UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

WILLARD L. SLOAN, EUGENE J. 

WINNINGHAM, and JAMES L. 

KELLEY,

Plaintiffs,

v.

BORGWARNER INC., 

BORGWARNER DIVERSIFIED 

TRANSMISSION PRODUCTS 

INC., and BORGWARNER 

FLEXIBLE BENEFITS PLANS,

Defendants.

Case 2:09-cv-10918-PDB-MKM

U.S. District Judge Paul D. Borman

U.S. Mag. Judge Mona K. Majzoub

BORGWARNER’S NOTICE OF SUPPLEMENTAL AUTHORITY

BorgWarner Inc., BorgWarner Diversified Transmission Products Inc., and 

BorgWarner Flexible Benefits Plans—referred to collectively as “BorgWarner”—

hereby notify the Court of Tackett v. M & G Polymers USA, LLC, Nos. 12-3329, 

12-3407, 2013 WL 4045989, at *1 (6th Cir. Aug 12, 2013) (attached), a 

supplemental authority relevant to BorgWarner’s pending motion for summary 

judgment. The motion is fully briefed and was argued before this Court on 

November 7, 2012.

BorgWarner has argued that it is entitled to summary judgment for either of 

two independent reasons. First, as a matter of law, Plaintiffs cannot prove an 

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 1 of 15 Pg ID 7299
2

agreement between the UAW and BorgWarner to vest their retiree health benefits 

because, among other things, the parties “agreed to disagree” about whether 

benefits were vested. (R. 95, Defs.’ Mot. 12–16.) Second, even if the benefits were 

vested, the changes BorgWarner made to Plaintiffs’ health benefits in May 2009

were reasonable and permissible under Reese v. CNH America LLC, 574 F.3d 315, 

324–27 (6th Cir. 2009). (R. 95, Defs.’ Mot. 16–19.) Plaintiffs responded to the 

Reese argument by complaining that the changes increased their share of the costs 

too much. (R. 112, Pls.’ Opp’n 13–14.)

Tackett speaks directly to the second issue and confirms that plan changes 

that increase costs to retirees can satisfy the Reese standard. In Tackett, the Sixth 

Circuit affirmed the district court’s determination that the retirees’ health benefits 

vested. 2013 WL 4045989, at *9. The district court, however, “ordered retirees and 

dependents enrolled in the pre-2007 Comprehensive Plan to be enrolled in the 

current Comprehensive Plan instead of being reinstated to the pre-2007 plan.” Id.

The district court found the 2007 changes—which increased co-payments, 

deductibles, and stop-loss limitations—reasonable under Reese. Id. The changes 

were not de minimis. For example, the stop-loss limit increased eightfold, from 

$500 per family to $4,000 per family. Id. The Sixth Circuit affirmed the district 

court’s assessment. Id.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 2 of 15 Pg ID 7300
3

Tackett provides an additional yardstick against which to measure 

BorgWarner’s 2009 changes.

Dated: August 21, 2013

Elisa Angeli Palizzi (P52088)

(angeli@millercanfield.com)

Miller, Canfield, Paddock and Stone, 

P.L.C.

150 West Jefferson, Suite 2500

Detroit, Michigan 48226

313.496.7635

313.963.6420 fax

Respectfully submitted,

s/Joshua David Rogaczewski

Bobby R. Burchfield

(bburchfield@mwe.com)

Joshua David Rogaczewski 

(jrogaczewski@mwe.com)

McDermott Will & Emery LLP

600 13th Street, Northwest

Washington, D.C. 20005

202.756.8000 

202.756.8087 fax

Attorneys for BorgWarner Inc., BorgWarner Diversified Transmission Products 

Inc., and BorgWarner Flexible Benefits Plans

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 3 of 15 Pg ID 7301
CERTIFICATE OF SERVICE

I hereby certify that on August 21, 2013, I electronically filed the foregoing 

BorgWarner’s Notice of Supplemental Authority with the Clerk of the Court 

using the ECF system which will send notification of such filing to all ECF 

participants.

s/Joshua David Rogaczewski

Joshua David Rogaczewski

(jrogaczewski@mwe.com)

McDermott Will & Emery LLP

600 13th Street, Northwest

Washington, D.C. 20005

202.756.8000 

202.756.8087 fax

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 4 of 15 Pg ID 7302
Only the Westlaw citation is currently available.

United States Court of Appeals,

Sixth Circuit.

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,

v.

