District Lodge 26 v. United Technologies Corporatio, No. 10-702 (2d Cir. 2010)
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10-0702-cv District Lodge 26 v. United Technologies Corp. 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 4 5 August Term, 2009 (Argued: June 9, 2010 Decided: July 8, 2010) 6 Docket No. 10-0702-cv 7 ------------------------------------- 8 9 DISTRICT LODGE 26, INTERNATIONAL ASSOCIATION OF MACHINISTS & AEROSPACE WORKERS, AFL-CIO, 10 Plaintiff-Appellee, 11 - v. - 12 UNITED TECHNOLOGIES CORPORATION, PRATT & WHITNEY, 13 Defendant-Appellant. 14 ------------------------------------- 15 16 Before: MINER, SACK, and HALL, Circuit Judges. Appeal from a judgment of the United States District 17 Court for the District of Connecticut (Janet C. Hall, Judge). 18 Following a bench trial, the district court issued a declaratory 19 judgment to the effect that the defendant's announced plans to 20 close two facilities in Connecticut and move the work performed 21 at those facilities outside the State violated the collective 22 bargaining agreement between the company and the plaintiff union. 23 The district court issued a permanent injunction prohibiting the 24 company from implementing the plans during the term of the 25 collective bargaining agreement, which ends later this year. 26 Affirmed. 1 2 3 4 ALLAN B. TAYLOR (Steven M. Greenspan and Douglas W. Bartinik, on the brief), Day Pitney LLP, Hartford, CT, for DefendantAppellant. 5 6 7 8 GREGG D. ADLER (Mary E. Kelly, on the brief), Livingston, Adler, Pulda, Meiklejohn & Kelly, P.C., Hartford, CT, for Plaintiff-Appellee. 9 10 11 RICHARD BLUMENTHAL, Attorney General of Connecticut, Hartford, CT, for amicus curiae State of Connecticut. 12 13 14 SACK, Circuit Judge: 15 Corporation, Pratt & Whitney Division ("Pratt"), appeals from a 16 February 18, 2010, declaratory judgment issued by the United 17 States District Court for the District of Connecticut (Janet C. 18 Hall, Judge) following a five-day bench trial. 19 that Pratt's announced plans to close two of its airplane engine 20 overhaul and repair facilities in Connecticut and move the work 21 performed at those facilities out of the State violated its 22 currently-in-force collective bargaining agreement (the "CBA") 23 with the plaintiff-appellee, District Lodge 26 of the 24 International Association of Machinists and Aerospace Workers, 25 AFL-CIO ("District Lodge" or the "Union"). 26 the implementation of those plans during the remaining term of 27 the CBA. 28 one of the thirty-four "Letters of Agreement" incorporated by 29 reference in the CBA, "Letter 22," which requires Pratt to "make 30 every reasonable effort to preserve" work performed by members of 31 the Union, and which defines "every reasonable effort" to include The defendant-appellant United Technologies The court held The court enjoined The court concluded that the plans fail to comply with 2 1 "pursuing actively and in good faith the goal of preserving the 2 work" and assigning "extra value" in its decision-making to 3 choices that would preserve the work. 4 Letter 22, at Section 2. The district court based its conclusion that in 5 developing and seeking to implement the closure plans, Pratt was 6 not pursuing, in good faith, the goal of preserving work within 7 the bargaining unit on a wide variety of factual findings, many 8 of which are not challenged on appeal and none of which, we 9 conclude, were clearly erroneous. These findings include: that 10 Pratt exhibited an unwillingness to consider alternative plans 11 that would not generate annual recurring savings through 2013; 12 that it refused to measure savings under any metric other than 13 earnings before interest and tax ("EBIT"); that it abandoned 14 negotiations with the State of Connecticut, which hoped to 15 persuade Pratt not to remove work from the State;1 and that it 16 failed to accord "extra value" to options that would avoid 17 closing the Connecticut facilities in question before developing 18 and proposing plans to do so. 19 The district court concluded that Pratt had not made, 20 and was not making, "every reasonable effort" to preserve 21 bargaining unit work as required by the CBA. 22 the district court's application of the fact-intensive inquiry 23 bargained for by the parties in Letter 22 or in the district 24 court's determination that Pratt failed to pursue the goal of 1 We find no error in The State participates in this appeal as amicus curiae. 