Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-05264/USCOURTS-cand-4_05-cv-05264-7/pdf.json

Nature of Suit Code: 720
Nature of Suit: Labor Management Relations Act
Cause of Action: 29:185 Labor/Mgt. Relations (Contracts)

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

BERENICE ANGOTTI, DANIEL BORRERO,

JACK GRIFFITH, KENT D. RUSSELL, SR.,

and BERNARD W. SCHREINER, on behalf

of themselves and all others

similarly situated,

Plaintiffs,

v.

REXAM, INC. and REXAM, INC., PENSION

AND BENEFITS COMMITTEE,

Defendants.

 /

No. C 05-5264 CW

ORDER GRANTING

PLAINTIFFS'

MOTION FOR CLASS

CERTIFICATION AND

APPOINTMENT OF

CLASS COUNSEL

Plaintiffs Berenice Angotti, Daniel Borrero, Jack Griffith,

Kent D. Russell, Sr., and Bernard W. Schreiner have filed a motion

(docket number 129) for certification of two Plaintiff Classes. 

Defendants Rexam, Inc. and Rexam, Inc., Pension and Benefits

Committee (collectively, Rexam) oppose the motion in part and

propose dividing one of the classes into two subclasses. Rexam

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 1 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 2

gives notice of non-opposition to certification of the other class

and appointment of class counsel. The matter was decided on the

papers. Having considered all of the papers filed by the parties,

the Court GRANTS Plaintiffs' motion.

BACKGROUND

Plaintiffs are retired former employees of Rexam who are

eligible for health and other welfare benefits administered by

Rexam's Pension and Benefits Committee. Plaintiffs seek

certification of two classes consisting of retirees and the spouses

or surviving spouses of retirees who retired between 1960 and the

present, and who have had their retiree benefits unilaterally

terminated by Rexam: 

The San Leandro/Modesto Class (SLM Class) is composed of

retirees, and spouses and surviving spouses of retirees,

who retired from the company's San Leandro or Modesto,

California facilities and were covered by an independent

agreement negotiated between an International

Association of Machinists and Aerospace workers (IAM)

affiliate and Rexam or a predecessor. 

The Kent/Vancouver/Gary Class (KVG Class)consists of

retirees, and spouses and surviving spouses of retirees,

who retired from Kent or Vancouver, Washington or Gary,

Indiana facilities covered by an independent agreement

negotiated between an IAM affiliate and Rexam or a

predecessor. 

Plaintiffs estimate that there are approximately 273 members

of the SLM Class and 72 members of KVG Class. (Plaintiff's Memo.

at 10.) Rexam does not oppose the certification of the KVG Class

and argues only that the SLM Class should be split into two

subclasses pursuant to Rule 23(c)(4)(B).

Effective January 1, 2002, Rexam unilaterally changed the

prescription drug benefits provision of its retiree health plans,

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 2 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 3

raising out-of-pocket costs for Plaintiffs and members of the two

proposed classes. (Complaint ¶ 25; Answer ¶ 25.) In

correspondence sent in September, 2005 to the members of both

classes, Rexam announced that all medical and prescription drug

benefits would be discontinued for Medicare-eligible retirees,

effective January 1, 2006. (Martorana Decl. ¶ 11.) On January 1,

2006, Rexam terminated all benefits as previously announced. 

(Second Amended Answer and Counterclaim ¶ 44.)

Plaintiffs and the two proposed classes contend that Rexam's

unilateral changes to their retiree health benefits violated the

applicable collective bargaining agreements (CBAs) and the retiree

health plans that Rexam was required to maintain pursuant to the

CBAs. Plaintiffs have asserted claims against Rexam under Section

301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185,

and Section 502 of the Employee Retirement Income Security Act of

1974, as amended, 29 U.S.C. § 1132. 

The independent CBAs provide that retirees eligible for

pensions will also receive health benefits for themselves, their

spouses and their surviving spouses. Defendants contend that the

SLM Class should be divided into two subclasses because a 1991

change in the language used in the San Leandro and Modesto

facilities' independent CBA might create a conflict of interest

between Plaintiffs and some absent class members.

