UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

WHEELING-PITTSBURGH STEEL
CORPORATION,
Plaintiff-Appellant,

v.                                     No. 96-1499

CSX TRANSPORTATION,
INCORPORATED; CSX CORPORATION,
Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of West Virginia, at Wheeling.
Frederick P. Stamp, Jr., Chief District Judge.
(CA-94-45-5, CA-94-66-5)

Argued: March 3, 1997
Decided: April 24, 1997

Before MURNAGHAN and ERVIN, Circuit Judges, and
MICHAEL, Senior United States District Judge for the Western
District of Virginia, sitting by designation.

_________________________________________________________________
Reversed and remanded by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Basil Carl Culyba, HOWREY & SIMON, Washington,
D.C., for Appellant. Richard McMillan, Jr., CROWELL & MORING,
L.L.P., Washington, D.C., for Appellees. ON BRIEF: Andrew E.
Thomas, HOWREY & SIMON, Washington, D.C., for Appellant.
Javier M. Guzman, CROWELL & MORING, L.L.P., Washington,
D.C., for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________
OPINION

PER CURIAM:

The instant case involves a contract dispute between Wheeling-
Pittsburgh Steel Corporation ("Wheeling-Pitt") and CSX Transporta-
tion, Inc. ("CSX") regarding the terms of a contract which imple-
mented a settlement agreement. Both parties moved for summary
judgment. The district court found the contract unambiguous in
favor
of CSX's interpretation and Wheeling-Pitt appeals. Since we find
that
the language of the contract was unambiguous as to Wheeling-Pitt's
interpretation, we reverse the district court's grant of summary
judg-
ment and grant summary judgment in favor of Wheeling-Pitt.
I. FACTS

In 1983, Wheeling-Pitt and other steel companies sued CSX and
other railroads alleging anti-trust violations. In order to resolve
the
pending litigation, CSX entered into a settlement agreement with
Wheeling-Pitt. The parties used an existing contract, Contract CSXT
2067 ("Contract 2067"), as the implementation device for the
settle-
ment agreement. Contract 2067 governed CSX's transportation of
coal from Wheeling-Pitt's Omar Mine.

Prior to the settlement agreement, paragraph 3 of Contract 2067 set
out the transportation rates which CSX would charge to transport
coal
for Wheeling-Pitt. As part of the settlement agreement, CSX agreed
to provide a $.65 per net ton rate reduction on coal shipped from
the
Omar Mine. The parties then amended paragraph 3 of Contract 2067

                                 2
to implement the settlement agreement. Amendment 2 to Contract
2067 provided in part:

     Paragraph 3, TRANSPORTATION RATES, is amended to
     reduce the present contract rate on coal transported from the
     Omar Mine . . . by sixty-five cents ($.65) per net ton for the
     period beginning April 4, 1989 and terminating April 3,
     1996. The reduction shall become effective April 4, 1989
     and shall continue during the term of this Contract as
     extended. Provided, however, that if Wheeling-Pitt is unable
     to ship by rail an aggregate of 10.5 million tons from the
     Omar Mine during the period April 4, 1989 to April 3, 1996,
     inclusive, the $.65 per net ton reduction described herein
     will continue in effect until the total tonnage shipped from
     the Omar Mine reaches 10.5 million tons; or, alternatively,
     if, during the period through April 3, 1996 Wheeling-Pitt
     shall sell or otherwise divest itself of its interest in the
     Omar
     Mine and obtain high-volatile coal from other sources, the
     $.65 per net ton rate reduction described herein will be
     applied to the net rate currently in effect, including all
     reductions, for such other high-volatile coal transportation
     as may be designated by Wheeling-Pitt, and, in such case a
     reduction of $.65 per net ton shall continue in effect until
     the
     total tonnage shipped from all mines, including Omar,
     beginning April 4, 1989, reaches 10.5 million tons. Provided
     further that the rates reduced herein will be subject to all
     future RCCR adjustments,1 beginning with the April 1, 1989
     adjustment, but will at no time be reduced below the rates
     established by Contract CSXT 2067, as amended. 2
_________________________________________________________________
1 The RCCR is the Railroad Cost Recovery Index published by the
Association of American Railroads. The RCCR is a contract rate
adjust-
ment and allows the rates in the contract to be adjusted for
various costs
such as wage rates and fuel costs. In Contract 2067, the RCCR
adjust-
ments are subject to a contract floor and therefore can only lead
to an
upward adjustment.
2 In short the amount by which CSX settled the anti-trust
litigation
included $6,825,000 (10.5 million times $.65) payable, however,
only to
the extent that Wheeling-Pitt through coal shipments to it from the
Omar
Mine (or in effect the successor supplier of coal to Wheeling-Pitt)
received coal up to a maximum of 10.5 million tons. By that proviso
CSX improved the likelihood that it would continue to carry over
its
lines coal shipped to Wheeling-Pitt.
3
In 1993, Wheeling-Pitt sold the Omar Mine to A.T. Massey Coal
Company ("Massey") and entered into a coal supply agreement with
Massey whereby Massey would supply all of Wheeling-Pitt's coal
requirements for ten years. Massey then entered into a contract
with
CSX to transport 100% of Wheeling-Pitt's coal requirements at an
initial rate lower than that in Contract 2067.

