N O T PRECEDENTIAL

U N IT E D STATES COURT OF APPEALS

F O R THE THIRD CIRCUIT

N o s . 06-2275, 06-2278 and 06-2491

IN T E R N A T IO N A L CHEMICAL WORKERS

U N IO N COUNCIL OF THE UNITED FOOD AND

C O M M E R C IA L WORKERS UNION AND ITS LOCALS 45C AND 776C,

Appellant No. 06-2275

U N IT E D STEELWORKERS OF AMERICA,

A F L -C IO -C L C , a labor organization,

Appellant No. 06-2278

L O C A L LODGE 470 OF DISTRICT 161

IN T E R N A T IO N A L ASSOCIATION OF MACHINISTS

A N D AEROSPACE WORKERS, AFL-CIO,

Appellant No. 06-2491

v. P P G INDUSTRIES, INC.

O n Appeal from the United States District Court

f o r the Western District of Pennsylvania

(D .C . Nos. 01-cv-01751, 01-cv-01601 and 01-cv-02110)

D is tric t Judge: Honorable David S. Cercone

S u b m itte d Under Third Circuit LAR 34.1(a)

M a y 17, 2007

B e f o re : FISHER and ROTH, Circuit Judges, and RAMBO,* District Judge.

(F ile d : June 14, 2007 ) O P IN I O N OF THE COURT F IS H E R , Circuit Judge.

T h is appeal consists of three related cases against PPG Industries, Inc. ("PPG").

The Appellants, unions 1 that represent employees of PPG, challenge the District Court's g ra n t of summary judgment in favor of PPG. For the reasons that follow, we will affirm.

I.

A s we write only for the parties, who are familiar with the factual context and the p ro c e d u ra l history of the case, we will set forth only those facts necessary to our analysis.

In 2001, PPG sent a letter to thousands of its retired employees stating that it intended to re d u c e/m o d if y retiree health benefits. The medical benefits had been negotiated under v a rio u s , expired collective bargaining agreements ("CBAs") between the Appellants and P P G .2 The Appellants filed grievances claiming that PPG could not modify/reduce retiree m e d ica l benefits, and sought arbitration under the terms of the CBAs.3 PPG refused to p ro c e ss the grievances and to arbitrate. The Appellants then filed suit in the District C o u rt under section 301 of the Labor Management Relations Act ("LMRA"), 29U.S.C.

§ 185. The complaints alleged that PPG violated the terms of expired CBAs.

T h e parties filed cross-motions for summary judgment on the issue of arbitration.

The unions claimed that PPG was obligated to arbitrate the issue of whether PPG could m o d if y/re d u c e retiree benefits. PPG argued that it was necessary for the District Court to d e te rm in e whether the benefits had vested before it could determine the issue of a rb itra b ility. According to PPG, the benefits were non-vested benefits granted under ex p ired CBAs and, thus, were not subject to arbitration. The Appellants claimed there w a s sufficient evidence of vesting to enable them to at least survive summary judgment.

T h e Magistrate Judge recommended that summary judgment be entered in favor of P P G . After the Appellants filed objections, the District Court adopted the Magistrate's re c o m m e n d a tio n s and entered summary judgment in favor of PPG. It determined that the m e d ic a l benefits were not vested and that PPG was not required to arbitrate the g rie v a n ce s. This timely appeal followed.

II.

W e have jurisdiction pursuant to 28U.S.C. § 1291. We review the District Court's o rd e rs granting summary judgment de novo. See Kneipp v. Tedder, 95 F.3d 1199, 1204 (3 d Cir. 1996). We apply the same standard employed by the District Court, and view the f a c ts in the light most favorable to the Appellants. See Moore v. City of Philadelphia, 4 6 1 F.3d 331, 340 (3d Cir. 2006).

I I I.

T h e Appellants claim that the District Court erred by deciding whether the benefits w e re vested in order to determine whether the dispute was arbitrable. They argue that the D is tric t Court improperly reached the merits of the underlying claim, when it should have o n ly decided the arbitration issue. Although the law in this area is somewhat unclear, we b e liev e it was necessary for the District Court to consider whether the benefits vested in o rd e r to make the determination of whether the dispute was arbitrable.

