NC Supreme Court urged to throw out earlier ruling on government retiree health benefits

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  • Lawyers representing the state government health and retirement plans and Treasurer Dale Folwell seek a rare "writ of prohibition" from the N.C. Supreme Court. The writ would block a 2022 ruling linked to government retirees' health benefits.
  • About 220,000 retirees are seeking a court ruling guaranteeing them premium-free health care benefits for life. They challenge a 2011 state law that allowed the state to charge premiums.
  • A 4-2 ruling from the N.C. Supreme Court in March 2022 allowed the case to move forward. The latest court filing labels that ruling "void" because the court did not have a quorum of neutral justices.

The State Health Plan, Teachers’ and State Employees’ Retirement System, and Treasurer Dale Folwell are asking the N.C. Supreme Court to issue a rare “writ of prohibition.” The writ would block a ruling last year that allowed 220,000 government retirees to pursue a lawsuit for premium-free health care benefits.

The state Supreme Court issued a 4-2 decision in March 2022 allowing the case to proceed. But the latest court filing urges the high court to throw out its 15-month-old decision.

“This Court’s decision was without jurisdiction and legal authority, so it is void,” wrote private attorneys representing the state health and retirement plans and Folwell.

Without new action from the state’s highest court, a trial judge will move forward with the case.

“Without this Court’s intervention, the Superior Court will continue to proceed without lawful authority,” the court filing continued. “Defendants therefore seek this Court’s issuance of a writ of prohibition to correct its own past irregular and unauthorized actions.”

“The Writ of Prohibition is an extraordinary remedy. This is an extraordinary case,” the lawyers wrote. “Defendants, therefore, respectfully submit that the extreme circumstances present here merit the issuance of the Writ and remedy requested.”

The court filing argues that the Supreme 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 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 latest 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 latest court 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.

Editor’s note: This story has been updated to clarify the plaintiffs’ request from the courts.