Dewhurst et al v. Century Aluminum Company et al
Filing
146
MEMORANDUM OPINION AND ORDER denying defendant's 131 MOTION to Dismiss 128 Third Amended Complaint; Century is given leave to renew its contentions at the summary judgment stage of the case; directing that the parties meet and confer and fil e, no later than 1/4/2013, a joint report addressing a proposed discovery deadline and timing of other case events; denying as moot defendant's 129 MOTION to Lift Stay of Deadlines in Court's December 29, 2011 Scheduling Order for Sole P urpose of Filing and Briefing of Defendants' Motion to Dismiss Plaintiffs' Third Amended Complaint; denying as moot plaintiff's 138 MOTION to Lift Stay of Deadlines in December 29, 2011 Scheduling Order and to Reset Certain Deadlines re: 122 Order. Signed by Judge John T. Copenhaver, Jr. on 12/19/2012. (cc: attys; any unrepresented parties) (tmh)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
HAROLD DEWHURST and DAVID BRYAN,
on behalf of themselves
and all other persons
similarly situated, and
UNITED STEEL, PAPER AND FORESTRY,
RUBBER, MANUFACTURING, ENERGY,
ALLIED INDUSTRIAL AND SERVICE
WORKERS INTERNATIONAL UNION,
Plaintiffs
v.
Civil Action No. 2:09-1546
CENTURY ALUMINUM COMPANY,
CENTURY ALUMINUM OF
WEST VIRGINIA, INC.,
CENTURY ALUMINUM MASTER WELFARE BENEFIT PLAN,
DOES 1 THROUGH 20,
Defendants
MEMORANDUM OPINION AND ORDER
Pending are the plaintiff retirees' motion to lift the
stay and to reset certain deadlines, filed September 13, 2012,
and the defendants' motions (1) to dismiss the third amended
complaint filed August 9, 2012, which was fully briefed on
October 9, 2012, and (2) to lift the stay for the sole purpose
of allowing the filing and briefing of the aforementioned motion
to dismiss, filed August 9, 2012.
I.
This class action involves the putative obligation of
Century Aluminum Company (“CAC”), its wholly-owned subsidiary
Century Aluminum of West Virginia, Inc. (“CAWV”), and the
Century Aluminum Master Welfare Plan (“Plan”), which the court
refers to collectively as "Century", to restore the retirees'
healthcare benefits.
On June 24, 2010, the court denied the
retirees' request for a preliminary injunction ("June 24, 2010,
order").
This memorandum opinion and order assumes the reader's
familiarity with the lengthy discussion found in the June 24,
2010, order.
On June 30, 2010, the retirees noticed an appeal of
the June 24, 2010, order.
On August 24, 2011, the court of
appeals affirmed, with the appellate mandate following on
September 13, 2011.
On September 26, 2011, the parties were
directed to meet and confer respecting scheduling.
Following the filing of plaintiffs' First and Second
Amended Complaints on October 19 and December 29, 2011,
respectively, and the entry of a scheduling order on December
29, 2011, the court, on April 23, 2012, granted the parties'
joint motion to stay the case pending a ruling on the as-yet
unfiled Joint Motion for Final Approval of Class Action
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Settlement Agreement.
The settlement negotiations anticipated
to lead to that document apparently stalled later in the summer,
and evaporated entirely in the fall, on dates unknown.
On June 26, 2012, the retirees filed their Third
Amended Complaint.
Paragraph 3 of the Third Amended Complaint
describes the thrust of this action:
Class Members earned their right to retiree medical
benefits through decades of employment. Now retired,
Class Members rely on retiree medical benefits for
their medical needs. The rights were created through
collective bargaining between CAWV (or its
predecessors) and the USW, which represented retiree
Class Members before they retired. The successive
labor agreements contained provisions which
established CAWV’s obligation to provide retiree
medical benefits throughout retirement at no cost.
Despite these contract provisions, as well as other
promises to provide benefits to Class Members
throughout retirement, CAWV eliminated all coverage
for some Class Members effective January 1, 2010
and for virtually all remaining Class Members
effective January 1, 2011.
(Third Am. Compl. ¶ 3).
retirees seek relief
Based upon these allegations, the
under Section 301 of the Labor Management
Relations Act (“LMRA”), 29 U.S.C. § 185(a), and Section
502(a)(1)(B) and (a)(3) of the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132(a)(1)(B) and
(a)(3).
On June 26, 2012, the court set July 6, 2012, as the
date for filing of the Joint Motion for Final Approval of Class
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Action Settlement Agreement.
