NewPage Wisconsin System, Inc. et al v. United Steel, Paper & Forestry, Rubber, Mfg. Energy, Allied Industrial and Service Workers International Union, AFL-CIO/CLC et al.

Filing 36

ORDER dismissing claim in Count II of the complaint for lack of subject matter jurisdiction; declining to exercise jurisdiction over the claim in Count I of the complaint. Action dismissed and judgment to be entered. Signed by District Judge Barbara B. Crabb on 7/16/2010. (llj)

N e w Page Wisconsin System, Inc. et al v. United Steel, Pap... International Union, AFL-CIO/CLC et al.

Do c. 36

IN THE UNITED STATES DISTRICT COURT FO R THE WESTERN DISTRICT OF WISCONSIN --------------------------------------------N E W P AG E WISCONSIN SYSTEM INC. and N PW S I RETIREE HEALTH PLAN f/k/a T H E SENA RETIREE HEALTH PLAN,

O PIN IO N and ORDER 10-cv-41-bbc

P l a i n t i ff s , v. U N IT ED STEEL, PAPER & FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, AFL-CIO/CLC; WILLIAM CLENDENNING; LAWRENCE BIERSTAKER; BERNARD ROUSE; and GARY DOLLEVOET, D efendan ts. --------------------------------------------In 2006 and 2010, plaintiff NewPage Wisconsin System Inc. (NPWSI), the operator o f several paper mills in Wisconsin and elsewhere, made changes in benefits for certain union retirees who retired from paper mills operated by NPWSI in Wisconsin.1 The modifications

Throughout this opinion, plaintiff NewPage Wisconsin System Inc. will be referred to as NPWSI to distinguish it from its parent company, NewPage Corporation, the defen dan t in a related lawsuit in the Southern District of Ohio. References to NWPSI R etiree Health Plan will be to "the plan."

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led to two federal lawsuits: a proposed class action brought by United Steel, Paper and F orestry, Rubber, Manufacturing, Energy, Allied Industrial Workers International Union, A F L -C IO /C LC (the union) and three retirees in the Southern District of Ohio against the paren t corporation of NPWSI, challenging the modifications under the Employee R etirem en t Income Security Act (ERISA), 29 U.S.C. § 1132(a)(1)(B) and (a)(3), and § 30 1(a) of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185; and, one month later, this suit for declaratory judgment brought by NPWSI and the NPSWI Retiree Health Plan under 28 U.S.C. § 2201, the LMRA and ERISA, seeking declaratory relief against d efen dan ts (the union, Clendenning, Bierstaker, Rouse, Dollevoet and a proposed defendant c la s s ) . In this suit, plaintiffs seek judgment declaring that NPWSI's amendments to the em ployee benefits plan did not violate ERISA or the collective bargaining agreements betw een the parties. Defendants have filed a motion to dismiss plaintiffs' complaint for lack o f subject matter jurisdiction, Fed. R. Civ. P. 12(b)(1), and for failure to state a claim on w hich relief may be granted, Fed. R. Civ. P. 12(b)(6). In the alternative, defendants ask the cou r t to exercise its discretion under the Declaratory Judgment Act, 28 U.S.C. § 2201(a), an d dismiss this case in favor of the Ohio proceeding or transfer it to the Southern District of Ohio. In their brief in opposition to the motions to dismiss or transfer, plaintiffs argue at

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length that NWPSI and not its parent corporation is solely responsible for the plan changes an d that neither of the plaintiffs is subject to suit in Ohio. It is not necessary to reach those qu estion s because I conclude that this court lacks subject matter jurisdiction over plaintiffs' claim for declaratory relief regarding the alleged ERISA violations. Therefore, I am

dism issing that claim. Jurisdiction would be present over their motion for declaratory ju dgm en t claim regarding their alleged LMRA violations, but I am exercising my discretion un der the Declaratory Judgment Act and dismissing that claim in favor of the pending class action in the Southern District of Ohio filed by the union and the retirees, the natural plaintiffs in this dispute. Plaintiffs will have an opportunity in that court to argue their con tention s that they are not subject to suit there. In determining whether this court can exercise jurisdiction over this case and whether p lain tiffs' complaint states a claim upon which relief may be granted, I have relied only on th e allegations in plaintiffs' complaint. However, in determining whether this case should be dismissed in favor of the Ohio case, I have considered the pleadings and other info rm ation submitted by the parties related to the Ohio proceeding.

