United States District Court, D. Maine
INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AFL-CIO, LOCAL LODGE, Plaintiffs,
VERSO PAPER CORP., et al., Defendants.
ORDER DISMISSING PLAINTIFFS' MOTION FOR DECLARATORY AND INJUNCTIVE RELIEF; AND DISMISSING PLAINTIFFS' MOTION FOR ATTACHMENT AND TRUSTEE PROCESS
JOHN A. WOODCOCK, Jr., District Judge.
No earlier than January 16, 2015, Verso Paper Corp. and Verso Paper LLC (Verso) anticipate selling the Bucksport, Maine Paper Mill to AIM Development USA, LLC and in anticipation of the sale, Verso ceased paper mill operations in Bucksport. In this lawsuit, former or soon to be former Verso employees of the Bucksport Paper Mill and their union seek a declaratory judgment and injunctive relief against Verso concerning their right to timely payment of severance pay and final wages, including accrued 2015 vacation pay, in accordance with time frames they say are established under state law. The Court dismisses Plaintiffs' claims for severance pay because Maine law precludes them from proceeding once the state of Maine Director of Bureau of Labor Standards brought suit in state court against the Defendants, and the Court dismisses Plaintiffs' claims for vacation pay because state rather than federal court, is a better venue for adjudicating that claim. The Court also dismisses Plaintiffs' motion for attachment and trustee process because the motion is related to enforcement of their severance and vacation pay claims only, and dismisses the United Steelworkers' motion for joinder as it relates to Plaintiffs' severance and vacation pay claims because its motion is now moot.
A. Procedural Background
On December 15, 2014, the International Association of Machinists and Aerospace Workers, AFL-CIO, Local Lodge No. 1821 (IAM or IAMAW), Richard Gilley, Corey Darveau, Brian Simpson, Brian Abbott, and Harold Porter (Plaintiffs) filed a complaint against Verso Paper Corp. and Verso Paper LLC (Verso) and against AIM Development USA LLC (AIM). Compl. for Declaratory and Injunctive Relief (ECF No. 1) ( Compl. ). In the Complaint,  Plaintiffs allege that Verso refuses "to comply with the laws of the State of Maine governing the timely payment of severance pay and final wages, including accrued 2015 vacation time, " in violation of 26 M.R.S. §§ 625-B and 626. Id. ¶ 6. Also on December 15, 2014, Plaintiffs filed a motion for expedited declaratory judgment and a request for a preliminary and permanent injunction, as well as a motion for attachment and trustee process. Pls.' Mot. for Expedited Declaratory J. and Req. for Prelim. and Permanent Inj. (ECF No. 6) ( Pls.' Mot. ); Pls.' Mot. for Attach. and Trustee's Process (ECF No. 5) ( Pls.' Attach. Mot. ).
At the request of Plaintiffs, the Court held a telephone conference on December 19, 2014 and set initial scheduling deadlines. Minute Entry (ECF No. 26). On December 22, 2014, Plaintiffs filed an amended complaint, which added 53 Local No. 1821 Members as plaintiffs and included additional allegations. First Am. Compl. for Declaratory and Injunctive Relief (ECF No. 29) ( Am. Compl. ). Also on December 22, 2014, Verso submitted a joint stipulation of facts, Joint Stipulations Relating to Count 9 of the Compl.: Timely Payment of Severance and Vacation Pay (ECF No. 31) ( Stipulation of Facts ), and proposed statements of fact. Proposed Statements Relating to Count 9 of the Compl.: Timely Payment of Severance and Vacation Pay (ECF No. 32) ( Defs.' Proposed Statements of Fact ). Again on December 22, 2014, Verso filed its response in opposition to Plaintiffs' motion. Defs. Verso Paper Corp. and Verso Paper LLC's Opp'n to Pls.' Mot. for Expedited Declaratory J. and Req. for Prelim. and Permanent Inj. (ECF No. 34) ( Defs.' Opp'n ).