As noted, the settlement never
materialized, leading to the filing of the instant motion to
dismiss the Third Amended Complaint on August 9, 2012.
Following extension of certain briefing deadlines by the court
at the parties' request, the motion to dismiss ripened on
October 9, 2012.
In essence, the motion to dismiss asserts that the
June 24, 2012, order and the court of appeals' decision in this
matter dooms the Third Amended Complaint as a matter of law.
II.
A.
Governing Standard
Federal Rule of Civil Procedure 8(a)(2) requires that
a pleader provide “a short and plain statement of the claim
showing . . . entitle[ment] to relief.”
Fed. R. Civ. P.
8(a)(2); Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007).
Rule
12(b)(6) correspondingly permits a defendant to challenge a
complaint when it “fail[s] to state a claim upon which relief
can be granted . . . .”
Fed. R. Civ. P. 12(b)(6).
The required “short and plain statement” must provide
“‘fair notice of what the . . . claim is and the grounds upon
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which it rests.’”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
545 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957),
overruled on other grounds, Twombly, 550 U.S. at 563); see also
Anderson v. Sara Lee Corp., 508 F.3d 181, 188 (4th Cir. 2007).
In order to survive a motion to dismiss, “a complaint must
contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’”
Ashcroft v.
Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S.
at 570); see also Monroe v. City of Charlottesville, 579 F.3d
380, 386 (4th Cir. 2009).
Application of the Rule 12(b)(6) standard requires
that the court “‘accept as true all of the factual allegations
contained in the complaint . . . .’”
Erickson, 127 S. Ct. at
2200 (quoting Twombly, 127 S. Ct. at 1965); see also South
Carolina Dept. Of Health And Environmental Control v. Commerce
and Industry Ins. Co., 372 F.3d 245, 255 (4th Cir. 2004)
(quoting Franks v. Ross, 313 F.3d 184, 192 (4th Cir. 2002)).
The court must also “draw[] all reasonable . . . inferences from
th[e] facts in the plaintiff's favor . . . .”
Edwards v. City
of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).
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B.
Analysis
Century asserts that it is entitled to dismissal
inasmuch as the "unambiguous language in the applicable
documents combined with the legal standard set forth by the
Fourth Circuit demonstrate that the retiree health benefits were
not vested" and thus subject to reduction or elimination at any
time.
(Defs.' Memo. at 7).
Century offers several reasoned
arguments in support, relying upon the June 24, 2010, order and
the court of appeals' opinion.
Two considerations in
combination, however, practically overcome those assertions.
First, the standard governing the retirees'
preliminary injunction request is quite different from that
attached to a Rule 12(b)(6) motion.
As noted in Ashcroft, "The
plausibility standard [in Twombly governing Rule 12(b)(6)
challenges] is not akin to a ‘probability requirement . . . .'”
of the type used in applying the applicable preliminary
injunction standard.
See Ashcroft, 556 U.S. at 678; Twombly,
550 U.S. at 556 (“Asking for plausible grounds does not impose a
probability requirement at the pleading stage; it simply calls
for enough facts to raise a reasonable expectation that
discovery will reveal evidence of illegal agreement.").
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Century concedes as much.
(Defs.' Reply at 3 ("To be
sure, the procedural standards applicable to a preliminary
injunction differ from those that govern a motion to
dismiss.")).
Additionally, the court of appeals reviewed the
matter under an abuse of discretion standard.
Dewhurst v.
Century Aluminum Co., 649 F.3d 287, 289 (4th Cir. 2011)("Because
the district court did not abuse its discretion in denying the
preliminary injunction, we affirm the judgment of the district
court.").
Second, these settled procedural standards take on
added significance when one considers the several instances in
the June 24, 2010, order, and the court of appeals' opinion,
suggesting that further inquiry beyond the applicable collective
bargaining and related instruments might be necessary.
One
example follows:
Finally, plaintiffs rely upon the extrinsic evidence
summarized supra. Some of that evidence might possibly
have significance at a later point in the case. If an
as-yet unapparent ambiguity arises on the subject of
vesting that would warrant consideration of matters
extrinsic, the controversy surrounding the 2007 Master
Plan SPD might bear on the question of whether there
was an intent to vest.
Dewhurst, 731 F. Supp.2d at 520 (emphasis added); see also,
e.g., id. ("The payment to former retirees of healthcare
benefits after expiration of the 1988 CBA on October 31, 1990,
and continuing during the 1990–92 Lockout from October 1990 to
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1992 when the 1992 CBA became effective might have significance
as well.") (emphasis added); id. (stating, "[T]he Century Q & A
document . . . received by Mr. Walters in April 2006 and Mr.
