Coffin v. Bowater Inc.

United States Court of Appeals
For the First Circuit

Nos. 06-1964, 06-2101

ARTEMIS COFFIN; JAMES MINGO; TERRENCE LYON; HAROLD SMITH;
ROBERT DEWITT; DUANE HANSCOM; JOSEPH GAGLIARDI, JR.;
TRINA VAZNIS; RAYMOND MACDONALD; ROBERT P. HEALEY;
BARRY BRYANT; LEE WHEATON; GEORGE BAKER; GALEN LANDER,
Individually and as Representatives of a Class of Persons
Similarly Situated,

Plaintiffs-Appellants/Cross-Appellees,

v.

BOWATER INCORPORATED; BOWATER LIFE INSURANCE PLAN; GROUP
PROTECTION FOR EMPLOYEES OF BOWATER INCORPORATED
GREAT NORTHERN INC. DIVISION; BOWATER INCORPORATED
POINT OF SERVICE MEDICAL BENEFITS PLAN;
BOWATER INCORPORATED BENEFIT PLAN,

Defendants-Appellees/Cross-Appellants.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE

[Hon. Gene Carter, Senior U.S. District Judge]

Before

Torruella, Circuit Judge,
Tashima,* Senior Circuit Judge,
and Lipez, Circuit Judge.

Leon Dayan, with whom Douglas L. Greenfield, Abigail V.
Carter, Diane A. Khiel and Jonathan Beal were on brief, for
plaintiffs-appellants/cross-appellees.

*
Of the Ninth Circuit, sitting by designation.
 Andrew Pincus, with whom Reginald R. Goeke, Andrew E.
Tauber, Mayer, Brown, Row & Maw LLP, and Richard G. Moon were on
brief, for defendants-appellees/cross-appellants.

September 7, 2007
 LIPEZ, Circuit Judge. This case concerns the continuing

liability of Bowater, Inc. for the health benefits of some of the

retired workers of its subsidiary, Great Northern Paper, Inc.

("GNP"), after Bowater sold GNP to Inexcon in 1999. Bowater claims

that its responsibility for these benefits terminated either at the

time of GNP's sale or in 2003, when Bowater consolidated its

benefit plans under an umbrella plan whose coverage did not extend

to GNP retirees. A putative class of GNP retirees, whose claims

for benefits Bowater denied, assert that neither the 1999 sale nor

the 2003 plan consolidation met the procedural requirements for

terminating a benefit plan under the Employee Retirement Income

Security Act, 29 U.S.C. §§ 1001-1461 ("ERISA"), which governs these

benefit plans. They claim that plan coverage did not end until

April 2004.1

In addition, GNP retirees who belonged to various unions

raise a claim under the Labor Management Relations Act, 29 U.S.C.

§ 141 ("LMRA"), arguing that Bowater's denial of benefits breached

collective bargaining agreements ("CBA"s) entitling them to

lifetime health coverage. These plaintiffs argue that Bowater's

2004 termination of its responsibilities under ERISA had no effect

on its continuing responsibility under the CBAs.

1
All parties agree that Bowater terminated its responsibility
for these benefit plans under ERISA on April 19, 2004, when its
Board of Directors amended its benefit plan through a written
document stating that GNP retirees were not eligible for benefits.

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 On cross-motions for summary judgment, the district court

granted summary judgment to Bowater on the LMRA claim. It granted

partial summary judgment to Bowater and partial summary judgment to

plaintiffs on the ERISA claim, concluding that Bowater retained

responsibility for the ERISA plans beyond GNP's sale, but only

until its consolidated plan took effect on January 1, 2003. We

agree with the district court and affirm.

I.

We provide here only the most basic facts, reserving

details for the particular discussions of each issue below. In

1992, Bowater acquired GNP from Georgia-Pacific Corp.2 Following

the acquisition, both unionized and non-unionized GNP employees

received health benefits under ERISA plans. At the time of the

acquisition, the CBAs between Georgia-Pacific and GNP's unionized

workers were in the middle of their terms. Bowater expressly

adopted these CBAs and it negotiated new contracts in 1995. As

part of the contract negotiations, the parties agreed to substitute

a managed health care plan for the previous health plan. Bowater

was named as plan sponsor and plan administrator under both the

original health plans and the managed care plan. In addition, each

of these plans, described by a "summary plan description" as

required by ERISA, allowed the plan sponsor to modify, amend or

2
As part of the acquisition agreement, Georgia-Pacific
retained responsibility for retiree benefits for pre-1992 retirees.

-4-
terminate the plan at any time. Because the plans are identical on

these relevant characteristics, we do not distinguish between them

in our analysis.3

In August 1999, Bowater sold GNP to Inexcon. Bowater

explicitly retained responsibility for the pensions of GNP workers

who had retired between 1992 and the date of sale, as reflected in

section 2.05 of the Stock Purchase Agreement ("SPA"), which stated:

"Seller shall retain . . . any and all liabilities arising under

the GNP Pension Plans." As we discuss in detail below, there is no

equally clear language allocating responsibility for the health

benefits of GNP's retired workers. GNP paid these benefits after

the sale and until about the time it declared bankruptcy in 2003.

When plaintiffs sought benefits from Bowater thereafter, Bowater –

as plan administrator – denied all claims, citing multiple grounds:

(1) that GNP (and not Bowater) was responsible for those benefits

even before GNP's sale to Inexcon; (2) that the terms of GNP's 1999

sale clearly stated that GNP (and not Bowater) retained

responsibility for its retirees' health benefits; and (3) that a

2003 consolidation of Bowater's benefit plans effectively

terminated any residual responsibility Bowater retained under the

plans.

3
Workers who retired after 1995 were covered by the Bowater
Point of Service Medical Benefits Plan; certain workers who retired
between 1992 and 1995 were covered under the Indemnity Retiree
Basic Program or the Indemnity Retiree Comprehensive Program.

-5-
 On December 31, 2003 fifteen GNP retirees filed this

action in federal court on behalf of themselves, their

beneficiaries and a class of 638 similarly situated retirees,

seeking health benefits from Bowater. Plaintiffs raise claims

under both ERISA and the LMRA.4 Under the ERISA claim, workers who

retired from both salaried and hourly positions seek health

benefits from the date in 2003 when GNP refused to continue paying

health benefits through April 19, 2004. See 29 U.S.C. § 1132(a).

In addition, retired hourly workers have asserted a claim under

§ 301 of the LMRA, 29 U.S.C. § 185, alleging that Bowater failed to

honor its obligations under various CBAs to provide them lifetime

health benefits. Because some of these workers retired under pre-

1999 CBAs and others retired under a CBA adopted in 1999 – which

contained substantially different language regarding health

benefits – the LMRA claims are split into two counts.5

On June 21, 2005, the court certified three classes: a

single class representing all retired workers seeking relief under

the ERISA claim and two classes representing former unionized

4
The complaint also included a count alleging breach of
fiduciary duty. The district court granted plaintiffs' unopposed
motion to dismiss that claim.
5
GNP employees were represented by six different unions and
are thus governed by a variety of individual CBAs. However, the
parties have proceeded as if the terms of the individual unions'
pre-1999 CBAs are identical and the terms of their 1999 CBAs are
identical. Therefore, aside from noting the distinction between
pre-1999 and 1999 CBAs – we do not further distinguish between
them.