On December 22, 2014, the parties and the state of Maine Attorney General participated in a settlement conference before Magistrate Judge John C. Nivison. Minute Entry (ECF No. 36). On December 23, 2014, Plaintiffs filed their reply to Verso's response in opposition. Pls.' Reply Regarding Severance and Accrued 2015 Vacation Time Payments (ECF No. 39) ( Pls.' Reply ). Also on December 23, 2014, the state of Maine and the Director of Bureau of Labor Standards filed a complaint against Verso in Kennebec County Superior Court, and a proposed consent order; Superior Court Justice Robert Mullen signed and dated the Consent Order the same day it was filed. Def. Verso Paper Corp. and Verso Paper LLC's Supplemental Mem. of Law in Opp'n to Pls.' Mot. for Expedited Declaratory J. and Req. for Prelim. and Permanent Inj. Attach. 2 Compl. (ECF No. 40) ( Director Compl. ); id. Attach. 3 Consent Order ( Consent Order ). Verso also filed a supplemental response in opposition to Plaintiffs' motion on December 24, 2014. Def. Verso Paper Corp. and Verso Paper LLC's Supplemental Mem. of Law in Opp'n to Pls.' Mot. for Expedited Declaratory J. and Req. for Prelim. and Permanent Inj. ( Defs.' Supplemental Opp'n ). On December 26, 2014, Plaintiffs filed a reply to Verso's supplemental response. Pls.' Reply to the Verso Defs.' Dec. 24, 2014 Supplemental Mem. of Law in Opp'n to Pls.' Mot. for Expedited Declaratory J. and Req. for Prelim. and Permanent Inj. Regarding Severance and 2015 Vacation Time Pay (ECF No. 44) ( Pls.' Supplemental Reply ).
On December 27, 2014, the parties filed a number of documents. First, Plaintiffs filed a request for judicial notice, and a sworn attorney declaration relating to the accuracy of the documents attached to the First Amended Complaint. Pls.' Req. for Judicial Notice (ECF No. 45) ( Req. for Judicial Notice ); Decl. of Kimberly J. Ervin Tucker (ECF No. 46) ( Tucker Decl. ). Next, the parties filed a joint stipulation concerning exhibits. Joint Stipulation Regarding Authenticity and Admissibility of Exs. (ECF No. 47) ( Joint Stipulation ). Third, Verso filed another supplemental memorandum. Def. Verso Paper Corp. and Verso Paper LLC's Second Supplemental Mem. of Law in Opp'n to Pls.' Mot. for Expedited Decl. J. and Req. for Prelim. and Permanent Inj. (ECF No. 48) ( Defs.' Second Supplemental Opp'n ). Fourth, Plaintiffs filed another supplemental memorandum. Pls.' Mem. on Why Abstention is not Appropriate in this Case (ECF No. 49) ( Pls.' Mem. on Abstention ). Plaintiffs also filed proposed verified statements of fact. Pls.' Proposed Verified Statements of Fact Relating to Count 9 of the Compl.: Timely Payment of Severance and Accrued 2015 Vacation Pay (ECF No. 50) ( Pls.' Proposed Verified Statements of Fact ). Finally, Verso filed another proposed statements of fact. Proposed Statements Relating to Count 9 of the Compl.: Timely Payment of Severance and Vacation Pay (ECF No. 51) ( Defs.' Second Proposed Statements of Fact ).
