Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-05264/USCOURTS-cand-4_05-cv-05264-3/pdf.json

Nature of Suit Code: 720
Nature of Suit: Labor Management Relations Act
Cause of Action: 29:185 Labor/Mgt. Relations (Contracts)

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United States District Court

For the Northern District of California

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Plaintiffs have voluntarily dismissed their claims against

former Defendant Rexam Pension and Benefits Committee. 

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

BERENICE ANGOTTI, DANIEL BORRERO,

RALPH E. COWLEY, JACK GRIFFITH,

DONALD S. MUELLER, KENT D. RUSSELL,

BERNARD W. SCHREINER and RAYMOND

VALLI, on behalf of themselves and

others similarly situated,

Plaintiffs,

v.

REXAM, INC., and REXAM, INC. PENSION

AND BENEFITS COMMITTEE,

Defendants. /

No. C 05-5264 CW 

ORDER GRANTING IN

PART PLAINTIFFS'

MOTION FOR A

PRELIMINARY

INJUNCTION

Plaintiffs Berenice Angotti, Daniel Borrero, Jack Griffith,

Kent D. Russell, Sr. and Bernard W. Schreiner move for a

preliminary injunction requiring Defendant Rexam, Inc.1 (Rexam) to

rescind its January, 2006 termination of Plaintiffs' medical and

prescription drug benefits. Rexam opposes the motion for a

preliminary injunction. The matter was heard on April 28, 2006. 

Having considered all the papers filed by the parties and oral

argument on the motion, the Court grants in part the motion for a

preliminary injunction, as explained below. 

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2The claims of a third group, who retired from a facility

covered by a "Basic Agreement" negotiated between IAM and Rexam or

a Rexam predecessor, were severed from Plaintiffs’ and transferred

to the District Court of Minnesota, where a related case is

pending, Rexam, Inc., v. United Steelworkers of Am., No. 03-CV2998-ADM/AJB (D. Minn., filed May 20, 2003) (hereinafter Rexam I). 

Rexam filed Rexam I against the United Steelworkers of

America, the IAM, nine individual steelworker retirees and one

machinist retiree. Judge Ann D. Montgomery recently denied Rexam’s

motion for summary judgment against the IAM in that case. Rexam I, February 21, 2006 Memorandum Opinion and Order. 

2

BACKGROUND

Plaintiffs are retired former employees of Rexam who are or

were eligible for health and other welfare benefits. According to

their complaint, Plaintiffs seek to represent two classes of

retirees formerly represented by the International Association of

Machinists and Aerospace Workers, AFL-CIO (IAM) and their

dependents: (1) those who retired from San Leandro or Modesto,

California facilities covered by an independent collective

bargaining agreement (CBA) between an IAM affiliate and Rexam or a

Rexam predecessor; (2) those who retired from Kent or Vancouver,

Washington or Gary, Indiana facilities covered by an independent

CBA between an IAM affiliate and Rexam or a Rexam predecessor.2

Plaintiffs have not yet moved for class certification. 

The independent CBAs provide that retirees eligible for

pensions will also receive health benefits. Plaintiffs identify

numerous agreements containing language either stating or implying

that retirees will continue to receive health benefits for their

lifetimes. For instance, the San Leandro and Modesto plants' CBA

for 1988-1991 sets forth the total maximum medical benefits to be

received “during the life of the employee” and “during the life of

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3

Unless otherwise specified, all citations to exhibits refer

to those attached to the Declaration of Frank Martorana. 

3

the spouse . . . so long as the spouse does not remarry in the

event of the pensioned employee’s death.” Martorana Decl., Ex. 4A,

San Leandro and Modesto Plants Agreement Between American National

Can Co. and IAM, May 1, 1988-Apr. 30, 1991 at 77.3

 Most of the

Kent, Vancouver and Gary CBAs explicitly promise, “Major Medical

coverage will be extended to cover retired employees for their

lifetime.” Ex. 2A, Vancouver Plant Agreement Between National Can

Co. and IAM, Apr. 16, 1981-Apr. 15, 1984 at 77. 

The independent CBAs refer to coverage as provided by a

“retired group insurance plan.” Some of those insurance plans also

contain “lifetime” language. The most recent plan covering San

Leandro and Modesto retirees explains, 

When Does Coverage End?

You coverage is continued for the rest of your life.

Your spouse’s coverage will continue as long as he or she

remains your spouse. Should you die, coverage for your spouse

will be continued for the remainder of their life or

remarriage.

Ex. 6, American National Can Co. Group Benefit Plan for Retired

Hourly Employees of the San Leandro & Modesto Plants Who Retired On

or After May 1, 1991. The 1988 and 1980 Summary Plan Descriptions

(SPDs) of that plan similarly provide that “[a]ll Benefits for your

dependent spouse will cease if your spouse remarries after your

death. Ex. 7, Group Benefit Plan for Retired Employees of the San

Leandro & Modesto Plants Who Retired On or After May 1, 1988 at 2;

Ex. 8, Group Insurance Plan for Retired Employees of the San

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Leandro & Modesto Plants, Amended May 1, 1980 at 1. 

However, the 1980 and 1988 San Leandro and Modesto SPDs also

provide,

If the Group plan is terminated or amended to terminate the

insurance of any class [of] employees in which you are

included, your Group Life protection continues for 31 days. 

Ex. 7 at 16; Ex. 8 at 18. Elsewhere, these SPDs state, “Coverage

[or “insurance”] for yourself and your dependent spouse will

terminate if the group policies terminate.” Ex. 7 at 14

(“Coverage”); Ex. 8 at 16 (“Insurance”). The 1977 Summary Plan

Description (SPD) for San Leandro and Modesto’s group benefits plan

contains a section on termination of insurance,

Insurance for yourself and your dependent will terminate when

you are no longer eligible or if the group policies terminate. 

Hospital, Surgical and Medical Benefits will terminate when

you have received benefits equal to the total lifetime

maximum. The insurance of a spouse will terminate if your

spouse remarries after your death or if the spouse has

received benefits equal to the total lifetime maximum. 

Ex. 9, Group Insurance Plan for Retired Employees of San Leandro

and Modesto Plants, National Can, Summary Plan Description, May 1,

1977 at 15. 

In contrast to the “Basic” CBAs between Rexam and the IAM

(which are no longer at issue in this case), neither the

independent CBAs, the retiree health plans nor the SPDs contain a

clause reserving to Rexam the right to amend, modify or discontinue

retiree health benefits. Herman Howell, a former San Leandro plant

employee who became the local IAM business representative in 1985

and the chief negotiator for the IAM’s San Leandro and Modesto

employees in 1988, declares, 

It has always been my understanding that retiree health

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benefits were guaranteed for the lives of the retiree and his

eligible spouse unless the spouse remarried. By the time I

became involved in negotiations, retiree health benefits had

been provided under the collective bargaining agreement for

several years and most of the discussions about these benefits

were negotiations over improvement in these benefits, not

discussions about the duration of these benefits, which the

Union believed was long settled.

Howell Decl. ¶ 6. 

The plans do contain “coordination of benefits” clauses. For

instance, the 1988 San Leandro and Modesto SPD states,

If an insured person is entitled to any medical, dental care

or major medical benefits or services from another source

. . . such benefits under this plan may be reduced to an

amount, which, together with all such other benefits, will not

exceed 100% of any necessary, reasonable and customary item of

expense covered under this plan or any such other plan.