FA CT S A. Allegations of Fact in Plaintiffs' Complaint 1. The parties

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Plaintiff NewPage Wisconsin System Inc. (NPWSI) is a Wisconsin corporation with offices in Wisconsin Rapids, Wisconsin that operates paper mills in several states and Nova Scotia, Canada. NPWSI was formerly known as Stora Enso North America Corp., Stora En so Consolidated Papers, Inc. and Stora Enso Acquisition, Inc. At times relevant to this case, NPWSI operated mills in Wisconsin Rapids, Biron, Stevens Point, Niagara and K im berly, Wisconsin. NPWSI also administers an employee benefit plan, providing retiree m edical benefits. Through its predecessors, NPWSI entered into collective bargaining agreem ents concerning benefits for active employees who retired. Plaintiff NPWSI Retiree Health Plan, formerly known as the SENA Retiree Health Plan, is an ERISA-regulated welfare benefit plan administered within this judicial district by N PW SI. Defendant United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Works International Union, AFL-CIO/CLC (the union) is a labo r organization headquartered in Pittsburgh, Pennsylvania, that maintains offices th ro ugh ou t Wisconsin, including in Wisconsin Rapids, Wisconsin. Between 1984 and 20 10 , plaintiff NPWSI and its predecessors, including Consolidated Papers, Inc., Midtec P ap er Corporation and Niagara of Wisconsin Paper Corporation, entered into a series of collective bargaining agreements with the union and its predecessors, including the United Paperwo rkers International Union, the Paper, Allied-Industrial, Chemical & Energy Workers Interna tional Union and Paper Mill Workers Union of Kimberly, regarding employee

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retirem ent plans provided by NPWSI to its employees. The labor agreements covered certain union bargaining unit members at several mills in Wisconsin, including mills at B iro n , Stevens Point, Wisconsin Rapids, Whiting, Kimberly and Niagara, Wisconsin. D efendant William Clendenning is a resident of Wisconsin Rapids, Wisconsin, who w orked for NPWSI at a mill in Wisconsin Rapids for 38 years until he retired in 2004. He is over 65. Clendenning was a member of the union bargaining unit at the Wisconsin R a pid s facility and was also president of Local 187. D efendants Lawrence Bierstake and Bernard Rouse are residents of Green Bay, W iscon sin who worked for NPWSI at a mill in Niagara, Wisconsin until they retired. They are over 65 and retired as members of the union bargaining unit at the Niagara mill. D e fen d a n t Gary Dollevoet is a resident of Appleton, Wisconsin who worked for N P W S I at the Kimberly mill until he retired. He is over 65 and was the local union p resid en t for the Kimberly Mill from 1995 through 2000.

2. Changes to retiree's health benefits In 2004 and 2009, plaintiff NPWSI announced that it intended to phase out its con tribution to the health care premiums for retirees and spouses age 65 and older. Neither the union or any other defendant took action to challenge the 2004 changes. NPWSI also am en ded the retiree health benefits in 2006.

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3. Ohio lawsuit O n December 24, 2009, the union, defendant Clendenning and two other retirees initiated a lawsuit against NewPage Corporation and the NewPage Corporation Welfare Benefit Plan in the Southern District of Ohio. Clendenning v. NewPage Corporation, 09-cv493-tm r. NewPage Corporation is the parent company of NewPage Consolidated Papers Inc., which is the parent company of plaintiff NPWSI. NewPage Corporation is not the sam e entity or a successor entity to NPWSI, Consolidated Papers, Inc., Stora Enso North Am erican or Niagara of Wisconsin Paper Company. Plaintiffs NPWSI and the Plan were no t named as defendants in the Ohio lawsuit. In the Ohio complaint, the union and the retirees contend that union members retiring from NPWSI facilities had vested retiree health benefits under the NewPage Welfare Plan that "were created through collective bargaining between NewPage (or its predecessors) an d the union (or its predecessors)" and "established NewPage's obligation to provide retiree m edical benefits throughout retirement." The union and the retirees contend that Newpage C o rp o ratio n violated the collective bargaining agreements, the Labor Management Relations Act, 28 U.S.C. § 185(a), and § 502(a)(1)(B) and (a)(3) of ERISA by reducing health coverage to retirees age 65 and older and their spouses.

