Visteon Corporation v.

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 12-3352
_____________
In re: VISTEON CORPORATION, et al.,
Debtor
INTERNATIONAL UNION, UNITED AUTOMOBILE,
AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA,
UAW,
Appellant
_____________
No. 12-3353
_____________
In re: VISTEON CORPORATION, et al.,
Debtor
INTERNATIONAL UNION, UNITED AUTOMOBILE,
AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA,
UAW,
Appellant
____________
On Appeal from the United States District Court
for the District of Delaware
(Nos. 1:10-cv-00918, 1:10-cv-01070)
District Judge: Hon. Richard G. Andrews
Argued May 20, 2014
Before: McKEE, Chief Judge, CHAGARES, and NYGAARD, Circuit Judges.
(Filed: August 28, 2014)
John G. Adam, Esq.
Legghio & Israel
306 South Washington
Suite 600
Royal Oak, MI 48067
Peter D. DeChiara, Esq.
Cohen, Weiss & Simon
25th Floor
330 West 42nd Street
New York, NY 10036
Counsel for Appellant
Heather A. Bloom, Esq.
Kirkland & Ellis
655 15th Street, N.W.
Suite 1200
Washington, DC 20005
Andrew B. Bloomer, Esq.
Catherine L. Fitzpatrick, Esq.
R. Allan Pixton, Esq.
Kirkland & Ellis
300 North LaSalle Street
Chicago, IL 60654
Laura D. Jones, Esq.
James E. O'Neill, III, Esq.
Pachulski Stang Ziehl & Jones
Suite 1600
919 North Market Street
P.O. Box 8705, 17th Floor
Wilmington, DE 19801
Counsel for Appellee
____________
OPINION
____________
2
CHAGARES, Circuit Judge.
This case is about the consequences of failing to appeal a final order of a
bankruptcy court. For the reasons that follow, we will affirm the orders of the District
Court.
I.
Because we write solely for the benefit of the parties, we recount only the facts
relevant to our disposition. Visteon, a supplier of parts for automobiles, filed a voluntary
petition for bankruptcy relief under Chapter 11 of the Bankruptcy Code in 2009. Shortly
after filing, Visteon moved the Bankruptcy Court for permission pursuant to 11 U.S.C. §
363(b)(1) to terminate “other post-employment benefits” (“OPEB”) that it previously had
been providing for a number of its retirees. Visteon gave notice of its motion to every
retiree that would be affected as well as the labor unions that had represented them. The
International Union, United Automobile, Aerospace and Agricultural Implement Workers
of America (“UAW”) represented retirees at Visteon’s plants in Canovanas, Puerto Rico
and Lansdale, Pennsylvania (the “North Penn” plant). The Industrial Division of the
Communications Workers of America (“IUE”) represented approximately 2,100 retirees
from Visteon’s plants in Connersville and Bedford, Indiana. At the time that Visteon
entered bankruptcy, all of these plants were closed, except for the North Penn plant.
The UAW, IUE, and numerous salaried employees contested the termination
motion in the Bankruptcy Court. They argued that in order to terminate the OPEB,
Visteon would need to comply with § 1114 of the Bankruptcy Code, which contains
certain substantive and procedural protections for retiree benefits in bankruptcy. Visteon
3
argued that because these benefits were not vested and it could terminate them
unilaterally outside of bankruptcy (or after emerging), it should not have to follow the
special procedures of § 1114. After a two-day trial, the Bankruptcy Court determined
that as a factual and legal matter, Visteon did not need to employ the procedures of §
1114, and could terminate the OPEB unilaterally while still in bankruptcy.
The Bankruptcy Court carved-out the benefits for retirees from the North Penn
plant from its order, because the plant was still operating and an ongoing collective
bargaining agreement (“CBA”) governed employee and retiree benefits. Subsequent to
the Bankruptcy Court’s order, Visteon and the UAW entered into a Closure Agreement
for the North Penn plant to settle all disputes related to the North Penn closing. The
Closure Agreement set forth the procedures for terminating OPEB for North Penn
retirees, and was approved by the Bankruptcy Court.
