Shy v. Navistar International Corp.

291 F.R.D. 128, 2013 WL 485808, 2013 U.S. Dist. LEXIS 16236
CourtDistrict Court, S.D. Ohio
DecidedFebruary 6, 2013
DocketNo. 3:92cv333
StatusPublished
Cited by3 cases

This text of 291 F.R.D. 128 (Shy v. Navistar International Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shy v. Navistar International Corp., 291 F.R.D. 128, 2013 WL 485808, 2013 U.S. Dist. LEXIS 16236 (S.D. Ohio 2013).

Opinion

DECISION AND ENTRY SUSTAINING THE SUPPLEMENTAL BENEFIT COMMITTEE OF THE NAVISTAR INTERNATIONAL TRANSPORTATION CORPORATION RETIREE SUPPLEMENTAL BENEFIT PROGRAM’S MOTION TO INTERVENE (DOC. #394) UNDER RULE 24 OF THE FEDERAL RULES OF CIVIL PROCEDURE; SAID INTERVENOR IS ORDERED TO FILE A PLEADING, IN ACCORDANCE WITH RULE 24(c), IN ORDER TO BRING ITS MOTION INTO COMPLIANCE WITH THE RULE’S PROCEDURAL REQUIREMENTS FOR INTERVENTION.

WALTER H. RICE, District Judge.

The Supplemental Benefit Committee of the Navistar International Transportation Corporation Retiree Supplemental Benefit Program (the “Committee”) is the administrator and fiduciary of the Supplemental Benefit Program and Trust (“Supplemental Program”), a creation of the Settlement Agreement approved by this Court on June 8, 1993. Doe. # 327. The Settlement Agreement terminated the above-captioned class action which retired employees and their union representatives had brought against Defendant Navistar International Corporation (“Navistar”), after the company had reduced the medical benefits of its retired employees.

Pending before the Court is the Committee’s Motion to Intervene pursuant to Rule 24 of the Federal Rules of Civil Procedure. For the reasons set forth below, the Court SUSTAINS the Committee’s Motion to Intervene. However, the Committee did not file a pleading with its original motion to intervene, as required by Rule 24(e). Therefore, the Court ORDERS the Committee to file such a pleading with the Court so that its motion complies with all procedural requirements of Rule 24. Said pleading must be filed within ten (10) calendar days from the date of this Decision and Entry.

I. BACKGROUND AND PROCEDURAL HISTORY

This litigation arose out of a decision by Navistar, announced on July 28, 1992, to make major reductions in the insurance and health benefits offered to the company’s retired employees and their dependents. Doe. # 324 at 1. During the 1980s, Navistar suffered a decline in revenue, the fate of many American manufacturing concerns during that decade and the decades since. Id. By 1992, Navistar’s annual revenue had declined to $3.8 billion after reaching highs during the late 1970s of $8.25 billion. Id. The company reduced its workforce during the same time period, shrinking its base of employees from over 100,000 to approximately 13,500 by 1992. Id. In addition, Navistar shuttered or sold many of its manufacturing facilities as it “downsized” its workforce. Id. Even as it did so, the company retained the obligation to pay for the insurance and health benefits it owed to its retired employees. Id. at 1-2.

However, by 1992, Navistar no longer had the financial ability to provide the retirees’ benefits and at the same time remain solvent. Id. at 5. Negotiations between the company and the retirees’ union occurred during much of that year. Id. at 5. The talks broke down, in July of 1992, after Navistar announced that it was unilaterally making drastic changes to the retirees’ health insurance benefits. Id. at 6-8. The Navistar retirees filed suit as a class in August of 1992, along with a number of unions that had represented them [132]*132during their years of employment with the company. Id. at 9. After hundreds of meetings, the parties reached a Settlement Agreement. Id. at 10.

The Court’s Opinion of May 27, 1993, announced its factual findings and certified the class of retirees. Doc. # 324. In its Opinion, the Court described the Settlement Agreement in part as follows (the passage is quoted at length because of its particular relevance to the motion before the Court):

The settlement agreement contains two plans, the Base Plan and the Supplemental Plan. The Base Plan provides basic life and health insurance benefits to retirees. Nav-istar is obligated to provide $1 billion to the Base Plan. Under the Base Plan, retirees’ health and life insurance benefits would be reduced. For instance, company-provided life insurance would be reduced to a maximum of $5,000. In addition, retirees would be required to pay monthly premiums for their health insurance, as well as deductibles and, for those under the age of 65, co-payments. However, the Supplemental Plan, which is a truly innovative concept, turns over much of the ownership of Navistar to the very retirees who must sacrifice benefits under the settlement agreement, a Plan which could well alleviate some (perhaps as much as one-half or more) of the hardship which the settlement will require retirees to endure. The Supplemental Plan is a trust which will be administered by retirees and their representatives. Navistar must contribute 50% of the shares of its common stock and a portion of its future profits to the trust established under the Supplemental Plan. The income generated by the Supplemental Plan can be used, for instance, to reduce the premiums which retirees must pay for their health insurance. Thus, if the retirees’ sacrifices allow Navistar to return to prosperity, the retirees will own a significant share of the consequent gain in the value of the company. The $1 billion which Navistar must contribute to the Base Plan will reduce retiree health and life insurance benefits to 38% of the former value of those benefits, $2.6 billion; however, conservative projections set the value of the stock and Navistar’s profits which will be contributed to the Supplemental Plan at $750 million; thus, the value of the settlement agreement could rise to 68% of the former amount of $2.6 billion, or even more. Indeed, 67% of the value of the restructured Navistar’ will be in the Base and Supplemental Plans, and thus be owned by the retirees.

Id. at 10-11 (emphasis added).

On June 8, 1993, the Court approved the Settlement Agreement in its Supplemental Opinion (Doe. # 326), and entered final judgment as a consent decree (Doc. # 327).

On March 23, 2012, the Committee filed a Motion to Intervene under Rule 24 of the Federal Rules of Civil Procedure, “seeking] to intervene in order to request this Court to enforce the terms of the settlement agreement” pertaining to Navistar’s obligations to the Supplemental Program and the Committee. Doc. # 394. Navistar filed a Memorandum in Opposition to the Committee’s Motion to Intervene on April 25, 2012. Doc. # 404. The Committee filed its Reply to Navistar’s Memorandum in Opposition to the Motion to Intervene on April 27, 2012. Doe. #405.

II. ANALYSIS

Under Rule 24 of the Federal Rules of Civil Procedure, a non-party may move to intervene in a civil action. The rule provides for two types of intervention: 1) intervention of right, which requires that the Court allow a non-party to intervene, and 2) permissive intervention, which is granted at the Court’s discretion. Fed.R.Civ.P. 24(a), (b).

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291 F.R.D. 128, 2013 WL 485808, 2013 U.S. Dist. LEXIS 16236, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shy-v-navistar-international-corp-ohsd-2013.