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Local 1522 of Council 4 v. Bridgeport Health Care Center, Inc.

United States District Court, D. Connecticut

March 21, 2018

LOCAL 1522 OF COUNCIL 4, AMERICAN FEDERATION OF STATE COUNTY AND MUNICIPAL EMPLOYEES, ET AL., Plaintiffs,
v.
BRIDGEPORT HEALTH CARE CENTER, INC., ET AL., Defendants.

          RULING ON MOTION FOR CLASS CERTIFICATION (DOC. NO. 194)

          Janet C. Hall, United States District Judge.

         I. INTRODUCTION

         Carmen Espejo, Natividade Goncalves, Marion V. Perez, and Carlota Rafael on behalf of themselves and certain other employees of Bridgeport Health Care Center, Inc. (the “putative representatives”) and labor organization Local 1522 of Council 4, American Federation of State, County, and Municipal Employees, AFL-CIO (“Local 1522”), bring this action against defendants, Bridgeport Health Care Center, Inc. (“BHCC”) and BHCC Chief Operating Officer Chaim Stern (“Stern”). In their Third Amended Complaint (Doc. No. 179), the plaintiffs bring twenty-seven claims against one or both defendants, arising from the defendants' alleged failure to fund employment benefits programs, including a health plan, a pension plan, disability insurance plans, life insurance plans, as well as the defendants' failure to make payments to credit unions and other designated entities on behalf of BHCC employees.

         Pending before the court is the plaintiffs' Motion for Class Certification (Doc. No. 194). In that Motion, the plaintiffs propose two subclasses:

(a) All employees of Bridgeport Health Care Center from January 1, 2015 to the present, who are represented by Local 1522, who receive health insurance coverage from Bridgeport Health Care Center pursuant to Article 29 of the parties' collective bargaining agreement, life insurance or disability insurance, and/or have payments deducted for Bridgeport Federal Credit Union, and have union dues deducted from their paychecks.
(b) All employees of Bridgeport Health Care Center from January 1, 2015 to the present, who are represented by Local 1522 and are participants in the Bridgeport Health Care Center Pension Plan pursuant to Article 33 of the parties' collective bargaining agreement.

Mot. for Class Cert. (Doc. No. 194) at 1. The plaintiffs seek an order certifying their proposed subclasses under Federal Rule of Civil Procedure 23(b)(1), (b)(2), and (b)(3). The plaintiffs further seek an order appointing Espejo, Goncalves, Perez, and Rafael as class representatives and the Law Offices of J. William Gagne, Jr. & Associates, P.C. as class counsel. See Memorandum in Support of Motion for Class Certification (“Pl.'s Mem.”) (Doc. No. 194-1) at 2.

         For the reasons set forth below, the Motion for Class Certification (Doc. No. 194) is denied.

         II. BACKGROUND

         Local 1522 is an unincorporated labor organization that represents certified nursing assistants, dietary workers, ward maid and housekeeping workers, maintenance mechanics, foodservice workers, dietician aides, recreation workers, laundry workers, beauticians, and licensed practical nurses who are employed by defendant BHCC. Third Amended Complaint (“3d Am. Compl.”) (Doc. No. 179) at 6 ¶¶ 1-2; Defendants' Answer to Third Amended Complaint (“Def.'s Answer”) (Doc. No. 205) at 3. The putative class representatives are employees of BHCC and are part of the Local 1522 bargaining unit.[1] 3d Am. Compl. at 6-7 ¶¶ 3-6; Def.'s Answer at 3.

         Defendant BHCC is a Connecticut corporation. 3d Am. Compl. at 7 ¶ 7; Def.'s Answer at 3. Defendant Stern is the Chief Operating Officer of BHCC. 3d Am. Compl. at 7 ¶ 8; Def.'s Answer at 3.

