United States District Court, S.D. West Virginia, Charleston
BENNY FITZWATER and CLARENCE BRIGHT, and TERRY PRATER, and EMMET CASEY, JR., and CONNIE Z. GILBERT, and ALLAN H. JACK, SR., and ROBERT H. LONG, on behalf of themselves and others similarly situated, Plaintiffs,
CONSOL ENERGY, INC., and CONSOLIDATION COAL CO., and FOLA COAL CO., LLC, and CONSOL OF KENTUCKY, INC., and CONSOL BUCHANAN MINING CO., LLC, and CONSOL PENNSYLVANIA COAL CO., LLC, and KURT SALVATORI, Defendants.
MEMORANDUM OPINION AND ORDER
T. Copenhaver, Jr., Judge
is the plaintiffs' supplemental motion for class
certification, filed August 17, 2018.
April 24, 2017, plaintiffs Benny Fitzwater
(“Fitzwater”), Clarence Bright
(“Bright”), and Terry Prater
(“Prater”), on behalf of themselves and others
similarly situated, filed their amended complaint against
CONSOL Energy, Inc., Consolidation Coal Co., Fola Coal Co.,
LLC, CONSOL of Kentucky, Inc., and Kurt Salvatori (CONSOL
Energy, Inc.'s Vice President of Human Resources from
2011-2016 and fiduciary of the plaintiffs' employee
welfare benefit plans) in this court. First Am. Compl., ECF
No. 36 (“ECF No. 36”). This case was consolidated
on December 22, 2017 with Casey v. CONSOL Energy, Inc. et
al., brought by Emmett Casey, Jr. (“Casey”),
Connie Z. Gilbert (“Gilbert”), Allan Jack Sr.
(“Jack”), and Robert H. Long
(“Long”). ECF No. 90.
Casey, Gilbert, Jack, and Long filed an amended complaint on
March 1, 2018. Second Am. Compl., ECF No. 103 (“ECF
No. 103”). After Fitzwater, Bright, and Prater's
original motion to certify class, filed July 13, 2017, was
denied as moot by the court's February 6, 2018 order, see
ECF No. 100, all seven named plaintiffs jointly filed a
supplemental motion for class certification against CONSOL
Energy, Inc., Consolidation Coal Co.,  Fola Coal Co.,
LLC, CONSOL of Kentucky, Inc., CONSOL Pennsylvania Coal Co.,
LLC (collectively, “CONSOL”),  and Mr. Salvatori
on August 17, 2018. Pls.' Suppl. Mot. Class Cert., ECF
No. 155 (“ECF No. 155”).
named plaintiffs are retired miners who worked at CONSOL mine
sites consisting of the CONSOL of Kentucky mines, the
Buchanan Mine located in Virginia and the Enlow Fork Mine
located in Pennsylvania, or at the Fola mine sites located in
West Virginia. Pls.' Mem. Supp. Suppl. Mot. Class Cert.
4-5, ECF No. 156 (“ECF No. 156”); ECF No. 103
¶¶ 23, 58; ECF No. 36 ¶¶ 30-31. They seek
to represent some 4, 000 miners who worked at numerous CONSOL
mine sites in four different states over the course of
approximately forty years. ECF No. 156 at 1; Pls.' Reply
Suppl. Mot. Class Cert. 1, ECF No. 162 (“ECF No.
162”). The plaintiffs allege wrongful and
discriminatory termination of retiree health benefits
pursuant to the Employee Retirement Income Security Act of
1975 (“ERISA”), 29 U.S.C. § 1001, et seq.
ECF Nos. 36, 103.
early 1980s, CONSOL began holding orientation sessions for
new, non-union employees at each of its mine sites, during
which CONSOL representatives allegedly made oral and written
promises of lifetime medical benefit coverage to miners and
their beneficiaries as part of their “major initiative
to begin opening non-union coal mines.” ECF No. 156 at
representations were allegedly “made in written form on
slide shows - which Defendants projected on the wall for the
putative class members to read - or in hand-outs distributed
to class members by Consol.” Id. at 4-5. The
materials allegedly “explained the CONSOL retiree
benefits and stated that those benefits would remain
competitive with the lifetime, Congressionally-backed
benefits available to miners through the UMWA, ”
referring to the United Mine Workers of America. Id.
at 5. The plaintiffs believed these lifetime retiree benefits
included medical, prescription drug, dental, vision, and life
insurance coverage. ECF No. 103 ¶ 63.
plaintiffs refer to these benefits as the “Lifetime
Plan” for which there was no uniform formal statement
and no Summary Plan Document (“SPD”). Formal
plans with SPDs did exist, consisting of varying degrees of
coverage for medical, prescription drug, short- and long-term
disability, dental, vision, and life insurance benefits, in
addition to pension payments under a separate retirement
plan. See, e.g., August 31, 2018 Declaration of Deborah
Lackovic (Consol's Director - Benefits) (“Second
Lackovic Decl.”), Exs. A-P, ECF Nos. 160-19 to 160-24.
