Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
By Jacklyn Wille
Jan. 21 — A dispute over retiree health benefits that ushered in new U.S. Supreme Court precedent is headed to a trial judge for additional fact-finding.
In 2015, the Supreme Court held that courts should use ordinary principles of contract interpretation when determining whether a company's retirees are entitled to vested lifetime health-care benefits under a collective bargaining agreement, rather than the pro-retiree inference that some federal courts—including the U.S. Court of Appeals for the Sixth Circuit—had employed (17 PBD, 1/27/15).
After the Supreme Court instructed the Sixth Circuit to reconsider a case involving retirees of M&G Polymers USA LLC in 2015, the Sixth Circuit on Jan. 21 punted the case back down to the district court for more fact-finding, explaining that prior factual determinations in the case were made in the “shadow” of the now-discredited inference.
This is the third time the Sixth Circuit has considered the M&G retirees' claim for vested lifetime health benefits.
The dispute arose from M&G Polymers' 2006 announcement that it would begin requiring retirees to contribute to the cost of their health benefits. The retirees filed a lawsuit alleging that M&G's bargaining agreements with the United Steelworkers granted them free lifetime health benefits.
The case bounced between the Sixth Circuit and the U.S. District Court for the Southern District of Ohio until 2013, when the Sixth Circuit upheld a permanent injunction ordering the retirees reinstated in M&G's plan (156 PBD, 8/13/13).
After this ruling, the Supreme Court announced that it would use the M&G case to consider how the Sixth Circuit and other courts handle disputes over retiree health benefits under collective bargaining agreements (87 PBD, 5/6/14).
In 2015, the Supreme Court issued its ruling, striking down the Sixth Circuit's reliance on the controversial Yard-Man inference. Rather than place a thumb on the scale in favor of finding that retiree health benefits have vested—as instructed by Yard-Man—the Supreme Court told lower courts to use ordinary principles of contract interpretation when reviewing collective bargaining agreements.
In striking down the Yard-Man inference, the Supreme Court instructed the Sixth Circuit to reconsider whether the M&G retirees were entitled to vested benefits.
In the instant ruling, the Sixth Circuit said that it couldn't follow the Supreme Court's directive until additional fact-finding had been conducted.
That's because earlier fact-finding in the case was done in the “shadow of Yard-Man” and therefore may be incomplete, the Sixth Circuit said.
According to the Sixth Circuit, it “remains unclear” how much the district court's original decision and the parties' litigation efforts were influenced by Yard-Man.
Given this, the Sixth Circuit sent the case back to the district court with instructions to decide several additional issues, including what documents made up the parties' agreement and whether extrinsic evidence should be considered.
The Sixth Circuit's decision was written by Chief Judge R. Guy Cole Jr. and joined by Senior Judges Gilbert S. Merritt and Damon J. Keith.
The retirees were represented by Bredhoff & Kaiser, Ledbetter & Parisi and Cook & Logothetis. M&G was represented by Morgan Lewis & Bockius.
To contact the reporter on this story: Jacklyn Wille in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jo-el J. Meyer at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)