Since Wheeling-Pitt was no longer transporting coal, it designated
another shipment to which it requested that CSX apply the $.65 per
net ton discount. CSX refused. Wheeling-Pitt argues that it is
entitled
to the discount, or at least the value of the remaining unrealized
dis-
count. CSX argues that the $.65 per ton discount applied only to
coal
shipped under Contract 2067 and the discount could not be applied
to
other shipments. At the time Wheeling-Pitt sold the Omar Mine, CSX
had not applied the discount to 5,051,164 tons of coal.

II. DISCUSSION

We review the district court's grant of summary judgment de novo.
Roe v. Doe, 28 F.3d 404, 406 (4th Cir. 1994). When considering a
summary judgment motion in the context of a contract dispute, the
court must first determine whether the contract is ambiguous or
unambiguous on its face. World-Wide Rights Limited Partnership v.
Combe, Inc., 955 F.2d 242, 245 (4th Cir. 1992). If the contract is
unambiguous, the court may interpret the contract as a matter of
law
and grant summary judgment. Id.
In interpreting the contract, the court must construe the terms of
the
contract so as to give meaning and effect to every part of the
contract.
Goodman v. Resolution Trust Corp. , 7 F.3d 1123, 1127 (4th Cir.
1993). In addition, contracts containing unambiguous language must
be construed according to their plain and natural meaning.
Fraternal
Order of Police v. City of Fairmont , 468 S.E.2d 712, 716 (W. Va.
1996); Marchetti v. Karpowich, 667 A.2d 724, 727 (Pa. Super. Ct.
1995).3
_________________________________________________________________
3 The parties disagree as to whether West Virginia or Pennsylvania
law
applies. The Court declines to reach this issue because the canons
of con-
tract interpretation are similar in both jurisdictions.

                                4
The district court held that the contract was unambiguous and that
the $.65 discount only applied to Contract 2067. The district court
determined that the language in Contract 2067 which stated that if
Wheeling-Pitt sold the Omar Mine then the discount would be applied
"to the net rate currently in effect" referred to the rates
originally
listed in paragraph 3 of Contract 2067. The court thus concluded
that
the discount could only apply to Contract 2067 and that the "Court
finds nothing in the amendment to Contract 2067 or in the
settlement
agreement which would indicate that the 65 cent per ton discount
was
intended to be applied to a contract to which Wheeling-Pitt is not
a
party."

However, the district court's interpretation of the contract fails
to
give meaning and effect to every part of the contract. In addition,
the
settlement agreement and the amended version of Contract 2067
clearly and unambiguously anticipated that the discount would con-
tinue to apply absent Contract 2067. Furthermore, the contract
clearly
and unambiguously intended that the discount would apply to con-
tracts to which Wheeling-Pitt was not a party.
The clause "net rates currently in effect" must be read in the con-
text of the entire paragraph. Earlier in the paragraph, the clause
pro-
vides that if Wheeling-Pitt sells the Omar Mine and obtains coal
from
other sources the discount will apply to the "net rate currently in
effect, including all reductions" for such other coal as designated
by
Wheeling-Pitt. Since this provision anticipates that Wheeling-Pitt
might sell the Omar Mine, the reference to obtaining coal from
other
sources must apply to coal from a source other than Wheeling-Pitt.
If
"other sources" applies to coal provided by third parties, then the
con-
tract clearly anticipates that the discount will apply to coal
supplied
by other parties and transported by CSX. Otherwise, the anti-trust
set-
tlement would be largely scuttled if the Omar Mine was sold by
Wheeling-Pitt. Yet Amendment 2 to Contract 2067 clearly provides
that the $.65 per net ton reduction will remain in effect until
"the total
tonnage shipped from all mines including Omar . . . reaches 10.5
mil-
lion tons" (emphasis added).

In addition, the language in paragraph 3 clearly states that
Wheeling-Pitt has the right to designate the other shipments to
which
the discount will apply. Since it is clear that if Wheeling-Pitt
sold the

                               5
Omar Mine it would no longer supply its own coal, its right to
desig-
nate other shipments must include its right to designate shipments
supplied by third parties and transported by CSX.

Furthermore, the district court's interpretation of"net rates cur-
rently in effect" does not give each term in the contract meaning.
First, "net rates" itself would be surplusage. The plain meaning of
"net rate" is the rate "which remains after all allowable
deductions"
have been made. Black's Law Dictionary 1040 (6th ed. 1990). Thus,
the net rate would be the rate after other deductions and
allowances
have been made. However, if the district court's interpretation is
given to "net rate" then the language which follows "net rates,"
which
is "including all reductions," becomes redundant and hence surplus-
age. If net rates includes all reductions there would be no need to
specify "including all reductions" after the words "net rate."

