Alday v. Raytheon Co.
| Decision Date | 27 August 2012 |
| Docket Number | Nos. 08–16984,08–16985.,s. 08–16984 |
| Citation | 693 F.3d 772 |
| Parties | Frances ALDAY; Janice Aleshire; Mark Agraves; Frank Armenta; Milorad Arnokovich; Leonard Becwar; Joan Bernal; Irma Bravo; Jane Bravo; Thurman Brooks; Howard Brownstein; Marlene Burger; James Byrnes, Sr.; David Carless; Joe Carrasco; Lipa Carrasco; Rosemary Cesare; Ernie Corral; Rachel Delacruz; Joan Donnelly; Patrick Eccles; Lucy Esparza; Rebecca Federico; Jerry Fitch; Dickie Flores; Alice Gallardo; Patricia Garcia; Sandra Gary; Richard Gehrke, Sr.; Donald Genung; Ronald Geuder; Kathleen Glaser; George Gonzales; Jeanette Gray; Jose Gutierrez; Jeanne Harris; Robert Harris; Gloria Hernandez; Eloise Herran; Gerald Hotchkiss; Sharon Hudson; John Jackson; Joe Keiflin; Larry Kidney; Clare L'Armee; David Lillie; Leslie Llamas; Eric Martinez; Jimmie Martinez; Maria Martinez; Mary McKenna; Patricia McPheron; Josephine Meadows; Roy Mesa; Bill Meyer; Thomas Miller; Michael Mincheff; Carmen Miranda; Larry Mitchell; Henry Modrzejewski; Lois Moore; Heide Moran; Grace Moreno; Abdo Morgan; Carlos Ochoa; Felicita Ortega; Juan Ortiz; Richard Payne; Larry Pollock; Clifton Price; Jack Quattlebaum; Ignacio Rea; Jack Robinson; Bruce Rogers; Jennie Saenz; Robert Sager; Esperanza Saltzberry; Russell Scira; Jeannie Sides; David Sims; Jerold Small; James Smith, Jr.; Julia Soltero; Michael Sommer; Gina Soto; Donald Spross; Ronald Stallings; Donald Strauss; James Sullivan; Mary Terpening; John Terry; Donald Ulliman; Martha Villa; Steve Vuich; Lawrence Wickersham; Mary Williams; George Zukowski, Plaintiffs–Appellees, v. RAYTHEON COMPANY, a Delaware corporation, Defendant–Appellant. Mark Agraves; Ronald Geuder; Clare L'Armee; David Lillie, Plaintiffs–Appellants, and Frances Alday; Janice Aleshire; Frank Armenta; Milorad Arnokovich; Leonard Becwar; Joan Bernal; Irma Bravo; Jane Bravo; Thurman Brooks; Howard Brownstein; Marlene Burger; James Byrnes, Sr.; David Carless; Joe Carrasco; Lipa Carrasco; Rosemary Cesare; Ernie Corral; Rachel Delacruz; Joan Donnelly; Patrick Eccles; Lucy Esparza; Rebecca Federico; Jerry Fitch; Dickie Flores; Alice Gallardo; Patricia Garcia; Sandra Gary; Richard Gehrke, Sr.; Donald Genung; Kathleen Glaser; George Gonzales; Jeanette Gray; Jose Gutierrez; Jeanne Harris; Robert Harris; Gloria Hernandez; Eloise Herran; Gerald Hotchkiss; Sharon Hudson; John Jackson; Joe Keiflin; Larry Kidney; Leslie Llamas; Eric Martinez; Jimmie Martinez; Maria Martinez; Mary McKenna; Patricia McPheron; Josephine Meadows; Roy Mesa; Bill Meyer; Thomas Miller; Michael Mincheff; Carmen Miranda; Larry Mitchell; Henry Modrzejewski; Lois Moore; Heide Moran; Grace Moreno; Abdo Morgan; Carlos Ochoa; Felicita Ortega; Juan Ortiz; Richard Payne; Larry Pollock; Clifton Price; Jack Quattlebaum; Ignacio Rea; Jack Robinson; Bruce Rogers; Jennie Saenz; Robert Sager; Esperanza Saltzberry; Russell Scira; Jeannie Sides; David Sims; Jerold Small; James Smith, Jr.; Julia Soltero; Michael Sommer; Gina Soto; Donald Spross; Ronald Stallings; Donald Strauss; James Sullivan; Mary Terpening; John Terry; Donald Ulliman; Martha Villa; Steve Vuich; Lawrence Wickersham; Mary Williams; George Zukowski, Plaintiffs, v. Raytheon Company, a Delaware corporation, Defendant–Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
OPINION TEXT STARTS HERE
Robert Gregory, Mesa, AZ, for the plaintiffs/appellees/appellants.
