Retirement Heist: how companies plunder and profit from the nest eggs of American workers

The judge could have decided the case on the merits or sent it to trial. Instead, he insisted that the parties work it out. But when neither side budged, the judge scheduled a mediation meeting in Cleveland—a year later. A year passed. GenCorp then insisted that the retirees should include people from other locations, so several retirees traveled from Kentucky and Ohio, booking senior-discount rooms at the Holiday Inn. Kenneth Bottolfs, then in his eighties, came the farthest. His threeconnecting-flight trip from Waco, Texas, took eight hours.

When neither side backed down in this second mediation hearing, the judge ordered a third meeting. Eight months later, the retirees traveled to this third meeting, minus Wotus, who’d had a stroke. This meeting failed, too, so the judge finally ordered depositions and document production to proceed. This meant the retirees had to travel to Cleveland to be deposed by GenCorp lawyers. The May 2003 sessions took several hours each. The retirees whiled away their waits playing cards and trading war stories about their times at Okinawa and Iwo Jima.

END OF THE ROAD

The following August, the retirees’ lawyers filed to have the suit certified as a class action. Without this, even if the named plaintiffs won, no others would get their benefits restored. GenCorp opposed this. It said that the plaintiffs were too befuddled to represent the class. As was clear from their depositions, some had forgotten what they were thinking when they signed enrollment forms. One didn’t remember what was in GenCorp’s slide presentation explaining the benefit options eight years earlier.

GenCorp also accused the retirees of destroying evidence. The reason: They’d commingled their paperwork when they pooled their brochures in a cardboard box while searching for a lawyer. That constituted “spoliation,” GenCorp said, adding that it would “seek appropriate remedies at a later date.” Remedies in these situations can include charging retirees for a company’s legal fees.

Finally, GenCorp said the retirees should be denied class status because they were too dispersed, so that different legal standards governing different parts of the country would apply, and because the named plaintiffs were too sick to adequately represent everybody. The plaintiffs were, in fact, sick. Shortly after, in October 2003, Robert Berger, age sixty-nine, died. Polumbo died the next month, at eighty-nine. His widow, Mary Elizabeth, eighty-eight, volunteered to take his place. In December, the judge sided with GenCorp and denied the retirees’ request to be certified as a class.

The retirees had discovered another harsh reality: If he is so inclined, a judge can keep a case from ever reaching a trial. Judge Dan Polster had badgered the parties to settle and the retirees had to travel, time and again, to court hundreds of miles away, in some cases to attend incremental hearings that took only a short time.

The retirees figured that by denying the class action, the judge was just trying to get them to give up. But after this setback, the retirees rallied and signed up an additional 294 plaintiffs. They filed another suit in July 2004, in time to beat a statute of limitations that the company said was about to expire. The next month, the judge dismissed that case, telling the roughly four hundred retirees, mostly in their eighties, that each would have to file an individual case and pay the $150 filing fee for each one.

The retirees called the judge’s bluff. Payne and Stember filed four hundred individual suits, paying $60,000 in filing fees, rather than the $350 it would have cost if the judge hadn’t insisted on separate individual cases. They had to act fast: “They were dropping like flies,” Payne says. He told the judge that the average age of the retirees was eighty-two.

The judge’s reaction: He said he would grant each of the 342 retirees a trial. One at a time. Hearing one case individually, each month, minus vacation and holidays, would take years, and few of the retirees, whose average age was 82, would live long enough to see it be resolved.

The retirees were backed into a corner. They couldn’t appeal because an appeal can’t be made until a final judgment and there’s no final judgment until the end of a trial. They agreed to settle, and would pay a portion of their coverage. They did not, of course, get reimbursed for what they’d spent for the coverage over the prior six years.