12-1032
United Steel v. Cookson America, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
_______________
August Term, 2012
(Argued: February 5, 2013 Decided: March 18, 2013)
Docket No. 12-1032-cv
________________________________________________________
UNITED STEEL, PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED
INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, AFL-CIO/CLC,
Plaintiff-Appellee,
v.
COOKSON AMERICA, INC., VESUVIUS USA CORPORATION,
Defendants-Appellants.
________________________________________________________
Before: WALKER, KATZMANN, Circuit Judges, and PRESKA, District Judge.*
Appeal from a judgment entered on February 28, 2012 by the United States District Court
for the Western District of New York (Skretny, J.), which denied the motion of Defendants-
Appellants Cookson America, Inc. (“Cookson”) and Vesuvius USA Corporation (“Vesuvius”)
for summary judgment and granted the cross-motion of Plaintiff-Appellee United Steel, Paper
and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers
*
The Honorable Loretta A. Preska, of the United States District Court for the Southern District of
New York, sitting by designation.
International Union, AFL-CIO/CLC (“the Union”). We hold that the district court correctly
interpreted the parties’ agreement and that the Union, as a party to that agreement, had standing
to enforce it even where the benefits of enforcement accrued to third-party retirees.
AFFIRMED.
_______________
Counsel for Plaintiff-Appellee: DANIEL M. KOVALIK, Senior Associate General
Counsel (Katharine J. Shaw, Assistant General
Counsel, on the brief), United Steel, Paper and
Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union,
Pittsburgh, PA.
Counsel for Defendants-Appellants: NEAL J. MCNAMARA, Nixon Peabody LLP,
Providence, RI.
_______________
PER CURIAM:
In this case, we are called upon to construe an agreement between the parties and to
determine whether the Union, as a party to the relevant agreement, has standing to enforce it
even where the benefits of enforcement accrue to third-party retirees. Cookson and its wholly
owned subsidiary, Vesuvius, appeal from a judgment entered on February 28, 2012 by the
United States District Court for the Western District of New York (Skretny, J.). That judgment
enforced the district court’s February 25, 2012 Decision and Order, which denied Cookson’s and
Vesuvius’s motion for summary judgment and granted the cross-motion of the Union. In 2008,
Cookson and Vesuvius (collectively, “the companies”) closed a facility that Vesuvius had
operated in Hamburg, New York. Vesuvius and the Union entered into a Facility Closure
Agreement (“FCA”). They now dispute whether that agreement required Vesuvius to pay a
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retiree medical allowance (“RMA”) to certain eligible employees. The district court held that the
FCA imposed such a requirement. On appeal, the companies argue (1) that the district court
misinterpreted the FCA, (2) that the FCA did not unambiguously indicate that any right to
receive a RMA survived the parties’ collective bargaining agreement (“CBA”), and (3) that the
Union, which no longer represents the retirees, lacks standing to assert the relevant claim. For
the reasons set forth below, we affirm the district court’s judgment.
I. Background
From 1992 until 2008, Vesuvius operated a steel plant and foundry in Hamburg, NY. The
Union represented the employees at the Hamburg plant. In 1994, Vesuvius and the Union
negotiated a CBA. That CBA provided that employees “hired prior to March 15, 1994 who
ultimately retire from the Company, and reach age 65, will upon reaching age 65 be eligible to
receive a one time medical benefit allowance of seven thousand dollars ($7,000).” Appellee’s Br.
at 5; see also J. App’x at 82. In 2004, the parties increased the amount of the RMA to $8,000.
In August of 2007, Vesuvius announced that it would close the Hamburg plant in
approximately one year. Subsequently, the parties began negotiating the FCA. Vesuvius initially
proposed an agreement that did not provide for the continuing payment of RMAs to eligible
employees. The Union objected, and the FCA ultimately provided that: “The Company shall
honor the Retiree Medical Allowance provision of the CBA.” J. App’x at 90. The FCA further
provided that the existing CBA between the parties (“the 2004 CBA”), which also required
payment of RMAs, would “remain in effect on [its expiration date] and thereafter and w[ould] be
terminated when the last bargaining unit member of the Company located at the [Hamburg]
facility is terminated.” Id. at 89. The FCA did not provide for its own termination.
