Benefits Cap Challenge in Sonoma County Pared

(CN) - Sonoma County may have promised lifetime health care to retired employees, but only to those in unions who were hired after 1990, a federal judge ruled.

The Sonoma County Association of Retired Employees (SCARE), a group of about 1,400 retirees, brought the lawsuit after the county decided in 2008 to cap health care benefits for retirees at $500 per month survived.

Rejecting claims that the cap violates decades of promises by the county to provide health care to its employees and their dependents for life, U.S. District Judge Claudia Wilken found that the county's written and oral promises over the years did not amount to an implied contract.

Though Wilken refused to let retirees amend their claims for the second time, the California Supreme Court gave the action new life when it concluded in a similar case that such a promise could be "implied under certain circumstances from a county ordinance or resolution."

In its second amended complaint, the group included some 68 resolutions, ordinances and memorandums of understanding that it claimed proved the county had clearly intended to "bind itself to contracts with the retirees to provide post-retirement health care benefits."

All but 26 of these had been part of the previous complaint, however, and Sonoma County noted that the 9th Circuit deemed each of those insufficient.

Wilken found Friday that the retirees had provided enough new evidence to move forward with contract claims, but only insofar as they apply to union employees who were hired after 1990.

She noted in the ruling that all of the new evidence attached to the group's second amended complaint is related to unionized, post-1990 hires, and that "SCARE's complaint does not plausibly allege that the county impliedly promised to provide health care benefits in perpetuity to retirees who were hired before 1990."

"Although SCARE contends that the other resolutions and ordinances attached to its complaint show that the county made implied promises to provide benefits to retirees hired before 1990, SCARE cannot rely on these resolutions and ordinances because the Ninth Circuit has already found them insufficient," Wilken wrote. "Accordingly, just as SCARE cannot proceed on any of its claims based on the alleged contractual rights of non-union employees, it cannot proceed on any claims based on the alleged contractual rights of retirees hired before 1990."

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