UNITED ELEC., RADIO & MACH. WORKERS v. Amcast Indus.

• Decision Date: 21 April 1986
• Docket Number: No. C-3-84-1001.,C-3-84-1001.
• Citation: 634 F. Supp. 1135
• Parties: UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA, et al., Plaintiffs, v. AMCAST INDUSTRIAL CORP., et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

634 F. Supp. 1135

UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA, et al., Plaintiffs, v. AMCAST INDUSTRIAL CORP., et al., Defendants.

No. C-3-84-1001.

United States District Court, S.D. Ohio, W.D.

April 21, 1986.

COPYRIGHT MATERIAL OMITTED

Robert Lewis, New York City, John R. Doll, Sorrell Logothetis, Dayton, Ohio, for plaintiffs.

Robert J. Brown, Dayton, Ohio, Allan Kover, Christopher B. Nelson, Marcia E. Goodman, Chicago, Ill., for defendants.

DECISION AND ENTRY CONSTRUING DEFENDANTS' MOTION TO DISMISS AS A MOTION FOR SUMMARY JUDGMENT AND SUSTAINING IN PART AND OVERRULING IN PART SAID MOTION TO WIT: ALL CAUSES OF ACTION ARE DISMISSED EXCEPT COUNT ONE; DECISION SUSTAINING DEFENDANTS' MOTION TO STRIKE JURY DEMAND

RICE, District Judge.

This case is before the Court on Defendants' Motion to Dismiss and to Strike Jury Demand (Doc. # 6). The Motion to Dismiss branch of Defendants' motion argues six grounds for dismissing various portions of Plaintiffs' Complaint: failure to exhaust contractual remedies, lack of standing, failure to state a claim for breach of fiduciary duty under ERISA, lack of a federal common law of health and welfare or pension benefits, pre-emption of state law promissory estoppel and non-availability of punitive and mental distress damages. The Motion to Strike Jury Demand branch of Defendants' Motions argues that Plaintiffs' Complaint raises only equitable claims, and therefore there is no entitlement to a jury trial.

I. Factual Background

This action arises out of the termination on June 4, 1983, of a collective bargaining agreement and "Pension Agreement" between Defendant Amcast Industrial Corporation and Plaintiffs United Electrical, Radio and Machine Workers of America ("UE") and Local 765 ("Local") thereof. The Plaintiffs in this case are the UE, the Local and nine retired employees of Amcast who claim coverage under the Pension Agreement. The Defendants in this case are Amcast, the GHR Division of Amcast, the President of Amcast, the Vice-President of Amcast (sued individually, as Vice-President and as a fiduciary of the Pension Plan) and five other fiduciaries of the Pension Plan.

The events surrounding this action, as alleged by Plaintiffs (see Plaintiffs' Memorandum in Opposition to Defendants' Motion to Dismiss (Doc. # 12) at 2-5), began in March, 1983, when Amcast, the UE and the Local submitted notices pursuant to the Collective Bargaining Agreement (Exh. 2 to Affidavit of Thomas G. Amato (attached to Doc. # 7)) and the Pension Agreement (Exh. 2 to Affidavit of Thomas G. Amato (attached to Doc. #7)) that had been in effect since June 1, 1980, to terminate those agreements and to bargain for new ones. Prior to commencement of the new negotiations, Amcast had closed its GHR Division and had laid off all bargaining unit employees by April 1, 1983. Nevertheless on April 15, May 6, 18, 26, 31, June 1 and 6, 1983, the UE and the Local met with Amcast for purpose of negotiating new agreements. During these negotiations, Amcast proposed a number of wage and fringe benefit reductions for bargaining unit employees, including reductions in existing retirees' supplemental pension benefits and retirees' medical and life insurance benefits. The UE and the Local refused to negotiate reductions in pension supplements or health and life insurance benefits for existing retirees.

In the negotiation meeting which occurred on June 6, 1983 (two days after expiration of the agreements), Leslie J. Brunskill, Amcast's representative, handed John Hovis, the UE and the Local's representative, a letter addressed to retired employees, which announced that Amcast was terminating existing retirees' medical and life insurance benefits and early retirement pension supplements effective June 30, 1983. Mr. Hovis told Mr. Brunskill that the Local wanted to file a grievance contesting this termination of benefits. Mr. Brunskill stated, however, that Amcast would not accept or process a grievance or agree to arbitrate the termination because Amcast believed it had no obligation under either the Collective Bargaining Agreement or the Pension Agreement to do so, since these agreements had expired as of June 4, 1983.

The negotiations between Amcast, the UE and the Local continued from June 6, 1983 through November, 1983. Throughout this period Amcast represented to the UE and the Local that the Pension Agreement had expired, but that the "Pension Plan" was still in effect. On request for a copy of the Pension Plan by Mr. Hovis, Mr. Brunskill indicated that the only document in existence was the Pension Agreement. When a participant in the Pension Plan, Plaintiff Rubbennie Stephens, requested a copy of the Pension Plan document by a letter dated October 6, 1983, Mr. Brunskill sent a copy of the Pension Agreement.

