Cooper v. Honeywell Int'l, Inc.

• Decision Date: 08 March 2018
• Docket Number: No. 17-1042,17-1042
• Citation: 884 F.3d 612
• Parties: Rebecca COOPER, Morris McKenney, and Robert Kolinske, for themselves and others similarly-situated, Plaintiffs-Appellees, v. HONEYWELL INTERNATIONAL, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

884 F.3d 612

Rebecca COOPER, Morris McKenney, and Robert Kolinske, for themselves and others similarly-situated, Plaintiffs-Appellees,

v.HONEYWELL INTERNATIONAL, INC., Defendant-Appellant.

No. 17-1042

United States Court of Appeals, Sixth Circuit.

Argued: August 3, 2017

Decided and Filed: March 8, 2018

Rehearing En Banc Denied April 11, 2018^*

ARGUED: Cody D. Rockey, DYKEMA GOSSETT PLLC, Ann Arbor, Michigan, for Appellant. John G. Adam, LEGGHIO & ISRAEL, P.C., Royal Oak, Michigan, for Appellees. ON BRIEF: Cody D. Rockey, Jill M. Wheaton, DYKEMA GOSSETT PLLC, Ann Arbor, Michigan, Mark J. Magyar, DYKEMA GOSSETT PLLC, Grand Rapids, Michigan, for Appellant. John G. Adam, Stuart M. Israel, LEGGHIO & ISRAEL, P.C., Royal Oak, Michigan, William Wertheimer, LAW OFFICE OF WILLIAM WERTHEIMER, Bingham Farms, Michigan, for Appellees.

Before: SUTTON, McKEAGUE, THAPAR, Circuit Judges.

McKEAGUE, Circuit Judge.

This is yet another entry in a complicated tangle of cases dealing with whether retiree benefits in a collective bargaining agreement ("CBA") should extend beyond the CBA’s expiration. Rebecca Cooper and some 50 other retirees at Honeywell International’s Boyne City, Michigan plant say that Honeywell must provide them healthcare benefits until they reach age 65. Honeywell responds that its obligation to pay those benefits ended when its CBA with the Boyne City employees expired in March 2016.

While waiting for the district court to pick the winner in this fight, the retirees sought a preliminary injunction barring Honeywell from terminating their healthcare. The district court granted the injunction, concluding that the retirees had shown both a likelihood of success on the merits and that they would suffer irreparable harm without such relief. Because we find that the retiree healthcare benefit provision in the CBA did not clearly provide an alternative end date to the CBA’s general durational clause, we conclude that Cooper has not shown a likelihood of success on the merits and thus REVERSE the decision of the district court.

I

Named plaintiffs Rebecca Cooper, Morris McKenney, and Robert Kolinske (collectively, "Cooper") are all former employees at Honeywell International, Inc.’s Boyne City, Michigan auto parts plant. While working at the plant, they were members of the collective bargaining unit represented by the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America ("UAW"). This case concerns the CBA between the Boyne City UAW bargaining unit and Honeywell that became effective May 17, 2011 and remained in effect until March 30, 2016.

The focus of the parties' dispute is Article 19.7.4, the provision covering retiree healthcare¹ :

19.7.4 Retirees under age 65 who are covered under the BC/BS Preferred Medical Plan will continue to be covered under the Plan, until age 65, by payment of 16% of the retiree monthly premium costs which is currently, as of May 17, 2011, $113.64 per month for single and $275.52 per month for family, as adjusted year to year.

About 27 "under age 65" Boyne City employees—Cooper, McKenney, and Kolinske among them—took early retirement under the 2011 CBA and began receiving Honeywell-sponsored healthcare, consistent with the terms of Article 19.7.4. Other Boyne City employees had retired before the 2011 CBA took effect, but were still eligible for the retiree benefits provided for in Article 19.7.4.

On November 9, 2015, Honeywell notified the UAW and the Boyne City retirees that it planned to terminate retiree medical benefits upon the 2011 CBA’s March 30, 2016 expiration.² In December, Honeywell decided to delay the termination of benefits until the end of 2016.

Five months later, on May 6, 2016, Cooper filed a class-action suit against Honeywell. Suing on behalf of roughly 50 other retirees and their dependents, Cooper, McKenney, and Kolinske alleged Honeywell was obligated to continue providing benefits to retirees until they reached age 65. They identified a right to relief under the Labor Management Relations Act (LMRA), the Employment Retirement Income Security Act (ERISA), and Michigan common law estoppel. Plaintiffs also asked the court to compel Honeywell to arbitrate these claims, but the district court demurred.

Then, in November 2016, little more than a month before retiree healthcare benefits were set to expire, Cooper moved for a preliminary injunction enjoining Honeywell from terminating the benefits. In a brief two-page order, the district court granted Cooper’s preliminary injunction, relying on its reasoning at oral argument.

This appeal followed.