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4. Present lawsuit Plaintiffs NPWSI and the NPWSI Plan filed this lawsuit on January 29, 2010 against a defendant class of retirees (including their spouses, surviving spouses and eligible depen dents) formerly employed by NPWSI or its predecessors: (1) who were represented by the [the union] or its predecessors while working and w ho retired from NPWSI or its predecessors having met the eligibility requirements in effect at their retirement for retiree health insurance allegedly specified in the co llective bargaining agreements; and (2) as to whom NPWSI has reduced or announced that it will reduce or eliminate retiree health care benefits or retiree health care benefit contributions. Plaintiffs seek a declaratory judgment that the amendments to the Plan did not violate the L M R A or ERISA. Plaintiffs have named defendants Clendenning, Bierstaker, Rouse and D o llevo et as representatives of the proposed defendant class, and suggest that the following subclasses may be appropriate. (1 ) Joint labor agreement subclass, consisting of retirees formerly represented by [the union] Locals 2-94, 2-116, 2-187, 2-359 and 2-1306 or their predecessors; (2 ) Niagara contract subclass, consisting of retirees formerly represented by [the un ion ] Local 2-1166 or its predecessors; (3 ) Kimberly contract subclass, consisting of retirees formerly represented by [the un ion ] Local 2-0009 or its predecessors. T hese subclasses are identical to those proposed in the Ohio lawsuit.

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B . Additional Facts Related to Proceedings in Defendants' Ohio Case In the complaint filed by the union and retirees in the Ohio action, the union and retirees allege that NewPage Corporation is a Delaware corporation with its principal offices in Miamisburg, Ohio, that operated the paper mills where the retirees worked in Wisconsin an d was the administrator of the employee benefit plan that provided benefits to the retirees. T h e union and the retirees allege that jurisdiction and venue are proper in the Southern D istrict of Ohio because NewPage Corporation is headquartered in Ohio, the NewPage Plan is administered in Ohio and the amendments to the NewPage Plan were made in Ohio. On February 7, 2010, after plaintiffs NPWSI and the NPWSI Plan filed the present law suit in this court, the union and retirees filed a motion to amend their complaint in the O hio lawsuit and add NPWSI and the NPWSI Plan as defendants. NPWSI and the NPWSI Plan opposed the motion to amend, contending that the amendment would be futile because they are not subject to personal jurisdiction in Ohio. NPWSI argued that it is a Wisconsin corporation with its principal place of business in Wisconsin Rapids, Wisconsin, the collective bargaining agreements at issue were negotiated in Wisconsin and that this dispute sh ou ld be resolved in the new lawsuit it had initiated in the Western District of Wisconsin. O n February 12, 2010, NewPage Corporation and NewPage Corporation Welfare B enefit Plan, the defendants in the Ohio action, filed a motion to dismiss for lack of subject m atter jurisdiction, contending that it is NPWSI that administers the employee benefits plan

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to which the retirees were eligible to participate and only NPWSI and its predecessors were parties to collective bargaining agreements. NewPage Corporation provided the Ohio court a chart describing the corporate structure of the relevant companies at issue in this litigation. S ee copy of chart, plts.' brief, dkt. #31, at 7. O n May 3, 2010, the court in Ohio found venue proper for the union and retirees' ER ISA claim because the union and retirees had submitted undisputed evidence that the N PW S I Plan is administered in the Southern District of Ohio. Clendenning v. NewPage C orp ora tio n , 09-cv-493-tmr, dkt. #22, at 6. However, the court instructed the parties to subm it additional briefing on the issues of personal jurisdiction over NPWSI and the N PW SI Plan and the propriety of venue over the plaintiffs' LMRA claim. The court gave th e parties until July 20, 2010 to conduct discovery on the issue of personal jurisdiction and until August 27, 2010 to complete briefing on the issue. The court deferred ruling on the plaintiffs' motion for leave to file a second amended complaint and add NPWSI and the N P W S I Plan as defendants until it had ruled on the issue of personal jurisdiction.

O PIN IO N A . Subject Matter Jurisdiction P lain tiffs are suing under 28 U.S.C. § 2201 for declaration of their right to amend their ERISA plan. Section 2201 is not an independent source of jurisdiction, Ameritech v.

