Shy v. Navistar International Corp.

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 12a0407p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

X

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ART SHY, et al.,

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Plaintiffs-Appellees,

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-

Nos. 11-3215/4143

v.

,

>

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NAVISTAR INTERNATIONAL TRANSPORTATION -

NAVISTAR INTERNATIONAL CORPORATION;

-

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CORPORATION, n/k/a Navistar, Inc.;

NAVISTAR FINANCIAL CORPORATION; HARCO -

NATIONAL INSURANCE COMPANY; NAVISTAR -

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INTERNATIONAL TRANSPORTATION CORP.

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HEALTH PLAN; INDIANAPOLIS CASTING

CORPORATION, -

Defendants-Appellants. N

Appeal from the United States District Court

for the Southern District of Ohio at Dayton.

No. 3:92-cv-333—Walter H. Rice, District Judge.

Argued: October 4, 2012

Decided and Filed: December 14, 2012

Before: SILER and COOK, Circuit Judges; STEEH, District Judge.*

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COUNSEL

ARGUED: Cary R. Perlman, LATHAM & WATKINS LLP, Chicago, Illinois, for

Appellants. Jeremiah A. Collins, BREDHOFF & KAISER, P.L.L.C., Washington, D.C.,

for Appellees. ON BRIEF: Cary R. Perlman, LATHAM & WATKINS LLP, Chicago,

Illinois, Laurence H. Levine, LAURENCE H. LEVINE LAW OFFICES, Chicago,

Illinois, David P. Pierce, COOLIDGE WALL CO., L.P.A., Dayton, Ohio, for

Appellants. Jeremiah A. Collins, Julia Penny Clark, BREDHOFF & KAISER, P.L.L.C.,

Washington, D.C., Frederick G. Cloppert, Jr., Columbus, Ohio, for Appellees.

*

The Honorable George C. Steeh, III, United States District Judge for the Eastern District of

Michigan, sitting by designation.

1

Nos. 11-3215/4143 Shy, et al. v. Navistar Int’l, et al. Page 2

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OPINION

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SILER, Circuit Judge. The class action plaintiffs (“Shy Class”) initiated the

current litigation by seeking an injunction against Navistar International Corp.

(“Navistar”), claiming that Navistar’s unilateral move to substitute Medicare Part D into

their medical plan violated the parties’ 1993 settlement agreement (the “Agreement”).

The district court found that Navistar’s actions were in violation of the Agreement and

ordered Navistar to reinstate, retroactively, the prescription drug benefit that was in

effect before Navistar made the unilateral substitution.

On appeal, Navistar raises three issues. First, whether Navistar has discretionary

authority to construe and interpret the Health Benefit Program. Second, whether the

Agreement grants Navistar the power to substitute Medicare Part D for the prescription

drug plan described in the Agreement. And third, whether the district court erred when

it ordered Navistar to retroactively reinstate the prescription drug benefit from the

Agreement. For the reasons that follow, we AFFIRM.

I.

This case originated as a class action lawsuit in 1992 when Navistar attempted

to reduce its costs for retired employee health and life insurance benefits. Navistar

asserted that it would soon become insolvent if it were unable to reduce its retiree health

and life insurance obligations. In 1993, the U.S. District Court for the Southern District

of Ohio approved the Agreement between the parties. Shy v. Navistar Int’l Corp., No.

6-3-92-333, 1993 WL 1318607, at *12 (S.D. Ohio May 27, 1993). The district court

entered a judgment adopting the Agreement as a consent decree while retaining

continuing jurisdiction over the parties for the purposes of enforcing and administrating

the Agreement.

Nos. 11-3215/4143 Shy, et al. v. Navistar Int’l, et al. Page 3

The Agreement established the Retiree Health Benefit and Life Insurance Plan

(the “Plan”). In turn, the Plan established the Health Benefit Program Summary Plan

Description (the “Manual”). The Manual contains a description of the health benefits

and is furnished to all beneficiaries.

Through the Manual, the Agreement divides health benefits into two different

plans for retirees: Medical Plan 2 for those who are eligible for Medicare and Medical

Plan 1 for those who are not eligible. The Manual describes Plan 2 as a “Medicare

supplement plan that helps pay for expenses covered by Medicare, but not paid in full

by the government program.” Plan 2 participants who enroll in Medicare Part B are

required to pay the Medicare Part B premium. Additionally, any Plan 2 participants who

are eligible for Medicare but who are required to pay the Medicare Part A premium

(because of social security benefit ineligibility or other reasons), “are encouraged to

enroll and pay the required” premium because Plan 2 benefits are payable as if Medicare

Part A coverage were in effect. Plan 2 also has a monthly premium and an annual out-

of-pocket maximum.

