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AK Steel to Pay $1.7M Class Action Settlement to Pension Benefits Survivors
By John Curran
A class of widowers and widows of former AK Steel Corporation employees will split a $1.7 million class action settlement to resolve a pension benefits class action lawsuit that alleged the company inaccurately calculated the payments they should receive because of Social Security offsets.
According to the class action lawsuit, AK Steel reportedly paid survivor benefits based on the payments that the living spouse would receive from the Social Security Administration as a widow’s benefits and subtracted from that what they would have ordinarily received from the company, one-half of what their spouse’s pension was. In most cases, the survivor benefit from the government was higher, so that the manufacturing firm only had to pay the bare minimum of $140 per month, plaintiffs alleged.
Lawyers for the plaintiffs will receive $800,000 in fees per the terms of the AK Steel class action settlement agreement. The remaining $1.7 million will be available to claimants including lead plaintiff Judith A. Patrick, who applied for survivor benefit payments and received a reduced amount due to AK Steel including Social Security payments.
The decision comes even though similar litigation had went in favor of the company, when the Sixth Circuit Court of Appeals had reversed an affirmative decision in a similar case in October 2012. The justices found that AK Steel’s plan definition differed slightly from that of the statute governing the Social Security Administration’s determination of a widow’s’ benefits.
However, the calculation performed was fair, according to the decision, even though the AK Steel benefits guide omitted the detail of the widow’s Social Security benefits as a surviving spouse. When the court interpreted the language of the Social Security Act that the plan referenced, it found that incorporating the Social Security payments due to survivors met the implied meaning of the statute.
Plaintiffs and the steel company both benefited from the class action settlement agreement: the potential for litigation to go against Class Members as it did in the Sixth Circuit would have limited the remedy available to the surviving spouses, and the company avoids any ongoing litigation in venues where they may have had to make much larger payments on an ongoing basis. The negotiations for the Class occurred before the judge in the federal case in Ohio had a chance to review the appeals court decision and apply any case law to the Patrick case.
The plaintiffs are represented by class action lawyers from Vorys Sater Seymour and Pease LLP and Ruppert Bronson Ruppert Co. LPA.
The AK Steel Pension Benefits Class Action Lawsuit Settlement is Judith A. Patrick et al. v. AK Steel Corp. et al., Case No. 05-cv-00681, in the U.S. District Court, Southern District of Ohio.
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