Opinion
Case No.: 1:05 CV 168.
March 21, 2007
ORDER
Plaintiffs Isaac Rose, Peggy Knox, Joseph Henderson, Wilbert Whitt, Opal Whitt, Andrew Bergant, Jr., A.C. Wade, and Metro Burtyk (together, "Proposed Class Representatives"), along with International Union, and the United Automobile, Aerospace, and Agricultural Implement Workers of America ("UAW") (together, "Plaintiffs") filed the above-captioned action against Defendant Volvo Construction Equipment North America, Inc. ("VCENA" or "Defendant") on February 1, 2005, alleging that VCENA breached the Collective Bargaining Agreement and violated an Employee Retirement Income Security Act ("ERISA") plan. The Complaint also included class action claims, with the Class Representatives seeking to act on behalf of all similarly-situated class members.
Currently pending before the court is Plaintiffs' Amended Motion for Class Certification pursuant to Federal Rule of Civil Procedure 23(a) and 23(b)(1), or 23(b)(2), or 23(b)(3). ("Second Mot. for Class Cert." ECF No. 139.) For the reasons stated below, Plaintiffs' Second Motion for Class Certification is granted. There shall be two subclasses as suggested by VCENA in its Response to Plaintiffs' Second Motion for Class Certification.
I. BACKGROUND
On February 1, 2005, Plaintiffs filed this action under Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and Section 502 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132, alleging that they are entitled to lifetime, vested retiree health insurance and life insurance benefits. Plaintiffs maintain that VCENA and/or various other corporate entities operated facilities in Euclid, Ohio, involved with heavy truck manufacturing, engineering, and testing (the "Euclid Facility"). The individual Plaintiffs allege they are retirees, retiree spouses, surviving spouses or dependants of retirees from the Euclid Facility, who retired prior to January 1, 1987. While the Plaintiff retirees were employed at the Euclid Facility, the UAW and UAW Local 70, or its predecessor UAW Local 426 (collectively, the "Union"), served as their exclusive bargaining representative.
In 1984, Defendant VCENA, operating under the name of Clark Michigan Company ("Clark"), purchased the assets of the Euclid Facility, involved with heavy truck manufacturing, engineering, and testing. In 1994, Defendant VCENA, then operating under the name of "VME Americas Inc." ("VME"), entered into a joint venture agreement with Hitachi Construction Machinery ("HCM") to create Euclid-Hitachi Heavy Equipment, Inc. ("EHHE") and EHHE's wholly-owned Canadian subsidiary, Hitachi Construction Manufacturing Ltd. ("HTM"). EHHE was to operate the Euclid Facility. Between 1994 and 2000, VCENA transferred its interest in EHHE to HCM, until EHHE became a wholly-owned subsidiary of HCM in 2000. Sometime after 2001, the Euclid Facility was controlled by HTM, which operated the facility through one of its branches or divisions called the Euclid-Hitachi Technical Center ("EHTC").
While operating under the name of Clark, Plaintiffs allege that VCENA was bound by a collective bargaining agreement with the Union, effective 1983 to 1986 (the "1983 CBA"). ( See Third Amended Complaint ("TAC"), Ex. 1, ECF No. 138.) The 1983 CBA allegedly contained a section entitled, "Pension Plan, Insurance Program and Supplemental Unemployment Benefit Plan," which stated that the terms of the healthcare and life insurance benefits were contained in a series of Supplemental Agreements. ( See TAC, Ex. 1 at 144, ECF No. 144.) The Supplemental Agreements provided for an insurance program that guaranteed retirees and their spouses, surviving spouses, and eligible dependents fully paid healthcare benefits for life. ( See TAC, Ex. 2 at 22-24-B, 96-B, and 97-98-B, ECF No. 145.) Plaintiffs maintain that all subsequent collective bargaining agreements with HTM and its predecessors, including VCENA operating as Clark and VME, guaranteed retirees, their spouses and dependents the same coverage that they received under the 1983 CBA.
In a letter dated January 12, 2005, all retirees and their spouses, surviving spouses, and dependents were informed that their benefits would be cancelled as of February 28, 2005. ( See TAC, Ex. 9 (January 12, 2005 Form Letter).) The letter stated that EHHE was going out of business and the current retiree life and healthcare benefits would terminate on February 28, 2005. ( Id.) Plaintiffs allege that VCENA was obligated to provide them with "vested lifetime retiree health care and life insurance benefits" and that VCENA has breached this obligation. ( See TAC ¶¶ 64-66.)