On December 28, 2014, Plaintiffs filed a second supplemental reply. Pls.' Reply to the Verso Defs.' Second Supplemental Mem. of Law in Opp'n to Pls.' Mot. for Expedited Declaratory J. and Req. for Prelim. and Permanent Inj. (ECF No. 53) ( Pls.' Second Supplemental Reply ). On December 29, 2014, the Court heard oral argument. Minute Entry (ECF No. 56). Also on December 29, 2014, the United Steelworkers, on behalf of USW Local Union 4-01188 and 4-261 (USW) filed a motion for joinder. Mot. for Joinder as Pl. Filed by United Steelworkers (ECF No. 54) ( USW's Mot. ). That same day, Plaintiffs filed their response in opposition to the USW's motion, and on December 31, 2014, Plaintiffs filed a supplemental response in opposition. Pls.' Objection and Mot. in Opp'n to Permissive Joinder or Intervention of the USW (ECF No. 55) ( Pls.' Objection and Mot. in Opp'n to the USW's Mot. ); Supplemental Mem. of Law in Support of Pls.' Objection and Mot. in Opp'n to Permissive Joinder of the United Steelworkers Pursuant to Rule 20, Fed. R. Civ. P. (ECF No. 59) ( Pls.' Supplemental Objection and Mot. in Opp'n to the USW's Mot. ). Also on December 31, 2014, Verso filed a third supplemental memorandum. Def. Verso Paper Corp. and Verso Paper LLC's Third Supplemental Mem. of Law in Opp'n to Pls.' Mot. for Expedited Declaratory J. and Req. for Prelim. and Permanent Inj. (ECF No. 60) ( Defs.' Third Supplemental Opp'n ). That same day, Plaintiffs filed a third supplemental reply. Pls.' Reply to the Verso Defs.' Third Supplemental Mem. of Law in Opp'n to Pls.' Mot. for Expedited Declaratory J. and Req. for Prelim. and Permanent Inj. (ECF No. 61) ( Pls.' Third Supplemental Reply ).
B. Factual Background
1. The Parties
The Bucksport Mill is a paper mill located in Bucksport, Maine owned by subsidiaries of Verso Paper Corp. Stipulation of Facts ¶ 1. Verso Paper Corp. is a publicly-held Delaware corporation headquartered in Memphis, Tennessee. Id. ¶ 2. Verso Paper LLC is a Delaware limited liability company, a subsidiary of Verso Paper Corp., and the employer of the employees at the Bucksport Mill. Id. ¶ 3. The IAM or IAMAW is a labor union representing 59 hourly-wage persons employed as mechanics at the Bucksport Mill. Id. ¶ 4.
2. Verso Agrees to Sell the Bucksport Mill
On October 1, 2014, Verso announced its plans to shut down the Bucksport Mill, and on December 4, 2014, Verso ceased paper production there. Id. ¶¶ 5-6. Verso agreed to pay all hourly-wage employees at the Bucksport Mill, including IAM members, through December 31, 2014. Id. ¶ 7. January 8, 2015 is the pay day for the next regularly scheduled pay period ending after December 31, 2014. Id. ¶ 11.
On December 5, 2014, Verso Paper LLC and Verso Maine Power Holdings LLC, another subsidiary of Verso Paper Corp., entered into a Membership Interest Purchase Agreement (MIPA) to sell the entities owning the Bucksport Mill to AIM. Id. ¶ 24. Verso's counsel has confirmed that the closing is scheduled to take place no earlier than January 16, 2015. Minute Entry (ECF No. 41). For some employees, their last full day of work was on December 17, 2014, whereas all other employees' last full day of work was on or before December 31, 2014 except for "approximately 44 employees that have been slated to remain working to maintain the power plant at the Mill and other duties." Pls.' Mot. at 19.
3. Verso's Original Stance on Severance and Vacation Pay; Effects Bargaining of October and November 2014; Determination Letters Issued by the Maine Bureau of Labor Standards
The Bucksport Mill is a "Covered Establishment" as defined in 26 M.R.S. § 625-B(1)(A) and the closure of the Bucksport Mill is a "Termination" as defined in 26 M.R.S. § 625-B(1)(G). Stipulation of Facts ¶¶ 8-9. Verso has a contractual obligation to pay the IAM members whose employment will be terminated as a result of the closure of the Bucksport Mill severance in an amount equal to or greater than the amount required under the formula in 26 M.R.S. § 625-B(2). Id. ¶ 10.
On October 28, 2014, Verso began effects bargaining with the unions as required by Section 12.5 of the CBA with the IAM and identical provisions of the CBAs with the other unions. Id. ¶ 14; see also Section I.B.4, infra. During the process, representatives from all the unions representing the hourly-wage employees at the Bucksport Mill were present and participated. Stipulation of Facts ¶ 15. Also on October 28, 2014, Verso offered two written drafts of a Memorandum of Agreement (MOA) between Verso and the unions, which the unions rejected. Id. ¶ 16.
