INTERNATIONAL UNION, UAAAW v. Facet Enterprises

• Decision Date: 27 September 1984
• Docket Number: No. 84-CV-0712.,84-CV-0712.
• Parties: INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW) and its Locals 104, 604 and 771 and Andrew Kinnear, Lawrence Galloway, Richard Stewart, Leo Rose, John C. Krust, and Mykola Chubenko, Plaintiffs, v. FACET ENTERPRISES, INC., a Delaware Corporation, and the Bendix Corporation, a Delaware Corporation, Defendants.
• Court: U.S. District Court — Western District of Michigan

601 F. Supp. 292

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW) and its Locals 104, 604 and 771 and Andrew Kinnear, Lawrence Galloway, Richard Stewart, Leo Rose, John C. Krust, and Mykola Chubenko, Plaintiffs, v. FACET ENTERPRISES, INC., a Delaware Corporation, and the Bendix Corporation, a Delaware Corporation, Defendants.

No. 84-CV-0712.

United States District Court, E.D. Michigan, S.D.

September 27, 1984.

Leonard R. Page, Detroit, Mich., for plaintiffs.

Frank T. Mamat, Bloomfield Hills, Mich., for defendants.

MEMORANDUM OPINION AND ORDER

PHILIP PRATT, District Judge.

Plaintiffs are the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW") and its Locals 104, 604 and 771, along with six individuals who are members of those locals and retired from employment with defendant Facet Enterprises, Incorporated ("Facet").¹ Plaintiffs commenced this action under Section 301, 29 U.S.C. § 185, and ERISA, 29 U.S.C. § 1132(a), seeking declaratory and injunctive relief as well as damages. Defendant Facet has moved for dismissal on the grounds that there is no "case or controversy" under Article III of the Constitution and that the remaining claims are matters within the exclusive jurisdiction of the National Labor Relations Board. In response, plaintiffs have filed a cross motion for summary judgment claiming that they are entitled to declaratory and injunctive relief.

I.

Prior to April of 1976, Facet was a wholly-owned subsidiary of defendant Bendix Corporation ("Bendix"). In April, a Federal Trade Commission decree required Bendix to divest itself of Facet. As part of the reformation, Facet gained independent control, among other items, over three plants: the Filter Products Division in Madison Heights, the Fuel Devices Division in Detroit, and the Motor Components Division in Elmira, New York. At the time of the decree until the present, the UAW and its locals have been the bargaining representatives for workers in the three plants. In conjunction with the spin off of Facet and with the urging and consent of the UAW, Bendix entered into a limited guaranty of specified pension and insurance benefits for retirees and for employees who had ten years of service as of April of 1976 and who subsequently retired from Facet. The apparent purpose of the guaranty is to protect the aforementioned individuals' rights to receive pension and insurance coverage in the event Facet did not provide such benefits.

After April of 1976, Facet and the UAW entered into a series of collective bargaining agreements. These agreements established pension and health plans for members of the bargaining unit. Under the plans, Facet was to make contributions for current employees as well as contributions for retirees.

The parties' most recent collective bargaining agreement expired on October 31, 1983. Negotiations for a new bargaining agreement had begun in August of 1983. The UAW submitted the affidavit of John Mando, Director of the UAW's Bendix and Facet Intracorporation Councils, in opposition to defendants' motion. In his affidavit Mando states that in negotiations conducted in September of 1983 Facet proposed the possibility of reducing insurance coverage for its 1,400 retirees. Mando Affidavit ¶ 11. The union rejected this suggestion. The parties were unable to agree on a new contract before the expiration date. Apparently, Facet demanded substantial concessions from the Elmira and Madison Heights employees which the UAW could not accept. Consequently, a strike commenced in early November of 1983. To this date, the parties have still been unable to reach an agreement and are continuing negotiations.

On November 15, 1983, Facet submitted a formal written proposal that included reductions in health and life insurance benefits for current employees and retirees of the Madison Heights and Elmira plants. The proposal contemplated that these changes would be implemented on December 1, 1983. According to Mando, "Facet threatened to implement these changes, absent agreement, on December 1, 1983." Mando Affidavit ¶ 12. The language of the proposal, however, does not suggest such unilateral action. Contemporaneous with the proposal of reductions for the Madison Heights and Elmira plants, Facet also proposed wage increases and insurance benefits better than those in the expired agreement for the financially stronger Fuel Devices Division in Detroit. Paul Dick Affidavit, ¶ 12 (Director of Industrial Relations for Facet).

