CHARLESTON, W.Va. -- A federal judge has thrown out a suit brought by the United Mine Workers and a group of retired miners who are trying to preserve pension and health-care benefits for 10,000 active and retired Patriot Coal miners and their families.
U.S. District Judge Joseph R. Goodwin ruled in favor of Peabody Energy and Arch Coal after the companies sought to have the class-action suit dismissed.
The class-action lawsuit in federal court in Charleston was filed in October 2012 on behalf of the UMW and eight active and retired miners. Peabody and Arch, both based in St. Louis, were named as defendants.
The suit alleged that Peabody and Arch planned to transfer employees and benefit plan obligations to Patriot Coal "for the purposes of depriving" the employees and retirees of their benefits. The suit alleged that such a move is illegal under federal law.
In a 13-page ruling issued Friday, Goodwin said that actions by Peabody and Arch did not violate the federal Employee Retirement Income Security Act, or ERISA.
One provision of ERISA prohibits an employer from interfering with the attainment of any right to which employees may become entitled under a benefit plan covered by the law.
But Goodwin said that section of the law applies only to the individual rights of employees to attain benefits, not to the financial security of the plan as a whole.
"Here, the plaintiffs do not assert that the spin-off/sale of the subsidiaries interfered with their right to attain benefits," the judge wrote. "Instead, the plaintiffs argue their rights were interfered with because the sale/spin-off of the subsidiaries jeopardized the fund's capacity to pay their entitled benefits. However, courts have generally held that [ERISA] does not protect the financial stability of a pension fund."
In a footnote, though, Goodwin also noted that the situation could provide the miners with a cause of action under a separate law, the Coal Act, if the purpose of the moves that created Patriot was to evade benefit liability under that law. The miners and the UMW did not make such claims, however, the judge noted.