Court Opinion

ID: 9488582
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:49:17.974892+00
Date Added: 2024-06-11T17:52:58.153029
License: Public Domain

MILBURN, Circuit Judge,
dissenting.
In their opinion, the majority accepts GM’s argument that the sale of the Alison facility is the functional equivalent of a plant closing. Specifically, the majority states:
We believe that, under all the circumstances, the decree precludes successor liability for individual facilities. This is a .close question because Section V [of the consent decree] expressly states that successors are bound under the decree. We find GM’s plant closing analogy persuasive, however.
Because I disagree with this conclusion, I respectfully dissent.
The majority ignores the critical distinction between a reduction in workforce or closure of one of GM’s facilities and the action taken here. In this case, GM did not close or reduce the workforce at Allison Gas Turbine; it sold Alison as an ongoing business enterprise. Furthermore, from the evidence presented to the district court, Allison’s purchaser, AEC, is operating the new company intact and along the same lines as GM operated Allison Gas Turbine. Athough GM contends that “[f]or purposes of the decree, divestiture decisions are functionally equivalent to decisions to down-size or shut down a [GM] facility,” Appellants’ Brief at 12, . a decision to close or down-size a facility does not give rise to an issue of successor liability. However, the sale of the facility as a continuing enterprise can lead to successor liability, a determination which is made based on factors independent of the “four corners” of the consent decree.
The majority also adopts GM’s argument that because the consent decree was carefully structured to provide prospective affirmative-relief on a class-wide basis, the district court erred in applying the affirmative relief provisions of the consent decree to a single, divested facility such as AEC. Specifically, the majority has erroneously concluded that the district court intended to impose a mini-monitoring system at AEC. Athough the district court engaged in a discussion of such a possibility, the district court did not impose any particular method of compliance with the consent decree on AEC or GM. Rather, it determined that AEC was liable under the consent decree as a successor to GM. In its June 28, 1994 opinion and order, the district court stated that it would “not decide the precise details of how [AEC] and GM should go about complying with ... the [c]onsent [d]ecree,” but would “leave that for the parties and [AEC] to work out.” J.A 78. The district court also acknowledged that “[i]t may in fact turn out that imposing a mini-monitoring system on [AEC] is impractical.” J.A 78.
Furthermore, the district court did not err in imposing the affirmative relief requirements of the consent decree on a single facility such as AEC. In applying the factors set forth in MacMillan Bloedel Containers, Inc., 503 F.2d 1086, 1094 (6th Cir.1974), to this case, the district court found that:
There is no serious dispute in this case about MacMillan factors (3) through (9): [AEC] uses the same plant, the same work force, the same supervisory personnel, and the same machinery as the former Alison Gas Turbine Division. The first MacMil-lan factor — whether the successor had notice of the discrimination charge — also is not an issue in this case both because the discrimination charge and the Consent Decree are public knowledge and because the upper management of Allison Gas Turbine Division for the most part have continued as management under the new owners. This dispute therefore turns on whether GM or its successor Allison is able to provide adequate post-sale relief and whether imposition of liability is consistent with Allison’s legitimate expectations and the interests of the plaintiff class.
J.A. 71-72. I agree.
Further,
*137two factors [notice and ability to provide relief] are critical to the imposition successor liability. The successor doctrine is derived from equitable principles, and it would be grossly unfair, except in the most exceptional circumstances, to impose successor liability on an innocent purchaser when the predecessor is fully capable of providing rehef on when the successor did not have the opportunity to protect it-self_
Musikiwamba v. ESSI, Inc., 760 F.2d 740, 750 (7th Cir.1985). “The primary concern [of successorship liability] ... is to provide the discriminatee with full rehef. Such rehef may be awarded against the successor. On the other hand, the amenability of the predecessor to suit and its ability to provide rehef will be a necessary inquiry.” MacMillan, 503 F.2d at 1092.
The district court did not commit clear error in balancing the MacMillan factors. Factors one and three through nine are unquestionably satisfied. In addition, AEC is hardly an innocent purchaser; many of its management officials were also management officials at Allison Gas Turbine and had notice of the consent decree and its requirements. Thus, AEC had the opportunity to protect itself, as part of the purchase agreement with GM; AEC could have demanded an indemnification clause through which GM would agree to reimburse AEC for any costs it incurred in complying with the provisions of the consent decree. Further, there is no evidence in the record suggesting that AEC will be unable to afford relief to members of the plaintiff class who are now employed by AEC. As the district court noted, the exact form of this relief is unclear; it may be either a mini-monitoring system at AEC or some alternative form of rehef negotiated by the parties and AEC.
However, the record casts doubt upon GM’s ability to provide rehef to members of the plaintiff class who are now employed by AEC. GM retains no ownership or any other interest in AEC, and the purchase agreement between GM and AEC does not obligate AEC to continue GM’s salary structure, promotional schedule, or performance appraisal system. Thus, the MacMillan factors, particularly AEC’s notice of the consent decree and its ability to afford rehef to the members of the plaintiff class whom it now employs, weigh heavily in favor of the imposition of successorship liability under the consent decree on AEC.
Finally, GM argues “assuming, arguendo, that [the] Consent Decree obhgations apply to [AEC], [GM] should not be hable for [AEC’s] comphance [or noncomphance] with the remaining, affirmative obhgations of the [Consent] Decree.” Appellant’s Brief at 17. I agree, and conclude that the district court erred in finding that GM remained hable if AEC were unable to comply with the prospective affirmative rehef provisions of the consent decree.
Therefore, for the reasons stated, I would affirm the district court’s judgment finding AEC to be a successor under the consent decree, and reverse the district court’s judgment finding that GM remained hable if AEC were unable to comply with the prospective affirmative rehef provisions of the consent decree.