         This case arises from defendant BHCC's alleged failure to fund various employee benefit programs, including health and life insurance plans and a retirement plans. 3d Am. Compl. at ¶¶ 4-9. The plaintiffs allege that the defendants withheld money from employee paychecks for these benefit programs, but did not use the funds for the proper purpose. Id. ¶¶ 17-20. The plaintiffs further allege that BHCC withheld money from employee paychecks for union dues but did not give that money to the union as promised. Id. at ¶¶ 5, 21. Finally, the plaintiffs allege that Chaim Stern is a fiduciary for the employee benefit plans and breached his fiduciary duty, including by using the aforementioned payroll deductions “to pay other unrelated premiums and company obligations.” Id. at 27-34, 39-40, 67-70.

         The twenty-seven counts in the Third Amended Complaint fall into the following categories: (1) breach of contract claims arising from the collective bargaining agreement between Local 1522 and BHCC (Counts One, Two, Twelve, Sixteen, and Seventeen); (2) tort claims including fraud, equitable estoppel, promissory estoppel, misrepresentation, and conversion (Counts Three, Four, Ten, Eleven, Eighteen, Nineteen, Twenty-Five, Twenty-Six, and Twenty-Seven); (3) claims that BHCC failed to fund benefit programs alleging violations of the Employee Retirement Income Security Program (“ERISA”), title 29, section 1001 et seq. (Counts Five, Six, Twenty, and Twenty-One); (4) claims that BHCC failed to give required notice to plan participants alleging violations of ERISA (Counts Thirteen, Fourteen, and Fifteen); (5) promissory estoppel claims alleging violations of ERISA (Counts Seven, Eight, Twenty-Two, and Twenty-Three); and (6) claims that Stern violated his fiduciary duty alleging violations of ERISA (Counts Nine[2] and Twenty-Four). See generally 3d Am. Compl. The plaintiffs request declaratory relief; injunctive relief; money damages in the form of compensatory, consequential, and punitive damages; and attorneys' fees. 3d Am. Compl. at 74-76.

         The plaintiffs have moved for class certification. See Mot. for Certification (Doc. No. 194). The plaintiffs propose two subclasses: one devoted to employees who participated in health, life, dental, and other benefits plans, and one specific to employees who were members of the BHCC pension plan. Id. at 1. Both proposed subclasses are limited to employees who are represented by the Local 1522 bargaining unit. Id. The Motion for Certification is not limited to any particular claims raised by the plaintiffs, and the text of the Plaintiffs' Memorandum reflects the plaintiffs' intent to certify the class as to the thirteen claims brought by the putative representatives.[3]

         In support of their Motion, the plaintiffs attach Affidavits by the putative representatives (Doc. Nos. 201, 202, 203, 204) and an Affidavit by Gail Richer (Doc. No. 194-3), Strategic Account Executive with UMR, Inc., a corporation that formerly acted as a third party claims administrator for BHCC. The plaintiffs also provide two charts of claims that were denied for non-payment, one which lists the claims denied by UMR, Inc., see Exh. to Aff. of Gail Richer (Doc. No. 196-1); and (2) a chart that lists claims denied by third-party administrator Meritain Health, with whom BHCC contracted subsequent to its relationship with UMR, Inc. (Doc. No. 233). Finally, in support of their request that plaintiffs' counsel be appointed class counsel, the plaintiffs attach an Affidavit by plaintiffs' counsel, Attorney William Gagne. See Affidavit of J. William Gagne, Jr. (“Gagne Aff.”) (Doc. No. 194-10).

         The defendants did not respond to the Motion for Class Certification.

         On July 5, 2017, the court issued an Order directing the parties to inform the court as to whether the benefits plans in question were specific to members of the Local 1522 bargaining unit, or whether the plans covered employees who are not affiliated with Local 1522. Order (Doc. No. 228). In response, on July 10, 2017, the parties filed a Joint Stipulation stating, among other things, that “[t]he health plan, pension plan and other employee benefit plans in question do not cover only members of Local 1522.” Joint Response (Doc. No. 229). Two days later, the parties filed a Supplement to their Stipulation, emphasizing that, while the benefits plans cover employees who are not affiliated with Local 1522, the bargaining agreement between Local 1522 and BHCC means that certain terms of the benefits plans only apply to members of the Local 1522 bargaining unit. For example, employees affiliated with other unions “may negotiate a different retirement age or change the method of calculating the employees' retirement benefit” as well as “negotiate a different annual contribution by the employer or different contribution terms for the employee.” Supplemental Stipulated Statement (Doc. No. 230) at 2.