After a participant has paid the annual out-of-pocket maximum, Plan 2 covers

100% of the difference between the Medicare-approved expenses and the amount that

Medicare actually pays. In sum, Medicare eligible retirees were required to make three

types of payments for health insurance benefits under the Agreement: (1) monthly

premiums for Medicare Part B; (2) monthly premiums for Medical Plan 2; and (3) the

annual out-of-pocket maximum.

A prescription drug benefit was also provided under the Agreement. The

Prescription Drug Plan is presented in a separate section of the Manual and the benefits

provided are identical for both Plan 1 and Plan 2. The participants are required to pay

up to an $8.00 co-pay for a 30-day supply of any generic prescription drug and up to an

$18.00 co-pay for a 30-day supply of any brand-name prescription drug. After the co-

pay, which does not count toward the Plan 2 annual out-of-pocket maximum, any further

costs for prescription drugs is generally covered under the Prescription Drug Plan. The

Prescription Drug Plan covers all legend drugs and certain prescribed, non-legend drugs.

Nos. 11-3215/4143 Shy, et al. v. Navistar Int’l, et al. Page 4

A legend drug is defined as one required by federal law to bear the legend “Caution:

Federal Law prohibits dispensing without a prescription.”

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003,

which created Medicare Part D, became effective in 2006. See Pub. L. No. 108-173, 117

Stat. 2066 (codified in scattered sections of 42 U.S.C.). In September 2005, Navistar

sent a letter to all Medicare-eligible retirees stating that Medicare beneficiaries could

stay in their current plan (coverage under Medical Plan 2) and choose not to enroll in the

new Medicare Part D because their current coverage equaled or exceeded the new

Medicare drug benefit. Then, in 2010, Navistar announced that Plan 2 participants

would receive primary prescription drug coverage through Medicare Part D, effective

July, 1, 2010. The announcement required Plan 2 participants to pay the Medicare Part

D premiums, which were $35.00 per month at the time. The announcement also stated

that participants would be enrolled in the SilverScript plan offered by CVS Caremark,

and only the drugs on the SilverScript plan formulary would be covered. Participants

were required to pay for the entire cost of any prescription drug that was not on the

SilverScript formulary, even if it was previously covered under the Prescription Drug

Plan in the Manual.

In 2010, the Shy Class filed a motion to compel Navistar to comply with the

Agreement. In February 2011, the district court sustained the plaintiffs’ motion for an

injunction in part, declaring that Navistar was without authority to unilaterally substitute

Medicare Part D for the prescription drug benefit adopted by the parties in the

Agreement, and overruled the motion for an injunction in part by denying the plaintiffs

injunctive relief. Navistar appealed the ruling, resulting in case number 11-3215.

In April 2011, at the court’s request, both parties tendered to the court position

papers concerning the need and appropriateness of additional orders in connection with

the February 2011 district court order. Subsequently, in September 2011, the district

court ordered Navistar to immediately reinstate, retroactively, the prescription drug

benefit that was in effect before Navistar unilaterally substituted Medicare Part D. The

district court ordered Navistar to reimburse the plaintiffs for the Medicare Part D

Nos. 11-3215/4143 Shy, et al. v. Navistar Int’l, et al. Page 5

premiums that had been paid in the interim and any extra cost for the prescriptions that

were filled under Medicare Part D. Navistar again appealed, resulting in case number

11-4143.

II.

Generally, we review a district court’s interpretation of a consent decree de novo.

Nat’l Ecological Found. v. Alexander, 496 F.3d 466, 476 (6th Cir. 2007). However,

where the court is reviewing an interpretation of a consent decree by the district court

that crafted the judgment, the standard of review is more accurately described as

“deferential de novo.” Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d

367, 371-72 (6th Cir. 1998); see also Brown v. Neeb, 644 F.2d 551, 558 n.12 (6th Cir.

1981) (the district judge’s interpretation of a consent decree deserved deference where

that judge oversaw and approved the consent decree); G.G. Marck & Assocs. v. Peng,

309 F. App’x 928, 935 (6th Cir. 2009) (“[W]e give some deference to a district court’s

interpretation of a consent decree where that court was involved in creating the

decree.”).

