The opinion of the court was delivered by: Mihm, Chief Judge.
This matter comes before the Court on Defendant International
Union, United Automobile, Aerospace, and Agricultural Implement
Workers of America's ("UAW") Motion for Summary Judgment and
Plaintiffs' Cross-Motion for Summary Judgment. To the extent
set forth herein, the UAW's Motion for Summary Judgment is
GRANTED IN PART, DENIED IN PART, AND RESERVED IN PART and the
Plaintiffs' Cross-Motion for Summary Judgment is GRANTED IN
PART, DENIED IN PART, AND RESERVED IN PART.
Plaintiff Wayne M. Zimmerman is the plan administrator of
Caterpillar, Inc.'s ("CAT") group medical benefit plan (the
"CAT Plan"). Plaintiff Northern Trust Company is the trustee of
the assets of the CAT Plan. Defendant UAW is an international
union which represents certain CAT employees.
On June 21, 1994, the UAW declared a nationwide strike
against CAT. The parties agree that a strike is a "qualifying
event" within the meaning of the Employee Retirement Income
Security Act ("ERISA") of 1974. 29 U.S.C. § 1163(2).
Accordingly, striking CAT employees and their dependents who
were covered under the CAT Plan on the day before the strike
were eligible to elect continuation coverage under the CAT Plan
pursuant to the provisions of the Consolidated Omnibus Budget
Reconciliation Act ("COBRA") of 1985. 29 U.S.C. § 1161-69.
COBRA allows employees who suffer qualifying events to continue
their coverage under an employer's group health plan for
certain time periods defined in 29 U.S.C. § 1162(2).
Individuals electing COBRA continuation coverage must pay a
premium to their employers. When an employee who elected
continuation coverage becomes covered under another group
health plan not containing any pre-existing exclusions, the
employer may terminate the continuation coverage.
29 U.S.C. § 1162(2)(D)(i).
During the 1991-92 CAT strike, the UAW paid CAT directly for
the cost of maintaining strikers under the CAT Plan. At the
commencement of the current strike, the UAW decided to provide
health coverage directly to some of its members and recommended
that other strikers elect COBRA coverage under the CAT Plan.
Local union officers and UAW benefit representatives
interviewed strikers to determine which strikers had a risk of
significant medical claims. Strikers identified as having a
pre-existing medical conditions or a history of medical costs
in excess of the COBRA premium were asked to elect COBRA.
Strikers whose medical expenses were predicted to be less than
the COBRA premium were covered under the UAW's self-funded
The UAW hired third-party administrators AMERAPLAN and NCAS
to pay the medical claims for strikers who did not elect COBRA.
The UAW advised the third-party administrators to provide
medical benefits according to the Group Health Program outlined
in the 1988-91 Collective Bargaining Agreement between CAT and
the UAW. UAW Response to Plaintiffs' First Discovery Request at
3. The UAW's Strike Fund provides funds to cover the costs of
medical benefits to strikers who did not elect COBRA and to pay
the COBRA premiums for strikers who elected continuation
coverage under the CAT Plan. Id. at 4, 12. Evidence in the
record also indicates that a yet-undetermined number of
strikers who elected COBRA had certain medical claims,
including prescription drug bills, paid by the UAW.
The UAW moved for summary judgment on Plaintiffs' Second
Amended Complaint, and Plaintiffs filed a Cross-Motion for
Summary Judgment. Summary judgment is proper if "the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with 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." Fed.R.Civ.P.
56(c). A motion for summary judgment must demonstrate, based on
the record, an absence of evidence to support the non-movant's
case. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct.
2548, 2552, 91 L.Ed.2d 265 (1986). "[A] party opposing a
properly supported motion for summary judgment may not rest
upon mere allegation or denials of his pleading, but must set
forth specific facts showing that there is a genuine issue for
trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106
S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986); Fed.R.Civ.P. 56(e).
The record and all justifiable inferences drawn from it are
viewed in the non-movant's favor. Id. at 255, 106 S.Ct. at
COBRA provides that an employer can terminate continuation
The date on which the qualified beneficiary first
becomes, after the date of the election —
(i) covered under any other group health plan (as
an employee or otherwise) which does not contain
any exclusion or limitation with regard to any
pre-existing condition of such beneficiary.
29 U.S.C. § 1162(2)(D)(i). COBRA defines the term "group health
plan" as an employee welfare benefit plan that provides medical
care to participants and beneficiaries directly, through
insurance, reimbursement, or otherwise. 29 U.S.C. § 1167(1).
The term "employee welfare plan" means a plan, fund, or program
established or maintained by an employee organization for the
purpose of providing for its participants, through the purchase
of insurance or otherwise, medical benefits.
29 U.S.C. § 1002(1). A plan has been established under ERISA if "a
reasonable person could ascertain the intended benefits,
beneficiaries, source of financing, and procedures for
receiving benefits." Diak v. Dwyer, Costello & Knox, P.C.,
33 F.3d 809, 811-12 (7th Cir. 1994) (quoting Donovan v.
Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982)). A written
plan document need not exist for a plan to be covered under
ERISA. Id. at 811. The UAW's health care program for strikers
not electing COBRA satisfies each of the requisite elements by
providing (i) determinable medical benefits, i.e., benefits
described in the 1988-91 Collective Bargaining Agreement
between CAT and the UAW; (ii) to a specific category of
beneficiaries, i.e., strikers and their dependents who did not
elect COBRA; (iii) through ...