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hourly workers who retired before and after the adoption of the

1999 CBA, respectively.

Shortly after class certification, Bowater filed a motion

for summary judgment on all claims and plaintiffs filed a cross-

motion for summary judgment on the ERISA claim. In a thorough

opinion, the district court granted Bowater's motion on the LMRA

claims, having found that neither the pre-1999 CBAs nor the 1999

CBAs provided for lifetime benefits. It granted plaintiffs' cross-

motion on the ERISA claim through January 2003, but granted summary

judgment to Bowater for the period thereafter, finding that: (1)

Bowater remained the sponsor of the health plans after GNP's sale;

(2) steps taken by Bowater during the sale did not divest it of

responsibility for these benefits; and (3) Bowater's January 2003

consolidation of benefits could reasonably have been viewed by the

benefits program administrator as having terminated Bowater's

responsibility to GNP's retirees. The district court then approved

a joint stipulation that the amount owed for the period prior to

January 1, 2003 amounted to $62,000 and entered its final judgment.

Both sides appealed.6

II.

Bowater and plaintiffs find fault with the district

court's determination that Bowater's responsibility under ERISA

6
On appeal, Bowater did not renew its argument that it had
never been responsible for benefits to GNP employees under the
ERISA plans.

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ended when it consolidated its benefit plans in 2003. Bowater

insists that its responsibility ended in 1999, when it sold GNP to

Inexcon. Plaintiffs argue that Bowater's responsibility did not

end until 2004.

We review a district court's grant of summary judgment de

novo, construing the facts in the light most favorable to the party

opposing the motion. Int'l Strategies Group, Ltd. v. Greenberg

Traurig, LLP, 482 F.3d 1, 6 (1st Cir. 2007). Summary judgment is

appropriate where "there is no genuine issue as to any material

fact and [] the moving party is entitled to judgment as a matter of

law." Fed. R. Civ. P. 56(c). For the reasons we describe in

section II.C.1, we apply de novo review to the benefit plan

administrator's determination of eligibility for benefits under the

terms of the plan, even though the plan documents themselves afford

the administrator substantial deference. See Firestone Tire &

Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Where the

administrator's determination of eligibility depends upon an

interpretation of non-plan documents (in this case, the SPA), our

review is also de novo. Firestone, 489 U.S. at 112.7

It is well-established that ERISA does not prevent

employers from adopting, modifying or terminating welfare plans at

any time and for any reason. Curtiss-Wright Corp. v.

7
Bowater concedes that we owe no deference to its
interpretation of the documents related to GNP's sale to Inexcon as
plan administrator.

-8-
Schoonejongen, 514 U.S. 73, 78 (1995).8 However, it requires that

employers meet certain procedural standards when they do so. Id.

at 82-83. In particular, ERISA requires that qualifying benefit

plans "provide a procedure for amending such plan, and for

identifying the persons who have authority to amend the plan," 29

U.S.C. § 1102(b)(3). In addition, such plans must be "maintained

pursuant to a written instrument" that provides "for one or more

named fiduciaries" who have "authority to control and manage the

operation and administration of the plan," id., § 1102(a)(1), and

the fiduciary must act "in accordance with the documents and

instruments governing the plan," id., § 1104(a)(1)(D). We have

interpreted this language to require that the amendment or

termination of written ERISA plans be accomplished through a

written document, Bellino v. Schlumberger Techs., Inc., 944 F.2d

26, 33 (1st Cir. 1991) (citing Frank v. Cold Indust. Inc., 910 F.2d

90, 98 (3d Cir. 1990)), and executed by a party authorized to

effect such amendment or termination, cf. Law v. Ernst & Young, 956

F.2d 364, 370 n.9 (1st Cir. 1992).

8
This latitude contrasts with ERISA's tighter regulation of
pension plans. See, e.g., Balestracci v. NSTAR Elec. & Gas Corp.,
449 F.3d 224, 229-30 (1st Cir. 2006) (discussing the distinction
under ERISA between welfare benefit plans and pension plans, which
are "subject to strict vesting requirements").

-9-
 Each of Bowater's benefit plans includes language

allowing Bowater to terminate or amend the plans at any time.9

Through various board resolutions, Bowater authorized its Chief

Executive Officer, the Vice President for Human Resources, and its

Chief Financial Officer to take such action.10 These provisions do

not specify any particular steps that must be taken to effectuate

a termination or amendment. The Supreme Court has held that such

general clauses meet the requirements of 29 U.S.C. § 1102(b)(3).

Curtiss-Wright, 514 U.S. at 75. In so concluding, the Court made

several observations about the important goals served by ERISA's

9
The indemnity plan states:

[Bowater] reserves the right to terminate, suspend,
withdraw, amend or modify the Plan at any time. Any such
change or termination in benefits (a) will be based
solely on the decision of the Director of Employee
Benefits and (b) may apply to active Employees, future
retirees and current retirees as either separate groups
or as one group.

The managed care plan states:

[Bowater], in its sole discretion, may at any time modify
or amend the provisions, terms and conditions of the Plan
or may at any time terminate the Plan without the consent
of any Participant or any other beneficiary under the
Plan.

It further specifies that these terms and conditions "may not be
modified by any oral statement."
10
A 1997 board resolution authorized Bowater's Chief Executive
Officer and its Vice President for Human Resources to amend or
terminate the Plans. A 1999 board resolution extended authority to
the Chief Financial Officer to amend or terminate "any and all
retirement, compensatory or welfare benefits plans" in order to
further the consummation of the transaction selling GNP to Inexcon.

-10-
procedural requirements. In particular, they "increase[] the

likelihood that proposed plan amendments, which are fairly serious

events, are recognized as such and given the special consideration

they deserve." Id. at 82-83. They also "enable[] plan

administrators . . . to have a mechanism for sorting out, from

among the occasional corporate communications that pass through

their offices and that conflict with the existing plan terms, the

bona fide amendments from those that are not." Id. Finally,

requiring that every benefit plan be maintained pursuant to a

written instrument "enable[s] beneficiaries to learn their rights

and obligations under the plan at any time." Id. at 83.

In light of these goals, several circuit courts have held

that only those written documents that clearly indicate that a plan

is being changed or terminated meet ERISA's procedural

requirements. The Fifth Circuit was the first court to articulate

this principle in Borst v. Chevron Corp., 36 F.3d 1308, 1323 (5th

Cir. 1994), where it explained that – for the same reasons that an

"oral agreement cannot sustain a cause of action under ERISA" –

neither can "written modifications or promises which are not, and

do not purport to be, formal amendments of a plan." See also Kalda

v. Sioux Valley Physician Partners, Inc., 481 F.3d 639, 648 (8th

Cir. 2007); Sprague v. General Motors Corp., 133 F.3d 388, 403 (6th

Cir. 1998). Our precedent also recognizes that "Congress intended

ERISA insurers to speak clearly, in plain language, to plan

-11-
recipients." Glista v. UNUM Life Ins. Co. of Am., 378 F.3d 113,

132 (1st Cir. 2004).

