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City wants federal court for retiree suit

July 2, 2013

WOONSOCKET – The city’s lawyers don’t want the state courts to hear the first legal challenge to the Budget Commission’s unilateral cuts in retiree health benefits.
Lawyer Daniel Kinder said the city asked the state Superior Court to move the case to the federal system on Tuesday. The city had the leverage to do so because retired policeman Glen Hebert’s suit rests on a federal law – the contract clause of the U.S. Constitution.
Defendants in such cases have the right to ask for the switch to the federal system, which is considered a routine process, according to Kinder.
The request short-circuited what was scheduled as a preliminary hearing on Hebert’s request to block the commission from altering his health care plan.
But Hebert’s lawyer predicted the case will end up back in Superior Court very soon. Lawyer Edward C. Roy Jr. said he would refile the case in the state system no later than today and omit the federal law. Instead, he would substitute a nearly identical clause from the state constitution.
He called the request for a change of jurisdiction “a maneuver” by the city’s lawyers, “but not a thing I would criticize them for.”
“I don’t think they did it for a bad reason,” he said. “They’re good lawyers. Some lawyers want cases that rest on federal law to be heard in a constitutional forum.”
One reason Roy said he doesn’t want the case heard in the U.S. District Court in Providence is because his client – Hebert – currently works there as a court security worker. Roy said he did not know whether Hebert is a direct employee of the federal government or an outside contractor, but either way, the judges who work in the same building as Hebert would likely want to avoid the appearance of a conflict in the case.
To do that, he said, they would have to recuse themselves from hearing the case, shifting the venue to another court within the First District network of federal courts. Roy suggested the case could have landed in New Hampshire, but other courts in the district are as close as Worcester. The First District includes Rhode Island, Massachusetts, New Hampshire and Maine.
Though Hebert is the only plaintiff in the case so far, the argument he makes is applicable to many other retirees who have been affected by the Budget Commission’s “enactments,” which took effect on July 1.
After a lengthy period of collective bargaining, the commission recently signed contractual agreements with five of the city’s seven major employees unions, chiefly on the issue of health care benefits. The net result was to move all workers to a single, unified health plan that lowers costs for the city and requires workers to shoulder more out-of-pocket costs. Combined with some departmental restructuring, the city envisions a savings of some $5.1 million through 2017 as a result of the new pacts, a central feature of the commission’s five-year plan to erase the city’s crippling fiscal deficits.
The same changes in health care benefits were imposed on many retirees, but without collective bargaining, which Hebert contends is illegal.
Mayor Leo T. Fontaine acknowledged yesterday that the outcome of the case could deal a serious blow to the savings envisioned by the commission’s five-year plan. Counting only ex-police officers who, like Hebert, are in the state retirement system, the potential pool of litigants who could join his suit as co-plaintiffs numbers about 62, but Fontaine said there are many more retirees from the Woonsocket Education Department and City Hall who were similarly affected by the commission’s health care enactments for retirees.
Fontaine said members of the locally administered retirement plan for police and firefighters are also in the same boat. That group alone consists of about 250 retirees.
Losing the savings envisioned by shifting all retirees to cheaper health care could push the city into receivership, said the mayor, especially if state lawmakers nix the proposed $2.5 million supplemental tax bill.
“We’ve worked very hard to make these cuts in a way that’s fair and equitable to everyone involved,” said the mayor. “If retirees don’t like it, in all likelihood they’re going to like what a receiver has in store for them even less. Being equitable is the last thing a receiver is going to care about.”
Hebert, 55, worked for the Woonsocket police department from March 1984 through April 2005. Fontaine said his base pension is $2,519 a month, plus a COLA of $529. Under the provisions of his now-defunct health plan, the city picked up 100 percent of the premium for his Blue Cross coverage, or about $23,186 a year.
The enactments of the commission would push him and other retirees onto a plan in which the premium, sometimes called the working rate, is expected to be about $14,500 a year, according to Fontaine. Beneficiaries would be held responsible for a 20 percent co-share of that, plus an annual deductible of $1,000 a year for family coverage, $500 for individuals.
Follow Russ Olivo on Twitter @russolivo

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