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.

                                                   -5-
       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


                                                -6-
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).

                                                  -7-
       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”).

                                                  -8-
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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