Reese v. CNH Industrial N.V.

every healthcare benefits were a feature in

CBA for over six dec- between words, parties, simply

ades. The other would

assumed the benefits continue anticipated

for life neither side because

upheaval industry the automotive had any to think that CBA reason future pattern of past

would alter the

years. led talk” likely This to “loose benefits, no

lifetime healthcare one implied to articulate

feeling need employ- like all

caveat that these life, explicitly

ee benefits not vested for dependent on

were the existence of cur- Kelsey-Hayes

rent and the CBA between

UAW. any event,

In I believe that our decision Gallo,

in this is controlled case whether my musing

or not about the nature

extrinsic evidence is correct. I therefore

respectfully dissent. REESE; Pidde;

Jack Frances Elaine Cichanofsky; Roger Miller;

James

George Nowlin, Plaintiffs-Appellees, N.V.;

CNH INDUSTRIAL America, LLC,

Industrial

Defendants-Appellants.

No. 15-2382 Appeals, States Court of

United

Sixth Circuit.

Argued: October April

Decided and Filed: Burchfield, Bobby

ARGUED: R. KING LLP, D.C., Washington, & for SPALDING Brault, Appellants. Darcie R. CANZANO, SMITH, MCKKNIGHT, BRAULT, P.C., Oak, Royal RADTKE & Michigan, ON BRIEF: Bob- Appellees. for Burchfield, by R. KING & SPALDING LLP, D.C., for Washington, Appellants. Brault, MCKKNIGHT, Darcie R. CANZA- P.C., NO, SMITH, BRAULT, RADTKE & Royal Oak, Appellees. Doug- for Michigan, Darch, A. BAKER & las MCKENZIE LLP, Illinois, for Chicago, Amicus Curiae. GIBBONS, SUTTON, Before: DONALD, Judges. Circuit GIBBONS, J., opinion delivered DONALD, J., joined in which DONALD, 887), judgment. (pg. J. opinion concurring in separate delivered a SUTTON, 887-93), (pp. J. the result. dissenting separate opinion. delivered a OPINION GIBBONS, Circuit JULIA SMITH Judge.

Defendants-appellants CNH Industrial N.V. and CNH Industrial America LLC “CNH”) (collectively appeal the district plaintiffs’ granting court’s order motion The trial court reconsideration. reversed grant summary judgment its for CNH summary judgment granted instead plaintiffs. appeal, again In this plaintiffs’ right find that asks this court to benefits failed to care to lifetime healthcare insurance to its retired employees and If, however, to find that vest. we were their spouses who receiving were a [pen- vested, right had CNH believes sion or a spouse’s pension]” from the com- in finding district court erred pany. Id. at 318. “From 1974through proposed were not “rea- changes CNH’s (in terms) each CBA or four-year three- sonably commensurate” with renewed this commitment in ‘substantially plan. current unchanged’ form, and each provided CBA by employees that complicated change This matter is a did not have to pay premi- long-running litigation in the law since this in ums order to receive coverage.” Id. USA, In light Polymers (internal of M G began. omitted). & citations — Tackett, U.S. -, v. LLC 135 S.Ct. 1998, In CNH and UAW entered into (2015), 926, 190 L.Ed.2d 809 which abro generated CBA that this lawsuit. Id. cases, gated this circuit’s Yard-Man line of 2004, That 2, CBA was in May effect until the district court had revisit the ques to provided and that: plaintiffs tion of whether had a vested Employees who retire under the Case right to lifetime healthcare benefits. The Corporation Pension Plan for Hourly ultimately they court that did. Be found 7/1/94, Employees Paid or their ambiguous, we find that cause the CBA surviving spouses eligible to receive because the evidence indi and extrinsic spouse’s pension under the provisions of that for the health cates intended Plan, eligible that shall be for the Group life, we affirm care benefits to vest for benefits in as described the following district court’s determination. Re paragraphs. is proper, mand district court how ever, properly because it weigh failed to paragraphs Id. The that followed listed the costs and of the proposed “Medical” “Prescription and Drug” bene- benefits II. plan, by instructed Reese fits available all classes of to covered retir- regardless ees of the duration of their I. service before retirement. “The CBA Id- long complicated This case’s factual and does not spell out what ‘Medical’ benefits procedural has been history and recounted included; just eligibility it for several times court and this specific coverage will based on each Plaintiffs, court. former district plan’s eligibility requirements, goes and CNH who retired between and to note that no contributions ... are re- 2004, filed Eastern suit District of quired for Care the Health Plans....” Id. 2004, Michigan seeking a declaration (internal omitted.) quotations and citations to were entitled lifetime health- Ultimately, court the district and the benefits, injunction requiring care CNH questions: Reese I court faced two “Did “maintain health the level of retiree care agree provide [CNH] the 1998 CBA effect,” currently and damages benefits health-care benefits retirees and their injuries might sustain if retirees And, so, spouses scope for life? does the the benefits were terminated. Reese v. of this CNH to promise permit alter these (6th LLC, Am. CNH Cir. the future?” Reese v. CNH Am. 2009) (Reese I). (then In CNH known 2012) LLC, F.3d Corporation) as Case the United Auto- (Reese II). I, In this court answered Reese mobile, Aerospace, Agricultural Work- affirmative, questions both in the but re- (“UAW”) of America ers entered into a manded court it (“CBA”), to the district so collective-bargaining agreement “to and in agreed provide in which CNH health- could determine “how what circum- reconsideration, motion district re- may alter [the stances ” I, 574 F.3d at On Reese versed course found not benefits].... remand, court failed to reach the district were even after plaintiffs’ rights vested question and did not the reasonableness proposed also that but CNH’s upon record which create factual Thereafter, changes were unreasonable. II, 694 at 683. could Reese F.3d rule. timely appeal. CNH filed this Instead, uni- that CNH could not found changes scope make laterally II. which was plaintiffs’ healthcare grant We review district court’s in Reese I. with our commands conflict Domingo summary judgment de novo. Thus, case remanded the dis- was Kowalski, again, this time a list of trict court v. Har (citing Party Green Tenn. making factors consider when its seven to 2014)). (6th 533, 542 gett, 767 F.3d Cir. deter- reasonableness-of-the-proposed-plan most Construing light the evidence in the mination and with clear instructions nonmovant, (citing favorable to the id. Vil the changes could unilateral to CNH make Nashville, 709 legas v. Metro. Gov’t F.3d II, at plan.1Reese 694 F.3d 685-86. (6th 2013)), summary judg Cir. remand, another While this second if appropriate ment is movant shows “the to unexpected wrinkle was added this case genuine no as to dispute there is abrogated this Supreme Court