Ex. 7 at 14. The plan addresses coordination of benefits with

Medicare in particular detail. Id. (providing that the company

will reimburse retirees for actual Medicare Part B premium up to

$20 per month). 

Language in some of the CBAs and Plans refers to the

"continuation" of group insurance coverage, i.e. statements in the

CBAs that retiree health insurance “will remain in effect.” For

instance, the continuation clause in the 1989-1993 Vancouver CBA

states,

The Retired Group Insurance Plan described in the booklet

entitled “Our Plan of Group Insurance for Hourly Retired

Employees” will remain in effect without cost to the retired

employees.

Ex. 2B at 86. Other CBAs and SPDs do not contain continuation

clauses. 

Over the years, Rexam has changed retirees’ health benefits

after their retirement. As Genevieve Barratt, a former director of

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benefits for American Can, explained in an August 1, 1994 letter to

participants in the plans,

We’re pleased to tell you about a new program designed to

reduce the cost of your prescription purchases. This program

will go into effect September 1, 1994. Once you’ve read the

details, we’re sure you will agree the new program is an

improvement to your health care plan and offers many

advantages.

Ex. 15, R047801. In 2001, Rexam’s medical plan administrator,

United Healthcare, was administering 146 different union and nonunion retiree health plans, of which 34 were associated with

various groups of IAM retirees. Second Hardin Aff. ¶ 4. Many of

these plans had similar benefit levels, and in 2001 the IAM plans

were modified and consolidated to just six plans, four for current

retirees and two for future retirees. Id. To the extent that

pooled plans had different benefit levels, Rexam generally chose to

provide more generous benefits to all of the retirees in the newly

consolidated group. Id. ¶ 5. For instance, San Leandro and

Modesto retirees who retired prior to 1983 received major medical

and prescription drug coverage for the first time in 2002. Id.

¶ 7. Don Hardin, Rexam’s benefits consultant, describes this as a

unilateral decision to improve benefits to some retirees in order

to streamline administration. Id.

In memos dated September, 2005, Rexam distributed information

to its retirees stating that their company-provided health benefits

would be discontinued. Retirees who were enrolled in Rexam's

"Prescription Drug Only" coverage were informed that they would

have to enroll in Medicare Part D, the new voluntary prescription

drug plan taking effect January 1, 2006. Retirees receiving an

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allowance to supplement Medicare Part B (outpatient medical)

coverage were informed that this benefit would be discontinued

beginning January 1, 2006. Retirees enrolled in a "post-65 Medical

Plan" were informed that Rexam would be discontinuing its retiree

medical and prescription drug benefits. Plaintiffs charge that

these changes breached Rexam’s obligations under the relevant CBAs

and ERISA welfare plans. 

Plaintiffs are retirees on fixed incomes. In support of their

initial motion for preliminary injunctive relief, they and other

similarly situated retirees declared that they believed they would

receive Rexam medical benefits for their lifetimes and therefore

did not budget for supplemental medical and prescription drug

expenses. They declared that Rexam’s proposed termination of their

medical and prescription drug benefits would cause their monthly

medical costs to increase and their standards of living to

decrease. 

Now, several months after Rexam’s termination of medical

benefits, some retirees have been or are being forced to make

difficult decisions in order to compensate for the reduction in

benefits. Mr. Russell lives on a fixed income including Social

Security and a $2,250 per month (post-tax) pension. Since Rexam

terminated his benefits, he pays an additional $132 per month for

supplemental medical insurance, $41 per month for prescription drug

insurance and $12 per month towards his Medicare Part B premium. 

Supp. Russell Decl. ¶ 4. Because his prescription for a brand name

acid reflux drug now comes with a much higher co-payment, Mr.

Russell has started cutting dosages in half and sharing pills with

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4

According to Mr. Hardin, “[b]ecause of the limitations on

certain dental procedures, it is impossible for [him] to determine

what reimbursement, if any, Ms. Barbara Smith would have received

for her claimed $8,000 in dental bills.” Second Hardin Aff. ¶ 10. 

He also notes that only the Modesto retirees had received dental

coverage. 

8

a family member who takes the same drug. Id. ¶ 5. Mr. Russell,

who is diabetic, also can no longer afford “test strips” to measure

his blood sugar every morning; again, he has been receiving some

from a family member, but worries that that person “has been

shorting himself so I can get the test strips.” Id. ¶ 5. Mr.

Russell has been told by his doctor that he needs prostate surgery,

but is not sure whether he can afford it. Id. ¶ 6. 

Barbara Smith and her husband, Billy Smith, a retiree from the

Modesto plant, live on two pensions worth a total of $1332 per

month and Social Security. Since Rexam terminated their

supplemental benefits, the Smiths obtained alternative coverage

that costs an additional $136 per month for medical and

prescription drug coverage; they now have a new $250 yearly

deductible for hospital stays. Smith Decl. ¶ 9. The Smiths no

longer have dental coverage provided by Rexam; Ms. Smith, not

realizing that her dental coverage had been cut, went to the

dentist in January and was told that she would need to pay $8,000

in order to get new plates and titanium screws due to bone loss in

her mouth and jaw.4 Id. ¶ 11. The Smiths cannot afford this

amount, so the dental work cannot be done. Because she switched

insurance providers, Ms. Smith can no longer see her trusted

doctor, who, in 2005, supervised her breast cancer treatment, which

included two surgeries, chemotherapy and radiation. Id. ¶ 12. Ms.

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Smith states that her 2005 illness would have financially

devastated her family had it not been for Rexam’s coverage of all

out-of-pocket costs above $1,500. Id. ¶ 13. Because of the recent

decline in benefits, Mr. Smith’s standard of living has decreased;

he is no longer able to afford trips for hunting and fishing. Id.

¶ 14. 

Other retirees report facing similarly difficult decisions. 

Donald Weseman and his wife now pay an extra $261.14 per month

premium for supplemental medical insurance and have cut back on gas

purchases for grocery trips and visiting family. Weseman Decl.

¶ 11. Ms. Angotti, who refilled all her prescriptions at the end

of 2005 and has since not seen a doctor, is concerned that once she

starts paying new medical costs, she may have to move out of her

house or stop payments on her life insurance policy, which she

intended to leave to her children. Supp. Angotti Decl. ¶ 5. Jack

Griffith and his wife, whose monthly income includes only a $1,013

(after-tax) per month pension and Social Security, can no longer

afford dental and vision coverage, and therefore paid $283 to get

two cavities filled. (Had he still received Rexam dental benefits,

he believes 90% of that cost would have been covered.) Supp.

Griffith Decl. ¶ 4. He is not sure if his glaucoma is considered a

medical or vision problem. Although Mr. Griffith is able to obtain

prescription drug coverage through the Veterans’ Administration,

the VA will not pay for two drugs, or anything similar, formerly

covered by the Rexam plan: Singulair, for breathing problems, and

Actos, for diabetes. Id. ¶ 5. Mr. Griffith cannot afford to pay

for these drugs himself, and is not sure what he will do when his

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current prescriptions run out. Id. Alyce Asch and her husband

have no income other than Social Security and $1330 per month in

combined pensions; their health care costs have increased by at

least $175 per month in additional insurance premiums and

prescription drug co-payments, as well as 100% of any drug costs

for the year that fall between the $2250 and $3600 “doughnut hole”

in their new Kaiser coverage. Asch Decl. ¶¶ 8-10. Because of

these increased medical costs as well as loans for two major

expenses in the previous year (a new heat pump and a car), the

Asches have cut out additional expenses such as magazine

subscriptions, cell phone use and travel to visit family. Id.

