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Sessions v. Owens-Illinois

April 16, 2010


The opinion of the court was delivered by: Judge Conner


Presently before the court is plaintiffs' motion (Doc. 84) for class certification, in this action filed pursuant to the Employee Retirement Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461. In the above-captioned case, plaintiffs allege that, under the Eighth Amended and Restated Salary Retirement Plan for employees of defendant Owens-Illinois, Inc. ("OI") and its affiliated employers, they were entitled to receive enhanced retirement benefits. They complain that defendants*fn1 wrongfully denied them these benefits. For the reasons set forth below, the court will grant plaintiffs' motion (Doc. 84) to certify a class.

I. Factual Background & Procedural History

Plaintiffs and all proposed class members are former employees of Owens-Brockway Plastic Products, Inc. ("OB"). (Def. FF ¶ 1; see also Doc. 103, Proposed Findings of Fact [hereinafter "Pl. FF"] ¶ 28, Doc. 85 at 6, 11). OB was formerly a wholly-owned subsidiary of OI Plastic Products FTS, Inc. ("OI Plastic Products"), a subsidiary of defendant OI. (Def. FF ¶ 2; Doc. 85 at 10). All members of the proposed class, by definition, participated in OI's Salary Retirement Plan (the "plan"). (Doc. 85 at 6). A participant in the plan is eligible for enhanced retirement benefits when he or she qualifies as a "Terminated Retiree," which the plan defines by the following criteria: (1) the participant must have at least ten years of service, (2) the sum of the participant's age and years of service must be at least sixty-five years, and (3) the participant's employment with an OI-affiliated employer must have been "terminated for a reason other than Cause or Resignation." (Pl. FF ¶ 26; Def. FF. ¶¶ 6-7).

Plaintiffs contend that they became "Terminated Retirees" entitled to receive enhanced retirement benefits as a result of a sale (the "Graham sale"), (see Doc. 85 at 6), in which OI Plastic Products sold 100% of its stock in OB to Graham Packaging Company ("Graham") on October 7, 2004. (Pl. FF ¶ 29; Def. FF ¶¶ 2, 11). Under the definition of the proposed class, all class members are participants in the plan, with at least ten years of service, and with a combined age and years of service of at least 65. (Doc. 85 at 6). Hence, the proposed class is defined in such a way that all of its members would be eligible for enhanced retirement benefits, provided that plaintiffs can show that their employment was "terminated for a reason other than Cause or Resignation."*fn2

Defendants assert that plaintiffs are not eligible for the enhanced benefits for various reasons,*fn3 most notably that each plaintiff received a "comparable offer of employment" from Graham. (See Doc. 89 at 7). The plan's definition of "Resignation" encompasses not only the traditional sense of the word, but also provides that "[a]n employee who is employed at an Employment Unit which ceases to be owned or operated by the Employer, and who upon Severance from Service from the Employer receives a comparable offer of employment with the successor employer which assumes control of the Employment Unit, will be deemed separated as a Resignation." (Pl. FF ¶ 26.d; Def. FF ¶ 9). Hence, under this definition, employees who receive a "comparable offer of employment" are not "terminated for a reason other than Cause or Resignation." Defendants argue that plaintiffs are in precisely this position, because all of them received the same base salary before and after the sale, and the plan administrators consider only base salary in determining whether an offer of employment is comparable. (Doc. 89 at 21). Accordingly, defendants assert that plaintiffs are ineligible for enhanced retirement benefits. (See Doc. 89 at 7).

In advance of the Graham sale, defendants issued a "Frequently Asked Questions" ("FAQ") document, which stated that enhanced retirement benefits would not be available to OB employees as a result of the sale. (See Doc. 27 Ex. 2 ¶ 28, Pl. FF ¶¶ 33-34). The FAQ document reiterated information contained in OI's "Summary Plan Description," which stated that an enhanced retirement benefit would not be available to an employee who is "employed (or decline[s] an offer of employment) by a successor employer that assumes control of the location where you work (even if the employment or offer is at another location)." (Doc. 37, Ex. H at 2). Plaintiffs contend that this information was misleading.

