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Bland v. Fiatallis North America
United States Court of Appeals for the Seventh Circuit
401 F.3d 779 (2005)
Lou Bland and other salaried and hourly employees (plaintiffs) of Fiatallis North America, Inc. (Fiatallis) (defendant) retired between 1970 and 1988. Before or at the time of their retirement, the employees received summary plan descriptions (SPDs) detailing the medical and dental benefits they and their spouses would receive. Several different SPDs were issued from 1970–1985, each including language indicating that benefits could last for the lifetime of the employees and their spouses. None of the issued SPDs included a clause reserving the employer’s right to change or cancel the benefits at any point in time. In the mid-1980s, Fiatallis consulted law firms to discuss whether the retirement benefits mentioned in the SPDs were vested. Fiatallis discussed a plan to roll back retirement benefits to combat rising insurance costs. In 2001, Fiatallis notified the retired employees of an increase in medical and dental coverage costs and of the possibility that their benefits could be altered in retirement. The retired employees filed suit in Illinois state court, claiming that Fiatallis had unilaterally reduced vested benefits by increasing the costs. Fiatallis removed the case to federal district court. The employees filed an amended complaint with several claims, including a breach-of-contract obligation under the Employee Retirement Income Security Act (ERISA). The district court granted summary judgment in favor of Fiatallis, and the employees voluntarily dismissed their other claims with prejudice to appeal their ERISA contract-breach claim to the United States Court of Appeals for the Seventh Circuit.
Rule of Law
Holding and Reasoning (Cudahy, J.)
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