when fact and the is entitled to movant material proge decision and its circuit’s Yard-Man judgment matter of R. as a law.” Fed. Civ. USA, LLC v. Tack ny. Polymers M & G 56(a). P. — 926, 930, ett, U.S. -, 135 S.Ct. (2015) (Tackett). Because L.Ed.2d 809 III. in created an inference favor Yard-Man Supreme Before the decided Court cases, collective-bargaining employees Tackett, rights created collective- I, 321, the Reese district court agreements bargaining were reviewed with required plain reconsider whether was to employ- a the scale in thumb on favor to right tiffs had vested lifetime health Tackett, ees. 135 S.Ct. This doc- at 935. Initially, the district care benefits. trine, most the Yard- commonly known not, noting that it found did was inference, Man in this circuit was law Supreme.Court’s de by the “[constrained (DE years. Order, thirty than it was the Op. more And cision” Tackett. & 16912.) However, on Page ID law effect when court and dis- 1. The seven factors are: pocket cost What about under the new ments must What about under the new new under the Plan)? costs ^{[4] [3]} equivalent figure ^{[1] [2]} What What is What is How fast plan likely What under premiums, old (the retirees to retirees is the plan average per-beneficiary average grow the old for the new the retirees’ (the equivalent figure pay deductibles and Group under the old for their healthcare under the old annual total out-of- plan? plan? plan? plan? Benefit Group out-of-pocket What is the How fast Benefit copay- Plan)? plan? plan? cost Reesev. CNH plans the new graphically grow companies retiring today? ^[7] available to current and new [6] What difference are CNH's [5] What difference quality How does the new under available 2012) (Reese plans? plan similar CNH and Am., LLC, similar of care each? per-beneficiary and the employees? retirees II). (if (if any) available under 694 F.3d any) plans plan compare is there between is there between and workers at costs CNH makes with demo- likely 685-86 the old people to initially rights at .... trict court reviewed the ises that are as to [Contracts silent Tackett, Supreme this case. In issue in their duration will ordinarily be treated abrogated the inference Court Yard-Man “operative perpetuity” not as but as “ordinary apply courts to instructed for a “operative reasonable time.” of contract principles reviewing law” when (cid:127) rules of [T]raditional contractual inter- collective-bargaining agreements. Id. at pretation require a clear manifestation Thus, found, Court de- conferring of intent before benefit claim to spite progeny’s Yard-Man and its obligation. contrary, been em- we had not (cid:127) cease, obligations Contractual will ordinary contract-interpretation ploying course, ordinary upon termination of disentangle, principles. What is hard to bargaining agreement. however, many, any, is how the con- (cid:127) When a contract is silent as to Yard-Man principles tract created duration of retiree a court Presumably, cases survive line of Tackett. infer intended those every contract-interpretation principle to vest for life. impermissibly in those cases relied found But, employees. on inferences favor of LLC, USA, M & Polymers Tackett v. G required us Tackett to revisit those old 2016) (Tackett impermissible assump- weed out rules to III) 933-37). (citing 135 S.Ct. at inferences. tions and III court Tackett went on to cite Court, from Supreme On remand the we principles highlighted by additional Justice instructions, high the interpreted Court’s Ginsburg’s concurrence: following, the non-exhaustive and noted (cid:127) the con- principle Under cardinal of ordinary principles list of of contract law: interpretation, tract the intention of the (cid:127) contract, any par- other the [A]s gathered be parties, to from the whole ties’ intentions control. instrument, prevail. must (cid:127) the words of a contract writ- Where (cid:127) the ambiguous, contract is [W]hen clear ing unambiguous, its may consider extrinsic evidence to meaning is to be in accor- ascertained par- the intentions of determine the plainly with its intent. expressed dance example, ties .... the bar- parties’ [F]or (cid:127) Although may a court to known look history. gaining in- usages particular customs or in a requires express” .(cid:127)No rule “clear and dustry meaning to determine of a the in order to language parties show that contract, parties prove the must those intended health-care benefits to vest. usages using customs or affirmative ev- (cid:127) upon employer the after Constraints identiary support given in a case. expiration date of a collective-bar- (cid:127) agreement presumed written is [T]he gaining agreement may ... be derived encompass agreement the whole terms,” agreement’s “explicit from the parties. may implied but arise as well from (cid:127) Courts avoid constructions of [should] expired agreement. terms of promises contracts that would render Tackett, (citing Id. at illusory' 208-09 S.Ct. promises because such cannot J., (Ginsburg, concurring)). “Impor- serve consideration for a 937-38 contract.... noted, promise “partly” illusory that is III re- tantly,” [A] Tackett “the Court illusory. definition jected inferences in favor Yard-Man’s (cid:127) retirees, ‘ex- adopt also declined to ambigu- should but not construe [CJourts writings prom- plicit language’ requirement ous to create lifetime favor Moen, Inc., 135 see Gallo (citing at 209 Id. companies.” that, J., due to concurring)); (finding (Ginsburg, at 937-38 S.Ct. Div., date, Printing a Div. the CBA’s specific Fin. of a end also Litton lack see N.L.R.B., Inc. v. Sys., governed Bus. Litton benefits should healthcare 190, 203, clause), 111 S.Ct. U.S. general-durational agreement’s (“[A] (1991) collective-bar- L.Ed.2d here does not. clause general-durational in ex- [may] provide!] agreement gaining in this case This is so because continue that certain plicit terms life such as out certain carved nev- expiration,” but agreement’s after insurance, and and healthcare insurance ertheless, employer upon “constraints coverages ceased at those stated a collective- date of expiration provisions of the than other time different ... arise as bargaining agreement True, says only that provision this CBA. implied terms of express well from coverage past continues itself.”). Thus, rely- expired agreement on whether of retirement and is silent date Ginsburg’s concur- heavily on Justice ing past the termination the benefits continue rence, presumptions III removed Tackett But, when read agreement. date of the explicitly de- vesting, but also in favor of instrument, as conjunction with the whole presumption clined to shift commands, silence, rather III Tackett employer. it. ambiguity, furthers We resolving than proceeded III court then The Tackett not, cannot, presume and should effect the absence discuss what says every- clause here general-durational vesting of has on the language durational Tackett parties’ intentions. thing about It that: rights. held III, F.3d at 209. decision Supreme [in Court’s [W]hile case, partially ambiguity in this To find presuming us from prevents Tackett] parties’ inten- from the silence as to language specific that “absent tions, not offend the Court’s does themselves, benefits referring to retiree Tackett that we not infer mandate from nothing says durational clause general surely a silence. There is vesting from benefits,” we vesting of retiree about the ambiguity from finding difference between that the of presume absence also-cannot vesting from silence. finding silence itself, by evi specific language, such Tackett; impermissible latter is The or to vest benefits an intent not dences court to turn to permits the the former clause durational general that a the intent evidence to determine extrinsic to vest. about the intent everything goal any parties precisely of the — III, at The Tackett Tackett dispute. contract that the retirees highlighted III court Further, has agree- just Court acknowledged that that case express from lacked clear that we not infer ments issue commanded benefits, re- but still language vesting not to infer silence, it has directed us the district court so manded the case to tying of benefits vesting from whether certain it could determine But, as status. pensioner achievement of part agreements documents were silence, ig- not directed us it has extrinsic evi- “may otherwise serve as ambiguity. ability to create tying’s nore Id. at 210 & n.3. dence.” Here, pen- were tied to healthcare benefits This, itself, says little eligibility. sion