M & G POLYMERS USA, LLC, M & G Polymers

USA, LLCComprehensive 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.

Nos. 12–3329, 12–3407.

Argued: March 15, 2013.

Decided and Filed: Aug. 12, 2013.

Background: Retirees, their spouses, and their dependents brought class action against employer, asserting claims under Labor Management Relations

Act (LMRA) and Employee Retirement Income Security Act (ERISA) arising from employer's alleged

violation of various collective bargaining agreement (CBA) provisions granting them lifetime contribution-free health care benefits. The district court

dismissed the action. Plaintiffs appealed. The Court

of Appeals, 561 F.3d 478, affirmed in part and reversed in part and remanded. On remand, the district court made a finding for plaintiffs on issue of

liability during a bench trial. The United States District Court for the Southern District of Ohio,

Gregory L. Frost, J., 853 F.Supp.2d 697, granted

plaintiffs' motion for permanent injunction. Parties

appealed.

Holdings: The Court of Appeals, Cole, Circuit

Judge, held that:

(1) district court did not clearly err in finding that

side letters that “capped” employer's contribution

toward cost of retiree health care benefits were not

part of prior CBA;

(2) any portions of CBA affecting retirees' benefits

had not been lawfully implemented by employer's

unilateral action after impasse had been reached in

bargaining;

(3) district court did not clearly err by declining to

find summary plan description (SPD) persuasive as

to whether retiree benefits had been capped;

(4) district court did not clearly err in finding that

prior retirees had vested right to receive contribution-free lifetime health care benefits; and

(5) district court did not clearly err in finding that

increased prescription drug costs and annual deductibles for retirees were not severe and unreasonable under comprehensive health care plan.

Affirmed.

West Headnotes

[1] Federal Courts 170B 0

170B Federal Courts

After a bench trial, the Court of Appeals reviews a district court's factual findings for clear error and its legal conclusions de novo.

[2] Federal Courts 170B 0

170B Federal Courts

The scope of a permanent injunction is reviewed for an abuse of discretion.

[3] Federal Courts 170B 0

170B Federal Courts

A district court abuses its discretion when it relies on clearly erroneous findings of fact, uses an

erroneous legal standard, or improperly applies the

law.

Page 1

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 5 of 15 Pg ID 7303
[4] Labor and Employment 231H 0

231H Labor and Employment

A health care plan is an ERISA welfare benefit

plan which, unlike a pension plan, does not vest

automatically, but only if the parties so intended

when they executed the applicable labor agreements; to vest, in this context, means to remain

binding beyond the expiration of the collective bargaining agreement. Employee Retirement Income

Security Act of 1974, § 2 et seq., 29 U.S.C.A. §

1001 et seq.

[5] Labor and Employment 231H 0

231H Labor and Employment

Substantive federal law governs the analysis of

whether the parties intended for an ERISA health

care plan to vest under a collective bargaining

agreement (CBA). Employee Retirement Income

Security Act of 1974, § 2 et seq., 29 U.S.C.A. §

1001 et seq.

[6] Labor and Employment 231H 0

231H Labor and Employment

District court did not clearly err in finding that

side letters that “capped” employer's contribution

toward cost of retiree health care benefits were not

part of prior collective bargaining agreement

(CBA); although “internal union conversations” appeared to indicate that at least some union representatives believed that cap letters applied, those

representatives did not participate in local bargaining and parties with authority to bind employer and

union rejected or disputed cap letter applicability.

[7] Federal Courts 170B 0

170B Federal Courts

Credibility determinations are a matter of fact

and a district court's determination regarding them

receives great deference.

[8] Labor and Employment 231H 0

231H Labor and Employment

Employers may lawfully implement portions of

a final offer after an impasse is reached in bargaining for a collective bargaining agreement (CBA).

[9] Labor and Employment 231H 0

231H Labor and Employment

Any portions of collective bargaining agreement (CBA) affecting retirees' benefits had not

been lawfully implemented by employer's unilateral

action after impasse had been reached in bargaining, since ability of employer to take unilateral action post-impasse applied only to mandatory topics

of bargaining, while retiree benefits were permissive topic.

