International Union, United Automobile, Aerospace and Agriculture Implement Workers of America Local 2383 v. Martinrea Heavy Stampings, Inc.

Filing 17

MEMORANDUM OPINION & ORDER: Defendant Martinrea Heavy Stampings, Inc.'s Motion to Dismiss 6 is GRANTED. This matter is DISMISSED, with prejudice, and stricken from the Court's docket. Signed by Judge Danny C. Reeves on 8/9/2011.(CBD)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
(at Frankfort)
INTERNATIONAL UNION, UNITED
AUTOMOBILE, AEROSPACE AND
AGRICULTURE IMPLEMENT
WORKERS OF AMERICA LOCAL 2383,
Plaintiff,
V.
MARTINREA HEAVY STAMPINGS,
INC.,
Defendant.

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Civil Action No. 3: 11-22-DCR

MEMORANDUM OPINION
AND ORDER

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This matter is before the Court for consideration of the Motion to Dismiss filed by
Defendant Martinrea Heavy Stampings, Inc. (“Martinrea” or “the Company”). [Record No. 6]
Martinrea argues that the Complaint of Plaintiff United Auto Workers Local 2383 ( “the Union”)
is barred by the applicable statute of limitations. The Court heard oral argument on the motion
on this date. For the reasons discussed below, Martinrea’s motion will be granted.
I.

BACKGROUND

Martinrea and the Union are parties to a collective bargaining agreement. This case arises
out of a grievance filed by the Union pursuant to that agreement and the arbitration that
followed. The grievance pertained to the eligibility of two Martinrea employees, Kevin Kennedy
and Anthony Volpe, for retirement and early retirement benefits. The dispute was not resolved

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through the grievance procedure and consequently was submitted to an arbitrator. The following
two issues were presented to Arbitrator Langdon D. Bell for decision:
Issue #1
With respect to Kevin Kennedy and Anthony Volpe, when is or was each eligible
for early retirement under the Martinrea Heavy Stampings, Inc., Shelbyville
Retirement Security Plan or the Collective [B]argaining Agreement with an early
retirement supplement? (1) The Union maintains that they were eligible when
each, respectively, attained at least 30 years of eligibility service and the
combination of his age and years of eligibility service totaled 80 . . . . (2) The
Company maintains that Kennedy and Volpe are not eligible until each,
respectively, has attained at least 30 years of eligibility service and the
combination of his age and years of eligibility service totals 85 . . . .
Issue #2
With respect to Kevin Kennedy and Anthony Volpe, what entity should pay the
supplement[?] (1) The Company maintains that it should be apportioned between
the Martinrea Heavy Stampings, Inc., Shelbyville Retirement Security Plan
(“Plan”) and the Budd-UAW Consolidated Retirement Benefit Plan. (2) The
Union maintains it should be paid entirely by the Plan.
[Record No. 1-2, p. 3 (footnotes omitted)]
The arbitrator issued his Decision and Award on October 29, 2010. In it, he concluded
that Kennedy and Volpe “were eligible to retire when each, respectively, attained at least 30
years of eligibility service and the combination of their age and years of eligibility total 80 [(the
“Rule of 80”)] . . . and that [the] reduced supplement provided for herein should be paid entirely
by the Shelbyville Pension Plan.” [Id., p. 64] Arbitrator Bell’s reference to a “reduced
supplement” reflected his finding that the parties had agreed to the Rule of 80, subject to
reduction of the $1,700 monthly benefit based upon an employee’s age at retirement.1 [See id.,

1
Under this “‘80 points with reductions’ scenario,” as the arbitrator explained in his decision, an
employee who retired at age 50 after 30 years of service would receive a smaller percentage of the $1,700