While, cases, presence some those healthcare about whether any cure clause will general-durational of a however, does, ere- benefits, It for life. should vest as to the duration ambiguity ambiguity parties’ dispositive weight general-duration- ate an inten to the vesting from Inferring tying tions. alone al clause here would move the thumb from ordinary principles violates Tackett and the employees’ side place scale and interpretation. Finding contract an ambi it on the side of employers. how- guity tying explore from allows court to ever, sought playing field, to create a level extrinsic evidence discover what the not to inequitable foster an equally one. This, parties actually intended. as with si Accordingly, we reach the extrinsic evi- lence, any principle does not offend of dence in this case to determine the parties’ Instead, contract interpretation. moves intent. goal us closer to in any the ultimate con previously district court re dispute: discovering tract parties’ true viewed the extrinsic evidence and found III, intentions. See Tackett 811 F.3d at 208 rights had vested. The (holding principle that the “cardinal of con record supports the district court’s finding. interpretation” govern: tract should what example, document, For accounting intentions?) were the parties’ (citing Tack CNH calculated the of certain costs retir ett, J., (Ginsburg, 135 S.Ct. at 937-38 con benefits, ees’ determining and when curring)). costs, healthcare figure based the on the Silence as to the duration retiree employees’ span. unlikely life It that an benefits, healthcare when combined with employer would base future cost of pensioner those coupling benefits’ status supplying an employee with healthcare in and their from other segregation entitle surance employee’s on the life span, as CBA, ments in pre overcomes here, employer CNH did if that knows that sumption general-durational its healthcare obligations expire at a fixed clause govern. (noting should See id. Further, date. representatives re general- our limitation on that a presuming peatedly company’s employees told the clause, itself, conclusively an that retirees would have healthcare cover swers the If question vesting). these age for For example, their lifetimes. in a elements or if present, were not the CBA Williams, June Reba letter to clearly general-durational stated that the spouse retiree, of a deceased CNH in govern clause was intended formed her have she would medical insur likely the CBA would most (DE ance “coverage[ lifetime.” ] [her] case, unambiguous. But this is not the 61.) 153, Exh. pro And CNH intended to Tackett III us from prohibits relying ex group coverage vide insurance clusively on general-durational clause spouses of retirees “in consistent man Here, to resolve presuming this matter.2 way ner” to the it handled Williams’s that general-durational CBA’s clause 62.) (DE 154, claim. Exh. These and other says everything parties’ about inten examples CNH, in the record indicate that evidence, ignores tions taken from the retirees, in spouses, and the retirees’ instrument, indicating whole that the par tended and may expected ties healthcare have intended the benefits to beyond Giving provided extend the end the CBA. were vested for life. Park, City 2. To the III dent. Oak extent that Tackett and Gallo are Darrah v. 255 F.3d dispute (quoting conflict—a which reasonable 309-10 Salmi v. III, Servs., being Sec’y minds differ—Tackett first in Health & Human 774 F.2d time, 1985)); govern. must To so hold is not an en- see also 6th Cir. R. 32.1(b) ("Published reasoning panel opinions dorsement of Tackett Ill’s nor are bind is it Gallo’s) rather, simply ing panels. published opinion an indictment of on later A banc.”). prece- only by to overruled en demonstrates this court’s the court adherence together grouped It the first five However, factors. a CBA oth unless rights pertain factors all erwise, vesting of healthcare and stated that these modifications cur- prevent plan reasonable to the comparing proposed does I, at 325. Reese rights. to those court then consid- plan. The district rent Thus, whether CNH’s we must consider factors at the end remaining the two ered In Reese reasonable. changes are proposed comparison pro- analysis: of its II, whether plans were reasonable. tors were: should consider. at 683. In so exhaustive factors court so payments plan? is the plan? alent cost to CNH Group of-pocket Group old ^{[4] [1] [3] [2]} we What What What How fast plan? remanded this figure Benefit Benefit equivalent is the premiums, deductibles is the proposed must retirees What about cost under the old doing, we listed seven for the new it could under the old Plan)? Id. at 685-86. Plan)? are the retirees’ out-of- average average per-beneficiary to retirees figure for the new changes case to the district Reese What is the district annual total out- consider, again, under the new pay plan plan II, plan? Those fac under (the (the and co- equiv- What their non- weigh rent that CNH’s posed plan parison terms similar tor. reasoning found the yet found that this first posed plan. plaintiffs tween CNH’s relying primarily, ees “are ably commensurate creased offered strongly The district court employees and five factors— in favor of either of their healthcare companies’ plans. costs to in favor of either and current final questioned the CNH’s proposed plan was not The district court found similar roughly proposed plan and factor—-the plaintiffs if not proposed plans with the current specifically, factor did not retirees and a com- ultimately concluded companies employees similar exclusively, utility of CNH offers party, under the comparison situation,” but party. plan to other positions in —did and and retir- reason- It also on the weigh in its plans plan, pro- cur- fac- be- in- analysis court’s erred The district likely grow under the old

