Kerns v. Caterpillar Inc.

• Decision Date: 17 November 2015
• Docket Number: Case No. 3: 06-CV-1113
• Citation: 144 F.Supp.3d 963
• Parties: Judith K. Kerns, et al., Plaintiffs, v. Caterpillar Inc., Defendant/Third-Party Plaintiff, v. International Union, UAW, et al., Third-Party Defendants
• Court: U.S. District Court — Middle District of Tennessee

144 F.Supp.3d 963

Judith K. Kerns, et al., Plaintiffs,

v.Caterpillar Inc., Defendant/Third-Party Plaintiff,

v.International Union, UAW, et al., Third-Party Defendants

Case No. 3: 06-CV-1113

United States District Court, M.D. Tennessee, Nashville Division.

Signed November 17, 2015

Lisa M. Smith, Samuel C. McKnight, Klimist, McKnight, Sale, McClow & Canzano, P.C., Jordan D. Rossen, McKnight, McClow, Canzano, Smith & Radtke, P.C., Southfield, MI, Samuel Morris, Deborah Godwin, Godwin, Morris, Laurenzi & Bloomfield, PC, Memphis, TN, Joseph J. Torres, Winston & Strawn, Chicago, IL, for Plaintiffs.

Columbus R. Gangemi, Jr., Derek Grady Barella, Joseph J. Torres, Heather S. Lehman, Winston & Strawn LLP, Chicago, IL, Lawrence Slade Eastwood, Jr., Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Nashville, TN, for Defendant/Third-Party Plaintiff.

David W. Garrison, Edmund L. Carey, Jr., Barrett Johnston Martin & Garrison, LLC, Nashville, TN, Joshua B. Shiffrin, Julia Penny Clark, W. Gary Kohlman, Matthew Clash-Drexler, Bredhoff & Kaiser, PLLC, Washington, DC, Lisa M. Smith, Klimist, McKnight, Sale, McClow & Canzano, P.C., Southfield, MI, for Third-Party Defendants.

MEMORANDUM OPINION

ALETA TRAUGER, UNITED STATES DISTRICT JUDGE

Pending before the court is a Motion to Reconsider filed by Caterpillar, Inc. (“Caterpillar”) (Docket No. 451), accompanied by a Memorandum in support (Docket No. 452). The plaintiffs have filed a response in opposition (Docket No. 459), and Caterpillar has filed a Reply (Docket No. 466). The plaintiffs have also filed a Motion to Reconsider (Docket No. 464) and a Memorandum in support (Docket No. 465). Caterpillar has filed a response in opposition (Docket No. 467,) and the plaintiffs have filed a Reply (Docket No. 470). For the following reasons, the court will deny both motions.

I. Background

This is a class-action lawsuit brought on behalf of surviving spouses of former employees of Caterpillar who retired on or after March 16, 1998, and before January 10, 2005. Because the court has recounted the factual and procedural history of this case numerous times, familiarity with the facts will be assumed.¹ The plaintiffs filed this action in 2006, seeking relief under § 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185, and under § 502 of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132. The plaintiffs allege that Caterpillar breached its contractual obligation to provide lifetime health benefits to surviving spouses of Caterpillar retirees at no cost.

On June 27, 2007, the court denied Caterpillar's motion to dismiss, rejecting its arguments that the court lacked subject matter jurisdiction over the plaintiffs' LMRA and ERISA claims, that the plaintiffs could not maintain an action on behalf of a hypothetical group of “future” surviving spouses that could not be readily identified, and that the claims of current surviving spouses were moot. (Docket No. 77, at 3.) The court also found that, because the parties had presented plausible, but competing, interpretations of the contractual language of the retiree benefits plan with respect to the alleged intention to confer lifetime health benefits to surviving spouses, extrinsic evidence could be introduced to resolve the ambiguity. (Id. , at 28.) However, because little discovery had been completed at that time, the court found that it was too early to determine whether, as a matter of law, the plaintiffs' benefits had vested and, if so, when they vested. (Id. , at 28–29.)

On March 26, 2010, the court ruled on the plaintiffs' and Caterpillar's cross motions for summary judgment and granted and denied each in part. (Docket No. 262.) The portion of the collective bargaining agreement (“CBA”) between Caterpillar and the UAW that addresses the retiree health benefits for the Kerns plaintiffs is the 1998 Group Insurance Plan (“GIP”). A subsection of the 1998 GIP is the Insurance Plan Agreement (“IPA”). (Docket No. 222–9 at 1–3.) Contrary to the finding at the motion to dismiss stage that the contract language was ambiguous, in the summary judgment memorandum opinion, the court found that the language in Section 5.15 of the 1998 GIP (Docket No. 222–9, at 61) that provided that health care benefits “will be continued following the death of a retired Employee for the remainder of the surviving spouse's life without cost” was “sufficient to unambiguously vest in the surviving spouse a right to lifetime ‘no cost’ health benefits.” (Id. , at 35–36.) The court further found that, although it was not necessary to consider extrinsic evidence because Section 5.15 of the 1998 GIP was unambiguous, the extrinsic evidence before the court “plainly supports the plaintiffs' position.” (Id. , at 36–37 n.18.)

