JOHN T. COPENHAVER, JR., District Judge.
Pending is plaintiffs' motion for preliminary injunction seeking a continuation of retiree healthcare benefits with respect to retirees who retired prior to the current June 1, 2006, collective bargaining agreement ("CBA"). On February 18, 2010, the court conducted the preliminary injunction hearing.
On November 13, 2009, plaintiffs, who are retired employees from a facility operated by one or more of the defendants, instituted this action in the United States District Court for the Southern District of Ohio. On December 23, 2009, the action was transferred here. The court has certified a class today, which consists of approximately 437 retirees, along with the benefit-eligible spouses and dependents of deceased retirees. The two-count class action complaint alleges that Century's actions contravene the applicable CBAs in violation of section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, and violate sections 502(a)(1)(B) and (a)(3) of the Employee Retirement Income Security Act, 29 U.S.C. § 1132(a)(1)(B) and (a)(3).
Ravenswood Aluminum Corporation assumed the then-current CBA between the Union and Kaiser, which had been executed on April 4, 1988.
The retirees were represented by the Union during their employment by Century and its predecessors. The Union negotiated a series of successive CBAs with Century and its predecessors governing the terms and conditions of hourly employment. One component of these successive CBAs was the provision of retiree healthcare benefits, which appear to have been contemplated in the successive CBAs agreed upon since 1959. The primary question for resolution is whether the current 2006 CBA, which became effective June 1, 2006, and has been extended to August 31, 2010, provides customary healthcare benefits to approximately 437 retirees who retired prior to June 1, 2006, as well as their spouses and other dependents. They apparently received such benefits until January 1, 2010.
In its response brief, Century details the financial challenges it faced beginning in 2007 based upon the volatility in aluminum prices. Rising healthcare costs, Century's inability to sell aluminum at profitable prices, and other factors, contributed to cash operating losses of $34,000,000 in 2007 and $9,000,000 in 2008. After curtailing all operations at the facility, Century continued to suffer negative cash flow. One component was approximately $14,250,000 in healthcare benefits provided to active, laid-off, and retired employees. Century projected that the healthcare benefits for retirees would total $3.5 million for 2009.
On October 19, 2009, Century sent letters to those retirees who left Century prior to the effective date of the 2006 CBA, stating its intention to modify or terminate their healthcare benefits effective January 1, 2010. Century's decision affected those former employees who retired after February 6, 1989, and before June 1, 2006.
In sum, plaintiffs assert that the healthcare benefits the retirees are receiving are vested, last a lifetime, and are not subject to termination or modification by Century. Plaintiffs seek a preliminary injunction during the pendency of this action directing Century to fully reinstate the modified and/or terminated retiree healthcare benefits.
From 1959 through the present day, successive CBAs covering the facility have contained, or incorporated by reference, language obligating Century or its predecessors to provide some form of healthcare benefits at no cost to the retirees. The 1959, 1962, 1963, and 1965 CBAs include the healthcare benefits negotiated for active and retired employees.
Article 15 of the 1959 CBA provides for retiree healthcare benefits up to a stated annual maximum. The retiree's spouse was subject to termination of benefits upon the retiree's death or upon reaching the same monetary maximum, whichever first occurred. Notably, Article 21 of the 1959 CBA, which expired July 31, 1962, provided additionally as follows: "[T]he terms and conditions of this Agreement, and each of them, shall continue in effect until July 31, 1962. . . ." (1959 CBA at 75). Essentially similar provisions are found in the 1962, 1963 and 1965 CBAs, together with a 1968 extension, that cover the years down to June 1, 1971.
In 1971, the parties began using the combination of a CBA and SPD during this bargaining cycle. The 1971 SPD states that it is part of the 1971 CBA. Upon the death of the retiree, his surviving spouse and dependent children continued to have coverage for six months. The 1971 SPD specifically provided that its benefits "remain[ed] in effect for the term of the 1971. . . [CBA]." (1971 SPD at 33).
The 1981 SPD contained a similar provision
Though the parties have been unable to locate the 1988 SPD, the 1988 CBA provides at Article 15.A.1 as follows:
(1988 CBA at 116). A specific termination provision is found at Article 15.A.2:
(Id. at 116).
As noted, Ravenswood Aluminum Corporation assumed the 1988 CBA between the Union and Kaiser, which was set to expire on October 31, 1990. On February 2, 1989, Ravenswood Aluminum Corporation and the Union entered into the "RACUSWA AGREEMENT," which included the following terms:
(Id. ¶ 4).