The IUE, on behalf of the retirees it represented from the Connersville and
Bedford plants — and only the IUE, not the UAW — appealed the OPEB termination
order to the District Court, which affirmed. The IUE then appealed to this Court, and we
reversed. See In re Visteon Corp., 612 F.3d 210 (3d Cir. 2010) (“Visteon I”). We held
that Visteon could not terminate retiree benefits without employing the special
procedures of § 1114. We only vacated the Bankruptcy Judge’s legal determination that
§ 1114 did not apply; we did not vacate any of his factual findings regarding whether the
OPEB were vested, or opine on Visteon’s right to unilaterally terminate OPEB once it
emerged from bankruptcy. Id. at 212 n.1.
4
After we issued our mandate, the IUE and UAW both moved the Bankruptcy
Court to reinstate the OPEB for all retirees. The Bankruptcy Court agreed and restored
OPEB to all retirees except the North Penn subgroup (which was covered by the Closure
Agreement) on August 17, 2010. In doing so, it stated that “view[ed] the Third Circuit as
having if not technically, in effect, voiding, ab initio, this Court's order in December,
authorizing termination of retiree benefits. . . . [My] holding is going to be, that all retiree
benefits that were terminated in December, will need to be restored at some point. And
that restoration will need to be backdated.” Aug. 17, 2010 Hr’g Tr., ECF No. 3970 in
No. 09-11786-CSS (Bankr. D. Del.), at 9-10. The Bankruptcy Court entered a written
order restoring all retiree OPEB on August 30, 2010.
The Bankruptcy Court confirmed Visteon’s reorganization plan on August 31,
2010, and Visteon emerged from bankruptcy on October 1, 2010. The confirmed plan
reserved Visteon’s right to terminate retiree benefits after emerging from bankruptcy,
which it did a month later.1
Visteon timely appealed the Bankruptcy Court’s August 30 restoration order to the
District Court. It argued that the UAW and its retirees remained bound by the OPEB
termination order because they never appealed it. It further argued that because the
UAW was not a party in the IUE’s appeal, it could not now reap the benefit of the relief
1
Visteon’s post-bankruptcy termination is not at issue in this appeal; it is the subject of
separate litigation that was initiated in the Eastern District of Michigan. The Supreme
Court recently granted a petition for certiorari that will help resolve the question of what
CBA language is necessary to “vest” retiree benefits. See Tackett v. M & G Polymers
USA, LLC, 733 F.3d 589 (6th Cir. 2013) cert. granted in part, 134 S. Ct. 2136 (U.S.
2014).
5
that we gave to the IUE. The UAW also cross-appealed the Bankruptcy Court’s carve-
out of the North Penn plant on account of the Closure Agreement. The District Court
ruled in favor of Visteon on both Visteon’s appeal and the UAW’s cross-appeal, orders
which the UAW timely appealed to this Court.
II.
The Bankruptcy Court had jurisdiction pursuant to 28 U.S.C. § 157. The District
Court had jurisdiction over the final order of the Bankruptcy Court restoring OPEB
pursuant to 28 U.S.C. § 158(a). We have jurisdiction over the District Court’s order
pursuant to 28 U.S.C. § 158(d).
Our review of the District Court’s disposition is plenary. In re Heritage Highgate,
Inc., 679 F.3d 132, 139 (3d Cir. 2012). We exercise plenary review over the Bankruptcy
Court’s legal conclusions, and review its findings of fact for clear error. In re
Philadelphia Newspapers, LLC, 599 F.3d 298, 303 (3d Cir. 2010).
III.
A.
It is clear “that any party contesting an unfavorable order or judgment below must
file an appeal.” EF Operating Corp. v. Am. Bldgs., 993 F.2d 1046, 1048 (3d Cir. 1993).
