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.
"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.
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 ...