Fitzwater et al v. CONSOL Energy, Inc. et al
Filing
244
MEMORANDUM OPINION AND ORDER denying 226 RENEWED MOTION for Class Certification. Signed by Senior Judge John T. Copenhaver, Jr. on 7/2/2020. (cc: counsel of record; any unrepresented party) (lca)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
BENNY FITZWATER, CLARENCE
BRIGHT, TERRY PRATER,
EMMET CASEY, JR., CONNIE Z.
GILBERT, ALLAN H. JACK, SR.,
and ROBERT H. LONG, on behalf of
themselves and others similarly
situated,
Plaintiffs,
v.
Civil Action No. 2:16-cv-09849
CONSOL ENERGY, INC.,
CONSOLIDATION COAL CO.,
FOLA COAL CO., LLC,
CONSOL OF KENTUCKY, INC.,
CONSOL PENNSYLVANIA COAL CO.,
LLC, and KURT SALVATORI,
Consolidated with:
Civil Action No. 1:17-cv-03861
Defendants.
MEMORANDUM OPINION AND ORDER
Pending is plaintiffs’ renewed motion to certify
class, filed May 13, 2020.
I.
Background
Earlier, on August 17, 2018, all seven named
plaintiffs jointly filed a supplemental motion for class
certification, which was denied by the court on October 15,
2019.1
See Fitzwater v. CONSOL Energy, Inc., No. 1:17-CV-03861,
2019 WL 5191245 (S.D.W. Va. Oct. 15, 2019).
The court’s October
2019 decision laid out the background of this case, and the
renewed motion does not require a complete rehashing of the
facts.
Rather, plaintiffs’ renewed motion relates only to
plaintiffs’ Count III: Discrimination against individual plan
participants based on health status-related factors under 29
U.S.C. § 1182.
Of relevance here, on September 30, 2014 CONSOL
Energy, Inc. and its subsidiaries (collectively, “CONSOL”)
announced that it was terminating retiree health and welfare
benefits for all active employees on October 1, 2014.
See July
27, 2017 Declaration of Deborah Lackovic ¶ 13, ECF No. 67-5; ECF
No. 155-14 (CONSOL PowerPoint presentation dated October 1, 2014
titled, “Benefit Changes”).2
Under the announcement, retirement-
eligible employees could continue to receive health and welfare
benefits under the benefit plan for retired employees (the
1
In addition, on December 22, 2017, Civil Action No. 2:16-cv09849 was consolidated with Casey v. CONSOL Energy, Inc., No.
1:17-cv-03861 (S.D.W. Va. filed Aug. 23, 2017). Prior to
consolidation, plaintiffs in the 2016 case, Benny Fitzwater,
Clarence Bright and Terry Prater, filed a motion to certify
class on July 13, 2017. See ECF No. 63. Following
consolidation, that motion was denied as moot by the court’s
February 6, 2018 order. See ECF No. 100.
2 Plaintiffs make no dispute about the timing of the notice by
CONSOL.
2
“Retiree Benefits Plan”) if they retired as of September 30,
2014, although the Retiree Benefits Plan would terminate
entirely on January 1, 2020.
Alternatively, active employees
could continue working and receive a one-time, lump sum
transition payment, based on their years of service, to support
their healthcare coverage upon retirement.
Unlike active
employees at the time, individuals who retired prior to the
September 2014 announcement did not receive the option to
receive a one-time transition payment as compensation for the
termination of their retiree health and welfare benefits.
In
any event, CONSOL informed retired employees a year later by
letter that their retiree benefits under the Retiree Benefits
Plan would terminate instead on December 31, 2015.
See
Fitzwater, 2019 WL 5191245, at *3–4.
The amended complaint filed March 1, 2018 alleged that
“[i]ndividuals who had already retired as of September 30, 2014
necessarily had a lengthier history of filing claims under the
applicable Plan and receiving healthcare under that Plan (i.e.,
they had a lengthier claims experience), and also tended to be
less healthy due to their advanced age relative to the active
workers.”
ECF No. 103 ¶ 130.
Under 29 U.S.C. § 1182,
defendants may not discriminate based on prohibited “health
status-related factors,” including health status, medical
3
condition (including both physical and mental illnesses), claims
experience, receipt of health care, medical history, or
disability.
