Opinion ID: 786985
Heading Depth: 3
Heading Rank: 1

Heading: Whether Plaintiffs Suffered Irreparable Harm

Text: 32 The district court held that plaintiffs had demonstrated irreparable harm by showing that, absent an injunction ordering Honeywell to provide premiums sufficient to secure guaranteed levels of benefits, the reductions in medical coverage will cause: (1) substantial risk to plaintiffs' health; (2) severe financial hardship; (3) the inability to purchase life's necessities; and (4) anxiety associated with uncertainty. Laforest II, 2003 WL 23180220, at . Indeed, if substantiated by the evidence, the district court's holding comports with this Court's understanding of irreparable harm as harm shown to be non-compensable in terms of money damages. Wisdom Import Sales Co., L.L.C. v. Labatt Brewing Co., Ltd., 339 F.3d 101, 113-14 (2d Cir.2003). 33 In concluding that plaintiffs demonstrated irreparable harm, the court relied on this Court's holdings in Whelan v. Colgan, 602 F.2d 1060 (2d Cir.1979), and Communications Workers of America, Dist. One, AFL-CIO v. NYNEX Corp., 898 F.2d 887 (2d Cir.1990), that the termination of medical benefits will ground a claim of irreparable harm. The court also relied on United Steelworkers of America v. Textron, Inc., 836 F.2d 6 (1st Cir.1987), an opinion written by Justice Breyer while still on the First Circuit. 34 In Whelan, this Court affirmed the granting of a preliminary injunction ordering the defendant to continue providing medical benefits to striking workers. In doing so, it stated that the threatened termination of benefits such as medical coverage for workers and their families obviously raised the spectre of irreparable injury. Whelan, 602 F.2d at 1062. And in NYNEX, the defendant informed its employees that it intended to terminate medical benefits, but also informed them that they were eligible for replacement benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. §§ 1161-68 (COBRA). Nevertheless, because the defendant then frustrated the employees' efforts to receive COBRA benefits, the Court treated the defendant's conduct as, effectively, a threatened termination of benefits. Citing Whelan, the Court affirmed the district court's grant of a preliminary injunction ordering the defendant to facilitate COBRA benefits. NYNEX, 898 F.2d at 891-92. 35 In Textron, the defendant ceased paying medical insurance premiums for retired former employees, in circumstances somewhat analogous to the present case. In affirming the district court's grant of a preliminary injunction ordering the defendant to resume payment of premiums, the court considered: 36 general facts that either are commonly believed or which courts have specifically held sufficient to show irreparable harm; such general facts 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. 37 Textron, 836 F.2d at 8 (citing, inter alia, Whelan ). The Court then explained that it was accepting as proof of the actual existence of these general facts a single affidavit of a union official stating that three of the retirees had actually suffered a reduction in medical care as a result of the termination of benefits. Id. 38 After considering these authorities, the district court turned to plaintiffs' evidence. It noted that plaintiffs provided affidavits of six people entitled to benefits under the Bendix Guaranty. Each undoubtedly demonstrates that they will suffer much more than monetary harm. Laforest II, 2003 WL 23180220, at . On this basis, the district court held that plaintiffs sufficiently demonstrated that Honeywell's refusal to pay the shortfall in premiums needed to restore benefits to the guaranteed level caused irreparable harm to the putative class. 39 Defendants contest the district court's conclusion by noting, first, that in the cases on which the district court relied, plaintiffs suffered the threat of termination, or the actual termination, of their medical benefits — whereas here plaintiffs suffered a reduction in benefits (or increased costs of maintaining benefit levels). Defendants argue that approximately ninety percent of the putative class is eligible for Medicare, and thus is able to secure alternative coverage, and that every member of the class was given the opportunity to participate in an alternative prescription drug program. However, it is not clear that this difference is dispositive. So long as plaintiffs demonstrated injury non-compensable in terms of money damages, Wisdom Import Sales, 339 F.3d at 113-14, they have demonstrated irreparable injury. 40 The district court found that plaintiffs demonstrated more than mere monetary harm, and the record supports this finding. Most significantly, rather than the prescription drug program with no deductibles, no maximum, and a $3 co-pay for non-generic drugs that plaintiffs previously enjoyed, the alternative plan provided by Motor Components imposes a $100 per year deductible, a $3000 annual maximum, and $15/40/60 co-pays for generic, preferred name-brand, and non-preferred name-brand prescriptions. Plaintiffs provided individualized evidence of the impact of these changes on the retirees, including an imminent threat that they would have to forego needed prescriptions. In addition, plaintiffs note that the approximately ten percent of the class that is ineligible for Medicare received a replacement stipend of only $125 per month from Motor Components, and presented evidence that this amount was seriously inadequate for their needs. We hold that the district court did not abuse its discretion in relying on this evidence in concluding that the then-putative class suffered irreparable harm warranting a preliminary injunction. 