Tackett v. M & G Polymers, Usa, LLC

• Decision Date: 03 April 2009
• Docket Number: No. 07-4516.,No. 07-4515.,07-4515.,07-4516.
• Parties: Hobert TACKETT, et al., Plaintiffs-Appellants, v. M & G POLYMERS, USA, LLC, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

561 F.3d 478

Hobert TACKETT, et al., Plaintiffs-Appellants, v. M & G POLYMERS, USA, LLC, et al., Defendants-Appellees.

No. 07-4515.

No. 07-4516.

United States Court of Appeals, Sixth Circuit.

Argued: January 22, 2009.

Decided and Filed: April 3, 2009.

ARGUED: Renate Klass, Martens, Ice, Klass, Legghio & Israel, Royal Oak, Michigan, Robert E. Rickey, Cook, Portune & Logothetis, Cincinnati, Ohio, for Appellants. Deborah Shannon Davidson, Morgan, Lewis & Bockius, Chicago, Illinois, for Appellees. ON BRIEF: Renate Klass, Stuart M. Israel, Martens, Ice, Klass, Legghio & Israel, Royal Oak, Michigan, Robert E. Rickey, David M. Cook, Cook, Portune & Logothetis, Cincinnati, Ohio, for Appellants. Deborah Shannon Davidson, Philip A. Miscimarra, Morgan, Lewis & Bockius, Chicago, Illinois, for Appellees.

Before: MARTIN and MOORE, Circuit Judges; GWIN, District Judge.^*

OPINION

PER CURIAM.

The Plaintiffs United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC ("USW") and Hobert Tackett, Woodrow W. Piles, and Harland B. Conley ("Retiree Plaintiffs") separately appeal the district court's dismissal of their case under Federal Rule of Civil Procedure 12(b)(1) and (b)(6).

The Plaintiffs alleged that, under their collective bargaining agreement ("CBA"), the Defendant M & G Polymers, USA ("M & G") promised them vested health-care benefits. When Defendant M & G announced it would begin requiring retiree contributions to health-care costs, the Plaintiffs sued. In addition to suing M & G, the Plaintiffs also sued the M & G-sponsored health plans that Retiree Plaintiffs receive their benefits from: the M & G Comprehensive Medical Benefits Program for Employees and Their Dependents, the M & G Catastrophic Medical Plan, the M & G Medical Necessity Benefits Program of Hospital, Surgical, Medical, and Prescription Drug Benefits for Employees and Their Dependents, and the M & G Major Medical Benefits Plan (collectively with Defendant M & G, "Defendants").

In resolving this appeal, we must decide two main issues: (1) whether, under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a), a district court must find that a violation of a collective bargaining agreement has occurred before it can exercise jurisdiction; and (2) whether, under this Circuit's Yard-Man analysis, UAW v. Yard-Man, 716 F.2d 1476, 1479 (6th Cir.1983), the Plaintiffs have sufficiently established a right to vested health-care benefits to survive a motion to dismiss under Rule 12(b)(6) by relying on CBA language promising a "full Company contribution" to these benefits.

Because we hold that (1) a violation is not a prerequisite to jurisdiction under § 301 and because (2) the Plaintiffs have sufficiently shown an intention to vest health-care benefits to survive a motion to dismiss, we REVERSE and REMAND.

I. Standard of Review

We generally review a district court's ruling under Rule 12(b)(1) and 12(b)(6) de novo. Nichols v. Muskingum College, 318 F.3d 674, 677 (6th Cir.2003) (citations omitted); Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir.2007). Courts have, however, observed an exception to this de novo standard of review under Rule 12(b)(1). When Congress statutorily confers subject-matter jurisdiction, it can require that certain prerequisites be met before a federal district court can exercise jurisdiction. See, e.g., 28 U.S.C. § 1332 (establishing jurisdiction over cases between "citizens of different States"). When Congress establishes a jurisdictional prerequisite, a district court may admit extrinsic evidence and resolve disputed facts to decide if the asserted claim satisfies the jurisdictional prerequisite. Arbaugh v. Y & H Corp., 546 U.S. 500, 516, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006). If a district court considers and resolves facts in deciding a Rule 12(b)(1) motion, we review those findings for clear error. Nichols, 318 F.3d at 677. Aside from the resolution of jurisdictional prerequisites, a district court must generally confine its Rule 12(b)(1) or 12(b)(6) ruling to matters contained within the pleadings and accept all well-pleaded allegations as true. Gentek Building Products, Inc. v. Sherwin-Williams, 491 F.3d 320, 330 (6th Cir.2007).

II. Background and Procedural Posture

Before their retirement, the Retiree Plaintiffs worked at the Point Pleasant Polyester Plant (the "Plant") in Apple Grove, West Virginia. At that location, Plaintiff USW, or its predecessor union, bargained on behalf of the Plant's employees. The Plant has changed ownership several times, and M & G now owns the plant.

