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Union Retirees Not Entitled to Preliminary Injunction that Would Allow Healthcare Benefits to Continue During Litigation

Dewurst, et al. v. Century Aluminum Company
Case No.: 10-1759, 4th Cir., August 22, 2011

by Eric M. Leppo, Associate
Semmes, Bowen & Semmes (www.semmes.com)

In this recently issued opinion from the U.S. Court of Appeals for the Fourth Circuit, the Appellate Court affirmed the ruling from the U.S. District Court for the Southern District of West Virginia and found that Plaintiffs failed to meet the high burden necessary to obtain a preliminary injunction.

The Plaintiffs are retired workers and members of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (“retirees”). The retirees are retired from working at Defendant Century Aluminum Company’s Ravenswood, West Virginia plant. In 2007, the company began to experience financial difficulties due in part to rising healthcare costs. In 2009, Century announced its plan to modify or terminate retiree healthcare benefits for retirees aged sixty-five or older who retired between February 6, 1985 and June 1, 2006.

The retirees filed suit alleging their benefits could not be modified or terminated as they were vested and that Century’s intended modification would violate both the Labor Management Relations Act, 29 U.S.C. § 185, and the Employee Retirement Income Security Act, 29 U.S.C. § 1132(a)(1)(B) and (a)(3). At that time, they also sought a preliminary injunction to prevent any effect on their healthcare benefits during the litigation. The District Court denied the preliminary injunction, and Plaintiffs appealed.

In reviewing the District Court decision, the Fourth Circuit relied upon the Supreme Court’s decision in Winter v. Natural Res. Def. Council, Inc., 129 S. Ct. 365 (2008), noting that a preliminary injunction is "an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Id. at 376. Winter set out four (4) factors that the Plaintiff must establish to obtain preliminary injunctive relief: (1) that Plaintiff is likely to succeed on the merits, (2) that Plaintiff is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in Plaintiff’s favor, and (4) that an injunction is in the public interest. Winter at 374.

However, the District Court determined that the retirees failed to establish sufficient likelihood of success on the merits, and therefore, did not reach the remaining factors. The retirees alleged that collective bargaining agreements between the Union and the Company provided vested healthcare benefits lasting beyond the specific term of the agreements based on Fourth Circuit precedent Keffer v. H.K. Porter Co., 872 F.2d 60, 62 (4th Cir. 1989).

The Fourth Circuit noted, however, that the lesson of Keffer was not that such benefits lasted past a collective bargaining agreement’s term, but rather that a collective bargaining agreement is to be interpreted as any other contract when the language of the agreement provides the clear intention of the parties. In Keffer, there was express language that the benefits of the workers would last beyond the agreement’s termination date. In this case, the agreement stated clearly “that such benefits shall remain in effect for the term of this [year] Labor Agreement.” Dewurst at *8.

As such, the Court determined that there was no clear establishment that the retirees were likely to succeed on the merits of their claim and therefore, could not satisfy the first prong of the Winter test for obtaining a preliminary injunction.


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