Carlisle Power Transmission Products, Inc.v. United Steel Workers of America
Filing
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ORDER granting 33 Motion for Summary Judgment; denying 35 Motion for Summary Judgment; (Schroeppel, Kerry)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
SOUTHERN DIVISION
CARLISLE POWER TRANSMISSION
PRODUCTS, INC., f/k/a Carlisle
Engineered Transportation Solutions
and Carlisle Power Transmission
Products, Inc.,
)
)
)
)
)
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Plaintiff,
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)
vs.
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)
UNITED STEEL, PAPER AND
)
FORESTRY, RUBBER,
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MANUFACTURING, ENERGY,
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ALLIED INDUSTRIAL AND SERVICE )
WORKERS INTERNATIONAL UNION, )
LOCAL UNION NO. 662.
)
)
Defendant.
)
Case No. 10-3538-CV-S-RED
ORDER
Before the Court are Plaintiff Carlisle Transportation Products, Inc.’s Motion for Summary
Judgment (Doc. 33) and Defendant’s Motion for Summary Judgment (Doc. 35). Plaintiff Carlisle
Transportation Products, Inc., f/k/a Carlisle Engineered Transportation Solutions and Carlisle Power
Transmission Products, Inc. (“Carlisle”) is seeking summary judgment in its favor on its Complaint
for Declaratory Judgment (Doc. 1) against Defendant United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, Local
Union No. 662 (“United Steel”). United Steel opposes Carlisle's Motion for Summary Judgment
and also moves for summary judgment in its favor seeking a determination that Carlisle is barred
from bringing this lawsuit.
INTRODUCTION
The parties agree on a majority of the facts that are relevant to the issue of whether either
party is entitled to an entry of summary judgment in its favor. The dispute between the parties arises
out of a grievance filed by Gary Mincks ("Mincks"), a former Carlisle employee, concerning a
dispute over long term disability benefits and whether that grievance is subject to arbitration
pursuant to the parties' collective bargaining agreement ("CBA"). The parties also entered into a
CBA Plan Description, which was incorporated into the CBA, setting forth a review process for long
term disability benefits. Aetna Life Insurance Company (“Aetna”), the insurance provider for
Carlisle’s offered benefits, also has a review process governing long term disability benefits, which
is set forth in an Aetna Long Term Disability Plan.
Mincks applied for long term disability benefits on July 2, 2004, which was granted. Mincks
also applied for disability benefits through the Social Security Administration, which was granted
on May 16, 2005. Aetna thereafter informed Mincks that it considered the disability benefits he was
receiving through the Social Security Administration to be ‘other income’ entitling it to offset the
long term disability benefits he was receiving and also entitling Aetna to be compensated for
overpaying on Mincks’ long term disability benefits claim.
Mincks formally appealed Aetna’s decision under the process set forth in the Aetna Long
Term Disability Plan and the CBA Plan Description and Aetna, on February 9, 2006, determined
that its original decision was correct. Mincks did not challenge Aetna’s decision in state or federal
court. Instead, United Steel, the Union responsible for representing Mincks, filed a grievance on
his behalf challenging Aetna’s decision about Mincks’ long term disability benefits.
Carlisle and United Steel were not able to resolve Mincks’ grievance before the CBA expired
and Carlisle took the position that the grievance did not survive the expiration of the 2001 CBA.
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The parties submitted a limited issue to an arbitrator in order to have an arbitrator decide whether
Mincks’ grienance, along with two unrelated grievances of other employees, survived the expiration
of the 2001 CBA. An arbitrator determined that the three grievances survived the CBA's expiration
and the arbitrator's decision was affirmed by the Honorable Ortrie D. Smith on July 16, 2008, and
later by the Eighth Circuit on June 4, 2009.
Now Carlisle has filed this declaratory action and requests that the Court find Mincks’
greivance is not subject to arbitration under the parties' CBA. United Steel presents no opposition
to this argument. Rather, United Steel argues that Carlisle is barred by the doctrine of res judicata
and barred by the statute of limitations from bringing this declaratory judgment action. Both parties
have filed motions for summary judgment, but the facts discussed and the arguments raised for both
motions are identical.
