Amicus Brief — Kaiser Steel Corp. v. Mullins

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Office Supreme Court, U.S.

EBILED

AUG 81 198)

No. 80-1345

ALEXANDER L. STEVAS,

IN THE

Supreme Couwt of the Bnited States

OCTOBER TERM, 1980

KAISER STEEL CORPORATION,

Petitioner,

Vv.

JULIUS MULLINS, ETAL.,

Respondents.

On Writ Of Certiorari

To The United States Court Of Appeals

For The District of Columbia Circuit

BRIEF OF INTERNATIONAL UNION,

UNITED MINE WORKERS OF AMERICA,

AMICUS CURIAE

HARRISON COMBS

WILLARD P. OweNns*

A. RANDALL VEHAR

900 - 15th Street, N.W.

Washington, D.C. 20005

(202) 842-7330

Counsel for International

Union, United Mine Workers

of America, Amicus Curiae

*Counsel of Record

AEN CARER EPS OA

PRESS OF BYRON S. ADAMS PRINTING, INC., WASHINGTON, D.C.

> >

TABLE OF CONTENTS

Page

THE INTEREST OF THE INTERNATIONAL UNION, UNITED MINE

i aces cs cubed seb bes 60 60é's l

ES 3

os See ece bebe 4

EE onic ces dcsenbcesbewsscesess 8

ees aah bese bob enasbhbesvee 10

I. INA CONTRACT ENFORCEMENT ACTION BY

HEALTH AND RETIREMENT PLAN

TRUSTEES, STATE COURTS AND FEDERAL

COURTS, IN THE FIRST INSTANCE, DO NOT

HAVE JURISDICTION TO DETERMINE

WHETHER CONTRACTUAL PROVISIONS ARE

UNFAIR LABOR PRACTICES ................ 10

A. Congress and This Court Recognize, While

Section 8(e) and Antitrust Actions or Defenses

May Be Raised Against the Union in the Prop-

er Forums, That Overriding Public Policy Con-

cerns Do Not Support Such Defenses in

Trustee Enforcement Actions .............. 11

B. The Purchase-of-Coal Provision Requiring

Retirement and Benefit Contributions Should

Be Presumed Legal and Enforceable, Since the

Proper Agency Has Not Rendered the Provi-

7 SAPO 8 Sa ae a 14

C. Permitting Employers to Raise a Section 8(e)

Defense in irustee Enforcement Actions

Might Impermissibly Extend Jurisdiction over

Federal Unfair Labor Practices to State Courts . 20

Il. KAISER HAS NOT ALLEGED FACTS SUFFI-

CIENT TO REBUT THE PRESUMED LEGALITY

OF THE PURCHASER-OF-COAL PROVISION .. 21

lil. AFEDERAL ANTITRUST DEFENSE MAY NOT

BE RAISED BY KAISER IN A HEALTH AND

RETIREMENT TRUSTEES’ ENFORCEMENT

ACTION, WHETHER BROUGHT IN FEDERAL

Se sie 6,500 6 60 00 bes ss0 weve 24

ee ee ewe ne ve ce tee pened 27

a A See a la

TABLE OF AUTHORITIES

CASES: Page

Amalgamated Meat Cutters v. Jewel Tea Co., 381 U.S. 676

SEIT Sd a oes cx sao ck ck be lew ek ks 18-20, 25-26

Appalachian Power Co. v. Regional Properties, Inc., 364

Se TE, CTO. « \cialp sed oe eA coset anes 26

Associated General Contractors & Teamsters, 227 N.L.R.B.

re OG ae a! peepee ged b 21

Associated General Contractors v. Otter Tail Power Co.,

EG F s e MEPS TOTS) vasccdccnacccnvecces 20

Azalea Drive-In Theatre v. Sargoy, 215 Va. 714, 214

S.E.2d 131 (1975), cert. denied, 423 U.S. 940 (1975) 26

Ball v. Victor Adding Machine Co., 236 F.2d 170 (Sth Cir.

RU A OC eg sh ag Cates Vesa rete Ss 2% 24

Bayside Enterprises, Inc., v. NLRB, 429 U.S. 298 (1977) . 10

Berggren v. Sun Oil Co., 79 F.R.D. 87 (E.D. Wis. 1978) . 25

Brotherhood of Railroad Trainmen v. Jacksonville Terminal

i ee ee SE) okt co ct bose pinabee ec 10

Bruce's Juices vy. American Can Co., 330 U.S. 743

SN Pa PERG s idad bryan nok od dd 14-16, 24-26

Complete Auto Transit, Inc. v. Reis, _.. U.S. —_. , 49

SOT REUEED oie o0vug vv Ubanodoeckwerns 13

Connell Construction Co. v. Plumbers & Steamfitters, 421

ER eee. hel ch als cose na gente 15, 17-20

Davis v. Alabama Power Co., 383 F.Supp. 880 (N.D. Ala.

Ot aaa eel eauls Uae kven bos chew eaS awe oes 24

Dixie Mining Co., 165 N.L.R.B. 467 (1967) ............ 4-6

Dixie Mining Co., 188 N.L.R.B. 753 (1971) . 2.0.00... passim

Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203

I CeCe a ae Si, 4 ah oc cls 0s heck beenwh ene 22

First National Maintenance Corp. v. NLRB, —— US.

ebdag eT MLS TE MR OROD bce cacucdeenérdede 22

Freeman v. Bee Machine Co., 319 U.S. 448 (1943) ...... 26

General Investment Co. v. Lake Shore & Michigan

Southern Railway Co., 260 U.S. 261 (1922) ........ 26

General Talking Pictures Corp. v. DeMarce, 203 Minn. 28,

TEED Se Skis sé ccoveacccbecsb actus 26

Table of Authorities Continued

Page

Inland Steel Co. v. NLRB, 170 F.2d 247 (7th Cir. 1948),

cert. denied, 336 U.S. 960 (1949) .... 0.0... cc eee 24

International Union, UMWA _ (Consolidation Coal Co.),

NLRB Case No. 6-CE-17 (March 28, 1979) (charge

CE | vivccavctaceh >.cdhicbucyyeav del ourann 8, 16

International Union, UMWA_ vy. NLRB, 399 F.2d 977

Cee es Gs COUOE cc dbis nuestecas ss adeuiesceeses 6

International Union, UMWA vy. NLRB, 468 F.2d 1139

(D.C. Cir. 1972) and sub nom. U.S. Steel Corp. v.

NLRB, No. 73-1700 (D.C. Cir. 1973), cert. denied,

SEs OOF REPT naire ina Wee sv oeeenianaee 6

Kelly v. Kosuga, 358 U.S. 516 (1959) ......... 14-15, 24-26

Lewis v. Benedict Coal Corp., 361 U.S. 459 (1960) .... passim

Lewis v. NLRB, 350 F.2d 801 (D.C. Cir. 1965) ........ 5

Lyons v. Westinghouse Electric Corp., 222 F.2d 184 (2d

COC ROEE cS encude th tints FERC CCRKR DOLORES 26

Miller v. Granados, 529 F.2d 393 (Sth Cir. 1976) ....... 26

Mills v. Electric Auto-Lite Co., 396 U.S. 375 (1970) ..... 16

Mullins v. Kaiser Steel Corp., 642 F.2d 1302 (D.C. Cir.

