Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_06-cv-00032/USCOURTS-azd-4_06-cv-00032-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.-Employee Benefits

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WO

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Frances Alday, et al., 

Plaintiffs,

v.

Raytheon Company, a Delaware corporation, 

Defendant. _______________________________________

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CV 06-32 TUC DCB

ORDER

Plaintiffs Frances Alday, et al, bring this action against Defendant Raytheon

Company alleging two claims: 1) failure to comply with provisions of the Employment

Retirement Income Security Act of 1974 (“ERISA”) and 2) failure to comply with provisions

of the Labor Management Relations Act (“LMRA”). Defendant seeks dismissal of both

claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons

discussed below, the Defendant’s motion on the ERISA claim is denied, and Defendant’s

motion on the LMRA claim is denied without prejudice to it being reurged after discovery

as a Motion for Summary Judgment, pending further briefing addressing the jurisdiction of

this Court over the LMRA claim.

I. INTRODUCTION

Plaintiffs are retirees from Raytheon Company, or its predecessor, Hughes

Missile Systems Company ("Hughes"), or a spouse or dependant of a retiree. These

employees retired while they were between 55 and 65 years old, with three or more years

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1

It is undisputed that participants in the non-contributory plan option must pay for their

medical benefits.

2

of continuous participation in the contributory option1 of the Retirement Plan immediately

preceding retirement, and had at least five years of continuous employment ("Early

Retirees"). In 1993, Hughes and the International Association of Machinists and

Aerospace Workers Local Old Pueblo Lodge No. 933 (the “Union”) negotiated a

collective bargaining agreement (“1993 CBA”), which detailed the welfare and pension

benefits of employees and retirees. For these Early Retirees, Hughes agreed to provide

Comprehensive Medical Benefits (the “Benefits”) at no charge until they attained age 65. 

These benefits extended to the Plaintiffs' spouses and their dependents in a limited extent. 

In 1996, Hughes and the Union negotiated a new CBA (“1996 CBA”), which left the

benefit package for early retirees untouched.

In 1997, Hughes merged with Raytheon Missile Systems Company (“Raytheon”)

and in an Addendum Agreement, dated October 31, 1997, agreed to continue providing

company-paid retiree medical coverage in accordance with the terms of the 1996 CBA. 

In 1999, a new CBA (“1999 CBA”) was negotiated between the Union and

Raytheon, making minor changes to medical benefits for early retirees retiring after 2000. 

In early 2003, Raytheon modified and replaced the Hughes Retiree Medical Plan with the

Raytheon Health Benefits Plan (the “2003 Plan”), which provided that the Company had

sole discretion to change the contribution amount, to amend the Plan, and to reduce or

eliminate benefits pursuant to the provisions of the Plan. In late 2003, the Union and

Raytheon signed a new CBA (“2003 CBA”), which initiated payment for medical

benefits for early retirees retiring after 2003 that were contributory participants of the

Retirement Plan and restated the policy that non-contributory participants paid for their

medical benefits. The 2003 CBA did not mention the payment status of early retirees

who retired after 1993, but before 2003 and were contributory participants of the

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(Complaint at ¶ 16); (D's MD, Ex. 4D: "Important Information about Retiree Medical

Changes Effective July 1, 2004 and Your Open Enrollment Package")

3

Retirement Plan.

Early in 2004, Raytheon issued a notice (the "Notice")2

 stating that when it

purchased Hughes, it had agreed to continue to provide retiree medical coverage at no

cost to eligible employees and retirees participating in the contributory portion of the

Raytheon Retirement Plans for five years (until December 17, 2002). Effective July 1,

2004, Raytheon was changing the retiree medical contribution policy to one comparable

to that offered to other Raytheon retirees, meaning that to continue retiree medical

coverage, retirees had to begin paying a share of the cost of coverage and would receive a

monthly bill. (D's MD, Ex. 4D).

This Court has jurisdiction pursuant to the judicial review provision of ERISA,

29 U.S.C. § 1132(e). ERISA enables health plan participants and beneficiaries to bring

equitable relief actions under § 1132 (a)(3) and economic damage claims under § 1132

(a)(1)(B). This court also has jurisdiction pursuant to the judicial review provision of the

LMRA, 29 U.S.C. §185.

II. STANDARD OF REVIEW FOR ERISA AND LMRA CLAIMS

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a

complaint if it fails to state a claim upon which relief can be granted. On motions to

dismiss brought pursuant to Rule 12(b)(6), “[a]ll allegations of material fact are taken as

true and construed in the light most favorable to the plaintiff.” SmileCare Dental Group v.