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The Hamburg plant closed in August 2008. Between August 2008 and December 31,
2010, Vesuvius paid RMAs to the approximately six eligible employees who reached the age of
sixty-five. On December 30, 2009, however, Cookson notified employees that, “After a thorough
study of costs and plan design, we have concluded that, effective January 1, 2011, Cookson will
no longer provide a one time retiree medical allowance at age 65 to employees hired prior to
March 15, 1994 and who ultimately retire from the Company.” Id. at 96.
On January 19, 2010, the Union sued Cookson and Vesuvius, seeking a declaration that
the FCA obligated the companies to pay RMAs to the thirty-six potentially eligible retirees from
the Hamburg plant who had yet to reach the age of sixty-five. The parties cross-moved for
summary judgment on March 10, 2011. The district court held that, because the parties’ CBA
remained operative until the Hamburg plant closed, the provision of the FCA that required
Vesuvius to “honor the Retiree Medical Allowance provision of the CBA” necessarily required it
to do so after the closure of the Hamburg plant. United Steel, Paper & Forestry, Rubber, Mfg.
Energy, Allied Indus. & Serv. Workers Int’l Union, AFL-CIO, CLC v. Cookson Am., Inc., No.
10-CV-041S, 2012 WL 639616, at *3 (W.D.N.Y. Feb. 27, 2012). The district court also rejected
the companies’ challenge to the Union’s standing, reasoning that the Union could sue as a party
to the FCA. Id. at *4. Accordingly, the district court granted the Union’s motion for summary
judgment and denied the companies’ cross-motion.
Cookson and Vesuvius now appeal from that decision.
II. Discussion
“We review a district court’s grant of summary judgment de novo, construing the
evidence in the light most favorable to the non-moving party and drawing all reasonable
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inferences in its favor.” Allianz Ins. Co. v. Lerner, 416 F.3d 109, 113 (2d Cir. 2005). “We will
affirm the judgment only if there is no genuine issue as to any material fact, and if the moving
party is entitled to a judgment as a matter of law.” Id.
Under 29 U.S.C. § 185(a), federal courts may hear suits “for violation of contracts
between an employer and a labor organization representing employees in an industry affecting
commerce.” “When courts interpret [such contracts], traditional rules of contract interpretation
apply as long as they are consistent with federal labor policies.” Aeronautical Indus. Dist. Lodge
91 v. United Techs. Corp., 230 F.3d 569, 576 (2d Cir. 2000). “[A]s with all contracts, courts
should attempt to read CBAs in such a way that no language is rendered superfluous.” Id.
Here, the FCA required Vesuvius to “honor the Retiree Medical Allowance provision of
the” 2004 CBA. J. App’x at 90. The FCA also provided that the 2004 CBA, instead of expiring
before the facility’s closure, would “remain in effect” until “the last bargaining unit member of
the Company located at the [Hamburg] facility is terminated.” Id. at 89. Because the 2004 CBA
contained the initial requirement that Vesuvius pay a RMA, and continued to require Vesuvius to
make such payments until the facility closed, the FCA’s independent provision could only have
required Vesuvius to “honor” the parties’ arrangement after the facility’s closure. See
Aeronautical Indus. Dist. Lodge 91, 230 F.3d at 576.1
1
The companies argue that their proposed interpretation of the FCA does not render the language
in question superfluous. They base this argument on the claim that the FCA, in fact, imposed an
independent requirement on Vesuvius to pay a RMA before the facility’s closure. They note that the FCA
also provided that, if the facility had not closed by August 28, 2008, the Union could begin negotiating a
new CBA. According to the companies, had a newly negotiated CBA not imposed the same requirements
as the 2004 CBA, the FCA would have still required Vesuvius to pay the RMA. But the companies do not
explain why a newly negotiated CBA might not have required payment of the RMA—which had been a
part of the parties’ CBAs since 1994—much less why the parties would have prepared for that remote
possibility when drafting the FCA.
