Reese v. Cnh America LLC

Decision Date27 July 2009
Docket NumberNo. 08-1912.,No. 08-1234.,No. 08-1302.,08-1234.,08-1302.,08-1912.
Citation574 F.3d 315
PartiesJack REESE, Frances Elaine Pidde, James Cichanofsky, Roger Miller, and George Nowlin, Plaintiffs-Appellees/Cross-Appellants, v. CNH AMERICA LLC (f/k/a Case Corporation) and CNH Global N.V., Defendants-Appellants/Cross-Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

ARGUED: Bobby R. Burchfield, McDermott, Will & Emery LLP, Washington, D.C., for Appellants. Roger J. McClow, Klimist, McKnight, Sale, McClow & Canzano, P.C., Southfield, Michigan, for Appellees. ON BRIEF: Bobby R. Burchfield,

Jason Alan Levine, McDermott, Will & Emery LLP, Washington, D.C., Norman C. Ankers, Honigman Miller Schwartz and Cohn LLP, Detroit, Michigan, for Appellants. Roger J. McClow, Klimist, McKnight, Sale, McClow & Canzano, P.C., Southfield, Michigan, for Appellees.

Before: RYAN, GIBBONS, and SUTTON, Circuit Judges.


SUTTON, Circuit Judge.

At stake in this appeal is whether a collective bargaining agreement (CBA) grants retirees lifetime health-care benefits upon retirement. Consistent with our precedents in this area, we hold that it does so. That conclusion, however, does not resolve the scope of those benefits. Because the CBA and related documents do not say anything about subsequent modifications to these benefits and because the application of the relevant CBA provisions suggests that the parties contemplated reasonable modifications, we remand the case to the district court to determine what types of changes are permitted.


The Parties. CNH America LLC, formerly known as Case Corporation, makes construction and agricultural equipment in Racine, Wisconsin. It was once a wholly owned subsidiary of Tenneco, Yolton v. El Paso Tenn. Pipeline Co., 318 F.Supp.2d 455, 459 (E.D.Mich.2003), but as part of a corporate restructuring, Tenneco sold its interest in the company in a public offering in June 1994. Id. at 459-60.

The plaintiffs represent a class of retired Case employees and their spouses (who retired from July 1, 1994 through November 12, 1999) and CNH employees and their spouses (who retired from November 12, 1999 through November 1, 2004). Each employee retired after the Tenneco reorganization in July 1994 but before November 1, 2004.

The 1998 CBA. In 1971, Case entered into a CBA with the United Automobile, Aerospace and Agricultural Workers of America ("UAW"), in which Case agreed to provide health-care insurance to its retired employees and their spouses who were "receiving a J I Case Pension [or] a Spouse's Pension." JA 144. From 1974 through 1995, each CBA (in three- or four-year terms) renewed this commitment in "substantially unchanged" form, JA 91, and each CBA provided that employees did not have to pay premiums in order to receive coverage.

Case and the UAW entered into the CBA that prompted this lawsuit in 1998, and it lasted until May 2, 2004. Under the 1998 CBA, Case agreed that:

Employees who retire under the Case Corporation Pension Plan for Hourly Paid Employees after 7/1/94, or their surviving spouses eligible to receive a spouse's pension under the provisions of that Plan, shall be eligible for the Group benefits as described in the following paragraphs.

JA 1288; see also JA 1213 (noting that "[t]he group insurance plan agreed to between the parties ... is hereby made a part of this Agreement"). The next paragraphs listed "Medical" and "Prescription Drug" benefits available to all classes of covered retirees regardless of the duration of their service before retirement. JA 1288-91. The CBA does not spell out what "Medical" benefits are included; it just says that "[e]ligibility for specific coverage [will be] based on each plan's eligibility requirements." JA 1290. "No contributions," the CBA adds, "are required for the Health Care Plans...." JA 1291.

A Letter of Understanding concerning the "[c]ost of [h]ealthcare [c]overage" supplemented the 1998 CBA. JA 1304. "[O]ver the term of the 1998 labor agreement," it said, "employees and retirees who are enrolled in a Company offered HMO, PPO or other plan will not have to pay any additional employee contributions above those which may be required for enrollment in the Case Network Plan (if any)." Id. The letter added that Case was "responsible for the retention of HMOs, PPOs and other health care delivery mechanisms during the [CBA's] term," and that Case could "terminate" a provider giving inadequate coverage and adopt a "replacement plan [that] will provide comparable benefits and access to the type of plan it replaces," provided that the new plan satisfied "the UAW's standards regarding access and quality." Id.