[10] Labor and Employment 231H 0

231H Labor and Employment

District court did not clearly err by declining to

find summary plan description (SPD) persuasive as

to whether retiree benefits had been capped, when

determining whether retirees had vested right to receive contribution-free health care benefits; although court was permitted to consider SPD as extrinsic evidence, SPDs were not legally binding, nor

parts of the benefit plans themselves. Employee Retirement Income Security Act of 1974, § 2 et seq.,

29 U.S.C.A. § 1001 et seq.

[11] Labor and Employment 231H 0

231H Labor and Employment

District court did not clearly err in finding that

prior retirees had vested right to receive contribution-free lifetime health care benefits, since intent

to vest was in accordance with collective bargaining agreement (CBA) language promising a “full

contribution” to qualifying employees; although

union subsequently made concessions, union could

not modify them without retirees' permission.

[12] Labor and Employment 231H 0

231H Labor and Employment

The interpretation of a collective bargaining

agreement (CBA) is a matter of law only when the

Page 2

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 6 of 15 Pg ID 7304
parties rely wholly on the terms of the CBA and do

not present any extrinsic evidence of intent.

[13] Labor and Employment 231H 0

231H Labor and Employment

In the interpretation of a collective bargaining

agreement (CBA) where the parties present extrinsic evidence of intent, the determination of intent becomes a mixed question of both law and fact, for

which the standard of review is clear error.

[14] Labor and Employment 231H 0

231H Labor and Employment

A court determines whether the parties to a collective bargaining agreement (CBA) intended benefits to vest by applying traditional rules of contract

interpretation, as long as doing so is consistent with

federal labor policies.

[15] Labor and Employment 231H 0

231H Labor and Employment

To interpret the language of a collective bargaining agreement (CBA), a court must: (1) look to

the explicit language, (2) evaluate that language in

light of the context that led to its use, (3) interpret

each provision as part of the integrated whole, (4)

construe each provision consistently with the entire

document and the relative positions and purposes of

the parties, (5) construe the terms so as to render

none nugatory and to avoid illusory promises, (6)

look to other words and phrases in the document to

resolve ambiguities, and (7) review the interpretation for consistency with federal labor policy.

[16] Labor and Employment 231H 0

231H Labor and Employment

District court did not clearly err in finding that

increased prescription drug costs and annual deductibles for retirees who had vested right under

collective bargaining agreement (CBA) to receive

contribution-free lifetime health care benefits were

not severe and unreasonable under comprehensive

health care plan, in light of changes in health care,

where co-pay for generic drugs went from $4 to

$10, annual prescription drug deductible went from

$175 to $250, and maximum out-of-pocket limit

went from $500 to $4,000 per family.

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.

ARGUED: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. ON BRIEF: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.

OPINION

COLE, Circuit Judge.

*1 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.

FN1 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.

Page 3

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 7 of 15 Pg ID 7305
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.

I.

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.”

*2 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

Page 4

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 8 of 15 Pg ID 7306
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 “1997 CBA,” effective until November 6,

2000.

M & G bought Apple Grove in 2000. In

September 2000, M & G and the USW and Local

644 entered into the “2000 CBA.” A P & I Agreement, effective on Nov, 6, 2000, accompanied the

2000 CBA. In 2003, M & G and the USW, acting

on behalf of Local 644, began bargaining over the

next collective bargaining agreement. The bargaining continued through August 2005, and included

more than sixty days of negotiations. On August 9,

2005, M & G and the USW on behalf of Local 644

entered the “2005 CBA,” to be effective August 9,

2005 to November 5, 2008. The 2005 CBA included Letter of Understanding 2003–6 (“LOU

2003–6”). All Plaintiffs were, prior to retirement,

active employees under one or more of the above

CBAs.

*3 The 2000 P & I contained the following language:

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.

The 1994 and 1997 P & I Agreements contained similar language.FN2 Each P & I Agreement, once reached, was printed as a booklet and

distributed to local union members.

The side letters were also known as “cap letters” because they “capped” the company's contribution towards the cost of retiree health care benefits. 1991 Letter G was the first such letter. 1994

Letter G, 1997 Letter H and LOU 2003–6 were also

“cap letters,” similar to 1991 Letter G, specifying

various coverage maximums and “bite dates” when

required contributions would begin. The letters

were not reproduced in P & I booklets and allegedly not ratified as part of the local agreement.

In December 2006, M & G announced that it

would begin requiring retirees to contribute to the

cost of their medical benefits. See Tackett v. M & G

Polymers, USA, LLC (Tackett I), 561 F.3d 478, 480

(6th Cir.2009) (per curiam). At the time, each

Plaintiff was enrolled in either (1) the Medical Necessity Plan; (2) the Catastrophic Plan; or (3) the

Comprehensive Plan. Some Plaintiffs refused to

pay premiums and were dropped from coverage.

