IMPORTANT IN FORMATION

Court of Appeals Filing Date 05/17/2010

Minnesota Court of Appeals

Event - Oral Panel - scheduled for 7/15/10, 9:30 a.m., Duluth            
Location:             St. Louis County Courthouse, Duluth MN   
Date of Hearing:   07/15/2010  (Thursday, July 15^th)    
Time of Oral Consideration: 09:30AM

Panel Members:   Judge Jill Flaskamp Halbrooks,

                             Judge Terri J. Stoneburner,

                             Judge Larry B. Stauber, Jr.

 3/25/2010

To keep our retirees informed as to the progress of our appeal, here is the last legal brief we submitted to the Minnesota Court of Appeals. 

APPELLATE COURT CASE NUMBER A09-2093
STATE OF MINNESOTA
IN COURT OF APPEALS

APPELLANT’S REPLY BRIEF

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NEW: Security Fund Mailing

3/31/2010

Case No. 69DU-CV-10-507

3/30/2010 - Taken Under Advisement (Judicial Officer: DeSanto, John E. )

Published February 18 2010

Fire union sues Duluth over retiree health-care benefits

The city of Duluth’s fire union is suing the city over retiree health care, seeking to prevent retired firefighters from having their health benefits changed.

By: Brandon Stahl, Duluth News Tribune

The city of Duluth’s fire union is suing the city over retiree health care, seeking to prevent retired firefighters from having their health benefits changed.

The union brought the suit on behalf of three firefighters who were “contemplating retirement” and asked for assurances from the city that their health-care benefits would remain the same as under the current contract, according to legal documents filed on Monday.

The city, however, declined to offer that protection and “took the position that retiree health benefits are not fixed at the time of retirement but may be modified or changed in the future by the city as active employees,” the suit says.

The union appears to be challenging a ruling made last year by Judge Kenneth Sandvik that allowed the city to modify retiree health-care benefits to mirror those of active employees.

Union President Erik Simonson declined to comment on the lawsuit.

The city believes the union has no grounds for the lawsuit because no one has yet retired and no one has been harmed, said Duluth Chief Administrative Officer David Montgomery.

If the suit does proceed to court or arbitration, Montgomery said he believes the city will prevail and still will be able to modify retiree health care to match active employees’ benefits.

“The city feels that it’s a critical right we have to keep the city’s financial viability,” Montgomery said.

12/22/09 

Court Order:
       Plaintiffs' Motion for an Injunction Pending Appeal under Minn. R. Civ. P. 62.02 is hereby DENIED.
Plaintiffs may obtain a stay of this Court's October 13th Order provided a supersedeas bond in the amount of $750,000 is filed with the Court.

Translation:
       The court has decided that a $750,000 bond is required of us in order to prevent the City from changing our healthcare benefits while the appeal process continues.

12/18/09

We had standing room only at court today with well over 100 retirees present. Folding chairs were brought in for as many as could find room to sit.

Judge Sandvik said that he will make a ruling before the end of the year. We hope that he rules in our favor.

We have a new court date set for a hearing!

 Friday, December 18^th at 10:30 a.m., before Judge Sandvik in the St. Louis County Courthouse, 3rd Floor Courtroom in Duluth.

We are requesting a Temporary Restraining Order and Temporary Injunction Pending an Appeal. We are asking all retirees that can, to attend this court hearing.

We have been notified that the Judge will not be available at the date and time we were originally given. We will let you know as soon as we can what the new date and time is.

 12/07/2009

      We have a court date set for a hearing on

Monday December 21^st. at 1pm. before Judge Sandvik in the St. Louis County Courthouse in Duluth to request a Temporary Restraining Order and Temporary Injunction Pending an Appeal. We are asking all retirees that can, to attend this court hearing.

     The insurance meetings set up by the City are presumptuous and assume that we have no choice. Attendance at them would only support their notion that we have capitulated.

    The City of Duluth is planning to move all retirees to Medical Plan 3 on January 1, 2010. 

    They are not waiting for the appeal process to conclude.  Notification letters from the City are going out.

http://www.duluthmn.gov/employment/retiree_health_care.cfm

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A BIG THANK YOU TO ALL THAT ATTENDED, WE FILLED THE CHURCH!

SPECIAL MEETING

Tuesday, November 24^th., 2009, 1:00 P.M.

First United Methodist Church (Coppertop),

Mesaba Avenue & Skyline Boulevard

     This meeting is being called to update everyone on the status of our Lawsuit and the Appeal process being taken.  We are in a fight with the City to keep benefits promised to us and granted by Contract.  Judge Sandvik is totally wrong in his conclusions and we have to overturn his order. This is a MUST meeting to attend.  We need all retirees and their spouses to be at this meeting.  Other issues that follow are aimed at taking away benefits from us.  We can no longer sit back and watch our retirement benefits be stolen from us.

