UAW v. Park-Ohio Industries, Inc.

• Decision Date: 01 May 1987
• Docket Number: Civ. A. No. C 85-1761.
• Citation: 661 F. Supp. 1281
• Parties: INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE, AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, et al., Plaintiffs, v. PARK-OHIO INDUSTRIES, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

661 F. Supp. 1281

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE, AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, et al., Plaintiffs, v. PARK-OHIO INDUSTRIES, INC., et al., Defendants.

Civ. A. No. C 85-1761.

United States District Court, N.D. Ohio, E.D.

May 1, 1987.

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Betty Grdina, William P. Bobulsky, Ashtabula, Ohio, for plaintiffs.

Martin T. Franey, Cleveland, Ohio, Diane E. Stanton, Atlanta, Ga., Michael S. Cecore, Jackson, Lewis, Schnitzler & Krupman, New York City, for defendants.

MEMORANDUM AND ORDER

ANN ALDRICH, District Judge.

Plaintiffs in this action seek equitable relief and damages for alleged violations of their contractual rights created by a collective bargaining agreement, and of their statutory rights created by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461 (1982 and Supp. III 1985). They also plead state causes of action of promissory estoppel and intentional and/or negligent infliction of emotional distress. These rights were allegedly breached by defendants' refusal to provide employees who retired after the expiration of a collective bargaining agreement with health/hospitalization and life insurance benefits. Pending before the Court are a plethora of motions:

(1) Defendants' motion for summary judgment, seeking dismissal of the complaint;

(2) Plaintiff's motion for partial summary judgment, on the issue of whether defendants breached the collective bargaining agreement;

(3) Defendants' motion for partial summary judgment, alternatively seeking judgment on the promissory estoppel claims if the Court does not find them preempted by federal law;

(4) Defendants' motion to dismiss plaintiffs' request for punitive and emotional distress damages; and

(5) Defendants' motion to strike plaintiffs' jury demand.

For the reasons set forth below, this Court determines that plaintiffs' contractual rights to post-retirement health and hospitalization benefits (hereinafter collectively designated as "health benefits") were breached, and that plaintiffs are entitled to partial summary judgment with respect to those benefits based upon their contract claim and some of their ERISA claims. Summary judgment cannot be granted for either plaintiffs or defendants with respect to the life insurance benefits, requiring that the parties proceed to trial on plaintiffs' federal claims. However, the pendent state claims are dismissed as preempted under § 301 of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185 (1982) ("§ 301"), even though plaintiffs will be entitled to present a promissory estoppel claim under § 301 as a basis for their life insurance benefits. Defendants' motion to strike plaintiffs' jury demand is denied, but their motion to dismiss plaintiffs' request for punitive and emotional distress damages as ERISA remedies is granted. Defendants' motion for summary judgment on claims pursuant to § 510 of ERISA, 29 U.S.C. § 1140 (1982) ("§ 510") is also granted.

Jurisdiction rests on § 301 of the LMRA; §§ 502(a)(1) and 502(a)(3) of ERISA, 29 U.S.C. §§ 1132(a)(1) and 1132(a)(3) (1982) ("§ 502(a)(1)" and "§ 502(a)(3)"); 28 U.S.C. § 1331 (1982) and pendent jurisdiction over state law claims.

I. THE PARTIES AND THE COMPLAINT

Defendant Park-Ohio Industries, Inc. ("Park-Ohio") is a business engaged in manufacturing products. It was a party to a series of collective bargaining agreements with plaintiffs the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America ("UAW") and UAW's Local No. 91 ("Local No. 91") (together, "the union"). Park-Ohio employed thirty-four hourly employees who have retired since the expiration on July 11, 1983 of the most recent collective bargaining agreement between the union and Park-Ohio. These thirty-four persons, or their widowed spouses, are also plaintiffs in this action ("the individual plaintiffs"). Park-Ohio's Ohio Crankshaft Division ("Ohio Crankshaft") is the plan administrator of a benefit plan negotiated as part of the most recent collective bargaining agreement to provide health and life insurance benefits for Park-Ohio retirees, and it is also named as a defendant. Park-Ohio and Ohio Crankshaft are hereinafter collectively designated as "defendants" or "the company," and the Court does not fix the liability apportioned to each defendant in ruling upon these motions, but rather determines whether plaintiffs will be permitted to establish liability against either defendant.

