Opinion ID: 6982231
Heading Depth: 1
Heading Rank: 2

Heading: facts

Text: The facts in this case are not complicated in and of themselves, but they are complicated by other relevant cases. Plaintiffs filed a related ease in the United States District Court in the Southern District of New York — Devlin v. Transportation Communications Int’l Union, 95 Civ. 0742 (S.D.N.Y.1995) (“D din /”) — mentioned above, from which a discussion of this ease cannot be divorced. As well, other relevant litigation was and continues to be pending in the United States District Court for the District of Maryland. All of this we will address in turn below. The Parties Robert J. Devlin, Andrew Hagan, Thomas Hewson, Steven Milone, and Frederick Rinckwitz are retired officers, members, and former employees of the Transportation Communications International Union. Defendanb-Appellee Robert A. Scardelletti is the International President of the Union. Medical Benefits For many years the Union provided its retirees with medical benefits at no cost to the retirees under the Railway Labor Organizations Group Life, Hospital, Surgical and Medical Insurance Plan (“the Plan”). However, retirees were notified that, effective January 1, 1994, they would be required to pay $100 per month to maintain their medical benefits. Active employees were provided with free medical benefits and were not affected by the January 1, 1994, change. The change in the provision of retiree benefits was achieved through an authorization in the Plan Instrument. The Plan Instrument provides that “The Organizations participating in the Group Policies shall have the right to terminate, suspend, withdraw, amend or modify the Plan in whole or in part at any time.” Retirees were allegedly told more than once by TCU officials, both before and after retiring, that their health benefits would be paid throughout their retirement. The alleged communications stating such were both written and oral and included a 1964 letter to Union members and officers from the Grand President of the Brotherhood of Railway and Steamship Clerks. 1 On February 2, 1995, the same parties who are plaintiffs in the instant matter filed suit in Devlin I (against the instant defendants, and one additional party) challenging the imposition of the $100 charge for retirees’ medical benefits. The plaintiffs asserted claims under (1) the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq. (“ERISA”); (2) New York state law prohibitions on age discrimination, see New York Human Rights Law, N.Y. Exec. Law §§ 290 et seq.; and (3) common-law breach of contract. By Opinion and Order dated June 26, 1995, the district court held that plaintiffs’ state-law claims for age discrimination and breach of contract were preempted under § 514 of ERISA, 29 U.S.C. § 1144. In dismissing the age discrimination claim, the court noted that plaintiffs had argued that their state-law claim withstood preemption because it alternatively could have been pled as a federal age discrimination claim under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq. The court stated that “[i]f Plaintiffs have a federal age discrimination claim, they should plead it.” Devlin v. Transportation Communications Int’l Union,. No. 95 Civ. 0742, 1995 WL 380374, at  (S.D.N.Y. June 26, 1995). In a subsequent order, dated September 15, 1997, the district court granted summary judgment for defendants, dismissing the remainder of plaintiffs’ complaint. Judgment was entered in Devlin I on September 17, 1997. (Plaintiffs brought a separate appeal from Devlin I, which we also decide today. In that case, Devlin v. Transportation Communications Int’l Union, 173 F.3d 94 (2d Cir.1999), we affirm in part, reverse in part, and remand.) As will be discussed more fully below, plaintiffs filed the instant action, Devlin v. Transportation Communications Int’l Union, 95 Civ. 10836 (S.D.N.Y.1995) (“Devlin II ”), in the district court on December 22, 1995 — that is, after the district court had dismissed plaintiffs’ state-law claims in Devlin I as preempted, but before the court had either ruled on the remaining ERISA claims or entered judgment in that case. In contrast to Devlin I, plaintiffs’ complaint in the instant action pled a claim under the ADEA. In addition, the complaint in this case challenged defendants’ acts besides those taken with respect to the Medical Benefits Plan. We turn now to those other acts. Death Benefits The Union maintained a Death Benefit Fund, which paid $300 to the member’s or retiree’s family upon the retiree’s or member’s death. The dollar amount was not increased from $300 since approximately 1930, allegedly because the fund was in financial trouble. The Death Benefit was eliminated in 1995 at the 1995 TCU convention, effective January 1, 1996. The Union justified the elimination on the basis of financial necessity. Retirement Plan COLA TCU maintains a pension plan, known as the “TCU Staff Retirement Plan,” which is administered by designated trustees. In 1990, the trustees implemented an automatic Cost of Living Adjustment (“COLA”) to the Retirement Plan effective January 1,1991. In 1995, the current trustees of the Retirement Plan filed suit against the 1990 trustees in the United States District Court for the District of Maryland, alleging that the COLA amendment was enacted in breach of the 1990 trustees’ fiduciary duty because the COLA amendment put an excessive strain on the Union’s funds. See Scardelletti v. Bobo, 897 F.Supp. 913 (D.Md.1995) (“Bobo I”). The Maryland district court ruled in part that the 1990 trustees had breached their fiduciary duties. See Scardelletti v. Bobo, 1997 U.S. Dist. LEXIS 14498, at -27 (D.Md. Sept. 8, 1997). In addition, the court held that plaintiffs, as current trustees of the Retirement Plan, could repeal the 1991 COLA amendment as to the retirees who retired before 1991. 