Navistar argues that because Judge Rice, the district court judge who made the

orders below, did not personally draft the Agreement, his interpretation of the consent

decree is due no deference. In Sault Ste. Marie Tribe of Chippewa Indians v. Granholm,

we ruled that the district judge’s interpretation was due no deference because he was not

the district judge who oversaw and approved the original consent decree. 475 F.3d 805,

810 (6th Cir. 2007). However, nine years earlier, we did give deference to an

interpretation by the district court judge who oversaw and drafted the same consent

decree. Engler, 146 F.3d at 371-72. Therefore, the distinction is not whether the district

judge personally drafted the consent decree, but whether the district judge “oversaw and

approved” the consent decree and later interpreted the same consent decree. Brown,

644 F.2d at 558 n.12.

Here, Judge Rice, whose interpretation of the Agreement is at issue on appeal,

oversaw and approved the original settlement agreement/consent decree. Therefore, his

interpretation “deserves deference” because “[f]ew persons are in a better position to

Nos. 11-3215/4143 Shy, et al. v. Navistar Int’l, et al. Page 6

understand the meaning of a consent decree than the district judge who oversaw and

approved it.” Id.

III.

The Plan is a registered employee health benefit plan under the Employee

Retirement Income Security Act (ERISA). The Agreement established Navistar as the

“named fiduciary” within the meaning of 29 U.S.C. § 1102(a)(2) and the plan

“administrator” within the meaning of 29 U.S.C. § 1002(16)(A). In Firestone Tire &

Rubber Co. v. Bruch, the Supreme Court recognized that “ERISA abounds with the

language and terminology of trust law,” and that “[t]rust principles make a deferential

standard of review appropriate when a trustee exercises discretionary powers.” 489 U.S.

101, 110, 111 (1989). Citing Firestone, Navistar argues that it has discretionary power

to construe and interpret the Plan and therefore its interpretation of the Plan is due

deference by this court under the arbitrary and capricious standard.

ERISA defines a fiduciary as anyone who “exercises any discretionary authority

or discretionary control respecting management of [a] plan.” 29 U.S.C.

§ 1002(21)(A)(i). A fiduciary has “authority to control and manage the operation and

administration of the plan,” and must provide “a full and fair review” of claim denials.

29 U.S.C. §§ 1102(a)(1), 1133(2). These statutes indicate that one is characterized as

a fiduciary to the extent he exercises any discretionary authority or control, and not that

a fiduciary exercises complete discretionary authority or control. See Firestone Tire &

Rubber Co., 489 U.S. at 113. Therefore, as the plan administrator, Navistar is a

fiduciary and while it may have discretionary authority to control and manage the plan,

that does not necessarily mean that Navistar has discretionary authority to construe and

interpret the plan. See Anderson v. Great W. Life Assurance Co., 942 F.2d 392, 395 (6th

Cir. 1991) (“[D]iscretion is not an all-or-nothing proposition. A plan can give an

administrator discretion with respect to some decisions, but not others.”).

The question of whether deference is due relies entirely on whether discretion has

been expressly granted in the plan for the specific decision at issue because “discretion

is the exception, not the rule,” and “[u]nless the plan grants discretion, the court should

Nos. 11-3215/4143 Shy, et al. v. Navistar Int’l, et al. Page 7

review the actions of the administrator de novo.” Id. A plan’s grant of discretionary

authority should be both “express” and “clear” before application of the highly

deferential arbitrary and capricious standard. Yeager v. Reliance Standard Life Ins. Co.,

88 F.3d 376, 380 (6th Cir. 1996); see also Brown v. Ampco-Pittsburgh Corp., 876 F.2d

546, 550 (6th Cir. 1989). Therefore, whether Navistar’s interpretation of the Plan is due

any deference depends on whether Navistar is expressly and clearly granted

discretionary authority to construe and interpret the Plan.

Navistar specifically argues that Article V of the Plan grants it broad

discretionary authority to construe and interpret the Health Benefit Program. However,

a plain reading of Article V does not support this assertion. Article V states that

Navistar “is responsible for the administration of the Health Benefit Program . . . subject

to review by the Health Benefit Program Committee.” Article V further states that

“[s]ubject to such review,” Navistar has the “power[], right[], and dut[y] . . . to construe

and interpret the Health Benefit Program and . . . to decide all questions of eligibility

under such programs.”