Other Plaintiffs paid premiums, even if under

protest, and remained enrolled in their plans.

Plaintiffs filed suit on February 9, 2007.

Plaintiffs contended that the promise of a “full

Page 5

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 9 of 15 Pg ID 7307
Company contribution towards the cost of [health

care] benefits” in the CBAs provided them with a

vested right to receive health care benefits in retirement without making any contributions. Tackett I,

561 F.3d at 482. Defendants contended that various

other agreements between Local 644 and the successive employers, specifically the cap letters, limited that promise.

Plaintiffs' amended complaint stated three

claims: (1) violation of labor agreements under §

301 of the Labor Management Relations Act

(“LMRA”), 29 U.S.C. § 185(a); (2) violation of an

employee welfare benefit plan under §§

502(a)(1)(B) of the Employee Retirement Income

Security Act of 1974 (“ERISA”), 29 U.S.C. §§

1132(a)(1)(B); and (3) breach of fiduciary duty under § 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3).

The district court granted Defendants' motion

to dismiss on all three counts and Plaintiffs appealed to this Court. We affirmed the dismissal of

the breach of fiduciary duty claim, but reversed the

dismissals of and remanded the first two claims.

Tackett I, 561 F.3d at 493. Then, the district court

conducted a bench trial on the issue of liability.

*4 Eight witnesses testified at the bench trial.

For Plaintiffs: two Apple Grove retirees (Woodrow

Pyles and Hobert Tackett), and four former union

negotiators (Ron Hoover, Randall Moore, Karen

Shipley, and Brian Wedge). For Defendants: M &

G's Human Resources director for Apple Grove

(Kimm Korber), and a former M & G negotiator

(Robert Long). The district court opinion amply

summarizes their testimonies. See Tackett v. M & G

Polymers USA, LLC, 853 F.Supp.2d 697, 703–09

(S.D.Ohio 2012).

After the trial, the district court found in favor

of Plaintiffs on both remaining claims. Plaintiffs

moved for a permanent injunction to reinstate their

lifetime contribution-free health care benefits. The

district court ordered that Plaintiffs be reinstated,

but to the post–2007 versions of their plans.

Defendants appeal the liability ruling and, accordingly, seek to have the permanent injunction

dissolved. Plaintiffs appeal the portion of the permanent injunction that orders retirees and dependents previously enrolled in the pre–2007 Comprehensive Plan or Catastrophic Plan to be enrolled in

the current Comprehensive Plan instead of being reinstated to the pre–2007 Comprehensive Plan.FN3

II.

[1][2][3] After a bench trial, we review the district court's factual findings for clear error and its

legal conclusions de novo. Lincoln Elec. Co. v. St.

Paul Fire & Marine Ins. Co., 210 F.3d 672, 683

(6th Cir.2000) (citation omitted). We review the

scope of a permanent injunction for an abuse of discretion. Lee v. City of Columbus, 636 F.3d 245, 249

(6th Cir.2011) (citation omitted). “The district court

abuses its discretion when it relies on clearly erroneous findings of fact, uses an erroneous legal

standard, or improperly applies the law.” See

United States v. Lawrence, 555 F.3d 254, 261 (6th

Cir.2009) (quotation omitted).

[4][5] The liability determination in this case

hinges on whether the collectively bargained agreements between Plaintiffs and Defendants vested in

Plaintiffs a right to lifetime no-contribution health

care benefits. A health care plan is a welfare benefit

plan which, unlike a pension plan, does not vest

automatically, but only “if the parties so intended

when they executed the applicable labor agreements.” See Noe v. Polyone Corp., 520 F.3d 548,

552 (6th Cir.2008). To vest, in this context, means

to remain binding “beyond the expiration of the

collective bargaining agreement.” See UAW v.

Yard–Man, Inc., 716 F.2d 1476, 1479 (6th

Cir.1983). Substantive federal law governs the analysis. See id.

A.

In Tackett I, we said that the P & I language indicated a desire to vest benefits:

First, the “full Company contribution” language suggests that the parties intended the emPage 6

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 10 of 15 Pg ID 7308
ployer to cover the full cost of health-care benefits for those employees meeting the age and

term-of-service requirements. Keeping in mind

the context of the labor-management negotiations

identified in Yard–Man, [716 F.2d 1476 (6th

Cir.1983) ] we find it unlikely that Plaintiff USW

would agree to language that ensures its members

a “full Company contribution,” if the company

could unilaterally change the level of contribution. The CBA has no limitation on the amount of

a company contribution and if the Defendants' argument were accepted, the company presumably

could lower the contribution to zero without violating this language. Such a promise would be illusory.

