REESE v. CNH AMERICA LLC 315

Cite as 574 F.3d 315 (6th Cir. 2009)

the firearm. Nor does it appear that an

exception to fruits analysis such as the

independent-source rule or inevitable-discovery doctrine applies to make suppression unwarranted. United States v. Davis,

430 F.3d 345, 358 (6th Cir.2005) (citing

Murray v. United States, 487 U.S. 533,

537, 108 S.Ct. 2529, 101 L.Ed.2d 472

(1988), and Nix v. Williams, 467 U.S. 431,

443–44, 104 S.Ct. 2501, 81 L.Ed.2d 377

(1984)). Accordingly, the district court

erred when it denied See’s motion to suppress.

III. CONCLUSION

Because we conclude that the initial Terry stop was not supported by reasonable

suspicion, we REVERSE the district

court’s denial of See’s motion to suppress

and REMAND for proceedings consistent

with this opinion.

RONALD LEE GILMAN, Circuit

Judge, concurring.

I concur in the lead opinion, but write

separately to emphasize my view that this

is an extremely close case. I believe that

the totality of the circumstances would

have provided Officer Williams with reasonable suspicion to conduct a Terry stop

if, for example, Officer Williams had been

responding to a complaint, if he had acted

on a tip, if he had seen the men doing

anything potentially criminal, or if the men

had tried to flee as Williams approached.

But because Officer Williams observed

the men only for a moment before blocking

their exit and had not seen them do anything other than sitting in See’s vehicle, I

cannot say that there were ‘‘articulable

facts that criminal activity ‘may be afoot,’ ’’

See United States v. Sokolow, 490 U.S. 1,

7, 109 S.Ct. 1581, 104 L.Ed.2d 1 (1989)

(quoting Terry v. Ohio, 392 U.S. 1, 30, 88

S.Ct. 1868, 20 L.Ed.2d 889 (1968)), or that

the officer had anything more than an ‘‘illdefined hunch[ ].’’ See United States v. Urrieta, 520 F.3d 569, 578 (6th Cir.2008).

Officer Williams had every right to investigate further, but he should have simply

parked his patrol car alongside See’s vehicle to carry out the investigation in a consensual manner. Instead, he parked his

patrol car in such a way so as to block in

See’s vehicle, thus transforming the encounter into a Terry stop. I therefore

concur, although barely so, in the conclusion that the stop was not supported by

reasonable suspicion.

,

Jack REESE, Frances Elaine Pidde,

James Cichanofsky, Roger Miller, and

George Nowlin, Plaintiffs–Appellees/Cross–Appellants,

v.

CNH AMERICA LLC (f/k/a Case Corporation) and CNH Global N.V., Defendants–Appellants/Cross–Appellees.

Nos. 08–1234, 08–1302, 08–1912.

United States Court of Appeals,

Sixth Circuit.

Argued: March 3, 2009.

Decided and Filed: July 27, 2009.

Background: Retirees brought action

against employer, seeking a declaration

that they were entitled to lifetime healthcare benefits, an injunction requiring employer to maintain the level of retiree

health-care benefits then in effect, and

damages for injuries the retirees might

sustain if the benefits were terminated.

The United States District Court for the

Eastern District of Michigan, Patrick J.

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316 574 FEDERAL REPORTER, 3d SERIES

Duggan, J., 2007 WL 2484989, granted

summary judgment in favor of retirees and

awarded attorney’s fees to retirees, 2008

WL 2546936. Employer appealed.

Holdings: The Court of Appeals, Sutton,

Circuit Judge, held that:

(1) District Court did not abuse its discretion by refusing to transfer case;

(2) retirees were entitled to lifetime

health-care benefits; but

(3) employer was entitled to reasonably

alter health-care benefits; and

(4) retirees did not have a Seventh

Amendment right to a jury trial.

Affirmed in part, reversed in part, and

remanded.

1. Labor and Employment O677

District court in Michigan did not

abuse its discretion by refusing to transfer

retirees’ suit against employer, which

sought a declaration that retirees were

entitled to lifetime health-care benefits under a collective bargaining agreement

(CBA), to district court in Wisconsin, even

though employer was headquartered in

Wisconsin, CBA negotiations took place

there, employer administered the healthcare plans there, and most of the retirees

lived in Wisconsin, where case was assigned to same Michigan trial judge who

had handled parallel lawsuit involving

same types of claims under different CBAs

against successors in interest to employer.

28 U.S.C.A. § 1404(a).

2. Federal Courts O103, 819

District courts have broad discretion

to determine when party convenience or

the interest of justice make a transfer

appropriate; only when the district court

clearly abuses its discretion in balancing

these considerations will the Court of Appeals reverse. 28 U.S.C.A. § 1404(a).

3. Labor and Employment O426

While ERISA heavily regulates promises to provide pension benefits, health

benefits are purely a matter of contract—

permitting a company to guarantee health

benefits for life or to make them changeable, or even terminable, at the will of the

company. Employee Retirement Income

Security Act of 1974, §§ 201(1), 203(a), 29

U.S.C.A. §§ 1051(1), 1053(a).

4. Labor and Employment O549(1)

When a health plan was not collectively bargained, the court will require a clear

statement before it will infer that an employer meant to promise health benefits

for life.

5. Labor and Employment O549(1)

Because vesting of welfare plan benefits is not required by law, an employer’s

commitment to vest such benefits is not to

be inferred lightly; the intent to vest must

be found in the plan documents and must

be stated in clear and express language.

6. Labor and Employment O549(1)

When a health plan stems from a collective bargaining agreement (CBA), the

court applies ordinary principles of contract interpretation to determine whether

benefits have vested, and to the extent it

puts a thumb on the scales in this setting,

it favors vesting.