Christopher Landau, Washington, DC, for the defendant/appellant/appellee.
Appeal from the United States District Court for the District of Arizona, David C. Bury, District Judge, Presiding. D.C. No. 4:06–cv–00032–DCB.
Before: M. MARGARET McKEOWN, WILLIAM A. FLETCHER, and MARSHA S. BERZON, Circuit Judges.
The Slip Opinion filed on May 21, 2012, is amended as follows:
After the words in the last full paragraph on page 5547, add a footnote that reads:
Such a breach gives rise to a cause of action under not just the LMRA, but also ERISA, for the reasons first laid out in Armistead v. Vernitron Corp., 944 F.2d 1287 (6th Cir.1991). With regard to the retirees' ERISA claim in that case, the Sixth Circuit reasoned: Id. at 1298. Welfare plans must “ ‘provide a policy and a method for funding the plan’ ” and “ ‘specify a basis for payments to and from the plan.’ ” Cinelli v. Sec. Pac. Corp., 61 F.3d 1437, 1441 (9th Cir.1995) (citation omitted). An ERISA plan fulfilling these requirements need not be in any particular form, nor need it be in an official plan document. See Winterrowd v. Am. Gen. Annuity Ins. Co., 321 F.3d 933, 938–39 (9th Cir.2003); Scott v. Gulf Oil Corp., 754 F.2d 1499, 1503 (9th Cir.1985), abrogated on other grounds by Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987); Donovan v. Dillingham, 688 F.2d 1367, 1372 (11th Cir.1982) (en banc). The terms of a CBA can therefore establish the terms of an ERISA plan and give rise, if violated, to an ERISA cause of action.
With this amendment, the panel has voted to deny the petition for rehearing and to reject the suggestion for rehearing en banc.
The full court has been advised of the suggestion for rehearing en banc and no active judge has requested a vote on whether to rehear the matter en banc. Fed. R.App. P. 35.
The petition for rehearing is DENIED and the suggestion for rehearing en banc is REJECTED.
No future petitions for rehearing or rehearing en banc will be entertained.
Employees at a defense plant in Arizona collectively bargained for the right to receive employer-provided healthcare coverage after they retired. We consider whether those employees—now retirees—are contractually entitled to receive premium-free healthcare coverage until age 65, or whether the contracts on which the retirees rely as providing that entitlement allowed their prior employer to start charging them for their insurance. Our analysis depends on the language of the relevant documents, considered against the background of employee benefits law and labor law precepts.
The plaintiffs here are a class of retirees who had worked at a defense plant in Tucson, Arizona, as well as their eligible spouses and dependents.1 The plant was owned by Hughes Missile Systems Group until 1997, at which point it was taken over by the Raytheon Company. Hughes and then Raytheon entered into a series of collective bargaining agreements (“CBAs”) with the International Association of Machinists and Aerospace Workers, AFL–CIO and its Local Old Pueblo Lodge, No. 933 (“the union”). From 1972 to 1999, the CBAs entered into consistently stipulated that the “Employer” would provide health insurance for eligible employees who retired under the retirement plan's so-called “contributory option.” To participate in the retirement plan's contributory option, employees had to contribute three percent of their eligible compensation.