Agenda

Welcome (P. Alexander) and introduction of Ad Hoc Committee

• History of Health Care Issue and creation of Ad Hoc Commmittee
• Court Case and restraining order.  Selection of Don Bye as attorney
• Class Action filing and adverse ruling from Judge Sandvik
• Appeal Process explanation by Don Bye and Shelly Marquardt
• Fund drives creating a security fund and a report on status (collections and expenses)
• PERA issues involving a reduction in cost of living increases for the next several years
• PERG (Public Employee Retirees Group) is a group we should join.  We need a strong voice.
• Where are the Active Employees and their representative unions on these issues?
• Open microphone for discussion, input and direction.

      (3 minutes per speaker)

• Join PERG  

Ad Hoc Committee:

Eli Miletich 727-7862, Ted Griak 626-3142,

Bob LaFlamme 722-9494, Gerry Veillet 722-2564,

Dick Smith 722-0305, Patrick Alexander 728-5704,

Walter Peterson 724-3322, Paula Savela

11/092009

New information on PERA overpayment error by City of Duluth

10/26/2009

Re:   Virgil Swing column of October 25, 2009

         Duluth Budgeteer

      Shocking ignorance of the collective bargaining process. That’s about the only way to describe the article by your Virgil Swing.
       Let’s give a bit of history of labor/management history in the U.S. and Minnesota in particular.
      In 1935, the U.S. Congress, at the urging of president Franklin D. Roosevelt and many others involved with the labor movement in the country who were fed up with the arbitrary treatment of those who delivered their skills and expertise to the growth of this nation, passed  the Wagner  Labor Relations act.  That law guaranteed the right to organize unions and further guaranteed the right to good faith negotiations for wages and terms and conditions of employment. It, the Labor Law, gave workers a seat at the table. It did not disrupt owners or managers their right to manage.

      Public employees were left behind with no assurances of fair treatment by their employers.

      In 1971 and with corrections in 1973, the Minnesota Legislature approved the Public Employment Labor Relations Act, PELRA, which assured public employees the right to good faith collective bargaining, mediation, arbitration, and with the exception of police, fire and certain hospital workers, the right to strike when negotiations reach an impasse.

      With few exceptions around the state, PELRA was the correct remedy for the injustices which were foisted on public employees and everybody was satisfied.

       In 1982, the public employees of the City of Duluth listened to a proposal by the then Administrative Assistant to the mayor, that they, the employees, reduce their demands for an equitable pay adjustment, forgo the accumulation of sick leave days and back off on several minor benefit requests.  In lieu of this the City would assure retirees a guaranteed medical-health plan for their lifetime.  Needless to say, the unions negotiators were hesitant, but agreed to bring the proposal to their respective memberships.  Heavy debate followed, but the logic that the proposal would relieve the homeowners tax burden and at the same time allow for a zero tax increase in the budget.  The City negotiators assured us that this, the health plan, would be an annual budget item. All unions accepted the proposal. With the departure of Mayor Fedo, the new administration blew the budgeted money on frills such as a fish tank, aquarium and the so-called technology village, no budget since included retiree health care.

      Donny Ness became mayor and felt that retirees would be an easy, defenseless target and made his pronouncement that he was going to eliminate that which was guaranteed by Agreement, I.E., contract. He claimed an unfunded liability.

      We, the ad hoc committee of retirees formed to try to protect retiree rights were not successful in Round one, not because we were wrong, but perhaps we had a judge who was not familiar with collective bargaining rights.  PELRA prohibits unions from negotiating for retirees and the contracts of each of the City unions states lists those who are covered by their negotiations and eventual contracts. Retirees are NOT included in that list. The judge ruled that whatever the current unions negotiated covers retirees.

  Thus, it is the strong belief of all City of Duluth retirees that the judge erred in his decision, and there are more than several court decisions in Minnesota which support our position.
 

     I will conclude by referring to the Webster Dictionary definition of CONTRACT:

               “An agreement between two or more people to do something, especially one formally set forth in writing and enforceable by law.”

  We will be appealing to the Minnesota Court of Appeals!

  Eli J. Miletich, member, ad hoc committee
  to protect City Retirees negotiated health benefits
  727-7862

Another viewpoint of the Summary judgment

James J. Anderson  /  10-25-2009

The recent Summary Judgment was a huge disappointment and one that we need to appeal.  Although I’m just a layman, I found many points of contention, and do not agree with the verdict.  I think we’ve all heard the saying, “there is justice, and then there’s the law.”   Unfortunately, this appears to be the latter.

The crux of this case, according to the Court, revolves around the language used in the following paragraph within the CBAs (Collective Bargaining Agreements) between the City and the Collective Bargaining Units (CBUs).  As noted in the Findings Of Facts (pg. 3, #11):

Version A: Any employee who retires from employment with the City...shall receive hospital-medical insurance coverage to the same extent as active employees, subject to the following conditions and exceptions...