Ravenswood Aluminum Corporation and the Union thereafter negotiated a new CBA, which became effective on June 12, 1992.
(Id. at 1). The 1992 SPD also contains Section 7.6, which again appears to cancel
(1992 SPD at 75).
The 1994 CBA became effective on November 30, 1994, with an expiration date of May 31, 1999. Articles 15.A.1 and 15.A.2 are materially identical to those referenced above from the 1988 and 1992 CBAs. The retiree healthcare benefits were to "remain in effect for the term of this 1994 Labor Agreement." (1994 CBA at 182).
The SPD attached to the 1994 CBA became effective January 1, 1995 ("1995 SPD"). The language within the 1995 SPD is similar to the 1992 SPD with one substantive difference. The 1992 SPD covered only employees retiring after June 12, 1992, the effective date of the 1992 SPD, while additionally noting that those retiring prior to June 12, 1992, were covered by the SPD in effect on the date of their retirement. The 1995 SPD covers those retirees and surviving spouses who "retired or commenced receiving a surviving spouse pension . . on or after February 7, 1989." (1995 SPD at 1). The 1995 SPD also provides continuation language to the effect that those "who retired on or after February 7, 1989, . . . [would] be enrolled in" a "Health Care Program" that included participation in the Ravenswood Aluminum Preferred Provider Plan for medical treatment ("continuation language"). (1995 SPD at 5). This continuation language also appears in the 1999 SPD but is absent from the 2006 SPD. (1999 SPD at 4). The 1995 SPD again reflects that its "benefits shall remain in effect for the term of the Labor Agreement." (Id. at 92).
The 1999 CBA also includes the Article 15 language carried through the CBAs since 1988.
(1999 CBA at 1). Again, the 1999 SPD prescribes that the benefits reflected within it "shall remain in effect for the term of the Labor Agreement." (1999 SPD at 79).
The final CBA at issue was executed and effective on June 1, 2006, with a termination date of May 31, 2009. The parties extended the 2006 CBA to terminate as of August 31, 2010. The 2006 version is identical or similar to its 1999 predecessor.
(2006 CBA at 95). Similar to those SPDs preceding it, the 2006 SPD sets forth its reach at the outset, making its terms applicable
(2006 SPD at 2).
At least two observations are worth mention in summary. First, all of the
Plaintiffs have offered extrinsic evidence which they assert to be supportive of their position that their healthcare benefits have vested. First, they note a recent attempt by Century to include a reservation of rights within the 2007 Master Plan SPD. After the Department of Labor directed Century to produce a plan document related to the 2006 CBA, the 2007 Master Plan SPD was provided to the Union. It contained the following language:
(Pls.' Mem. in Supp. at 12 (quoting 2007 Master Plan SPD)). Following an objection by the Union, the reservation-of-rights language was removed. The Union asserts that Century contemporaneously assured it that it never claimed a right to alter retiree healthcare benefits. In fact, plaintiffs contend that Century retained this language in the 2007 Master Plan SPD:
(Id. at 12 quoting 2007 Master Plan SPD at 140 (noting also the 2007 Master Plan SPD provision that the retiree healthcare benefits at issue were "maintained subject to a collective bargaining agreement.")). As noted, the 2007 Master Plan SPD never became effective. Instead, a Century/Union agreed SPD was published in January 2008, and is referred to as the 2006 SPD.
Second, plaintiffs assert that Century officials have repeatedly represented to bargaining unit members that retiree healthcare benefits last for a lifetime. For example, Roger Walters, a former Century hourly employee who retired in April 2006, received an informational handout from Century on or about April 14, 2006, near his retirement date. The document provided as follows:
(Doc. 18-20 at 11 (emphasis supplied)). The same document was provided to retiree Ted Cochran when he retired from
Third, plaintiffs note the matter of supplemental Medicare coverage. Under the 2006 SPD, they assert that Century is obligated to reimburse the monthly Medicare premium paid by those of their number who reach age 65. Under the Century Pension Plan, however, an employee may retire at age 55, meaning that "this [healthcare benefit] promise would not be fulfilled for at least 10 years, well beyond the duration of the applicable CBA." (Pls.' Memo. in Supp. at 16).
Fourth, during the 1990-92 Lockout, while no CBA was in effect, Century no longer provided healthcare benefits to active employees. It continued, however, to provide those benefits to retired former employees.