STANDARD OF REVIEW
On a motion for summary judgment, a court must view the record in a light most favorably
to the nonmoving party. Taylor v. St. Louis Cnty. Bd. of Election Comm’rs, 625 F.3d 1025, 1026-27
(8th Cir. 2010). Summary judgment is appropriate where "there are no genuine issues of material
fact and the moving party is entitled to judgment as a matter of law. Id.
LEGAL ANALYSIS
A. The doctrine of res judicata does not bar Carlisle from filing this lawsuit
United Steel argues that the doctrine of res judicata bars Carlisle’s suit because Carlisle
should have raised the issue of whether Mincks' grievance relating to long term disability benefits
is subject to arbitration under the CBA before the arbitrator. In support, United Steel notes that
arbitration awards have preclusive effect and prevent parties from asserting the same or additional
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claims in a new proceeding. Val-U Constr. Co. of S.D. v. Rosebud Sioux Tribe, 146 F.3d 573, 581
(8th Cir. 1998). As United Steel further notes, the doctrine of res judicata applies if there is: “1) a
final judgment on the merits, 2) based on proper jurisdiction, 3) between the same parties, and 4)
based on the same claims or causes of action.” Wintermute v. Kan. Bankers Sur. Co., 630 F.3d 1063,
1067 (8th Cir. 2011). In order for the doctrine of res judicata to apply, the arbitrator’s decision
finding that the three grievances survived the expiration of the 2001 CBA agreement would have
to be found to constitute a final judgment on the merits and it would have to be determined this
action and the action before the arbitrator arise “out of the same nucleus of operative facts.” Banks
v. Int’l Union Elec., Elec., Technical, Salaried & Mach. Workers, 390 F.3d 1049, 1052 (8th Cir.
2004). The parties limit their arguments to whether the arbitrator's decision was a final judgment
on the merits and whether this lawsuit is based on the same cause of action as the case before the
arbitrator.
Carlisle argues that the arbitrator’s decision did not constitute a final judgment on the merits
because it dealt with a procedural issue only. Carlisle also argues that the present action and the
arbitration do not arise out of the same nucleus of operative facts because the arbitration action dealt
with whether three different grievances survived the expiration of the 2001 CBA and the underlying
facts of Mincks’ grievance were not before the arbitrator.
The Court disagrees with Carlisle's position. Although the ultimate issue as to whether
Mincks' long term disability benefits are subject to offset was not addressed by the arbitrator, this
does not mean that the arbitrator's decision was not a final judgment on the merits. The arbitrator
was asked and ultimately decided on the merits the sole legal issue to which he was presented, i.e.
whether or not the grievance was subject to arbitration in light of the expiration of the CBA. The
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Court also notes that the cases cited by Carlisle1 attempting to demonstrate that the arbitrator's
decision was not on the merits are not persuasive, as they discuss instances where a cause of action
was dismissed on procedural grounds before reaching the merits of the issue, not where a final
decision on the merits was rendered on a procedural issue. Therefore, the Court finds that the
arbitrator's decision in this case constitutes a final judgment on the merits for purposes of res
judicata.2
The Court also finds that this lawsuit and the case before the arbitrator arise out of the same
cause of action. Notably, both cases have been limited to the procedural issue of whether Mincks'
grievance is subject to arbitration under the CBA. It is telling that the Court is not asked to
determine whether Aetna was correct in determining that Mincks' long term disability benefits could
be offset by his social security benefits. Therefore, for purposes of res judicata, the Court finds that
the procedural issue before this Court arises out of the same cause of action as the procedural issue
before the arbitrator. If we were to stop here, res judicata would be applicable.
However, the Court finds that United Steel waived its right to rely on the doctrine of res
judicata by agreeing to specifically limit the procedural issue before the arbitrator. See Dodd v.
1
See (Suggestions in Opposition Doc. 37 p. 6) citing: Harper Plastics, Inc. v. Amoco Chems.
Corp., 657 F.2d 939, 943 (7th Cir. 1981) (noting that a case dismissed for lack of jurisdiction is not
subject to the doctrine of res judicata); Saunders v. Am. Warehousing Servs., Inc., No. 04 C 7455,
2005 WL 2304804, at * 4 (N.D. Ill. Sep. 19, 2005) (finding that a case dismissed as untimely is not
barred by the doctrine of res judicata); Kennedy v. Dretke, No. Civ.A. H-05-2805, 2005 WL
3504346, at * 5-6 (S.D. Tex. Dec. 21, 2005) (determining that a case dismissed on procedural
grounds is not barred by the doctrine of res judicata).
