McDonnell Retirees Lose Legal Bid to Have Health Benefits Extended

About 7,000 non-union retirees of McDonnell Douglas Corp. lost their legal bid to force the aerospace company to extend their health benefits beyond 1996, McDonnell and the retirees’ attorneys said Thursday.

A class-action lawsuit filed by the retirees in U.S. District Court in Los Angeles was dismissed at McDonnell’s request Dec. 28 by Judge A. Wallace Tashima, the parties said.

Kevin Roddy, an attorney for the retirees or their surviving spouses, said they were disappointed by the court’s decision and plan to appeal.

The suit was filed after the St. Louis-based company, whose Douglas Aircraft subsidiary operates in Long Beach, said in 1992 that it was terminating its company-funded lifetime health coverage for non-union retirees.

McDonnell did arrange to provide the retirees with alternative coverage through 1996, using excess cash from its pension fund. McDonnell has not outlined any specific coverage that would be available after 1996.

McDonnell spokesman Tom Williams said the company is pleased with the judge’s ruling but declined further comment.

The plaintiffs retired from McDonnell after Jan. 1, 1975. A parallel lawsuit on behalf of about 2,000 non-union workers who retired before that date is pending in Orange County Superior Court.

The retirees’ effort gained notoriety after Donald Douglas Jr., the son of the founder of Douglas Aircraft, publicly denounced McDonnell’s action and formed an organization of retirees to block a cutoff of the benefits.

Douglas’ group, in fact, filed its own federal lawsuit to extend the benefits, but Tashima dismissed that suit in 1993 in favor of the class-action case, Roddy said. The group’s appeal of that decision is also pending, he said.

Despite Tashima’s dismissal of the class-action suit as well, Roddy said the retirees “are still hopeful” that McDonnell “will decide to settle the litigation and reinstate some or all of the health care benefits.”