This page will be used to keep SCARE members and other retirees informed of various legal or related actions taken by the SCARE Board related to the threat to retiree health insurance benefits. It includes correspondence and other information relevant to this issue. There is some overlap with information on the Health Insurance link. Material is listed in reverse chronological order with the most recent shown first. The older items are left on the page even though they may no longer apply, just for information on what has happened. If it is underlined, it is a link. Click on it to get to documents.
Legal Update - April 18, 2017 Judge Wilken approved our settlement agreement with Sonoma County on April 18, 2017, so officially, our lawsuit is over.
Legal Update - December 28, 2016 On December 6, 2016, the Sonoma County Board of Supervisors approved the Settlement Agreement. After that, the U.S. District Court preliminarily approved the settlement. The court also approved the filing of an amended complaint changing our lawsuit to a class action. Last week, the court-appointed settlement administrator sent out a court-approved Notice to all members of the Class. (The Class is defined in the Settlement Agreement and the Notice, but generally it consists of those who retired prior to June 30, 2016 and who were receiving County contributions for health insurance or who had waived that contribution subject to an agreement with the County at that time that they had a right to re-start it.) No action on your part is needed if you are in the Class and want to be covered by the settlement agreement. If you opt out, there is no guarantee that the County will provide anything to you, now or in the future. Please read the Notice carefully.
November 3,2016 vote to accept or reject the proposed Settlement Agreement with the County. It was approved! - We know there are many SCARE members who could not attend today's meeting for a variety of reasons with many of you living a long distance away. We thought you would like to hear the results of the vote as soon as possible.
Over 300 members attended our meeting at the Finley Center. There was a presentation on the settlement agreement; why the SCARE Board is recommending it; legal background presented by our attorney, Jeff Lewis, and information on future steps. Speaking for the Board, we were very happy to see so many members turn out and vote on the agreement which is so important in guaranteeing County contributions for health insurance to retirees in the future. The vote was overwhelmingly to accept the tentative settlement agreement.
The next step is for the agreement to go to the Board of Supervisors for their approval which we expect to happen at their December 6th Board Meeting. We suggest that you attend if you can.
SCARE and Sonoma County have reached agreement on terms for settling our lawsuit regarding retiree health benefits. This letter to members summarizes the details of the settlement agreement and sets the date and time for the Special Membership Meeting so that SCARE members can vote on it. The meeting will be on November 3rd at 1 p.m. The letter provides a lot of information on the settlement and why we agreed to it as well as information on the next steps. The actual agreement is much longer. If you want to review all the details you can click here for the full settlement agreement. This agreement has been the result of many legal battles and much negotiation. It is not all we hoped for but it does contain promises of benefits for the next 25 years. There will be a chance to ask questions of the SCARE Board and our attorney at the meeting on the 3rd. Only SCARE members can vote on this agreement.
There have been a lot of questions regarding the Health Reimbursement Accounts (HRA) as most retirees are not familiar with these. The money that goes into HRAs can be used for most medical expenses including co-pays and deductibles, including vision and dental care. The County will contribute to retiree HRAs over a 3 year period starting in 2017. Retirees may use the money immediately or can hold onto it for years if they think they will need it more later.
Mediation - March 16 and 17, 2016
The SCARE Legal Committee (Carol, Phyris, Greg and Dick) along with our attorney met with County representatives and their attorneys on March 16th & 17th for a mediation on our lawsuit. This mediation was held in order to try to settle our lawsuit with the County to avoid an expensive trial and was done at the recommendation of Judge Wilken.
After 2 very long, grueling days we did arrive at a tentative settlement agreement. It is not nearly what we hoped for but does give retirees some guarantees related to their health insurance. This is particularly important now as the Sonoma County Board of Supervisors is looking at ways to cut retiree benefits even further. The tentative agreement has been approved by the SCARE Board but it has to be formalized with a lot of additional legalize before it can be released to and voted on by SCARE members. Unfortunately we are sworn to keep the details confidential until the final settlement agreement is ready to share. We are sorry for the delay as we know members are wondering what the outcome was.
Once the settlement agreement is finalized, we will put it on this website and it will be sent to all SCARE members for their vote at a specially called meeting. We expect this to happen in May or June.
