Opinion ID: 786209
Heading Depth: 3
Heading Rank: 4

Heading: The Lawsuit and the Settlement

Text: 19 The Plaintiffs filed their complaint on March 5, 2002, setting forth two claims for relief. In the first claim, the Plaintiffs alleged that RBX breached the 1997 CBA and that the two Unions breached their duties of fair representation in violation of § 301 of the LMRA. In the second claim, the Plaintiffs alleged that RBX neglected and refused to pay, J.A. at 35-36 (Pl.Compl.), the benefits provided in the three plans, which entitled the Plaintiffs to receive the benefits and punitive damages pursuant to ERISA.
20 In March 2002, the USWA met again with RBX officials. Twomey made clear that RBX was lowering its offer and that he did not believe the Plaintiffs' lawsuit would succeed. RBX appeared to have the upper hand in these negotiations, mainly as it believed it did not have any obligation to provide health insurance coverage beyond ninety days because the SUB fund position fell below 4% in early 2001. RBX made no contributions to the SUB Plan trust fund in 2001 because the required contributions were reduced, under the terms of the SUB Plan, by the cost of providing medical insurance to employees on layoff. J.A. at 481 (McMillan Aff.). The Unions and the Plaintiffs countered that even if the fund position dipped below 4% at some point in October 2001, the fund position was over 4% in September 2001 and that was the position that should have been used to calculate the benefits. 21 Twomey drafted a settlement proposal for Jones to review, and the USWA ultimately agreed to its terms. The Settlement was signed and completed on April 5, 2002, although the membership of Local 77L never voted on the matter. The Settlement bound RBX to pay all Barberton employees: 1) nine days of pay, equal to the number of days that the plant closing notice was allegedly late; and 2) ninety days of RBX's share of health insurance premiums, plus payment of the same amount toward COBRA premiums for a number of additional weeks equal to the number of years worked. J.A. at 101. Additionally, the Settlement resolved many of the outstanding employee grievances pursued by the USWA. 22 The Settlement superseded the 1997 CBA and all the Plans, except for the Pension Plan. J.A. at 99 (This Agreement shall be controlling and superior to any inconsistent provisions of the currently applicable [CBA] between the Parties and to any other document or documents....); J.A. at 100 (Any and all other severance provisions and/or other benefits ... including but not limited to the [SUB] Plan, [the Medical Plan] and any other plans ... hereafter shall be null and void in their entirety.). The Settlement contained a provision regarding the SUB Plan, which stated that RBX met its SUB Plan funding obligations, that there were insufficient funds to pay a benefit, and that the fund assets would be used to administer the SUB Plan with the remainder to be distributed to the Barberton employees. Finally, the Settlement purported to resolve all lingering issues, providing: [T]his Agreement provides a full remedy for the effects of the Company's decision and ... no further negotiation of the decision to close and/or the effects of that decision shall be required, J.A. at 100, and This Agreement completely and finally resolves all disputes, grievances and disagreements between the Parties[,] and the Company has no continuing obligations under the [CBA]. J.A. at 103.
23 The Plaintiffs filed a motion for a temporary restraining order and a preliminary injunction on March 26, 2002, to prevent RBX and the Unions from completing the effects negotiations that eventually produced the Settlement. The district judge denied the motion for a temporary restraining order as moot on April 16, 2002, because the Settlement had already been signed. On May 2, 2002, the district court heard arguments regarding the Plaintiffs' renewed motion for a preliminary injunction. The district judge denied the motion for a preliminary injunction, ruling that the Plaintiffs failed to demonstrate a strong likelihood of success on the merits. 24 The Plaintiffs then sought to amend their complaint on July 11, 2002, alleging a claim under the LMRDA, 29 U.S.C. § 411, that the Defendants deprived them of the right to sue promised by the LMRDA. RBX and the Unions opposed this amendment because it was filed only three weeks before the close of discovery and because, they asserted, it would not survive a Rule 12(b)(6) motion to dismiss. The district judge agreed with the Defendants and denied the motion to amend on futility grounds. The Plaintiffs moved for reconsideration of this denial, arguing that the Settlement had divested the district court of subject matter jurisdiction, and thus the Unions, by allegedly acting in concert with RBX, effectively destroyed the Plaintiffs' lawsuit, all of which violated the LMRDA. The district court declined to reconsider its decision. 25 Both defendants moved for summary judgment in early August. The district court granted both motions on October 17, 2002. The district court did not rule against the Plaintiffs based upon a jurisdictional defect. Instead, it held that the Plaintiffs could not succeed on their § 301 claim because: 1) the Union had the authority to negotiate and enter into the settlement agreement; 2) the Union did not breach its duty of fair representation in representing the Plaintiffs; and 3) RBX did not breach the 1997 CBA. The district court granted the Defendants' motions for summary judgment and dismissed the case. Plaintiffs timely appealed, and we have jurisdiction over the final order of the district court pursuant to 28 U.S.C. § 1291.