Tackett v. M&G Polymers United States, LLC

Decision Date22 October 2013
Docket Number12–3407.,Nos. 12–3329,s. 12–3329
Citation733 F.3d 589
PartiesHobert Freel TACKETT, Woodrow K. Pyles, United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, and Harlan B. Conley, Plaintiffs–Appellees/Cross–Appellants, v. M & G POLYMERS USA, LLC, M & G Polymers USA, LLC Comprehensive Medical Benefits Program for Employees and their Dependents, M & G Catastrophic Medical Plan, M & G Medical Necessity Benefits Program of Hospital, Surgical, Medical, and Prescription Drug Benefits for Employees and their Dependents, and M & G Major Medical Benefits Plan, Defendants–Appellants/Cross–Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

OPINION TEXT STARTS HERE

ARGUED:Philip A. Miscimarra, Morgan, Lewis & Bockius LLP, Chicago, Illinois, for Appellants/Cross–Appellees. David M. Cook, Cook & Logothetis, LLC, Cincinnati, Ohio, for Appellees/Cross–Appellants. ON BRIEF:Philip A. Miscimarra, Morgan, Lewis & Bockius LLP, Chicago, Illinois, Christopher A. Weals, Morgan, Lewis & Bockius LLP, Washington, D.C., for Appellants/Cross–Appellees. David M. Cook, Jennie G. Arnold, Claire W. Bushorn, Cook & Logothetis, LLC, Cincinnati, Ohio, for Appellees/Cross–Appellants.

Before: KEITH, MARTIN, and COLE, Circuit Judges.

OPINION

COLE, Circuit Judge.

DefendantsAppellants Cross–Appellees M & G Polymers USA, LLC (M & G) and associated health plans appeal the permanent injunction granted by the district court in favor of PlaintiffsAppellees Cross–Appellants, retirees and dependents of retirees from an M & G plant and the union that currently represents plant employees.1 Plaintiffs brought a class action suit against Defendants after M & G announced that Plaintiffs would be required to make health care contributions. After a bench trial, the district court found Defendants liable for violating both a labor agreement and an employee welfare benefit plan. The district court issued a permanent injunction ordering Defendants to reinstate Plaintiffs to the current versions of the benefits plans they were enrolled in until 2007 to receive health care for life without contributions.

While Defendants ask this Court to reverse the liability determination and injunction, Plaintiffs request this Court to reinstate certain Plaintiffs to the pre–2007 versions of their benefits plan. Defendants argue that the district court clearly erred when it found that (1) certain letters requiring retiree contributions to health care costs were not a part of Plaintiffs' labor agreements; and (2) Plaintiffs' right to lifetime health care vested at retirement. Plaintiffs cross-appeal, arguing that, although the district court correctly held that their right to lifetime contribution-free benefits vested, the district court erred by restoring them to the current versions of their benefits plan, as opposed to the pre–2007 versions. We affirm the judgment of the district court.

I.

The named plaintiffs are Ohio residents and retirees from the Apple Grove, West Virginia Point Pleasant Polyester Plant (Apple Grove), which M & G has owned since 2000. From 1992 to 2000, Apple Grove was owned by Shell Chemical Company (“Shell”). Prior to 1992, it was owned by The Goodyear Tire & Rubber Company (“Goodyear”).

Plaintiffs and similarly situated retirees belong to Local Union 644 (“Local 644”) of the United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union, AFL–CIO (USW), which currently represents Apple Grove employees. Prior to 1995, Local 644 belonged to the United Rubber Workers (“URW”), which merged with the USW in 1995. Over the years that Apple Grove was owned by Goodyear, Shell and M & G, Local 644 entered into a number of labor agreements.

Typically, the union as a whole—first the URW and later the USW—would negotiate a “master” agreement with the employer. Individual plants would adopt an agreement in one of three ways: (1) some plants directly participated in the “master bargaining” with the employer and entered into the master agreement itself; (2) some plants separately adopted “me-too” agreements that were the same as the master agreement; and (3) some plants, including Apple Grove according to Plaintiffs, negotiated “me-too with exceptions” agreements, meaning that they adopted agreements based on the master agreement, but with certain exceptions or differences. M & G, however, claims that Apple Grove was a ‘me-too’ location[ ] that “had a consistent practice of applying the ‘master agreement’ settlement year-after-year.”

