Sprague v. General Motors Corp.

804 F. Supp. 931, 15 Employee Benefits Cas. (BNA) 2881, 1992 U.S. Dist. LEXIS 16536, 1992 WL 311911
CourtDistrict Court, E.D. Michigan
DecidedOctober 23, 1992
Docket90-CV-70010
StatusPublished
Cited by11 cases

This text of 804 F. Supp. 931 (Sprague v. General Motors Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sprague v. General Motors Corp., 804 F. Supp. 931, 15 Employee Benefits Cas. (BNA) 2881, 1992 U.S. Dist. LEXIS 16536, 1992 WL 311911 (E.D. Mich. 1992).

Opinion

OPINION AND ORDER

FEIKENS, District Judge.

A putative plaintiff class of approximates ly 40,000 non-union salaried retirees of the General Motors Corporation (“GM”) sues under the Employee Retirement Income Se *932 curity Act of 1974 (“ERISA”). They seek a judgment which would require GM to furnish them with basic health care-coverage at no cost to them for their life-times,■ and for the: life-times of their surviving spouses. At issue is whether plaintiffs are entitled to a jury trial. In this opinion, I find that plaintiffs are not entitled to a jury trial under ERISA or under the Seventh Amendment to the United States Constitution.

1. Procedural Background

On August 8, 1989, plaintiff Robert D. Sprague, together- with 113 other named plaintiffs, filed a complaint in the United States District Court for the Central District of California against their previous employer, GM, alleging that the automaker had violated their rights under ERISA, 29 U.S.C. §§ 1001 et seq. The named plaintiffs' filed the complaint as a purported class action pursuant to Federal Rule of Civil Procedure 23, and claimed to represent over 84,000 salaried retirees or their surviving spouses. Pursuant to 28 U.S.C. § 1404(a), Judge William D. Keller ordered the action transferred to this court on November 27, 1989.

The essence of the complaint is that GM violated the terms of its health care plan, thereby violating ERISA §§ 402, 502(a)(1)(B) and 502(a)(3), 29 U.S.C. §§ 1102, 1132, when it reduced or eliminated certain health care coverages in 1988. (Complaint, Count II). Plaintiffs also claim that the changes implemented in 1988 constituted a breach of GM’s fiduciary duties arising under section 404 of ERISA, 29 U.S.C. § 1104 (Complaint, Count III). Plaintiffs assert separate causes of actions, arising from the same changes in health care coverages, based, on breach of contract and equitable or promissory estoppel claims arising under “ERISA federal common law.” (Complaint, Counts IV and V). Finally, plaintiffs allege that GM violated the requirements of ERISA by failing to maintain its health care plan pursuant to a written instrument, ERISA § 402(a), 29 U.S.C. § 1102(a); refusing or failing to supply requested information, ERISA § 502(c), 29 U:S.C. § 1132(c); and failing to comply with requirements for summary plan descriptions.

GM moved for summary judgment on Count II, arguing that the coverage modifications instituted in 1988 do not constitute violations of the plan because retirees did not have vested benefits under the plan. Plaintiffs moved for summary judgment on Counts IV and V of the Complaint in favor of early retirees, based on bilateral contracts which allegedly contain GM’s promise to provide early retirees with vested health care benefits. GM moved to dismiss Count III.

I granted GM’s motion for summary judgment as to the general retirees but denied it as to the early retirees. Sprague v. General Motors Corp., 768 F.Supp. 605 (E.D.Mich.1991). I found that within the plan provisions, GM unambiguously reserved the right to change the plan; GM did not agree in the general plan documents to provide salaried employees with health care benefits which vested upon retirement for purposes of ERISA. However, I did not foreclose the possibility that GM bilaterally contracted to provide vested benefits to early retirees. I noted that it appears that some early retirement agreements contain GM’.s promise to furnish early retirees with a particular level of health care coverage in exchange for the early retirees' promise, among other things, to release GM from liability for certain causes of action. I commented that the early retirement agreements may be enforceable under ERISA as independent bilateral contracts or as modifications of GM’s health care benefit plan.

Plaintiffs’ motion for summary judgment was denied. Summary judgment is precluded for or against the early retirees as a class because there are genuine issues of material fact and law as to: (1) which “early retirement agreements” constitute bilateral contracts; (2) the terms of those contracts; and (3) whether the 1988 changes constitute a breach of those contracts. I granted GM’s motion to dismiss Count III. For a more detailed discussion of the procedural history and factual scenario, see my earlier opinion. Id.

*933 On November 4, 1991, I issued a class certification order establishing four subclasses of early retirees: (1) those who signed “long form” statements of acceptance; (2) those who signed “short form” statements of acceptance; (3) those who signed “statements. of intent” to retire; and (4) those for whom no such documents can be found.

On August 11, 1992, I set trial for November 16, 1992, on Counts II and IV with regard to sub-classes (1) and (2). Plaintiffs demand a jury trial. Deféndant filed a motion to strike plaintiffs’ demand for jury trial. Parties filed briefs on this issue, and a hearing was held on October 8, 1992. Following this hearing, the parties submitted supplemental briefs, and another hearing was held on October 16, 1992. For the reasons set forth below, defendant’s motion to strike plaintiffs’ demand for jury trial is granted.

II. Analysis

The Seventh Amendment to the Constitution states: “In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.” The Amendment provides for a jury trial where the relief sought is legal rather. than equitable in nature. Chauffeurs, Teamsters, and Helpers, Local 391 v. Terry, 494 U.S. 558, 565, 110 S.Ct. 1339, 1344, 108 L.Ed.2d 519 (1990). To determine the Seventh Amendment’s applicability:

[T]he “legal” nature of an issue is determined by considering, first, the pre-merg-, er custom with reference to such questions; second, the remedy sought; and, third, the practical abilities and limitations of juries.

Ross v. Bernhard, 396 U.S. 531, 538 n. 10, 90 S.Ct. 733, 738 n. 10, 24 L.Ed.2d 729 (1970). The emphasis remains on the second factor. Terry, 494 U.S. at 565, n. 4, 110 S.Ct. at 1345 n. 4.

Plaintiffs cite my earlier decision in Sprague, 768 F.Supp. at 612, for the proposition that their claims are federal common law claims under ERISA for breach of contract, or alternatively, ERISA section 502 claims for breach of the plan.

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804 F. Supp. 931, 15 Employee Benefits Cas. (BNA) 2881, 1992 U.S. Dist. LEXIS 16536, 1992 WL 311911, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sprague-v-general-motors-corp-mied-1992.