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Zanghi v. Freightcar America, Inc.

United States District Court, W.D. Pennsylvania

January 14, 2014

ANTHONY J. ZANGHI, KENNETH J. SOWERS, DOMINIC MCCUCH, JAMES HOHMAN, and DARRELL SHETLER, on behalf of themselves and others similarly situated; UNITED STEEL, PAPER AND FORESTRY, RUBBER MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, AFL-CIO/CLC, Plaintiffs,
v.
FREIGHTCAR AMERICA, INC.; JOHNSTOWN AMERICA CORPORATION; and JOHNSTOWN AMERICA CORPORATION USWA HEALTH & WELFARE PLAN, Defendants

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[Copyrighted Material Omitted]

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For ANTHONY J. ZANGHI, DARRELL SHETLER, on behalf of themselves and others similarly situated, DOMINIC MCCUCH, KENNETH J. SOWERS, Plaintiffs: William T. Payne, LEAD ATTORNEY, Joel R. Hurt, Pamina G. Ewing, Feinstein Doyle Payne & Kravec, LLC, Pittsburgh, PA.

For JAMES HOHMAN, Plaintiff: William T. Payne, LEAD ATTORNEY, Joel R. Hurt, Pamina G. Ewing, Feinstein Doyle Payne & Kravec, LLC, Pittsburgh, PA; Michael J. Parrish, Jr., Spence, Custer, Saylor, Wolfe & Rose, Johnstown, PA.

For UNITED STEEL, PAPER, AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, AFL-CIO/CLC, Plaintiff: Joseph Stuligross, United Steelworkers of America, Pittsburgh, PA; William T. Payne, Feinstein Doyle Payne & Kravec, LLC, Pittsburgh, PA.

For FREIGHTCAR AMERICA, INC., JOHNSTOWN AMERICA CORPORATION USWA HEALTH & WELFARE PLAN, JOHNSTOWN AMERICA CORPORATION, Defendants: Sam P. Myler, LEAD ATTORNEY, PRO HAC VICE, Nancy G. Ross, LEAD ATTORNEY, Kirk Watkins, McDermott Will & Emery LLP, Chicago, IL; James Clark Munro, II, Spence, Custer, Saylor, Wolfe & Rose, LLC, Johnstown, PA; Michael J. Parrish, Jr., Ronald P. Carnevali, Jr., Spence, Custer, Saylor, Wolfe & Rose, Johnstown, PA.

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MEMORANDUM AND ORDER OF COURT

KIM R. GIBSON, UNITED STATES DISTRICT JUDGE.

I. INTRODUCTION

Plaintiffs filed a two-count complaint under the Labor Management Relations Act (" LMRA" ) and the Employee Retirement Income Security Act (" ERISA" ) regarding a dispute over continued medical and life insurance contributions to retirees of a railcar facility. Before the Court is a motion to dismiss, transfer, or stay proceedings (ECF No. 17) filed by Defendants FreightCar America, Inc., Johnstown America Corporation, and Johnstown America Corporation USWA Health & Welfare Plan (collectively, " FreightCar" ). FreightCar asks the Court to dismiss the complaint in favor of FreightCar's first-filed action in the Northern District of Illinois or to stay this case until the Illinois court determines the most appropriate venue. Alternatively, Freightcar requests this case be transferred to the Northern District of Illinois or to the Pittsburgh Division of the Western District of Pennsylvania. For the reasons that follow, the Court will deny FreightCar's motion (ECF No. 17).

II. JURISDICTION AND VENUE

The Court exercises jurisdiction under 28 U.S.C. § 1331, 29 U.S.C. § 185, and 29 U.S.C. § § 1132(e)(1) and (f). Venue is proper under 28 U.S.C. § 1391(b)(2) because a substantial part of the events giving rise to the claims occurred in Johnstown, Pennsylvania. Venue is also proper under 29 U.S.C. § 185 and 29 U.S.C. § 1132(e)(2). Because the parties disagree on the most appropriate venue, however,

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the Court will fully address that issue below.

III. BACKGROUND

This case stems from ten years of litigation concerning the rights to continued medical coverage and life insurance benefits (" welfare benefits" )[1] under an employee benefit plan. To put the current matter in context, the Court will first discuss the underlying facts and extensive procedural history in this case.

A. Underlying Facts

From 1923 to 1991, Bethlehem Steel Corporation (" Bethlehem" ) produced railroad freight cars at a facility in Johnstown, Pennsylvania. (Compl. ¶ 3). In 1991, Bethlehem sold the facility to Johnstown America Industries, Inc. ( Id. ). In 1999, Johnstown America Industries, Inc. renamed itself Transportation Technologies Industries, Inc., selling its railcar business to newly formed Johnstown America Corporation (" JAC" ).[2] ( Id. ¶ 4). To better reflect its business of manufacturing railcars, in 2004, JAC changed its name to FreightCar America, Inc. ( Id. ).

Throughout the years, hourly production and maintenance workers at the Johnstown facility bargained for welfare benefits. ( Id. ¶ ¶ 6, 33, 34). These benefits are assured through collective bargaining agreements between former employers of the Johnstown facility and the workers' union representative: the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO/CLC (" USW" ).

The welfare benefits at issue are described in and provided through " negotiated plan booklets." ( Id. ¶ 36). A 1990 booklet known as the Bethlehem Program of Hospital-Medical Benefits (" Bethlehem PHMB" ) stated:

Any pensioner or individual receiving a Surviving Spouse's benefit who become covered by the [PHMB] shall not have such coverage terminated or reduced . . . so long as the individual remains retired from the Company or receives a Surviving Spouse's benefit, notwithstanding the expiration of this agreement, except as the company and union may agree otherwise.

(ECF No. 1-4 at 67 ¶ 7) (emphasis added). After JAC acquired the Johnstown facility, it entered into an October 18, 1991 agreement with the USW, whereby JAC would " create mirror bargaining unit employee benefit plans identical in all material respects to the Bethlehem plans they replace." (Compl. ¶ 41) (citing ECF No. 1-4 at 72). Additionally, when JAC purchased the Johnstown facility, Bethlehem apparently agreed to reimburse JAC for the cost of these welfare benefits. (ECF No. 1-8 at 5).

Although JAC initially fulfilled its obligations under the 1991 mirroring agreement to pay retiree welfare benefits, JAC never prepared a new plan apart from the Bethlehem PHMB. (Compl. ¶ 47). The parties agree that the Bethlehem PHMB controlled the terms of retiree welfare benefits, at least until 1997. ( Id. ¶ 44). In 1997, however, JAC and the USW negotiated a new collective bargaining agreement (" 1997 CBA" ) that is central to this dispute. Specifically, the 1997 CBA provided that " [the CBA] and the documents

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expressly referred to herein are the only documents by which the parties intend to be contractually or statutorily bound." (ECF No. 1-8 at 5). As well, the 1997 CBA provided:

The Parties agree that employees shall be eligible for insurance and other benefits as set forth in JAC's Employee Guide for Represented P& M [Production and Maintenance] employees, as amended during the negotiations which ...

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