International Union et al v. Consinental Automotive Systems U.S., Inc.
MEMORANDUM OPINION AND ORDER DISMISSING CASE that the court APPROVES the parties' settlement agreement in its entirety, the settlement agreement is binding on UAW, Continental, and all class members, class members release all claims that were as serted or could have been asserted in this lawsuit, the above-styled actions are DISMISSED with prejudice, costs are taxed as paid; as more fully set out in order. Signed by Judge C Lynwood Smith, Jr on 5/21/2012. Associated Cases: 5:10-cv-02440-CLS, 5:11-cv-00890-CLS(AHI )
2012 May-21 AM 07:57
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SUSAN BEATY, et al.,
SYSTEMS U.S., INC.,
INTERNATIONAL UNION, UNITED
AUTOMOBILE, AEROSPACE, AND
WORKERS OF AMERICA, AFL-CIO; et
SYSTEMS U.S., INC.,
Civil Action No. CV-11-S-890-NE
Civil Action No. CV-10-S-2440-NE
MEMORANDUM OPINION AND ORDER
The first action identified in the caption above — Susan Beaty, et al. v.
Continental Automotive Systems, U.S., Inc., Civil Action No. 11-890-NE (the “Beaty
case”) — was commenced in the Eastern District of Michigan on October 21, 2010.1
It was transferred to this district on March 7, 2011.2 The named plaintiffs in that case
are two former employees of defendant, Continental Automotive Systems U.S., Inc.
Doc. no. 1 (Complaint). Unless otherwise noted, all document numbers cited refer to the
See doc. no. 23.
(“Continental”), the spouses of those former employees, and the international union
of which the employees were members, the United Automobile, Aerospace and
Agricultural Implement Workers of America, AFL-CIO (“UAW”). Plaintiffs sue
individually and as representatives of a putative class of retired Continental
employees and their spouses and dependants.3
The second action identified in the caption — International Union, United
Automobile, Aerospace and Agricultural Implement Workers of America, AFL-CIO
v. Continental Automotive Systems U.S., Inc., Civil Action No. 10-2440-NE (the
“UAW case”) — was commenced in this district on September 10, 2010.4 The sole
plaintiff in that case is the UAW, and the sole defendant is Continental.
At a hearing conducted on January 31, 2012, the court ruled that the cases
should be consolidated, and entered an order of consolidation on February 6, 2012.5
On the same day, the court certified the class, preliminarily approved the proposed
settlement agreement, and set a final fairness hearing for April 4, 2012.6 The cases
are before the court on the parties’ joint motion for final approval of their settlement
See doc. no. 1 ¶ 14.
UAW case, at doc. no. 1 (Complaint).
See doc. no. 44.
See doc. no. 45 (Memorandum Opinion); doc. no. 46 (Order).
Doc. no. 49.
I. FINDINGS OF FACT
The plaintiffs’ claims stem from retiree benefit agreements negotiated by the
UAW and Continental’s predecessor corporations. Specifically, the claims arise from
Continental’s automotive electronics manufacturing facilities in Huntsville,
Alabama.8 In 2003, those facilities were owned by DaimlerChrysler Corporation
(“Chrysler”).9 Chrysler sold the facilities to Siemens VDO Automotive Electronics
Corporation (“Siemens”) in 2004.10 Prior to that sale, the UAW and Chrysler reached
an agreement guaranteeing that Chrysler would sell the Huntsville facilities to
Siemens only if Siemens committed to provide facility employees with benefits that
“mirrored” those provided to UAW-represented Chrysler employees.11 The “mirrored
benefits” would be provided for the duration of the then-current collective bargaining
agreement between Chrysler and the UAW, and any employee who retired before that
agreement expired would be entitled to mirrored retirement benefits for the duration
of his or her retirement.12
At the time of Chrysler’s sale of its Huntsville facilities, Siemens and the UAW
See doc. no. 1 ¶ 14.
See id. ¶ 26.
Id. ¶ 27.
