UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

WILLARD L. SLOAN, EUGENE J. 

WINNINGHAM, JAMES L. KELLEY, 

on behalf of themselves and a similarly 

situated class, 

Plaintiffs, 

v. 

BORGWARNER, INC., 

BORGWARNER FLEXIBLE 

BENEFITS PLANS and 

BORGWARNER DIVERSIFIED 

TRANSMISSION PRODUCTS, INC., 

Defendants. 

Case 2:09-cv-10918-PDB-MKM 

U.S. District Judge Paul D. Borman 

U.S. Mag. Judge Mona K. Majzoub 

DEFENDANTS’ REPLY BRIEF IN SUPPORT OF ITS 

MOTION FOR SUMMARY JUDGMENT 

Elisa Angeli Palizzi (P52088) 

MILLER, CANFIELD, PADDOCK 

 AND STONE, P.L.C. 

150 West Jefferson, Suite 2500 

Detroit, Michigan 48226 

Telephone : (313) 496-7635 

Facsimile: (313) 963-6420 

epalizzi@millercanfield.com 

Bobby R. Burchfield 

 Counsel of Record 

Nikesh Jindal 

KING & SPALDING LLP 

1700 Pennsylvania Ave., NW 

Washington, DC 20006 

Telephone: (202) 737-0500 

Facsimile: (202) 626-3737 

bburchfield@kslaw.com 

njindal@kslaw.com 

Counsel for BorgWarner Inc., BorgWarner Diversified Transmission Products 

Inc., and BorgWarner Flexible Benefits Plans

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TABLE OF CONTENTS 

TABLE OF AUTHORITIES ................................................................................. ii 

I. TACKETT AND THE CONTRACTS UNDERMINE VESTING. ................. 2

II. PLAINTIFFS’ ARGUMENTS FOR VESTING ARE FLAWED. ................ 5

III.WAL-MART PRECLUDES PLAINTIFFS’ DAMAGES CLAIM. ................ 6

CERTIFICATE OF SERVICE ..............................................................................................

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TABLE OF AUTHORITIES 

 Page(s) 

Cases 

Allison v. Citgo Petroleum Corp., 

151 F.3d 402 (5th Cir. 1998) ................................................................................ 7 

Celotex Corp. v. Cantrell, 

477 U.S. 317 (1986) .............................................................................................. 2 

Int’l Union, UAW v. Yard-Man, Inc., 

716 F.2d 1476 (6th Cir. 1983) .....................................................................passim

Litton Fin. Printing Div. v. NLRB, 

501 U.S. 190 (1991) .............................................................................................. 4 

M&G Polymers USA LLC v. Tackett, 

135 S. Ct. 926 (2015) ...................................................................................passim

Nolde Brothers Inc. v. Bakery Workers, 

430 U.S. 243 (1977) .............................................................................................. 4 

Reese v. CNH Industrial N.V., 

2015 WL 6865964 (E.D. Mich. Nov. 9, 2015) ..................................................... 2 

Sprague v. General Motors Corp., 

133 F.2d 388 (6th Cir. 1998) ............................................................................. 2,3 

Wal-Mart Stores, Inc. v. Dukes, 

131 S. Ct. 2541 (2011) ...................................................................................... 6, 7 

Yolton v. El Paso Tenn. Pipeline Co., 

435 F.3d 571 (6th Cir. 2006) ................................................................................ 5 

Statutes 

ERISA ........................................................................................................................ 3 

Other Authorities 

Rule 23(b)(1) and (b)(2) ............................................................................................. 6 

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BorgWarner’s opening brief confirmed this Court’s view that M&G 

Polymers USA LLC v. Tackett, 135 S. Ct. 926 (2015), “undeniably has changed, at 

least to some degree, the legal landscape on the issue of lifetime vesting of retiree 

health benefits in this Circuit.” Order at 2 [R. 145]. Indeed, “[t]o suggest that 

Tackett has no significant bearing on the Court’s [February 27, 2014 decision] . . . 

is simply untenable.” In its 2014 decision, this Court determined that the 

“interpretive ‘thumb on the scale’ in favor of vesting” mandated by the prior legal 

regime offset BorgWarner’s strong evidence countering vesting, id., and denied the 

cross motions for summary judgment because the vesting issue was effectively in 

equipoise. Now that Tackett has removed that interpretive weight and inferences, 

Plaintiffs can point to nothing in the agreements that fulfills their burden of 

proving vesting. Moreover, the language of the agreements precludes vesting. 

In response, Plaintiffs continue to rely on inferences repudiated in Tackett. 

They argue that the record contains just enough to avoid summary judgment for 

BorgWarner, although they now concede the record is insufficient to support 

summary judgment for Plaintiffs. In particular, they contend that the purported 

“tying” of retiree health insurance benefits to pension benefits supports vesting, 

even though the Supreme Court twice rejected that reasoning in Tackett. They also 

contend that the existence of specific durational limits for some benefits but not for 

retiree health benefits suggests the retiree health benefits are vested, but Tackett

also rejected that argument. Finally, they contend that denial of any retiree health 

benefits for later-hired employees must mean that the company agreed to provide 

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lifetime benefits for Plaintiffs. As shown below, this argument, too, is inconsistent 

with Tackett and illogical. 

