Retirees' suit against Caterpillar can proceed

NEW YORK, May 17 (Reuters) - A U.S. district judge ruled on Thursday that a potential class-action lawsuit against heavy equipment maker Caterpillar Inc. (CAT.N) can proceed, court documents show.

The suit, by Caterpillar retirees or their surviving spouses, alleges Caterpillar denied lifetime medical benefits that had been promised under union contracts. Workers' collective bargaining agreements committed the company to provide free lifetime health care benefits, but Caterpillar has been charging plaintiffs for a portion of the premiums, according to the complaint.

A Caterpillar spokesman could not immediately be reached for comment.

Caterpillar has argued the case should be dismissed because the court had no jurisdiction over the suit, and said its union agreements reserved the right to amend benefits. The company also argued the complaint failed to state claims upon which relief can be granted, and that some claims were not filed on time.

Judge Aleta Trauger of the U.S. District Court for the Middle District of Tennessee rejected the company's motion to dismiss.

"The plaintiffs have presented evidence that Caterpillar intended no-cost retiree medical benefits to last for life," Judge Trauger said in the ruling.

Caterpillar shares ended down $1.11 at $74.84 on Thursday on the New York Stock Exchange.

((Reporting by Nick Zieminski, editing by Braden Reddall; nick.zieminski@reuters.com; Reuters Messaging: nick.zieminski.reuters.com@reuters.net; +1 646 223 6162)) Keywords: CATERPILLAR LAWSUIT

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