INTERN. UNION, UNITED AUTO. v. Midland Steel Prod., 1:89CV02138.

• Citation: 771 F. Supp. 860
• Decision Date: 14 August 1991
• Docket Number: No. 1:89CV02138.,1:89CV02138.
• Parties: INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, et al., Plaintiffs, v. MIDLAND STEEL PRODUCTS CO., et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

771 F. Supp. 860

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, et al., Plaintiffs, v. MIDLAND STEEL PRODUCTS CO., et al., Defendants.

No. 1:89CV02138.

United States District Court, N.D. Ohio, E.D.

August 14, 1991.

Betty E. Grdina, Bobulsky, Gervelis & Grdina, Ashtabula, Ohio, for plaintiffs.

Lee Hutton, Cleveland, Ohio, for defendants.

AMENDED MEMORANDUM OF OPINION AND ORDER DENYING DEFENDANTS' MOTION FOR INTERLOCUTORY APPEAL

KRENZLER, District Judge.

The United Auto Workers Local No. 486 and several named individuals ("plaintiffs"), now certified as a class, filed suit against Midland Steel Products Co. and the Lamson & Sessions Co. (hereinafter collectively referred to as "Midland"), in November, 1989 alleging that Midland discharged approximately 290 union employees for the purpose of interfering with the attainment of certain medical and life insurance benefits. Plaintiffs brought this action under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001, et seq., seeking both equitable and legal remedies. Specifically, they seek $10 million in compensatory damages for violations of ERISA, a judgment of $10 million to fund the retirement health insurance coverage, and "other equitable and declaratory relief as this Court may deem appropriate." The plaintiffs requested a trial by jury pursuant to their Seventh Amendment right.

Midland moved to strike the jury demand asserting that there is no right to a jury trial in equitable actions. They further argued that § 502(a)(3), the language of which specifies only equitable remedies, is the exclusive means of enforcing rights guaranteed under ERISA and that the Seventh Amendment does not provide plaintiffs a jury trial for claims arising in equity. This Court, however, finds that the more comprehensive § 502(a) remedy scheme does provide legal remedies in cases such as the one at bar where both legal and equitable issues are presented. As plaintiffs asserting legal claims are entitled to a jury trial, this Court upheld the jury demand in accordance with the terms of the statute and the Seventh Amendment. Accordingly, this Court overruled defendants' motion to strike the jury demand.

Now the defendants move that this Court amend that order and certify it for immediate appeal under 28 U.S.C. § 1292(b). The plaintiffs contend that the motion to certify an appeal was not timely pursuant to Federal Rule of Civil Procedure 59(e) which specifies that appeals must be made within 10 days of the Court's judgment. Rule 59(e), however, is not applicable to this case because it refers specifically to judgments that give rise to a right to appeal. If this Court's order denying defendants' motion to strike the jury demand gave rise to an appeal, the defendants would not need to seek to certify an interlocutory appeal in this Court. Interlocutory appeals are properly regulated by Federal Rule of Appellate Procedure 5(a) which states that "an order may be amended to include the prescribed statement stipulated by 28 U.S.C. § 1292(b) at any time, and permission to appeal may be sought within ten days after entry of the order as amended." Under this rule, this Court has the authority to amend its order and certify it for appeal at any point in time.

Interlocutory appeals may be granted when there is substantial ground for differing opinions regarding a controlling issue of law and when an immediate appeal from the order would materially advance the ultimate termination of the litigation. 28 U.S.C. § 1292(b). Applications for interlocutory appeals should not stay proceedings in the federal court unless a federal district or circuit judge so orders. 28 U.S.C. § 1292(b). Section 1292(b) was enacted so that appeals from interlocutory orders could be obtained in the exceptional circumstance where it is necessary to avoid unnecessary delay and expense. Accordingly, the Sixth Circuit has held that certification under § 1292(b) is to be "sparingly applied." Kraus v. Board of Road Commissions, 364 F.2d 919, 922 (6th Cir.1966).