Plaintiffs have sought relief under the LMRA and ERISA, and request that this court: (A) Certify this action as a class action; (B) Determine that Defendant VCENA is obligated under ERISA and the LMRA to provide vested lifetime retiree health care and life insurance benefits to the Class Representatives and class members as set forth in the applicable collective bargaining agreements; (C) Enter permanent injunctive relief requiring Defendant VCENA to maintain the retiree health care and life insurance benefits provided for in the applicable collective bargaining agreements during the lifetime of the Class Representatives and class embers; (D) Award Plaintiffs attorney's fees, and costs incurred in this action; (E) Grant such further relief as may be deemed necessary and proper. ( See TAC at ¶¶ A.-E.)
II. LAW AND ANALYSIS
A court must engage in a "rigorous analysis" of the plaintiffs' ability to meet the requirements of Federal Rule of Civil Procedure 23(a), before certifying a class. Gen. Tel. Co. v. Falcon, 457 U.S. 147, 161 (1982). To obtain class certification, Plaintiffs must satisfy the requirements of Rule 23(a) commonly known as numerosity, commonality, typicality, and adequacy of representation, and demonstrate that the class fits under one of the three subdivisions of Rule 23(b). Coleman v. GMAC, 296 F.3d 443, 446 (6th Cir. 2002). A district court has broad discretion in determining whether to certify a class, within the dictates of Rule 23.
Plaintiffs previously moved for class certification pursuant to Federal Rule of Civil Procedure 23(b)(2). ( See First Mot. for Class Cert. at 13, ECF No. 57.) This court denied Plaintiffs' first Motion for Class Certification under Rule 23(a) and 23(b)(2) because Plaintiffs' Second Amended Complaint sought monetary damages, which would have required individualized damage determinations. ( See Order denying Pls.' First Mot. for Class Cert., ECF No. 125.) Plaintiffs have since amended their Complaint ( see TAC) and currently do not seek any monetary damages. ( See id. at 14.)
A. Definition of the Class
Before analyzing the requirements of Rule 23(a), a court must first "consider whether a precisely defined class exists and whether the named plaintiffs are members of the proposed class." Bentley v. Honeywell Int'l, Inc., 223 F.R.D. 471, 477 (S.D. Ohio 2004) (citing East Texas Motor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403 (1977)).1. Plaintiffs' Proposed Class
In the instant case, the named Plaintiffs seek certification under Rule 23(b)(1), 23(b)(2), or 23(b)(3) of the following proposed class:
Hourly retirees from the Euclid Facility who retired prior to January 1, 1987, and the spouses, surviving spouses, and eligible dependants of those retirees who retired from the Euclid Facility prior to January 1, 1987.
(Pls.' Second Mot. for Class Cert. at 2, ECF No. 57-1.) There are approximately 305 persons in the proposed class. ( See TAC at ¶ 20.)
Defendant VCENA does not oppose certification of a Rule 23(b)(2) class in this case, but objects to the class as proposed by Plaintiffs. Defendant states that it has not acted on grounds generally applicable to the class as defined by Plaintiffs, nor would declaratory or injunctive relief be appropriate to the class, as defined by Plaintiffs. VCENA explains that Plaintiffs have prayed for final injunctive relief, requiring VCENA to provide "lifetime retiree health care and life insurance benefits to the Class Representatives and Class Members" (TAC ¶¶ B and C), but have included both surviving spouses and dependents in their amended class definition, in addition to retirees. Defendant contends that none of the collective bargaining agreements at issue provide any basis for an injunction or declaration requiring VCENA to provide life insurance benefits to surviving spouses or dependents. Consequently, according to Defendant, even if the retirees could prove they have vested life insurance benefits, which VCENA disputes, this would not require the conclusion that surviving spouses and dependents also have the same benefit. Therefore, VCENA maintains it would be possible, under the same collective bargaining agreement language, for the retirees to succeed in proving their claim for life insurance benefits, while the surviving spouses and dependents fail to prove their claim for life insurance benefits. As such, VCENA argues that it cannot be true that VCENA has acted "on grounds generally applicable to the class," or that final injunctive relief or a declaration would be appropriate with respect to Plaintiffs' proposed class.
