Beale et al v. Kraft Heinz Foods Company

REPLY / Defendant's Response to Plaintiffs' Supplemental Additional Statement of Facts in Opposition to Defendant's Motion for Summary Judgment re MOTION for Summary Judgment

S.D. IowaNovember 2, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA DAVENPORT DIVISION MARTIN BEALE, SR. ROBERT GARROW, MELVIN HILL, for themselves and all persons similarly situated, and, UNITED FOOD AND COMMERCIAL WORKERS LOCAL UNION, 431 Plaintiff(s), No. 3:16-CV-00119-SMR-HCA vs. DEFENDANT’S RESPONSE TO PLAINTIFFS’ SUPPLEMENTAL ADDITIONAL STATEMENT OF FACTS IN OPPOSITION TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT KRAFT HEINZ FOODS COMPANY Defendant. ____________________ In accordance with this Court’s Order dated August 7, 2017, Defendant Kraft Heinz Foods Company (“Kraft Heinz” or the “Company”) submits this response to Plaintiffs’ Supplemental Additional Statement of Facts in Opposition to Defendant’s Motion for Summary Judgment. 1. During each of the negotiations that resulted in the collective bargaining agreements (“CBA”) between Defendant Kraft Heinz Food Company, Inc. (“Kraft Heinz”) and UFCW Local 431 covering the years 1995-98, 1998-2002, and 2002-06. [sic] both parties made proposals regarding retiree health insurance benefits and discussed them across the bargaining table. Declaration of James Nunn dated October 26, 2017, ¶’s 1-4. RESPONSE: Objection.1 Plaintiffs failed to cite to admissible evidence in the record sufficient to support Plaintiffs’ Supplemental Additional Statement of Undisputed Facts (“Plaintiffs’ Supplemental SOUF”) ¶ 1. Plaintiffs cite only to ¶ 1-4 of the Declaration of James 1 Under Fed. R. Civ. P. 56(c)(2), “a party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.” Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 1 of 23 2 Nunn (“Nunn Declaration”). Paragraphs 1-4 do not establish that Nunn has sufficient personal knowledge to testify to the proposed facts which relate to information from years ago. Federal Rule of Civil Procedure 56 “requires that affidavits supporting or opposing a motion for summary judgment ‘shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.’ Affidavits asserting personal knowledge must include enough factual support to show that the affiant possesses that knowledge …. In evaluating evidence related to possible summary judgment, a court may not consider affidavits that do not satisfy the requirements of Fed. R. Civ. P. 56.” El Deeb v. Univ. of Minn., 60 F.3d 423, 428–29 (8th Cir. 1995) (internal citations omitted); see, also, Sam's Riverside, Inc. v. Intercon Solutions, Inc., 790 F. Supp. 2d 965, 979 (S.D. Iowa 2011). Thus, Nunn’s statements in ¶ 1-4 of his Declaration are inadmissible pursuant to Federal Rule of Evidence (“FRE”) 602, and therefore Plaintiffs’ Supplemental SOUF ¶ 1 is unsupported by any citation to admissible evidence and must be ignored. Additionally, objection that Plaintiffs’ Supplemental SOUF ¶ 1 regarding proposals made during negotiations is entirely inadmissible per FRE 401-402 as irrelevant. Extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp. v. Int'l Union, United Auto., Aerospace & Agric. Implement Workers of Am., 687 F.3d 1076, 1086 (8th Cir. 2012). 2. No proposal presented by either party sought to alter the retiree health insurance benefits provided to past retirees. All proposals pertained to retiree health insurance to be provided to future retirees. Id. ¶ 6. Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 2 of 23 3 RESPONSE: Objection. Plaintiffs failed to cite to admissible evidence in the record sufficient to support Plaintiffs’ Supplemental SOUF ¶ 2. Plaintiffs cite only to ¶ 6 of the Nunn Declaration. Paragraph 6 does not establish that Nunn has sufficient personal knowledge to testify to the proposed facts which relate to information from years ago. Federal Rule of Civil Procedure 56 “requires that affidavits supporting or opposing a motion for summary judgment ‘shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.’ Affidavits asserting personal knowledge must include enough factual support to show that the affiant possesses that knowledge …. In evaluating evidence related to possible summary judgment, a court may not consider affidavits that do not satisfy the requirements of Fed. R. Civ. P. 56.” El Deeb v. Univ. of Minn., 60 F.3d 423, 428–29 (8th Cir. 1995) (internal citations omitted); see, also, Sam's Riverside, Inc. v. Intercon Solutions, Inc., 790 F. Supp. 2d 965, 979 (S.D. Iowa 2011). Thus, Nunn’s statements in ¶ 1-4 of his Declaration are inadmissible pursuant to Federal Rule of Evidence (“FRE”) 602, and therefore Plaintiffs’ Supplemental SOUF ¶ 2 is unsupported by any citation to admissible evidence and must be ignored. Further objection that Plaintiffs’ Supplemental SOUF ¶ 2 regarding proposals made during negotiations is entirely inadmissible per FRE 401-402 as irrelevant. Extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 3. At no point in any of the negotiations with Kraft Heinz for the 1995-98, 1998- 2002, and the 2002-06 CBA’s did Kraft Heinz state that retiree health insurance language would remain