Moen v. Regents of the Univ. of Cal., No. A153386 (D1d5 Aug 1, 2018)
A class action against the UC brought by some Retirees at the Lawrence Livermore lab. Retirees claim that the UC system either implicitly or explicitly promised them health insurance and that the UC’s failure to honor those promises after the lab was privatized is an unconstitutional impairment of contract. The case has been pending for eight years. A class was ultimately certified, and a part of the case about the UC system’s authority to enter the alleged contracts was tried. Retirees won.
But the UC then moved to decertify the class, arguing that the rest of the case—about whether promises were actually made and relied upon—was too individualized to be addressed class-wide. The trial court agreed and decertified the class. Retirees appeal.
The Court of Appeal reverses, in part. Contract formation is typically an individualized question. But Retirees’ theory is that the UC had a uniform practice of offering the benefits and that the benefits were implicitly accepted by the retirees when they came and/or continued to work for the lab. Under the circumstances, there was enough commonality among the members of the class for the contract formation issues to be tried class-wide. Similarly, the mostly legal issue of whether contracts, if formed, were impaired, could be addressed by a class because it did not require specific proof of economic injury.
On the other hand, damages could not be decided on a class-wide basis. That would require an assessment of the value of the allegedly promised policy versus the value of what each Retiree ultimately received, which could have a great deal of variety of factors, including each Retiree’s actual use of the heath care benefits provided.
Reversed in part.
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