3 1 preserving bargaining unit work in good faith. 2 We therefore affirm the judgment. BACKGROUND 3 4 Pratt, a division of United Technologies Corporation 5 ("UTC"), engages in the design, manufacture, and sale of 6 commercial and military aircraft engines. 7 maintenance, repair, and overhaul of such equipment. 8 maintains several facilities in Connecticut, two of which are the 9 focus of the present controversy: the Cheshire Engine Center It also performs It 10 ("Cheshire"), a site for overhaul and repair work, and the 11 Connecticut Airfoils Repair Operations ("CARO"), a site for 12 turbine airfoil repairs. 13 bargaining agent for employees at the two Connecticut facilities. 14 It also represents other Pratt employees at other installations. 15 District Lodge is the exclusive On December 3, 2007, Pratt and District Lodge entered 16 into the CBA, which is effective, by its terms, until December 5, 17 2010. 18 "not call or sanction any strike . . . during the period of [the 19 CBA]." 20 retain the sole right . . . to determine the number and location 21 of its plants . . . [and] the assignment of all work to employees 22 or other persons." Pursuant to the CBA, District Lodge agreed that it would CBA art. 24. The CBA also provides that Pratt "will Id. art. 1. 23 Article 27 of the CBA details the procedures that Pratt 24 is required to follow before closing a facility or transferring a 25 business unit governed by the CBA. 26 announces a plan to close a facility, it is required to make 4 Among other things, if Pratt 1 itself available to meet and confer with the Union about such a 2 plan. 3 "[t]he final decision regarding closing a plant or transferring a 4 business unit rests solely with [Pratt]." 5 that Pratt has complied with the procedural requirements set 6 forth in Article 27. 7 See id. art. 27. Article 27 also provides, however, that Id. It is undisputed There are thirty-four "Letters of Agreement" 8 incorporated into the CBA. 9 of this action. One of these, Letter 22, is the focus It provides, inter alia: "[T]he Company [Pratt] 10 will make every reasonable effort to preserve the work presently 11 and normally manufactured by employees [covered by the CBA]." 12 Letter 22 § 2(A). 13 as: 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 "[E]very reasonable effort" is further defined pursuing actively and in good faith the goal of preserving the work presently and normally manufactured by employees covered by [the CBA], while giving reasonable consideration to the Company's own interests, including the profitability of its operations. The Company will . . . assign extra value in its decision-making to choices that preserve such work in the bargaining unit. As part of any "meet and confer" process undertaken pursuant to Article 27, the Company will describe the efforts made to comply with this Letter and will provide the Union the opportunity to propose other reasonable efforts, including modifications to the collective bargaining agreement, which the Company will consider in good faith. In no event will "every reasonable effort" require the Company to make a capital investment, increase the size of the workplace, or require lower profits. Id. § 2(b)(4). Over the course of the past three years, Pratt has developed restructuring plans that contemplate the closure of 5 1 Cheshire and CARO. According to those plans, it would begin 2 relocating work from Cheshire in 2010, and close the facility in 3 2011. 4 close that facility in the same year. 5 plans would cost approximately 832 bargaining unit employees 6 their jobs. It would also begin relocating work from CARO in 2010 and 7 Implementation of the The closure plans for Cheshire and CARO evolved 8 somewhat differently. Cheshire has historically performed less 9 well than Pratt's other engine repair facilities. In July 2008, 10 Pratt foresaw that the national economic downturn and the merger 11 of Delta Airlines and Northwest Airlines would likely further 12 worsen Cheshire's results beginning in early 2010.2 13 supervisor of the facility, Thomas Mayes, recommended to Pratt 14 that Cheshire be closed and the work be transferred to a facility 15 outside Connecticut. 16 support to the closure plan in or about January 2009. 17 requested funding for the closure plan from its parent, UTC, on 18 February 13, 2009. 