Judge dismisses Livermore lab retirees’ lawsuit against UC: Transfer of retiree health plan deemed legal

Background: A group of retired nuclear lab employees sued UC with regard to their transfer to a less desirable retiree medical plan than currently covers other UC employees. Readers may remember that for decades UC ran the labs as a legacy of the World War II Manhattan Project. When administration of the labs – after various security-related scandals – was transferred to a consortium of private contractors and UC, benefits such as pensions and health care became an issue.

Judge dismisses Livermore lab retirees’ lawsuit: Transfer of retiree health plan deemed legal

By Suzanne Bohan, Contra Costa Times, Updated: 06/08/2011 (excerpt)

A three-year legal battle by Lawrence Livermore Laboratory retirees over medical benefits has sustained a major setback, according to a spokesman for the plaintiffs. In a lawsuit against the regents of the University of California, four lab retirees argued that UC illegally transferred them into the health care plan of the entity that took over lab management from the university in 2007. But on May 27, an Oakland judge dismissed the lawsuit.

Alameda County Superior Court Judge Frank Roesch (ruled that) the plaintiffs didn’t deliver evidence of “a binding contract” guaranteeing them health benefits “equal to those provided to other UC retirees,” the judge wrote. Nor was their assertion of major financial injury upheld. Roesch wrote that the switch from one retiree health plan to another isn’t “an injury so severe” as to require court intervention. Charles Robinson, UC’s vice president and general counsel for legal affairs, stated in an email that UC “is pleased that the judge acknowledged that the university’s transfer of responsibility” for retiree medical benefits “was legal and appropriate.”

Full story at http://www.contracostatimes.com/bay-area-news/ci_18224492

In the short term, this ruling relieves UC of the potential costs of re-assuming the old benefit plan for these employees. But, of course, it also spotlights the shakier obligation of UC retiree health relative to the pension obligation.