“[A] party which does not appeal a decision by a district court cannot receive relief with
respect to that decision.” In re Taylor, 655 F.3d 274, 287 (3d Cir. 2011). “[T]he mere
fact that a [party] may wind up with a judgment against one [party] that is not logically
consistent with an unappealed judgment against another is not alone sufficient to justify
taking away the unappealed judgment.” Repola v. Morbark Indus., Inc., 980 F.2d 938,
6
942 (3d Cir. 1992). A party that makes “a considered choice not to appeal . . . cannot be
relieved of such a choice because hindsight seems to indicate to him that his decision not
to appeal was probably wrong.” Ackermann v. United States, 340 U.S. 193, 198 (1950).
A final order “precludes the parties or their privies from relitigating” issues
elsewhere. Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981). “[T]he res
judicata consequences of a final, unappealed judgment on the merits [are not] altered by
the fact that the judgment may have been wrong or rested on a legal principle
subsequently overruled.” Id. A final order can “only” be challenged “by direct review.”
Id. Although this rule may be harsh, it furthers the important goals of finality, autonomy,
and respecting settled expectations. See Ackermann, 340 U.S. at 198.
The Supreme Court’s Ackermann decision is instructive. There, three people, a
brother, his sister, and her husband, had their naturalization cancelled in a consolidated
trial. The brother appealed, but the sister and her husband did not. The brother prevailed
in his appeal, after which the sister and her husband attempted to avail themselves of the
brother’s victory. The Supreme Court rejected their attempt. It held that they had a “duty
to take legal steps to protect [their] interest in [the] litigation,” and that the outcome of
the brother’s case could not undo their “voluntary, deliberate, free, untrammeled choice .
. . not to appeal.” Ackermann, 340 U.S. at 197, 200.2
2
Courts readily apply these principles in the bankruptcy context. See, e.g., In re
Albrecht, 233 F.3d 1258, 1261 (10th Cir. 2000) (failure to appeal the bankruptcy court’s
final order prevented a party from challenging it in a subsequent appeal); Krebs Chrysler-
Plymouth, Inc. v. Valley Motors, Inc., 141 F.3d 490, 494 (3d Cir. 1998) (failure to file a
notice of appeal from a final order of the bankruptcy court prevented further litigation of
7
The application of these principles to this case is relatively straightforward. The
UAW opposed Visteon’s motion to terminate OPEB for its retirees in the Bankruptcy
Court and lost. The Bankruptcy Court entered an order which was final and appealable
as to this specific issue. If the UAW wanted relief from that order, it had to appeal. It
did not. Just as Visteon would have been bound by that order had it lost and not
appealed, so is the UAW.
The UAW’s decision not to appeal “was a risk,” but one that the UAW made in a
“calculated and deliberate” fashion. Id. at 198. At oral argument before the District
Court, the UAW conceded that “were we to reconsider the situation, I would have filed [a
notice of appeal] too, or at least urged my client to allow us to do that.” Appendix
(“App.”) 285. It also acknowledged that it was “not saying that every time somebody
appeals something in Bankruptcy Court, just because it could affect other people or
there’s a common issue, that in effect they’ve all appealed.” Id. The UAW cannot now
“seek to be the windfall beneficiaries of an appellate reversal procured by other
independent parties.” Moitie, 452 U.S. at 400.
Our opinion in Visteon I made no mention of the UAW whatsoever. We only
mentioned the IUE and its “2,100 retirees from Visteon Corporation’s manufacturing
plants in Connersville and Bedford, Indiana.” Visteon I, 612 F.3d at 212. We referenced
the closing agreements that were specific to those plants. Id. at 213. The judgment that
we issued along with the opinion in Visteon I was admittedly broad. It directed the
the issue); Turshen v. Chapman, 823 F.2d 836, 839 (4th Cir. 1987). The UAW does not
cite any decision that has held to the contrary.
8
Bankruptcy Court to “order Visteon Corporation to take whatever action is necessary to
immediately restore all terminated or modified benefits to their pre-
termination/modification levels.” Visteon I Judgment at 2. But “[w]hen an opinion is
silent as to the scope [of the parties,] the district court should assume as a general rule
that only the issues and parties on appeal are included.” Repola, 980 F.2d at 943. “[I]t
would be anomalous to assume” that our judgment applied to “a nonparty to the appeal,
without even mentioning it.”3 Id.
