Cases & Deals

Continental Automotive Systems obtains ruling to have putative class action case regarding retiree medical benefits transferred

Client(s) Continental Tire North America, Inc.

On March 7, 2011, the United States District Court for the Eastern District of Michigan ruled in favor of Jones Day client Continental Automotive Systems U.S., Inc. ("CAS"), transferring the case to federal court in Alabama in the interest of justice and for the convenience of parties and witnesses.

Plaintiffs—a putative class action of former CAS bargaining unit employees at the Huntsville, Alabama manufacturing facility and the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America—filed this lawsuit in Michigan federal court, attempting to take advantage of favorable 6th Circuit law, and alleging that CAS refused to provide vested lifetime retiree benefits under collective bargaining agreements. But six weeks before initiating this action, the Union and a few other plaintiffs sued CAS in federal court in Alabama to force arbitration over other benefits under the same collective bargaining agreements.

CAS, represented by Jones Day, moved to transfer this case to Alabama. It argued that transfer was warranted because (1) the named Plaintiffs and putative class members all reside either in Alabama or neighboring Tennessee; (2) key witnesses are likewise either in Alabama or Tennessee; and (3) all remaining witnesses and relevant documents are either in Alabama or South Carolina. There was, in sum, absolutely no reason to try this matter in Michigan. Plaintiffs opposed transfer, chiefly arguing that their choice of forum should be honored.

The court adopted CAS's arguments and ordered that the matter be transferred to Alabama. In particular, "the Court [found] it compelling that there is ongoing litigation involving the same parties, the same plant, and the same agreements pending in the Northern District of Alabama."

Beaty, et al. v. Continental Automotive Systems U.S., Inc., Case No. 10-CV-14217-BAF-RSW (E.D. Mich.)