Admittedly, I cannot find fault with the Court’s interpretation of Item A.  I’m convinced that most people, upon reading that single paragraph by itself, would agree that the intended meaning is not ambiguous.  However, there is much more to this case than just Version A, to wit the following:

Item B:  Retirees and disabled employees who are receiving a pension may retain health insurance coverage as provided under the terms of the current labor agreement under which he/she resigned or retired (see current labor agreement for your bargaining unit).

This paragraph, also noted in the Findings Of Facts (pg. 5, #25), is from a document provided by the City to people who contemplated retirement or have retired from the City.  Its existence casts a shadow of doubt upon the interpretation of Version A, and if genuine, it is clear evidence that some ambiguity must exist concerning the interpretation and intent therein.  It is the viewpoint of the Plaintiffs’ that the meaning of Item B closely mirrors their understanding of how the retiree health benefits have been and should be administered, as described by the following:

Version B: Retirees (Plaintiffs’) health benefits are fixed and governed by the plan in place on the date of their retirement.

The Court addresses the doubt raised by Item B in two ways.  First, by attempting to diffuse this evidence by stating that the meaning of Item B is concurrent with Version A, and that it simply refers the reader back there for further details (pg. 5, #26).  But, that makes no sense.  That certainly cannot explain why the word ‘current’ is used twice in the document, nor can it account for the phrasing: “...under which he/she resigned or retired...”   If the contract was meant to be interpreted as the Court suggests, then the use of these words and terms are totally unnecessary.  There would be no reason to make reference to ‘current’ labor agreements, if everyone were to be treated the same as active employees.  The use of the word ‘current’ implies that change could occur, and if that change does occur, the information being sought will be located within a different document.

Likewise, if retirees were to be treated the same as the active employees, there would be no point to make mention of the ‘labor agreement under which he/she resigned or retired’, since that specific agreement would be null and void, replaced with a new edition, and the retiree would need to reference that new contract.  The connotation being that since agreements change, one must consult the agreement under which he/she resigned or retired.  In fact, this entire document would be pointless and unnecessary, if it were to mean the same as what is stated in Version A. 

So, it is clear that Item B contradicts the language of Version A, and standing alone, it upholds the Plaintiff’s contentions.  I’m confident that most people would agree that the language of Item B indicates the same basic concept of Version B  Furthermore, I believe that the Court also understands this, and could not truly doubt the validity of this document, as I’ll explain later.

Secondly, the Court slams the door on any further inquiry from this quarter, by declaring Version A to be a contract that is neither incomplete nor ambiguous.  This is accomplished by citing numerous precedents of case law, after which the Court is then empowered to disregard from consideration any evidence concerning the intent of the parties involved with the contract (pages 9-15).  In other words, no matter what the parties to the contract may have intended to agree upon, the law proclaims, “it is what it is.”

Naturally, to base the verdict in a case like this solely on the letter-of-the-law, may seem somewhat unfair.  Especially when one considers all of the extraneous information, as well as the emotions involved.  To the Court’s credit, this was recognized, and the Court proceeded to analyze the matter under the Promissory Estoppel theory as well (pages 15-16).  But, while this was certainly the right thing to do, it presents the Court with a very slippery slope to traverse.

For those unfamiliar with Promissory Estoppel, the following three items were taken from the internet and will provide a basic understanding of this legal theory.

“A promise made to another party to a contract that the contract will be waived or not enforced, in whole or in part, and which, once acted upon by the promisee, prevents the promisor from taking subsequent proceedings to enforce the contract.”
"The application and the attractiveness of the notion of estoppel is quite easy to appreciate. One party enjoys a legal right under a contract. That party says that it is not going to enforce that right on a particular occasion. The other party relies on that representation and acts accordingly. Then the first party changes its mind and decides that it does want to enforce its strict legal rights; but only after its counterpart has irretrievably committed itself. The equitable doctrine of estoppel is designed to prevent such an unfair tactic...."

"To use a common metaphor, you are not allowed to let someone go out on a limb so that you can saw him off."

The Court, once again relying on legal precedents, declares that for it to support a Promissory Estoppel claim, the promisee must show (1) a clear and definite promise, (2) intended to induce reliance, (3) on which the promisee relied to his or her detriment, and (4) that must be enforced to prevent injustice (pg.15).  The Court further cites that judicial determinations of injustice involve a number of considerations, “including the reasonableness of a promisee’s reliance” (pg. 15).

Despite this seemingly complex task, the Court completed the analysis of this case vis-a-vis Promissory Estoppel, and was able to present a complete explanation within three paragraphs.  The Court decided to take issue with only the fourth prong of the requirements.  Why?  Quite simply, that was the only avenue open to manipulation.  Plus, any open examination of the first three requirements would actually jeopardize the Court’s ability to take issue with the fourth prong.

