Status Report 12/6/09


Our Legal Situation:


The major news of the day is that we can now say what we purchased for our $15,000. The summary below is probably more complete than it would have been if I had not consulted with our lawyers.


For you draw poker players, we have put our anted up to see our initial draw. The hand looks favorable and we need to decide whether to fold or match the current bid. If we match the current bid and get a poor hand we can fold. If we get a good hand, we will have to decide if we can afford to stay in the game,  unless the opposition folds. The amount we need to stay in the game for the moment is probably in the $75,000 to $150,000 range.


ˆThere is a form at the end of this status report for you to fill out.  §


Legal Status Report:


  John Holzrichter and I met with our lawyers on Monday, Nov. 23, 2009.


  Their report began with a brief factual background based on the materials we have provided to our legal team.  Many of the facts are clear, but some things still need to be investigated further.  For example, we have been unable to review the policies that the Regents passed sometime in the 1960Õs, when they first began providing retiree medical benefits.


  Among the things we donÕt yet know for certain is when the Regents ever reserved the right to unilaterally change or discontinue this benefit.  From materials we provided, it looks like 1990 was the first time that an express, written reservation of the right to make such changes appeared. 


  If you have any documents in which the University or the Regents claim to reserve the right to make changes in retiree health, especially a document from before 1990, please send us a copy.


  Our lawyers believe that LLNL retirees who were hired before 1990 have a viable claim that UC has improperly modified the retiree health benefits -- assuming there was no reservation of rights before.  These retirees may also have a claim based on UCÕs transfer of responsibility for providing these benefits to LLNS.


  Even if the Regents reserved the right to make changes before 1990, it is possible that retirees hired before that year would still have a legal claim based on the fact that the Regents led them to believe they would receive the same retirement benefits as other UC retirees.


  LLNL retirees hired after 1990 might have a claim, but this is less likely.  It will depend on the scope of the reservation of rights.  


  It would be useful to know how many retirees were hired before 1990 and how many were retired after 1990. I have put together a web form so we can collect the statistics to see the effect of the 1990 date.  It is at the end of this status report.


  The most practical way (and the only certain way) to find out if the Regents included a reservation of rights in the retiree medical benefits that were enacted in the 1960Õs (and modified repeatedly over the years) is to file a lawsuit and use the courtÕs subpoena power (or the equivalent) to get the records. 


  Between 1962 and 2005, the Regents passed or modified provisions relating to retiree medical benefits more than one hundred times   Most of the RegentsÕ records are available only on microfiche, and the only way we have found to review them is to make an appointment at the Office of the Secretary to the Regents, which is simply not practical.  (More recent RegentsÕ records are on their web site but earlier meetings are not and these are the most relevant.)  By filing suit, we should be able to compel UC to provide all of the relevant records as part of the ÒdiscoveryÓ process.


  If a lawsuit were successful, a court could order the Regents to return LLNL retirees to the UC system.  Alternatively, a court could order the Regents to pay monetary damages to LLNL retirees who have suffered losses as a result of the changes made by Extend Health, Inc. at the request of LLNS. 


  A lawsuit would, of course, cost more than the evaluation that has just been completed.  Our lawyers are preparing a proposal that will show the estimated costs for filing suit, opposing a motion to dismiss the lawsuit (which they anticipate UC would make), and (assuming we win the motion), obtaining the documents and records needed to evaluate the scope of the commitment made by the Regents (and thus the strength of our claim). 


  Our lawyers estimate that it will cost between $75,000 and $150,000 to cover this phase of a lawsuit.   We will need to raise these funds if we want go forward.  The UCLRG Legal Defense Fund is not willing to sign a contract for legal services without money in the bank to pay for it so the money will have to be collected in advance of any further legal action.


  It is not practical to consider a contingency arrangement at this time because we do not know if the court would award injunctive relief (moving us back to UC) or monetary relief.  Further, we feel that LLNL retirees are better off paying for the legal services than having the attorneys take one-third or more of the benefits we have lost as a contingency. 


  We need to bear in mind that, while the amounts listed above ($75,000 - $150,000) should cover the initial phase of a lawsuit, this would not cover the entire cost of the case.   There would still be a hearing or a trial at which we would be required to prove (through documents, witnesses and/or declarations) that we are entitled to an injunction (or the equivalent) returning us to the UC system, or alternatively, to an award of monetary damages.  This would be the second phase.


  We would not have to make the decision at this time about going ahead with the second phase.  We can evaluate the strength of the case after we review the documents and records we expect to receive (assuming we win the anticipated motion to dismiss the lawsuit).  At that point we can decide if we want to and can raise additional funds and continue moving forward. 


  The amount of individual contributions required will be considerably less than any of us would have to pay if we consulted an attorney as an individual retiree of the Laboratory.  If it turns out that our case is not as strong as we hope, we will have the choice of cutting our losses and ending this effort.


  If we move forward, we may be able to ask the court to order UC to give us the names and contact information for all LLNL retirees so that we can contact them to see if they wish to join in our efforts.  However, we would not be able to do so until after we had filed suit and reviewed the RegentsÕ documents. 


The Next Steps:


  We need to contact more retirees if possible. If anyone has a suggestion of how we can contact them so that we can expand our group, please let us know.  At a minimum, if you know any other LLNL retirees personally, contact them yourself and give us their names and addresses.


We need to decide whether to take the next step. We have roughly half of the money we need to continue. Ultimately, you will vote with your wallets. The decision may hinge on the number of retirees hired before 1990,  although I suspect that if we force UC to take some of us back, they will take all of us back.



Extend Health/Kaiser Retiree Meetings:


Several retirees asked if the results of the meetings arranged by the Retiree Organization could be put online so people that couldnÕt make the meetings could see what transpired. Chuck Meier will try to get copies of the presentations to post on the organizations web site. The URL is



Out-Of-State Policy Problems:


It seems like LLNS moved all out-of-state retirees into individual policies on 1/1/09 without informing them. Because the were losing their group coverage through no fault of their own, federal law gave them  a one time special enrollment option allowing them to transfer to a new provider without going through underwriting (proving they had no disqualifying prior conditions). That locked them into  their policies and will not have an open enrollment option this year or in future years. With Kaiser being available for in-state open enrollment this year when it was not last year,  I suspect its availability means in-state retirees will be moved to individual policies on 1/1/10 without advanced notification. That probably means this is your last chance to change providers.



Prorating LLNS Contributions For Less Than 20 Years Of Service:


Retirees hired after 1/1/1990 have always had their percentage of UC contributions prorated, getting 50% at 10 years and working up to 100% at 20 years. This year, LLNS has prorated payments for retirees hired prior to 1990 contrary to UC commitments.  




Survey Form:


The following link is to a survey form designed to get some information to help decide where we should go next. Please fill it out and click the send button. You should get an acknowledgement back when your input is accepted.