Caterpillar Retiree Litigation
Winnett, et al. v. Caterpillar, Inc., No. 3:06-0235 (M.D.Tenn.)
Our firm represents the plaintiffs in this case in conjunction with Lieff, Cabraser, Heimann & Bernstein, LLP and AARP against Caterpillar, Inc. Plaintiffs have filed a class action alleging that Caterpillar unlawfully reduced its employees’ retirement medical benefits by denying them the benefits that were offered for years under their union contracts. Plaintiffs allege that Caterpillar unlawfully charged retirees for portions of their medical insurance premiums and unlawfully charged retirees and their surviving spouses increased payments on prescription drugs and medical procedures.
The case is pending in the United States District Court for the Middle District of Tennessee in Nashville. The plaintiffs have sued Caterpillar on behalf of a class of all retirees and surviving spouses of retirees who were represented by the union and who retired on or after January 1, 1992 and before March 16, 1998. The plaintiffs bring claims under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1132(a)(1)(B) and (a)(3), and the LMRA, the Labor Management Relations Act ("LMRA"), 29 U.S.C § 185 (a).On September 26, 2006, the court appointed Michael Mulder of our firm to be lead counsel in the case. Click here to read the court's opinion.
On May 17, 2007, the court denied Caterpillar's motion to dismiss and ordered that the lawsuit against Caterpillar go forward. Read the entire opinion here. In her opinion, Judge Trauger rejected each of the defendant’s arguments and held that the plaintiffs have stated a claim under the LMRA and ERISA. She further stated that "in interpreting the language of the relevant documents, the court finds evidence that Caterpillar intended to confer lifetime vested retiree medical benefits upon the plaintiffs." (p. 27). The judge ordered that the case will now proceed with the discovery and class certification phases.
On July 12, 2007, the court certified this case as a class action and certified three subclasses. In her opinion Judge Trauger stated: "The court finds that the named plaintiffs share a keen interest in declaring the rights of the entire class to vested, lifetime healthcare benefits under the 1988 agreements and plans without any premium-sharing payment by them and without the modifications that have reduced their benefits and imposed new out-of-pocket costs since January 1, 2006. Caterpillar's actions have been directed at the entire proposed class, and the class members have been affected in the same way (i.e. by Caterpillar's alleged unlawful withdrawal or modification of their healthcare insurance benefits)." (p. 16) Read the court's opinion granting class certification here.
On July 20, 2007, the District Court granted Caterpillar's motion to allow it take an interlocutory appeal of the Court's decision that it had jurisdiction over the ERISA and LMRA claims of those class members who are not surviving spouses or members of the Caterpillar Logistic Services subclass. Both sides have filed briefs in the Sixth Circuit Court of Appeals. As of yet, no date has been set for oral argument. The case continues to be litigated before the district court.On August 20, 2007, Caterpillar filed a third-party complaint against the UAW, seeking damages to cover payments it would be required to make if the class is successful in this lawsuit.
In the fall of 2007, After learning from some of the class members that Caterpillar was charging some surviving spouses premiums to maintain their health insurance, class counsel filed a motion to amend the complaint to add these allegations. The District Court granted plaintiffs' motion and allowed the amended complaint to be filed on December 3, 2007.
On December 21, 2007, plaintiffs filed a motion seeking a preliminary injunction on behalf of the subclass of retirees who worked under the Caterpillar Logistics Services agreement, asking the Court to order Caterpillar to stop deducting premium charges and to provide the CLS subclass with the same level of healthcare that is currently provided to those who retired under the UAW's 1988 contract prior to January 1, 1992. On March 7, 2008, the Court heard oral argument on this motion.
On April 2, 2008, the court decided to hold an evidentiary hearing on plaintiffs' motion for a preliminary injunction on behalf of the CLS subclass. The order can be read here.
UPDATE August 11, 2008: On July 8-10, 2008, Judge Trauger conducted an evidentiary hearing on our motion for a preliminary injunction on behalf of CLS retirees. Judge Trauger requested post-hearing briefs from both the plaintiffs and Caterpillar, due on July 28, 2008 and August 6, 2008. Those briefs are finished and have been submitted to the court. We are now waiting on the court's ruling on the injunction motion.
Also, the Sixth Circuit court of appeals has set a date for oral argument on Caterpillar's interlocutory appeal of Judge Trauger's denial of their motion to dismiss the case. The oral argument will occur on September 23, 2008.
UPDATE September 16, 2008: The Court granted the plaintiffs' motion for a preliminary injunction on behalf of the CLS retirees. As of September 16, 2008, Judge Trauger has prohibited Caterpillar from deducting premium charges for the CLS subclass' retiree healthcare coverage; charging them for premiums to maintain their retiree healthcare benefits; charging deductibles of $300 (individual) or $600 (family) before the health insurance applies; charging the retirees' share of a 90/10 split on maximum out of pocket payments; and charging individual and family deductibles for dental service and new costs for the vision plan. Click here to read the opinion and here to view the order.
UPDATE March 15, 2010: The plaintiffs have filed a motion supported by evidence and legal briefing that requests the judge to decide the case in favor of the class based on the labor agreements and other evidence that has been submitted to the court. Caterpillar has also filed a motion asking the court to find in its favor based on the agreements and other evidence before it. These motions are now fully briefed and ready to be decided by the court; however, the submissions are lengthy and we believe it will take several months before the court issues a ruling.
The issue raised by these motions is whether Caterpillar has breached the labor agreements with the class. If the court finds that it did, then the question of damages will be sorted out in the next phase of the case.
If the court were to grant either of these motions, there would be no trial. However, the judge may decide that she needs to hear the evidence and hold a trial on the remaining issues. The court continues to hold June 29, 2010 as the trial start date if she decides she cannot resolve the matter based on the papers before her.
Finally, the outcome will likely be influenced by what the Court of Appeals in Cincinnati, Ohio rules with respect to Caterpillar's pending appeal. Caterpillar appealed the preliminary injunction ruling for the Caterpillar Logistics Services subclass. This appeal was argued to the court in the middle of October 2009. We do not know when the ruling will be issued, but we will provide information on this website when it does.
