Joseph Di Biase v. SPX Corporation, 872 F.3d 224

Background

Retirees of SPX, their spouses/dependents, and the UAW sued SPX after SPX replaced retiree group health plans with individual-market purchases funded by employer-funded HRAs effective Jan. 1, 2015, alleging breach of two 2003 settlement agreements requiring SPX to provide lifetime healthcare coverage or a "substantial equivalent."
Plaintiffs filed a motion for a preliminary injunction in Dec. 2014 seeking to enjoin implementation of the HRAs or to restore the prior group plans pending litigation; the HRAs went into effect before the district court resolved the motion.
The district court denied the preliminary injunction as moot and, alternatively, on the Winter factors, concluding plaintiffs had not shown likelihood of success, irreparable harm, or favorable balance of equities and public interest.
On interlocutory appeal, the Fourth Circuit held the injunction motion was not moot when filed pre-change and intended to restore the status quo, but nonetheless affirmed denial because plaintiffs failed to satisfy Winter.
The Fourth Circuit found ERISA §502(a)(1)(B) jurisdiction viable (plaintiffs pled participant/beneficiary claims) but held the record was too underdeveloped to conclude HRAs are not a "substantially equivalent" form of coverage.
The court affirmed because plaintiffs lacked a demonstrated likelihood of success on ambiguously worded settlement provisions, failed to show imminent irreparable harm, and the equities/public interest did not support injunctive relief.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Mootness of pre-change injunction motion	Motion filed before HRA implementation seeks restoration of pre-change status quo; thus not moot	HRA implementation completed on Jan. 1, 2015, so injunction to prohibit the act is moot	Not moot: injunction filed pre-change to restore status quo remains viable under Pashby/Aggarao
Jurisdiction under ERISA/LMRA and standing/class capacity	Plaintiffs: ERISA §502(a)(1)(B) claims as participants/beneficiaries suffice; other threshold defenses don’t defeat relief	SPX: LMRA §301 inapplicable, UAW may lack representative consent/ERISA standing, class issues	Fourth Circuit found ERISA §502(a)(1)(B) claim adequately pleaded; no need here to resolve other threshold defenses for this appeal
Likelihood of success on merits ("substantially equivalent")	HRAs are not "coverage" and cannot be "substantially equivalent" to specified group plans; breach as a matter of law	HRAs can potentially satisfy the settlement language; agreements are ambiguous and require fact development	Plaintiffs failed to show likelihood of success; record too undeveloped and terms sufficiently ambiguous to preclude clear showing
Irreparable harm and balance of equities/public interest	Loss of insurance, health risk, emotional distress, and financial hardship from transitional burden justify injunction	Retirees could use HRAs to obtain coverage; no evidence of inability to obtain coverage; reinstating group plans would impose administrative disruption	Plaintiffs did not show imminent irreparable harm; equities and public interest favored allowing merits litigation to proceed

Key Cases Cited

Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (establishes four-factor preliminary injunction standard)
Pashby v. Delia, 709 F.3d 307 (4th Cir. 2013) (preliminary injunction preserves status quo and motion filed pre-change can seek restoration)
Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355 (4th Cir. 2012) (injunction may restore a recently disturbed status quo)
United Steelworkers of Am. v. Kelsey-Hayes Co., 750 F.3d 546 (6th Cir. 2014) (addressed whether HRAs substituted for employer group coverage violated contract)
Railway Labor Execs. Ass'n v. Chesapeake W. Ry., 915 F.2d 116 (4th Cir. 1990) (a request to enjoin an act is moot if the act has already occurred)
Sampson v. Murray, 415 U.S. 61 (1974) (possibility of later adequate relief weighs against finding irreparable harm)