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pp. 47-60] The arbitrator stated that he would retain jurisdiction “for ninety days to resolve any
issues associated with the implementation of this Award.” [Id., p. 64]
On December 15, 2010, the Union filed a motion with the arbitrator seeking
“‘clarification’” or “‘resolution’” regarding the early-retirement benefits due Kennedy and Volpe
under the October 29 Award. [Record No. 1-3, pp. 3-4] The Union argued that Martinrea had
improperly implemented the Award by paying the employees early-retirement supplements of
less than $1,700 per month. [See id., p. 4] In the Union’s view, the arbitrator had ruled in its
favor on the two issues presented to him — i.e., when the employees were eligible for early
retirement and what entity was responsible for paying their benefits — and should not have
reduced the amount of the monthly payments Kennedy and Volpe would receive. [See id.]
Arbitrator Bell disagreed. On February 2, 2011, he issued a decision captioned “Arbitrator’s
Ruling on Union’s Motion to Clarify and/or Resolve an Issue Associated with Implementation
of the Arbitration Award Issued Herein October 29, 2010” [id., p. 1] in which he found the
October 29 Award to be “consistent with his authority upon finding a violation of the parties’
collective bargaining agreement (the employer’s failure to recognize employees’ rights to early
retirement benefits based on the ‘Rule of 80’) to order an appropriate remedy as dictated by the
same collective bargaining agreement.” [Id., p. 5] The arbitrator explained, “What the
Arbitration Decision and Award did was give effect to the Union’s own proposal of January 4,

monthly benefit than an employee who retired at age 55 with the same length of service. [Record No. 1-2,
p. 54] Arbitrator Bell observed that the parties had not raised the issue of reductions and noted that such an
arrangement “could be ‘problematic’ for the union as it would reduce benefits for a more senior employee
with thirty years of service so as to provide also reduced retirement benefits — for the first time — to a fifty
year old employee with thirty years of service.” [Id., pp. 54-55]

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2002, in which the union melded both the reduction in eligibility for early retirement and the
reduction in early retirement benefits into a single provision . . . .” Accordingly, in the final
paragraph of his ruling (under the heading “Supplemental Order”), Arbitrator Bell concluded that
Martinrea had not erred in its implementation of the Award by reducing the employees’ monthly
benefits below $1,700. [Id., p. 6]
The Union filed the present lawsuit on April 26, 2011, pursuant to section 301 of the
Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185. Alleging that the arbitrator
exceeded his authority by reducing the amount of the early-retirement benefits Kennedy and
Volpe should receive, the Union seeks to have that part of the October 29 Award vacated.
[Record No. 1, p. 7] It also asks the Court to enforce the Award with respect to when the
employees may retire and who should pay their benefits. [Id.] The Union’s claims, however,
are time-barred.
II.

ANALYSIS

The parties agree that the statute of limitations for the Union’s claims is three months.
See Ky. Rev. Stat. § 417.050 (exempting collective bargaining agreements from coverage under
state arbitration act); Occidental Chem. Corp. v. Int’l Chem. Workers Union, 853 F.2d 1310,
1315-16 (6th Cir. 1988) (adopting three-month limitations period for § 301 suits where no
analogous state cause of action exists); Int’l Bhd. of Teamsters, Local 783 v. Dean Foods Co.,
No. 91-6259, 1992 U.S. App. LEXIS 16875, at *14 (July 14, 1992) (applying Occidental to find
three-month statute of limitations applicable to § 301 suits in Kentucky). Thus, for present
purposes, the only relevant issue is when the limitations period began to run. More specifically,

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the Court must determine which of the arbitrator’s decisions triggered the statute of limitations:
the October 29 Award, or the February 2 Ruling?
Citing several cases in support of its position, Martinrea maintains that the October 29
Award was final and appealable. Therefore, it asserts, the deadline to challenge the Award
passed in January 2011. [Record No. 6, pp. 3-4; Record No. 15, pp. 3-7] According to the
Union, however, it was Arbitrator Bell’s second ruling that started the clock running. [Record
No. 12, p. 3 (“Because the Arbitrator retained jurisdiction, the arbitration process was not
complete until the issuance of the Supplemental Order [on] February 2, 2011.”)] The Union
relies primarily on policy arguments, without citations, to bolster its position. [See id., pp. 3-4]
A “final” arbitration award is one that is “intended by the arbitrator to be his complete
determination of every issue submitted to him.” Anderson v. Norfolk & Western Ry. Co., 773
F.2d 880, 883 (7th Cir. 1985). If the arbitrator has “retain[ed] jurisdiction in order to decide a
substantive issue the parties have not yet resolved, this retention of jurisdiction ‘indicates that
the arbitrator did not intend the award to be final.’” Orion Pictures Corp. v. Writers Guild, 946
F.2d 722, 724 (9th Cir. 1991) (quoting Millmen’s Local 550 v. Wells Exterior Trim, 828 F.2d
1373, 1376-77 (9th Cir. 1987)). Courts must look to “the language and nature of the award
itself” and make an objective determination of the arbitrator’s intent. Teamsters Local 486 v.
Quality Carriers, Inc., No. 02-10059-BC, 2003 U.S. Dist. LEXIS 886, at *13 (E.D. Mich. Jan.
22, 2003).
Here, the arbitrator’s October 29 Decision and Award clearly resolved both of the
substantive issues presented to him: (1) when the employees were eligible to retire (after 30

