$742 Million Recovery for 23,000 Navistar Retirees in Decades-Long ERISA Benefit Fight

Navistar International, the heavy-truck manufacturer, began cutting retiree health and life insurance benefits in the 1980s, telling the courts it could not absorb the costs without risking insolvency. The reductions stripped thousands of workers who had spent careers at the company of coverage they believed was guaranteed, leaving them with scaled-back plans that fell well short of what they had been promised.

The case first reached federal court in 1992, when retirees filed suit in the Southern District of Ohio. In 1993, the parties reached a consent decree under which Navistar pledged ongoing annual payments into a fund supporting the Retiree Health Benefit and Life Insurance Plan, which covered union and salaried retirees hired before 1995. The court retained jurisdiction to enforce the decree, and that retained jurisdiction became critical.

Over the following years, new disputes arose over how Navistar was supposed to coordinate benefit payments with Medicare prescription coverage and how much it owed under the supplemental program. The case traveled up to the Sixth Circuit multiple times, with appellate courts repeatedly addressing how the 1993 consent decree should be interpreted and enforced. The litigation accumulated nearly three decades of docket entries before both sides agreed that a global resolution was the only practical path forward.

Bill Markovits and Terence Coates of Markovits, Stock and DeMarco served as court-appointed class counsel throughout the final phase of the litigation, representing the approximately 23,000 retirees and future retirees who made up the settlement class. On January 10, 2022, Judge Walter H. Rice of the Southern District of Ohio granted preliminary approval of a settlement valued at $742 million plus interest. The funds were structured to increase healthcare benefits for class members across three programs: the Health Benefit Program, the Life Insurance Program, and the Supplemental Benefit Program.

A fairness hearing was held June 9, 2022. Navistar agreed to pay class counsel fees separately, subject to a $750,000 cap negotiated between the parties and approved by the court. The settlement carried no admission of wrongdoing by Navistar.

The result stands as one of the largest ERISA benefit resolutions in Sixth Circuit history, returning meaningful coverage to retirees who had spent years, in some cases decades, fighting to preserve what they had earned on the job.