Still, let’s suppose that the Court had taken issue with the first three requirements. To contest the first requirement, the Court would need to explain why there exists a preponderance of evidence that there existed complete agreement between the City and CBUs regarding the health insurance benefits for retirees from 1983 until the current City administration.  To wit, all employees who have retired since 1983, have in fact, had their health benefits fixed and governed by the plan in place on the date of their retirements.  This is truly an instance where actions speak louder than words, because for that to occur, it is obvious that all parties had to be in complete agreement and “on the same page” as to the accepted meaning and actions regarding retiree health insurance.

The Court certainly recognized that for a scenario like that to continue to exist for all those years, enduring multiple changes of the city’s administration and numerous CBAs, that some form of an agreement between the parties had to exist.  Especially when each and every contract was argued and reviewed extensively by both parties.  Any suggestion to the contrary would require a monumental stretch of the imagination, and call into question the integrity and intelligence of everyone involved.
 
It follows then, that if such an agreement was not in the form of a written contract, then it most certainly had to be either an oral contract, an unwritten policy, or at the very least, a gentlemen’s agreement.  But, it had to exist.  To believe otherwise is absurd.  And that is precisely why I stated earlier that the Court could not have doubted the validity of Item B, and the implications therein.  If it truly thought otherwise, the Court would have undertaken a discussion on this point.  Instead, the Court chose to be obtuse about the meaning of Item B, the only physical piece of evidence that implies an official agreement between the parties.  One could speculate here about what other documentation supporting the Plaintiffs’ position might be readily available, were it not for the protection afforded by the attorney-client privilege on the part of the City.

The Court likewise knew better than to take issue with requirements (2), and (3), of the Promissory Estoppel theory.  Clearly, a span of 25 years, wherein the City allowed the retirees to maintain their health benefits as fixed and governed by the plan in place on the date of their retirement, is sufficient enough in nature to convince anyone that such action would intend to induce reliance.  In fact, that definition of the retiree health benefit was considered common knowledge amongst all city workers.  I can personally attest that from the day I was hired in 1983, and throughout my 22.5 years, and including my exit interview, I heard not a single contrary explanation of the health insurance benefit for retirees.  Furthermore, the city’s current administration, the defendant in this case, would be very hard pressed to find anyone from the past who could testify differently.  The court heard testimony to that effect from Paula Savela.
 
Naturally, the reliance based upon the promises and past actions of how the retirement health benefits were being administered, had to have an effect on every retiree’s plans, starting with the life-changing decision of when to actually retire, and encompassing every financial decision they have had to make since that day.  For the Court to argue that reliance on these promises would not be to the retiree’s detriment, would be ludicrous.

Which brings us back to the one issue of Promissory Estoppel upon which the Court has boldly hung its hat.  Taking issue with the fourth prong, the Court contends that it would be unnecessary to enforce Promissory Estoppel in this case, because there is no injustice.  That’s because, according to precedent, a Judge must consider whether or not the Plaintiff’s reliance on the aforementioned promises are reasonable.  If they are not, there is no injustice.  The Court could find no facts to support the claim that the Plaintiff’s reliance on the City’s promises were reasonable.  Thus, there is no basis for Promissory Estoppel and that claim is denied.  Judgement for the City.   End of story.

Wait a minute!  Time out!  What just happened there?  If this were a poker game, this is the moment I’d be demanding to inspect that deck of cards the Court is using.  And, for good reason.  The Court just changed the rules of this game, declared a wild card, and slipped another ace into its own hand!  And that was all accomplished in just the last three paragraphs of the Judgement (pg. 15-16).

When the Court chose the fourth prong to take issue with, it also referenced a precedent to help it define the subjective term of injustice.  This helpful term was, ‘reasonableness’, which also carries a subjective definition.  In the contract law portion of this memorandum, the Court went to great lengths explaining how all the precedents it cited applied to its decision.  Here, however, the Court offers no such illuminating discussion,  thereby making it impossible to determine if the context from which the quotes came, has any relationship whatsoever, to the matter at hand.  With no concrete definition of ‘reasonableness’, the Court could create its own definition and the wild card it needed.

The Court then determined to hold the Plaintiffs’ arguments up against the CBAs, to demonstrate just how unreasonable those claims and expectations were.  But the Court had a gigantic problem.  Under the Promissory Estoppel theory, the Court had already accepted that the Plaintiffs’ were under the distinct impression that their benefits were contractually fixed and governed by the plan in place on the date of their retirement as per Version B.  If the Court were to make a comparison of the Plaintiffs’ position versus Version B, the Plaintiffs’ would not seem unreasonable at all.  The Plaintiffs’ would be seen as getting exactly what they had expected and been promised.  And no reasonably altered definition of ‘reasonableness’ could change that.  Something more was needed.

The Court realized that it had the perfect tool for this in the form of Version A.  It could use the very contract (Version A), that it had made a ruling on via contract law, within this very same memorandum.  But, would that be considered proper?   Should the Court take the matter-in-question, make a ruling on it, and then in the process of looking at that same matter-in-question from a second, but totally different legal viewpoint, use its own previous ruling on the matter-in-question and insert that ruling into the argument of the second matter-in-question, knowing that in doing so, it will undoubtedly influence the second decision on that same matter-in-question?  That’s a good question, and it begs others.  Would that be logical?  Would that be good law?  Would that be fair?  Would that be applicable to determining if the Promissory Estoppel theory applied here?

