United States Court of Appeals
For the First Circuit
No. 02-1170
WILLIAM W. ADAMS, ET AL.,
Plaintiffs, Appellants,
v.
BOWATER INCORPORATED, ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Gene Carter, U.S. District Judge]
Before
Boudin, Chief Judge,
Torruella and Howard, Circuit Judges.
Patrick N. McTeague with whom James W. Case, McTeague, Higbee,
Case, Cohen, Whitney and Toker, P.A. and William T. Payne were on
brief for appellants.
Mary Ellen Signorille, AARP Foundation Litigation, and Melvin
Radowitz, AARP, on brief for AARP, Amicus Curiae.
Thomas J. Piskorski with whom Brian J. Hipp, Seyfarth Shaw,
Daniel A. Pileggi and Roy, Beardsley, Williams & Granger, LLC were
on brief for appellees.
December 17, 2002
BOUDIN, Chief Judge. The main question on this appeal is
whether the case in the district court was properly dismissed as
moot after the challenged conduct ceased or was undone. The
plaintiff-appellants are 551 employees of Great Northern Paper,
Inc. ("Great Northern"); the principal defendants are Bowater
Incorporated ("Bowater") and the pension plan administered by
Bowater for its own employees and those of Great Northern.
The background facts are undisputed. In August 1999,
Great Northern, until then a subsidiary of Bowater, was sold in a
share sale to a third party. Bowater, however, retained the assets
and responsibilities of the pension plan that covered both Bowater
and Great Northern employees. In the same month, Bowater announced
that it would amend the plan to cut back certain early retirement
benefits that the plan offered to Great Northern employees. The
plan was so amended in October retroactive to August 13.
In brief, the plan prior to August 1999 had allowed
employees with extensive service at Great Northern to opt for early
retirement and yet receive pensions as if they had retired at
ordinary retirement age or, in other cases, with something less
than the usual discount in benefits for early retirement. For
example, an employee who had worked 30 years could retire at age 60
and receive the same benefits as if he had worked to 65. In
effect, Bowater's amendment meant that future work by employees at
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Great Northern, now no longer a Bowater subsidiary, would not count
for purposes of early retirement.
Whether and to what extent an employer can cut back on
such benefits for employees who have not yet retired is governed by
provisions of ERISA--in particular, by section 204(g), 29 U.S.C. §
1054(g) (2000). For present purposes, the details of the statute
and its application here are unimportant; it is enough to say that
Bowater maintained that its cut-back was lawful and that the
employees took the opposite position. In January 2000, the Bowater
employees brought the present action in federal district court
under ERISA against Bowater and the plan.
The main count of the complaint (count I) sought a
declaration that the plan amendment violated section 204(g) and an
order requiring the defendants to delete the amendment. Other
counts (counts II and III) sought further relief for ten of the
plaintiffs who said that they had relied on Bowater's statements
about the amendment and advice to individual employees; the ten
plaintiffs said that as a result they had accepted lump sum
payments, surrendering their rights to the greater benefits that
would have been available to them under the original plan.
At this point, Bowater began to retreat but reluctantly.
In March 2000, Bowater, as plan administrator, sent a letter saying
that work done by Great Northern employees would continue to be
credited toward early retirement; the letter did not explain how
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this could be reconciled with the plan amendment. In the same
month Bowater filed its answer to the complaint which continued to
deny that the plan amendment was unlawful. In April, Bowater
amended the plan to conform to the letter, but it declined to enter
into a consent decree conceding that the original amendment was
unlawful or promising not to adopt the same amendment in the
future.
Count I was referred to a magistrate judge and, based on
her recommendation, the district court ruled in September 2000 that
count I was moot. Litigation on counts II and III continued until,
in October 2000, Bowater posed a notice agreeing to allow full
benefits under the original plan to those who had taken a lump sum
payment in exchange for surrendering their right to full benefits.
In June 2001, Bowater amended the plan to conform to this promise
of full benefits. Thereafter, the district court ruled that counts
II and III were moot.