The San Leandro and Modesto plants' CBAs at all relevant times

set forth the total maximum medical benefits to be received "during

the life of the employee" and "during the life of the spouse . . .

so long the spouse does not remarry in the event of the pensioned

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 3 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 4

employee's death." (June 14, 2006 Order at 2). The most recent

San Leandro and Modesto plant retiree group insurance plan (the

Post-1991 Plan) took effect on May 1, 1991. (Tedrow Decl., Exh. 

A-2.) This plan advised, "Your coverage is continued for the rest

of your life," and that, if the retiree should predecease his or

her spouse, the spouse's coverage would "be continued for the

remainder of their life or remarriage." (June 14, 2006 Order at

3.) The plan for San Leandro and Modesto plant retirees in effect

before the Post-1991 Plan, (the Pre-1991 Plan) in contrast,

provided, "Insurance for yourself and your dependent will terminate

when you are no longer eligible or if the group policies

terminate." (June 14, 2006 Order at 24.)

Despite the difference in language used in the plans, it is

Plaintiffs' contention that both the Pre-1991 Plan and the Post1991 Plan provide for vested lifetime benefits. (Plaintiffs'

Complaint ¶¶ 41-42.) In support thereof, Herman Howell, a former

San Leandro plant employee who became the local IAM business

representative in 1985 and the chief negotiator for the IAM’s San

Leandro and Modesto employees in 1988, declares, 

It has always been my understanding that retiree health

benefits were guaranteed for the lives of the retiree and his

eligible spouse unless the spouse remarried. By the time I

became involved in negotiations, retiree health benefits had

been provided under the collective bargaining agreement for

several years and most of the discussions about these benefits

were negotiations over improvement in these benefits, not

discussions about the duration of these benefits, which the

Union believed was long settled.

Howell Decl. ¶ 6. 

Most of the Kent, Vancouver and Gary CBAs explicitly promise,

“Major Medical coverage will be extended to cover retired employees

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 4 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 5

for their lifetime.” As noted above, Rexam does not oppose

certification of the Kent/Vancouver/Gary class. 

LEGAL STANDARD

A court may certify a class action only if (1) the class

is so numerous that joinder of all members is impracticable,

(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). In addition

to meeting the requirements of Rule 23(a), to bring a class

action, a plaintiff must also satisfy the requirements of one

of the subsections of Rule 23(b).

The party seeking class certification bears the burden of

demonstrating that each element of Rule 23(a) is satisfied. 

Doninger v. Pacific N.W. Bell, Inc., 564 F.2d 1304, 1308 (9th Cir.

1977). The Court may certify a class only if, after "rigorous

analysis," it determines that the party seeking certification has

borne its burden. General Tel. Co. v. Falcon, 457 U.S. 147, 158-61

(1982); Hanlon v. Dataproducts Corp., 976 F.2d 497, 509 (9th Cir.

1992). This determination, however, is committed to the district

court's discretion. Califano v. Yamasaki, 442 U.S. 682, 703

(1979). 

For the purposes of determining class certification, the court

must take the allegations in the complaint as true. Blackie v.

Barrack, 524 F.2d 891, 901 n.14 (9th Cir. 1975). Although some

inquiry into the merits is necessary, it is improper to advance a

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 5 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 6

decision on the merits at the certification stage. Eisen v.

Carlisle & Jacqueline, 417 U.S. 156, 1677-78 (1974).

DISCUSSION

I. Certification of the San Leandro/Modesto Class

Rexam opposes certification of the SLM Class on the grounds

that the proposed class does not meet the requirements of Rule

23(a)(2)-(4). It therefore proposes that the SLM Class be divided

into subclasses.