The defendants provided the court with SPDs from 1992, 1998,
2003, 2005, 2006, 2011, 2014 that were distributed to
CONSOL's retired and active employees. Id.
instance, the 1992 SPDs benefits binder given to production
and maintenance employees at “Enlow Fork Mining
Company, ” “Consol of Pennsylvania Coal Company,
” and “Consolidation Coal Company of
Kentucky” summarized the (a) life insurance, (b)
medical, (c) salary continuance/disability, (d) dental, and
(e) retirement benefit plans, and provided a separate SPD for
each of them. Second Lackovic Decl., Ex. K, ECF No. 160-23.
The SPDs the defendants provided up until the mid-2000s
covered both active and retired employees within the same
plans. See, e.g., Id. Ex. J, ECF No. 160-22 at 28,
CONSOL022576; Id. Ex. M, ECF No. 160-24 at 12,
2006, CONSOL began providing two separate sets of SPDs, one
for retirees and one for active employees. Second Lackovic
Decl. ¶¶ 7-8, ECF No. 160-19. Retirees and active
employees also both received a separate SPD for each type of
benefit they received: medical, prescription drug, dental,
vision, disability, and life insurance, though the SPDs for
retired and active employees were all contained in a common
welfare plan designated Plan Number 581. Id. Exs.
B-F, (SPDs for retirees), Exs. G-H (SPDs for active
employees), ECF Nos. 160-19 to 160-20; ECF No. 103 ¶ 89.
January 2011, CONSOL issued a separate benefit plan for
retired employees called the CONSOL Energy Inc. Retiree
Health and Welfare Plan (“Retiree Benefits
Plan”). See Second Lackovic Decl., Ex. A, ECF No.
160-19. Active employees remained participants in what was
known as the CONSOL Energy Inc. Health and Welfare Plan
(“Active Employee Benefits Plan.”), which the
parties at times refer to as the CONSOL Energy, Inc. Flexible
Benefits Program Comprehensive Medical Expense Benefits Plan.
See July 27, 2017 Declaration of Deborah Lackovic
(“First Lackovic Decl.”) ¶ 9, ECF No. 67-5;
Second Lackovic Decl. ¶ 8, ECF No. 160-19; ECF No. 36
¶ 50. Unlike earlier plans that covered dental and
disability, the Retiree Benefits Plan only covered medical,
prescription drug, vision, and life insurance benefits. See
First Lackovic Decl. ¶ 8, ECF No. 67-5; Second Lackovic
Decl., Ex. A, ECF No. 160-19. The Active Employee Benefits
Plan continued to carry medical, prescription drug, vision,
dental, disability, and life insurance benefits. Second
Lackovic Decl. ¶ 8, ECF No. 160-19; Id. Ex. G,
ECF No. 160-20.
around 2010, the defendants allegedly “became aware of
a union organizing drive, ” and in order to
“halt” organizational efforts, the defendants
“repeatedly represented to their employees, ”
including Bright, Fitzwater, and Fola miner Harold Scott,
that the “lifetime benefits plan . . . was altogether
more valuable than benefits offered by the UMWA.” ECF
No. 36 ¶¶ 36-37. During the union organizing drive,
the defendants allegedly “repeated their previous
statements regarding the Lifetime Plan, specifically
providing written statements to the plaintiffs that:
‘This is a better deal than the UMWA negotiated in the
national contract. AND REMEMBER, IT DIDN'T COST YOU A
PENNY IN DUES OR ASSESSMENTS.'” Id. ¶
these assurances, the plaintiffs soon learned that they were
not in fact assured lifetime benefits under a single, unified
plan. Indeed, dating back to 1992, the SPDs for the various
benefit plans each contained a reservation of rights clause
that stated that CONSOL reserves the right to amend or
terminate the plans at any time for active employees and
current or future retirees. See, e.g., Second Lackovic Decl.
¶¶ 9-10, ECF No. 160-19. In accordance with the
reservation of rights clauses, CONSOL announced in late 2014
that it was terminating retiree health and welfare benefits
for all active employees on October 1, 2014. ECF No. 155-14.
Retirement-eligible employees could continue to receive
health and welfare benefits under the Retiree Benefits Plan
if they retired as of September 30, 2014, although the
Retiree Benefits Plan would terminate on January 1, 2020.