The Wisconsin case. On February 11, 2004, CNH filed a declaratory judgment action against the UAW in the United States District Court for the Eastern District of Wisconsin. It sought a declaration that the post-reorganization retirees were not entitled to lifetime health-care benefits under the 1998 CBA and that it could "modify or terminate" the retirees' benefits "at its discretion" at the end of the CBA. JA 1513. The district court dismissed the action in August 2004 because ERISA does not give a plan fiduciary the right to seek an order clarifying its plan obligations and because the Labor-Management Relations Act, 29 U.S.C. § 141 et seq., does not create a cause of action in the absence of a claim that a CBA has been violated.

The Reese case. On February 18, 2004, a group of former employees, who retired from the company between 1994 and 2004, as well as spouses of such employees, filed the present case in the Eastern District of Michigan, seeking a declaration that they were entitled to lifetime health-care benefits, an injunction requiring CNH to "maintain the level of retiree health care benefits currently in effect" and damages for injuries the retirees might sustain if the benefits were terminated. JA 1533. In February 2005, the district court denied CNH's motion to transfer the case to the Eastern District of Wisconsin.

In August 2007, the district court granted the retirees' motion for summary judgment, concluding that the 1998 CBA unambiguously granted lifetime health-care benefits to the retirees. In a separate opinion filed the same day, the district court granted CNH's motion to strike the retirees' demand for a jury trial, concluding that there is no Seventh Amendment right to a jury trial for ERISA or LMRA claims. The district court also awarded $1.4 million in attorney's fees to the retirees. See 29 U.S.C. § 1132(g); Reese v. CNH Global N.V., No. 04-70592, 2008 WL 2546936, at *5 (E.D.Mich. June 20, 2008).

The Yolton case. One more layer of complication exists: There is a parallel lawsuit involving the same types of claims under different CBAs against two successors in interest to CNH—CNH America and El Paso Tennessee Pipeline Co. Yolton v. El Paso Tenn. Pipeline Co., 435 F.3d 571, 574 (6th Cir.2006). In December 2002, a group of former employees of Tenneco and Case, all of whom had retired before July 1, 1994, filed a class action against CNH America and El Paso. Yolton, 318 F.Supp.2d at 459-60, 464. In December 2003, the United States District Court for the Eastern District of Michigan issued a preliminary injunction, reasoning that the retirees were likely to succeed on the merits of their claim that the 1990 CBA gave them a right to lifetime health-care benefits. Id. at 471, 476. The court thus ordered the employer to continue to provide the benefits during the litigation. Id. at 460, 471, 473. In 2006, the Sixth Circuit upheld the preliminary injunction, Yolton, 435 F.3d at 585, and the case is currently pending in front of Judge Duggan, the same judge who is handling the present dispute.


CNH first challenges the district court's refusal to transfer the case to the Eastern District of Wisconsin. "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). As the permissive language of the transfer statute suggests, district courts have "broad discretion" to determine when party "convenience" or "the interest of justice" make a transfer appropriate. Only when the district court "clearly abuse[s] its discretion" in balancing these considerations will we reverse. Phelps v. McClellan, 30 F.3d 658, 663 (6th Cir.1994).

In resolving the motion, the court considered six factors: "the convenience of the parties and witnesses," the accessibility of evidence, "the availability of process" to make reluctant witnesses testify, "the costs of obtaining willing witnesses," "the practical problems of trying the case most expeditiously and inexpensively" and "the interests of justice." JA 76; see Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 30, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988); Moses v. Bus. Card Express, Inc., 929 F.2d 1131, 1136-37 (6th Cir.1991). And it kept in mind that, "unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Cf. Dowling v. Richardson-Merrell, Inc., 727 F.2d 608, 612 (6th Cir. 1984); JA 76.

The key question is whether the district court properly applied those factors. On one side of the ledger, several considerations favored a transfer: CNH is headquartered in Wisconsin, the CBA negotiations took place there, CNH administers the health-care plans there, most of the class members live in Wisconsin and few class members live in Michigan, all of which suggests that Wisconsin is the most convenient forum for the parties and witnesses. On top of that, CNH stores its documents in Wisconsin, which means that a Wisconsin forum would make it easier to obtain access to the evidence.

On the other side of the ledger: The case was assigned to the same Michigan trial judge who had handled the Yolton case (and was still handling the case), giving him a leg up on the...

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