pocket costs necessary to ways, and remand is plan? about under the new several plan? What II made per-beneficiary How fast are CNH’s' mistakes. Reese address these under each? likely grow costs court was to consider clear that district ^[5] What difference (if any) is there be- not only any increased costs to plaintiffs, care available under that inured quality additional benefits tween but plans? II, and new Specifi- the old 694 F.3d at 685. to them. Reese (if court to deter- cally, asked the district any) is there be- we difference [6] What plans benefits differ plan the new mine “the retirees’ tween employees current makes available to from those offered respects material retiring today? people retiring to- people current ^[7] How does the new plan compare day,” and whether proposed changes light and workers plans available to retirees “are reasonable plan to the and with companies (including similar CNH access to in health care changes employees? demographically similar prescrip- and procedures new medical (internal tions).” cita- quotations and Id. remand, reconsidering Id. On and omitted). Thus, while the district vested, tions rights had whether plans provide the two court held that to consider these proceeded district court roughly “quality ever, the same of care” because thirteen plaintiffs very young — provide coverage both for “medically nec- spouses of retirees —who ineligi- would be essary” procedures, ignores that, be- ble for Medicare in 2032. unlucky These procedure medically fore a can be neces- thirteen subject would be to drastic in- sary, it must be medically possible. As we creases in for healthcare, costs their and II, noted in Reese “[n]ew and better medi- the district court refused to ignore them in procedures cal arise while others become its analysis. reasonableness Although it obsolete. And it is the rare medical innova- right was to acknowledge this small subset tion that costs less than the one it re- class, the district court -placed an II, places.” Thus, Reese 694 F.3d at 683. undue weight amount of on their costs. In “[rjetirees, quite understandably, do not setting, institutional there will be cer- eligibility want lifetime for the medical- tain members who are by harmed policy plan place insurance day on the of re- decisions. These spouses thirteen fall into tirement, even means would that camp. pay premiums no for it.” Id. at 683-84. proposed Because the plan was material- Instead, “[tjhey eligibility up-to- want for ly similar plan offered to current date plans, medical-insurance all with ac- employees retirees, and while being less up-to-date cess to procedures medical and expensive plaintiffs, the district court drugs.” Id. at 684. The district court’s fail- further erred in finding that this factor did ure to consider the increased First, favor either side. the mere fact along costs, with the increased necessitates that the proposed plan equal was in sub- remand. stance to plan offered to current em- The district court heavily focused ployees weighs and retirees in favor of cost-shifting provided proposed reasonableness. II Reese asked the district plan. It good many did so with reason: “[wjhat (if court any) difference is there the Reese II factors dealt changes plan between the plans new and the costs for for plaintiffs. CNH and In consid- makes employees available to current ering costs, however, changes those people retiring today?” II, Reese district court made several mistakes. For Thus, at 686. this reasonableness bench- Medicare-eligible those plaintiffs, the dis- mark asked the district court to determine trict court only considered the costs shift- if the proposed plan was similar to the CNH, away ed from apparently pre- plans being by current offered The CNH. plaintiffs sumed that would foot this entire Second, district court found was. true; bill. Of course this is not a substantial proposed plan place does the portion of the costs shifted to Medicare- plaintiffs substantially position the same eligible plaintiffs will be covered in terms of healthcare benefits as current Thus, government. federal the true cost- retirees, employees and plaintiffs but also shifting is less than that highlighted by the pay less for these same benefits. district court. district was motivated to find The district by focusing court also erred this factor in equipoise looking to bene- heavily too on the future increased costs to post-2004 employees fits that and retirees non-Medicare-eligible plaintiffs. plain- No tiff-retiree, received outside the very healthcare-benefit plaintiff-spouses, few example, context. ineligible premi- will be For while their Medicare in 2032. Thus, higher the most dramatic ums are than those cost-shifting pro- un- under proposed plan posed der the paper tiger plan, more current and retirees than expectation. are, realistic There how- higher pensions receive and a one- tors, worthy of health-savings aggregate to ac- this is con- data

time contribution these Requiring consideration of count. sideration. by subsequently bargained that it The district court also could held CNH, essentially grand- and would UAW pro- the not consider reasonableness of the new CBA past-retirees

