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Re: Honeywell International Inc. v. International Union

December 16, 2011

RE: HONEYWELL INTERNATIONAL INC.
v.
INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, ET AL.



The opinion of the court was delivered by: William J. Martini Judge

MARTIN LUTHER KING JR. FEDERAL BLDG. & U.S. COURTHOUSE 50 WALNUT STREET, P.O. BOX 419 NEWARK, NJ 07101-0419 (973) 645-6340

LETTER OPINION

Dear Counsel:

This matter comes before the Court on Defendants' motion to dismiss. The Court heard oral argument on November 30, 2011. For the reasons stated below, the motion to dismiss is GRANTED.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Honeywell International Inc. ("Honeywell" or "the Company") is a diversified technology and manufacturing company incorporated in Delaware and maintaining its principal place of business in Morristown, New Jersey. Defendant International Union, United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW") was the collective bargaining representative for more than 4,700 Honeywell manufacturing plant employees who have since retired. The UAW's headquarters are in Detroit, Michigan. The four individual Defendants are retired hourly employees who worked at Honeywell's Teterboro, New Jersey facility.

For over 50 years, the UAW and Honeywell (or one of its predecessors) have been parties to a series of collective bargaining agreements ("CBAs"). The terms of the CBAs are re-negotiated every three or four years, and the negotiations have always taken place in Michigan. Throughout the negotiations of 2003, 2007, and 2011, the parties had an ongoing dispute regarding Honeywell's obligation to provide healthcare benefits to retirees. As part of the 2007 CBA, the parties agreed that new language regarding retiree healthcare contributions would take effect on January 1, 2012, but the parties disagreed about whether the new language could be lawfully applied to retirees who retired before 2003. Before Honeywell filed its Complaint, both parties had taken opposing legal positions during negotiations, but neither party had threatened litigation.

On July 25, 2011, Honeywell filed this action against four retired manufacturing employees, a putative class of similarly situated retirees, eligible dependents and surviving spouses, and the UAW. The complaint states that the Company "will begin capping its contributions toward . . . healthcare coverage" on January 1, 2012. Compl. 4, ECF No. 1. The Company seeks a declaration that it may cap its contributions for all retirees, including those who retired before 2003.

On September 15, 2011, seven weeks after Honeywell filed its complaint (the "NJ Complaint"), and one day before its response to the NJ Complaint was due, the UAW filed a breach of contract action against Honeywell in the Eastern District of Michigan ("Michigan action"). The Michigan action alleges that Honeywell's announcement in its NJ Complaint that it will limit healthcare contributions starting on January 1, 2012 constituted an anticipatory breach of the CBAs. The following day, the UAW filed the instant motion to dismiss the NJ Complaint. On September 19, 2011, Honeywell formally notified the retirees that it planned to limit healthcare contributions starting on January 1, 2012.

II. DISCUSSION

Defendants urge the Court to exercise its discretion under the Declaratory Judgment Act to dismiss this action in favor of the Michigan action. Honeywell argues that the Court should retain jurisdiction over this action pursuant to the first-filed rule. For the reasons set forth below, the Court will decline jurisdiction in this case.*fn1

A.Standard of Review

The Declaratory Judgment Act ("DJA") provides that, "[i]n the case of [an] actual controversy within its jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201(a). The Supreme Court has made clear that "district courts possess discretion in determining whether and when to entertain an action under the DJA, even when the suit otherwise satisfies subject matter jurisdictional prerequisites." *fn2 Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995). District courts are instructed to exercise this discretion based on "considerations of practicality and wise judicial administration." State Auto Insurance v. Summ'y, 234 F.3d 131, 134 (3rd Cir. 2000), citing Wilton, 515 U.S. at 288. "'[T]he propriety of declaratory relief in a particular case will depend upon a circumspect sense of its fitness informed by the teachings and experience concerning the functions and extent of federal judicial power.'" Wilton, 515 U.S. at 287 ...


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