29 U.S.C. § 1182(a)-(b).
By only offering the one-
time transition payment to active employees and not retirees,
defendants allegedly established and enforced rules for
eligibility for the cash transition payment “based on the health
status-related factors of health status, medical condition,
claims experience, receipt of healthcare, medical history,
and/or disability.”
See ECF No. 103, ¶ 131; ECF No. 36 ¶¶ 121-
25.
Based on these allegations, plaintiffs’ 2018
supplemental motion proposed the following subclass definition
applicable to Count III:
Class B: All individual plan participants, and their
dependents, who had enrolled in a retiree welfare
benefits plan administered by Consol prior to Consol
terminating their plan participation in the years of
2014 and 2015.
ECF No. 162 at 4.
The October 2019 decision concluded that
those same allegations did not support class certification of
Count III, reasoning that “[t]he mere fact that retirees and
active employees were treated differently does not support the
assertion that they were discriminated against based on their
health status under §1182.”
Fitzwater, 2019 WL 5191245, at *17.
4
The renewed motion does not dispute this finding, but
focuses instead on the approximately 50 then-active workers who
had reached age 55 by September 30, 2014 and declined the cash
transition payment, opting instead to retire and enroll in the
Retiree Welfare Plan on or before September 30, 2014.
No. 226 at 2–3.
See ECF
For these approximately 50 new retirees (plus
nine surviving spouses), such as named plaintiffs Terry Prater
and Clarence Gilbert, “CONSOL provided a pro-rated portion of
the previously rejected transition payment to reflect the
receipt of an additional year of benefits under the Retiree
Benefits Plan.”
at 15 n.1.
Fitzwater, 2019 WL 5191245, at *4; ECF No. 227
This pro-rated benefit was paid out from December
2015 through January 2016.
See ECF No. 238 at 2.
The renewed motion seeks to certify a narrower class
purportedly not yet addressed by the court, comprised only of
those retirees (i.e., Retiree Welfare Plan participants) for
whom plaintiffs contend that CONSOL denied the new pro-rated
cash transition benefit based on “claims experience.”
Invoking
the court’s discretionary authority under Rule 23(c)(1)(C) of
the Federal Rules of Civil Procedure, plaintiffs propose the
following new class definition for Count III, comprised of
approximately 2,937 members:
5
All individuals who were participants or surviving
beneficiaries covered by the CONSOL Energy Inc.
Retiree Health and Welfare Plan, whose benefits were
terminated in 2015, and to whom CONSOL did not offer
the same transition benefit provided to those
participants who joined the Plan on or after September
30, 2014.
ECF No. 226 at 6; ECF No. 227 at 12, 16.
In response, defendants argue that plaintiffs’ renewed
motion should be denied as procedurally deficient in that it was
untimely filed and raises nothing “new” that plaintiffs could
not have briefed previously.
See ECF No. 233.
Moreover, they
assert that the renewed motion fails even if the court analyzes
it under Rule 23 factors for class certification.
II.
Id.
Legal Standard
Rule 23(c)(1)(A) instructs that district courts should
determine whether to certify a class “[a]t an early practicable
time.”
Fed. R. Civ. P. 23(c)(1)(A).
Subsection (c)(1)(C)
further provides that “[a]n order that grants or denies class
certification may be altered or amended before final judgment.”
Fed. R. Civ. P. 23(c)(1); id., Advisory Committee Notes (“A
determination once made can be altered or amended before the
decision on the merits if, upon fuller development of the facts,
the original determination appears unsound.”).
6
Although plaintiffs do not point the court to
authority from the Fourth Circuit, other courts have interpreted
Rule 23(c)(1)(C) to mean that “[d]istrict courts have ample
discretion to consider (or to decline to consider) a revised
class certification motion after an initial denial.”
In re
Initial Pub. Offering Sec. Litig., 483 F.3d 70, 73 (2d Cir.
2007).
For example, courts have “permit[ted] renewed
certification motions that set out a narrower class definition
or that rely upon different evidence or legal theories.”
See
Hartman v. United Bank Card, Inc., 291 F.R.D. 591, 597 (W.D.
Wash. 2013); Gutierrez v. Johnson & Johnson, 269 F.R.D. 430, 434
(D.N.J. 2010) (“A court may revisit a prior denial after
developments in the factual background, a modified proposed
class definition, new class representatives, or any other
changes which may cure defects earlier found by the court.”).