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The companies object to this conclusion for two reasons. First, they argue that, because
Vesuvius closed the facility, the employees who worked there did not “retire” within the
meaning of the 2004 CBA, and thus have no entitlement to RMAs. Nonetheless, since this
interpretation of the relevant provisions would prevent any employee who worked at the facility
until its closure from claiming a RMA, it would also render the relevant language in the FCA
superfluous. Moreover, the companies have not cited to any case in which an employer has
escaped its obligation to pay retirement benefits to otherwise eligible employees simply by
laying them off.
Second, the companies argue that Vesuvius may refuse to pay the RMA because, “after a
CBA expires, an employer generally is free to modify or terminate any retiree medical benefits
that the employer provided pursuant to that CBA.” Am. Fed’n of Grain Millers v. Int’l
Multifoods Corp., 116 F.3d 976, 979 (2d Cir. 1997). According to the companies, only when a
CBA “unambiguously indicates” a continuing entitlement to benefits will courts require payment
of those benefits after the CBA’s expiration. Id. at 980. Here, however, the FCA imposes the
relevant requirement. Unlike the 2004 CBA, the FCA does not provide for its own expiration.
What the expiration of the CBA might entitle Vesuvius to do, then, is inapposite. Because the
FCA imposes a continuing obligation, Vesuvius must meet that obligation on a continuing basis.
Finally, the companies argue that the Union lacks standing to bring the claims at issue
because it no longer represents the relevant employees, who have all retired. “Standing generally
has two aspects: constitutional standing, a mandate of the case or controversy requirement in
Article III [of the United States Constitution], and prudential considerations of standing, which
involve judicially self-imposed limits on the exercise of federal jurisdiction.” Lerner v. Fleet
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Bank, N.A., 318 F.3d 113, 126 (2d Cir. 2003) (internal quotation marks omitted). The relevant
prudential considerations of standing include so-called “statutory standing,” i.e., “the
requirement that a plaintiff’s complaint fall within the zone of interests protected by the law
invoked.” Id. (internal quotation marks omitted).
We turn first to constitutional standing. To demonstrate such standing, a plaintiff must
show (1) that it has suffered “an injury in fact” that is “concrete and particularized” as well as
“actual or imminent,” (2) that there is “a causal connection between the injury and the conduct
complained of,” and (3) “that the injury will [likely] be redressed by a favorable decision.” Lujan
v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal quotation marks omitted). The
Union satisfies these requirements. Because the Union was a party to the FCA, Cookson’s
refusal to pay retiree benefits under that agreement will injure the Union by depriving it of the
benefit of its bargain. That this benefit accrues to third parties, namely, the retirees, does not
change the fact that the Union has negotiated for the benefit and has incurred obligations in order
to secure it. See Frontier Comm’cns of N.Y., Inc. v. IBEW, AFL-CIO, No. 07 Civ. 10327, 2008
WL 1991096, at *3 (S.D.N.Y. May 6, 2008) (“It is axiomatic that a party to an agreement has
standing to sue a counter-party who breaches that agreement, even where some or all of the
benefits of that contract accrue to a third party.” (internal quotation marks omitted)). Moreover,
Cookson’s refusal to pay the RMA will cause the Union’s injury, and a decision declaring that
the FCA obligates Cookson to pay will redress that injury. Accordingly, the Union has
constitutional standing to sue to enforce the FCA. This conclusion is consistent with the
decisions of other Circuit Courts of Appeals. See, e.g., Cleveland Elec. Illuminating Co. v. Util.
Workers Union of Am., 440 F.3d 809, 815 (6th Cir. 2006); United Steelworkers v. Canron, Inc.,
580 F.2d 77, 81 (3d Cir. 1978).
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Turning to statutory standing, 29 U.S.C. § 185(a) gives federal courts jurisdiction over
“[s]uits for violation of contracts between an employer and a labor organization representing
employees in an industry affecting commerce.” Section 185(b), in turn, permits a “labor
organization” to “sue or be sued as an entity and in behalf of the employees whom it represents.”
Here, the Union has sued the companies “for violation” of the FCA, which qualifies as a contract
“between an employer and a labor organization representing employees in an industry affecting
commerce.” The Union also satisfies the requirements of § 185(b) because it sues “as an entity”
to vindicate its own contractual interests. See Frontier Comm’cns of N.Y., 2008 WL 1991096, at
*3.2 Thus, the Union has statutory standing because its “complaint fall[s] within the zone of
interests protected by the law invoked.” Lerner, 318 F.3d at 126.