*5 Second, the limiting language, “[e]mployees

will be required to pay the balance of the health

care contribution,” follows the provision requiring contributions by those retirees who had not

attained the requisite seniority points. From the

placement of this language, we can reasonably infer that it did not apply to all retirees, but only to

those retirees who had not attained the requisite

seniority points.

Third, the collective bargaining agreement tied

eligibility for health-care benefits to pension benefits. This is another factor indicating that the

parties intended the health care benefits to vest

upon retirement.

561 F.3d at 490. Subsequently, we described

this analysis as “[t]he determination above that the

parties intended health care benefits to vest [which]

carries over to the ERISA § 502(a)(1)(B) claim.”

Id. at 491. According to the district court, “[b]y

presenting the intended vesting as a fact leading to

the result that Plaintiffs had presented a plausible

claim, the appellate court pointedly issued a conclusion instead of merely recognizing a credible possibility.”

Although we applied general principles of contract interpretation in Tackett I, see 561 F.3d at

489–90, we did not apply them to a complete factual record as would have been necessary for a conclusive determination of the vesting issue. For example, it was a matter of factual dispute whether

the side letters were part of the CBA. If part of the

CBA, they would have been relevant to the issue of

vesting. However, this Court found them to be

“extrinsic” to the Rule 12(b)(6) analysis because

they were not part of the pleadings. See id. at 487 n.

6 (citing approvingly the district court's “note[ ]”

that the “ ‘unusual’ procedural posture of the case

... allowed the court to consider the Letter Agreements in a [Rule] 12(b)(1) motion but not in the

[Rule] 12(b)(6) motion.”).

Tackett I also limited its “determination[s]” to

the Rule 12(b)(6) context in two other ways. First,

prior to embarking on the Rule 12(b)(6) analysis,

which contains the language relied on by the district court, the Tackett I panel pointedly declined to

convert Defendants' Rule 12(b)(6) motion into a

Rule 56 motion for summary judgment. See id. at

487–88. The panel concluded that it “w[ould] not

consider matters extrinsic to the pleadings and

[would] proceed to review the district court's Rule

12(b)(6) analysis.” Id. at 488. Second, the panel acknowledged the possibility that the district court

might determine on remand that Plaintiffs did not

have vested benefits. See id. at 493 n. 11. For these

reasons, Tackett I did not conclusively determine

that Plaintiffs' retirement benefits had vested.

B.

[6] Fortunately, the district court's determination that benefits had vested did not rest solely on a

misinterpretation of Tackett I. The district court

also performed its own analysis of the facts, which

led it to conclude that the cap letters were not part

of the Apple Grove CBA and that vesting occurred.

The district court considered the following evidence, in addition to the P & I agreement: (1) documents indicating an agreement between the union

and the employers to “cap” health benefits, several

“side” letters and the SPD, which were part of the

“master” agreements; (2) P & I booklets circulated

to Apple Grove employees that described, among

Page 7

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 11 of 15 Pg ID 7309
other things, retiree benefits, and did not contain

any “capping” documents; (3) testimony from individuals involved in “master” negotiations, Apple

Grove local negotiations or both. See Sw. Williamson Cnty. Cmty. Ass'n, Inc. v. Slater, 173 F.3d

1033, 1036 (6th Cir.1999) (citing Dandridge v. Williams, 397 U.S. 471, 475 n. 6, 90 S.Ct. 1153, 25

L.Ed.2d 491 (1970)) (holding that an appellate

court can affirm district court on alternate grounds

supported by the record).

*6 Whether the cap letters were part of Apple

Grove's CBAs is an issue of fact, reviewable only

for clear error. See Thomasville Furniture Indus.,

Inc. v. JGR, Inc., 3 F. App'x 467, 473 (6th

Cir.2001) (“Whether a given document is part of a

written contract is a question of fact.” (citing

Greenberg v. The Life Ins. Co. of Va., 177 F.3d

507, 516 (6th Cir.1999) (additional citation omitted))). The district court did not clearly err in finding the cap agreements inapplicable to Apple

Grove.