A more logical reading, and one which does not make the reference
to "net rates" or the reference to "including all reductions"
surplusage,
is that the provision applies to coal delivered by other sources.
The
reference to net rate would be the net rate per ton including the
RCCR
adjustments. The reference to "including all reductions" would
apply
to volume discounts or other incentives to which another carrier
might
be entitled. Thus, Wheeling-Pitt would be entitled to the net rate
in
effect for the other supplier, and would also be entitled to the
benefit
of any other reductions which CSX provided to the supplier. 4 How-
ever, under CSX's interpretation of the contract, the phrase
"including
all reductions" would be irrelevant. As part of the amended
Contract
2067, the parties canceled the incentive refunds to which Wheeling-
Pitt was entitled under Contract 2067. Thus, if the phrase only
applied
to Contract 2067, the term "net" and the phrase "including all
reduc-
tions" would serve no purpose.
_________________________________________________________________

4 For example, Massey, as a large supplier of coal, might receive
incen-
tive reductions from CSX once it ships a certain amount of coal.
This
would not be factored into the "net rate" per ton since it would be
unknown if the supplier would reach the incentive amount. The
language
"including all reductions" allows Wheeling-Pitt to get the benefit
of fur-
ther reductions.

                                6
The contract contains additional language which unambiguously
favors Wheeling-Pitt's interpretation that the $.65 reduction
applies
outside of the context of Contract 2067. First, the contract states
that
if Wheeling-Pitt does not ship 10.5 million tons by April 3, 1996,
the
"$.65 per net ton reduction described herein will continue in
effect
until the total tonnage shipped from the Omar Mine reaches 10.5
mil-
lion tons." However, Contract 2067 by its own terms terminated on
April 3, 1996, and the contract explicitly provided for a
continuation
of the discount even after the contract expired. The contract did
not
provide for an automatic extension of the contract, but rather
provided
for a continuation of the discount even after the contract expired.
Thus, the contract cannot be the sole mechanism for the discount
since the parties clearly intended the discount to apply even in
the
absence of the contract.

Second, when the contract was negotiated, Wheeling-Pitt knew that
it might sell the Omar Mine. It therefore negotiated language which
provided that the discount would continue even if Wheeling-Pitt
sold
the Omar Mine. That language states:

     alternatively, if, during the period through April 3, 1996,
     Wheeling-Pittsburgh shall sell or otherwise divest itself of
     its interest in the Omar Mine and obtain high-volatile coal
     from other sources, the $.65 per net ton rate reduction
     described herein will be applied to the net rates currently in
     effect . . . for such other high-volatile coal transportation
     as
     may be designated by Wheeling-Pittsburgh, and, in such
     case, the reduction of $.65 per net ton shall continue in
     effect until the total tonnage shipped from all mines, includ-
     ing Omar, beginning April 4, 1989, reaches 10.5 million
     tons.

Thus, if Wheeling-Pitt sold the Omar Mine, the contract explicitly
allowed it to designate other shipments to which the discount would
apply. As discussed previously, since Wheeling-Pitt would no longer
be a supplier of coal, the provision anticipates that the reduction
would apply to other shipments by other suppliers. Thus, the clear
language of the contract allows Wheeling-Pitt to designate another
contract, to which it is not a party, to which the discount should
apply.

                                 7
CSX still receives a benefit since the $.65 per net ton reduction
applies only to coal transported by CSX.

CSX argues that even if it had a duty to provide the discount to
Wheeling-Pitt it has done so, since the discount was built into the
rate
which CSX charges Massey, the current supplier of coal to Wheeling-
Pitt. Although the rate CSX charges Massey is lower than the rate
CSX charged Wheeling-Pitt, including the discount, there is no evi-
dence in the record that the rate CSX charges Massey includes the
$.65 discount.

First, the contract between CSX and Massey was a commercially
negotiated agreement between the two parties. There is no evidence
that Wheeling-Pitt was involved in the negotiations. In fact, there
is
evidence in the record that Wheeling-Pitt continued to assert its
rights
to the discount even as CSX was negotiating its agreement with Mas-
sey.

Second, the contract between CSX and Massey does not just cover
rates charged to Wheeling-Pitt. The contract also covers coal
supplied
by Massey for U.S. Steel Corporation. Third, Massey was a much
larger supplier of coal than Wheeling-Pitt and there is evidence in
the
record that Massey's lower rate was due to its significant
bargaining
leverage and not due to the $.65 per net ton discount.

Finally, the contract with Massey runs through 2004. There is no
language in the contract that the rate will go up by the amount of
the
discount once the discounted rate has been applied to 10.5 million
tons of coal under Wheeling-Pitt's original anti-trust settlement
agree-
ment. If CSX only gave Massey the discounted rate due to the
settle-
ment agreement, the contract should have contained language
increasing the rate once CSX met its settlement obligation.

The language at issue unambiguously gives Wheeling-Pitt the right
to the $.65 per net ton discount on 10.5 million tons of coal. We
reverse the district court's grant of summary judgment in favor of
CSX and grant summary judgment as to Wheeling-Pitt. We remand
the case to the district court for further proceedings consistent
with
this opinion.

 REVERSED AND REMANDED

                                 8