SE ain 64 ae ow ee CRP s Rian o rbancle cena males 4,7,8

National Woodwork Manufacturers v. NLRB, 386 U.S.

ie CHES soe uh Vokes 65 an oa ee iy 2e

NLRB v. Amax Coal Co., __— U.S, ——, 49 U.S.L.W.

WE SIONS oic's vcanaeety abe Wess ce oe 16

NLRB vy. Erie Resistor Corp., 373 U.S. 221 1963) ...... 10

NLRB vy. International Longshoremen’s Ass'n, 447 US.

SH REEED havc Sh bode e ond kt awe Cae 11, 18

NLRB v. Pipefitters, 429 U.S. 507 (1977) ...........065 10

Occidental Life Insurance Co. v. Pat Rvan & Assoc., Inc.,

496 F.2d 1255 (4th Cir. 1974), cert. denied, 419 U.S.

SEP AEST vesrk ahs 4048s s i500 a nak eae ons 16

Pennington v. UMWA, 325 F.2d 804 (6th Cir. 1963),

reversed in part, 381 U.S. 659 (1965), cert. denied in

relevant part sub nom. Pennington v. Lewis, 381 U.S.

POR TIGNGE ihc deed esc cee seas RACER Ate 12, 14-16

Table of Authorities Continued

Page

Puerto Rico vy, Shell Co., 302 U.S. 253 A937) ooo... 26

Raymond O. Lewis, 144 N.L.R.B. 228 (1963) 0000... 5

Raymond O. Lewis, 148 N.L.R.B. 249 (1964) 000, 5, 6

Riverton Coal Co. v. UMWA, 79 L.R.R.M. 2348 (S.D.

Ohio 1970), rev'd, 453 F.2d 1035 (6th Cir. 1972),

cert. denied, 407 U.S. 915 (1972) ©.............. 22,23

Smith v. Evening News Ass'n, 371 U.S. 195 (1962) ...... 18

South-East Coal Co. v. Consolidation Coal Co., 434 F.2d

PT PUD cb bccccesccccescccccecccecs S

Tennessee Consolidated Coal Co, v. UMWA, 416 F.2d

1192 (6th Cir. 1969), cert. denied, 397 U.S. 964

CC EE Wat c clos ceccrecescceceveccescess Ss

UMWA (BCOA), 179 N.L.R.B. 479 (1969) 0000. 22

UMWA v. Coronado Coal Co., 259 U.S. 344 (1922) .... 2

UMWA vy. Pennington, 381 U.S. 657 (1965) ........... 8, 15

Union Oil Co. v. Chandler, 4 Cal.App.3d 716, 84 Cal.

TEED occ dccccccccecccececccceces 19, 26

United States Steel Corp. v. International Union, UMWA,

Civil No. 75-1966 (D.D.C. 1977) 200.6... 7, la-Sa

Vaca v. Sipes, 386 U.S. 171 (1967) 600. 18

Vaughn Co., Lid. v. Saul, 143 Ga. App. 74, 237 S.E.2d

Cela weccccccccccccecseveecees 26

Walsh v. Schlect, 429 U.S. 401 1977) 000, 15, 25

STATUTES Page

National Labor Relations Act, as amended 29 U.S.C. §$151, er

seq. (1973)

Section 8(b), 29 U.S.C. 8158(b) oo, 15

Section 8(e), 29 U.S.C. §158(e) 2.6... passim

Section 10(b), 29 U.S.C. §160(b) 20... 19

Section 10(1), 29 U.S.C. $1600) ©. 0.0.0.0... 14, 16, 17

Section 14(b), 29 U.S.C. §164(b) oo. 17

Section 14(c), 29 U.S.C. §164(0) 2.0... 9, 20

Section 301, 29U.S.C. 8185 6.00... 13, 18

Table of Authorities Continued

Page

Labor-Management Reporting and Disclosure (Landrum-

Griffin) Act, Pub, L. No. 86-257, 73 Stat. 525 (1959) (codified

in scattered sections of 29 U.S.C.) (1973)

Section 8(e), 29 U.S.C. 81S8l]e) ......cceevccvees passim

Section 10(1), 29 U.S.C. $160(1) ............8. 14, 16, 17

Section 14(c), 29 U.S.C. 8164(c) ......cccvccvcvvees 9, 20

Labor Management Relations (Taft-Hartley) Act, 61 Stat.

136 (1947), 29 U.S.C. $141, et seq. (1973)

Section 10(1), 29U.S.C. $1600)... 6... eee 14, 16, 17

Section 14(B), 29 U.S.C. 8164(B) ...... ccc cece eens 17

PRON SOEs SF AN UEES Saesvevetccvesccecies 13, 18

Multiemployer Pension Plan Amendments Act of 1980,

Pub. L. No. 96-364, 94 Stat. 1208 (codified at 29

U.S.C. $1001a, et seg.) (1981 Supp.) ...... 9, 16, 17, 23

Section 41 1(c), 29 U.S.C. $1103 (0) (2V(AN GD 17

Sections 4211(d)(2) and 4216, 29 U.S.C. §81391(d) (2)

ee Be SS Ws vac boca Kaece ewes euncac 23

Black Lung Benefits Reform Act of 1977, Pub. L. No, 95-

239, 92 Stat. 95 (1978) (amending 30 U.S.C. § 901, er

Bs SEs Oa Suit onc eccyscdceecxreebere 23

Black Lung Benefits Revenue Act of 1977, Pub. L. No.

95-227, § 3(a)-(c), 92 Stat. 12 (1978) (codified at 30

ae PEON CL SUEUED sccicccdurceuenpeneawne 23

Norris-LaGuardia Act, 29 U.S.C. $101, et seg. (1973)

BOC Cre TUOD hes isactesccdaccsveseteer 25

Sherman Antitrust Act, 15 U.S.C. §1, et seq. (1973)

OB oat EO a re 4, 26, la, 2a

Clayton Act, 15 U.S.C. $12, et seq. 1973)

A Sis sa cle 0 0b v-vn'é Cauie'c cwareb once 19

LEGISLATIVE MATERIALS

96 CONG. REC. $10,105 (daily ed. July 29, 1980)

(remarks of Sen. Randolph) ................ laces

96 CONG. REC. H7899 (daily ed. Aug. 26, 1980)

(remarks of Rep. Thompson) ........... 11-13, 20,

Table of Authorities Continued

National Labor Relations Board, Levislative History of the

Labor-Management Reporting and Disclosure Act of

IT ay ANE cindy 456 ks cetick Value bekin can

Black Lung Reform Act and Black Lune Benefits Revenue

Act of 1977, Committee on Education and Labor,

House of Representatives, Committee Print, Leg.

we Le yy )

Hearings on H.R, 3904, the Multiemployer Pension Plan

Amendments Act of 1979, before the Task Force on

Welfare and Pension Plans, Committee on Educa-

tion and Labor, House of Representatives, 96th

Cong., Ist Sess. June 5 and 7, 1979) 260... ee

MISCELLANEOUS

43 Fed. Reg. 36,803 (Aug. 18, 1978) ........ cece eee

ees EPA IP EMOTE LEDGES cs civeoncseteeveesus

Note, Secondary Boycotts and Work Preservation, 57 VA,

Si AE EEE Ea c Cass cc's ceduyeuase ces’

Page

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

No. 80-1345

KAISER STEEL CORPORATION,

Petitioner,

Vv.

