Status Report 11/21/12
Happy Thanksgiving Everyone!
Appeals Court Hearing:
The Appeals Court hearing occurred as planed. It lasted about 30 minutes with Dov first stating our position followed by UCŐs lawyer stating their position and finally a brief rebuttal by Dov. The Court was obviously well prepared and understood the issues.
My interpretation of UCŐs position, based on the Orange County Case, is that an implied contract can only exist only if a legislative action or written contract underlies it. That is the same viewpoint they had before Orange County. Our position is that we have shown enough evidence of an implied contract that the Demurrer should be overturned.
I donŐt think anything said in the hearing surprised the Court so we can expect the same ruling as we would have gotten if UC had not requested the hearing. Our best guess is that the Demurrer will be overturned.
Carl Whitaker is continuing to help us with publicity even though we canŐt afford to pay him. His work has resulted in at least 3 stories on the Appeal. They appear at the end of this status report and will be posted in the web site data archive under news articles. If it was up to the reporters we will win our appeal.
Our lawyers expect we will get the appeal ruling before the end of the year. Assuming the court rules in our favor, either UC can try to delay matters longer by asking the Appeals Court to reverse itself or petitioning the California Supreme Court to overturn the appeal. If they donŐt, we will likely be remanded to the lower court to continue the case.
We will have a total of about $2,000 on hand. Very soon there will be a significant change in legal status and we will find ourselves in need of more money. So far, our mode of operation has been to negotiate a fixed cost contract with our lawyers, have our donors approve the contract, collect the funds and sign the contract. This time, we may not be able to continue in that mode due to time constraints.
We are going to start a fund raising drive immediately with no pre-specified contract or cost. By the time the legal situation clarifies we hope to have enough funds to continue. At that time we will work with our lawyers to determine the scope of work needed, approximate timetable, and schedule of needed escrow payments. We will need to have enough money in hand to cover the first escrow payment and be willing to use best efforts to cover subsequent payments as they become due. In the unlikely event we donŐt need the money or canŐt raise enough to continue, we are not adverse to issuing refunds.
You have probably received your medical insurance costs for next year. Mine went up 40% for 2013. That is plenty of encouragement for me to keep fighting. I assume most of you have the same opinion.
Now is the time to support our cause, give us a Christmas present and get a 2012 charitable deduction all with a single donation. Be aware that to get the deduction this year we must have the donation deposited in our account prior to the first of the year so donŐt delay to long.
For those of you who canŐt remember, instructions for donations are as follows:
Make checks out to:
UCLRG Legal Defense Fund
Send Donations to:
UCLRG Legal Defense Fund
C/O Barbara Sokoloski
1144 Xavier Way
Livermore, CA 94550
Remember the basic donation rule; donŐt send us anything you canŐt afford to lose because we canŐt give any guarantees.
Tax Filing Situation:
The IRS has forgiven all of the roughly $5,500 in penalties we incurred for late filing of our 990 forms. Our pointing out to them that they said they didnŐt want our forms until after we received our determination letter was enough to convince them. Unfortunately the State is not so lenient but is a lot less greedy. We paid a little over $100 in late fees.
Below are the 3 news articles Carl has placed for us:
Courts try to apply state Supreme Court precedent in pension suits
By Laura Hautala
For retired computer scientist Joe Requa, getting transferred off the University of California health plan felt like a broken promise. Requa, who worked at the UC-run Lawrence Livermore National Laboratory for 34 years, says he expected to stay on the insurance plan for the rest of his life. But when a private contractor took over the lab in 2007, the UC Regents took its lab retirees out of their general pool of insured workers. Requa's new health plan required higher employee contributions. "They're going sky high as we get older," Requa said.As a lawsuit over the change goes before the 1st District Court of Appeal today, the justices could be the ones to decide whether any such promise was made. The court will consider whether the retired workers sufficiently allege a contract violation by the regents. Joe Requa v. The Regents of the University of California, Al32778 (Cal. App. 1st Dist., Jul. 29, 2011).
The stakes are high for both sides, as public entities try to lower their unfunded liabilities and retirees fight for what they see as deferred payment for their public service.
