International Brotherhood of Electrical Workers, Afl-Cio, Local 47 v. Southern California Edison Company

I. Overview

Appellant is a labor organization that represents a unit of Southern California Edison Company (“Edison”) employees Appellant sued Edison for breach of contract, seeking to recover benefits wrongfully withheld under a health care plan negotiated by the parties and administered by appellee. The district court granted summary judgment for the defendant on the grounds that the contract explicitly permitted Edison to withhold the benefits as it did, and that the district court must defer to Edison’s interpretation of the contract unless that interpretation was arbitrary and capricious. We reverse and remand. The court should not defer to Edison’s interpretation of the contract. The contract is ambiguous on its face and appellant’s reading of the contract is reasonable, precluding summary judgment.

II. Factual and Procedural Background

In 1968, Edison and Local 47 negotiated the creation of the medical benefits plan at issue in this case as part of a collective bargaining agreement. The plan provides for medical benefits to dependents of Edison employees. The parties periodically have negotiated amendments to the plan, most recently in 1983 and 1986. In the 1983 contract…