Schweizer Aircraft Corp. v. Local 1752, 29 F.3d 83 (2d Cir. 1994), on which the
companies rely, is not to the contrary. In Schweizer, we noted in dicta that the Supreme Court
had previously held that retirees do not qualify as part of a union’s bargaining unit under the
National Labor Relations Act (“NLRA”), 29 U.S.C. § 151 et seq. See 29 F.3d at 87; see also
Allied Chem. & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 181 n.20 (1971).
The exclusion of retirees from a union’s bargaining unit, however, means only that an employer
need not bargain with retirees on a collective basis. Id. at 164. As the Third Circuit has
explained, the mere fact that retirees are not a part of a union’s bargaining unit does not prevent
employers from contractually obligating themselves to pay retirement benefits. Canron, 580 F.2d
2
We need not decide whether § 185(b) also requires the Union to sue “in behalf of the employees
whom it represents” because, even assuming arguendo that § 185(b) does impose such a requirement, the
Union meets that requirement for the reasons described below. See Allied Chem. & Akali Workers v.
Pittsburgh Plate Glass Co., 404 U.S. 157, 181 n.20 (1971) (noting that retirees may “have a federal
remedy under [29 U.S.C. § 185] for breach of contract”).
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at 80-81 (discussing Allied Chemical). Where employers have undertaken such contractual
obligations, “accepted contract principles” indicate that a “union has a legitimate interest in
protecting the rights of the retirees and is entitled to seek enforcement of the applicable contract
provisions.” Id. The Third Circuit’s conclusion is supported by the Supreme Court’s observation,
in Allied Chemical, that “the future retirement benefits of active workers are part and parcel of
their overall compensation and hence a well-established statutory subject of bargaining.” 404
U.S. at 180.
We note that several other Circuit Courts of Appeals have held that a union’s standing to
represent retirees may turn on whether it has obtained the retirees’ consent to litigate on their
behalf. See Cleveland Elec. Illuminating Co., 440 F.3d at 817; Rossetto v. Pabst Brewing Co.,
128 F.3d 538, 541 (7th Cir. 1997); see also Int’l Ass’n of Machinists & Aerospace Workers
Local Lodge 2121 v. Goodrich Corp., 410 F.3d 204, 213 (5th Cir. 2005). But see IBEW, AFL-
CIO Local 1245 v. Citizens Telecomm. Co., 549 F.3d 781, 786-88 (9th Cir. 2008) (disagreeing
with Rossetto and Cleveland Electric); Canron, 580 F.2d at 80-81 (upholding a union’s standing
without finding that the retirees had consented to the suit). The unique circumstances of this
case, however, do not present the concerns that motivated the imposition of a consent
requirement. Thus, we need not decide whether those concerns, where present, would lead us to
adopt such a requirement. First, because the Hamburg plant has closed, there is no “potential for
conflict between the interests of retirees and the interests of active employees.” Rossetto, 128
F.3d at 540 n.2. In the absence of any conflicts of interest, we have no reason to believe that the
Union has acted “against [retirees’] wishes,” thereby “arrogat[ing] to [itself] power that
Congress has not clearly given.” Goodrich, 410 F.3d at 213. Finally, given that the plant’s
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closure has capped the number of eligible retirees at thirty-six, we need not worry about the
possibility of future suits by individual retirees who lack notice of the present case. See
Cleveland Elec., 440 F.3d at 817; see also Goodrich, 410 F.3d at 212 (noting that a union’s suit
“was not res judicata as to a retiree who did not know about, much less participate in,” the suit).
Thus, because the instant suit does not implicate the concerns that animated the decisions of the
Fifth, Sixth, and Seventh Circuits, those concerns cannot support the conclusion that the Union
here lacks standing to represent these particular retirees.
III. Conclusion
Accordingly, for the foregoing reasons, the judgment of the district court is hereby
AFFIRMED.
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United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union v. Cookson America, Inc.
Court: Court of Appeals for the Second Circuit
Date filed: 2013-03-18
Citations: 710 F.3d 470
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