in effect only until the termination of the CBA under which the retiree worked when s/he retired, state that the retiree health insurance proposals agreed to did not survive the expiration of Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 3 of 23 4 that CBA, or state that Kraft Heinz could unilaterally modify the benefits for past retirees after the expiration of the CBA in effect when they retired. Id. ¶ 7. RESPONSE: Objection. Plaintiffs’ Supplemental SOUF ¶ 3 attempts to suggest that the CBA’s express duration clause might not apply to a particular subset of contract rights (retiree health benefits) because nobody specifically stated during negotiations that the duration clause did apply to those particular contract rights like it applied to the other contract rights. The notion is nonsensical, and Plaintiffs’ Supplemental SOUF ¶ 3 is entirely inadmissible per FRE 401-402 as irrelevant. The CBAs at issue contain an express durational clause. Dkt. 18, Defendant’s Statement of Undisputed Facts ¶ 17, 35, 50. The law is clear that benefit entitlements end with the termination of the CBA. M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 937 (2015). Plaintiffs must point to language in the CBAs showing that this particular set of rights did not terminate with the expiration of the CBAs, which Plaintiffs do not and cannot. Moreover, extrinsic evidence, such as comments allegedly made or not made in contract negotiations some 20 years ago, cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 4. During the negotiations for the 1998-2002 CBA, Kraft Heinz negotiating committee member Hansen told the Local 431 negotiating committee on March 25, 1998 across the bargaining table in reference to a hypothetical employee who retires: “If I retire, select the HMO and stay in Davenport for 5 years, and then decide to move to Arizona, I will have benefits under a Kraft HMO or network in the area I am moving.” Id. ¶ 8. RESPONSE: Objection. Plaintiffs’ Supplemental SOUF ¶ 4 regarding hypotheticals mentioned during negotiations 19 years ago is entirely inadmissible per FRE 401-402 as irrelevant. The four-year duration of the 1998 CBA was not yet agreed to when the five-year Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 4 of 23 5 hypothetical was allegedly communicated. The parties were still in negotiations during the alleged comment about a hypothetical employee. This whole point is particularly meaningless and irrelevant, indicating more about the Plaintiffs’ desperation in trying to avoid summary judgment. In any event, such extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 5. The five year period Hansen used in the hypothetical is one year longer than the four year CBA the parties entered into. Id. ¶ 9. RESPONSE: Objection. Plaintiffs’ Supplemental SOUF ¶ 5 regarding hypotheticals mentioned during negotiations 19 years ago is entirely inadmissible per FRE 401-402 as irrelevant. The four-year duration of the 1998 CBA was not yet agreed to when the five-year hypothetical was allegedly communicated. The parties were still in negotiations during the alleged comment about a hypothetical employee. This whole point is particularly meaningless and irrelevant, indicating more about the Plaintiffs’ desperation in trying to avoid summary judgment. In any event, such extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 6. Hansen did not state or imply that Kraft Heinz could unilaterally alter retiree health insurance after the CBA of the hypothetical Local 431 member he referred to had expired. Id. ¶ 10. RESPONSE: Objection. Plaintiffs’ Supplemental SOUF ¶ 6 attempts to suggest that the CBA’s express duration clause might not apply to a particular subset of contract rights (retiree health benefits) because nobody stated that the duration clause did apply to those particular contract rights like it applied to the other contract rights. The notion is nonsensical, and Plaintiffs’ Supplemental SOUF ¶ 6 is entirely inadmissible per FRE 401-402 as irrelevant. Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 5 of 23 6 The CBAs at issue contain an express durational clause. Dkt. 18, Defendant’s Statement of Undisputed Facts ¶ 17, 35, 50. The law is clear that benefit entitlements end with the termination of the CBA. Tackett, 135 S. Ct. at 937. Plaintiffs must point to language in the CBAs showing that this particular set of rights did not terminate with the expiration of the CBAs, which Plaintiffs do not and cannot. Moreover, extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 7. During a bargaining session held on April 2, 1998, Local 431 negotiating committee member Wubker stated in reference to retiree health insurance, “We still need to know what retiree cost is.” Kraft Heinz negotiator Donovan replied, “We will match active employee costs. Our next sheet will say that.” Id. ¶ 11. RESPONSE: For the purposes of this motion2, admitted, but only as applicable for the duration of the CBA being negotiated. Denied to the extent Plaintiffs seek to imply that Kraft Heinz agreed to provide such coverage beyond the duration of the CBA. Plaintiffs’ interpretation is simply their wishful thinking as the alleged comments do not contain any express promise to provide unchangeable medical benefits to retirees, forever, and thereby supersede the express duration clause of the CBA. As such, they are inadmissible per FRE 401- 402 because they are irrelevant and because they are improper extrinsic evidence. 