JOSEPH DI BIASE, Individually and on behalf of similarly situated persons; JOHN PRODORUTTI, Individually and on behalf of similarly situated persons; DAVID BRASS, Individually and on behalf of similarly situated persons; RON BEEGLE, Individually and on behalf of similarly situated persons; DAVID BOBCOCK, Individually and on behalf of similarly situated persons; CARL VAN LOON, Individually and on behalf of similarly situated persons; INTERNATIONAL UNION, UNITED AUTOMOBILE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW, Plaintiffs - Appellants,
SPX CORPORATION, Defendant-Appellee.
Argued: May 9, 2017
from the United States District Court for the Western
District of North Carolina, at Charlotte. Robert J. Conrad,
Jr., District Judge. (3:14-cv-00656-RJC-DSC)
Narendra K. Ghosh, PATTERSON HARKAVY LLP, Chapel Hill, North
Carolina, for Appellants.
A. Hiller, ROBINSON, BRADSHAW & HINSON, P.A., Charlotte,
North Carolina, for Appellee.
Michael L. Fayette, PINSKY, SMITH, FAYETTE & KENNEDY,
LLP, Grand Rapids, Michigan, for Appellants.
C. Wright, III, Cary B. Davis, Amanda R. Pickens, ROBINSON,
BRADSHAW & HINSON, P.A., Charlotte, North Carolina, for
GREGORY, Chief Judge, KING, and KEENAN, Circuit Judges.
by published opinion. Chief Judge Gregory wrote the opinion,
in which Judge King and Judge Keenan joined.
GREGORY, Chief Judge:
individual plaintiffs, retirees of SPX Corporation
("SPX"), their spouses and eligible dependents, and
their labor union, the International Union United Automobile,
Aerospace and Agricultural Implement Workers of America, UAW
("UAW"), (collectively, "Plaintiffs"),
appeal the district court's denial of their motion for
preliminary injunction. Because we conclude the district
court did not abuse its discretion in finding that Plaintiffs
failed to satisfy the requirements for a preliminary
injunction, we affirm and remand for further proceedings.
case arises out of an underlying action to enforce the health
benefits provisions of two court-approved settlement
agreements. Signed in 2003 by the parties to a class action
brought against SPX, the settlement agreements require SPX to
provide lifetime healthcare coverage to identified retirees
and their eligible family members through specified group
health insurance plans or through "coverage which is
substantially equivalent in benefits." J.A. 33-39,
70-100, 114-20. Between 2004 and 2015, SPX provided insurance
coverage for the retirees and their family members through
various group health plans.
March and July 2014, SPX notified UAW representatives and
Medicare-eligible retirees that effective January 1, 2015, it
intended to change the arrangement by which healthcare
benefits would be provided. Under the new arrangement, SPX
would provide each beneficiary an annual healthcare
reimbursement account ("HRA") containing up to $5,
000 for beneficiaries to purchase their own healthcare plan
from an insurance exchange secured and identified by SPX. The
HRAs could also be used to reimburse covered individuals for
Medicare Part B expenses, provide catastrophic drug coverage,
and provide an additional $500 per year to those previously
enrolled in a dental plan. SPX engaged the healthcare
exchange OneExchange to assist individuals with the
transition and the process of selecting insurance plans with
funds available through the HRA accounts.
November 2014, Plaintiffs filed the underlying class
action against SPX. They alleged that the HRA
accounts offered by SPX were not substantially equivalent to
their current healthcare benefits and that the implementation
of SPX's new arrangement would breach the settlement
agreements in violation of Section 301 of the
Labor-Management Relations Act ("LMRA"), 29 U.S.C.
§ 185, and Section 502(a)(1)(B) of the Employee
Retirement Income Security Act of 1974 ("ERISA"),
29 U.S.C. § 1132(a)(1)(B). On December 15, 2014,
Plaintiffs moved for a preliminary injunction, seeking to
enjoin SPX from terminating the current healthcare plan and
implementing the HRA accounts during the pendency of the
action or until further order of the court. They asserted
that absent injunctive relief, they would "suffer severe
emotional distress and irreparable harm to their health and
welfare." J.A. 825. The motion could not be resolved,
however, before the HRA accounts went into effect on January
1, 2015, because the briefing schedule had not concluded by
the end of the calendar year.
September 2015 scheduling conference, the district court and
the parties discussed the pending motion for preliminary
injunction. The district court queried whether the motion was
now moot given that the HRAs had already gone into effect.
Plaintiffs argued that the motion was not moot and that it
was now an appropriate time for a ruling on the merits
because open enrollment would begin again in October 2015,
with a new plan "coming up in January , " and
they "were going to be faced with the same issues all
over again." J.A. 835-36.
September 29, 2015, nearly nine months after the effective
date of the HRA accounts, the district court denied
Plaintiffs' motion as moot, and moreover held that
Plaintiffs failed to meet the standard required for a
preliminary injunction. As to the issue of mootness, the
district court noted that the purpose of a preliminary
injunction is to preserve the status quo pending a final
determination on the merits of the case. Pashby v.
Delia, 709 F.3d 307, 319 (4th Cir. 2013) (citation
omitted). The court concluded that the status quo,
the provision of health insurance through the group health
insurance plans, had already changed with the implementation
of the HRA accounts on January 1, 2015. Finding that the
change Plaintiffs sought to prohibit had already occurred,
the district court held that the motion was moot because a
"request for an injunction to prohibit an act is
rendered moot by the happening of the act." Winston
v. Fed. Bureau of Prisons, No. 5:10-HC-2192-FL, 2011
W.L. 3664416, at *2 (E.D. N.C. Aug. 18, 2011) (citing Ry.
Labor Execs. Ass'n v. Chesapeake W. Ry., 915 F.2d
116, 118 (4th Cir. 1990)).
district court alternatively concluded that Plaintiffs were
unable to meet the standard required for a preliminary
injunction as set forth in Winter v. Natural Resource
Defense Council, Inc., 555 U.S. 7, 20 (2008). First, the
court noted that granting the preliminary injunction and
returning to the status quo would result in SPX having to
revert to the group health insurance plan, "which would
only cause more emotional distress and harm." J.A. 828.
The court found that Plaintiffs were unable to show a
likelihood of success on the merits. It held that "the
ultimate success of Plaintiffs' claims depends on the
determination of whether the HRA structure provides
'substantially equivalent' health benefits."
J.A. 827. According to the court, Plaintiffs failed to offer
sufficient evidence to make such a determination, and a
fact-sensitive inquiry such as this required a more developed
evidentiary record, which would only become available through
discovery. J.A. 827-28.
district court then held that Plaintiffs failed to show that
they would suffer the type of irreparable injury that
requires the "extraordinary and drastic" remedy of
a preliminary injunction. J.A. 828 (quoting Munaf v.
Geren, 553 U.S. 674, 690 (2008)). Other than
Plaintiffs' conclusory statements that nothing could
compensate them for the administrative burden and impediment
to effective coverage, ...