7. Labor and Employment O694

Although courts reviewing a health

plan that stems from a collective bargaining agreement (CBA) do not apply a legal

presumption that benefits vest, and although they require plaintiffs to bear the

burden of proving that vesting has occurred, they apply an inference that it is

unlikely that welfare benefits would be left

to the contingencies of future negotiations,

so long as they can find either explicit

contractual language or extrinsic evidence

indicating an intent to vest benefits.

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REESE v. CNH AMERICA LLC 317

Cite as 574 F.3d 315 (6th Cir. 2009)

8. Labor and Employment O549(1)

Employees were entitled to lifetime

health-care benefits upon retirement pursuant to collective bargaining agreement

(CBA) which provided that employees who

retired under employer’s pension plan

were eligible to receive health-care benefits, though summary plan descriptions

(SPDs) distributed after effective date of

CBA warned that amendment or termination of benefit plans might affect coverage; health-care benefits provision of CBA

did not contain a specific durational clause

while other benefits provisions contained

such clauses, eligibility for health-care

benefits was tied to eligibility for pension,

and SPDs indicated that official plan documents were controlling.

9. Labor and Employment O483(2), 547

If an employer includes unqualified

reservation-of-rights language in a summary plan description (SPD) to the effect

that the employer has a unilateral right to

terminate coverage, and if a union fails to

grieve or object to such language, then

such reservation-of-rights language prevents retiree benefits from vesting even if

the SPD was distributed after the effective

date of the collective bargaining agreement (CBA); however, no divesting occurs

when the SPD contains language reminding readers that the contracts represent

the full commitments between the parties

because a union cannot fairly be expected

to protest when the SPD makes it clear

that the CBA, not the SPD, controls a

conflict.

10. Labor and Employment O445,

549(1)

Employer was entitled to reasonably

alter health-care benefits for retirees, even

though employer could not terminate the

benefits because the retirees’ right to lifetime benefits vested upon retirement pursuant to collective bargaining agreement

(CBA) which provided that employees who

retired under employer’s pension plan

were eligible to receive health-care benefits; parties had a history of altering the

benefits, including entering CBAs that created changes for past and future retirees

by imposing managed care on all of them,

and nothing in text of CBA stated that

health-care coverage would be fixed and

irreducible.

11. Labor and Employment O1295(1)

A union does not represent retired

employees when it bargains a new contract

for its employees.

12. Jury O14(1.4)

Retirees did not have Seventh Amendment right to a jury trial on their claims

for declaratory and injunctive relief under

ERISA and LMRA. U.S.C.A. Const.

Amend. 7; Employee Retirement Income

Security Act of 1974, § 2 et seq., 29

U.S.C.A. § 1001 et seq.; Labor Management Relations Act, 1947, § 1 et seq., 29

U.S.C.A. § 141 et seq.

13. Labor and Employment O549(1)

The Yard–Man test, which provides

for an inference of vesting of welfare plan

benefits in close cases, applies to claims for

benefits that arise out of a collective bargaining agreement (CBA), and the

Sprague standard, which requires that the

intent to vest must be stated in clear and

express language, is limited to cases in

which an employer unilaterally instituted a

benefit program.

ARGUED: Bobby R. Burchfield,

McDermott, Will & Emery LLP, Washington, D.C., for Appellants. Roger J.

McClow, Klimist, McKnight, Sale, McClow

& Canzano, P.C., Southfield, Michigan, for

Appellees. ON BRIEF: Bobby R. Burch2:09-cv-10918-PDB-MKM Doc # 101-15 Filed 05/14/12 Pg 3 of 14 Pg ID 4572
318 574 FEDERAL REPORTER, 3d SERIES

field, Jason Alan Levine, McDermott, Will

& Emery LLP, Washington, D.C., Norman

C. Ankers, Honigman Miller Schwartz and

Cohn LLP, Detroit, Michigan, for Appellants. Roger J. McClow, Klimist,

McKnight, Sale, McClow & Canzano, P.C.,

Southfield, Michigan, for Appellees.

Before: RYAN, GIBBONS, and

SUTTON, Circuit Judges.

OPINION

SUTTON, Circuit Judge.

At stake in this appeal is whether a

collective bargaining agreement (CBA)

grants retirees lifetime health-care benefits upon retirement. Consistent with our

precedents in this area, we hold that it

does so. That conclusion, however, does

not resolve the scope of those benefits.

Because the CBA and related documents

do not say anything about subsequent

modifications to these benefits and because

the application of the relevant CBA provisions suggests that the parties contemplated reasonable modifications, we remand

the case to the district court to determine

what types of changes are permitted.

I.

The Parties. CNH America LLC, formerly known as Case Corporation, makes

construction and agricultural equipment in

Racine, Wisconsin. It was once a wholly

owned subsidiary of Tenneco, Yolton v. El

Paso Tenn. Pipeline Co., 318 F.Supp.2d

455, 459 (E.D.Mich.2003), but as part of a

corporate restructuring, Tenneco sold its

interest in the company in a public offering

in June 1994. Id. at 459–60.

The plaintiffs represent a class of retired Case employees and their spouses

(who retired from July 1, 1994 through

November 12, 1999) and CNH employees

and their spouses (who retired from November 12, 1999 through November 1,

2004). Each employee retired after the

Tenneco reorganization in July 1994 but

before November 1, 2004.

The 1998 CBA. In 1971, Case entered

into a CBA with the United Automobile,

Aerospace and Agricultural Workers of

America (‘‘UAW’’), in which Case agreed

to provide health-care insurance to its retired employees and their spouses who

were ‘‘receiving a J I Case Pension [or] a

Spouse’s Pension.’’ JA 144. From 1974

through 1995, each CBA (in three- or fouryear terms) renewed this commitment in

‘‘substantially unchanged’’ form, JA 91,

and each CBA provided that employees

did not have to pay premiums in order to

receive coverage.