October 29,2015 - Judge Wilken presided over a hearing on Motions for Summary Judgement made by SCARE and Sonoma County. She did not rule on the motions but referred us to mediation to see if we could settle the case. If not, the next step would be a bench trial before Judge Wilken. The mediation will take place in March 2016. The delay is caused by difficulty in scheduling all the people who need to be involved in the mediation.
August 2015 - Our attorneys filed a Motion for Partial Summary Judgement on August 6, 2015. It is quite interesting and is a partial representation of the information our attorneys have gathered to support our case. The County has 30 days in which to rebut it and then our attorneys have a chance to respond before the case going to Judge Wilken. She can decide on the facts for either party or she can remand the case for trial.
April 22,2014 - Judge Wilken ruled on our Motion for Reconsideration. It was a very positive ruling for us as it once again inclued the pre-1990 employees as long as they worked under a 1989 or later MOU. The Judge will also allow us to argue the tie agreement. The conclusion read: "Pursuant to the amended order,SCARE may proceed with its claims on behalf of pre-1990 retirees who worked under the post-1989 MOUs. The Court also clarifies that it has not dismissed SCARE’s tie agreement theory except insofar as it relies only on an alleged 1985 agreement" This is a great win for SCARE.
January 2014 - We finally received the decision from Judge Wilken on the County's motion to dismiss our case. The Judge granted in part and denied in part the County’s request to dismiss our case. While we cleared a number of legal hurdles the County threw at us and we can now proceed to the discovery phase of the litigation, the decision limits those retirees included in the lawsuit to retirees hired after 1990 who were also covered by a union contract. Although we will move forward with the suit, it means fewer retirees may be covered if we get a final decision in our favor. We have a right to appeal on behalf of those retirees who were excluded, but may not do so until the final decision is made on those who remain covered by the lawsuit.
We do not agree with the Judge’s exclusion of the pre-1990 hires and non-union retirees. We have met with our legal counsel to discuss the decision, our options and the time frames for all of the actions needed before a trial on those who currently remain covered. We remain optimistic on our ability to ultimately prevail, not only on behalf of post-1990 hires and union retirees, but also on behalf of pre-1990 hires and non-union retirees, and are committed to continue the fight to protect retirees’ benefits. We have not given up our claim that a promise was made and needs to be honored by the County and we intend to ensure that the County cannot make additional cuts at a later date. Judge Wilken's Decision on the County's motion to dismiss is available if you would like to read it.
November 2013 - We are still waiting for Judge Wilken to make a decision on the County's motion to dismiss.
July 2013 - Mediation: We met twice in all day sessions with County representatives. Unfortunately, the mediation was unsuccessful and ended in impasse so we will continue to work with our attorneys to move the litigation forward as quickly as possible.
There was also a hearing on July 11th before Judge Wilken on the County’s motion to dismiss the lawsuit. The judge has not ruled on the motion to dismiss but she did set timelines for future actions to take place. Continued discovery and depositions should take place by next May when the case will go back to the judge.
May 2013 - Once our case was returned to the District Court, the County filed another motion to dismiss on the case. While we were waiting for a hearing on that motion, the County contacted our attorneys about entering into mediation to see if there was a way to settle the case. Mediation is a non-binding, facilitated process by which both sides are able to explore the possibility of settling the case outside of the courtroom. While it may not lead to a solution, we felt it was worth a try given the extended time it will likely take to resolve the lawsuit.
February 26, 2013 - Great News! We just got the decision on our appeal before the U.S. Court of Appeals for the Ninth Circuit. We are very pleased to report that the Court ruled in our favor. What this means is that our case will be remanded (returned) to the District Court where we can resume presenting our case. As you may recall, when we were last in the District Court, we did not get to the stage in the case in which we could gather and present any evidence beyond the content of our complaint and attached Board resolutions and MOUs. When we return to the District Court, we will hopefully progress to this stage and be able to compile the relevant evidence, including the County's written statements, and the testimony of numerous individuals to show what retirees were consistently told, both verbally and in writing, about the health benefits that they would have during retirement.
The Ninth Circuit Court Decision is available if you would like to read it.