The sole exception to the rule that to obtain relief a party must appeal is “where
the disposition as to one party is inextricably intertwined with the interests of a non-
appealing party” and it is “impossible to grant relief to one party without granting relief
to the other.” United States v. Tabor Court Realty Corp., 943 F.2d 335, 344 (3d Cir.
1991). This is typically the case in in rem-type disputes over property that cannot belong
to more than one party. This exception has no application to this case because it is
possible to grant relief to IUE retirees without also granting it to UAW retirees. The
disposition as to IUE retirees was no more intertwined with the interests of UAW retirees
as the interests of the family members were in Ackermann.
3
The dissent argues that the instant “case is different because Visteon’s actions negate
explicit procedural protections Congress intended to create as part of the bankruptcy
process” in § 1114. Slip Op. 3. The dissent has not identified anything unique about §
1114 that relieved the UAW or its retirees of their obligation to appeal the Bankruptcy
Court’s decision to decline to employ § 1114 procedures. If the UAW or its retirees
thought that the Bankruptcy Court’s OPEB termination order was contrary to law, our
adversary system requires them to protect their rights through an appeal.
9
B.
The UAW advances a number of arguments to try to surmount this relatively
straightforward application of firmly established law. None are availing.
1.
The UAW argues that Visteon I rendered the Bankruptcy Court’s termination
order void ab initio, or “null from the beginning.” Black’s Law Dictionary (9th ed.
2009). If this is the case, then the termination order never had any legal effect, meaning
that the UAW retirees’ OPEB were never actually terminated.
An order is only void ab initio if the court that entered the order (1) lacked the
power or jurisdiction to do so, Raymark Indus., Inc. v. Lai, 973 F.2d 1125, 1132 (3d Cir.
1992), or (2) acted in a manner inconsistent with due process of law, Union Switch &
Signal Div. Am. Standard Inc. v. United Elec., Radio & Mach. Workers of Am., Local
610, 900 F.2d 608, 612 n.1 (3d Cir. 1990). Accord 11 Wright & Miller, Federal Prac. &
Proc. § 2862 (3d. 2012). “[A] judgment is not void . . . simply because it is erroneous, or
is based upon precedent which is later deemed incorrect or unconstitutional.” Marshall v.
Bd. of Ed., Bergenfield, N. J., 575 F.2d 417, 422 (3d Cir. 1978); accord United Student
Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 270 (2010) (“A judgment is not void, for
example, simply because it is or may have been erroneous.” (quotation marks omitted)).
The OPEB termination order falls into neither category.4 There is no question that
the Bankruptcy Court had jurisdiction over the parties and issues relevant to the OPEB
4
The dissent characterizes the Bankruptcy Court's initial termination order as “obviously
void because that action was prohibited by the Bankruptcy Code.” Slip Op. 2. Although
10
termination order. The process it afforded the parties leading up to its entry of the OPEB
termination order was exemplary. All potentially impacted retirees were notified of
Visteon’s application. The parties briefed the issue extensively, took discovery and the
Bankruptcy Court held a two-day trial. The OPEB order was not void ab initio.5
2.
The UAW next argues that its failure to appeal should not bind its retirees because
it was never appointed to represent them. According to the UAW, because retirees are
not employees that are current members of the UAW’s bargaining unit, the UAW could
only represent them after it was appointed to represent them through the process of §
1114. See 11 U.S.C. § 1114(c)(1) (outlining the process by which a union can become
the “authorized representative of those persons receiving any retiree benefits.”).
This argument fails for multiple reasons. It is inconsistent with the UAW’s course
of conduct. The UAW has represented in court filings that “[a]t all relevant times during
[Visteon’s] chapter 11 proceedings, the UAW has been the authorized representative of
Visteon’s former hourly employees . . . and other individuals at Visteon’s former
Caribbean facility in Puerto Rico, and its North Penn facility. . . who may have a claim
against Visteon arising from any . . . agreements for the payment of retiree benefits.”
