Honeywell International Inc. v. International Union, United Automobile, Aerospace & Agricultural Implement Workers of America

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________

No. 11-4557
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HONEYWELL INTERNATIONAL INC.,
Appellant
v.

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE
AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA;
ROBERT B. AMBROSINI, individually and as a representative of
a defendant class; PETER ANTONELLIS, individually and as a representative
of a defendant class; DANIEL KARDASH, individually and as a representative
of a defendant class; GEORGE L. STOUT, individually and as a representative
of a defendant class,

_______________

On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 2-11-cv-4250)
District Judge: Hon. William J. Martini
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Submitted Under Third Circuit LAR 34.1(a)
September 25, 2012

Before: McKEE, Chief Judge, JORDAN, and VANASKIE, Circuit Judges.

(Filed: October 26, 2012 )
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OPINION OF THE COURT
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JORDAN, Circuit Judge.

Honeywell International Inc. (“Honeywell”) appeals a judgment of the United

States District Court for the District of New Jersey dismissing its Declaratory Judgment

Act complaint against the International Union, United Automobile, Aerospace and

Agricultural Implement Workers of America (the “Union”) in favor of a second-filed suit

that the Union brought against Honeywell in Michigan. Honeywell argues that it was

reversible error for the District Court to not follow the “venerable ‘first-filed’ rule,” under

which the first of two identical suits in co-equal federal courts should generally proceed

to judgment. (Appellant’s Reply Br. at 1.) We disagree and will affirm.

I. Background

Honeywell, a diversified technology and manufacturing company, is incorporated

in Delaware and maintains its principal place of business in New Jersey. The Union is

headquartered in Michigan. For over fifty years, Honeywell and its predecessors have

entered into collective bargaining agreements (“CBAs”) with the Union. Those

agreements are operative for a stated period of time, and are re-negotiated every three-to-

four years in Michigan, on behalf of Honeywell employees in California, Indiana,

Michigan, New Jersey, and New York. The CBAs provide, among other things, that

Honeywell must afford certain healthcare benefits to retirees, their eligible dependents,

and surviving spouses.

In the 2003 CBA, Honeywell and the Union “agreed to language that would limit

the total amount of … contributions” Honeywell was required to make towards retiree

benefits. (Joint App. at 27.) When the parties met to negotiate a new CBA in 2007,

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however, the Union disputed the legality of that provision, claiming that “retiree

healthcare benefits were legally vested and … that Honeywell [therefore] could not

implement … [contribution] caps” on such benefits. (Id. at 33.) Despite the Union’s

disagreement with Honeywell, it “did not insist on any modifications to the cap language

itself,” but instead “asked for an extension of the effective date of the contribution caps.”

(Id. at 33-34.) Honeywell obliged, and the 2007 CBA thus provided that any “limit on

[Honeywell] retiree health care contributions w[ould] not apply to any year prior to

calendar year 2012.” (Id. at 34 (internal quotation marks omitted).)

Honeywell and the Union met to negotiate a new CBA in 2011. During those

negotiations, the Union told Honeywell that it “could not legally implement the caps with

respect to those retirees, eligible dependents, and surviving spouses with a retirement date

before” the effective date of the 2003 CBA. (Id. at 35.) Honeywell, in turn, “explained

that the plain language of the 2003 and 2007 [CBAs] implemented the caps with respect

to all ‘present and future’ retirees, … including … those … with [a] retirement date”

before that time. (Id.) Despite taking those competing positions, however, neither party

threatened litigation, and the CBA was ultimately finalized with the same contested

contribution cap language that had been included in the 2003 and 2007 agreements.

Shortly thereafter, Honeywell filed suit against the Union in the District Court

under the Declaratory Judgment Act, 28 U.S.C. § 2201. 1 Honeywell stated in its

1
Section 2201 provides that in “a case of actual controversy within its jurisdiction,
… any court of the United States … may declare the rights and other legal relations of
any interested party seeking such declaration, whether or not further relief is or could be
sought.” 28 U.S.C. § 2201(a).

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complaint that it planned to “implement the contribution caps on January 1, 2012” as to

“all present retirees, eligible dependents, and surviving spouses …, including those with

an effective retirement date before” the 2003 CBA (id. at 36), and it asked the District

Court to declare that it could do that without violating the Labor Management Relations

Act, 29 U.S.C. § 185, or the Employee Retirement Income Security Act, 29 U.S.C.

§ 1132.

