The opinion of the court was delivered by: Moran, Senior District Judge.
This lawsuit is a purported class action brought on behalf of
individuals who elected early retirement from the Continental
Insurance Company in 1992. Plaintiffs allege that health care
benefits promised to them as part of the early retirement package
were terminated in violation of federal and state law. Defendants
move to dismiss the complaint for plaintiffs' alleged failure to
exhaust the benefit plan's appeal procedures before filing this
lawsuit. For the reasons stated below, we deny defendants'
According to the complaint, Michael J. Vallone (Vallone), Joyce
E. Heidemann (Heidemann), and James J. O'Keefe (O'Keefe)
(collectively "plaintiffs") are former employees of Continental
Insurance Company (Continental). In October 1991, plaintiffs
received a document entitled "A Brief Description of the
Voluntary Special Retirement Program" ("brief description"),
which described an early retirement package offered by
Continental as part of a restructuring of its workforce. Along
with hundreds of other Continental employees nationwide,
plaintiffs elected to accept the package from Continental known
as the Voluntary Special Retirement Program (VSRP).
In 1995, Continental merged with CNA Insurance, now known as
CNA Financial Corporation (CNA).*fn1 As part of the business
combination, CNA subsumed Continental as a subsidiary entity and
assumed responsibility for maintaining Continental's retiree
benefit programs. The transition into one company resulted in a
merger of Continental's and CNA's health care plans in 1996. In
August 1998, CNA informed all retired Continental employees that,
as a result of the merger of health care plans, the retiree
health care allowance contributions would end on December 31,
Upset by the termination of the health care allowance, some
early retirees under the VSRP decided to challenge CNA's actions.
In August and September 1998, plaintiffs Vallone and Heidemann
telephoned officials at CNA, arguing that the early retirees were
given a lifetime health care allowance and inquiring about
whether there would be a review of the termination of benefits.
They were informed that CNA's actions were appropriate and final,
and that no reconsideration or other remedy was available. Other
early retirees also complained of the termination of the health
care allowance, and at least two individuals filed written
appeals to the Plan administrator. The Plan administrator
responded to these appeals with substantially the same
information given to Vallone and Heidemann over the telephone —
that the early retirees were not provided with a lifetime health
care allowance and that CNA's decision to terminate those
subsidies was final.
Dissatisfied with the responses they received from CNA
officials, plaintiffs filed this purported class action lawsuit
on behalf of the approximately 500 or more persons nationwide who
retired under the VSRP. In their complaint, plaintiffs allege
that the termination of the retiree health care allowance
violated the Employee Retirement Income and Security Act (ERISA)
and state common law. Defendants have moved to dismiss the
complaint, arguing that plaintiffs have failed to exhaust the
appeal procedures provided under the Plan before filing this
Defendants move to dismiss the complaint under Fed.R.Civ.P.
12(b)(1) and (6). On such a motion to dismiss we take plaintiffs'
well-pleaded factual allegations as true and construe them in
their favor. See Dawson v. General Motors Corp., 977 F.2d 369,
372 (7th Cir. 1992). Dismissal is proper only if it appears
beyond doubt that the plaintiffs cannot prove any set of facts
consistent with the complaint that would entitle them to the
relief requested. Conley v. Gibson, 355 U.S. 41, 45-46, 78
S.Ct. 99, 2 L.Ed.2d 80 (1957).
A fair reading of the contracts relating to plaintiffs' health
care benefits indicates that the appeal procedures contained in
the Plan apply to all Continental retirees, including individuals
who elected early retirement under the VSRP. See Murphy v.
Keystone Steel & Wire Co., 61 F.3d 560, 565 (7th Cir. 1995)
(related contract documents must be read together in order to
give them their proper construction). We look first to the
documents relating to the VSRP. The VSRP documents contain
language specifically directing early retirees to the Plan's
contract documents. For example, the brief description of the
VSRP, which sets forth the features of the early retirement
package, expressly refers to "A Guide to Benefits for Employees
Considering Retirement During 1991" (Guide) and "Your Benefits in
1991" (SPD). The VSRP election forms, by which plaintiffs
accepted early retirement, similarly advise retirees: "Before you
make your Retiree Elections, you may wish to familiarize yourself
with the information contained in the current [Guide]." The Guide
and SPD discuss and summarize the benefits provided by the Plan.
These documents also describe the appeal procedures established
by the Plan for retirees who are dissatisfied with company
decisions regarding their benefits. Having been described in
documents expressly referred to by the VSRP contract materials,
the Plan's appeal procedures are applicable to plaintiffs in this
Other health benefit documents also indicate that the Plan's
appeal procedures apply in this case. For example, in an
information packet which accompanied CNA's August 1998
announcement regarding the termination of the health care
allowance, the defendants advised retirees: "Please note that the
Plan contains a formal claims procedure through which you can
file a claim for Plan coverage with the Plan Administrator. If
you believe you are entitled to continued benefits under the Plan
for any reason, you may send a written request to the Plan
Administrator. . . ." This information confirms the understanding
embodied in ...