father all into piecemeal fashion. CNH posed plan explicitly excluded. from which were urges this and us challenges holding Requiring equal plaintiffs’ increase can so that the court ex- remand district every benefit or healthcare benefits for proposed in this plan way. amine the by employ- won current CNH concession point, no law on directly There is and not of the Reese II framework. part ees is Reese I nor II addresses neither Reese this plan proposed The must offer cases, directly. language There is both by cur- similar to those received benefits however, that that suggests court and It does not rent retirees. to sever permit could district court this to com- requirement have to exceed part and proposed plan address each indi- to which plaintiffs for benefits pensate vidually. supports CNH claims Reese its would be they are not entitled. To do so proposed that the terms of the position could have unfair CNH but also may be and examined plan severed individ- future collective- consequences adverse agreements. ually. Specifically, it that Reese bargaining Fs court “to direction district decide in deter- Finally, the district court erred may how and in what circumstances” CNH was mining proposed plan whether suggests alter such benefits court light changes to health- reasonable I, may Reese sever terms. See court to care. This factor asked the district CNH, Although at 327. not cited lan- by “companies offered similar plans review II guage suggests in Reese demographically and with similar to CNH II, There, Reese 694 F.3d at 686. employees.” terms severed. court this utility court district discounted inquiry held that reasonableness here factor, noting “[njaturally, pro- vexing parties one” that “if the “is a and compare favorably to some posed plan will own, cannot resolve the on their [issues] others, parties not to plans and (and court) we the district will do our best surely plans support locate the will II, it for to resolve them.” Reese litigation-induced positions respective their Thus, why at we no reason see plans comparators.” and select those as court individual district cannot examine 17031.) (DE 450, Order, Op. Page & ID proposed plan terms of the for reasonable- Yet, in- though acknowledged even And, allowing ness. the district “cherry- parties’ biases of the herent reasonable, which are determine terms plans, the court still used picked” district' not, might which are facilitate the settle- its comparator as the basis for process ment between the (Id. 17031.) It true decision. quicker lead to resolution of could factor that the last is less than clear litigation. long-running as a qualifies company” what “similar remand, the district court should On exactly by “demographically is meant what presented reconsider the factors Reese employees,” not war- similar but this does II, special attention on the increased ignoring aggregate rant irrelevant plaintiffs including those ben- companies. Many these com- data of 900 — proce- in medical progress efits created (Ford, large are Gen- panies corporations etc.) prescriptions. The district court Motors, AT&T, dures and similar eral CNH, and, compara- while also consider how much of the cost perfect should

887 precedent. Medicare-eligible retirees will be borne As I in my noted dissent government II, federal or others. by Court, the And Reese of “[s]everal decisions lastly, the district court should reconsider as well Supreme precedent, Court ex proposed the is plan whether reasonable that, press principle once a retiree’s at plans compa- offered similar light life, health care have benefits vested for ie., large manufacturing corpora- employer’s nies — unilateral modification of the representation.3 with union It should tions scope of those benefits is a violation of the look to the terms proposed individual Labor Management Relations Act.” Reese determine, if not reasonable on the II, (citing 694 F.3d at 687 Allied Chemical whole, pieces whether individual Am., & Alkali Workers Local Union plan reasonable. Co., No. 1 v. Pittsburgh Plate Glass Chem Division, n.20, ical 404 U.S. 92 rv. (1971); S.Ct. 30 L.Ed.2d Yolton v. above, For the reasons we affirm stated Co., El Paso Tenn. Pipeline finding district that plaintiffs’ court’s 2006)). My review of this to lifetime healthcare benefits right vested. law, issue by and the relevant unchanged however, is necessary, Remand so that the Tackett, Supreme Court’s decision in court can district reconsider reason- causes in my me to continue belief that plan proposed light ableness CNH’s because we have found that the retirees’ I, II, of Reese and the instructions life, vested for “the provide. level of those benefits must be deemed scope subject vested in to unilater CONCURRENCE II, al by modification CNH.” Reese DONALD, BERNICE BOUIE F.3d at 688. concurring. however, Considering, the well-estab- agree opinion with I the lead as to af- doctrine, lished law-of-the-case see Cald- firming the district court’s deter- Louisville, City well v. Fed.Appx. and, so, judgment. mination concur (“The 432-33 law-of- however, separately, my write reassert the-case precludes doctrine reconsidera- disagreement previous with this Court’s tion of at an earlier stage issues decided despite determination lifetime vest- case”), I recognize the limitations— unilaterally may modify CNH ing, although reaching impossibility —in of the retirees’ healthcare benefits. scope a result inconsistent with that I, In Reese held that “to the Court reached at this first of this Court’s review suggests [the court] extent district ease. precise- these benefits must be maintained for in ly provided at level the 1998 DISSENT CBA, CBA, it is not supported SUTTON, Judge, dissenting. Circuit provided by extrinsic evidence reversing In a our 9-0 decision I, 574 or common sense.” Reese USA, M & converse, Polymers G LLC “reason- benefits, however, Supreme asked us to do two alter Court ably” these is not (1) things: supported interpret bargain- this Court Court collective ly-bargained-for coupled “demographically employees” agreements, similar 3. The manufacturing language limiting large inquiry from II factor this Reese must do work, corporations, help compa- comparing ensure that the some we believe collec- will tively-bargained-for CNH. agreements to collective- rators are similar to of contract law know of no other area “according ordinary- to ing agreements (2) law,” subject to stop agreement’s promises, and to contract which an principles clause, extraordinary Yard-Man “infer- could using the an uncontradicted durational a thumb on the ences,” “placfed] which had as to their duration— ambiguous found retiree benefits in favor of vested scale last for life. The interpreted then and — collective-bargaining agreements.” all is ordi- to this contract approach court’s 935, 926, 933, -, 190 135 S.Ct. U.S. ways circuit and nary only in this (2015). unanimous With the L.Ed.2d 809 unam- Court’s that contradict Yard-Man, Inc., 716 v. overruling UAW interpret how to biguous directives about (6th 1983), those twin di- 1476 Cir. respectfully I dissent. such contracts. apply normal rules became one: rectives principles tell ordinary contract Several interpretation promises contract says that to resolve this case. One us how benefits. to healthcare respect bargain collective the four corners of the long had insisted our court Because good place a to start. ing agreement are sprang from or- inferences the Yard-Man agreement pre is ‘the written “Because law, Supreme Court contract dinary encompass agreement the whole sumed to what counts guide us about proceeded has Congress because parties,’ and principle and what ordinary contract as emphasis on the ‘written placed special respect told us to does not. The Court plans, we must terms’ of retiree healthcare in collective durational clauses” “general written.” v. enforce those terms as Gallo reminded us that agreements, bargaining 265, Inc., 270 Moen ambiguous not construe “courts should 2016) 936, Tackett, 135 U.S. at (quoting promises,” create lifetime writings to — 972), denied, 933, U.S. cert. S.Ct. that, “when a contract is silent directed us 375, -, 196 L.Ed.2d 137 S.Ct. benefits, a duration of retiree as to the 1102(a)(1). (2016); § In also 29 U.S.C. see in- not infer instance, key agree what the this for life.” Id. those benefits to vest tended say. It never and does not ment does at 936-37. benefits. promises lifetime healthcare quick make principles should These things: specific are two is written What this case. In this collective bar- work of of retiree healthcare benefits promise company never agreement, gaining clause that ends the general durational healthcare benefits promised provide 2, “May 2004.” That agreement entire life, a dura- agreement and the contained long as as the means the benefit lasts of the benefits clause that limited all tional 2, 2004. May commitment—until (not otherwise of the contract and burdens is another shortened) Reinforcing that conclusion six-year extended obli- principle. traditional every “[Contractual In other agreement. term of the course, cease, ordinary country, that would end this will gations circuit control, bargaining agree- The durational clause would upon case. termination of benefits would last as and the Printing Fin. Div. healthcare ment.” Litton clause said long as the durational 190, 207, NLRB, 501 U.S. S.Ct. would. (1991); Tackett, see 115 L.Ed.2d con- agreement does not S.Ct. at 937. This here. The court concludes