Plaintiffs filed the above-captioned action on September 12, 2007, and they filed an amended complaint on January 4, 2008. Count I of the amended complaint accuses defendants of failing to provide ERISA benefits, in violation of ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). Count II complains of an alleged breach of fiduciary duty,*fn4 in violation of ERISA §§ 404(a) and 405, 29 U.S.C. §§ 1104(a) and 1105, for alleged misrepresentations. Finally, in Count III, plaintiffs contend that defendant OI interfered with protected rights, in violation of ERISA § 510, 29 U.S.C. § 1140. In the pending motion, plaintiffs ask the court to certify Counts I and II to proceed as a class action.

II. Standard of Review

Rule 23 of the Federal Rules of Civil Procedure "states that '[a] class action may be maintained' if two conditions are met: The suit must satisfy the criteria set forth in subdivision (a) (i.e., numerosity, commonality, typicality, and adequacy of representation), and it also must fit into one of the three categories described in subdivision (b)."*fn5 Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., ____ U.S. ____, 2010 WL 1222272 (2010) (quoting FED. R. CIV. P. 23). Determining whether the specifications set forth in Rule 23 are satisfied requires the court to engage in a "rigorous analysis[.]" In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 309 (3d Cir. 2008). The Third Circuit has made it clear that "the decision to certify a class calls for findings by the court, not merely a 'threshold showing' by a party, that each requirement of Rule 23 is met." Id. at 307. It has also held that "the court must resolve all factual or legal disputes relevant to class certification, even if they overlap with the merits" of the case. Id. If, after rigorous analysis and resolution of all relevant disputes, the court finds by a preponderance of the evidence that the requirements of Rule 23 are satisfied, then class certification is appropriate.

III. Discussion

The court will examine each criterion for class certification seriatim and determine whether plaintiffs have established by a preponderance of the evidence that each one is satisfied.

A. Rule 23(a)(1): Numerosity

Rule 23(a)(1) provides that, in order for a representative party to sue on behalf of members of a class, "the class [must be] so numerous that joinder of all members is impracticable[.]" FED. R. CIV. P. 23(a)(1). The rule does not articulate any particular number of class members required to satisfy this prerequisite. Plaintiffs estimate that there are approximately 85 individuals, plus their beneficiaries, in the class they have proposed. (Doc. 101 at 5; Pl. FF ¶ 15). Defendants do not contest that plaintiffs' proposed class satisfies the numerosity requirement. (See Doc. 104, Proposed Conclusions of Law ¶ 15). Based on the estimated number of class members, and the likelihood that the class will be geographically dispersed, (see Pl. FF ¶ 16), the court finds that joinder of all class members would be impracticable. Therefore, this requirement is satisfied.

B. Rule 23(a)(2): Commonality

Under Rule 23(a)(2), "questions of law or fact common to the class" must exist as a prerequisite to class certification. FED. R. CIV. P. 23(a)(2). At minimum, "only one question of law or fact in common is necessary to satisfy the commonality requirement, despite the use of the plural 'questions' in the language of Rule 23(a)(2)." In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 597 n.10. (3d Cir. 2009). In support of their argument that common questions exist in the instant case, plaintiffs observe that defendants stated the same rationale for denying enhanced benefits to each of the named plaintiffs. Plaintiffs contend that all members of the proposed class were uniformly affected by defendants' interpretation of the plan and decision that the Graham sale did not entitle any OB employees to enhanced retirement benefits.

Defendants argue that plaintiffs cannot satisfy their burden to show, by a preponderance of the evidence, that common questions of law or fact exist. Quoting Forman v. Data Transfer, Inc., 164 F.R.D. 400 (E.D. Pa. 1995), defendants assert that "courts have been unwilling to find commonality where the resolution of 'common issues' depends on factual determinations that will be different for each class plaintiff." 164 F.R.D. at 403. Defendants also insist that "not every common question... will suffice," because "at a sufficiently abstract level of generalization, almost any set of claims can be said to display commonality." Kane v. United Indep. Union Welfare Fund, No. 97-1505, 1998 WL 78985 (E.D. Pa. Feb. 24, 1998) (quoting Sprague v. Gen. Motors, 133 F.3d 388, 397 (6th Cir. 1998)). Defendants suggest that plaintiffs have not established commonality, because resolution of the issues in the instant case will depend on each class member's unique circumstances, and because plaintiffs have not presented satisfactory common questions of law or fact.

The court concludes that plaintiffs have satisfied the commonality requirement in the instant case. The named plaintiffs share numerous questions of law or fact with the class, and the court is not persuaded that these questions are too abstract or too dependent on individualized factual determinations to make class certification ...

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