Boeing Co. v. March
| Decision Date | 09 September 2009 |
| Docket Number | No. 06 CV 4997 (lead).,No. 07 CV 3555 (closed member).,06 CV 4997 (lead).,07 CV 3555 (closed member). |
| Citation | 656 F.Supp.2d 837 |
| Parties | The BOEING COMPANY and the Boeing Company Retiree Health and Welfare Plan, Plaintiffs, v. Lori M. MARCH, William G. Takacs, and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW, Defendants. John R. Mayfield, Robert Mecleary, and Thomas J. Sheridan, on behalf of themselves and a similarly situated class, Plaintiffs, v. The Boeing Company and the Boeing Company Retiree Health and Welfare Plan, Defendants. The Boeing Company and the Boeing Company Retiree Health and Welfare Plan, Counter-Claimants, v. John R. Mayfield, Robert Mecleary, and Thomas J. Sheridan, on behalf of themselves and a similarly situated class, Counter-Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Gregory Lee Curtner, Robert J. Wierenga, Miller, Canfield, Paddock and Stone, PLC, Ann Arbor, MI, Carrie Alice Herschman, Penny Nathan Kahan & Associates, Ltd., Chicago, IL, Richard W. Warren, Miller, Canfield, Paddock & Stone, PLC, Detroit, MI, for Plaintiffs.
Laurie Marie Burgess, Burgess Law Offices, P.C., Chicago, IL, for Defendants.
Robert A. Seltzer, Cornfield & Feldman, George Jackson, III, Mary Margaret Moore, Bryan Cave LLP, Chicago, IL, for Plaintiffs/Counter-Defendants.
These two cases, which involve claims under the Employee Retirement Income Security Act of 1974 and the Labor-Management Relations Act, were consolidated for all purposes. In both matters, the Boeing Company seeks a declaration that a series of collective bargaining agreements negotiated by Boeing with the UAW and Local 1069 (collectively, "the Union") did not vest lifetime health benefits for the following class:
All former employees of Boeing who retired from Boeing Rotorcraft before March 18, 2006; who, as employees, were represented by the Union in collective bargaining; and who are participants in the Retiree Health Plan (i.e., those currently participating in The Boeing Company Retiree Health and Welfare Benefit Plan (Plan 502) and receiving pension benefits under the Local 1069 Non-Contributory Retirement Plan (Plan 005)); and their spouses, same-gender domestic partners, and eligible dependents, and surviving spouses and eligible dependents, who are participants in the Retiree Health Plan, as described above.
Boeing also seeks a declaration that it has the right to modify, amend, or terminate class members' health benefits. On September 30, 2008, 2008 WL 4450309, this court certified the class for all pending claims in the consolidated litigation.
Represented by lead plaintiffs John R. Mayfield, Robert Mecleary, and Thomas J. Sheridan, the class argues that Boeing does not have a unilateral right to modify class members' health benefits under the current collective bargaining agreement (CBA). Specifically, they protest the changes Boeing made to those benefits in September 2006 and July 2009. The UAW, for its part, also considers these changes to be a breach of the CBA and a violation of Boeing's obligation to provide lifetime benefits to retirees. It contends, however, that the court lacks subject-matter jurisdiction over Boeing's claims against the Union.
The UAW, the class, and Boeing each have filed motions for summary judgment. This opinion resolves the three motions.
Before delving into the substantive dispute, the court considers its jurisdiction over each claim in the consolidated litigation. The court begins this analysis by briefly identifying the parties and recounting the litigation's history.
On one side of the dispute is the Boeing Company ("Boeing") and the Boeing Company Retiree Health and Welfare Plan ("Retiree Health Plan"). Boeing is a Delaware corporation with its corporate headquarters and principal place of business in Chicago, Illinois. One of its divisions, Boeing Rotorcraft (which went by other names in the past) has manufacturing facilities in Ridley Township, Pennsylvania ("the Ridley plant"), and at the Wilmington Airport in New Castle County, Delaware ("the Wilmington Airport facility"). At all relevant times, Boeing has been an "employer" within the meaning of Section 3(5) of ERISA, 29 U.S.C. § 1002(5), and the "plan sponsor" of the Retiree Health Plan within the meaning of Section 3(16)(B) of ERISA, 29 U.S.C. § 1002(16)(B). The Retiree Health Plan, meanwhile, is an "employee welfare benefit plan" within the meaning of ERISA § 3(1), 29 U.S.C. § 1002(1), and it is administered primarily in Chicago, Illinois.
