Donohue v. New York

• Citation: 347 F.Supp.3d 110
• Decision Date: 24 September 2018
• Docket Number: 1:11-CV-1530 (MAD/CFH)
• Parties: Danny DONOHUE, as President of the Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO, and Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO, and Milo Barlow, Thomas Jefferson, Cornelius Kennedy, Judy Richards, and Henry Wagoner, on Behalf of Themselves and Certain Other Retirees of the State of New York Formerly in the CSEA Bargaining Units, Plaintiffs, v. The State of NEW YORK, Andrew M. Cuomo, as Governor of the State of New York, New York State Civil Service Department, Patricia A. Hite as Acting Commissioner, New York State Civil Service Department, New York State Civil Service Commission, Caroline W. Ahl and J. Dennis Hanrahan, as Commissioners of the New York State Civil Service Commission, Robert L. Megna, as Director of the New York State Division of the Budget, Thomas P. Dinapoli as Comptroller of the State of New York, New York State and Local Retirement System; Jonathan Lippman as Chief Judge of the New York State Unified Court System, and the New York State Unified Court System, Defendants.
• Court: United States District Courts. 2nd Circuit. United States District Court of Northern District of New York

347 F.Supp.3d 110

Danny DONOHUE, as President of the Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO, and Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO, and Milo Barlow, Thomas Jefferson, Cornelius Kennedy, Judy Richards, and Henry Wagoner, on Behalf of Themselves and Certain Other Retirees of the State of New York Formerly in the CSEA Bargaining Units, Plaintiffs,

v.The State of NEW YORK, Andrew M. Cuomo, as Governor of the State of New York, New York State Civil Service Department, Patricia A. Hite as Acting Commissioner, New York State Civil Service Department, New York State Civil Service Commission, Caroline W. Ahl and J. Dennis Hanrahan, as Commissioners of the New York State Civil Service Commission, Robert L. Megna, as Director of the New York State Division of the Budget, Thomas P. Dinapoli as Comptroller of the State of New York, New York State and Local Retirement System; Jonathan Lippman as Chief Judge of the New York State Unified Court System, and the New York State Unified Court System, Defendants.

1:11-CV-1530 (MAD/CFH)

United States District Court, N.D. New York.

Signed September 24, 2018

CIVIL SERVICE EMPLOYEES ASSOCIATION, INC. OF COUNSEL: DAREN J. RYLEWICZ, ESQ., ERIC E. WILKE, ESQ., JENNIFER C. ZEGARELLI, ESQ., 143 Washington Avenue, P.O. Box 7125, Capitol Station, Albany, New York 12224, Attorneys for Plaintiffs.

OFFICE OF THE NEW YORK STATE ATTORNEY GENERAL OF COUNSEL: HELENA LYNCH, AAG, RICHARD LOMBARDO, AAG, The Capitol, Albany, New York 12224, Attorneys for Defendants.

MEMORANDUM-DECISION AND ORDER

Mae A. D'Agostino, U.S. District Judge:

I. INTRODUCTION

In their second amended complaint dated July 29, 2014, Plaintiffs seek declaratory and injunctive relief pursuant to 28 U.S.C. §§ 2201 and 2202, and money damages, to redress Defendants' alleged deprivation of Plaintiffs' rights secured pursuant to the Contracts Clause of the United States Constitution, the Fourteenth Amendment to the United States Constitution, 42 U.S.C. § 1983, Article I, § 6 of the New York State Constitution, and for breach of contract, and violation of New York State Civil Service Law § 167, resulting from Defendants' unilateral action effective October 1, 2011, increasing the contribution rates that Plaintiffs pay for their retiree health insurance. See Dkt. No. 55 at ¶ 1. Plaintiffs further seek an order declaring Chapter 491 of the Laws of 2011, amending Civil Service Law § 167(8), unconstitutional, as applied, and enjoining Defendants' implementation thereof, to the extent that said law and any regulations adopted thereunder impermissibly impair the obligation of the contract between the State and individual Plaintiffs, and the class they represent, by increasing the contribution rates that such retirees are required to pay for health insurance benefits in retirement. See id. at ¶ 2.

Currently before the Court are the parties' cross motions for summary judgment.

See Dkt. Nos. 93 & 98.¹

II. BACKGROUND

A. The Parties

Plaintiff Danny Donohue is the statewide president of the Civil Service Employees Association, Inc. ("CSEA"). See Dkt. No. 98 at ¶ 1. Plaintiff CSEA is the collective negotiating representative for New York State employees in the Administrative Service Unit ("ASU"), Institutional Services Unit ("ISU"), Operational Services Unit ("OSU"), and Division of Military and Naval Affairs Unit ("DMNA"), as well as one unit of employees of the New York State Unified Court System. See id. at ¶ 2. Plaintiff Milo Barlow is a retired former member of the OSU and is receiving individual health insurance coverage. See id. at ¶ 3. Plaintiff Thomas Jefferson is a retired former employee of the Unified Court System who receives dependent coverage. See id. at ¶ 4. Plaintiff Cornelius Kennedy is a retired former member of the DMNA unit and receives dependent health insurance coverage. See id. at ¶ 5. Plaintiff Judy Richards is a retired former ASU member and receives dependent health insurance benefits. See id. at ¶ 6. Plaintiff Henry Wagoner is a retired former member of the ASU unit and receives individual health insurance benefits. See id. at ¶ 7.