Delta Dental Plan of California, Inc., 88 F.3d 780, 782-83 (9th Cir. 1996). “However,

conclusory allegations of law and unwarranted inferences are not sufficient to defeat a

motion to dismiss.” Associated General Contractors of America v. Metropolitan Water

District of Southern California, 159 F.3d 1178, 1181 (9th Cir. 1998) (citation and internal

quotation marks omitted). A motion to dismiss should be granted if “it appears beyond

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doubt that plaintiff can prove no set of facts in support of his claim which would entitle

him to relief.” SmileCare, 88 F.3d at 783. A complaint may be dismissed as a matter of

law for either “lack of a cognizable theory” or “insufficient facts under a cognizable legal

claim.” Id. (citation and internal quotation marks omitted).

Plaintiffs contend that the inclusion of the documents submitted to this Court by

Raytheon that are not central to the Complaint and are not relied on by Plaintiffs should

not be used by this Court to rule on the Motion to Dismiss.

Rule 12(b) of the Federal Rules of Civil Procedure provides that if, on a motion

to dismiss under Rule 12(b)(6), matters outside the pleadings are presented and not

excluded by the court, the motion must be treated as one for summary judgment and

disposed of as provided in Rule 56. However, if a complaint is accompanied by attached

documents, the court deciding a motion to dismiss is not limited by allegations contained

in the complaint; rather, attached documents are part of the complaint and may be

considered in determining whether the plaintiff can prove any set of facts in support of

the claim. Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994). A collective bargaining

agreement can properly be considered when determining whether to dismiss a complaint

for failure to state a claim, if it was referred to in the complaint and if the agreement’s

authenticity is not at issue. Stone v. Writer’s Guild of America West, Inc. 101 F.3d 1312,

1313-14 (9th Cir. 1996).

To the extent that the Plaintiffs referred to documents in the Complaint, the Court

may examine these documents without converting the Rule 12(b)(6) motion to a Rule 56

motion. In the case at hand, the Plaintiffs have attached to the pleadings various excerpts

of the 1993, 1996, 1999, and 2003 collective bargaining agreements ("CBAs").

(Complaint at Ex. 1-4). Plaintiffs made reference to these CBAs in the pleadings. In

addition, Plaintiffs made reference to the 1993 Hughes Retiree Medical Plan, the 1999

Raytheon Health Benefit Plan and the Raytheon Retirement Guide for Participants in the

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Raytheon Non-Bargaining and Bargaining Retirement Plans (the “Guide”). Furthermore,

Plaintiffs referred to the Notice Raytheon gave on July 1, 2004, which stated that the

company was changing the current retiree medical contribution policy for current and

retired employee members of the bargaining unit, including the Plaintiffs. Therefore, the

Court relies on these documents without converting the motion to dismiss to a motion for

summary judgement.

III. DISCUSSION MOTION TO DISMISS ERISA CLAIM

A. Plaintiffs’ Failure to Exhaust the Plan’s Administrative Remedies

Defendant contends that 95 of the 98 Plaintiffs did not exhaust their ERISA

administrative remedies and, therefore, these Plaintiffs do not have standing to sue under

the ERISA statue. In addition, Defendant contends that this Court has no jurisdiction to

review the dismissal decisions for the remaining three plaintiffs because the Medical

Health Benefit Plan Administrator has “absolute discretion to construe and interpret any

and all provisions of the Plan and the Benefit Programs, including, but not limited to, the

discretion to resolve ambiguities, inconsistencies or omissions conclusively.” (Defendant

Motion to Dismiss (D's MD) at 7 (quoting the 2003 Plan)). Furthermore, because the

Plan Administrator has absolute discretion, the Plan Administrator could have reversed

the unfavorable decision issued to the first three Plaintiffs and pronounced a different

decision for the remaining appealing Plaintiffs.

Although ERISA does not specifically require exhaustion of administrative claim

procedures in the Plan, federal courts have concluded that they have the authority to

enforce the exhaustion requirement in ERISA suits and that as a matter of sound policy

should usually do so. Amato v. Bernard, 618 F.2d 559, 568 (9th Cir. 1980); see also

Morgan v. Laborers Pension Trust Fund for Northern California, 433 F. Supp. 518, 527

(N.D. Cal. 1977) (exhaustion of administrative remedies required prior to suit under

ERISA). Exhaustion is not required in the following cases: denial of meaningful access

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to the plans claim review procedure, Medical Center-West, Inc. v. Cluett, Peabody & Co.,

814 F. Supp. 1109, 1111 (N.D. Ga. 1993), collection of delinquent contributions due

under a collective bargaining agreement, Chicago Painters' & Decorators’ Pension v.