8. No member of Kraft Heinz’ negotiating committee stated or implied that the retiree health insurance rates proposed were subject to unilateral change by Kraft Heinz after the expiration of the CBA in effect when the employee retired. Id. ¶ 12. RESPONSE: Objection. Plaintiffs’ Supplemental SOUF ¶ 8 attempts to suggest that the CBA’s express duration clause might not apply to a particular subset of contract rights 2 Defendant reserves the right to object to these notes in the event of trial. Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 6 of 23 7 (retiree health benefits) because nobody specifically stated that the duration clause did apply to those particular contract rights like it applied to the other contract rights. The notion is nonsensical, and Plaintiffs’ Supplemental SOUF ¶ 8 is entirely inadmissible per FRE 401-402 as irrelevant. The CBAs at issue contain an express durational clause. Dkt. 18, Defendant’s Statement of Undisputed Facts ¶ 17, 35, 50. The law is clear that benefit entitlements end with the termination of the CBA. Tackett, 135 S. Ct. at 937. Plaintiffs must point to language in the CBAs showing that this particular set of rights did not terminate with the expiration of the CBAs, which they do not and cannot. Moreover, extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 9. During a bargaining session held on March 31, 1998, Local 431 negotiator Wubker stated, “We need to give you another health care proposal (E-6B). We don’t want to have retirees pay more for insurance then [sic] they currently are.” Id. ¶ 13. RESPONSE: Admitted Wubker so stated, but objection that his statement is entirely inadmissible per FRE 401-402 as irrelevant because there is no contract language or other language suggesting that the Union’s comment in negotiations related to time periods after the expiration of the contract, much less would bind the Company after the expiration of the contract. Moreover, whether retirees have any vested rights to health care benefits must be examined in light of what was actually agreed to – not what was proposed. The CBAs at issue contain an express durational clause. Dkt. 18, Defendant’s Statement of Undisputed Facts ¶ 17, 35, 50. The law is clear that benefit entitlements end with the termination of the CBA. Tackett, 135 S. Ct. at 937. Plaintiffs must point to language in the CBAs showing that this particular set of rights did not terminate with the expiration of the CBAs, which they do not and cannot. Finally, and somewhat ironically, the alleged comment by the Union negotiator demonstrates Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 7 of 23 8 that the Union made a proposal specifically in order to try to prevent cost increases from being imposed on current retirees—something that would only be a possibility if the retirees’ medical benefits were in fact alterable. The Union recognized all along that retirees had no vested medical benefits, and this proferred statement of a Union negotiator demonstrates that. 10. No member of Kraft Heinz’ negotiating committee disputed Wubker’s statement that retirees will not have to pay more for insurance than they currently paid as active employees or state or imply that Kraft Heinz could unilaterally alter these rates after the expiration of the CBA in effect when the employee retired. Id. ¶ 14. RESPONSE: Denied. Plaintiffs’ Supplemental SOUF ¶ 10 mischaracterizes Wubker’s comments. In Supplemental SOUF ¶ 9, Plaintiffs state Wubker said “We don’t want to have retirees pay more for insurance then [sic] they currently are.” The alleged statement tacitly acknowledges the Union’s understanding that retirees’ medical benefits were subject to changes. In Supplemental SOUF ¶ 10, Plaintiffs attempt to turn Wubker’s expressed desire into a statement of fact. Additionally, objection. Supplemental SOUF ¶ 10 attempts to suggest that the CBA’s express duration clause might not apply to a particular subset of contract rights (retiree health benefits) because nobody specifically stated that the duration clause did apply to those particular contract rights like it applied to the other contract rights. The notion is nonsensical, and Plaintiffs’ Supplemental SOUF ¶ 10 is entirely inadmissible per FRE 401-402 as irrelevant. The CBAs at issue contain an express durational clause. Dkt. 18, Defendant’s Statement of Undisputed Facts ¶ 17, 35, 50. The law is clear that benefit entitlements end with the termination of the CBA. Tackett, 135 S. Ct. at 937. Plaintiffs must point to language in the CBAs showing that this particular set of rights did not terminate with the expiration of the CBAs, which Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 8 of 23 9 Plaintiffs do not and cannot. Moreover, extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 11. During these