Abels v. Titan Intern., Inc.

• Decision Date: 31 January 2000
• Docket Number: No. 3-98-CV-90074.,3-98-CV-90074.
• Parties: Joseph F. ABELS, et al., Plaintiffs, v. TITAN INTERNATIONAL, INC., and The French and Hecht Division Kelsey-Hayes Company Hourly-Rate Employees Pension Plan, Defendants.
• Court: U.S. District Court — Southern District of Iowa

85 F.Supp.2d 924

Joseph F. ABELS, et al., Plaintiffs, v. TITAN INTERNATIONAL, INC., and The French and Hecht Division Kelsey-Hayes Company Hourly-Rate Employees Pension Plan, Defendants.

No. 3-98-CV-90074.

United States District Court, S.D. Iowa, Davenport Division.

January 31, 2000.

Russell Woody, Chicago, IL, for Plaintiffs.

Patrick W. Driscoll, Rachel R. Watkins Schoenig, Davenport, IA, for Defendants.

ORDER

PRATT, District Judge.

Before the Court are two Motions for Summary Judgment, filed respectively by 62 members of a local bargaining unit on October 15, 1999 and by the employer and its pension plan filed October 18, 1999. The parties have filed resistances and replies to each of the Motions for Summary Judgment. Plaintiffs seek a merits determination of their claims arising under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Defendants claim dismissal of this action is warranted under principles of res judicata. A hearing on both Motions was held January 26, 2000 at the United States Courthouse in Davenport, Iowa. The matter is fully submitted.

I. Facts and Procedural Background

This is a labor dispute over retirement benefits between employees and their employer, Titan International, Inc. ("Titan") and their pension plan ("the Plan"). The case raises important questions concerning the role unions play in the collective bargaining process and on behalf of their members when federal statutory rights are implicated. Finally, and as burn out by Defendants' Motion, this case tests the limits to which principles of res judicata can govern the adjudication of workers' federal statutory rights when their Union, in a prior court action, has purportedly already spoken. A detailed description of the history of this litigation will be helpful in resolving the legal contentions raised by the parties.

Plaintiffs are 62 individuals who are, or were, hourly-rated production and maintenance employees employed by Titan at its Walcott, Iowa plant. At all material times relevant to this lawsuit, Titan's production and maintenance employees at the plant were represented by Local Lodge 2048 of the International Association of Machinists and Aerospace Workers, AFL — CIO ("the Union"). Each of the Plaintiffs in this lawsuit belongs to the Union, which is their exclusive certified bargaining representative.

The relationship between Titan and its workers is governed by a collective bargaining agreement ("CBA"). In 1993, Titan and the Union undertook important negotiations concerning the company's pension plan. During these negotiations, Titan allegedly made oral promises to preserve benefit rights under a provision commonly referred to as the "30-and-out" provision.¹ On July 12, 1993, the Union membership approved and ratified an amendment concerning the Plan. That amendment, which became part of the governing CBA, provided in relevant part:

(b) The Defined Benefit Plan will be frozen with no loss of vested benefits as of July 12, 1993.

(c) Employer will contribute to a new Union administered pension program, the sum of 10¢ per actual straight time hour worked for each employee with one (1) year seniority during the course of the Agreement. The Union shall provide all required Summary Plan Descriptions and reports as required by law.

See 1993 Agreement, Article XIX, ¶ 19:03(b), (c) (hereinafter "1993 Freeze Amendment"). At all times following ratification of the 1993 Freeze Amendment, Titan served as administrator of the Plan.

In February or March of 1995, Plaintiff Glenn Carlton had achieved 30 years of service with Titan. He applied for early retirement benefits under the "30 and out" provision. Titan denied that request because, as Titan interpreted the 1993 Freeze Amendment, he did not have 30 years of service as of July 12, 1993. This dismayed the Union (and Mr. Carlton) who apparently relied on the company's alleged promise in its vote to approve the 1993 Freeze Amendment that benefits under the 30-and-out provision would be unaffected. After Titan failed to reconsider its decision with respect to Mr. Carlton's request for 30-and-out benefits, the Union filed an unfair labor practice charge with the National Labor Relations Board (NLRB), charging Titan with having violated its duty under Section 8(a)(5) of the National Labor Relations Act (NLRA), 29 U.S.C. § 158(a)(5) to bargain in good faith with the Union. On June 13, 1995, the NLRB, through its Regional Director, issued its ruling: "In these circumstances, where there is no evidence to show that the Employer bargained in bad faith or modified the bargaining agreement, the only dispute lies in how the pension plan should be interpreted. Inasmuch as the Board does not in these circumstances resolve such conflicts, I am refusing to issue a complaint in this matter. United Telephone of the West, 1955 WL 13197, 112 NLRB 779 (1955)."