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C o m m u nicatio n s Workers of America, 220 F.3d 814, 818(7th Cir. 2000); 28 U.S.C. § 2201 (authorizin g federal courts to grant declaratory judgments in cases within their jurisdiction); plaintiffs assert jurisdiction under §§ 1331 (federal question) and 1367 (supplemental ju r i s d ic t i o n . D efendants contend that neither statute supplies a basis for jurisdiction. In support of their argument that Seventh Circuit precedent precludes plaintiffs' claim for declaratory relief, defendants rely on Newell Operating Co. v. International Union of United Au tom ob ile, Aerospace and Agricultural Implement Workers of America, 532 F.3d 583 (7th C ir. 2008), overruled on other grounds by Envision Healthcare, Inc. v. PreferredOne Insurance Co., 604 F.3d 983, 986 n.1 (7th Cir. 2010) (holding that court of appeals should have applied "abuse of discretion" standard rather than "de novo" standard of review to district court's decision to dismiss declaratory judgment action in Newell). In Newell, the em p lo yer had amended an ERISA welfare benefit plan to require increased premiums for retirees. In anticipation of complaints from the retirees and their union, Newell (and related entities, the ERISA plan and the plan's administrative committee) filed a declaratory judgm ent action in the Northern District of Illinois against the union and 474 retirees, seeking a declaration that the plan amendments did not violate ERISA or the LMRA. About a month later, the union and four retirees filed a putative class action in the Western District o f Michigan, alleging that the amendment violated ERISA and breached the applicable

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collective bargaining agreements in violation of the LMRA. On the union's motion in the Illino is case to dismiss for lack of subject matter jurisdiction or alternatively, to transfer venue to the Michigan district, the district court held that jurisdiction existed under the L M R A but not under ERISA, because the plaintiffs were not suing to obtain equitable relief in order to enforce the terms of ERISA or an ERISA plan; rather, the plaintiffs were seeking to force retirees to make larger premium payments. Exercising its discretion, the court declined to retain jurisdiction over the suit, finding it more appropriate for resolution in M ichigan. On appeal, the Court of Appeals for the Seventh Circuit upheld the lower court's decision, observing that although the Declaratory Judgment Act empowers a federal court to enter a declaratory judgment in "a case of actual controversy within its jurisdiction," 28 U .S .C . § 2201(a), the Act is not "an independent grant of jurisdiction[;] rather jurisdiction m ust be predicated on some other statute.'" Newell, 532 F.3d at 587 (quoting Rueth v. E PA , 13 F.3d 227, 31 (7th Cir. 1993)). Analyzing the question of jurisdiction under ERISA, th e court of appeals agreed with the district court that subject matter jurisdiction did not exist over the plaintiffs' ERISA claim. It explained that ERISA § 502(a)(3) provides subject m atter jurisdiction over equitable claims by the fiduciary of an ERISA plan for a declaration "to enforce any provisions of this subchapter or the terms of the plan," 29 U.S.C. § 11 32 (a)(3)(B )(ii), but this does not mean that the courts have jurisdiction over every suit

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for equitable relief by an ERISA fiduciary. Their jurisdiction extends only to suits by fiduciaries seeking to "enforce" ERISA or ERISA plans. Newell, 532 F.3d at 589. The suit by the Newell entities could not "logically be construed as" such a suit, id., because the fiduc ia ry did not need judicial authorization to collect the newly implemented premium charges. It could simply stop providing benefits to any retiree who did not pay the required am ount. Moreover, the Newell entities could not be held to have violated their fiduciary duties if they were enforcing the terms of the plan. In affirming the district court's dismissal of the suit, the court of appeals said that A plaintiff cannot bring a claim within ERISA § 502(a)(3) by advantageous and creative pleading . . . . The appellants have attempted to usurp the ju risd ictio n al choice of the UAW and retirees by filing an anticipatory suit for declaratory relief under ERISA § 502(a)(3) before they could be sued in M ichigan; however, without a need to enforce the Plan or ERISA, appellants' effort is for naught. The appellants' suit for declaratory and injunctive relief u nd er ERISA § 502(a)(3) against the UAW and retirees was unnecessary, and the district court properly concluded that jurisdiction did not exist under the statu te. We therefore affirm the district court's dismissal of the counts of app ellan ts' complaint that advanced claims under ERISA for lack of subjectm atter jurisdiction.

