Amicus Curiae Brief — Rawl Sales & Processing Co. v. United Mine Workers of America 1974 Pension Trust

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tages Court, U °

FILED

No. 92-1945 i MUN 1 4 1993

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1992

PITTSTON COAL GROUP COMPANIES,

» Petitioners,

UNITED MINE WORKERS OF AMERICA

1974 PENSION TRUST, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF OF

ASSOCIATED ELECTRIC COOPERATIVE, INC.

AS AMICUS CURIAE IN SUPPORT OF PETITIONERS

EUGENE E. ANDERECK *

PATRICK A. BAUMHOER

ANDERECK, EVANS, MILNE,

PEACE & BAUMHOER

1111 South Glenstone

Springfield, Missouri 65808

(417) 864-6401

Counsel for Amicus Curiae

Associated Electric

Cooperative, Inc.

June 14, 1993 * Counsel of Record

WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON. D.C. 20001

TABLE OF CONTENTS

TABLE OF AUTHORITIES

INTEREST OF AECI AS AMICUS CURIAE .

ARGUMENT

CONCLUSION

Page

TABLE OF AUTHORITIES

CASES

Associated Electric Cooperative, Inc. v. Holland,

C.A. No. 93-0944-HHG (D.D.C.) .........................

Rawl Sales and Processing Company v. Trustees,

UMWA 1950 Pension Trust, et al., No. 92-1775..

PERIODICALS AND PUBLICATIONS

“Annual Energy Outlook 1993”, Energy Informa-

tion Administration, U.S. Department of Energy

(Dec. 1992) Ne RR sts in.

“Inventory of Power Plants In the United States,

1991,” Energy Information Administration, U.S.

Department of Energy (Oct. 1992) 0000000000...

“The U.S. Coal Industry, 1970-1990: Two Decades

of Change,” Energy Information Administra-

tion, U.S. Department of Energy (Nov. 1992) _.

4,5

IN THE

Siyrene Court of the United States

OcTOBER TERM, 1992

No. 92-1945

PITTSTON COAL GROUP COMPANIES,

Petitioners,

Vv.

UNITED MINE WORKERS OF AMERICA

1974 PENSION TRUST, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF OF

ASSOCIATED ELECTRIC COOPERATIVE, INC.

AS AMICUS CURIAE IN SUPPORT OF PETITIONERS

This brief is submitted by Associated Electric Coopera-

tive, Inc. (“AECI”) as amicus curiae in support of

petitioners. '

INTEREST OF AECI AS AMICUS CURIAE

The Trustees’ assertion that the Court of Appeals’ in-

terpretation of the evergreen clause will have no effect

outside the limited sphere of unionized bituminous coal

' The parties have consented to the filing of this brief. Copies of

‘cd with the Clerk of the Court.

the letters of consent have bee:

mining is incorrect... To the contrary, the Court’s deci-

sion imposes unanticipated obligations on electric power

generators such as AECI.

AECI is a rural electric power cooperative established

and incorporated in 1961 under the laws of the State of

Missouri. AECI is the wholesale firm power supplier to

six regional generation and transmission cooperatives,

which in turn supply wholesale power to forty-three dis-

tribution cooperatives. These distribution cooperatives

serve at the retail level over 1.2 million consumer mem-

bers in rural Missouri and much of southeastern Iowa.

AECI operates two power generation plants in Missouri

at New Madrid and Thomas Hill. These power plants

are coal-fired. That is, they burn coal in cyclone boilers

to produce steam and, ultimately, electrical energy. Dur-

ing its history AECI, like many other electric power gen-

erators, has -owned bituminous coal mines to produce

coal for its own use. It also has purchased coal from

unaffiliated coal mining companies. From 1980 until the

end of 1992, AECI owned and operated bituminous coal

mines adjacent to its Thomas Hill plant. When AECI

acquired these coal mining operations, it became bound

by the 1978 National Bituminous Coal Wage Agreement

(“NBCWA”) as the successor to the prior signatory

operator. AECI signed so-called “me-too” agreements in

1981, 1984 and 1988.

The NBCWAs required contributions to the respondent

UMWA Trusts, not only for bituminous coal produced

and hours worked by UMWA employees, but also for

any bituminous coal purchased by a signatory or me-too

2 Brief in Opposition to the Petition for a Writ of Certiorari in

Rawl Sales and Processing Company v. Trustees, UMWA_ 1950

Pension Trust, et al., No. 92-1775 at 6. Rawl Sales was consolidated

with the instant case in the Court of Appeals. The Court of Ap-

peals’ judgment was the same in both cases.

company. As a result of the decision of the Court of

Appeals, AECI is subject to a potentially perpetual obli-

gation to contribute to the Trusts at rates negotiated by

the BCOA for work performed by UMWA-represented

employees at its non-operetional mines and, absent a

judicial holding that the purchase of coal clause is illegal,

for any bituminous coal it purchases, notwithstanding that

it is no longer in the coal mining business and is not a

member of BCOA.

