reduce or eliminate benefits in the future, such claims are not ripe and will be dismissed for failure to state a claim. The Ohio Plaintiffs’ declaratory judgment claims are not based on any immediate threat of harm. Rather, they assert that in 2012 Energizer Holdings decided to terminate these benefits, then reversed this decision before the termination went into effect. . . . . The Amended Complaints’ assertion that ‘the retirees . . . , having once been told that their benefits were terminated remain fearful that these benefits will again be taken away, . . . ’ does not create an Article III controversy. Id. *6. Here, the Retiree-Plaintiffs had the benefit of a restraining order maintaining the status quo with respect to the defined benefit plan. Additionally, counsel represented to this Court on May 10, 2018 that no changes would be made to the defined benefit plan pending the outcome of LMRA-based judicial review of the ROD Opinion. (ECF No.76, Motions Hrg. Transcript at (p. 20 16-23.) Under these circumstances, notwithstanding the alleged “misleading” communications, the Plaintiffs’ “need” for an ERISA-based declaration is a procedural fencing makeweight, unnecessary as a matter of equity. The declaratory relief requested in Count II is 3 The Retiree-Plaintiffs ask this Court to permit them to proceed to discovery on their ERISA claim. Opp. Br. at 14-15. It is incredulous to suggest that the Retiree-Plaintiffs get discovery to ascertain what injury they have suffered, when that knowledge and the burden of alleging it rests entirely with the ERISA plan participant. Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 8 of 21 PageID #: 2332 9 essentially the same purely legal remedy provided in the ROD Opinion, and that Plaintiffs are simultaneously pursuing through their adjudication of the LMRA confirmation count.4 II. COUNT II FAILS TO STATE A CLAIM. A. The Second Amended Complaint Does Not Request Relief under ERISA Section 502(a)(3) that Is Necessary. Plaintiffs skip over the Coal Companies’ extensive arguments that Count II must be dismissed because adequate legal remedies are available. The Fourth Circuit has long recognized that ERISA Section 502(a)(3) is a “safety net, offering appropriate equitable relief for injuries caused by violations that [ERISA § 502] does not elsewhere adequately remedy.” Korotynska v. Metropolitan Life Ins. Co., 474 F.3d 101, 105 (4th Cir. 2006) (emphasis added). Plaintiffs plainly have adequate legal remedies—namely judicial enforcement of the ROD Opinion (which, of course, is an administrative review provision in an ERISA health plan), or a claim under ERISA Section 502(a)(1)(B) to clarify future benefits under the terms of the plan. Plaintiffs avoid confronting the fact that legal remedies are available by mischaracterizing their LMRA confirmation claim as a claim for “equitable relief.” (Opp. Br., ECF No. 101 at 14.) It is not; it is a claim to enforce an arbitration decision which is legal, not equitable relief. Moreover, the Retiree-Plaintiffs do not allege in Count II that equitable relief is required because no other remedy is available. The pleading’s insufficiency is transparent, because equitable relief under the ERISA Section 502(a)(3) “safety net” is neither “necessary” (as the statute commands), nor appropriate where, as here, plainly adequate legal remedies abound. Count II must therefore be dismissed for failure to state a claim. 4 Indeed, Plaintiffs make this very point, claiming that ROD opinions bind “all of the employers” in the coal industry, and that all unionized bituminous coal miners (including the Retiree-Plaintiffs) are proper parties to Count I. Opp. Br. at 13. Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 9 of 21 PageID #: 2333 10 B. Count II Does Not Seek Relief That is Equitable. The requested relief in the SAC for Count II is “a declaration from this Court” that unilateral change was not permitted. ECF No. 78, ¶55. Appreciating now the hurdles to stating a claim under Section 502(a)(3) of ERISA, Plaintiffs seek to recast this requested relief as requiring “reformation” or other relief that is “equitable in nature.” (ECF No. 101 at 14.) This attempt to supplement the SAC through litigating in its briefs is, in any event, futile because the relief sought in Count II is not actually equitable in nature. To substantiate a claim for reformation, Plaintiffs rely exclusively on Cigna Corp. v. Amara, 563 U.S. 421 (2011). In Cigna, the employer adopted and implemented a new plan for calculating a participant’s