In December 2006, M & G announced that it would begin requiring retirees to contribute to the cost of their health-care benefits. After Defendant M & G's announcement, Retiree Plaintiffs, as putative class representatives, and USW sued under § 301 of the LMRA and under the Employee Retirement Income Security Act ("ERISA") §§ 502(a)(3) and 502(a)(1)(B), 29 U.S.C. § 1132. Following the district court's dismissal, the Plaintiffs appealed separately, with USW challenging the district court's ruling on § 301 and the Retiree Plaintiffs challenging the ruling on both § 301 and ERISA §§ 502(a)(3) and 502(a)(1)(B). The appeals were consolidated for submission to this Court.

In their Complaint, the Plaintiffs pointed to language in the November 6, 2000 CBA between M & G and USW that governed retirees' entitlement to health-care benefits:

Employees who retire on or after January 1, 1996 and who are eligible for and receiving a monthly pension under the 1993 Pension Plan ... whose full years of attained age and full years of attained continuous service ... at the time of retirement equals 95 or more points will receive a full Company contribution towards the cost of [health-care] benefits. ... Employees who have less than 95 points at the time of retirement will receive a reduced Company contribution. The Company contribution will be reduced by 2% for every point less than 95. Employees will be required to pay the balance of the health care contribution, as estimated by the Company annually in advance, for the [health care] benefits.... Failure to pay the required medical contribution will result in cancellation of coverage.

(emphasis added). According to the Plaintiffs, this "full Company contribution" language shows a vested right to health-care benefits: those employees meeting the age and term-of-service qualifications are entitled to fully-covered health care benefits and those falling below these qualifications would receive reductions from full coverage as set out in the plan. The Retiree Plaintiffs also sought to represent surviving spouses whose benefits were affected by Defendants' alleged breach. The Plaintiffs said that the Defendants unilaterally set the "contribution" at a level below full coverage violating the above-quoted language.

The Defendants moved to dismiss the Complaint under Rule 12(b)(1) and 12(b)(6). The Defendants argued that, § 301, which confers subject-matter jurisdiction in federal district courts in "[s]uits for violation of contracts," 29 U.S.C. § 185(a), required that a plaintiff show a "violation" before a district court could exercise subject-matter jurisdiction. In the alternative, the Defendants moved to dismiss saying that the language quoted by the Plaintiffs did not establish a vested right to health-care benefits.

In moving to dismiss, the Defendants submitted evidence of several side letter agreements. Defendants said that these side letters were incorporated by reference into the CBA that the Plaintiffs sued under and that the side letters cap the amount of the employer's contribution to the cost of health-care benefits. Responding, the Plaintiffs said that these side cap letters were not part of the collective bargaining agreement that the Plaintiffs sued under. Resolution of this disputed issue, however, required consideration of materials extrinsic to the pleadings.¹ The Defendants said that the district court could consider this extrinsic material under Rule 12(b)(1) because the court found a lack of a violation, which was a jurisdictional prerequisite.

The district court agreed with the Defendants and held that the showing of a collective bargaining agreement violation was a prerequisite to jurisdiction: "Absent a breach by Defendants, this Court lacks jurisdiction over the § 301 claim." Tackett v. M & G Polymers USA, LLC., 523 F.Supp.2d 684, 691 (S.D.Ohio 2007). The court then admitted and weighed the extrinsic evidence on the side letters to decide whether M & G breached the collective bargaining agreement.² Id., at 690. Ultimately, the district court concluded that the Defendants did not breach the CBA, and that it lacked jurisdiction.

As an alternative to its dismissal for lack of jurisdiction, the district court then assumed for argument purposes that it had jurisdiction over the Plaintiffs' claims for relief and addressed the Defendants' 12(b)(6) motion to dismiss. Because the LRMA § 301 and the ERISA § 502(a)(1)(B) claims both turned on whether the Plaintiffs' benefits were vested, the district court considered these claims together and held that the "full Company contribution" language did not plausibly state a claim for vested health-care benefits.

The district court additionally granted the Defendants' 12(b)(6) motion directed at the Plaintiffs' ERISA fiduciary claim, holding that Plaintiffs "failed to plead facts" supporting this claim. Id. at 696.

III. Rule 12(b)

III.A. Rule 12(b)(1)

Our review of the district court's dismissal under Rule 12(b)(1) turns on whether a plaintiff must establish the breach of a collective bargaining agreement as a prerequisite to jurisdiction under § 301 of the LMRA.³ The LMRA confers subject-matter jurisdiction in federal district courts in "[s]uits for violation of contracts." 29 U.S.C. § 185(a).⁴ Whether the language in...