Still, courts generally require some basis to justify
further argument as to class certification, such as new evidence
or “materially changed or clarified circumstances.”
See
Washington v. Vogel, 158 F.R.D. 689, 693 (M.D. Fla. 1994)
(quoting 2 H. Newberg and A. Conte, Newberg on Class Actions (3d
ed. 1992) § 7.47 at 7–146)); Terrill v. Electrolux Home Prod.,
Inc., 274 F.R.D. 698, 700 (S.D. Ga. 2011); Hartman, 291 F.R.D.
at 597.
“Plaintiffs must show some justification for filing a
7
second motion, and not simply a desire to have a second or third
run at the same issue.” Hartman, 291 F.R.D at 597. “Rule
23(c)(1) provides Plaintiffs with a limited opportunity to
adduce additional facts: It is not a Trojan Horse by which
Plaintiffs may endlessly reargue the legal premises of their
motion.”
Gardner v. First Am. Title Ins. Co., 218 F.R.D. 216,
218 (D. Minn. 2003) (emphasis in original) (granting motion to
strike renewed motion for class certification “insofar as it
pertains to matters other than facts uncovered through discovery
conducted since” the court previously denied class
certification).
Even in the case of newly discovered evidence, courts
consider whether granting the renewed motion “would postpone
resolution of this case.”
See Vogel, 158 F.R.D. at 692; Mogel
v. UNUM Life Ins. Co. of Am., 677 F. Supp. 2d 362, 366 (D. Mass.
2009); Cabrera v. Gov’t Employees Ins. Co., No. 12-61390-CIV,
2015 WL 464237, at *5 (S.D. Fla. Jan. 16, 2015) (denying renewed
certification motion as untimely because the motions deadline
“has long since passed and granting Plaintiff’s renewed motion
would postpone resolution of this already drawn-out case”).
For that matter, Rule 16(b)(4) provides that “[a]
schedule may be modified only for good cause and with the
judge's consent.”
Fed. R. Civ. P. 16(b)(4); see also L. R. Civ.
8
P. 16.1(f).
When a plaintiff seeks to file an untimely motion,
factors to consider include the “danger of prejudice to the nonmoving party, the length of delay and its potential impact on
judicial proceedings, the reason for the delay, and whether the
movant acted in good faith.”
Tawwaab v. Virginia Linen Serv.,
Inc., 729 F. Supp. 2d 757, 768–69 (D. Md. 2010) (citations
omitted).
“Rule 16(b)’s good cause standard focuses on the
timeliness of the amendment and the reasons for its tardy
submission; the primary consideration is the diligence of the
moving party.”
Montgomery v. Anne Arundel Cty., Maryland, 182
F. App’x 156, 162 (4th Cir. 2006) (citations omitted).
Finally, courts have found that undue delay or undue
prejudice to defendants provide grounds to deny renewed or
untimely certification motions that failed to meet court-imposed
deadlines.
See O’Leary v. New Hampshire Boring, Inc., 323
F.R.D. 122, 128 (D. Mass. 2018) (finding that granting
plaintiffs’ attempts to seek class certification past the
scheduling order deadline would unduly prejudice defendants
where “parties agreed at a prior hearing that the plaintiffs had
not raised the issue of class certification” and plaintiffs
“offered no reason for failing to seek certification prior to
the deadline even though they had the opportunity to do so”);
Mogel, 677 F. Supp. 2d at 365 (denying motion for leave to file
9
renewed motion for class certification because there were no
facts alleged, besides the denial of class certification, “that
were not known when plaintiffs initially filed for class
certification”); Vogel, 158 F.R.D. at 692 (finding plaintiffs
failed to show “good cause for their earlier failure to seek
certification”).
III. Discussion
The court’s scheduling order entered on July 17, 2018
set an August 17, 2018 deadline for motions for class
certification.
See ECF No. 149.
Nearly two years have passed
since and, by the time of the filing of the renewed motion,
nearly seven months had passed after the court denied
plaintiffs’ supplemental motion for class certification.
At no
point has the court granted plaintiffs leave to file a renewed
class certification motion or set a new deadline for such
motions.
In their reply, plaintiffs attempt to justify the
timeliness of the renewed motion by noting that Rule 23(c)(1)(C)
permits the court to alter and amend previous class
certification rulings “before final judgment,” and no final
judgment has been entered.
Civ. P. 23(c)(1)).