JULIUS MULLINS, ET AL.,

Respondents.

On Writ Of Certiorari

To The United States Court Of Appeals

For The District of Columbia Circuit

BRIEF OF INTERNATIONAL UNION,

UNITED MINE WORKERS OF AMERICA,

AMICUS CURIAE

THE INTEREST OF THE INTERNATIONAL UNION,

UNITED MINE WORKERS OF AMERICA

The International Union, United Mine Workers of America

(hereinafter **UMWA"’), is the collective bargaining agent for

approximately 160,000 members employed in coal mines

covered by collective bargaining agreements in the bitumi-

nous coal industry. As such, it negotiated, and is a party to,

the National Bituminous Coal Wage Agreement of 1974

(hereinafter ‘*1974 Agreement’), the agreement under

which the Trustees of the UMWA Health and Retirement

Funds (hereinafter ‘‘Trustees’*) seek herein to collect

royalties due the Funds under the “‘purchase-of-coal clause”

in the 1974 Agreement.

The interest of the UMWA in this litigation, prompting the

filing of this brief, amicus curiae, supporting the respondents

Trustees, is UMWA’s deep and continuing interest in safe-

guarding the integrity of all collective bargaining agreements

executed by it on behalf of its members. UMWA has sought

for many years to protect its members from the ever-en-

croaching evils and practices of signatory operators sub-

contracting coal lands and coal-producing facilities and

purchasing coal from nonsignatory operators, which under-

mine its members’ tenure of employment, wage standards,

fringe benefits, and other working conditions set forth in

UMWA’s national agreements.' The ‘‘purchase-of-coal

clause’’ at issue here is but one of many clauses which the

UMWA has, over the years, negotiated to seek this objective.

UMWA must protect its members from the practice of opera-

tors who, afler UMWA has bargained for this clause, violate

their bargaining commitments and seek financial windfalls at

their employees’ expense. The *‘purchase-of-coa! clause’’ re-

quires royalties to be paid into the Benefit and Pension Funds

established in 1950, the first multiemployer funds of their

kind in the United States. Billions of dollars have been paid to

the beneficiaries of these Funds. More than 100,000 coal min-

ing families are being served by the 1950 and 1974 Funds.

Presently, approximately 70,000 miners are receiving pen-

sions from the 1950 Pension Trust, while approximately

14,000 are receiving pensions from the 1974 Pension Trust.

The 1950 Benefits Trust had approximately 190,000 benefici-

aries in 1980. These benefits are based upon an industry-wide

concept, with pension benefits paid after specified service in

the industry, not just service for a single employer.’

' Language in UMWA vy. Coronado Coal Co., 259 U.S. 344, 396

(1922), demonstrates it as one arising out of a subcontract for just

such a purpose. The Bituminous Coal Operators Association has also

expressed concern in another setting regarding the effect on their

sector of the coal industry caused by possible cost differentials arising

out of the UMWA Funds. See n. 31 in/ra.

?The 1950 Funds, for instance, support almost 20,000 retirees,

who may have as little as five (5) years of signatory service, so long

as they have a total of twenty (20) years of total coal mine employ-

ment. 96 CONG. REC. $10,105 (daily ed. July 29, 1980) (remarks of

Sen. Randolph).

The cost of the 1950 Funds and the 1974 Funds represents

the single largest cost differential between UMWA mines and

nonsignatory mines. The reason for this differential is that

pension plans, if any, of nonsignatories cover only employees

and retirees of the single employer and their years of qualified

service are based only on the service of the single employer.

Few, if any, ever achieve the required years of service neces-

sary to qualify for pension benefits. In addition, these plans

often do not include me‘ical payments to already retired

miners, as do the UMWA Funds. Thus, the royalty on pur-

chased coal, which is equivalent to the royalty paid on coal

produced for sale or use, reasonably represents the differential

in labor costs between mines under the Agreement and those

not. C.A.J.A. 568, 572. UMWA’s interest is to protect those

beneficiaries already retired and the employee-members now

receiving health benefits and gaining service credit at all bitu-

minous mines. By this negotiated and agreed payment on pur-

chased coal, UMWA has thus increased and enhanced the

ability of the Funds to pay the benefits then available and

perhaps in the future to increase and expand them.

STATEMENT OF THE CASE

The Trustees brought suit against the Kaiser Steel Corpora-

tion (hereinafter *‘Kaiser’’) seeking payment of contributions

due these Funds under the terms of the 1974 Agreement. The

1974 Agreement was first negotiated between UMWA and the

Bituminous Coal Operators Association (hereinafter

*BCOA”™), a multiemployer bargaining unit. Kaiser, as a

member of BCOA, became a signatory operator to the 1974

Agreement. As part of that Agreement, Article XX(d)(v)

provided that a signatory operator pay a specified royalty on

each ton of coal procured or acquired for sale or use for which

no contribution had been made to the appropriate Trusts, as

’ References to appendices to the Petition for Certiorari are cited as

**Pet. App. —": references to Joint Appendix filed herein are cited

as ““J.A. —_—”*; references to Joint Appendix filed in the Court of

Appeals are cited as ““C.A.J.A. —.

provided for in Article XX. The amount of the royalty to be

paid was calculated by the negotiators to be an amount equal

to what the signatory operator would have paid if the operator

had produced the coal at its own mines. J.A. 31.

The Trustees brought suit against Kaiser for failure to pay

into the Funds the required royalty for coal purchased from

employers for which no royalty contribution had been paid.

The United States Court of Appeals for the District of Col-

umbia Circuit affirmed the District Court’s granting of the

Trustees’ Motion for Summary Judgment. Kaiser's principal

defense was that Article XX(d)(v), commonly referred to as

the ‘‘coal-purchasing clause,”’ was illegal under the federal

antitrust laws‘ and Section 8(e) of the National Labor Rela-

tions Act, as amended (hereinafter ‘Section 8(e)"’).° The

Circuit Court affirmed the District Court’s holding that Kaiser

**was not entitled to interpose the illegality defense.”” Mullins

v. Kaiser Steel Corp., 642 F.2d 1302, 1308 (D.C. Cir. 1980).