Certification under Rule 23(b)(2) is appropriate when the party opposing the class has acted or refused to act on grounds generally applicable to the class, making final injunctive or declaratory relief appropriate.
2. Defendant's Proposed Classes
Defendant VCENA, while denying that any of the agreements attached to the Third Amended Complaint confer any vested right upon any person, suggests that Plaintiffs' proposed class be broken into two subclasses for certification under 23(b)(2):
(a) a subclass of retirees who had worked as hourly employees at the Euclid Facility and who retired prior to January 1, 1987; and
(b) a subclass of surviving spouses and eligible dependents of persons who had retired from service as an hourly employee at the Euclid Facility prior to January 1, 1987.
(Def.'s Opp'n to Pls.' Second Mot. for Class Cert. at 3, ECF No. 152.) Plaintiffs have no objection to breaking their proposed class into the two subclasses suggested by VCENA, though they do not agree with Defendant's position that surviving spouses and eligible dependents did not and do not have any right to any life insurance benefit under the 1983 CBA. (Pls.' Response, ECF No. 153.)
Plaintiffs maintain that there are currently no spouses, surviving spouses and/or eligible dependents who are entitled to life insurance under the terms of the 1983 CBA.
B. The Requirements of Fed.R.Civ.P. 23(a)
Under Rule 23(a), a class action may not be maintained unless certain preconditions are met. Those preconditions are: (1) the class must be so numerous that joinder of all members is impracticable, (2) there must be questions of law or fact common to the class, (3) the claims or defenses of the representative parties must be typical of the claims or defenses of the class, and (4) the representative parties must fairly and adequately protect the interests of the class. See Fed.R.Civ.P. 23(a). This court has previously discussed these preconditions and concluded that Plaintiffs have satisfied all the preconditions of Rule 23(a). ( See Order, ECF No. 125.)
C. Certification of Two Subclasses
The court finds that the creation of two subclasses is appropriate at this stage. Federal Rule of Civil Procedure 23(c)(4)(B) provides that "[w]hen appropriate . . . a class may be divided into subclasses and each subclass treated as a class . . ." Fed.R.Civ.P. 23(c)(4)(B). The court has the discretion to break up a proposed class into subclasses, provided that the each subclass meet the requirements of Rule 23. Bert v. AK Steel Corp., 2006 U.S. Dist. LEXIS 22904 *22 (S.D. Ohio 2006). District courts commonly certify subclasses in retiree benefit cases where the rights of the various proposed class members might differ depending upon their circumstances, but where the members of the subclasses otherwise satisfy Rule 23 requirements. See, e.g., Rexam Inc. v. United Steel Workers of America, 2005 U.S. Dist. LEXIS 24132 (D. Minn. 2005) (certifying subclasses of retirees based upon the plant at which they worked). The court also retains the discretion to "alter or decertify [the] subclasses, if further discovery and developments should warrant." Bert, 2006 U.S. Dist. LEXIS 22904, at *22.
The named Plaintiffs already include persons from both proposed subclasses who could serve as subclass representatives. Plaintiffs Burtyk, Henderson, Rose, Wade, and Wilbert Whitt each allege to be retirees, and can serve as representatives of the subclass of retirees. ( See TAC, ¶¶ 5-12.) Plaintiffs Bergant, Knox, and Opal Whitt each allege to be surviving spouses and/or dependents and could serve as representatives of the subclass of surviving spouses and dependents. ( See id.) The court finds that the named Class Representatives satisfy Rule 23(a)(4)'s adequacy requirement for class representatives. There is no indication that their claims or interests are adverse to the rest of their respective subclasses. Therefore, for the reasons discussed above, the court certifies the following classes under Rule 23(a) and (b)(2):
Retirees who had worked as hourly employees at the Euclid Facility and who retired prior to January 1, 1987.
Surviving spouses and eligible dependents of persons who had retired from service as an hourly employee at the Euclid Facility prior to January 1, 1987.
III. CONCLUSION
For the foregoing reasons, the court concludes that certification of the proposed subclasses under Rules 23(a) and 23(b)(2) is warranted. Therefore, Plaintiffs' Second Motion for Class Certification is granted. (ECF No. 139.)IT IS SO ORDERED.