Not saying that health- tain written terms made a lifetime commitment company dura- excepted from the care benefits as a matter of provide healthcare benefits The opposite: tional clause. Just “ordinary application law. Is this the Group Benefit agreement law”? I am dubious. principles of contract concurrently promises Plan run with this “will life. hereby part and is made a Agreement of See Noe v. PolyOne Corp., 520 F.3d (emphasis R. 439-4 at 45 Agreement.” (Sutton, J., concurring added). clause, and the ab- in part dissenting in part). The other any provision setting a time sence of just-mentioned circuits applied the rules anyone is all frame for healthcare interpretation just to contracts like this needs to know to decide this case. The one, confirming these rules are indeed beyond May not last benefits do “ordinary,” respected and thus the dura- agreement not promise because the did See, tional in each e.g., clauses of them. Any that beyond ap- them date. other Senior Corp., v. NSTAR Elec. & Gas 449 issue, proach explained, Tackett (1st 206, 2006); F.3d Joyce 218 Cir. v. agreement the text” of the “distort[s] 130, Curtiss-Wright Corp., 171 F.3d 134 “refus[ing] apply general durational (2d 1999); Cir. v. Engine UAW Skinner provisions governing clauses to retiree Co., (3d 130, 1999); 188 140 F.3d Cir. Ros at benefits.” 135 S.Ct. 936. Co., 539, setto v. Brewing Pdbst 217 F.3d (7th 2000); 543 Raymond Cir. see also A. principle A cements this conclu- third Franklin, Note, Vesting Retirement Bene sion. a contract as to the is silent “[W]hen Revisiting Yard-Man and Its Unac a duration of retiree fits: knowledged Presumption, 25 Civ. Rts. J. parties not intended those infer (2011). 803, & Econ. 821-22 Dev. After vest for life.” Id. 937. In this benefits to Tackett, case, promise unsurprisingly, the other courts of is si- healthcare-benefits commitment, appeals length general continue enforce dura- lent as to the tional similar expiration agreements an clauses in agreement and the contains —in years. promise cluding a Fourth deci date of six That means unanimous Circuit 2, 2004, May just ago. and until the sion from few weeks Barton ends on unless a See Prods.-Ravenswood, to extend it in the next col- v. Rolled agree Constellium (4th bargained (just LLC, 349, 2017); lectively agreement as 354 see 851 F.3d Cir. past). NLRB, often in they had so done v. F.3d Finley Hosp. 827 (8th 2016); Corp. Cir. Michels Cent. Last least is this: Even there but States, Se., Fund, Areas Pension & Sw. in language, were no durational even other 2015). six-year words if were no limit to the there agreement, we still could not construe this area, pointing There is one it’s worth as -agreement’s commitments lifetime out, in which our circuit has followed these promises. principle,” “[T]he traditional post- traditional Pre-Tackett and rules. noted, is “that Tackett courts should not Tackett, principles honored these we have ambiguous to create life writings construe promise if the was con- healthcare-benefits “[Cjontracts promises.” time Id. at 936. employment agreement tained in an be- duration that are silent as to their will company, tween individual and the ‘operative in ordinarily treated not as agree- opposed collectively bargained to a perpetuity’ ‘operative but as for a reason Corp., Sprague ment. See v. Gen. Motors ” Corbin, Id. (quoting able time.’ 3 A. Cor- (en banc). (1960)). § p. bin on Contracts presump- applied That means we have a it is tion favor of lifetime where should resolve this principles