This grant of authority fails to meet the discretionary authority requirements of

being “express” and “clear.” Yeager, 88 F.3d at 380. Not only does Article V not state

that Navistar’s authority to construe and interpret the Health Benefit Program is

discretionary, it specifically states that Navistar’s authority is subject to review by the

Health Benefit Program Committee (the “Committee”).1 Article V further states that

Navistar shall perform its duties “on a reasonable and non-discriminatory basis and shall

apply uniform rules to all persons similarly situated.” Thus, although Navistar has the

power to construe and interpret the Plan, that power is not discretionary. Therefore,

Navistar’s interpretations of the Agreement, the Plan, and the Manual shall be given no

deference.

1

The Committee consists of seven members: three appointed by Navistar, two appointed by

United Auto Workers (UAW), one appointed by the non-UAW retirees, and a seventh member appointed

by a majority of the other members.

Nos. 11-3215/4143 Shy, et al. v. Navistar Int’l, et al. Page 8

IV.

A.

The main crux of this appeal involves the question of whether the Agreement

authorized Navistar to substitute Medicare Part D into the Health Benefit Program. The

district court, whose interpretation is due some deference, found that Navistar was not

authorized to do so. Navistar relies on Article V of the Plan and statements in the

Manual to argue not only that the Agreement authorized the substitution of Medicare

Part D, but that the change in question was a required administrative change. The Shy

Class relies on statements in both the Plan and the Manual to refute this assertion.2

The Supreme Court has noted that “consent decrees bear some of the earmarks

of judgments entered after litigation” and that “[a]t the same time, because their terms

are arrived at through mutual agreement of the parties, consent decrees also closely

resemble contracts.” Local No. 93, Int’l Ass’n of Firefighters v. City of Cleveland,

478 U.S. 501, 519 (1986). It is this resemblance to contracts that requires that the scope

of a consent decree “be discerned within its four corners, and not by reference to what

might satisfy the purposes of one of the parties to” the consent decree. United States v.

Armour & Co., 402 U.S. 673, 682 (1971). Therefore, while Navistar’s argument that the

parties’ original intent was to permanently reduce Navistar’s retiree healthcare costs

might be relevant in a motion to modify the consent decree, the interpretation of the

consent decree as written should focus only within the four corners of the consent

decree.

B.

The structure and presentation of the Manual indicate that the Medical Plans

(1 and 2) are separate and distinct from the Prescription Drug Plan. First, the Manual

is separated into five different sections in its table of contents: Introduction, Medical

2

The Agreement explains that in resolving any discrepancies between the Agreement and either

the Plan or the Manual, the Agreement controls, while the Plan controls in any discrepancies between the

Plan and the Manual.

Nos. 11-3215/4143 Shy, et al. v. Navistar Int’l, et al. Page 9

Plan 1, Medical Plan 2, Prescription Drug Plan, and General Information. Second, in the

Introduction section, on page 6 of the Manual, there is a chart that lists what the

participants in Plan 1 and Plan 2 will pay under each plan. This chart lists the Medicare

Part B premium, but does not list any of the expenditures associated with the

Prescription Drug Plan. The prescription drug expenditures for Medical Plan 1 and 2

participants (which are the same) are listed in a separate chart on page 9 of the Manual,

entitled “Summary of Prescription Drug Benefits.” This configuration of the Manual

indicates that while participants are eligible for either Medical Plan 1 or Medical Plan

2 (but not both), the Prescription Drug Plan is separate and complementary to both plans.

It is noted in several places throughout the Manual that “Medical Plan 2 is a

Medicare supplement plan that helps pay for expenses covered by Medicare, but not paid

in full by the government program.” However, the Manual also specifically notes that

“[p]rescription drugs are not covered under Medicare.” Further, the Manual states that

“[i]f Medicare doesn’t cover an expense, Plan 2 won’t cover it either, except for

prescription drug expenses.” These statements in the Manual indicate that while

prescription drugs are not covered by Medicare, they are provided to participants

enrolled in Medical Plan 2.

Additionally, the Manual notes in several places that Medicare consists

specifically of two parts: Medicare Part A and Medicare Part B. More importantly, the

Manual specifically addresses the possibility of changes to Medicare in the future:

Future legislation may change Medicare. If the Medicare changes are

minor, the Company has the ability to change the Program accordingly,

without any effect on overall benefits available the Program. If Medicare

makes major changes (such as an increase in the Medicare Part B annual

deductible), the Health Benefit Committee will redesign the benefits as

long as the Company’s liability is not increased.