A. Numerosity

"The prerequisite of numerosity is discharged if 'the class is

so large that joinder of all members is impracticable.'" Hanlon,

150 F.3d at 1019 (quoting Fed. R. Civ. P. 23(a)(1)). It would be

impracticable for all 273 members of the proposed SLM class to be

joined in the present action. Rexam does not deny the numerosity

of the SLM Class. The Court finds that this requirement is

satisfied.

C. Commonality

"A class has sufficient commonality 'if there are questions of

fact and law which are common to the class.'" Hanlon, 150 F.3d at

1019 (quoting Fed. R. Civ. P. 23(a)( 2)). "All questions of fact

and law need not be common to satisfy this rule. The existence of

shared legal issues with divergent factual predicates is

sufficient, as is a common core of salient facts coupled with

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 6 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 7

disparate legal remedies within the class." Hanlon, 150 F.3d at

1019.

Rexam argues that the claims of the proposed class members

lack commonality because the benefits owed to class members derive

from agreements containing different language. Relying on Hanlon,

Rexam argues that all class members' claims must stem from the same

source and therefore must derive from the same contract language. 

However, Plaintiffs allege in their complaint that all class

members' benefits were intended to last for their lifetimes. 

(Plaintiffs' Complaint ¶¶ 41-42.) The Court may not decide this

issue at the certification stage but must accept this allegation as

true. Blackie, 524 F.2d at 901 n.14. Therefore, the Court finds

for the purposes of this motion that the question of whether

Rexam's termination of benefits was lawful is common to all members

of the SLM Class. Additionally, the factual question of whether

Rexam terminated these benefits is common to all class members. 

Because there are issues of fact and law common to all class

members, the Court finds that the proposed class meets the

commonality requirement of Rule 23(a)(2).

C. Typicality

"The typicality prerequisite of Rule 23(a) is fulfilled if

'the claims or defenses of the representative parties are typical

of the claims or defenses of the class.'" Hanlon, 150 F.3d at 1020

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 7 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 8

(quoting Fed. R. Civ. P. 23(a)(3)). The test for typicality is 

"whether other members have the same or similar injury, whether the

action is based on conduct which is not unique to the named

plaintiffs, and whether other class members have been injured by

the same course of conduct." Hanon v. Dataproducts Corp., 976 F.2d

497, 508 (9th Cir. 1992) (quoting Schwartz v. Harp, 108 F.R.D. 279,

282 (C.D. Cal. 1985)). "[R]epresentative claims are 'typical' if

they are reasonably co-extensive with those of absent class

members; they need not be substantially identical." Hanlon, 150

F.3d at 1020. 

Rexam argues that because all of the named Plaintiffs retired

under Post-1991 Plans, their claims are not typical of the claims

of SLM class members who retired under Pre-1991 Plans. However,

Plaintiffs claim to have suffered the same injury as the rest of

the SLM class: wrongful termination of benefits. Additionally,

Plaintiffs claim that the same course of conduct, Rexam's 2002

prescription drug co-pay change and 2006 termination of benefits,

injured themselves and all members of the SLM class. Rexam does

not argue that the action is based on conduct unique to the

Plaintiffs. Therefore, the Court finds that Plaintiffs and the

proposed SLM class meet the typicality requirement of Rule

23(a)(3).

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 8 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 9

D. Adequacy

"The final hurdle interposed by Rule 23(a) is that 'the

representative parties will fairly and adequately protect the

interests of the class.'" Hanlon, 150 F.3d at 1020 (quoting Fed.

R. Civ. P. 23(a)(4)). "Resolution of two questions determines

legal adequacy: (1) do the named plaintiffs and their counsel have

any conflicts of interest with other class members and (2) will the

named plaintiffs and their counsel prosecute the action vigorously

on behalf of the class?" Id. Factual differences in the merits of

the named plaintiffs' underlying claims do not necessarily affect

the plaintiffs' ability vigorously to represent the class. Walters

v. Reno, 145 F.3d 1032, 1046 (9th Cir. 1997). 

