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Grove v. Johnson Controls, Inc.

United States District Court, M.D. Pennsylvania

December 3, 2014

WILLIAM GROVE, SR.; VIRGINIA B. GROVE; SANDRA PALMIERI; MICHAEL G. FUHRMAN; WILLIAM WINTER; PRESTON HIMES; and EDWARD MYERS, on behalf of themselves; and FLOYD MITZEL, MAURICE KEFAUVER, III, HAROLD G. LUCKENBAUGH, WILMER C. BARRETT, LARRY LEHMAN, GERALD A. YOUNG, and JOHN C. DOUGLASS, on behalf of themselves and others similarly situated; and INTERNATIONAL UNION UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW, Plaintiffs
v.
JOHNSON CONTROLS, INC.; JOHNSON CONTROLS, INC. UNION RETIREE WELFARE PLAN (PLAN 570); JOHNSON CONTROLS, INC. UNION WELFARE PLAN (PLAN 565); and DOES 1 through 20, Defendants

For William Grove, Sr., Michael G. Fuhrman, William Winter, Floyd Mitzel, Plaintiffs: Tybe A. Brett, LEAD ATTORNEY, Joel R Hurt, McKean J Evans, Pamina G. Ewing, Stephen M. Pincus, William T Payne, Feinstein Doyle Payne & Kravec, LLC, Pittsburgh, PA USA.

For Harold G. Luckenbaugh, Preston Himes, Edward Myers, Maurice Kefauver, III, Plaintiffs: McKean J Evans, Pamina G. Ewing, Feinstein Doyle Payne & Kravec LLC, Pittsburgh, PA USA; Stephen M. Pincus, William T Payne, Feinstein Doyle Payne & Kravec, LLC, Pittsburgh, PA USA.

For Wilmer C. Barrett, on behalf of himself and others similarly situated, Sandra Palmieri, Plaintiffs: McKean J Evans, Feinstein Doyle Payne & Kravec LLC, Pittsburgh, PA USA; Stephen M. Pincus, Feinstein Doyle Payne & Kravec, LLC, Pittsburgh, PA USA; William T Payne, Feinstein Doyle Payne & Kravec, LLC, Aspinwall, PA USA.

For Larry Lehman, Plaintiff: McKean J Evans, Feinstein Doyle Payne & Kravec LLC, Pittsburgh, PA USA; William T Payne, Feinstein Doyle Payne & Kravec, LLC, Aspinwall, PA USA; Stephen M. Pincus, Feinstein Doyle Payne & Kravec, LLC, Pittsburgh, PA USA.

For Gerald A Young, John C. Douglass, Virginia B. Grove, Plaintiffs: Stephen M. Pincus, Feinstein Doyle Payne & Kravec, LLC, Pittsburgh, PA USA.

For Johnson Controls, Inc., Defendant: Alan R. Boynton, Jr. McNees, Wallace & Nurick Harrisburg, PA USA; Bernard J. Bobber, Foley & Lardner LLP, Milwaukee, WI USA; Brian F. Jackson, McNees, Wallace & Nurick, Harrisburg, PA USA; John F. Birmingham, Foley & Lardner LLP, Detroit, MI USA; Larry S. Perlman, Foley & Lardner LLP, Miami, FL USA.

For Johnson Controls, Inc. Union Retiree Welfare Plan (Plan 570), Johnson Controls, Inc. Union Welfare Plan (Plan 565), Defendants: Bernard J. Bobber, Foley & Lardner LLP, Milwaukee, WI USA; Larry S. Perlman, Foley & Lardner LLP, Miami, FL USA.

ORDER

Sylvia H. Rambo, United States District Judge.

The background of this order is as follows: Plaintiffs Floyd Mitzel, Maurice Kefauver III, Harold G. Luckenbaugh, Wilmer C. Barrett, Larry Lehman, Gerald A. Young, and John C. Douglass (" Class Representatives") filed this action on behalf of themselves and similarly-situated groups of retirees (" Retirees"), including the additional individually-named Plaintiffs, who were previously represented by Plaintiff International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 (collectively " the Union"). (Doc. 85, ¶ 1.) Retirees built products at manufacturing facilities in the York, Pennsylvania, area that have been owned by Borg-Warner Air Conditioning Inc., Applied Systems, York International Corporation, and Defendant Johnson Controls Inc. (Id.) Johnson Controls is now the plan sponsor and fiduciary of the employee benefit plan that provides retiree health benefits to Retirees. (Id. at ¶ ¶ 9-10.)

