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Biase v. SPX Corp.

United States Court of Appeals, Fourth Circuit

September 28, 2017

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,
v.
SPX CORPORATION, Defendant-Appellee.

          Argued: May 9, 2017

         Appeal 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)

         ARGUED:

          Narendra K. Ghosh, PATTERSON HARKAVY LLP, Chapel Hill, North Carolina, for Appellants.

          Mark A. Hiller, ROBINSON, BRADSHAW & HINSON, P.A., Charlotte, North Carolina, for Appellee.

         ON BRIEF:

          Michael L. Fayette, PINSKY, SMITH, FAYETTE & KENNEDY, LLP, Grand Rapids, Michigan, for Appellants.

          David C. Wright, III, Cary B. Davis, Amanda R. Pickens, ROBINSON, BRADSHAW & HINSON, P.A., Charlotte, North Carolina, for Appellee.

          Before GREGORY, Chief Judge, KING, and KEENAN, Circuit Judges.

         Affirmed by published opinion. Chief Judge Gregory wrote the opinion, in which Judge King and Judge Keenan joined.

          GREGORY, Chief Judge:

         The 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.

         I.

         This 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."[1] 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.

         Between 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.

         In November 2014, Plaintiffs filed the underlying class action[2] 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.[3]

         At a 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 [2016], " and they "were going to be faced with the same issues all over again." J.A. 835-36.

         On 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).[4] 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)).

         The 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.[5] 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.

         The 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, ...


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