History of the Dispute

It is not contested that many signatory operators sought to

avoid the terms of the collective bargaining agreements they

negotiated with UMWA by the practice of subcontracting

their coal lands and coal mines to nonsignatory operators with

the agreement that the signatory operators had the right to

purchase the coal. If UMWA would permit, a signatory opera-

tor could avoid its collective bargaining obligations by shutting

down its mines, limiting production, and subcontracting its

mining facilities or coal lands to nonsignatory operators and

supplying its customers with coal purchased from these non-

signatories. The signatory operators could also accomplish the

same result by purchasing coal from operators who were not

subcontractors. The concern of the UMWA with this practice

has been reflected in its collective bargaining agreements for

over forty years. See Dixie Mining Co., 165 N.L.R.B. 467, 471

‘Sections | and 2 of the Sherman Act, 15 U.S.C. §$1 and 2 (1976).

‘Labor-Management Reporting and Disclosure Act of 1959, 29

U.S.C. §158(e) (1978).

(1967). All of the clauses inserted in agreements prior to 1958

failed to accomplish their objective, so in 1958 the UMWA

negotiated into its National Agreement a provision entitled

the ‘Protective Wage Clause’ (hereinafter “*PWC"’). PWC

provided, in essence, that the signatory operators agreed that

all bituminous coal mined, produced, or prepared by them or

acquired by them under a subcontracting arrangement shall

be mined or produced under terms and conditions which are

as favorable to the employees as those provided in the

UMWA National Agreement.

PWC’s effectiveness was destroyed in 1963 when the NLRB

found that the clause violated Section 8(e). Raymond O.

Lewis, 144 N.L.R.B. 228 (1963). Shortly thereafter, UMWA’s

National Agreement was amended (1964) to replace the PWC

with a purchase-of-coal clause, which required a signatory op-

erator to pay 80-cents into the UMWA Welfare and Retire-

ment Fund on all coal purchased from nonsignatory opera-

tors, as compared with the royalty of 40-cents a ton on coal

produced by the signatory operator.’ This clause has been re-

ferred to as the **80-cent clause.”

The **80-cent clause”’ was not included in the agreements

covering the captive mines of the steel companies. The Board

found the **80-cent clause” violative of Section 8(e) in a sup-

plemental compliance determination in Raymond O. Lewis,

148 N.L.R.B. 249 (1964), and in an independent decision and

order in a subsequent case, Dixie Mining Co., 165 N.L.R.B.

467 (1967) (hereinafter the **80-cent cases”*). Both the PWC

and the 80-cent cases were brought before the Circun Court

of Appeals and both were remanded to the Board for further

proceedings. Lewis v. NLRB, 350 F.2d 801 (D.C. Cir. 1965),

* Kaiser wrongfully characterizes the purchase-ol-coal clause in the

1974 Agreement as a penalty clause which gives a signatory operator

an advantage Over nonsignatory operators who sell coal (Brief at 4

n.5), because the amount of royalty paid by a signatory operator who

produces the coal is equal to the amount of royalty paid on coal pur-

chased. Prior to the 1974 Agreement, the royalty on purchased coal

was double the royalty on coal produced by signatory operators,

hence, it was characterized as a penalty clause.

International Union, UMWA v. NLRB, 399 F.2d 977 (D.C.

Cir. 1968).

After remand and further proceedings, the Board found

that the PWC and the 80-cent clause had a lawful objective of

preserving unit work and standards and did not contravene

Section 8(e). The Board concluded that the **80-cent clause

functions as a union standards clause in protecting and pre-

serving the work of employees working under the UMWA

agreement and the standards under which such work is per-

formed by removing the economic incentive to subcontract

such work stemming from the lower wage and fringe benefit

costs of nonsignatory mines.”* Dixie Mining Co., 188 N.L.R.B.

753, 754 (1971) (hereinafter **Dixie Mining (1971)"*). Seven

steel companies had sought to file exceptions to the Hearing

Examiner's decision, but the Board denied the request be-

cause they were not parties to the proceedings. The Board

determined that the steel companies’ brief was in the nature

of an amicus curiae brief and considered it on that oasis. Dixie

Mining (1971), supra at 753 n.3. The steel companies” brief

asserted the 80-cent clause contravened Section 8(e).

When the 80-cent case was again brought before the Circuit

Court by the UMWA, the Circuit Court, acting on a motion of

Dixie Mining Company, one of the independent operators

that had challenged the clause, found that it did not have

jurisdiction, since no aggrieved party had yet appealed from

the Board’s second decision, because the Circuit Court's

“unqualified remand in this case operated to divest us of

jurisdiction.”’ Thus, UMWA’s petition to review was denied ”

’The PWC and 80-cent cases were consolidated for appeal. The

Circuit Court held that the PWC case was moot because the Joint In-

dustry Contract Committee, charged with the administration of the

PWC, suspended operation of the PWC on November 4, 1959, one

week before the effective date of Section 8(e), and had not enforced

it since. Thus, the Circuit Court stated, *‘We therefore think the is-

sue of the PWC’s validity lacks the immediacy of a live controversy

calling for judicial resoiution.”’ Int'l Union, UMWA vy. NLRB, 468

F.2d 1139, 1141 (D.C. Cir. 1972) and sub nom. U.S. Steel Corp. v.

NLRB, No. 73-1700 (D.C. Cir. 1973), cert. denied, 416 U.S. 983

(1974).

Although the contracts of the steel companies did not con-

tain the coal-purchasing clause in the 1964 and 1966 contracts,

they agreed in 1968 that, if during the life of the agreement,

all questions concerning the lawfulness of the 80-cent clause

shall have been resolved in favor of such clause by the court

of last resort, the captive operators ‘shall engage in good faith

negotiations with you concerning what action may be ap-

propriate between it and UMWA under the then existing cir-

cumstances.’’ C.4.J.A. 473. Following the Board’s decision in

January 1971, all of the captive operators, including Kaiser.

agreed to include the purchase-of-coal clause in the 1971

Agreement and it has been included in each succeeding agree-

ment.*

Subsequently, when the Trustees discovered that U.S. Steel

Corporation had failed to pay royalty due under the terms of

the 1974 Agreement on purchased coal and failed to report

such purchases to the Funds, U.S. Steel filed a suit against

UMWA and the Trustees, making the same antitrust and Sec-

tion 8(e) allegations as Kaiser does herein. The Trustees filed

a counterclaim seeking payment of royalties due. United States

Steel Corp. v. International Union, UMWA, Civil No. 75-1966

(D.D.C. 1977). In U.S. Steel, the District Court found that the

purchase-of-coal clause did not violate the antitrust laws and

also dismissed the complaint with prejudice because the par-

ties agreed ‘“‘that the remaining portion of plaintiffs com-

plaint, which challenges the ‘purchase-of-coal’ clause as

violating Section 8(e) of the National Labor Relations Act, 29

U.S.C. §158(e), should be dismissed with prejudice,”’ and that

the Trustees’ counterclaim was dismissed with prejudice, con-

ditioned upon payment by U.S. Steel to the Trustees of *‘all

royalties due under the purchase-of-coal clause of the 1974

Agreement.” Kaiser, supra at 1312. A copy of the District

Court’s Order and the Memorandum of Agreement are

attached hereto as Appendix A.

*The royalty on produced coal was increased in the 1971 Agree-

ment. Likewise, the amount of royalty on purchased coal was also in-

creased. While the UMWA prevailed in Dixie Mining (1971), supra,it

attempted to get the ‘court of last resort’’ to also sanction the clause.

