Case-IH retirees win benefits battle
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By Jennifer DeWitt | Saturday, March 15, 2008 |
Thousands of former Case-IH retirees and their dependents have scored a big win in what has been a lengthy battle to regain their lifetime health care benefits.
Roger McClow, the Southfield, Mich., attorney representing the more than 5,000 Case-IH retirees and their spouses in the class-action lawsuit, said a federal court judge issued three rulings Friday in favor of the retirees.
“I had a really good day — one of the better days I had in 30 years. The retirees had a good day,” McClow said in a telephone interview Monday.
In a ruling handed down Friday, U.S. District Court Judge Patrick Duggan granted a motion for a summary judgment on liability — ruling that the company had an obligation to provide company-paid healthcare for the former employees and their spouses for life.
The suit involves Case-IH employees who retired on or before July 1, 1994, when Case was spun off as a separate company by then-parent Tenneco. Represented by the suit are retired workers in the Quad-Cities, where Case once had plants in Rock Island, East Moline and Bettendorf; as well as retirees in Racine, Wis.; Burlington, Iowa; Warsaw, Wis.; Terre Haute, Ind.; and other smaller plants.
The lawsuit is known as Yolton, et al. vs. El Paso Tennessee Pipeline Co. and CNH America LLC. Case Corp. now is known as CNH America.
In the class-action lawsuit filed in 2002, the retirees claimed their union contract guaranteed lifetime free benefits for themselves and their spouses.
The retirees’ benefits were turned over in 1996 to El Paso, when it merged with Tenneco. In 2002, El Paso began charging the retirees a premium for their health coverage for the first time. The premium began at $290 a month, increased to $501 a month and eventually to $561 a month in 2004 before the judge ordered that Case LLC pay for the retirees’ health insurance benefits as the lawsuit proceeded through the court.
According to McClow, the ruling on liability was necessary to move on to the damages stage of the suit. “You can’t have a final judgment until you have a liability judgment and damages,” he said.
Duggan ruled last fall that the retirees and spouses were entitled to lifetime health care benefits.
In the latest ruling, Duggan upheld the plaintiff’s argument that Case Corp. is responsible for providing lifetime health benefits to the retirees although it had contracted with El Paso to take over administration of their benefits.
McClow said the next step will be to determine the total amount of damages the retirees have sustained since El Paso first began charging them for their health care coverage. He said those retirees who stayed in the plan paid about $9,500 in premium costs.
“For those who stayed in the health care plan … they will get their premium contributions back since El Paso first charged them in September, 2002, through March 2004,” he said.
Retirees who left the health care plan would be entitled to out-of-pocket damages — such as cost for other insurance and medical expenses, but will have to prove they incurred the costs.
He added that 1,900 retirees stayed in the plan, while 1,200 dropped out. “I don’t know what others might have paid … but some could have run up huge bills.”
McClow estimated the total damages could range from $25 million to $28 million. The impacted retirees will be notified by the court regarding the next step.
In another decision, Duggan rejected CNH’s argument that it is not responsible for the retirees’ benefits because the company was a different company than it was before the July 1994, reorganization.
“The judge said you’re the same company, you’re a continuation of the same company and therefore liable,’’ McClow said.
CNH could not be reached for comment Monday.
In the third ruling, Duggan also rejected El Paso’s argument that it should be allowed to modify or change the retirees’ health care plan.
According to McClow, El Paso wanted to change the benefit plan from an indemnity plan, in which retirees could chose their own healthcare provider, to a managed care plan.
The case was one of two lawsuits involving Case-IH retirees and health benefits. McClow, who also represents the plaintiffs in the second suit, said a final judgment was entered about two weeks ago in the case of Reese et al. vs. CNH America LLC.
That case involves those who retired after July 1, 1994, as opposed to before that date as in the other case. In that ruling, the judge determined that the labor contracts provided lifetime health benefits — from Case Corp. — for those retirees.
McClow said the company has already appealed that case to which the plaintiffs have filed an appeal.
United Auto Workers International representative James Hecker could not be reached for comment Monday. The UAW represented the Case-IH retirees.
Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com. Comment on this story at qctimes.com.
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