Plaintiffs have come forward with no probative evidence to meet their 

burden of proving vesting. See Celotex Corp. v. Cantrell, 477 U.S. 317, 322 

(1986) (summary judgment for Defendant if Plaintiff cannot prove an essential 

element of its case). Accordingly, summary judgment for BorgWarner on the 

vesting issue is warranted. 

I. TACKETT AND THE CONTRACTS UNDERMINE VESTING. 

It is Plaintiffs’ burden to prove their benefits are vested, R. 147, Def. Br. at 

10. Tackett states that “‘an employer’s commitment to vest such benefits is not to 

be inferred lightly; the intent to vest must be found in the plan documents and must 

be stated in clear and express language.’” 135 S. Ct. at 937 (quoting Sprague v. 

General Motors Corp., 133 F.2d 388, 400 (6th Cir. 1998)). The plan documents 

must evidence a “clear manifestation of intent” not only to confer the benefit, but 

also to vest it. Id. at 936 (quoting Int’l Union, UAW v. Yard-Man, Inc., 716 F.2d 

1476, 1481 n.2 (6th Cir. 1983)).1

 

 

1 Justice Ginsburg’s concurring opinion has no precedential weight, especially to 

the extent it conflicts with the unanimous Opinion of the Court. See Def. Br. at 

12 n.4. Judge Duggan’s decision granting reconsideration in Reese v. CNH 

Industrial N.V., 2015 WL 6865964 (E.D. Mich. Nov. 9, 2015), now on appeal 

to the Sixth Circuit, misconstrued Tackett and improperly relied on Justice 

Ginsburg’s concurring opinion. Judge Duggan’s latest opinion recognizes that 

Tackett effected a significant change in the law.

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Plaintiffs concede the pertinent contracts contain no language meeting either 

of these requirements. Rather, they construe Tackett as stating only that a court 

must use “ordinary contract principles” to determine vesting. See, e.g., Pls. Opp. at 

2, 3 [R. 151]. But they misquote the Court, which required reference to “ordinary 

principles of contract law, at least when those principles are not inconsistent with 

federal labor policy.” 135 S. Ct. at 933 (emphasis added). This admonition 

followed a lengthy paragraph emphasizing the explicit Congressional decision not 

to mandate vesting of welfare benefits, giving employers freedom “under ERISA, 

for any reason at any time, to adopt, modify, or terminate welfare plans.” Id. 

Clear language is necessary to overcome this Congressional policy. 

Plaintiffs also assert that the Court’s quotation of Sprague merely 

“underscores Yard-Man’s deviation from ordinary contract law.” This makes no 

sense. The Court cited Sprague to contrast the Sixth Circuit’s treatment of vesting 

for non-collectively-bargained plans with its treatment of vesting for collectivelybargained plans. The Court’s plain message is that the Sixth Circuit erred by 

distinguishing the two situations; having repudiated the rules of interpretation set 

forth in Yard-Man for collectively-bargained plans, the only reasonable reading is 

that the Court approved the rules set forth in Sprague. Further, the next paragraph 

of Tackett states “we have already recognized that ‘a collective-bargaining 

agreement [may] provid[e] in explicit terms that certain benefits continue after the 

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agreement’s expiration.’” Id. at 937 (citation omitted).2 The Court further 

confirmed that explicit language is necessary for vesting by emphasizing the 

“traditional principle that courts should not construe ambiguous writings to create 

lifetime promises,” id. at 936, “when a contract is silent as to duration of retiree 

benefits a court may not infer that the parties intended those benefits to vest for 

life,” id. at 937, and that courts must give effect to general duration clauses, id. at 

937. 

Next, Plaintiffs claim that Tackett “plainly contemplated” evidence about 

industry custom and usage. To the contrary, in the quoted language the Tackett

Court was criticizing Yard-Man for creating presumptions favoring vesting based 

on “no record evidence indicating that employers and unions in that industry 

customarily vest retiree benefits,” and then extending those presumptions 

“indiscriminately across industries.” 135 S. Ct. at 935. This hardly mandates a 

broad-based trial about industry custom in every vesting case. Such a broad 

inquiry would undermine the Court’s holding and rules of construction set forth in 

the Opinion. In any event, Plaintiffs have come forward with no evidence of 

industry custom, and thus, have not carried their burden. 

 

2 The Court quoted Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 207 (1991). 

The quoted passage addressed whether employees laid off after expiration of 

the CBA had a right to enforce their seniority protections in the expired CBA; 

the Court held that those protections did not survive expiration. Plaintiffs cite 

other language from Litton, as well as Nolde Brothers Inc. v. Bakery Workers, 

430 U.S. 243 (1977), relating to different issues. If the Court had intended to 

quote other language from Litton, it would have done so. 

