OIL, CHEM. WORKERS INTERN. v. CIT GROUP, Civ. A. No. H-93-3506.

• Decision Date: 26 April 1995
• Docket Number: Civ. A. No. H-93-3506.
• Citation: 898 F. Supp. 451
• Parties: OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION and its Local 4-612, AFL-CIO; William Wright; Antonio Romo; Saul Vasquez; and A.A. Mackinnon, for Themselves and All Others Similarly Situated, Plaintiffs, v. CIT GROUP/CAPITAL EQUIPMENT FINANCING, INC.; New York Life Insurance Company, Inc.; John Hancock Mutual Life Insurance Company; John Hancock Variable Life Insurance Company; Mellon Bank, N.A., Trustee; and Refinery Holding Co., L.P., Defendants.
• Court: U.S. District Court — Southern District of Texas

898 F. Supp. 451

OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION and its Local 4-612, AFL-CIO; William Wright; Antonio Romo; Saul Vasquez; and A.A. Mackinnon, for Themselves and All Others Similarly Situated, Plaintiffs, v. CIT GROUP/CAPITAL EQUIPMENT FINANCING, INC.; New York Life Insurance Company, Inc.; John Hancock Mutual Life Insurance Company; John Hancock Variable Life Insurance Company; Mellon Bank, N.A., Trustee; and Refinery Holding Co., L.P., Defendants.

Civ. A. No. H-93-3506.

United States District Court, S.D. Texas, Houston Division.

April 26, 1995.

COPYRIGHT MATERIAL OMITTED

Patrick M. Flynn, Houston, TX, for plaintiffs.

Steven Mark Zager, Weil, Gotshal & Manges, Houston, TX, for defendants.

MEMORANDUM AND ORDER

WERLEIN, District Judge.

Pending are the Motion for Summary Judgment of Defendant Refinery Holding Company, L.P. (Document No. 28); the Motion for Summary Judgment of Defendants CIT Group/Equipment Financing, Inc., New York Life Insurance Company, Inc., John Hancock Mutual Life Insurance Company, John Hancock Variable Life Insurance Company, and Mellon Bank, N.A., Trustee (Document No. 31); and Plaintiffs' Motion for Summary Judgment (Document No. 35). After having carefully considered the summary judgment evidence, arguments, and authorities submitted by counsel, the Court is of the opinion that both of Defendants' motions should be GRANTED, and Plaintiffs' motion should be DENIED.

I. Background

Plaintiffs in this case are (1) former employees of El Paso Refinery, L.P. ("EPR"), and (2) the union that represented a majority of these former employees, the Oil, Chemical and Atomic Workers International Union and its Local 4-612 ("OCAW"). Plaintiffs bring this action claiming that Defendants closed the EPR employment site and fired Plaintiffs¹ without first providing 60-days advance notice as required by the Worker Adjustment and Retraining Notification Act ("WARN"), 29 U.S.C. § 2101, et seq.

The uncontroverted summary judgment evidence reveals the following: Defendants CIT Group/Equipment Financing, Inc., New York Life Insurance Company, Inc., John Hancock Mutual Life Insurance Company, John Hancock Variable Life Insurance Company, and Mellon Bank, N.A., Trustee (collectively referred to as "the Term Lenders") provided financing to EPR, which owned and operated a refinery in El Paso, Texas. In connection with this financing, the Term Lenders held security interests in certain of EPR's assets ("the Refinery Assets"). On October 23, 1992, EPR filed a Chapter 11 bankruptcy petition, Case No. 92-13446-FM, in the United States Bankruptcy Court for the Western District of Texas, Austin Division ("the Bankruptcy Court"). The Bankruptcy Court appointed an Examiner, Mr. Richard Smith, on December 3, 1992, to assume control of EPR's operations, including the hiring and firing of employees. The Examiner retained most of the operations employees and maintained the refinery in a "warm shutdown" stage—that is, the refinery did not produce products, but remained in a position quickly to restart full operations if and when necessary.

On April 19, 1993, the Bankruptcy Court approved an agreement between the Term Lenders, the Examiner, and other EPR creditors whereby the Term Lenders were permitted to foreclose on the Refinery Assets. The category of "Refinery Assets" as defined in the Order of the Bankruptcy Court did not list employment contracts or employment agreements held by EPR, nor did it expressly exclude such. The Order, and the underlying agreement approved by the Bankruptcy Court, was simply silent on any assignment of employee contracts or agreements. On May 3, 1993, the day before the foreclosure, the Examiner was informed by representatives of the Term Lenders that the Term Lenders were not going to retain or hire any EPR employees. Upon hearing this, the Examiner decided that the EPR employees would have to be terminated.