No matter.  The Court went ahead and did exactly that, thereby changing the rules of the game and slipping an extra ace into its hand.  And, it was against this new ace, Version A, that the Court chose to compare the “ ‘reasonableness’ of the reliance’ “ of the Plaintiffs’ position.  The Court also chose that moment to play its wild card.  The Plaintiffs’ position now appeared untenable.  With the Court’s attachment of a monetary definition to ‘reasonableness’ and linking that to Version A, the Court achieved the desired result.  It now would appear to anyone reading the Court’s decision that the Plaintiffs’ position in this matter, is nothing more than greed coupled with a sense of entitlement.

Was the Court aware of an undertone of bias within that argument?  Apparently not. It’s equally apparent that the Court failed to recognize the contradiction and double standard it implied.  The Court purports that no facts could be found in the record to support the reasonableness of the Plaintiffs’ reliance.  Yet the Court arrived at its determination of the Plaintiffs’ unreasonableness by comparing their position against Version A and rising healthcare costs, and displayed further knowledge of these rising costs in the final paragraph.  It was, after all, the Court’s decision that ‘reasonableness’ could be determined using some sort of monetary standard, thus making that knowledge necessary.

So, how does it follow that the Court has sufficient information about high healthcare costs and its effect upon the City, but knows nothing of how that same information might relate to the Plaintiffs’ own finances?  If the Court comprehends healthcare cost information from the City’s position, it should be able to make the correlation to an individual’s viewpoint.  Precisely what facts did the Court lack?  Were the Plaintiffs’ required to explain their personal finances to the Court?  Would the Court have been impressed with a simple linear chart showing the percent effect of healthcare costs on individuals?  Or would the Court have preferred to peruse a glossy, professional presentation, complete with colored graphs, pie charts, and the necessary documentation required to explain all those red numbers and their implications on future budgets?  It would have been nice to know beforehand.

Ultimately, what the Court undertook and presented as its analysis of the Promissory Estoppel theory leaves much to be desired.  The brevity, reasoning and subsequent conclusions the Court derived from its foray into this theory, falls far short of producing a convincing argument, let alone a reasonable attempt at justice.

10/18/2009

Retiree's view:

Employees now know that city’s word means nothing

By: Paul Stein, Duluth News Tribune

From the viewpoint of the city of Duluth’s administration, last week’s retiree health insurance ruling could be considered coup, and probably should be. I suspect city taxpayers are relieved as well that great sums of tax dollars will be saved.

How could anyone justify the greedy retirees standing up for such largess when economic times are bleak and when the city would consider closing libraries and parks?

The other side of the story has a long history of promises from the city to its employees. Very often, the city cried poverty during negotiations with employees, claims that were never found to be quite accurate by mediators or arbiters.

The city dangled a carrot of retiree health insurance to its employees in lieu of partial pay raises. Accepting the offer, employees gained the promise of health insurance for life but lost wage increases and, later, parts of their retirement pensions as those were based on wages earned during working years.

The city also agreed to set aside money to fund retiree health insurance. But, historically, administrations consistently failed to set aside that money, allowing the unfunded liability to grow to crisis proportions.

Now, the current city administration has solved the retiree health liability by placing it squarely on the backs of the retirees.

While that may pose a short-term solution to budget woes, I suggest a whole new Pandora’s Box has been opened. While the current administration has won the admiration and respect of constituents and can use the issue of solving the budget crisis as a steppingstone to future ambitions, problems left in the wake of the judge’s ruling need to be considered.

Employees of the city of Duluth enjoy years of service to the city and gainful employment. Administrations come and go. Tenured employees will now realize that a handshake and a promise mean nothing. Tenured employees will now realize that even written contracts accepted in good faith can be whisked away at the stroke of a pen or legislated away from the bench. Such was the action of Judge Sandvik when he opined that “50 cent co-pays are unreasonable.”

The door is now open to reconsidering any agreement in which one party sees an appreciation of value to an item previously agreed upon between two parties. A vendor can come back and say, “It’s now worth more; I want more.”

I believe bargaining units for employees of the city of Duluth will come to see the long history of the retiree health insurance issue as something they zealously protected in wage and benefit negotiations and that was agreed to by city administration. But they’ll also come to see it as an example of the city reneging on agreements. And they’ll be fairly unwilling, in the future, to accept good-faith and well-intentioned promises of the city.

I further believe the savings the administration proudly is calculating will be whittled away by individual and group lawsuits aimed at restoring what retirees sacrificed to protect.

As a retired city employee, my fate as it relates to my health-care coverage is in the hands of the city administration and the employee bargaining units.

The city administration could find it economical to offer current employees a separate cash payout every year and ask employees to use that money to provide for their own health insurance, based upon their individual needs. The employee could find that option agreeable.

