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Retired Emples. Ass'n of Orange County v. County of Orange

United States Court of Appeals, Ninth Circuit

February 13, 2014

RETIRED EMPLOYEES ASSOCIATION OF ORANGE COUNTY, INC., Plaintiff-Appellant,
v.
COUNTY OF ORANGE, Defendant-Appellee

Argued and Submitted November 4, 2013, Pasadena, California

Appeal from the United States District Court for the Central District of California. D.C. No. 8:07-cv-01301-AG-MLG. Andrew J. Guilford, District Judge, Presiding.

Michael P. Brown (argued), Law Office of Michael P. Brown, Seattle, Washington; Ernest Galvan, Rosen Bien Galvan & Grunfeld LLP, San Francisco, California, for Plaintiff-Appellant.

Arthur A. Hartinger (argued) and Jennifer L. Nock, Meyers, Nave, Riback, Silver & Wilson, Oakland, California, for Defendant-Appellee.

Before: M. Margaret McKeown, Ronald M. Gould, and Jay S. Bybee, Circuit Judges.

OPINION

Page 1138

McKEOWN, Circuit Judge:

For the second time, we consider what health benefits retired Orange County employees have under contract with the County of Orange (" County" ). The Retired Employees Association of Orange County (" Retired Employees" or " REAOC" ), which represents 4,600 retired employees and their spouses, sued the County, alleging that the Retired Employees have an implied vested right to the pooling of their health care premiums with those of current employees (" pooled premium" ). Like the district court, we are sympathetic to the retirees' plight. As the California Court of Appeal reflected in an earlier case involving medical benefits for retirees, " [t]he spiraling cost of health care in America is simply unconscionable. The present high cost of medical insurance has unfortunately become a fact of life which in most instances results in disparate rates and medical coverage for those who can least afford it, including retirees." Ventura Cnty. Retired Emps. Ass'n v. Cnty. of Ventura, 228 Cal.App.3d 1594, 1598, 279 Cal.Rptr. 676 (1991). Nonetheless, we have no choice but to affirm the district court's grant of summary judgment in favor of the County because REAOC failed to raise a genuine issue of material fact regarding its alleged implied contract right to the pooled premium, leaving its implied contract claim without factual or legal support.

FACTUAL AND PROCEDURAL BACKGROUND

I. History of the County's Pooled Benefits

This suit arises from the County's decision to stop pooling retired and active employee health insurance premiums. The County first began providing group medical insurance for its retired employees in 1966. The County subsequently decided to cover retiree health insurance premium costs through a monthly grant.

Over a decade later, the County's Board of Retirement (" Retirement Board" ) voted, due to budgetary concerns, to stop providing monthly grants for prospective retirees but to continue the grants for employees retiring before June 28, 1979. Orange Cnty. Emps. Ass'n v. Cnty. of Orange, 234 Cal.App.3d 833, 839, 285 Cal.Rptr. 799 (1991).

Page 1139

This decision provoked the first round of benefits litigation, which took six years to wind its way through the California courts. Id. at 837, 845. The Orange County Employees Association (" OCEA" ) and other unions asked the County Board of Supervisors (" Board" ) to override the Retirement Board's decision on statutory grounds, but the Board refused.[1]Orange Cnty. Emps. Ass'n, 234 Cal.App.3d at 837-41. The California Court of Appeal ruled that " the statutory scheme permits local agencies to consider the differences between retired and active employees in providing health benefits." Id. at 843. The court of appeal also upheld the County's ...


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