19 plan to the Union five months later, on July 21, 2009. The Pratt's President, David Hess, gave his Pratt With the approval of UTC, Pratt announced the 20 In arriving at his recommendation, Mayes considered 21 three alternatives: closing the facility but transferring the 22 work to another bargaining unit facility in Connecticut; reducing 23 the number of product lines at Cheshire; and allowing volume to 2 Pratt had a contract with Northwestern that was cancelled after the merger because Delta operates its own engine repair facility that would accommodate the Northwestern work done by Pratt. 6 1 reduce by attrition through non-renewal of customer contracts. 2 He rejected all three, however, because they did not offer 3 financial returns equivalent to those that would likely be 4 achieved through closing the plant. 5 the closure plan to the value of the alternatives, Mayes did not 6 assign extra monetary value to workforce preservation. In comparing the value of 7 When Pratt presented the closure plan to UTC for 8 approval, it also presented alternative programs that were 9 projected to generate lower savings over a recurring period, but 10 it did not pursue funding for any such program. 11 decision, Pratt did not assign extra monetary value to workforce 12 preservation. 13 objectives was to avoid disruption to the workforce. 14 In making that It did represent to UTC, however, that one of its Before Pratt received approval for the closure plan and 15 announced it to the Union, it implemented, at Mayes' insistence, 16 various short-term measures at Cheshire that succeeded in making 17 some improvement to its performance. 18 Pratt began considering a plan to close CARO in 2007, 19 at which time the facility was performing poorly. Pratt's Vice- 20 President of Global Repair Services, Tom Hutton, initially 21 declined to pursue a closure option, in part because of the value 22 he attached to work preservation. 23 improvements at CARO were accomplished in 2008 by scaling down 24 its operations. 25 recommended closing the facility, a move he estimated would yield 26 approximately $20 million in annual recurring savings measured in Drastic operational Nevertheless, in February 2009, Hutton 7 1 terms of EBIT. 2 Pratt made efforts to improve performance at CARO. 3 Even after Hutton proposed the closure plan, Pratt President Hess agreed with the proposal. None of 4 the decision-makers appears to have assigned "extra value" at 5 this stage of the process to alternatives that would preserve 6 bargaining unit work. 7 close Cheshire -- presented to UTC for approval and funding in 8 February 2009. 9 announced it to the Union, with the approval of UTC, in July 10 The closure plan was -- like the plan to And -- also like the Cheshire plan -- Pratt 2009. 11 The Union exercised its right under Article 27 to 12 engage the company in a meet-and-confer process, during which the 13 proposed closures of Cheshire and CARO were both discussed. 14 Early in the process, Pratt informed the Union that the closure 15 of the two facilities (together, the "Closure Plan") would yield 16 $53.8 million in annual recurring savings.3 17 figure, which was a product of calculations using the EBIT 18 metric, did not reflect the fact that, because several of Pratt's 19 facilities were joint ventures, Pratt would not realize the full 20 value of the savings achieved through the Closure Plan. 21 appears instead that approximately $13 million of the projected 22 $53.8 million savings would be realized by Pratt's joint venture 23 partners. 3 The $53.8 million It That forecast had in fact fluctuated widely in 2009. 8 1 Pratt also informed the Union that in order to persuade 2 Pratt to keep the bargaining unit work in Connecticut, the Union 3 would have to propose an alternative plan that would generate 4 approximately $40 million in annual recurring EBIT savings. 5 Pratt intended the difference between its $53.8 million figure 6 and its $40 million demand on the Union to satisfy the 7 requirement under Letter 22 of the CBA that it assign "extra 8 value" to plans that preserve bargaining unit work. 9 The district court found that although Pratt used EBIT 10 to calculate its $53.8 million savings, and insisted that any 11 alternative plan proposed by the Union generate $40 million in 12 annual recurring EBIT savings, Pratt has frequently used metrics 13 other than EBIT to evaluate business plans. 