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

• Decision Date: 22 October 2020
• Docket Number: C/w: Civil Action No. 1:17-cv-03861,Civil Action No. 2:16-cv-09849
• Court: U.S. District Court — Southern District of West Virginia
• Parties: BENNY FITZWATER, CLARENCE BRIGHT, TERRY PRATER, EMMET CASEY, JR., CONNIE Z. GILBERT, ALLAN H. JACK, SR., and ROBERT H. LONG, on behalf of themselves and others similarly situated, Plaintiffs, v. CONSOL ENERGY, INC., CONSOLIDATION COAL CO., FOLA COAL CO., LLC, CONSOL OF KENTUCKY, INC., CONSOL PENNSYLVANIA COAL CO., LLC, and KURT SALVATORI, Defendants.

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

CONSOL OF KENTUCKY, INC., 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 22, 2020

MEMORANDUM OPINION AND ORDER

Pending is defendants' motion for summary judgment, filed May 29, 2020. ECF No. 231.

I. Background

As this case has progressed, plaintiffs' claims have distilled down to two key issues: (1) whether plaintiffs were misled by fiduciaries of an ERISA plan regarding the nature and duration of their welfare benefits; and (2) whether defendants discriminated against plaintiffs based on health status-related factors in violation of ERISA.

The seven named plaintiffs include Benny Fitzwater, Clarence Bright and Terry Prater ("Fitzwater Plaintiffs"), and Emmett Casey, Jr., Connie Z. Gilbert, Allan Jack Sr. and Robert H. Long ("Casey Plaintiffs").¹ Plaintiffs worked at four current or former subsidiaries of CONSOL Energy, Inc.: (a) Fola Coal Company, L.L.C. ("Fola"); (b) CONSOL of Kentucky Inc. ("CKI"); (c) CONSOL Pennsylvania Coal Co., LLC ("CONSOL Pennsylvania"), and (d) Consolidation Coal Company ("Consolidation") (collectively, "CONSOL"). In addition to these corporate defendants, plaintiffs also bring the same claims against Kurt Salvatori, CONSOL Energy, Inc.'s Vice President of Human Resources from 2011-2016.

To briefly summarize the work history of the Fitzwater Plaintiffs, Fitzwater worked at a Fola site in West Virginia since 1995, shifting to CONSOL when it acquired Fola in 2007. He was laid off in February 2013 and had his retiree benefits terminated in September 2014.² Bright was also a Fola employeesince 1995 and joined CONSOL after its acquisition. He was laid off in June 2013 and retired in May 2014.³ Prater started working for CONSOL in November 2000 and retired on September 30, 2014.⁴ As to the Casey Plaintiffs, Casey started working for Consolidation in the 1970s, began working as a salaried employee at the Buchanan Mine in November 1992, and retired on February 1, 2013.⁵ Although Gilbert worked at Consolidation in a union hourly position from 1994 to 1997, she only started working at CONSOL's Buchanan Mine located in Virginia in 2005, where she held a non-union hourly position until she retired on September 30, 2014.⁶ In 1991, Jack started working at the Enlow Fork Mine located in Pennsylvania as a non-union hourly miner for CONSOL Pennsylvania, retiring in 2009.⁷ Long started working for Consolidation as a union miner in 1967, moved to a salaried position at the Enlow Fork Mine in 1991, and continued to workfor Consolidation until retiring in 2003.⁸ Defendants offer the following graph summarizing these events:

Image materials not available for display.

Plaintiffs maintain that during their employment at CONSOL, defendants made oral and written promises of lifetime medical benefits coverage to non-union miners and their beneficiaries, all of which comprised a "Lifetime Plan," consisting of lifetime medical, prescription drug, dental, vision, and life insurance coverage. Defendants dispute that any such Lifetime Plan existed. In opposition to summary judgment, plaintiffs largely rely on the same written materials evaluated by the court's October 2019 decision denying plaintiffs' supplemental motion for class certification. See ECF No. 203.

First, plaintiffs furnish new-hire orientation scripts used at CONSOL's Enlow Fork and Bailey Mines in Pennsylvania around 1990, which state that "[t]his wage and benefit package is clearly superior to any . . . wage and benefit packagenegotiated by the UMWA [(United Mine Workers of America)] for anybody anywhere." ECF No. 66-1 at 7-9. ECF No. 67-2 ("Salvatori Decl.") ¶¶ 4-6, 13. Second, plaintiffs cite a "Know the Facts" handbill distributed by CONSOL and its subsidiaries to miners at the Fola operations around 2010. ECF No. 66-5. It states that "[y]ou are eligible for Retiree Health Care . . . once you have 10 years of service and reach age 55." It further concludes, "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." See ECF No. 66-5. It does not state that such benefits were "vested" for life.

