The opinion of the court was delivered by: Paul L. Friedman United States District Judge
These cases involve a dispute over two coal mining companies' obligations to contribute to a pension trust benefiting retired coal miners. The matter is before the Court on four motions for summary judgment in these two consolidated cases: Civil Action No. 07-0490 and Civil Action No. 07-1050.*fn1
In Civil Action No. 07-0490, plaintiffs Michael Holland, Michael Buckner, B.V. Hyler and Steven Schaab, trustees of the United Mine Workers of America 1974 Pension Trust (the "Trust"), bring suit under Sections 502 and 515 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132 and 1145, respectively, and Section 301(a) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a), against defendants Freeman United Coal Mining Company ("Freeman") and Monterey Coal Company ("Monterey").*fn2 The Trust argues that Freeman and Monterey have failed to contribute to the Trust as required by an agreement called the 2007 National Bituminous Coal Wage Agreement, and it has moved for summary judgment on the issue of the coal mining companies' liability for the allegedly delinquent contributions.
In Civil Action No. 07-1050, Freeman has brought suit against the Trust, the United Mine Workers of America (the "Union") and the Bituminous Coal Operators' Association ("BCOA") seeking a declaration that Freeman is not required to contribute to the Trust according to the 2007 National Bituminous Coal Wage Agreement.*fn3 In the alternative -- that is, if the Court concludes that Freeman is obligated to contribute to the Trust according to that agreement -- Freeman seeks damages against BCOA on the theory that (1) BCOA served as Freeman's agent during the negotiation of the 2007 National Bituminous Coal Wage Agreement, (2) BCOA therefore owed duties of good faith and fair dealing to Freeman, and (3) BCOA breached those duties by negotiating pension contribution rates that are adverse to Freeman's interests. The Trust, the Union and BCOA have moved for summary judgment in Civil Action No. 07-1050.*fn4
Upon consideration of the parties' papers, the oral arguments of counsel and the entire record in this case, the Court will grant summary judgment in favor of the Trust in Civil Action No. 07-0490. The Court will also grant summary judgment in favor of the Trust, the Union and BCOA on the issue of Freeman's liability in Civil Action No. 07-1050. It declines to exercise supplemental jurisdiction over Freeman's agency claim.
The Union is a labor organization representing mine workers. BCOA is a nonprofit corporation that bargains with the Union on behalf of its member companies -- i.e., those companies that authorize BCOA to engage in collective bargaining on their behalf. The Trust was created by the Union and BCOA in 1974. Its purpose is to provide benefits to retired coal miners and their eligible dependents, and it is funded by contributions from employers who agree to participate in the Trust. Employers agree to participate in the Trust by signing agreements to that effect with the Union. Freeman and Monterey agreed to participate in the Trust by signing many such agreements over the years. See BCOA Mot., Defendant BCOA's Statement of Material Facts Not in Dispute ¶¶ 2-3; Monterey Supp. Opp., Ex. E, Declaration of Howard C. Schulz ¶¶ 4-5.*fn5
One of BCOA's principal functions is to negotiate with the Union collective bargaining agreements called National Bituminous Coal Wage Agreements, or "NBCWAs." NBCWAs typically expire after three to five years, and the Union and BCOA then engage in negotiations to create "successor" NBCWAs. See Trust Mot. at 22. Generally speaking, the terms of any particular NBCWA -- which include wages, hours and other terms and conditions of employment -- are binding only upon BCOA members and those non-BCOA members who affirmatively "sign on" to the NBCWA or another agreement incorporating its terms. See BCOA Supp. Reply at 12-13. One important exception to this rule is at the heart of this case.
B. The Evergreen Clause and the Pittston Litigation
In addition to wages and other terms and conditions of employment, each NBCWA also establishes the rates at which all employers who have ever agreed to participate in the Trust must contribute to the Trust.*fn6 In other words, an employer who has agreed to participate in the Trust at any time -- whether by signing a previous NBCWA as a member or non-member of BCOA, or by signing a different agreement with the Union that requires the employer to contribute to the Trust -- is bound by the rates set forth in a new NBCWA, even if that employer is not a BCOA member at the time the new NBCWA is executed, and even if that employer does not affirmatively sign on to the new NBCWA or a similar agreement. See United Mine Workers of America 1974 Pension v. Pittston Co., 984 F.2d 469, 473-74 (D.C. Cir. 1993). To explain why requires a short digression.
Every NBCWA executed since 1978 has incorporated by reference the documents setting forth the terms and conditions of participation in the Trust (hereinafter the Trust's "governing documents"). See, e.g., National Bituminous Coal Wage Agreement of 2002, art. XX § c(1) at 143-44 (2002).*fn7 The Trust's governing documents include a provision called the "evergreen clause." The current version of the evergreen clause provides:
Any Employer who employed any Participant eligible for coverage under, or who receives or received benefits under, the 1974 Pension Plan, or any Employer who was or is required to make, or who has made or makes contributions to the 1974 Pension Plan and Trust, is obligated and required to comply with the terms and conditions of the 1974 Pension Plan and Trust, as amended from time to time, including, but not limited to, making the contributions required under the National Bituminous Coal Wage Agreement of 1978, as amended from time to time, and any successor agreements thereto, including, but not limited to, the National Bituminous Coal Wage Agreement of 2007.