Cochran sometime in 2003, wherein it is stated that a retiree's
surviving spouse is entitled to lifetime healthcare benefits,
appears to be similar to extrinsic evidence identified by the
decision in Keffer as supporting the vesting determination
reached in that case.
The court will, however, not reach the
parties' extrinsic evidence if it ultimately concludes that the
governing documents are unambiguous.") (citations omitted)
(emphasis added); id. ("In sum, for each contention offered by
plaintiffs, an equally or more compelling response is, in the
main, presented by Century.")(emphasis added).
Similar
reservations appear in the court of appeals' opinion, including
the following:
The Retirees also contend they are likely to succeed
on the merits because, in their view, the language of
the relevant CBAs infers an intent for retiree
healthcare benefits to extend beyond expiration of the
relevant CBA, despite the durational language which
limits benefits to the length of the agreement. For
instance, the Retirees argue (among other things) the
fact that Century did not specifically reserve the
right to eliminate or alter benefits suggests that the
bargainers did not intend to delegate to Century such
a right. As noted by the district court, however,
“[i]t might just as easily be explained ... that
Century deemed a reservation of rights as to
healthcare benefits unnecessary inasmuch as it deemed
the subject to arise anew during each bargaining
cycle.” Dewhurst, 731 F.Supp.2d at 518 n. 19. As with
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each of the Retirees' contentions, even if the absence
of a reservation of rights provision were to inject
ambiguity into the relevant CBAs, that ambiguity alone
could not satisfy the Retirees' burden under Winter to
make a “clear showing,” 129 S.Ct. at 376, that they
are “likely to succeed on the merits.” Id. at 374.
Dewhurst, 649 F.3d at 292-93 (emphasis added); see also id. at
293 (agreeing with the undersigned's conclusion that '"for each
contention offered by [the Retirees], an equally or more
compelling response is, in the main, presented by
Century.'")(citation omitted).
An additional consideration is noteworthy.
The court
may, as Century urges, ultimately enter a judgment adverse to
the retirees based upon the clarity of the durational language
found in the various collective bargaining agreements.
The
prudent course in that event, however, and one which would
provide the court of appeals the benefit of this court's further
analysis, would be to assess in the alternative the extrinsic
evidence currently in the record, along with that which would be
developed in discovery.
The district court and the court of appeals in Keffer
undertook that precise effort.
See Keffer, 872 F.2d at 64 ("As
the district court recognized, then, both the language in the
parties' agreements and the conduct of Connors' representatives
indicate that the benefits at issue here were intended to
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continue beyond the expiration of the collective bargaining
agreement.")(emphasis added); Dewhurst, 649 F.3d at 291 ("After
finding [in Keffer that] the language of the controlling
documents created benefits that survived the expiration of the
CBA, we then noted that extrinsic evidence also supported that
conclusion.")(emphasis added).
This more thorough and searching inquiry and analysis
seems appropriate in light of the nature of the inquiry.
See
Keffer v. H.K. Porter Co., Inc., 872 F.2d 60, 62 (4th Cir. 1989)
(stating that “‘[i]n order to interpret ... [a collective
bargaining agreement] it is necessary to consider the scope of
other related collective bargaining agreements, as well as the
practice, usage and custom pertaining to all such agreements.’”)
(emphasis added) (quoting Transportation–Communication Employees
Union v. Union Pacific R.R. Co., 385 U.S. 157, 161 (1966)).
In sum, it is one thing to conclude, as this court and
the court of appeals have done, that the retirees lack a clear
likelihood of success on the merits.
It is quite another, based
upon the foregoing discussion, to conclude that they have not
stated a plausible claim.
They have.
Consequently, the better approach is to allow
completion of the evidentiary record, after which the case can
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be fully and finally adjudicated.
It is, accordingly, ORDERED
that the motion to dismiss be, and it hereby is, denied, with
Century given leave to renew its contentions at the summary
judgment stage of the case.
C.
Remaining Motions
Inasmuch as the court has denied the motion to
dismiss, it is ORDERED that the parties be, and they hereby are,
directed to meet and confer and file, no later than January 4,
2013, a joint report addressing a proposed discovery deadline
and
timing of other case events.
The court, accordingly,
ORDERS that the respective motions to lift stay be, and they
hereby are, denied as moot.
The Clerk is directed to forward copies of this
written opinion and order to all counsel of record and any
unrepresented parties.
DATED: December 19, 2012
John T. Copenhaver, Jr.
United States District Judge
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