In their fourth amended complaint, Plaintiffs allege that successive collective bargaining agreements, which were created as a result of bargaining between the Union and Retirees' former employer, contained provisions that established the employer's obligation to provide retiree health benefits to Retirees and their spouses. (Id. at ¶ 26.) The underlying agreements specified that retiree health benefits would continue for Retirees throughout their retirement, with no lifetime maximum limit or cap on benefits. (Id. at ¶ 28.) Nevertheless, Defendant Johnson Controls unilaterally reduced Retirees' retiree health benefits by instituting a $50, 000.00 cap on benefits incurred by each participant after age 65. (Id. at ¶ 31.)

In Count I of the amended complaint, Plaintiffs allege that, because Retirees' right to retiree health benefits were created through agreements between a labor organization and an employer, violation of those agreements is actionable in this court under Section 301 of the Labor Management Relations Act (" LMRA"), 29 U.S.C. § 185(a). In Count II, which is brought pursuant to Section 502(a)(1)(B) and (a)(3) of the Employee Retirement Income Security Act of 1974 (" ERISA"), 29 U.S.C. § 1132(a)(1)(B), Plaintiffs seek a declaration that Retirees' rights to retiree health benefits provided under the collective bargaining agreements have vested and that the negotiated plan terms cannot be unilaterally modified or terminated by Defendants. In Count III, Plaintiffs assert a claim for breach of fiduciary duty under Sections 404 and 502 of ERISA.

On October 28, 2014, Class Representatives filed a motion for certification of subclasses (Doc. 80) and brief in support (Doc. 81), seeking certification pursuant to Federal Rule of Civil Procedure 23 and Local Rule 23.3. (Doc. 80, p. 1 of 4.) In their motion, Class Representatives seek class certification as to Counts I and II of their amended complaint, [1] and propose the following subclasses for certification:

Subclass A
Former employees of Johnson Controls, Inc. and/or its predecessors who (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired before November 1, 1984; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

Subclass B

Former employees of Johnson Controls, Inc. and/or its predecessors who (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired between November 1, 1984 and October 31, 1996, inclusive; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

Subclass C

Former employees of Johnson Controls, Inc. and/or its predecessors who (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired between November 1, 1996 and June 30, 2000, inclusive; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

Subclass D

Former employees of Johnson Controls, Inc. and/or its predecessors who (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired between July 1, 2000 and June 30, 2003, inclusive; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

Subclass E
Former employees of Johnson Controls, Inc. and/or its predecessors who (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired between July 1, 2003 and July 30, 2006, inclusive; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

Subclass F

Former employees of Johnson Controls, Inc. and/or its predecessors who (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired between July 31, 2006 and July 1, 2009, inclusive; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

(Doc. 80, pp. 1-4; Doc. 79, ¶ 35.) Class Representatives propose that they be appointed to represent the subclasses as follows:

Subclass A -- John C. Douglass
Subclass B -- Gerald A. Young
Subclass C -- Maurice Kefauver, III
Subclass D -- Harold G. Luckenbaugh, Wilmer C. Barrett
Subclass E -- Floyd Mitzel
Subclass F -- Larry Lehman

(Doc. 80-1, p. 3.) Class Representatives further propose that their counsel be appointed as Class Counsel. ( See Doc. 81, pp. 12-13.)

On November 17, 2014, Defendants filed a response to the motion for certification, wherein they stated that they do not oppose the certification of Subclasses A, B, C, D, E, and F, or the appointment of Plaintiffs' counsel as Class Counsel in this matter. (Doc. 86, p. 2 of 4.) Defendants agree that the proposed Subclasses individually satisfy the requirements of Rule 23(a) as well as the requirements of at least one subsection of Rule 23(b) and that certification is thus appropriate under the Rules. (Id.)