¶ 11. Judy Bond states that her parents, who both needed hospital

care in 2005, had trouble finding alternative coverage due to her

mother's pre-existing condition, and now cannot afford the high

deductible for a major hospital stay under their new insurance; Ms.

Bond anticipates that she would have to sell her house and move in

with her parents if the need for another hospital stay arose. Bond

Decl. ¶¶ 7, 9. 

Meanwhile, Rexam’s consultant Jeff Ries states that the named

class representatives received relatively little in benefits from

Rexam as the secondary payor to their coverage under Medicare Parts

A and B; Mr. Borrero received no such benefits, while Mr. Russell

received $1,696 in benefits. Second Ries Aff. ¶ 3. Mr. Ries does

not address the past medical needs of the other prospective class

members who submitted declarations, such as the Smiths, the

Wesemans, the Asches or Ms. Bond’s parents. With respect to

prescription drug benefits, Mr. Ries calculates that Rexam paid

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approximately $316,000 for members of the proposed classes during

2005, with an average payment of $68 per month per retiree. Id.

¶ 4. Considering all of the benefits terminated by Rexam, Mr. Ries

estimates generally that the average San Leandro or Modesto retiree

will incur $86 in additional monthly medical costs, while the

average Kent, Vancouver or Gary retiree will incur $78 per month in

additional costs. Id. ¶ 7. However, Mr. Ries does not include the

cost of monthly Medicare Part D premiums in his calculations. 

Rexam does not contend that it would suffer financial hardship

if it were required to reinstate benefits for IAM retirees who

retired under the San Leandro, Modesto, Vancouver, Kent and Gary

CBAs. However, Charlotte Reilly, Rexam’s Vice President of

Benefits, states that the administrative costs of transitioning

members of the Plaintiff class back to Rexam plans would be

$122,000 and would take approximately three to six weeks to

complete. Third Reilly Aff. ¶ 5. She states that Rexam would

incur $80,000 in administrative costs and pay approximately

$424,000 per year (based on 2005 costs) in benefits if these

retirees were reinstated. Id. ¶ 6. Ms. Reilly also declares that

Rexam would be unable to take advantage of approximately $100,000

in tax credits on its prescription drug benefits; because Rexam

planned to discontinue those benefits, it did not provide the IRS

with evidence of creditable drug plan coverage by October 31, 2005,

as required for the tax break. 

Mr. Hardin declares that given “the significant variation in

approved Medicare Part D plan designs coordinating with Medicare

Part D is costly and complex to communicate and administer.” 

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Second Hardin Aff. ¶ 21. 

Plaintiffs filed this lawsuit and applied for a temporary

restraining order (TRO) on December 20, 2005. The Court found that

although Plaintiffs raised at least serious questions regarding the

merits of their case and had made a showing of a likelihood of

irreparable harm, their showing of need for a TRO was undercut by

their belated filing of the case and their failure to seek

injunctive relief in a court already familiar with the case, such

as the District of Minnesota. The Court also found that Rexam made

a strong initial showing in support of the transfer of at least

some Plaintiffs’ claims to Minnesota. Accordingly, the Court

denied Plaintiffs’ motion for a TRO, and postponed ruling on their

request for a preliminary injunction until after deciding Rexam’s

motion for a transfer. The Court later transferred the claims of

one group of IAM retirees to Minnesota. See February 14, 2006

Order Granting in Part and Denying in Part Defendants’ Motion to

Transfer. Plaintiffs filed their renewed motion for a preliminary

injunction on March 3, 2006. 

LEGAL STANDARD

"The basis for injunctive relief in the federal courts has

always been irreparable injury and the inadequacy of legal

remedies." Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982). 

To establish entitlement to a preliminary injunction, a moving

party must demonstrate either:

(1) a combination of probable success on the merits and the

possibility of irreparable harm, or

(2) that there exist serious questions regarding the merits

and the balance of hardships tips sharply in its favor.

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Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th

Cir. 1987); California Cooler, Inc. v. Loretto Winery, Ltd., 774

F.2d 1451, 1455 (9th Cir. 1985); see also William Inglis & Sons

Baking Co. v. ITT Continental Baking Co., 526 F.2d 86, 88 (9th Cir.

1975); County of Alameda v. Weinberger, 520 F.2d 344, 349 (9th Cir.

1975). The test is a "continuum in which the required showing of

harm varies inversely with the required showing of

meritoriousness." Rodeo Collection, 812 F.2d at 1217 (quoting San

Diego Comm. Against Registration and the Draft v. Governing Bd. of

Grossmont Union High Sch. Dist., 790 F.2d 1471, 1473 n.3 (9th Cir.

1986)). To overcome a weak showing of merit, a plaintiff seeking a

preliminary injunction must make a very strong showing that the

balance of hardships is in its favor. Rodeo Collection, 812 F.2d

at 1217.

DISCUSSION

I. Nature of Proposed Injunctive Relief

The parties dispute whether the injunctive relief sought by

Plaintiffs is mandatory or prohibitory in nature. 

Mandatory injunctions, which are subject to a higher standard

than prohibitory injunctions, are those that involve “preliminary

relief that goes well beyond simply maintaining the status quo

pendente lite.” Stanley v. University of S. Cal., 13 F.3d 1313,

1319 (9th Cir. 1994) (quoting Martin v. Int’l Olympic Comm., 740

F.2d 670, 674-75 (9th Cir. 1984)); accord Anderson v. United

States, 612 F.2d 1112, 1114 (9th Cir. 1980) (citing Martinez v.

Mathews, 544 F.2d 1233, 1243 (5th Cir. 1976)). The Ninth Circuit

has explained that the “status quo ante litem refers not simply to

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any situation before the filing of a lawsuit, but instead to ‘the

last uncontested status which preceded the pending controversy.’” 

GoTo.com, Inc., v. Walt Disney Co., 202 F.3d 1199, 1210 (9th Cir.

2000) (quoting in part Tanner Motor Livery, Ltd. v. Avis, Inc., 316

F.2d 804, 809 (9th Cir. 1963)). For instance, in GoTo.com, the

court found the status quo ante litem to be the situation that

existed prior to the defendant’s use of an allegedly infringing

logo, which then precipitated the lawsuit. 

As Rexam notes, Plaintiffs’ proposed preliminary injunction

would require it to take affirmative action, namely resuming

payment and administration of benefits. However, Rexam’s focus on

the present necessity for affirmative conduct ignores the Ninth

Circuit’s use of a comparison between the proposed relief and the

status quo ante litem to test whether an injunction constitutes

disfavored mandatory preliminary relief. Rexam relies on Dahl for

its argument that an injunction that would require affirmative

action should be treated as mandatory. Yet Dahl never addressed

the issue presented here and in GoTo.com of determining the

appropriate status quo ante litem with which to compare the

proposed injunctive relief. In Dahl, former patient participants

in a clinical trial sued to require the defendant to continue

providing them with experimental medication after the clinical

trial had ended. 7 F.3d at 1401. Thus, the preliminary injunction

in Dahl did not merely preserve the plaintiffs’ last uncontested

status. Similarly, in In re White Farm Equip. Corp., 788 F.2d 1186

(6th Cir. 1986), the Sixth Circuit referred, in dicta, to an

injunction obtained by retirees requiring their former employer to

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reinstate their health benefits as a “mandatory injunction.” 