The question before us is whether Bowater's actions in

its 1999 sale of GNP or in its 2003 plan consolidation complied

with ERISA's requirements and terminated its responsibilities for

these ERISA plans. The principles outlined above guide our review.

A. The Effect of GNP's Sale to Inexcon

Bowater advances two related arguments to support its

position that its responsibility for benefits under ERISA

terminated when it sold GNP to Inexcon in 1999. First, it argues

that the act of selling a subsidiary – in and of itself –

terminates a parent company's responsibilities for such benefits.

Second, it argues that even if we reject such an "automatic

termination" rule, the particular documents and actions through

which Bowater sold GNP ended its obligations. Plaintiffs counter

that the case law does not support a per se rule automatically

terminating a parent company's benefit responsibilities upon sale

of a subsidiary and that such a rule would undermine the procedural

protections afforded by ERISA. In addition, they argue that

neither the terms of the SPA nor any other documents or actions

related to the sale of GNP to Inexcon fulfilled these procedural

requirements. The district court adopted plaintiffs' position on

both contentions. We review these conclusions de novo. Having

conducted such review, we agree with plaintiffs and the district

-12-
court that the 1999 sale did not terminate Bowater's

responsibilities under its ERISA health and benefit plans.

Bowater begins its argument for an "automatic

termination" rule by noting that ERISA does not prescribe

particular steps that must be taken to terminate a welfare plan.

In this absence, Bowater continues, courts have found that, when an

employer's action eliminates any of the features required by ERISA

– e.g., mechanisms for administering and funding the plan – that

action also terminates the plan. Bowater concludes that because

the sale of a subsidiary typically eliminates one or more

"requisite features" of a welfare plan sponsored by the

subsidiary's former parent, the sale of the subsidiary generally

terminates any such plan. Bowater also invokes case law for the

proposition that a parent company's welfare plan is "terminated by

operation of law with respect to the employees of a subsidiary when

the parent sells the subsidiary by means of a duly authorized

written instrument," citing in particular Chiles v. Ceridian Corp.,

95 F.3d 1505, 1516 (10th Cir. 1996). See also Sejman v. Warner-

Lambert Co., 889 F.2d 1346 (4th Cir. 1989); Conkin v. CNF Transp.,

Inc., No. 03-CV-1058-J, 2004 U.S. Dist. LEXIS 15434 (D. Wyo. May 4,

2004). Finally, Bowater argues that an automatic termination rule

is consistent with ERISA's ultimate goal of encouraging employers

to establish and maintain welfare plans. Bowater contends that

allowing employees of a former subsidiary to claim benefits under

-13-
the former parent's welfare plan might cause parent corporations to

avoid offering such benefits in the first instance.

We disagree with each link in this logical chain.

Although Bowater is correct that parent companies tend to terminate

ERISA plans when selling a subsidiary, there is nothing automatic

about this correlation. Indeed, the three cases Bowater cites in

support of an automatic termination rule are factually

distinguishable from the instant case because each case involved

the sale of a subsidiary with attendant circumstances that met

ERISA's procedural requirements.

In Chiles, the Tenth Circuit found that a parent

company's long-term disability plan was terminated by sale of the

subsidiary where the buyer instituted a replacement benefit plan,

appointed new trustees to oversee the new plan, the buyer became

the new plan's administrator, the seller transferred money to fund

the new plan and, after the transfer, the buyer assumed all of the

seller's obligations with respect to the plan beneficiaries. 95

F.3d at 1515-16. In addition, the court noted that the original

plan's master document clearly stated that the plan terminated for

each participant "on the date he or she ceases to be an employee of

[the parent] or one of its wholly-owned subsidiaries." Id. at 1516

n.11.

In Sejman, the Fourth Circuit found that a parent company

did not retain responsibility for severance benefits to its former

-14-
employees after selling its subsidiary where: (1) the parent

specifically amended its plan to clarify that severance benefits

would not be available to employees who had the opportunity to

continue working for the acquiring company; and (2) the severance

policy's text specified that, in order to be eligible for benefits,

"the claimant had to be both an employee of [the parent] and

'terminated by [the parent] as a result of job elimination, work

performance, or other reasons of [the parent's] convenience.'" 889

F.2d at 1349 (emphasis omitted). Because the acquirer – not the

parent – had terminated the workers' employment, this specific

language established that the employees were not covered by the

parent's plan. Id. at 1350.

Finally, in Conkin, the district court found that the

sale of a subsidiary terminated the parent's welfare benefit

responsibilities where: (1) an Employee Benefit Matters Agreement

announced that the subsidiary's employees immediately ceased

participation in the seller's benefit plans, (2) the buyer set up

new welfare benefits for its employees and the retirees of its new

acquisition, and (3) the seller transferred sufficient assets from

its own retirement plan to the newly created retirement plan of the

buyer to cover the accrued benefits of its plan's participants.

2004 U.S. Dist. LEXIS 15434, at *18-20.

In none of these cases did the mere fact of a sale

automatically terminate a parent company's responsibility for its

-15-
subsidiary's employee welfare benefit plan. To the contrary, they

illustrate that companies tend explicitly to terminate benefit

plans in the process of selling a subsidiary. In each of these

cases, the language of the agreements and the corresponding changes

to plan documents were sufficiently clear to alert employees that

the parent was terminating responsibility for its welfare benefits

upon the sale of the subsidiary. Thus, they met ERISA's minimal

procedural requirements. As we will explain below, Bowater did not

meet these requirements when it sold GNP.

Bowater's argument that an automatic termination rule

best serves ERISA's goals is also unpersuasive. While it is true,

as Bowater emphasizes, that "[o]ne of Congress's intentions in

enacting ERISA . . . was to encourage the growth of private

employee benefit plans," Wolf v. Reliance Std. Life Ins. Co., 71

F.3d 444, 447 (1st Cir. 1995), we have also held that Congress

intended that ERISA plan beneficiaries receive clear information

about their plans, see Glista, 378 F.3d at 132. Bowater

overreaches with its argument that requiring such clear information

might discourage employers from adopting ERISA plans for fear of

unexpected outcomes. In our view, requiring parent companies to

clarify their responsibility for welfare benefits upon the sale of

a subsidiary is a modest requirement, fully compatible with ERISA's

substantive and procedural aims.

-16-
B. GNP's Sale Documents

Bowater next argues that, even if the sale itself did not

end its benefit responsibilities, the SPA governing Bowater's sale

of GNP to Inexcon clearly did so. Because the SPA was both written

and signed by a party duly authorized to amend or terminate its

benefit plan (i.e., Bowater's Chief Financial Officer), Bowater

contends that it satisfies ERISA's procedural requirements. While

plaintiffs agree that the SPA was written and signed by a properly

identified designee, they argue that the SPA did not effectuate

either a termination or amendment of Bowater's responsibility under

the plans because it did not purport to do so. We agree.

Bowater argues that the SPA transfers the obligation to

fund the ERISA plans from Bowater to GNP, thereby amending the

plans. It relies on language in section 4.12 of the SPA, which

reads:

No Undisclosed Liabilities. Except as set
forth in Section 4.12 of the Disclosure
Schedule, and except for the Retained
Liabilities, GNP has no known liabilities or
obligations of any nature . . . other than (i)
the liabilities and obligations to the extent
reflected in the Base Balance Sheet or the Net
Working Capital Certificate . . . (iv) the
liabilities and obligations in any of the
documents specifically identified in any
Section of the Disclosure Schedule, except to
the extent within the Knowledge of Seller
(after no inquiry by Seller) and not disclosed
by Seller herein or in the Disclosure Schedule
(collectively, with the exception of Retained
Liabilities, the "Assumed Liabilities").