M & G argues that the conduct of union representatives from 1991 to 2005 was inconsistent with

the district court's interpretation of the CBAs and P

& Is as not including the cap letters. M & G claims

that even the testimony of Plaintiffs' witnesses

demonstrates that union representatives did not believe there was a vested right to lifetime nocontribution benefits for Apple Grove retirees. The

most persuasive evidence cited by M & G is the

“internal union conversations” that appear to indicate that at least some union representatives believed

the cap letters to apply. Moore testified that he had

been told by some local committee members that

the 1997 Letter H applied, but that, despite

“seach[ing] extensively,” he could not find “any

document indicating it had been adopted or ratified

by the local.” Hoover advised Moore and Shipley

that “if” they used “a letter like Goodyear,” they

should “move the damn dates out or your retirees

are going to get hit with a premium.” Moore testified that Shipley told him that she was told “to be

aware that there was a Letter H.”

Although these statements certainly have the

potential to imply that cap agreements were applicable, they need not be dispositive. Hoover participated in the master bargaining, which undisputedly

included cap letters. However, he did not participate in local bargaining for Apple Grove, and the

fact that he told some Apple Grove negotiators

about the cap letters in the master agreement does

not demonstrate that they applied to Apple Grove,

especially since he qualified his advice with the

word “if.” At best, Hoover and Moore acknowledged the possibility that the cap letters applied to

Apple Grove, but neither had any firm knowledge

or documentation of the letters' applicability. In the

face of such ambiguity, the district court did not

clearly err by concluding that the letters did not apply to Apple Grove.

In sorting through conflicting recollections of

negotiations, the district court noted that several

parties with authority to bind M & G and the union

rejected or disputed cap letter applicability. M & G

objects to the district court's “focus on what union

entity can ‘bind’ the union” as an error of law. M &

G argues that “[q]uestions regarding who can ‘bind’

the union ... are unrelated to the probative value of

evidence regarding what local bargaining committee members have done or said about past bargaining or past agreements.”

[7] The district court did not, as M & G claims,

treat statements of those with “binding authority”

as dispositive, but it did appear to weigh these

statements more heavily than statements from those

without binding authority. Credibility determinations are a matter of fact and the district court's determination receives great deference. See United

States v. Esteppe, 483 F.3d 447, 452 (6th Cir.2007).

It is not unreasonable to infer that a party with authority to bind would be more likely to be informed

regarding important documents.

*7 M & G describes the district court as

“find[ing] that the collective bargaining agreement

was enforceable only as to specific items described

during ratification votes,” and cites Teamsters LocPage 8

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 12 of 15 Pg ID 7310
al 589 (Jennings Dist., Inc.), 349 NLRB 124, 128

(2007) for its argument that such a “deficiency”

does not void union ratification of an agreement.

The district court did not, as M & G suggests, use

the non-presentation of the cap letters as an “escape

mechanism” from an otherwise-ratified agreement.

Rather, Apple Grove employees' lack of knowledge

regarding the cap letters was cited as an example of

absence of evidence of the letters' inclusion in the

Apple Grove agreements. As Plaintiffs point out,

this was “but one piece of evidence among many.”

Similarly, the district court did not err by considering the lack of awareness of the cap letters on

the part of Shell's accountants and M & G's actuaries. The district court merely noted the absence of

the type of evidence of the cap letters' applicability

to Apple Grove that one would expect to see if Defendants' account of events was credible. The district court properly treated such lack of awareness

as circumstantial, not “dispositive,” evidence that

the cap letters did not apply to Apple Grove.

[8] M & G argues that LOU 2003–6, which

permitted collecting contributions from retirees

whose insurance costs exceeded the caps set forth

in the 2001 Letter H, was applicable to all

Plaintiffs, including those who retired prior to August 9, 2005, because employers may lawfully implement portions of a final offer after an impasse is

reached in bargaining. See United Paperworkers

Int'l Union v. NLRB, 981 F.2d 861, 866 (6th

Cir.1992) (per curiam).

[9] In early 2004, when LOU 2003–6 was unilaterally implemented by M & G, any portions affecting then-retirees' rights were not lawfully implemented because the ability to take unilateral action post-impasse only applies to mandatory topics

of bargaining, see Taylor Warehouse Corp. v.

NLRB, 98 F.3d 892, 902 (6th Cir.1996), while retiree benefits are a permissive topic. See Yard–Man,

716 F.2d at 1482. Furthermore, in August of 2005,

when LOU 2003–6 became part of the 2005 CBA,

it could not be applied to pre-August 9, 2005 retirees because their benefits had already vested, as described below.

