Golden v. Kelsey-Hayes Co.

• Citation: 73 F.3d 648,22 C.C.P.A. 744
• Decision Date: 18 January 1996
• Docket Number: 95-1474,Nos. 94-1463,KELSEY-HAYES,s. 94-1463
• Parties: 151 L.R.R.M. (BNA) 2258, 64 USLW 2458, 19 Employee Benefits Cas. 2457 Joseph GOLDEN, Angelo Deitos, Edward Jones, Ida Thomason, Luther Palmer, Caroline Forys, Josephine Thomas, John Hoyle, Arthur Sallis, Thelma Songer, John W. Galloway and Roger Farrar, Plaintiffs-Appellees, v.COMPANY, Defendant-Appellant (94-1463). In re Joseph GOLDEN, Angelo Deitos, Edward Jones, Ida Thomason, Luther Palmer, Caroline Forys, Josephine Thomas, John Hoyle, Arthur Sallis, Thelma Songer, John W. Galloway and Roger Farrar, on behalf of themselves and a class of persons similarly situated, Petitioners (95-1474).
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 648

73 F.3d 648

151 L.R.R.M. (BNA) 2258, 64 USLW 2458,

19 Employee Benefits Cas. 2457

Joseph GOLDEN, Angelo Deitos, Edward Jones, Ida Thomason Luther Palmer, Caroline Forys, Josephine Thomas, John Hoyle Arthur Sallis, Thelma Songer, John W. Galloway and Roger Farrar, Plaintiffs-Appellees, v. KELSEY-HAYES COMPANY Defendant-Appellant (94-1463) In re Joseph GOLDEN, Angelo Deitos, Edward Jones, Ida Thomason, Luther Palmer, Caroline Forys, Josephine Thomas, John Hoyle, Arthur Sallis, Thelma Songer, John W. Galloway and Roger Farrar, on behalf of themselves and a class of persons similarly situated, Petitioners (95-1474).

Nos. 94-1463, 95-1474.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 19, 1995.

Decided Jan. 18, 1996.

Roger J. McClow (argued and briefed), Klimist, McKnight, Sale, McClow & Canzano, Southfield, MI, for plaintiffs-appellees.

Mark T. Nelson, Butzel, Long, Gust, Klein & Van Zile, Detroit, MI, Kirk D. Messmer (argued and briefed), Jay G. Swardenski (briefed), Christopher A. Johlie, Elliot H. Goldman, Matkov, Salzman, Madoff & Gunn, Chicago, IL, for defendant-appellant.

Before: BROWN, BOGGS, and NORRIS, Circuit Judges.

BROWN, J., delivered the opinion of the court, in which NORRIS, J., joined. BOGGS, J. (pp. 663-666), delivered a separate opinion concurring in part and dissenting in part.

BAILEY BROWN, Circuit Judge.

This opinion resolves an appeal of a district court's grant of a preliminary injunction and resolves a petition to this court for a writ of mandamus. Both matters arise from the same underlying lawsuit regarding whether the plaintiffs are entitled to continuing health insurance benefits. First, as indicated, the defendants appeal the district court's grant of a preliminary injunction. Second, the plaintiffs petition this court for a writ of mandamus ordering the district court to allow them a jury trial. After summarizing the relevant facts giving rise to the district court litigation, we will address each issue in turn.

I. FACTS

The plaintiffs are retired employees of, and surviving spouses of retired employees of, Kelsey-Hayes Company and Hayes Wheels International, which manufacture automobile brakes and wheels. During the plaintiffs' or plaintiffs' spouses' employment, the United Automobile Workers (UAW) and five of its local unions represented them in collective bargaining with their employer. The five bargaining units originally served employees at seven different Kelsey-Hayes plants. Since the 1960s, as required by collective bargaining agreements (CBAs) in effect at each plant, Kelsey-Hayes has provided health insurance benefits to employees, to retirees, and to the surviving spouses of deceased retirees.

In 1987, Kelsey-Hayes sold three of its plants. At that time, the employees in those plants terminated their employment with Kelsey-Hayes. Kelsey-Hayes, however, continues to provide health insurance benefits to employees who retired from those plants before the sales, and to their spouses, and to the surviving spouses of deceased retirees.

In December of 1992, Kelsey-Hayes split into two companies: Kelsey-Hayes Co., which continued the brake business, and Hayes Wheels International, which continued the wheel business. ¹ When the company split, the new Kelsey-Hayes (see footnote 1) took three plants, and Hayes Wheels took one plant. Kelsey-Hayes continues the sponsorship of health insurance benefit plans On April 26, 1993, each company announced that it would modify the health insurance benefits provided to retirees and surviving spouses, effective January 1, 1994. The companies described the changes in a summary plan description ² (SPD) sent to all retirees in November of 1993. The modifications included the imposition of a monthly premium contribution, increased co-payment and annual deductible requirements, a lifetime benefit cap of $500,000 per beneficiary, and the elimination of the Special Age 65 Benefit. ³ Generally, the companies were to deduct the costs of these modifications from the pensioners' monthly checks. These changes affected at least some retirees from five different plants, and their spouses. The modifications went into effect as planned on January 1, 1994.

for pre-split retirees, including those who are retired from the three plants sold in 1987, while each company sponsors the plans for its own post-split retirees.