Defendant Andrew Cuomo is Governor of the State of New York. See id. at ¶ 8. Defendant Patricia A. Hite was, in 2011, Acting Commissioner of the New York State Department of Civil Service. See id. at ¶ 9.² Defendants Caroline W. Ahl and Dennis Hanrahan were, in 2011, the members of the Civil Service Commission. See id. at ¶ 10. Defendant Robert Megna was, in 2011, the Director of the New York State Division of Budget. See id. at ¶ 11. Defendant Thomas P. DiNapoli is the Comptroller of the State of New York. See id. at ¶ 12. Finally, Defendant Jonathan Lippman was at the relevant time the Chief Judge of the Unified Court System. See id. at ¶ 13.

B. Collective Bargaining Agreement Negotiated Between the State and CSEA in 2011

On June 22, 2011, the Governor issued a press release announcing that the State had reached a five-year labor agreement (the "2011-16 CBA") with the CSEA. See Dkt. No. 98 at ¶ 14. The press release announced a two percent increase in the premium contribution rate for Grade 9 employees and below, and a six percent increase for Grade 10 and above. See id.

The 2011-16 CBA between CSEA and the State was signed on August 15, 2011, and covered the periods between April 2, 2011 and April 1, 2016. See id. at ¶ 15. Section 9.14 of the 2011-16 CBA provides as follows:

The State agrees to pay 90 percent of the cost of individual coverage and 75 percent of the cost of dependent coverage toward the hospital/medical/mental health and substance abuse components provided under the Empire Plan. Effective October 1, 2011 for employees in a title Salary Grade 9 or below, the State agrees to pay 88 percent of the cost of individual coverage and 73 percent of the cost of dependent coverage toward the hospital/medical/mental health and substance abuse components provided under the Empire Plan. Effective October 1, 2011 for employees in a title Salary Grade 10 and above or an employee equated to a position title Salary Grade 10 and above the State agrees to pay 84 percent of the cost of individual coverage and 69 percent of the cost of dependent coverage toward the hospital/medical/mental health and substance abuse components provided under the Empire Plan.

Id. at ¶ 16.³ Section 9.1(a) of the 2011-16 CBA further states that "[t]he State shall continue to provide all the forms and extent of coverage as defined by the contracts in force on March 31, 2011 with the State's health insurance carriers unless specifically modified by this Agreement." Id. at ¶ 17. The parties agree that the "contracts in force on March 31, 2011 with the State's health insurance carriers" refers to the contracts between the State and the health and dental insurance carriers. See id. at ¶ 18. According to Defendants, none of the contracts between the State and any insurance carriers, including those in force on March 31, 2011, contained any provisions setting forth the respective premium contribution rates for the State and its employees. See Dkt. No. 93-2 at ¶ 19; Dkt. No. 98 at ¶ 19.

Section 9.26 of the 2011-16 CBA provides that "[t]he unremarried spouse and otherwise eligible dependent children of an employee, who retires after April 1, 1979, with ten or more years of active State service and subsequently dies, shall be permitted to continue coverage in the health insurance program with payment at the same contribution rates as required of active employees for the same coverage." Dkt. No. 98 at ¶ 20. Article 50 of the 2011-16 CBA, entitled "Conclusion of Collective Negotiations," provides that

[t]his Agreement is the entire agreement between the State and CSEA, terminates all prior agreements and understandings and concludes all collective negotiations during its term. During the term of this Agreement, neither party will unilaterally seek to modify its terms through legislation or other means. The parties agree to support jointly any legislation or administrative action necessary to implement the provisions of this Agreement. The parties acknowledge that, except as otherwise expressly provided herein, they have fully negotiated with respect to the terms and conditions of employment and have settled them for the term of this Agreement in accordance with the provisions thereof.

Id. at ¶ 21.⁴

C. 2011 Legislation to Implement Contribution Rate Changes for Health Insurance Premiums

Prior to 2011, section 167(8) of the Civil Service Law provided, in relevant part, that the "state cost of premium or subscription charges for eligible employees" covered by a CBA "may be increased to the terms of such agreement." Dkt. No. 98 at ¶ 22 (citing Senate Bill 5846, Assembly Bill 8513). On August 17, 2011, section 167(8) was amended to read as follows:

Notwithstanding any inconsistent provision of law, where and to the extent that an agreement between the state and an employee organization entered into pursuant to article fourteen of this chapter so provides, the state cost of premium or subscription charges for eligible employees covered by such agreement may be modified pursuant to the terms of such agreement. The president, with the approval of the director of the budget, may extend the modified state cost of premium or subscription charges for employees or retirees not subject to an agreement referenced above and shall promulgate the necessary rules or regulations to implement this provision.

Id. at ¶ 23. Defendants contend that "[s]ection 167(8) was amended to implement the collectively bargained provisions of the CSEA 2011-16 CBA relating to health insurance contributions." Dkt. No. 93-2 at ¶ 24. Plaintiffs, however, assert that "the parties never agreed to change retiree health insurance contributions as part of collective bargaining, despite the State's proposals to change the level of premium contribution rates to a sliding scale based upon number of years of employment during the...