CHARLESTON, W.Va. -- More than 900 interested parties sent letters to the U.S. Bankruptcy Court in St. Louis before Wednesday's decision that allowed Patriot Coal to cut health care and pension benefits for thousands of working and retired miners.
Judge Kathy Surratt-States said that all of those letters, many of which detail the huge risks and sacrifices inherent in mining, were read before she ruled against the miners.
"Some discuss how physically, mentally and emotionally grueling being a coal miner was," Surratt-States wrote. "A sacrifice made with due consideration of the promised health care from cradle to grave."
But her 102-page opinion finds that the risk of potential mine closings if Patriot is not allowed to cut benefits outweighs the broken promise to the miners.
"What is better," Surratt-States asks, "something for a period of time or nothing in a short period of time?"
Two weeks earlier, on May 16, Surratt-States allowed bankrupt Patriot Coal to pay $6.9 million in bonuses to "key employees," rejecting union arguments that those bonuses unfairly rewarded executives.
Surratt-States also warned about the negative impacts of a strike by the United Mine Workers of America.
"If the UMWA calls a strike, especially a lengthy strike -- a decision which at least initially lies with President [Cecil E.] Roberts -- debtors will be forced to liquidate."
After last Wednesday's ruling, Roberts announced that negotiations between the union and the company will continue.
"We remain willing to take painful steps to help Patriot get through the rough period it faces over the next couple of years," Roberts stated. "But if we're going to share in that pain, then we have every right to share in the company's gain when it becomes profitable again."
Bennett Hatfield, Patriot Coal's president and CEO, called the bankruptcy ruling "a major step forward" for his company. He also said Patriot would continue bargaining with the union.
Critics believe that Surratt-States decision will be devastating to working and retired miners, as well as other workers across the country.
She was appointed as a bankruptcy judge in 2003 by President George W. Bush.
In her decision to reject the collective bargaining agreements and to modify retiree benefits Surratt-States ruled that Patriot Coal does not have to meet any contractual obligations to provide benefits to working or retired coal miners under the company's contracts with the UMWA.
She warned that if Patriot liquidates and closes its current mining operations in West Virginia, Kentucky and Illinois, then the overwhelming majority of Patriot's current employees will be unemployed.
Today, Patriot has about 4,200 employees, more than 2,900 of whom are represented by the UMWA.
The ruling set up a traditional conflict between labor leaders and the business community. Business leaders expressed sympathy for the miners, but talked about how difficult it is to preserve jobs and benefits in a tough economy. Labor leaders said that if the decision is not overruled it will devastate the benefits and legal rights first created for American workers during the New Deal under President Franklin D. Roosevelt.
Critics of the Patriot Coal Ruling
Patriot Coal was founded in 2007 when Peabody Energy sold all of its union operations east of the Mississippi to the newly created company. In 2008, Patriot bought Magnum Coal, a company that had taken over the union mines once operated by Arch Coal.
Those deals, the UMWA argues, gave Patriot Coal far more liabilities than assets from its creators -- Peabody and Arch.
Kenny Perdue, president of the state AFL-CIO, called the Patriot bankruptcy ruling sickening and called on Congress to reform federal bankruptcy laws.
"The judge ruled Patriot is not required to meet collective bargaining agreements that provide the workers, who made the original corporations billions in profits, health care and retirement benefits," Perdue said.
Perdue said that the bankruptcy court should "protect hardworking Americans and their promised benefits from greedy corporations ....
"This is not the first time this has happened. The steelworkers, the autoworkers and others have been down this road before. The consequences are catastrophic.