UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

WILLARD L. SLOAN, EUGENE J.

WINNINGHAM, and JAMES L. KELLEY, 

on behalf of themselves and a similarly 

situated class, Case No. 09-cv-10918

Hon. Paul D. Borman

Plaintiffs, Magistrate Mona K. Majzoub

v. Class Action

BORGWARNER, INC., BORGWARNER 

FLEXIBLE BENEFITS PLANS and

BORGWARNER DIVERSIFIED 

TRANSMISSION PRODUCTS, INC.,

Defendants.

____________________________________________________________________/

David R. Radtke (P47016)

Roger J. McClow (P27170)

Patrick J. Rorai (P65091)

KLIMIST, McKNIGHT, SALE, 

McCLOW & CANZANO, P.C.

Attorneys for Plaintiffs

400 Galleria Officentre, Suite 117

Southfield, MI 48034

248-354-9650; fax 248-354-9656

dradtke@kmsmc.com

rmcclow@kmsmc.com

prorai@kmsmc.com

Bobby R. Burchfield

Joshua D. Rogaczewski 

McDERMOTT WILL & EMERY

Attorneys for Defendants 

600 Thirteenth St., N.W.

Washington, D.C. 20005

202-756-8000; fax 202-756-8087

bburchfield@mwe.com

jrogaczewski@mwe.com

Elisa Angeli Palizzi (P52088)

MILLER, CANFIELD, PADDOCK

& STONE, P.L.C.

Attorneys for Defendants

150 W. Jefferson Avenue, Suite 2500

Detroit, MI 48226

313-496-7635; fax 313-963-6420

angeli@millercanfield.com

___________________________________________________________________/

PLAINTIFFS’ RESPONSE BRIEF IN OPPOSITION TO 

DEFENDANTS’ MOTION TO CERTIFY SUMMARY JUDGMENT 

RULING FOR INTERLOCUTORY APPEAL

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-iTABLE OF CONTENTS

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

I. FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

A. Standard to Certify A Matter for Interlocutory Appeal. . . . . . . . . . . . 3

B. Defendant Fails To Show That A Substantial Ground Exists 

For a Difference Of Opinion Regarding The Correctness of the 

Court’s Ruling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

C. An Interlocutory Appeal Will Only Delay -- Not Advance -- 

The Ultimate Resolution of This Case. ........................5

D. The Court’s Order Does Not Present Controlling Questions 

of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

E. Reese Reasonableness Standard Is Not Applicable to 

This Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

III. CONCLUSION ...............................................8

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-iiTABLE OF AUTHORITIES

In re ASC, Inc., 386 B.R. 187 (E.D. Mich.2008) ..........................6

In re City of Memphis, 293 F.3d 345 (6th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . 3, 6

In re Dow Corning Corp., 255 B.R. 445 (E.D. Mich. 2000) .................3

Eagan v. CSX Transp., Inc., 294 F. Supp.2d 911 (E.D. Mich. 2003) . . . . . . . . . 4, 5

Newsome vs. Young Supply Co., 873 F. Supp. 2d 872 (E.D. Mich 2012) ........5

Reese v. CNH America, LLC, 574 F.3d 315 (6th Cir. 2009) . . . . . . . . . . . . . . . . 7, 8

UAW v. Yard-Man, 716 F.2d 1476 (6th Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . 4, 8

United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, 

Allied Industrial and Service Workers, International Union 

v. Kelsey-Hayes Company, Case No. 13-1717 (April 22, 2014) ...............7

W. Tenn. Chapter of Assoc. Builders & Contrs., Inc. 

v. City of Memphis, 138 F. Supp 2d 1015 (W.D. TN 2000)) .................5

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I. FACTS

In February 2009, BorgWarner announced that it was going to drastically

reduce retiree health care benefits for pre-Medicare retirees and surviving spouses

and stop providing health care benefits for Medicare-eligible retirees and surviving

spouses on May 1, 2009. (Dkt. #104-1, Exs. 17, 18, 19) On March 11, 2009, Plaintiffs

filed the instant lawsuit on behalf of a similarly situated class of retirees and surviving

spouses of retirees and asserting that Defendant’s unilateral reduction and elimination

of retiree health care benefits violated collectively bargained health insurance

agreements and ERISA. (Dkt. #1) Over the past five years and two months, the

parties have exchanged tens of thousands of pages of documents and conducted over

a dozen depositions. Discovery closed in March 2012 and cross motions for summary

judgment were filed in May 2012. 