October 1, 2012 - The U.S. Court of Appeals for the Ninth Circuit heard oral arguments on our case on June 13, 2012. We thought our attorney represented us very well but so far, there has been no decision from the judges. Our attorney asked that our case be remanded (returned) to the District Court since the California Supreme Court decision on the REAOC case allows for implied contracts. As you may recall, the District Court ruled against us because we did not have Board resolutions that specifically stated retirees would have medical benefits for their "lifetime" or "in perpetuity". The Supreme Court decision that allows for implied contracts (meaning promises can be made in a variety of ways rather than just in Board resolutions) appears to be in our favor.
At the hearing, the judges were very clearly considering the impact of the Supreme Court decision. We await the court's decision. Note: Federal judges have no limits on how long they can take to make a decision so we are unable to tell you that we will have a decision from the Appellate Court by a certain date.
April 8, 2012 - We were waiting for a decision from the California Supreme Court on REAOC (Retired Employees Association of Orange County) vs. Orange County since it related to our case. On November 21, 2011, the California Supreme Court unanimously held in the Orange County Retirees’ case that counties can enter into contracts that contain implied terms. This decision will be helpful in SCARE’s lawsuit challenging Sonoma County’s cuts in retirees’ medical benefits. As you know, our case was dismissed by the U.S. District Court and is currently on appeal before the U.S. Court of Appeals for the Ninth Circuit. The hearing is scheduled for June 13, 2012. One of the basis for the district court’s dismissal of our case was its opinion that counties cannot enter into contracts that contain implied terms. Our attorneys will, of course, bring the new decision to the attention of the U.S. Court of Appeal. The decision in the Orange County case does not automatically mean that our appeal will be successful. There are additional legal issues that the Court of Appeal will have to decide. However, the Orange County decision will be a great help to us. To read the actual decision, click on California Supreme Court decision.
April 29, 2011 - Our attorneys had requested a stay on providing the Appellate Court with a brief on our case until the California Supreme Court made a decision on the Orange County case. However the County opposed the delay so our attorneys filed our opening brief today . It will still be a long time before our case is heard, probably not until 2012.
December 29, 2010 - An Amicus Brief supporting Orange County retirees prepared by our attorneys was filed with the California Supreme Court. CRCEA and Contra Costa also supported this amicus.
On December 21, 2010, our attorneys also filed a Notice of Appeal with the Ninth Circuit Court of Appeals. This allows us to appeal Judge Wilken's decision to dismiss our case. Now we wait to see what the Supreme Court decides related to implied contracts with public agencies as that may have some affect on our appeal.
December 1, 2010 Letter to Members: - We are sorry to report that Judge Wilken dismissed our amended complaint (lawsuit). This is not happy holiday news but we wanted to give you information about this and talk about the next steps SCARE will be taking.
The Dismissal Orders:
The First Dismissal Order: Judge Wilken’s first dismissal order held, in part, that vested rights to lifetime retiree medical benefits could not be formed through an implied contract in the public employment context. In other words, a County’s promises and actions for decades could not create an obligation to pay retiree medical benefits for life. The promise had to be made by formal action of the Board of Supervisors.
The Second Dismissal Order: We filed an amended complaint on July 6, 2010. On November 23, 2010, Judge Wilken issued an order dismissing the amended complaint. This order held that the allegations in the First Amended Complaint and the 68 resolutions and memoranda of understanding (“ MOUs”) attached to the complaint were not sufficient to create a binding contract. Judge Wilken reasoned that because no resolution or ordinance explicitly stated that retiree medical benefits were vested for life or promised in perpetuity, a binding contract was not formed between Sonoma County and its retirees. We intend to appeal both of those dismissal orders to the Ninth Circuit Court of Appeals, the federal appellate court that reviews orders such as the dismissal orders issued by Judge Wilken here. We believe that there are good grounds to appeal both of the dismissal orders, particularly in light of the pending Orange County case described below. Our lawyers disagree with both of the Judge’s decisions.
The Retired Employees Association of Orange County Appeal:
The Orange County retiree health care case is currently being litigated in the Ninth Circuit Court of Appeals (the federal appeals court) and the California Supreme Court (the State of California’s highest court). The Orange County case, like SCARE’s case, was filed in federal court.