2
The Court also notes that it is disingenuous for Carlisle to argue that the arbitrator's decision
was not a final judgment on the merits while also seeking a decision from this Court about whether
Mincks' grievance is subject to arbitration and arguing that they are now seeking a judgment on the
merits. The issues presently before this court are just as much "procedural" as the issue before the
arbitrator, since all relate to whether or not the ultimate issue of offset is subject to arbitration.
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Hood River Cnty., 59 F.3d 852, 862 (9th Cir. 1995) (noting that a party may waive the defense of
res judicata by agreeing to split a claim); Restatement (Second) of Judgments § 26(1)(a) (1982)
(noting that the parties may agree "in terms or in effect," or the defendant may acquiesce in, the
plaintiff splitting his claim). The parties agreed to submit a limited issue to the arbitrator so that the
arbitrator would only determine whether three grievances survived the expiration of the 2001 CBA.
See (Carlisle's Statement of Facts Doc. 34 ¶ 44; United Steel's Response Doc. 38 ¶ 44). Therefore,
the Court finds that United Steel may not rely upon the defense of res judicata because it agreed to
limit what the arbitrator would be able to decide.
B. Carlisle is not barred by the statute of limitations from bringing this lawsuit
United Steel next argues that the six month statute of limitations contained under section
10(b) of the National Labor Management Relations Act applies to Carlisle's cause of action and
furthermore, the six month statute of limitations has run. Although Carlisle disputes the application
of the six month statute of limitations in this case and argues for the application of a five year statute
of limitations, the Court will apply the six month statute of limitations because it does not affect the
outcome of the case. However, the Court notes that the six months statute of limitations appears
to be the applicable statute of limitations because had United Steel filed an action seeking to compel
Carlisle to participate in arbitration, the six month statute of limitations would clearly apply. See
Local No. 88 United Food and Commercial Workers Union, AFL-CIO, CLC v. Middendorf Meat
Co., No. 92-2955, 1993 WL 96905, at *2 (8th Cir. Feb. 2, 1993) (citing cases from other circuit
courts finding that the six month statute of limitations under section 10(b) of the National Labor
Management Relations Act applies to a motion to compel arbitration and noting that the district
court correctly applied this statute of limitations).
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The statute of limitations begins to run from the date the employer “clearly refuses to
arbitrate” a grievance. Aluminum, Brick and Glassworkers Int’l Union Local 674 v. A.P. Green
Refractories, Inc., 895 F.2d 1053, 1055 (5th Cir. 1990). United Steel argues that the six month
statute began to run once Carlisle issued a written decision denying Mincks’ grievance on May 8,
2006. However, the Court does not find this to be the appropriate date, as nothing about this denial
clearly demonstrated that Carlisle would not arbitrate the dispute. Notably, although Carlisle stated
that it did not believe the grievance was arbitrable because it did not survive the expiration of the
2001 CBA, the parties thereafter engaged in arbitration to determine this issue.
United Steel then argues that even if the date of the Eight Circuit’s decision affirming the
arbitrator’s decision was selected as the applicable date, June 4, 2009, then this action would still
be considered untimely. Again, however, nothing about the date the Eighth Circuit issued its
decision clearly demonstrated that Carlisle would not arbitrate Mincks’ grievance. The Eighth
Circuit's decision merely affirmed the arbitrator's determination.
With the above in mind, the Court finds that the letter issued by Carlisle’s attorney to United
Steel on December 8, 2010, indicating that Carlisle “does not agree to proceed with the arbitration
scheduled for December 16, 2010" because the claim is not subject to arbitration under the CBA
(Ex. 4 Doc. 3-4), begins the running of the six month statute of limitations, as Carlisle clearly
advised United Steel that it would not participate in the scheduled arbitration for Mincks’ claim.
Carlisle filed its complaint on December 30, 2010, well within the six-month period. Therefore,
Carlisle is not barred by the statute of limitations from maintaining this lawsuit against United Steel.
C. Mincks’ grievance is not subject to arbitration under the CBA
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The final issue that must be addressed is whether Carlisle is entitled to a declaratory
judgment determining that Mincks' grievance is not subject to arbitration. United Steel does not
address this argument, appearing to concede that arbitrating the dispute over the long term disability
benefits is improper.