Rexam argues that Plaintiffs' goals are counter to those of

class members who retired under Pre-1991 Plans because the language

in the Pre-1991 Plans could be used to support the argument that

only the Post-1991 Plans provide for vested lifetime benefits. 

This would incidentally prove that the Pre-1991 Plans did not

provide for lifetime benefits and thereby harm the interests of

class members who retired under Pre-1991 Plans. 

However, Plaintiffs have other evidence that Post-1991 Plans

provided lifetime benefits for retirees, such as Mr. Howell's

testimony. Rexam's speculation that Plaintiffs' interests might

become adverse to Pre-1991 class members is therefore not supported

by the record.

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 9 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 10

Rexam relies on Mayfield v. Dalton, 109 F.3d 1423 (9th Cir.

1997). In Mayfield, however, the court found that there were

undoubtedly members of the proposed class who were in favor of the

challenged practice and would want it to continue. Id. at 1427. 

Mayfield is distinguishable because Plaintiffs are pursuing

recovery of lifetime benefits for the entire class. There is no

reason why class members who retired under Post-1991 Plans would

favor Rexam's termination of other class members' benefits. There

are no class members who stand to benefit, financially or

otherwise, from the termination of benefits. 

Plaintiffs and their counsel have shown that they will be able

to represent vigorously the interests of the class. Plaintiffs

from the SLM Class have declared that they are willing and able to

prosecute this case and suffer no impairments that would prevent 

them from doing so. (Angotti Decl. ¶¶ 9,10; Borrero Decl. 

¶¶ 11,12; Griffith Decl. ¶¶ 10,11.) Accordingly, the Court finds

that Plaintiffs have met the adequacy requirement of Rule 23(a)(4). 

E. Rule 23(b)(1)

In addition to the requirements of Rule 23(a), a proposed

class must also meet one of the three requirements of Rule 23(b).

Plaintiffs seek to have the class certified under Rule 23(b)(1) or

(2). To certify a class pursuant to Rule 23(b)(1), a court must

find that rulings in separate actions would establish incompatible

standards of conduct for the defendant or that rulings in the first

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 10 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 11

in a series of actions would alter the substantive rights of those

with similar claims. Fed. R. Civ. P. 23(b)(1). If each of the 

273 proposed SLM class members were forced to adjudicate his or her

claim individually, there is a significant risk of inconsistent

judgments. Therefore, the Court finds that Plaintiffs have met the

requirements of Rule 23(b)(1).

F. Division of the class into subclasses is inappropriate at

the class certification stage 

As noted above, it is improper to advance a decision on the

merits at the certification stage. Rexam's argument that the SLM

Class should be divided into two subclasses presumes that the Pre1991 Plan does not provide for vested lifetime benefits. However,

the Court has yet to make that finding and to do so at this stage

would be an inappropriate decision on the merits. Without this

assumption, there is no basis for differentiating between class

members who retired under Pre-1991 Plans and those who retired

under Post-1991 Plans. Therefore, dividing the SLM Class into

subclasses is inappropriate at this stage.

II. Certification of the Kent/Vancouver/Gary Class

Rexam does not oppose certification of the Kent/Vancouver/Gary

class (KVG class). The Court finds that Plaintiffs have met the

requirements for class certification of Rule 23(a) and (b).

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 11 of 12
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 12

III. Appointment of Class Counsel

Rexam does not oppose appointment of Sally M. Tedrow, Francis

J. Martorana and Jennifer R. Simon of the law firm of O'Donoghue &

O'Donoghue LLP as counsel for the SLM and KVG Classes. The Court

finds that the proposed class counsel have met the requirements for

appointment of class counsel of Rule 23(g). 

CONCLUSION

 For the foregoing reasons, the Court grants Plaintiffs'

motion for certification of the classes as Plaintiffs have defined

them and appointment of class counsel (Docket No. 129). 

IT IS SO ORDERED.

Dated: 9/20/06

 

CLAUDIA WILKEN

United States District Judge

Case 4:05-cv-05264-CW Document 139 Filed 09/20/06 Page 12 of 12