Id. ¶ 26.
also entered into an agreement. That “mirrored benefits agreement” separately
ensured that former Chrysler employees electing to remain at the Huntsville
electronics facilities as Siemens employees would receive wages and benefits
mirroring those offered to UAW-represented Chrysler employees through September
14, 2011.13 Another agreement stated that the terms of the UAW-Siemens agreements
would be binding on the successors of Siemens, and, unaffected by changes in
corporate structure.14 In 2007, Continental acquired Siemens and its Huntsville
facilities.15 Thus, Continental assumed the contractual responsibilities of Siemens,
and provided wages and benefits that mirrored those of UAW-represented Chrysler
The disagreement that led to these consolidated actions is that Continental has
not provided mirrored retiree benefits to the former employees of the Huntsville
facilities. Retirees covered by the collective bargaining agreement between Chrysler
and the UAW receive retirement benefits from a voluntary employee benefit
association trust established through the collective bargaining process.17 Rather than
mirroring those benefits, however, Continental has taken the position that retiree
Doc. no. 1 ¶¶ 28-29. There were actually two agreements, one each for the hourly and
salaried employees, containing an identical mirroring term. See id.
Id. ¶ 30.
Id. ¶ 31.
Id. ¶¶ 32-33.
Id. ¶ 35.
benefits must be negotiated anew; that is, Continental refused to mirror the retiree
benefits negotiated between the UAW and Chrysler, and instead insisted on direct
negotiation between the UAW and Continental to establish a retiree benefits
The Chrysler-UAW Trust
In October of 2007, Chrysler and the UAW negotiated a national settlement
agreement regarding the future provision of retiree health benefits for Chrysler
retirees who were represented by the UAW.19 That Chrysler settlement agreement
provided for the termination of Chrysler’s retiree medical plan, and created a
voluntary employees’ beneficiary association trust (the “Chrysler-UAW Trust”) to
provide retiree health benefits for UAW-represented Chrysler retirees in the future.20
The United States District Court for the Eastern District of Michigan approved that
settlement agreement on July 31, 2008.21
In early 2009, Chrysler declared bankruptcy. As part of the bankruptcy
proceeding, Chrysler and the UAW entered into a new retiree settlement agreement
Doc. no. 1 ¶ 36. Since the expiration of the collective bargaining agreements on September
14, 2011, Continental has provided retiree medical benefits to the members of the putative class,
while maintaining its position that it has no contractual obligation to do so. See doc. no. 49-1
(Settlement Agreement) § 5.
See doc. no. 9 (Motion to Dismiss), at 4.
See International Union, United Automobile, Aerospace and Agricultural Implement
Workers of America, AFL-CIO v. Chrysler L.L.C., No. 2:07-cv-14310, (E.D. Mich. July 31, 2007),
at doc. no. 47.
that modified the funding structure of the Chrysler-UAW Trust so as to provide
retiree health benefits to UAW-represented Chrysler retirees, beginning January 1,
2010.22 The United States Bankruptcy Court for the Southern District of New York
approved that agreement on June 1, 2009. See In re Chrysler, L.L.C., 405 B.R. 84,
92 (Bankr. S.D.N.Y. 2009).
On August 31, 2009, Continental announced its intent to close the Huntsville
facility, effective December 31, 2010.23 In November of 2009, Continental and the
UAW began negotiations regarding the effects of the closure of the Huntsville
facility.24 During those “effects bargaining negotiations,” Continental sought to
negotiate a new retiree medical plan.25 The UAW maintained the position that
Continental was obligated to provide the same retiree health benefits as were being
provided under the Chrysler-UAW Trust.26
On October 5, 2010, Continental initiated a grievance regarding the
interpretation of the mirrored benefits agreement. Continental notified the UAW and
its local chapters that Continental took the position that the mirrored benefits
agreement did not require it to provide the same level of retiree medical benefits that
See doc. no. 9, at 4.
See doc. no. 1 ¶ 34, doc. no. 9, at 5.
Doc. no. 9, at 5.
See doc. no. 1 ¶ 36.