Supp. App. 5. Nothing prevents a union from representing its retirees if “the union has a
the order ultimately was held to be legally erroneous, the dissent does not identify any
error of jurisdiction or due process violation that rendered it void from its inception.
5
The UAW also argues that Visteon I rendered the OPEB termination order void ab
initio because the Bankruptcy Judge characterized it that way. We never so held. Nor
did we as much as hint that the Bankruptcy Court lacked jurisdiction over the dispute, or
that any party was deprived of due process.
11
legitimate interest in protecting the rights of the retirees and is entitled to seek
enforcement of the applicable contract provisions.” United Steelworkers of Am., AFL-
CIO v. Canron, Inc., 580 F.2d 77, 80-81 (3d Cir. 1978). Further, even if this argument
had any merit, it would not further the cause of the retirees from the Puerto Rico and
North Penn plants because none of them individually appealed. The consequence of the
UAW’s argument is that each retiree would need to file an individual notice of appeal —
after all, some entity would have needed to “take legal steps to protect [their] interest in
[the] litigation.” Ackermann, 340 U.S. at 197. None of them did.
3.
The UAW next argues that Visteon’s confirmed plan, which incorporated the
OPEB restoration order, moots this appeal. The UAW contends that because the
“provisions of a confirmed plan bind the debtor,” 11 U.S.C. § 1141, Visteon would have
needed to appeal the plan in order to pursue an appeal of the OPEB reinstatement order.
This squarely conflicts with our holding in In re Pillowtex, Inc., 304 F.3d 246, 250 (3d
Cir. 2002) that “[t]he confirmation of [the debtor’s] plan of reorganization does not moot
[an] appeal.” The UAW has not advanced any reason why this clear statement of the law
in Pillowtex does not apply.
4.
Finally, the UAW argues that even if our judgment in Visteon I did not obligate
the Bankruptcy Court to restore OPEB to UAW retirees, it was within the Bankruptcy
Judge’s power to do so. In making this argument, the UAW relies on cases involving the
law of the case doctrine. This doctrine “expresses the practice of courts generally to
12
refuse to reopen what has been decided,” but is “not a limit to their power” to do so.
Messinger v. Anderson, 225 U.S. 436, 444 (1912). The UAW, however, ignores an
important limitation on the law of the case doctrine: it only governs the power of a court
to revisit its prior orders prior to “final judgment.” 18B Wright & Miller, Fed. Prac. &
Proc. § 4478 (2d ed. 2002); cf. In re Continental Airlines, Inc., 279 F.3d 226, 232-233 (3d
Cir. 2002) (noting that the law of the case doctrine is applicable to rulings within a single
litigation). “If no appeal is taken, as was the case here, the apposite doctrine is that of
issue preclusion,” not law of the case. In re Scrivner, 535 F.3d 1258, 1266 (10th Cir.
2008); accord United States v. Gov’t of V.I., 363 F.3d 276, 292 (3d Cir. 2004) (holding
that claim preclusion prevents relitigation of an issue that could have been the subject of
an earlier appeal).
Finality in bankruptcy differs from other contexts because more orders are
considered “final” and subject to immediate appeal. “In the bankruptcy context, finality
is accorded a somewhat flexible, pragmatic definition.” Matter of Taylor, 913 F.2d 102,
104 (3d Cir. 1990). “To determine whether a decision is final, we consider three factors:
(1) the impact of the matter on the assets of the bankruptcy estate, (2) the preclusive
effect of a decision on the merits, and (3) whether the interests of judicial economy will
be furthered.” In re Marcal Paper Mills, Inc., 650 F.3d 311, 314 (3d Cir. 2011)
(quotation marks omitted). An order is generally “final” if it “fully and finally resolved a
discrete set of issues, leaving no related issues for later determination.” Matter of Taylor,
913 F.2d at 104. The order need not resolve the entire bankruptcy proceeding in order to
be final. See In re Martin, 490 F.3d 1272, 1275 (11th Cir. 2007).
