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OREGON SUPREME COURT RULES THAT OREGON LAW GIVES PUBLIC EMPLOYEE RETIREES RIGHT TO HEALTH CARE INSURANCE SUBJECT TO AN AFFIRMATIVE DEFENSE OF IMPOSSIBILITY

On February 4, 2010, the Oregon Supreme Court issued a favorable decision in the cases of  Ronald Doyle, Robert Deuel, Ben Miller and Charles Steinberg v City of Medford and Michael Dyal.  This case involves claims by four retirees of the City of Medford who contend that the City violated a state law, ORS 243.303, engaged in age discrimination and violated due process rights when the City denied plaintiffs the option of continuing their group health insurance upon retirement.

U.S. District Judge Owen Panner originally granted the City summary judgment dismissing the age discrimination and due process claims.  The Ninth Circuit reversed the District Court on the age discrimination claim finding that the District Judge abused his discretion by failing to permit the plaintiffs to conduct discovery.  On the due process claim, the Ninth Circuit certified questions of law to the Oregon Supreme Court on the meaning of a state law, ORS 243.303.  The Ninth Circuit asked the Oregon Supreme Court to advise the Ninth Circuit as to the amount of discretion that ORS 243.303 grants to local public entities to deny retirees the option to continue their group health insurance upon retirement.  The Ninth Circuit concluded that the answer to this question may determine whether the plaintiffs rights to due process were violated when the City denied them the option to continue their health insurance.

On February 4, 2010, the Oregon Supreme Court answered the certified questions ruling that ORS 243.303 creates a mandatory obligation on local governments to make health insurance available to retirees.  The Oregon Supreme Court held that the mandatory obligation to make health insurance available to retirees is limited to making coverage available "in so far as and to the extent possible."  The local government may be excused from the obligation to provide health insurance if the local government can demonstrate that it was not possible under the statutory standard to make the coverage available.  Perhaps most important, the Supreme Court held emphatically that the local government can not meet the "impossibility" standard by simply pointing to the fact that the local government has chosen an insurance provider that does not offer retiree health insurance coverage.

The due process claim now returns to the Ninth Circuit Court of Appeals which will decide whether, based upon the Oregon Supreme Court's decision, ORS 243.303 gives employees of local government a property interest subject to due process protection under the U.S. Constitution.

The plaintiffs age discrimination is pending in the U.S. District Court.  The same plaintiffs have claims under state laws pending in Jackson County Circuit Court.

The Oregon Supreme Court's decision is publicly reported as Doyle, et al v City of Medford and Dyal,347 Or 564 (2010).

 

JACKSON COUNTY JUDGE DENIES MEDFORD'S REQUEST TO DELAY ORDER REQUIRING COMPLIANCE WITH ORS 243.303 ON SAME DAY AS OREGON SUPREME COURT ISSUES FAVORABLE RULING

On February 4, 2010, Jackson County Circuit Court Judge Mark Schiveley issued an important decision favorable to current employees of the City of Medford in the class action case, Bova v City of Medford, Case Number 09-1663-E7.

Judge Schiveley ruled in July 2009 that the City was in violation of ORS 243.303 by failing to provide City employees the option to choose to continue health insurance when they retire.  The Judge concluded the City failed to show that it was not possible under ORS 243.303 to provide the continuation benefit.  In December 2009, Judge Schiveley signed a Limited Judgment which required the City to come into compliance with the Oregon law.  

The City subsequently filed an appeal of Judge Schiveley's rulings and asked the Judge for a "stay" of his Order and Limited Judgment while the case was on appeal.  If granted a "stay" would give the City permission to delay complying with the Oregon law until the appeal was decided.  On February 4, 2010, Judge Schiveley rejected the City's request for a delay.

 Judge Schiveley made important rulings in denying the City's request for a delay.  In particular, Judge Schiveley reviewed the Oregon Supreme Court's decision in Doyle v City of Medford and ruled that the City's appeal was not likely to succeed.  After reviewing the Doyle decision, Judge Schiveley stated he remains persuaded that his interpretation of ORS 243.303 was correct.  Further, Judge Schiveley pointed to Medford's conduct in delay and "unnecessarily compounding and confusing the record" in his court.  He stated he was particularly concerned about evidence that Medford had received advice from two of its attorneys more than eight years ago that the City was in violation of ORS 243.303 and the City apparently decided to "roll the dice" about ORS 243.303.

 Judge Schiveley ultimately denied City's request for a stay finding the current City employees are entitled to their right to elect continued health insurance coverage and requiring them to wait indefinitely until the appeal process ends would be unfair particularly given the "City's deliberate choice to proceed with its plan to eliminate retiree coverage notwithstanding the advice of two of its inside counsel."



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