Id. Alternatively, active employees could continue
working and receive a one-time, lump sum transition payment
(to be paid on or around October 22, 2014), based on their
years of service, to support their healthcare coverage upon
retirement. Id. Employees who had retired prior to this
Fall 2014 announcement never had the option of receiving a
transition payment. Id.
later, CONSOL informed retired employees by letter that their
retiree benefits under the Retiree Benefits Plan would
terminate on December 31, 2015. ECF No. 155-16. For retirees,
such as named plaintiff Prater, who had previously elected to
retire after the Fall 2014 announcement, 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. First Lackovic
Decl. ¶ 15, ECF No. 67-5; Prater Dep. 125:2-127:5, ECF
No. 67-7; Samons Dep. 65:2-6, ECF No. 67-9.
plaintiffs now contend that the defendants violated ERISA by
representing, orally and in writing, the existence of a
single, unified retiree welfare benefits plan, which they
coin the “Lifetime Plan, ” consisting of lifetime
medical, prescription drug, dental, vision, and life
insurance coverage. ECF No. 156 at 1-3. They claim that the
oral representations along with the orientation and training
materials created a Lifetime Plan enforceable under ERISA
conditioned on the plaintiffs retiring at age fifty-five and
attaining ten years of credited service. ECF No. 103 ¶
2; ECF No. 36 ¶ 21.
is no SPD for a “Lifetime” Plan. The plaintiffs
assert that “Consol created the Lifetime Plan through
its slideshows and explanations that retiree welfare benefits
would vest” in retirement after working the requisite
number of years. ECF No. 162 at 13. The plaintiffs also
allege that the defendants withheld or inconsistently
distributed the separate SPDs for retirees, which also failed
to mention obligations under the Lifetime Plan. The
plaintiffs say that some employees never received the SPD for
the Retiree Benefits Plan and others only received the SPD
when they became eligible for retirement, which was the first
time they learned that there were any differences in the
welfare benefits of retirees versus active employees. ECF No.
103 ¶¶ 76-83, 138; ECF No. 36 ¶¶ 65-75;
ECF No. 156 at 10, 22.
Class Action Allegations
consolidated plaintiffs move for class certification on all
seven counts listed in the March 1, 2018 amended
complaint: (I) Breach of fiduciary duties as to the
Lifetime Plan under 29 U.S.C. § 1104(a)(1)(a)(i); (II)
Enforcement of the Lifetime Plan as an ERISA plan under 29
U.S.C. § 1132(a)(1-3); (III) Discrimination against
individual participants based on health-status related
factors under 29 U.S.C. § 1182; (IV) Failure to meet the
duty of disclosure by providing the plaintiffs with
incomplete SPDs that did not mention the Lifetime Plan's
benefits and obligations or with no SPDs at all under 29
U.S.C. § 1021(a)(1); (V) Failure to provide accurate and
comprehensive SPDs regarding the Lifetime Plan under 29
U.S.C. § 1022(a); (VI) Failure to accurately state the
Lifetime Plan's requirements with respect to eligibility
under 29 U.S.C. § 1022(b); and (VII) Failure to provide
an adequate SPD regarding the Lifetime Plan in a timely
manner under 29 U.S.C. § 1024(b)(1). ECF No. 156 at
plaintiffs originally proposed the following class definition
which would establish a class for retirees only:
All individuals who in 2014 or 2015 were participants in or
beneficiaries of a welfare benefits plan (medical,
prescription drug, dental, vision, and/or life insurance)
administered by CONSOL Energy (“Consol”), whose
receipt of such benefits was predicated on being a retiree
from Consol or the dependent of a retiree from Consol, and
whose receipt of such benefits terminated in the years of
2014 and 2015.
ECF No. 156 at 3. In their response to the plaintiffs'
supplemental motion for class certification, the defendants
argued that the class definition was too indefinite because
it ranged anywhere from 12, 000 to 16, 000 individuals based
on the allegations in the complaint. Defs.' Resp. Suppl.
Mot. Class Cert. 1-2, ECF No. 160 at 1-2 (“ECF No.
160”). The definition was also overbroad in that it
“would include individuals who were not impacted by
CONSOL's 2014 and 2015 decisions to terminate retiree
medical benefits” because their retiree medical
liabilities had already been transferred to a separate
entity, Murray Energy Corporation. Id. at 8-9. Thus,
the actual size of the putative class was only around 4, 000
individuals. ECF No. 162 at 3.
first time in their reply, the plaintiffs now seek to certify
the following two classes of CONSOL employees from mine sites
located in West Virginia, Kentucky, Virginia, Pennsylvania,
and “neighboring states:”
Class A: All individual plan participants, and their
dependents, who had qualified to enroll in a retiree welfare
benefits plan administered by CONSOL Energy
(“CONSOL”), but who had not yet enrolled in such
plan when CONSOL terminated their plan participation in the
years of 2014 and 2015.
