United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO
DISSOLVE INJUNCTION AND ENTER JUDGMENT FOR DEFENDANTS
G. Edmunds, United States District Judge.
2003 and 2004, the plaintiff retirees and their union, the
International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America
(“UAW”), brought the two above-captioned suits
against their former employers, Defendant Meritor, Inc. and
its corporate predecessors (collectively
“Meritor”),  alleging that the retirees, their
surviving spouses, and their dependents (collectively
“Retirees”) were entitled under a series of
collective bargaining agreements (“CBAs”) to
lifetime healthcare benefits. On December 22, 2005, this Court
entered a preliminary injunction directing Meritor to
reinstate the Retirees' healthcare benefits and resume
paying the full cost of these benefits. See Cole v.
ArvinMeritor, Inc., 516 F.Supp.2d 850, 880 (E.D. Mich.
2005). The Court later granted the Retirees' motion for
summary judgment as to liability, and awarded permanent
injunctive relief in the Retirees' favor as to their
entitlement to lifetime healthcare benefits. See Cole v.
ArvinMeritor, Inc., 515 F.Supp.2d 791, 809 (E.D. Mich.
of these rulings, the Court relied in significant part on the
Sixth Circuit's decision in International Union,
United Automobile, Aerospace, & Agricultural Implement
Workers of America v. Yard-Man, Inc., 716 F.2d 1476,
1482 (6th Cir. 1983), which held that “when the parties
[to a CBA] contract for benefits which accrue upon
achievement of retiree status, there is an inference that the
parties likely intended those benefits to continue as long as
the beneficiary remains a retiree.” See Cole,
516 F.Supp.2d at 865-66 (applying this so-called
“Yard-Man inference”); Cole,
515 F.Supp.2d at 797-99 (same). Similarly, when the Sixth
Circuit subsequently affirmed this Court's award of
summary judgment and permanent injunctive relief in the
Retirees' favor, it determined that it was bound to apply
the inference recognized in Yard-Man and its progeny
that, absent countervailing evidence, retiree benefits are
vested for life. See Cole v. ArvinMeritor, Inc., 549
F.3d 1064, 1069, 1073-74 (6th Cir. 2008).
timely sought rehearing of the Sixth Circuit's decision,
and the case remained in a holding pattern for several years
while the parties pursued settlement negotiations. In the
meantime, the law governing this litigation changed
considerably when the Supreme Court abrogated the
Yard-Man line of cases. See M & G Polymers
USA, LLC v. Tackett, ___ U.S. ___, 135 S.Ct. 926, 935-37
(2015). Thus, when the parties' negotiations reached an
impasse in 2016 and the Sixth Circuit restored Meritor's
petition for rehearing to its active docket, the Court of
Appeals found that due to “a sea change in the
applicable law, ” this Court's ruling in favor of
the Retirees was “no longer sustainable.”
Cole v. Meritor, Inc., 855 F.3d 695, 696, 699 (6th
Cir. 2017). The Sixth Circuit therefore reversed this
Court's judgment in the Retirees' favor and remanded
“for any further proceedings that might be
necessary.” Cole, 855 F.3d at 702.
Meritor's view, no such further proceedings are
necessary. Instead, through the present motion filed on July
19, 2017, Meritor requests that the Court dissolve its
permanent injunction and enter a judgment in Meritor's
favor. In support of this motion, Meritor argues that in
light of the Sixth Circuit's rulings in this suit and in
other cases decided in the wake of Tackett, the
Retirees can no longer viably claim that they were granted
healthcare benefits for life under the relevant terms of the
CBAs negotiated by the parties. In response, the Retirees
concede that the Sixth Circuit conclusively resolved the
issue of “patent” CBA ambiguity in Meritor's
favor, but they contend that they should be permitted to
marshal evidence in support of a claim that there are
“latent” ambiguities in the relevant CBA
provisions that, once resolved, would demonstrate their
entitlement to lifetime healthcare benefits.
August 30, 2017, the Court heard oral argument on
Meritor's motion. For the reasons stated more fully
below, the Court GRANTS this motion, dissolves its permanent
injunction, and dismisses this case.
disposition of Meritor's present motion turns entirely on
the proper interpretation of the Sixth Circuit's recent
decision reversing this Court's judgment and remanding
“for any further proceedings that might be
necessary.” Cole, 855 F.3d at 702.
Accordingly, the Court begins its analysis with an
examination of the Court of Appeals' ruling. This
decision, in turn, relies substantially on Gallo v. Moen
Inc., 813 F.3d 265 (6th Cir. 2016), another Sixth
Circuit ruling issued in the wake of the Supreme Court's
opinion in Tackett. As stated in Cole, the
Sixth Circuit panel in Gallo was called upon
“for the first time” to “interpret a
specific CBA according to the contract principles
espoused” by the Supreme Court in Tackett, and
the application of these “ordinary principles of
contract law” led the Gallo court to
“conclude that the CBA before the court was unambiguous
in not vesting retiree healthcare benefits for life.”
Cole, 855 F.3d at 699 (citing Gallo, 813
F.3d at 273-74).
to this case, the panel in Cole found that
“the facts of Gallo are materially
indistinguishable from the facts before us, ” and that
it therefore was bound to “reach the same
conclusion.” Cole, 855 F.3d at 699. The court
The Gallo court faced an identical issue: whether a
series of CBAs entitled a class of retirees to lifetime
healthcare benefits. Gallo's CBA contained terms
stating that healthcare benefits for retirees “will be
provided, ” “will be covered, ” and would
“[c]ontinue.” [Gallo, 813 F.3d] at 269.
These provisions were determined not to be specific enough to
override the CBA's general durational clause and,
therefore, the healthcare benefits did not vest for life.
Id. The Gallo court held that
“[a]bsent a longer time limit in the context of a
specific provision, the general durational clause supplies a
final phrase to every term in the CBA.” Id. In
making that determination, this court did not look
“beyond the contract's four corners” and
ruled that, because the contract was unambiguous, the
consideration of extrinsic evidence was inappropriate.
Id. at 273-74.
In this case, the 1968 CBA and every subsequent CBA provided
that retiree healthcare benefits “shall be
continued.” There is no language in Exhibit B to the
1968 CBA that provides a specific expiration date for those
benefits. All of the CBAs, however, included a general
durational clause that terminated the agreement after three
years. See, e.g., Article XVIII, 1968 CBA; Article
XIX of the 2000 CBA. In addition, Exhibit B to each CBA had
its own durational clause, identical in wording to that
previously quoted from Section 8 of the 1968 CBA, that
explicitly tied healthcare benefits to the continuing
existence of the CBA in question.
The “shall be continued” language in Exhibit B is
thus not sufficient to vest the retirees with healthcare
benefits for life. As stated in Gallo, “[i]f
Tackett tells us anything, . . . it is that the use
of the future tense without more - without words committing
to retain the benefit for life - does not guarantee lifetime
benefits.” Id. at 271. Like the CBAs at issue
in Gallo, the CBAs between the UAW and Meritor made
commitments for “approximately three-year terms - well
short of commitments for life.” Id. at 269.
The CBAs also contained durational clauses that supplied a
concrete date of expiration for retiree healthcare benefits.
These durational clauses give meaning to the promise that
healthcare benefits “shall be continued.” That
is, Meritor guaranteed healthcare benefits only until the
expiration of the final CBA, nothing more. See Id.
This result is in line with the ordinary principles of
contract law, which dictate that “contractual
obligations will cease, in the ...