Seventh Circuit Affirms Class Certification but Reverses Summary Judgment Against Alcoa in Pre-1993 Retiree Healthcare Vesting Dispute

In Kaiser v. ALCOA USA Corp., No. 25-1627, — F.4th —-, 2026 WL 2364300 (7th Cir. Aug. 14, 2026), Plaintiff, on behalf of herself and a class of former Alcoa employees, their spouses, and dependents, sued Alcoa USA Corp. and three of its benefit plans after Alcoa terminated retiree healthcare benefits on January 1, 2021, for more than 3,000 recipients who had retired before June 1, 1993. Plaintiff asserted a claim under Section 301 of the Labor Management Relations Act and claims under ERISA Sections 502(a)(1)(B) and 502(a)(3), contending that Alcoa unilaterally reduced healthcare benefits in violation of the governing collective bargaining agreements. The district court certified a class under Federal Rule of Civil Procedure 23(b)(2) and granted partial summary judgment to Plaintiff on liability, relying on judicial estoppel to bar Alcoa from disavowing an obligation to provide lifetime benefits based on positions it took in Curtis v. Alcoa, Inc., 525 F. App’x 371 (6th Cir. 2013). It then declared the class entitled to lifetime healthcare benefits and issued a permanent injunction requiring Alcoa to reinstate the pre-2021 plan. Alcoa appealed both orders. The Seventh Circuit affirmed the class certification order and reversed the summary judgment ruling.

On class certification, the court held that the district court did not abuse its discretion in finding commonality and typicality under Rule 23(a). Because it was undisputed that none of the CBAs, whether or not in the record, contained any language addressing the duration of retiree healthcare benefits, all of the agreements treated duration identically through silence, and Plaintiff could attempt to prove latent ambiguity as to vesting through evidence common to the class. The court explained that under Seventh Circuit precedent the presumption against vesting of retiree healthcare benefits applies only where the court has nothing to go on but silence, and that a latent ambiguity may be shown by objective evidence, including the sworn testimony of Alcoa’s lead 1993 labor negotiator that the company believed it could not touch the benefits of already-retired workers and did not attempt to negotiate changes for them. The court rejected Alcoa’s argument that differing CBAs across facilities defeated commonality and typicality, noting that Alcoa offered nothing beyond speculation and did not dispute the objective evidence Plaintiff proffered. The court further held that certification under Rule 23(b)(2) rather than Rule 23(b)(3) was proper because the primary relief sought was injunctive and declaratory, and any monetary reimbursement was incidental and calculable by reading class members’ claims against the reinstated plan.

On summary judgment, the court held that the district court abused its discretion in applying judicial estoppel. Examining each of the Alcoa statements from the Curtis litigation on which the district court had relied, the court concluded that none was clearly inconsistent with Alcoa’s position here. Certain statements merely summarized the opposing party’s position, others addressed the rights of post-1993 rather than pre-1993 retirees, and Alcoa’s post-judgment statement that benefits were vested “if . . . vested at all” was conditional at best. The court also observed that the Curtis court had expressly declined to add vesting language to its judgment, so there was no basis to conclude that it had accepted Alcoa’s statements as fact. Because judicial estoppel did not bar Alcoa from contesting the merits, the court reversed the grant of partial summary judgment as to liability, leaving to the district court’s discretion whether to entertain renewed summary judgment motions or proceed to trial. The court affirmed the class certification order, reversed the summary judgment order, and remanded for further proceedings.