Shy v. Navistar International Corp.
701 F.3d 523
6th Cir.2012Background
- Shy class sued Navistar challenging Navistar’s unilateral Medicare Part D substitution under a 1993 consent decree/settlement.
- Agreement created two Medical Plans (Plan 1 non-Medicare, Plan 2 Medicare-eligible) and a separate Prescription Drug Plan described in the Manual.
- Plan 2 is a Medicare supplement; prescription drugs are not covered by Medicare but are provided under the Prescription Drug Plan.
- In 2010 Navistar substituted Medicare Part D for the Prescription Drug Plan, imposing Part D premiums and using the SilverScript formulary.
- District court preliminarily found Navistar lacked authority to substitute Part D and later ordered retroactive reinstatement of the prior drug benefit and reimbursements.
- This court reviews a district court’s interpretation of a consent decree de novo with some deference to the district judge who oversaw the decree.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Navistar had discretionary authority to interpret the Plan | Shy asserts no discretion to construe Plan; deference not warranted. | Navistar contends it has discretionary authority to interpret the Plan under ERISA. | Navistar’s interpretations receive no deference; discretion was not expressly granted. |
| Whether the Agreement authorized substituting Medicare Part D for the Prescription Drug Plan | Substitution was not authorized by the Agreement/Plan as written. | The Agreement/Plan permitted the substitution as a required administrative change. | Substitution was not authorized; Part D was a major change and not a required administrative change. |
| Whether the district court could retroactively reinstate the prescription drug benefit | Equitable remedy to make class whole for loss caused by Navistar’s actions. | Court lacked basis to grant retroactive relief and damages individually. | District court did not err; retroactive reinstatement was appropriate equitable relief. |
| Whether the district court had jurisdiction to issue the September 2011 order | Consent decree enforcement falls within court’s continuing jurisdiction. | Navistar challenges jurisdiction as improper. | Court had jurisdiction under the consent decree; abuse of discretion standard applies. |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (Trust principles justify deferential review of discretionary powers)
- Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367 (6th Cir. 1998) (deference when judge oversaw and approved consent decree)
- Brown v. Neeb, 644 F.2d 551 (6th Cir. 1981) (district judge involvement yields deference to decree interpretation)
- Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376 (6th Cir. 1996) (discretion must be expressly and clearly granted to trigger deferential review)
- Armour & Co. v. United States, 402 U.S. 673 (1971) (consent decrees resemble contracts; discern scope within four corners)