These in which (company promises needed least case. would resolve this case in And collectively represent- employees were every country. circuit in Before other by union), where it is most Tackett, ed a needed only was the circuit that ours (company promises which the applied presumption treating a in favor of to identify efforts Notably, Tackett Consider the court’s representative). have no Judge it in a favorably ambiguity cited Nelson’s decision and to resolve favor of apply provision we should Sprague, suggesting promise. points lifetime It settings. same rules in both says pension- Group Benefit Plan that S.Ct. at 936-37. ... eligible “who retire retirees eligible “shall be spouses and their 7/1/94” our pressed am hard understand Group for the benefits as described following path that hesitance following include medi- paragraphs [which us, has set Court coverages cal All other cease coverage]. followed, long other circuits have employment coincident the date of when it to non- we have followed comes re- R. collectively bargained agreements with termination to retirement.” 439-3 at due subject spect In what to the same matter. But provision disregard area law would we of contract past coverage continues How, clause? I know of none. say date of It does not retirement. then, application of ordi- can this be past the termination date benefits continue nary principles? contract know not. agreement, much less of the that (and continue for life. an abrading split

In an inter-circuit the split) intra-circuit that Court length the of this Silence about commit- shut, just respect the court with sutured ment, adds, supports finding the a of court much of the in the makes too silence ambiguity. In court’s words: the “when provision the healthcare-benefits about in the whole conjunction read with instru- length commitment and little of of the too ment, silence, ... than rather resolv- express the clause’s limitation durational Maj. ing ambiguity, Op. furthers it.” 882. “May benefits to 2004.” Con- these ignore that only But is true we what true, ambiguity, may gives it tractual be says. “the whole instrument” When read for a to search the record courts warrant conjunction a that durational clause meaning. of contractual extrinsic evidence expressly provisions agree- all limits requires finding But that warrant textual as to a years, ment to six silence benefits compet- there are unfound here —that two provision to the must submit durational ing both of are fair- interpretations, which clause, not it. override ly plausible readings language. of the See require interpretation Nor does this us Enters., Co., Inc. v. Fed. Ins. TMW “presume general that durational [the] 2010); 582-83 Antonin everything clause intent to Garner, Bryan Reading Scalia & A. Law: USA, Polymers vest.” Tackett v. M & G Legal The Interpretation Texts LLC, 2016); (2012). 811 F.3d see differently, if Put there is one Maj. Op. That is a straw man. The reading agreement, fair of the that is the 882. date, hardly end of the matter. durational clause sets an end surprise bargaining agree- a collective Everyone agrees So it end here. should ment, applies date and that end when that reading: on one fair retiree healthcare nothing agreement contradicts it. last, like the benefits would rest of necessary. And presumptions No no ambi- con- promises agreement, until the guity. on the duration of the retir- Silence 2, 2004. May majority tract The expired ee healthcare benefits means that promised offers another: contract agreement’s general clause life. But for the contract retiree benefits specifying the only provision still when spelled the Court out in principles that commitments May permit reading. do not those Tackett terminate — Gallo, Any Maj. See at 269-70. Op. the CBA.” 882. But that is a re-born, approach re recycling point other is Yard-Man addressed above— built, re-purposed for new adventures. the agreement says that retiree healthcare benefits continue after the date “[gjiving The court is troubled that dis- retirement, quite understandably, but weight general-durational positive expiration not after the date of agree- here would move thumb from clause ment. All go has to on to extend employees’ place side of the scale past the end of the agreement, the side of and that employers” it on again, once is: silence. And under sought playing “Tackett to create a level we cannot infer from silence. field, not to equally inequitable foster an Maj. Op. 883. No there. As next one.” worries The court claims ambiguity about shown, just there is no risk in “dis- giving whether the healthcare benefits last a life- weight” to an du- positive express general eligibility time because for healthcare ben- clause honor long pensions rational so as courts efits is linked to and because limits or express promises pensions extensions of vested lifetime commitments. agreement. fundamentally, More Tack- But tying language in this has contract not direct courts to give nothing ett did to do with the duration of the employers litigation equal agreement says shot benefits. said; regardless pensioners what their contract “shall eligible” bargaining agree- ensured collective long healthcare benefits as same, interpreted by is, ments would be agreement provides those benefits—that ordinary 2, principles as contracts. until May long other 2004—not for as as retir- contracts, between not between Equality pension. ees earn a The court admits that litigants faced with different contractual tying the of healthcare benefits to pension- area, itself, commitments. any In other we would “by er status little about wheth- durational say general an uncontradicted er those healthcare benefits for should vest however, does, controls all of the in an promises clause life. It create an ambiguity If agreement. puts any Op. a thumb on about parties’ Maj. intentions.” scale, of the it’s the text of side because 882. collectively bargained agreement put it tying says vesting, But little about

there. And silence cannot lift it. ambiguity how it create does about vest- How, ask, might one court side- ing? does the not know. Tackett at rate do that, step “rejected Court’s command this kind of a ‘tying’ analysis as reference, a contract is silent the dura- “when as to relic of a misdirected frame of benefits, tion of retiree not calling many a court it one of infer- Yard-Man parties ordinary infer intended those bene- ences that was ‘inconsistent with ” Tackett, Gallo, at principles fits to vest life”? 135 S.Ct. of contract law.’ 813 Isn’t that applicable (quoting 937. rule here? Don’t F.3d at 272 at 135 S.Ct. 937). repeated the court’s references to “silence” A inference gener- forbidden cannot the duration of plausible reading. the healthcare-bene- ate a And without implicate plausible explanation fits commitment rule? The treating majority demurs promise “because the healthcare as a promise benefits, life, this case carved out certain such for general durational clause con- insurance, “expect as life insurance and trols. not healthcare We do find lifetime and at coverages agreements.” stated those ceased time-limited commitments Gallo, a time different than other at provisions suppose 269. To 892 exactly dealt with this situation Gallo: tying language suggests agreement’s

