Retirement Health Benefits Class Action Certified
Retirement Health Benefits Class Action Certified; Summary Judgment Decision Pending
On September 2, 2016, North Carolina Superior Court Judge Edwin Wilson certified a case filed by Gray Layton Kersh as a class action. Gray Layton Kersh attorneys Michael Carpenter and Bill Moore argued in favor of class certification along with Gary Jackson of the Rabon Law Firm and Sam McGee of Tin, Fulton & Owen. The State of North Carolina, represented by the Attorney General’s office, opposed class certification.
There are approximately 222,000 eligible North Carolina State retirees whose retirement health benefits were reduced in 2009 and 2011 that are part of the class, including lead Plaintiff former North Carolina Chief Justice I. Beverly Lake. Specifically, the class includes:
1. All members of the N.C. Teachers’ and State Employees’ Retirement System (“TSERS”) who retired before January 1, 1988;
2. TSERS members who retired on or after January 1, 1988, were hired before October 1, 2006 and have 5 or more years of contributory service with the State of North Carolina; and,
3. Certain surviving spouses of former State employees or retirees provided that the death of the employee or retiree occurred prior to October 1, 1986.
Postcards notifying class members of the class action were mailed on Friday, September 30, 2016. For more information about the specifics of the class action, you can visit the dedicated site lakeclasscase.com.
Michael Carpenter of Gray Layton Kersh and Gary Jackson of the Rabon Law Firm have been appointed as class counsel and class administrators for the 222,000 class members.
On November 14th, Judge Wilson heard arguments for summary judgment. Gray Layton Kersh attorneys asked in briefs and oral arguments that Judge Wilson find that the promise to provide the State Health Plan to retirees created a contract that cannot be reduced and that the State did reduce the value of State Health Plan when it began charging a premium for the 80/20 Standard Plan. Judge Wilson indicated that a decision would likely be made in the first two weeks of December.
Case background
This case was initially filed in April of 2012, by Gray Layton Kersh attorneys on behalf of North Carolina State to restore their contractually and constitutionally guaranteed retirement health benefits. It has been designated by the Chief Justice of the Supreme Court as an “exceptional” case and Judge Wilson was assigned to preside over it. The lawsuit is captioned as I. Beverly Lake, et al. v. State Health Plan for Teachers and State Employees, et al. (Gaston: 12-CVS-1547). The named Plaintiffs are now retired State employees who were formerly employed in a wide range of positions within the North Carolina state government, including members of the judiciary (including a former Chief Justice of the North Carolina Supreme Court and a former North Carolina Court of Appeals Judge), presidents and superintendents of community colleges and local school systems, teachers, law enforcement personnel and administrators.
The suit specifically seeks the restoration of a non-contributory 80/20 retirement health insurance benefit, as well as a 90/10 retirement health insurance benefit option. The suit contends that the State is contractually obligated to provide these benefits, and constitutionally prohibited from reneging on the prior contract with the now retired employees. Both of these benefits were in place prior to the enactment of legislation in 2011 and 2009.
On June 29, 2012, the State of North Carolina filed a motion to dismiss Plaintiff’s claims. That motion was fully briefed by both sides and heard in front of Judge Wilson. Judge Wilson denied the State’s motion, and the State appealed the decision to the North Carolina Court of Appeals. The Court of Appeals upheld the ruling for the Plaintiffs on June 17, 2014. That decision can be found here. On December 18, 2014, the North Carolina Supreme Court denied Defendants’ Petitions for Discretionary Review.
In addition, extensive discovery has been conducted and exchanged by the parties, resulting in over one million pages of documents and nearly 40 depositions, including all living named Plaintiffs and State officials such as North Carolina Treasurer Janet Cowell, Executive Director of the State Health Plan Mona Moon, and several actuaries to the State Health Plan.
Gray Layton Kersh attorneys have requested that the Court grant partial summary judgment in favor of the Plaintiffs that the Retirement Health Benefit is a contract and the State of North Carolina breached that contract with its retirees by reducing the benefit. The Defendants have likewise requested that summary judgment be requested in their favor, and that Plaintiffs claims be dismissed. Should summary judgment be granted for the Plaintiffs, barring an appeal by the Defendants, the Court would then determine what damages the class is owed. If you want more details about the case, you can visit the class action website at lakeclasscase.com