In a January 20, 1984 negotiating session, held for the purpose of engaging in bargaining relative to the permanent closing of the GHR foundry, Mr. Brunskill presented the UE and the Local with a draft of a new Pension Plan document dated September 28, 1983. Mr. Brunskill told Mr. Hovis at this meeting that this document was a draft which Amcast did not intend to unilaterally implement, and that the original Pension Agreement was still in effect. By a letter dated March 21, 1984, addressed to Mr. Brunskill, Mr. Hovis set forth the UE and the Local's position opposing cancellation of retirees' medical and life insurance benefits and early retirement pension supplements. Mr. Hovis also requested arbitration under the terms of the Pension Agreement. However, by letter dated April 18, 1984, Amcast notified the UE and the Local that the draft Pension Plan presented on January 20, 1984, had been unilaterally implemented by Amcast. Mr. Hovis, by a letter dated May 14, 1984, again requested Amcast to arbitrate the dispute as to termination of the retirees benefits. At a meeting between the parties on May 17, 1984, Mr. Brunskill presented an Amended and Restated Pension Plan document, along with a Summary Plan Description summarizing this Pension Plan, which drastically amended the Pension Plan retroactive to June 5, 1983. No further meetings were held between Amcast, the UE and the Local regarding either the closing of the GHR Division or Amcast's termination of retirees' medical and life insurance benefits and early retirement supplements.

Plaintiffs' Complaint contains seven counts. The first count alleges a claim under the Labor Management Relations Act (LMRA). The second, third and fourth counts allege claims under the Employee Retirement Income Security Act (ERISA). Count Five alleges claims under federal common law. Count Six alleges claims under the doctrine of estoppel. Count Seven seeks damages for emotional suffering and punitive damages.

II. Motion to Dismiss

As indicated previously, the Defendants' Motion to Dismiss argues six grounds for dismissal of various portions of Plaintiffs' Complaint: failure to exhaust contractual remedies, lack of standing, failure to state a claim for breach of fiduciary duty under ERISA, lack of federal common law of health and welfare or pension benefits, preemption of state law promissory estoppel and non-availability of punitive and mental distress damages. Because both the Plaintiffs and the Defendants have supported their arguments with affidavits and other material outside the pleadings, the Court will treat this motion as a Motion for Summary Judgment. See Fed.R.Civ.P. 12(b).

A. Exhaustion

The Defendants first argue that the UE, the Local and the individual retiree Plaintiffs' claims under both ERISA and the LMRA must be dismissed because the Plaintiffs have failed to exhaust the contractual dispute resolution mechanisms of the Collective Bargaining Agreement and the Pension Agreement. However, for the reasons set forth below, the Court finds that genuine issues as to material fact exist on whether the Plaintiffs fall within any exception to the exhaustion requirement, and so Defendants' motion is overruled on its argument that Plaintiffs have failed to exhaust contractual remedies.

Under both the LMRA and ERISA, exhaustion of contractual dispute resolution mechanisms is generally a prerequisite to review of the dispute by the courts. In the context of suits brought under the LMRA § 301, 29 U.S.C. § 185, exhaustion of contract remedies has long been considered a prerequisite to a damages lawsuit. See, e.g., Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967); Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965); Drake Bakeries, Inc. v. American Bakery & Confectionary Workers Int'l, 370 U.S. 254, 82 S.Ct. 1346, 8 L.Ed.2d 474 (1962). Similarly, the courts construing ERISA have implied exhaustion of a plan's review procedures as a prerequisite to lawsuit under that Act. See Kross v. Western Electric Co., 701 F.2d 1238 (7th Cir.1983); Amato v. Bernard, 618 F.2d 559 (9th Cir.1980); Cowden v. Montgomery County Soc. for Cancer Control, 591 F.Supp. 740 (S.D.Ohio 1984).

However, exceptions exist to the general prerequisite of exhaustion. In Anderson v. Alpha Portland Industries, Inc., 752 F.2d 1293, 1298 (8th Cir.) (en banc), cert. denied, ___ U.S. ___, 105 S.Ct. 2329, 85 L.Ed.2d 846 (1985), the court held that usual presumption in favor of arbitrability does not apply to contract language that creates benefits for retirees, and thus concluded that the language of the collective bargaining agreement therein did not require retirees to exhaust contractual remedies prior to filing a lawsuit. In concluding that the usual presumption in favor of arbitrability does not apply to retirees, the Anderson court relied upon case law indicating that while retirees may seek to preserve their rights under a collective bargaining agreement through a union's assistance, the union has no duty to represent the retirees and the retirees may therefore seek to enforce their rights without assistance from a union. See ...