this clearly enough hopes “That a to its credit company to override lifetime for its clause find an retir- is to subsidize healthcare benefits explicit it linguistic long possible commitment in a ees for as does mean elephant-sized id.; v. Am. F.3d promised See Whitman has to do so.” 813 mousehole. Ass’ns, 457, 468, context, 121 accounting 531 U.S. document Trucking Taken (2001). 903, 1 planned L.Ed.2d It doesn’t only hoped S.Ct. and shows that CNH fit, belong. it doesn’t pay and not that lifetime healthcare do contractually it bound to so. See was retiree healthcare benefits Because Techs., Inc., v. Acument Glob. Witmer 2004, 2, expired May extrinsic evi- 2012). 774, F.3d by the court is here invoked neither dence setting Still, nor the ab- there. even aside remaining is extrinsic evidence Nor re- ambiguity a contractual sence of it helpful, predates as most of relevant setting aside the indeed solve—even consist of period. plaintiffs time retir- precluding use of agreement’s provision 1, 1, and July April ees from between evidence, R. 439-4 at 47—the extrin- parol dispute and concerns what the this support sic does not the court’s evidence to that company promised group. No parties’ bargaining position. Start with regarding of parol prior amount evidence history. “The 1998 CBA set agreements, including promises made to employees during who retired rules for ’80s, in the 1970s workers who retired CBA; reset years next six meaning of a probative set who the rules for retired promises corporate a new distinct made July 1, is inconsistent with the which parent for time then the first (using and 1995 that the 1990 CBAs notion in altered in 1998. The 1993 and 1995 form lan- [retiree benefit] same “cap planned that CNH letters” showed CBA) unaltera- as the 1998 created guage beyond the term of the provide coverage ble, health benefits.” Reese v. irreducible agreement, again but commendable LLC, CNH Am. entail hope-filled plan does not a bind- 2009). Tackett, that logic After same shows reject ing should commitment. We exactly is vesting, a lack of which what we argument the same reason Fourth That concluded Gallo. these benefits just rejected Cap it: “The Letters Circuit Gallo) (or “continued” Tackett’s, were reset requirement both fall far short of expired under- prior agreements signal parties for a clear that intend for theory it indi- mines a because negate fail to benefits to vest and they would have to be reset cates that unambiguous language in durational [the again agreement expired. See when Barton, agreement].” F.3d at 851 356. Gallo, 270. F.Sd at 813 that Understanding” accom- “Letter[s] of moreover, panied agreement, re- 1998 history also bargaining casts a clar- This inforce conclusion that benefits accounting on the document ifying light provided letter that were vested. One planned that to health- pay shows CNH unilaterally alter benefits to CNH could life of care for the the retiree. benefits laws, reflect new the other CNH and the union renewed retiree keep limited its to retiree costs promise healthcare benefits each successive of the 1998 constant to “the term labor litigation All agreement began. until this if 42. Even agreement,” R. 439-3 at admis- accounting that document shows is sible, the do not establish a documents expected practice to contin- CNH benefits. lifetime to healthcare budget accordingly. right ue its We and forecast * * ^[*] cates that the retiree health benefits did not vest general [because durational today’s The conundrum of decision is explicit clause] contains lan- apply that Tackett ordinary tells us guage stating that retiree health bene- principles agreements, contract these fits continue ‘for the term of govern- yet every country other court ing Barton, CBA.” would 851 F.3d at differently. handle this case could opinion double the length of this with ap Either our or circuit the rest of the plicable quotes from other circuits but will country applying is not “ordinary princi- just offer point. few to make the Here’s ples of contract agreements. law” these “[Ejntitlements one circuit: established we, 937. I S.Ct. at fear that agreements collective bargaining do not again, are out step. survive their expiration modifica A point, equities. last No one tion .... The mere silence Collective likes the thought ending healthcare ben- Bargaining Agreements plan docu efits for ments retirees who concerning the vestment of .have worked for welfare give benefits fails to rise to an much ambiguity.” of their who lives and not be Indus., Inc., Senn v. United Dominion jobs able to take on new now. But it is (quotation Cir. no means clear this is what would omitted). And another: “Contractual vest happen we followed and ruled Tackett ing prevail, is narrow doctrine. To Plain that the benefits not vest. did The absence strong tiffs prohibitory must assert or of a right contractual to lifetime healthcare granting language; mere silence is not of does not mean that these retirees will not abrogation itself the right to alter [of receive healthcare benefits. Even aside coverage].” health v. El Wise Paso Nat. existing from programs, federal healthcare 1993). Co., Gas 986 F.2d no there’s reason to think that the incen- And “Promising provide another: bene company tives that drove the and the un- fits for a certain of time period necessarily agree ion to repeatedly retiree health- period establishes that that time once ex care will past cease to drive pires, promise well.... does as There arrangements to make similar fore, provision we conclude that this unam During argument, the future. oral biguously establishes once the CBAs intended, if it prevailed confirmed that it expired, free to Multifoods was reduce re issue, bring on the vesting this class of tiree medical benefits.” Am. Fed’n of plan retirees into a healthcare that mir- Corp., Grain Millers v. Int’l Multifoods rors the one to current offered 1997). (2d And stake, then, and more At recent retirees. another: reading “The most natural of a desire for better healthcare endpoints contract that has defined benefits than current and re- and 2001 is that in the terms contract request cent retirees. is fair Whether apply to events between 1998 and 2001.” not, not, equitable or it isn’t what this Union, Des Moines Mailers Teamsters agreement collective bargaining provides. NLRB, Local No. 358 v. 2004). another: And still “Silence reasons, respectfully For these dissent. interpreted duration ... not be an agreement by company to vest re

tiree benefits in perpetuity.” UAW Skin (3d Engine Co.,

ner

1999). yet plain And “The another: lan

guage of clearly the CBA and SPD indi-

Case Details

Case Name: Reese v. CNH Industrial N.V.

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Apr 20, 2017

Citation: 854 F.3d 877

Docket Number: 15-2382

Court Abbreviation: 6th Cir.