Krey ex rel. All Persons Similarly Situated Formerly Known All Persons Similarly Situated v. Cuomo

Decision Date24 September 2018
Docket Number1:11-CV-1529 (MAD/CFH)
Parties David KREY, Individually and on Behalf of All Persons Similarly Situated Formerly Known as Hyman Kuritz; Alvin Magid, Individually and on Behalf of All Persons Similarly Situated; Sara A. Knapp, Individually and on Behalf of All Persons Similarly Situated; Lawrence S. Wittner, Individually and on Behalf of All Persons Similarly Situated; Frederick E. Kowal, as President of the United University Professions; and United University Professions, Plaintiffs, v. Andrew M. CUOMO, as Governor of the State of New York; Patricia A. Hite, as Acting President of the New York State Department of Civil Service and as Acting Commissioner of the New York State Department of Civil Service; 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 ; Gary Johnson, as Director of the New York State Governor's Office of Employee Relations; and Thomas P. DiNapoli, as Comptroller of the State of New York, Defendants.
CourtU.S. District Court — Northern District of New York

NEW YORK STATE UNITED TEACHERS, 800 Troy-Schenectady Road, Latham, New York 12110-2455, Attorneys for Plaintiffs, OF COUNSEL: HAROLD EISENSTEIN, ESQ., ROBERT T. REILLY, JR., ESQ.

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

MEMORANDUM-DECISION AND ORDER

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

I. INTRODUCTION1

In a complaint dated December 28, 2011, Plaintiffs allege that Defendants unilaterally increased the percentage of contributions that Plaintiffs, active and retired employees, are required to pay for health insurance benefits in retirement and, thereby, violated the Contracts and Due Process Clauses of the United States Constitution, impaired Plaintiffs' contractual rights under the terms of their Collective Bargaining Agreement, and violated state law. See Dkt. No. 1. On August 4, 2014, Plaintiffs filed an amended complaint. See Dkt. No. 57. In their amended complaint, 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, who are active and retired employees of the State of New York, pay for their health insurance in retirement. See Dkt. No. 57 at ¶ 1.

Currently before the Court are the parties' cross-motions for summary judgment and Plaintiffs' motion to strike. See Dkt. Nos. 96 & 100.

II. BACKGROUND
A. The Parties

Plaintiff David Kreh is a former Associate Librarian who receives health benefits through the New York State Health Insurance Program ("NYSHIP"). See Dkt. No. 96-2 at ¶ 1. Plaintiff Alvin Magid is a retired former professor at the State University of New York ("SUNY") at Albany and former member of a collective bargaining unit represented by United University Professions ("UUP"), and is enrolled in NYSHIP. See id. at ¶ 2. Plaintiff Sarah A. Knapp is a retired former librarian at SUNY Albany and former member of a collective bargaining unit represented by UUP, and is enrolled in NYSHIP. See id. at ¶ 3. Plaintiff Lawrence S. Wittner is a retired former professor at SUNY Albany and former member of a collective bargaining unit represented by UUP, and is enrolled in NYSHIP. See id. at ¶ 4. Plaintiff Frederick E. Kowal is the president of UUP. See id. at ¶ 5. Plaintiff UUP is the bargaining representative for the members of the State University Professional Services Negotiating Unit. See id. at ¶ 6.

Defendant Andrew M. Cuomo is Governor of the State of New York. See id. at ¶ 7. Defendant Patricia A. Hite was, in 2011, Acting Commissioner of the New York State Department of Civil Service. See id. at ¶ 8.2 Defendants Caroline W. Ahl and Dennis Hanrahan were, in 2011, the members of the Civil Service Commission. See id. at ¶ 9. Defendant Robert Megna was, in 2011, the Director of the New York State Division of Budget. See id. at ¶ 10. Defendant Thomas P. DiNapoli is the Comptroller of the State of New York. See id. at ¶ 11. Defendant Gary Johnson was at the relevant time the Executive Director of the New York State Governor's Office of Employee Relations ("GOER"). See Dkt. No. 57 at ¶ 52.