Based on Class Representatives' submissions and Defendants' response thereto, the court concludes that all requirements of Federal Rule of Civil Procedure 23 are satisfied as to each of the proposed Subclasses. Accordingly, the court HEREBY ORDERS that Class Representatives' motion to certify (Doc. 80) is GRANTED. The court makes the following specific findings and rulings:

1. For a class to be certified, the proposed group of litigants must satisfy the four requirements of Rule 23(a) and fall within one of the three subdivisions of Rule 23(b). In addition, appointment of counsel requires satisfaction of Rule 23(g).
2. Because the number of Class Members is approximately 860 individuals, including approximately 35 members in Subclass A, 115 members in Subclass B, 110 members in Subclass C, 181 members in Subclass D, 217 members in Subclass E, and 198 members in Subclass F, each subclass is so numerous that joinder of all members is impracticable, satisfying Rule 23(a)(1).
3. There are common questions of law and fact as to each Subclass, satisfying Rule 23(a)(2), because the members of each proposed subclass are covered by labor agreements and plan documents containing similar language regarding retiree medical benefits. Common questions as to each Subclass include: (1) whether Section 301 of the LMRA prohibits Defendants from unilaterally modifying Subclass members' health care benefits; and (2) whether ERISA prohibits Defendants from doing so.
4. Rule 23(a)(3) is satisfied because the claims of the Class Representatives of each Subclass are typical of the claims of the respective proposed Subclasses. Defendants have modified retiree health benefits, which affects the Class Representatives of each Subclass and the members of their respective Subclasses in the same way.
5. Rule 23(a)(4) is satisfied because the Class Representatives and their counsel will fairly and adequately protect the interests of each Subclass. First, Class Representatives for each Subclass have common interests with unnamed members of the respective Subclasses, as established by the fact that Rule 23(a)(2) commonality and Rule 23(a)(3) typicality are satisfied. Further, nothing suggests that any of the Class Representatives have interests that are conflicting or antagonistic to the interests of the members of the respective proposed subclasses. Second, Class Representatives will represent the interests of the proposed Subclasses through qualified counsel, as discussed in the following paragraph.
6. Rule 23(g)(1)(A) requires that the court consider the following factors when appointing counsel: (1) the work counsel has done in identifying or investigating potential claims in the action; (2) counsel's experience in handling class actions, other complex litigation, and claims of the type asserted in the action; (3) counsel's knowledge of the applicable law; and (4) the resources counsel will commit to representing the class. The court has carefully considered each of these factors and concludes that each is satisfied here.
7. The court finds that the requirements of Rule 23(b)(2) may be satisfied, i.e., that Defendants have acted or refused to act on grounds generally applicable to each proposed Subclass, so that final injunctive relief or corresponding declaratory relief may be appropriate with respect to the class as a whole.
8. The court finds that the requirements of Rule 23(b)(1)(A) are satisfied, i.e., that the prosecution of separate actions by individual members of each Subclass would create a risk of inconsistent or varying adjudications with respect to individual members of the Subclass, which would establish incompatible standards of conduct for the parties opposing the Subclass.
9. Based on the foregoing, the court certifies the following Subclasses:

Subclass A

Former employees of Johnson Controls, Inc. and/or its predecessors who: (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired before November 1, 1984; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

Subclass B

Former employees of Johnson Controls, Inc. and/or its predecessors who: (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired between November 1, 1984 and October 31, 1996, inclusive; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

Subclass C

Former employees of Johnson Controls, Inc. and/or its predecessors who: (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired between November 1, 1996 and June 30, 2000, inclusive; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

Subclass D

Former employees of Johnson Controls, Inc. and/or its predecessors who: (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired between July 1, 2000 and June 30, 2003, inclusive; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

Subclass E

Former employees of Johnson Controls, Inc. and/or its predecessors who: (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired between July 1, 2003 and July 30, 2006, inclusive; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.

Subclass F

Former employees of Johnson Controls, Inc. and/or its predecessors who: (1) worked at facilities of Johnson Controls, Inc. and/or its predecessors in York, Pennsylvania; (2) retired between July 31, 2006 and July 1, 2009, inclusive; (3) were represented by the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (" UAW") and its Local Union No. 1872 in collective bargaining; and (4) after retirement, received health care benefits; as well as the spouses and surviving spouses of these former employees.
10. The court appoints Plaintiff Douglass as Class Representative for Subclass A; Plaintiff Young as Class Representative for Subclass B; Plaintiff Kefauver as Class Representative for Subclass C; Plaintiffs Luckenbaugh and Barrett as Class Representatives for Subclass D; Plaintiff Mitzel as Class Representative for Subclass E; and Plaintiff Lehman as Class Representative for Subclass F.
11. The court appoints the law firm of Feinstein Doyle Payne & Kravec, LLC as Class Counsel.

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