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Utility Workers Union of America, Local 601 v. Public Service Electric and Gas Co.

February 10, 2009

RE: UTILITY WORKERS UNION OF AMERICA, LOCAL 601, ET AL.
v.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY, ET AL.



The opinion of the court was delivered by: William J. Martini, U.S.D.J.

MARTIN LUTHER KING JR. FEDERAL BLDG. & U.S. COURTHOUSE 50 WALNUT STREET, P.O. BOX 419 NEWARK, NJ 07101-0419 (973) 645-6340

WILLIAM J. MARTINI JUDGE

LETTER OPINION

Dear Counsel:

This matter comes before the Court on the parties' cross-motions for summary judgment. There was no oral argument. Fed. R. Civ. P. 78. For the reasons stated below, Defendants' motion for summary judgment is GRANTED, Plaintiffs' motion is DENIED, and Plaintiffs' complaint therefore is DISMISSED with prejudice.

I. BACKGROUND

The pertinent facts of this case are not in dispute. Defendant Public Service Electric and Gas Company ("PSE&G") is a utility company that distributes gas and electric service throughout the state of New Jersey. Plaintiff Utility Worker's Union of America, Local 601 (the "Union"), is a labor union that represents PSE&G employees. Plaintiffs Valerie King, Kevin Freeland, Richard Guida, Mark Bellinger, and Elizabeth Avila (collectively "Plaintiff-employees") are PSE&G employees and members of the bargaining unit represented by the Union.

The Union and PSE&G are parties to a Collective Bargaining Agreement*fn1 ("CBA"), which establishes the terms and conditions of Plaintiff-employees' employment. Article XVII of the CBA states that: "During the period of the Agreement, [PSE&G] shall not suspend its ... Medical Insurance Plan and Pension Plan, or diminish any of the benefits provided under said plans ..." (Exs. A, B, C to Pl.'s Statement of Material Facts) ("Pl's SMF").

Consistent with this provision of the CBA, PSE&G offers medical and dental benefits to approximately 10,000 employees. (Certification of Charles L. Miracola ¶ 2) ("Miracola Cert."). The Public Service Electric and Gas Company Benefits 2000 Health and Welfare Benefits Plan for Represented Employees (the "Plan") is one of the medical and dental benefits plans offered by PSE&G.

A packet of information about the Plan, including the summary plan description ("SPD") was mailed to those Union employees eligible to enroll. (Miracola Cert. ¶ 4, Pl.'s SMF Ex. D, E, F). As the name implies, the SPD provided details to the eligible employees about enrollment in and the benefits available under the Plan.

At issue now between the parties is one aspect of the Plan -- the availability of the so-called "waiver credit." As explained in the SPD, eligible employees could receive a cash credit for waiving coverage under the Plan, provided that they had coverage elsewhere and demonstrated proof of that coverage to PSE&G. Specifically, the SPD for July 1, 2001 provided that:

You may choose the No Coverage option [for medical and dental benefits] and waive coverage as long as you have coverage elsewhere (for example, through your spouse's plan). If you choose No Coverage, you will receive a credit. ... To choose No Coverage, you will be required to provide documentation to Benefits 2000 stating that you have coverage elsewhere. Include the name of the plan under which you are covered and the name of the employer providing the plan.

(P's SMF ¶ 15, Miracola Cert. Ex. B).*fn2 This "waiver credit" would have amounted to approximately $60 per month -- $50 for waiving medical coverage and $10 for waiving dental coverage. (D's Br. in Supp. of Summ. J. at 1, 8).

Despite not receiving benefits from PSE&G, Plaintiff-employees were not paid this "waiver credit." In October 2003, Plaintiff King contacted PSE&G's plan manager to ask why she was not receiving the credit. (Bissinger Cert. Ex. L at 61: 20-62: 2). King then submitted a letter to the plan administrator in January 2004 requesting reimbursement for the "waiver credits" that she had not received for the years 2001 though 2003. (Bissinger Cert. Ex. M). King's claim was denied, which she appealed, consistent with the grievance procedures outlined in the SPD. (Miracola Cert. ¶¶61, 62). This appeal was denied by PSE&G's Employee Benefits Committee. (Miracola Cert. ¶ 64). The matter then went to arbitration, where it was determined that the matter was not arbitrable. (Pl.'s SMF ¶¶ 71, 74). As such, the arbitrator denied King's grievance.

Following the denial of King's grievance, the Union, together with Plaintiff-employees, brought the instant action.*fn3 Now, both parties have filed motions for summary judgment.

II. ANALYSIS

Before the Court now are the parties' cross-motions for summary judgment. At issue are the three claims raised by Plaintiffs: 1) an Employee Retirement Income Security Act of 1974 ("ERISA") claim based on Defendant's alleged wrongful denial of benefits, i.e. the "waiver credit" (Count Two of the complaint); 2) a claim for breach of fiduciary duty brought under ERISA (Count Three); and, 3) a claim for breach of the Collective Bargaining Agreement brought under the Labor-Management Relations Act ("LMRA") (Count One). Both cross-motions address these three claims.

A. Summary Judgment Standard

Summary judgment eliminates unfounded claims without resorting to a costly and lengthy trial. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). However, a court should grant summary judgment only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the 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). The burden of showing that no genuine issue of material fact exists rests initially on the moving party. Celotex, 477 U.S. at 323. A litigant may discharge this burden by exposing "the absence of evidence to support the nonmoving party's case." Id. at 325. In evaluating a summary judgment motion, a court must view all ...


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