Case 3:21-cv-00377-SMY Document 80 Filed 10/03/22 Page 1 of 10 Page ID #1384
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`RICKEY CATES,
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`vs.
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`ALLIANCE COAL, LLC et al,
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`Plaintiff,
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`Defendants.
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF ILLINOIS
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`Case No. 21-CV-377-SMY
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`MEMORANDUM AND ORDER
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`This matter comes before the Court on Defendant Hamilton County Coal, LLC and White
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`County Coal, LLC’s Motion to Dismiss Plaintiff's Complaint in part under Fed. R. Civ. P. 12(b)(6)
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`(Doc. 24), and Defendant Alliance Coal, LLC, Alliance Resource Partners, L.P., Alliance
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`Resources Operating Partners, L.P., and Alliance Resource Management GP, LLC’s ("Alliance
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`Defendants") Motion to Dismiss under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction,
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`and in the alternative, for failure to state a claim as to Count III under Fed. R. Civ. P. 12(b)(6)
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`(Doc. 25). Plaintiff Rickey Cates responded in opposition (Docs. 45, 46). For the following
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`reasons, Defendants’ motions are DENIED.
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`BACKGROUND
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`Cates filed the instant collective and class action, individually and on behalf of all other
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`similarly situated persons, alleging violations of the Fair Labor Standards Act (“FLSA”), Illinois
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`Minimum Wage Law (“IMWL”), and Illinois Wage Payment and Collection Act (“IWPCA”)
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`(Doc. 1). He makes the following allegations in the Complaint (Doc. 1): Cates and all putative
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`class members worked as miners in Defendants’ Hamilton Mining Complex in Hamilton County,
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`Illinois and Pattiki Complex in White County, Illinois (“Illinois Mines”) under Defendants’
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`policies and practices. The Alliance Defendants own and control each of the Subsidiary
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`Case 3:21-cv-00377-SMY Document 80 Filed 10/03/22 Page 2 of 10 Page ID #1385
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`Defendants: Hamilton County Coal, LLC (Hamilton Mining Complex) and White County Coal,
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`LLC (Pattiki Complex) and “uniformly established and directed” the “employment policies and
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`procedures” used by Hamilton County Coal and White County Coal (Doc. 1 ¶¶ 17).
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`Cates and numerous other similarly situated current and former employees at the Illinois
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`Mines are or were in non-exempt positions.1 Defendants unlawfully failed to pay current and
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`former coal miners for “off-the clock” work, overtime, and non-discretionary bonuses. The
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`uncompensated “off-the-clock” work included: time spent dressing in personal protective clothing
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`and gear; visiting various locations to gather tools; attending safety meetings; and returning
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`personal protective clothing and gear after shifts were completed (Doc. 1 ¶¶ 49-55).
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`In addition to being paid on an hourly basis at an agreed hourly rate, Cates and other coal
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`miners were entitled to be paid various types of bonuses (Doc. 1 ¶¶ 19, 48). The ‘Benefits
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`Handbook’ provided to Cates and other coal miners described the bonus compensation that they
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`would be entitled to as part of their work for Defendants (Doc. 1 ¶ 62). Defendants failed to pay
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`the coal miners at the proper overtime rate for certain non-discretionary bonuses because the
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`bonuses were not included in the “regular rate” for the purposes of determining the appropriate
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`overtime rate (Doc. 1 ¶¶ 60-66). These bonuses included an attendance incentive bonus, a weekly
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`production bonus, a safety incentive bonus, and others (Doc. 1 ¶¶ 63-66). Additionally,
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`Defendants used a “boosted hours” formula that did not compensate the coal miners for the full
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`overtime premium owed (i.e., excluding off-the-clock work in calculating the bonuses) (Doc. 1 ¶
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`66).
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`1 “Non-exempt” refers to employees who are not exempt from the protections of the FLSA and the Illinois
`Minimum Wage Law, working in positions entitled to be paid overtime compensation for work performed in excess
`of forty (40) hours per week.
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`Case 3:21-cv-00377-SMY Document 80 Filed 10/03/22 Page 3 of 10 Page ID #1386
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`DISCUSSION
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`Rule 12(b)(2) – Jurisdiction
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`The Alliance Defendants contend that they lack the minimum contacts with the State of
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`Illinois necessary for the Court to exercise personal jurisdiction over them. In reviewing a Rule
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`12(b)(2) motion to dismiss, the Court “take[s] the plaintiff’s asserted facts as true and resolves any
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`factual disputes in its favor.” uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 423-424 (7th Cir.
