Doyle v. City of Medford, No. 07-35753 (9th Cir. May 4, 2009); Bove v. City of Medford, No. 08-35091 (9th Cir. May 4, 2009)

| May 3, 2009 | Daily Developments in EEO Law |

A panel of the Ninth Circuit decides the same case — challenging a town’s cancellation of retiree health care for its employees — three different ways in three separate opinions. In the first, the panel certifies for the Oregon Supreme Court the issue of whether rescinding the insurance violated state law. In the second, it orders dismissal of a challenge to the policy by still-employed plaintiffs on ripeness grounds. In the third and unpublished decision, a federal ADEA claim is remanded for further discovery, which the panel holds was prematurely denied by the district court.

Doyle v. City of Medford, No. 07-35753 (9th Cir. May 4, 2009):  By state law in Oregon, towns that provide health insurance to employees must to the extent possible offer it equally to its retirees. Oregon Revised Statutes section 243.303(2) reads, in pertinent part: “The governing body of any local government that contracts for or otherwise makes available health care insurance coverage for officers and employees of the local government shall, insofar as and to the extent possible, make that coverage available for any retired employee of the local government who elects within 60 days after the effective date of retirement to participate in that coverage and, at the option of the retired employee, for the spouse of the retired employee and any unmarried children under 18 years of age.”

The City of Medford turned over coverage to the Teamsters, which it turn wiped out the retiree benefit:

“Before 1990, the City permitted all employees to elect to continue their health insurance coverage upon retirement. In 1990, however, the City negotiated with its police officers’ union for a health insurance program that did not give officers the opportunity to continue coverage after retirement. In 2001, the City placed all of its management-level employees under that same health insurance program, which does not cover retirees. In 2002, the City placed its non-management employees in both its Parks and Recreation Department and Public Works Department in the same program.

“The City contracts with the Oregon Teamsters Employers Trust to provide health insurance to its employees. The Teamsters’ contract with the City states: ‘[P]articipants are not allowed to participate in the Trust’s Retiree Plan or any insured or HMO option available through it.’ This provision means that retirees are excluded from coverage under the Teamsters’ plan. The members of the Teamsters are responsible for voting on the extent of coverage. According to the City, the Teamsters were ‘willing’ to provide health insurance benefits to retired employees, but only ‘if the members of the Teamsters voted for such coverage.’ To date, the members of the Teamsters have not approved an extension of health insurance benefits to retirees.”

A group of retirees sued, challenging that the policy violated state law, as well as the ADEA (see below) and due process.  The district court granted summary judgment on the federal claims.  The plaintiffs took an appeal to the Ninth Circuit and at the same time refiled their state-law claims in state court (still pending as of the day these decisions came down).

The panel (Graber, Fisher Smith) orders the certification of a state-law question to Oregon’s high court, to determine whether section 243.303(2) conferred a property right on retirees to continued health insurance: “What amount of discretion does Oregon Revised Statutes section 243.303 confer on local governments to determine whether or not to provide health insurance coverage to their employees after retirement?”  The panel notes that the parallel litigation of the case in state court makes certification especially attractive:

“If we were not to abstain and instead were to interpret the statute based on our best understanding of Oregon law, the existence of parallel state and federal proceedings that address the same legal question presents the risk of inconsistent judgments as to the proper interpretation of section 243.303. If the federal and state courts adopted different readings of the statute, local governments and their employees would be uncertain about what the law requires of them with regard to retiree health insurance coverage. Such uncertainty is best resolved by a definitive decision by the Oregon Supreme Court as to the proper meaning of section 243.303.”

Bove v. City of Medford, No. 08-35091 (9th Cir. May 4, 2009):  The second case was brought by employees not yet retired from service.  The panel holds, as to them, that their challenge is not yet ripe, and that the court accordingly lacks jurisdiction, substantially relying on the analysis in a similar case, Auerbach v. Board of Education, 136 F.3d 104, 108-09 (2d Cir. 1998). Although originally unpublished two months earlier, the court published the order today (signed by Judge Graber).  The panel states:

“Plaintiffs’ alleged injury-denial of health insurance coverage-has not yet occurred. It is contingent upon two events: (1) each Plaintiff’s retirement from City service; and (2) the City’s official denial of benefits to him or her. It is possible that neither of the two events will occur. Plaintiffs could change jobs, be terminated, or die (though we hope not) before retiring. Or, by the time Plaintiffs retire, the City may have abandoned its current policy in favor of one that provides insurance coverage to retired employees, mooting the substantive questions at issue.”

That the continuation of the policy might deter or delay the employees from retiring is held too contingent to constitute an actual injury for Article III purposes.

Doyle v. City of Medford, No. 07-35753 (9th Cir. May 4, 2009) (unpub):  The same panel per curiam remands the ADEA case, finding that the district court abused its discretion when it denied the plaintiffs’ Fed. R. Civ. P. 56(f) motion for further discovery before it granted summary judgment.  The order summarizes:

“Plaintiffs’ lawyer submitted an affidavit listing six topic areas in which discovery was necessary in order to defend properly against the summary judgment motion. That affidavit met all three of the Family Home [& Fin. Ctr., Inc. v. Fed. Home Loan Mortgage Corp., 525 F.3d 822, 827 (9th Cir. 2008)] criteria. First, it set forth in sufficient detail the facts that Plaintiffs hoped to elicit from further discovery. Second, it is likely that the requested information exists, as Defendants were able to produce several documents relating to the decision-making process in support of their own summary judgment motion. Third, the information sought was essential to Plaintiffs’ opposition to the summary judgment motion on the ADEA claim. Therefore, the district court abused its discretion in denying Plaintiffs’ Rule 56(f) motion.”



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