At the El Paso County Courthouse, El Paso, Texas, on May 4, 1993, at 1:27 p.m. M.S.T., the substitute trustee under the applicable deed of trust sold at foreclosure to the highest bidder the Refinery Assets. The Term Lenders were the highest bidder and, at their direction, the substitute trustee conveyed the Refinery Assets to Defendant Refinery Holding Company, L.P. ("RHC"), a company established by the Term Lenders for this purpose. At approximately 8:00 p.m. the same day, a representative of the Examiner informed the employees at the refinery that they would no longer be employed as of 11:00 p.m. that evening. The terminated employees' final paycheck was paid by EPR. Plaintiffs had not been given the statutory 60-days advance notice of their termination. EPR had provided a notice in November, 1992, but that notice failed to comply with statutory prerequisites. Plaintiffs have not named the Examiner or EPR as defendants in this case.

II. Discussion

A. The Summary Judgment Standard

Rule 56(c) provides that "summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A party seeking summary judgment bears the initial burden of informing the district court of the basis for the motion, and identifying those portions of the pleading, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which the moving party believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). The moving party has the burden of showing that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Willis v. Roche Biomedical Lab., Inc., 21 F.3d 1368, 1371 (5th Cir.1994).

Once the movant carries this burden, the burden shifts to the nonmovant to show that summary judgment should not be granted. Celotex, 477 U.S. at 322-24, 106 S.Ct. at 2553-54. A party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials of his pleading, but must set forth specific facts showing the existence of a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57, 106 S.Ct. 2505, 2514-15, 91 L.Ed.2d 202 (1986). Unsubstantiated or conclusory assertions that a fact issue exists will not suffice. See Krim v. BancTexas Group, Inc., 989 F.2d 1435, 1442 (5th Cir.1993); Thomas v. Price, 975 F.2d 231, 235 (5th Cir.1992). The nonmovant "must adduce admissible evidence which creates a fact issue concerning the existence of every essential component of that party's case." Krim, 989 F.2d at 1442.

In considering a motion for summary judgment, the district court must view the evidence through the prism of the substantive evidentiary burden. Anderson, 477 U.S. at 253-54, 106 S.Ct. at 2513-14. All justifiable inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). "If the record, viewed in this light, could not lead a rational trier of fact to find" for the nonmovant, summary judgment is proper. Kelley v. Price Macemon, Inc., 992 F.2d 1408, 1413 (5th Cir.1993), cert. denied, ___ U.S. ___, 114 S.Ct. 688, 126 L.Ed.2d 656 (1994), citing Matsushita, 475 U.S. at 576, 106 S.Ct. at 1351. On the other hand, if "the factfinder could reasonably find in the nonmovant's favor, then summary judgment is improper." Id., citing Anderson, 477 U.S. at 249, 106 S.Ct. at 2511.

Finally, even if the standards of Rule 56 are met, a court has discretion to deny a motion for summary judgment if it believes that "the better course would be to proceed to a full trial." Anderson, 477 U.S. at 253, 106 S.Ct. at 2513. Accord, Veillon v. Exploration Services, Inc., 876 F.2d 1197, 1200 (5th Cir.1989); 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2728 (1983).

B. Who Should Have WARNed Plaintiffs?

Defendants move for summary judgment on Plaintiffs' claim that Defendants were responsible under WARN for providing 60-days advance notice before terminating Plaintiffs' employment. Defendants assert that they cannot be held liable under WARN because at no time were they ever employers of Plaintiffs and at no time did they ever terminate Plaintiffs.

WARN provides that an "employer," defined as "any business enterprise that employs ... 100 or more employees," 29 U.S.C. § 2101(a)(1)(A), must give affected employees 60-days written notice prior to an employment site closing or mass layoff. 29 U.S.C. § 2102(a).² WARN further provides that "any employer who orders a plant closing or mass layoff in violation of section 2102 of this title shall be liable for each aggrieved employee who suffers an employment loss as a result of such closing or layoff...." 29 U.S.C. § 2104(a)(1).

Representatives of RHC and the individual Term Lenders have submitted sworn affidavits that their respective entities never employed any of the Plaintiffs. Plaintiffs have produced no controverting summary judgment evidence that Defendants exercised any employer functions with regard to Plaintiffs, such as hiring, firing, supervising, or paying them. See Local 217, Hotel & Restaurant Employees Union v. MHM, Inc., 976 F.2d 805, 808 (2d Cir.1992) (Hotel management company was employer under WARN because it "bargained with, hired, fired, supervised, paid, and ultimately laid off the employees."). Additionally, it is uncontroverted that the Examiner, who was vested with employer powers over the EPR employees pursuant to his appointment by the Bankruptcy Court, made the decision to and did in fact terminate Plaintiffs.³

Despite this evidence, Plaintiffs...