Swindle v. Remington

• Decision Date: 08 March 2019
• Docket Number: 1161044
• Parties: Sarah S. SWINDLE et al. v. Sheila Hocutt REMINGTON
• Court: Alabama Supreme Court

291 So.3d 439

Sarah S. SWINDLE et al.

v.Sheila Hocutt REMINGTON

1161044

Supreme Court of Alabama.

March 8, 2019

Opinion Issued on Denial of Rehearing May 24, 2019

David R. Boyd and Dorman Walker of Balch & Bingham LLP, Montgomery; and Leura G. Canary and Jared H. Morris, Retirement Systems of Alabama, Montgomery, for appellants.

J. Cecil Gardner, M. Vance McCrary, and Thomas Loper of The Gardner Firm, P.C., Mobile; Samuel H. Heldman of The Gardner Firm, P.C., Washington, D.C.; Clinton M. Daughtrey, Alabama Education Association, Montgomery; and Fred F. Bell, Montgomery, for appellee.

BOLIN, Justice.

Sarah S. Swindle, Bill Newton, Young Boozer, Philip Cleveland, Susan Williams Brown, Richard Brown, Joe Ward, Luke Hallmark, Susan Lockridge, Russell Twilley, John R. Whaley, Charlene McCoy, C. Ray Hayes, and Donald L. Large, Jr., in their official capacities as board members of the Public Education Employees' Health Insurance Program ("PEEHIP"), appeal from a summary judgment entered by the Montgomery Circuit Court in favor of Sheila Hocutt Remington, acting personally and as then president of the Alabama Education Association ("the AEA"). Specifically, the members of the PEEHIP Board ("the Board") challenge the circuit court's determination that they violated the Alabama Open Meetings Act, § 36-25A-1 et seq., Ala. Code 1975, and its judgment granting Remington declaratory and injunctive relief.

I. Facts and Procedural History

A. Background

PEEHIP is a self-funded group-health-insurance plan that provides benefits to participating teachers and public-education employees ("the insureds"). The Board is responsible for maintaining the health plan. See Ala. Code 1975, § 16-25A-4. As a self-funded health plan, PEEHIP's annual budget must pay all covered health costs for the insureds during each fiscal year.

At times relevant to this appeal, the Board conducted biannual meetings, one in the fall and one in the spring.¹ The usual practice for PEEHIP staff members ("staff") during the spring meeting was to present the Board with a proposed annual budget for the upcoming fiscal year, which begins on October 1. Since April 2014, staff has also presented financial reports and updates, including information regarding PEEHIP's projected budget shortfalls, if any, for the following three fiscal years (e.g., in April 2014, these were fiscal years 2015, 2016, and 2017), during the meeting.

B. The April 2016 Meeting

At some point during the week before the scheduled spring Board meeting, Swindle, the chair of the Board, along with Diane Scott, chief financial officer for the Retirement Systems of Alabama ("RSA") and PEEHIP, and other PEEHIP officials collectively decided to schedule a training session before the open meeting.

On April 22, 2016, Don Yancey, a PEEHIP staff member, via Tisha Woodhan, another PEEHIP staff member, sent an e-mail to Board members advising that an "education session" was set for 9:30 a.m. on the morning of the April 27, 2016, Board meeting, which was scheduled for the afternoon. Yancey also advised that "attendance at this education session will be limited to board members and PEEHIP staff only" and that "[i]t was vitally important that we make this educational session as productive as possible and that as many questions as possible be dealt with so that the board meeting can be as short as possible, as there are some board members who need to leave early due to travel schedules."

According to Scott, on April 27, 2016, staff conducted a closed training session for the Board in the morning, which was followed by a luncheon and then an open meeting in the afternoon. Specifically, Scott stated in her affidavit:

"At 9:30 a.m. on April 27, 2016, prior to the PEEHIP Board's public meeting that afternoon, PEEHIP staff conducted a non-public training session for the PEEHIP Board in the training room of RSA's offices at 201 South Union Street, Montgomery, Alabama 36104. The sole purpose of the training session was for PEEHIP staff members to make educational presentations about various matters including recommended options that Board members needed to understand in order to deliberate them at the afternoon Board meeting. These recommendations were different actions the Board could take to meet a projected $141.5 million deficit in PEEHIP funding for FY 2017, and a projected $220 million deficit in FY 2018. The recommendations included proposed increases in the amounts paid monthly by PEEHIP members for their health insurance. The Board members present at the training session listened to the staff reports and presentations about numerous matters, including PEEHIP's financial situation, projected budget shortfalls, a proposed transition to a Medicare Advantage Prescription Drug Program (projected to save PEEHIP $55 million in FY 2017), and staff recommendations to increase premiums and spousal surcharges, and asked questions as necessary so that they could better understand the matters about which the staff was presenting. These matters were complex and technical and needed careful explanation by staff members to be sure that Board of Control members understood and could deliberate these issues at a public meeting scheduled for later the same day."

Scott also stated in her affidavit that, at the beginning of the morning session, Leura Canary, PEEHIP's general counsel, instructed the Board on the requirements for complying with the Open Meetings Act as follows:

"Canary explained that the Board members could not ‘deliberate’ with one another prior to the open meeting and ... that ‘deliberation’ is defined by the Open Meetings Act as an exchange of information or ideas among a quorum of a governmental body intended to arrive at or influence a decision as to how to vote on a specific matter. She also told the board members that they could question PEEHIP staff about the presentations so that they could fully understand the presentations, but she specifically instructed that they should limit their comments to those questions and that during the training session, at the lunch, or at any time outside the public meeting they should not discuss the presentations or any matter which might come before the Board for a vote."

Attorneys Canary and Jared Morris remained present during the morning session.

During the session, several Board members "asked questions as necessary so that [they] could better understand the issues about which the staff was presenting, including the proposed increases in the amount paid monthly by PEEHIP members for their health insurance."² According to those Board members, no one engaged in any deliberation during the morning session.

The recollection of Board members Susan Brown and Ward, however, is markedly different from that of the other Board members. Both Susan Brown and Ward objected to the morning session on the basis that no notice was provided to the public and that the session was closed to the public. They both alleged:

"Before the lunch break and before the public was allowed to enter the meeting, [the Board was] provided information concerning proposed health insurance increases related to PEEHIP. That information was provided in a way that was designed to suggest that the Board should adopt the proposed premium increases. There was deliberation concerning this specific matter, which later in the day was coming up for a vote. Various members shared thoughts and views on the proposed increases, through discussion, questioning and otherwise."

In addition, Ward stated that, although staff recommended the proposed increases, he advocated that the Board should take the additional funds necessary to cover the shortfall from the trust fund itself.

At noon, the Board and staff remained in the training room for a luncheon, which included a farewell presentation for Lee Hayes, a retiring PEEHIP official, and for Swindle as a long-term Board member and chair of the Board.

After the luncheon, the Board and staff moved from the training room to the boardroom of the RSA building. The open Board meeting, which was publicly noticed with the Alabama Secretary of State, began at 1:00 p.m. The meeting was conducted by Swindle and attended by the press and members of the public. During the open meeting, staff presented a financial report concerning PEEHIP's projected budget shortfall of $141.5 million for fiscal year 2017 and $220 million for fiscal year 2018. Staff also presented various proposals to fill the projected shortfall for fiscal year 2017, including a federal program. During the three-hour open meeting, the Board openly deliberated regarding the recommendations. According to the appellants, all the information presented during the morning session, as well as additional information, was presented during the open meeting.³

The Board voted on several matters during the afternoon meeting. They approved staff's recommendation to adopt the Medicare Advantage Prescription Drug Plan, a new retiree health plan. The Board also voted seven to six against a member's proposal to take the maximum allowable amount from the Alabama Retired Education Employees' Health Care Trust to help fill the projected shortfall for fiscal year 2017. In addition, they voted seven to six in favor of increasing spousal surcharges and premiums effective October 1, 2016.

C. The Lawsuit

On May 17, 2016, Remington filed the underlying action in her individual capacity and in her capacity as the then president of AEA's board of directors, asserting a violation of the Open Meetings Act and seeking declaratory and injunctive relief, including an order invalidating the premium and surcharge increases. On May 27, 2016, the Board filed a motion to dismiss the action. After the court conducted a hearing on the motion to dismiss, the parties agreed to a briefing schedule on their respective motions for a summary judgment.

On September 23, 2016, the court signed a proposed order submitted by Remington that directed PEEHIP to hold the April 27, 2016,...