See p. 6 and n.7, supra.

Subsequent thereto, as the Circuit Court pointed out in the

instant case, “‘another employer signatory to the 1974 Agree-

ment has previously charged that the purchase-of-coal clause

violates Section 8fe), but the Board’s General Counsel re-

fused to issue a complaint. /nternational Union, UMWA (Con-

solidation Coal Co.), NLRB Case No. 6-CE-17 (March 28,

1979). The implication of this action is that the General

Counsel did not regard the claim as ‘sufficiently meritorious

to warrant Board consideration. NLRB v. Sears, Roebuck &

Co., 421 U.S. 132, 139 (1975).°° Kaiser Steel supra at 1308 n.5.

The purchase-of-coal clause has never been found to violate

the antitrust laws, although it has been held that, even if legal,

it can be used as evidence, along with other facts, to assert

that UMWA and other large coal operators conspired to put

small operators out of business, in violation of the antitrust

laws. South-East Coal Co. v. Consolidation Coal Co., 434 F.2d

767 (6th Cir. 1970).°

SUMMARY OF ARGUMENT

The issues before the Court are (1) whether a delinquent

employer, Kaiser, who breached its voluntarily assumed obli-

gations to pay health and retirement contributions to benefit

plans on behalf of its employees, and who refuses to invoke its

available NLRB remedies against the union, can require third

party, neutral trustees to litigate the same labor law issues in a

delinquency enforcement action; and (2) whether, in the

same type of action, the employer may raise antitrust defenses

more appropriately directed to the union. The courts below

answered both questions in the negative. The UMWA re-

spectfully asserts that those decisions were correct.

*The purchase-of-coal clause was not considered in UMWA vy.

Pennington, 381 U.S. 657 (1965), nor in Tennessee Consolidated Coal

Co. v. UMWA, 416 F.2d 1192 (6th Cir. 1969), cert. denied, 397 U.S.

964 (1970), as asserted in Kaiser's Brief at 5 n.8.

I. Public policy, as previously expressed by this Court

and recently affirmed by Congress in enacting the Multiem-

ployer Pension Plan Amendments Act of 1980, 29 U.S.C.

$100la (1981 Supp.), requires that employee benefit plan

trustee delinquency collection actions not be complicated by

extraneous labor law issues. This is particularly so when the

contemplated labor law remedies against the proper party, the

union, could have been, but were not invoked by the em-

ployer. By reversing the decision below, thereby granting

jurisdiction to federal courts to consider, in the first instance,

unfair labor practice questions in delinquency-collection ac-

tions, the Court may well force such trustee contract actions

back into state courts, thwarting congressional intent to en-

courage a national pension policy. Furthermore, state courts

have been denied jurisdiction over federal unfair labor prac-

tices, unless the Board cedes jurisdiction to them, an authority

never exercised. 29 U.S.C. §164(c).

Il. Even if Kaiser is permitted to raise a defense in fed-

eral or state court under Section 8(e), Kaiser has not suffi-

ciently alleged facts on the issue to withstand a summary deci-

sion. The challenged provision, which is legal on its face, has

not been shown to have been applied improperly herein.

Ill. Assuming arguendo a possible antitrust violation,

such a defense is not applicable against neutral, third party

trustees, in a contract enforcement action, nor is it applicable

to “intelligible economic transactions,’* which the purchase-

of-coal clause is, particularly when the defense would deny

already-earned compensation to employees. As with the Sec-

tion 8(e) defense, permitting the defense of illegality under

the antitrust laws in trustee delinquency enforcement actions,

which can also be brought in state courts, will unnecessarily

raise the issue of whether or not a federal antitrust defense

can be raised in a similar collection action before a state court.

Since the challenged provision deals with “‘wages, hours

and other conditions of employment,”* absent a conspiracy by

Kaiser and the BCOA with the UMWA, the purchase-of-coal

clause is protected by the labor exemption to the antitrust

acts. Kaiser has not sufficiently alleged facts regarding the

1974 Agreement negotiations that were conducted by newly-

installed UMWA officers to withstand summary disposal of its

conspiracy defense.

Since Kaiser can pursue its antitrust and labor actions

against the proper party, the union, it should not be permitted

to unnecessarily complicate what should be a simple delin-

quency-collection action by neutral, third party trustees.

Reversal of the decision below will encourage litigation and

delay collections, thereby adding further complexities, both

short and long range, to the financial planning for employee

benefit trusts. As this nation increasingly relies on its private

pension system to protect its retired workers, such a result

should not be sanctioned.

ARGUMENT

1. IN A CONTRACT ENFORCEMENT ACTION BY

HEALTH AND RETIREMENT PLAN TRUSTEES,

STATE COURTS AND FEDERAL COURTS, IN THE

FIRST INSTANCE, DO NOT HAVE JURISDICTION

TO DETERMINE WHETHER CONTRACTUAL PRO-

VISIONS ARE UNFAIR LABOR PRACTICES

This Court has long recognized that interpreting and apply-

ing the National Labor Relations Act ‘‘is often a difficult and

delicate responsibility, which the Congress committed pri-

marily to the National Labor Relations Board, subject to lim-

ited judicial review... .”” by the federal courts. NLRB v. Erie

Resistor Corp., 373 U.S. 221, 236 (1963). Indeed, in applying

the often ‘‘elusive’’ concept of secondary activity, Brotherhood

of Railroad Trainmen v. Jacksonville Terminal Co., 394 U.S.

369, 386-88 (1969), ‘‘courts should defer to the NLRB’s un-

derstanding of the statute which it administers.’ NLRB v.

Pipefitters, 429 U.S. 507, 528 (1977); see Bayside Enterprises,

Inc. v. NLRB, 429 U.S. 298, 303-04 (1977). ** Accordingly, re-

gardless of how (the Court) might have resolved the question

as an initial matter, the appropriate weight . . . must be given

to the judgment of the agency whose special duty (it) is to ap-

ply this broad statutory language to varying fact patterns. . ..”’

Bayside, supra at 304.

This general rule of deferral to the Board makes it inappro-

priate to raise unfair labor practices as a defense to contract

enforcement actions by trustees before federal or state courts.

First, public policy dictates that neutral, third party health and

retirement fund trustees should not be thrust into litigating

difficult, often contentious, and complicated labor matters,

when appropriate remedies exist against the proper party —

the union.'’ Secondly, Congress, which has carefully crafted

the remedies that are available against unions for secondary

activities and hot cargo provisions, clearly limited federal

courts, regarding enforcement of alleged Section 8(e) provi-

sions, to injunctive relief initiated by the Board and review of

Board orders. The Board should have the initial opportunity to

apply the often ‘‘elusive’’ concepts of secondary activity to the

broad range of fact patterns that can arise. Finally, after long

debate, Congress refused to grant state courts jurisdiction

over unfair labor practices, unless the NLRB specifically ceded

such to them.'! Yet, reversal! of the opinion below could lead

to that result, since trustee actions are often brought in state

courts.