Juhrend, 1998 U.S. Dist. LEXIS 10100 at *2 (N.D. Ill. September 2, 1988), interference

with protected rights, Amaro v. Continental Can Co., 724 F.2d 747, 752 (9th Cir. 1984),

and breach of fiduciary duties under ERISA. Bartz v. Carter, 709 F. Supp. 827, 828-29

(N.D. Ill. 1989).

A court will waive the exhaustion requirement where resort to internal

administrative appeal procedures would be inadequate or futile. Amato v. Bernard, 618

F.2d 559, 568 (9th Cir. 1980) (citing Winterberger v. General Teamsters Auto Truck

Drivers and Helpers Union Local 162, 558 F.2d 923, 925 (9th Cir. 1977)). This futility

exception is particularly appropriate where the past pattern of a plan administrator, as

well as its position on the merits of a current matter in litigation, reveal that any further

administrative review would provide no relief. DePina v. General Dynamics Corp., 674

F. Supp. 46, 51 (D. Mass. 1987); B. Mezines, J. Stein, and J. Gruff, Administrative Law §

49.02(4) (1985). The claimant must demonstrate that the plan’s position has become so

fixed that an appeal would serve no purpose. Berger v. Edgewater Steel Co., 911 F.2d

911, 917 (3rd Cir. 1990). The plaintiffs must show that it is certain that their claim will

be denied on appeal, not merely that they doubt that an appeal will result in a different

decision. Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 419 (6th Cir. 1998); Ross v.

Diversified Benefit Plans, Inc., 881 F. Supp. 331, 335 (N.D. Ill. 1995).

Here, Defendant notified Plaintiffs in early 2004 that they would no longer

receive medical benefits at no charge, and effective July 1, 2004, they would be billed a

premium for benefit coverage, with Raytheon contributing $256 per month. Upon

receiving the Notice, Plaintiffs allege that approximately 200 retirees complained in some

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way or another, arguing that they had a right to receive medical benefits from Raytheon

through age 65 at no charge.

According to the Defendant, of the 100 Plaintiffs named here, 30 made initial

claims to Raytheon regarding the termination of their benefits at no charge, but failed to

administratively appeal Raytheon's denial. Sixty-five of the Plaintiffs failed to file any

administrative claim whatsoever. Only three Plaintiffs completed the entire

administrative review process by appealing the denial to the Raytheon Benefits Appeals

Committee, which affirmed the denial of these three Plaintiff's claims.

The Notice did not contain any information regarding the appellate procedures

that the Defendant now asserts apply to bar Plaintiffs' ERISA claim for failure to exhaust

administrative remedies. Defendant has attached a letter to its Motion to Dismiss sent by

a retiree complaining that the Collective Bargaining Agreement under which he retired

entitled him to health plan coverage until age 65 with no premium charge and asking that

his benefits be so reinstated. (D's MD, Ex. 4C.) 

In response to the complainant, the Defendant sent a letter explaining that it

would "construe" his letter as a "claim under Section 6.1(Claims Procedures) of the Plan. 

(D's MD, Ex. 4B: Letter to Mincheff, dated July 27, 2004.) Defendant explained that

unlike claims for benefits under the Plan which are determined by the Claims

Administrator for the particular program covering the claimant, the decision to "require

participant contributions for you and similarly situated employees was made by Raytheon

Company, the Plan Sponsor and consequently, it was more appropriate for Raytheon

Company as the Plan Administrator to determine his request for reinstatement of no-cost

coverage." Id. at 1. Defendant denied the request, relying on the same arguments it

makes here: no such vested rights existed under the Plan, which reserved to Raytheon the

right to change medical benefits, and that the various CBAs provided that benefits would

be administered in accordance with the Plan. Id. at 1-2. In keeping with its construction

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of the complainant's letter as a "benefit claim," the Defendant referred him to the

appellate procedures in the Plan for appealing to the Raytheon Benefits Appeals

Committee. Id. at 3.