Doc. no. 9, at 5.
were provided by the Chrysler-UAW Trust.27 Continental took the position that it
was obligated to provide only those wages and benefits that were provided by
Chrysler itself to similarly-situated employees, and not to match benefits provided by
the Chrysler-UAW Trust.28 Continental stated that if the UAW disagreed with its
position, it would submit the issue to arbitration, pursuant to the collective bargaining
On September 10, 2012, the UAW filed the UAW case.30 The UAW sought to
compel arbitration regarding cost of living allowance provisions in the mirrored
benefit agreement.31 On November 15, 2010, Continental filed an answer and
counterclaim to the complaint in the UAW case.32 In the counterclaim, Continental
sought to compel arbitration on the retiree medical benefits grievance.33
On October 21, 2010, the individual plaintiffs and the UAW filed the Beaty
case.34 Plaintiffs alleged that the refusal by Continental to mirror benefits provided
to Chrysler retirees violated the collective bargaining agreement with Siemens, as
Id. at 5-6.
Id. at 6.
UAW case, doc. no. 1 (Complaint).
Id. at 9.
UAW case, doc. no. 9.
Id. at 8.
Doc. no. 1.
Continental is the corporate successor of Siemens, and that the refusal by Continental
to provide mirrored benefits is also a violation of the Employee Retirement and
Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”) and the Labor
Management Relations Act of 1947, 29 U.S.C. §§ 141, 167, 171 et seq. (“LMRA”).
Plaintiffs sought certification of the case as a class action.35 Plaintiffs sought
injunctive relief requiring Continental to provide lifetime retiree health benefits to the
class.36 Plaintiffs additionally sought a declaratory judgment that the parties’ dispute
over retiree medical benefits was not subject to arbitration.37
Continental filed a motion to dismiss the Beaty case.38 Continental denied that
it had changed the retiree health benefits it was providing to plaintiffs, and argued
that with respect to active employees who had not yet retired, the dispute was subject
to the grievance process and should be submitted to arbitration.39
Continental argued that the action should be dismissed because plaintiffs had failed
to join the local union chapters in the action, and that plaintiffs had failed to plead
sufficient facts to establish that there was a contract or an employee welfare benefit
plan that provided for vested retiree medical benefits.40
Id. at 12.
Id. at 12.
Id. at 13.
Doc. no. 9.
Id. at 17-20.
Id. at 7-17.
On December 30, 2010, Continental filed a motion to change the venue of the
Beaty case.41 The motion was granted, and the case was transferred to this court on
March 7, 2011.42 As stated in the introductory section of this opinion, the Beaty case
was consolidated with the UAW case on February 6, 2012.43
Continental and the UAW were engaged in intensive effects bargaining
negotiations regarding the closure of the Huntsville facility from April through
August of 2011. On August 29, 2011, Continental and the UAW entered into an
“effects bargaining agreement” regarding all outstanding issues.44 The effects
bargaining agreement included a framework for the settlement of the retiree medical
dispute underlying the Beaty case.45 The parties further agreed to dismiss with
prejudice their claims in the UAW case following final approval of the settlement
agreement in the Beaty case.46
The agreement regarding retiree medical benefits required Continental to pay
approximately $23.8 million to the Chrysler-UAW Trust in order to fund retiree
Doc. no. 14.
Doc. no. 23.
Doc. no. 44.
Doc. no. 41 (Joint Memorandum of Litigation Status), at 2.
Id. at 3-4.
health benefits for the class.47 Plaintiffs’ counsel conducted an independent analysis
of the settlement terms. He retained an expert, Stuart I. Wohl, to evaluate whether it
would be better to create a new, stand-alone trust, or to seek the inclusion of the
Huntsville retirees in the existing Chrysler-UAW Trust.48 Wohl concluded that
inclusion in the Chrysler-UAW Trust would allow for the provision of benefits with
lower administrative costs, greater investment options, and less expected volatility
than an independent trust.49
The parties determined that inclusion in the Chrysler-UAW Trust was the best
option. From September of 2011 through January of 2012, the parties negotiated with
each other and with the Chrysler-UAW Trust to determine the terms and conditions
under which the class members would be accepted as participants in the ChryslerUAW Trust.50 The parties entered into the settlement agreement on January 27,
The settlement agreement provides that Continental will pay $23,846,342.47
Settlement Agreement § 4.3
See doc. no. 43-9 (Expert Report of Stuart I. Wohl). The parties filed a joint motion
requesting permission for Continental to pay for the costs related to commissioning Wohl. Doc. no.