In Real Truth About Obama, Inc. v. Federal Election Commission, 575 F.3d 342 (4th Cir.2009), vacated ___ U.S. ___, 130 S.Ct. 2371, 2371, 176 L.Ed.2d 764 (2010), reinstated in part, 607 F.3d 355, 355 (4th Cir.2010), our court of appeals abandoned its longstanding approach for passing on motions seeking a preliminary injunction.
The decision in Obama reiterates that "[a] preliminary injunction is an extraordinary remedy afforded prior to trial at the discretion of the district court that grants relief pendente lite of the type available after the trial." Obama, 575 F.3d at 345 (citing In re Microsoft Corp. Antitrust Litig., 333 F.3d 517, 524-26 (4th Cir.2003))(emphasis added); see also De Beers Consol. Mines, Ltd. v. United States, 325 U.S. 212, 220-21, 65 S.Ct. 1130, 89 L.Ed. 1566 (1945).
The characterization of the remedy appears appropriate. Granting the ultimate relief requested, even temporarily, at an early point in the case, often prior to the issues even being joined in the pleadings, seems rightly reserved for only the most compelling of cases. Id. at 346 ("The . . . [Supreme Court's] requirement that the
In order to obtain a preliminary injunction, the movant must clearly establish four things: "`[1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.'" Id. at 346 (quoting Winter, 129 S.Ct. at 374). In a departure from the former Blackwelder standard, which allowed some play in the joints
With respect to analysis of the numerous documents in this action, the court of appeals has provided the following standard in Keffer v. H.K. Porter Company, Inc., 872 F.2d 60, 64 (4th Cir.1989), a decision that involved whether certain welfare benefits continued beyond the expiration of a collective bargaining agreement in which they were found:
Id. at 62 (citations omitted); see also District 29, United Mine Workers of America v. Royal Coal Co., 768 F.2d 588, 590 (4th Cir.1985) ("Whether an employer's obligation to provide benefits to its retirees continues beyond the expiration of the underlying collective bargaining agreement depends upon the intent of the parties. Moreover, whether the parties intended such an employer's obligation to continue beyond the expiration of the collective bargaining agreement is primarily a question of contract interpretation.") (citations omitted).
There are limits though to the loosened rules of contract construction in the collective bargaining context. Courts will bar extrinsic evidence that is inconsistent with an unambiguous writing. See, e.g., Pace v. Honolulu Disposal Serv., Inc., 227 F.3d 1150,
Additionally, the explicit and unambiguous language found in a series of labor agreements might be deemed the best indicator of the parties' longstanding expectations of one another. See, e.g., 20 Richard A. Lord, Williston on Contracts § 55:23 (4th ed. 2010)("While there is thus some debate concerning how and the extent to which the parol evidence rule applies to collective bargaining agreements, there seems to be general agreement among most courts that parol evidence of the parties' bargaining history may be used to explain or supplement the terms of the collective bargaining agreement, but may not be admitted to prove an agreement at variance with the normal or customary meaning of the words chosen by the parties to express their agreement."); 12 Employment Coordinator—Labor Relations § 47:17 (Elec. ed. 2010) ("While there is broad latitude in the admissibility of bargaining history to construe a collective bargaining agreement, where the meaning of the clause in question is clear, no interpretation is necessary, and evidence of bargaining history is not admissible to explain its meaning.").
The best method for determining if plaintiffs have satisfied their rigorous burden under Obama is to examine the contentions they offer in support of a vesting determination. First and foremost, they rely upon International Union, United Auto., Aerospace, and Agr. Implement Workers of America (UAW) v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir.1983). That decision by the United States Court of Appeals for the Sixth Circuit provides that "when the parties contract for benefits which accrue upon achievement of retiree status, there is an inference that the parties likely intended those benefits to continue as long as the beneficiary remains a retiree." Id. at 1482.
Plaintiffs assert that our court of appeals adopted the Yard-Man inference in Keffer. They reference the following language from Keffer in support:
Keffer, 872 F.2d at 64.
