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BOUBOULIS v. TRANS. WORKERS UNION GREATER NY LOCAL 100

July 7, 2004.

NICHOLAS BOUBOULIS, et al., Plaintiffs,
v.
TRANSPORTATION WORKERS UNION OF GREATER NEW YORK, LOCAL 100, et al., Defendants.



The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge

OPINION AND ORDER

I. INTRODUCTION

  Twenty-three retired employees of defendant Transport Workers Union of Greater New York, Local 100 ("Local 100") and twenty-two of their wives, bring this action against Local 100, the Transport Workers Union of America ("TWU"), and the TWU Local 100 Staff Benefit Plan (the "Plan"). Plaintiffs seek equitable and monetary relief in connection with defendants' termination of their health insurance coverage under the Plan, which forced plaintiffs to revert to inferior coverage provided by plaintiffs' other former (or, in one case, current) employers. Plaintiffs assert claims based on breach of contract and breach of fiduciary duty, pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"),*fn1 as well as promissory and equitable estoppel. Defendants now move for summary judgment. For the reasons set forth below, defendants' motion is granted as to both the ERISA and the equitable estoppel claims, but granted in part and denied in part with regard to the promissory estoppel claim.

  II. BACKGROUND

  Plaintiffs are retired former staff members of Local 100 ("Retirees") and their wives.*fn2 Retirees are also active or retired employees of the New York City Transit Authority or of its subsidiary, the Manhattan and Bronx Surface Transit Operating Authority (collectively, the "TA").*fn3

  Local 100 is a local union that represents TA employees and is affiliated with the TWU, a national union.*fn4 Although Local 100 is governed by the TWU's constitution, it has its own bylaws, elects its own officers, employs its own staff, has its own building, and has its own revenue stream from membership dues.*fn5 The Plan is an employee benefit plan sponsored by the TWU, in which Local 100 participates.*fn6

  Between 1971 and 1991 each of the Retirees left his job at the TA to take a job with Local 100. Many of the Retirees claim that they were told or promised by Local 100 officers or staff either before they were hired, upon being hired, when considering retirement, or at various other times during their employment, that they would have lifetime health insurance coverage under the Plan.*fn7 All Retirees believed that they were guaranteed lifetime health coverage.*fn8 The health benefits provided to Retirees under the Plan were superior to those offered by the TA to its active and retired employees.*fn9

  The terms of the Plan are set out in two documents. The complete terms and conditions of the Plan are detailed in a Group Insurance Certificate*fn10 that has been in effect since April 1, 1981.*fn11 The terms of the Plan are also summarized in a summary plan description (the "SPD")*fn12 which was distributed in 1982.*fn13 Among other things, the SPD provides that "[t]he benefits outlined herein apply to both active and retired members of the TWU staff."*fn14 The SPD contains no express reservation of the right to amend or terminate coverage under the Plan. Under the terms of the Plan, plaintiffs' health insurance was funded by the payment of premiums by Local 100.*fn15

  In a letter to Plan participants dated April 17, 1989,*fn16 then Local 100 president Sonny Hall announced a modification to the terms of the Plan. Under the SPD, when a participant died, his or her spouse's insurance coverage under the Plan continued for only one year after the participant's death. Hall's letter announced that effective January 1, 1989, a spouse of a participant who died would continue to be covered for the remainder of the spouse's life. In 1998 or 1999, there was a meeting between Dennis Calhoun (then Secretary-Treasurer of Local 100), William James (then President of Local 100), Sonny Hall (TWU President), and David Rosen (the TWU's attorney) during which Rosen advised the others that there were no guarantees of life-long health insurance under the Plan, and that the health insurance coverage could be changed or terminated.*fn17 In December 1999, Local 100 stopped providing free health insurance to its active employees, though it continued to provide coverage to its retirees.*fn18 Also in 1999, William James promised or told several Retirees that although Plan coverage for active employees was being terminated, those employees would be covered again after retirement.*fn19 In a letter to Local 100's administrative coordinator, dated December 28, 1999,*fn20 Calhoun stated that anyone who retired from Local 100 would receive health insurance under the Plan, paid for by Local 100. At least one Retiree received a copy of this letter when it was distributed at a staff meeting.*fn21

  In December 2000, Roger Toussaint and Ed Watt were elected to the positions of President and Secretary-Treasurer, respectively, of Local 100, and they assumed office in January 2001.*fn22 In December 2001, Toussaint wrote a letter to TWU President Sonny Hall, in which Toussaint notified Hall that Local 100 was considering scaling back its benefits for active and retired Local 100 officers, and asked Hall if any promises or assurances had been made to Local 100 employees regarding the modification or termination of benefits.*fn23 In his deposition, Toussaint stated he did not recall whether Hall had informed him of any such promises.*fn24

  On April 16, 2003, Local 100 decided to stop paying health insurance premiums on behalf of all retirees who were entitled to receive health insurance from other employers. This decision became effective on or shortly after September 1, 2002.*fn25 As active or retired TA employees, Retirees are entitled to health insurance at no cost through the TA.*fn26 As a result, they ceased to be covered under the Plan on September 1, 2002.*fn27

  Plaintiffs seek an injunction restoring their health insurance coverage under the Plan and preventing future ERISA violations by defendants. They also seek monetary damages to the extent they have incurred expenses as a result of their present, inferior health insurance, as well as costs and attorneys' fees.*fn28

  III. LEGAL STANDARD

  Rule 56 of the Federal Rules of Civil Procedure provides for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."*fn29 "An issue of fact is `material' for these purposes if it `might affect the outcome of the suit under the governing law[,]' [while] an issue of fact is `genuine' if `the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'"*fn30

  In determining whether issues of material fact are in dispute, a court must view the evidence "in the light most favorable" to the non-movant.*fn31 A court must then resolve all ambiguities and draw all reasonable factual inferences in favor of the non-moving party.*fn32 "Although the moving party bears the initial burden of establishing that there are no genuine issues of material fact, once such a showing is made, the non-movant must `set forth specific facts showing that there is a genuine issue for trial.'"*fn33

  The non-moving party may not "rest upon . . . mere allegations or denials."*fn34 "Statements that are devoid of any specifics, but replete with conclusions, are insufficient to defeat a ...


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