The North Carolina Supreme Court building in Raleigh (File photo)
The state Supreme Court on Tuesday heard arguments that could upend a case about state retiree health benefits that’s more than a decade old, potentially overturning yet another of its own rulings.
Before 2011, state employees who became vested were promised no-cost health care in retirement as part of their benefits package. But in 2011, the state legislature allowed the N.C. State Health Plan to charge retirees health care premiums. A group of retirees sued over the change, alleging breach of contract.
The case has bounced through the court system ever since. In 2016, Superior Court Judge Edwin Wilson certified the retirees as a class of about 220,000 members.
The Supreme Court in 2022, with a Democratic majority, ruled for the retirees.
Lawyers for the State Health Plan and the state Treasurer are now asking the Supreme Court to reconsider. They say the class really isn’t a class because the plaintiffs’ individual cases are too dissimilar to meet the definition.
Mark Jones, a lawyer for the Health Plan, said an expert for the retirees did not “prove liability in one stroke” as required. Because of that failure, Jones said, “the 2016 class cannot be sustained.”
Mark Carpenter, a lawyer for the retirees, said the request to decertify the class is extreme.
“What they are asking you to do is throw the baby out with the bath water,” Carpenter said.
If a Supreme Court majority agrees with the Health Plan lawyers, it could negate the class action and force the retirees to file individual lawsuits seeking compensation.
North Carolina Supreme Court vacates nine years of Leandro school funding orders
The Republicans who now hold a 5-2 majority of Supreme Court seats have been willing to reverse the court’s past rulings.
Just this month, the court reversed a 2022 decision on public school funding in a case known as Leandro. The 2022 court had ordered the legislature to fund the first two years of a remedial plan. Republican legislators asked the court to reconsider, which resulted in the 4-3 ruling that the courts could not tell the legislature how to spend money.
Justice Richard Dietz, a Republican, dominated the questioning Tuesday. It’s the court’s job to make sure the class is constituted correctly and make sure problems are fixed, he said.
“Our job as courts, in class action, is to defend the rights of the absent class members. That’s the whole purpose of all the protections that we’ve built into class certification,” he said. “If we know the class definition is wrong, we need to fix it.”
In its 2022 opinion, the court agreed the retirees had a right to lifetime enrollment in a premium-free insurance plan, with Democratic Supreme Court Justice Anita Earls writing for the majority. The opinion sent the case back to the trial court to determine how much the retirees are owed. Democrats held a 4-3 majority at the time.
Republican Justices Tamara Barringer and Phil Berger Jr. agreed in 2022 that the case should go back to trial court, but said the judge should determine whether the retirees could have reasonably relied on a promise of no-cost health insurance, because some of the information the state produced at the time contained caveats.
“When the entirety of the record is viewed in the light most favorable to the State, the right-to-amend provision, the disclaimers in the booklets, and the constant statutory changes are substantial evidence that could support a finding that plaintiffs did not reasonably rely on a promise of health benefits provided by statute in entering into or continuing employment with the State,” Barringer wrote.
Republican Chief Justice Paul Newby did not participate that year.
State retirees who attended the court hearing said they are frustrated that the case has gone on so long without a resolution.
“It’s frustrating for people on both sides of the issue for it to take this long to get it resolved,” said Boyd Bennett, a former director of prisons who worked for what was called the Department of Correction for 36 years. “And it looks like, from what I hear, we’re not even closer than we were.”
Some of the plaintiffs have died. The lead plaintiff remains I. Beverly Lake Jr., a former Supreme Court chief justice, who died in 2019.
Bennett said requiring retirees to file individual cases “would swamp the court system all across the state.”
Bennett said he could have made more money in private industry than working for the state. “But I gave that up to serve the public and plus to have these benefits that we were told we would have,” he said.
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