-17-
Section 4.20(a) of the Disclosure Schedule lists the benefit plans

under which plaintiffs make their claims. Taken together, Bowater

argues, these documents effectively transfer responsibility for

GNP's employees' health benefits from Bowater to GNP. Bowater

further argues that plaintiffs are wrong to suggest that a document

must invoke the "magic words" "amend" or "terminate" in order to

effectuate a change to a welfare benefit plan.

We agree with this principle; however, irrespective of

the failure to use the words "amend" or "terminate," we find this

SPA language insufficient to meet ERISA's requirements because the

SPA fails to convey that the agreement is amending or terminating

the plans. Therefore, it does not enable the parties to "sort[]

out . . . the bona fide amendments from those that are not," or

allow them to "learn their rights and obligations under the plan at

any time," as the Supreme Court envisioned in Curtiss-Wright, 514

U.S. at 82-83. See also Borst, 36 F.3d at 1323.

Section 4.12 of the SPA reflects Bowater's understanding

that Inexcon was purchasing a subsidiary – GNP – with "liabilities

and obligations . . . specifically identified in any Section of the

Disclosure Schedule." The benefit plans at issue here are listed

in Section 4.20(a) of the Disclosure Schedule. However, the SPA

itself does not explicitly transfer those liabilities from Bowater

to GNP. It also does not expressly terminate Bowater's

responsibility for those benefits. Finally, even if this language

-18-
more clearly terminated Bowater's responsibility for health

benefits, the language is embedded in a disclosure provision, where

one would not normally look for such a termination. Upon reading

this SPA language, one might expect to find a separate document in

which such a transfer or termination took place; however, Bowater

points to no such document.11 Indeed, Bowater concedes that it did

not execute any document – other than the SPA – that amended or

terminated its responsibility for the benefit plans in connection

with the 1999 sale.

Bowater argues that a document claiming to amend or

terminate an ERISA plan need not be labeled as such, citing a

string of cases in support. See Halliburton Co. Benefits Comm. v.

Graves, 463 F.3d 360, 372 (5th Cir. 2006) ("[A] provision in a

merger agreement could amend a welfare plan, even if it is not

labeled as a plan amendment."); Allison v. Bank One-Denver, 289

F.3d 1223, 1235 (10th Cir. 2002) (holding that a Plan Advisory

Committee's memorandum could serve as a plan amendment if it met

the criteria of the plan's amendment procedure); Aldridge v. Lily-

11
Interestingly, the "Closing Document Checklist" provided by
the parties in their joint appendix lists a "GNP Benefit Plan Side
Letter Agreement," but that document is not provided. The "Closing
Memorandum," listing actions taken and the documents delivered in
connection with the sale of GNP, also notes that, "[o]n July 28,
1999, the Board of Directors of Seller took all corporate action
necessary to authorize the Purchase Agreement and the transactions
contemplated thereby." The record before us contains no evidence
that a termination or amendment to the plan was a part of such
"corporate action."

-19-
Tulip, Inc., 40 F.3d 1202, 1210 (11th Cir. 1994) (finding that

adoption of a resolution by a corporation's board of directors may

terminate a plan); Horn v. Berdon, Inc. Defined Benefit Pension

Plan, 938 F.2d 125, 127 (9th Cir. 1991) (holding that a resolution

by the Corporation's Board of Directors can serve to amend a plan).

While these cases support the proposition that a welfare benefit

plan may be amended or terminated through a document not itself

labeled as an amendment or termination, the pertinent language in

each case clearly conveyed that such a change was occurring. That

is not true here.

In Aldridge and Horn, the board resolutions met the ERISA

procedural criteria: they were written documents, signed by parties

with authority to amend or terminate the plans; they followed the

amendment or termination procedures laid out in the plans

themselves; and, most importantly, each resolution indicated

exactly how it would alter the plan. See Aldridge, 40 F.3d at 1205

n.2 ("The resolution reads as follows: 'II. Termination of the

Retirement Plan [] WHEREAS, The Corporation deems it desirable to

terminate the Retirement Plan . . . NOW THEREFORE BE IT RESOLVED,

That the Retirement Plan be and hereby is terminated . . . .'");

Horn, 938 F.2d at 127 ("[The 'Board'] adopted two resolutions in

anticipation of the sale . . . . The first declared the Plan would

terminate . . . . The second amended the Plan to provide each

-20-
beneficiary with all benefits accrued as of [a certain date], and

to eliminate any additional benefits accruing thereafter.").

More tellingly, Halliburton and Allison – while they

found that a merger or plan advisory committee memorandum could

amend a plan – ultimately determined that the particular actions

taken in those cases failed to qualify as plan amendments. In

Halliburton, the Fifth Circuit found that Halliburton did not,

through the merger agreement, assume all rights and

responsibilities for the employee benefit plans of the corporation

that had merged into its subsidiary. Instead, the court concluded

that the obligation arose three months later when Halliburton

entered a separate agreement through which it explicitly agreed to

assume, adopt and amend the company's employee benefit plans. 463

F.3d at 371 & n.7. In Allison, the court determined that a

unanimously approved Advisory Committee memorandum was insufficient

to amend the plan to turn it into a participant-directed plan where

the plan contained specific procedures for such a conversion.

Instead, the court characterized the resolution as an "insufficient

step in performing the requirements" laid out in the plan for

converting to a participant-directed plan. 289 F.3d at 1234. The

court went on to say: "Resort to a plan's terms in the event of a

dispute should not require the prescience of a clairvoyant as to

whether an amendment has occurred. We have repeatedly rejected

-21-
efforts to stray from the express terms of a plan, regardless of

whom those express terms may benefit." Id. at 1236.

We also note that in Bellino, 944 F.2d at 33 n.8, we

refused to consider a letter the company sent to workers that

purported to explain its severance policy and that included new

terms as an amendment to the company's severance plan. There was

no explicit statement that the letter itself was intended to change

those terms. We thus drew a distinction between written documents

that suggest an amendment or termination has occurred and documents

that clearly purport to and actually succeed in amending or

terminating an ERISA plan.

While Bowater is thus correct that it could have amended

or terminated its plan in its SPA with Inexcon, the language of

that document did not clearly do so. See also Kalda, 481 F.3d at

647-48 (rejecting the argument that the amendment of balance sheets

reflecting the company's plan constituted a plan amendment despite

the fact that they were written and approved by an authorized

party); Sprague, 133 F.3d at 403 (rejecting plaintiffs' written

statements of acceptance that contained changed plan terms as plan

amendments because the documents did not purport to amend the

plan). Moreover, the original plan documents – which named Bowater

as plan administrator and plan sponsor – remained in place and no

new responsible parties were identified by Bowater. Where the plan

continued to list Bowater as plan sponsor and administrator and the

-22-
language of the SPA did not expressly terminate Bowater's

responsibility, the fact that Bowater presumed in the SPA a

transfer of responsibility to GNP did not meet ERISA requirements

and therefore failed to accomplish such a transfer.