The plaintiffs have now appealed, challenging the
mootness rulings. In substance, they say that Bowater has never
conceded that its original amendment was unlawful and, absent a
decree, Bowater remains free to reinstitute that amendment in the
future. A claim to attorney's fees, which ERISA permits, would
also be strengthened by such a decree, although this is not a basis
for litigating a case that is otherwise moot. See Friends of the
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Earth, Inc. v. Laidlaw Envtrl. Servs., Inc., 528 U.S. 167, 192 n.5
(2000). The issue is quite close.
Where during litigation a defendant ceases to engage in
challenged conduct and restores the status quo ante, the lawsuit
may or may not be moot. The Supreme Court has said that such a
case is moot only if the defendant meets his "heavy burden" of
persuading the court that it is "absolutely clear that the
allegedly wrongful behavior could not reasonably be expected to
recur." See Friends of the Earth, Inc., 528 U.S. at 189 (quoting
United States v. Concentrated Phospate Export Ass'n., 393 U.S. 199,
203 (1968)); accord Nunez-Soto v. Avarado, 956 F.2d 1, 3 (1st Cir.
1992). Here, the district court determined that any threat that
the amendment would be introduced was "speculative" and that the
defendants' behavior could not reasonably be expected to recur.
At first blush, this might appear to be a factual finding
entitled to respect unless clearly erroneous. See Vinick v. United
States, 205 F.3d 1, 6 (1st Cir. 2000). However, no evidence was
presented as to the likelihood that Bowater will reintroduce its
original amendment; and, where the district court applies an
abstract standard to known facts, the extent of deference accorded
on review varies from substantial deference to none at all,
depending on the subject matter and on other circumstances. In re
Extradition of Howard, 996 F.2d 1320, 1327-28 (1st Cir. 1993). In
mootness matters, reviewing courts tend to exercise their own
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judgment, see, e.g., Verhoeven v. Brunswick Sch. Comm., 207 F.3d 1,
5 (1st Cir. 1999), and both sides agree that our review here is de
novo.
Bowater controls the information about its own
intentions and has made no declaration as to any firm plan. This
gap in information might be weighed against Bowater (cf. Friends of
the Earth, Inc., 528 U.S. at 189 ("defendant's heavy burden")), but
we prefer to rest our decision on somewhat different grounds.
After all, Bowater could plausibly say that it has no plans one way
or the other and thus nothing more to disclose. Still, on this
record Bowater cannot say that it has affirmatively ruled out the
possibility of reintroducing the amendment.
The Supreme Court's primary test--"reasonably be expected
to recur"--suggests an estimate of raw probabilities. At either
end of the spectrum, this is probably the intended approach. If
there is a high likelihood of recurrence, the case should not be
deemed moot; if very low, mootness ought to follow. But in the
middle ground, we doubt that the Supreme Court meant woodenly to
exclude all other factors, including equitable or other
considerations, bearing on whether a case that began with a
concrete controversy should be dismissed when the conduct ceases;
its own case law suggests that other concerns can play a role.1
1
Bd. of Educ. of Hendrick Hudson Cent. Sch. Dist. v. Rowley,
458 U.S. 176, 186 n.9 (1982) (mootness inappropriate where alleged
wrong was "capable of repetition without review"); Adarand
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Here, the likelihood of recurrence being very hard to
estimate, several such considerations work in favor of litigating
this case to judgment. One--a predicate point but not the decisive
consideration--is that Bowater has been persistently unwilling
either to admit that its amendment was unlawful or to say that it
will not be reintroduced. This refusal may make sense as a
management decision to preserve all options--after all, the ERISA
precedents may develop in Bowater's favor--but it suggests that the
possibility of recurrence is not wholly fanciful.
Of course, if the risk were merely that the company would
change position next month, it might still appear to be extremely
low and easy to brush aside. But this case concerns retirement
benefits that are earned over a substantial period and can affect
pay-outs that may occur many years into the future. The ability of
workers to plan their careers, and their savings, is impaired by
uncertainties as to what Bowater might do three, five, or even ten
years from now. Further, the withdrawal of the amendment is not
like the abandonment of plans to build a bridge or a dam: the
amendment could be reintroduced without cost to Bowater at a
moment's notice; again, imagine that a couple of favorable
appellate decisions come down the pike next year.