On February 27, 2014, the Court issued an Opinion and Order denying both

parties’ motions for summary judgment on the issue of vesting. (Dkt. # 127) The 53

page Opinion and Order analyzed the law and the facts and determined that the

collectively bargained Health Insurance Agreements (“HIA”) were ambiguous on the

issue of vesting, viewing the facts in light most favorable to the non-moving parties

and that genuine issues of material fact exist as to the parties’ intent to vest (or not)

retiree health care benefits. (Dkt. #127, p. 52)

Subsequently, the Court issued a Scheduling Order setting August 4, 2014 for

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the Final Pre-Trial Order, August 11, 2014 for the Final Pre-Trial Conference and a

trial date to be named later. 

Incredibly, on April 22, 2014, nearly two months after the Court’s Opinion and

Order was issued, and after the trial Scheduling Order was set and then re-set,

Defendant filed a Motion to Certify Summary Judgment Ruling for Interlocutory

Appeal. BorgWarner claims that an “agreement to disagree” provision in the 1990

Agreement on Modification and Extension of Existing Labor Contract (ACME

Agreement”) and in the 2009 plant Shutdown Agreement precludes a finding of vested

retiree health care benefits as a matter of law. This Court, in its Opinion and Order,

found that the “agreements to disagree” in the ACME Agreement and in the Plant

Shutdown Agreement are issues of fact that are interwoven with the over 20 years of

collectively bargained HIAs and the extrinsic evidence that relates to the interpretation

of those agreements. The Court reached its conclusion after a significant analysis of

the factual evidence that relates to the HIAs, the “agreements to disagree” and the

extrinsic evidence. The interpretation of the “agreements to disagree” is not a matter

of law, it is a matter of fact. (Dkt. #127, pp. 51-52) Therefore, the court of appeals

will not be able to decide that issue absent a trial on the merits as to the meaning of

those provisions. 

BorgWarner also alleges that a reservation of rights clause, which was

unilaterally written by BorgWarner three years after the 1989 HIA was negotiated, and

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was appended to the 1989 HIA, precludes a finding of vested retiree health care

benefits as a matter of law. This Court discussed the reservation of rights clause at

length in the Order. (Dkt. #127, pp. 7, 24-26, 30-31, 38-42, 46-47) The Court

concluded that based on the extensive case law on these clauses, there was a genuine

issue of fact as to whether the unilaterally issued reservation of rights clause affected

Plaintiffs’ claim that the retiree health care benefits were vested. Once again, this is

an issue of fact -- not an issue of law. 

II. ARGUMENT

A. Standard to Certify A Matter for Interlocutory Appeal.

In determining whether to certify a matter for interlocutory appeal under 28

U.S.C. §1292(b), the court must decide whether “(1) the order involves a controlling

question of law; (2) a substantial ground for difference of opinion exists regarding the

correctness of the decision; and (3) an immediate appeal may materially advance the

ultimate termination of the litigation.” In re City of Memphis, 293 F.3d 345, 350 (6th

Cir. 2002). “Review under § 1292(b) is granted sparingly and only in exceptional

cases.” Id. [emphasis added] The burden is on the party seeking to certify for appeal

an interlocutory order to establish that exceptional circumstances justifies departure

from the basic principle of postponing appellate review until after entry of final

judgment. In re Dow Corning Corp., 255 B.R. 445 (E.D. Mich. 2000).

