Stone v. Signode Indus. Grp., LLC, No. 17 C 5360

CourtUnited States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
Writing for the CourtHonorable Thomas M. Durkin, United States District Judge
Citation365 F.Supp.3d 957
Parties Harold STONE and John Woestman, for Themselves and Others Similarly Situated; and United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union, ALF-CIO-CLC, Plaintiffs, v. SIGNODE INDUSTRIAL GROUP, LLC; and Illinois Tool Works Inc., Defendants.
Docket NumberNo. 17 C 5360
Decision Date13 March 2019

365 F.Supp.3d 957

Harold STONE and John Woestman, for Themselves and Others Similarly Situated; and United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union, ALF-CIO-CLC, Plaintiffs,
v.
SIGNODE INDUSTRIAL GROUP, LLC; and Illinois Tool Works Inc., Defendants.

No. 17 C 5360

United States District Court, N.D. Illinois, Eastern Division.

Signed March 13, 2019


365 F.Supp.3d 958

John G. Adam, Stuart M. Israel, Legghio & Israel, P.c., Royal Oak, MI, George A. Luscombe, III, Stephen Anthony Yokich, Dowd, Bloch, Bennett, Cervone, Auerbach & Yokich, Chicago, IL, for Plaintiffs.

Joseph James Torres, Derek Grady Barella, Winston & Strawn LLP, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

Honorable Thomas M. Durkin, United States District Judge

Plaintiffs are a labor union and two former employees of a company that was Defendants' predecessor in interest. Plaintiffs sue to enforce healthcare benefits under a collective bargaining agreement. The parties have cross-moved for summary judgment. R. 28; R. 35. For the following reasons, Plaintiffs' motion is granted and Defendants' motion is denied.

Legal Standard

Summary judgment is appropriate "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) ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court considers the entire evidentiary record and must view all of the evidence and draw all reasonable inferences from that evidence in the light most favorable to the nonmovant. Horton v. Pobjecky , 883 F.3d 941, 948 (7th Cir. 2018). To defeat summary judgment, a nonmovant must produce more than a "mere scintilla of evidence" and come forward with "specific facts showing that there is a genuine issue for trial." Johnson v. Advocate Health and Hosps. Corp. , 892 F.3d 887, 894, 896 (7th Cir. 2018). Ultimately, summary judgment is warranted only if a reasonable jury could not return a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Background

Plaintiffs Harold Stone and John Woestman worked for Acme Packaging Corporation at its plant in Riverdale, Illinois, before retiring after 46 and 37 years of employment, respectively. R. 38 ¶ 3. Stone and Woestman were members of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC ("the Union"). Id. ¶ 4. In 1994, the Union negotiated a collective bargaining agreement with Acme providing for healthcare benefits. After their retirement, Stone and Woestman have continued to receive healthcare benefits pursuant to that agreement. Id. ¶¶ 3, 5, 10-11.

365 F.Supp.3d 959

Acme went into bankruptcy. As part of the bankruptcy settlement, the Union and Acme reached new collective bargaining agreements in 2001 and again in 2002, which the bankruptcy court approved. After emerging from bankruptcy in 2003, Acme was acquired by defendant Illinois Tool Works. Id. ¶ 25. Although Illinois Tool Works closed the Riverdale plant and the collective bargaining agreement expired in 2004, Illinois Tool Works continued to provide benefits under the agreement.

In 2014, Illinois Tool Works spun-off part of its business and transferred its obligations under the relevant collective bargaining agreement (along with other assets and liabilities), to defendant Signode Industrial Group. In 2015, Signode announced that it was terminating the collective bargaining agreement.

There is no dispute that the parties to this case are party to the collective bargaining agreement. There is also no dispute as to the relevant collective bargaining agreement provisions, which are the following:

Any Pensioner or individual receiving a Surviving Spouse's benefit who shall become covered by the Program established by the Agreement shall not have such coverage terminated or reduced (except as provided in this Program) so long as the individual remains retired from the Company or receives a Surviving Spouse's benefit, notwithstanding the expiration of this Agreement, except as the Company and the Union may agree otherwise.

R. 36-5 at 4 (p. 66, § 6). And further that:

[This agreement] shall remain in effect until February 29, 2004, thereafter subject to the right of either party on [120] days written notice served on or after November 1, 2003 to terminate the [agreement].

Id. at 5 (p. 67, § 7), 10 (p. 7, § II.C(2) ).

Analysis

"Unlike pension benefits under ERISA, insurance benefits, such as the benefits at issue in this case, do not automatically vest." Cherry v. Auburn Gear, Inc. , 441 F.3d 476, 481 (7th Cir. 2006). "Employers nonetheless may create vested welfare benefits by contract." Sullivan v. CUNA Mut. Ins. Soc'y , 649 F.3d 553, 555 (7th Cir. 2011). Whether a collective bargaining agreement creates vested welfare benefits is determined...

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1 practice notes
  • Stone v. Signode Indus. Grp. LLC, No. 19-1601
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • 20 Noviembre 2019
    ...this appeal challenges that conclusion, we must decide that legal issue in this appeal. See Stone v. Signode Industrial Group, LLC , 365 F. Supp. 3d 957 (N.D. Ill. 2019) (granting summary judgment to plaintiffs). In other words, we have jurisdiction under 28 U.S.C. § 1292(a) to review the r......
1 cases
  • Stone v. Signode Indus. Grp. LLC, No. 19-1601
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • 20 Noviembre 2019
    ...this appeal challenges that conclusion, we must decide that legal issue in this appeal. See Stone v. Signode Industrial Group, LLC , 365 F. Supp. 3d 957 (N.D. Ill. 2019) (granting summary judgment to plaintiffs). In other words, we have jurisdiction under 28 U.S.C. § 1292(a) to review the r......

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