Case and the UAW entered into the

CBA that prompted this lawsuit in 1998,

and it lasted until May 2, 2004. Under the

1998 CBA, Case agreed that:

Employees who retire under the Case

Corporation Pension Plan for Hourly

Paid Employees after 7/1/94, or their

surviving spouses eligible to receive a

spouse’s pension under the provisions of

that Plan, shall be eligible for the Group

benefits as described in the following

paragraphs.

JA 1288; see also JA 1213 (noting that

‘‘[t]he group insurance plan agreed to between the parties TTT is hereby made a

part of this Agreement’’). The next paragraphs listed ‘‘Medical’’ and ‘‘Prescription

Drug’’ benefits available to all classes of

covered retirees regardless of the duration

of their service before retirement. JA

1288–91. The CBA does not spell out

what ‘‘Medical’’ benefits are included; it

just says that ‘‘[e]ligibility for specific coverage [will be] based on each plan’s eligibility requirements.’’ JA 1290. ‘‘No contributions,’’ the CBA adds, ‘‘are required

for the Health Care PlansTTTT’’ JA 1291.

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A Letter of Understanding concerning

the ‘‘[c]ost of [h]ealthcare [c]overage’’ supplemented the 1998 CBA. JA 1304.

‘‘[O]ver the term of the 1998 labor agreement,’’ it said, ‘‘employees and retirees

who are enrolled in a Company offered

HMO, PPO or other plan will not have to

pay any additional employee contributions

above those which may be required for

enrollment in the Case Network Plan (if

any).’’ Id. The letter added that Case was

‘‘responsible for the retention of HMOs,

PPOs and other health care delivery mechanisms during the [CBA’s] term,’’ and that

Case could ‘‘terminate’’ a provider giving

inadequate coverage and adopt a ‘‘replacement plan [that] will provide comparable

benefits and access to the type of plan it

replaces,’’ provided that the new plan satisfied ‘‘the UAW’s standards regarding access and quality.’’ Id.

The Wisconsin case. On February 11,

2004, CNH filed a declaratory judgment

action against the UAW in the United

States District Court for the Eastern District of Wisconsin. It sought a declaration

that the post-reorganization retirees were

not entitled to lifetime health-care benefits

under the 1998 CBA and that it could

‘‘modify or terminate’’ the retirees’ benefits ‘‘at its discretion’’ at the end of the

CBA. JA 1513. The district court dismissed the action in August 2004 because

ERISA does not give a plan fiduciary the

right to seek an order clarifying its plan

obligations and because the Labor–Management Relations Act, 29 U.S.C. § 141 et

seq., does not create a cause of action in

the absence of a claim that a CBA has

been violated.

The Reese case. On February 18, 2004,

a group of former employees, who retired

from the company between 1994 and 2004,

as well as spouses of such employees, filed

the present case in the Eastern District of

Michigan, seeking a declaration that they

were entitled to lifetime health-care benefits, an injunction requiring CNH to

‘‘maintain the level of retiree health care

benefits currently in effect’’ and damages

for injuries the retirees might sustain if

the benefits were terminated. JA 1533.

In February 2005, the district court denied

CNH’s motion to transfer the case to the

Eastern District of Wisconsin.

In August 2007, the district court granted the retirees’ motion for summary judgment, concluding that the 1998 CBA unambiguously granted lifetime health-care

benefits to the retirees. In a separate

opinion filed the same day, the district

court granted CNH’s motion to strike the

retirees’ demand for a jury trial, concluding that there is no Seventh Amendment

right to a jury trial for ERISA or LMRA

claims. The district court also awarded

$1.4 million in attorney’s fees to the retirees. See 29 U.S.C. § 1132(g); Reese v.

CNH Global N.V., No. 04–70592, 2008 WL

2546936, at *5 (E.D.Mich. June 20, 2008).

The Yolton case. One more layer of

complication exists: There is a parallel

lawsuit involving the same types of claims

under different CBAs against two successors in interest to CNH—CNH America

and El Paso Tennessee Pipeline Co. Yolton

v. El Paso Tenn. Pipeline Co., 435 F.3d

571, 574 (6th Cir.2006). In December

2002, a group of former employees of Tenneco and Case, all of whom had retired

before July 1, 1994, filed a class action

against CNH America and El Paso. Yolton, 318 F.Supp.2d at 459–60, 464. In

December 2003, the United States District

Court for the Eastern District of Michigan

issued a preliminary injunction, reasoning

that the retirees were likely to succeed on

the merits of their claim that the 1990

CBA gave them a right to lifetime healthcare benefits. Id. at 471, 476. The court

thus ordered the employer to continue to

provide the benefits during the litigation.

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Id. at 460, 471, 473. In 2006, the Sixth

Circuit upheld the preliminary injunction,

Yolton, 435 F.3d at 585, and the case is

currently pending in front of Judge Duggan, the same judge who is handling the

present dispute.

II.

[1, 2] CNH first challenges the district

court’s refusal to transfer the case to the

Eastern District of Wisconsin. ‘‘For the

convenience of parties and witnesses, in

the interest of justice, a district court may

transfer any civil action to any other district or division where it might have been

brought.’’ 28 U.S.C. § 1404(a). As the

permissive language of the transfer statute

suggests, district courts have ‘‘broad discretion’’ to determine when party ‘‘convenience’’ or ‘‘the interest of justice’’ make a

transfer appropriate. Only when the district court ‘‘clearly abuse[s] its discretion’’

in balancing these considerations will we

reverse. Phelps v. McClellan, 30 F.3d

658, 663 (6th Cir.1994).

In resolving the motion, the court considered six factors: ‘‘the convenience of

the parties and witnesses,’’ the accessibility of evidence, ‘‘the availability of process’’

to make reluctant witnesses testify, ‘‘the

costs of obtaining willing witnesses,’’ ‘‘the

practical problems of trying the case most

expeditiously and inexpensively’’ and ‘‘the

interests of justice.’’ JA 76; see Stewart

Org., Inc. v. Ricoh Corp., 487 U.S. 22, 30,

108 S.Ct. 2239, 101 L.Ed.2d 22 (1988);

Moses v. Bus. Card Express, Inc., 929

F.2d 1131, 1136–37 (6th Cir.1991). And it

kept in mind that, ‘‘unless the balance is

strongly in favor of the defendant, the

plaintiff’s choice of forum should rarely be

disturbed.’’ Cf. Dowling v. Richardson–

Merrell, Inc., 727 F.2d 608, 612 (6th Cir.