14 for example, measured the net present value of a business plan in 15 terms of the cash savings it would generate. 16 It has in the past, Pratt and the Union exchanged several proposals during 17 the meet-and-confer process. 18 any proposal that was not projected to generate significant 19 savings through at least 2013. 20 including its last, best offer, would have required Union members 21 who were unconnected with the two facilities in question to agree 22 to a wage reduction. 23 Pratt never offered or considered And each of Pratt's proposals, Throughout the meet-and-confer process, the State of 24 Connecticut consulted with both parties. 25 assistance that it valued at $20 million in savings per year for 26 five years to keep the jobs in question in the State. 9 It offered Pratt Pratt 1 valued it at approximately $5 million annually. The difference 2 in valuation was at least in large part a product of Pratt's use 3 of the EBIT metric, i.e., the State's offer would have conferred 4 on Pratt a yearly cash benefit that was greater than $5 million 5 but would not have increased its EBIT by that amount. 6 informed Pratt that it would be willing to provide an additional 7 $10-12 million over five years and that Pratt should engage the 8 State in further talks if it was close to an agreement with the 9 Union. 10 State. The State 11 Pratt did not initiate further negotiations with the On September 8, 2009, toward the end of the meet-and- 12 confer process, two Pratt officials exchanged emails raising, but 13 leaving unanswered, the question of what Pratt would do if the 14 Union succeeded in proposing an alternative plan that would 15 generate the target savings. 16 this exchange that at least some Pratt officials were not certain 17 that Pratt would abandon the Closure Plan even if the Union 18 identified an alternative way to generate savings on the scale 19 that Pratt demanded. 20 The district court inferred from The Union never did propose such an alternative plan, 21 however. On September 21, 2009, shortly after the conclusion of 22 the meet-and-confer process, Pratt informed the Union that it was 23 proceeding with the Closure Plan. 24 next day in the United States District Court for the District of 25 Connecticut seeking to prevent Pratt from implementing the 26 Closure Plan. 10 The Union filed a lawsuit the 1 Following a five-day bench trial, the district court 2 ruled in favor of the Union. See District Lodge 26 of Int'l Ass'n 3 of Machinists & Aerospace Workers, AFL-CIO v. United Techs. 4 Corp., Pratt & Whitney, 689 F. Supp. 2d 219 (D. Conn. 2010) 5 ("District Lodge"). 6 violated the requirement under Letter 22 that Pratt make every 7 reasonable effort to preserve work within the bargaining unit. 8 The court also found that the Closure Plan violated Pratt's 9 implied covenant. 10 The court concluded that the Closure Plan The district court found facts as rehearsed above. In 11 determining that the Closure Plan was in breach of the CBA, it 12 relied on, among other things, Pratt's refusal to consider an 13 alternative plan that would not generate recurring annual savings 14 through at least 2013; its refusal to measure savings under any 15 metric other than EBIT, which the court found resulted in the 16 overvaluation of the Closure Plan and the undervaluation of 17 alternatives; its undervaluation of the State's proposal (also 18 based on Pratt's refusal to look beyond EBIT savings); its 19 failure to engage the State in negotiations to the extent offered 20 by the State; and its failure to accord "extra value" to plans 21 that would preserve work before the meet-and-confer process, by 22 which time the Closure Plan had already been developed internally 23 and proffered to the union. 24 See id. passim. In addition, in reaching its conclusion, the court took 25 into account the September 8, 2009, emails between Pratt 26 officials expressing doubt as to the possible consequences of an 11 1 alternative Union plan had it been able to generate the target 2 savings. 3 the President of UTC indicating that he had already decided that 4 he "[would] not support" a request from the State "not to go 5 ahead with [the closure of] Cheshire" before the meet-and-confer 6 process had concluded. 