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McKinney v. United States Postal Service

United States District Court, District Circuit

January 16, 2013

PAMELA McKINNEY, Plaintiff,
v.
UNITED STATES POSTAL SERVICE, Defendant.

NOT INTENDED FOR PUBLICATION

MEMORANDUM OPINION [1]

ROBERT L. WILKINS United States District Judge

Plaintiff Pamela McKinney (“Plaintiff” or “McKinney”) brings this putative class action on behalf of herself and all other similarly situated beneficiaries, seeking to recover unpaid interest on additional death benefit amounts that were paid, or that should have been paid, by the United States Postal Service (the “Postal Service”) pursuant to an Annuity Protection Program. The matter is presently before the Court on McKinney’s Motion for Class Certification. (Dkt. No. 38). Having carefully considered the parties’ respective briefing, the entire record in this case, and the arguments of counsel during a hearing on January 14, 2013, the Court finds that McKinney’s proposed class satisfies all of the elements of Federal Rule of Civil Procedure 23(a), as well as the “predominance” factor of Rule 23(b)(3), for the reasons set forth herein. However, the Court defers a full ruling on McKinney’s Motion for Class Certification pending limited discovery efforts aimed at the manageability aspect of Rule 23(b)(3)’s “superiority” prong, followed by a further report and/or additional briefing from the parties on that issue.

BACKGROUND

In July 1981, the Postal Service and several postal employee unions entered into a three-year collective bargaining agreement (“CBA”) that relates to this case. (Dkt. No. 38-1). As relevant here, the CBA deferred until 1984 a cost-of-living adjustment (“COLA”) in the amount of $3, 619.00 that would have otherwise gone into effect in 1981. (Id. at Art. 9, sect. 3). At that time, the Postal Service and the unions also executed a memorandum of agreement, known as the Annuity Protection Program, which provided, in relevant part, that:

[N]o employee[] whose basic pay is not increased by the amount of $3, 619 (the annualized cost-of-living adjustment accumulated during the life of the 1978 National Agreement) before the first full pay period of October, 1984, due to the provisions set forth in Article 9, Section 3, of the 1981 National Agreement, will suffer any diminution of annuity (e.g., optional, disability, or survivors benefits) by reason thereof.

Id. at p. 163). Apparently, the Postal Service and the unions also had an oral understanding that “no one will get hurt” by the delay in rolling the accumulated COLA into employees’ basic pay. (Dkt. No. 26 (“Am. Compl.”) at ¶ 11).

Subsequently, the Postal Service and the unions disagreed over the scope of the Annuity Protection Program surrounding which specific benefits were to be included within its terms. (Id. at ¶ 12). That dispute was arbitrated, and a decision and award was issued by the arbitrator, Clark Kerr, on August 5, 1986. (Dkt. No. 38-2). Among other rulings, the arbitrator determined that life insurance benefits were among those benefits included in the Annuity Protection Program, explaining that “[f]ull remedy should be awarded to those survivors of deceased postal employees who have suffered a diminution of life insurance benefits.” (Id.). The arbitrator did not make any determination as to whether interest should be awarded on any remedies, “since this was not adequately explored before him, ” and that issue was left open for discussion between the parties. (Id.). For reasons unexplained, however, the Postal Service and the unions apparently never discussed whether interest should be included in the award, nor did they ever ask the arbitrator to rule on that issue.

According to McKinney’s Amended Complaint, her father, Lepolion McKinney, was employed by the Postal Service from April 17, 1969 through December 17, 1969, and later from November 1980 until January 31, 1982. (Am. Compl. at ¶ 5). He passed away on January 31, 1982, and his death was ruled accidental, entitling McKinney and her siblings to death benefits as beneficiaries under her father’s life insurance policy from the Postal Service. (Id. at ¶¶ 6-7). According to McKinney, the Office of Federal Employees’ Group Life Insurance (OFEGLI) issued initial death benefit payments to her and her siblings shortly after his death. (Id.). But her father was subject to the Annuity Protection Program encompassed in the July 1981 CBA, which meant that those initial death benefit payments did not factor in additional amounts that would have been paid out as a result of the deferred COLA.

After the Kerr Award was issued in July 1986, decades inexplicably passed before the Postal Service took any action to pay McKinney or her siblings the additional benefits to which they were owed under the Annuity Protection Program. (Id. at ¶¶ 18, 23). Finally, on July 23, 2008, McKinney received a letter from the Postal Service, notifying her that she may be eligible for an additional death benefit payment. (Id. at ¶ 18; Dkt. No. 41-1). On August 22, 2008, McKinney was sent a check from the Postal Service in the amount of $2, 665.80, which was described as “the difference in the death benefit you had received from OFEGLI and the amount you would have received if applicable cost of living adjustments had been part of [her father’s] basic pay.” (Am. Compl. at ¶ 20). She also alleges that on May 22, 2009, she received a second check, in the amount of $1, 333.33, representing the COLA adjustment on a double benefit under her father’s life insurance policy based on the classification of his death as “accidental.” (Id. at ¶ 21). Altogether, McKinney received an additional $3, 999.13 in death benefits attributable to the Annuity Protection Program. (Id. at ¶ 22). However, the Postal Service refused to pay McKinney any interest on these additional amounts, ostensibly because “the agreements do not state that the USPS is obligated to pay any interest on the monies due to the beneficiaries.” (See Dkt. Nos. 38-3, 38-4, 38-5).

McKinney now brings this putative class action on behalf of herself and all other similarly situated beneficiaries, seeking to recover interest on any additional benefits that were, or that should have been, paid out by the Postal Service pursuant to the Annuity Protection Program. Through her Amended Complaint, she asserts four remaining claims: (1) Breach of Contract, (2) Unjust Enrichment, (3) Enforcement of Arbitration Decision, and (4) Accounting.[2] As defined in her moving papers, McKinney seeks to certify the following proposed class:

All former employees of the United States Postal Service covered by the July 1981 Collective Bargaining Agreement (CBA), the Memorandum of Agreement and/or the oral understanding among the Postal Service and the unions relating to the CBA, and their heirs and beneficiaries, who were paid or were entitled to be paid benefits in accordance with the agreements and the arbitration decision dated August 5, 1986 alleged in paragraph 14 of the amended complaint, and who were not paid interest.

(Dkt. No. 38 (“Pl.’s Mem.”) at 1).

ANALYSIS

A. McKinney’s Claims Were Timely Filed Under 28 U.S.C. § 2401

As an initial matter, and before even turning to the issue of class certification, the Postal Service argues that the Court should dismiss McKinney’s claims for lack of subject matter jurisdiction pursuant to 28 U.S.C. § 2401(a), which provides that “every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues.” 28 U.S.C. § 2401(a). It bears mentioning that this is not the first time the Postal Service has argued for dismissal on jurisdictional grounds. The Court previously considered and rejected a number of jurisdictional arguments raised by the Postal Service through its Motion to Dismiss McKinney’s Amended Complaint. (See Dkt. No. 27). Ultimately, the Court concluded that McKinney ...


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