After initial losses in the courts earlier this year, a group of University of California retirees at the Lawrence Livermore National Laboratory submitted an appeal to the California First District Court of Appeal on Feb. 27, seeking to prove that health coverage benefits they were promised were unfairly altered.
The retirees claim that their monthly premiums and co-payments on health insurance rose in September 2008 after Lawrence Livermore National Security – a government consortium of private companies and the UC – took over management of the lab from the U.S. Department of Energy.
According to the appeal, plaintiffs Joe Requa, Wendell Moen, Jay Davis and Donna Ventura all worked for decades at Livermore Lab, retiring between 1999 and 2006, before the consortium began operating the lab in 2007. The UC continued to provide them with the same pensions and health care provided to other UC retirees under the UC Retirement Plan until Jan. 1, 2008, the appeal states. At that time, the UC removed the retirees from the pool of active and retired UC employees and the consortium switched their health care provider to an outside source, according to the appeal.
The plaintiffs’ largest concern was that their benefits would become increasingly expensive as they had been separated from the larger population of UC retirees and placed in a pool composed of older and generally less healthy people, according to the appeal.
The Alameda County Superior Court ruled that the UC Board of Regents’ demurrer — essentially a request to throw out a case — would be sustained with leave to amend in December 2010 and ruled in favor of the regents in May 2011. Judge Frank Roesch reasoned that the documents presented by the the retirees’ attorneys contained “conditional language” and did not guarantee the retirees lifetime participation in UC employees’ medical plan.
“We expect that the appellate court will affirm the Superior Court’s ruling that the University’s transfer of responsibility for retiree medical benefits to the new contractor at the Lawrence Livermore National Laboratory was legal and appropriate,” said Charles Robinson, UC vice president and general counsel for legal affairs, in a statement last May.
The retirees filed a writ of mandate – the first step in the appeals process that can take several months, according to Carl Whitaker, a publicist hired by the retirees – in late summer, resulting in $75,000 in legal fees on top of a $150,000 payment already spent on the case.
For their appeal, Whitaker said in an email that retirees are relying on precedent set by a case in November 2011, in which the justices of the California Supreme Court unanimously ruled in favor of Orange County retirees in a similar situation. The high-profile November decision found that state agencies can be bound by an implied contract – meaning that the regents may be obligated to maintain the post-employment benefits promised to the appellants upon their hire.
“(Judge Roesch) was saying you need to show clear, unambiguous language,” said Bill Payne, a partner in one of the law firms representing the plaintiffs. “But the California Supreme Court said that circumstances can imply lifetime benefits. That case, which came out after ours, increases our chances to prevail.”