Finally, we note that this outcome does not create an

onerous burden on plan sponsors under ERISA. As all parties here

concede, Bowater finally terminated its responsibility under these

benefit plans on April 19, 2004, when Bowater's Board of Directors

amended its benefit plan to clarify that

no individual who is an employee or former
employee of [GNP] . . . shall be eligible to
participate in the Plan or any separate
Benefit Program under the Plan . . . such
Plan, Benefit Program, predecessor and other
programs and arrangements, as applied to
GNP . . . being terminated as of the date of
the sale of GNP to Inexcon.

Thus, while ERISA does not require employers to meet difficult

standards in order to amend a welfare benefit plan, it does provide

for minimal procedures that must be followed. That is, an ERISA

plan amendment must be in writing; it must be executed by a party

authorized to amend the plan; the language of the amendment must

clearly alert the parties that the plan is being amended; and the

amendment must meet any other requirements laid out for such

amendments in the plan's governing documents. This insistence on

specificity ensures that disputes between employees and their

employers may be resolved by reference to the documents that govern

the plan.

-23-
C. The 2003 Consolidation of Bowater's Benefit Plans

Bowater is a large corporate conglomerate that employs

roughly 7,000 people and operates pulp and paper mills and related

operations at several locations in five different states (as well

as internationally). Effective January 1, 2003, Bowater

established the Bowater Incorporated Benefit Plan ("BIBP") as a

unified plan to replace the various plans under which its employees

received health and welfare benefits. At least in part, this

consolidated plan was adopted to ease the administrative burden of

filing separate tax returns and ERISA-mandated forms for each of

Bowater's benefit plans.12 Bowater, as plan administrator,

determined that BIBP's adoption effectively terminated its

liability under its previous health and benefit plans. The

district court, reviewing this decision under the traditional abuse

of discretion standard, affirmed that decision. Plaintiffs argue

that BIBP's language cannot reasonably be construed to effectuate

such a termination. Before delving into this debate, we must

determine the correct standard under which we review Bowater's

decision in light of recent developments in this circuit relating

to the standard of review in ERISA cases such as this one.

12
This intention is clear from the language of the BIBP
itself, which states: "All Benefit Programs offered under the Plan
shall constitute a single plan for purposes of the annual reporting
requirements of the [Internal Revenue] Code and ERISA."

-24-
 1. Standard of Review

We have traditionally reviewed a denial of benefits under

an ERISA plan for abuse of discretion where the plan document

itself grants the plan administrator discretion to determine

eligibility or to construe the terms of the plan. Firestone, 489

U.S. at 115. Where the plan administrator operates under a

conflict of interest, i.e., where the plan administrator is also

the plan sponsor and therefore stands to gain from each dollar of

benefits it denies to claimants, we have reviewed the

administrator's interpretation of plan terms and eligibility for

abuse of discretion, but with "more bite," placing "special

emphasis on reasonableness." Doyle v. Paul Revere Life Ins. Co.,

144 F.3d 181, 184 (1st Cir. 1998).

However, since the district court issued its decision in

this case, we have issued a decision, Denmark v. Liberty Life

Assur. Co., 481 F.3d 16, 19 (1st Cir. 2007), which calls into

question the appropriate standard of review for ERISA cases

involving structural conflicts such as those that exist in this

case. In Denmark, two members of the court expressed their unease

with the traditional standard of review in these cases and urged

the court to reconsider this issue in an en banc proceeding. A

petition for rehearing en banc that asks the court to reconsider

the standard of review in ERISA cases involving structural

conflicts of interest is currently pending before this court. As

-25-
we stated in a similarly situated case: "If we thought any change

in the applicable standard of review (and we are not intimating in

any way that there will necessarily be such a change) might affect

the outcome of this appeal, we would defer a decision on this

appeal until the en banc petition in Denmark was resolved."

Kansky v. Coca-Cola Bottling Co., ___ F.3d ___, No. 06-2042, 2007

U.S. App. LEXIS 15514 at * 7 (1st Cir. June 29, 2007). However, as

we describe below, we find that plaintiffs' claim fails even under

de novo review and so we need not delay our review of this issue.

2. Reviewing the BIBP

Plaintiffs and Bowater agree that the key language with

respect to plaintiffs' claims is set forth in Article I, Section

1.03 of the BIBP, labeled "Benefit Programs":

The separate Benefit Programs that are
consolidated into the Plan are listed in
Appendix A. Separate Program Documents which
describe the specific benefits provided by
each Benefit Program, the individuals covered
by each Benefit Program and the other terms
and conditions of each Benefit Program,
including any contract with an Insurance
Company maintained in connection with a
Benefit Program, as amended from time to time,
shall be incorporated herein by this
reference. The Plan supersedes and replaces
any program document defining the terms of or
describing a Benefit Program that is not
incorporated and made part of the Plan. If
there is a conflict between the specific terms
of a Program Document and the terms of the
Plan, the Program Document shall control
(unless contrary to applicable law), except
that any terms exclusively set forth in the
Plan document shall control.

-26-
(Emphasis added).

Both sides agree that plaintiffs are not covered under

the terms of the BIBP. Bowater contends that Section 1.03,

particularly the third (underlined) sentence, consolidates all of

Bowater's benefit plans into a single plan and supersedes any plans

not listed in Appendix A (plaintiffs' plans are not listed in

Appendix A). Plaintiffs disagree and argue that the only thing

being "superseded or replaced" are informal documents describing

benefit plans listed in Appendix A. According to this reading, the

excerpted language does not refer to, and thus has no effect on,

plaintiffs' benefit plans.

The BIBP itself specifies that "[w]henever capitalized

and used in the Plan, [particular] words and phrases shall have the

respective meanings specified in this Section . . . unless the

context plainly requires a different meaning." Because two of

these terms play an important role in plaintiffs' interpretation of

the BIBP, we include their defined meanings here:

Benefit Program means a separate welfare
program that is sponsored by an Employer and
which forms part of the Plan and is
incorporated herein by reference.

Program Document means the written summary of
the terms of each separate Benefit Program,
that may consist of a summary plan
description, separate plan document and/or
Insurance Company contract or certificate.

The heart of the debate concerns the third sentence of

Section 1.03 and, in particular, what is being "superseded or

-27-
replaced" by its third sentence.13 This question, as posed by

plaintiffs, turns on whether the phrase "that is not incorporated

and made part of the Plan" modifies "program document" or "Benefit

Program."

a. Plaintiffs' Interpretation

Plaintiffs argue that the phrase "that is not

incorporated and made part of the Plan" modifies the term "program

document" and that what is being superseded are informal program

documents that are not incorporated into the BIBP. In making their

case, they distinguish between the capitalized term, "Program

Documents," which they describe as "formal" program documents, and

the uncapitalized term, "program documents," which they

characterize as "informal" program documents. They interpret the

second sentence of Section 1.03 – which uses the capitalized term

– as incorporating into the BIBP the formal Program Documents

associated with the benefit programs listed in Appendix A. They

interpret the third sentence – which purposefully employs the

uncapitalized term – as requiring that informal documents

13
Plaintiffs also contend that the first and second sentences
limit the scope of the subsequent sentences to the benefit programs
specifically listed in Appendix A. Neither of the benefit programs
under which plaintiffs seek recovery appear in the Appendix.
Plaintiffs specifically argue that the second sentence clarifies
that only formal Program Documents that describe a Benefit Program
listed in Appendix A are to be incorporated. Bowater argues that
while these sentences specify that the benefit programs listed in
Appendix A are incorporated into the BIBP, they do not restrict the
scope of the subsequent sentences to programs listed in that
appendix.

