Siebert v. Cent. States Se. & Sw. Areas Health & Welfare Fund
| Decision Date | 21 October 2020 |
| Docket Number | Case No. 18 C 6681 |
| Citation | 496 F.Supp.3d 1152 |
| Parties | John H. SIEBERT, Plaintiff, v. CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS HEALTH AND WELFARE FUND, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Patrick N. Ryan, Stephen Jay Rosenblat, Baum Sigman Auerbach & Neuman, Ltd., Chicago, IL, for Plaintiff.
Francis Joseph Carey, John Joseph Franczyk, Jr., Central States Law Department, Chicago, IL, for Defendant Thomas C. Nyhan.
Francis Joseph Carey, John Joseph Franczyk, Jr., Central States Law Department, Chicago, IL, James Patrick Condon, Glenview, IL, for Defendant Central States, Southeast and Southwest Areas Health and Welfare Fund.
After defendant Central States Southeast and Southwest Areas Health and Welfare Fund ("Central States") denied his request for retiree health benefits, plaintiff John H. Siebert filed this action, claiming that defendant violated § 502(a)(1) and (3) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a)(1) and (3). The parties have filed cross-motions for summary judgment. For the reasons set forth below, the Court grants defendant's motion for summary judgment and denies plaintiff's motion.
The following facts come from the parties Local Rule 56.1 statements and, based on their Local Rule 56.1 responses, appear to be undisputed. Plaintiff, who lives in Elmwood Park, Illinois, worked for United Parcel Service ("UPS") from 1974 to 2004. During that time, plaintiff was a member of International Brotherhood of Teamsters ("Teamsters") Local Union No. 705 ("Local 705"). In 2004, he took an indefinite unpaid leave of absence from UPS, maintaining his seniority, and went to work as a business agent for Local 705. He worked for Local 705 continuously until January 2018, when he retired at age 61 and began to collect his Local 705 pension.
During most of plaintiff's employment with UPS, UPS provided health care coverage to its employees and retirees under its own employee benefit plans. However, the collective bargaining agreement ("CBA") between Local 705 and UPS effective August 1, 2013, provided that any "eligible employee covered by this Section who retires effective January 1, 2014 or thereafter shall be provided retiree medical benefits" by Central States. (Def.’s LR 56.1 Resp. ¶ 18, ECF No. 52.) Central States is a self-funded, jointly administered, multi-employer employee benefit plan under ERISA, 29 U.S.C. § 1002(1), administered in Chicago, Illinois. Pursuant to an Illinois Trust Agreement, Central States provides health and welfare benefits to active and retired workers who are or were employed under collective bargaining agreements negotiated between contributing employers, including UPS, and affiliates of the Teamsters, including Local 705. Central States is administered by a Board of Trustees, composed of an equal number of representatives of management and labor.
In May 2014, UPS and Central States entered into a "UPS-Teamsters Employee & Retiree Medical Benefits" agreement ("Medical Benefits Agreement" or "MBA") to govern Central States's assumption of responsibility for providing benefits to UPS employees and retirees represented by the Teamsters during their employment. (Defs.’ LR 56.1 Resp. ¶ 21.) Specifically, the MBA provides that "[w]ith respect to claims incurred on and after the Implementation Date by Covered Group members ... who retire from UPS on or after January 1, 2014, the Central States Fund shall have sole responsibility for and be the exclusive source of funds to provide Central States Fund Medical Benefits for any such Covered Group members" (id. ¶ 22), in exchange for a lump-sum payment from UPS. The MBA defines "Covered Group" as "all UPS-Teamster Represented Future Retirees participating in or eligible to participate in any of the UPS Plans and their eligible spouses, surviving spouses and dependents." (Id. ¶ 23.) The MBA defines "UPS-Teamster Represented Future Retirees" as "employees of UPS ... who were represented by [the Teamsters and/or an affiliated local union such as Local 705] during their active employment with UPS and who retire from such employment on or after January 1, 2014." (Pl.’s LR 56.1 Resp. ¶ 36, ECF No. 53.)