"The issue then is whether these employees have a right to those benefits," said A. Thomas Sinclair, a sole practitioner who is working on the appeal for Requa and the three other retirees on the case.
Requa is not the only former public employee to ask the courts to decide whether retirement perks like health insurance and pensions are set in stone. Cases in Sonoma and Contra Costa counties are currently in limbo, and the city of Redding's employee union recently won its case asking for restored health care benefits.
The landscape around these cases shifted with a 2011 state Supreme Court decision granting health benefits to retired public employees of Orange County. Those retirees found themselves moved out of the larger pool of insured workers and sued to have the previous coverage restored. Retired Employees Assn. of Orange County v. County of Orange, 52 Cal.4th 1171 (2011).
'When they were handed over and over again these booklets that say when you retire you will participate in the UC medical benefits, that was a promise.' - Ernest J. Galvan
The case found its way to the 9th U.S. Circuit Court of Appeals, where the court decided it needed input from the state Supreme Court on state contract law. The Supreme Court remanded the case to the trial court, finding the retirees had the facts necessary to go forward with the case. Yet attorneys on both sides of the issue claimed the decision as a victory.
At issue is whether the actions of legislative bodies - be they county boards of supervisors or the UC Regents - sometimes constitute contractual promises.
The regents, represented by Joseph M. Quinn, Dorothy S. Liu and Sarah D. Mott of Hanson Bridgett LLP in San Francisco, have argued they neither passed a resolution nor made a promise to provide the UC health care benefits indefinitely.
"We appreciate the long and dedicated service of our employees," said Brooke Converse, a spokeswoman for the UC Regents. But the regents agree with the Superior Court's decision to dismiss the retirees' lawsuit. "We're pleased that the judge acknowledged transfer of retiree medical benefits to the new contractor," Converse said.
But lawyers for the retirees, headed by Dov M. Grunschlag of Carter, Carter, Fries & Grunschlag, plan to argue today that the Regents intended to provide health care for the appellants when they crafted a nearly 60-year-old resolution setting forth employee health care.
To make their point, Sinclair said they'll point to evidence that the Regents looked into the cost of providing retiree health care and then directed the university system's president to look at appropriate insurance for retirees. Attorneys for the retirees also intend to point out that lab employee booklets repeatedly told workers they could stay on the plan after retirement.
Ernest J. Galvan of Rosen Bien Galvan & Grunfeld LLP, who argued the Orange County case in front of the state Supreme Court, said the UC Regents would like to construe the Orange County decision as very narrowly defining how public entities enter into contractual agreements.
But under his interpretation of the decision, Galvan said the lab retirees can adequately prove that the Regents intended to provide the benefits as part of retirement.
Panel May Revive Lab Retirees' Suit Over Benefits
By Cynthia Foster
November 20, 2012
Judge Frank Roesch, Alameda County Superior Court Image: Jason Doiy/The Recorder
SAN FRANCISCO — A First District Court of Appeal panel Tuesday seemed likely to side with a group of East Bay retirees who say a trial court judge erroneously threw out claims that their former employer, Lawrence Livermore National Laboratory, illegally terminated their retirement medical benefits.
Two of the justices said Alameda County Superior Court Judge Frank Roesch had erred in tossing the case at the demurrer stage. And they said the lab's lawyer erred when he said in his appellate briefs that Roesch's factual findings were proper.
Instead, the panel reminded Joseph Quinn of Hanson Bridgett, the standard of review at the demurrer stage does not call for fact-finding, and Quinn was wrong to say so.
Quinn's error "helps highlight the criticism" made by the retirees that Roesch shouldn't have thrown the case out, said Justice Mark Simons.
The four petitioners are all long-time Lawrence Livermore Lab employees who retired before a coalition of mostly private-sector companies led by Bechtel Corp. took over management of the lab in 2007. (The lab was founded as an offshoot of the University of California, and is funded primarily by the U.S. Department of Energy.) They claim that Bechtel violated a 30-plus-year implied contract in 2008 when it canceled the retirees' university-sponsored group health insurance, instead opting to pay them a lump sum of money which they could use to buy their own insurance. The retirees, who could make class claims later in the case on behalf of all lab retirees, allege in their petition for a writ of mandate that the change in policy flies in the face of a promise of medical benefits made in retirement materials distributed to employees. Joe Requa, the lead petitioner in Requa v. Regents of the University of California, A132778, says his insurance premiums have gone up six-fold since he was excluded from the university's group plan.
