BORGWARNER DIVERSIFIED TRANSMISSION PRODUCTS, INC. v. UNITED AUTOMOBILE, AEROSPACE, AND AGRICULTURAL IMPLEMENTS WORKERS OF AMERICA, LOCAL NO. 287 et al

Filing 195

ORDER denying 189 Plaintiff's Motion to Amend Findings. See Order for details. c/m Signed by Judge Larry J. McKinney on 10/24/08. (GJQ)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

BORGWARNER DIVERSIFIED TRANSMISSION PRODUCTS, INC., Plaintiff,

) ) ) ) vs. ) ) UNITED AUTOMOBILE, AEROSPACE, AND) AGRICULTURAL IMPLEMENT WORKERS ) OF AMERICA, LOCAL NO. 287; GERALD ) POOR; WILLARD L. SLOAN; EUGENE J. ) WINNINGHAM; ) BOB L. BERTRAM; JAMES L. KELLEY; ) JIM BARRETT; LARRY BRADBURN; ) JAMES A. CLARK; JOHN W. FENNIMORE; ) EARL F. HERRON; RALPH K. SMITH; ) LARRY TERRELL; MAX VAN ULZEN; ) DORAN C. KENDALL; TERRY GARRIOTT; ) KEITH MOSES; DON HOBBS; ) JOHNNY MASSEY; and BOBBY GUESS; ) individually and as the representatives of the ) defendant class, ) Defendants. )

1:06-cv-058-LJM-TAB

ORDER ON PLAINTIFF'S MOTION TO AMEND FINDINGS This matter is before the Court on Plaintiff's, Borgwarner Diversified Transmission Products, Inc. ("DTP"), Motion to Amend Findings pursuant to Rule 52(b) of the Federal Rules of Civil Procedure ("Rule 52(b)"). Plaintiff initiated this lawsuit against Defendants, United Automobile, Aerospace, and Agricultural Implement Workers of America, Local No. 287, et al (the "Union"), as a class action under § 502 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132, and § 301 of the Labor-Management Relations Act ("LMRA"), 29 U.S.C. § 185. The Court

has fully considered the parties' arguments and, for the reasons discussed below, DENIES Plaintiff's Motion to Amend Findings.

I. BACKGROUND In 2006, DTP modified its ERISA health insurance plan to control health care costs. Tr. at 24-25. Specifically, the changes aligned retiree benefits with those of current employees by imposing monthly premiums, increasing annual deductibles, and increasing the co-pays for drugs. Pl.'s Tr. Exs. 1, 2. The changes took effect at two different time periods: (1) on April 1, 2006, for those who retired after January 1, 1993; and (2) on October 1, 2006, for those who retired between October 27, 1989, and December 31, 1992. Pl.'s Tr. Ex. 3. The dispute between the parties stems from these changes, namely, whether the changes violated the parties' agreements with respect to health care benefits for retirees. In a trial before the Court on September 9 and 10, 2008, DTP sought a declaration that it was permitted to unilaterally amend its health insurance plans prior to the expiration of their term in order to reduce the level of benefits provided to retirees. DTP argued that the Court should first decide whether the agreements conferred vested lifetime benefits. Then, after that determination, the Court should decide whether Plaintiff had the right to unilaterally change the retirees' benefits under the collective bargaining agreements. At the end of Plaintiff's case in chief, the Court granted the Union's Motion for Judgment on Partial Findings pursuant to Rule 52(c) of the Federal Rules of Civil Procedure. The Court concluded that DTP did not have the right to unilaterally modify the retirees' health insurance benefits under the collective bargaining agreements. See Dkt. Nos. 184-85. Moreover, the Court declined to pass judgment on the lifetime benefits issue because the Court 2

concluded that the issue was not ripe for adjudication. Dkt. No. 185, at 9. DTP moves the Court to amend its findings of fact and conclusions of law to include a decision on the lifetime benefits issue.

II. STANDARD Rule 52(b) provides: "On a party's motion filed no later than [ten] days after the entry of judgment, the court may amend its findings­or make additional findings­and may amend the judgment accordingly." Fed. R. Civ. P. 52(b). Motions made pursuant to Rule 52(b) are intended to correct manifest errors of law or fact or to present newly discovered evidence. See, e.g., Am. Train Dispatchers Ass'n v. Norfolk & W. Ry. Co., 627 F. Supp. 941, 947 (N.D. Ind. 1985). Rule 52(b) is not a vehicle to obtain a rehearing or to relitigate old matters. Id.

III. DISCUSSION DTP cites several Seventh Circuit opinions in an effort to demonstrate that the Court committed manifest error. However, the Court concludes that, given the facts of this case, none of the cases cited by DTP requires the Court to consider the lifetime benefits issue. DTP relies heavily on Bidlack v. Wheelabrator Corp., 993 F.2d 603 (7th Cir. 1993) (en banc). In Bidlack, the union brought a class action on behalf of retired employees in which it argued that the parties' collective bargaining agreements conferred lifetime benefits. Id. at 604. The collective bargaining agreements had already expired and the plant at which the retirees formerly worked had closed. Id. The Union argued that the agreements provided lifetime benefits to retirees. Id. Ultimately, the court held that a genuine issue of material fact existed on whether or not the agreements conferred lifetime benefits. Id. at 609-10. The dissent argued that the court should not 3