retirement benefit, which the Court found resulted in consequences detrimental to participants’ interests that were never appropriately disclosed. Id. at 430-31. The relief sought by the plaintiffs in Cigna therefore required a change in the terms of the plan in order to remedy the harm to plaintiffs. The plaintiffs in Cigna sought to hold their employer to the benefits promised because the benefits being provided had changed. Here, no change has been implemented to the Employer Plan, so what reformation is possible? See ROD Opinion at 9, ECF No. 78-1 (“The Trustees acknowledge that the Respondent has not yet made any changes to its EBP.”)5 5 Plaintiffs claim in their Opposition Brief that “Defendant threatened to eliminate the ROD process going so far as to send retirees what it purported to be a modification to the Employer Plan requiring that all changes to its unlawful actions be made in the Western District of Pennsylvania.” (Opp. Br., ECF No. 101 at 15.) It is unclear whether Plaintiffs are suggesting that this merits “reformation”, but in any event, it does not. Plaintiffs fail to point out that the ROD Opinion specifically addressed the ROD process and concluded it was a benefit that could not be changed without Union consent. ROD Opinion at p. 8, ECF No. 78-1. Thus, no reformation is necessary. Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 10 of 21 PageID #: 2334 11 C. Plaintiffs Failed to Exhaust Administrative Remedies. Plaintiffs summarily cite to Smith v. Sydnor, 184 F.3d 56, 357 (4th Cir. 1999), for the proposition that they are not required to exhaust administrative remedies. Sydnor, however, explicitly recognized that, through “artful pleading,” a claim “for breach of fiduciary duty is actually a claim for benefits where the resolution of the claim rests upon an interpretation and application of an ERISA-regulated plan rather than upon an interpretation and application of ERISA.” Smith v. Sydnor, 184 F.3d 356, 362 (4th Cir. 1999) (emphasis in original). Since Count II pivots solely on the interpretation of the terms of the Employer Plan, it is, in fact, a claim for benefits. As a result, Plaintiffs must exhaust administrative remedies for Count II, and they cannot escape this requirement through artful pleading. Commc’ns Workers of Am., 40 F.3d at 434 (vacating the district court’s waiver of administrative exhaustion and requiring administrative denials before “the District Court may properly consider appellees’ ERISA claim at that time.”). Plaintiffs’ Opposition Brief asserts without authority that the ROD Opinion, filed by one individual, constructively satisfies the Retiree-Plaintiffs duty to exhaust their administrative remedies, because all retirees are beneficiaries of the ROD Opinion. In the final analysis, however, this argument undercuts the Retiree-Plaintiffs’ claim for equitable relief in Count II. It only further underscores that a legal remedy—and an effective one at that—is available to them: each Retiree-Plaintiff has, or could have, already obtained via that administrative process the very relief now requested in Count II. In sum, Plaintiffs’ exhaustion argument validates the more basic point that it is not necessary or appropriate for this Court to provide an equitable remedy when an effective legal remedy is available. Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 11 of 21 PageID #: 2335 12 D. The Second Amended Complaint Fails to Allege any Fact in Support of Plaintiffs’ Claim that the Coal Companies Breached a Fiduciary Duty Owed to any Retiree-Plaintiff. Plaintiffs allege that certain specified communications constitute the fiduciary breach alleged in Count II. But their only response to the Coal Companies’ argument that the Plaintiffs are legally estopped by their prior judicial statements from asserting the Coal Companies issued the allegedly misleading communications is to request further discovery. Discovery is neither appropriate nor available when Plaintiffs repeatedly asserted that CONSOL Energy was the sole actor. See infra at 15-16. Plaintiffs offer no legal authority to refute the Companies’ arguments that Plaintiffs are estopped from abandoning their previous judicial admissions that CONSOL Energy was solely responsible for sending the correspondence at issue. Id. Plaintiffs rely on Varity Corp. v. Howe, 516 U.S. 491, 493 (1996), for the proposition that misleading communications can, per se, constitute a breach of fiduciary duty, but Varity is inapposite. The communications in Varity were provided to employees