Meanwhile, the plaintiffs filed this action as a class action on November 12, 1993. ⁴ The plaintiffs raise one claim, for breach of collective bargaining agreements, that is relevant to the issues presented here. They seek declaratory, injunctive, and monetary relief, and costs and attorney fees. In their complaint, the plaintiffs included a demand for a jury trial.

On December 23, 1993, the plaintiffs filed a motion for a preliminary injunction. The district court scheduled a hearing on the motion for March 10, 1994. Prior to the hearing, one of the UAW locals negotiated new CBAs for two of the plants at issue, one owned by Kelsey-Hayes, the other by Hayes Wheels. During these negotiations, both Kelsey-Hayes and Hayes Wheels entered into separate letter agreements with the local union rescinding virtually all the changes to the retiree health plans for those two plants, retroactive to January 1, 1994, and subject to the outcome of this litigation. As a result, the plaintiffs withdrew their request for a preliminary injunction as to retirees from those two plants.

On March 14, 1994, the district court entered a preliminary injunction directing Kelsey-Hayes to reinstate health insurance benefits to pre-1994 levels for retirees of the three remaining plants affected by the injunction. ⁵ The injunction took effect on April 18, 1994, when the plaintiffs posted an injunction bond. On April 29, 1994, Kelsey-Hayes filed a notice of its intent to appeal the preliminary injunction.

On December 20, 1994, the plaintiffs filed an amended complaint in which they added Hayes Wheels as a defendant. The amended complaint, like the original complaint, included a demand for a jury trial. On February 28, 1995, the district court struck the plaintiffs' jury demand on the recommendation of a magistrate judge, after briefs and argument.

On May 4, 1995, the plaintiffs filed in this court a petition seeking a writ of mandamus directing the district court to reinstate their jury demand.

II. THE PRELIMINARY INJUNCTION

The plaintiffs brought this action for reinstatement of retiree health insurance benefits under section 301(a) of the Labor--Management Relations Act (LMRA), 29 U.S.C. Sec. 185 (1988). ⁶ The district court granted the

                plaintiffs' motion for a preliminary injunction ordering the defendant to resume providing complete health insurance benefits to the plaintiffs at no cost to them.   Golden v. Kelsey-Hayes Co., 845 F.Supp. 410, 417 (E.D.Mich.1994).  The defendant, Kelsey-Hayes Co., filed this interlocutory appeal, presenting the following issues:  (1) Did CBAs between the plaintiffs' union and the defendant provide the plaintiffs a vested right to receive lifetime health insurance benefits without cost;  and (2) did the district court abuse its discretion in granting class-wide relief before certifying the class?   For the reasons set forth below, we AFFIRM the district court's order granting the preliminary injunction
                

ANALYSIS

Did CBAs between the plaintiffs' union and the defendants provide the plaintiffs a vested right to receive lifetime health insurance benefits without cost?

Standard of Review

An appellate court reviews a district court's grant of a preliminary injunction for an abuse of discretion. CSX Transp. v. Tennessee Bd. of Equalization, 964 F.2d 548, 554 (6th Cir.1992). We will hold that the district court erred only if it incorrectly applied the law, or relied on clearly erroneous findings of fact. Christian Schmidt Brewing Co. v. G. Heileman Brewing Co., 753 F.2d 1354, 1356 (6th Cir.), cert. dismissed, 469 U.S. 1200, 105 S.Ct. 1155, 84 L.Ed.2d 309 (1985). We therefore review the district court's conclusions of law de novo and its findings of fact for clear error. Performance Unlimited v. Questar Publishers Inc., 52 F.3d 1373, 1381 (6th Cir.1995). Questions of contract interpretation are generally considered questions of law subject to de novo review. Boyer v. Douglas Components Corp., 986 F.2d 999, 1003 (6th Cir.1993).

Standard for Issuing a Preliminary Injunction

When presented with a motion for a preliminary injunction, a district court considers four factors: (1) the plaintiffs' likelihood of success on the merits, (2) whether the plaintiffs could suffer irreparable harm without the injunction, (3) whether granting the injunction will cause substantial harm to others, and (4) the impact of the injunction on the public interest. Performance Unlimited, 52 F.3d 1373 at 1381. None of these factors, standing alone, is a prerequisite to relief; rather, the court should balance them. Id. (citing In re DeLorean Motor Co., 755 F.2d 1223, 1228 (6th Cir.1985)).

The district court did not abuse its discretion in this case.

The district court considered each of the four factors listed above and granted the preliminary injunction. On appeal, the defendant challenges (1) the court's determination that the plaintiffs are likely to succeed on the merits, (2) its determination that the plaintiffs are likely to suffer irreparable harm without the injunction, and (3) its balancing of the harms. We will consider the district court's decisions on these factors in turn.

1. The plaintiffs' likelihood of success on the merits

The plaintiffs are likely to succeed on the merits of this case if they can prove they have a "vested" right to the comprehensive health insurance benefits they received prior to January 1, 1994. To prove this, the plaintiffs must show that the defendant and the union intended to include a right to lifetime benefits when they negotiated the CBAs at issue here. There is no statutory right...