On November 19, 2014, Verso resumed effects bargaining with the IAM and on November 24, 2014, Verso resumed effects bargaining with the other unions. Id. ¶¶ 17-18. The next day, Verso and the other unions entered into a MOA. Id. ¶ 19. Also on November 25, 2014, and again on December 1, 2014, Verso resumed effects bargaining with the IAM. Id. ¶¶ 20-21.
On December 3, 2014, Verso and the IAM entered into a MOA. Id. ¶ 22. The MOA between Verso and the IAM resolved many issues, but not the timing for payment of (a) severance benefits and (b) the equivalent of the vacation time the union members would have received in 2015. Id. ¶ 23. Verso estimates that the equivalent of the 2015 vacation time allotted to the IAM's members is approximately $390, 000. Id. ¶ 26.
The dispute revolves around the timing of payments. Verso has maintained since at least November 2014 that it will not pay severance or accrued 2015 vacation time to its employees before April 1, 2015. See, e.g., Compl. Attach. 3 Nov. 19, 2014 Letter from United States Senator Susan Collins to Verso ("We have been told that Verso management does not intend to issue severance pay until 90 days after the mill is closed. The Commissioner of the Maine Department of Labor and the Governor have stated that doing so would be a violation of Maine State law. What is Verso's plan for paying the legally required severance pay on time?"); id. Attach. 4 Nov. 19, 2014 Resp. Letter from Verso to Senator Collins (explaining that Verso presented a proposal to the unions, including the IAMAW, for "enhanced severance benefits that go well beyond those agreed to in our labor agreements or required by Maine law, " but would not be paid until "three months after their last day of employment - just as it is written in the labor agreements"); id. Attach. 10 Mem. of Agreement ¶ 10 ("[T]he Company will pay terminated employees (voluntarily or involuntarily) 2015 vacation time. Payment will be made three (3) months following their termination date or as ultimately resolved").
Verso's position on the timing of severance payments has been met with unified opposition from the highest-ranking Maine officials, including Governor Paul LePage, United States Senators Susan Collins and Angus King, Maine Attorney General Janet Mills, the Commissioner of the Maine Department of Labor Jeanne Paquette, the Director of the Bureau of Labor Standards Pamela Megathlin, and legislative leadership. Am. Compl. ¶ 116.
Contrary to its position, Verso received two Determination Letters from Director Pamela Megathlin regarding timing for severance pay. Pls.' Mot. at 3. On November 25, 2014, Director Megathlin wrote the First Determination Letter to Charles Welch, Manager of Human Resources for Verso, stating in part:
It is our understanding that the workers will be paid in full, along with all benefits until December 31, 2014. If this understanding is correct, and the employment relationship ceases on December 31, 2014 for all other purposes, then we interpret the law [26 M.R.S. § 625-B(2)] to conclude that the "last full day of work" will be December 31, 2014 for all applicable employees. Based upon the information we have, severance payments will then be due within one regular pay period after this date, which we understand to be January 8, 2015.
Any further delay of severance payment by Verso will be viewed as a violation of the law and will subject Verso and its parent company to an enforcement action for full legal remedies authorized by law.
Compl. Attach. 9 at 1-2 ( First Determination Letter ). On December 9, 2014, Director Megathlin wrote a follow-up letter to Mr. Welch. Id. Attach. 27 ( Second Determination Letter ). She reiterated the Bureau of Labor's position that severance payments are due on January 8, 2015, and added:
[T]he determining factor for the "last full day of work" is the continued payment of wages. If an employee is not paid through December 31, 2014, that employee's last "full day of work" pursuant to 26 M.R.S. § 625-B(2) would be the date in which the worker is last paid for a "full day of work."