Id . at 589. T he court held that it was proper for the district court to dismiss the Illinois case in favor of the one in Michigan, although the court could have retained the LMRA claim b ecau se it had jurisdiction under § 301 of the LMRA, which provides jurisdiction over

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"[s]u its for violation of contracts between an employer and a labor organization representing em ployees." Id. (quoting 29 U.S.C. § 185); see also Stevens Construction Corp. v. Chicago R egional Council of Carpenters, 464 F.3d 682, 685 (7th Cir. 2006) ("[A] declaratory judgm ent plaintiff accused of violating a collective-bargaining agreement may ask a court to d eclare the agreement invalid.") (quoting Textron Lycoming Reciprocating Engine Division, A vco Corp. v. United Automobile, Aerospace, and Agricultural Implement Workers of Am erica, 523 U.S. 653, 658 (1998)). The union and retirees were the "natural plaintiffs" and both the ERISA and LMRA claims could proceed in the same suit in Michigan. Newell, 5 3 2 F.3d at 590-91. The court of appeals noted that if the district court had decided not to dismiss the LMRA action, it was likely it would have transferred the case to Michigan because the majority of the retirees lived in Michigan, the plants where the retirees worked w ere located in Michigan and the collective bargaining agreement was negotiated there. Id. In this case, defendants do not deny that the court has subject matter jurisdiction ov er plaintiffs' claim for declaratory relief regarding LMRA violations. They acknowledge th e rulings in Newell and related cases to that effect. E.g., Stevens Construction, 464 F.3d at 685; J.W. Peters, Inc. v. Bridge, Structural & Reinforcing Iron Workers, 398 F.3d 967, 9 7 3 (7th Cir. 2005). Their disagreement with plaintiffs centers on the existence of

jurisdiction over plaintiffs' ERISA claim. Defendants contend that Newell requires dismissal of plaintiffs' claim under ERISA. Plaintiffs read the case quite differently, contending that

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it "practically dictates" retention of the case. Plfs.' Br., dkt. #31, at 14. In plaintiffs' view, this court has jurisdiction under 28 U.S.C. § 1331 or § 1367 because their declaratory judgm ent claim arises under federal law or, alternatively, because jurisdiction exists over their L M R A claim and the court has supplemental jurisdiction over their ERISA claim.

1. Jurisdiction of declaratory judgment claims under federal law Since Newell was decided in 2008, at least two district courts in this circuit have held that although employers do not have independent standing to sue under ERISA for a declaration of their rights under ERISA or an ERISA plan to modify or terminate employee benefits, employers (or plan fiduciaries) may bring such claims under the Declaratory Ju dgm en t Act and invoke the court's federal question jurisdiction under § 1331. Boeing Co. v. March, 656 F. Supp. 2d 837, 844-45 (N.D. Ill. 2009) (finding jurisdiction under Act because suit brought by employer mirrored employee-initiated suit over which court had jurisd ic ti o n ) ; Trustmark Life Insurance Co. v. Hibben, 2009 WL 1684513, *3 (N.D. Ill. June 12, 2009) (finding jurisdiction under Act over plaintiff seeking declaration that it did no t violate provisions of ERISA plan by reducing defendant's disability payments). In both cases, the district courts noted that in deciding whether federal jurisdiction can be exercised over a declaratory judgment action, the usual practice is to determine whether a federal question would be present had the declaratory defendant filed suit against the declaratory

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plaintiff and the subject matter of the complaint remained the same. Boeing, 656 F. Supp. 2d at 843; Trustmark, 2009 WL 1684513 at *3. In Boeing, the court concluded that because a union or retiree could bring a claim under ERISA, the employer could "piggyback" on that suit to establish jurisdiction over a declaratory judgment action. Id. at 845. It distinguished the case before it from Franchise Tax Board of the State of California v. C on struction Laborers Vacation Trust for Southern California, 463 U.S. 1 (1983), in which th e Supreme Court held that federal jurisdiction did not exist over a state agency's claim for a declaration that its tax levy on a benefit fund did not violate ERISA, despite the possibility that the benefit fund could have brought a suit under ERISA in federal court to stop the state from levying against the fund to recover unpaid personal income taxes from fund m e m b e rs . Analyzing the case in Boeing, the district court was persuaded that the