7 human resources officer of UTC acknowledging that the assistance 8 proposed by the State, which the State valued at $20 million, but 9 Pratt valued at $5 million, may actually "benefit" Pratt "beyond 10 the [$5 million]," but stating that he would "feel better if all 11 there [was] for real savings [was] the [$5 million]." 12 235. 13 It also made note of two other emails. Id. at 236. One was from The other was from the chief Id. at In determining that the Closure Plan was also in breach 14 of the implied covenant of good faith and fair dealing, the 15 district court reasoned that Pratt had "materially evaded the 16 spirit of [the CBA]," which the court defined as Pratt's 17 obligation to "make a good faith effort to preserve work within 18 the bargaining unit" by "going through the motions of complying 19 with Letter 22 without making any genuine effort to preserve 20 work." 21 Id. at 266. The district court entered a declaratory judgment "that 22 [Pratt's] announced plans to close [Cheshire and CARO], and to 23 move the work performed at those facilities outside of the State 24 of Connecticut constitutes a breach of Letter 22 . . . ." 25 Accordingly, it issued a permanent injunction "prohibiting the 26 defendant from implementing the restructuring plans . . . during 12 1 the term of the [CBA]." 2 Judgment (Feb. 18, 2010) (Dkt. No. 72). 3 District Lodge, No. 09 Civ. 1494, Pratt appeals. DISCUSSION 4 5 I. Jurisdiction and Standard of Review 6 Section 301 of the Labor Management Relations Act 7 "provides subject matter jurisdiction to the federal courts for 8 suits involving violations of collective bargaining agreements." 9 Baldracchi v. Pratt & Whitney Aircraft Div., United Techs. Corp., 10 814 F.2d 102, 104 (2d Cir. 1987). "In cases where section 301 is 11 the basis of jurisdiction, it also requires that courts apply 12 federal common law to determine the meaning of the agreement." 13 Id. 14 always rigidly apply to collective bargaining agreements, courts 15 must look to traditional state contract law, when it is not 16 inconsistent with federal labor policy, to form the content of 17 the federal common law governing labor agreements." 18 RWDSU, UFCW v. 1864 Tenants Ass'n, No. 06 Civ. 1190, 2007 WL 19 634751, at *11, 2007 U.S. Dist. LEXIS 14766, at *37 (S.D.N.Y. 20 Mar. 1, 2007), aff'd, 533 F.3d 98 (2d Cir. 2008) (per curiam); 21 see also S. Air Crew Grp. v. S. Air, Inc., No. 3:08 Civ. 1115, 22 2008 WL 4642939, at *2, 2008 U.S. Dist. LEXIS 83601, at *6 (D. 23 Conn. Oct. 20, 2008) ("In interpreting a collective bargaining 24 agreement, traditional rules of contract interpretation apply as 25 long as they are consistent with federal labor 26 policies."); cf. Bozetarnik v. Mahland, 195 F.3d 77 (2d Cir. "While it is true that traditional contract rules do not 13 Local 377, 1 1999) (relying on cases from this Circuit and others to interpret 2 a collective bargaining agreement). 3 "In reviewing a district court's decision in a bench 4 trial, we review the district court's findings of fact for clear 5 error and its conclusions of law de novo." 6 Food, 237 F.3d 174, 178 (2d Cir. 2001). 7 erroneous' when although there is evidence to support it, the 8 reviewing court on the entire evidence is left with the definite 9 and firm conviction that a mistake has been committed." 10 13 "A finding is 'clearly United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948). 11 12 White v. White Rose II. A. Whether Pratt Breached Letter 22 The "Every Reasonable Effort" Clause Letter 22 required Pratt to make "every reasonable 14 effort" to preserve work within the bargaining unit. The parties 15 agreed upon a definition of "every reasonable effort" that 16 focused on an "active" and "good faith" pursuit of the goal of 17 work-preservation. 18 of work-preservation in good faith is one of fact. 19 Condon, 224 Conn. 231, 237 n.11, 618 A.2d 501, 505 n.11 (1992) 20 ("It is the burden of the party asserting the lack of good faith 21 to establish its existence and whether that burden has been 22 satisfied in a particular case is a question of fact."); see 23 also Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 24 F.3d 89, 98 (2d Cir. 2007) ("[W]hether particular conduct 25 violates or is consistent with the duty of good faith and fair 26 dealing necessarily depends upon the facts of the particular The question whether Pratt pursued the goal 14 See Habetz v. 1 case, and is ordinarily a question of fact to be determined by 2 the jury or other finder of fact."); cf. Songbird Jet Ltd., Inc. 3 v. Amax, Inc., 581 F. Supp. 912, 925 (S.D.N.Y. 1984) ("[T]he 4 corporate state of mind [is] a fact capable of ascertainment."); 5 In re Motors Liquidation Co., No. 09 Civ. 7794, 2010 WL 1730802, 6 at *7, 2010 U.S. Dist. LEXIS 41642, at *21 (S.D.N.Y. Apr. 28, 7 2010) ("The Bankruptcy Court's finding of good faith . . . is 8 either a factual question or mixed question of fact and law that 9 must be reviewed for clear error."). 