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 3-4; ECF No. 156 at 12. Class A covers the six
“Lifetime Plan” Counts of I-II and IV-VII, and
Class B applies only to remaining Count III (Discrimination
based on Health Status-Related Factors). ECF No. 162 at 4.
Declaration of CONSOL's Director - Benefits Deborah
Lackovic (“Lackovic”) that is included in the
defendants' response notified the plaintiffs that
“[n]otwithstanding any differences in coverage between
the groups, ” Plan Number 583 encompassed all CONSOL
retirees, including UMWA retirees. Second Lackovic Decl.
¶¶ 4-5, 12, ECF No. 160-19. The plaintiffs contend
in their reply that they proposed this two-part class
definition “to account for excluding the UMWA
members” that Lackovic explained were still covered
under the Retiree Benefits Plan, designated Plan Number 583.
ECF No. 162 at 3. The defendants insist in their surreply
that the plaintiffs lack a proper justification for belatedly
expanding this class definition to include
retirement-eligible individuals in addition to retirees.
Defs.' Surreply, ECF No. 173 at 8-12 (“ECF No.
173”). They point out that nothing in their argument
regarding Murray Energy Corporation raised any issues related
to retirement-eligible individuals the plaintiffs now seek to
include in Class A. Id. at 10.
ordinary rule in federal courts is that an argument raised
for the first time in a reply brief or memorandum will not be
considered.” See Clawson v. FedEx Ground Package
Sys., Inc., 451 F.Supp.2d 731, 734 (D. Md. 2006) (citing
United States v. Williams, 445 F.3d 724, 736 n.6
(4th Cir. 2006)). However, district courts have discretion to
consider these issues, such as when the opposing party files
a surreply. Id. at 734-35 (citing Curry v. City
of Syracuse, 316 F.3d 324, 330 (2d Cir. 2003)). Inasmuch
as the court held an additional hearing addressing the
revised class definition and granted the defendants leave to
file a surreply, the plaintiffs' newly proposed class
definition will be evaluated.
parties vigorously dispute the proof relied upon by the
plaintiffs in attempting to meet their certification burden
under Rule 23 of the Federal Rules of Civil Procedure. The
court thus undertakes the “rigorous” analysis
required under United States Supreme Court precedent, see
Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350-51
(2011), nevertheless mindful of our court of appeals'
admonition that Rule 23 should be accorded a liberal
construction “which will in the particular case
‘best serve the ends of justice for the affected
parties and . . . promote judicial efficiency.'”
Gunnells v. Healthplan Services, Inc., 348 F.3d 417,
424 (4th Cir. 2003) (quoting In re A.H. Robins, 880
F.2d 709, 740 (4th Cir. 1989)).
seeking class certification must satisfy the requirements
found in Rule 23(a) of the Federal Rules of Civil Procedure
and demonstrate satisfaction of at least one of the
subdivisions of Rule 23(b). Amchem Prods., Inc. v.
Windsor, 521 U.S. 591, 614 (1997). The material
provisions of Rule 23(a) provide as follows:
(a) Prerequisites. One or more members of a class may sue or
be sued as representative parties on behalf of all members
(1) the class is so numerous that joinder of all members is
(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 defenses of the class; and
(4) the representative parties will fairly and adequately
protect the interests of the class.
Fed. R. Civ. P. 23(a); see generally Thorn v.
Jefferson-Pilot Life Ins. Co., 445 F.3d 311 (4th Cir.
the numerosity requirement does not mandate a specific number
of plaintiffs to maintain a class action. Brady v.
Thurston Motor Lines, 726 F.2d 136, 145 (4th Cir. 1984).
Rather, the “[p]racticability of joinder depends on
many factors, including, for example, the size of the class,
ease of identifying its numbers and determining their
addresses, facility of making service on them if joined and
their geographic dispersion.” Baltimore v.
Laborers' Int'l Union of N. Am., 67 F.3d 293
(4th Cir. 1995) (quoting Kilgo v. Bowman Transp.,
Inc., 789 F.2d 859, 878 (11th Cir. 1986)).
commonality and typicality requirements “both serve as
guideposts for determining whether under the particular
circumstances maintenance of a class action is economical and
whether the named plaintiff's claim and the class claims
are so interrelated that the interests of the class members
will be fairly and adequately protected in their
absence.” Soutter v. Equifax Info. Servs.,
LLC,498 Fed.Appx. 260, 264 (4th Cir. 2012) (internal
quotation marks omitted). These requirements “tend to
merge” with the adequacy of representation requirement,
see Amchem Prods., Inc., 521 U.S. at 626 n. 20,
which precludes class certification unless the class
representative “possess[es] the same interest ...