Plaintiffs also support their claims with testimony that CONSOL representatives made oral representations of guaranteed lifetime benefits. Jack testifies that the orientation attendees interpreted the reference to UMWA in the CONSOL scripts to mean that they "were promised to have exactly the same benefits" as UMWA, with the knowledge that "UMWA represented coal miners -- would never ever go without health care in retirement." Jack Dep. 96:15-97:11 (testifying that CONSOL's Human Resources representative, Luke Gianato, told him during new hire employer orientation "that some day, when you retire, you and your wife will be covered for life.").

Prater testifies that during his orientation when he joined CONSOL in 2000, the films shown to new employees stated that once employees obtained ten years of service and reached age 55 and retired, "we get medical[,] insurance and prescription the rest of our life until we turned 65 years of age. Then CONSOL's insurance would drop down to a supplement to our Medicare." Prater Dep. 28:23-29:23; see also ECF No. 66-2 (Prater Dep.) 37:10-38:4. Prater explains that he received the same message in documents and oral statements given during the orientation, all of which gave employees the impression that they would have these benefits guaranteed for life "because it was told to us all the time" during presentations. ECF No. 66-2 (Prater Dep.) 37:10-38:20. ("[It] would be safe to say every employee that CONSOL had up to January the 30th, 2014, that meeting, I[t]'d be safe to say every employee in their heart thought they would have medical insurance and prescription insurance the rest of their life.").

Although not directly referenced in opposition to the motion for summary judgment, testimony of Fitzwater, Bright, Casey, Gilbert, and Long in the record also assert that CONSOL representatives told employees that their benefits would vest for life after obtaining ten years of service and age 55. For instance, Fitzwater describes how CONSOL's Manager of HumanResources, Gerald Kowzan, offered him and other employees "that they could have medical coverage and retirement, if they met the requirements, for life." See Fitzwater Dep. 42:11-43:23, 89:24-90:18. Bright testifies, "I remember when they explained that we was going to have insurance and retirement after 10 years of service at age 55," though he acknowledges that such representations were only made orally. Bright Dep. 15:15-17; id. at 105:2-19. Casey states that he was told that once you met the minimum threshold, "you was vested into the retirement health benefit plan" as well as other benefits including vision, life, and dental insurance. ECF No. 155-10 (Casey Dep.) 344-345.

Long describes how Luke Gianato told him at his Enlow Fork orientation, and numerous other times, that benefits were "vested" "for life" if you met the age and service requirements, and that he believes such statements were included in presentation materials. Long Dep. 49:9-53:17; ECF No. 155-12 (Long Dep.) 40-42. Gilbert also remembers that the documents she received at orientation said that retiree health benefits would "vest" and that CONSOL's benefits would be the same, if not better, than union benefits. ECF No. 155-9 (Gilbert Dep.) 30, 33-35. As a former union employee, she "knew our union benefits were for our lifetime." Id. at 34:20-35:5.

Plaintiffs also cite testimony that CONSOL used an "equated date" for calculating employees' eligibility to retire and told employees that their benefits would vest after an "equated service date." Plaintiffs assert that the equated service date represents the company's policy that once attaining ten years of service and reaching the age of fifty-five, their medical benefits would vest for life.⁹ By contrast, Salvatori testifies that an employee's "equated date" simply refers to his or her years of service with CONSOL, taking into account any service breaks. ECF No. 155-5 (Salvatori Dep.) 54:5-11. According to Salvatori, the company used the equated date to calculate the transition payment owed to employees as of September 30, 2014. Id. at 53:12-54:14.

Finally, plaintiffs again rely on Dean Michael Hymes, a former Regional Manager of Human Resources for CONSOL who oversaw employee orientations, workers' compensation, union relations, and employee development and training. ECF No. 155-4("Hymes Decl.") ¶ 5. Hymes described orientations at Buchanan, CKI, and Jones Fork mines until his departure from CONSOL in January 1993. He testified that the objective of the orientation scripts "was to make everyone understand that they would not lose their benefits" and that non-union, CONSOL retiree benefits "were equal to, or better than the mine workers." ECF No. 175-1 ("Hymes Dep.") 137:24-139:11. Although he was "intimately involved in preparing the union-free orientation materials" during his tenure, his testimony provides no evidence as to CONSOL's "state of affairs" after his 1993 departure. Id. at 117:8-13; Hymes Decl. ¶ 6. This led the court to conclude in its October 2019 decision denying class certification that Hymes could not testify as to what was shown to any of the seven named plaintiffs, other than potentially Casey, inasmuch as Fitzwater, Bright, and Prater all started at CONSOL after 1993, Gilbert attended her orientation in 2005, and Jack and Long attended their new-hire orientations at Enlow Fork in 1991. See Fitzwater v. CONSOL Energy, Inc., No....