in conjunction with making a voluntary decision—whether to switch to another employer who would thereafter assume responsibility for providing benefits. The plaintiffs asserted they were provided false information which induced them to make a decision that resulted in a loss of benefits. Since they were no longer a participant in their former plan they could not pursue a claim against it for benefits, and therefore could only seek redress through equitable relief under Section 502(a)(3). Similarly, in Griggs v. E. DuPont de Nemours & Co., 27 F.3d 371, 373, 375 (4th Cir. 2001), the participant relied upon misleading correspondence to elect a particular form of benefit and suffered monetary loss as a result. In both Varity and Griggs, information provided by the plan infused the participants’ decision-making process, and caused them to make a decision they would not have made with accurate information. In fact, every case cited by Plaintiffs involving “misleading communications” involved a factual scenario where the beneficiary relied on the Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 12 of 21 PageID #: 2336 13 communication and was harmed as a result. The situation here, in contrast, did not involve any decision required by participants or any harm suffered by any Retiree-Plaintiff, and the SAC does not allege otherwise. III. VENUE IS IMPROPER IN THIS DISTRICT UNDER RULE 12(B)(3). A. Venue is Improper for Count II (ERISA). Even assuming Plaintiffs have standing to bring Count II, and have a cognizable cause of action for purposes of Rule 12(b)(6), Plaintiffs fail to satisfy their burden of establishing that venue is properly laid for Count II in this District. The applicable venue standard is not in dispute. See 29 U.S.C. § 1132(e)(2). ERISA provides laypersons suing ERISA plan administrators, pension and welfare plans, and plan sponsors with three venue alternatives.6 Two options potentially contemplate venue beyond the borders of the District where the layperson’s “plan is administered”. The parties, however, fundamentally disagree as to the proper construction and scope of these two specific venue options, especially in the Coal Companies’ view, given the prior ruling in this case. Plaintiffs’ reliance on either (or both) of these two venue options –i.e., where “a defendant resides or may be found” or where the “breach took place”-- is misplaced when it comes to laying venue over the Coal Companies in Count II. Plaintiffs contort the venue phrase “may be found” to mean any district which can establish personal jurisdiction over ERISA defendant. (ECF No. 101 at 21.) This approach of collapsing the meaningful distinction between ERISA-based venue, on the one hand, and ERISA-based personal jurisdiction (the latter animated by ERISA’s nationwide service of 6 The third venue option –“where the plan is administered”— points back to the Coal Companies “nerve center” in Pennsylvania. It is plainly unavailable to Plaintiffs. Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 13 of 21 PageID #: 2337 14 process language)7 is flawed. Even assuming a general congressional policy of “ready access to the Federal courts,” this does not provide judicial license to anchor venue anywhere simply through serving an ERISA nationwide summons on a plan fiduciary. Plaintiffs’ own case law fairly construes the “where a defendant may be found” venue option to subsume a “minimum contacts” analysis. See, e.g., Abercrombie v. Continental Cas. Co., 295 F. Supp. 2d. 605, 607 (D. S.C. 2003) (insurer’s concession it provided insurance to South Carolina businesses deemed “sufficient to establish minimum contacts . . . such [that defendant] can ‘be found’ in South Carolina for purposes of the ERISA venue provision”). This Court has previously ruled that the Coal Companies did not have “minimum contacts” with southern West Virginia as of January 2017, and had not for several years preceding that date. This ruling is the law of the case and precludes Plaintiffs from attempting to shoehorn the Coal Companies in through ERISA’s “may be found” venue option. Plaintiffs’ fallback claim that venue is properly laid over the Coal Companies because this District is “where the breach took place” is also fundamentally flawed. First, Plaintiffs rely principally upon a distinguishable 1981 ruling from this Court involving a pension calculation crediting dispute. Bostic v. Ohio River Co. (Ohio Div.) Basic Pension Plan, 517 F. Supp. 627 (S.D. W.Va. 1981) (breach took place where plaintiff worked and earned the pension credit). In Bostic, however, Judge Staker specifically refrained from deciding “in which district a breach of duties imposed by ERISA itself occurs,” id. at 637, and Plaintiffs here are alleging breach of a duty imposed by ERISA. 