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B. Defendant Fails To Show That A Substantial Ground Exists For a

Difference Of Opinion Regarding The Correctness of the Court’s

Ruling.

Under 28 U.S.C. §1292(b), a substantial ground for difference of opinion exists

only when: (1) the question is difficult, novel, and either a question on which there is

little precedent or one whose correct resolution is not substantially guided by previous

decisions; (2) a difference of opinion exists within the controlling circuit; or (3) the

circuits are split on the question. Eagan v. CSX Transp., Inc., 294 F. Supp.2d 911, 916

(E.D. Mich. 2003).

Here, the Court is presented with an issue of straight-forward contract

interpretation – not a difficult or novel question of law. The question of law present

in this case (i.e. whether retiree healthcare benefits are vested) has been litigated for

decades. See UAW v. Yard-Man, 716 F.2d 1476 (6th Cir. 1983) and its progeny.

There is substantial precedent on this issue. (See Dkt. #127, passim.) 

The issues raised by BorgWarner as reasons for Interlocutory Appeal are: (1)

issues of fact -- not issues of law; and (2) are straight-forward contract interpretation

issues that do not meet any of the tests set forth in Eagan. The existence of an

“agreement to disagree” provision in the ACME Agreement or the Plant Shutdown

Agreement does not create a legal question of first impression within this circuit -- it

merely presents a unique issue of fact for the court to resolve at trial. The

interpretation of RORs and SPDs has been the part of numerous cases in this circuit.

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These issues are not difficult or novel matters of law. 

The Defendant also fails to set forth a difference of opinion within the Sixth

Circuit or a split of opinion among the federal appellate courts which justify

interlocutory appeal. As Defendant fails to establish that this is an exceptional case

to warrant immediate review, its Motion must be denied. 

C. An Interlocutory Appeal Will Only Delay -- Not Advance -- The

Ultimate Resolution of This Case.

An interlocutory appeal materially advances the ultimate termination of the

litigation when judicial economy is best served. Eagan v. CSX Transp. Inc., 294 F.

Supp. 2d at 916. “Interlocutory appeal is most appropriate early in the proceedings.

In contrast, the role of interlocutory appeal is diminished when a case is nearing trial

and large expenditures have already been made.” Newsome vs. Young Supply Co., 873

F. Supp. 2d 872, 876 (E.D. Mich 2012) (citing W. Tenn. Chapter of Assoc. Builders

& Contrs., Inc. v. City of Memphis, 138 F. Supp 2d 1015, 1026 (W.D. TN 2000)) 

Here, this case is over five years old and has been extensively litigated.

Discovery has long been completed and the parties are on the cusp of trial. A

premature appeal and unnecessary stay will only serve to further delay the ultimate

resolution of this litigation -- not advance its conclusion. Further, an interlocutory

appeal will not substantially save judicial resources or litigation expenses as those

resources have already been expended. As judicial economy will not be served by an

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interlocutory appeal, Defendant’s Motion must be denied. 

D. The Court’s Order Does Not Present Controlling Questions of Law.

Controlling questions do not include issues within the trial court’s discretion

or that require the reviewing court to study the record or find facts. In re City of

Memphis, 293 F.3d at 350; In re ASC, Inc., 386 B.R. 187, 196 (E.D. Mich.2008). 

Contrary to Borg Warner’s contention, the Court’s Order denying summary judgement

does not present any controlling questions of law ripe for appeal -- it presents genuine

issues of fact ripe for trial. The Court’s Order clearly states that “genuine issues of

material fact exist on the question of the parties’ intent to vest (or not) retiree health

care benefits.” (Dkt. #127, p. 52) These issues include: (1) whether the “agreement

to disagree” language contained in the 1990 ACME is evidence of the parties intent

to vest retiree healthcare benefits; (2) whether the reservation of rights (ROR)

language included in the 1989 HIA was negotiated by the parties or unilaterally

appended to the HIA by Borg Warner; (3) whether the ROR did, in fact, reserve a

unilateral right to terminate health care benefits; and (4) whether extrinsic evidence

shows an intent to vest. Defendant’s Motion effectively seeks appellate review over

issues of fact that are solely within this Court’s discretion to resolve at trial and clearly

require fact finding that precludes interlocutory review under 28 U.S.C. §1292(b).