Unlike the Rexam retirees, the White Farm Equip. retirees’ coverage

was discontinued prior to their commencement of an adversary

proceeding in bankruptcy court. 788 F.2d at 1188-89. To the

extent that White Farm Equip. holds that any reinstatement of

benefits constitutes a mandatory injunction, it appears to be in

conflict with GoTo.com, and it is the latter that is binding on

this Court. 

Here, Plaintiffs filed suit prior to Rexam’s termination of

their benefits. Therefore, Plaintiffs’ proposed injunctive relief

would simply preserve the last uncontested status preceding the

current litigation. See United Steelworkers of Am., AFL-CIO v.

Textron, Inc., 836 F.2d. 6, 10 (1st Cir. 1987) (holding that a

preliminary injunction requiring company to resume payment of life

and health insurance premiums was prohibitory, not mandatory)

(citing Westinghouse Elec. Corp. v. Free Sewing Mach. Co., 256 F.2d

806, 808 (7th Cir. 1958)). Rexam acted at its peril when it

decided to proceed with its intended termination of Plaintiffs’

benefits even after this lawsuit was filed. See Desert Citizens

Against Pollution v. Bisson, 231 F.3d 1172, 1187 (9th Cir. 2000)

(noting that if a defendant is notified of the pendency of a suit

seeking an injunction, defendant acts at its peril even if a

temporary injunction is not granted). To the extent that Rexam had

already incurred administrative costs in anticipation of its

January 1, 2006 termination of benefits by the time Plaintiffs

filed suit, the consideration of these costs is incorporated in the

usual balancing test for preliminary injunctive relief. 

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Therefore, the Court applies to Plaintiffs’ request the usual

standard for prohibitory injunctive relief. 

II. Likelihood of Success

Plaintiffs assert that their medical benefits are vested

according to the relevant CBAs, SPDs and plans, and thus Rexam’s

termination of those benefits is unlawful. Rexam denies that the

benefits at issue are vested. 

A. Applicable Law: ERISA and LMRA Claims

ERISA requires that welfare benefit plans be “established and

maintained pursuant to a written instrument.” 29 U.S.C.

§ 1102(a)(1). Employers must provide employees with a written

“Summary Plan Description” (SPD) that contains twelve required

categories of information and is “written in a manner calculated to

be understood by the average plan participant” and “sufficiently

accurate and comprehensive to reasonably apprise such participants

and beneficiaries of their rights and obligations under the plan.” 

29 U.S.C. § 1022(a). Any modifications to a welfare benefit plan

must also be written in a manner calculated to be understood by the

average plan participant and furnished according to the

requirements of 29 U.S.C. § 1024(b)(1). Id. Inconsistencies

between the language of an ERISA master plan document and an SPD

are resolved in the employee’s favor. Bergt v. Retirement Plan for

Pilots Employed by MarkAir, Inc., 293 F.3d 1139, 1145 (9th Cir.

2002). 

Under ERISA, “[h]ealth care benefits provided in an employee

benefit plan are not vested benefits; the employer may modify or

withdraw these benefits at any time, provided the changes are made

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in compliance with . . . the terms of the plan.” Serrato v. John

Hancock Life Ins. Co., 31 F.3d 882, 884 (9th Cir. 1994) (quoting

Doe v. Group Hosp. & Med. Servs., 3 F.3d 80, 84 (4th Cir. 1993)). 

Welfare benefit plans “are generally neither vested nor accrued,”

but the parties may set out in plan documents whether the benefits

vest or whether they may be terminated. Cinelli v. Security Pac.

Corp., 61 F.3d 1437, 1441 (9th Cir. 1995). A contractual agreement

for vesting of benefits must be found in the plan documents. Id.

Similarly, a retiree’s right to receive lifetime medical benefits

at a particular cost “can only be found if it is established by

contract under the terms of the ERISA-governed benefit plan

document.” Pisciotta v. Teledyne Indus., Inc., 91 F.3d 1326, 1329

(9th Cir. 1996). Thus, whether or not retirement health benefits

are vested may be a matter of contractual interpretation. Int’l

Assn. of Machinists and Aerospace Workers v. Masonite Corp.

(hereinafter IAM), 122 F.3d 228, 231 (5th Cir. 1997); Murphy v.

Keystone Steel & Wire Co., 61 F.3d 560, 564 (7th Cir. 1995).

The question of vesting is also at issue in a claim under the

LMRA. If retiree medical insurance constitutes a vested benefit

under a CBA, that benefit cannot be ended without the retirees'

consent. Bower v. Bunker Hill Co., 725 F.2d 1221, 1223 (9th Cir.

1984) (citing Allied Chemical & Alkali Workers v. Pittsburgh Plate

Glass Co., 404 U.S. 157, 181 n. 20 (1971)). 

If a CBA “unambiguously limited medical benefits to the term

of the agreement, no benefits were vested." Id. at 1223 (citing

Turner v. Local Union No. 302, Int'l Bhd. of Teamsters, 604 F.2d

1219, 1225 (9th Cir. 1979)). However, the inverse is not

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necessarily true; a CBA that does not unambiguously limit medical

benefits to the term of the agreement does not result in

presumptively vested benefits. This is consistent with Bower

because, as Rexam notes, Bower involved the review of a grant of

summary judgment to the company, and thus all possible inferences

from the record were drawn in the retirees’ favor. See also

Baumgardner v. Smurfit-Stone Container Corp., 347 F. Supp. 2d 927,

932 (D. Or. 2004) (noting in context of motion to dismiss that

dismissal would be improper if there is any ambiguity as to rights

created under CBA). On the other hand, the ERISA presumption

against vesting does not apply to collectively-bargained-for

welfare benefits if the CBAs are ambiguous. To the contrary,

courts in this circuit have noted a “distinction between

entitlement to benefits under a CBA--resulting from a process of

collective bargaining--and an entitlement to benefits under an

ERISA plan--adopted by an employer solely at its discretion.” 

Baumgardner, 347 F. Supp. 2d at 933 (citing Krishan v. McDonnell

Douglas Corp., 873 F. Supp. 345, 351 (C.D. Cal. 1994)

(distinguishing collectively-bargained agreements from the usual

ERISA context with respect to the admission of extrinsic

evidence)). Indeed, a presumption against vesting would seem to

contradict the Ninth Circuit’s approach in Bower. But see, e.g.,

Murphy v. Keystone Steel & Wire Co., 61 F.3d 560, 565 (7th Cir.

1995) (holding that if either CBA or ERISA document is silent on

the issue of vesting, then rebuttable presumption exists that

benefits were not intended to vest); Bidlack v. Wheelabrator Corp.,

993 F.2d 603, 608 (7th Cir. 1993) (en banc) (noting that if CBA is

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silent on the duration of health benefits for retirees, then

extrinsic evidence not admissible to show lifetime entitlement). 