[10] Finally, M & G cites the SPD as evidence

that retiree benefits were capped. However, SPDs

“are not legally binding, nor parts[ ] of the benefit

plans themselves.” Engleson v. Unum Life Ins. Co.

of Am., ––– F.3d ––––, No. 12–4049, 2013 WL

3336741, at *7 (6th Cir.2013) (quotation marks and

citations omitted). Although the district court was

permitted to consider the SPD as “extrinsic evidence,” see Moore v. Menasha Corp., 690 F.3d 444,

456 (6th Cir.2012), we cannot say that the district

court clearly erred by declining to find it persuasive.

C.

[11][12][13] Given that the district court did

not clearly err in finding that the cap letters were

not part of the pre–2005 CBAs, the district court

also did not clearly err in interpreting the pre–2005

CBAs as vesting a right to lifetime contributionfree benefits in the pre-August 9, 2005 retirees. Interpretation of a CBA is a matter of law only when

the parties rely wholly on the terms of the CBA and

do not present any extrinsic evidence of intent. See

Yard–Man, 716 F.2d at 1480 n. 1. In this case, the

determination of intent becomes a mixed question

of both law and fact, for which the standard of review is clear error. See id.

*8 [14][15] We must determine whether the

parties intended benefits to vest by applying traditional rules of contract interpretation, as long as doing so is consistent with federal labor policies. Id.

at 1479. To interpret the language of a CBA, we

must:

(1) “look to the explicit language,” (2) evaluate

that language “in light of the context” that led to

its use, (3) “interpret each provision ... as part of

the integrated whole,” (4) construe each provision “consistently with the entire document and

the relative positions and purposes of the

parties,” (5) construe the terms “so as to render

none nugatory” and to “avoid illusory promises,”

(6) look to other words and phrases in the docuPage 9

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 13 of 15 Pg ID 7311
ment to resolve ambiguities, and (7) “review the

interpretation ... for consistency with federal

labor policy.”

Tackett I, 561 F.3d at 489 n. 7 (quoting

Yard–Man, 716 F.2d at 1479–80).

Though Tackett I was not conclusive on the

vesting issue as a whole, it is conclusive on a narrower question: that of whether the quoted “explicit

language” of the CBA, in the absence of “other

words and phrases in the document” such as the cap

letters, indicates an intent to vest. Tackett I interpreted the quoted language of the CBA, standing

alone, as indicating intent to vest and this interpretation bound the district court, while leaving it free

to make its own conclusion about the ultimate question of vesting based on other portions of the document, extrinsic evidence or both. See, e.g. Yolton v.

El Paso Tenn. Pipeline Co., 435 F.3d 571, 579 (6th

Cir.2006) ( “When ambiguities exist, courts may

look to other provisions of the document and other

extrinsic evidence.”) (citation omitted). The qualifying language in Tackett I implied that the CBA

language, though indicating intent to vest, contained enough ambiguity to permit examination of

such additional evidence.

The district court's presumption that, in the absence of extrinsic evidence to the contrary, the

agreements indicated an intent to vest lifetime contribution-free benefits was in accordance with both

Tackett I and the CBA language promising a “full

contribution” to qualifying employees. To the extent that vesting was presumed, it was not the district court that, sua sponte, shifted the burden of

proof, but rather the language of the CBA and its

linkage of health care benefits to pension benefits,

see Reese v. CNH America LLC, 574 F.3d 315, 322

(6th Cir.2009), that led to the conclusion that retirees had a vested right to health care benefits and, in

the absence of evidence to the contrary, a vested

right to contribution-free health care benefits. Having reached the conclusion that benefits were vested, it was then reasonable for the district court to

conclude that those benefits could not be bargained

away without retiree permission.

M & G points out that we have previously said

that vesting of contribution-free health care benefits

should not be presumed “simply ... because none of

the CBA documents provided that retirees ‘would

be required’ to pay premium contributions.” Wood

v. Detroit Diesel Corp., 213 F. App'x 463, 466 (6th

Cir.2007). But in this case, the 2000 CBA, and the

others with similar language, specifically promised

a “full Company contribution” towards health care

benefits. Furthermore, in Detroit Diesel, there were

applicable “Supplemental Agreements” advising retirees that they “ ‘may be required to make monthly

contributions' “ and that “rates of payment, coverages, and terms and conditions of the program were

all subject to change by Detroit Diesel at any time

on reasonable notice.” Id. at 467. In the present

case, the analogous capping agreements are not applicable. Finally, even in Detroit Diesel, where

there was weaker evidence of affirmative intent to

vest and stronger anti-vesting evidence, this Court

still concluded that the plaintiffs had sufficient likelihood of success on the merits, even though it

“[might] not [have been] a ‘strong’ likelihood,” to

warrant preliminary injunctive relief. See id. at 471.

