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UNITY REAL ESTATE CO. v. HUDSON

March 14, 1997

UNITY REAL ESTATE COMPANY, Plaintiff
v.
MARTY D. HUDSON, et al., Defendants and UNITED STATES OF AMERICA, Intervenor-Defendant



The opinion of the court was delivered by: SMITH

MEMORANDUM ORDER

 SMITH, District Judge

 I. INTRODUCTION

 This matter is currently before the Court on cross-motions for summary judgment. In a published opinion and order, Unity Real Estate Co. v. Hudson, 889 F. Supp. 818 (W.D.Pa. 1995), this Court granted a preliminary injunction in favor of plaintiff Unity Real Estate Co. ("Unity"), finding that Unity had demonstrated a likelihood of succeeding on the merits on its claim that an application of the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701-9722 (the "Coal Act") would effect an uncompensated "taking" in violation of the Takings Clause of the Fifth Amendment. *fn1"

 In its motion for summary judgment, Unity reiterates its takings claim, as well as its contention that the liabilities imposed upon it by the Coal Act give rise to due process violations, a claim that this Court rejected at the preliminary injunction stage. Unity, 889 F. Supp. 818 at 824-25 (finding Congress had a rational basis for passing the legislation). Defendants, Trustees of the UMWA Combined Benefit Fund and the 1992 UMWA Benefit Plan, assert that new facts and subsequent appellate decisions addressing the Takings Clause issue, including a recent opinion by the Court of Appeals for the Third Circuit, Lindsey Coal Mining Co. v. Chater, 90 F.3d 688 (3d Cir. 1996), compel a conclusion that the Coal Act, as applied, does not effect an uncompensated taking.

 I agree with the Trustees that recent decisions from the Courts of Appeals and a more complete factual record require a re-examination of Unity's takings claim. Although it is undisputed that enforcement of the Coal Act in this instance will cause severe economic hardship, the current case law now establishes that the Trustees' motion for summary judgment should be granted.

 II. FACTUAL FINDINGS

 A. Unity and Its Related Companies

 In their motion for summary judgment, the Trustees submit new facts regarding Unity and its related coal companies that have been obtained since the preliminary injunction. With a few exceptions, as noted, Unity does not dispute the following facts.

 Incorporated in 1947 by members of the Jamison family, Unity currently owns a commercial building and parking lot in Greensburg, Pennsylvania. Unity, 889 F. Supp. 818 at 821. With annual gross revenues of approximately $ 50,000 and a net worth of approximately $ 85,000, Unity only employs two individuals, an officer at a salary of $ 7,200 per year, and a janitor. Id.

 In 1969, Unity became the surviving entity of the merger of three inactive coal companies: South Union Coal Company, Penn View Coal, and Stewart Coke & Coal. Unity is also a successor to two additional coal companies, Jamison Coal Company and Moremet Coal Company. Unity, 889 F. Supp. at 821.

 The following is a description of the individual coal companies that were merged into or created by Unity.

 1. South Union Coal Company

 South Union was incorporated in 1922 by the Jamison family. From 1923 through 1961, the company operated two mines in Pennsylvania and West Virginia employing more than 100 UMWA-represented miners at each mine. (Def. facts PP 43, 44). South Union was signatory to the National Bituminous Coal Wage Agreements ("NBCWA") of 1947 through 1961. (Def. facts P 45). *fn2" From 1923 to 1941, South Union was a member of the Western Pennsylvania Coal Operators' Association ("WPCOA"), and from 1943 to 1961, it was a member of the Northern West Virginia Coal Operators' Association ("NWVCOA"). (Def. facts P 46). The latter association was a member of the Bituminous Coal Operators' Association, Inc. ("BCOA"). South Union earned a profit in every year from 1946 to 1960. (Def. facts P 49).

 In 1961, South Union closed down and remained idle until its merger with Unity in 1969. (Def. facts P 51). At the time of the merger, Unity assumed all of the assets and liabilities of South Union. (Def. facts P 52). Although South Union stopped making payments to the UMWA benefits funds at the time it ceased operations in 1961, it was aware that its former employees continued to receive benefits. (Def. facts PP 53, 54).

 The parties have not provided much information on Penn View Coal. The Jamison family was the major stockholder of Penn View, a strip mining and mine equipment company. (Def. facts P 55). Penn View merged into Unity in 1969. Id. The parties do not specify to which NBCWAs Penn View was a signatory. (Pl. objections to def. facts P 2).

 3. Stewart Coal & Coke

 Stewart was incorporated by the Jamison family in 1949 and family members owned a majority of the stock. (Def. facts P 56). Stewart operated both a coal mine and a coke manufacturing plant, employing approximately sixty UMWA-represented employees. (Def. facts P 57). It had a representative on the WPCOA and made payments to the UMWA benefit funds from 1949 to 1958. (Def. facts PP 58-59). When it ceased operations in the late 1950s, Stewart stopped paying into the UMWA funds. Its former employees, however, continued receiving benefits. (Def. facts P 60).

 In 1970, Unity executed new promissory notes to the Jamison family to replace notes Stewart had given them in the amount of $ 212,857.70. Unity repaid approximately $ 80,000 of these notes in 1974 and 1975, $ 100,000 in 1992, and $ 52,000 in 1993. (Def. facts PP 95-98).

 4. Jamison Coal Company

 Jamison Coal Company was incorporated in 1958. Although the Jamison family controlled the company, Unity purchased more than 15% of its stock at the time of its incorporation. (Def. facts PP 62, 63). In addition, South Union purchased approximately 41.5% of the stock, Stewart approximately 9%, and members of the Jamison family bought approximately 32.2%. (Def. facts PP 64-66).

 The Trustees assert that Jamison Coal was a signatory to the NBCWAs, but do not specify which years. Jamison Coal was a board member of the WPCOA. (Def. facts P 68). The company paid into the UMWA Funds from 1961 to 1967, apparently pursuant to the NBCWAs. (Def. facts P 69).

 5. Moremet Coal

 Unity purchased Moremet Coal Company in 1975 to mine the coal assets it had acquired by its merger with Stewart. (Def. facts P 72). It was a wholly-owned subsidiary of Unity. Id. Moremet employed UMWA miners and made payments to the UMWA Funds, ...


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