As he neared his January 2018 retirement, plaintiff applied to Central States for retiree health coverage. Central States denied the request, and plaintiff appealed, represented by Local 705. In February 2018, Central States denied the appeal, explaining that, under section 3.01 of Central States's UPS Retiree RU Plan Document (hereafter, "Central States plan"), a retiree in plaintiff's position is eligible for health coverage only if his employer has made health and welfare contributions on his behalf for at least forty weeks’ worth of work in each of the preceding five years or in seven of the preceding ten years. Central States had not received contributions on plaintiff's behalf in those amounts during the relevant time frames. Plaintiff appealed to the Board of Trustees, arguing that his failure to meet the contribution requirement in recent years should not bar him from receiving retiree health coverage when (a) he would have been eligible for retirement benefits under the old UPS plan (see Pl.’s LR 56.1 Stmt., Ex. 3A, Admin. Record, Ex. C, UPS Health and Welfare Package & UPS Health and Welfare Package for Retired Employees (hereafter, "UPS plan"), ECF No. 49-1); (b) Central States agreed to provide benefits to people like him when it entered into the MBA, and it did in fact award benefits to other individuals in similar circumstances; (c) the Local 705 CBA in effect at the time of the MBA expressed an intent to expand, not restrict, retiree benefits; and (d) prior to the transition, Central States representatives gave a presentation in which they assured UPS plan participants that the new plan would be "almost identical" and "equal to—if not better than—"the UPS plan it was replacing. (Defs.’ LR 56.1 Resp. ¶ 20). Additionally, plaintiff argued that Central States had given him inadequate notice of the initial denial of benefits and had not adequately informed him of the reasons for the decision on his intermediate-level appeal.
In June 2019, the Central States Health and Welfare Trustee Appellate Review Committee (hereafter, "Trustees") denied plaintiff's appeal, interpreting the contribution requirement of the participant eligibility provisions in section 3.01 of the Central States plan to apply to plaintiff. (See Young Aff., Ex. B, Jun. 17, 2019 Letter, ECF No. 46-3.) The Trustees reasoned that any representations Central States representatives may have made about coverage leading up to the transition were immaterial, particularly given that plaintiff's situation was all but unique and therefore "of no concern to the vast majority of the rank and file Local 705 members [who were] covered by the new CBA" and affected by the transition. (Id. at 4.) Although plaintiff had argued to the contrary, the Trustees found only one individual similarly situated to plaintiff who had received retiree health benefits from Central States, and upon inquiry, they learned that this individual had received benefits following a lower-level staff decision, without trustee-level input "or the development of a formal record determining that [the employee] was entitled to benefits." (Id. at 5.) The Trustees rejected plaintiff's interpretation of the MBA as well, reasoning that at most it required Central States to cover UPS employees who retired from "active employment" after January 1, 2014, and plaintiff was not an active employee when he retired. The Trustees also rejected plaintiff's procedural challenges, concluding that he had received all the necessary documents and, even if there had been any violations or omissions, they were trivial and harmless.
Plaintiff subsequently filed this suit, and these cross-motions for summary judgment followed.
Summary judgment shall be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). When considering a motion for summary judgment, the Court must construe the evidence and make all reasonable inferences in favor of the non-moving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate when the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to the party's case and on which that party will bear the burden of proof at trial."
Celotex v. Catrett , 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "A genuine issue of material fact arises only if sufficient evidence favoring the nonmoving party exists to permit a jury to return a verdict for that party." Brummett v. Sinclair Broadcast Group, Inc. , 414 F.3d 686, 692 (7th Cir. 2005). The Court applies these "ordinary standards for summary judgment" in the same way whether one or both parties move for summary judgment; when the parties file cross-motions, the Court treats each motion individually, "constru[ing] all facts and inferences arising from them in favor of the party against whom the motion under consideration is made." Blow v. Bijora, Inc. , 855 F.3d 793, 797 (7th Cir. 2017) ; see Reeder v. Carter , 339 F. Supp. 3d 860, 869-70 (S.D. Ind. 2018).
ERISA § 502 provides a cause of action for a participant or beneficiary of an ERISA plan "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan[.]" 29 U.S.C. § 1132(a)(1)(B). Additionally, a participant or beneficiary may bring suit under ERISA § 502 to "(A) enjoin any act or practice which violates any provision of this subchapter or the...
To continue reading
Request your trial
-
Malloy v. Walgreen Co.
...Ins. Co. of, North America, 2013 WL 677886, at *2 (N.D. Ill. Feb. 25, 2013); see also generally Firestone Tire, 489 U.S. at 115; Siebert, 496 F.Supp.3d at 1157. Even the Court were to assume Ms. Blumka was properly delegated the authority to deny benefits to Plaintiff, the Court cannot rule......
-
Lane v. Structural Iron Workers Local No.1 Pension Tr. Funds
...medical condition or of the merit of his claim. His application received “effective review” even without this evidence. See Siebert, 496 F.Supp.3d at 1164-66 (citing The undisputed facts show that the Trustees' decision was supported by substantial evidence, it was not clearly erroneous, an......