As we have previously explained, based on the current collective bargaining agreement, Verso may not mitigate its liability for severance pursuant to 26 M.R.S. § 625-B(3)(B) unless the severance pay has actually been paid. Verso may not mitigate its liability for severance pursuant to 26 M.R.S. § 625-B(3)(B) by agreeing to pay the amount of severance due under the law, but paying it at a date later than one regular pay period after the last full day of work.
Id. at 1-2.
Following issuance of the Second Determination Letter, Plaintiffs inquired whether Verso had changed its position with respect to the time for payment of severance. Pls.' Mot. at 3. On December 12, 2014, Mr. Welch responded: "Verso's position on timing of severance pay and the payment required by Section 10 (2015 Vacation) of the MOA has not changed, but we continue to evaluate circumstances as they arise." Compl. Attach. 18 Subject: RE: Confirmation of Verso's Position.
4. Collective Bargaining Agreement Provisions
Verso is a party to a collective bargaining agreement (CBA) with the IAM that contains provisions regarding the payment of severance and vacation benefits. Stipulation of Facts ¶ 12. Verso is a party to collective bargaining agreements with four other unions that represent other hourly-wage employees at the Bucksport Mill: USW Locals 1188 and 261, IBEW Local 1777, and OPEIU Local 555. Id. ¶ 13.
According to Plaintiffs, the relevant provisions of the CBA are Sections 7, 11.15(a), 12 and 29. Am. Compl. ¶ 110. The applicable CBA is effective from May 1, 2011 through April 30, 2015. CBA § 2.1.
The relevant provisions of the CBA state:
SECTION 7. SENIORITY
7.5 In the event of a layoff, the employees with the least department seniority shall be the first laid off in each department and shall be returned to work in reverse order. This section also applies to vacations.
7.6 Seniority referenced in this section shall refer to Mill Seniority as defined in Section 7.2. If an employee with one (1) year seniority or less is laid off for less than twelve (12) months due to lack of work, their seniority remains unbroken. If an employee with more than one (1) year seniority is laid off for less than eighteen (18) months due to lack of work, their seniority remains unbroken. If more than twelve (12) months or eighteen (18) months respectively, their seniority starts anew. If an employee is recalled and offered employment at their regular kind of work within the twelve (12) month or eighteen (18) month period respectively, and does not report, their seniority will be broken.
7.7 In the event of a temporary curtailment of operations which does not exceed twenty-one (21) continuous days, the following guidelines are established IAM members Mechanical Maintenance Department.
1. Every reasonable effort will be made to give people time off during the curtailment if they request it. Scheduled vacations will be honored first.
2. Positions will be filled by department seniority. Seniority means most senior qualified.
3. The parties may mutually agree to change the schedule.
4. Unanticipated openings will be offered to the most senior qualified person not scheduled by department seniority.
SECTION 11. VACATIONS
11.15 The following provisions will govern the administration of the vacation clause relating to (a) retiring and terminated employees, (b) employees who have otherwise met the eligibility requirements but have failed to meet the required 1, 200 work hour qualification because of absence due to sickness and (c) employees who are absent from work due to an occupational injury.
(a) Retiring and Terminated Employees
Employees who retire or resign giving proper notice of at least two weeks to the Company or die will be granted accrued vacation pay on the following basis:
Employees who retire or resign from the Company or die will be granted vacation pay for the current vacation year prorated on the basis of one-twelfth (1/12) normal vacation pay for each full month completed on the active payroll by the employee during the vacation year in which they retire, resign or die.
SECTION 12. SEVERANCE PAY
12.1 In instances of addition, elimination or modification of equipment which results in employment of fewer employees, the company will provide a severance payment equal to 40 hours × the employee's current card rate for each year of service.
12.2 Such severance pay shall only apply to employees permanently laid off for three (3) months or more and payment will not be made until three (3) months following the date of layoff.
12.5 The Company agrees that when exercising its rights under the current labor agreement, it will undertake any reductions in force through voluntary severance and/or attrition except in situations involving temporary lay-offs or permanent reductions due to complete or partial closure. In situations involving temporary lay-offs, current labor agreement provisions will apply. In situations involving permanent reductions due to complete or partial closures, employees will be laid-off in accordance with the current labor agreement and effect bargaining will take place.