negotiations, Kraft Heinz presented a “Company Final Offer,” which the Local 431 negotiating committee accepted and submitted to its membership for ratification. Id. ¶ 15. RESPONSE: Objection. Plaintiffs failed to cite to admissible evidence in the record sufficient to support Plaintiffs’ SOUF ¶ 11. Paragraph 15 of the Nunn Declaration purports to attach the “Company Final Offer” as Exhibit 4, but the document attached as Exhibit 4 is neither complete nor properly authenticated. For example, the final page of Exhibit 4 (Dkt. No. 32-2 p. 193) is actually the signature page of the 1998 MOA. See, Appx. p. 507. If this objection is overruled, Admitted that Kraft Heinz presented a “Company Final Offer” during negotiations for the 1998 CBA for purposes of this motion,4 but otherwise denied. 12. This document was signed by both parties. Id. ¶ 16. RESPONSE: Denied. Plaintiffs failed to cite to admissible evidence in the record sufficient to support Plaintiffs’ SOUF ¶ 12. What purports to be the signature page of Exhibit 4 (Dkt. No. 32-2 p. 195) is actually the signature page of the 1998 MOA. See, Appx. p. 507. 13. The UFCW Local 431 members employed by Kraft Heinz ratified the Company Final Offer. Id. ¶ 17. RESPONSE: Denied. Plaintiffs failed to cite to admissible evidence in the record sufficient to support Plaintiffs’ SOUF ¶ 13. What purports to be the signature page of Exhibit 4 (Dkt. No. 32-2 p. 196) is actually the signature page of the 1998 MOA. See, Appx. p. 507. 3 Plaintiffs did not provide appendix numbers. 4 Defendant reserves the right to object to this document in the event of trial. 5 Plaintiffs did not provide appendix numbers. Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 9 of 23 10 14. The Company Final Offer contained the following language under the Health and Welfare section: “Effective no later than 10-01-98 current employees and future retirees will be able to choose among two health plans...” Id. ¶ 18. RESPONSE: Admitted this offer contained the quoted language which would apply for the specified duration of that CBA. Plaintiffs point to no language indicating these rights would extend beyond the duration of the CBA, and the Final Offer stated “The Agreement will expire April 7 th of 2002.” Dkt. No.32-2 at p. 8. This express termination date was ratified by the Union membership and became binding. Each of the CBAs at issue in this litigation contains an express durational clause. Dkt. 18, Defendant’s Statement of Undisputed Facts ¶ 17, 35, 50. The law is clear that benefit entitlements end with the termination of the CBA. Tackett, 135 S. Ct. at 937. Plaintiffs must point to language in the CBAs showing that this particular set of rights did not terminate with the expiration of the CBAs, which Plaintiffs do not and cannot. Furthermore, Plaintiffs have previously admitted that their rights to benefits are found in the CBAs, SPDs, and MOAs – nowhere mentioning the Company’s offers as contractual commitments. Compl. ¶¶19-20. The Company Final Offer itself conveys no rights and extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 15. The Company Final Offer further provided in attachment the rates for “Employees/Retiree Contribution/Pretax” and noted: “Retirees with less than 30 years of service will receive medical coverage at the same rate as active employees.” Id.¶ 19. RESPONSE: Admitted that the Company Final Offer so stated, as applicable to the duration of the CBA. Plaintiffs point to no language indicating the Company proposed that these 6 Plaintiffs did not provide appendix numbers. Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 10 of 23 11 rights would extend beyond the terms of the CBA. The CBAs at issue contain an express durational clause. Dkt. 18, Defendant’s Statement of Undisputed Facts ¶ 17, 35, 50. The law is clear that benefit entitlements end with the termination of the CBA. Tackett, 135 S. Ct. at 937. Plaintiffs must point to language in the CBAs showing that this particular set of rights did not terminate with the expiration of the CBAs, which Plaintiffs do not and cannot. Furthermore, Plaintiffs have previously admitted that their rights are found in the CBAs, SPDs, and MOAs– nowhere mentioning the Company’s offers as contractual commitments. The Company Final Offer itself conveys no rights and extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 16. Following ratification by Local 431’s members, Kraft Heinz prepared a MOA. The MOA did not contain the language cited in paragraph 19 above. Id. ¶ 20. RESPONSE: Admitted, but objection as entirely inadmissible per FRE 401-402 as irrelevant. The Union signed the MOA and that reflects the parties’ agreement. This paragraph attempts to suggest that language should have been included in a contract Plaintiffs agreed to nearly 20 years ago, but does not attempt to explain why they would sign and ratify it if it truly lacked a material term of importance to them. In any event, extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. Here, the MOA confirmed the parties’ agreement as to the precise minute the CBA would terminate – midnight on April 7, 2002. See Appx. p. 000507. That is the moment that all contractual rights pursuant to the CBA terminated, unless some specific language confirmed the parties’ agreement to extend some particular right beyond the contract’s termination. Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 11 of 23 12 17. Kraft Heinz did not inform the Local 431 bargaining committee this language was not contained in the MOA. No agreement had been reached by the parties to omit this language from the MOA. Id. ¶ 21. RESPONSE: Admitted, but objection as entirely inadmissible per FRE 401-402 as irrelevant. The Union signed the MOA and that reflects the parties’ agreement. This paragraph attempts to suggest that language should have been included in a contract Plaintiffs agreed to nearly 20 years ago, but does not attempt to explain why they would sign and ratify it if it truly lacked a material term of importance to them. In any event, extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 18. After the negotiations for the 2002-06 CBA were concluded, Kraft Heinz prepared a document entitled, “2002 Contract Summary of Changes,” which summarized the tentative agreements reached regarding the terms of this CBA. Id. ¶ 22. RESPONSE: Admitted Kraft Heinz prepared the document identified as Plaintiffs’ Exhibit 5. Objection as entirely inadmissible per FRE 401-402 as irrelevant. This summary is not the final agreement, and extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 19. UFCW Local 431 distributed this Summary to its members for use in ratifying the CBA. Id. ¶ 23. RESPONSE: Admitted as to UFCW distributing the Summary to its members, but objection as to the purpose of the distribution. Plaintiffs failed to cite to admissible evidence in the record sufficient to support Plaintiffs’ Supplemental SOUF ¶ 19. Plaintiffs cite only to ¶ 23 of the Nunn Declaration. Paragraph 23 does not establish that Nunn has sufficient personal Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 12 of 23 13 knowledge to testify to the proposed fact as to the purpose of the distribution. Federal Rule of Civil Procedure 56 “requires that affidavits supporting or opposing a motion for summary judgment ‘shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.’ Affidavits asserting personal knowledge must include enough factual support to show that the affiant possesses that knowledge …. In evaluating evidence related to possible summary judgment, a court may not consider affidavits that do not satisfy the requirements of Fed. R. Civ. P. 56.” El Deeb v. Univ. of Minn., 60 F.3d 423, 428–29 (8th Cir. 1995) (internal citations omitted); see, also, Sam's Riverside, Inc. v. Intercon Solutions, Inc., 790 F. Supp. 2d 965, 979 (S.D. Iowa 2011). Thus, Nunn’s statements in ¶ 1-4 of his Declaration are inadmissible pursuant to Federal Rule of Evidence (“FRE”) 602, and therefore Plaintiffs’ Supplemental SOUF ¶ 19 is unsupported by any citation to admissible evidence and must be ignored. 20. The members voted to ratify the CBA and no further negotiations took place. Id. ¶ 24. RESPONSE: Admitted. 21. This Summary contained the following language, which accurately reflected agreements reached at the bargaining table: “Retiree [sic] with at least 30 years of service will continue to receive medical coverage at no cost. Retirees with less than 30 years of service will continue to receive medical coverage at the same rate as active employees.” Id. ¶ 25. RESPONSE: Admitted that the Summary so states, as applicable for the duration of the CBA, but denied to the extent Plaintiffs seek to imply that Kraft Heinz agreed to provide such coverage beyond the duration of the CBA. The quoted language has no durational term, and Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 13 of 23 14 gives no indication that by agreement the parties intended it to supersede the express durational term of the CBA. As such, this ¶ 21 is inadmissible per FRE 401-402 as irrelevant. 22. Following ratification by Local 431’s members, Kraft Heinz prepared a MOA. The MOA did not contain the language cited in paragraph 25 above. Id. ¶ 26. RESPONSE: Denied. The cited Paragraph 25 does not quote or refer to any language. To the extent this SOUF ¶ 22 intended to refer to ¶ 25 of the Nunn Declaration rather than “paragraph 25 above” as it states, Kraft Heinz admits the MOA does not contain the language cited in ¶ 25 of the Nunn Declaration, but objection as entirely inadmissible per FRE 401-402 as irrelevant. The Union signed the MOA and that reflects the parties’ agreement. This paragraph attempts to suggest that language should have been included in a contract Plaintiffs agreed to 15 years ago, but does not attempt to explain why they would sign and ratify it if it truly lacked a material term of importance to them. In any event, extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 23. Kraft Heinz did not inform the Local 431 bargaining committee this language was not contained in the MOA. No agreement had been reached by the parties to omit this language from the MOA. Id. ¶ 27. RESPONSE: Admitted, but objection as entirely inadmissible per FRE 401-402 as irrelevant. The Union signed the MOA and that