Based on Defendant's offers of proof, Plaintiffs might argue they were denied

meaningful access to grievance procedures because the Notice failed to inform them that

the administrative claims procedures in the Plan applied in the event a retiree sought to

appeal the Notice. Such an argument would be supported by the Defendant's need to later

"construe" the letter protesting the termination of benefits as a claim subject to the Plan's

administrative claim procedures. Regardless of whether or not this case fits within this

exception to the exhaustion requirement, the Court finds that the exhaustion requirement

is waived here because the administrative claim procedures would have been inadequate

and futile. Defendants denied the claims of all three employees who pursued the plan

grievance procedure to its end, leaving no doubt that other similarly situated retirees'

grievances would have been similarly rejected. 

As explained by the Defendant, the administrative remedy procedures in the

ERISA Plan pertain to all disputes involving all provisions of the Plan. (D's MD at 14-

15). Arguably, Plaintiffs' allegation falls beyond the broad sweep of these administrative

procedures because Plaintiff challenges the inclusion in the Plan of provisions allowing

Defendant to terminate their "no cost" medical benefits. "Plaintiffs are challenging the

substantive changes in the Plan itself, not an administrator's interpretation of existing Plan

provisions." (Ps' Response at 14.) "An administrator has no power to determine whether

Raytheon's changes to the Plan are lawful - it only has the power to interpret the Plan as it

exists. Plaintiffs are not challenging the denial of benefits by the administrator of the

Plan (in which case the Court could require exhaustion of administrative remedies);

rather, they are challenging whether Raytheon had the legal authority to alter collectively

bargained retiree healthcare benefits." Id. at 14-15.

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"This is an inquiry that is governed by Section 301. If the changes were unlawful

under the federal common law of Section 301, as Plaintiffs contend, they were unlawful

under ERISA." Id. In other words, the ERISA claim is derivative of the Section 301

claim. (Plaintiff's Response at 15). 

Federal courts have distinguished the difference between the legality and the

interpretation of a benefit plan under ERISA. Constantino v. TRW, Inc., 13 F.3d 969,

975 (6th Cir. 1994); Zielinski v. Pabst Brewing Co., 360 F. Supp. 2d 908, 921 (E.D. Wis.

2005) ("The former is typically a question for administrative review while the latter is

more likely a question for a court."). If Plaintiffs pursue the administrative process in

hopes to remedy a legal issue, they need not exhaust their administrative remedies since

they would be futile. Constantino, 13 F.3d at 975. The court reasoned that going through

the administrative process for a remedy that could not be provided by the plan grievance

process defeated the purposes of administrative exhaustion. Id.

Here, Plaintiffs argue that Defendant does not have the power to change the plan

benefits, specifically, the “no charge” provision for retiree’s medical benefits given them

in the 1993, 1996, 1999 and 2003 CBAs. In other words, Plaintiffs challenge Defendant's

inclusion in the Plan of a provision that was contrary to the alleged binding CBAs to

provide medical benefits at no charge. This determination hinges on the collective

bargaining agreements between the parties. Such a legal inquiry would be futile in the

administrative process.

B. Plaintiffs’ Failure to Plead a Valid Claim under ERISA §502(a)(3)

Defendant maintains that the Complaint fails to state a valid claim for relief under

ERISA §502(a)(3), which provides injunctive relief to enforce ERISA or the terms of the

plan. Defendant notes that the Complaint only addresses Plaintiffs’ economic harm,

merely seeking damages and not identifying any equitable relief. Defendant seeks to

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 29 U.S.C. §1132(a)(3) authorizes beneficiaries on an employee welfare benefit plan to bring

a civil action "(A) to enjoin any act or practice which violates ... the terms of the plan, or (B) to

obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce ... the terms

of the plan."

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dismiss the first count to the extent it seeks relief under this Court's injunctive powers,

pursuant to §502(a)(3), since none is pleaded.

Plaintiffs clarify their equitable relief position in the Response to Defendant’s

Motion to Dismiss. Plaintiffs will seek equitable relief in the form of a preliminary

injunction to estop Raytheon from requiring Plaintiffs to make monthly contributions for

receipt of healthcare benefits. Such injunctive relief, whether or not Plaintiffs seek it as a

preliminary matter, satisfies the pleading requirements for a claim under §502(a)(3).3

Plaintiffs may amend the complaint to state such a claim. The Court will allow Plaintiffs

leave to amend the Complaint to properly and specifically allege the relief sought under

§502(a)(3) and §502(a)(1)(B).