At least one court of appeals, and some commentators, seize upon this brief mention to suggest, with little to no analysis, that our court of appeals adopted the "far-reaching" Yard-Man inference. See, e.g., International Union, United Auto., Aerospace & Agr. Implement Workers of Am., U.A.W. v. Skinner Engine Co., 188 F.3d 130, 140-41 (3rd Cir.1999) ("It appears that the First, Fourth, and Eleventh Circuits also apply the Yard-Man inference."); Richard L. Kaplan et al., Retirees at Risk: The Precarious Promise of Post-Employment Health Benefits, 9 Yale J. of Health Pol'y, Law, and Ethics, 287, 308-09 (2009)(citing Keffer for the proposition that "[s]ome circuits deem the inference a strong factor in ascertaining the intent of the parties to a CBA. . . ."); Jason Blumberg, Bringing Back the Yard-Man Inference, 4 U. Pa. J. Lab. & Emp. L. 195, 202 (2001) ("Presently, the Fourth, Sixth, and Eleventh Circuits accept the Yard-Man inference.").
These authorities read more into Keffer than it says. The Keffer decision's quotation of Yard-Man's reasoning comes only after the panel concluded that the retiree healthcare benefits at issue had vested. That vesting analysis rested not on Yard-Man, but upon (1) the language of the controlling documents, and (2) certain extrinsic evidence. In essence, the court of appeals in Keffer concluded that its reasoning, and Yard-Man's more "far-reaching" analysis, had yielded the same result.
Second, plaintiffs assert that vesting is indicated inasmuch as their eligibility for healthcare benefits is tied to their entitlement to a pension. Relying exclusively upon decisional law from the United States Court of Appeals for the Sixth Circuit and district courts in that circuit following Yard-Man, plaintiffs contend that this linkage means that as long as they receive a pension they are likewise entitled to healthcare benefits.
Inasmuch as the court has concluded that the foundational decision in Yard-Man is not part of the law of this circuit, it would be inappropriate to apply rules of construction developed therefrom.
(2002 PPS at 5-6). In sum, Century aptly contends that the language referenced indicates that the parties understood how to vest an employee or retiree benefit when they chose to do so. The failure to do so explicitly with retiree healthcare benefits, Century asserts, is telling.
Third, in their opening brief plaintiffs rely upon language found in the 1995 SPD that eligible dependents, including spouses, receive healthcare benefits "on the same basis" as the retirees. (1995 SPD at 87). They further contend that "on the same basis" means that a spouse is entitled to lifetime healthcare benefits inasmuch as, according to plaintiffs, the retiree is so entitled. Quite to the contrary, the 1995 SPD provides specifically that "Your coverage on account of a dependent [which includes a spouse] shall cancel on the date such person is no longer an eligible dependent as defined or upon your death, whichever occurs first." (1995 SPD at 87 (emphasis added)). Thus, although the spouse is entitled to "same basis" healthcare benefits with respect to the kinds of coverage, the duration of that coverage appears to end with the death of the retiree.
Fourth, plaintiffs contend that the presence of durational limits on other welfare benefits indicates that the retirees' healthcare benefits are not so limited and have vested. Plaintiffs rely upon Keffer in support. They assert that the agreements in that case specifically limited other benefits to the life of the collective bargaining agreement and provided for retiree medical coverage to continue until Medicare eligibility. In Keffer, the applicable language explicitly provided that "`[p]articipation in . . . [the group insurance] program . . . shall terminate when
While plaintiffs offer some language from the 2006 SPD for active employees supportive of their position, there is no comparable language to that just noted in Keffer in any of the CBAs or the SPDs in this action. The agreements in Keffer are simply different from those at issue here. See, e.g., Keffer, 872 F.2d at 64 (observing that, unlike the circumstances here presented, "the parties' later collective bargaining agreements . . . continued to expressly limit the [active] employee coverage to the lives of the agreements without similarly limiting the retirees' medical coverage.").
On this same point, Century cites District 29, United Mine Workers of America v. Royal Coal Company, 768 F.2d 588 (4th Cir.1985). In Royal Coal, the court of appeals had under consideration a coal company's obligation to provide health benefits to its retired employees beyond the expiration dates contained in the National Bituminous Coal Wage Agreements of 1978 and 1981.
Most of the class members retired from signatory Royal Coal Company ("Royal") prior to June 5, 1981, the effective date of the 1981 Wage Agreement, and all of them retired prior to the expiration of the 1981 Wage Agreement on October 1, 1984. Royal ceased all active mining activity during the life of the 1981 Wage Agreement and did not sign the subsequent 1984 Wage Agreement. Royal ceased providing health benefits to the class members on October 1, 1984.