A. Congress And This Court Recognize, While Section 8(e)

And Antitrust Actions Or Defenses May Be Raised

Against The Union In The Proper Forums, That Overrid-

ing Public Policy Concerns Do Not Support Such Defenses

In Trustee Enforcement Actions

Federal employee benefit and labor policies require that

Kaiser raise its legal objection to the purchased-coal provision

' It should be noted that the really complex and controversial fac-

tual issues that would be necessary to resolve, if this case is

remanded, particularly the contested factual issues, have not been

litigated in this case. Compare, for example, Roger Haynes’ and Do-

nald Pierce’s affidavits. Trustees should not be placed in the middle

of such a dispute, nor should they be expected to argue what will nor-

mally be the union’s position in such an action, 96 CONG. REC.

H7899 (daily ed. Aug. 26, 1980) (remarks of Rep. Thompson). Nor

are these questions appropriate for initial consideration by a court.

They are properly raised before the Board. NLRB vy. Intl Longshore-

men’s Ass'n, 447 U.S. 490, 511 (1980).

'' See, n. 25, infra.

against the proper party, the UMWA, rather than interject the

Funds’ Trustees into the often contentious and tortous litiga-

tion history of this provision and its predecessors. Lewis vy.

Benedict Coal Corp., 361 U.S, 459 (1960), Pennington v,

UM WA, 325 F.2d 804, 818 (6th Cir, 1963) reversed in part 381

U.S. 659 (1965), cert. denied in relevant part sub nom, Pen-

nington v, Lewis, 381 U.S. 949 (1965). In reaffirming this pol-

icy, Congress, aware of the nation’s increasing reliance on the

private pension system, recently took note of the particular

situation facing this Court:

Recourse available under current law for collecting delin-

quent gontributions is insuflicient and unnecessarily

cumbersome and costly. Some simple collection actions

brought by plan trustees have been converted into lengthy,

costly, and complex litigation concerning claims and defenses

unrelated to the employer's promise and the plans’ entitlement

to the contributions, This should not be the case. Federal

pension law must permit trustees of plans to recover

delinquent contributions efficaciously, and without regard

to issues which might arise under labor-management relations

law — other than 29 U.S.C. 186. Sound national pension

policy demands that employers who enter into agree-

ments providing for pension contributions nor be permit-

ted to repudiate their pension promises.

In this regard we endorse judicial decisions such as Lewis

v. Benedict Coal Corp., 361 U.S. 459 (1960); Lewis v. Mill

Ridge Coals, Inc., 298 F.2d 552 (6th Cir. 1962); and Huge

eae Hauling Company, Inc., §90 F.2d 457 (3d Cir.

Remarks of Rep. Thompson, Chairman of the Task Force on

Welfare and Pension Plans and the House Subcommittee on

Labor-Management Relations, supra (emphasis added).

This Court previously adopted the same policy in Benedict

Coal, supra. In a collection action by the UMWA Fund

Trustees, the Court refused to permit the employer to raise as

a defense the alleged breach of the contract by striking miners,

In so doing, the Court took note that the bargaining history

did not “‘explicitly’’ protect Benedict Coal from claims by the

Trustees, id. at 469; that, in view of the industry-wide nature

of the Funds, Benedict Coal's failure to pay would “‘fall in the

first instance upon the employees and their families across the

country,”* /d.; and since royally payments ‘‘are really another

form of compensation to the employees,”* allowing Benedict

Coal to default on its contribution requirement would violate

Section 301(b) of the Taft-Hartley Act, which prevents collec-

tion of money judgments against individual union members.

Id. at 469-70.

Similar to Benedict Coal, nothing in the legislative history of

Section 8(e) ‘“‘explicitly’’ provides that Congress meant to

protect Kaiser!’ against claims by the Trustees. On the contrary,

Congress last year indicated just the opposite. Remarks of

Rep. Thompson, supra. Kaiser's failure to pay these royalties

had an impact on over 70,000 retirees and their families across

the country, when the UMWA 1950 Pension Plan ran out of

assets and had to temporarily suspend pension payments for

several months during the 1977-78 contract strike. 96 CONG.

REC. $10,105 (daily ed. July 26, 1980) (remarks of Sen. Ran-

dolph).'' Finally, Kaiser's failure to pay not only effectively

decreased the employees’ compensation, its failure to pay acts

as a nonenforcement remedy and, thereby, effectively collects

damages for the allegedly secondary activity from the in-

dividual employees and retirees, rather than from the union.

See Complete Auto Transit, Inc. v. Reis, —~ U.S. ——, 49

U.S.L.W, 4473 (1981). When other remedies exist against the

proper party, the union, this Court, as it did in Benedict Coal,

should defer to the public policy of “simplifying delinquency

collection’’ actions and not thrust plan trustees into the

'? Kaiser mischaracterizes itself as the ‘neutral’ employer in this

matter, Kaiser, as a signatory to three separate agreements contain-

ing the challenged clause, is the primary, not the secondary em-

ployer, since the intent of the clause is to discourage Kaiser from

deteriorating the work unit, Dixie Mining (1971), supra.

'' Kaiser's statement (Brief at 4 1.4), that the 1978 and 1981

Agreements contain a guarantee of the benefits provision has no

relevancy. The contract at issue, the 1974 Agreement, had no such

guarantees. Even if it had, Kaiser's delinquency makes it more likely

that benefits could not be increased or expanded.

thicket of Section 8(e) and antitrust litigations, Remarks ot

Rep. Thompson, supra,

B. The Purchase-Of-Coal Provision Requiring Retirement

And Benefit Contributions Should Be Presumed Legal And

Enforceable, Since The Proper Agency Has Not Rendered

The Provision Void

When Congress created a new unfair labor practice in 1959

with the passage of Section 8(e) of the Labor-Management

Reporting and Disclosure Act, it made no exception to the

prevailing rule that, in the first instance, unfair labor practices

must be litigated before the National Labor Relations Board.

While recognizing that, in appropriate instances, contract pro-

visions alleged to be unfair labor practices unde. this section

could be temporarily enjoined by federal courts from enforce-

ment, Congress left the initiation of that remedy solely to the

NLRB, 29 U.S.C. $1600) (1978), Had Congress intended to

sanction the type of self-help engaged in by Kaiser, there

would have been little need to have included Section 8(e) as

one of the few unfair labor practices for which the Board must

seek temporary relief under Section 100), pending admin-

istrative action,

By upholding the Court of Appeals herein, Kaiser is not di-

vested of the remedies that Congress did provide — it simply

must pursue those remedies in the proper forum, the NLRB.

With that in mind, there is no reason for this Court to judicial-

ly sanction the new private right of invalidation sought by

Kaiser, Bruce's Juices v. American Can Co., 330 U.S, 743, 755-

56 (1947), or to effectively grant the status of a private attor-

ney general on Kaiser. Kelly v. Kosuga, 358 U.S. 516, 520

(1959).