If the language of a CBA is ambiguous, then the court may

consult extrinsic evidence to help resolve the ambiguity. The

Ninth Circuit has explained,

When the operation of an ordinary contract is not clear from

its language, a court generally may consider extrinsic

evidence to determine the intent of the parties in including

that language. That principle is applied with even greater

liberality in the case of a CBA. In ascertaining the intent

of the parties to a CBA, ‘the trier of fact may look to the

circumstances surrounding the contract's execution, including

the preceding negotiations . . . It may also consider the

parties' conduct subsequent to contract formation . . . and

such conduct is to be given great weight.’

Ariz. Laborers, Teamsters & Cement Masons Local 395 Health &

Welfare Trust Fund v. Conquer Cartage Co., 753 F.2d 1512, 1517-18

(9th Cir. 1985) (emphasis and internal citation omitted) (quoting

Laborers Health & Welfare Trust Fund v. Kaufman & Broad, 707 F.2d

412, 418 (9th Cir. 1983)). 

B. Discussion

Plaintiffs argue that the collectively-bargained-for documents

are unambiguous: the parties intended for retirees to receive

health benefits for each retiree’s “lifetime.” Because the Court

finds that Plaintiffs have demonstrated a likelihood of success

even if those documents are ambiguous, and because the parties’

briefing does not adequately address each individual CBA and Plan,

the Court will not decide at this time whether particular documents

are ambiguous. 

At the least, the “lifetime” language contained in almost all

of the CBAs and plans is strong evidence that the parties intended

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5In their supplemental submission, the parties identify a few

exceptions in which neither the CBA nor the applicable plan

contains any lifetime language. The parties are not aware of any

class member who retired as early as these: Kent, March 1, 1974 to

April 15, 1981; Vancouver, March 1, 1974 to April 15, 1977; and

Gary, June 2, 1971 to June 1, 1981. See Joint Supp. Submission Re:

Pls.’ Mot. for a Prelim. Inj., Exs. A, C and D. However, the

parties have identified a class member or members who retired under

the Vancouver CBA that was in place from April 16, 1978 to April

15, 1981; this CBA does not any include lifetime language. Id., Ex. C. 

The primary ground for relief identified by Plaintiffs with

respect to those Vancouver retirees is the connection between

eligibility for pension benefits and eligibility for medical

benefits. In Int’l Union v. Yard-Man, Inc., 716 F.2d 1476, 1482

(6th Cir. 1983), a case cited by the Ninth Circuit in Bower, the

court held that “when the parties contract for benefits which

accrue upon achievement of retiree status, there is an inference

that the parties likely intended those benefits to continue as long

as the beneficiary remains a retiree.” The Sixth Circuit

subsequently clarified that there was no legal presumption of

vesting based on retiree status. See Int’l Union v. Cadillac

Malleable Iron Co., 728 F.2d 807, 808 (6th Cir. 1984). Likewise, a

reasonable inference could be drawn here that the parties intended

medical benefits to be concomitant with pensions, which, as Rexam

itself argues, were expressly vested for life. But see Anderson v.

Alpha Portland Indus., Inc., 836 F.2d 1512, 1517 (8th Cir.)

(disagreeing with Yard-Man to the extent that it recognizes an

inference of an intent to vest). Thus, the parties could have

deemed it unnecessary to use the same express language to discuss

medical benefits as had already been used to vest pensions. 

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to vest retiree health benefits.5 The most arguably ambiguous

lifetime language is that in the Modesto and San Leandro CBAs prior

to May 1, 1991, yet even these CBAs contain language that is highly

probative of vesting, namely references to maximum benefits

received “during the life of the employee” and “during the life of

the spouse.” These collectively-bargained-for statements would

hold little meaning if the benefits could be unilaterally revoked

by Rexam after the expiration of the CBA. 

Rexam argues that such “lifetime” language refers only to the

duration of coverage on an individual basis, and is not sufficient

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to establish vesting. However, the case law shows only that this

type of “lifetime” language may not vest benefits when contained in

the same document as a clear reservation of rights clause, which

none of the CBAs at issue in this litigation contain. See, e.g.,

In re Unisys Corp. Retiree Med. Benefit ERISA Litigation, 58 F.3d

896, 903-04 (3rd Cir. 1995) (holding that plan not ambiguous where

SPD contained both “lifetime” language and a clear, broad

reservation of rights clause); Jensen v. SIPCO, Inc., 38 F.3d 945,

950 (8th Cir. 1994) (holding that ERISA plan ambiguous as to

vesting where it contained both lifetime language and an

unambiguous reservation of rights clause); Anderson v. Alpha

Portland Indus., 836 F.2d at 1518 (construing in larger context a

phrase providing continuing health insurance “until death of

retiree” to limit the company’s obligation to provide benefits

until death, but noting that phrase itself was “highly probative of

intent to vest benefits”); United Mine Workers of Am. v. Brushy

Creek Coal Co., 410 F. Supp. 2d 723, 727-28 (S.D. Ill. 2006)

(finding contract to be ambiguous where it contained both lifetime

language and a reservation of rights clause). For instance, in

Pisciotta v. Teledyne Indus., Inc., 91 F.3d 1326, 1329-31 (9th Cir.

1996), the Ninth Circuit found that a booklet containing “lifetime”

language was not probative evidence that ERISA welfare benefits had

vested where the booklets also did not meet the statutory

definition of an SPD and the booklets contained a disclaimer

stating that a contract would be the controlling document, and that

contract in turn contained a clear reservation of rights clause. 

Plaintiffs also point to extrinsic evidence of intent to vest,

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at least for certain time periods. Mr. Howell declares that it was

always the intent of the parties to the San Leandro and Modesto

CBAs that medical benefits for retirees would be vested, and the

retirees’ statements reflect a similar understanding. Rexam’s

conduct prior to the instant dispute, which never involved a

significant termination or reduction in benefits, is consistent

with Mr. Howell’s testimony that retiree health benefits were a

continuing, bargained-for obligation rather than a benefit provided

at Rexam’s pleasure. 

Rexam argues Plaintiffs are nevertheless unlikely to succeed,

due to additional language in the CBAs as well as other extrinsic

evidence showing that the benefits at issue were not vested. Rexam

argues that “continuation” language, i.e. statements in the CBAs

that retiree health insurance “will remain in effect,” is

inconsistent with vesting. However, the cases on which Rexam

relies for this proposition did not involve the same type of

continuation language used here. For instance, in Anderson v.

Alpha Portland Industries, the appellate court found that the

following continuation language, combined with explicit reservation

of rights language, supported a finding that medical benefits were

not vested:

Insurance coverages under the Prior Programs not hereinafter

provided shall be continued to the extent applicable to

Retirees and their Dependents in accordance with the

provisions of the Prior Programs as if fully set out herein

and as the same may now or hereinafter be amended, modified or

supplemented in collective bargaining between the parties.

836 F.2d at 1514-1515; see also DeGeare v. Alpha Portland Indus.,

Inc., 837 F.2d 812, 813 (8th Cir. 1988) (same contract). In

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contrast, the continuation language that Rexam identifies here in

certain of the CBAs or plans simply states generally that the CBA

or plan “will remain in effect” during the term of the CBA or plan. 

This language is no different from similar statements regarding

pensions, e.g. “the 1968 Pension Plan . . . will remain in effect

for the term of this Agreement dated April 16, 1984 and any

extensions thereof.” Ex. 20A, Vancouver CBA at 83. Certainly, it

is undisputed that the pensions were vested, notwithstanding socalled continuation language. The Court finds that Plaintiffs are

likely to succeed despite the presence of this continuation

language. 