4 41 Our conclusion is not affected by defendants' attack on the evidence on which the district court relied. Defendants note that the district court granted relief on the basis of affidavits submitted by persons who were not named plaintiffs, and, moreover, that the court relied on only six affidavits in a case involving nearly six hundred putative class members. The procedural posture of this case is relevant in this regard. The district court first properly granted summary judgment to plaintiffs on the issue of liability, and then issued a preliminary injunction ordering relief for the putative class. But before reaching this Court, the putative class became a certified class. That the six affidavits relied upon by the district court were submitted by unnamed plaintiffs gives us little pause, given that these persons are now members of the certified class. 42 Regarding the adequacy of the six affidavits, defendants urge this Court to adopt the evidentiary standard set forth in Adams v. Freedom Forge Corp., 204 F.3d 475 (3d Cir.2000), and assert that Adams requires a more exacting level of proof to support injunctive relief in a case such as this. The facts of Adams are analogous to the present case insofar as, in each, the dispute is over the increased cost of medical benefits. There, 136 retirees (and surviving spouses) brought suit to enjoin the defendant from altering the health care benefits it had been providing them since they retired. Adams, 204 F.3d at 479. The proposed modifications to the plaintiffs' benefits included a shift from a no-premium plan to one in which the retirees could choose between plans, all of which provided substantially similar coverage as the original plan — but also required the retirees to pay monthly premiums. Id. at 480. The district court granted the plaintiffs a preliminary injunction, precluding the defendant from instituting the changes. On appeal, the Third Circuit reversed in part. The court first noted that only 11 of the 136 plaintiffs testified as to the effect the changes would have. Id. at 481. It then found that only three of these plaintiffs provided testimony sufficient to demonstrate irreparable harm, as opposed to mere monetary harm, id. at 483-84, and that only two of these plaintiffs had demonstrated a likelihood of success on the merits, id. at 494. The court thus reversed the district court's grant of a preliminary injunction for all but two of the plaintiffs. 43 In severely trimming the scope of the injunction, the Adams court criticized then-Judge Breyer's reliance in Textron on general facts and common sense, regarding the sort of harm suffered by retirees whose health benefits are terminated, as an insufficient foundation on which to conclude that individuals had suffered irreparable injury. See Adams, 204 F.3d at 485-87. The Adams court asserted that [t]he law does not take judicial notice of matters of `common sense,' and common sense is no substitute for evidence. Id. at 487. The court thus articulated a standard by which the plaintiffs must present individualized proof of irreparable harm. 44 Notably, the Adams court recognized that its standard could be met in a representative fashion (as in a class action), and explained that so long as the plaintiffs lay an adequate foundation from which one could draw inferences that the testifying plaintiffs are similarly situated — in terms of irreparable harm — to all the other plaintiffs, a court could permissibly engage in inductive reasoning to reach the conclusion that every plaintiff suffered the threat of irreparable harm. Id. Because the plaintiffs in that case did not lay such a foundation, the court held that they presented insufficient evidence to justify a preliminary injunction protecting all of the plaintiffs. Id. at 488. 5 See also Cooper v. TWA Airlines, LLC, 274 F.Supp.2d 231, 242 (E.D.N.Y.2003) (denying class-wide injunctive relief in the absence of, among other things, some indication that individuals suffering irreparable harm were representative of the class). 45 In urging this Court to adopt the standard set forth in Adams, defendants suggest that the district court's citation to Textron indicates that it relied heavily on the general facts noted by Justice Breyer. However, the district court explicitly relied on the affidavits of six persons covered by the Guaranty, each of whom alleged circumstances amounting to irreparable injury. As Adams concedes, plaintiffs should be allowed to adduce evidence of harm representatively, so long as they lay a foundation that the representative plaintiffs are similarly situated with regard to the issue of irreparable harm. 6 Adams, 204 F.3d at 487. 46 Determining whether plaintiffs have laid such a foundation is a case-sensitive inquiry subject to review for abuse of discretion. As such, under Adams the question in the present case would be whether the district court abused its discretion in finding that plaintiffs 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. Were we to adopt Adams — and we do not do so now, thereby leaving open whether, in this Circuit, Textron, Adams , or something in between is the governing approach — we would conclude that the district court did not abuse its discretion in inferring from the evidence presented that irreparable harm was class-wide. 7 Cf. Golden v. Kelsey-Hayes Co., 73 F.3d 648 (6th Cir.1996).