The opinion of the court was delivered by: Aspen, District Judge:
MEMORANDUM OPINION AND ORDER
The Equal Employment Opportunity Commission ("EEOC") brought
this action against defendants MTC Gear Corporation ("MTC")
and Profile Gear Corporation ("Profile"), alleging that
defendants have maintained a discriminatory disability
benefits policy in violation of Title VII of the Civil Rights
Act of 1964. 42 U.S.C. § 2000e et seq. Profile has moved for
summary judgment under Fed.R.Civ.P. 56(c). For the reasons
stated below, we deny Profile's motion.
Facts and Procedural Posture
Profile's summary judgment motion raises two issues: (1)
whether the Supreme Court's decision in Newport News
Shipbuilding & Dry Dock Co. v. EEOC, 462 U.S. 669, 103 S.Ct.
2622, 77 L.Ed.2d 89 (1983), should be applied retroactively to
the discriminatory employment practices alleged in the
complaint; and (2) whether Profile can be held liable under
Title VII as a corporate "successor" to MTC.
For now we will only sketch the factual background. We will
develop more facts later as they become relevant to the legal
arguments. The complaint alleges that both Profile and MTC
manufacture gears and other parts for use in motor vehicles.
The parties do not dispute that on December 19, 1983, Profile,
a new corporation, bought substantially all of MTC's assets
from ITT Industrial Credit Company, a secured creditor of MTC.
The substance of the complaint alleges that since 1979 MTC
has violated Title VII by imposing special limitations on its
coverage of the medical expenses incurred by its male
employees, while imposing no such limitation on its coverage
of the medical expenses incurred by its female employees for
the medical expenses of their spouses. The complaint also
alleges that since its birth in January 1984, Profile has
continued MTC's discriminatory medical coverage policy. The
parties seem to agree that this policy falls within the
embrace of Newport News.*fn1 Below we will assume so, without
finally deciding the issue, which we leave for a later motion
for summary judgment.
The EEOC filed the complaint on May 23, 1984, following an
investigation which dates back to 1981. On July 6, 1984,
Profile filed its motion for summary judgment. No answer has
been filed, and to our knowledge discovery has not begun.
Although it is unusual for a defendant to move for summary
judgment before answering the complaint (such motions are
usually styled as ones to dismiss under Rule 12), we will
consider Profile's motion as one under Rule 56. See
Fed.R.Civ.P. 56(b) (defendant may, "at any time," move for
summary judgment); generally 10 C. Wright, A. Miller & M. Kane,
Federal Practice & Procedure, § 2718.
Retroactivity of Newport News
Before reaching the successorship issue, we must decide the
threshold issue of whether the Newport News decision should
apply retroactively to MTC's alleged disability policy.*fn2
"Generally, a decision which changes existing law or policy is
given retroactive effect unless retroactive application would
cause `manifest injustice.'"
NLRB v. Lyon & Ryan Ford, Inc., 647 F.2d 745, 757 (7th Cir.
1981), cert. denied, 454 U.S. 894, 102 S.Ct. 391, 70 L.Ed.2d
209 (1981), quoting Chevron Oil Co. v. Huson, 404 U.S. 97, 92
S.Ct. 349, 30 L.Ed.2d 296 (1971). The Supreme Court in Chevron
created a three-part test to determine whether a civil,
non-constitutional precedent should be applied prospectively
(1) Does the decision establish a new principle
of law, either by (a) overruling clear past
precedent on which litigants may have relied,
or (b) deciding an issue of first impression
whose resolution was not clearly
(2) Will retrospective application of the rule
further or retard its operation, considering
the history of the rule, and its purpose and
(3) Will retroactivity create substantial
inequities, i.e., injustice or hardship for
one of the parties?
404 U.S. at 106-07, 92 S.Ct. at 355; Lyon & Ryan Ford, 647 F.2d
at 757. All three parts of the Chevron test must be met to
preclude retroactivity; moreover, the Court must presume that a
decision will be applied retroactively, and the party opposing
retroactivity bears the burden of overcoming the presumption.
Lyon & Ryan Ford, 647 F.2d at 757; Valencia v. Anderson
Bros. Ford, 617 F.2d 1278, 1288-89 (7th Cir. 1980), rev'd on
other grounds, 452 U.S. 205, 101 S.Ct. 2266, 68 L.Ed.2d 783
(1981); Kumrow v. Teamsters General Local No. 200, 579 F. Supp. 393,
395 (E.D.Wis. 1983). We hold that Profile has failed to
meet its burden of satisfying the requirements of Chevron, and
therefore Newport News may apply retroactively to this case.
Profile argues that Newport News "overruled clear past
precedent on which" the defendants "may have relied." On May 9,
1983, the Seventh Circuit decided EEOC v. Joslyn Mfg. and
Supply Co., 706 F.2d 1469 (1983), which reached a conclusion
opposite to the one in Newport News. The Supreme Court handed
down Newport News just forty-two days later, on June 20, 1983,
prompting the Seventh Circuit to vacate its earlier holding.
724 F.2d 52 (Dec. 13, 1983). Thus, if Joslyn can be considered
"clear past precedent," it achieved that status for only
forty-two days. The EEOC argues that Joslyn was not "clear past
precedent" because the Court itself knew that the Circuits were
split on the issue and the Supreme Court's decision was
imminent. 706 F.2d at 1476. We need not decide whether Joslyn
was clear past precedent, because even assuming that it is,
Profile has failed to prove that it is one "on which the
litigants may have relied." Profile concedes it did not exist
when Joslyn was decided, so it clearly could not have relied on
that case. And Profile has presented no evidence that MTC "may
have relied" on Joslyn during the opinion's brief, forty-two
day lifetime. The complaint alleges that MTC's policies have
continued with no gap from 1979 — well before Joslyn — until
now. No evidence suggests that during the forty-two days MTC
reassessed its policy and decided to keep it in reliance on
Joslyn. Even if such evidence did ...