- Government retirees object to a proposed "writ of prohibition" from the N.C. Supreme Court that would stop them from pursuing a class-action lawsuit. The retirees want the state to restore premium-free health benefits they enjoyed before a change in state law in 2011.
- The atate health and retirement plans and Treasurer Dale Folwell are seeking the rare writ. Their lawyers argue that the state Supreme Court never should have issued a decision allowing the lawsuit to proceed.
- The case ultimately could affect 220,000 government retirees.
N.C. government retirees suing for access to their former premium-free health benefits oppose the latest courtroom request from their legal opponents. They filed paperwork Friday with the N.C. Supreme Court objecting to a rare “writ of prohibition” in the case.
The dispute ultimately could affect 220,000 government retirees.
The State Health Plan, Teachers’ and State Employees’ Retirement System, and Treasurer Dale Folwell asked the state’s highest court earlier this month to issue the writ of prohibition. It would block a 15-month-old ruling allowing retirees to proceed with their lawsuit before a trial judge.
The state Supreme Court issued a 4-2 decision in March 2022 allowing the case to proceed. But the health plan’s court filing urges the high court to reverse course. Lawyers representing Folwell and the health and retirement plans label the 2022 decision void.
The retirees disagree.
“The Writ of Prohibition is an extraordinary writ reserved for situations in which a lower court must be stopped from unlawful activity causing irreparable harm. No such thing is occurring here,” retirees’ lawyers wrote. “There is nothing extraordinary happening that needs to be prohibited.”
“Remarkably, the Defendants’ Petition seeks to prohibit nothing, but otherwise asks for everything,” according to Friday’s brief. “Though claiming not to seek a review on the merits of this Court’s 15‐month‐old decision, Defendants seek complete eradication of that opinion, therefore reverting back to a Court of Appeals opinion that six Justices of this Court reversed.”
“Thus, the Defendants ask for nothing a Writ of Prohibition is designed to do, and everything it has never once been used to accomplish,” retirees’ lawyers added.
“[T]he Defendants have persistently engaged in delay and distraction,” the brief added. “Even after a final ruling on the primary contractual issue from this Court over a year ago, Defendants’ current petition stands as yet another attempt to delay and distract.”
In seeking the writ of prohibition, Folwell and the health and retirement plans argued that the state Supreme Court never should have issued its March 2022 decision. The court did not have a “quorum of four neutral Justices” to be able to consider the case.
“This Court therefore acted without jurisdiction or legal authority,” according to the health plan’s brief. “Though this Court attempted to invoke the Rule of Necessity to sidestep the jurisdictional necessity of a quorum, Plaintiffs had no right to be heard by this Court, so this Court improperly applied the Rule of Necessity as if it were the ‘Rule of Discretion.’”
The case dates back to the General Assembly’s decision in May 2011 to authorize the State Health Plan to charge premiums under certain coverage options. Twenty-six plaintiffs led by retired N.C. Supreme Court Chief Justice Beverly Lake filed suit in April 2012. They argued “that, by charging members a premium, Defendants had impaired Plaintiffs’ lifetime contract for premium-free healthcare benefits,” according to the brief.
Class-action certification in 2016 expanded the list of plaintiffs. Lake is still listed as the lead plantiff, though he died in 2019.
A unanimous N.C. Court of Appeals panel ruled in 2019 against the retirees. Appellate judges agreed the plaintiffs had failed to prove the existence of a valid contract.
The state Supreme Court agreed to take the case in February 2020, though “this Court did not acknowledge its lack of a quorum when it granted Plaintiffs’ petition,” according to the health plan’s court filing.
In January 2021, the state Supreme Court announced that five of seven justices were disqualified from hearing the case “based on familial relationships with potential class members” who might benefit from the court’s decision. Plaintiffs urged the court to rely on a Rule of Necessity to move forward with the case. Defendants objected.
The high court granted the plaintiffs’ request. In the end, only Chief Justice Paul Newby recused himself from hearing the case. The March 2022 decision ended up splitting the court along party lines, with the court’s four Democrats outvoting their two remaining Republican colleagues.
“By allowing Plaintiffs’ Petition for Discretionary Review, this Court acted without both jurisdiction and legal authority,” according to the health plan’s filing. “An order or judgment entered by this Court without jurisdiction, or authority to act, is void and a nullity. All proceedings of the North Carolina Supreme Court in this case were conducted without jurisdiction or lawful authority, so the opinion of the Court of Appeals is the last lawfully entered judgment in this case.”
“This Court should enter a Writ of Prohibition against the Superior Court, prohibiting it from
acting except as directed by the remand order of the Court of Appeals,” the brief continued.
Challengers object to a 2011 law allowing the State Health Plan to charge state workers and retirees a monthly premium for standard health care coverage, known as the Regular State Health Plan. Plaintiffs argue that the state had breached its contract to provide them with premium-free health insurance.
They want the state to resume the premium-free coverage provided before the 2011 law took effect. They seek reimbursements for premiums they have paid.