The most recent collective bargaining agreement between Park-Ohio and the union, effective between July 11, 1980 and July 11, 1983 ("the 1980-83 labor agreement"), contained provisions establishing health and life insurance plans for retirees, including health insurance coverage for retirees' spouses and eligible dependents. Plaintiffs aver that these benefits were meant to be provided throughout the retirees' lifetimes, outlasting the duration of the collective bargaining agreement. They argue that these lifetime retirement benefits were contractually vested when employees attained retirement eligibility during the term of the 1980-83 labor agreement.

After the expiration of the collective bargaining agreement on July 11, 1983, the union began a strike which is still unresolved. During the strike, the individual plaintiffs or their decedents, who met the pension plan's requirements for early retirement before the 1980-83 labor agreement's expiration, elected to retire. The complaint alleges that the individual plaintiffs were provided with health and life insurance benefits until April 1, 1984, when defendants terminated the benefits as a tactic for leverage in the contract negotiations. It avers that the individual plaintiffs had detrimentally relied upon the company's representations that health and life insurance benefits would be provided to employees eligible to retire before the labor agreement's expiration and who later retired.

Plaintiffs aver that defendants' termination of the health and life insurance benefits to persons retiring after July 11, 1983, or their surviving spouses, violates the 1980-83 labor agreement and is compensable under § 301 and ERISA. Plaintiffs also assert that defendants breached fiduciary duties created by §§ 404 and 406 of ERISA, 29 U.S.C. §§ 1104 and 1106 (1982) ("§ 404" and "§ 406"), and that defendants have discriminated against them in order to interfere with their rights under the labor agreement or ERISA, in violation of § 510 of ERISA. They plead that defendants' representations — that those bargaining unit employees eligible to retire before July 11, 1983 who chose to retire after the 1980-83 labor agreement expired would receive the same health and life insurance benefits as those retiring before July 11, 1983 — were relied upon by the post-July 11, 1983 retirees, and that defendants should be estopped from not satisfying this promise. Finally, plaintiffs allege that the termination of the retirement benefits constitutes intentional or negligent infliction of emotional distress.

The second amended complaint requests a preliminary and permanent injunction restraining Park-Ohio from refusing to abide by individual plaintiffs' vested rights in their health and life insurance benefits; damages adequate to fund lifetime health and life insurance coverage for individual plaintiffs and other union retirees similarly situated; compensatory damages, including out-of-pocket medical expenses and emotional distress of the individual plaintiffs; punitive damages; disgorement of profits resulting from the breach of fiduciary duties; and attorneys' fees and costs.

II. STANDARDS FOR SUMMARY JUDGMENT

Fed.R.Civ.P. 56(c) governs summary judgment motions and provides:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law....

The nature of materials properly presented in a summary judgment pleading is set forth in Fed.R.Civ.P. 56(e):

Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.... The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits. When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

However, the movant is not required to file affidavits or other similar materials negating a claim on which its opponent bears the burden of proof, so long as the movant relies upon the absence of the essential element in the pleadings, depositions, answers to interrogatories, and admissions on file. Celotex Corp. v. Catrett, ___ U.S. ___, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

In reviewing summary judgment motions, this Court must view the evidence in the light most favorable to the non-moving party to determine whether a genuine issue of material fact exists. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Hasan v. CleveTrust Realty Investors, Inc., 729 F.2d 372 (6th Cir.1984). A fact is "material" only if its resolution will affect the outcome of the lawsuit. Anderson v. Liberty Lobby, Inc., ___ U.S. ___, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Determination of whether a factual issue is "genuine" requires consideration of the...