While Apple Grove was owned by Goodyear, Goodyear and Local 644 entered into a collective bargaining agreement (1991 CBA”) effective November 6, 1991, to November 6, 1994, and a collectively bargained Pension, Insurance and Service Award Agreement effective May 15, 1991, to May 15, 1994, (1991 Master P & I Agreement”). The 1991 Master P & I Agreement described, among other things, the health care benefits that retirees could expect to receive. A “side letter” (1991 Letter G”) was part of the 1991 Master P & I Agreement for certain URW locals, but not necessarily all. The 1991 Letter G stated:

If the average annual cost of health care benefits [per retiree who retires on or after May 1, 1991, including his/her spouse] exceeds [$10,500 for retirees (including surviving spouses) under age 65 and $4200 for retirees (including surviving spouses) over age 65], the cost in excess ... shall be allocated evenly to all retired employees (including surviving spouses) in such group.

The 1991 Letter G also specified that the required contributions would not begin until July 1, 1997.

Also, a Summary Plan Description (“SPD”), effective as of May 15, 1991, stated that the “Company has established a required maximum average annual company cost per retiree for medical coverage,” and set this maximum at $10,500 per year for each retiree under age 65 and $4,200 per year for each retiree over age 65 (surviving spouses included). It provided that the cost of any excess above the maximums would be allocated among all members of the group of retirees evenly, and that contributions would not begin until at least July 1, 1997.

In 1992, Shell bought Apple Grove and, in 1993, formally adopted the Goodyear benefit plans previously in effect at the plant. In 1994, Shell and the URW and some URW locals entered into the 1994 Master P & I Agreement” which, for some URW locals, included a side letter: 1994 Letter G.” The same year, Shell and Local 644 entered into another collective bargaining agreement, the 1994 CBA,” effective November 6, 1994 to November 6, 1997.

On May 9, 1997, Shell and the USW (the current union) entered into the 1997 Goodyear Master P & I Agreement,” which was effective until May 9, 2003. This agreement included, for some USW locals, a side letter: 1997 letter H.” On November 6, 1997, Shell and the USW and Local 644 entered into the 1997 CBA,” effective until November 6, 2000.

M & G bought Apple Grove in 2000. In September 2000, M & G and the USW and Local 644 entered into the 2000 CBA.” A P & I Agreement, effective on Nov, 6, 2000, accompanied the 2000 CBA. In 2003, M & G and the USW, acting on behalf of Local 644, began bargaining over the next collective bargaining agreement. The bargaining continued through August 2005, and included more than sixty days of negotiations. On August 9, 2005, M & G and the USW on behalf of Local 644 entered the 2005 CBA,” to be effective August 9, 2005 to November 5, 2008. The 2005 CBA included Letter of Understanding 2003–6 (“LOU 2003–6”). All Plaintiffs were, prior to retirement, active employees under one or more of the above CBAs.

The 2000 P & I contained the following language:

Employees who retire on or after January 1, 1996 and who are eligible for and receiving a monthly pension under the 1993 Pension Plan ... whose full years of attained age and full years of attained continuous service ... at the time of retirement equals 95 or more points will receive a full Company contribution towards the cost of [health-care] benefits.... Employees who have less than 95 points at the time of retirement will receive a reduced Company contribution. The Company contribution will be reduced by 2% for every point less than 95. Employees will be required to pay the balance of the health care contribution, as estimated by the Company annually in advance, for the [health care] benefits.... Failure to pay the required medical contribution will result in cancellation of coverage.

The 1994 and 1997 P & I Agreements contained similar language.2 Each P & I Agreement, once reached, was printed as a booklet and distributed to local union members.

The side letters were also known as “cap letters” because they “capped” the company's contribution towards the cost of retiree health care benefits. 1991 Letter G was the first such letter. 1994 Letter G, 1997 Letter H and LOU 2003–6 were also “cap letters,” similar to 1991 Letter G, specifying various coverage maximums and “bite dates” when required contributions would begin. The letters were not reproduced in P & I booklets and allegedly not ratified as part of the local agreement.

In December 2006, M & G announced that it would begin requiring retirees to contribute to the cost of their medical benefits. See Tackett v. M & G Polymers, USA, LLC (Tackett I), 561 F.3d 478, 480 (6th Cir.2009) (per curiam). At the time, each Plaintiff was enrolled in either (1) the Medical Necessity Plan; (2) the Catastrophic Plan; or (3) the Comprehensive Plan. Some Plaintiffs refused to pay premiums and were dropped from coverage. Other Plaintiffs paid premiums, even if under protest, and remained enrolled in their plans.

Plaintiffs filed suit on February 9, 2007. Plaintiffs contended that the promise of a “full Company contribution towards the cost of [health care] benefits” in the...

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