13
The order of the Bankruptcy Court terminating OPEB was undoubtedly final,
subject to immediate appeal, and binding absent an appeal. It directly affected Visteon’s
assets because it allowed Visteon to stop paying ongoing obligations. It resolved the
discrete issue of whether Visteon could terminate OPEB during bankruptcy, leaving
nothing more for the Bankruptcy Court to consider. Importantly, it was binding and had
preclusive effect between all involved parties, as the UAW conceded in its brief to the
District Court. See Supp. App. 96. “The normal rules of res judicata and collateral
estoppel apply to the decisions of bankruptcy courts.” Katchen v. Landy, 382 U.S. 323,
334 (1966); accord Peloro v. United States, 488 F.3d 163, 175 (3d Cir. 2007). The
termination order became final as to the UAW when the UAW decided not to appeal it.
IV.
The other issue in this appeal is the Bankruptcy Court’s decision to carve the
North Penn retirees out from its OPEB termination order. This decision was correct. The
Bankruptcy Court did not include North Penn employees or retirees in the OPEB
termination order because they were covered by an active CBA. An active CBA can only
be modified or terminated through the special procedures of § 1113 of the Bankruptcy
Code. After the Bankruptcy Court refused to allow Visteon to terminate the OPEB of
North Penn retirees, instead of employing the procedures of § 1113, the parties negotiated
the North Penn Closure Agreement.
The Closure Agreement was a settlement agreement “to settle and resolve all
disputes and to set forth the rights and responsibilities of all parties” related to the
closing, of the North Penn plant, including retiree OPEB. Supp. App. 74. The UAW
14
negotiated the agreement for employees and retirees “as the[ir] authorized or presumptive
representative.” Supp. App. 74. In the agreement, the UAW and those it represented
waived and released any and all claims they had or may have against Visteon pursuant to
the National Labor Relations Act and “all other statutes and regulations.” Supp. App. 79.
The Bankruptcy Court approved the Closure Agreement. Supp. App. 70-72.
The Closure Agreement specifically provided that North Penn employees and
retirees would continue to receive OPEB for a specific time after the termination of the
CBA, and that Visteon could then terminate their OPEB with three months’ notice.
Supp. App. 75. Pursuant to these terms, Visteon notified the UAW and its retirees in
February 2010 that it intended to terminate OPEB on June 1, 2010. The UAW agreed to
this process and specifically “acknowledge[d] that 11 U.S.C. § 1114 [was] not implicated
by this agreement.” Supp. App. 74. Each individual retiree signed a waiver releasing
Visteon from “any and all claims” relating to the Closure Agreement and separation of
employment more generally. Supp. App. 79. The agreement was a comprehensive,
negotiated contract between the UAW and Visteon.
Settlement agreements are considered binding contracts and are governed by the
ordinary principles of contract law. In re Cendant Corp. Litig., 233 F.3d 188, 193 (3d
Cir. 2000). It is firmly established that “changes in the law after settlement do not affect
the validity of the agreement and do not provide a legitimate basis for rescinding the
settlement.” Ehrheart v. Verizon Wireless, 609 F.3d 590, 595 (3d Cir. 2010); accord
Coltec Indus., Inc. v. Hobgood, 280 F.3d 262 (3d Cir. 2002). Although the UAW may
15
have wished that it had waited until after Visteon I to negotiate this agreement, this
subsequent change in the law cannot relieve the UAW of its calculated choice.
V.
For the foregoing reasons, we will affirm the orders of the District Court.
16
McKEE, Chief Judge, concurring in part and dissenting in part:
I agree with the majority’s conclusion that the North Penn retirees’ Closing
Agreement with Visteon precludes any relief in this action. However, for the reasons that
follow, I must dissent from the majority’s conclusion that the employees represented by
the UAW at the Puerto Rico plant were not entitled to reinstatement of “other post-
employment benefits” (OPEB) after we decided In re Visteon, 612 F.3d 210 (3d Cir.