jurisdictional deficiency in Franchise Tax Board was not whether the state agency had independent standing to sue under ERISA or the Declaratory Judgment Act, but whether the con troversy was "within the carefully circumscribed ambit of federal jurisdiction." Boeing, 6 5 6 F. Supp. 2d at 844. It concluded that although a dispute about a state tax-levying regulation was not within the "ambit of federal jurisdiction," a plaintiff employer's suit seeking to determine the legality of its modifications to an ERISA plan would be. With respect, I believe that the court in Boeing reached a conclusion that does not com po rt with Newell, 656 F.3d 837. The Newell court made it clear that it found no source

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of jurisdiction in ERISA and it held by implication that it found no source of jurisdiction in any other statute. On appeal, the plaintiffs argued that regardless whether ERISA could be a source of jurisdiction, the court had jurisdiction under the Declaratory Judgment Act beca use the retirees and union could have filed a coercive action under ERISA that would have necessarily presented a federal question. Appellants' Br., at 16, available at 2007 WL 2051 746. The court of appeals did not address this argument directly, but it affirmed the district court's dismissal of the plaintiffs' ERSIA claims for lack of subject matter jurisdiction and stated that jurisdiction could not be predicated on the Declaratory Judgment Act. Newell, 532 F.3d at 587, 589. If the court of appeals had agreed with the plaintiffs that the nature of the defendants' case supplied subject matter jurisdiction under § 1331or that the plaintiffs h ad established subject matter jurisdiction under the Declaratory Judgment Act, it would not h ave affirmed dismissal on the ground of subject matter jurisdiction. Further, the court of app eals would not have stated that Michigan was a more desirable forum because, unlike in Illino is, "the ERISA and LMRA claims may go forward in the same litigation" in Michigan. Id. at 591 (emphasis added). The court of appeals decided that ERISA does not permit plan fiduciaries to seek a d eclaratio n that their modification or termination of retiree benefits is lawful under ERISA, b ecau se such declaratory relief is unnecessary to further the purpose of ERISA. Newell, 532 F.3d at 589. In other words, Congress enacted the civil enforcement provision of ERISA so

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that plan participants and beneficiaries can enforce their rights, not so that plan adm inistrators can seek declaration of their right to reduce or deny benefits. E.g., Gulf Life In su ran ce Co. v. Arnold, 809 F.2d 1520, 1523-25 (11th Cir. 1987) (affirming dismissal of declaratory judgment claim by fiduciary seeking to determine liability for benefits claimed by former employee because plain language of ERISA venue provisions precluded such declaratory action and allowing such a suit "would stand ERISA's unequivocal purpose to p r o te ct the interests of plan participants and beneficiaries] on its head."); Crown Cork & S eal Co. v. International Association of Machinists & Aerospace Workers, AFL-CIO, 2004 W L 5627647, *2-4 (D. Neb. Jan. 20, 2004) (dismissing for failure to state claim declaratory action filed by fiduciary of ERISA plan seeking declaration that it may unilaterally modify health benefits); CNH America LLC v. International Union, United Automobile, Aerospace, & Agricultural Implement Workers of America, 2004 WL 5627648, *12 (E.D. Wis. Aug. 3, 2004) (dismissing declaratory judgment claim for declaration that retirees are not entitled to lifetime health care benefits for lack of jurisdiction under ERISA or § 1331). The court o f appeals' conclusion that subject matter jurisdiction was lacking must have been based on its conclusion that the plaintiffs' suit did not involve the enforcement of any ERISA rights. In other words, because ERISA does not permit employers, administrators or fiduciaries to seek declarations that their modifications to benefit plans do not violate ERISA, the federal cou rts do not have jurisdiction over such claims.