38. The court granted that motion. Doc. no. 42.
Expert Report of Stuart I. Wohl, at 2.
Doc. no. 43 ¶ 8.
Settlement Agreement, at 21-22.
to the Chrysler-UAW Trust for the purpose of financing retiree health benefits for the
class.52 That sum is to be reduced by an offset equal to the total projected cost to
Continental of providing the class with retiree health benefits from January 1, 2012
until the Chrysler-UAW Trust begins providing retiree health coverage for the class.53
The parties agreed on that reduction because the $23.8 million total was based on the
assumption that the Chrysler-UAW Trust would assume coverage on January 1,
2012.54 The length of the settlement negotiations, and the need to seek approval from
the court, delayed the transfer of coverage.55 Continental continued to provide
benefits in the interim.56 The actuaries for the parties agreed on the projected cost to
Continental of each month of interim benefits.57 Once the settlement agreement has
been given final approval, the parties will be able to calculate the total offset based
on that formula.
Continental will make three payments to the Chrysler-UAW Trust in
satisfaction of the settlement agreement. The first, totaling $9 million less the amount
offset for interim coverage, will be made within five business days of the effective
date of the settlement agreement: i.e., within five business days of the expiration of
Id. § 4.3.
Id. § 4.3.2(a).
Id. § 5.
Settlement Agreement § 5.
See id. § 4.3.2(a).
the appeal period following the court’s final approval of the settlement agreement.57
The second payment, in the amount of $7,590,000, will be made on January 4 of the
calendar year that begins immediately after the year in which the effective date
occurs.58 The third and final payment, of $7,256,342.47, will be made on January 3
of the next calendar year.59
The settlement agreement will be implemented, and the Chrysler-UAW Trust
will begin providing retiree medical coverage to the class, on the first day of the
second month following the month in which the settlement becomes effective.60 From
that date forward, Continental will have no further obligation to provide retiree
medical coverage to the class and will have no responsibility for the administration
of the Chrysler-UAW Trust.61 Likewise, Continental will have no responsibility for
the investment returns or financial performance of the funds paid pursuant to the
settlement agreement once those funds are tendered to the Chrysler-UAW Trust.62
The parties and the Chrysler-UAW Trust entered into a participation agreement
establishing the terms under which the class will participate in the Chrysler-UAW
Id. §§ 1.15, 4.3.2.
Id. § 4.3.3.
Id. § 4.3.4.
Settlement Agreement, §§ 1.15, 1.22. Thus, if the settlement agreement were to take effect
on June 25, 2012, the implementation date would be August 1, 2012.
See id. §§ 16.2-16.3.
Id. § 4.3.5.
Trust.63 That agreement provides that, from the implementation of the settlement
agreement forward, the class will be eligible to receive benefits from the ChryslerUAW Trust consistent with the Chrysler retiree settlement agreement and the
Chrysler-UAW Trust benefits plan, already in effect for Chrysler retirees.64 The class
will receive the same benefits as UAW-represented Chrysler retirees.65 Thus, the
benefits received by the class will “mirror” the benefits received by Chrysler retirees,
which was the relief sought by plaintiffs in the Beaty case. The settlement agreement
also allows Continental to settle its other post-employment benefit liabilities to the
Motion for Class Certification and Preliminary Settlement Approval
On August 31, 2011, plaintiffs filed a motion to certify a class of individuals
who were former Continental employees, who were represented in collective
bargaining by the UAW, who had retired from the Huntsville facility, and who were
not otherwise entitled to receive benefits from the Chrysler-UAW Trust.67 The parties
identified 93 such individuals, along with their spouses and dependents, who met the
Doc. no. 43-7 (Participation Agreement).
Id. ¶¶ 4-5.
See Settlement Agreement §§ 3.2, 6.
Doc. no. 36.
class criteria.68 Continental conditionally consented to the certification of the class.69
On January 28, 2012, the parties filed a joint motion for preliminary approval
of the settlement agreement.70 On February 6, the court granted that motion,
preliminarily approving the settlement.71 The court also granted the motion for
conditional class certification, and ordered Continental to send the class notice to
each class member by February 14, 2012.72 Continental provided notice to the class
members on February 13th, and to the United States Attorney General and the
attorneys general of Alabama and Tennessee, the states where the class members
reside, on February 17th.73 The court ordered that any class member wishing to
object to the terms of the settlement must make a written objection on or before
March 4, 2012.74 No written objections were lodged.
