<nobr>Jan 17, 2006</nobr>

Six Circuit Upholds Injunction Reinstating Health Benefits for Case Retirees and their Spouses

The U.S. Court of Appeals for the Sixth Circuit upheld, January 17, an injunction issued by a federal district court that required employer-paid health insurance benefits be restored for thousands of Case Corp. workers who retired prior to Oct. 3, 1993 (Yolton v. El Paso Tennessee Pipeline Co., 6th Cir., No. 04-1182, 1/17/06).

The three-judge appellate panel refused to dissolve the injunction that reinstated employer-paid benefits for some 3,400 retirees and 1,500 dependent spouses, agreeing with the lower federal court that the retirees and their surviving spouses are likely to succeed on the merits of their claim that they are entitled to free lifetime health benefits.

The appeals court agreed with the district court that Case Corp. and its predecessors intended to provide free lifetime health benefits to retirees as evidenced through a series of collective bargaining agreements that linked health benefits to the retirees' pension benefits. According to the appeals court, because pension benefits are vested benefits, the linking of health benefits to the retirees' pension benefits provided support for a finding that the retirees' health benefits also were vested.

In addition, the appeals court noted that J.I. Case management told the retirees that their medical benefits "would continue unchanged for their lifetime." Moreover, as evidence that health benefits were vested, the pre-spinoff retirees pointed out that their health insurance cards contained the words "lifetime" or "lifetime coverage," the appeals court said.

Text Files:

Yolton v. El Paso Tennessee Pipeline Co.

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