1984); JA 76.

The key question is whether the district

court properly applied those factors. On

one side of the ledger, several considerations favored a transfer: CNH is headquartered in Wisconsin, the CBA negotiations took place there, CNH administers

the health-care plans there, most of the

class members live in Wisconsin and few

class members live in Michigan, all of

which suggests that Wisconsin is the most

convenient forum for the parties and witnesses. On top of that, CNH stores its

documents in Wisconsin, which means that

a Wisconsin forum would make it easier to

obtain access to the evidence.

On the other side of the ledger: The

case was assigned to the same Michigan

trial judge who had handled the Yolton

case (and was still handling the case), giving him a leg up on the legal and factual

issues presented, and suggesting that the

objectives of trying the case expeditiously

and inexpensively would benefit from a

Michigan forum. There also is much to be

said from an interests-of-justice perspective for applying the same law to both

cases rather than Sixth Circuit law to one

case and Seventh Circuit law to the other.

The answer to this question, as an original matter, is not self-evident. The locus

of the dispute, the key parties and the

location of most of the evidence favor Wisconsin. But at the same time, it makes

sense to resolve the health benefits of both

sets of retirees—both of whom worked in

the same plant for the same effective employer—under the same circuit law and in

front of the same district court judge. In

the end, the issue turns on the standard of

review. Compelling considerations favor

both parties’ positions, making it difficult

to say that the district court would have

abused its discretion had he picked either

location as the more appropriate forum.

The court, in short, had authority to keep

the case.

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III.

Turning to the merits, we face two questions: Did Case in the 1998 CBA agree to

provide health-care benefits to retirees

and their spouses for life? And, if so, does

the scope of this promise permit CNH to

alter these benefits in the future?

A.

In answering these questions, we have

several ground rules. First, we give fresh

review to the district court’s summary

judgment ruling—that the ‘‘plain language’’ of the contract conveyed an ‘‘intent

to grant lifetime retiree health insurance

coverage to retirees,’’ JA 109—and we

draw all factual inferences in favor of the

party opposing summary judgment: CNH.

See Cline v. BWXT Y–12, LLC, 521 F.3d

507, 509 (6th Cir.2008).

[3] Second, we assess promises to pay

retirement benefits differently depending

on the type of obligation involved. ERISA

makes a promise to pay a covered ‘‘pension’’ binding at retirement, 29 U.S.C.

§ 1053(a), but it exempts ‘‘employee welfare benefit plans’’ from this requirement,

see id. § 1051(1). Thus, while ERISA

heavily regulates promises to provide pension benefits, health benefits are purely a

matter of contract—permitting a company

to guarantee health benefits for life or to

make them changeable, or even terminable, at the will of the company. See Noe v.

PolyOne Corp., 520 F.3d 548, 552 (6th

Cir.2008); Sprague v. Gen. Motors Corp.,

133 F.3d 388, 400 (6th Cir.1998).

[4, 5] Third, we assess health-care-benefit promises differently depending on

whether the contract stemmed from a

CBA or not. When the health plan was

not collectively bargained, we require a

clear statement before we will infer that

an employer meant to promise health benefits for life. ‘‘Because vesting of welfare

plan benefits is not required by law, an

employer’s commitment to vest such benefits is not to be inferred lightly; the intent

to vest must be found in the plan documents and must be stated in clear and

express language.’’ Sprague, 133 F.3d at

400 (internal quotation marks omitted).

[6, 7] When the health plan stems from

a CBA, by contrast, we apply ‘‘ordinary

principles of contract interpretation’’ to determine whether benefits have vested, see

Yolton, 435 F.3d at 580, and to the extent

we put a thumb on the scales in this

setting, it favors vesting. Although we do

not apply a ‘‘legal presumption that benefits vest’’ and although we require plaintiffs to bear the burden of proving that

vesting has occurred, we apply an ‘‘inference’’ that ‘‘it is unlikely that [welfare benefits] would be ‘left to the contingencies of

future negotiations,’ ’’ so long as we can

find either ‘‘explicit contractual language

or extrinsic evidence indicating’’ an intent

to vest benefits. Yolton, 435 F.3d at 580

(quoting UAW v. Yard–Man, Inc., 716

F.2d 1476, 1482 (6th Cir.1983)). The precise weight of the Yard–Man ‘‘inference,’’

we appreciate, is elusive. ‘‘[S]tanding

alone,’’ on the one hand, this factor is

‘‘insufficient to find an intent to create

interminable benefits.’’ Yard–Man, 716

F.2d at 1482; see Yolton, 435 F.3d at 579–

80; Maurer v. Joy Techs., Inc., 212 F.3d

907, 917 (6th Cir.2000). But, on the other,

it must mean something or else there

would be no point in having it. In the end,

it may come to nothing more than this: a

nudge in favor of vesting in close cases.

See Yolton, 435 F.3d at 579–80.

In applying these principles here, we

face one question that is relatively

straightforward under our case law (did

the benefits ‘‘vest’’?) and one that is not

(what does vesting mean in this context?).

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B.

[8] Did the employees’ right to lifetime

health-care benefits vest upon retirement?

