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September 9, 2011

Judge moves Delphi retirees lawsuit forward

— — A lawsuit brought by Delphi salaried retirees has been given the green light by a federal judge in Michigan to move forward.

The Delphi salaried retirees, organized as the Delphi Salaried Retirees Association, is suing the Pension Benefit Guaranty Corp. to reclaim what they lost in retirement pensions. The Michigan decision, which was received last week, is a positive step forward, said Den Black, chairman of the DSRA.

Judge Arthur Tarnow in the Eastern District of Michigan ruled that all four counts the DSRA brought against the PBGC would go to the “discovery” phase of civil court. Discovery is the part of the court process where evidence is gathered by both sides. Each party has until April 2012 to complete discovery in the DSRA lawsuit.

Tarnow did throw out the DSRA’s other lawsuits against the US Department of the Treasury, the Auto Industry Task Force, Treasury Secretary Timothy Geithner, former car czar Steven Rattner and former White House manufacturing adviser Ron Bloom.

The judge said the retirees’ complaint fails to include “sufficient factual allegations against those defendants.” Tarnow’s decision said it felt the result was required by two recent U.S. Supreme Court decisions emphasizing the need for fact-specific allegations.

The DSRA case against the defendants may have been dismissed, but Tarnow did not stop the retirees from asking to be allowed to amend the complaint at a later time to add additional factual allegations.

The decision also mentioned the whole issue could be resolved outside of court.

“The court also anticipates that (the retirees) will continue to utilize the political process to pursue the relief they seek,” the court decision said. “The subject of the complaint may be a matter that is best resolved through the political process.”

In July 2009, the roughly 22,000 salaried retirees nationwide found out their pensions were going to be turned over to the federal PBGC, as part of the bankruptcy emergence plans for General Motors and Delphi. The move led to cuts in the pensions ranging from 30 percent to 70 percent. Pensions for hourly workers was topped off by GM.

A few months before that in April 2009, retirees found out they were losing their health and life insurance benefits. Lawmakers have backed the salaried retirees, as four hearings on the issue have been held in Congress.

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