Laforest v. Former Clean Air Holding Co.

376 F.3d 48, 2004 U.S. App. LEXIS 14616
CourtCourt of Appeals for the Second Circuit
DecidedAugust 9, 2004
DocketDocket 03-9007(L), 03-9043(CON), 03-9045(CON), 03-9313(CON), 03-9357(CON), 04-0104(CON)
StatusPublished
Cited by19 cases

This text of 376 F.3d 48 (Laforest v. Former Clean Air Holding Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Laforest v. Former Clean Air Holding Co., 376 F.3d 48, 2004 U.S. App. LEXIS 14616 (2d Cir. 2004).

Opinion

WESLEY, Circuit Judge. 1

In this appeal, we are called upon to assess a district court’s issuance of injunc-tive relief to a putative class of plaintiffs alleging that they are in imminent danger of suffering irreparable harm. Plaintiffs are all retirees, or surviving spouses of retirees, of Bendix Corporation. They average 83 years of age, and, due to the actions of one of the third-party defendants-appellants, recently suffered a drastic reduction in their level and quality of health care benefits. Plaintiffs contend that defendant-appellant Honeywell International, Inc. — a successor of Bendix — -is obligated to remedy this reduction under the terms of an agreement that Bendix entered into in 1976. For the reasons that follow, we hold that the district court correctly ruled that Honeywell is liable under the agreement, and properly issued an injunction ordering Honeywell to comply with that agreement. We remand, however, for the district court to clarify and modify its injunctive relief in two material respects.

1. Facts & Procedural Posture

In 1974, pursuant to a consent order entered by the Federal Trade Commission (“FTC”), Bendix Corporation (“Bendix”) made plans to divest itself of three unionized manufacturing facilities by selling them to the newly created Facet Enterprises, Inc. (“Facet”). 2 In its negotiations with the International Union, United Automobile, Aerospace & Agricultural Implement Workers of America (“UAW”), Bendix entered into an agreement entitled a “Guaranty,” by which it promised, in essence, that certain retirees, vested employees, and surviving spouses would retain— for life — the level of health benefits in place at Bendix on April 1, 1976. In September 2002, third-party defendant-appellant Motor Components, L.L.C. (“Motor Components”) — a successor of Facet — reduced retiree benefit levels below the level in place in 1976. Plaintiffs-appellees James LaForest et al. (“plaintiffs”) initially brought a putative class action in the United States District Court for the Eastern District of Michigan, asserting claims against defendant-appellant Honeywell International, Inc. (“Honeywell”) — a successor of Bendix — under, inter alia, the Labor Management Relations Act (“LMRA”) § 301, 29 U.S.C. § 185. Plaintiffs sought to hold Honeywell to the terms of the Guaranty.

In May 2003, the case was transferred to the United States District Court for the Western District of New York, pursuant to 28 U.S.C. § 1404(a). In August 2003, the district court granted summary judgment *51 to plaintiffs on the issue of liability, holding that the Guaranty unambiguously obligated Honeywell to provide for the level of health benefits available in 1976, given the triggering fact that Motor Components reduced benefits below that threshold. See LaForest v. Honeywell Int’l, Inc., No. 03-CV-6248T, 2003 WL 22103474 (W.D.N.Y. Aug.7, 2003) (“LaForest I ”). Subsequently, in September 2003, the district court issued a preliminary injunction ordering Honeywell to comply with the Guaranty, see Laforest v. Honeywell Int’l, Inc., No. 03-CV-6248T, 2003 WL 23180220 (W.D.N.Y. Sept.19, 2003) (“Laforest II”), and, in November 2003, the court issued an unreported decision in which it clarified the terms of that injunction. More recently, in March 2004, the district court certified the plaintiff class. Honeywell and third-party defendants-appellants (collectively “defendants”) appeal the district court’s September 2003 issuance of the preliminary injunction ordering Honeywell to honor the Guaranty, as well as the court’s August 2003 grant of summary judgment to plaintiffs.

II. Discussion

At the outset, we are presented with a jurisdictional question. This Court has jurisdiction to hear the appeal of the district court’s September 2003 issuance of the preliminary injunction under 28 U.S.C. § 1292(a)(1). Although the August 2003 judgment is not a final order, “where an issue is ‘inextricably intertwined’ with a question that is the proper subject of an immediate appeal, or ... where review of a jurisdietionally insufficient issue is ‘necessary to ensure meaningful review’ of a jurisdietionally sufficient one, an appellate court may exercise pendent jurisdiction.” Rein v. Socialist People’s Libyan Arab Jamahiriya, 162 F.3d 748, 757-58 (2d Cir. 1998) (quoting Swint v. Chambers County Comm’n, 514 U.S. 35, 51, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995)). Thus, since the issuance of the preliminary injunction was premised in part on the grant of summary judgment, we assert pendent jurisdiction over the latter. And for the reasons that follow, we affirm the district court’s grant of summary judgment and issuance of the preliminary injunction, but remand for clarification and modification of that injunction.

A. The District Court’s Grant of Summary Judgment

Defendants challenge the district court’s grant of summary judgment on several grounds. First, defendants note that under the terms of the Guaranty, Honeywell’s obligation to provide for the maintenance of benefit levels may be “reduced in an amount equal to the reduction, if any, in the insurance coverage ... below that provided for in the Insurance Agreement as of [April 1, 1976], pursuant to any agreement betiveen Facet and the Union.” Defendants argue that the UAW “tacitly” agreed to Motor Components’ reduction of benefit levels insofar as it did not “vigorously” contest that reduction — and therefore that Honeywell is not liable to provide for benefit levels above those resulting from this “agreement.”

The record is to the contrary. In April 2002, Motor Components informed UAW representative Scott Montani that it could no longer afford to pay benefits at then-current rates. Montani responded by explaining that the UAW would “fight” any reduction in benefits. In July 2002, Motor Components announced that it would be reducing benefits. In an e-mail, Montani explained, inter alia, that “[t]he UAW does not cease to represent our retirees! That is our heritage.” In an August 2002 letter to the retirees, Montani assured them that “[t]he Union is on the verge of taking action, if appropriate, on your be *52 half.” While this conduct is squarely in accordance with the UAW’s history of resisting benefit reductions, defendants claim that subsequent conduct was to the contrary.

During Motor Components’ negotiations with the UAW over their 2002 collective bargaining agreement, Motor Components reiterated its position that it could no longer afford then-current levels of benefits, and proposed discontinuing them. The UAW then filed suit against Honeywell, seeking to hold it to the Guaranty. Motor Components and the UAW continued to negotiate regarding then-current employees, but ceased negotiations over retiree benefits.

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Laforest v. Former Clean Air Holding Company
376 F.3d 48 (Second Circuit, 2004)

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Bluebook (online)
376 F.3d 48, 2004 U.S. App. LEXIS 14616, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laforest-v-former-clean-air-holding-co-ca2-2004.