12.6 It is understood that should the State or Federal law provide a greater severance allowance those affected employees would receive the higher amount. In order to qualify for these higher benefits, such employees would have to be terminated per the conditions of the applicable law.
SECTION 29. CONTRAVENTION OF LAW
29.1 If any provision or section of this Agreement is in contravention of the laws or regulations of the United States or of the State in which the mill covered by this Agreement is located, such provisions shall be superseded by the appropriate provisions of such law or regulations, so long as same is in force and effect, but all other provisions of the Agreement shall continue in full force and effect.
5. The Consent Order
Having reached an agreement with Verso regarding the payment of severance and vacation pay, the State through the Director of the Bureau of Labor Standards (Director) filed a complaint against Verso and proposed consent order in Kennebec County Superior Court on December 23, 2014. Director Compl.; Consent Order. Superior Court Justice Mullen signed and dated the Consent Order on December 23, 2014. Consent Order at 6. In the Consent Order, the Director and Verso agree:
10. Defendants agree to pay one-half of the severance pay as set forth on Attachments A-D to each of the affected hourly employees on or before January 8, 2015. Payments shall be made directly by the Defendants by direct deposit or other usual payroll method to the affected employees.
11. Defendants agree to pay the remaining severance pay due to the affected hourly employees on the earlier of
a. the 5th business day after the completion of the sale of the Verso Bucksport Mill or any portion thereof; or
b. March 19, 2015.
12. Defendants agree to pay all benefits due to the affected hourly employees under Section 10, Vacation, of the applicable Memorandum of Agreement on the earlier of
a. the 5th business day after the completion of the sale of the Verso Bucksport Mill or any portion thereof, or
b. March 19, 2015.
13. If the sale takes place before March 19, 2015, Defendants will notify the Office of the Attorney General within 24 hours of the completion of the sale.
15. Plaintiffs [Director] assert that Defendants will be in violation of 26 M.R.S. § 625-B for the portion of the severance not paid by January 8, 2015. Plaintiffs agree to forego penalties or other enforcement action against Defendants for such alleged violation if timely payments are made in full compliance with paragraphs 10, 11, and 12 of this Consent Order. Notwithstanding Plaintiff's assertion, Defendants do not admit they will be in violation of 26 M.R.S. § 625-B for the portion of the severance not paid by January 8, 2015.
22. The [Superior] Court shall retain jurisdiction over this matter for the purpose of allowing the parties to apply to the Court at any time for such further orders or proceedings as may be necessary for the construction or enforcement of any provision of this Consent Order, including, in the event of noncompliance with the Consent Order's obligation provisions, contempt proceedings under M.R. Civ. P. 66.
Id. ¶¶ 10-13, 15, 22. During a telephone conference on December 24, 2014, counsel for both parties confirmed that the Consent Order covers all Plaintiffs, including IAMAW members. Minute Entry (ECF No. 41).
II. POSITION OF THE PARTIES
A. Plaintiffs' Motion
Plaintiffs seek " timely payment of severance pay and final wages, including accrued 2015 vacation time pay from Verso... by January 8, 2015, pursuant to the time frames for such payments established in and mandated by 26 M.R.S.A. §§ 625-B and 626." Pls.' Mot. at 2 (emphasis in original). To ensure payment by January 8, 2015, Plaintiffs argue that declaratory and injunctive relief are appropriate because the case presents (1) an actual controversy; (2) within the jurisdiction of the Court; and (3) they have standing to bring this action on behalf of themselves and all similarly-situated employees. Id.
Citing 26 M.R.S. §§ 625-B and 626, and the First and Second Determination Letters, Plaintiffs contend that both the legal obligation to pay severance and the time frame by which the legal obligation must be fulfilled by Verso is unambiguous- severance pay is due the Bucksport Mill employees no later than January 8, 2015. Id. at 3. However, because Verso stated that it does not intend to pay severance and vacation pay by this date, Plaintiffs claim that
The threat that these rights will be violated by Verso is real, imminent and undebatable;
The harm that Bucksport employees will suffer is substantial, irreparable and unquestionable;
The risk that Verso will declare bankruptcy of its Bucksport Mill subsidiary after a merger with NewPage is complete-denying Bucksport employees the ability to recover their severance under Maine law is significant and irrefutable; and
The need for immediate court action, through a declaration and injunction to prevent this violation of law is indisputable and in the interest of justice.