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years of eligibility service and a combined total of 80 years of eligibility service and age), and
(2) what entity should pay their early-retirement benefits (the Shelbyville Plan). [Record No.
1-2, p. 64] When analyzing the first issue, Arbitrator Bell determined that the parties had agreed
to reductions as part of their agreement that the Rule of 80 would apply. [See Record No. 1-2,
pp. 47-60; see also Record No. 1-3, p. 4; id., p. 5 (noting documents of record demonstrating
“that both parties ultimately agreed to the reduction in the [early-retirement] supplement to
reflect its early receipt”)] In fact, the Union acknowledges that “[t]he issue of liability was not
in question” following the October 29 Award and that the purpose of its motion — and the
arbitrator’s February 2 Ruling — was merely “to ‘clarify and/or resolve an issue associated with
implementation of the initial Award.’” [Record No. 12, p. 4]
Both parties cite McKinney Restoration Co. v. Illinois District Council No. 1, 392 F.3d
867 (7th Cir. 2004), in which the Seventh Circuit held that an arbitration award is final and
appealable when the “arbitrator believes the assignment is completed.” Id. at 872. The
McKinney court noted that an arbitrator’s retention of jurisdiction may be a “marker” of a nonfinal order where a substantive issue — e.g., remedy — remains to be resolved. Id.; see also
Int’l Bhd. of Elec. Workers, Local 124 v. Alpha Elec. Co., 759 F. Supp. 1416, 1420 (W.D. Mo.
1991) (“An award is not ‘final’ if it decides only liability and leaves unresolved the question of
remedy.”). Such a situation is not presented here, however. As explained above, the arbitrator’s
October 29 Award unequivocally resolved both substantive issues submitted to him, and he
retained jurisdiction only for the purpose of “resolv[ing] any issues associated with the

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implementation of th[e] Award.” [Record No. 1-2, p. 64] McKinney is therefore unhelpful to
the Union.
Sterling China Co. v. Glass, Molders, Pottery, Plastics & Allied Workers No. 24, 357
F.3d 546 (6th Cir. 2004), cited by the Union, is likewise distinguishable. In Sterling, as in this
case, the arbitrator issued an award in which he “‘retain[ed] jurisdiction should any disputes arise
between the parties with respect to the implementation of th[e] remedy.’” Id. at 554. More than
two years later, after continued disagreement between the parties concerning “the proper
application of the issued remedy,” id. at 552, the arbitrator issued a supplemental award. Id. at
551. The company then filed suit in federal district court, seeking to vacate the supplemental
award. Id. at 548. It argued that the supplemental award was null and void because the union
had waited too long to ask that the original award be vacated or changed. Id. Thus, at issue in
Sterling was whether the arbitrator’s second ruling, made during his period of retained
jurisdiction, was valid under the applicable statute of limitations. Here, by contrast, the
Complaint makes clear that the Union seeks to challenge only the arbitrator’s original decision.
The relief sought relates not to the February 2 Ruling, but rather the October 29 Award. [See
Record No. 1, p. 7 (asking the Court to enforce in part and vacate in part the October 29 Award)]
Unlike the situation presented in Sterling, the pertinent issue here is not the validity of the
arbitrator’s second decision, but whether the Union missed its chance to challenge the first.
Relevant on that point is the supplemental authority provided by Martinrea’s counsel
during oral argument: Dreis & Krump Mfg. Co. v. Int’l Ass’n of Machinists & Aerospace
Workers, Dist. No. 8, 802 F.2d 247 (7th Cir. 1986). There, the court rejected an argument that