-28-
associated with the benefits programs listed in Appendix A be

superseded or replaced by the terms of the BIBP. On this reading,

the superseded materials are informal documents – such as

information brochures and handouts describing plan benefits – as

distinguished from official "Program Documents." Thus, the overall

effect of these three sentences is to incorporate into the BIBP the

formal program documents of all benefit programs listed in Appendix

A and to supersede any inconsistent terms and conditions contained

in informal documents describing those same programs. According to

plaintiffs, this language has no effect on any benefit programs -

like those at issue in this case - that are not listed in Appendix

A.

Plaintiffs also argue that their interpretation of the

BIBP preserves the defined meaning of the capitalized term "Benefit

Program." This is so because "Benefit Program" refers only to

benefit programs listed in Appendix A. If the phrase, "that is not

incorporated and made part of the Plan" modifies "Benefit Program"

– as Bowater contends – then it strips the capitalized term of its

contractually provided meaning because a benefit program cannot be

both incorporated under the BIBP (as the term's capitalization

suggests) and "not incorporated and made part of the Plan" (as the

modifying clause suggests).

Plaintiffs' construction of Section 1.03 reflects the

proposition that it would be reasonable for a company to attempt to

-29-
eliminate possibly inconsistent references to its plans, or

imprecise use of plan terms, by limiting the relevant documents to

those formally generated. See, e.g., Health Cost Controls of Ill.,

Inc. v. Washington, 187 F.3d 703, 712 (7th Cir. 1999) (noting that

"in ERISA land[] often the terms of an ERISA plan must be inferred

from a series of documents none clearly labeled as 'the plan'").

However, such informal documents generally contain language

clarifying that they contain merely a "summary" of the plan terms

and that the actual agreement contains the operative terms. Id.

Thus, the need expressly to exclude such documents from being

considered part of the consolidated plan is not compelling.

Moreover, plaintiffs' argument that the critical phrase

("that is not incorporated and made part of the Plan") modifies

"program document" is weakened considerably by the fact that the

modifying phrase comes after the intervening phrase "defining the

terms of or describing a Benefit Program." The grammatical "rule

of the last antecedent" – which was used by the Supreme Court in

Barnhart v. Thomas, 540 U.S. 20, 26 (2003), and which provides that

a modifying phrase "should ordinarily be read as modifying only the

noun or phrase that it immediately follows," id. – suggests that

the phrase modifies "Benefit Program" rather than "program

document." Thus the sole virtue of plaintiffs' interpretation is

that it preserves the defined meaning of the capitalized term

"Benefit Program" in the third sentence of this section.

-30-
 b. Bowater's Interpretation

Bowater reads the third sentence as providing that any

benefit program not incorporated into the consolidated plan is

superseded and replaced by the BIBP. This reading has the effect

of consolidating all outstanding Bowater plans into a single plan

under the terms and conditions of the BIBP. Thus, according to

Bowater, the superseded program documents are those describing

unincorporated benefit programs, not informal documents describing

incorporated benefit programs. Because the plan supersedes and

replaces the program documents describing unincorporated benefit

programs, it effectively terminates those programs as well.

Bowater emphasizes that this interpretation squares with the

intention stated on the first page of the BIBP – titled

"Establishment and Purpose" – that "[a]ll Benefit Programs offered

under the Plan shall constitute a single plan for purposes of the

annual reporting requirements of the [Internal Revenue] Code and

ERISA." Its interpretation is also grammatically superior to

plaintiffs' because the modifying phrase ("that is not incorporated

and made part of the Plan") directly follows "Benefit Plan" rather

than "program document," suggesting that the phrase is referring to

benefit plans that are not being incorporated into the Plan.

As plaintiffs point out, however, Bowater's

interpretation seems to conflict with the BIBP's own definition of

"Benefit Program," which "means a separate welfare program that is

-31-
sponsored by an Employer and which forms part of the [BIBP]."

Nonetheless, as the plan itself explains, such capitalized terms

"shall have the respective meanings" defined in the contract

"unless the context plainly requires a different meaning." Here,

Bowater argues that we must read the term "Benefit Program" in the

context of the modifying phrase "that is not incorporated and made

part of the Plan."

Finally, Bowater casts doubt on the sharp distinction

plaintiffs draw between formal "Program Documents" and informal

"program documents." This distinction is at the heart of

plaintiffs' argument that the contested sentence of the BIBP

intends the BIBP to supersede and replace informal program

documents of benefit programs incorporated in Appendix A. This

distinction is not borne out by the definition of "Program

Documents," which includes any "written summary of the terms of

each separate Benefit Program," and specifies that such a summary

"may consist of a summary plan description, separate plan document

and/or Insurance Company contract or certificate." While the

second sentence of this definition refers to an array of formal

documents, the definition contemplates a mix of formal and informal

documents. Thus, while plaintiffs' interpretation may preserve the

proper usage of the defined term "Benefit Program" in the third

sentence of Section 1.03, its reliance on a sharp distinction that

seems inconsistent with the definition of "Program Document"

-32-
significantly weakens its appeal. Bowater also offers a plausible

alternative account for its use of the uncapitalized term "program

documents" in the contested sentence. Rather than signaling that

"informal" documents were being superseded and replaced, Bowater

explains that "program documents" remains uncapitalized because the

capitalized term refers only to the program documents associated

with benefit plans listed in Appendix A. Because the third

sentence refers to program documents associated with benefit

programs that are not incorporated into the BIBP, the more

inclusive, uncapitalized term was necessary.

c. The More Persuasive Interpretation

We find Bowater's arguments significantly more persuasive

than plaintiffs' for the following reasons:

(1) Given that the modifying phrase directly follows

"Benefit Program" rather than "program document," Bowater's

argument is consistent with the "rule of the last antecedent;"

(2) Plaintiffs' textual argument relies on the shaky

foundation of a strict dichotomy between "formal" and "informal"

program documents that is not supported by the BIBP's own

definitions of Program Document;

(3) Plaintiffs' argument based on the Plan's

capitalization scheme ignores the important language in the Plan

-33-
itself explaining that the defined terms should not be given effect

where context requires otherwise;

(4) Plaintiffs' account of what the third sentence of

Section 1.03 accomplishes – superseding and replacing informal

documents – is unpersuasive, given that such informal documents

tend explicitly to state that, where their terms conflict with the

terms in the actual Program Documents, the latter are controlling;