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`2010). When as here, the Court rules on a motion to dismiss for lack of personal jurisdiction
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`without an evidentiary hearing, “the plaintiff bears only the burden of making a prima facie case
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`for personal jurisdiction.” Id. at 423.
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`A federal court exercises personal jurisdiction over a defendant according to the law of the
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`forum state. Hyatt Intern. Corp v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). In Illinois, personal
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`jurisdiction over a nonresident defendant is premised “on any basis now or hereafter permitted by
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`the Illinois Constitution and the Constitution of the United States.” 735 Ill. Comp. Stat. § 5/2-
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`209(a-c) (Long-Arm statute). As such, “due process requires only that in order to subject a
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`defendant to judgment in personam, if he be not present within the territory of the forum, he have
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`certain minimum contacts with it such that the maintenance of the suit does not offend traditional
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`notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310,
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`316 (1945). Personal jurisdiction may be either general or specific.
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`General Jurisdiction:
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`To set out a prima facie case for general jurisdiction, Cates must show that the Alliance
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`Defendant’s contacts with Illinois are such that they are essentially taking up a physical presence
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`in this state. Tamburo v. Dworkin, 601 F.3d 693, 701 (7th Cir. 2010). The Alliance Defendants
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`are a multi-tiered system of partnerships and limited liability companies organized in the State of
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`Case 3:21-cv-00377-SMY Document 80 Filed 10/03/22 Page 4 of 10 Page ID #1387
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`Delaware with their principal places of business in Oklahoma (see Doc. 1 at ¶¶ 8-11). More
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`specifically:
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`(cid:120) Alliance Resource Partners, L.P. heads up the organization and is operated by its general
`partner, Alliance Resource Management GP, LLC. (Doc. 46-5 at p. 4).
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`(cid:120) Alliance Resource Management GP, LLC operates in Illinois through its direct operation
`of Alliance Resource Partners, L.P. and has been registered to do business in the State of
`Illinois since 1999. (Doc. 46-8).
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`(cid:120) Alliance Resources Operating Partners, L.P. is a wholly-owned subsidiary of Alliance
`Resource Partners, L.P. and acts as the holding company for Alliance Coal. (Id. at p. 6).
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`(cid:120) Alliance Coal, LLC is a wholly-owned subsidiary of Alliance Resources Operating
`Partners, L.P. and acts as a holding company for the various LLC’s (including Hamilton
`County Coal (“Hamilton”) and White County Coal (“Pattiki”)) that own the coal mines in
`seven states, including the Illinois mines (Hamilton and Pattiki). (Id. at pp. 6, 9, 10).
`Alliance Resource Partners, L.P. identifies Alliance Coal as “the holding company for the
`coal mining operations of Alliance Resource Operating Partners, L.P.” (Id. at p. 4).
`Alliance Resource Operating Partners, L.P. facilitates the mining operations by providing
`significant working capital, as well as a $100 million accounts receivable securitization
`facility used to purchase trade receivables of the coal mining operations. (Id. at pp. 19-20).
`Alliance Coal holds 100% direct ownership in the various mining operations in Illinois and
`other states. (Id. at pp. 30-31). Alliance Coal is responsible for administration of payroll,
`human resources, employment benefits, accounts payable, and other managerial and
`operational support activities for the mining operations.
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`(cid:120) Essentially the same group of people manage and operate all of these interrelated entities.
`(Docs. 46-5 at pp. 22-27; 46-6).
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`Regarding the extent of the Alliance Defendants’ operations in this state, the exhibits and
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`evidence provided reveal the following:
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`(cid:120) Tom Wynne is the Senior Vice President and Chief Operating Officer for Alliance
`Resource Partners, L.P. “In his new role, Tom’s strong leadership skills and vast
`experience will serve us well as he assumes the responsibilities of directing the day-to-
`day operations for all of Alliance’s coal mines.” (Doc. 46-9) (emphasis added).