Trust Mot., Ex. E to the Declaration of Dale Stover, United Mine Workers of America 1974 Pension Plan, art. VIII § B(16) at 33 (2007).*fn8
The meaning of the evergreen clause -- and in particular the effect of its incorporation in all post-1978 NBCWAs and similar agreements -- was the subject of extensive litigation before this Court and the D.C. Circuit. See United Mine Workers of America 1974 Pension v. Pittston Co., 984 F.2d 469 (D.C. Cir. 1993); In re United Mine Workers of America Employee Benefit Plans Litigation, 782 F. Supp. 658 (D.D.C. 1992) (collectively, "the Pittston litigation"). In the Pittston litigation, a dispute between the pension trusts and certain employers who had previously agreed to participate in the trusts
arose upon the expiration of the NBCWAs to which the appellant [employers] were signatories. Instead of entering into successor NBCWAs, the [employers] withdrew from the BCOA and negotiated individual labor agreements with the [Union] which included modifications of their contribution obligations to the trusts. The Trustees then brought . . . suit, contending that the evergreen clause obligates the [employers] to continue contributing to the trusts at the levels established in successor NBCWAs [rather than the levels established in the employers' non-NBCWA agreements with the Union].
United Mine Workers of America 1974 Pension v. Pittston Co., 984 F.2d at 472 (footnotes omitted).
The trustees' theory in the Pittston litigation was that the employers were subject to the evergreen clause in the Trust's governing documents by virtue of having signed one or more NBCWAs (or other agreements incorporating the Trust's governing documents), and that the evergreen clause imposed a perpetual obligation on those employers to contribute to the Trust at rates set forth in "any successor agreements" to the 1978 NBCWA. See In re United Mine Workers of America Employee Benefit Plans Litigation, 782 F. Supp. at 661. The trustees further argued that only a subsequent NBCWA could qualify as a "successor agreement" within the meaning of the evergreen clause, and hence that the coal mining companies could not escape their contribution obligations under the current NBCWA by entering into individual, nonNBCWA agreements with the Union. Id. at 663-64. Judge Hogan agreed with the trustees and granted summary judgment in their favor.
The D.C. Circuit affirmed. Specifically, the court concluded that because the employers had signed NBCWAs or similar agreements incorporating the Trust's governing documents, including the evergreen clause, those employers had
agreed to be bound by the evergreen clause to make continuing contributions to the [Trust]; and this obligation included an agreement to make contributions at rates specified in subsequent NBCWAs, without regard to whether the employer was still a party to the subsequent agreements. The Coal Companies cannot now rely on their refusal to sign successor NBCWAs to release them from a previously agreed-upon perpetual obligation.
United Mine Workers of America 1974 Pension v. Pittston Co., 984 F.2d at 474. The court of appeals also found "unconvincing . . . the Coal Companies' argument that the evergreen clause allows for the modification of contribution requirements in non-NBCWA labor agreements," reasoning that "the only 'successor' agreement to an NBCWA is another NBCWA." Id. at 475. The Circuit agreed with Judge Hogan that these conclusions were consistent with the intentions of the evergreen clause's drafters, which were to (1) "ensure that all employers participating in the [Trust] would share equally in the burden of amortizing the existing Trust deficits and in funding future benefits," and (2) prevent employers from terminating or reducing their contributions by negotiating individual labor agreements with the Union, thereby "leaving other employers to carry more than their share of the [Trust's] liabilities." In re United Mine Workers of America Employee Benefit Plans Litigation, 782 F. Supp. at 665.
All of this is common ground for the parties. Freeman and Monterey acknowledge that they obligated themselves to contribute to the Trust by signing multiple NBCWAs while members of BCOA. Freeman and Monterey further acknowledge that, by signing multiple NBCWAs -- all of which incorporated by reference the evergreen clause in the Trust's governing documents -- they incurred a perpetual obligation to contribute to the Trust at rates set forth in all "successor" agreements. See, e.g., Freeman Supp. Opp., Freeman Response to UMWA's Statement of Material Facts Not In Dispute ¶ 25; see also Monterey Supp. Opp. at 7.
Nevertheless, Freeman and Monterey contend that they need not comply with the increased contribution rates set forth in the latest NBCWA. As discussed in more detail below, they offer two main arguments on this score. First, the coal mining companies seem to argue that the behavior of the Union and BCOA during the negotiation, adoption and implementation of the 2007 NBCWA permits them to refuse to contribute to the Trust under that agreement. See, e.g., Freeman Supp. Opp. at 2-3. Second, the coal mining companies argue that they are not bound by the 2007 NBCWA because (1) the evergreen clause requires them to comply only with "successor agreements" to the NBCWAs to which they are parties, see Monterey Supp. Opp. at 10 ("[The evergreen clause] requires contributions only if a 'successor NBCWA' is negotiated."), and (2) the 2007 NBCWA is not a successor agreement within the meaning of the evergreen clause. See Freeman Supp. Opp. at 3 ("Because it is not a 'successor' agreement [within the meaning of the evergreen clause], the increased contribution rates contained in the 2007 [NBCWA] are not binding [on] non-signatories to the [NBCWA], including Freeman.").
With respect to the second argument, the coal mining companies reason as follows: The drafters of the evergreen clause intended the term "successor agreement" to apply to agreements negotiated by the Union and BCOA, but not to any and all agreements negotiated by the Union and BCOA. In particular, the drafters did not intend the term to apply to agreements negotiated by the Union and BCOA regardless of BCOA's composition. Rather, according to the coal mining companies, the drafters of the evergreen clause intended that an agreement would qualify as a "successor agreement" -- and thus bind all participating employers by operation of the evergreen clause -- if and only if BCOA was "a robust multi-employer bargaining unit of numerous unaffiliated companies" representing "a significant percentage of the unionized coal industry" at the time the agreement was negotiated. Freeman Supp. Opp. at 1, 3. All acknowledge that at the time the 2007 NBCWA was negotiated, voluntary withdrawals had reduced BCOA's membership -- which once numbered in the hundreds -- to eleven member companies, all of which were owned ...