Past is prologue in answering this question, because one of our cases—Yolton—

arose from a nearly identical CBA. The

Yolton CBA said that ‘‘[e]mployees who

retire under the Case Corporation Pension

Plan for Hourly Paid Employees, or their

surviving spouses eligible to receive a

spouse’s pension under the provisions of

that Plan, shall be eligible’’ to receive

health-care benefits, JA 813, and added

that ‘‘the Company shall pay the full premium cost of the above coverages,’’ JA

815. The 1998 CBA in today’s case provided that ‘‘[e]mployees who retire under

the Case Corporation Pension Plan for

Hourly Paid Employees after 7/1/94, or

their surviving spouses eligible to receive a

spouse’s pension under the provisions of

that Plan, shall be eligible for’’ health-care

benefits, JA 1288, and added that ‘‘[n]o

contributions are required for the Health

Care Plans,’’ JA 1291.

Promise for promise, the two sets of

commitments are effectively identical.

That is not surprising: The Yolton CBA

involved retirees who worked at the same

plant as today’s retirees and concerned an

employer that was different in name—

Case’s former parent company, Tenneco—

but in few other meaningful ways. We

start, then, by considering how Yolton

dealt with a similar plan.

At issue in Yolton was whether this

court should affirm a preliminary injunction preventing the employer from terminating or significantly modifying healthcare benefits for previously retired employees. The employees all took retirement before 1994 and were covered by the

1990 CBA with Tenneco. When El Paso

(Tenneco’s new parent company) threatened to terminate or significantly modify

the health benefits of the retirees, they

sought a preliminary injunction to prevent

the change.

In gauging the parties’ prospects on the

merits, the court construed the language

of the CBA as likely creating a right to

lifetime health-care benefits upon retirement. See Yolton, 435 F.3d at 583. It

first relied on the fact that the company’s

benefits plans tied eligibility for pension

benefits to eligibility for health-care benefits. Noting that this ‘‘tying’’ consideration had played a ‘‘key’’ role in a vestingof-health-benefits determination in an earlier case, the court reasoned that it ‘‘demonstrate[s] an intent to provide lifetime

benefits.’’ 435 F.3d at 580, 584–85; see

Golden v. Kelsey–Hayes Co., 73 F.3d 648,

656–57 (6th Cir.1996) (affirming a preliminary injunction based in part on a district

court’s conclusion that ‘‘[CBA] provisions

TTT which tie retiree and surviving spouse

eligibility for health insurance coverage to

eligibility for vested pension benefits’’

demonstrate an intent to vest health benefits); see also Noe, 520 F.3d at 558–59;

McCoy v. Meridian Auto. Sys., Inc., 390

F.3d 417, 422 (6th Cir.2004).

Other aspects of the 1990 CBA, Yolton

determined, also suggested an intent to

create lifetime benefits. For example,

some benefits were subject to express durational limitations while retiree health

benefits were not, prompting the court to

conclude that ‘‘the inclusion of specific durational limitations in other provisions TTT

suggests that retiree benefits, not so specifically limited, were intended to survive.’’

Yolton, 435 F.3d at 582 (quoting Yard–

Man, 716 F.2d at 1481–82). And the Yolton court also pointed to language in the

summary plan descriptions saying that

‘‘continued coverages will be the same as

those that were in effect on the day preceding your retirement.’’ Id. at 583.

Yolton supports the district court’s conclusion that the 1998 agreement granted

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retirees a right to lifetime health benefits.

Like Yolton: this case involves a CBA; it

involves a health-care benefits plan with

identical language concerning entitlement

to benefits upon retirement; it ties eligibility for health benefits to eligibility for a

pension; it does not contain a specific durational clause while other benefits provisions in the CBA contain such clauses, see

JA 1285–86; and above all it concerns

employees who worked in virtually identical circumstances (apparently making the

same products in the same plant) to the

Yolton employees before each group retired.

Yes, Yolton was a preliminary injunction

decision, and, yes, that means only the

retirees’ likelihood of success on the merits

was at issue, not their actual success on

the merits as in the case of a decision

granting summary judgment in their favor.

But in view of the common language between the plans and the centrality of the

tying rationale in Yolton’s merits determination and in cases before and since, it

seems appropriate to treat these two

groups of like-situated employees in like

ways.

[9] In arguing that the two cases

should be treated differently, CNH relies

on a 2000 Summary Plan Description

(SPD) of the health plan, which warned

that ‘‘[a]n amendment or termination of

the TTT benefit plans may affect TTT the

coverage[ ]’’ of retirees. JA 1438 (emphasis added). A 1999 SPD was to the same

effect. As CNH sees it, even if the 1998

CBA created a right to lifetime benefits,

the retirees are estopped from seeking any

such relief by their acceptance of the 1999

and 2000 SPDs, which described the benefits as terminable at CNH’s will. There is

some case law in support of this notion. If

an employer includes ‘‘unqualified reservation-of-rights language’’ in an SPD to the

effect that the employer has a ‘‘unilateral

right TTT to terminate coverage,’’ and if a

union fails to grieve or object to such

language, then such reservation-of-rights

language ‘‘prevent[s] retiree benefits from

vesting’’ even if the SPD was distributed

after the effective date of the CBA. Prater

v. Ohio Educ. Ass’n, 505 F.3d 437, 444 (6th

Cir.2007); see Maurer, 212 F.3d at 919.

But there is an exception. No divesting

occurs when the SPD contains language

reminding readers that ‘‘the contracts represent the full commitments between the

parties’’ because a union cannot fairly be

expected to protest when the SPD makes

it clear that the CBA, not the SPD, controls a conflict. See Prater, 505 F.3d at

444–45.

The exception applies. The 2000 SPD

reminded readers that, ‘‘[i]f there is any

variance between the contents of this

handbook and the official plan documents

and labor agreements, those documents or

agreements will govern.’’ JA 1438. And

the 1999 SPD contains a similar warning:

‘‘Our responsibilities to you,’’ warned the

company, ‘‘as well as the conditions of your

coverage with us, are defined in the documents that make up your contract.’’ JA

1383. This qualifying language precludes

CNH from maintaining that it had the

unilateral right to terminate benefits.