ECF No. 238 at 4 (quoting Fed. R.
Plaintiffs clarify that they do not seek
10
reconsideration of an already decided issue and emphasize how
the motion is not barred by the law of the case doctrine.3
No. 238 at 4–5.
ECF
Although the motion is styled as a “renewed
motion,” plaintiffs, in their reply, point to the standards for
reconsideration of motions, namely: (1) an intervening change in
controlling law; (2) new evidence not previously available; or
(3) to correct a clear error of law or prevent manifest
injustice.
Id. at 4 (citing 3 Newberg on Class Actions § 7:35
(5th ed.); see also Zinkand v. Brown, 478 F.3d 634, 637 (4th
Cir. 2007) (citations omitted); Slavinski v. Columbia Ass’n,
Inc., No. CIV. CCB-08-890, 2011 WL 2119231, at *1 (D. Md. May
27, 2011) (applying standard to plaintiff’s motion for
reconsideration of order denying conditional class
certification).
The reply asserts that the renewed motion was
filed “based on new evidence and to remedy an error of law,”
though plaintiffs’ briefing does not identify any “clear error
of law.”
See ECF No. 238 at 5.
Rather, plaintiffs’ renewed
3
“The law-of-the-case doctrine recognizes that ‘when a court
decides upon a rule of law, that decision should continue to
govern the same issues in subsequent stages in the same case.’”
Graves v. Lioi, 930 F.3d 307, 318 (4th Cir. 2019) (quoting
Arizona v. California, 460 U.S. 605, 618 (1983)).
11
motion relies solely on the second factor: the availability of
new evidence.
Insofar as plaintiffs, for the first time, apply
reconsideration standards in their reply, this court has
previously cautioned plaintiffs that it need not heed arguments
raised for the first time in reply briefs.
See Fitzwater, 2019
WL 5191245, at *6 (citing Clawson v. FedEx Ground Package Sys.,
Inc., 451 F. Supp. 2d 731, 734 (D. Md. 2006)).4
Regardless,
plaintiffs have not provided adequate reasons for the court to
grant their certification request.
First, plaintiffs justify this renewed motion by
asserting that “new evidence clarifies” that the extended
transition benefits “were new and distinct benefits under the
Retiree Welfare Plan, and that CONSOL denied these to the
putative class based on their claims experience.”
at 2.
ECF No. 227
These are at most “new” revelations — though not based on
new evidence — inasmuch as plaintiffs declined to raise these
arguments in their motion to certify class and in the
4
In a similar vein, the reply refers to the instant motion for
the first time as “Plaintiffs’ Renewed Motion to Certify Class
or in the Alternative, Motion to Alter or Amend Order.” ECF No.
238 at 1 (emphasis added). Insofar as plaintiffs seek to subtly
recharacterize the motion in their reply, the court relies on
the relief requested in the motion and memorandum in support
thereof, which do not move to reconsider the court’s previous
order.
12
supplemental class certification motion.
Plaintiffs’ first and
supplemental certification motions each argued that CONSOL
discriminated by not offering “transition assistance” or
“transitional benefits” to those who had already elected to
retire.
See ECF No. 64 at 9, 17-18; ECF No. 156 at 2, 21–22.
The existence of the pro-rata transition payment was addressed
in the October 2019 decision.
at *4.
See Fitzwater, 2019 WL 5191245,
Even though plaintiffs declined to originally seek class
certification on these specific grounds, the extended transition
benefits were not a novel revelation made in recent discovery or
“materially changed or clarified circumstances” to justify
revisiting the court’s prior ruling.
See Vogel, 158 F.R.D. at
693; Hartman, 291 F.R.D. at 597.
Plaintiffs asserts that the court’s October 2019
decision “did not consider evidence of claims experience of the
putative class, but rather their health status.”
at 5.
ECF No. 238
Much of the suggested “new” evidence is simply a new
analysis that comes from plaintiffs’ own ERISA expert, Harley
Bjelland.
See ECF No. 227 at 5-6; ECF No. 226-3 (Report of
Harley Bjelland dated February 3, 2020).
As explained by Mr.
Bjelland, “claims experience” refers to “the doctor bills,
hospital bills, pharmaceutical expenses and surgeries that a
specific group has actually incurred over a year or, even
13
better, a number of years.”
ECF No. 226-3 at 8.