This statement directly correlates to the powers, rights, and duties distributed in the Plan.

First, under section 8.1(a) of Article VIII (Amendment and Termination) of the

Plan, as plan administrator, Navistar’s right to make amendments to the Health Benefit

Program (the “Program”) are limited to “non-material technical and administrative

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amendments thereto . . . which are necessary to comply with . . . applicable legal

requirements; provided, that no such amendment shall adversely affect the level of

benefits to any Class Member.” Just as stated in the Manual, Navistar may only make

minor changes that do not affect the level of overall benefits available to participants.

Second, section 3.8 of the Plan, titled “State or National Health Insurance

Programs,” states that in the event of any legislative change in a state or national health

insurance program that results in participants receiving post-retirement health care

benefits greater or lesser than those provided under the plan, “the Health Benefit

Program Committee may redesign the Health Benefit Program, including, in its sole

discretion, by modifying the benefits thereunder and the amount of contributions

required to be made by or on behalf of Enrolled Participants.” (Emphasis added). This

correlates directly with the statement in the Manual that after a legislative change to

Medicare, only the Committee can make major changes to the Program that will effect

the benefits available to participants. Additionally, the Committee may, but is not

required to, redesign the Program in the event of legislative changes to Medicare.

Third, in Article VI (describing the Committee and its powers, rights, and duties),

section 6.3 reiterates the power granted to the Committee “reasonably to redesign

benefits under the Health Benefit Program as provided in Section 3.8 as it may deem

appropriate in its sole discretion.” This power is again reiterated in section 8.1(c) of

Article VIII.

Navistar’s actions were in direct contradiction to these powers, rights, and duties.

The example used in the Manual to identify a “major” change to Medicare was the

increase in the annual Medicare Part B deductible. By comparison, the addition of an

entire new part to Medicare, with its own monthly premium, could only be classified as

a major change to Medicare. If this is not obvious on its face, it is so because Medicare

Part D and the SilverScript plan have their own formulary that is smaller than the

Manual’s Prescription Drug Plan in that it does not include all legend drugs. This

resulted in a lesser available benefit to Medical Plan 2 participants. Additionally,

Medical Plan 2 participants were required to pay the Medicare Part D premiums,

Nos. 11-3215/4143 Shy, et al. v. Navistar Int’l, et al. Page 11

increasing their required contributions. For these reasons, Medicare Part D was a major

and material change to both Medicare, and, when substituted for the Prescription Drug

Plan in the Manual, to the Program.

This contradicts Navistar’s assertion that implementing Medicare Part D into the

Program was a required administrative change and not a substitution. Implementing

Medicare Part D was a major change to Medicare that could have only been

implemented by the Committee as a discretionary redesign of the Program. Therefore,

the substitution of Medicare Part D for the Prescription Drug Plan in the Manual was not

required under the Agreement and Navistar was not authorized to make the substitution.

V.

Navistar next argues that the district court erred when it issued its September

2011 order directing Navistar to retroactively reinstate the former prescription drug

benefit, for three reasons: (1) the court lacked jurisdiction to enter the September 2011

order; (2) the Shy Class members have no individual right to recover money damages

from Navistar; and (3) no evidence of class damages was presented. For the reasons

that follow, we conclude that the district court did not err in ordering Navistar to

retroactively reinstate the former prescription drug benefit.

A.

The district court’s subject matter jurisdiction is well established. Courts “have

a duty to enforce . . . their consent decrees as required by circumstance.” Waste Mgmt.

of Ohio v. City of Dayton, 132 F.3d 1142, 1146 (6th Cir. 1997); see also United States

v. Local 359, United Seafood Workers, 55 F.3d 64, 69 (2d Cir. 1995) (“[A] consent

decree is an order of the court and thus, by its very nature, vests the court with equitable

discretion to enforce the obligations imposed on the parties.”); Williams v. Vukovich,

720 F.2d 909, 920 (6th Cir. 1983) (“A consent decree is essentially a settlement

agreement subject to continued judicial policing.”).

Further, section 15.4 of the Agreement provides that the district court “will retain

exclusive jurisdiction to resolve any disputes relating to or arising out of or in

Nos. 11-3215/4143 Shy, et al. v. Navistar Int’l, et al. Page 12

conjunction with the enforcement, interpretation or implementation of this Settlement

Agreement, except for disputes relating solely to eligibility or entitlement to benefits

hereunder.” In its supplemental opinion and order in 1993, the district court adopted the

Agreement as a consent decree and retained “continuing jurisdiction over all parties

hereto for the purposes of implementing, enforcing and administering the Settlement

Agreement and exhibits thereto.”