One day before the Union’s answer to Honeywell’s complaint was due, the Union

filed suit against Honeywell in the United States District Court for the Eastern District of

Michigan, alleging that Honeywell’s plan to implement the benefit contribution caps

violated the same federal laws as to which Honeywell’s complaint sought a declaration of

rights. The Union then moved in the District Court in New Jersey to dismiss

Honeywell’s complaint, arguing that the Court should decline to entertain Honeywell’s

request for declaratory relief so that the dispute could be litigated in Michigan.

The Court agreed with the Union. Although it recognized that Honeywell was a

New Jersey domiciliary and that more of the affected retirees resided in New Jersey than

in Michigan, 2 the Court determined that Michigan was a better forum for the dispute than

New Jersey because it “ha[d] a greater nexus to the parties and the dispute.” (Id. at 7.)

As it explained:

The parties’ negotiations have taken place against the backdrop of
Sixth Circuit precedent for over half a century. The … CBAs have been
negotiated in the Eastern District of Michigan for more than 50 years, and

2
As the Court pointed out, however, the largest group of retirees resides in neither
New Jersey nor Michigan.

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 the 2003, 2007, and 2011 negotiations giving rise to this dispute took place
in Michigan. The healthcare retirement language that is central to this
dispute was negotiated in that District. Furthermore, the [Union] has been
headquartered in the Eastern District of Michigan for more than 75 years
and Honeywell’s predecessors were headquartered in Michigan for decades.
Finally, the office of Honeywell’s chief negotiator (who negotiated the
2003, 2007, and 2011 CBAs) is located in the Eastern District of Michigan.
Thus, the Court finds that Michigan has a stronger connection to the
dispute.

(Id.)

In view of those facts and others, the District Court declined to entertain

Honeywell’s request for Declaratory Judgment Act relief. (See id. at 6-7 (noting that

“‘district courts possess discretion in determining whether and when to entertain an action

under the [Declaratory Judgment Act]’” and invoking that “discretion to defer to [the

Union’s] choice of forum” (quoting Wilton v. Seven Falls Co., 515 U.S. 277, 282

(1995))).) In so ruling, the Court rejected the argument that Honeywell’s complaint for

declaratory relief should proceed rather than the later-filed Michigan action. While

observing that the first-filed complaint would ordinarily be the one to proceed when

substantially similar cases involving the same parties were pending in two judicial

districts, the Court concluded that it was appropriate to depart from the first-filed rule

under the circumstances of this case. In support of that conclusion, it pointed to the fact

that Honeywell had sued before providing required statutory notice to the retirees of its

plan, 3 which, the Court said, “suggest[ed] that Honeywell raced to the courthouse to get its

choice of forum.” (Id. at 8.)

3
Under 29 U.S.C. § 1024, the administrator of a plan governed by the Employee
Retirement Income Security Act must provide notice of a “material reduction in covered
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 The Court thus dismissed Honeywell’s complaint “without prejudice.” (Id. at 10.)

This timely appeal followed.

II. Discussion 4

Honeywell argues that the District Court’s dismissal of its complaint was improper

under the “first-filed rule,” because, in its view, that principle of judicial administration

should have ensured that its declaratory judgment suit in New Jersey would “trump” the

Union’s suit in Michigan. (Appellant’s Opening Br. at 2.)

Honeywell is correct that the first-filed rule ordinarily counsels deference to the

suit that was filed first, when two lawsuits involving the same issues and parties are

pending in separate federal district courts. See EEOC v. Univ. of Pa., 850 F.2d 969, 971

(3d Cir. 1988) (noting that the first-filed rule allows a co-equal federal court to “enjoin

the subsequent prosecution of proceedings involving the same parties and the same issues

services or benefits … to participants and beneficiaries … .” 29 U.S.C. § 1024(b)(1)(B).
4
The District Court had jurisdiction under 28 U.S.C. § 1331, because Honeywell’s
complaint demonstrates that the Union could seek coercive relief against Honeywell
under the Labor Management Relations Act or the Employee Retirement Income Security
Act. See Metropolitan Life Ins. Co. v. Price, 501 F.3d 271, 277 n.4 (3d Cir. 2007)
(noting that, in “the declaratory judgment context, ‘[f]ederal courts have regularly taken
original jurisdiction over … suits in which, if the declaratory judgment defendant brought
a coercive action to enforce its rights, that suit would necessarily present a federal
question.’” (alterations in original) (quoting Franchise Tax Bd. v. Constr. Laborers
Vacation Trust for S. Cal., 463 U.S. 1, 19 (1983))); see also Stuart Weitzman, LLC v.
Microcomputer Res., Inc., 542 F.3d 859, 862 (11th Cir. 2008) (“Federal question
jurisdiction exists in a declaratory judgment action if the plaintiff has alleged facts in a
well-pleaded complaint which demonstrate that the defendant could file a coercive action
arising under federal law.” (citation and internal quotation marks omitted)). We have
jurisdiction under 28 U.S.C. § 1291, “notwithstanding [the dismissal order’s] without
prejudice modifier,” as Honeywell has, in appealing, “elected to stand upon the original
complaint.” Frederico v. Home Depot, 507 F.3d 188, 192 (3d Cir. 2007) (citation and
internal quotation marks omitted).

