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Biase v. SPX Corp.

United States District Court, W.D. North Carolina, Charlotte Division

October 2, 2017

JOSEPH Di BIASE, JOHN PRODORUTTI and DAVID BRASS as individuals, on behalf of themselves and a persons similarly situated, and INTERNATIONALUNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURALIMPLEMENT WORKERS OF AMERICA, UAW, Plaintiffs,
v.
SPX CORPORATION, Defendant.

          ORDER

          ROBERT J. CONRAD, JR. UNITED STATES DISTRICT JUDGE.

         THIS MATTER comes before the Court on Plaintiff's Complaint, (Doc. No. 1), Plaintiff's Motion for Class Certification, (Doc. No. 72), Plaintiff's Memorandum in Support (Doc. No. 73), Defendant's Memorandum in Opposition, (Doc. No. 75), and Plaintiffs' Reply Brief on Motion for Class Certification (Doc. No. 77).

         I.BACKGROUND

         In 2001, the United Automobile Workers (“UAW”) and certain class plaintiffs litigated in the Western District of Michigan against Defendant SPX in two separate actions. (Doc. No. 1 ¶ 2). Those actions alleged a breach of promise made in collective bargaining agreements between the UAW and SPX, or its predecessor. (Id.) This litigation resulted in two settlement agreements: the L&N Settlement Agreement and the Muskegon Settlement Agreement. These agreements were approved on January 12, 2004 in Di Biase et al. v. SPX Corp. et al., No. 1:01-cv-624-RAE (W.D. Mich. 2004), and Pedler et al. v. SPX Corp., No. 1:01-cv-623-RAE (W.D. Mich. 2004). (Id. ¶ 11).

         Each agreement provided settlement class members with specific retiree health care plans and benefits (“SPX Plans”) “for the remainder of their lives.” (Id. ¶ 26). Provisions within the settlement agreements allowed SPX to change those plans, carriers, networks, and providers under the condition that the class members' new benefits were “substantially equivalent” to the original SPX Plans. (Id. ¶ 27).

         In the fall of 2014, SPX announced to the retirees its plan to terminate the participation of Medicare-eligible class members-typically those 65 or older-in the fore mentioned SPX Plans. This termination would take effect on January 1, 2015 and replace this age group's original SPX Plan with a “New Approach to Retiree Health Care Coverage” (“New Approach”). (Id. ¶ 28). The New Approach differs from the previous SPX Plan as it is a Health Reimbursement Account (“HRA”), “into which SPX places a specified sum of money each year.” (Id. at ¶ 31). Unlike the prior health care plan, the New Approach requires the retiree to locate and purchase their own appropriate health insurance coverage. (Id.). The retirees may then seek reimbursement for their expenditures from the HRA until the account is exhausted. (Id.). Upon depletion of the account, the retiree becomes financially responsible for his/her medical care for the rest of the year. (Id.).

         Plaintiff filed suit in this District on November 25, 2014, alleging violations of the settlement agreement arising from collective bargaining agreements (Counts I and III), and violation of the ERIA Plan (Counts II and IV). (Id. ¶ 10-12). Plaintiffs claim that “the New Approach requires the Medicare Eligible Settlement Class Members to be sufficiently capable (mentally and physically) to engage in the acquisition of information and decision making necessary to choose a new plan or plans from the many hundreds available, to ‘front' the sums necessary to pay the required premiums, and to provide certain required documentation for reimbursement to SPX's administrator of the HRA.” (Id. ¶ 33). On September 2, 2016, Plaintiff filed a Motion to Certify Class, (Doc. No. 72).[1] On September 26, 2016, Defendant filed a Response in Opposition to Motion to Certify Class (Doc. No. 75) and on October 11, 2016, Plaintiff filed a Reply Brief to the Motion to Certify Class (Doc. No. 77).

         II. LEGAL STANDARD

         “The district court has broad discretion in deciding whether to certify a class.” Thorn v. Jefferson-Pilot Life Ins. Co., 445 F.3d 311, 317 (4th Cir. 2006) (internal quotation marks omitted). In the execution of this discretion, a court must accept the substantive allegations of the complaint as true and “interpret Rule 23 in such a manner as to promote justice and judicial efficiency.” Farrar & Farrar Dairy, Inc., 254 F.R.D. at 72; In re Kirschner Med. Corp. Sec. Litig., 139 F.R.D. 74, 84 (D. Md. 1991). Nonetheless, the burden of establishing certification remains with the party seeking class certification. Thorn v. Jefferson-Pilot Life Ind. Co., 445 F.3d 311, 314 (4th Cir. 2006). A class “may only be certified if the trial court is satisfied, after rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.” Gen Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982).

         III. DISCUSSION

         The class action is “an exception to the usual rule that litigation is conducted by and on the behalf of the individual named parties only.” Comcast Corp. v. Behrend, 133 S.Ct. 1423 (2013) (citing Califano v. Yamasaski, 442 U.S. 682, 700-701 (1979)). To fall within the exception, a party seeking to maintain a class action “must affirmatively demonstrate his compliance” with Rule 23 of the Federal Rules of Civil Procedure. This rule requires a two-part test for certifying a class. First, the plaintiff must establish the four requirements under Rule 23(a):

(1) The class is so numerous that joinder of all members is impracticable;
(2) There are questions of law or fact common to the class;
(3) The claims or defenses of the representative parties are typical of the claims or ...

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