reflects the parties’ agreement. This paragraph attempts to suggest that language should have been included in a contract Plaintiffs agreed to nearly 20 years ago, but does not attempt to explain why they would sign and ratify it if it truly lacked a material term of importance to them. In any event, extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 14 of 23 15 24. Kraft Heinz did insert the language cited in paragraph 25 above into the SPD’s issued after negotiations concluded. Id. ¶ 28. RESPONSE: Denied. The cited Paragraph 25 does not quote or refer to any language. To the extent this SOUF ¶ 24 intended to refer to ¶ 25 of the Nunn Declaration rather than “paragraph 25 above” as it states, Kraft Heinz denies the 2003 SPDs contain the exact language, but admit they each state: “The amount you pay towards the cost of retiree medical coverage is the same as the active rates unless you retire with 30 years of service; then there is no cost for retiree medical coverage.” 2003 HMO SPD (Appx. p. 000142); 2003 Out of Area SPD (Appx. p. 000180); 2003 Network SPD (Appx. p. 000228). None of that or any other language promised that this would continue forever, without any change by the Company. To the contrary, each 2003 SPD states: “Kraft or its Management Committee for Employee Benefits reserves the right to amend or terminate the Kraft Foods Global, Inc. Medical Plan at any time for any reason, subject to the provisions of any applicable collective bargaining agreement or as required to comply with applicable federal law or regulations … health care benefits do not vest like retirement plan benefits. That means you do not have a guaranteed right, at any time, to receive plan benefits.” Dkt. No. 18 at ¶ 32 and ¶ 33. 25. During the negotiations for the 1995-98 CBA Kraft Heinz provided the UFCW Local 431 negotiating committee with two documents reflecting Kraft Heinz’ labor costs and fringe benefit costs incurred at the Davenport plant. Id. ¶ 29. RESPONSE: Admitted. 26. The labor cost document had an entry for “Retirees’ medical” of $3.09 per hour, representing costs incurred for employees who had retired under prior CBA’s. Id. at KRAFT 000566. This was the largest labor cost reported. Id. ¶ 30. Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 15 of 23 16 RESPONSE: Admitted, but to the extent Plaintiffs argue this shows a lifetime benefit, such facts are irrelevant and inadmissible per FRE 401-402. The fact the Company was incurring costs does not demonstrate a contractual or other legal commitment to provide retirees with an entire lifetime of medical benefits that are unchangeable by the Company. The law is clear that for a union and/or retirees to carry their burden to prove that an employer contractually bound itself to provide retiree medical benefits indefinitely, beyond the termination of the labor contract, and to never modify those benefits for as long as the retiree lived, the plaintiffs must point to some language in the labor contracts that confirms this employer commitment. M & G Polymers USA, LLC v. Tackett, 135 S.Ct. 926, 937 (2015) (“[W]hen a contract is silent as to the duration of retiree benefits, a court may not infer that the parties intended those benefits to vest for life.”); Anderson v. Alpha Portland Indus., Inc., 836 F.2d 1512, 1517-1518 (8th Cir. 1988) (finding welfare benefits were not vested despite language promising to provide benefits until “death of retiree” when the company had expressly reserved the right to terminate or amend the plan). The plan or labor contract must provide that the benefits are unchangeable. See, e.g. Hughes v. 3M Retiree Med. Plan, 281 F.3d 786, 792–93 (finding language in the plan booklets devoid of vesting language and expressly reserving the right to modify the retiree medical benefit plan at any time demonstrated the welfare benefits were not vested); Pabst Brewing Co. v. Corrao, 161 F.3d 434, 439 (7th Cir. 1998) (“ERISA does not require the vesting of welfare benefits; if they vest at all, they do so under the terms of a particular contract.”). There is no such binding language to be found in the material contract documents in this case. Moreover, this extrinsic evidence is irrelevant as to what was finally agreed to by the Union and Kraft Heinz. Extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 16 of 23 17 27. The Fringe Benefits Report for the year 1994 indicated Kraft Heinz incurred a cost of $7,275,000 for “Retiree Med. Svc,” which means retiree health insurance costs for employees who had retired under prior CBA’s. This was the highest fringe benefits cost reported. Id. ¶ 31. RESPONSE: Admitted, but to the extent Plaintiffs argue this shows a lifetime benefit, such facts are irrelevant and inadmissible per FRE 401-402. The fact the Company was incurring costs does not demonstrate a contractual or other legal commitment to provide retirees with an entire lifetime of medical benefits that are unchangeable by the Company. The law is clear that for a union and/or retirees to carry their burden to prove that an employer contractually bound itself to provide retiree medical benefits indefinitely, beyond the