September 7, 2010; withdrawn and opinion filed May 21, 2012
Appeal from the United States District Court for the District of Arizona D.C. Nos. 4:06-cv-00032-DCB & 4:06-cv-00032-DCB David C. Bury, District Judge, Presiding.
The opinion of the court was delivered by: Thompson, Senior Circuit Judge
Argued and Submitted February 9, 2010 -- San Francisco, California
Before: David R. Thompson, M. Margaret McKeown and Marsha S. Berzon, Circuit Judges.
The plaintiffs are a class of retirees from Raytheon and its predecessor, Hughes Missile Systems, along with their spouses and eligible dependents. Since 1972, Hughes, and later Raytheon, paid insurance premiums for healthcare coverage for early retirees until age 65 pursuant to a series of collective bargaining agreements ("CBAs") with the plaintiffs' union. In 2004, Raytheon limited its contributions to premiums for this insurance and started charging the plaintiffs monthly payments for their healthcare coverage. The plaintiffs sued alleging that Raytheon breached the CBAs and violated the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132. The district court concluded that the CBAs obligated Raytheon to continue to pay the premiums and granted summary judgment in favor of the plaintiffs. Raytheon appeals the order granting summary judgment.
In a separate order, the district court granted Raytheon's motion for judgment on the pleadings, concluding that the plaintiffs were not entitled to punitive and extra-contractual damages. The plaintiffs appeal that judgment.
We have jurisdiction under 28 U.S.C. § 1291, and we affirm the district court's summary judgment in favor of the plaintiffs and its judgment on the pleadings in favor of Raytheon.
The CBAs that apply to the plaintiffs are those adopted in 1990, 1993, 1996 and 1999. Each CBA provided premium-free medical insurance coverage to qualified retirees until they attained the age of 65 years, as well as their spouses and eligible dependents. To qualify, retirees had to be at least age 55 but less than age 65, with five years of continuous employment, and three years of continuous participation in the company retirement plan.
Hughes Missile Systems executed the 1990-1996 CBAs. In 1997, Hughes Missile Systems merged into Raytheon and Raytheon was substituted as the employer in the 1996 CBA. In 1999, Raytheon executed a new CBA that continued to provide retirees with premium-free medical insurance coverage.
The relevant provisions of the 1990-1999 CBAs remained largely unchanged. Each CBA carried a three-year term. For qualifying retirees, Hughes and Raytheon agreed "to continue to provide the Comprehensive Medical Plan coverages for which they were covered while active employees, until the retired employee attain[ed] age 65 . . . ." This promise assured retirees of premium-free medical insurance coverage, because a separate provision of the CBAs obligated Hughes and Raytheon to pay the premiums for the Comprehensive Medical Plan for active employees. Starting in 1993, a provision was added to the CBAs confirming that for retirees "there is no weekly premium/charge" for the Preferred Plan, the Hughes Medical Plan, or an HMO. Raytheon continued to pay the full premiums for retirees until 2004.
In 2003, Raytheon negotiated a new CBA that eliminated its obligation to pay the full medical insurance premiums for retirees. The 2003 CBA obligated Raytheon to pay only a portion of the premiums for retiree medical insurance coverage. Raytheon applied this new agreement retroactively and, in 2004, began charging ...