It is clear that the expiration of a CBA does not automatically extinguish the p a rtie s ' duty to arbitrate. See Nolde Bros., Inc. v. Local No. 358, Bakery & Confectionery W o r k e rs Union, 430 U.S. 243, 251 (1977). Rather, the duty to arbitrate disputes that arise u n d e r the contract continues even after expiration of the CBA. See id. In Litton F in a n c i a l Printing Division v. National Labor Relations Board, 501 U.S. 190 (1991), the S u p r e m e Court explained that its holding in Nolde applied "only where a dispute has its re a l source in the contract." Id. at 205. A dispute regarding an expired CBA has its real so u rce in the contract when "it involves facts and occurrences that arose before e x p ira tio n , where an action taken after expiration infringes a right that accrued or vested u n d e r the agreement, or where, under normal principles of contract interpretation, the d is p u te d contractual right survives expiration of the remainder of the agreement." Id. at 2 0 5 -0 6 .

W h e th e r arbitration is required and what issues are subject to arbitration are q u e stio n s to be determined by the court, "and a party cannot be forced to arbitrate the a rb itra b ility question." Id. at 208-09 (internal quotation marks and citations omitted).

Although there is a presumption in favor of arbitration when a CBA contains a broad a rb itra tio n clause, the presumption should not be applied "wholesale in the context of an e x p ire d [CBA], for to do so would make limitless the contractual obligation to arbitrate." Id. at 209. When a court is asked to determine whether a duty to arbitrate exists, it " c an n o t avoid that duty because it requires [it] to interpret a provision of a [CBA]." Id.

W e agree with our sister courts that have held that a court may need to decide the m e rits of the underlying claim in order to decide arbitrators' jurisdiction. See Indep. Lift T r u c k Builders Union v. Hyster Co., 2 F.3d 233, 236 (7th Cir. 1993); United Parcel Serv., In c . v. Union de Tronquistas de Puerto Rico, 426 F.3d 470, 473-74 (1st Cir. 2005); Int'l B h d . of Elec. Workers v. GKN Aerospace N. America, Inc., 431 F.3d 624, 628-29 (8th C ir. 2005).4 However, there is some conflict between the courts as to whether a court s h o u ld actually rule on the merits of the underlying claim. The United States Court of A p p e a ls for the Seventh Circuit stated that "[i]f the court must, to decide the arbitrability is s u e , rule on the merits, so be it." Hyster, 2 F.3d at 236. The United States Courts of A p p e a ls for the First and Eighth Circuits, however, have held that a court should not d e c id e the merits as long as it is possible that an arbitrator could reasonably determine th a t the dispute arose under the contract. See U.P.S., 426 F.3d at 474; GKN, 431 F.3d at 6 2 8 . It is unnecessary for us to weigh in on this question because as discussed below we d o not believe that the retiree medical benefits provided under the CBAs could reasonably b e interpreted to have vested. As the Appellants claim that this dispute is arbitrable based o n the vesting of the retiree health benefits, it was proper for the District Court to c o n sid e r whether the benefits vested.5 W e now must consider whether the benefits vested or could possibly be interpreted to have vested. The interpretation of a CBA or plan document is a question of law. See U .A .W . v. Skinner Engine Co., 188 F.3d 130, 138 (3d Cir. 1999). The Appellants "bear[] th e burden of proving by a preponderance of the evidence, that the employer intended the w e lf a re benefits to vest." Id. at 138-39 (internal quotation marks and citation omitted).

Because an employer is not required to vest such benefits, a determination of vesting "is n o t to be inferred lightly and must be stated in clear and express language," and this p rin c ip le applies regardless of the particular type of plan document at issue. Id. at 139 (in terna l citations omitted).

T h e Appellants claim that the plain language of the CBAs and the GIPs expressly p ro v id e vested retiree medical benefits. However, the language in the relevant documents in this case is quite similar to the language we examined in Skinner.6 For example, some o f the provisions state that PPG "will provide" retiree health benefits or that such benefits " m a y be continued" or "will continue." As in Skinner, "[i]t cannot be said that the p h ra se s clearly and expressly indicate vesting." 188 F.3d at 141. Although some of the te rm s provide that coverage will be provided to the surviving spouse of a retiree until the s p o u s e remarries or dies, this is not durational language that qualifies these terms. Id.

(e x p la in in g that durational language such as "`will continue for the life of the retiree' or th a t the they `shall remain unalterable for the life of the retiree'" would clearly and e x p re ss ly indicate vesting). The CBAs all included termination provisions which p rov ided that the terms of the CBA remained in effect until the expiration of the CBA. In S k in n e r, we explained that reading provisions related to retiree medical benefits in c o n ju n c tio n with termination provisions could suggest that the benefits only continued u n til the end of the CBA's term. Id.7 It cannot be said that the language of the CBAs and th e GIPs unambiguously vested the retiree health benefits.