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`(cid:120) Payroll and human resources for the mines are based in Tulsa under the offices of Layne
`Herring (the Vice President of Compensation and Payroll) and Paul Mackey (Vice
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`President of Employee Health & Benefits)2; and, both are administered through Alliance’s
`Oracle E-Business Suite which includes applications for human resources, payroll,
`purchasing and accounts payable, to coordinate operations at each of the mine sites with
`the Tulsa home office. (Doc. 46-10 at ¶12; Doc. 46-21). A Payroll Clerk at each mine was
`responsible for collecting timekeeping data for the time worked by miners and transferring
`that data to the Alliance Coal office in Tulsa. (Doc. 46-10 at ¶5). Tulsa would then process
`the miners’ and office personnel’s time records and pay them via direct deposit. (Id.). All
`mine employees could access their paystubs online using Alliance Resource Partners,
`L.P.’s website or Alliance Coal’s website. (Id.). These same timekeeping and payment
`practices were followed by all of the mines operated by Alliance Coal, including those in
`Illinois. (Id. at ¶7). Any pay raises or terminations of employment (for either miners or
`office personnel) were not made without the Tulsa office’s approval. (Id. at ¶17). The
`miners received clothing and uniforms that depicted the word ‘Alliance’ and/or a large ‘A’
`company logo. (Id. at ¶16; Doc. 46-15 at ¶13). The office personnel all used work email
`addresses with the ‘ARLP.com’ domain name. (Doc. 46-10 at ¶16; Doc. 46-15 at ¶13).
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`(cid:120) Alliance Resource Operating Partners, L.P. maintains the bank accounts for the Alliance
`entities; and, it is also responsible for borrowing from lending institutions to fund the
`operations of the Alliance coal mine operations and subsidiaries. (Doc. 46-7 at pp. 21-23).
`The regional office in Lexington was responsible for “operations management, land
`management, legal, worker’s comp, engineering and permitting, government affairs,
`information technology and accounting services.” (Doc. 46-35). It was generally the
`Lexington office that provided, maintained, and approved for payment the invoices and
`purchase orders for the various mines. (Doc. 46-15 at ¶¶ 3-4).
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`(cid:120) Tom Wynne, the Senior Vice President and Chief Operating Officer for Alliance Resource
`Partners, L.P., is also one of the executive primarily responsible for regulatory filings,
`including, but not limited to, his correspondence with the Mine Safety and Health
`Administration to support the passage of Mine Improvement and New Emergency
`Response Act of 2006. (Doc. 46-36). Mr. Todd Beavan, Manager of Permitting &
`Environmental Compliance, has also been involved in the regulatory activities for the
`Illinois mines when he corresponded to the Illinois Department of Natural Resources in
`2019 requesting a modification to White County Coal’s permit. (Doc. 46-37; Doc. 46-38).
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`(cid:120) The Alliance Movants are also dedicated to their Illinois business interests in that they have
`engaged in lobbying and spending significant amounts in campaign contributions through
`the offices of Alliance Resource Partners, L.P.’s Heath Lovell, Vice President of Public
`Affairs and a direct reporter to Joseph W. Craft III, the President and CEO. (Doc. 46-39).
`In total, the Alliance Movants have handed out nearly $24 million in federal campaign
`contributions and nearly 70-90% of the coal industry spending in the Illinois gubernatorial
`and legislative races. (Doc. 46-48). In connection with the campaign contributions,
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`2 Paul Mackey reports to R. Eberly Davis. Mr. Davis is responsible for the day-to-day business decisions for the
`Alliance Movants and is an officer of Alliance Resource Management GP, LLC. He is also responsible for health
`benefits and workers’ compensation, including for Alliance Coal and its subsidiaries. (Doc. 46-7 at pp. 15-17).
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`Case 3:21-cv-00377-SMY Document 80 Filed 10/03/22 Page 6 of 10 Page ID #1389
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`Alliance has also invited various Illinois lawmakers to the Illinois mines; and, they have
`contributed to the lawmakers’ campaigns who attended an energy regulation session. (Doc.
`46-42; Doc. 46-44; Doc. 46-45). The Alliance Movants are members of the Illinois Coal
`Association and the Coal Institute, both lobbyist organizations for the coal industry. (Doc.