10 Because the question of whether Pratt pursued the goal 11 of work preservation in good faith is one of fact, we review for 12 clear error the district court's conclusion, following a five-day 13 bench trial at which the district court had the opportunity to 14 review the evidence and observe witnesses first-hand, that 15 Pratt's actions did not constitute "every reasonable effort" to 16 preserve work within the bargaining unit. 17 We are not left with "the definite and firm conviction 18 that a mistake [w]as . . . committed" by the district court in 19 its findings of fact requiring us to overturn the district 20 court's ruling in this regard. 21 Quite the contrary. 22 the facts outlined above that Pratt, in developing and seeking to 23 implement the Closure Plan, was not pursuing in good faith the 24 goal of preserving work within the bargaining unit. U.S. Gypsum, 333 U.S. at 395. The district court could easily infer from 15 1 B. 2 The central argument in Pratt's briefing, and the focus 3 of its presentation at oral argument, was that the district court 4 overstepped its bounds by faulting Pratt for refusing to consider 5 any savings that came in non-EBIT form. 6 that Pratt's refusal to consider non-EBIT savings resulted in the 7 undervaluation of alternative plans, including assistance offered 8 by the State, and its insistence on measuring savings only under 9 EBIT resulted in the overvaluation of the savings that could be 10 11 Other Asserted Errors of Law The district court found achieved by the Closure Plan. Pratt argues that its decision to value the Closure 12 Plan and alternative plans exclusively in terms of their 13 projected EBIT savings was a business decision to which the 14 district court was required to defer. 15 rule is a presumption that in making a business decision the 16 directors of a corporation acted on an informed basis, in good 17 faith and in the honest belief that the action taken was in the 18 best interests of the company." 19 Derivative Litig., 964 A.2d 106, 124 (Del. Ch. 2009) (internal 20 quotation marks omitted). 21 "The business judgment In re Citigroup Inc. S'holder But it inheres in the nature of a contract relating to 22 the business of a corporation -- a collective bargaining 23 agreement included -- that to the extent set forth in the 24 contract the corporation has surrendered the ability to act 25 otherwise than according to its lawful obligations thereunder 26 irrespective of the corporation's subsequent contrary "business 16 1 judgment." 2 voluntarily entering into an agreement, thereby surrendering, to 3 some extent, its free exercise thereof thereafter. 4 then, by invoking the business judgment rule, effectively 5 insulate from review whether it engaged in a good faith pursuit 6 of work preservation by requiring that we defer to its method of 7 accounting for its measures. 8 9 Each party fully exercises its business judgment by Pratt cannot, The valuation of the Closure Plan and its alternatives was plainly part of the calculus used by Pratt in determining 10 whether to close the two Connecticut facilities. 11 that valuation are subject to review in determining whether 12 Pratt's adoption of the Closure Plan was proper. 13 court concluded that the adoption of the Closure Plan was 14 improper. 15 that Pratt has used metrics other than EBIT to evaluate business 16 plans. 17 finding that the consideration of savings other than in terms of 18 EBIT may well have lowered the value of the Closure Plan and 19 increased the value of various alternatives. 20 The means of The district It supported that conclusion with its factual finding And Pratt does not appear to contest the district court's Pratt also argues that the district court should have 21 deferred to its "business judgment" to consider only alternative 22 proposals that would generate annual recurring savings at least 23 through 2013. 