have considered the broader issue of lifetime benefits, but rather, that the court should have only considered whether the collective bargaining agreements required the company to maintain the retirees' health insurance benefits at levels provided to active employees. Id. at 614-15 (Easterbrook, J., dissenting). The dissent described the majority's opinion as "largely advisory." Id. In response, the majority reasoned that unless the retirees' rights were vested "the company can cut them off tomorrow" because the collective bargaining agreements at issue had expired. Id. at 610. "If they have no contractual guarantee of benefits, they had better start shopping around for other medical insurance." Id. The facts presented to the Court in this case provide an entirely different scenario. First, the Court concluded that the retirees have a contractual guarantee of benefits such that DTP cannot cut them off tomorrow. Dkt. Nos. 184-85. Second, DTP, and not the Union, asked the Court to determine the lifetime benefits issue, unlike in Bidlack, where the Union sought a declaration of their rights. Id. At the heart of Bidlack, the court was concerned that the Company could end the benefits to retirees immediately. Because the retirees sought a decision on whether the collective bargaining agreements conferred lifetime benefits, the retirees could not get a "full satisfaction of their claim" if the Seventh Circuit limited its review to whether or not the retirees should receive the same level of benefits as active employees under the agreements. Id. Conversely, here the Union received a "full satisfaction of their claim" because the Court concluded the retirees had a contractual guarantee of benefits under the current collective bargaining agreements. Dkt. Nos. 184-85. There is no concern that DPT will cut the retirees' benefits tomorrow because the collective bargaining agreements dictate that they must provide the retirees benefits until the agreements expire. Id. Alth ough DTP alleges that it will end all benefits to the retirees when the current agreements expire, 4

the parties still have time to negotiate without fear that DTP will cut the retirees' benefits at any time. Therefore, Bidlack does not require the Court to decide the lifetime benefits issue. In Diehl v. Twin Disc, Inc., 102 F.3d 301 (7th Cir. 1996), another case cited by DTP, the plant closed and the union and the company negotiated a shutdown agreement. The shutdown agreement provided that retirees would be entitled to the health insurance benefits identified in prior insurance agreements "for the lifetime of the pensioner." Id. at 302-03. The Diehl court acknowledged that it could limit its review to the legitimacy of any modification under the shutdown agreement but, following Bidlack, it decided to answer the lifetime benefits question. Id. at 305-06. However, as in Bidlack, in Diehl it was the union that pressed the court to decide whether or not the collective bargaining agreements conferred lifetime benefits, unlike the present case, where DTP pressed the issue. Id.; Bidlack, 993 F.2d 604. Here, the Union has consistently sought a ruling only on the validity of DTP's unilateral change to the retirees' benefits under the collective bargaining agreements. Therefore, Diehl does not require the Court to consider the lifetime benefits issue. The Court concludes that the lifetime benefits issue is not properly before the Court because the retirees have a contractual guarantee of benefits until the current collective bargaining agreements expire and the retirees do not seek a declaration of their rights to lifetime benefits. Those facts distinguish the present case from Bidlack, Diehl, and the other cases cited by Plaintiff. See Barnett v. Ameren Corp., 436 F.3d 830, 831 (7th Cir. 2006); Int'l Union of Unit. Auto., Aero. & Agric. Implement Workers of Am., U.A.W. v. Rockford Powertrain, Inc., 350 F.3d 698, 700, 702 (7th Cir. 2003). As a result, the retirees have received a "full satisfaction of their claim." Bidlack, 993 F.2d at 610.

5

IV. CONCLUSION For the foregoing reasons, Plaintiff's, Borgwarner Diversified Transmission Products, Inc., Motion to Amend Findings is DENIED. IT IS SO ORDERED this 24th day of October, 2008.

________________________________ LARRY J. McKINNEY, JUDGE LARRY J. McKINNEY, JUDGE United States District Court United States District Court SoSouthern District of Indiana uthern District of Indiana

Distributed electronically to: Kim F. Ebert OGLETREE, DEAKINS, NASH, SMOAK & STEWART [e-mail] Kristin B. Keltner OGLETREE, DEAKINS, NASH, SMOAK & STEWART [e-mail] Kenneth B. Siepman OGLETREE, DEAKINS, NASH, SMOAK & STEWART [e-mail] Robert Adam Hicks MACEY SWANSON & ALLMAN [e-mail] Barry A. Macey MACEY SWANSON & ALLMAN [e-mail] 6

Distributed via U.S. Postal Service to: Jeffrey D. Sodko INTERNATIONAL UNION, UAW 8000 East Jefferson Avenue Detroit, MI 48214 GE R A L D POOR 2800 W. Memorial Drive Lot 207 Muncie, IN 47302 WI LL A R D L. SLOAN 2858 N. Sherman Dr. Luddington, MI 49431 EU G E N E J. WINNINGHAM 199 Webb Winningham Jamestown, TN 38586 BOB L. BERTRAM 910 Guthrie Chapel Burkesville, KY 42717 JAMES L. KELLEY 170 Maple Drive Scottsville, KY 42164 JI M BARRETT 550 N. Meridian St. Redkey, IN 47373 LA R R Y BRADBURN 1809 N. CR 397 E. Muncie, IN 47303 JAMES A. CLARK 1409 Italiano Drive Muncie, IN 47304 JO H N W. FENNIMORE 1532 N. CR 563 E. Selma, IN 47383 7 EARL F. HERRON 809 N. 600 E. Selma, IN 47383 RA L P H K. SMITH 6550 W. 1070 N. Gaston, IN 47342 LA R R Y TERRELL 4216 Maple Manor Parkway Muncie, IN 47302 MA X VAN ULZEN 2026 S. Hackley St. Muncie, IN 47302 DO R A N C. KENDALL 3813 W. 11th St. Muncie, IN 47302 TE R R Y GARRIOTT 408 N. CR 563 RR 2 Selma, IN 47383 KE I T H MOSES 9660 N. CR 425 E. Albany, IN 47320 DO N HOBBS 1835 E. 21st St. Muncie, IN 47302 JO H N N Y MASSEY 6431 S. CR 700 W Yorktown, IN 47396 BO B B Y GUESS 1415 S. Brotherton St. Muncie, IN 47302