Poore v. Simpson Paper Co.

544 F.3d 1062, 44 Employee Benefits Cas. (BNA) 2537, 184 L.R.R.M. (BNA) 3249, 2008 U.S. App. LEXIS 20089, 2008 WL 4291174
CourtCourt of Appeals for the Ninth Circuit
DecidedSeptember 22, 2008
Docket05-36060
StatusPublished
Cited by3 cases

This text of 544 F.3d 1062 (Poore v. Simpson Paper Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Poore v. Simpson Paper Co., 544 F.3d 1062, 44 Employee Benefits Cas. (BNA) 2537, 184 L.R.R.M. (BNA) 3249, 2008 U.S. App. LEXIS 20089, 2008 WL 4291174 (9th Cir. 2008).

Opinions

Opinion by Judge O’SCANNLAIN; Dissent by Judge GRABER.

O’SCANNLAIN, Circuit Judge:

We must decide whether we have subject matter jurisdiction over this dispute about retirement benefits.

I

Simpson Paper Company (“Simpson”) owned and operated the Evergreen Mill in West Linn, Oregon from 1990 until 1996, when it closed for economic reasons. Plaintiffs are former workers in the mill, who retired at ages over 55 but under 65, and their dependent spouses (collectively referred to as “early retirees” or “retirees”).

The Association of Western Pulp and Paper Workers (“the Union”) represented the hourly employees at the mill, including the early retirees, from the 1970s through the time of the mill’s closure. Three collective bargaining agreements (“CBAs”) were in force during the time Simpson owned the mill: 1990-93, 1993-95, and 1995-2001. Simpson and the Union negotiated a closure agreement in 1996, which terminated the 1995-2001 CBA.

The first CBA incorporated by reference a benefit booklet, as follows: “Subject to all the provisions of the Benefit Plan Booklet the Company will provide for each eligible employee and each eligible dependent the coverages agreed to in its labor agreement dated November 27, 1990.” The incorporated booklet provided that early retirees could continue medical coverage that existed at the time of retirement and that they could “change coverage at the annual open enrollment on the same basis as active employees.” The booklet further provided that such coverage would continue until the retiree “bec[ame] eligible for Medicare, attain[ed] age 65, or until ... death, whichever occurs first.” A similar extension period was provided for continuation of medical coverage for the retirees’ spouses. During the time that such coverages continued, the cost was “paid on the same basis as active employees.” Finally, the benefits booklets specifically reserved to Simpson the “right to alter, amend, delete, cancel or otherwise change” the welfare plan benefits “at any time, subject to negotiation with the Union.'” (Emphasis added.)

The latter two CBAs likewise incorporated the benefits booklet. Such contracts stated that, “[ujnless otherwise specified, all participants covered by the health care plans will be subject to the same level of contributions as active employees and to the same health care plan provision changes which take effect from time to time.” Though there were slight changes to the benefits booklet over the years, the benefits Simpson provided therein remained substantially the same.

[1065]*1065Simpson’s closure agreement negotiated with the Union provided that

[e]mployees who are curtailed as a result of the closure and begin receiving their Simpson pension benefits as of the first of the month immediately following curtailment, will be eligible for retiree medical coverage in accordance with the provisions of the Benefits Plan Booklet.

Then-active employees received a “Termination Checklist” at meetings just before the closure. It contained essentially the same provision just quoted. Neither the closure agreement nor the information given to employees who remained employed until closure referenced early retiree or dependent spouse benefits for those who already had retired.

In 2002, Simpson notified all retirees that it intended to phase out, and eventually to eliminate, retirement health benefits, and on July 1, 2004, it carried out such intention and stopped providing retirement health benefits. The present action followed.

The early retirees assert that Simpson breached its duties under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132, by terminating health benefits without having obtained the Union’s agreement or having bargained to impasse. They also assert breach of contract claims under the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185(a), arguing Simpson violated its obligations under the CBAs. The district court granted summary judgment to Simpson, concluding that the early retirees have no vested right to the benefits they seek. This timely appeal followed.

II

The parties do not question our jurisdiction; however, we have an “independent obligation” to ensure that such exists. Hernandez v. Campbell, 204 F.3d 861, 865 (9th Cir.2000) (per curiam).

A

To establish standing to sue under ERISA, the early retirees must show that they are plan “participants.” Burrey v. Pac. Gas & Elec. Co., 159 F.3d 388, 392 (9th Cir.1998). ERISA defines a “participant” as “any employee or former employee of an employer ... who is or may become eligible to receive a benefit of any type from an employee benefit plan .... ” 29 U.S.C. § 1002(7). The Supreme Court has clarified that former employees satisfy this definition if they have “ ‘a reasonable expectation of returning to covered employment’ or .... ‘a colorable claim’ to vested benefits.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 117, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989) (emphasis added) (quoting Kuntz v. Reese, 785 F.2d 1410, 1411 (9th Cir.1986)).

However, ERISA does not require that welfare benefits, including health benefits, actually vest. 29 U.S.C. § 1051(1); Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 78, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995). Rather, whether such benefits are vested is a matter of private contract. See Inter-Modal Rail Employees Ass’n v. Atchison, Topeka & Santa Fe Ry. Co., 520 U.S. 510, 514-15, 117 S.Ct. 1513, 137 L.Ed.2d 763 (1997); Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154, 1160 (9th Cir.2001) (“Simply put, an employee’s rights under an ERISA welfare plan do not vest unless and until the employer says they do.”). Additionally, because vesting welfare benefits is “an extra-ERISA commitment, such] must be stated in clear and express language.” Grosz-Salomon, 237 F.3d at 1160 (citation omitted).

A “vested right” is commonly defined as a “right that so completely and definitely belongs to a person that it cannot be impaired or taken away without the person’s [1066]*1066consent.” Black’s Law Dictionary 1349 (8th ed.2004).1 Such definition suggests that unalterability, or at least unalterability in the absence of consent from the person holding the right, is required before a right is deemed vested.2 We have applied a similar interpretation in at least two prior opinions.

In Bower v. Bunker Hill Co.,

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544 F.3d 1062, 44 Employee Benefits Cas. (BNA) 2537, 184 L.R.R.M. (BNA) 3249, 2008 U.S. App. LEXIS 20089, 2008 WL 4291174, Counsel Stack Legal Research, https://law.counselstack.com/opinion/poore-v-simpson-paper-co-ca9-2008.