03-4026 & 03-4027 Nelson v. Stewart (63383)

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“Section 1114’s statutory scheme and Congress’ expressed intent indicates that the statute was enacted to achieve the very specific and focused objective of protecting retiree benefits from unilateral termination. It permits the bankruptcy court to determine whether retirees ought to be represented by the union or some other entity when their retirement benefits are at stake in a Chapter 11 proceeding. It further sets forth a process which the bankruptcy court must follow in order to ensure that the interest of retirees in their benefits are accorded equal and fair treatment in the shaping of the court’s remedial decree. We do not discern in this focused statutory provision any congressional intent, expressed or implied, of a preemptive force so ‘powerful’ as to preempt entirely every aspect of the relationship between the retirees and the entity representing them. Franchise Tax Bd., 463 U.S. at 23-24. Notably, § 1114 does not purport to provide any federal cause of action for inadequate representation. Nor does the legislative history of the section ‘unambiguously describe[] an intent to treat such actions as “arising under the laws of the United States in similar fashion to those brought under section 301 of the Labor-Management Relations Act of 1947.”’ Beneficial Nat’l Bank, 539 U.S. at 8 (quoting Metro. Life Ins. Co., 481 U.S. at 65-66). Specifically, we can discern no intent on the part of Congress in enacting this bankruptcy provision to provide an exclusive federal remedy governing the relationship of the retirees and the entity representing them before the bankruptcy court. See id.”

Affirmed in part, and Reversed and Remanded in part.

Appeals from the United States District Court for the Southern District of Indiana, Young, J., Ripple, J.