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E. Reese Reasonableness Standard Is Not Applicable to This Case.

The Defendant’s Motion claims that:

[i]n the absence of an appeal on vesting now, the parties

face a non-jury trial on the vesting and, potentially,

subsequent litigation -- and another non-jury trial -- on

whether BorgWarner’s changes to Plaintiffs’ benefits

satisfy the reasonable standard in Reese v. CNH America,

LLC, 574 F.3d 315, 324-27 (6th Cir. 2009). An

interlocutory appeal resolved in BorgWarner’s favor,

however, will end this litigation. (Dkt. #130, pp. 1-2)

Subsequent to Defendant’s Motion, the Sixth Circuit Court of Appeals issued

a decision in United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,

Allied Industrial and Service Workers, International Union v. Kelsey-Hayes Company,

Case No. 13-1717 (April 22, 2014) which narrowed the holding in Reese to its facts.

(Ex. 1) The United Steel court stated:

In sum, the Reese courts concluded that there, the scope of

the vested right to health care could be unilaterally altered

because that is what the evidence indicated the parties

intended in that case, not because all vested health care

rights in all CBAs are subject to unilateral alteration as a

matter of law. (Emphasis supplied.)

Id. at 10. 

The court’s decision in United Steel, which refused to apply the “reasonable

standard” announced in Reese broadly to all retiree health care cases eliminates

BorgWarner’s concerns about two trials. This Court will issue a decision as to

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whether the benefits are vested after a trial and that will be the end of the litigation at

the district court level. In keeping with the long, long line of cases going back to

UAW v. Yard-Man, if the benefits are vested, BorgWarner’s unilateral changes

implemented on May 1, 2009 violated the parties’ collectively bargained agreements

and ERISA. There will be no need for a second trial as to whether the changes were

“reasonable” because BorgWarner’s broad reading of Reese that it applies to all vested

health care rights, including this case, is wrong.

III. CONCLUSION

For the above-stated reasons, Plaintiffs respectfully request that this Honorable

Court deny Defendant’s Motion.

Respectfully submitted,

McKNIGHT, McCLOW, CANZANO, 

SMITH & RADTKE, P.C.

By: /s/ David R. Radtke 

 DAVID R. RADTKE (P47016)

 ROGER J. McCLOW (P27170)

 PATRICK J. RORAI (P65091)

 Attorneys for Plaintiffs

 400 Galleria Officentre, Suite 117

 Southfield, MI 48034

 (248) 354-9650

 dradtke@michworklaw.com 

 rmcclow@michworklaw.com

Dated: May 8, 2014 prorai@michworklaw.com

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CERTIFICATE OF SERVICE

I hereby certify that on May 8, 2014, I electronically filed the foregoing paper

with the Clerk of the Court using the ECF system which will serve it upon:

Bobby R. Burchfield

Joshua D. Rogaczewski 

Elisa Angeli Palizzi

Respectfully submitted,

McKNIGHT, McCLOW, CANZANO, 

SMITH & RADTKE, P.C.

By: /s/ David R. Radtke 

 DAVID R. RADTKE (P47016)

 ROGER J. McCLOW (P27170)

 PATRICK J. RORAI (P65091)

 Attorneys for Plaintiffs

 400 Galleria Officentre, Suite 117

 Southfield, MI 48034

 (248) 354-9650

 dradtke@michworklaw.com 

 rmcclow@michworklaw.com

 prorai@michworklaw.com

P:\RHC Cases\BorgWarner\2009 MI Lawsuit\Pleadings\PLs Response Motion Certify Appeal.wpd

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