Health Benefits Dispute Sent Back to District Court Again

The 6th Circuit wants the district court to reconsider the vested retiree health benefits challenge in light of a Supreme Court decision about the case.

Tackett v. M&G Polymers, an argument about whether retirees were vested in health care benefits for life, has been remanded to the U.S. District Court for the Southern District of Ohio.

The case has been bounced back and forth between courts like a ping pong ball since 2007, when retirees of M&G Polymers filed suit against their former employers. The two sides disagreed about the meaning of certain expired collective-bargaining agreements. The retirees, and their former union, claimed these agreements created a right to lifetime contribution-free health care benefits for retirees, their surviving spouses and their dependents. The employer claimed those provisions terminated when the agreements expired.

In 2007, the district court initially dismissed the case for failure to state a claim. In 2011, the 6th Circuit relied on a decision in International Union, United Auto, Aerospace, & Agricultural Implement Workers of Am. v. Yard-Man, Inc. and reversed the district court’s decision, and said the case could move forward. The district court then ruled for retirees and the federal appellate court confirmed. In 2014, the case made it to the Supreme Court.  In 2015, the high court ruled that the 6thCircuit’s misused the Yard-Man presumption, saying its decision was incompatible with ordinary principles of contract law. 

Back with the 6th Circuit, upon reviewing the Supreme court’s decision, the court noted that the high court overturned the primary precedent on which the district court’s and its prior decisions relied and directed the courts to use ordinary principles of contract law.

The appellate court remanded the case to the district court to decide, outside the “shadow of Yard-Man,” what documents went into the agreements; whether referring to outside evidence is appropriate;  and whether the agreements vest with the lifetime contribution-free health care benefits.

The 6th Circuit’s opinion is here.