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THOMAS v. READING ANTHRACITE CO.

December 30, 1966

Emmett Thomas et al., Trustees of Anthracite Health and Welfare Fund, Plaintiffs,
v.
Reading Anthracite Company, Defendant


Nealon, D.J.


The opinion of the court was delivered by: NEALON

NEALON, D.J.:

Plaintiffs, Trustees of the Anthracite Health and Welfare Fund, brought suit under Section 301(a) of the Labor-Management Relations Act of 1947, 29 U.S.C. § 185, to collect payments of royalties allegedly owed them by defendant, Reading Anthracite Company, under the terms of the Anthracite Wage Agreements of February 1, 1959, and September 1, 1964.

 Defendant has filed a motion under Rule 12(b) in which it seeks:

 1. to dismiss the action for the reason that the complaint fails to state a claim against the defendant upon which relief can be granted;

 2. to dismiss the action for the reason that the Court lacks jurisdiction under § 301(a) of the Labor-Management Relations Act of 1947, 29 U.S.C. § 185, in that plaintiffs are not a labor organization, are not representing employees, and have never entered into a contract with defendant within the meaning of the Act;

 3. to dismiss the action for the reason that diversity of citizenship does not exist between plaintiffs and defendant and, therefore, the Court lacks jurisdiction;

 4. to dismiss the action for the reason that the Court lacks jurisdiction of the subject matter in that the Anthracite Health and Welfare Fund is not subject to Federal law;

 5. to dismiss the action for the reason that the complaint fails to join an indispensable party, viz., the United Mine Workers of America, and

 6. to order the plaintiffs to furnish defendant with a more definite statement of their claim for the reason that the complaint is so vague and ambiguous that defendant should not be required to prepare a responsive pleading.

 Passing over Argument Number 1 enumerated above for the time being, we will briefly consider defendant's remaining Arguments. Defendant's Arguments Numbers 2, 3, 4 and 5 were considered and rejected by this Court in Emmett Thomas, et al. v. Honeybrook Mines, Inc., No. 8499 Civil (Memorandum dated March 30, 1965).

 In Honeybrook we concluded that a suit by Trustees to collect royalties allegedly due them under the terms of a collective bargaining contract was cognizable in Federal Court under Section 301(a). Smith v. Evening News Association, 371 U.S. 195, 9 L. Ed. 2d 246, 83 S. Ct. 267; Dowd Box Company v. Courtney, 368 U.S. 502, 7 L. Ed. 2d 483, 82 S. Ct. 519. Obviously, if jurisdiction exists under § 301(a), then there is no need for diversity of citizenship between the parties. Further, we held in Honeybrook that the Trustees are the proper parties to enforce payments to the Fund and the United Mine Workers of America is not an indispensable party. United Mine Workers of America, District 22 v. Roncco, 314 F.2d 186 (10th Cir. 1963); Lewis v. Quality Coal Corp., 243 F.2d 769 (7th Cir. 1957). Finally, defendant's contention that the complaint is vague and ambiguous is held to be without merit. The complaint sufficiently informs defendant of the nature of the claim and the relief sought in accordance with accepted Federal practice.

 Returning now to defendant's first Argument, it is contended that royalty payments cannot be legally made by the defendant to the plaintiffs because the Anthracite Health and Welfare Fund does not comply with the statutory requirements of the Labor-Management Relations Act. Specifically, defendant asserts that § 302(a) of the Act, 29 U.S.C. § 186(a), provides that it shall be unlawful for any employer to pay any money to a representative of any of his employees or to any labor organization which represents any of his employees, excepting, however, payments to a trust fund established by such representative for the sole and exclusive benefit of his employees, their families and dependents, which trust fund must contain certain minimum requirements. *fn1" According to defendant, the trust fund involved herein does not meet these requirements and does not qualify under the Act because:

 (a) the purposes for which payments may be made from the Anthracite Health and Welfare Fund are not limited or restricted to those permitted by Section 302(c)(5)(A) of the said Statute;

 (b) the provisions of the Fund do not set up a detailed basis on which payments are to be made from the Fund, and there is no written agreement with the employer setting out the detailed basis on which payments are to be made from the Fund;

 (c) the employees and employers are not equally represented in the administration of the Fund, inasmuch as two of the three Trustees are officers of local Unions of the United Mine Workers;

 (d) there is no written agreement providing that employers and employees shall agree on an impartial umpire to decide disputes in the administration of the Fund or, in the event of their failure to agree within a reasonable length of time, that an impartial umpire shall be appointed on petition of either group by the United States District Court of the District where the Fund has its principal office; and

 (e) it appears that the agreement for the administration of the Fund does not contain the provisions for annual audit and statement of results to be available for inspection, as required by the aforesaid statute.

 (f) The provisions of the Anthracite Health and Welfare Fund, as set out in the Complaint, do not comply with the requirements of Section 302(c)(5)(C) in that payments to be used for providing pensions or annuities are not required to be made to a separate fund which provides that such funds cannot be used for any purpose other than paying pensions or annuities.

 Assuming that the Arguments advanced are proper under a Rule 12 motion, we will treat these points seriatim.

 I. THE PURPOSES FOR WHICH PAYMENTS MAY BE MADE ARE NOT LIMITED TO THOSE PERMITTED BY SECTION 302(c)(5)(A).

 Section 302(c)(5)(A) (see footnote 1), recognizes the validity of payments to a trust fund provided the money is used for the purpose of paying certain enumerated benefits for the employees, their families and dependents. The Anthracite Wage Agreement of September 1, 1964, provides for certain amendments to the Anthracite Health and Welfare Fund as follows:

 
"1. The Fund heretofore created shall be held in trust irrevocably and shall endure as long as the purposes for its creation shall exist. Said purposes shall be to pay either from principal or income or both, the following:
 
(a) benefits to employees of said operators, their families and dependents, for medical or hospital care, pensions on retirement or death of employees, compensation for injuries or illness resulting from occupational activity or insurance to provide any of the foregoing, or life insurance, disability and sickness insurance or accident insurance;
 
(b) benefits with respect to wage loss not otherwise compensated for at all or adequately under the ...

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