In that case, the district court ruled in favor of Orange County. The retiree association appealed the district court’s order to the Ninth Circuit. Because California state law, rather than federal law, governs how a contract is formed in California, the Ninth Circuit asked the California Supreme Court for guidance on the following issue:
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 California Supreme Court agreed to answer that question for the Ninth Circuit. We don’t know how broad or narrow the California Supreme Court’s ruling will be. However, if the California Supreme Court’s decision is decided in favor of the retirees, that could help SCARE’s case on appeal. As such, our attorneys are working with a number of retiree groups around the state to draft amicus briefs to support the retirees’ claim to benefits. An amicus brief, also called a “friend of the court” brief, is a brief from someone who is not a party to the litigation, but who believes that the court’s decision may affect its interest. Given the importance of the Supreme Court case, our Board has approved funding of the amicus brief and will be talking to other county retiree groups and to the California Retired County Employees Association (representing 20 counties) to get their support and to share the cost. Even if the California Supreme Court decides that question in the negative, that would not necessarily be fatal to our case because we might still be able to argue that Judge Wilken’s second dismissal order was wrong.
The Next Steps:
We have 30 days to file a notice of appeal. A notice of appeal simply provides notice to the Ninth Circuit that we will be appealing Judge Wilken’s two dismissal orders. Any filing of briefs and oral argument on the merits of the appeal will not take place for several months, at the earliest, even if we ask for an expedited review of the case. By filing a notice of appeal before that deadline, we fully preserve our rights while the Orange County case works its way through the California Supreme Court and the Ninth Circuit Court of Appeals. If the Orange County case comes out favorably, that may help our appeal before the Ninth Circuit. On the other hand, if we don’t file a notice of appeal within the 30 day period, our case is essentially over. The SCARE Board took a straw vote on this at Tuesday's General Membership Meeting and had unanimous support from our members for filing an appeal. The Board then officially approved the filing of an appeal.
While we know that many of you need this issue to be resolved now; as we have noted before, the legal system moves very slowly. Our attorneys still think we have a good case which would be strengthened by a Supreme Court decision in favor of the Orange County retirees. The issue of implied contracts is incredibly important since retirees in so many counties have received various health benefits without Board language that says it is a lifetime benefit. While there is no guarantee of winning this case, your Board believes that we must continue this fight in order to protect our benefits. Otherwise the erosion of our benefits is likely to continue.
October 22, 2010 - Our attorneys filed our amended complaint in July and the County again filed a motion to dismiss. The case went to the judge who will decide, based on the merits of the written arguments made by attorneys for both sides, whether to hear the case or to dismiss it. The case mangagement conference scheduled for September was postponed to Oct. 26, and that one was just cancelled pending a decision by the judge. Nothing further can really be done until the judge makes her decision on whether to accept or dismiss the case so everything is on hold. There is no deadline for how quickly federal judges have to make a ruling so we don't know when we will hear something. Sorry, but the legal system moves very slowly.
Meanwhile, the Orange County case (in which they are challenging the County action that depooled retirees from actives and drastically increased their health care costs) went to the federal appeal court which referred it to the California Supreme Court. The Supreme Court has agreed to hear the case. While the Orange County case is a bit drfferent than ours, it is similar so we are very interested in the Supreme Court ruling on that case. Again, we have no idea when that ruling will be made.
July 6, 2010 - Our attorneys filed our amended complaint, again in federal court, providing the judge with the additional information she had requested. The County's attorneys will undoubtedly again file a motion to dismiss. The judge will probably make a decision on whether to hear the case by the next case management conference which is scheduled for the first part of September.
May 1, 2010 - As you know, SCARE filed a complaint (lawsuit) against the County last September. The County attorney's then filed a response asking the court to dismiss our case. At our case management conference on April 6, 2010, the Court gave us 90 days to amend our complaint to allege additional facts and the opportunity to conduct further discovery of documents from the Board of Supervisors. Our attorneys will review the documents we have already received from the County and will continue to gather additional documents as needed. After we amend our complaint, the Court will decide whether our case can go forward and what the scope of the case will be. Our attorneys remain positive about our case. These are just the steps you have to go through with litigation. While we all wish for a speedy resolution, litigation can be a slow process. Thank you for your patience and we will keep you posted.
The SCARE lawsuit (this link takes awhile to load) against Sonoma County was filed on September 22, 2009 in federal court in San Francisco. The County then hired the law firm of Hanson Bridgett to defend them. That law firm filed a motion to dismiss, which is a typical first response. Our attorneys have prepared a response to that motion and both were filed with the court in February, 2010. It may take a month or two for the judge to review and respond. This is a slow process and will take some time to resolve.