Rexam notes that the CBAs contain express language vesting

Plaintiffs’ pensions, and argues that, had the parties intended to

vest health benefits, they would have used the same express vesting

language to do so. For instance, the Pension Plan Agreement

attached to the June 2, 1978-June 1, 1981 Gary CBA contains a

survival clause, stating, 

The Company guarantees the payment of the pension and survivor

benefits provided in the [Pension Plan] Agreement for all

employees and survivors who are granted benefits during the

term of this Agreement. . . . The termination of the other

provisions of this Agreement shall not affect the validity of

this covenant, which shall remain binding upon the Company

until it shall have been fully performed. No benefit properly

payable pursuant to this Agreement shall be discontinued or

reduced or denied except as provided herein.

Rexam’s argument would be more persuasive if the CBAs contained a

reservation of rights clause or some other more direct indication

of an intent not to vest health benefits. In the context of these

CBAs, however, the absence of express vesting language regarding

medical benefits is fairly susceptible to two alternative

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explanations: both Rexam’s position that the parties intended that

medical benefits not be vested, and Plaintiff's position that

eligibility for retiree health benefits was linked to eligibility

for pensions. 

Rexam notes that some of the ERISA plans themselves

unambiguously state that benefits are terminable. See Cinelli, 61

F.3d at 1444 (finding ERISA plan provision that insurance would

terminate upon discontinuation of the policy to be unambiguous

indication of company’s right to terminate policy at will). For

instance, the San Leandro and Modesto group insurance plan,

effective May 1, 1977, states, “Insurance for yourself and your

dependent will terminate when you are no longer eligible or if the

group policies terminate.” Although this argument may be

persuasive with respect to Plaintiffs’ ERISA claims under those

plans, it does not address Rexam’s obligation under the CBAs. 

Furthermore, another persuasive reading of this plan provision,

especially in the context of the CBAs’ references to “lifetime”

coverage maximums, is that the company may switch or terminate its

participation in a particular insurance plan, but not reduce or

terminate contractually agreed-upon benefits. 

Rexam also claims that many of the CBAs include express

provisions terminating benefits upon expiration of the CBA. For

instance, it points to the 1991 San Leandro and Modesto CBA’s

provision that the 

maximum benefit for any one retired employee or eligible

defendant has been increased from $20,000 to $100,000 with

respect to the entire duration of coverage of any one retired

employee or dependent under the [plan].

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However, this excerpt does not expressly state that the “duration

of coverage” is the same as the duration of the CBA, and instead

begs the question of whether the “duration of coverage” for a

retiree was intended to be his or her lifetime. Cf. Cherry v.

Auburn Gear, Inc., 441 F.3d 476, 482 (7th Cir. 2006) (holding that

the promise in CBA to provide welfare benefits “during the period

of this agreement” unambiguously showed that benefits did not

vest); John Morrell, Co. v. United Food and Commercial Workers

Int’l Union, 37 F.3d 1302, 1307 (8th Cir. 1994) (finding clause

expressly limiting duration of retirement health benefits to

duration of master agreement to be inconsistent with intent to vest

health benefits for life). Here, Rexam does not identify more

specific durational clauses like those that the Seventh Circuit has

held result in an unambiguous lack of vesting. See Bidlack v.

Wheelabrator Corp., 993 F.2d 603, 607 (7th Cir. 1993) (rejecting

the “extreme position” that “the contract must either use the term

‘vest’ or must state unequivocally that it is creating rights that

will not expire when the contract expires”). Moreover, to the

extent that Rexam argues that the CBAs’ own duration clauses (most

are for four years) means that an otherwise ambiguous contract did

not vest welfare benefits, this would create a presumption against

vesting of retiree health benefits that would be inconsistent with

the approach taken by the Ninth Circuit. See Bower, 725 F.2d at

1223 (noting that although CBA has expiration date, the medical

insurance program is “not necessarily bound by this date”). 

Rexam argues that “coordination of benefits” clauses are

inconsistent with vesting at fixed levels, or vesting at all. 

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Under Eighth Circuit law, such clauses do weigh against vesting,

although, as Judge Montgomery noted, a coordination of benefits

clause is still “just a factor to consider in the entirety of the

documents.” Rexam I, Summary Judgment Order at 13. See, e.g.,

Anderson v. Alpha Portland Indus., 836 F.2d at 1519 (“coordination

of benefits is inconsistent with vesting”). The Anderson court

reasons that a coordination of benefits clause “reduces benefits to

be paid to all retirees,” and thus those health benefits cannot be

said to be vested entitlements. 836 F.2d at 1519. Here, however,

Rexam has not shown that the coordination of benefits clause

necessarily means that it may reduce benefits paid to retirees;

Plaintiffs’ reasonable interpretation of the clause is that it

merely prevents retirees from duplicative recovery of benefits. To

the extent that the Eighth Circuit sets forth a per se rule that

coordination of benefits clauses is inconsistent with vesting, the

Court finds this approach unpersuasive. It would mean that parties

to a CBA who wished to provide vested welfare benefits would not be

able to allow retirees to receive benefits from new government

programs. 

Rexam also cites extrinsic evidence which it argues shows that

the parties did not intend to vest retiree health benefits. 

According to Rexam, one of its predecessor companies asserted in

1989 litigation, in which IAM representatives participated, that

there was no intent to vest retiree benefits for either salaried or

union employees. However, Rexam provides no additional evidence to

support this prior assertion. Rexam also points to the testimony

of former union representative Reginald Newell that, over the

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course of the negotiation of a Basic Agreement, the IAM twice

requested, and was refused, language guaranteeing that retirees’

medical coverage would not be reduced. Second Gibson Aff., Ex. 1,

Newell Dep. 195, 202, 217-18. The relevance of Rexam’s proffered

evidence relating to the Basic Agreement, which is not at issue in

this action, is not clear. Moreover, Mr. Newell himself explained

that, although retired workers lacked an explicit guarantee against

reduction of benefits, he did not believe at the time that the

company had the unilateral right to terminate medical benefits. 

Newell Dep. 195. 

Rexam also relies on changes made to retirees’ benefits as

evidence that medical benefits were not vested and could be changed

at will by the company. For instance, Rexam notes that IAM

retirees from the San Leandro and Modesto plants who retired prior

to 1983 received only “base” medical benefits for hospitalization,

not including major medical or prescription drug coverage, which

these retirees only received after Rexam’s later decision to

consolidate administration of its medical benefits plans. Second

Hardin Aff. ¶¶ 6-7. However, Rexam does not dispute that all of

the members of the proposed subclasses did retire pursuant to CBAs

which promised them some level of benefits, so even if subsequent

increases resulted in gifts rather than entitlements, Rexam’s

argument does not support its 2006 elimination of all health

benefits. To the extent that Rexam increased or improved retiree

health benefits, this is not inconsistent with vesting, because

Rexam was adding to benefits required by contract, and not taking

away benefits provided by the contract. Because the benefit

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changes identified by Rexam were not the result of negotiated

modifications, the Eighth Circuit cases regarding negotiation of

modifications to retiree health benefits do not apply here. Cf.

Morrell, 37 F.3d at 1307 (“The fact that modifications were

routinely negotiated is fundamentally inconsistent with the notion

that any retirement health benefits were ever vested”) (emphasis in

original) (citing Anderson v. Alpha Portland, 836 F.2d at 1519). 

