Court Files Order Granting County’s “Motion for Summary Judgment” Retiree Health Subsidy Lawsuit Dismissed by Judge

Court Files Order Granting County’s “Motion for Summary Judgment” Retiree Health Subsidy Lawsuit Dismissed by Judge

By Mike DeBord

On September 30, 2013, the Federal Judge who conducted a hearing on the County’s “Motion for Summary Judgment” found in favor of the County and entered a Judgment granting the motion and closing the case.  SCREA has 30 days to file a Notice of Appeal of this judgment and we are working with our attorney to preserve that option.

Click Here To Download & Read Summary Judgement:  LINK

The following provides some key dates and actions related to our lawsuit:

  • February 8, 2011- SCREA filed a lawsuit against the County for violations of contract clauses and violations of equal treatment clauses contained in California and U.S. constitutions.
  • April 1, 2011- County filed a “Motion to Dismiss” the lawsuit.
  • November 21, 2011- Supreme Court of California ruled on a question that had been posed in an appeal for another California county lawsuit: “Whether, as a matter of California law, a California county and its employees can form an implied contract that confers vested rights to health benefits on retired county employees.”  The unanimous decision by the court was “Yes”.
  • March 31, 2012- The Federal Judge denied the County’s “Motion to Dismiss” the lawsuit, citing in part the Supreme Court decision.
  • May 24, 2013 – County filed a “Motion for Summary Judgment” of the lawsuit.
  • September 30, 2013- The same Federal Judge granted County’s “Motion for Summary Judgment”.

The retirees of Sacramento County received health and dental subsidies for more than three decades and now those subsidies are gone for nearly all retirees.  In 1980, when the annual subsidies began on a continuous basis for every year thereafter, the cost of health and dental premiums were relatively low.  As annual health premiums increased by double digit percentages during the most recent decade, these pre-tax health subsidies for retirees became far more valuable.  We know by reading more than 1,000 survey responses that most all of those responding to the SCREA survey indicated that they believed that they were entitled to a health insurance subsidy upon their retirement (as is the case for retirees of the State and many other local jurisdictions).  This belief was shared by front line workers up to the very top management positions in the County and as reported through survey responses, the retiree health subsidies played a role in recruitment, longevity in County service, and job choice decisions to either stay with the County or work for another jurisdiction.  As the County reduced the subsidies and then took actions to eliminate these subsidies in total, many retirees felt betrayed by their former employer.  The financial impact of the subsidy loss was hard felt by our retirees.  After many years of trying to work with the County and the Board of Supervisors to continue the retiree subsidies, in 2011, SCREA filed a lawsuit to try and protect the long standing past practice by the County.  The SCREA Board Directors and our attorney Mark Merin dedicated a tremendous amount of time and energy over the last several years working with County retirees to build our case.  The ruling on the “Summary Judgment” prior to a jury trial was a real disappointment to say the least.

This lawsuit process has demonstrated several things to me.  First, what is “legal” vs. what is “right” are two different things, i.e. legality vs. morality.  As prior career employees, we know much about the dedication, commitment and loyalty we provided to the County and the tremendous value we collectively provided to the community.  The pride and job satisfaction we felt as employees will always reside within each of us.  What the County has done by dropping our subsidies after we retired and the way the County continued to provide health and dental subsidies to some groups of retirees while eliminating it for others is simply not right, even if it is determined by the court not to be a violation of the law.

In closing, whether or not we are successful on the appeal process, I want to thank the SCREA Board of Directors for unanimously voting to take the action of filing and supporting this lawsuit on behalf of all retirees, our attorney Mark Merin for his tremendous effort on this case, the retirees for supporting our effort and especially those who responded to our survey, provided documents, contributed to declarations, and helped us build our case.  The SCREA Board of Directors and membership came together to fight the good fight on behalf of all County retirees, and for that I am very proud.

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