Having concluded that lifetime benefits had vested for the surviving spouses and that Caterpillar had no viable affirmative defenses, the court turned to an analysis pursuant to Reese v. CNH Am. LLC , 574 F.3d 315 (6th Cir.2009), which “stands for the proposition that, even if the retiree has a vested right to lifetime health benefits from his employer, unless there is some exceptional language that dictates that benefits can ‘never vary,’ that retiree is entitled to ‘lifetime benefits subject to reasonable changes.’ ” (Docket No. 262, at 27 (quoting Reese , 574 F.3d at 326 ).) The court concluded that, pursuant to Reese, the additional deductibles, coinsurance, and increased out-of-pocket costs were permissible, but held that Caterpillar's imposition of monthly premiums violated ERISA and the LMRA. (Id. , at 39–41.) Accordingly, the court entered judgment for the plaintiffs on their claims related to Caterpillar's imposition of premiums. The summary judgment order resolved all liability issues between the plaintiffs and Caterpillar. (Id. , at 47–48.)

Still pending at the time of the court's March 26, 2010 summary judgment ruling was Caterpillar's October 16, 2008 appeal of the court's preliminary injunction order for a subclass of the Winnett plaintiffs. On June 22, 2010, the Sixth Circuit reversed this court's Winnett preliminary injunction order, finding that the claims of the subclass were barred by the statute of limitations. (Winnett Docket No. 470.)

After the Sixth Circuit issued its ruling, Caterpillar filed motions to reconsider in both Winnett and Kerns. (Winnett Docket No. 475; Kerns Docket No. 266.) In the Kerns motion, Caterpillar argued that, by the logic of the Sixth Circuit's decision in Winnett, the Kerns plaintiffs' claims were also barred by the statute of limitations. (Docket No. 280, at 15.) On January 12, 2011, this court rejected Caterpillar's argument, based on factual differences between the claims of the plaintiffs in Winnett and Kerns. In particular, the Winnett plaintiffs sought to maintain the level of benefits under the 1988 GIP, not the 1998 GIP, which led to a different determination of when the Kerns plaintiffs' claims accrued. (Id. , at 16–17.)

The court also rejected Caterpillar's argument that the Sixth Circuit's intervening decision in Wood v. Detroit Diesel Corp. , 607 F.3d 427, 428 (6th Cir.2010), justified a reconsideration of the court's ruling that the plaintiffs have a vested right to lifetime, premium-free health benefits under the 1998 GIP. (Docket No. 280, at 18 n.6.) The court concluded that, unlike in Wood —which found that, when various provisions of the agreements were read together, the only coherent interpretation was that plaintiffs are entitled to lifetime, capped health care benefits—this case has “no clearly conflicting language for the court to blend together, and, therefore, there is no basis for the court to reconsider its earlier ruling.” Id. Accordingly, the court granted Caterpillar's motion to reconsider in Winnett based on the statute of limitations, but denied its motion in Kerns. (Docket No. 280.)

On August 20, 2014, the court ruled on Caterpillar's motion for summary judgment on damages issues, in which Caterpillar argued that it was not liable for the out-of-pocket expenses incurred by surviving spouses who canceled their Caterpillar insurance. (Docket No. 408.) The court denied the portion of Caterpillar's motion that the court construed as a motion to strike certain damages, holding that, under Section 301 of the LMRA, Caterpillar is liable for the cost of replacement insurance and out-of-pocket expenses incurred by plaintiffs who obtained alternative insurance or became uninsured because Caterpillar breached the collective bargaining agreement. (Id. ) The court granted Caterpillar's motion and entered judgment in its favor on the claims of four class members who had produced no admissible evidence demonstrating their damages or who had produced no admissible evidence that they terminated their Caterpillar insurance because of the imposition of premiums. (Id. ) As to eight other class members who were the subjects of Caterpillar's motion for summary judgment, the court held the motion in abeyance and requested that those plaintiffs file a cross motion for summary judgment. (Id. ) On January 16, 2015, the court granted the motion for summary judgment filed by the eight plaintiffs, entered judgment in their favor as to damages in the form of out-of-pocket expenses, and ordered Caterpillar to re-enroll these plaintiffs in its insurance plan without premiums. (Docket No. 432.)

II. Legal Standard

While the Federal Rules of Civil Procedure fail to explicitly address motions to reconsider interlocutory orders, “[d]istrict courts have authority both under common law and Rule 54(b) to reconsider interlocutory orders and to reopen any part of a case before entry of final judgment.” Rodriguez v. Tenn. Laborers Health & Welfare Fund , 89 Fed.Appx. 949, 959 (6th Cir.2004) (citing Mallory v. Eyrich , 922 F.2d 1273, 1282 (6th Cir.1991) ); accord In re Life Investors Ins. Co. of Am. , 589 F.3d 319, 326 n. 6 (6th Cir.2009). Thus, district courts may “afford such relief from...