However, Plaintiffs have not established that all retirees

enjoy the same likelihood of success with respect to the full

panoply of benefits which they enjoyed until 2006. Plaintiffs

assert that improvements made to class members’ health benefits,

such as added prescription drug coverage for San Leandro and

Modesto class members who retired prior to 1983, were “novations”

to the CBAs. Plaintiffs provide no legal authority to support this

argument. Because the changes made by Rexam to these retirees’

benefits did not result in a significant reduction in bargained-for

benefits, there is no reason to think that the change caused the

CBAs to be replaced by new agreements. Nor have Plaintiffs shown

that their success in obtaining reinstatement of those benefits

that were not provided at the time they retired is likely to be

greater with respect to their ERISA claims. 

 In sum, Plaintiffs have shown that they are likely to succeed

on the merits of their LMRA claim that they have a vested

entitlement to the health benefits that they received when they

retired. However, Plaintiffs have not shown that they likely enjoy

vested rights to all of the benefits they were receiving as of

December, 2005. 

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6

The other cases cited by Rexam are factually inapposite in

part because they involve requests for injunctions against state

prisons, a circumstance in which injunctions are to be used

“sparingly.” Stevens v. Harper, 213 F.R.D. 358, 367-68 (E.D. Cal.

2002) (finding allegations of individual violations insufficient to

support requested class-wide injunctive relief); see also Lewis v.

Casey, 518 U.S. 343, 349 (1996) (finding no basis for class-wide

injunction where plaintiffs showed only isolated instances of

class-wide injury). 

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III. Probability of Irreparable Harm

The parties also dispute whether Plaintiffs have shown that

they have been or will be irreparably harmed if an injunction does

not issue. 

A. Applicable Law

In order to show that they are entitled to a preliminary

injunction, Plaintiffs must show that they will be exposed to

irreparable harm. Carribean Marine Servs. Co., Inc., v. Baldrige,

844 F.2d 668, 674 (9th Cir. 1988) (citing Los Angeles Mem’l

Coliseum Com. v. Nat’l Football League, 634 F.2d 1197, 1202-03 (9th

Cir. 1980)). “Speculative injury does not constitute irreparable

injury sufficient to warrant granting a preliminary injunction.” 

Id. (citing Goldie’s Bookstore, Inc. v. Superior Court, 739 F.2d

466, 472 (9th Cir. 1984)). “Injuries compensable in monetary

damages are ‘not normally considered irreparable.’” Cotter v.

Desert Palace, Inc., 880 F.2d 1142, 1145 (9th Cir. 1989) (quoting

Los Angeles Mem’l Coliseum Com., 634 F.2d at 1202). 

To support its contention that Plaintiffs have failed to show

irreparable harm with the required specificity, Rexam relies

primarily on Adams v. Freedom Forge Corp., 204 F.3d 475 (3rd. Cir.

2000),6 in which the Third Circuit overturned an injunction against

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a company’s plan to switch managed care programs, which would have

resulted in retirees’ payment of increased premiums and copayments. It reasoned that, because only a small number of

retirees actually alleged that they would forgo needed medical care

under the proposed managed care program, the plaintiffs’ showing

was insufficient to justify the requested class-wide injunction. 

204 F.3d at 487. The Third Circuit also criticized some of the

decisions relied upon by Plaintiffs, including United Steel Workers

of America v. Textron, Inc., 836 F.2d 6 (1st Cir. 1987), for

substituting “common sense” for evidence, on the grounds that this

unfairly shifted the burden to defendants to disprove the need for

an injunction. 

In Textron, the First Circuit upheld a preliminary injunction

against a company that failed to pay insurance premiums, finding

that the district court could properly consider “general facts that

are either commonly believed or which courts have specifically held

sufficient to show irreparable harm,” such as

(1) most retired union members are not rich, (2) most live on

fixed incomes, (3) many will get sick and need medical care,

(4) medical care is expensive, (5) medical insurance is,

therefore, a necessity, and (6) some retired workers may find

it difficult to obtain medical insurance on their own while

others can pay for it only out of money that they need for

other necessities of life.

836 F.2d at 8; see also Helwig v. Kelsey-Hayes, Co., 857 F. Supp.

1168, 1179-80 (E.D. Mich. 1994) (enjoining company from raising copayments and premiums, even though some putative class members were

likely well-off, because others were retired secretarial and

clerical workers who likely faced hardship); Schalk v. Teledyne,

Inc., 751 F. Supp. 1261 (W.D. Mich. 1990) (finding additional

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yearly medical expense of $600 to $2000 would impose hardship on

retirees and the uncertainty of knowing how much money would be

needed to cover medical expenses would cause irreparable harm of

anxiety). 

Plaintiffs argue that the Third Circuit’s approach in Adams is

inconsistent with that taken in the Ninth Circuit. In Beltran v.

Meyers, 677 F.2d 1317, 1322 (9th Cir. 1982), the court upheld a

preliminary injunction against the State of California’s

application of a transfer of assets rule for Medicaid eligibility. 

The plaintiffs had been denied Medicaid benefits on the basis of

the rule, and the court summarily held, “Plaintiffs have shown a

risk of irreparable injury, since enforcement of the California

rule may deny them needed medical care. That is a sufficient

showing.” 677 F.2d at 1322; see also Newton-Nations v. Rogers, 316

F. Supp. 2d 883, 888 (D. Ariz. 2004) (enjoining implementation of

copayments for State Medicaid benefits where plaintiffs showed that

increase in costs would likely cause some Medicaid recipients to be

denied care) (citing Beltran, 677 F.2d at 1322). The plaintiffs in

Beltran and Newton-Nations, however, were, by definition, so poor

that they could not otherwise afford any medical care, and

therefore the finding that they faced irreparable harm could have

been a reasonable inference even without any particularized

showings by individual class members. 

In LaForest v. Former Clean Air Holding Co., 376 F.3d 48 (2d

Cir. 2004), the Second Circuit upheld the district court’s

preliminary injunction against a company’s proposed increases in

deductibles and co-payments, despite the eligibility of ninety

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percent of prospective class members for Medicare, on the basis of

six affidavits showing that prospective class members faced health

risks, severe financial hardship, inability to purchase necessities

and anxiety associated with uncertainty. In doing so, it

considered the competing standards set forth in Adams and Textron,

but expressly left open whether those cases, or something in the

middle, would be its governing approach. 376 F.3d at 58. Instead,

the Second Circuit found that, even under Adams, plaintiffs had 

provided a sufficient foundation that the six affidavits on

which the district court relied are representative of the

class. On that issue, it is worth noting that every member of

the class was either an employee of the same firm or is a

surviving spouse of such an employee, and defendants do not

contest the fact that the average age of the approximately 600

retirees at issue is 83 years old.

Id. It further noted that, “while it is possible that class

members will suffer varying degrees of harm, such is the nature of

induction. It does not produce certainty; it produces

probability.” 376 F.3d at 58 n.7. In essence, LaForest does chart

a middle course between Adams and Textron, requiring plaintiffs to

show both particularized harm through their affidavits and reason

to infer that the harms faced by the declarants are representative

of prospective class members generally. The Court finds this

analysis to be persuasive, and consistent with the approach so far

taken by the Ninth Circuit. Plaintiffs therefore must first show

proof of particularized harm through affidavits, and then reason to

conclude that these harms are representative. 