The district court's analysis does not conflict with

that in Detroit Diesel.

*9 M & G also contends that, because the USW

recently agreed that retirees must make medical

contributions, Apple Grove retirees cannot possibly

have a vested right to lifetime contribution-free

health care. However, if benefits are vested, then

subsequent concessions by the union cannot modify

them without retirees' permission. See Allied Chem.

& Alkali Workers of Am., Local Union No. 1 v. Pittsburgh Plate Glass Co., Chem. Div., 404 U.S. 157,

181 n. 20, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971).

Given the inapplicability of the capping agreements, the district court did not clearly err in finding that pre-August 9, 2005 retirees had a vested

right to receive contribution-free health care benefits.

Page 10

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 14 of 15 Pg ID 7312
D.

[16] Plaintiffs cross-appeal the scope of the

permanent injunction. They contend that the district

court abused its discretion when it ordered retirees

and dependents previously enrolled in the pre–2007

Comprehensive Plan to be enrolled in the current

Comprehensive Plan instead of being reinstated to

the pre–2007 plan.

Plaintiffs argue that the district court misapplied Reese v. CNH America. In Reese, we held that

retirees whose lifetime health care benefits had vested could nonetheless be subject to “reasonable

changes” in their health care benefits, as long as the

changes were “reasonable in light of changes in

health care” and “roughly consistent with the kinds

of benefits provided to current employees.” 574

F.3d at 326 (citations omitted). However, this was

only the case because the CBA did not contain any

statements to the contrary. See id.

Plaintiffs argue that the P & I agreements specify the precise benefits provided to retirees. They

cite, for example, the 2000 P & I stating that

“[a]fter the date of the Employee's retirement, the

deductible ... shall be limited to $175 per person,

$350 per family ....“ However, they do not explain

why these plan specifics, unlike those in Reese, are

vested for life. Plaintiffs argue that vested no-cost

medical coverage would be illusory if the Comprehensive Plan is “allowed to be whittled away under

the guise of ‘plan design changes' until no shred ...

remained,” but that is a red herring because our

reasonableness requirement does not permit such an

extreme “whittling.”

The 2007 changes to the Comprehensive Plan

that Plaintiffs point to were not unreasonable.

Plaintiffs cite increased prescription drug costs and

annual deductibles that do not appear to be severe

and unreasonable (e.g., co-pay for generic drugs

going from $4 to $10, annual prescription drug deductible going from $175 to $250). The increase in

the maximum out-of-pocket limit from $500 to

$4,000 per family is the most significant change

cited, but not so large that the district court clearly

erred in finding it to be “reasonable in light of

changes in health care.” Id. at 326 (quotation marks

omitted).

III.

For the above reasons, we affirm the judgment

of the district court.

FN1. Hobert Freel Tackett; Woodrow K.

Pyles; Harlan B. Conley; and United Steel,

Paper & Forestry, Rubber, Manufacturing,

Energy, Allied Industrial & Service Workers International Union.

FN2. The 1994 and 1997 Master P & Is

contain nearly identical language, except

instead of referencing the “1993 Pension

plan,” they reference the “1950 Pension

Plan.” The 1991 P & I states:

Employees who retire with 10 or more

years of continuous service and who are

eligible and receiving a monthly pension

under the 1950 Pension Plan for a pension (other than a deferred vested pension), shall receive the benefits described in this [section]; provided,

however, that each Employee eligible

under the 1950 Pension Plan for a deferred vested pension whose employment with the Employer is terminated

during or subsequent to the month in

which he attained age 60 shall also receive such benefits effective as of the

first day of the month for which he receives a deferred vested pension.

FN3. Plaintiffs previously enrolled in the

Medical Necessity Plan do not object to

being enrolled in the current version.

C.A.6 (Ohio),2013.

Tackett v. M & G Polymers USA, LLC

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

END OF DOCUMENT

Page 11

--- F.3d ----, 2013 WL 4045989 (C.A.6 (Ohio))

(Cite as: 2013 WL 4045989 (C.A.6 (Ohio)))

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

2:09-cv-10918-PDB-MKM Doc # 122 Filed 08/21/13 Pg 15 of 15 Pg ID 7313