Id. at 3-4.
Anticipating Verso will assert that it is exempt under section 625-B(3)(B) from complying with the time requirement under section 625-B(2), Plaintiffs counter that the legislative history indicates that section 625-B(3)(B) was amended in 2003 to "clarify" legislative intent regarding mitigation of liability under a collective bargaining agreement; specifically, an employer's liability under " state law is mitigated as a result of a contract providing for severance pay only if the contractual severance pay has actually been paid pursuant to the terms of the contract. '" Id. at 4-5 (quoting Comm. Amend. A to L.D. 1733 (HP 1255) (121st Legis. 2003)) (emphasis in Plaintiffs' original). Thus, although Verso claims that if it complies with Section 12.2 of the CBA-providing that severance shall be paid within three months of the date of layoff-it has properly mitigated its liability under the severance pay statute, Plaintiffs argue that "[t]his ignores the plain meaning of the words of the statute... as well as the clear statements of legislative intent and context of the enactment of the 2003 amendment." Id. at 5.
Next, Plaintiffs contend that even under the CBA, Verso owes severance pay to its former employees by January 8, 2015. Id. at 6. Citing Section 29 of the CBA, which provides that any provision that "is in contravention of the laws" of Maine "shall be superseded" by Maine law, Plaintiffs argue that Section 12.2 is superseded by the timing requirements under section 625-B(2). Id. Thus, Plaintiffs state that "Verso has both a statutory and contractual obligation to pay severance and accrued 2015 vacation time by January 8, 2015." Id. at 7.
Plaintiffs next address the suitability of a declaratory judgment in this case. Citing 28 U.S.C. § 2201 and Federal Rule of Civil Procedure 57, Plaintiffs explain that declaratory relief is authorized where there is "(1) an actual controversy;' (2) within its jurisdiction' (subject-matter jurisdiction in the federal court); and (3) an interested party' (parties with standing)." Id. at 10. Plaintiffs also cite a case from the District of Massachusetts for the proposition that the Court should treat a motion for declaratory judgment just as it would a motion for summary judgment; in other words, Plaintiffs have the burden of showing there is no genuine dispute as to any material fact and are entitled to judgment as a matter of law. Id. at 11 (citing Delaware Cnty. Emps. Retirement Fund v. Portnoy, Civil Action No. 13-10405-DJC, 2014 WL 1271528, at *4, 2014 U.S. Dist. LEXIS 40107, at *11-12 (D. Mass. Mar. 26, 2014)). Moreover, Plaintiffs point out that "a litigant does not have to await consummation of threatened injury to obtain preventive relief; if an injury is certainly impending, that is enough." Id. (citing State of R.I. v. Narragansett Indian Tribe, 19 F.3d 685, 693 (1st Cir. 1994)).
Here, according to Plaintiffs, "there is no genuine issue of fact in dispute." Id. at 7. Although the parties dispute the timing of severance pay, Plaintiffs assert that " this is an issue of law NOT fact. " Id. (emphasis in original). In addition, based on the language of section 625-B(2) and the Second Determination Letter, and based on Section 29 of the CBA, Plaintiffs argue they "have a substantial likelihood of success on the merits for all severance pay claims." Id. at 12-13. Furthermore, regarding accrued 2015 vacation time, "Verso has agreed to pay 2015 vacation time in the MOAs entered with all Bucksport hourly wage employees and 26 M.R.S.A. § 626 mandates such sums be paid, under the circumstances of this case on January 8, 2015, " and therefore, according to Plaintiffs, they "have a substantial likelihood of success on all claims" related to accrued 2015 vacation time. Id. at 13.