But where would that leave the retiree?

A far-fetched scenario, you say? I suggest it is no more far fetched than a city administration and the courts discarding a written agreement they had with me.

Paul Stein of Maple retired from the Duluth Police Department in 2001 and now operates the Woof ’N’ Hoof Kennel. He is also currently a citizen representative on the News Tribune editorial board.

10/18/2009

Mr. Stein's comments were right on, however, he neglected a few points: The judge was obviously derelect in his duties to consider the full content of the contracts under which employees of the City retired. One must read the "..." portion quoted to fully understand the contract language. For instance, under the 2004-2006 contract, it clearly states the retiree is entitled to his/her choice of those plans offered at that time, same as active employees, without cost to the retiree {Art 23 (b)}, and that such coverage "shall be for the life of the retiree" {Art.23(d)}. This clearly says that these are the terms that apply to those who retire under this contract subject to stated effective dates for certain coverages. Nowhere in this contract does it say that those people who retired under this contract will be subject to language in any future contract. When a person retires, he takes with him/her the contract languange in effect at the time of retirement. This is the way it has always been. Retirees cannot vote on future contracts and to assume they should be subject to future contract language is absurd. If these contracts can be so easily broken because of an "opinion" , then where will it end; will current contracts be violated because the "City" decides it cannot afford some part of it or doesn't like it anymore. The "City" needs to do the right thing and start honoring it's obligations to retirees as "promised" and negotiated in past contracts.

Claudia Johnson

Duluth, MN

8/08/2009 Link... Updated notes on PERA situation

On Tuesday January 6th. 2009, Mayor Don Ness told the Duluth Chamber of Commerce that the retirees who filed a lawsuit blocking the city from changing the health-care plans “represent a very narrow subset of retirees, the hard-liners who are not willing to compromise.” He has budgeted up to $200,000 to fight that so called "narrow subset".

The Duluth City Council votes to increase payment to their contracted attorney by $100,000 to a total of $180,000.

DULUTH CITY COUNCIL MEETING

Monday, June 15, 2009

BY PRESIDENT GILBERT                  (COMMITTEE OF THE WHOLE)

09-0384R - RESOLUTION AMENDING RESOLUTION 08-0344 (AS AMENDED) RETAINING KENNEDY & GRAVEN, CHARTERED, AS SPECIAL COUNSEL TO ASSIST THE CITY ATTORNEY IN RETIREE HEALTHCARE LITIGATION BY $100,000. -- PASSED 8-1 (Stauber)

COMMITTEE OF THE WHOLE 09-0384R

RESOLUTION AMENDING RESOLUTION 08-0344 (AS AMENDED)

RETAINING KENNEDY & GRAVEN, CHARTERED, AS SPECIAL

COUNSEL TO ASSIST THE CITY ATTORNEY IN RETIREE HEALTH

CARE LITIGATION BY $100,000.

CITY PROPOSAL:

RESOLVED, that the proper city officers are hereby authorized to amend Resolution 08-0344 (as amended by Resolution 09-0029), retaining Kennedy & Graven, Chartered, to assist the city attorney in the representation of the city in a matter currently pending in the St. Louis County district court and entitled Hartley Conrad, Paula Savela and Carol Griak v. City of Duluth, Court File No.69DU-CV-08-1793, and to be available on a continuing basis to advise the city on the issues involved in the lawsuit, as set out in the request for proposals, pursuant to its proposal dated May 20, 2008, not to exceed $180,000, payable from Fund 610-036-1650-5319.

Approved: Approved for presentation to council:

Department Director Chief Administrative Officer

Approved as to form: Approved:

Attorney Auditor

ATTY GBJ:cjk 5/28/2009

STATEMENT OF PURPOSE: This resolution will further amend Resolution 08-0344, approved May 30, 2008, and previously amended by Resolution 09-0029 dated January 26, 2009, increasing the total amount to be paid by $100,000. This increase is necessary due to the expansion of the matter in question. Whereas this matter previously only encompassed three retirees and their particular benefits it recently became a class action lawsuit covering all retirees and their dependents from January 1, 1983, to December 31, 2006. The city has asserted a counterclaim for declaratory judgment on the issue of whether the class members have a right to health benefits that are greater than active employees. The city has brought a motion for summary judgment on the meaning of the language “to the same extent as active employees.” If this matter proceeds to trial it would take place after November of 2009. It is also anticipated that any decision by the trial court would be appealed

March 12, 2009

     There were 75 retirees in Judge Sandvik's court today to witness another hearing. The result was mediation sessions scheduled and a status hearing set for April 14th.

     There was some discussion in the courtroom as to whether or not to expand the lawsuit and possibly have it become a class-action suit.

     All City Retirees are asked to consider a second donation to the cause as we must prevail. See Security Fund Letter

February 27, 2009 
 
The following is an interim report of your attorneys:
 
Number One! You all still have health insurance coverage.
 
