Fitzwater v. Consol Energy, Inc., Civil Action No. 2:16-cv-09849

• Decision Date: 15 October 2019
• Docket Number: C/w: Civil Action No. 1:17-cv-03861,Civil Action No. 2:16-cv-09849
• Parties: BENNY FITZWATER and CLARENCE BRIGHT, and TERRY PRATER, and EMMET CASEY, JR., and CONNIE Z. GILBERT, and ALLAN H. JACK, SR., and ROBERT H. LONG, on behalf of themselves and others similarly situated, Plaintiffs, v. CONSOL ENERGY, INC., and CONSOLIDATION COAL CO., and FOLA COAL CO., LLC, and CONSOL OF KENTUCKY, INC., and CONSOL BUCHANAN MINING CO., LLC, and CONSOL PENNSYLVANIA COAL CO., LLC, and KURT SALVATORI, Defendants.
• Court: U.S. District Court — Southern District of West Virginia

BENNY FITZWATER and CLARENCE BRIGHT, and TERRY PRATER,and EMMET CASEY, JR., and CONNIE Z. GILBERT, and ALLAN H. JACK, SR.,and ROBERT H. LONG, on behalf of themselves and others similarly situated, Plaintiffs, v. CONSOL ENERGY, INC., and CONSOLIDATION COAL CO., and FOLA COAL CO., LLC,and CONSOL OF KENTUCKY, INC., and CONSOL BUCHANAN MINING CO., LLC,and CONSOL PENNSYLVANIA COAL CO., LLC, and KURT SALVATORI, Defendants.

Civil Action No. 2:16-cv-09849

C/w: Civil Action No. 1:17-cv-03861

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF WEST VIRGINIA AT CHARLESTON

October 15, 2019

MEMORANDUM OPINION AND ORDER

Pending is the plaintiffs' supplemental motion for class certification, filed August 17, 2018.

I. Background

On April 24, 2017, plaintiffs Benny Fitzwater ("Fitzwater"), Clarence Bright ("Bright"), and Terry Prater ("Prater"), on behalf of themselves and others similarly situated, filed their amended complaint against CONSOL Energy, Inc., Consolidation Coal Co., Fola Coal Co., LLC, CONSOL of Kentucky, Inc., and Kurt Salvatori (CONSOL Energy, Inc.'s Vice President of Human Resources from 2011-2016 and fiduciary of the plaintiffs' employee welfare benefit plans) in this court. First Am. Compl., ECF No. 36 ("ECF No. 36"). This case was consolidated on December 22, 2017 with Casey v. CONSOL Energy, Inc. et al., brought by Emmett Casey, Jr. ("Casey"), Connie Z. Gilbert ("Gilbert"), Allan Jack Sr. ("Jack"), and Robert H. Long ("Long"). ECF No. 90.

Plaintiffs Casey, Gilbert, Jack, and Long filed an amended complaint on March 1, 2018.¹ Second Am. Compl., ECF No. 103 ("ECF No. 103"). After Fitzwater, Bright, and Prater's original motion to certify class, filed July 13, 2017, was denied as moot by the court's February 6, 2018 order, see ECF No. 100, all seven named plaintiffs jointly filed a supplemental motion for class certification against CONSOL Energy, Inc., Consolidation Coal Co.,² Fola Coal Co., LLC, CONSOL of Kentucky, Inc., CONSOL Pennsylvania Coal Co., LLC (collectively,"CONSOL"),³ and Mr. Salvatori on August 17, 2018. Pls.' Suppl. Mot. Class Cert., ECF No. 155 ("ECF No. 155").⁴

The named plaintiffs are retired miners who worked at CONSOL mine sites consisting of the CONSOL of Kentucky mines, the Buchanan Mine located in Virginia and the Enlow Fork Mine located in Pennsylvania, or at the Fola mine sites located in West Virginia. Pls.' Mem. Supp. Suppl. Mot. Class Cert. 4-5, ECF No. 156 ("ECF No. 156"); ECF No. 103 ¶¶ 23, 58; ECF No. 36 ¶¶ 30-31. They seek to represent some 4,000 miners who worked at numerous CONSOL mine sites in four different states over the course of approximately forty years. ECF No. 156 at 1; Pls.' Reply Suppl. Mot. Class Cert. 1, ECF No. 162 ("ECF No. 162"). The plaintiffs allege wrongful and discriminatory termination of retiree health benefits pursuant to the Employee Retirement Income Security Act of 1975 ("ERISA"), 29 U.S.C. § 1001, et seq. ECF Nos. 36, 103.

In the early 1980s, CONSOL began holding orientation sessions for new, non-union employees at each of its mine sites,during which CONSOL representatives allegedly made oral and written promises of lifetime medical benefit coverage to miners and their beneficiaries as part of their "major initiative to begin opening non-union coal mines." ECF No. 156 at 4. Therein, representations were allegedly "made in written form on slide shows - which Defendants projected on the wall for the putative class members to read - or in hand-outs distributed to class members by Consol." Id. at 4-5. The materials allegedly " explained the CONSOL retiree benefits and stated that those benefits would remain competitive with the lifetime, Congressionally-backed benefits available to miners through the UMWA," referring to the United Mine Workers of America. Id. at 5. The plaintiffs believed these lifetime retiree benefits included medical, prescription drug, dental, vision, and life insurance coverage. ECF No. 103 ¶ 63.