B. Collective Bargaining Agreement in Effect in 2011 Between New York and Plaintiffs

During 2011, the State of New York and UUP were parties to a collective bargaining agreement ("CBA") for the period April 1, 2007, through March 31, 2011 (the "2007-11 CBA"). See Dkt. No. 96-2 at ¶ 12. Section 39.1(a) of the 2007-11 CBA provided as follows: "The State shall continue to provide all the forms and extent of coverage as defined by the contracts in force on July 1, 2007 with the State's health insurance carriers unless specifically modified by this Agreement." Id. at ¶ 13. Section 39.1(d) provided that "[t]he State agrees to pay 90 percent of the cost of individual coverage and 75 percent of the cost of dependent coverage, include prescription drug coverage, provided under the Empire Plan." Id. at ¶ 16. Additionally, Section 39.10(d) provided that "[t]he unremarried spouse or domestic partner who has not acquired another domestic partner and otherwise eligible dependent children of an employee, who retires after April 1, 1979 with 10 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." Id. at ¶ 18.

C. Collective Bargaining Agreements from 1982 to 2011

The various collective bargaining agreements between the State and UUP from 1983 to 2011 contained substantially the same provisions as discussed above. See id. at ¶¶ 24-34. The 1982-85 CBA, however, provided that the State would pay 100 percent of the cost of individual coverage and 75 percent of the cost of dependent coverage provided under the Statewide Plan.

D. Subsequent Collective Bargaining Agreement Between New York and UUP

In January 2014, the State of New York and UUP entered into the Collective Bargaining Agreement with the effective dates July 2, 2011, through July 1, 2016 (the "2011-16 CBA"). See Dkt. No. 96-2 at ¶ 19. The 2011-16 CBA provided that "[t]he State shall continue to provide all the forms and extent of coverage as defined by the contracts in force on July 1, 2011 with the State's health insurance carriers unless specifically modified by this Agreement." Id. at ¶ 20. Section 39.1(d) provides as follows: "Effective September 1, 2013, Empire Plan premium contributions shall be adjusted on a going forward basis. For employees with a full-time salary of $40,137 or more the State agrees to pay 84 percent of the cost of individual coverages and 69 percent of the cost of dependent coverage." Id. at ¶ 21. As with previous CBAs, Section 39.10(d) of the 2011-16 CBA states that "[t]he unremarried spouse or domestic partner who has not acquired another domestic partner and otherwise eligible dependent children of an employee, who retires after April 1, 1979 with 10 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." Id. at ¶ 23.

E. Legislation, Administrative Measures, and Fiscal Crisis

The Court will not repeat all of the facts relating to the 1983 and 2011 Legislation, the fiscal crisis facing the State in 2010 and 2011, or the parties' arguments relating to Defendant Hite acting as the head of the Department of Civil Service. Rather, the Court refers the parties to the discussion set forth in the accompanying Memorandum-Decision and Order from the Lead Case.

F. The Amended Complaint and Pending Motions for Summary Judgment

In their first cause of action, Plaintiffs allege that the increase in the percentage of the health insurance premium contribution paid by retirees violated the Contracts Clause of Article I, § 10 of the United States Constitution. See Dkt. No. 57 at ¶¶ 131-37. Defendants contend that the Court should dismiss this cause of action because the collective bargaining agreements do not establish a contractual right to a perpetually fixed health insurance premium contribution rates. See Dkt. No. 96-1 at 10-15. Further, Defendants argue that, even if Plaintiffs do have a vested right to a perpetually fixed premium contribution rate, they failed to demonstrate a substantial impairment of that right. See id. at 15-18. Moreover, Defendants contend that they are entitled to summary judgment on this claim because the law at issue served a legitimate public purpose and the means chosen to accomplish that purpose were reasonable and necessary. See id. at 18-22.

The second cause of action alleges that the retirees' premium contribution increase violated Plaintiffs' right to due process under the Federal and State Constitutions. See Dkt. No. 57 at ¶¶ 138-42. Defendants argue that these claims fail because Plaintiffs do not have a property interest in a perpetually fixed premium contribution rate. See Dkt. No. 96-1 at 22-26. Additionally, Defendants contend that, even if Plaintiffs had a property interest, the claim still fails because they had an adequate state-court remedy of which they failed to avail themselves. See id. at 26-29. Further, Defendants argue that the New York State-based due process claim must be dismissed because the State Constitution does not...

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