Bish v. Aquarion Services Co.
| Decision Date | 14 October 2003 |
| Docket Number | No. 3:03CV1118 (JBA).,3:03CV1118 (JBA). |
| Court | U.S. District Court — District of Connecticut |
| Parties | BISH, et al. v. AQUARION SERVICES CO., et al. |
J. William Gagne, Jr., J. William Gagne & Assoc., Wethersfield, CT, John R. Williams, Williams & Pattis, New Haven, CT, for Plaintiffs.
Daniel Schwartz, Jennifer L. Sachs, Patricia M. Canavan, Day, Berry & Howard, Christian A. Grenier, Conrad S. Kee, Jeffrey M. Vona, Jackson Lewis, Stamford, CT, John Richard Mitola, Office of the City Attorney, Bridgeport, CT, for Defendants. Ruling on Defendants Aquarion's and U.S. Filter's Motions to Dismiss [Docs. ## 29, 31]
Plaintiffs commenced this suit to reinstate their retirement medical insurance coverage that was terminated after the transfer of administration of the Bridgeport Water Pollution Control Authority's waste water treatment facilities, where they had been formerly employed. Defendants Aquarion Services Company, Aquarion Company, and Aquarion Water Company (collectively "Aquarion") moved to dismiss all counts of Plaintiffs' Amended Complaints that were directed at Aquarion. Defendant U.S. Filter Operating Services, Inc. ("US Filter") moved under Fed. R. Civ. P. 12(b)(1) and (6) to dismiss Counts Five, Eleven, Twelve and Fifteen of Plaintiffs' Amended Complaint. For the reasons discussed below, Aquarion's motion is denied. US Filter's motion is granted as to Count Five and denied as to Counts Eleven, Twelve and Fifteen.
Plaintiffs Alexander Bish and Richard Faustine, and Intervening Plaintiff Donald Mohyde, are retired employees of the Bridgeport Water Pollution Control Authority ("WPCA"). Plaintiff Local 1303 of Council 4, American Federation of State, County and Municipal Employees, AFL-CIO ("Local 1303") is the union representing Bish, Faustine and other WPCA employees. Intervening Plaintiff International Brotherhood of Teamsters Local 145 ("Local 145") is the union representing Mohyde and certain other employees of the WPCA. Plaintiffs claim entitlement to retirement medical benefits, which they were refused after Aquarion replaced U.S. Filter as the private entity operating the WPCA's waste water treatment facilities.
On April 28, 1997, Defendant City of Bridgeport ("Bridgeport") entered into a contract with a private company, Professional Services Groups, Inc. ("PSG"), to operate the WPCA's waste water treatment site. Prior to the privatization of management of the water treatment facilities, Bridgeport Mayor Joseph P. Ganin stated in a letter to WPCA employees that all city waste water treatment employees would be offered jobs by PSG, would be provided with an equal or better wage and benefit package, and would, as employees of PSG, be allowed to participate in the state-managed retirement fund with no disruption in pension plans.
Upon formally entering into the privatization contract on April 28, 1997, PSG accepted the terms of Mayor Ganin's letter to WPCA employees, recognized the unions, and entered into collective bargaining agreements with Local 1303 ("Local 1303 CBA"), and with Local 145 ("Local 145 CBA"). Both collective bargaining agreements were to remain in effect for five years from the date of execution and were thereafter to be automatically renewed absent notice from one of the parties.
US Filter subsequently purchased PSG and agreed to adopt the CBA. When plaintiffs Bish and Faustine retired, they were covered by the Local 1303 CBA and were provided with retiree medical benefits by U.S. Filter pursuant to Section 29-3 of the CBA, which states:
For those employees who have completed fifteen (15) years of service and are fifty-five (55) years of age, or have completed twenty-five (25) years of service regardless of their age, and who will retire during the term of this agreement or an employee over the age of sixty-five (65) but not eligible for Medicare and who will retire during the term of this [a]greement, PSG shall provide and pay for the Insurance coverages as described in Section 29-1(a), (b), (c), and (d) for each retiree and his enrolled dependents.
A) PSG may offer a point-of-service plan option that enables employees to receive improved benefits and administration through a network of participating providers.
B) There shall be a retiree contribution equal to five (5%) percent of the cost of the difference between the employee and the dependent(s) premium.
Mohyde, who was covered by the Local 145 CBA, also retired during the CBA's term and received the same retirement benefits from U.S. Filter, his pursuant to Section 17.03 of the Local 145 CBA.