When a party to a consent decree is injured by the violation of the consent

decree, “the injured party must ask the court for an equitable remedy.” Cook v. City of

Chicago, 192 F.3d 693, 695 (7th Cir. 1999); see also Waste Mgmt. of Ohio, 132 F.3d at

1145 (a court is required to “protect the integrity of the decree with its contempt

powers”). In enforcing a consent decree “[a] federal court has broad equitable remedial

powers” and “[t]he court’s choice of remedies is reviewed for an abuse of discretion.”

Stone v. City and Cnty. of San Francisco, 968 F.2d 850, 861 (9th Cir. 1992); see also

Screw Machine Tool Co. v. Slater Tool & Eng’g Corp., 683 F.2d 159, 163 (6th Cir.

1982) (the standard of review of an order granting relief for the violation of a consent

decree is abuse of discretion).

The dispute at hand does not fit within Section 15.4's exception for disputes

relating solely to eligibility or entitlement to benefits under the Agreement. The current

dispute regards whether the Agreement, the Plan, and the Manual can be interpreted to

allow for the substitution of Medicare Part D for the Prescription Drug Plan described

in the Manual for all Medical Plan 2 participants. Therefore the Agreement and well-

established precedent provided the district court with jurisdiction to enforce the

settlement agreement/consent decree through the use of an equitable remedy and we

review the district court’s September 2011 order under the abuse of discretion standard.

B.

Navistar argues that the September 2011 order was improper because the Shy

Class members have no individual right to recover money damages. However, the

district court did not grant individual damages, but in fact granted equitable relief in

response to the Shy Class motion for an injunction to compel compliance with the

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Agreement. Relief that enforces a consent decree, “[e]ven if compensatory in purpose

and effect . . . is . . . an equitable order.” Cook, 192 F.3d at 695 (italics removed).

Where a consent decree is violated, the court should fashion equitable relief that is

“designed to make the party whole for his or her loss.” Id. Here, that is exactly what the

district court has done – ordered equitable relief that is compensatory in nature and

designed to make the Shy Class whole for their loss.

The district court specifically ordered Navistar to “reinstate the drug benefit plan

which existed prior to its unilateral action and to make whole the Plaintiffs’ class for

their losses.” This order was consistent with the court’s February 2011 order, which

noted that there was nothing in the Agreement “indicating that individual members of

the class have a private right of action against Navistar to recover the premiums which

they have been wrongfully required to pay for Medicare Part D.” Thus, the district

court, after awaiting settlement negotiations between the two parties, ordered equitable

relief to the class as a whole where there was no adequate remedy at law for the

individual plaintiffs.

C.

Lastly, Navistar argues that the district court was required to hold an evidentiary

hearing because the district court did not have an evidentiary basis for class damages.

The district court’s decision not to conduct an evidentiary hearing before issuing its

September 2011 order is subject to review for an abuse of discretion. Cf. Ford Motor

Co. v. Mustangs Unlimited, Inc., 420 F. App’x 522, 527 (6th Cir. 2011) (district court

decision not to hold an evidentiary hearing before terminating a consent decree is

reviewed for an abuse of discretion).

Navistar’s argument ignores the underlying legal determinations and factual

findings by the district court. In its February 2011 order, the district court declared that

“Navistar was without authority to unilaterally substitute Medicare Part D for the

prescription drug benefit adopted by the parties” in the Agreement. It also found, and

Navistar does not dispute, that the Shy Class members who were in Medical Plan 2 paid

the premiums for Medicare Part D after July 1, 2010 and were required to pay for all

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prescription drugs that were not on SilverScript formulary. These findings were all that

was needed to prove that the Shy Class suffered damages in the amount of the Medicare

Part D premiums and any costs associated with prescriptions that were not on the

SilverScript formulary.

Navistar contends that a small number of low-income class members paid less

under Medicare Part D because they qualified for a low-income subsidy from the federal

government and paid lower co-payments. However, this ignores the fact that the low-

income class members were still subjected to Medicare Part D premiums in violation of

the consent decree. Therefore, any reduction in co-payments under Medicare Part D and

any federal subsidies provided are irrelevant to the district court’s order. Thus, the

district court did not abuse its discretion by refusing to hold an evidentiary hearing and

retroactively reinstating the former prescription drug benefit.

AFFIRMED.