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the arbitrator, by retaining jurisdiction to resolve any issues that arose concerning
implementation of his award, “had somehow deprived the award of its finality.” Id. at 250-51.
Two reasons underlay the court’s conclusion:
First, all that was in doubt was the precise amount of backpay, for which the
company’s records had to be consulted but which once they were consulted would
be determined automatically, without an exercise of judgment or discretion. This
was, therefore, a “ministerial” detail, such as would not have prevented the
judgment from being deemed final for purposes of appeal; no more did it prevent
the award from becoming final for purposes of starting the statute of limitations
running. Second, and more interesting, the analogy between a suit to set aside an
arbitration award and an appeal from a regular judgment is just an analogy, and
not an identity, and it breaks down on the issue of finality. A suit to set aside an
arbitration award under section 301 of the [LMRA] is a suit for breach of
contract, the contract being the arbitration clause of the collective bargaining
agreement; and the suit is ripe as soon as the breach is definitive. Quite apart
from the details of backpay, the rendition of an award which if the company is
correct ordered it to do things . . . that were in excess of the arbitrator’s authority
to order was a breach of contract that set the statute of limitations running.
Id. at 251 (citations omitted).
The reasoning of Dreis & Krump is persuasive here. First, the implementation of
Arbitrator Bell’s October 29 Award was a “ministerial” task that merely required the parties to
apply the formula set forth in the Award. Id. Furthermore, the breach of contract asserted by
the Union in this case is the arbitrator’s issuance of the October 29 Award, parts of which
allegedly exceeded his authority under the parties’ collective bargaining agreement. [See Record
No. 1, p. 7] As the Dreis & Krump court explained, the statute of limitations began to run “as
soon as the breach [was] definitive” — i.e., as soon as the arbitrator issued the October 29
Award. 802 F.2d at 251.

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Moreover (and more importantly), the Award itself indicates that Arbitrator Bell intended
it to be final. As Martinrea points out, the arbitrator stated at the outset that he had “full
jurisdiction and authority to issue a final and binding award on the issues.” [Record No. 1-2, p.
30; see Record No. 15, p. 4] He did not “retain[] jurisdiction . . . to decide a substantive issue
the parties have not yet resolved,” Orion Pictures Corp., 946 F.2d at 724; rather, the substantive
issues — eligibility for early retirement and who would pay the benefits — were clearly disposed
of by the October 29 Award. In short, “the language and nature of the award,” Teamsters Local
486, 2003 U.S. Dist. LEXIS 886, at *13, show that it was meant to be a “complete determination
of every issue submitted.”2 Anderson, 773 F.2d at 883. Thus, the October 29 Award was final
and appealable. See id.
III.

CONCLUSION

The arbitrator’s October 29, 2010 Decision and Award resolved all substantive issues
submitted to him and was intended to be final and binding. Because the Union did not file its
Complaint until nearly six months later, this action is barred by the three-month statute of
limitations. Accordingly, it is hereby

2
Tellingly, although it twice refers to the February 2 Ruling as a “final” decision (perhaps merely in
the chronological sense), the Union makes no attempt to argue that the October 29 Award was not final under
the definitions set forth in the various cases cited above. [See Record No. 12] Instead, the Union’s position
is simply that the statute of limitations did not run for as long as the arbitrator retained jurisdiction. [See id.,
pp. 3-4] As Martinrea observes, however, the parties had already exhausted the arbitrator’s jurisdiction over
the merits of the grievance; he retained jurisdiction only to the extent there were “any issues associated with
the implementation of th[e] Award.” [Record No. 1-2, p. 64; see Record No. 15, p. 8]

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ORDERED that Defendant Martinrea Heavy Stampings, Inc.’s Motion to Dismiss
[Record No. 6] is GRANTED. This matter is DISMISSED, with prejudice, and stricken from
the Court’s docket.
This 9th day of August, 2011.

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