(5) Bowater's explanation – that any program documents

related to plans not incorporated in the BIBP were superseded and

replaced by the terms of the BIBP – is more logically consistent

with the purpose behind the BIBP's adoption: to consolidate

Bowater's many benefit plans into a single plan; and

(6) Focusing on the plain language of the disputed

provision and putting aside for the moment the technical arguments

of the parties, that provision expressly states that it "supersedes

and replaces" program documents associated with unincorporated

benefit programs – that is, any benefit program that is not listed

in Appendix A to the BIBP – thereby terminating those

unincorporated benefit programs. The benefit programs at issue

here are not listed in Appendix A. Hence, by the plain language of

the disputed provision, the benefit programs at issue have been

superseded and replaced. Without intending or implying any

criticism of the skillful advocacy of plaintiffs, the fact that

advocacy can muster arguments that seem to impugn the clarity of

-34-
such plan language does not mean that the document's language is

insufficiently clear for ERISA purposes. See Foisy v. Royal

Maccabees Life Ins. Co., 356 F.3d 141, 147 (1st Cir. 2004)

(explaining, in the context of contract interpretation, that "a

mere controversy over interpretation is not, by itself, enough to

create ambiguity."). The plan at issue here conveys with the

clarity required by ERISA that program documents related to

unincorporated benefit plans (like plaintiffs' health plans) – and

those plans as well – were superseded and replaced by the BIBP.

For all of these reasons, we affirm the district court's ruling

that Bowater's 2003 plan consolidation effectively terminated its

responsibility for plaintiffs' health benefits.14

III.

In addition to the ERISA claim applicable to all class

members, retirees who were employed on an hourly basis under union

contracts also seek lifetime health benefits that they claim were

promised to them under the terms of their CBAs with Bowater. Our

conclusion that the BIBP ended Bowater's responsibility for the

benefit plans on January 1, 2003 under ERISA has no effect on these

14
Plaintiffs also seek reversal of two district court rulings
that they contend erroneously reduced the number of retirees
permitted to recover for lost benefits on the ERISA claim from 653
to 400 retirees. However, because the parties entered into a
stipulation before the district court specifying the amount of
damages to be awarded if we affirmed the district court's
determination that Bowater's responsibility under the ERISA plans
ended on January 1, 2003, that issue does not arise here.

-35-
claims, which arise under the LMRA. We consider each subclass's

claims in turn. As this issue requires us to interpret a labor

contract under the LMRA, our review is de novo, Bath Marine

Draftsmen's Ass'n v. NLRB, 475 F.3d 14, 27 (1st Cir. 2007), and it

is governed by substantive federal law, Textile Workers Union v.

Lincoln Mills, 353 U.S. 448, 456 (1957).

A. Pre-1999 CBAs

A provision in each of the pre-1999 CBAs states that

health and welfare benefits will be provided "[d]uring the term of

this labor agreement." This provision applies equally to active

employees during the term of the CBA and to employees who retire

during the term of the CBA.15 Despite this clear durational

language, plaintiffs contend that all parties understood these CBAs

to provide lifetime health benefits to GNP's employees. Plaintiffs

argue that Bowater's statements and actions support this shared

understanding and create a latent ambiguity that requires us to

look beyond the clear language of the contracts to construe the

CBAs. Plaintiffs remind us that, because we are reviewing the

district court's grant of summary judgment, we must reverse if we

find that plaintiffs have established a genuine issue of material

15
A retired worker's labor rights are governed by the CBA
under which she retired and the terms of any ERISA plans
incorporated therein. See Senior v. NSTAR Elec. & Gas Corp., 449
F.3d 206, 219-22 (1st Cir. 2006).

-36-
fact that a reasonable jury could resolve in their favor. See

Vélez-Rivera v. Agosto-Alicea, 437 F.3d 145, 150 (1st Cir. 2006).

Even under this standard, we agree with the district court that

plaintiffs have failed to identify any such ambiguity.

We have stated that "[a]n unambiguous contract must be

enforced according to its terms, under both the common law and

labor law." Senior v. NSTAR Elec. & Gas Corp., 449 F.3d 206, 219

(1st Cir. 2006). However, in the exceptional case, a latent

ambiguity in seemingly clear contract language may require us to

consider extrinsic evidence to determine the actual object of the

parties' agreement. See RCI Ne. Servs. Div. v. Boston Edison Co.,

822 F.2d 199, 202 (1st Cir. 1987). "An ambiguity is latent when

the language employed is clear and intelligible and suggests but a

single meaning, but some extrinsic fact or extraneous evidence

creates a necessity for interpretation or a choice among two or

more possible meanings." Moore v. Pa. Castle Energy Corp., 89 F.3d

791, 796 (11th Cir. 1996). For example, a contract may refer to an

object by a name that denotes more than one actual thing or the

parties may use a term that, while signifying one thing in common

parlance, designates something particular within the industry's

jargon. See AM Int'l, Inc. v. Graphic Mgmt. Assocs., 44 F.3d 572,

575 (7th Cir. 1995) (giving examples of both scenarios). The

classic case of latent ambiguity is Raffles v. Wichelhaus, 2

Hurlstone & Coltman 906, 159 Eng. Rep. 375 (Ex. 1864), in which a

-37-
contract respecting a shipment of cotton to arrive from a certain

port on the ship "Peerless" was found ambiguous when the parties

discovered that two ships named "Peerless" had departed from the

same port. We review de novo whether a contract is ambiguous.

Senior, 449 F.3d at 219.

Mindful that a court may not deprive the contracting

parties of the protection they sought when they embodied their

agreement in writing, courts have generally allowed only

"objective" evidence to establish such a latent ambiguity. That

includes "evidence of ambiguity that can be supplied by

disinterested third parties," AM Int'l, 44 F.3d at 575, and

evidence that is uncontested between the parties, Rossetto v. Pabst

Brewing Co., 217 F.3d 539, 546 (7th Cir. 2000); it excludes "the

self-serving testimony of one party to the contract as to what the

contract . . . 'really' means," id.

Here, plaintiffs seek to introduce extrinsic evidence of

Bowater's statements and actions indicating that both parties

understood that the CBAs provided lifetime benefits. In doing so,

plaintiffs do not provide a plausible alternative meaning for the

durational language in the contracts. Instead, they argue that the

language does not mean what it says.16 This argument goes well

16
Plaintiffs acknowledge in their brief that: "A stranger to
the parties, reading only the bare text of the provisions in the
pre-1999 [CBAs] requiring the company to 'pay the full cost of
comprehensive Medical Expense Coverage for retirees' and to do so

-38-
beyond the parameters of latent ambiguity jurisprudence, which

recognizes that "there must be either contractual language on which

to hang the label of ambiguous or some yawning void . . . that

cries out for an implied term. Extrinsic evidence should not be

used to add terms to a contract that is plausibly complete without

them." Bidlack v. Wheelabrator Corp., 993 F.2d 603, 608 (7th Cir.

1993) (en banc); see also AM Int'l, 44 F.3d at 575 ("[T]he

ambiguity is in the reference, that is, the connection between the

word and the object that it denotes."). Plaintiffs reject this

text-bound approach as "unduly narrow," arguing that Rossetto

teaches that a contract is latently ambiguous not only in the

multiple-reference cases like Raffles, but whenever "anyone

knowledgeable about the real-world context of the agreement would

realize that it might not mean what it says." Rossetto, 217 F.3d

at 547.

