By PAUL PAYNE
THE PRESS DEMOCRAT
A federal appeals court has reinstated a lawsuit brought by retired Sonoma County government employees claiming the Board of Supervisors reneged on a pledge to provide lifetime health benefits.
Monday’s 2-1 opinion from the U.S. 9th Circuit Court of Appeals means the group representing about 1,500 former county workers can try once again to make its case in district court.
“You can’t break your promises just because you don’t have the money,” said Jeff Lewis, an attorney for the Sonoma County Association of Retired Employees, which filed the lawsuit.
Board of Supervisors Chairman David Rabbitt downplayed the significance of the ruling and said the county remained on strong legal ground. Bruce Goldstein, county counsel, said he was encouraged by parts of the ruling, which suggest the county can’t be made to suffer such an immense financial impact without express action of the board.
“Even if the plaintiffs file a second amended complaint, we think a court is unlikely to find a vested right existed,” he said in a statement.
The retirees’ suit claimed the board violated its long-standing agreement to pay for “all or substantially all” health benefits when it cut them to $500 a month in 2008.
In 2010, U.S. District Judge Claudia Wilken dismissed the suit, saying the county never expressly promised to continue the subsidy in perpetuity.
But the California Supreme Court ruled otherwise in a similar case in Orange County last year. It said local government practices can add up to a binding commitment.
Based on that decision, appeals judges agreed the Sonoma County retirees might be able to provide evidence that the benefits were implied. They agreed to let the group submit an amended complaint to the lower court.
However, the judges warned of a “heavy burden” of proof that must include documents such as resolutions and memos from the board. And one justice said no such agreement ever existed.
The dispute stems from efforts to rein in health care costs that supervisors approved unanimously more than four years ago over heated opposition from current and retired workers.
At the time, then-county Administrator Bob Deis said the county faced annual deficits of $15 million because of rising health care premiums that were predicted to total $407 million over the next 30 years.
Under the changes, which went into effect in June 2010, the county’s contribution to retiree health benefits was to decrease 20 percent annually over five years until this year when it reaches a level of $500 a month per retiree, regardless of the number of dependents.
Officials estimate the changes affect about 40 percent of the 2,500 county retirees who are eligible for county medical benefits.
The remainder are unaffected because they are eligible for other coverage, such as Medicare, officials said.
Similar changes were imposed on 650 non-union county employees and unions representing about 3,000 workers. However, those employees received a discretionary cash allowance of $600 a month, which retirees did not get. Retirees argued in the lawsuit that they were owed a similar cash allowance.
Representatives of the retirees association have questioned the county’s savings figure. Also, those on fixed incomes say they are struggling to pay for their health care coverage.