Dov Grunschlag of Carter, Carter, Fries & Grunschlag, arguing for the retirees, pointed to a 2011 California Supreme Court decision in Retired Employees v. County of Orange, S184059, in which the high court held that a governmental body could enter into an implied contract to provide health benefits to employees. According to Grunschlag, that's exactly what the regents did in this case — booklets circulated to lab employees promised them health insurance as part of a larger retirement package.
But Quinn argued that the booklets didn't amount to a contract, and that the retirees are improperly suing to have access to a specific level and price of insurance when they don't even have a contractual right to insurance at all.
"An entirely implied contract" puts this case beyond the Supreme Court's ruling in Retired Employees, Quinn said, because in that case local governmental ordinances governed employment terms. In Requa, Quinn said, no statute or collective bargaining agreement applies.
Justices Simons, Barbara Jones and Terence Bruiniers have 90 days to issue an opinion.
Justices chastise UC Regents in retiree benefit case
By Laura Hautala
SAN FRANCISCO - A state appellate court panel seemed to side with retirees of Lawrence Livermore National Laboratory during oral arguments Tuesday as it weighed whether their case for government health insurance can proceed.
The retirees claim the University of California Regents wrongfully transferred them off their health plan.
The case tests a state Supreme Court opinion last year in which the court recommended that retirees of the Orange County government be able to pursue a request to have their government health benefits restored.
'We don't have a statute, and we don't have a collective bargaining agreement, so all we have are the booklets.'
- Joseph M. Quinn
During Tuesday's arguments, Joseph M. Quinn, a partner at Hanson Bridgett LLP, argued that a lower court was correct to dismiss the case last year because there wasn't a contract promising health benefits. Without a contract, plaintiffs cannot allege that the University of California Regents violated any promise, he said.
"No document says that," said Quinn, who is joined in representing the regents by Hanson Bridgett attorneys Dorothy S. Liu and Sarah D. Mott.
The regents removed the retirees from the general pool of UC health care recipients in 2007, when a private contractor took over Lawrence Livermore. That contractor now pays for part of the retirees' insurance, but name plaintiff Joe Requa said his own contribution has gone up from about $75 to nearly $600 a month since the change. Joe Requa v. The Regents of the University of California, Al32778 (Cal. App. 1st Dist., Jul. 29, 2011).
Requa and three other retirees filed a request in Alameda County Superior Court in 2010 asking that their government health benefits be reinstated; the plaintiffs argued they were denied a benefit that was promised as deferred payment for their service at the lab.
The regents said they never made such a promise. Last year, Superior Court Judge Frank Roesch agreed with the regents and dismissed the case at the demurrer stage.
But the case presents a chicken-and-egg style conundrum: whether a contract existed might be solely a question of fact - something that cannot be addressed at this stage in the case.
Presiding Justice Barbara J. R. Jones seemed to disagree with the lower court's ruling Tuesday, and appeared peeved at Quinn when he brought up contractual issues. At one point, she reminded Quinn that his team's briefs contained factual errors. "It is not helpful to misstate the standard of review," Jones said.
"I agree," Quinn said.
He returned to the question of whether the regents promised to cover the lab retirees' health care indefinitely.
"We don't have a statute, and we don't have a collective bargaining agreement, so all we have are the booklets," Quinn said, referring to employee benefits booklets the retirees have pointed to as evidence of a promise.
Jones said Roesch made factual findings but shouldn't have.
Dov M. Grunschlag, a partner at Carter, Carter, Fries & Grunschlag, argued for the retirees, saying their allegations should proceed in the lower court, "even though there is no formal contract between the parties."
Associate Justice Mark B. Simons said he thought the regents had admitted the promise was made in the initial court proceedings. "They, again, accept that the authority for benefits came from the regents," Simons said. "That's really all that's required as a matter of pleading."