The defendants argue that granting immediate leave to appeal would save the parties the expense of an additional trial. The Supreme Court, however, has "declined to find the costs associated with unnecessary litigation to be enough to warrant allowing the immediate appeal of a pretrial order." Lauro Lines SRL v. Chasser, 490 U.S. 495, 499, 109 S.Ct. 1976, 104 L.Ed.2d 548 (1989). In fact, in an earlier decision, the Supreme Court noted that forbidding interlocutory appeals "achieves significant savings in time and resources on the part of the litigants." Radio Station WOW, Inc. v. Johnson, 326 U.S. 120, 123-124, 65 S.Ct. 1475, 1477-1478, 89 L.Ed. 2092 (1945).

When this motion is considered in its entirety, it is clear that both efficiency and expense are better served by allowing the trial to proceed with a jury. While the issue of whether a trial by jury is available under § 502(a) of ERISA is one of first impression in this Circuit, there is substantial authority indicating that this Court's decision allowing a trial by jury is consistent with the intentions of Congress and with the holdings of the Supreme Court.

This action has already consumed a considerable amount of time, discovery has been completed, and this case is now ready for trial; permitting an interlocutory appeal would only serve to further delay the resolution of this litigation. Interlocutory appeals should not be used when it serves only to unnecessarily prolong litigation and to inconvenience the opposing party. Accordingly, this Court denies the defendants' motion to certify an appeal pursuant to 28 U.S.C. § 1292(b) and issues the following opinion supporting the right to a trial by jury under ERISA.

There are two primary steps involved in determining whether a party is entitled to a trial by jury. The first step looks to the statute to determine whether the right to jury is expressly or implicitly available. Curtis v. Loether, 415 U.S. 189, 192, 94 S.Ct. 1005, 1007, 39 L.Ed.2d 260 (1974), citing United States v. Thirty-Seven Photographs, 402 U.S. 363, 91 S.Ct. 1400, 28 L.Ed.2d 822 (1971). If the statute is unavailing, then the court must determine whether the Seventh Amendment guarantees such a right. Id.

ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans. Shaw v. Delta, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490 (1983). As part of this closely integrated regulatory system, Congress included various safeguards "to completely secure the rights and expectations brought into being by this landmark reform legislation." S.Rep. No. 93-127, P. 36 (1973).

ERISA § 510, the relevant section to this litigation, provides in pertinent part as follows:

It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, this subchapter, section 1201 of this title or the Welfare and Pension Plans Disclosure Act or for the purpose of interfering with the attainment of any right to which such participant may become entitled under this plan....

29 U.S.C. § 1140. Section 510 is enforced through the provisions of § 502(a) which state that:

A civil action may be brought —

(1) by a participant or beneficiary ... (B) to recover benefits due him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan ...

* * * * * *

(3) by a participant ... (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan ...

29 U.S.C. § 1132(a)(1)(B) and (a)(3). This Court is charged with determining whether the cited statutory language provides for legal remedies.

Several other federal courts have found an implied statutory right to a trial by jury in ERISA cases.¹ This Court joins with them in the assertion that jury trials are not precluded by the language of the statute. While § 502(a)(3) cites equitable remedies specifically, it does not render all § 510 actions under ERISA equitable in nature. Indeed many § 510 actions, including the one before this Court, are analogous to contractual issues and are, therefore, legal in nature. In addition, § 502(a)(1)(B), an integral part of the comprehensive § 502(a) remedy scheme, opens the door further for legal remedies under ERISA.

This Court finds that this reading of the statute is consistent with Congressional intent. The ERISA Conference Report states that actions under § 502(a)(1)(B) are to be regarded "in a similar fashion to those brought under Section 301 of the LMRA," where a right to jury trial has been upheld. See Teamsters Local 391 v. Terry, 494 U.S. 558, 110 S.Ct. 1339, 108 L.Ed.2d 519 (1990). In Terry, the Supreme Court held that there was a right to a jury trial in a Section 301 suit for breach of duty of fair representation as it was analogous to a claim for breach of contract. Id., 110 S.Ct. at 1345. As a result, the plaintiff was able to pursue compensatory damages in the form of backpay resulting from the wrong done to the individual employee. As Congress intended actions under § 502(a)(1)(B) to be analogous to § 301 actions, this Court holds that Congress intended to provide § 510 plaintiffs with the option of legal remedies as well as the right to trial by jury.

While the Supreme Court's ruling in Terry only suggested by analogy that legal remedies may be available under ERISA, the Supreme Court's more recent holdings confirm the availability of such remedies and, consequently, the entitlement to a jury trial. This new trend is...