Caterpillar Retirees File Class Action Lawsuit to Protect Promised Healthcare Benefits
Introduction
Lieff Cabraser Heimann & Bernstein, LLP, with co-counsel Meties, Mulder, Mollica and Glink, and AARP represents retirees of Caterpillar, Inc. in a class action lawsuit against the company to preserve the healthcare benefits promised them under collective bargaining agreements. The complaint, entitled Winnett et al. v. Caterpillar, Inc., was filed in April 2006 in U.S. District Court in Nashville, Tennessee, by two Caterpillar retirees and a surviving wife of a deceased retiree.
Caterpillar's Alleged Contractual Violations
In October 2004, Caterpillar began charging retirees monthly premium costs ranging from $134 to $280 per month for health care benefits.
However, the Complaint charges that Caterpillar’s labor contracts and benefit plans provided retiree’s health care coverage "continued for his or her lifetime at no cost." The lawsuit seeks to end these charges and restore the plaintiffs and similarly situated retirees to the position they would have been but for Caterpillar’s contractual violations.
Case History
Caterpillar filed a Motion to Dismiss the lawsuit and the District Court denied its motion in its entirety. The Court held that the plaintiffs have stated a claim under the Labor Management Relations Act ("LMRA") 29 U.S.C. sec, 185(a), and the Employment Retirement Income Act ("ERISA"), 29 U.S.C. §§ 1132(a)(1)(B). In denying Caterpillar's motion, the Court stated that "in interpreting the language of the relevant documents, the court finds evidence that Caterpillar intended to confer lifetime vested retiree medical benefits upon plainitffs." Caterpillar has since appealed this decision to the United States Court of Appeals for the Sixth Circuit. It argues that the District Court does not have jurisdiction over it to hear the ERISA and LMRA claims of those class members who are not surviving spouses or members of the Caterpillar Logistic Service subclass. Both sides have filed briefs with the Sixth Circuit and arguments are now set for September 23, 2008 in Cincinnati, Ohio.
On July 12, 2007 the District Court granted the plaintiffs class certification request and designated the named plaintiffs as class representatives. The class includes retirees and surviving spouses
- who are or were participants or beneficiaries in Caterpillar’s plan that provided for retiree medical insurance benefits;
- for whom the UAW had been the employees’ collective bargaining representative at the time of their retirement from Caterpillar, Inc.; and
- who began working for Caterpillar prior to the expiration of the 1988 labor agreement and who retired between January 1, 1992 and March 16, 1998; or in the case of beneficiaries, who is a surviving participant spouse.
In addition, the District Court certified three subclasses:
- members of the main class who were eligible to retire prior to January 1, 1992;
- members of the main class who worked (or whose employee spouses worked) under the Caterpillar Logistics Services Agreement; and
- members of the main class who are surviving spouses of Caterpillar retirees.
Plaintiffs also filed a motion to amend the Complaint after they learned that Caterpillar was charging some surviving spouses premiums to maintain their health insurance. The District Court granted the Plaintiffs' Motion to Amend and an Amended Complaint was filed on December 3, 2007.
On December 21, 2007, Plaintiffs asked the District Court to stop Caterpillar from charging the subclass of retirees who worked under the Caterpillar Logistics Services agreement with premiums and to provide them with the same level of healthcare that it currently provides to those who retired under the UAW's 1988 contract prior to January 1, 1992. Oral arguments on this motion were heard on April 2, 2008, and an evidentiary hearing was conducted on July 7-10.
Read a copy of the Caterpillar Class Certification Order or the Memorandum and Opinion issued by the Court.
"Workers at Caterpillar made the company into the world's leading manufacturer of construction and mining equipment and were assured free lifetime healthcare coverage," commented plaintiffs’ counsel Elizabeth Alexander at Lieff Cabraser Heimann & Bernstein, LLP. "Caterpillar should not charge them for any portion of their health care coverage through deductions from their pension benefits."
Contact Plaintiffs' Attorneys
Caterpillar retirees who wish to learn more about the lawsuit or contact counsel should call us toll-free at 1-866-313-1973 or click here to send us an email message.
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About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP is a sixty-plus attorney law firm that has represented plaintiffs nationwide since 1972. We have offices in San Francisco, New York and Nashville. We represent plaintiffs in class and group actions and in individual lawsuits in cases involving substantial losses. For the last seven years, The National Law Journal has selected Lieff Cabraser as one of the top plaintiffs' law firms in the nation.
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