Hobert Freel Tackett, Woodrow K. Pyles, United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, and Harlan B. Conley, Plaintiffs-Appellees/Cross-Appellants,
M&G Polymers USA, LLC, M&G Polymers USA, LLC Comprehensive Medical Benefits Program for Employees and their Dependents, M&G Catastrophic Medical Plan, M&G Medical Necessity Benefits Program of Hospital, Surgical, Medical, and Prescription Drug Benefits for Employees and their Dependents, and M&G Major Medical Benefits Plan, Defendants-Appellants/Cross-Appellees.
Argued: March 15, 2013
Appeal from the United States District Court for the Southern District of Ohio at Columbus. No. 2:07-cv-126—Gregory L. Frost, District Judge.
Philip A. Miscimarra, MORGAN, LEWIS & BOCKIUS LLP, Chicago, Illinois, for Appellants/Cross-Appellees.
David M. Cook, COOK & LOGOTHETIS, LLC, Cincinnati, Ohio, for Appellees/Cross-Appellants.
Philip A. Miscimarra, MORGAN, LEWIS & BOCKIUS LLP, Chicago, Illinois, Christopher A. Weals, MORGAN, LEWIS & BOCKIUS LLP, Washington, D.C., for Appellants/Cross- Appellees.
David M. Cook, Jennie G. Arnold, Claire W. Bushorn, COOK & LOGOTHETIS, LLC, Cincinnati, Ohio, for Appellees/Cross-Appellants.
Before: KEITH, MARTIN, and COLE, Circuit Judges.
COLE, Circuit Judge.
Defendants-Appellants Cross-Appellees M&G Polymers USA, LLC ("M&G") and associated health plans appeal the permanent injunction granted by the district court in favor of Plaintiffs-Appellees Cross-Appellants, retirees and dependents of retirees from an M&G plant and the union that currently represents plant employees. Plaintiffs brought a class action suit against Defendants after M&G announced that Plaintiffs would be required to make health care contributions. After a bench trial, the district court found Defendants liable for violating both a labor agreement and an employee welfare benefit plan. The district court issued a permanent injunction ordering Defendants to reinstate Plaintiffs to the current versions of the benefits plans they were enrolled in until 2007 to receive health care for life without contributions.
While Defendants ask this Court to reverse the liability determination and injunction, Plaintiffs request this Court to reinstate certain Plaintiffs to the pre-2007 versions of their benefits plan. Defendants argue that the district court clearly erred when it found that (1) certain letters requiring retiree contributions to health care costs were not a part of Plaintiffs' labor agreements; and (2) Plaintiffs' right to lifetime health care vested at retirement. Plaintiffs cross-appeal, arguing that, although the district court correctly held that their right to lifetime contribution-free benefits vested, the district court erred by restoring them to the current versions of their benefits plan, as opposed to the pre-2007 versions. We affirm the judgment of the district court.
The named plaintiffs are Ohio residents and retirees from the Apple Grove, West Virginia Point Pleasant Polyester Plant ("Apple Grove"), which M&G has owned since 2000. From 1992 to 2000, Apple Grove was owned by Shell Chemical Company ("Shell"). Prior to 1992, it was owned by The Goodyear Tire & Rubber Company ("Goodyear").
Plaintiffs and similarly situated retirees belong to Local Union 644 ("Local 644") of the United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union, AFL-CIO ("USW"), which currently represents Apple Grove employees. Prior to 1995, Local 644 belonged to the United Rubber Workers ("URW"), which merged with the USW in 1995. Over the years that Apple Grove was owned by Goodyear, Shell and M&G, Local 644 entered into a number of labor agreements.
Typically, the union as a whole—first the URW and later the USW—would negotiate a "master" agreement with the employer. Individual plants would adopt an agreement in one of three ways: (1) some plants directly participated in the "master bargaining" with the employer and entered into the master agreement itself; (2) some plants separately adopted "me-too" agreements that were the same as the master agreement; and (3) some plants, including Apple Grove according to Plaintiffs, negotiated "me-too with exceptions" agreements, meaning that they adopted agreements based on the master agreement, but with certain exceptions or differences. M&G, however, claims that Apple Grove was a "'me-too' location" that "had a consistent practice of applying the 'master agreement' settlement year-after-year."
While Apple Grove was owned by Goodyear, Goodyear and Local 644 entered into a collective bargaining agreement ("1991 CBA") effective November 6, 1991, to November 6, 1994, and a collectively bargained Pension, Insurance and Service Award Agreement effective May 15, 1991, to May 15, 1994, ("1991 Master P&I Agreement"). The 1991 Master P&I Agreement described, among other things, the health care benefits that retirees could expect to receive. A "side letter" ("1991 Letter G") was part of the 1991 Master P&I Agreement for certain URW locals, but not necessarily all. The 1991 Letter G stated:
If the average annual cost of health care benefits [per retiree who retires on or after May 1, 1991, including his/her spouse] exceeds [$10, 500 for retirees (including surviving spouses) under age 65 and $4200 for retirees (including surviving spouses) over age 65], the cost in excess . . . shall be allocated evenly to all retired employees (including surviving spouses) in such group.
The 1991 Letter G also specified that the required contributions would not begin until July 1, 1997.
Also, a Summary Plan Description ("SPD"), effective as of May 15, 1991, stated that the "Company has established a required maximum average annual company cost per retiree for medical coverage, " and set this maximum at $10, 500 per year for each retiree under age 65 and $4, 200 per year for each retiree over age 65 (surviving spouses included). It provided that the cost of any excess above the maximums would be allocated among all members of the group of retirees evenly, and that contributions would not begin until at least July 1, 1997.
In 1992, Shell bought Apple Grove and, in 1993, formally adopted the Goodyear benefit plans previously in effect at the plant. In 1994, Shell and the URW and some URW locals entered into the "1994 Master P&I Agreement" which, for some URW locals, included a side letter: "1994 Letter G." The same year, Shell and Local 644 entered into another collective bargaining agreement, the "1994 CBA, " effective November 6, 1994 to November 6, 1997.
On May 9, 1997, Shell and the USW (the current union) entered into the "1997 Goodyear Master P&I Agreement, " which was effective until May 9, 2003. This agreement included, for some USW locals, a side letter: "1997 letter H." On November 6, 1997, Shell and the USW and Local 644 entered into the ...