On April 4, 2012, the court conducted a final fairness hearing. At the fairness
hearing, based on the findings of fact outlined above, the court stated that it would
grant its final approval to the Settlement Agreement. The court determined that there
was no evidence of collusion between the parties. Indeed, contentious litigation in
Id. ¶ 4.
Doc. no. 39.
Doc. no. 43.
Doc. no. 45.
Id.; doc. no. 46.
Doc. no. 49-12 (Declaration of Stanley Weiner) ¶¶ 2, 5.
Doc. no. 46, at 2.
multiple courts, followed by many months of extensive negotiations, made it clear
that the parties acted at arms’ length and in good faith at all times. Class counsel
diligently investigated the proposed settlement, and concluded that it was fair,
reasonable, and adequate for the class. This case does not involve a limited fund, an
artificially created limited fund, or a limited pool of assets for the satisfaction of
II. CONCLUSIONS OF LAW
The court reiterates the findings and conclusions set forth in its Memorandum
Opinion and Order of February 6, 2012.75 Those findings and conclusions are
adopted as if contained herein. The requirements of Federal Rules of Civil Procedure
23(a) and (b)(2) are satisfied.
Final Approval of the Settlement Agreement
Any class action settlement requires court approval. Fed. R. Civ. P. 23(e).
Initially, the court must grant preliminary approval of the settlement. See, e.g.,
Dalton v. Cardworks Servicing, LLC, No. CA 09-00563-CB-C, 2010 WL 5341939,
at *2 (S.D. Ala. Nov. 19, 2010) (“The Court’s initial task is to make a ‘preliminary
evaluation of the fairness of the settlement before directing that notice be given to the
settlement class.’”) (quoting Smith v. William Wrigley Jr. Co., No. 09-60646-CIV,
Doc. no. 45.
2010 WL 2401149, at *1 (S.D. Fla. June 15, 2010)).
Factors for evaluating fairness
After conducting a fairness hearing, “[i]t is well settled that in order to approve
a settlement, the district court must find that it is fair, adequate and reasonable and
is not the product of collusion between the parties.” Carnegie v. Mutual Savings Life
Insurance Co., No. CV-99-S-3292-NE, 2004 WL 3715446, at *17 (N.D. Ala. Nov.
23, 2004) (Smith, J.) (internal quotation marks and citations omitted). The court
should consider six factors when evaluating the fairness, reasonableness, and
adequacy of the proposed terms of settlement:
the stage of the proceedings at which the settlement was
the likelihood of success at trial;
the range of possible recovery;
the point on or below the range of possible recovery at which the
settlement is fair, adequate, and reasonable;
the complexity, expense, and duration of litigation; and
the substance and amount of opposition to the settlement.
Id. (citing Bennett v. Behring Corp., 737 F.2d 982, 986 (11th Cir. 1984)). There is
a “strong judicial policy favoring settlement.” Bennett, 737 F.2d at 986.
The stage of proceedings at which the settlement was achieved
In evaluating the stage at which a settlement occurred, the court must be
satisfied that counsel has “achieved the desired quantum of information necessary to
achieve a settlement.” Cotton v. Hinton, 559 F.2d 1326, 1332 (5th Cir. 1977).76
Formal discovery is not a condition precedent to settlement. See In re Corrugated
Container Antitrust Litigation, 643 F.2d 195, 211 (5th Cir. 1981).
Even though the parties reached the settlement agreement before extensive
discovery was conducted, that fact is not consequential “because the parties had equal
access to the core legal agreements at issue” and, thus, could enter into negotiations
without the necessity of formal discovery.77 The parties had been negotiating the
impact of the plant closing on retiree benefits since November of 2009, and litigating
the issues involved in this case since 2010.78 Over the course of that litigation, the
parties filed numerous declarations and accompanying documents, which informed
the litigation and negotiation process. During the effects bargaining negotiations, the
parties provided each other with additional information, and undertook their own
independent studies of the settlement agreement.