Before the 2003–2006 CBA became operative on November 2, 2003, Raytheon provided fully funded healthcare coverage for eligible retirees who had participated in the contributory option of their respective retirement plans. The 2003 CBA, however, expressly limited Raytheon's contributions towards future eligible retirees' healthcare coverage. In 2004, Raytheon applied this policy to all employees who had retired while previous CBAs were in place, by starting to charge such retirees monthly premiums for their health insurance.
Several retirees sued on behalf of themselves and a class of other retirees, alleging claims under § 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185, and § 502 of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132. The district court certified a class of retirees, together with their eligible spouses and dependents, (“Retirees”) who had retired under the 1990, 1993, 1996, and 1999 CBAs, and otherwise satisfied the CBAs' eligibility criteria for employer-provided retiree health insurance. The court subsequently granted Retirees' motion for summary judgment on the LMRA and ERISA claims, holding that the CBAs' terms unambiguously establish eligible retirees' contractual right to premium-free health insurance until they reach age 65. Raytheon appeals the order granting summary judgment.
In a separate order, the district court granted Raytheon's motion for judgment on the pleadings regarding Retirees' claims for extracontractual and punitive damages, holding that Retirees are not entitled to such damages. Retirees cross-appeal that order.
Because the parties' positions depend on their differing interpretations of the relevant CBA and ERISA plan provisions, we begin by surveying these provisions in detail. Generally, “[a] retired worker's labor rights are governed by the CBA under which she retired and the terms of any ERISA plans incorporated therein.” Coffin v. Bowater Inc., 501 F.3d 80, 97 n. 15 (1st Cir.2007). We therefore look to the contractual documents in effect when Retirees left the active workforce.
As noted, the class includes retirees who retired under four different CBAs—those entered into in 1990, 1993, 1996, and 1999.2 While the last three CBAs were in effect, Raytheon issued the 1994, 1997, 1999, and 2003 ERISA welfare benefits plans (“the Plans”). Both the CBAs and the Plans changed over time in pertinent ways. We therefore consider both classes of documents in some detail.
Each CBA carried a three- or four-year effective term. According to all the CBAs' Current and Supplemental Agreements...
To continue reading
Request your trial
-
Dual Diagnosis Treatment Ctr., Inc. v. Blue Cross California, Case No.: SA CV 15-0736-DOC (DFMx)
...formally labeled as such." Horn v. Berdon, Inc. Defined Ben. Pension Plan, 938 F.2d 125, 127-28 (9th Cir. 1991); see Alday v. Raytheon Co., 693 F.3d 772, 778 (9th Cir. 2012) (holding that an ERISA plan that provides a method for funding and specifies how payments are made to and from the pl......
-
Fitzwater v. Consol Energy, Inc., Civil Action No. 2:16-cv-09849
...of rights clause "is effective only against contractual obligations explicitly covered by the reservation." Alday v. Raytheon Co., 693 F.3d 772, 791 (9th Cir. 2012). Yet, plaintiffs' argument presupposes the existence of a separate Lifetime Plan. Inasmuch as any promise of lifetime benefits......
-
Kendzierski v. Macomb Cnty.
...such linkage ‘signals the parties' intent to continue retirement health benefits notwithstanding expiration.’ " Alday v. Raytheon Co. , 693 F.3d 772, 785 (C.A. 9, 2012) (brackets omitted), quoting Quesenberry v. Volvo Trucks North America Retiree Healthcare Benefit Plan , 651 F.3d 437, 441 ......
-
Dairy v. Dairy Emps. Union Local No. 17 Christian Labor Ass'n of the U.S. Pension Trust
...plan fulfilling these requirements need not be in any particular form, nor need it be in an official plan document.” Alday v. Raytheon Co. , 693 F.3d 772, 782 (9th Cir.2012). Because ERISA's definition of a pension plan is so broad, virtually any contract that provides for some type of defe......