`46-46; Doc. 46-47). Beyond contributions to politicians and organizations, Alliance
`Movants are also the recipient of more than $1.9 million in grants from the Illinois
`Department of Commerce and Economic Opportunity. (Doc. 46-49).
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`(cid:120) Various Alliance executives have also made in-person contacts with Illinois regarding the
`coal business. Mr. Joe Craft, the CEO, has traveled to Illinois for events like a round table
`even at the Illinois Basic Coal & Mining Expo Symposium. (Doc. 46-50). Mr. Brian
`Cantrell, Senior Vice President and Chief Financial Officer, has traveled to Illinois for
`hearings regarding Alliance’s mining operation expansion at the Gibson Mine into Wabash
`County. (Doc. 46-52; Doc. 46-53).
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`While the Alliance Defendants argue that they merely “own” the Illinois Mines and do not
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`exercise “any meaningful control”, the Court disagrees. The entities are engaged in all major
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`aspects of the Illinois mines, including day-to-day operations, sales, payroll, human resources,
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`employee benefits, payables, regulatory and lobbying. It is clear that they operate a mining
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`business in Illinois, that the companies do not exist independently, and that these Defendants
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`continuously and deliberately participate in more than mere hands-off ownership of the Illinois
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`mines. As such they must reasonably anticipate being hailed into court in Illinois. See, Keeton v.
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`Hustler Magazine, Inc., 465 U.S. 770, 780 (personal jurisdiction appropriate where “respondent is
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`carrying on a ‘part of its general business’ in [the forum state])”).
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`Specific Jurisdiction
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`Specific jurisdiction depends on “the relationship among the defendant, the forum, and the
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`litigation.” Walden v. Fiore, 571 U.S. 277, 283 (2014). “As the Supreme Court has emphasized,
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`it is essential not only that the defendant have minimum contacts with the forum state but also that
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`the plaintiff’s claim against the defendant arise out of or relate to those contacts.” uBID., 623 F.3d
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`at 429. Minimum contacts are met where (1) a defendant has purposefully directed its activities
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`at the forum state or purposefully availed itself of the privilege of conducting business in that state,
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`Case 3:21-cv-00377-SMY Document 80 Filed 10/03/22 Page 7 of 10 Page ID #1390
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`and (2) the alleged injury arises out of the defendant’s forum-related activities. Tamburo v.
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`Dworkin, 601 F.3d 693, 702 (7th Cir. 2010). Here, the Alliance Defendants argue that Cates has
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`not and cannot allege any viable facts demonstrating that the Alliance Movants exercised any high
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`degree of control over Hamilton County Coal or White County Coal relative to their alleged
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`employment practices or otherwise engaged in any activity in Illinois that gave rise to Cates’
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`alleged overtime claim.
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`A defendant is not subject to specific personal jurisdiction based merely on random,
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`fortuitous, or attenuated contacts – there must be a real relationship with the state with respect to
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`the activities at issue. Northern Grain Marketing, LLC. V. Greving, 743, F.3d 487, 493 (7th Cir.
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`2014). The previously detailed facts regarding the Alliance Defendants’ activities and operations
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`sufficiently demonstrate that they have purposefully availed themselves of the privilege of doing
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`business in Illinois. Every Alliance entity has some connection to the Illinois mines and have
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`directed their actions toward Illinois.
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`The evidence also shows a sufficient nexus between the Alliance Defendants’ contacts and
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`activities within this state and Cates’ asserted claims. Cates’ employment by one of the Illinois
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`mines operated and maintained by the Alliance Defendants and the employment practices of that
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`mine directly gave rise to the claims in this case.
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`Moreover, Illinois has an obvious interest in providing a forum for litigating its residents’
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`claims. Given that the Alliance Defendants have operated coal mines in Illinois for the past two
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`decades, have related ties to Illinois, and have availed themselves of the privilege of doing business
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`in Illinois, this Court exercising personal jurisdiction over them would not offend traditional
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`notions of fair play and substantial justice. See, Curry, 949 F.3d at 402 (citing Int’l Shoe Co. v.
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`State of Wash., 326 U.S. 310, 316 (1945)) (the court must determine whether the exercise of
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`personal jurisdiction over the out-of-state defendant would offend traditional notions of fair play
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`and substantial justice); Summertime Produce, LLC v. Atlantic Produce Exchange, LLC, 2020 WL
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`2489708 at *4 (7th Cir. 2003).