termination of the labor contract, and to never modify those benefits for as long as the retiree lived, the plaintiffs must point to some language in the labor contracts that confirms this employer commitment. Tackett, 135 S.Ct. at 937 (“[W]hen a contract is silent as to the duration of retiree benefits, a court may not infer that the parties intended those benefits to vest for life.”); Anderson, 836 F.2d at 1517- 1518 (8 (finding welfare benefits were not vested despite language promising to provide benefits until “death of retiree” when the company had expressly reserved the right to terminate or amend the plan). The plan or labor contract must provide that the benefits are unchangeable. See, e.g. Hughes, 281 F.3d at 792–93 (finding language in the plan booklets devoid of vesting language and expressly reserving the right to modify the retiree medical benefit plan at any time demonstrated the welfare benefits were not vested); Pabst Brewing Co., 161 F.3d at 439 (“ERISA does not require the vesting of welfare benefits; if they vest at all, they do so under the terms of a particular contract.”). There is no such binding language to be found in the material contract documents in this case. Moreover, this extrinsic evidence is irrelevant as to what was Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 17 of 23 18 finally agreed to by the Union and Kraft Heinz. Extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 28. Kraft Heinz negotiators stated across the bargaining table that these retiree health insurance costs were an ongoing obligation, just like any other cost associated with the CBA. Id. ¶ 32. RESPONSE: Objection. Plaintiffs failed to cite to admissible evidence in the record sufficient to support Plaintiffs’ Supplemental SOUF ¶ 28. Plaintiffs cite only to ¶ 32 of the Nunn Declaration. Paragraph 32 does not establish that Nunn has sufficient personal knowledge to testify to this proposed fact. Federal Rule of Civil Procedure 56 “requires that affidavits supporting or opposing a motion for summary judgment ‘shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.’ Affidavits asserting personal knowledge must include enough factual support to show that the affiant possesses that knowledge …. In evaluating evidence related to possible summary judgment, a court may not consider affidavits that do not satisfy the requirements of Fed. R. Civ. P. 56.” El Deeb v. Univ. of Minn., 60 F.3d 423, 428–29 (8th Cir. 1995) (internal citations omitted); see, also, Sam's Riverside, Inc. v. Intercon Solutions, Inc., 790 F. Supp. 2d 965, 979 (S.D. Iowa 2011). Moreover, there is no attempt to authenticate or lay foundation for the conversation described in Nunn ¶ 32. “Negotiators” is not sufficient to identify the speaker, nor does Nunn make any attempt to identify when these alleged statements were made or where they were made. This lack of specificity deprives Kraft Heinz of the ability to investigate this claim of a comment allegedly made some 23 years ago. Thus, Nunn’s statements in ¶ 32 of his Declaration are Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 18 of 23 19 inadmissible pursuant to FRE 602 and 901, and therefore Plaintiffs’ Supplemental SOUF ¶ 32 is unsupported by any citation to admissible evidence and must be ignored. 29. At no point did any Kraft Heinz negotiator state it could unilaterally reduce these costs of retiree health insurance by terminating the plans or modifying the benefits provided. Id. ¶ 33. RESPONSE: Objection. Plaintiffs’ Supplemental SOUF ¶ 29 is entirely inadmissible per FRE 401-402 as irrelevant. Each SPD at issue contains, in writing, unambiguous reservation of rights provisions stating Kraft Heinz’s right to amend or terminate the plans. See, Defendant’s Statement of Undisputed Facts ¶¶ 32-33, ¶ 47, and ¶ 67. Even if it were true that no Company negotiator articulate orally what the SPD stated in writing, this is irrelevant. Moreover, extrinsic evidence cannot be considered when, as here, there is no ambiguity in the contract documents. Maytag Corp., 687 F.3d at 1086. 30. Paragraph 29 of Defendant’s Proposed Findings of Fact (“PPF”) (DKT# 18) states: “The medical plan booklet applicable to Plaintiff Garrow at his retirement date explained the future variability of retirees' medical benefits, stating ‘if the options offered to active employees change, the options offered to retirees may change at the same time. Some of the medical options available to active employees may not be available to retirees.’ [Barton Dec. Ex. B: Kraft Foods, Inc. Medical Plan For The HMO Option, effective January 1, 2003 ("2003 HMO SPD"), Appx. p. 000141].” Second Declaration of Kurt C. Kobelt, dated October 26, 2017 ¶ 2. RESPONSE: Admitted. 31. Defendant incorrectly cited “Appx. p. 000141” in support of this averment. In fact, the proper citation should have been “App. p. 00103.” The citation to “Appx. p. 000141” refers to a different SPD “For Those Out Of Area.” DKT# 8-5. Id. ¶ 3. Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 19 of 23 20 RESPONSE: Denied, but this is not a material fact or outcome determinative. Plaintiffs are confused. They merely and incorrectly identify a perceived error in citation, and do not dispute the documents are accurate or contain certain language. Regardless, “Appx. p. 000141” is the correct and proper citation. See Defendant’s Statement of Undisputed Facts, specifically Dkt. No. # 18-7, Appendix pgs. 000106-000152 (2003 HMO SPD). Dkt. No. 8-5 is Exhibit C to Kathleen Barton’s Declaration which is the 2003 SPD for those out of area, but filed in Support of Defendant’s Motion to Dismiss on February 10, 2017. 32. Defendant makes the same improper citation in its PPF Nos. 29-32. Id. ¶ 4. RESPONSE: Denied, but this is not a material fact or outcome determinative. Plaintiffs are confused. They merely and incorrectly identify a perceived error in citation, and do not dispute the documents are accurate or contain certain language. Paragraphs 29-32 of Defendant’s Statement of Undisputed Facts, DKT# 18, are cited correctly. Paragraph 29 cites to Barton Declaration, Exhibit B, 2003 HMO SPD, Appx. p. 000141. See Dkt. No. 18-7. Paragraph 30 cites to Barton Declaration Exhibit B, 2003 HMO SPD, Appx. p. 000142. See Dkt. No. 18-7. Paragraph 31 cites to Barton’s Supplement Declaration Paragraph 3, Appx. p. 000583. See Dkt. No. 18-20. Paragraph 32 cites to Barton Declaration Exhibit B, 2003 HMO SPD, Appx. p. 000149. See Dkt. No. 18-7. Plaintiffs allege that Defendant is citing incorrectly, however, Plaintiffs are referring to supporting documents filed with Defendant’ Motion to Dismiss and not the Appendix filed with Defendant’s Statement of Undisputed Facts. 33. Defendant also incorrectly cites the Appendix page numbers for the averments made in PPF Nos. 33, which refer to different SPD’s. Id. ¶ 5. RESPONSE: Denied, but this is not a material fact or outcome determinative. Plaintiffs are confused. They merely and incorrectly identify a perceived error in citation, and do not Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 20 of 23 21 dispute the documents are accurate or contain certain language. Paragraph 33 is cited correctly. See Dkt. No. 18-8, Barton Declaration Exhibit C, 2003 Out of Area SPD, Appx. p. 000181, 000192 and see DKT# 18-9., Barton Declaration Exhibit D, 2003 Network SPD, Appx. p. 000228, 000239. Plaintiffs allege that Defendant is citing incorrectly, however, Plaintiffs are referring to supporting documents filed with Defendant’ Motion to Dismiss and not the Appendix filed with Defendant’s Statement of Undisputed Facts. 34. Defendant erroneously accuses Plaintiffs of citing evidence not in the record in violation of Local Rule 56(b)(4). See Defendant’s Responses to Plaintiffs’ Proposed Findings of Fact Nos. 19-23, 27, 29. Id. ¶ 6. RESPONSE: Denied. Defendant’s Responses to Plaintiffs’ Proposed Findings of Fact Nos. 19-23, 27, 29 alleging Plaintiffs failed to cite evidence in the record to support their statements have nothing to do with the alleged incorrect citation. Defendant incorporates its Responses to these paragraphs by reference and states Plaintiffs did not cite admissible evidence in the record for these paragraphs. 35. Plaintiffs inadvertently followed Defendant’s erroneous citation when it cited the SPD for the HMO Option in their responses to Defendant’s PPF’s Nos. 19-23, 29-32. Id. ¶ 7. RESPONSE: Denied that the citation is erroneous, but this is not a material fact or outcome determinative. Plaintiffs merely and incorrectly identify an error in citation, and do not dispute the documents are accurate or contain certain language. 36. All of Plaintiffs’ responses correctly cited language appearing at Appx. pp. 000103-4. Id. ¶ 8. RESPONSE: Denied, but this is not a material fact or outcome determinative. Plaintiffs are confused. They merely and incorrectly identify a perceived error in citation, and do not Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 21 of 23 22 dispute the documents are accurate or contain certain language. Plaintiffs are referring to documents labeled KH000103-104, not Appx. pp. 000103-4. Respectfully submitted this 2nd day of November, 2017. OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. By: s/ Bernard J. Bobber Bernard J. Bobber Christine E. Bestor Townsend 1243 N. 10th Street, Suite 200 Milwaukee, WI 53205 Telephone: 414-239-6400 Facsimile: 414-755-8289 Bernard.bobber@ogletreedeakins.com Christine.townsend@ogletreedeakins.com ATTORNEYS FOR DEFENDANT KRAFT HEINZ FOODS COMPANY Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 22 of 23 23 PROOF OF SERVICE The undersigned certifies that the foregoing instrument was served upon the parties to this action by serving a copy upon each of the attorneys listed below on November 2, 2017, by U.S. Mail FAX Hand Delivered Electronic Mail FedEx/ Overnight Carrier X CM/ECF Kurt C. Kobelt Law Offices of Kurt C. Kobelt 7120 Caneel Trail Middleton, WI 53562-3683 608-770-6666 Telephone kurtkobelt@gmail.com Michael Halpin McCarthy Callas Church & Feeney P.C. Iowa State Bar No. AT0010598 309-788-2800 work 309-558-9062 cell 329 Eighteenth Street Rock Island, Illinois 61201 mhalpin@mcfe-law.com Signature: /s/ Christine J. Casarez 31786258.1 Case 3:16-cv-00119-SMR-HCA Document 33 Filed 11/02/17 Page 23 of 23