Sixth Circuit Revives Retiree Healthcare Litigation Despite Prior Final Judgment Against Unions Over Same 2001 Modifications

Earlier this month, the Sixth Circuit reversed summary judgment for an employer in a class action lawsuit brought by retirees over changes in their healthcare.   Amos v. PPG Industries, Inc., No. 10-3319 (6^th Cir. 11-1-12).   The employer had modified the insurance coverage in 2001 by requiring the retirees to contribute to a portion of the cost.   Unions which had negotiated collective bargaining agreements governing the terms of the retirees’ health coverage brought suit in federal court in Pittsburgh alleging that the employer’s modifications breached those bargaining agreements.  That lawsuit was dismissed on the grounds that the insurance benefits had not vested and was affirmed on appeal in 2007.  While that lawsuit was still pending in Pittsburgh, the plaintiffs then filed a class action suit in federal court in Columbus under ERISA and the LMRA alleging that the insurance benefits had vested and were not subject to change.  Following the dismissal of the Pittsburgh suit, the employer moved for summary judgment on the grounds of collateral estoppel: that the lawsuit had already been litigated and final judgment entered in favor of the employer in Pennsylvania.  The district court here agreed and entered judgment for the employer.  The Sixth Circuit reversed on the grounds that the Unions did not represent the plaintiff retirees and, thus, the retirees had not been given an opportunity to litigate the issue for themselves.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.