Yes - it used to happen - in addition to the OpUps from coach to business because of full flights (it happened to me TLV-JFK a few years ago when I was PL) I seem to remember that if you were a PL or TPL and you bought a full fare coach ticket, you had a very high probability of an automatic upgrade based on their calculus of status and how much you paid for the ticket. Thus, frequent LY travelers never paid full price for business class. Likewise, I have been op-upped from business to first on LY when flying on a full-fare business ticket (that someone else paid for) probably to make room for someone else to get bumped to business.

Can anyone else out there who flies/flew LY more than I do confirm this?