The Court of Appeals’ decision will have a substantial

impact on many members of the electric power industry.

More than half the electric power plants in the United

States are coal-fired and these power plants are perforce

either coal mine operators, coal purchasers or both. An-

nual Energy Outlook 1993, Energy Information Admin-

istration, U.S. Department of Energy (Dec. 1992) at 49.

Thus, the issues presented by the Petition have implica-

tions for collective bargaining in the electric power in-

dustry and for the ultimate cost to tens of millions of

consumers of electricity.

ARGUMENT

Article XX(d)(1) of the NBCWAs required signatory

and me-too operators to make contributions to the

UMWA Trusts based on tons of coal produced and to

contribute on a “cents per hour” basis for certain work

performed by UMWA employees. In addition, Article

XX(d)(1)(v), the so-called “purchase of coal” clause,

required contributions based upon tons of bituminous coal

purchased by a signatory or me-too company, for which

contributions had not already been made under Article

XX(d)(1).°

3 Although the Court of Appeals’ decision specifically addressed

the impact of the evergreen clause on the per-ton contribution

requirement of Article XX(d)(1), the Trustees have contended

that their evergreen theory applies equally to Article XX(d) (1) (v).

See Associated Electric Cooperative, Inc. v. Holland, C.A. No. 93-

0944-HHG (D.D.C.).

Although AECI is entirely out of the business of min-

ing bituminous coal. it continues to employ some UMWA

workers in land redamation projects. Under the Court

of Appeals’ reading of the evergreen clause, AECI must

continue to make pension contributions for these em-

ployees at BCOA-regotiated rates, even though: (1)

AECI may never agree to another NBCWA: (2) AECI

is no longer engaged in the production of coal: and (3)

AECI is not a member of BCOA. When AECT as-

sumed the obligations of the 1978 NBCWA, it did not

know that it would be deemed to have waived forever

its right to select a bargaining representative other than

BCOA to bargain with the union on the critical issue of

pension benefits for these workers.

Likewise, given the Court of Appeals’ interpretation

of the evergreen clause, under Article XX(d)(1)(v),

AECI is required to continue, porentially in perpetuity.

to make contributions to the Trusts at BCOA-nevotiated

rates for every ton of bituminous coal it purchases to

fire its power plants '—whether or not it ever signs an-

other NBCWA. When AECT assumed the oblivations of

the 1978 NBCWA, it did not know it was subjectine

itself to a perpetual obligation to make pension contribu-

tions for people who are not its employees, based on

bituminous coal it purchased after it ceased mining oper-

ations, and at rates set in the future by the BCOA.

AECI's situation is not unique. Over 86 percent of

the coal consumed in the United States today is used by

electric utilities. “The U.S. Coal Industry. 1970-1990:

Two Decades of Change.” Energy Information Adminis-

tration, U.S. Department of Energy (Nov. 1992) at 101.

4In order to comply with the Clean Air Act, AECI’s plans for

the future include a switch to non-bituminous, low-sulphur Western

coal. However, AECI also has retained title to its Missouri bitumi-

nous coal reserves. If AECI mines or buvs bituminous coal at any

time in the future, the Court of Appeats’ decision would require

contributions to the Trusts.

Electric utilities accounted for virtually all of the growth

in U.S. coal consumption between 1970 and 1990. 7d.

See also, “Annual Energy Outlook 1993”, Energy Infor-

mation Administration, U.S. Department of Energy (Dec.

1992) at G1, 65. Conversely, coal holds a dominant share

of the electric power fuel market. Slightly more than half

of all operating power plants burn coal and the 54

largest electric power plants currently on utilities’ drawing

hoards are coal fired. “Inventory of Power Plants In the

United States, 1991”, Energy Information Administra-

tion, U.S. Department of Energy (Oct. 1992) at 1.

The tnterdependence of the coal and electricity markets

is expected to continue into the next century. The En-

ergy Information Agency projects an increased demand

for electricity between the present and 2010 and, as a

result, a marked increase in coal production. “The U.S.

Coal Industry, 1970-1990" at 59-61. For now and into

the foreseeable future, most contributions made to the

Trusts under the purchase of coal clause will be made by

members of the electric power industry. Most of these

companies, under the Court of Appeals’ rationale, will

be forced to pay pension and benefit contributions, not

for their own employees and not because they agreed to

make such contributions, but rather to offset the contri-

butions that by contract should be paid by BCOA mem-

ber companies. This is not, as the Trustees contend, a

case of limited import that affects only a small number

of coal mine operators. The decision of the Court of Ap-

peals amounts to the imposition of huge obligations on the

electric utility industry which in turn will be borne by

millions of consumers of electric power.

CONCLUSION

For these reasons set forth by Petitioners and for the

reasons stated herein, the petition for a writ of certiorari

should be granted.

Respectfully submitted,