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already before another district court”). That general rule applies to suits under the

Declaratory Judgment Act, such as Honeywell’s, Crosley Corp. v. Hazeltine Corp., 122

F.2d 925, 930 (3d Cir. 1941), but it is not, as Honeywell seems to argue, a dispositive

rule, nor does it override the district court’s discretionary authority to determine whether

or not to entertain a suit for declaratory relief, see 28 U.S.C. § 2201(a) (noting a court

“may declare the rights and other legal relations of any interested party seeking [a]

declaration” (emphasis added)); Wilton, 515 U.S. at 282 (“[D]istrict courts possess

discretion in determining whether and when to entertain an action under the Declaratory

Judgment Act … .”).

“[C]ourts have consistently recognized that the first-filed rule is not a rigid or

inflexible rule to be mechanically applied.” Univ. of Pa., 850 F.2d at 976 (citation and

internal quotation marks omitted). Rather, though “exceptions … are rare,” id., the first-

filed rule may properly be departed from as the equities of a given case require. See id. at

976-77 (surveying the “proper bases for departing from the rule” and noting that the

“letter and spirit of the … rule … are grounded on equitable principles”). Among other

bases grounded in what “is right and equitable under the circumstances and the law,” id.

at 977, it may, for example, be appropriate to dispense with the first-filed rule amidst

evidence of “[b]ad faith” or “forum shopping,” id. at 976, or because the “balance of

convenience favors the second-filed action,” Emp’rs Ins. v. Fox Entm’t Grp., Inc., 522

F.3d 271, 275 (2d Cir. 2008) (internal quotation marks omitted).

Ultimately, then, the first-filed rule “is not a mandate directing wooden application

of the rule.” Univ. of Pa., 850 F.2d at 972. And because that is so, we review the

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decision to apply or depart from it for an abuse of discretion, id., meaning that we will

not disturb the district court’s decision “unless there is a definite and firm conviction that

the [district court] committed a clear error of judgment in the conclusion it reached.”

Hanover Potato Prods., Inc. v. Shalala, 989 F.2d 123, 127 (3d Cir. 1993). The District

Court did not commit reversible error under that standard.

We would not be understood as endorsing a casual approach to the first-filed rule,

and the District Court was not casual here. Its ruling was substantially based on the fact

that Michigan had a greater nexus to the dispute than New Jersey, and that Honeywell’s

decision to sue before providing the required statutory notice suggested that it was

attempting to beat the Union to the courthouse. Those conclusions find support in the

record and were factors that the District Court could appropriately consider in

determining whether deference to the second-filed action for coercive relief was “right

and equitable under the circumstances.” Univ. of Pa., 850 F.2d at 977; cf. Research

Automation, Inc. v. Schrader-Bridgeport Int’l, Inc., 626 F.3d 973, 980 (7th Cir. 2010)

(observing that “where the parallel cases involve a declaratory judgment action and a

mirror-image action seeking coercive relief … we ordinarily give priority to the coercive

action, regardless of which case was filed first”); Certified Restoration Dry Cleaning

Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 551-52 (6th Cir. 2007) (noting that the

“first-filed rule … much more often than not gives way in the context of a coercive action

filed subsequent to a declaratory judgment [action]” and thus opining that cases

“construing the interplay between declaratory judgment actions and suits based on the

merits of underlying substantive claims create … a presumption that a first filed

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declaratory judgment action should be dismissed … in favor of the substantive suit”

(citation and internal quotation marks omitted)).

We conclude, therefore, that the District Court did not abuse its discretion in

dismissing Honeywell’s Declaratory Judgment Act suit in favor of the second-filed action

for coercive relief in the Eastern District of Michigan.

III. Conclusion

For the foregoing reasons, we will affirm the District Court’s order granting the

Union’s motion to dismiss.

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