Under Section 19:05 of the CBA, disputes relating to the Plan were not subject to any grievance procedures. Shortly after the NLRB's decision, the Union membership, on recommendation from its leaders, decided to engage attorney Matthew Glasson. The Union retained Glasson as counsel and filed suit in the Davenport Division of this Court on January 16, 1996 alleging, inter alia;

4. Plaintiff [the Union] is the certified bargaining representative for production and maintenance employees employed by [Titan].

5. [The Union and Titan] are parties to a series of collective bargaining agreements the most recent of which has the effective dates of July 13, 1993 through July 12, 1996.

6. Article XIX of said [CBA] contains a provision for a defined benefit pension plan....

8. During the negotiations which led up to the current [CBA], the parties agreed to freeze the defined benefit pension plan and that agreement was incorporated in the collective bargaining agreement as Section 19.03(b) which provides that "The Defined Benefit Plan will be frozen with no loss of vested benefits as of July 12, 1993."

9. A dispute has arisen between the parties concerning the proper interpretation of Section 19.03(b).

10. Section 19.05 of [the CBA] provides that "No matter respecting the provision of these programs shall be subject to the grievance procedure."

11. The court has jurisdiction of this dispute pursuant to 29 U.S.C. § 185 and 29 U.S.C. § 1451.

WHEREFORE the [Union] requests that the court take jurisdiction over this dispute, review and interpret the disputed provision of the [CBA], issue appropriate declaratory and injunctive relief, and award the Plaintiff the costs of this action including its reasonable attorney fees.

International Assoc. of Machinists and Aerospace Workers, Local Lodge 2048 v. Titan Wheel Int'l, Inc., 3-96-CV-10008 ("the '96 suit").

The purpose for filing the '96 suit is sharply contested by the parties. According to Plaintiffs, "the only mechanism available to the [Union] for obtaining an authoritative interpretation of the disputed language of Section 19:03 was a suit against Titan for breach of the collective bargaining agreement under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185." Pls.' Brief in Opp. at 4-5 (emphasis added); in other words, to Plaintiffs, this was a contract dispute between their Union and Titan. And, given that pension disputes were expressly excluded from the grievance procedures, the '96 suit was the "functional equivalent of a grievance under the [CBA]." Pls.' Brief in Opp. at 5. According to Defendants, however, the '96 suit brought by the Union was meant not only to seek interpretation of the 1993 Freeze Amendment but also to request an award of benefits under the Plan. See Defs.' Reply to Pls.' Resistance to Defs.' Mot. for Summ.J. at 8.

During the pendency of the '96 suit, the Union and Titan reentered negotiations concerning the controversial freeze provision of the CBA. After a series of negotiations, both sides thought they reached a deal; the Union would withdraw its '96 suit in exchange for an increase in Titan's contribution to the Union-administered pension fund (from 10¢ to 25¢ per hour worked). Several meetings were held and Union members discussed the merits of the proposed deal. In July of 1996, the members voted down the proposal. Some time later in August of 1996, Union counsel Glasson expressed to Union local president Jerry Simms that prosecuting the '96 suit would be costly and time-consuming for the Union and its membership. Glasson urged the Union to accept the proposed deal. After a second vote in August of 1996, the membership finally accepted the proposed deal: the Union would dismiss its '96 suit with prejudice and Titan agreed to contribute 25¢ per hour to a separate Union-administered pension fund; additionally, as they had done in 1993, the Union and Titan agreed "[t]hat the Plan would remain frozen with no loss in vested benefits as of July 12, 1993." See 1996 Agreement, Article XIX, ¶ 19:03(b), (c) (hereinafter "1996 Freeze Amendment"). It is not disputed that Titan continues to contribute 25¢ per hour to a separate Union-administered pension fund pursuant to the 1996 Freeze Amendment.

In May of 1998, individual members of the Union filed the present suit against Titan and the Plan pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiffs are older workers who voted against the 1996 Freeze Amendment. In the present action ("the '98 suit"), Plaintiffs seek to have the 1996 Freeze Amendment declared null and void on grounds that it violates "notice" requirements of ERISA section 204(h), 29 U.S.C. § 1054(h), and/or that it violates "anti-cutback" provisions of ERISA section 204(g), 29 U.S.C. § 1054(g). Additionally, Plaintiffs seek an award of benefits, credit for time served, and other appropriate relief.

Defendants Titan and the Plan argue in their Motion for Summary Judgment that the voluntary dismissal with prejudice of the '96 suit...