We had a press conference regarding filing our lawsuit at our General Membership Meeting on September 22, 2009 and had several representatives from the press attend. Here are the links to the coverage for The Press Democrat article
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The Channel 5 clip and The Sonoma West Times and News.
Recap and Update on Legal Actions and Negotiations with the County
On February 8, 2009, SCARE’s attorney filed a government code claim with the County (see details of the claim in prior entry on this web page). We were required to file this claim with the County before we could file suit in court. The County did not respond to the claim and effectively denied it as of April 10, 2009. However, the Sonoma County Counsel asked if we would enter a 30 day mediation process to try to resolve our differences prior to filing our lawsuit. SCARE agreed to do this because we thought the County was serious about negotiating with us.The mediation period was from April 10 to May 8, 2009 and included all the employee organizations. The mediation was confidential so we cannot share the content of our discussions. Needless to say, we did not reach an agreement during mediation.
On the last day of mediation, the County extended a final proposal to SCARE. While we found it totally inadequate, we were still hopeful that a resolution was possible. Therefore, we sent the County a counterproposal on May 28, 2009, and requested the following: money to make retirees whole at 85% of lowest cost plan for 2009-10; the formation of joint committees that would look at potential cost containment strategies and at a trust fund and other long term solutions for retiree health benefits; and, if a trust fund was the chosen option, seed money to fund such a trust. We gave the County until June 18, 2009, to respond. The County let our offer expire without responding. Our attorney was told that it was not likely that we would receive a response in the near future.
SCARE has tried its best to work out a reasonable solution with the County regarding retiree health benefits. At this time it appears that our only option is to file our lawsuit and we have instructed our attorneys to do so as soon as practicable.
As we have said before, a lawsuit can take a long time to resolve. However there may be opportunities to settle it at various points along the way. We are hopeful that if the County realizes that retirees are serious about a lawsuit, they may decide to negotiate with us. In the meantime, we are proceeding with our lawsuit.
Your SCARE Board
President Carol Bauer's Guest Editorial sent to the Press Democrat. PD showed it online but did not print.
President Carol Bauer's update on legal actions, taken from the upcoming Newsletter. Just to let our members know, as of May 20, 2009, we are continuing to negotiate with the County and hope to at least have a short term agreement in the near future. Come to our General Membership Meeting on May 26th at 1 p.m. if you can.
IMPORTANT NOTICE TO MEMBERS Special general membership meeting scheduled on May 5th at 1 pm at Santa Rosa Vets Building. SCARE mediation with Sonoma County started April 8th and will end May 8, 2009. SCARE Board members and our attorney are meeting with the County and the unions to try to resolve the issues around the cuts to health benefits for retirees and active employees. We will update members as much as possible at the May 5th special meeting although we may still be in mediation which means we are limited in what we can share. Click link for details.
SCARE claim against Sonoma County was filed on Feb. 23, 2009. You can review it and the exhibit package.
Information packet for the Board of Supervisors FYI - The SCARE Board developed an information folder for the Board of Supervisors which outlined the many reasons why we think the County should not implement their proposal to cut retiree health benefits to $500 and give County employees a $600/month cash allowance that they can use to pay their health insurance. Individual SCARE Board Members met with individual BOS members in January, 2009, to review this information and ask them to rescind or postpone the planned cuts to retiree health. The pdf shown here (click on link at beginning of section) does not include all the backup documents but it does include most of the information that was presented to the BOS. The Board members listened attentively and reviewed the information but they have not made any decision to delay the implementation of the flat $500 rate. We have been emphasizing the fact that the County will lose close to $20 million dollars next year if they implement this change. Since the County has asked for cost saving ideas, both SCARE and the unions have suggested delaying the implementation of the cuts as a way to eliminated most of the County deficit. The Sonoma County Coalition of Labor Organzations which includes SCARE has formally asked the Board of Supervisors to postpone implementation of the $500/$600 arrangement and allow us to use the interest based bargaining process to try to resolve the health care issues. As of February 23, we are still waiting for an answer.
IMPORTANT: Letter from SCARE attorney to BOS sent on December 20, 2007. This letter outlines the SCARE legal position on our vested right to health insurance benefits and our tie to SCAMC. It is long but well worth reading.