McPeek v. Beatrice Co.

936 F. Supp. 618, 1996 U.S. Dist. LEXIS 11599, 1996 WL 446930
CourtDistrict Court, N.D. Iowa
DecidedJuly 30, 1996
DocketC 92-4017-MWB
StatusPublished
Cited by9 cases

This text of 936 F. Supp. 618 (McPeek v. Beatrice Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McPeek v. Beatrice Co., 936 F. Supp. 618, 1996 U.S. Dist. LEXIS 11599, 1996 WL 446930 (N.D. Iowa 1996).

Opinion

MEMORANDUM OPINION AND ORDER REGARDING MOTION FOR SUMMARY JUDGMENT

TABLE OF CONTENTS

I. INTRODUCTION AND BACKGROUND.621

II. FINDINGS OF FACT. 621

lb. STANDARDS FOR SUMMARY JUDGMENT.624

IV. CONCLUSIONS OF LAW.. 626

A. Background on ERISA.626

*621 B. Vesting of Benefits.627

1. Coverage Under the Plan.628
2. Vesting of Prescription Drug Benefits.629
C. Claim Under the Labor Management Relations Act.631

V. CONCLUSION....632

BENNETT, District Judge.

In an action brought under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1461, Plaintiffs, beneficiaries under an employee benefit and pension plan (“The Plan”), challenge changes made to the Plan which require them to obtain maintenance level supplies of prescription drugs through a mail order service. Although Plaintiffs characterize this case as merely being the simple enforcement of the principle that “a deal is a deal is a deal,” such a characterization assumes the threshold issue of the existence of a “deal” which might be enforced under the rubric of ERISA. Thus, before enforcement may be had here, the court is called upon to determine what “deal” existed under ERISA.

I. INTRODUCTION AND BACKGROUND

Plaintiffs, all former union members and beneficiaries under the Plan, filed their complaint against Defendant Beatrice Company (“Beatrice”) on April 2,. 1992, following Beatrice’s decision to switch to a mail-order service for maintenance prescription drugs for its retirees. Plaintiffs challenge the switch to mail-order maintenance drugs. In count I of the original complaint, Plaintiffs allege that Beatrice’s actions constitute an unauthorized modification of the Plan in violation of ERISA, 29 U.S.C. §§ 1132(a)(1), 1104, and 1109. Count II of the original complaint asserted a claim that Beatrice’s actions constitute a breach of the collective bargaining contracts in violation of the Labor Management Relations Act, 29 U.S.C. § 185(a). On November 25, 1994, Plaintiffs amended the complaint to add a number of individual plaintiffs to this action. Subsequently, on May 23, 1995, Plaintiffs amended their complaint again. In their second amended complaint Plaintiffs allege that Beatrice has violated Iowa Code section 514C.5 by requiring Plaintiffs to employ a mail order system for obtaining maintenance prescription drugs. On October 16, 1995, the court granted Defendant Beatrice’s Motion for Partial Summary Judgment and Motion to Dismiss. The court concluded that ERISA preempted Plaintiffs’ state law claim based on a violation of Iowa Code section 514C.5. The court further concluded that the extra-contractual damages for emotional distress damages sought by Plaintiffs under ERISA were not appropriate equitable relief authorized under ERISA. Therefore, Beatrice’s motion to dismiss Plaintiffs’ claims for emotional distress under ERISA was granted.

Beatrice has now moved for summary judgement on Plaintiffs’ remaining claims. Beatrice, makes four distinct arguments in its motion. First, Beatrice asserts that Plaintiffs do not have a contractually vested right to receive benefits under the Plan. Second, Beatrice contends that the mail order service program that it has implemented for maintenance level medications is consistent with the terms of the Plan. Third, Beatrice asserts that it is entitled to summary judgment on Plaintiffs’ LMRA claim since it was not a party to the Union contract. Finally, Beatrice asserts that it is entitled to summary judgment on Plaintiffs’ request for actual damages.

A hearing on Beatrice’s Motion for Summary Judgment was held on July 26, 1996. At the hearing Plaintiffs were represented by Patricia K. Wengert of Smith, MeElwain & Wengert, Sioux City, Iowa. Beatrice was represented by Roger J. Miller of McRath, North, Mullin & Kratz, P.C., Omaha, Nebraska, and Jeffrey R. Mohrhauser of Rawlings, Nieland, Probasco, Killinger, Ellwanger, Jacobs & Mohrhauser, Sioux City, Iowa. This matter is now deemed fully submitted.

II. FINDINGS OF FACT

For the purposes of this summary judgment motion only, the court finds the following facts:

*622 Plaintiffs are retirees of Swift & Company (“Swift”) who retired prior to January 1, 1979. Plaintiffs were employed at Swift’s meat packing facility in Sioux City, Iowa, and were union members covered by selective bargaining agreements between Swift and the Amalgamated Meat Cutters and Butcher Workmen of North America or the United Food and Commercial Workers International Union (“the Union”). Defendant Beatrice maintains and administers certain self-funded benefit plans for retirees of Esmark, Inc. (“Esmark”), and its subsidiary, Swift.

Esmark was acquired by Beatrice in 1984. The Plan at issue here was first formulated and made available to Swift employees during the 1976-79 Swift & Company Master Agreement with Amalgamated Meat Cutters and Butcher Workmen of North America (“The 1976-79 Master Agreement”). 1 Under the 1976-79 Master Agreement, the Plan provides for participants to receive a prescription drug card which enables participants to obtain covered drugs. 2 The Plan incorporates by reference the coordination of benefits provision contained in the Hospital, Surgical, Medical, Polio Plan for employees, as set forth in the Exhibit III of the 1976-79 Master Agreement. See 1976-79 Master Agreement at 130. The Plan does not prohibit the utilization of mail order services for the attainment of covered prescription drugs. The Plan does not specify or prohibit the manner by which participants obtain covered prescription drugs. The Plan excludes payment for prescriptions of more than thirty-four days or one hundred units. As it existed under the 1976-79 Master Agreement, the Plan was not available to retirees.

The Plan was continued in the 1979-82 Swift & Company Master Agreement with Amalgamated Meat Cutters and Butcher Workmen of North America (“The 1979-82 Master Agreement”). 3 The Plan was extended in the 1979-82 Master Agreement to include employees who retired after August 31, 1979. Retirees under the Plan, however, are required to pay a deductible of $1.75 per prescription or refill. 4

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Bish v. Aquarion Services Co.
289 F. Supp. 2d 134 (D. Connecticut, 2003)
Bublitz v. EI duPont De Nemours and Co.
171 F. Supp. 2d 906 (S.D. Iowa, 2001)
Johnson v. Land O' Lakes, Inc.
18 F. Supp. 2d 985 (N.D. Iowa, 1998)
Barz v. Geneva Elevator Co.
12 F. Supp. 2d 943 (N.D. Iowa, 1998)
Top of Iowa Cooperative v. Schewe
6 F. Supp. 2d 843 (N.D. Iowa, 1998)
Oeltjenbrun v. CSA Investors, Inc.
3 F. Supp. 2d 1024 (N.D. Iowa, 1998)
IBP, Inc. v. Foust
987 F. Supp. 714 (N.D. Iowa, 1997)
Coonley v. Fortis Benefit Insurance
956 F. Supp. 841 (N.D. Iowa, 1997)

Cite This Page — Counsel Stack

Bluebook (online)
936 F. Supp. 618, 1996 U.S. Dist. LEXIS 11599, 1996 WL 446930, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcpeek-v-beatrice-co-iand-1996.