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2. Exercise of supplemental jurisdiction over ERISA claim U nd er 28 U.S.C. § 1367(a), [I]n any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United S tates Constitution. P lain tiffs contend that their ERISA claim is "entangled" with their LMRA claim and that for this reason, this court should retain supplemental jurisdiction over their ERISA claim . Plfs.' Br., dkt. #31, at 13. The only case that plaintiffs cite in support of this argum ent is In re Repository Technologies, Inc., 601 F.3d 710, 724-28 (7th Cir. 2010), w hich involved circumstances completely different from those in the present case. In In re R epository, the court of appeals held that the district court abused its discretion by rem anding state law claims that were inseparable from the federal bankruptcy case and had already consumed the time of multiple federal judges. Id. Thus, unlike the present case, In re Repository is a classic example of a situation in which a district court may extend supple m ental jurisdiction: when a party asserts state law claims that are part of the same case or controversy as federal law claims over which the court has jurisdiction. Plaintiffs' argument under § 1367 fails for the same reasons its § 1331 arguments fail. Plaintiffs' ERISA declaratory judgment claim is not a state law claim; it is not even a federal law claim. According to the court of appeals in Newell and the plain language of ERISA §

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5 0 2 (a)(3 ), the fiduciary of an employee benefit plan does not have a cause of action for declaratory relief when the question is whether amendments to an employee benefit plan vio late ERISA. Newell, 532 F.3d at 589 (quoting Mertens v. Hewitt Associates, 508 U.S. 248, 253 (1993) ("[Section 502(a)(3)] does not, after all, authorize `appropriate equitable r elief' at large, but only `appropriate equitable relief' for the purpose of `redressing any violation s or . . . enforcing any provisions' of ERISA or an ERISA plan.") (emphasis in o rigin al)). Because a fiduciary does not have such a cause of action, district courts do not have supplemental jurisdiction over such claims. Newell, 532 F.3d at 589. In sum, the court of appeals has concluded, under circumstances almost identical to those in this case, that declaratory-plaintiffs may not bring claims seeking a declaration that am en dm en ts to an ERISA plan comply with the requirements of ERISA. The court of app eals warned that plaintiffs may not bring such claims through "creative pleading." Plaintiffs may not avoid the rule of the Newell case by asserting that their claim is "supplem ental to" or "derivative of" their LMRA claim or that their claim survives because it raises issues of federal law. Therefore, plaintiffs' claim for declaratory relief regarding ER ISA violations will be dismissed.

B . Discretion under Declaratory Judgment Act Although this court has subject matter jurisdiction over plaintiffs' LMRA claims, it

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rem ains to be decided whether jurisdiction should be exercised under the Declaratory Judgm ent Act. Under the Act, district courts "may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." 28 U.S.C. § 2201(a) (emphasis added). The Supreme Court has explained: B y the Declaratory Judgment Act, Congress sought to place a remedial arrow in the district court's quiver; it created an opportunity, rather than a duty, to grant a new form of relief to qualifying litigants. Consistent with the n o n ob ligato ry nature of the remedy, a district court is authorized, in the sound exercise of its discretion, to stay or to dismiss an action seeking a declaratory judgm ent before trial or after all arguments have drawn to a close. W ilton v. Seven Falls Co., 515 U.S. 277, 288 (1995). In other words, the Declaratory Judgm ent Act does not confer an absolute right upon a litigant to seek a declaratory ju dgm en t, Green v. Mansour, 474 U.S. 64, 72 (1985), and district courts have "significant discretion" in deciding whether to exercise this authority. Envision Healthcare, 604 F.3d at 9 8 6 . "[T]here is no set criteria for when a court should exercise its discretion to abstain" from entertaining a suit for declaratory relief, id., but the Court of Appeals for the Seventh Circuit has provided some guidance. In particular, the court of appeals has explained that tw o situations are well suited to declaratory judgment actions: (1)The controversy has ripened to a point where one of the parties could invo ke a coercive remedy (i.e. a suit for damages or an injunction) but has not d on e so; and (2) Although the controversy is real and immediate, it has not ripened to such a point, and it would be unfair or inefficient to require the p arties to wait for a decision.