Mr. Bjelland
testifies that “while an insurer may calculate the cost of a
defined benefit health benefit based upon [an individual’s]
status as active versus retired, it is a different action to
choose eligibility for benefits based upon how expensive a
person will be to cover under a defined benefit welfare plan.”
Id. at 17 (emphasis added).
To be sure, an insurer may use
“claims experience” to set the price for the insurance plan as a
whole, but administrators may not discriminate regarding
eligibility benefits within a group of otherwise similarly
situated participants based on an individual’s claims experience
(or any other health status-related factors).
See 29 C.F.R.
§ 2590.702(c) (Example 1); Nondiscrimination and Wellness
Programs in Health Coverage in the Group Market, 71 Fed. Reg.
75038, 75,041 (Dec. 13, 2006).
Yet, the court already took
these considerations into account in its October 2019 decision.
See Fitzwater, 2019 WL 5191245, at *16 n.14.
Plaintiffs also cite the July 13, 2018 deposition
testimony of defendant Kurt Salvatori, CONSOL’s Vice President
of Human Resources from 2011-2016 and fiduciary of the
plaintiffs’ employee welfare benefit plans.
10; Salvatori Dep., ECF No. 226-7.
ECF No. 227 at 8,
Mr. Salvotari explained that
providing the transition payment to retirees “was never a
14
consideration because the people that you're describing, the
inactive, had received the benefit for a period of time.
what was that worth; right?
It would have been an impossible
calculation to be able to figure out.”
187:10,
ECF No. 226-7.
And
Salvatori Dep. 186:10-
Of course, plaintiffs’ supplemental
class certification motion was filed in August 17, 2018, which
means they could have raised this testimony previously.
Plaintiffs’ attempts to repackage their “claims
experience” arguments are unavailing.
The court’s prior ruling
considered plaintiffs’ “assumption that the retirees necessarily
‘had a lengthier claims experience . . . and also tended to be
less healthy due to their advanced age.’”
Fitzwater, 2019 WL
5191245, at *17 (quoting ECF No. 103 ¶ 130).
Plaintiffs simply
did not offer adequate evidence or argument to support
certifying Count III based on claims experience or any other
health status-related factor.
Plaintiffs’ decision not to fully
raise the issue in previous briefing marks a tactical decision
the court need not alleviate.
See Vogel, 158 F.R.D. at 692
(“The fact that Plaintiffs’ counsel’s tactical decisions did not
work out as planned does not excuse the Plaintiffs’ failure to
timely seek class certification[.]”).
On the contrary, the court must weigh the effects of
this undue delay and undue prejudice to defendants.
15
See Mogel,
677 F. Supp. 2d at 365; O’Leary, 323 F.R.D. at 128.
Between the
court’s October 2019 scheduling order and the filing of
plaintiffs’ renewed motion, this court granted four separate
requests to modify the scheduling order to allow the parties
further opportunity for discovery and the filing of dispositive
motions.
See ECF Nos. 208, 211, 220, and 224.
Despite noticing
the parties as early as January 2020 “that the court is
disinclined to grant further extensions absent extraordinary
circumstances and good cause,” plaintiffs filed their renewed
motion without first moving for leave or offering a
justification for the delay.
See ECF No. 211.
Moreover,
plaintiffs’ renewed motion requests an additional 60 days to
conduct discovery on the class certification issue, a request
the court has since denied as it would unnecessarily prolong
this case.
See ECF No. 229 at 2.
Plaintiffs nonetheless repeat
the request for 60 days of additional discovery in their reply.
See ECF No. 238 at 16.
Briefing of defendants’ summary judgment was already
completed by the time the renewed motion was fully briefed on
June 22, 2020.
approaches.
The July 17, 2020 pretrial conference fast
Granting the renewed motion and reopening discovery
would again delay trial, currently set for August 4, 2020, well
into the fall and perhaps further.
16
All told, plaintiffs have not offered new evidence,
“materially changed or clarified circumstances,” or any other
ground on which to reopen the class certification issue and
postpone resolution of this case even further.
Accordingly, the
court finds no basis to grant plaintiffs’ renewed motion.
IV.
Conclusion
Based on the foregoing, it is ORDERED that plaintiffs’
renewed motion for class certification be, and it hereby is,
denied.
The Clerk is requested to forward copies of this order
to all counsel of record and to any unrepresented parties.
ENTER: July 2, 2020
17
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