24 "every reasonable effort" to preserve work within the bargaining 25 unit. 26 that under the contract the sufficiency of the effort must be But again, it was contractually bound to use Pratt cannot invoke the business judgment rule to argue 17 1 judged on the basis of recurrent savings for three years. 2 contract neither says nor implies as much. 3 The Pratt contends that the district court erred in 4 attempting to judge its "subjective intent," complaining that the 5 court effectively required it to "think good thoughts" about 6 preserving work within the bargaining unit. 7 54; see also Koufakis v. Carvel, 425 F.2d 892, 906 (2d Cir. 1970) 8 ("A breach is a breach; it is of marginal relevance what 9 motivations led to it."). Appellant's Br. at But the district court did not decide 10 whether Pratt's thoughts were good or evil or, in the abstract, 11 whether Pratt's motivation for doing what it did was benevolent. 12 The court analyzed Pratt's subjective intent because Letter 22 13 bound it to operate with the good faith pursuit of bargaining 14 unit work. 15 pursue "in good faith" the goal of preserving work for its 16 Connecticut employees, was the violation of the CBA. 17 Pratt's subjective intent, insofar as it failed to The district court did not, moreover, decide whether 18 Pratt wanted to keep the Connecticut facilities open. 19 is clear, but not determinative of whether Pratt breached the 20 CBA, that Pratt wanted to move the operations and attendant 21 employment in question elsewhere for economic reasons. 22 question, as the district court recognized, was whether Pratt 23 made a genuine effort to keep the work at issue within the 24 bargaining unit as it was contractually bound to do, whether it 25 wanted to or not. 18 Indeed, it The 1 Pratt argues that the improvements it made to Cheshire 2 and CARO before the Closure Plan gained traction unambiguously 3 demonstrate such an effort, but Pratt has identified no basis in 4 law for rejecting the district court's finding that such 5 improvements, viewed together with the other factual 6 circumstances, did not require an overall finding of a good faith 7 pursuit of work preservation. 8 term operational improvements to the Connecticut facilities in 9 2008 was not inconsistent with an unwillingness to attempt in 10 Pratt's decision to make short- good faith to keep the facilities open in 2010. 11 The district court relied, in part, on emails from 12 Pratt and UTC executives to determine whether Pratt was pursuing 13 the goal of work preservation in good faith. 14 improper method for attempting to gauge corporate intent. 15 "[C]orporate intent is shown by the actions and statements of the 16 officers, directors, and employees who are in positions of 17 authority or have apparent authority to make policy for the 18 corporation." 19 573 (4th Cir. 1983). 20 were sent by officers at Pratt and UTC, including the President 21 of UTC. 22 officers were in positions of authority at Pratt or, in the case 23 of the UTC officers, had the authority to make policy that would 24 be binding on Pratt. 25 district court constitute only a small portion of its analysis, That was not an United States v. Basic Constr. Co., 711 F.2d 570, The emails discussed by the district court Nowhere in its briefing does Pratt dispute that these In any event, the emails discussed by the 19 1 and the district court's conclusion was independently supported 2 by the other evidence it discussed. 3 Finally, Pratt argues that the district court erred in 4 finding that Letter 22 required it to accord extra value to 5 options that would preserve work within the bargaining unit 6 before the meet-and-confer process began. 7 based its finding on a close reading of the language of the 8 contract: Letter 22 set forth the "extra value" requirement 9 before describing the meet-and-confer process, during which Pratt The district court 10 was to describe to the Union the efforts it had already made to 11 comply with Letter 22. 12 This was a reasonable interpretation of Letter 22. 13 Pratt has persuasively argued that the contract was ambiguous as 14 to when the extra value had to be assigned.4 15 contractual language is ambiguous is [] a question of law subject 16 to our de novo review." 17 Gènèrale, 476 F.3d 90, 95 (2d Cir. 2007). 