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`For the foregoing reasons, the Court finds that a Cates has made prima facie showing that
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`both general and specific jurisdiction exists.
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`Rule 12(b)(6) – Count III: Illinois Wage Payment and Collection Act
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`Defendants Hamilton County Coal, LLC and White County Coal, LLC (Doc. 24) and the
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`Alliance Defendants (Doc. 25) seek to dismiss Count III of Cates’ claim under the Illinois Wage
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`Payment and Collection Act (“IWPCA”), 820 Ill. Comp. Stat. § 115/4, arguing that Cates has failed
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`to state a viable cause of action and his claim fails as a matter of law (Doc. 24). More particularly,
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`they argue that Cates fails to allege the existence of an enforceable agreement between he and
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`Defendants, and absent such an agreement, there can be no actionable IWPCA violation (Id. at 4).
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`When reviewing a Rule 12(b)(6) motion to dismiss, the Court accepts as true all allegations
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`in the Complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citing Bell Atl. Corp. v. Twombly,
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`550 U.S. 544, 555 (2007)). The federal system of notice pleading requires only that a plaintiff
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`provide a “short and plain statement of the claim showing that the pleader is entitled to relief.”
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`Fed. R. Civ. P. 8(a)(2). However, the allegations must be “more than labels and conclusions.”
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`Pugh v. Tribune Co., 521 F.3d 686, 699 (7th Cir. 2008). This requirement is satisfied if the
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`Complaint (1) describes the claim in sufficient detail to give the defendant fair notice of what the
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`claim is and the grounds upon which it rests and (2) plausibly suggests that the plaintiff has a right
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`to relief above a speculative level. Twombly, 550 U.S. at 555; see Ashcroft v. Iqbal, 129 S. Ct.
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`1937, 1949 (2009); EEOC v. Concentra Health Servs., 496 F.3d 773, 776 (7th Cir. 2007). “A claim
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`has facial plausibility when the plaintiff pleads factual content that allows the court to draw the
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`reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S. Ct. at
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`1949 (citing Twombly, 550 U.S. at 556).
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`To plead a viable IWPCA claim, a plaintiff must allege the existence of wages or final
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`compensation [that] is due to an employee from an employer under an employment contract or
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`agreement. See Landers-Scelfo v. Corporate Office Sys., Inc., 827 N.E.2d 1051, 1058 (Ill. App.
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`Ct. 2d Dist. 2005) (citing 820 ILCS 115/2, 3, 5). The term “employment agreement” for purposes
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`of the IWPCA is construed broadly and reaches far beyond a contract. Id. at 1067-68. To satisfy
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`the IWPCA, an agreement need not be “formally negotiated or written,” Dobrov v. Hi-Tech
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`Paintless Dent Repair, Inc., No. 1:20-CV-00314, 2021 WL 1212796, at *5 (N.D. Ill. Mar. 31,
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`2021), and need only amount to “a manifestation of mutual assent on the part of two or more
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`persons” that an employee will perform work in exchange for compensation. Id.; see also Snell-
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`Jones v. Hertz Corp., No. 19-cv-00120, 2020 WL 1233825, at *6 (N.D. Ill. Mar. 13, 2020).
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`Construing the relationship between Cates and Defendants broadly, Cates’ allegations
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`suffice to establish an employment agreement: there was an agreed hourly rate for the coal miners’
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`work, and that they would be classified as non-exempt from overtime; the coal miners were not
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`paid for all hours worked at the agreed rates; the “Benefits Handbook” set forth nondiscretionary
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`bonuses that were wrongly excluded from the coal miner’s regular rate for the purposes of
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`calculating overtime; and the “Benefits Handbook” established an agreement for safety and
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`production bonuses, and the formulas Defendants used to calculate those bonuses incorrectly
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`excluded off-the-clock work. These allegations suggest a mutual agreement between Cates and
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`Defendants that Cates was to perform work in exchange for compensation and are therefore
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`sufficient to state a colorable IWPCA claim in Count III.
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`For the above-stated reasons, Defendants’ Motions to Dismiss (Docs. 24, 25) are
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`DENIED.
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`IT IS SO ORDERED.
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`DATE: October 3, 2022
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`STACI M. YANDLE
`United States District Judge
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