C. Plaintiff’s Retiree Medical Benefits Did Not Vest

Defendant contends that Plan documents control the medical benefit rights for

Plaintiffs rather than the CBAs. Utilizing ERISA case law, the Defendant contends that

Plaintiffs have the burden of showing that the plan documents provide vesting of

Plaintiffs' medical benefits in clear and express language. (D's MD at 9 (citations

omitted)). See Cinelli v. Security Pacific Corp., 61 F.3d 1437, 1441 (9th Cir. 1995)

(ERISA presumption that welfare benefits do not vest unless expressly provided for in

plan documents). Defendant states that the Plan documents actually show that the early

retiree medical benefits do not vest. Defendant contends that the Plan documents

reserved to Raytheon the absolute right to change, add, delete and/or terminate any

benefits at will. Furthermore, the Defendant contends that the CBAs defer to the terms of

the applicable Plan documents when it comes to defining medical benefits. 

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Supra at 10. 

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Plaintiffs contend that Plan documents do not control the conferral of their retiree

medical benefits, but rather the CBAs dictate their retirement rights. "In other words, the

ERISA claim is derivative of the Section 301 claim."4

 Plaintiffs rely on the language in

the 1993 CBA expressly giving them benefits at no charge. Plaintiffs assert this

entitlement extended beyond the term of the 1993 CBA because subsequent CBAs did

not contradict or repeal it.

The Court finds that CBAs negotiated by unions and employers establish the

contractual relationship between union members and employers. Unilateral changes to

CBAs by the employer, union, or employees are invalid as contract modifications because

of lack of mutuality. Armistead v. Vernitron Corp., 944 F.2d 1287, 1296 (6th Cir. 1991) (

explaining that to construe the Plan to allow the employer to terminate benefits of an

employee-promisee, at will and without notice, is to invent a term which lacks mutuality

of obligation, is illusory, and unenforceable). Employers can not unilaterally reserve the

right to change the terms of a CBA and then adopt terms that conflict with rights granted

under a CBA. ASARCO v. USW, 2005 U.S. Dist. LEXIS 208731 at *12 (D. Ariz. July 26,

2005) (citing Armistead, 944 F.2d at 1297). In other words, a reservation of rights clause

in a plan document cannot affect contractually vested or bargained-for rights. Id.; see also

Allied Chemical & Alkali Workers of America, Local Union No. 1 v. Pittsburgh Plate

Glass Company, Chemical Division, 404 U.S. 157, 183 (1971) ("‘Where there is in effect

a collective-bargaining contract covering employees in an industry affecting commerce,

the duty to bargain collectively shall also mean that no party to such contract shall

terminate or modify such contract’ except upon (1) timely notice to the other party, (2) an

offer to meet and confer ‘for the purpose of negotiating a new contract or a contract

containing the proposed modifications,’ (3) timely notice to the Federal Mediation and

Conciliation Service and comparable state or territorial agencies of the existence of a

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For example, Defendant contends that various sections of the plan documents and the SPD

are inconsistent with vesting of medical benefits, as follows: a) provisions that show company

payment of retiree benefits as a current rather than a vesting activity; b) “coordination of benefits”

provisions in the plan are inconsistent with vesting; c) the plan contemplated the discontinuity of

retiree medical benefits. Vesting inconsistencies within the Plan can not, as a matter of law, defeat

health benefits secured for employees by a CBA, but are relevant to reflect the parties' contractual

intentions and the understanding of binding CBA requirements. 

12

‘dispute,’ and (4) continuation ‘in full force and effect [of] ... all the terms and conditions

of the existing contract ... until [its] expiration date...’") (paraphrasing the National Labor

Relations Act, 29 U.S.C.A. § 158(d)).

The Plan’s language is subservient to the CBA. The Plan may not circumvent or

extinguish benefit rights secured by a CBA. To the extent Defendant's Motion to Dismiss

makes such an argument, it is denied.5

 Given the contractual nature of CBAs, language in

the CBAs deferring to Plan documents only infers a derivative connection between the

Plan and the CBA as to any rights and/or benefits secured by a CBA. The dispositive

issue in this case, whether or not these Plaintiff Early Retirees have an entitlement to

medical benefits at no charge hinges on the provisions in the various CBAs. 

IV. DISCUSSION MOTION TO DISMISS SECTION 301 LMRA CLAIM

A. Exhaustion Requirement

Generally, an employee who brings a benefit dispute grounded in a collective

bargaining agreement must first exhaust his or her remedies under the collective

bargaining agreement. Mason v. Continental Group, Inc. 763 F.2d 1219, 1222 (11th Cir.

1985). There are, however, exemptions to this general rule of labor law, such as: a)

where a union breaches a duty of fair representation, Vaca v. Sipes, 386 U.S. 171, 185

(1967) b); where resort to the CBA grievance procedure would be futile, Glover v. St.