CNH next focuses on an historical feature of this case that, as best as we and

the parties can tell, has no parallel in

Yolton. The 1998 CBA purported to cover

future retirees as well as retirees who had

previously left the company during the

1990 and 1995 CBAs, and it made material

alterations to the health benefits of these

prior retirees. Why should we treat the

1998 CBA as creating vested rights, CNH

points out, if the company had the right to

alter the health benefits of employees who

had retired under the similarly worded

1990 and 1995 CBAs and if indeed the 1998

made material alterations to their bene2:09-cv-10918-PDB-MKM Doc # 101-15 Filed 05/14/12 Pg 9 of 14 Pg ID 4578
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fits? This is a good question. But it does

not go to vesting—at least as our cases,

including Yolton, have used the term. It

instead goes to a related, more difficult

question—what does vesting mean in this

setting?—a question to which we now turn.

C.

[10] What does vesting mean in this

context? Much of our case law in this area

draws heavily on an analogy between pension and health-care benefits. It is a useful analogy in one sense because both settings deal with retirement benefits, both

benefits often are for life and retirees legitimately depend heavily on both benefits

in view of the reality that many employees,

upon retirement, will not be able to supplement their retirement income in meaningful ways and will not be able to obtain

other employer-related health benefits.

But it is not a perfect analogy. The

value of a pension benefit, whether defined

or undefined, is clear cut—a matter of

concrete dollars and cents, fairly measurable as a matter of principal or income

stream before retirement, at retirement or

after retirement. Vested health-care benefits are another matter. Employers do

not send their active or retired employees

a monthly account itemizing the value of

their health-care benefits. And with good

reason: What would it say? What could it

say?

The language of health-care provisions,

as the 1998 CBA illustrates, generally does

not contain the kind of precision that characterizes a pension plan. ‘‘Employees,’’ it

says, ‘‘who retire under the Case Corporation Pension Plan for Hourly Paid Employees after 7/1/94, or their surviving spouses

eligible to receive a spouse’s pension under

the provisions of that Plan, shall be eligible

for’’ health-care benefits. JA 1288. It is

one thing to say that this kind of language,

when tied to eligibility for a pension plan,

prevents an employer from terminating

the benefits—which we have held here. It

is quite another to say that an employer

may not alter the benefits in any way,

particularly when the parties have a history of doing just that and when common

experience suggests that health-care plans

invariably change over time, if not from

year to year. See Diehl v. Twin Disc,

Inc., 102 F.3d 301, 309 (7th Cir.1996) (distinguishing a promise to provide ‘‘lifetime

insurance benefits’’ from ‘‘decid[ing] precisely what those benefits are’’).

[11] Which takes us to the nub of this

case: Whatever these words mean, the

parties’ actions and a common understanding of welfare benefits confirm that the

company’s healthcare benefits are not akin

to black-and-white pension benefits that

cannot be diminished by one cent once

they have vested. As CNH points out, no

party to this case—the union, the employer, the retirees—viewed the benefits in

this way. The 1998 CBA not only set the

rules for employees who retired during the

next six years of that CBA; it also reset

the rules for employees who retired after

July 1, 1994, which is inconsistent with the

notion that the 1990 and 1995 CBAs (using

the same language as the 1998 CBA, compare JA 813, 1040 with JA 1288) created

unalterable, irreducible health benefits.

The 1994–1998 retirees were not asked to

consent to this change, and they did not

consent to it. And as Yard–Man makes

clear and as later cases confirm, a union

does not represent retired employees

when it bargains a new contract for its

employees. UAW v. Gen. Motors Corp.,

497 F.3d 615, 626–27 (6th Cir.2007); see

Yard–Man, 716 F.2d at 1482. Notably,

Yolton did not deal with any of these issues when it determined that the retirees

had a likelihood of success on their claimed

entitlement to lifetime health benefits.

See 435 F.3d at 578–85.

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Cite as 574 F.3d 315 (6th Cir. 2009)

No doubt, the resetting of health-care

benefits for previously retired employees

might not concern anyone if each change

upgraded the existing package of benefits.

That sort of change would not break any

promises to provide irreducible benefits

for life. But that is not what happened

here. The 1998 CBA, among other

changes, created a Managed Health Care

Network Plan for past and future retirees.

In other words, it imposed managed care

on all of them, which represented a reduction in the effective choices of coverage

available for all retirees and the coverage

actually provided to many, if not most, of

them. Managed care plans were not popular when they were introduced because

they often restricted the availability of

‘‘discretionary or elective’’ services. See

Robert F. Rich & Christopher T. Erb, The

Two Faces of Managed Care Regulation &

Policymaking, 16 Stan. L. & Pol’y Rev.

233, 234–35, 237–39 (2005). Such plans

usually control costs by covering only a

limited network of providers, id. at 262, a

type of limitation against which covered

insureds often rebel, see id. at 267–68 (describing the broad adoption of state legislative reforms designed to curb restrictions on provider access), and against

which the UAW had rebelled when negotiating earlier CBAs, see, e.g., JA 2197.

Preferred provider organization (PPO)

plans—such as the ones made applicable to

retirees under the 1998 CBA, see JA

1167—allow insureds to use out-of-network

providers, but they provide lowered coverage for such care. See Amy B. Monahan,

The Promise and Peril of Ownership Society Health Care Policy, 80 Tul. L.Rev. 777,

789–90 (2006). Pre–1998 retirees thus saw

their coverage downgraded in at least one

respect: Unlike the prior plan, under

which they could choose any doctor without suffering a financial penalty, see Anne

Maltz, Health Insurance Fundamentals,

774 PLI Litig. 213, 235 (2008), they generally had to pay more for choosing an outof-plan doctor. It may be possible, to be

sure, that this reduction in the end benefitted some retirees in view of other improvements to the plan. See JA 1167 (describing ‘‘improvements sought by the Union’’

that were included in the new plans, including ‘‘full coverage (after modest copays)’’ for listed services such as ‘‘MRI

and CAT scans’’ and ‘‘[h]ospice care in

approved facility’’). But no evidence

shows that the change favored all retirees.