The Wage Agreements in Royal Coal provided that employees and retirees would receive certain health benefits but that the benefits were apparently "guaranteed [only] during the term of" the applicable Wage Agreements. Royal Coal, 768 F.2d at 590-91. Relying upon this language, and the earlier en banc decision in District 17, Dist. 29, Local Union 7113, and Local Union 6023, United Mine Workers of America v. Allied Corp., 765 F.2d 412 (4th Cir.1985), the court of appeals in Royal Coal concluded as follows:
Id. at 592.
Turning to the contractual documents in this action as they relate to plaintiffs' fourth argument, the 1988 CBA, which was the first collectively bargained agreement that governed the parties' relationship, provided pertinently as follows in Article 15.A.2:
(1988 CBA at 116 (emphasis added)). Indeed, as noted, all of the CBAs and SPDs from 1988 through the present contain language of this type. Thus the somewhat distinguishable language in Keffer, coupled with the language in Royal Coal and Allied that appears favorable to Century's position, diminishes plaintiffs' contention.
Finally, plaintiffs rely upon the extrinsic evidence summarized supra. Some of that evidence might possibly have significance at a later point in the case. If an as-yet unapparent ambiguity arises on the subject of vesting that would warrant consideration of matters extrinsic, the controversy surrounding the 2007 Master Plan SPD might bear on the question of whether there was an intent to vest. It is also the case, however, as all parties concede, that the 2007 Master Plan SPD is not an operative plan document. It never became effective and was superseded by the subsequently agreed upon 2006 SPD, published in January, 2008.
The payment to former retirees of healthcare benefits after expiration of the 1988 CBA on October 31, 1990, and continuing during the 1990-92 Lockout from October 1990 to 1992 when the 1992 CBA became effective might have significance as well. At the same time, Century asserts, somewhat weakly, that it had no dispute with the retirees during the 1990-92 Lockout and that there is, in any event, no indication that cessation of the retiree benefits was even considered during that time period.
Additionally, the Century Q & A document quoted earlier that was received by Mr. Walters in April 2006 and Mr. Cochran sometime in 2003, wherein it is stated that a retiree's surviving spouse is entitled to lifetime healthcare benefits, appears to be similar to extrinsic evidence identified by the decision in Keffer as supporting the vesting determination reached in that case. See Keffer, 872 F.2d at 64. The court will, however, not reach the parties' extrinsic evidence if it ultimately concludes that the governing documents are unambiguous.
In sum, for each contention offered by plaintiffs, an equally or more compelling response is, in the main, presented by Century. Further, the court has not reached some potentially meritorious, independent assertions made in the first instance by Century. For instance, some courts have concluded that continuation language like that found in the 1995 and 1999 SPDs cuts against a vesting determination. See, e.g., John Morrell & Co. v. United Food and Commercial Workers Intern. Union, AFL-CIO, 37 F.3d 1302, 1307 (8th Cir.1994) ("The provision in the 1973 Master Agreement that continued health benefits for past retirees is evidence that prior benefits were not vested.");
Under these circumstances, plaintiffs cannot satisfy their burden at the first step of the Obama analysis. They have failed to make a clear showing that they are likely to succeed in ultimately demonstrating Century's actions contravened either (1) the applicable CBAs or SPDs in violation of section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, or (2) sections 502(a)(1)(B) and (a)(3) of the Employee Retirement Income Security Act, 29 U.S.C. § 1132(a)(1)(B) and (a)(3).
Based upon the foregoing discussion, it is ORDERED that plaintiff's motion for a preliminary injunction be, and it hereby is, denied.
(1999 Pens. Plan § 6.1). Plaintiffs contend that the absence of a similar reservation of rights in the CBAs or SPDs is indicative of an intent to vest healthcare benefits. It might just as easily be explained, however, that Century deemed a reservation of rights as to healthcare benefits unnecessary inasmuch as it deemed the subject to arise anew during each bargaining cycle.
Plaintiffs also note that the 1999 Pension Plan also has a termination date and is effective only for "the duration of the Labor Agreement." They rely upon language purportedly found on a page of the 1999 Pension Plan that does not appear in the portion of the record they cite. Nevertheless, they assert that since these pension-related durational clauses could not be read as "`unvest[ing]'" pension benefits then neither should any similar language in the CBAs or the SPDs as it relates to healthcare benefits. (Pls.' Reply at 11). The question of whether pension benefits are vested is not before the court. Additionally, the healthcare benefit termination language found in the CBAs and SPDs appears clear on its face. A comparison of that language with pension language found in an entirely different plan would not advance plaintiffs' efforts to make the clear showing of their likelihood of success on the merits at this stage of the case.