Facet did not effectuate any change in retiree benefits in December of 1983 or any other time. In fact, Facet withdrew its proposal to reduce insurance benefits in January, 1984. The parties disagree as to the facts surrounding Facet's withdrawal of the proposal. According to Mando, on January, 9, 1984, the UAW threatened to file unfair labor practice charges for bargaining to impasse over retiree insurance which is a "permissive" subject of bargaining. Mando further asserts that on January 10, 1984, the company only withdrew its proposal to reduce retiree benefits at the Elmira plant but not the Madison Heights location. Mando Affidavit ¶ 13.² Paul Dick, the defendant's representative, in his affidavit, asserts that the proposal to narrow benefits was withdrawn for both plants and that there are no proposals before the parties concerning this issue. Dick Affidavit ¶ 13. Facet's counsel reiterated this assertion at the hearing and also stated that if there is any doubt, Facet again withdraws the proposal for both plants. Significantly, Mando further states in his affidavit that "there have been no further discussions regarding retiree insurance benefits during negotiations for a new master agreement," since the withdrawal of Facet's proposal in early January. Mando Affidavit ¶ 14.

On February 10, 1984 plaintiffs filed their complaint. The complaint consists of three counts. Count One seeks damages and declaratory and injunctive relief under § 301, 29 U.S.C. § 185, for an alleged breach of the collective bargaining agreement regarding health and insurance benefits of "retired employees and those who will retire and their eligible dependents." Count Two is a claim under ERISA, 29 U.S.C. § 1132(a)(1)(B), which "seeks to recover benefits due and to clarify rights to future benefits under an employee health and life insurance benefit plan." Count Three requests declaratory and injunctive relief and damages for breach of the "guaranty" contract entered into by the union and defendant Bendix Corporation.

Through the series of briefs concerning the instant motions and during oral argument at the hearing, plaintiffs have retreated from the broad language of their complaint and are now pursuing a narrower scope of claims. First, at the hearing, the plaintiffs agreed to dismiss Count Three of the complaint and Bendix as a party defendant. Plaintiffs admitted that not only has Bendix not breached the "guaranty" as plaintiffs averred in the complaint, but that Bendix has made no indication that it would not honor that agreement. Second, plaintiffs have likewise implicitly recognized that Facet has not breached the parties' past collective bargaining agreement, despite plaintiffs' allegations to the contrary. Plaintiffs have not presented any facts which suggest that Facet actually breached the contract. Moreover, all of plaintiffs' proofs and arguments focus upon Facet's alleged threatened breach of the agreement. Third, plaintiffs also concede explicitly in their briefs and implicitly by argument,³ that they are not pursuing claims of present employees in this action. Hence, stripped of the superfluous, plaintiffs are now only seeking relief from Facet's alleged threatened breach of their obligation under past collective bargaining agreements for the approximately 1,400 current retirees.⁴

Essentially, the claim of plaintiffs is that the benefits the 1,400 retirees are receiving pursuant to past collective bargaining agreements are vested and cannot be changed. Presumably, plaintiffs seek a declaration from this Court which sustains that proposition. Defendant Facet contends that this case should be dismissed since it is not seeking to change retiree benefits and, accordingly, no case or controversy exists. Facet also argues that dismissal is appropriate due to the pre-emptive jurisdiction of the NLRB.

The threshold issue concerns the appropriateness of adjudication of this controversy. The allegation of a threatened harm, as claimed by the plaintiffs here necessitates the application of two related doctrines of justiciability; standing and ripeness. The Supreme Court recently enunciated the test for Article III standing in Allen v. Wright, ___ U.S. ___, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). The Allen Court began its analysis by recognizing that "in essence the question of standing is whether the litigant is entitled to have the Court decide the merits of the dispute or of particular issues." Id. at 3324. The Court identified three components to the standing analysis which are to guide courts in this determination: "A plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be repressed by the requested relief." Id. at 3325.

As to the first prong, "personal injury", the injury must be "distinct and palpable" to the plaintiff and not "abstract" or "conjectural" or "hypothetical". 104 S.Ct. at 3325;⁵ Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 72-73, 98 S.Ct. 2620, 2629-2630, 57 L.Ed.2d 595 (1978). Accord, Young v. Klutznick, 652 F.2d 617, 623-24 (6th Cir. 1981). The Court must consider: "Is the injury too abstract, or otherwise not appropriate, to be considered judicially cognizable?" Allen v. Wright, supra, 104 S.Ct. at 3325. Second, the injury "must be `fairly' traceable to the challenged action ..." Id. The Court should determine...