18 contract is susceptible to more than one reasonable 19 interpretation, [] the contract is ambiguous." 20 v. Unionville Water Co., 294 Conn. 611, 623, 987 A.2d 1009, 1018 21 (2010) (internal quotation marks omitted; alterations 22 incorporated); In re Holocaust Victim Assets Litig., 282 F.3d 4 "Whether [] Aon Fin. Prods., Inc. v. Sociètè "If the language of a 19 Perry St., LLC Indeed, the contract was also ambiguous as to how extra value was to be assigned at all, because the extra value provision was followed by a provision to the effect that Pratt was not required to accept lower profits. However, Pratt does not dispute the district court's finding that Letter 22 required extra value to be assigned to proposals that would further the goal of work preservation. 20 1 103, 108 (2d Cir. 2002). But the interpretation of an ambiguous 2 contract provision is a question for the finder of fact that we 3 review for clear error. 4 68, 986 A.2d 329, 333 (Conn. App. Ct. 2010); In Time Prods., Ltd. 5 v. Toy Biz, Inc., 38 F.3d 660, 665 (2d Cir. 1994). 6 court's interpretation of Letter 22, well-grounded in its text 7 and the circumstances under which it was drafted, was not clearly 8 erroneous. See Tobet v. Tobet, 119 Conn. App. 63, The district 9 10 III. Whether Pratt Violated the Implied Covenant of Good Faith and Fair Dealing 11 The actual declaratory judgment issued by the court 12 referred only to Pratt's breach of the CBA and not to any 13 violation of the implied covenant of good faith and fair dealing. 14 But the district court did find, in the course of its opinion, 15 that the Closure Plan violated Pratt's implied covenant of good 16 faith and fair dealing. 17 There is an implied covenant of good faith and fair 18 dealing in every contract. See, e.g., Magnan v. Anaconda Indus., 19 Inc., 193 Conn. 558, 566, 479 A.2d 781, 785-86 (1984); cf. 511 W. 20 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 153, 21 746 N.Y.S.2d 131, 135, 773 N.E.2d 496, 500 (2002) (New York law). 22 However, in general, "[i]f the allegations do not go beyond the 23 statement of a mere contract breach and, relying on the same 24 alleged acts, simply seek the same damages or other relief 25 already claimed in a companion contract cause of action, they may 26 be disregarded as superfluous as no additional claim is actually 27 stated." Hall v. EarthLink Network, Inc., 396 F.3d 500, 508 (2d 21 1 Cir. 2005) (internal quotation marks omitted) (California law); 2 see also Deer Park Enters., LLC v. Ail Sys., Inc., 57 A.D.3d 711, 3 712, 870 N.Y.S.2d 89, 90 (2d Dep't 2008) ("A cause of action to 4 recover damages for breach of the implied covenant of good faith 5 and fair dealing cannot be maintained where the alleged breach is 6 intrinsically tied to the damages allegedly resulting from a 7 breach of contract." (internal quotation marks omitted)) (New 8 York law); Monahan v. GMAC Mortg. Corp., 179 Vt. 167, 187 n.5, 9 893 A.2d 298, 316 n.5 (2005) ("[W]e will not recognize a separate 10 cause of action for breach of the implied covenant of good faith 11 and fair dealing when the plaintiff also pleads a breach of 12 contract based upon the same conduct." (emphasis in original)) 13 (Vermont law); but see Gen. Clutch Corp. v. Lowry, 10 F. Supp. 2d 14 124, 133-34 (D. Conn. 1998) (upholding, as non-overlapping, 15 separate jury awards of damages for breach of employment 16 agreement and breach of implied covenant of good faith and fair 17 dealing, based on "the same factual evidence" or "conduct 18 evidence"). 19 We need not decide whether the district court's finding 20 of a breach of the implied covenant of good faith and fair 21 dealing by Pratt was clearly erroneous as a matter of fact or 22 mistaken as a matter of law. 23 made no mention of any breach of the implied covenant. 24 explicitly based on the district court's finding as to the breach 25 of contract claim. 26 the injunction issued by the district court were amply supported The declaratory judgment, as noted, It was We conclude that the declaratory judgment and 22 1 by the court's finding that Pratt's Closure Plan breached Letter 2 22 of the CBA. 3 without reaching the assertions as to the implied covenant of 4 good faith and fair dealing. We therefore affirm the judgment on that basis CONCLUSION 5 6 7 For the reasons set forth above, the judgment of the district court is affirmed. 23
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