On the other side are the named plaintiffs in the Mayfield complaint, John Mayfield, Robert Mecleary, and Thomas Sheridan ("Mayfield plaintiffs"); the named defendants in the March complaint, Lori March and William Takacs ("March defendants"); and the International Union, United Automobile, Aerospace & Agricultural Implement Workers ("UAW") and UAW Local 1069 (collectively, the "Union"). The Mayfield plaintiffs all retired from Boeing Rotorcraft before March 6, 2006, and the court has ruled that they adequately represent the class certified for this consolidated litigation. The March defendants were served on September 23 and September 21, 2006, respectively; they have not participated further in the litigation.
The class representatives and members are "participants" in the Retiree Health Plan, within the meaning of Section 3(7) of ERISA, 29 U.S.C. § 1002(7). Mayfield retired in 1988; Mecleary retired in 1999; and Sheridan retired in 2003. While employed at Boeing, Mayfield, Sheridan, and Mecleary were represented in collective bargaining by the UAW and UAW Local 1069, which are labor organizations as defined in Section 2(5) of the National Labor Relations Act, 29 U.S.C. § 152(5).
On August 21, 2006, the UAW and four retirees filed a class action-complaint in the Eastern District of Michigan (the "Wood complaint"). They voluntarily dismissed that complaint on September 13, 2006—the day the Mayfield plaintiffs filed suit in the Middle District of Tennessee. Two days later, Boeing and the Retiree Health Plan filed its declaratory complaint against the retirees and the Union in the Northern District of Illinois. The Mayfield complaint was subsequently transferred to this court, and the two actions were consolidated.
Both the Wood and Mayfield complaints contained an allegation that Boeing's changes to the retirees' health benefits breach its contractual obligation to provide vested, lifetime health benefits to the class. And both complaints included an allegation that the changes breach Boeing's obligations under the Retiree Health Plan. Finally, both complaints sought, under the LMRA and ERISA, a declaratory judgment that Boeing is obligated to provide health benefits to the class for the lives of the retirees and their surviving spouses; preliminary and permanent injunctive relief requiring Boeing to maintain the level of benefits established in the applicable collective bargaining agreements; and damages plus interest for any losses incurred as a result of the benefit changes.
There is no dispute that the court's jurisdiction over the class's amended complaint (formerly known as the Mayfield plaintiffs' amended complaint) is secure under section 301 of the LMRA, 29 U.S.C. § 185 and 28 U.S.C. § 1331, which empowers the court to resolve the class's claim for injunctive relief and damages for breach of a collective bargaining agreement. And the court has jurisdiction under sections 502(a)(1)(B), 502(a)(3), 502(e), and 502(f) of ERISA, 29 U.S.C. § 1132(a)(1)(B), 1132(a)(3), 1132(e) & 1132(f), and 28 U.S.C. § 1331, to resolve the class's claims for benefits due, to clarify the class's rights to future benefits under an employee welfare benefit plan, and to enjoin illegal changes to an employee welfare benefit plan. Jurisdiction over Boeing's declaratory complaint, however, is more complicated.
Boeing does not dispute that it lacks independent standing to sue under section 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3), because it is not a participant, beneficiary, or fiduciary, as those terms are defined in the Act. Boeing argues, though, that the court has subject-matter jurisdiction over the ERISA claims in its declaratory complaint because the retirees and the Union could bring (and indeed have brought) a coercive action against Boeing. The Union and the retirees disagree: they both argue that Boeing may not use the Declaratory Judgment Act, 28 U.S.C. § 2201, to "piggyback" on their standing under ERISA. The Union argues, moreover, that Boeing has not shown that the Union would have standing to bring ERISA and LMRA claims on behalf of the retirees—in other words, that there is any standing to "piggyback" on. Finally, the Union contests whether Boeing may bring an LMRA claim without alleging a contract violation. The court addresses each of these contentions below.
Relying primarily on the fact that Congress expressly limited private ERISA claimants to participants, fiduciaries, and beneficiaries, the Union argues that Boeing, an employer, may not subvert congressional intent by using the Declaratory Judgment Act to bring a claim it otherwise would not have standing to pursue. In a separate brief, the class joins, without elaborating, the Union's argument. Boeing responds that its declaratory complaint raises a substantial federal question because the class and the Union could (and in fact did) file a lawsuit alleging a violation of section 502 of ERISA, and federal-question jurisdiction would exist over such claims. And Boeing contends that, if a plaintiff invokes the Declaratory Judgment Act, there is no requirement that it have "independent standing" to sue under ERISA. Because the court has separate...
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