2010) (Visteon I).1
I understand my colleagues’ concern for finality of judicial orders as well as the
practical implications of extending the benefits of our decision in Visteon I to someone
who never appealed that decision. However, the issue here is not merely whether persons
who did not appeal that decision should be allowed to benefit from it. Rather, under the
unique circumstances here, we must also consider whether the failure to appeal somehow
cloaked Visteon with the authority to terminate benefits in a manner that directly
contravenes a controlling statute that would otherwise limit Visteon’s ability to terminate
employee benefits in bankruptcy.
In Visteon I, we held that Visteon could not terminate retiree benefits without first
complying with the special procedures mandated by 11 U.S.C. § 1114. We stated:
1
Inasmuch as I am responding to a nonprecedential opinion which is intended only for
the parties who are familiar with the underlying law, I will not elaborate upon the facts of
the cases cited in support of my position, nor engage in a detailed discussion or analysis
of those cases. Rather, consistent with our customary practice in drafting nonprecedential
opinions, I will only very briefly explain why I disagree with my colleagues’ analysis.
1
We hold that § 1114 is unambiguous and clearly applies to any and all
retiree benefits, including the ones at issue here. . . . Accordingly,
disregarding the text of that statute is tantamount to a judicial repeal of the
very protections Congress intended to afford in these circumstances. We
must, therefore, give effect to the statute as written.”
Visteon I, 612 F.3d at 219 (italics added). Thus, Visteon’s purported termination of
employee benefits without complying with § 1114 was obviously void because that
action was prohibited by the Bankruptcy Code.
My colleagues’ contrary holding allowing Visteon to terminate the benefits of
employees represented by the UAW despite our ruling in Visteon I, and the unambiguous
text of § 1114, effectuates the kind of judicial repeal of the protections of that statute that
Visteon I sought to preclude. The result is that Visteon has now managed to terminate
benefits in a manner that we have just held is absolutely contrary to federal law.
The cases the majority relies on are therefore readily distinguishable. For
example, in Federated Department Stores, Inc. v. Moitie, 452 U.S. 394 (1981), retail
purchasers brought an action against owners of various department stores alleging
violations of the Sherman Act. The underlying appeal presented the issue of whether
retail purchasers can suffer an actionable “injury” to their “business or property” under §
4 of the Clayton Act. The Court never had to decide if any party was authorized to “act”
under federal law. Rather, the Court only decided whether plaintiffs could bring a
2
lawsuit. In Ackermann v. United States, 340 U.S. 193 (1950), the party that “prevailed”
did so based on a stipulation by the United States.2
This case is different because Visteon’s actions negate explicit procedural
protections Congress intended to create as part of the bankruptcy process. We do not
excuse Visteon’s omission based upon our reading of § 1114 or any other provision of
the Bankruptcy Code. Nor is it based upon any suggestion that Congress intended to
forgive the omission when an affected party does not seek legal redress. Rather, the only
reason for excusing Visteon’s failure to comply with the Bankruptcy Code is that the
UAW employees did not appeal the underlying decision of the Bankruptcy Court in
Visteon I. Yet, the statutory requirements of bankruptcy proceedings remain the same,
and it is clear that Visteon did not do what the law required in order to terminate benefits.
As I noted at the outset, I recognize that my view raises significant issues of
finality that are not readily resolved, and I agree that my colleagues’ solution has the
appeal of closure. However, I know of no theory or precedent that would empower
employers to do something that Congress has prohibited merely because of concerns of
finality absent something to suggest Congress intended such a result.
Accordingly, I cannot join this judgment.
2
Repola v. Morbark Industries, Inc., 980 F.2d 938 (3d Cir. 1992) involved the failure to
file a cross-appeal from a jury verdict. EF Operating Corp. v. American Buildings, 993
F.2d 1046 (3d Cir. 1993) also involved failure to file a cross-appeal for lack of personal
jurisdiction.
3