T h e Appellants also claim that, even if the plain language is not clear, the relevant p ro v is io n s of the CBAs and the GIPs create an ambiguity which precludes the granting of s u m m a ry judgment. The determination of whether a CBA or other plan document p ro v is io n is ambiguous is a question of law. Id. at 142. The Appellants contend, as did th e appellants in Skinner, that phrases such as "will continue" or "shall provide" could be in te rp re te d to mean that PPG would pay for health benefits for the lifetime of a retiree.

See id. After considering the parties' arguments, we do not believe that this is a r e a so n a b l e interpretation of the phrases when they are read in the appropriate contexts.

W e also can consider extrinsic evidence in determining whether the CBAs and G IP s are ambiguous. Id. at 145. However, extrinsic evidence cannot be used to create a m b ig u ity. Id. In this case, the Appellants rely on the facts that PPG continued to p ro v id e insurance to retirees during strikes and letters PPG sent to retirees that explained th e scope of health benefits as extrinsic evidence that the benefits vested.

A lth o u g h this evidence could suggest an intent for the retiree benefits to vest, " e x trin s ic evidence should be carefully circumscribed." Id. at 146. There is no a m b ig u o u s contractual language, and we will not allow such evidence to create an a m b i g u ity where none exists. The phrases regarding retiree health benefits in this case " a re simply not susceptible to more than one reasonable interpretation, and they do not s o m e h o w render the CBAs incomplete or ambiguous." Id.

V ie w in g all reasonable inferences in favor of the Appellants, there is not sufficient ev iden ce for the unions to survive summary judgment.8 Therefore the District Court p ro p e rly determined that the retiree benefits did not vest.

IV .

F o r the foregoing reasons, we will affirm the District Court's grant of summary ju d g m en t in favor of PPG.

* The Honorable Sylvia H. Rambo, United States District Judge for the Middle D is tric t of Pennsylvania, sitting by designation.

1 The Appellants in No. 06-2275 are International Chemical Workers Union C o u n c il of the United Food and Commercial Workers Union, and its Locals 45C and

7 7 6 C . The Appellant in No. 06-2278 is United Steelworkers of America, AFL-CIO-CLC. The Appellant in No. 06-2491 is Local Lodge 470 of District 161, International A ss o c ia tio n of Machinists and Aerospace Workers, AFL-CIO.

2 T h e terms of the medical benefits programs are provided in a Group Insurance P la n or Group Benefits Plan ("GIP"). The parties agree that the GIPs are incorporated in t o the CBAs.

3 All of the relevant CBAs included broad arbitration provisions.

4 We recognize that the Supreme Court's holding in Litton is at odds with its d e c is io n in Nolde, which suggested that a court should not address the merits of the u n d e rlyin g claim. See, e.g., Luden's Inc. v. Local Union No. 6 of the Bakery, C o n fe c tio n e ry & Tobacco Workers' Int'l Union of America, 28 F.3d 347, 353-54 (3d Cir. 1 9 9 4 ). We did not need to resolve the tension in Luden's, but we expressed a reluctance to follow the decisions of other courts which treated Litton as impliedly overruling Nolde. Id. at 354. This case requires us to resolve the tension, and we choose to accept the duty dictated by Litton. We must determine the question of arbitrability, even if that requires u s to consider the underlying claim.

5 W e do not address the Appellants' claim that an implied-in-fact CBA existed in th is case because they failed to raise that argument in their opening briefs. "An issue is w a iv e d unless a party raises it in its opening brief, and for those purposes a passing re f ere n c e to an issue . . . will not suffice to bring that issue before this court." Laborers' In t'l Union of N. America v. Foster Wheeler Corp., 26 F.3d 375, 398 (3d Cir. 1994) (in te rn a l quotation marks and citations omitted). Because we do not consider the impliedin -f a c t CBA argument, we will deny the Appellee's motions to file sur-reply briefs to a d d re ss this argument.

6 The parties made memorandums of agreement ("MOAs") after they negotiated ter m s, but before they entered into a CBA. At least one of the MOA's used language to s u g g e st that the spouses of retirees were entitled to lifetime benefits. However, the M O A s were not incorporated into the CBAs. As the CBAs indicated that they were the f in a l and complete agreement between the parties, the MOAs do not reflect the final in t e n t of the parties. Therefore, the MOAs are not relevant to our analysis.

7 The Appellee also claims that durational provisions it inserted into GIPs b e g in n in g in the 1980s are clear evidence that it did not intend for the benefits to vest. The Appellants claim that the provisions were unilaterally inserted, they protested the in c lu sio n , and that the provisions are ineffective. It is unnecessary for us to resolve this a rg u m e n t as we believe that it is clear that the Appellants did not meet their burden of p r o v i n g that the benefits vested without consideration of the durational provisions.

8 We have fully considered all of the remaining arguments raised by the parties and f in d them to be without merit.