It is excellent coverage that you have earned and that each City Union fought to achieve and keep for its respective members as long as possible.
 
For all of you long term loyal City employees and dependents, you have nothing to apologize for. You are not to be in any way blamed or criticized for holding onto a valuable earned possession just because the City and a series of administrations and Councils (right down to the present), failed to fund the benefit, and even to recognize, acknowledge, modify or administer the benefit in any adequate way during the 26 years its been in existence. Remember it was first proposed and offered by a prior Mayor.
 
The following paragraphs are verbatim from the Temporary Restraining Order of the Court that we secured in August 2008. It is still in existence until further order of the Court.
 
"That medical benefits claims incurred by the Plaintiffs, any covered spouses of the Plaintiffs, and all similarly situated retired Duluth City Employees and their spouses shall be paid or reimbursed at the benefits levels that were in effect on December 31, 2007

 
That the City of Duluth will make no change in the health insurance benefit levels of the Plaintiffs or spouses and all similarly situated retired employees and their spouses without prior reasonable notice to the Plaintiffs and their attorney and until further order of this Court."
 
We are presently engaged in mediation on the total subject matter. Mediation has been directed and strongly recommended by the Court. Court procedures require an attempt at ADR (alternative dispute resolution) in all cases of this nature, before there can be a final trial. Mediation is generally the least expensive, quickest and most informal such process offered.
 
The present Court schedule contemplates trial on the main issues June 23, 2009. If we don’t have some suitable basis for resolving the matter beforehand.
 
We keep very much in mind that there is no practical way for us to meet with and get written fee and representation agreements with every single one of you. However, if anyone experiences trouble in getting or maintaining the coverage you have had we want to know about it.
 
As it is we keep in close communication with your core group, which we understand has recently expanded, and with your retiree organization MAPERA. We also have received a number of valuable communications and documents from individuals that have proved very helpful.
 
Sincerely yours,                                         Sincerely yours,
  
Don L Bye                                                  Shelly M Marquardt
Attorney at Law                                          Attorney at Law 

       A short summary from several who were in attendance at the Mayor's Retiree Health Care Presentation on January 15th.

        It was not "a meeting to discuss" retiree health-medical matters, but to hear the Mayor expound on the so-called "crisis" that the City allegedly faces. The Mayor, in not too subtle terms, again attempted to place any blame on retirees......  The mailing from the Mayor said "My intention is to have a respectful and honest exchange.....etc ". That exchange as the retirees discovered that attended however, was not allowed to happen except by filling out a questionnarie to submit to the City.
       Most importantly, in response to a question from retiree Pat Alexander, he said that there would be no questions taken, or answered, from persons in the audience. So much for democracy!

January 14, 2008

          We had a hearing in District Court again today with Judge Sandvik, and we were granted continuance of the restraining order.  There will be another hearing scheduled for March 12, 2009, subject; a motion to expand the case from 3 people to all  who retired before mid 2007. The discovery cut-off date was extended to April 15, 2009. A pre-trial date was set for May 12, 2009, subject; decision on a Jury or Court Trial. If no settlement is reached, the tentative trial dates are June 23 through 26, 2009

January 9, 2009

January 7, 2009

Don Bye, Attorney
1000 Torrey Building
Duluth, MN 55802

Don:

      Today, the Duluth News Tribune carried a comment by Donny Ness which is just the opposite of that which he has been quoted in the past week. To wit: In his State of the City speech on Monday, January 5th, he spoke of his plan to sell the city’s steam and gas utilities and went on to call on "reform minded" citizens to make change possible, stressing it had to be done in a way that is civil and ethical. (Is MP& L going to be the sole bidder?)
      Then, if you look at this days News Tribune and the story headlined with "Ness calls for increased civility", but when reading into the body of the story, you will note that Ness, when discussing the City retirees, took aim at the ad hoc committee for retirees and was quoted that the retirees who filed a lawsuit blocking the city from changing health-care benefits "represent a very narrow subset of retirees, the hard-liners who are not willing to compromise." He apparently is not aware, or refuses to accept, that hundreds of retirees willingly contributed to our fund to bring about this lawsuit. Also, we compromised in 1982 to arrive at a collective bargaining solution based on the City proposal for Health-Medical coverage for retirees. 
        Further instances of his hypocrisy is the comment he made in the article of Sunday, January 4th , page A 12. The article went as follows, "Ness said he hopes to repair damaged relationships with 2008's political opponents but stressed the onus is on them to change. ‘I think it will depend on their choosing a different approach’. (The reporter then said, "if they don’t?") And Ness replied, "Then we’ll continue to experience a lack of progress, and the city will be worse off for it".
       Now, I ask, is that practicing civility? Or is that the mind set of a borderline fascist?
       Don, the reason for this note is to ask that in as much as you plan to attend Ness’s session next week to take notes, you point out to him his lack of civility when dealing with and speaking of retirees. You, as a spouse of a retiree, do have a right to point that out.