Other clues support this interpretation.

Consistent with the parties’ practices,

nothing in the text of the 1998 CBA said

that health-care coverage would be fixed

and irreducible into perpetuity for all employees who retired under it. At best,

under our cases, it established a right to

lifetime health-care benefits, but not benefits that could not change from CBA to

CBA. A letter of understanding, signed by

the contracting parties, points in the same

direction. Addressing the ‘‘Cost of

Healthcare Coverage,’’ it said that, ‘‘over

the term of the 1998 labor agreement,’’

retirees ‘‘who enrolled in a Company offered HMO, PPO or other plan’’ would not

be required to pay ‘‘any additional employee contributions above those which

may be required for enrollment in the

Case Network Plan.’’ JA 1304 (emphasis

added). Why ensure that no ‘‘additional’’

contributions would be required if the retirees’ benefits were locked in by the 1998

CBA or an earlier CBA? And why limit the

promise to ‘‘the term of the 1998 labor

agreement’’ if the parties intended to create ‘‘fully paid lifetime retiree health care

benefits’’ that could never be ‘‘reduce[d]’’?

JA 33.

The letter of understanding also shows

that the parties, quite understandably,

contemplated replacing some managed

care providers with others at some point in

the future. Given the realities of managed

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care, in which a new plan may fail to cover

providers or services that an old plan had

covered, the retirees had no basis for assuming that each replacement plan would

at best improve, or at worst precisely

maintain, the level of care provided to each

individual retiree. A plan that permits the

substitution of managed care providers is

one that envisions making tradeoffs in the

future that may negatively impact some

retirees, if not all retirees, and one that is

inconsistent with unalterable and irreducible health benefits—particularly those

analogized to vested pension benefits.

That is why the CBA—unless it says otherwise—should be construed to permit

modifications to benefits plans that are

‘‘reasonably commensurate’’ with the benefits provided in the 1998 CBA, ‘‘reasonable

in light of changes in health care’’ and

roughly consistent with the kinds of benefits provided to current employees. Zielinski v. Pabst Brewing Co., 463 F.3d 615,

619, 620 (7th Cir.2006); see also Diehl, 102

F.3d at 310 (examining a CBA creating

vested benefits and concluding that ‘‘we

see nothing to indicate that the Shutdown

Agreement established a right to a particular insurance carrier, or even to a particular plan’’).

Nor do the statements of company representatives to retirees show that these

benefits were unalterable as a matter of

law. One retiree, indeed, was told that his

health benefits may be ‘‘change[d] in a

future UAW contract.’’ JA 1450. And the

statements made to other retirees do not

support an unbending construction of the

CBA—and certainly do not do so as a

matter of law. A 1992 retiree was told

that his ‘‘insurance benefits [would] remain

in effect as long as [he was] living,’’ JA

891, and a retiree’s wife reports that, in

1997, a Case representative told her that if

her husband were to die she ‘‘would continue to get TTT health insurance for the

rest of [her] life’’ and that the coverage

‘‘wouldn’t cost [her] anything,’’ JA 1463.

But all of this is consistent with lifetime

benefits subject to reasonable changes.

That the benefits ‘‘wouldn’t cost anything’’

was true through the end of the CBA, and

the representation at any rate was made

during the term of the 1995 CBA. We

know that the contracting parties viewed

the 1995 CBA’s benefits as subject to some

changes because they changed them. The

retirees point us to no other extrinsic evidence that is contemporaneous with the

1998 CBA and that clearly establishes a

promise of lifetime benefits that can never

vary.

This conclusion makes sense not only in

the narrow circumstances of this case but

also within the broader context of ERISA,

which contemplated just this sort of flexibility. Congress chose not to impose a

one-size-fits-all concept of welfare-benefit

vesting, unlike the specific rules applicable

to pension benefits:

With regard to an employer’s right to

change medical plans, Congress evidenced its recognition of the need for

flexibility in rejecting the automatic

vesting of welfare plans. Automatic

vesting was rejected because the costs

of such plans are subject to fluctuating

and unpredictable variables. Actuarial

decisions concerning fixed annuities are

based on fairly stable data, and vesting

is appropriate. In contrast, medical insurance must take account of inflation,

changes in medical practice and technology, and increases in the costs of treatment independent of inflation. These

unstable variables prevent accurate predictions of future needs and costs.

Moore v. Metro. Life Ins. Co., 856 F.2d

488, 492 (2d Cir.1988). For these reasons,

Congress concluded that ‘‘[t]o require the

vesting of these ancillary benefits would

seriously complicate the administration

and increase the cost of plans whose pri2:09-cv-10918-PDB-MKM Doc # 101-15 Filed 05/14/12 Pg 12 of 14 Pg ID 4581
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Cite as 574 F.3d 315 (6th Cir. 2009)

mary function is to provide retirement income.’’ H.R.Rep. No. 93–807 (1974), reprinted in 1974 U.S.C.C.A.N. 4639, 4670,

4726; S.Rep. No. 93–383 (1973), reprinted

in 1974 U.S.C.C.A.N. 4639, 4890, 4935.

The matter, then, was left to employers,

employees and unions to handle by contract.

All of this requires us to modify the

district court’s judgment. ‘‘Plaintiffs are

entitled to vested lifetime retiree health

care benefits,’’ it concluded, ‘‘as provided

for in the labor agreements in effect at the

time of their or their deceased spouses’

retirement.’’ JA 111. To the extent this

ruling indicates that the retirees have a

vested right to receive health care benefits

for life, it is consistent with Yolton and our

other cases. But to the extent it suggests

that these benefits must be maintained

precisely at the level provided for in the

1998 CBA, it is not supported by the 1998

CBA, extrinsic evidence provided by the

parties or common sense. CNH, in short,

cannot terminate all health-care benefits

for retirees, but it may reasonably alter

them. With this guidance, we leave it to

the district court to decide how and in

what circumstances CNH may alter such

benefits—and to decide whether it is a

matter amenable to judgment as a matter

of law or not.