B. Analysis

First, through the affidavits submitted, Plaintiffs have shown

that Rexam’s termination of medical benefits has caused, and will

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continue to cause, particularized, irreparable harm. The severity

of that harm will clearly vary depending on the individuals’

medical needs, ranging from Mr. Russell and Ms. Smith, who

anticipate that they will have to postpone or forego needed

prostate and dental surgery, respectively, to the Wesemans, who

must pay an additional $261.14 for supplemental insurance and

therefore have cut back on spending for grocery trips and visiting

family. Some declarants focus on anxiety about the future rather

than imminent harm; this is unsurprising in light of the purpose of

insurance to cover unexpected costs. 

Rexam maintains that the affidavits are insufficient to show

particularized, irreparable harm. For instance, Rexam argues that

having to choose between paying for medicine and being able to

afford hunting and fishing trips is not a choice between medicine

and necessities. Rexam’s arguments go to the degree, rather than

the sufficiency, of the harms alleged. It is true that not being

able to afford to partake in a vacation or to visit family is a

much less serious harm than being forced to forego necessities of

life; yet for retirees, not being able to travel may be an

incompensable harm. Similarly, the fact that no declarant

apparently is so impoverished as to qualify for the Medicare Part D

low income subsidy does not mean that the declarants do not state

irreparable harm. 

Rexam also faults the declarants for not disclosing their

liquid assets or, in some cases, not specifying the amount of

Social Security they receive. While these points somewhat affect

the weight of Plaintiffs’ evidence, the declarants still show

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irreparable harm. Almost all of the retirees state that they have

no “income” other than pension and Social Security, and that they

are not sure how they would pay for large medical expenses. Those

who do report the amount of their Social Security payments show

that they are modest and comparable to the size of their pensions,

which is to be expected. 

Rexam specifically attacks the declarations of Mr. Borrero,

Ms. Angotti and Mr. Griffith because they state that they have

found Rexam benefits to be valuable because they cover the

“substantial amounts of the cost Medicare does not pay,” despite

the fact that Rexam’s records show that those particular

individuals received nothing or very little over the past three

years. These declarants may base their statements on medical needs

that arose prior to 2003 or were incurred by dependants; Mr.

Borrero, for instance, specifically states that he learned of the

high costs of hospitalization based on past experience with his

wife. Borrero Decl. ¶ 9. 

More generally, the declarations are particularized evidence

of the irreparable harm of anxiety, even for those retirees who

ultimately may not take advantage of Rexam benefits during the

course of this litigation. Although this type of harm is much less

severe than that of an individual who foregoes medical care, it is

not de minimis. 

With respect to the second prong of the LaForest analysis, the

Court finds that it can reasonably infer that the harms faced by

the declarants are representative of prospective class members

generally. As in LaForest, the fact that all prospective class

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members either worked for the same company or had a spouse who did

is reason to think that the declarants are representative in terms

of age and income level. The Court can reasonably infer that all

or virtually all retirees will be faced with some increased

financial anxiety as a result of Rexam’s termination of their

benefits. Neither Rexam nor Plaintiffs can be certain which class

members may encounter increased medical needs during the course of

the litigation, but this is another factor supporting the

Plaintiffs’ motion for preliminary relief. 

For this reason, the Court finds that Plaintiffs have shown

that they will suffer irreparable harm if an injunction does not

issue. 

IV. Balance of Hardships

As described above, Plaintiffs have shown that they have and

will suffer irreparable hardships that are serious, but, for the

most part, not very severe. On the other hand, Rexam shows no

hardship other than the economic costs of transitioning the

retirees back to their plans, which it estimates to be about

$122,000, and the costs of continued coverage, an estimated

$504,000 per year. 

The Ninth Circuit has established that, faced with “a conflict

between financial concerns and preventable human suffering, we have

little difficulty concluding that the balance of hardships tips

decidedly in plaintiffs’ favor.” Rodde v. Bonta, 357 F.3d 988, 999

(9th Cir. 2004) (quoting Lopez v. Heckler, 713 F.2d 1432, 1437 (9th

Cir. 1983)). Even though the hardships faced by Plaintiffs are

less severe than those in Rodde, the balance of hardships is

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weighted in the same direction. Furthermore, Rexam knowingly

risked the transition costs attendant to any injunctive relief by

terminating benefits in the face of this lawsuit and the IAM’s

defense of Rexam’s claims against it in Minnesota district court. 

V. Public Interest

To the extent that the public interest factor is relevant

here, it favors Plaintiffs. There is a public interest in the

continued provision of welfare benefits guaranteed by CBAs and

ERISA. Medicare itself demonstrates the obvious public interest in

the health and well-being of senior citizens. 

VI. Security Bond

Rexam asks that the Court require Plaintiffs to post a $1.5

million bond. Rexam characterizes the lawsuit as a “commercial

dispute,” and cites Michaels v. Internet Entertainment Group, 5 F.

Supp. 2d 823, 842 (C.D. Cal. 1998), in which a district court

required two wealthy entertainers to post a bond upon receiving an

injunction against the distributor of a video tape. Given the

financial condition of Plaintiffs, and the public interest in

collectively-bargained-for health benefits, a modest bond is more

appropriate here. See, e.g., Yolton v. El Paso Tennessee Pipeline

Co., 318 F. Supp. 2d 455, 475-476 (E.D. Mich. 2003) (surveying

similar retiree cases and finding bonds awarded in amounts from

$50,000 to $100,000 despite monthly costs ranging from $90,000 to

$160,000). Because Rexam may fulfill the terms of the injunction

at a relatively low monthly cost, the Court will require Plaintiffs

to post a $25,000 bond. 

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CONCLUSION

The Court grants Rexam’s request for leave to submit

additional authority (Docket No. 105). 

The Court grants in part Plaintiffs’ motion for a preliminary

injunction (Docket No. 74). The Court hereby orders Rexam to

reinstate all medical and prescription drug benefit plans provided

before January 1, 2006 to any retirees (and spouses or surviving

spouses) who retired from the San Leandro or Modesto, California,

Kent or Vancouver, Washington or Gary, Indiana facilities covered

by an “independent agreement” negotiated by an IAM affiliate and

Rexam or a predecessor. Rexam must reinstate these medical and

prescription drug benefits only to the extent that retirees were

entitled to them at the date of their retirement, as set forth in

the parties’ Second Joint Supplemental Submission. For those

retirees who were enrolled in Rexam's prescription drug plan and

who choose or have chosen to enroll in Medicare Part D, Rexam must

pay their premiums as well reimburse any difference between

retirees’ costs incurred under Part D and those that would have

been incurred under the Rexam plan. The terms of the injunction

are retroactive to January 1, 2006. 

The Court acknowledges that the administrative costs of

complying with this injunction may exceed the administrative costs

of reinstating all benefits as previously calculated by Rexam. 

Therefore, Rexam may, as an alternative to complying with the terms

of the injunction as stated above, reinstate all medical and

prescription drug benefits that were provided prior to January 1,

2006, for all class members. 

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Rexam is also enjoined from terminating the health benefits of

any class member receiving or entitled to receive benefits under

these plans. The preliminary injunction takes effect on the filing

of a $25,000 bond by Plaintiffs. Rexam must fully comply with this

injunction within six weeks of the date the bond is filed. 

 IT IS SO ORDERED.

Dated: 6/14/06

 

CLAUDIA WILKEN

United States District Judge

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