Subsequently, Aquarion submitted proposals to the City to operate the Bridgeport waste water treatment facility. In September 2002, John Bonomo, the Vice President of Aquarion, wrote a letter to Andrew S. Abate, General Manager of the WPCA, stating: On April 18, 2003, Aquarion entered into an agreement to operate the waste water site.
After U.S. Filter's contract to operate the waste water treatment facilities terminated, Faustine, Bish, and Mohyde received the following letter from U.S. Filter:
The Bridgeport, CT project site was acquired by Aquarion Water Company (Aquarion) effective April 18, 2003.
In accordance with this acquisition, Aquarion has assumed full responsibility for the collective bargaining agreements that cover the employees at the Bridgeport site effective April 19, 2003. Therefore, US Filter Operating Systems was relieved of its obligations under the collective bargaining agreements for the provision of retiree medical insurance coverage effective that same date, i.e. April 19, 2003.
However, as a courtesy during this transition, USFilter will continue your retiree medical benefits through June 30, 2003. If you have any questions regarding your future retiree medical insurance coverage, please contact Lucy Teixeira, who is with Aquarion's Human Resources Department, as (203) 337-5986.
The letter was copied to Lucy Teixeira of Aquarion.
On May 15, 2003, Faustine, Bish and Mohyde received a letter from Aquarion:
On May 7, 2003, you were inadvertently provided with a letter from [U.S. Filter] stating that [Aquarion] has purchased a project site located in Bridgeport. The purpose of this letter is to provide you with accurate facts about this business transaction.
Aquarion Services Company entered into an agreement with the City of Bridgeport to operate their [sic] wastewater operation effective April 18, 2003. As part of the agreement, Aquarion Services hired the employees who were formerly employed by U.S. Filter and are in the process of negotiating the union contracts with the various represented groups. Aquarion Services did not acquire a site nor assume collective bargaining unit agreements. No transaction has transpired between U.S. Filter and Aquarion Services to shift the responsibility of retiree medical insurance from U.S. Filter to Aquarion.
When a stock acquisition ensues between two companies, the acquirer takes on the liabilities of the purchased companies. Aquarion did not purchase U.S. Filter, and therefore U.S. Filter maintains all its liabilities associated with the implied or express promise to provide you with retiree medical insurance coverage and your pension benefit.
The letter closes with a suggestion to contact U.S. Filter with further questions.
On May 27, 2003, U.S. Filter wrote to Aquarion:
I am writing regarding the retiree medical benefits of three former employees at the Bridgeport CT site: Richard Faustine, Don Mohyde and Alexander Bish.
In accordance with its acquisition of the Bridgeport CT project site on April 19, 2003, Aquarion assumed full responsibility for the collective bargaining agreements that cover the employees at the Bridgeport site. Therefore, [U.S. Filter] was relieved of its obligations under the collective bargaining agreements for the provision of retiree medical coverage that same date, i.e., April 19, 2003.
* * * * * *
Again, U.S. Filter has no retiree medical obligation by virtue of the termination of its collective bargaining agreements with the Bridgeport employees, coincident with the termination of its contract with the City of Bridgeport to operate the site.
Please be advised that [U.S. Filter] will honor its commitment to provide retiree medical insurance coverage for Messrs. Faustine, Mohyde and Bish through June 30, 2003. Further, due to the nature of this being retiree coverage, [U.S. Filter] does not have a continuation of coverage obligation under COBRA.
Finally, on May 29, 2003, Faustine and Mohyde received another letter from U.S. Filter, which again stated that Aquarion had assumed full responsibility for the collective bargaining agreement but that U.S. Filter would, as a courtesy, continue coverage through June 30, 2003.
Plaintiffs then brought suit in Superior Court for the Judicial District of Fairfield, and a temporary restraining order was issued prohibiting the defendants from canceling the plaintiffs' benefits. US Filter removed the case to this Court, and on August 1, 2003, this Court entered an order extending the TRO, requiring U.S. Filter to continue to provide the retiree health benefits to plaintiffs Bish and Faustine until further court order.
Plaintiffs' Amended Complaint alleges violations of the Labor Management Relations Act ("LMRA") and the Employment Retirement Income Security Act ("ERISA"), along with supplemental state common law claims. Counts One through Four, Six, and Seven of Plaintiffs' Amended Complaint allege breach of the collective bargaining agreement by U.S. Filter and Aquarium, and are brought under § 301 of the Labor Management...
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