From the Ad-Hoc committee regarding the January 15th. retiree healthcare meeting called by the City.

         From our perspective, I believe that the mayor is attempting a divide and conquer tactic designed to milk as much publicity as possible for him and his program to destroy our health-medical benefit. I see nothing to be gained from attending and will not attend.  From the dozens of calls we have received from retirees we have simply told them that we will not attend, and that to attend would only serve the Mayors purposes.
 
         Also, we have a negotiated contract (s) with the City of Duluth that the Mayor, by the City Charter, is responsible to  "see that the terms and conditions of all contracts are faithfully executed" (CHAPTER IV, Section 18, paragraph (i) of the City Charter.  Additionally, in as much as there is a District Court  Restraining order prohibiting the City from making any changes to the contracts, it, again, is obvious that Don Ness is just seeking publicity, further making retirees the fall guys.
 
         We, the ad-hoc committee, had a meeting today with our attorney, Don Bye, and he said that he was going to attend just to take notes, but he felt that it would serve us no good purpose to be in attendance.

The City of Duluth and PERA have decided that the City had overpaid PERA over the past 10 years resulting in possible pension payment deductions required of retirees and probably a smaller life-time pension payout in the future for those retirees affected by this mistake on the part of the City.   

 For further information click here.  

Oct. 11, 2008

Subject: Status of our lawsuit against City of Duluth

       For your information, we were in court again on September 25^th and after some mild haggling between the lawyers, the District Court Judge, Sandvick, granted another continuance until November 26^th and continued the Restraining Order prohibiting the City from making any changes in our health-medical benefit. In other words, the contracts in effect at the time of an individuals retirement must be honored.

       There have been several attempts by the City's carrier to make changes which they claimed were to the benefit of the retiree, but were in fact negative compared to what was available previously. Example: One spouse who receives a medication directly from Walgreens which needs to be kept refrigerated was told that he no longer could receive his medication through Walgreens but that it had to come through the mail, shipped from Fairview Pharmaceuticals in Minneapolis and that it would be less expensive for the retiree. That is pure unadulterated B.S.

        It was a not too subtle way of making a change to our agreements to that they could then argue that changes have been made and no retiree has complained. Likewise, a retired Public Works employee faced the same dilemma with the same company.

We brought this to the attention of our attorney and now both the
retirees above can receive their meds from the pharmacy of their
choice, locally.

       If any retiree has had any problems with hospital-medical coverage or with pharmacy needs, please let us know to that we can pass this on to Don Bye, our attorney. Thanks,

Retirees ad hoc committee on Health-Medical Insurance

Gerry Veillet

Bob LaFlamme

Ted Griak

Eli Miletich

Sept. 25, 2008

A hearing was held in District Court today. The result was another continuation of the temporary restraining order against the City that we obtained back in July. The attorneys for both sides are scheduled to meet again with Judge Sandvick via telephone by November 25th. We will post more information as we obtain it.

Our dispute with the City is far from settled.

July 1, 2008

To all City of Duluth Retirees:

As you may or may not be aware, our court case was heard June 25th, in District Court, Judge Sandvick from Two Harbors, and a temporary restraining order was issued prohibiting the City of Duluth from making any changes to our legally negotiated Medical Health benefits. That's round one. 

You may also contact us via email at info@duluthretirees.org  

A QUICK RESPONSE WILL BE APPRECIATED. As you may know, this committee has put in a lot of hours and sweat on this whole project, and we want to see it come to a successful conclusion for the benefit of ALL RETIREES.

July 1, 2008

      Those interested in a Minnesota Appeals Court case won by retirees in a struggle similar to ours can click on this link to the Minnesota Court of Appeals decision in Joyce E. Adams, et al., Respondents,vs. Independent School District No. 316, defendant and third party plaintiff, Appellant, vs. Education Minnesota-Greenway Local #1330, third party defendant, Respondent.

 Note: You will need the free Adobe Reader installed to access this document

Hospital-Medical

A hard won benefit.

     From time to time, the de facto committee made up of former bargaining unit presidents who negotiated the Hospital-Medical benefit at significant cost in wages and benefits, will be providing an update on our efforts to prevent the present City administration, as well as the incoming one, from taking negative action which would have a tremendous impact on our future. On Wednesday, December 12, 2007, at a meeting of the Minnesota Arrowhead Public Employee Retirees Association, we did give an overview to those in attendance with respect to our fundraising program which, we hope, will bring in enough dollars to help pay for an attorney if we end up in civil court.

      Example, only about a third of all those who were sent a letter have responded with a contribution. (see same letter under "Security Fund" at the top of this Web Page). That is not enough, what we are doing needs a common effort because it's for the common good!! Any questions, contact the de facto committee:  

   Duluth Retiree meetings usually immediately follow PERG
meetings.. See WWW.APERG.ORG for a meeting schedule.

    If you would like to help us in our effort to preserve our retiree benefits, please CLICK HERE Thanks.