The plaintiffs refer to these benefits as the "Lifetime Plan" for which there was no uniform formal statement and no Summary Plan Document ("SPD"). Formal plans with SPDs did exist, consisting of varying degrees of coverage for medical, prescription drug, short- and long-term disability, dental, vision, and life insurance benefits, in addition to pension payments under a separate retirement plan. See, e.g., August 31, 2018 Declaration of Deborah Lackovic (Consol'sDirector - Benefits) ("Second Lackovic Decl."), Exs. A-P, ECF Nos. 160-19 to 160-24. The defendants provided the court with SPDs from 1992, 1998, 2003, 2005, 2006, 2011, 2014 that were distributed to CONSOL's retired and active employees. Id.

For instance, the 1992 SPDs benefits binder given to production and maintenance employees at "Enlow Fork Mining Company," "Consol of Pennsylvania Coal Company," and "Consolidation Coal Company of Kentucky" summarized the (a) life insurance, (b) medical, (c) salary continuance/disability, (d) dental, and (e) retirement benefit plans, and provided a separate SPD for each of them. Second Lackovic Decl., Ex. K, ECF No. 160-23. The SPDs the defendants provided up until the mid-2000s covered both active and retired employees within the same plans. See, e.g., Id. Ex. J, ECF No. 160-22 at 28, CONSOL022576;⁵ Id. Ex. M, ECF No. 160-24 at 12, CONSOL022088.⁶

In 2006, CONSOL began providing two separate sets of SPDs, one for retirees and one for active employees. SecondLackovic Decl. ¶¶ 7-8, ECF No. 160-19. Retirees and active employees also both received a separate SPD for each type of benefit they received: medical, prescription drug, dental, vision, disability, and life insurance, though the SPDs for retired and active employees were all contained in a common welfare plan designated Plan Number 581. Id. Exs. B-F, (SPDs for retirees), Exs. G-H (SPDs for active employees), ECF Nos. 160-19 to 160-20; ECF No. 103 ¶ 89.

In January 2011, CONSOL issued a separate benefit plan for retired employees called the CONSOL Energy Inc. Retiree Health and Welfare Plan ("Retiree Benefits Plan"). See Second Lackovic Decl., Ex. A, ECF No. 160-19. Active employees remained participants in what was known as the CONSOL Energy Inc. Health and Welfare Plan ("Active Employee Benefits Plan."), which the parties at times refer to as the CONSOL Energy, Inc. Flexible Benefits Program Comprehensive Medical Expense Benefits Plan. See July 27, 2017 Declaration of Deborah Lackovic ("First Lackovic Decl.") ¶ 9, ECF No. 67-5; Second Lackovic Decl. ¶ 8, ECF No. 160-19; ECF No. 36 ¶ 50. Unlike earlier plans that covered dental and disability, the Retiree Benefits Plan only covered medical, prescription drug, vision, and life insurance benefits. See First Lackovic Decl. ¶ 8, ECF No. 67-5; Second Lackovic Decl., Ex. A, ECF No. 160-19. The Active EmployeeBenefits Plan continued to carry medical, prescription drug, vision, dental, disability, and life insurance benefits. Second Lackovic Decl. ¶ 8, ECF No. 160-19; Id. Ex. G, ECF No. 160-20.

In or around 2010, the defendants allegedly "became aware of a union organizing drive," and in order to "halt" organizational efforts, the defendants "repeatedly represented to their employees," including Bright, Fitzwater, and Fola miner Harold Scott, that the "lifetime benefits plan . . . was altogether more valuable than benefits offered by the UMWA." ECF No. 36 ¶¶ 36-37. During the union organizing drive, the defendants allegedly "repeated their previous statements regarding the Lifetime Plan, specifically providing written statements to the plaintiffs that: 'This is a better deal than the UMWA negotiated in the national contract. AND REMEMBER, IT DIDN'T COST YOU A PENNY IN DUES OR ASSESSMENTS.'" Id. ¶ 38.

Despite these assurances, the plaintiffs soon learned that they were not in fact assured lifetime benefits under a single, unified plan. Indeed, dating back to 1992, the SPDs for the various benefit plans each contained a reservation of rights clause that stated that CONSOL reserves the right to amend or terminate the plans at any time for active employees and current or future retirees. See, e.g., Second Lackovic Decl. ¶¶ 9-10,ECF No. 160-19.⁷ In accordance with the reservation of rights clauses, CONSOL announced in late 2014 that it was terminating retiree health and welfare benefits for all active employees on October 1, 2014. ECF No. 155-14. Retirement-eligible employees could continue to receive health and welfare benefits under the Retiree Benefits Plan if they retired as of September 30, 2014, although the Retiree Benefits Plan would terminate on January 1, 2020. Id. Alternatively, active employees could continue working and receive a one-time, lump sum transition payment (to be paid on or around October 22, 2014), based on their years of service, to support their healthcare coverage upon retirement. Id.⁸ Employees who had retired prior to this Fall 2014 announcement never had the option of receiving a transition payment. Id.

A year later, CONSOL informed retired employees by letter that their retiree benefits under the Retiree Benefits Plan would terminate on December 31, 2015. ECF No. 155-16. For retirees, such as named plaintiff Prater, who had previously elected to retire after the Fall 2014 announcement, CONSOL provided a pro-rated portion of the previously rejected transition payment to reflect the receipt of an additional year of benefits under the Retiree Benefits Plan. First Lackovic Decl. ¶ 15, ECF No. 67-5; Prater Dep. 125:2-127:5, ECF No. 67-7; Samons Dep. 65:2-6, ECF No. 67-9.

The plaintiffs now contend that the defendants violated ERISA by representing, orally and in writing, the existence of a single, unified retiree welfare benefits plan, which they coin the "Lifetime Plan," consisting of lifetime medical, prescription drug, dental, vision, and life insurance coverage. ECF No. 156 at 1-3. They claim that the oral representations along with the orientation and training materials created a Lifetime Plan enforceable under ERISA...