Thus, the proceedings have advanced sufficiently for the parties to reach an
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the
Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down
prior to the close of business on September 30, 1981.
Doc. no. 43 ¶ 21.
agreement that is fair, adequate, and reasonable.
The “facts suggest that the
proceedings were fairly advanced, and that the parties had sufficient opportunity to
evaluate the strengths and weaknesses of the case,” which provides a “sound basis to
evaluate the proposed settlement.” Carnegie, 2004 WL 3715446, at *19.
The likelihood of success at trial
Both plaintiffs and Continental faced the risk of an adverse adjudication at trial.
The Eleventh Circuit has not ruled definitively on whether retirement benefits have
vested in a factual scenario similar to that presented in these consolidated cases.
Compare United Steelworkers of America v. Connors Steel Co., 855 F.2d 1499 (11th
Cir. 1988) (holding that benefits had vested, and employer was obligated to pay, even
after expiration of agreement) with Stewart v. KHD Deutz of America, Corp., 980
F.2d 698 (11th Cir. 1993) (distinguishing Conners Steel where contract language was
ambiguous, and remanding for consideration of extrinsic evidence to determine
whether benefits had vested). With success at trial guaranteed to neither party, this
factor weighs in favor of final approval of the settlement; there is nothing unfair,
unreasonable, or inadequate about the settlement of a case with an uncertain outcome.
See Dalton v. Cardworks Services, L.L.C., No. 09-00563, 2010 WL 5341939, at *6
(S.D. Ala. Nov. 19, 2010).
The range of possible recovery
In their complaint, plaintiffs sought relief in the form of retiree medical benefits
mirroring those provided to UAW-represented Chrysler retirees by the ChryslerUAW Trust.79 If these cases were to proceed to trial and Continental to prevail,
plaintiffs could be left with no retiree benefits at all. Thus, the high end of the range
of trial recovery would be benefits equal to those provided to former Chrysler
employees through the trust, and the low end is no recovery at all. The terms of the
settlement agreement require Continental to add funds to the trust already serving the
Chrysler retirees so that plaintiffs may receive benefits from that trust for the
remainder of their respective lives.80 In other words, the settlement provides plaintiffs
with a recovery matching their best potential outcome at trial.
Although the settlement awards plaintiffs the exact relief they sought in their
complaint, it is beneficial to Continental as well. The settlement agreement allows
Continental to resolve all issues stemming from the closure of the Huntsville facility.
It additionally allows Continental to relinquish the responsibility of being the plan
administrator for plaintiffs’ retiree medical benefits, and to remove retiree medical
liability from its corporate balance sheet.81 In sum, all considerations indicate that the
Doc. no. 1, at 12.
See generally doc. no. 49-1 § 4.
Doc. no. 43 ¶ 17.
settlement agreement is fair, adequate, and reasonable for all parties, based on the
range of possible recovery.
The point on or below the range of possible recoveries at
which the settlement is fair, adequate, and reasonable
The fourth factor for evaluation is inextricably linked with the third. As
discussed in the previous subsection, the proposed settlement agreement lies at the
maximum end of the range of possible recoveries for plaintiffs. Thus, it is undeniably
fair, adequate, and reasonable from their point of view, and this factor weighs in favor
of approval of the settlement.
The complexity, expense, and duration of litigation
Retiree health benefit class action litigation is frequently high in cost and long
in duration. See, e.g., Stewart v. KHD Deutz of America Corp., 75 F.3d 1522, 1524
(11th Cir. 1996) (noting that the action was commenced in 1991). As previously
stated, the parties have been negotiating the issue of retiree medical benefits since
November of 2009, and litigating the issue (in multiple actions) since September of
2010. The parties began negotiating a resolution to this litigation in April of 2011,
but took five months to reach accord on the basic terms of the settlement agreement.82
The parties have already incurred considerable expense in the process of reaching the
Id. ¶ 19.
settlement agreement.83 Approving the settlement will avoid unnecessary further
expenditure of the resources of the parties and of the court. This factor supports a
finding that the settlement is in the best interest of the class and should be approved,
because of the “already lengthy duration” of the case and the likelihood of expenses
increasing even further. In re Motorsports Merchandise Antitrust Litigation, 112 F.
Supp. 2d 1329, 1338 (N.D. Ga. 2000).