IV.

[12] The retirees cross-appeal the district court’s determination that they do not

have the constitutional right to a jury trial

on their claims for declaratory and injunctive relief. As they acknowledge, we have

held that the Seventh Amendment does

not guarantee a jury trial in ERISA and

LMRA cases because the relief is equitable rather than legal, and we did so in the

context of nearly identical claims to the

ones filed here. See Bittinger v. Tecumseh Prods. Co., 123 F.3d 877, 882–83 (6th

Cir.1997); Golden, 73 F.3d at 660–63.

Great–West Life & Annuity Co. v.

Knudson, 534 U.S. 204, 122 S.Ct. 708, 151

L.Ed.2d 635 (2002), the retirees respond,

represents intervening authority that allows us to reconsider these decisions. But

Knudson, first and foremost, is not a Seventh Amendment case. It dealt with

whether an action ‘‘seek[ing] TTT to impose

personal liability TTT for a contractual obligation to pay money-relief’’ falls within

§ 502(a)(3) of ERISA, 29 U.S.C.

§ 1132(a)(3), which authorizes suits for

‘‘appropriate equitable relief.’’ See Knudson, 534 U.S. at 209–10, 122 S.Ct. 708.

The Court’s conclusion—that such claims

were not covered by § 502(a)(3) because

they were legal in nature, not equitable,

see id. at 210, 220–21, 122 S.Ct. 708—does

not undermine our prior decisions. Golden, for example, acknowledged that ‘‘a

monetary award, generally, is a form of

legal relief,’’ 73 F.3d at 661, before concluding that in health-care benefits cases

like this one, any backward-looking relief

is at best ‘‘incidental’’ in comparison to the

primary goal of ensuring injunctive access

to health-care benefits in the future, id.

Knudson, by contrast, did not involve forward-looking relief but only ‘‘reimbursement TTT for past medical treatment,’’ 534

U.S. at 208–09, 122 S.Ct. 708, leaving the

Court no opportunity to say, much less

hold, anything that would lead us to second guess Golden. What is more, the

retirees offer no tenable response to

CNH’s argument that, because CNH continued to fund their benefits pending this

lawsuit, they have no right to seek any

damages based on its past conduct, further

undermining the analogy to Knudson.

Golden and Bittinger remain the law of

this circuit and require us to reject the

retirees’ jury-trial argument.

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V.

CNH challenges the district court’s

award of $1,426,948.75 in attorney’s fees

and $55,430.09 in costs to the retirees,

Reese, 2008 WL 2546936, at *5, a matter

that receives abuse-of-discretion review,

Gaeth v. Hartford Life Ins. Co., 538 F.3d

524, 528 (6th Cir.2008). In CNH’s view,

the retirees may not reap the benefits of

ERISA’s fee-shifting provision, 29 U.S.C.

§ 1132(g)(1), because they ‘‘litigated (and

won) this case purely on LMRA grounds,’’

Appellant Fee Br. at 11. But, as the

district court noted, the retirees have pursued their rights under the LMRA and

ERISA. Reese, 2008 WL 2546936, at *2.

And that is appropriate because, ‘‘[i]f the

parties intended to vest benefits’’ and

there is a breach of the agreement, ‘‘there

is an ERISA violation as well as an LMRA

violation.’’ Maurer, 212 F.3d at 914.

[13] CNH insists that, if the retirees

had filed this action solely under ERISA,

the Sprague standard would have applied,

and the retirees would have lost because

they would not have been able to point to

‘‘clear and express language’’ in the 1998

CBA granting lifetime benefits. Sprague,

133 F.3d at 400. This argument begins

from a false premise, however. The

Yard–Man test applies to claims for benefits that arise out of a CBA, and Sprague

is limited to cases in which an employer

‘‘unilaterally instituted a retiree benefit

program.’’ Maurer, 212 F.3d at 917. We

have never suggested that we would apply Sprague if a plaintiff had proceeded

only under an ERISA theory in claiming

benefits under a CBA; nor have we ever

upheld an LMRA claim while denying a

parallel ERISA claim. In light of our

longstanding practice of treating LMRA

and ERISA claims involving CBAs in an

identical manner, CNH’s argument—supported only by precedents that do not

involve a CBA, see, e.g., Sengpiel v. B.F.

Goodrich Co., 156 F.3d 660, 668 (6th Cir.

1998)—does not show that Sprague would

apply had the retirees filed a stand-alone

LMRA claim.

One point, however, does deserve attention on remand. The district court’s

award of fees relied in part on its conclusion that the retirees ‘‘prevailed on the

dispositive issue in this case,’’ see Reese,

2008 WL 2546936, at *3, which meant that

one of the factors in the fee-shifting analysis, ‘‘the relative merits of the parties’

positions,’’ see Gaeth, 538 F.3d at 534, favored their fee claim. That is no longer

so. While the plaintiffs have succeeded in

showing that they are entitled to lifetime

benefits, they have not shown that they

are entitled to unchangeable benefits. See

JA 33 (suggesting that the retirees viewed

any ‘‘modif[ication]’’ of their benefits as a

breach of the CBA). At least part of the

rationale for the fee award, then, may no

longer be sound. Because the decision to

award fees is placed in the sound discretion of the district court, not our court, see

29 U.S.C. § 1132(g); Moon v. Unum Provident Corp., 461 F.3d 639, 642 (6th Cir.

2006), and because it remains to be seen

how the court will handle the merits issues

on remand, we vacate the fee award and

will allow the district court to decide in the

first instance what award is appropriate in

the context of its final decision.

VI.

For these reasons, we affirm in part and

reverse in part and remand for further

proceedings.

,

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