Louis-San Francisco R. Co., 393 U.S. 324, 330 (1969); c) where grievance procedures

have been repudiated, Vaca, 386 U.S. 171; d) where grievance procedures are not

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intended as exclusive remedies, Republic Steel Corp. v. Maddox, 379 U.S. 650, 657-58

(1965), or where the CBA did not through either language, intent or presumption, require

exhaustion, Anderson v. Alpha Portland Industries, Inc., 752 F.2d 1293, 1298-300 (8th

Cir. 1985). When an employer repudiates the grievance procedures or when the union

wrongfully refuses to process the grievance, the employee may bring an action against his

employer in the face of a defense based upon the failure to exhaust contractual remedies,

provided the employee can prove that the union as bargaining agent breached its duty of

fair representation in its handling of the employee's grievance. Schaub v. K&L

Distributors, 115 P.3d 555, 561 (Alaska 2005) (citing Vaca, 386 U.S. at 184-86).

Exhaustion of the CBA is a jurisdictional consideration, so the Court raises it sua

sponte. In the present case, the Defendant alleges that the Plaintiffs' claim for breach of

the CBA is subject to the Plan’s exhaustion requirement. Defendant blurs the distinction

between the Plan and the CBA’s grievance procedures. Standing to claim relief under

Section 301 is a function of the exhaustion of the CBA’s grievance requirements rather

than the Plan’s grievance requirements. Neither party addresses these requirements nor

whether there is any basis for waiving them.

Additionally, the Court requests briefing on the issue of the Union as a necessary

party or a non-aligned party to the action before us, which may or may not affect the

jurisdiction of this Court to hear the LMRA claim. See Kinnunen v. American Motors

Corp., 56 F.R.D. 102, 103 (E.D. Wis. 1972) (explaining that because the plaintiff is

required to show she exhausted her bargaining remedies or that the union did not act in

good faith, it is inappropriate to make either determination without the presence of the

union); Bradley v. Ford Motor Co., 417 F. Supp. 23, 25 (N.D. Ill. 1975) (explaining that

union was a necessary party to the action because the Court needed to determine if the

plaintiffs had exhausted their contractual remedies, which partly depended on whether or

not the union had violated its duty of fair representation); Nichols v. Frank, 1990 WL

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134539 at *2 (D. Or. Sept. 10, 1990) (joining a union as a non-aligned party to avoid the

possibility of inconsistent obligations based upon any relief the court may grant).

V. CONCLUSION

The Court denies Defendant's Motion to Dismiss as to the argument that

Plaintiffs failed to exhaust the Plan administrative remedies. While Defendant correctly

notes that Plaintiffs failed to articulate any injunctive relief under ERISA § 502(a)(3),

Plaintiffs shall have leave to amend the Complaint to state a claim for equitable relief.

Plaintiffs' ERISA claim is derivative and dependent upon the outcome of

Plaintiffs' § 301 claim, which is subject to jurisdictional exhaustion requirements under

the LMRA. Sua sponte, this Court must satisfy itself of its jurisdiction to reach the merits

of the case. Pending this, Plaintiffs may have leave to amend the Complaint to properly

state the ERISA § 502(a)(3) claim and to allege any jurisdictional exhaustion

prerequisites, if necessary, to properly state the LMRA claim. Pending any amendment,

the Court will be in a better position to address the merits of the case after discovery is

completed.

Accordingly,

IT IS ORDERED that the Defendant’s Motion to Dismiss (document #9) is

DENIED.

IT IS FURTHER ORDERED that denial of the Motion to Dismiss the LMRA

claim is without prejudice to Defendant's reurging the arguments in a motion for summary

judgment after the close of discovery.

IT IS FURTHER ORDERED that plaintiffs have 20 days from the filing date

of this Order to brief the jurisdictional issues, including identifying any relevant CBA

grievance procedures, exhaustion or waiver of such procedures, and whether the Union is

a necessary party. Defendant may file a Response within 20 days of receiving a copy of

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the Plaintiffs' brief, and Plaintiff may file a Reply within 10 days of receiving a copy of

the Response. 

IT IS FURTHER ORDERED that subsequent to affirmatively resolving all

jurisdictional questions over the LMRA claim, Plaintiffs shall be granted leave to amend

the Complaint to cure any jurisdictional deficiencies and to properly plead the § 502(a)(3)

ERISA claim.

DATED this 27th day of July, 2006.

Case 4:06-cv-00032-DCB Document 17 Filed 08/08/06 Page 15 of 15