7 Plaintiffs’ argument ignores the distinction drawn in Section 502(e)(2) between venue (“where a defendant resides or may be found”) and service of process (in “any other district where a defendant may reside or may be found”). The use of “other” for service of process plainly indicates service of process under ERISA Section 502(e)(2) is broader than where a defendant may be found for purposes of venue under ERISA. Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 14 of 21 PageID #: 2338 15 Second, and more fundamentally, Plaintiffs do not confront the Coal Companies’ reliance on the doctrine of judicial estoppel. When a party succeeds in maintaining a position, it may not thereafter simply assume a contrary position, especially if doing so prejudices the party acquiescing in the position formerly taken. New Hampshire v. Maine, 532 U.S. 742 (2001). Significantly, Count II did not introduce any new factual allegations that would support Plaintiffs new and contrary position. (See, e.g., ECF No. 67, at 2) (“[T]he facts giving rise to the ERISA count . . . are identical to the facts presented in the . . . Amended Complaint . . . “). Yet Plaintiffs claim that the same facts now establish ERISA venue over the Coal Companies. But Plaintiffs secured an injunction after pleading in their Amended Complaint that “CONSOL Energy has undertaken the conduct and transmitted the correspondence at issue (invariably on ‘CONSOL Energy, Inc.’ letterhead), not any of its individual subsidiaries.” [ECF No. 8, at Ex. 14-16, 18-20, 22, 24, 25, 29-32].”). (ECF No. 16, ¶ 3.) Plaintiffs’ emphatic allegations in the Amended Complaint on this point prompted this Court to accept Plaintiffs’ pleading allegation, and dismiss the Coal Companies, after recognizing that entering a judgment against them in southern West Virginia would contravene interests protected by the Constitution. Int’l Union, UMWA v. CONSOL Energy, Inc., 243 F. Supp. 3d 755, 760-61 (S.D. W. Va. 2017) (“[T]hey have committed no substantial activities here that would open them to being sued here.”). Therefore, even assuming that a fiduciary breach took place, Plaintiffs cannot now pin that alleged breach on the Coal Companies, because Plaintiffs specifically took a contrary and prevailing position earlier on this point. B. Venue is Improper for Count I (LMRA). Plaintiffs’ inability to establish any meaningful connection to this District for their LMRA confirmation action means that the UMWA cannot meet its burden of establishing that venue is proper. This Court tested LMRA venue in Plaintiffs’ Amended Complaint (ECF Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 15 of 21 PageID #: 2339 16 No. 16) by invoking the general civil venue statute to supplement their LMRA venue claim. See CONSOL Energy, 243 F. Supp. 3d at 761 (“[a]s for venue, the governing statute is 28 U.S.C. § 1391(b)(2) (‘a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred.’”)) (emphasis added). The Union offers no credible explanation for why that governing statute and the substantiality test it erects is now irrelevant. After all, Count I of the SAC seeks relief based on the same section of the same federal labor law as the Amended Complaint. Against this backdrop, Plaintiffs’ reliance on Section 301(c) of the LMRA, 29 U.S.C. § 185(c) is pure misdirection. The UMWA posits, without citing to a single case, that LMRA venue is tested solely by measuring a union plaintiff’s connection to its chosen forum for judicial review. But venue, as this Court has recognized, is a personal defense for each defendant. The LMRA’s venue safeguards (supplemented by 28 U.S.C. § 1391) protect unionized employers from being sued in an unfair or inconvenient forum. Leroy v. Great Western United Corp., 443 U.S. 171, 183-84 (1979). Abandoning the substantiality test for LMRA-based venue, Plaintiffs fall back to assert that LMRA venue safeguards evaporate the moment a union’s LMRA count is pled alongside an ERISA count advanced by an ERISA plan “participant.”8 There is no statutory or compelling decisional law supporting the abandonment of the LMRA’s venue safeguards. 