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BOWE BELL HOWELL COMPANY v. IMMCO EMPLOYEES' ASSOCIATION

May 11, 2005.

BOWE BELL HOWELL COMPANY, Plaintiff,
v.
IMMCO EMPLOYEES' ASSOCIATION; JAMES YUKNA and ALBERT SPINOZZI, individually and as representatives of a defendant class of other similarly situated retirees; and RONALD BUCKLAND, individually and as a representative of a defendant class of other similarly situated retirees, Defendants.



The opinion of the court was delivered by: JOHN W. DARRAH, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff, Bowe Bell Howell Company, filed a declaratory action against Defendants, Inserting and Mailing Machine Company Employees' Association ("IMMCO"); James Yukna and Albert Spinozzi, individually and as representatives of the hourly retired employees; and Ronald Buckland, individually and as representative of the salaried retired employees. Plaintiff seeks a declaration that it was entitled to modify, amend, or terminate the medical benefits of the Retiree Classes in an Employee Retirement Security Act ("ERISA") Plan. Defendants Yukna and Spinozzi have filed counterclaims, seeking injunctive, declaratory, and compensatory relief, for: (1) pension benefits, pursuant to 29 U.S.C. § 1132(a)(1)(B); (2) breach of fiduciary duty, pursuant to 29 U.S.C. § 1132(a)(2); (3) an injunction to prohibit the modification, reduction, or termination of retiree medical benefits, pursuant to 29 U.S.C. § 1132(a)(3); (4) breach of contract; (5) intentional or negligent misrepresentation; and (6) promissory estoppel.

Presently before the Court is Plaintiff's Motion to Certify Retiree Classes. Plaintiff seeks mandatory certification of Defendant classes: (1) hourly employees of Plaintiff who participated in the relevant medical benefits plan as retirees as of December 31, 2003 (the "hourly retiree class"); and (2) salaried employees of Plaintiff who participated in the relevant medical benefits plan as retirees as of December 31, 2003 (the "salaried retiree class"). For the following reasons, that motion is denied.

  LEGAL STANDARD

  "The Federal Rules of Civil Procedure provide the federal district court with broad discretion to determine whether certification of a class action lawsuit is appropriate." Keele v. Wexler, 149 F.3d 589, 592 (7th Cir. 1998) (quotation and citation omitted). In determining whether the class action requirements are met, "a judge should make whatever factual and legal inquiries are necessary under Rule 23." Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676 (7th Cir. 2001) (Szabo). The party seeking class certification has the burden of demonstrating certification is appropriate. Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 596 (7th Cir. 1993).

  To obtain class certification, Plaintiff must demonstrate that the proposed defense classes satisfy all four elements of Federal Rule of Civil Procedure 23(a), which include: (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. The defense classes must also satisfy at least one of the three provisions under Federal Rule of Civil Procedure 23(b); Plaintiff claims to have met the requirements of Rule 23(b)(1). While class members must be provided with an opportunity to opt out of a class action certified under Rule 23(b)(3), "[f]or any class certified under Rule 23(b)(1) or (2), the court may direct appropriate notice to the class." Fed.R.Civ.P. 23(c)(2). Under this rule, plaintiffs are not required to provide putative class members with notice or an opportunity to opt out of the class certified under Rule 23(b)(1). See Lemon v. Int'l Union of Operating Eng'rs, Local No. 139, 216 F.3d 577, 580 (7th Cir. 2000).

  Plaintiff seeks to enjoin any member of the certified class from instituting a separate law suit in any other court based on the subject matter of this suit — i.e., to preclude class members from opting out of the class.

  BACKGROUND

  The facts, for the purposes of this motion, are as follows.*fn1 Plaintiff is a manufacturing corporation who is both the plan sponsor and fiduciary of a medical benefits plan, which provides benefits to certain groups of hourly and salaried retirees who were former employees of Plaintiff. Defendant IMMCO is a labor organization that formerly represented and acted for certain hourly employees who participated in the plan. Defendants Yukna and Spinozzi are former hourly employees, and Defendant Buckland is a former salaried employee.

  Plaintiff provided salaried retirees with certain medical benefits who obtained a qualifying age and with a qualifying amount of service. A salaried retiree's contribution level was also determined based upon their age and amount of service at the time of retirement. Active hourly employees were represented by IMMCO for collective bargaining purposes, and Plaintiff agreed with IMMCO to provide hourly employees with medical benefits upon retirement. After unsuccessful collective bargaining negotiations, IMMCO disclaimed its interest in representing the hourly employees; and Plaintiff imposed a new medical benefit scheme.

  Plaintiff later announced its intention to amend the benefits provided to hourly and salaried retirees under age sixty-five and to terminate the benefits provided to hourly and salaried retirees age sixty-five and older. Plaintiff notified the retiree classes that the new amendments would become effective and provided an explanation of the changes. Thereafter, several members of the retiree classes contacted Plaintiff and announced their intent to challenge the legality of the amendments in court. Plaintiff then filed this action, and Defendants Yukna and Spinozzi filed counterclaims alleging, inter alia, that Plaintiff made certain representations concerning the retiree medical benefits.

  The members of the classes were hired between 1943 and 1987 and retired between 1976 and 2001. The material distributed by Plaintiff and the representations made to the putative class members varied. For example, different summary plan descriptions were issued to retirees in 1979, 1981, and 1983, as mandated by ERISA. See 29 U.S.C. § 1024(b). These summaries indicate that pension plan benefits vested after five years of employment and identified the medical benefits retirees could obtain under the plan. However, another summary plan description in 1988 does not discuss the availability of medical benefits after retirement. Plaintiff also conducted individual retirement meetings with its employees prior to retirement where the employees were provided with retirement information and could ask questions regarding retiree benefits.

  This action was filed on November 10, 2003. Defendants moved to dismiss based on lack of jurisdiction and the failure to state a claim upon which relief could be granted; this motion was denied on June 1, 2004. Thereafter, on November 12, 2004, one-hundred and thirty-five members of the putative hourly retiree class then filed suit against Plaintiff in the United States District Court for the Eastern District of Pennsylvania (the "Pennsylvania Action"). The claims filed in that action are ...


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