We do not agree that Rossetto authorizes such a broad

approach.17 In that case, the Seventh Circuit found a latent

ambiguity in a labor contract, due to its silence on the duration

of the employer's commitment to provide welfare benefits. Id.

While the lack of a durational term would ordinarily carry no

'[d]uring the term of this labor agreement,' would understand the
provisions as stating, by implication, that the requirement runs
'only during the term of this agreement.'"
17
Because our court has rarely addressed latent ambiguity in
contracts, this discussion relies heavily on cases from the Seventh
Circuit, which has the most developed case law on the subject.

-39-
special meaning, the Seventh Circuit found that an ambiguity arose

when the contract was compared to a labor contract between the same

employer and a second union that was identical to the first labor

contract except that it included a clear limitation on the duration

of the employer's obligation. Id. at 545-46. Thus Rossetto seems

to fall into the category of cases in which extrinsic evidence is

allowed to fill a "yawning void . . . that cries out for an implied

term." It provides no support for using extrinsic evidence to

ignore a clear term stated in the contract. Indeed, the Seventh

Circuit refused to consider broad-ranging extrinsic evidence to

establish a latent ambiguity in a labor contract with clear

durational language in the subsequent case of Cherry v. Auburn

Gear, Inc., 441 F.3d 476, 484-85 (7th Cir. 2006). Focusing on the

language of the contract, the court explained that: (1) "[i]solated

comments by company officials . . . 'do not allow us to look beyond

the written contracts agreed to by the parties,'" id. at 485; (2)

statements in letters sent to employees "signifie[d] nothing

concerning the meaning of the contract itself," id.; and (3)

statements made by the employer during an arbitration action "are

limited by the clear language of the contract, in which 'lifetime

benefits' are only operable so long as they are provided for in the

current [CBA]," id. at 486.

Indeed, the Seventh Circuit rejected a similar argument

that a clear durational term was latently ambiguous where

-40-
plaintiffs could provide no plausible alternative meaning for the

phrase:

[Plaintiff] strives mightily to persuade us
that the phrase "for the term of this
Agreement" is one of those contractual terms
that may seem clear on its face but in reality
is ambiguous, rather like the ship Peerless or
the use of specialized trade jargon.
Examination of [Defendant's] own negotiators'
notes would prove, according to [Plaintiff],
that neither party intended to destroy the
retirees' right to lifetime medical benefits
when they introduced that phrase for the first
time into the 1984 contract. Instead, it had a
private, specialized meaning. But
[Plaintiff's] argument breaks down at that
point. Neither in his brief, in the
[Department of Labor's amicus] brief, or at
oral argument, was anyone able clearly and
succinctly to tell us definitively what that
specialized meaning might be.

Pabst Brewing Co. v. Corrao, 161 F.3d 434, 441 (7th Cir. 1998).

See also Am. Fed'n of Grain Millers v. Int'l Multifoods Corp., 116

F.3d 976, 981 (2d Cir. 1997) (refusing to consider extrinsic

evidence purporting to show that the employer had intended to

provide lifetime medical benefits where the CBA contained clear

durational language); District 29, United Mine Workers v. Royal

Coal Co., 768 F.2d 588, 591-92 (4th Cir. 1985) (same).

Accordingly, we find no ambiguity in this contract. In the face of

clear durational language, we therefore conclude that plaintiffs

have raised no genuine issue of material fact requiring us to

overturn the district court's grant of summary judgment on the LMRA

claim related to the pre-1999 CBAs.

-41-
B. The 1999 CBAs

The 1999 CBAs were negotiated in anticipation of GNP's

sale to Inexcon. Accordingly, they provided that, "[u]pon the date

of sale, all Bowater contractual obligations except those referred

to in the Inexcon offer under 'pensions' shall cease." In the

section on pensions, the agreements stated: "Bowater will retain

liability for retirement benefits earned and accrued through the

day of sale." They also provided that, unless modified by the 1999

agreements themselves, the terms of the 1995 CBAs would "remain in

full force and effect." Thus, since we have already determined

that the pre-1999 CBAs provided no lifetime health benefits,

plaintiffs must show that the 1999 CBA provided such benefits for

the first time.

Plaintiffs rely on two sources in arguing that the 1999

CBAs entitle workers to lifetime health coverage from Bowater.

They begin with language from the section of the CBAs discussing

Bowater's responsibility for pension benefits, arguing that a fact

finder could reasonably determine that "retirement benefits" in the

sentence "Bowater will retain the liability for retirement benefits

earned and accrued through the day of sale" encompasses both

pensions and health benefits. Given that the context of that

sentence clearly indicates that the retirement benefits discussed

relate only to pensions and that health benefits are discussed in

a separate section of the agreement, we do not agree.

-42-
 Plaintiffs also argue that a triable issue of fact is

raised by an August 1999 side-letter agreement from Lambert Bedard,

President of Inexcon, allowing retirees to "preserve their lifetime

company-paid retiree health care." This agreement was drafted in

response to questions raised at an August 1999 meeting between

Inexcon executives and the unions regarding retirement benefits for

employees eligible to retire on the date of sale – August 17, 1999

– who actually retired between August 17, 1999 and October 1, 1999.

The side letter agreement extended particular retirement benefits

to this narrow class of individuals, specifying that "[t]hey will

also be included with current Bowater retirees, and those who are

eligible on the date of closing, to preserve their lifetime

company-paid retiree health care."

The parties dispute whether this document is part of the

CBAs; however, we treat the document as part of the CBAs in

reviewing a grant of summary judgment opposed by plaintiffs.18 The

language of this side agreement is the only possible modification

of the 1995 CBAs that could give rise to an entitlement to lifetime

health coverage. However, plaintiffs do not argue that this

language modified the 1995 CBAs, providing lifetime coverage to

retirees for the first time. Indeed, they conceded below that "the

18
Plaintiffs note that Bowater itself included the page that
contained the language "preserv[ing] . . . lifetime company-paid
retiree health care" for retirees as part of the 1999 CBAs it
submitted to the district court as part of its motion to dismiss.

-43-
[1999 CBA] does not purport to make any 'change' to the

understanding as to the duration of retiree health benefits.

Rather its purpose was to confirm an existing understanding, as its

use of the word 'preserve' makes clear." However, as we have

already determined, the pre-1999 CBAs contained no lifetime health

benefit for retirees that could be "preserved" in the 1999 CBAs.

Plaintiffs thus fail to provide any language in the 1999 CBAs

through which Bowater modified the terms of the 1995 CBAs to

provide lifetime health coverage to GNP's retirees.

IV.

For the reasons elaborated above, we affirm the district

court's grant of summary judgment to Bowater on the LMRA claims.

We find the language of the CBAs to be clear, and plaintiffs have

failed to establish a latent ambiguity that requires consideration

of extrinsic evidence. We also affirm the district court's partial

grant of summary judgment to plaintiffs on the ERISA claim because

we find that Bowater did not terminate its responsibility for ERISA

plans according to the procedural requirements of the statute when

it sold GNP to Inexcon in 1999. Finally, we affirm the district

court's partial grant of summary judgment to Bowater on the ERISA

claim because we agree with Bowater that its 2003 plan

consolidation effectively ended its financial responsibility for

plaintiffs' health benefits.

Affirmed.

-44-