2 See id. at -33. Shortly thereafter, on October 6, 1997, the Executive Council of the TCU adopted a Plan amendment repealing the benefits granted by the COLA amendment to the Plan participants who separated from service with the TCU prior to 1991. On October 14, 1997, Robert Scardellet-ti, Frank Ferlin, Jr., Joel Parker, and Don Bujold, who are the current trustees of the Retirement Plan, brought suit in the United States District Court for the District of Maryland for declaratory and injunctive relief against Robert J. Devlin, Thomas deBarr, Donald A. Bobo, R.I. Kilroy, F.T. Lynch, and Frank Mazur, individually and as representatives of a class including all participants and their beneficiaries of the Retirement Plan who earned service credit under the Retirement Plan before May 15, 1993. See Scardelletti v. Devlin, 97 Civ. 3464 (JFM) (D.Md.1997) (“Bobo II”). The plaintiffs in Bobo II identified the questions before the court, common to the defendant class, as (a) whether the 1991 COLA amendment should be declared null and void as of the date of its adoption since the court in Bobo I found that it was adopted as a result of a breach of fiduciary duty by the former Retirement Plan trustees and (b) whether the October 6, 1997, amendment to the Plan which eliminated the 1991 COLA increase and all future increases for those Plan participants who left service prior to January 1, 1991, was a lawful amendment. The plaintiffs requested, among other things, a declaratory judgment that the October 6, 1997, Retirement Plan amendment did not violate ERISA. In response to a claim by Devlin — who was originally the named defendant in Bobo II — that he could not properly represent a defendant class in Maryland, the court granted leave to name a new representative plaintiff on June 5, 1998. 3 This litigation is currently pending in Maryland, with a settlement conference scheduled for April 1999. The Instant Case Plaintiffs-appellants Robert J. Devlin, Andrew Hagan, Thomas Hewson, Steven Milone, and Frederick Rinckwitz filed a class action complaint in the United States District Court for the Southern District of New York against the TCU and Scardel-letti. See Devlin II. The plaintiffs alleged three categories of claims: (1) COLA claims; (2) medical benefits claims; and (3) Death Benefit Fund claims. The plaintiffs complained of age discrimination in the Union’s abolition of the Death Benefit Fund. The plaintiffs alleged that the elimination of the Fund was motivated by an “age-based animus against the plaintiffs,” and it was also a retaliatory action against the plaintiffs for having made complaints about the reduction in other retiree benefits. Complaint, ¶ 36, at 9. The plaintiffs maintained that the elimination of the Fund constituted discrimination because it benefited the younger, active Union members by making more funds available to them. The plaintiffs also made a wrongful conversion claim, alleging that “Defendants have acted to appropriate to themselves or for their benefit the $4,600,000 [ ] Death Benefit Fund.” Complaint, ¶ 23, at 6. With respect to the COLA amendment to the Retirement Plan, the plaintiffs alleged that, while the amendment was not eliminated at the time the complaint was filed, the Union’s intention to eliminate the COLA amendment was “motivated by defendants’ invidious[,] age-based discriminatory animus towards plaintiffs and others similarly situated.” Complaint, ¶ 67, at 15. The plaintiffs alleged that the requirement that the retirees pay $100 per month for their medical benefits constituted age discrimination because the “younger, active officers and employees” did not have to pay for medical benefits. Complaint, ¶ 85, at 20. The plaintiffs maintained that the defendants’ justification' — 'that the cost was imposed on the retirees to address the high health care costs — was a pretextual reason used to mask discrimination because it was factually untrue, as retirees’ benefits are primarily covered by Medicare. Complaint, ¶ 89, at 21. The defendants moved, pursuant to Fed. R.Civ.P. 12(b)(6), to dismiss the complaint. Alternatively, the defendants moved for summary judgment pursuant to Fed. R.Civ.P. 56. Plaintiffs cross-moved, pursuant to Fed.R.Civ.P. 56(f), for a continuance to allow discovery allegedly needed to oppose the defendants’ motions. On October 14, 1997, the district court (1) granted the defendants’ motion to dismiss on the plaintiffs’ medical benefits claim on the basis of res judicata, relying on the judgment in Devlin I; (2) granted the defendants’ motion for summary judgment on the plaintiffs’ Death Benefit Fund claims; (3) dismissed the plaintiffs’ COLA amendment claims on standing grounds; and (4) denied the plaintiffs’ cross-motion. Devlin v. Transportation Communications Int’l Union, 95 Civ. 10838, 1997 WL 634179, at  (S.D.N.Y. Oct.15,1997). This appeal followed.