Indeed, this case is not unlike an earier royalty enforce-

ment action by the UMWA Fund Trustees in the consolidated

case of Pennington v. UMWA, supra. Therein, the employer

not only raised the Sherman Act as a defense, but it claimed

that the collective bargaining agreement was void in its

entirety, based on alleged unfair labor practices. The Sixth

Circuit, while finding that the UMWA had violated the Sher-

man Act (a finding later reversed),'* relied in part on Kelly

and enforced the Trustees’ claim for uncollected royalties.

The Court emphasized that an antitrust defense, even if the

Trustees had themselves engaged in the conspiracy, did not

bar the Trustees’ collection action, 325 F.2d at 818.

The employer in Pennington also attempted to avoid its con-

tractual obligation to contribute by claiming that the contract

was void, since the UMWA allegedly unlawfully coerced the

employer into signing the Agreement in violation of Section

8(b) of the NLRA. The Sixth Circuit, however, as should this

Court, indicated that, absent a finding of such by the NLRB,

the courts had no jurisdiction to entertain such a defense, 325

F.2d at 818, 819. See Bruce's Juices, supra.

The Sixth Circuit also indicated that, with respect to rights

already accrued under the Agreement, as herein, that the

Trustees’ were not barred from collecting, citing Aelly, supra,

and Benedict Coal, supra. Prior to hearing the antitrust issue in

the consolidated case of UMWA_ vy. Pennington, supra, this

Court denied the employer's petition for certiorari on the

royalty-collection issue, thus permitting enforcement of the

Trustees’ collection action. Pennington v. Lewis, supra.

As in Pennington v. Lewis and Bruce's Juices, this Court is

not being asked to enforce a contract that has been found void

by the proper forum.'’ Contracts are presumed to be legal,

Walsh v. Schlect, 429 U.S. 401 (1977), unless they have been

' UMWA y. Pennington, 381 U.S. 657 (1965).

' The UMWA further contends that, Section &(e) need not be

read as voiding the 7rusices’ right to collect. Benedict Coal, supra;

Kelly, supra; Pennington v. UMWA, supra at 818. Indeed, this Court,

particularly in interpreting labor laws and Section 8(e), National

Woodwork Mirs. v. NLRB, 386 U.S. 612, 619 (1967), has advised

that it is a “familiar rule, that a thing may be within the letter of the

statute and yet not within the statute, because not within its spirit nor

within the intention of its makers.” Connell, infra at 628. In balanc-

ing the concerns expressed in Section 8c) against the concern that

(1) the defenses against the union not be applicable to action by

found illegal by the proper forum — the NLRB. The provision

challenged herein must, therefore, be presumed legal on its

face, '* until the agency of competent jurisdiction, the NLRB,

determines that the clause is void. Section 1G() insures that

premature enforcement of the provision may be prevented, if

the NLRB has a “‘reasonabie cause to believe” that the provi-

sion violates Section 8(e). Kaiser, however, chose not to file

an unfair labor practice charge or seek injunctive relief from

the NLRB, challenging the provision in the 1974, 1978, or

now the 1981 Agreement which became effective on June 7,

1981."

trustees, Benedict Coal, supra, and (2) that the financial integrity of

multiemployer pension plans should be encouraged, 29 U.S.C.

$1001a (1981 Supp.); NLRB v. Amax Coal Co., —— U.S. —— , 49

U.S.L.W. 4880 (1981), this Court should uphold the decision below

— particularly where the collective bargaining contract is completed

and the substandard produced coal has already been purchased.

Pennington v. UMWA, supra at 819.

However, the Court, in order to uphold the decision below, need

not determine, as it did in Mills v. Electric Auto-Lite Co., 396 U.S.

375, 386-87 (1970), accord Ovcidental Life Insurance Co. v. Pat Ryan

& Assoc., Inc., 496 F.2d 1255, 1265-66 (4th Cir. 1974) cert. denied,

419 U.S. 1023 (1974), that (as to the Trustees) the term ‘‘void"’ in

the statute was not absolute. As in Bruce's Juices, supra at 745-46, the

Court need only presume legality and decline to entertain the

illegality defense, because the appropriate tribunal — there the Fed-

eral Trade Commission, here the NLRB — has not had its jurisdic-

tion invoked and, therefore, has not ‘‘voided”’ the challenged provi-

sion.

chased-coal provision requiring double royalties on purchased coal.

'? Without conceding the point, the UMWA suggests that such a

charge by Kaiser might not be dismissed, if, as it claims, the provi-

sion is being applied illegally to Kaiser, a factual situation that may

not have existed in Consolidation Coal Co., NLRB Case No. 6-CE-17,

supra. Even if the NLRB refuses to issue a complaint, Kaiser's posi-

tion is not unlike a discharged employee who may believe that he or

she has a meritorious unfair labor practice case, but the NLRB’s

Gereral Counsel refuses to issue a complaint. cf. Bruce's Juices, supra

at 746.

Having chosen not to invoke the proper forum, Kaiser now

urges this Court to unnecessarily create another exception to

the preemption doctrine. While the UMWA concedes that

there are some exceptions to that doctrine, they are either cre-

ated by statute, e.g., 29 U.S.C. § 164(b) (1978), or i 1e excep-

tions touch areas primarily of local interest. Neither rationale

justifies the exception for which Kaiser now argues. In particu-

lar, the existence of Section 10(1) argues strongly against crea-

tion of another exception. '*

Kaiser is not content to carve out just another exception to

the primary jurisdiction rules. Its reading of Connell Construc-

tion Co. v. Plumbers & Steamfitters, 421 U.S. 616 (1975),

would have the general rule of primary NLRB jurisdiction

swallowed by its exception. This Court did not blanketedly

hold, as suggested by Kaiser, that courts always had jurisdic-

tion to determine whether a clause violated Section 8(e).'’

With little elaboration, the Court only indicated that ** federal

courts may decide labor law questions that emerge as collateral

issues in suits brought under independent federal remedies,

including the antitrust laws.’ Connell at 627 (emphasis

added). *"

In Connell, the primary issue relevant to this action in-

volved statutory construction, not factual findings — do the

words ‘“‘an employer in the construction industry’ mean any

employer or just employers within the context of a collective

bargaining relationship with the union. There was little need,

unlike here, to engage in extensive and complicated factual

'SIn the event that a Section 10(1) order is not granted by a court,

but the Board subsequently invalidates the provision, Kaiser's rights

should still not be prejudiced 29 U.S.C. §L103(c)(2(AI Gi) (1981

Supp.).

' Of course, after the NLRB has had an opportunity to consider

the issue, federal courts may exercise limited review of the Board ac-

tion.

” Connell apparently does not grant such jurisdiction on unfair la-

bor practice issues to stat? courts. However, state courts frequently

hear pension contribution enforcement actions.

findings, involving unit determinations, the negotiators’ in-

tentions, and the primary, secondary, or incidental effects of

the provision — matters best left, in the first instance, to the

Board. /nternational Longshoremen’s Association, supra. Thus,

Connell, in permitting the court to statutorily construe Section

8(e) itself, only lightly stepped over the doctrine of primacy.