The Eighth Circuit has noted that “[a]n arbitration clause may establish a presumption of
arbitrability, but the presumption may be overcome by an express provision excluding a particular
grievance from arbitration or by persuasive evidence of a purpose to exclude the claim from
arbitration.” Local 38N Graphic Communications Conference/IBT v. St. Louis Post-Dispatch, LLC,
638 F.3d 824, 826 (8th Cir. 2011). Carlisle argues that both prongs are met.
With respect to whether an express provision excludes arbitration of disputes concerning
long term disability benefits, Carlisle notes that the CBA Plan Description specifically states that
the “terms and conditions of these benefits programs are not to be construed or interpreted in
conjunction with any collective bargaining agreements between the Company and the Union, but
independently from them, except as otherwise provided in this document.” (CBA Plan Description
Doc. 34-4 p. 8). The CBA Plan Description also provides that “[n]o action shall be taken in the
administration of this benefits program that shall be construed or interpreted to be a violation of any
of the terms of any collective bargaining agreement.”3 Id. Furthermore, the CBA Plan Description
and the Aetna Certificate of Coverage both state that Aetna will review an employee’s benefits
claim, an employee may request a review by Aetna of his or her denied claim, and that Aetna will
3
United Steel objected to these provisions, stating that it contradicted by the fact that the
CBA Plan Description was incorporated into and considered a part of the CBA, but does not
otherwise demonstrate how these two provisions are contradictory to the CBA. The Court finds that
these provisions show that the benefits program is to be administered apart from the normal
grievance procedures provided in the CBA.
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then issue its final decision on the claim. (CBA Plan Description Doc. 34-4 p. 29-30; Aetna
Certificate of Coverage Doc. 34-3 p. 25). Finally, the CBA Plan Description and the Aetna
Certificate of Coverage both provide that an employee may file suit in state or federal court to
challenge a denied or ignored claim for benefits. (CBA Plan Description Doc. 34-4 p. 62; Aetna
Certificate of Coverage Doc. 34-3 p. 25).
The Court finds that the exclusionary language contained in the CBA Plan Description,
which was incorporated into the CBA, coupled with the fact that the CBA Plan description provides
an “alternative procedural framework” for resolving benefit disputes, demonstrates that disputes
concerning the benefits program are excluded from the Grievance Procedure (providing for
arbitration) contained within the CBA. See Teamsters Local Union No. 783 v. Anheuser-Busch, Inc.,
626 F.3d 256, 262-63 (6th Cir. 2010) (finding that where a Pension Plan “clearly provide[d] a
specific mechanism for resolving all grievances related to pension rights,” allowed for a claimant
to file suit in court if the claimant disagreed with the outcome, and was incorporated into the CBA,
it was explicitly demonstrated that “a grievance for rights under the Pension Plan [was] not
arbitrable”); Int’l Ass’n of Machinists and Aerospace Workers, Dist. No. 10 v. Waukesha Engine
Div., Dresser Indus., Inc., 17 F.2d 196, 198 (7th Cir. 1994) (finding that where the CBA provided
an “alternative review procedure” for the administration of benefits and allowed a claimant to
challenge the insurer’s decision in state or federal court, “the parties did not intend to arbitrate
disputes concerning the denial of benefits”). At the very least, these provisions appear to be
“persuasive evidence of a purpose to exclude” grievances concerning the administration of benefits
from arbitration. St. Louis Post-Dispatch, LLC, 638 F.3d at 826. Therefore, the Court finds that
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Carlisle is entitled to a declaratory judgment finding that Mincks' grievance is not subject to
arbitration.
CONCLUSION
For the reasons above, the Court GRANTS Plaintiff Carlisle Transportation Products, Inc.’s
Motion for Summary Judgment (Doc. 33) and DENIES Defendant’s Motion for Summary Judgment
(Doc. 35). The Court finds that Carlisle is entitled to a declaratory judgment finding that Gary
Mincks' grievance, No. 3-23-06-7103, wherein he challenges Aetna's decision to offset his long term
disability benefits and require him to reimburse Aetna for overpayment, is not subject to arbitration
under Carlisle's and United Steel's collective bargaining agreement.
IT IS SO ORDERED.
DATED:
April 5, 2012
/s/ Richard E. Dorr
RICHARD E. DORR, JUDGE
UNITED STATES DISTRICT COURT
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