II

Critical to this appeal is the district court’s conclusion that Cooper established a likelihood of success on the ultimate contract dispute. Cooper argued that Article 19.7.4’s "until age 65" language had a vesting effect, meaning those who retired before the 2011 CBA expired were entitled to healthcare benefits until they reached age 65—even if the 2011 CBA expired in the interim. Honeywell said that the "until age 65" language does not vest healthcare benefits beyond the CBA’s end date, but rather only explains who is eligible for benefits during the CBA’s operation. The district court was torn. Noting that the "law in this area is in something of a state of flux" and that "there’s not a slam dunk on either side," it nevertheless concluded that Cooper did enough to establish a likelihood of success on the merits and granted the injunction.

On appeal, the parties hold to their positions and renew the same arguments they urged before the district court. Aided by recent cases clarifying the law in this area, our review of those arguments leads us to a different conclusion: Cooper cannot show a likelihood of success on the merits. Failing to do so, the district court necessarily erred in granting Cooper’s preliminary injunction.

A. Standard of Review

District courts consider four factors in deciding whether to issue a preliminary injunction: "(1) whether the plaintiff has established a substantial likelihood or probability of success on the merits; (2) whether there is a threat of irreparable harm to the plaintiff; (3) whether issuance of the injunction would cause substantial harm to others; and (4) whether the public interest would be served by granting injunctive relief." Entm't Prods., Inc. v. Shelby Cty., Tenn., 588 F.3d 372, 377 (6th Cir. 2009). But a "preliminary injunction issued where there is simply no likelihood of success on the merits must be reversed."

Winnett v. Caterpillar, Inc. , 609 F.3d 404, 408 (6th Cir. 2010) (quoting Mich. State AFL–CIO v. Miller , 103 F.3d 1240, 1249 (6th Cir. 1997) ). Because Cooper’s argument falters on this first factor, our inquiry goes no further.

And while we normally review a district court’s weighing of the four preliminary injunction factors for an abuse of discretion, the "preliminary question of whether a movant is likely to succeed on the merits" is a question of law we review de novo. Tumblebus Inc. v. Cranmer , 399 F.3d 754, 760 (6th Cir. 2005). Likewise, the critical merits issue here turns on the meaning of a contract’s terms, another purely legal question reviewed de novo. Answers in Genesis of Ky., Inc. v. Creation Ministries Int'l, Ltd. , 556 F.3d 459, 466 (6th Cir. 2009). Because our analysis of the district court’s preliminary injunction decision starts and stops with the likelihood-of-success question, we owe the district court no deference.

B. Analysis

1. Key Case Law on CBAs and Benefit Vesting

Governed as we are by precedent, we cannot very well talk about this case without talking about the many, ever-so-slightly different ones before it. The sensible place to start is with the Supreme Court’s decision in M & G Polymers USA, LLC v. Tackett , ––– U.S. ––––, 135 S.Ct. 926, 190 L.Ed.2d 809 (2015). In Tackett , the Supreme Court abrogated the so-called Yard-Man inference that this Circuit had often invoked to place "a thumb on the scale in favor of vested retiree benefits in all collective-bargaining agreements." Id. at 935. It is hard to overstate how powerful this inference was, especially in benefits vesting cases. For instance, applying the Yard-Man inference had led us in the past to read a CBA’s "general-durational clause—the clause that typically says when the contract goes into and out of effect—to ‘say[ ] nothing about the vesting of retiree benefits’ unless the contract contained specific durational language that referred to retiree benefits." Watkins v. Honeywell Int'l Inc. , 875 F.3d 321, 324 (6th Cir. 2017) (quoting Noe v. PolyOne Corp. , 520 F.3d 548, 555 (6th Cir. 2008) ).

Tackett discarded Yard-Man and ordered the Sixth Circuit "to apply ordinary principles of contract law in the first instance." 135 S.Ct. at 937. Furthermore, and relevant to this case, Tackett said that a general durational clause can be read to prevent vesting; a contract need not include a specific end-date for each type of benefits. Id. at 936. It also concluded that our court "failed even to consider the traditional principle that courts should not construe ambiguous writings to create lifetime promises." Id. On remand, the Sixth Circuit identified several principles of contract law that it instructed the district court to apply. Tackett v. M & G Polymers USA, LLC , 811 F.3d 204, 210 (6th Cir. 2016) ( Tackett III ). One principle particularly relevant here: while courts cannot require a specific durational clause for each benefit to prevent vesting, courts also cannot presume "that a general durational clause says everything about the intent to vest." Id. at 209.

Gallo came next. In Gallo , we held that a CBA’s general durational clause foreclosed the retirees' vesting argument. We emphasized that "[w]hen a specific provision of the CBA does not include an end date, we refer to the general durational clause to determine that provision’s termination." Gallo v. Moen Inc. , 813 F.3d 265, 269 (6th Cir. 2016). Said another way: "Absent a longer time limit in the...