8 Plaintiffs’ reliance upon case law addressing pendent venue is distinguishable. This judicial common law doctrine has been utilized in far different commercial settings where the defendant had “frequented the forum,” D’Addario v. Geller, 264 F. Supp. 2d 367, 387 (E.D. Va. 2003), or “voluntarily reached into Charleston” to conduct the business at issue. C.H. James & Co., Inc. v. Federal Food Marketers, Co., 927 F. Supp. 187, 190 (S.D. W. Va. 1996). Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 16 of 21 PageID #: 2340 17 C. Law of the Case Doctrine Precludes Relitigation of the Sufficiency of the Coal Companies’ Forum Contacts. As developed in the Coal Companies’ Opening Brief, federal courts are generally precluded from reconsidering an issue already decided by the same court in the same case. Plaintiffs’ response to the Coal Companies’ contention that the law of the case doctrine precludes relitigating in personam jurisdiction is relegated to a footnote, and relies on a distinguishable Maryland court ruling. It also mischaracterizes this Court’s decision as merely a “preliminary ruling . . . that it lacked personal jurisdiction . . . .” (Opp. Br., ECF No 101 at 24 n.2.) In fact it was nothing of the sort. This Court ruled on the Coal Companies’ original Rule 12(b) motion after extensive briefing, a hearing, and pursuant to circuit precedent that it must take the uncontroverted allegations in Plaintiffs’ Complaint as true. This Court made explicit findings that none of the Coal Companies were amenable to suit in this Judicial District at the time Plaintiffs filed their First Amended Complaint. CONSOL Energy, 243 F. Supp. 3d at 761. The instant case is not like Metro. Reg’l Info. Sys., Inc. v. Am. Home Realty Network, Inc., 948 F. Supp. 2d 538 (D. Md. 2013), which Plaintiffs cite for the proposition that “in general” a court’s decision at the preliminary injunction phase does not constitute law of the case. Granting a motion to dismiss for lack of jurisdiction is not analogous to a situation where a trial court denies a Rule 12 motion or postpones it for development at trial in the heat of a fast- moving injunctive action. Plaintiffs understood that this Court’s March 2017 decision was a final, adverse dismissal ruling as to the Coal Companies. Plaintiffs never asked for a jurisdictional hearing or jurisdictional discovery during the weeks that the Coal Companies’ Rule 12 motion was pending and taken under advisement. Plaintiffs did not seek reconsideration Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 17 of 21 PageID #: 2341 18 before this Court after being served with the dismissal order nor did they appeal the adverse ruling in the course of adjudicating CONSOL Energy’s injunctive appeal.9 D. Pendent Personal Jurisdiction. Plaintiffs’ reliance on the doctrine of pendent personal jurisdiction, a doctrine with limited application in the Fourth Circuit, is unwarranted in this case. ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 1338 (4th Cir. 1997). It also assumes Plaintiffs can establish a legal basis for prosecuting an ERISA claim, which the Coal Companies have demonstrated cannot survive a Rule 12(b) motion to dismiss. To be sure, there are several federal statutes whose overarching policies have warranted the codification of nationwide or worldwide service of process. But the LMRA has never been among them. Since its enactment 70 years ago, the LMRA’s policy declarations --reducing industrial strife, fostering labor peace, and promoting collective bargaining-- have been advanced free from the specter and potential gamesmanship of nationwide summons issued to union and management officials alike to adjudicate primarily local or regional labor disputes. Nor is the instant case an appropriate vehicle or particularly suitable test case for abandoning time-honored, minimum contacts jurisdictional and venue constraints long applied to LMRA jurisprudence. These procedural rules including the LMRA venue suitability analysis amplified above, promote predictability and certainty when parties to collective bargaining agreements press the Judiciary to intervene in their labor dispute. In marked contrast, the cases Plaintiffs cite principally involve rolling some companion state claims into federal antitrust, 9 Against this procedural backdrop, Plaintiffs impermissibly ask this Court to relitigate this resolved matter by presiding over jurisdictional discovery regarding the Coal Companies contacts with this forum (Opp. Br. at 23, ECF No. 101 at 23.) They also ask that this Court be open to imposing liability on the Coal Companies on the basis of unpled and esoteric principles, including reverse piercing of the corporate veil. Id. at 25 n.3. Such invitations even if they were properly pled (which they are not), are properly rejected for the reasons set forth above and in the Coal Companies’ Opening Brief. Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 18 of 21 PageID #: 2342 19 bankruptcy, interpleader, patent, racketeering or securities fraud suits. But these are distinguishable contexts where the overarching LMRA concern of tilting the congressionally- prescribed and judicially enforced balance between labor and management in workplace relations is nonexistent. In this case, this Court should not depart from established principles, particularly given the facial pleading deficiencies and insufficiencies of Plaintiffs’ ERISA count developed above. E. Absent Knowing Waiver, Due Process Bars Compulsory Submission to Transferee Court Jurisdiction. Plaintiffs’ reliance on a Federal Circuit patent infringement ruling, In re Genentech, 566 F.3d 1338 (Fed. Cir. 2009), ignores constitutionally protected liberty interests and the interests of justice. The record establishes that: (i) the Coal Companies ceased their active coal production operations long ago; (ii) this Court determined 17 months ago that the Coal Companies’ only “nerve center” is in Pennsylvania, and (iii) the Coal Companies have not committed substantial activities in this District or throughout West Virginia for years. This notwithstanding, per Plaintiffs’ calculus, see Opp. Br., ECF No. 101 at 25, even the most miniscule “appearance” by the Coal Companies in their recently transferred case, Helvetia Coal Co. v. Int’l Union, UMWA, 18-cv-01095 (S.D. W. Va.), eclipses years of forum inactivity to manufacture “personal jurisdiction” over each involuntarily transferred plaintiff. Under the circumstances noted above, Plaintiffs’ calculus is misguided. The Coal Companies’ attempted to obtain judicial review within their home forum on the purely legal issue of whether the October 2017 ROD opinion is valid and binding. This does not imply their consent to personal jurisdiction in any transferee forum where their case may be sent. Federal transfer laws do not trump Fifth Amendment safeguards. “The personal jurisdiction requirement recognizes and protects a [Fifth Amendment] individual liberty interest. It represents a Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 19 of 21 PageID #: 2343 20 restriction on judicial power . . . as a matter of individual liberty.” Ins. Corp. of Ireland, Ltd v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982). Liberty interests would be impaired if a transferred plaintiff cannot extricate itself from being “forced” to prosecute its case in the transferee forum simply because a defendant filed an answer (lacking any counterclaim) with the transferor court before transfer. See Fed. R. Civ. P. 41(a)(2), see Helvetia, (ECF 32, Ans. at 8). CONCLUSION For the foregoing reasons, the Coal Companies’ Motion to Dismiss Plaintiffs’ Second Amended Complaint should be granted due to lack of standing, lack of subject matter and personal jurisdiction, improper venue and service of process, and failure to state a claim upon which relief can be granted. August 1, 2018 Respectfully submitted, /s/ John R. Woodrum John R. Woodrum (admitted pro hac vice) Ogletree Deakins Nash Smoak & Stewart Suite 1000 1909 K Street, NW Washington, DC 20006 Telephone: 202/887-0855 Facsimile: 202/887-0866 john.woodrum@ogletree.com /s/ Jan L. Fox Jan L. Fox, Esq. (WVSB #1259) Steptoe & Johnson PLLC P.O. Box 1588 Charleston, WV 25326-1588 Telephone: (304) 353-8000 Facsimile: (304) 353-8180 Jan.Fox@Steptoe-Johnson.com Counsel for Defendants Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 20 of 21 PageID #: 2344 CERTIFICATE OF SERVICE I hereby certify that on August 1, 2018, a true and correct copy of Coal Company Defendants’ Reply to Plaintiffs’ Opposition to Defendants’ Motion to Dismiss Plaintiffs’ Second Amended Complaint was served electronically via the Court’s electronic filing ECF system on the following counsel of record in this action: Arthur Traynor, Counsel to the UMWA Visiting Attorney, admitted Pro Hac Vice International Union, Union Mine Workers of America 18354 Quantico Gateway Drive, Suite 200 Triangle, VA 22172 Telephone: (703) 291-2400 Email: atraynor@umwa.org Charles F. Donnelly, General Counsel International Union, Union Mine Workers of America 1300 Kanawha Boulevard East Charleston, WV 25301 Telephone: (304) 346-0341 Email: cdonnelly@umwa.org 34984010.1 Case 1:16-cv-12506 Document 102 Filed 08/01/18 Page 21 of 21 PageID #: 2345