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T e m pco Electric Heater Corp. v. Omega Engineering, Inc., 819 F.2d 746, 749 (7th Cir. 19 87 ) (emphasis added). Further, a declaratory judgment action that is brought in the face o f clear threats of suit and seeking a determination that no liability exists should be closely scrutinized as potentially improper and unnecessary. Id. at 750. The court of appeals has also provided five equitable considerations that a district court may look to for guidance in deciding whether to entertain a declaratory judgment suit: (1) whether the judgment would settle the controversy; (2) whether the declaratory judgment action would serve a useful purpose in clarifying the legal relatio n s at issue; (3) whether the declaratory remedy is being used merely for the purpose of `procedural fencing' or `to provide an arena for a race for res ju dicata;' (4) whether the use of a declaratory action would increase friction betw een our federal and state courts and improperly encroach on state ju risd ictio n ; and (5) whether there is an alternative remedy that is better or m ore effective. N U CO R Corp. v. Aceros Y Maquilas de Occidente, S.A. de C.V., 28 F.3d 572, 579 (7th Cir. 1 9 9 4) (quoting Nationwide Mutual Fire Insurance Co. v. Willenbrink, 924 F.2d 104, 105 (6th Cir. 1991)). Finally, the court of appeals has cautioned that a suit for declaratory ju dgm en t should not be used as a tool "aimed solely as wresting the choice of forum from the `natural plaintiff.'" Hyatt International Corp. v. Coco, 302 F.3d 707, 718 (7th Cir. 20 02 ). Applying these principles to the facts of the present case, I conclude that this suit sh ou ld be dismissed in favor of the Ohio proceedings. Neither of the factual situations

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co ntem p lated by Tempco, 819 F.2d at 749, is present in this case. Before plaintiffs NPWSI and the NPWSI plan initiated this lawsuit, the union and three retirees had already filed a law suit in Ohio, seeking relief under the LMRA and ERISA on the basis of the same am endm ents to the employee benefits plan at issue in this case. Although they did not name plaintiffs NPWSI and the NPWSI plan as defendants in that case initially, they have sought leave to amend their complaint to do so. As the court of appeals explained in Newell, the retirees and the union are the "natural plaintiffs" in this type of dispute. Newell, 532 F.3d at 591. Thus, plaintiffs' decision to file suit in this court appears to be "procedural fencing" o r an attempt to "wrest" the choice of forum from the Union and retirees. In addition, because plaintiffs' claim under ERISA has been dismissed from this suit, this declaratory judgm ent action would not resolve all of the disputes between the parties. Again in Newell, the court of appeals stated that it is sensible to adjudicate claims in the court in which the ER ISA and LMRA claims may go forward in the same litigation. Id. U nw illing to concede the point, plaintiffs contend there are several reasons why this case should proceed in Wisconsin: the named defendants are citizens of Wisconsin; the m ills at which they worked were located in Wisconsin; the communications regarding benefit ch an ges to which defendants object were sent from NPWSI's offices in Wisconsin; and jurisdiction and venue are improper in Ohio. However, I need not decide whether the district court in the Southern District of Ohio has personal jurisdiction over NPWSI and the

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N PW S I plan and whether venue is proper there. Plaintiffs should make their arguments in the Ohio court, which will determine jurisdiction and venue after the parties have completed briefing on the issue. If the Ohio court determines that jurisdiction exists and that venue is proper, it may adjudicate the entire controversy in Ohio. If the Ohio court determines that it does not have jurisdiction or that venue is improper, it may decide to transfer the case to this district or in the alternative, dismiss the case, allowing the union and retirees to refile the case here. In any event, until the Ohio court makes such decision, the natural plaintiffs in this dispute may remain in their chosen forum.

OR DER IT IS ORDERED that 1. The motion to dismiss, dkt. #18, filed by defendants William Clendenning, Law rence Bierstaker, Bernard Rouse, Gary Dollevoet and United Steel, Paper and Forestry, R u bb er, Manufacturing, Energy, Allied Industrial Workers International Union, AFLC IO / C L C is GRANTED. The claim for declaratory relief under the Employee Retirement Inco m e Security Act, 29 U.S.C. § 1132, filed by plaintiffs NewPage Wisconsin System, Inc. an d NPWSI Retiree Health Plan, f/k/a The Sena Retiree Health Plan (count II of the co m p la in t) , is DISMISSED for lack of subject matter jurisdiction. The court declines to

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exercise jurisdiction over plaintiffs' claim for declaratory relief under the Labor Management R elation s Act, 29 U.S.C. § 185 (count I of the complaint). The action is DISMISSED. 2. The clerk of court is directed to enter judgment for defendants and close this case. E n tered this 16th day of July, 2010. B Y THE COURT: /s/ B AR B AR A B. CRABB D istrict Judge

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