Constructors, Inc. v. Slater, 528 U.S. 216, 224 (2000) (signaling
reluctance to moot a case "that has been litigated up to this Court
and back down again"); Friends of the Earth, Inc., 528 U.S. at 191-
92 & n.5 (noting that sunk costs to the judicial system counsel
against finding mootness)
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Some uncertainties cannot be avoided. All kinds of
threats to expected pensions can develop and expectations can often
be disappointed. But here a specific threat has been posed and a
substantial investment in litigation costs has been made to obtain
an answer to it; plaintiffs had already briefed their summary
judgment motion on the merits when count I was dismissed. All that
plaintiffs have asked is the chance to put the matter completely to
rest.
Finally, Bowater could easily have said on the record
that it would not in the future reintroduce for Great Northern
workers the substance of the challenged amendment. If this had
been done without hesitation in the district court, this almost
certainly would have persuaded us that the quarrel was moot. Yet,
even at oral argument on this appeal, Bowater's counsel said he
could not give such a commitment to the plaintiffs.
The plaintiffs have relied heavily upon Walling v.
Helmerich & Payne, Inc., 323 U.S. 37 (1944). There, the Supreme
Court refused to declare moot a wage and hours enforcement case
where the defendant had latterly altered his wage schedule to
conform to the law; the Court observed that defendant "has
consistently urged the validity of the [original schedule] and
would presumably be free to resume this illegal plan were not some
effective restraint made." Id. at 43. The Supreme Court has
rarely referred to this language again, although lower courts have
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often relied upon Walling. See, e.g., Donovan v. Cunningham, 716
F.2d 1455, 1461-62 (5th Cir. 1983), cert. denied, 467 U.S. 1251
(1984). See also 13A Wright & Miller, Federal Practice and
Procedure § 3533.5, at 326-28 & n.11 (2d ed. 1984).
In our view, Walling--although atmospherically helpful to
plaintiffs--should not be read mechanically to require a defendant
always to denounce his own conduct. Mootness turns primarily on
future threats, not upon penance. Other concerns (e.g., publicity,
concern about attorney's fees), or perhaps mere stubbornness, may
cause a retreating defendant to maintain that his now abandoned
position was lawful. But where a defendant is unwilling to give
any assurance that the conduct will not be repeated, a natural
suspicion is provoked that recurrence may well be a realistic
possibility.
Just how possible depends very much on the circumstances.
Here, the circumstances bring this case into a middle ground where
recurrence is certainly more than a theoretical possibility;
depending on how case law develops, it could easily be in
defendants' interest to try to reinstate the amendment. In this
situation, the prudential factors that tip the balance against
mootness have been candidly set forth. Thus, in our view count I
is not moot.
As to counts II and III, the ten plaintiffs separately
named in those counts appear to be in the same position as all of
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the hundreds of other employees with this exception: the ten say
that not only did the now rescinded amendment reduce their
prospective benefits but, in addition, they relied on the change to
elect a less favorable retirement option. When the defendants
withdrew the amendment, they also allowed the employees to undo
their misguided elections and restored the status quo ante.
Whether any of the ten plaintiffs is now retired is unclear, but
there is no indication that the ten have any current grievance.
Obviously the ten employees in counts II and III have the
same interest as all others in assuring that the original plan
amendment is not reinstated, but whether there is anything else
left for them to litigate is not apparent. It seems scarcely
conceivable that the defendants, having allowed the elections to be
withdrawn, would ever argue that the elections were still valid and
binding. In any event, it is hard to tell from the filings below
or the briefs on appeal whether there is anything live about counts
II and III except so far as the plaintiffs there seek the same
declaration as the plaintiffs in count I. This, we think, can be
sorted out on remand.
On remand, we do not foreclose the possibility that
defendants can make commitments so firm and effective as to
preclude the need for litigation. Whether the plaintiffs can
recover attorney's fees does not necessarily depend on whether a
formal judgment has been entered. The Supreme Court did require a
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judgment under one statute, Buckhannon Bd. & Care Home, Inc. v. W.
Va. Dep't of Health & Human Res., 532 U.S. 598, 600 (2001), but the
ERISA statute is differently phrased and conceivably the result
could be different.
Accordingly, we vacate the judgment dismissing the case
as moot and remand for further proceedings consistent with this
decision.
It is so ordered.
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