Next, Plaintiffs argue that they "do not have an adequate remedy at law." Id. They claim that, based on the language in Section 3.10 of the MIPA between AIM and Verso for the sale and transfer of the Mill,
Verso has revealed that it also intends to get paid $58 million by scrapper AIM to eat the Bucksport Mill employees' $30 to $35 million slice of severance cake - structuring a deal with scrapper AIM Development that will both further Verso's scheme of permanently eliminating the Bucksport Mill's paper-making capacity, while simultaneously attempting to shift Verso Paper Corp.'s statutory obligation to pay Bucksport's employees $30-$35 million in severance payments to Verso's Bucksport subsidiary as a part of the $58 million sale transaction with AIM.
Id. at 14 (emphasis in original).
In other words, Plaintiffs assert that Section 3.10 attempts to relieve Verso of all liability to make severance payments "by contractually transferring this obligation to a subsidiary that will have no assets remaining to pay this obligation." Id. According to Plaintiffs, the subsidiary could then file a Chapter 11 bankruptcy petition, and invoke one of the mitigation provisions under 26 M.R.S. § 625-B(3)(E) to avoid the liability completely. Id. Citing Roland Machinery Co. v. Dresser Industries, Inc., 749 F.2d 380, 386 (7th Cir. 1984) and Semmes Motors, Inc. v. Ford Motor Co., 429 F.2d 1197, 1205 (2d Cir. 1970), Plaintiffs contend that they have no adequate remedy at law because "just as in those cases, monetary damages received later, if recovered or recoverable, will not be adequate to compensate the Plaintiffs for the irreparable harms that they will endure in the interim if they are denied the timely payment of severance and accrued 2015 vacation time required by Maine law." Id. at 15-16 (emphasis in original).
Addressing the likelihood of irreparable harm, Plaintiffs note that not only will the former employees and their families suffer, but the legislative intent behind sections 625-B and 626 will be defeated and be "contrary to the public's interest." Id. at 17. Finally, addressing the balance of harms, Plaintiffs contend that Verso can assert no harm by making timely severance and accrued vacation payments in accordance with Maine law, whereas "Plaintiffs and the public will suffer significant and potentially irreparable harm if Verso is allowed to evade, delay or deny the payment of severance and accrued 2015 vacation time." Id. at 18.
In conclusion, Plaintiffs seek the following from the Court: (1) a judgment declaring that each employee of the Bucksport Mill is entitled to receive severance and vacation pay no later than January 8, 2015 (except for those approximately 44 employees who will remain working at the Bucksport Mill); (2) in the event that Verso fails to timely pay severance and vacation pay in accordance with Maine law and a declaratory judgment, interest at the rate of 6.13%; (3) an order directing Verso to deposit funds in the Court's registry should Verso decide to appeal a judgment against it; and (4) recovery of all reasonable costs and attorneys' fees. Id. at 19-20.
B. Verso's Opposition
Verso begins by referring to Section 12 of the CBA, and asserting that, under the terms of the agreement,
[d]uring the 3-month [layoff] period... employees are not terminated, but remain employees of the Company. Not only do laid-off employees retain employee status, they retain their seniority and remain eligible for recall.... Thus, not only did the IAM negotiate a time certain for payment, it succeeded in retaining recall rights for permanently laid off employees-even after they receive severance payments. The IAM now claims that it wants all the benefits of that deal, but none of the burdens.
Defs.' Opp'n at 3 (emphasis in original). Verso also contends that Plaintiffs are simply unhappy that their demands regarding timing of payment were not met during the effects bargaining process, and now, "the IAM turn[s] to the courts in an effort to set aside those provisions of the CBA to which the IAM no longer wished to be bound (while leaving intact those provisions of the CBA it still found beneficial)." Id. at 5. According to Verso, the Court should dismiss Plaintiffs' motion on the grounds that the state severance pay statute is preempted by federal law; "Plaintiffs have failed to exhaust the remedies available to them under the CBA"; and the state severance pay statute exempts it from severance liability because the CBA controls and expressly provides for severance payments. Id. at 5-6. In addition, Verso seeks dismissal ...