To further understand Connell, one must also look to the

cases cited. /d. at 626 n.3. The UMWA asserts that the three

tests set forth by the Court in Amalgamated Meat Cutters

v.Jewel Tea Co., 381 U.S. 676, 684-88 (1965), the primary

case relied on by the Connel/ court, are the most appropriate

for application here. Furthermore, we suggest that all three

tests must be met before the Court should exercise its

jurisdiction. *!

In Connell, as well as Jewel Tea, this Court recognized that

the nature of the action was important to resolution of the

jurisdiction issue. In those cases, a party to the contract, the

union, in defending itself against an antitrust action, was con-

tending that the challenged contractual provision was either

legal, or that the issue of legality should, in the first instance,

be left to the Board. Unlike here, the Court recognized,

though, that it would be rare for a wnion to challenge before

the NLRB the validity of a clause that the union was also seek-

ing to enforce. In Connell, one could not expect the Plumbers

Union to have filed a Section 8(e) charge to test the validty of

the contract. Similarly, in Jewel Tea, there was not a realistic

expectation of an available procedure for obtaining Board

2! The Court, while primarily relying on Jewel Tea, also cited Vaca

v. Sipes, 386 U.S. 171 (1967) and Smith v. Evening News Ass'n, 371

U.S. 195 (1962) for comparison. Neither of those two cases resolve

the issue here. Vaca, in refusing to defer unfair representation issues

to the Board, pointedly noted that this court-developed doctrine was

only belatedly adopted by the Board. Smith only stands for the propo-

sition that activities which constitute contract breaches, as well as

unfair labor practices, are cognizable by the courts under § 301 of the

Labor Management Relations of 1947, 29 U.S.C. § 185 (1978). Here,

it is not a contract breach, but the contract itself, that is alleged to be

the unfair labor practice.

determination,” /d, at 648, Unlike the defendants in Connell

and Jewel Tea, however, the defendant in Kaiser could realis-

tically have been expected to exercise its administrative reme-

dies before the Board, including injunctive relief.’' It chose

not to do so.**

In Jewel Tea, the Court also took note that the antitrust ac-

tion, when first initiated by the employer, only clearly alleged

a conspiracy between the union and one set of bargaining

units to impose certain terms on the rest of the units. It was

only later that it became evident, in addition to the conspiracy

theory, resolution of another major issue would be necessary

— whether the marketing-hours issue was ‘‘a condition of

employment,” so as to invoke the labor exemption, Thus,

deferral to the Board may have unnecessarily protracted the

litigation, From the outset here, there was never any doubt —

Kaiser, from the time it entered into the contract, considered

the provision as violative of Section 8(e), Thus, Kaiser fails to

meet two of the Jewel Tea tests. And as we will show, Kaiser

could not always meet the third test,

In Jewel Tea, there could not have been a Board determination,

since an unfair labor practice charging a refusal to bargain would

have been necessary to invoke the Board's jurisdiction, There was no

refusal to bargain, since the challenged agreement resulted from

bargaining, rather than the refusal to bargain,

*’ While the Court showed some concern with the six-month time

limit in Jewel Tea, we suggest that it was unlikely, since a contract

was reached, that there would have been a reaffirmation of a refusal

to bargain, thus extending the Section 10(b) time limits. However,

such reaffirmation is much more likely with a Section &(e) untair la-

bor practice. As was pointed out earlier, at no time, has Kaiser fited

8(e) charges secking invalidation of the challenged provision in the

1974, 1978, or 1981 Agreements.

“In refusing to entertain a federal antitrust defense to a contract

enforcement action, one court has noted that, as Kaiser, the ag-

grieved party did not avail itself of injunctive relief pursuant to 15

U.S.C. $26 (1978). Union Oil Co. v. Chandler, 4 Cal. App.3d 716,

728, 84 Cal. Rptr. 756, 764 (1970).

C. Permitting Employers To Raise A Section 84e) Defense In

Trustee Enforcement Actions Might Impermissibly Ex-

tend Jurisdiction Over Federal Unfair Labor Practices To

State Courts

Unlike Connell and Jewel Tea, which were federal antitrust

actions, which can only be brought in federal courts, 1S U.S.C,

$4, this is a contract enforcement action that could have also

been brought in a state court, Thus, while federal courts may

have experience in interpreting federal labor statutes, the

remaining test in Jewel Tea, supra at 647, the same cannot be

said for state courts, which have no jurisdiction to decide

unfair labor practice issues, Associated General Contactors v.

Onter Tail Power Co., 611 F.2d 684, 693 (8th Cir, 1979), unless

the NLRB specifically cedes jurisdiction to them, 29 U.S.C.

$164(c) (2). Itis, however, prevented from doing that here, 29

U.S.C. 816440) 01).

Should this Court rule in Kaiser's favor, it will face in this

or a Subsequent case the same issues in the context of a state

court action, To permit interpretation of Section 8(e) by state

courts will thwart congressional intent. To prohibit: such

defenses in state courts, but permit them in federal courts,

goes against the congressional policy to encourage simplified

federal collection actions. Remarks of Rep, Thompson, supra.

By upholding the Court of Appeals, the Court will avoid this

anomaly,

* The Landrum-Griffin Conference Committee, after extended

debate in the Congress, specifically rejected the Senate provision

which permitted state courts to exercise jurisdiction over a// Board

cases, The Committee, while permitting the Board to cede jurisdic-

tion in certain circumstances, prohibited the Board from ceding

jurisdiction on those matters over which it had already exerted

jurisdiction, such as the matters herein, Legislative History of the La-

bor-Management Reporting and Disclosure Act of 1959 at 940-41,

Il. KAISER HAS NOT ALLEGED FACTS SUFFICIENT

TO REBUT THE PRESUMED LEGALITY OF THE

PURCHASE-OF-COAL PROVISION

The NLRB has already determined in a Section 8(e) pro-

ceeding that the more restrictive predecessor to the pur-

chased-coal provision, the 80-cent clause, was legal on its face.

Dixie Mining (1971), supra. \n order for Kaiser to prevail on a

summary motion, it must allege facts that clearly show that

the provision is illegal in its application generally. /d. at 754.

Kaiser has failed to do this, *

In determining whether an otherwise lawful union stand-

ards provision has been unlawfully applied, the NLRB com-

pares the fotal labor costs of subcontractors with the foral labor

costs of the primary unit. Indeed, comparison of specific bene-

fits, rather than costs, may render the provision unlawful. As-

sociated General Contractors & Teamsters, 227 N.L.R.B, 269-73

(1976). The purchased-coal clause is intended to approx-

imately equalize the differences in the total costs of wage and

fringe benefits between signatory and nonsignatory em-

ployers, a lawful objective. Dixie Mining (1971), supra, ow-

ever, Kaiser's affidavits only compare the /evel of employee

332. This distinction between costs and benefits is particularly

important when comparing employers with single employer

plans to those with multiemployer plans, in which there are a

greater percentage of participants vesting, thus greatly increas-

ing the costs to the plan for similar benefit levels.

Indeed, one government study has shown that costs were

90-cents per employee-working-hour for coal miners under

the UMWA multiemployer plan, while costs for similar bene-

fits under non-UMWA (primarily single employer) plans were

only 4-cents per employee-working-hour,’’ Thus, the eco-