Adams v. Bowater Inc.

• Decision Date: 17 December 2002
• Docket Number: No. 02-1170.,02-1170.
• Citation: 313 F.3d 611
• Parties: William W. ADAMS, et al., Plaintiffs, Appellants, v. BOWATER INCORPORATED, et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 611

313 F.3d 611

William W. ADAMS, et al., Plaintiffs, Appellants, v. BOWATER INCORPORATED, et al., Defendants, Appellees.

No. 02-1170.

United States Court of Appeals, First Circuit.

Argued September 6, 2002.

Decided December 17, 2002.

Patrick N. McTeague with whom James W. Case, McTeague, Higbee, Case, Cohen, Whitney and Toker, P.A. and William T. Payne were on brief for appellants.

Mary Ellen Signorille, AARP Foundation Litigation, and Melvin Radowitz, AARP, on brief for AARP, Amicus Curiae.

Thomas J. Piskorski with whom Brian J. Hipp, Seyfarth Shaw, Daniel A. Pileggi and Roy, Beardsley, Williams & Granger, LLC were on brief for appellees.

Before BOUDIN, Chief Judge, TORRUELLA and HOWARD, Circuit Judges.

BOUDIN, Chief Judge.

The main question on this appeal is whether the case in the district court was properly dismissed as moot after the challenged conduct ceased or was undone. The plaintiff-appellants are 551 employees of Great Northern Paper, Inc. ("Great Northern"); the principal defendants are Bowater Incorporated ("Bowater") and the pension plan administered by Bowater for its own employees and those of Great Northern.

The background facts are undisputed. In August 1999, Great Northern, until then a subsidiary of Bowater, was sold in a share sale to a third party. Bowater, however, retained the assets and responsibilities of the pension plan that covered both Bowater and Great Northern employees. In the same month, Bowater announced that it would amend the plan to cut back certain early retirement benefits that the plan offered to Great Northern employees. The plan was so amended in October retroactive to August 13.

In brief, the plan prior to August 1999 had allowed employees with extensive service at Great Northern to opt for early retirement and yet receive pensions as if they had retired at ordinary retirement age or, in other cases, with something less than the usual discount in benefits for early retirement. For example, an employee who had worked 30 years could retire at age 60 and receive the same benefits as if he had worked to 65. In effect, Bowater's amendment meant that future work by employees at Great Northern, now no longer a Bowater subsidiary, would not count for purposes of early retirement.

Whether and to what extent an employer can cut back on such benefits for employees who have not yet retired is governed by provisions of ERISA — in particular, by section 204(g), 29 U.S.C. § 1054(g) (2000). For present purposes, the details of the statute and its application here are unimportant; it is enough to say that Bowater maintained that its cut-back was lawful and that the employees took the opposite position. In January 2000, the Bowater employees brought the present action in federal district court under ERISA against Bowater and the plan.

The main count of the complaint (count I) sought a declaration that the plan amendment violated section 204(g) and an order requiring the defendants to delete the amendment. Other counts (counts II and III) sought further relief for ten of the plaintiffs who said that they had relied on Bowater's statements about the amendment and advice to individual employees; the ten plaintiffs said that as a result they had accepted lump sum payments, surrendering their rights to the greater benefits that would have been available to them under the original plan.

At this point, Bowater began to retreat but reluctantly. In March 2000, Bowater, as plan administrator, sent a letter saying that work done by Great Northern employees would continue to be credited toward early retirement; the letter did not explain how this could be reconciled with the plan amendment. In the same month Bowater filed its answer to the complaint which continued to deny that the plan amendment was unlawful. In April, Bowater amended the plan to conform to the letter, but it declined to enter into a consent decree conceding that the original amendment was unlawful or promising not to adopt the same amendment in the future.

Count I was referred to a magistrate judge and, based on her recommendation, the district court ruled in September 2000 that count I was moot. Litigation on counts II and III continued until, in October 2000, Bowater posed a notice agreeing to allow full benefits under the original plan to those who had taken a lump sum payment in exchange for surrendering their right to full benefits. In June 2001, Bowater amended the plan to conform to this promise of full benefits. Thereafter, the district court ruled that counts II and III were moot.

The plaintiffs have now appealed, challenging the mootness rulings. In substance, they say that Bowater has never conceded that its original amendment was unlawful and, absent a decree, Bowater remains free to reinstitute that amendment in the future. A claim to attorney's fees, which ERISA permits, would also be strengthened by such a decree, although this is not a basis for litigating a case that is otherwise moot. See Friends of the Earth, Inc. v. Laidlaw Envtrl. Servs., Inc., 528 U.S. 167, 192 n. 5, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000). The issue is quite close.

Where during litigation a defendant ceases to engage in challenged conduct and restores the status quo ante, the lawsuit may or may not be moot. The Supreme Court has said that such a case is moot only if the defendant meets his "heavy burden" of persuading the court that it is "absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur." See Friends of the Earth, Inc., 528 U.S. at 189, 120 S.Ct. 693 (quoting United States v. Concentrated Phosphate Export Ass'n, 393 U.S. 199, 203, 89 S.Ct. 361, 21 L.Ed.2d 344 (1968)); accord Nunez-Soto v. Alvarado, 956 F.2d 1, 3 (1st Cir.1992). Here, the district court determined that any threat that the amendment would be introduced was "speculative" and that the defendants' behavior could not reasonably be expected to recur.

At first blush, this might appear to be a factual finding entitled to respect unless clearly erroneous. See Vinick v. United States, 205 F.3d 1, 6 (1st Cir.2000). However, no evidence was presented as to the likelihood that Bowater will reintroduce its original amendment; and, where the district court applies an abstract standard to known facts, the extent of deference accorded on review varies from substantial deference to none at all, depending on the subject matter and on other circumstances. In re Extradition of Howard, 996 F.2d 1320, 1327-28 (1st Cir.1993). In mootness matters, reviewing courts tend to exercise their own judgment, see, e.g., Verhoeven v. Brunswick Sch. Comm., 207 F.3d 1, 5 (1st Cir.1999), and both sides agree that our review here is de novo.

Bowater controls the information about its own intentions and has made no declaration as to any firm plan. This gap in information might be weighed against Bowater (cf. Friends of the Earth, Inc., 528 U.S. at 189, 120 S.Ct. 693 ("defendant's heavy burden")), but we prefer to rest our decision on somewhat different grounds. After all, Bowater could plausibly say that it has no plans one way or the other and thus nothing more to disclose. Still, on this record Bowater cannot say that it has affirmatively ruled out the possibility of reintroducing the amendment.

The Supreme Court's primary test— "reasonably be expected to recur" — suggests an estimate of raw probabilities. At either end of the spectrum, this is probably the intended approach. If there is a high likelihood of recurrence, the case should not be deemed moot; if very low, mootness ought to follow. But in the middle ground, we doubt that the Supreme Court meant woodenly to exclude all other factors, including equitable or other considerations, bearing on whether a case that began with a concrete controversy should be dismissed when the conduct ceases; its own case law suggests that other concerns can play a role.¹

Here, the likelihood of recurrence being very hard to estimate, several such considerations work in favor of litigating this case to judgment. One — a predicate point but not the decisive consideration — is that Bowater has been persistently...