The substance and quantity of opposition to the proposed
Continental provided all class members with written notice of the preliminary
approval of the settlement agreement on February 13, 2012.84 The class notice
informed them of their right to object to the settlement, and stated that any class
member wishing to object at the fairness hearing was required to file written notice
with the court by March 4, 2012.85 No objections were filed with the court, and no
class members attempted to object at the final fairness hearing. Additionally, class
counsel met with class members on August 30, 2011, and “those retirees and their
spouses at the meeting expressed support for the settlement.”86 The lack of objections
“suggests that the terms are satisfactory.” Id.
Doc. nos. 47-48.
Doc. no. 47-1.
Doc. no. 50 (Brief in Support of Motion for Final Approval), at 11.
Based upon a review of the foregoing factors, this court finds that the proposed
settlement agreement appears to be fair, adequate, and reasonable. Thus, the court
finds that the motion for final approval of the settlement agreement is due to be
The Labor Management Relations Act
The settlement agreement provides for Continental to make certain payments
to the Chrysler-UAW Trust in connection with the resolution of this case. Section
302 of the LMRA makes it unlawful for an employer to give something of value to
a union and for a union to accept such a payment. See 29 U.S.C. §§ 186(a) and (b).
Section 302(c)(2) provides an exception to this prohibition, allowing an employer to
make payments to a union in settlement of a disputed claim. See 29 U.S.C. §
Courts have concluded that Section 302(c)(2) permits payments arising from
a settlement agreement, court judgment, or other judicial resolution. See, e.g.,
Redington v. The Goodyear Tire & Rubber Co., No. 07-cv-1999, 2008 WL 3981461,
at *19 (N.D. Ohio Aug. 22, 2008) (settlement agreement in retiree class action);
Humility of Mary Health Partners v. Local 377 Chauffeurs, Teamsters,
Warehousemen & Helpers of America, 296 F. Supp. 2d 840, 848 (N.D. Ohio 2003)
(arbitrator’s award); White v. National Football League, 836 F. Supp. 1458, 1494 (D.
Minn. 1993) (settlement agreement).
The payments Continental will make to the Chrysler-UAW Trust pursuant to
the settlement agreement will be made to resolve a disputed claim regarding the
scope, if any, of retiree health benefits Continental owes to the class. Those
payments, therefore, are approved pursuant to Section 302(c)(2) of the LMRA, 29
U.S.C. § 186(c)(2).
The Class Action Fairness Act
The Class Action Fairness Act of 2005, 28 U.S.C. § 1711 et seq. (“CAFA”),
requires the defendant in a class action to “serve upon the appropriate State official
of each State in which a class member resides and the appropriate Federal official, a
notice of the proposed settlement . . . .” 28 U.S.C. § 1715(b). Pursuant to the CAFA,
a court may not issue an order approving a final settlement until at least 90 days after
notice has been provided to the appropriate officials. Id. § 1715(d). Continental
provided notice to the relevant attorneys general on February 17, 2012.87 Ninety days
have passed, and no objection has been filed by any State or Federal official upon
whom notice was served. Thus, this court may, in accordance with the CAFA, enter
an order of final approval of the settlement.
Retention of Jurisdiction
Pursuant to the settlement agreement, the Court retains exclusive jurisdiction
Doc. no. 50, at 11.
to resolve any disputes relating to, arising out of, or in connection with the
enforcement, interpretation, or implementation of the settlement agreement. See
Kokkonen v. Guardian Life Insurance Company of America, 511 U.S. 375, 382
(1994) (stating that a district court retains jurisdiction to enforce a settlement
agreement if it either (1) has language in the dismissal order indicating its retention
of jurisdiction or (2) incorporates the terms of the settlement agreement into the
III. CONCLUSION AND ORDER
For the reasons stated herein, the court APPROVES the parties’ settlement
agreement in its entirety. The settlement agreement is binding on UAW, Continental,
and all class members. Class members release all claims that were asserted or could
have been asserted in this lawsuit. The above-styled actions are DISMISSED with
prejudice. Costs are taxed as paid. The clerk is directed to close this file.
DONE and ORDERED this 21st day of May, 2012.
United States District Judge
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