Health Care Lawsuit Update from our counsel, Harry and Seth Greenberg

Thursday, July 6, 2017
Below constitutes an update on the status of the federal lawsuit, including background to where we came from, where we are at, and where we appear to be headed.
 
Lawsuit Background
 
Unilateral changes to health insurance were imposed upon your members beginning about October 2011.
 
After discussing the issues and options thoroughly, it was decided that the best courses of action initially would be to file (1) contract grievances and (2) improper practice charges.  A lawsuit, it was decided, might follow as well, though no authorization to move forward with a lawsuit was given to us initially. 
Shortly after the grievances and improper practice charges were filed, we were authorized to move forward with the filing of (3) a federal lawsuit, challenging the State's actions as a violation of federal law, and asking the federal court to assert supplemental jurisdiction over certain other state law claims.  We filed the lawsuit in February 2012.
 
Filing a federal lawsuit resulted in two reactions - first, the State successfully went to state courts to have the grievance arbitrations permanently stopped on the basis that the lawsuit in federal court addresses the same thing and therefore they should not have to litigate the same thing in two different forums; and second, PERB continued its conditionally dismissed the improper practice charges, deferring to the lawsuit.  That conditional dismissal is without prejudice and is subject to a request to reopen if there remains outstanding issues within PERB's jurisdiction.
 
It was decided by the group, after much discussion, not to seek temporary injunctive relief (either a TRO or preliminary injunction) because the risk of what a judge might say at the outset could have far reaching impact on the ultimate success of the lawsuit.
 
Litigation Process to Date

When the federal lawsuit was filed, it was filed in the Eastern District of New York.  The State made two alternative motions - one to dismiss the whole case and the other to have the case transferred to the Northern District of New York (up in Albany) where 10 other related cases were already being litigated.
 
Judge Spatt of the Eastern District granted the motion to change venue and the case was transferred to the Northern District.  It was assigned to Judge D'Agostino, who presided over the other related cases.
 
By this time, NYSCOA had already filed its own, separate action and, unlike our group, decided to seek injunctive relief.  Unfortunately, Judge Scheindlin of the Southern District rejected their application.  Even more unfortunate is that she opined about the likelihood of success of the case, concluding that it was very unlikely the case would succeed given her reading of the contract language.  This decision has been reference by the State throughout the litigation process. Shortly after Judge Scheindlin's decision, NYSCOA's case was also transferred to the Northern District, where all 11 related cases are aligned.
 
The State re-filed its motion to dismiss.  Although some aspects of the complaint were limited, we successfully maintained the lawsuit and the motion to dismiss was denied.
 
A subsequent motion for a judgment on the pleadings was filed by the State.  We were able to get that motion denied in its entirety.  And the Court also denied the State's subsequent motion for reconsideration.
 
Only after these pre-discovery motions (which took place over a span of a couple of years)  ended, did we move along to the discovery process.
 
Several obstacles then delayed discovery.  First, there was a dispute over the class of employees/retirees that are to be covered by the lawsuits.  After this was ultimately resolved, there was a change in the magistrate judge (who assists Judge D'Agostino on discovery and certain other matters) for some but not all of the cases.  Thereafter, there began, in earnest, an exchange of documents and other information.
 
On March 3, 2017, the Court issued orders setting forth certain deadlines.  Specifically, a status conference was set up for September 6, 2017 and a deadline for the completion of discovery was set for November 22, 2017.
The discovery process continued, depositions began, other depositions were scheduled, and documents continued to be exchanged.
 
Then, on June 20, 2017, in what appears to have come out of thin air, Judge D'Agostino issued an order that limited discovery and re-set the discovery deadline for September 1, 2017.  The deadline for summary judgment motions, which can resolve the case as a matter of law before and without the need for a trial, were re-set to November 3, 2017.
 
As directed by the Court, we continue to work in coordination with the other related cases, including directly with plaintiff's attorneys in the NYSCOA case, to develop a record before the discovery deadline approaches.  Much of the delay to this point is through no fault of our own (or Plaintiffs in any of the related cases).  Motions to change venue, to dismiss, for judgment on the pleadings, for reconsideration, etc. all were generated by the State, delaying the start and then continuation of discovery.  Once discovery began again, following the Court's orders to have everyone conduct discovery in coordination with each other, there were substantive issues and disputes that took a some time to resolve.
 
Nevertheless, we continue to move the case forward as expeditiously as possible.
 
A Look Ahead
 
Decisions on anticipated summary judgment motions are almost certain to conclude this case.  Initial motions are due November 3rd, with cross-motions, oppositions and replies to follow.  It is likely that the full motions will not be completed and filed with the Court until the end of the year or early January 2018.  It will likely then be some time before a decision is issued.  Either or both sides can appeal to the Second Circuit Court of Appeals. 

Our job is to try to convince Judge D'Agostino to find the opposite as Judge Scheindlin did some time ago.  If not successful, the next best thing is to try to prevent a ruling in favor of the State.  These cases are always very difficult but we push forward and we will continue to zealously advocate for you.

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