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“Vesting” means that “someone already retired under a particular CBA 

continues to receive the benefits provided therein despite the expiration of the 

agreement itself.” Yolton v. El Paso Tenn. Pipeline Co., 435 F.3d 571, 581 (6th 

Cir. 2006). But, as Plaintiffs concluded, their benefits were renegotiated from 

contract to contract, such that they derived their benefits from the HIA currently in 

effect rather than the one in effect when they retired. (Defs. Br. 6, SUMF para 

11).3 This is antithetical to “vesting,” as are the specific durational limits on the 

benefits, id. at 16-17,4 the general duration clauses, id. at 18, and the two 

“agreement[s] to disagree,” id. at 19-21. In short, the evidence defeating vesting is 

undisputed and compelling.

II. PLAINTIFFS’ ARGUMENTS FOR VESTING ARE FLAWED. 

None of Plaintiffs’ three arguments in favor of vesting survived Tackett. 

First, they rely on the so-called “tying” of health benefits to pension benefits. Pls. 

Opp’n 10. But Tackett twice addressed, and twice rejected this argument. 135 S. 

Ct. at 935, 936-37; see also Defs. Br. 22. Moreover, the contractual provision here 

(quoted at Defs. Br. 4-5), speaks to “entitlement” to health benefits (i.e., 

eligibility), but says nothing about the duration of those benefits. See R. 96-1, 

1989 HIA art. 8 § 1(A). This eligibility language ensures that Plaintiffs who retire 

 

3 Plaintiffs acknowledge that they incurred increased deductibles and stop losses, 

in successive HIAs, underscoring that benefits were not vested and 

unchangeable. See Pls. Opp’n 15.

4 The contract provides that “[t]he coverages provided under this Exhibit A 

terminate on the date . . . the Agreement is terminated.” (R. 96-1, Defs.’ Mot. 

Ex. 1., 1989 HIA, App. A, Ex. A, § 2(M)(2)). 

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during the agreement and are eligible for a pension will receive health benefits 

until expiration of the agreement. It says nothing about duration of health benefits 

beyond the CBA. 

Second, Plaintiffs argue that specific durational limits on other benefits, and 

the absence of specific limits on retiree health benefits, indicate an intent to vest. 

Pls. Opp’n 11. As shown (Defs. Br. 17, 23), Tackett expressly rejected this 

argument. Moreover, the effect of the specified time limits for other benefits is to 

remove them from the general durational limit. The absence of a specific limit for 

retiree benefits means that they remain subject to that general limit.

Finally, Plaintiffs claim that an agreement denying health benefits to laterhired employees when they retire somehow suggests that Plaintiffs were promised 

lifetime vested benefits. Pls. Opp’n 12-14. Plaintiffs again rely on inferences 

repudiated in Tackett. More pointedly, the agreements provide that later-hired 

employees lose all health benefits the day they retire regardless of how much time 

remains on the CBA, whereas Plaintiffs were to continue receiving benefits for the 

duration of that existing CBA. This distinction says nothing about whether health 

benefits for Plaintiffs extend beyond the relevant CBAs and HIAs. 

III. WAL-MART PRECLUDES PLAINTIFFS’ DAMAGES CLAIM. 

Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) held that Rule 

23(b)(1) and (b)(2) classes are inappropriate vehicles for awarding individualized 

damages on a class-wide basis. Plaintiffs note that the Court left open the prospect 

that such classes might obtain “monetary relief [that is] incidental to the injunctive 

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or declaratory relief.” Id. at 2557. But that is not this case.5 To recover damages 

here, each class member would need to prove that his or her individual out of 

pocket spending was above the amounts that he or she would have spent without 

the plan changes. Trial on those issues would not be “incidental,” but would 

“predominate” over the injunctive relief.6

Respectfully Submitted, 

Elisa Angeli Palizzi (P52088) 

MILLER, CANFIELD, PADDOCK 

 AND STONE, P.L.C. 

150 West Jefferson, Suite 2500 

Detroit, Michigan 48226 

Telephone : (313) 496-7635 

Facsimile: (313) 963-6420 

epalizzi@millercanfield.com 

/s Bobby R. Burchfield 

Bobby R. Burchfield 

 Counsel of Record 

Nikesh Jindal 

KING & SPALDING LLP 

1700 Pennsylvania Ave., NW 

Washington, DC 20006 

Telephone: (202) 737-0500 

Facsimile: (202) 626-3737 

bburchfield@kslaw.com 

njindal@kslaw.com 

Counsel for BorgWarner Inc., BorgWarner Diversified 

Transmission Products Inc., and BorgWarner Flexible Benefits Plans

 

5 The Court did not approve Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th 

Cir. 1998), but construed it as allowing “damages that flow directly from 

liability to the class as a whole” and as not requiring “additional hearings to 

resolve the disparate merits of each individual’s case.” 131 S. Ct. at 2560. 

6 Plaintiffs are correct (Pls. Opp’n 16-17) that the Court decided to address the 

vesting issues first, and then address, if necessary, whether the changes in 

benefits were reasonable. 

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CERTIFICATE OF SERVICE 

I hereby certify that on December 11, 2015, I electronically filed the 

foregoing with the Clerk of the Court using the ECF system which will send 

notification of such filing to all ECF participants. 

/s Bobby R. Burchfield 

Bobby R. Burchfield 

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