         During a discovery-related conference on August 7, 2017, the court expressed concerns with certifying a class of some, but not all, members of an ERISA plan, and gave the parties an opportunity to submit responses to those concerns. On August 14, 2017, the plaintiffs submitted a Response (Doc. No. 250), in which the plaintiffs renewed their argument that, because different unions may negotiate different terms for the employee benefits in question, the proposed classes of fewer than all plan members could be certified.

         On September 7, 2017, the court issued yet another Order expressing its concerns with certifying a class of fewer than all plan members for ERISA claims. Order (Doc. No. 255). The court ordered the parties to produce the terms of the benefits plans themselves, which had not previously been provided to the court. Id. The court also invited briefing from the parties related to the court's concerns about certifying the requested classes. Id. The parties jointly filed the terms of the benefits plans in question on September 14, 2017. Joint Response (Doc. No. 265). In addition, the plaintiffs filed a Response to that Order on September 29, 2017, which Response contained legal argument as to the court's stated concerns respecting class certification. Plaintiff's Response (“Pl.'s Response”) (Doc. No. 273). In keeping with their pattern of silence as to the Motion to Certify, the defendants did not take the opportunity to respond to the court's concerns.

         III. LEGAL STANDARD

         Federal Rule of Civil Procedure 23(a) contains four “[p]rerequisites” for class certification:

(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). These prerequisites are referred to as “numerosity, commonality, typicality, and adequacy of representation.” E.g., Amgen Inc. v. Connecticut Ret. Plans & Trust Funds, 568 U.S. 455, 460 (2013). Class certification is appropriate only if the court is satisfied, “after a rigorous analysis, ” that the proposed class meets each of the four prerequisites. See Wal-Mart Stores v. Dukes, 564 U.S. 338, 350-51 (2011).

         In addition to satisfying the four prerequisites, a class action must qualify under at least one of the types of class actions listed in Rule 23(b). The types of class actions are those in which,

(1) prosecuting separate actions by or against individual class members would create a risk of: (A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; or (B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests;
(2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; or
(3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.

Fed. R. Civ. P. 23(b).

         “The party seeking class certification bears the burden of establishing by a preponderance of the evidence that each of Rule 23's requirements has been met.” Amara v. CIGNA Corp., 775 F.3d 510, 519 (2d Cir. 2014) (quoting Myers v. Hertz Corp., 624 F.3d 537, 547 (2d Cir. 2010)). A court must “receive enough evidence, by affidavits, documents, or testimony, to be satisfied that” this is the case. Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234, 251 (2d Cir. 2011) (quoting In re Initial Pub. Offerings Sec. Litig., 471 F.3d 24, 42 (2d Cir. 2006)). In determining whether a putative class meets the requirements of Rule 23, the court must resolve any factual disputes and find any facts relevant to this determination. See In re Initial Pub. Offerings Sec. Litig., 471 F.3d at 41. The court's obligation to make such determination “is not lessened by overlap between a Rule 23 requirement and a merits issue, even a merits issue that is identical with a Rule 23 requirement.” Id. The Second Circuit grants trial courts substantial discretion in determining whether to grant class certification because of the Circuit's “longstanding view that the district court is often in the best position to assess the propriety of the class and has the ability, pursuant to Rule 23(c)(4)(B), to alter or modify the class, create subclasses, and decertify the class whenever warranted.” In re Sumitomo Copper Litig., 262 F.3d 134, 139 (2d Cir. 2001).

         IV. ...


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