Doyle v City of Medford
Filed May 26, 2010
Cite as 09-16037 Ninth Circuit Court of Appeals

Appeals Court Affirms Judgment on due Process Claim in Retirees’ Extended Health-Care Benefits Lawsuit

The issue was raised by Ronald Doyle and other retired employees against their former employer, the City of Medford, asking the courts whether or not the City’s policy of denying health insurance coverage to retirees violates their constitutional right to due process. The class-action lawsuit was filed in August 2006.

Court records show that in September 2006, Melvin Daniel, Fred Ramiskey, and a friend, Robert Haney, went on a hunting trip in Chambers Lake area near Packwood, Washington. The three men stayed in Daniel’s camper.

Based on court records, the City had permitted all employees to decide to continue with their health insurance coverage before 1990. However in 1990, the City negotiated with the police officers’ union which did not give the officers with the option to continue coverage after retirement.

In 2002, the City placed management-level employees under the same health insurance coverage that does not cover retirees. The City had a contract with the Oregon Teamster Employers Trust to provide health insurance to its employees.

The contract states that: "Participants are not allowed to participate in the Trust's Retiree Plan or any insured or HMO option available through it." The provision excludes retirees from coverage under the Teamsters’ plan. Retirees can only avail of Teamsters’ health insurance benefits only “if the members of the Teamsters voted for such coverage”.

And although the City does not provide health insurance coverage after retirement, retirees can choose to remain covered for 18 months under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) (29 USC section 1161-1168). After the 18-month period, retirees can enroll in the Oregon Public Employees Retirement System Health Insurance Program to obtain coverage.

In the 2006 lawsuit, the retirees complained against the following violations:

• Violation of Resolution no. 5715 and Oregon Revised Statutes section 243.303
• Violation of the Due Process Clause of the Fourteenth Amendment
• Violation of Age Discrimination in Employment Act (ADEA) and the parallel Oregon statute

After hearing, the district court held that neither section 243,303 nor Resolution 5715 granted the plaintiffs (retirees) a “constitutionally protected property interest”, which is a prerequisite to a due process claim. The district court therefore granted summary judgment on the due process and ADEA claims.

The retirees sought an appeal.

During appeal, the Ninth District Court of Appeals held that under the Oregon Supreme Court’s interpretation of section 243.03, neither the statute nor Resolution no. 5715 creates a “protected property interest”, therefore affirming the district court’s summary judgment on the retirees’ due process claim.