Herbert Kolbe, et al., Appellants,v.Christine J. Tibbetts,, et al., Respondents.

Brief

N.Y.November 14, 2013

APL-2013-00035 Appellate Division Docket No. CA 12-00171 Niagara County Index No. 143032 Court of Appeals State of New York HERBERT KOLBE, LYNNE NICHOLAS, JOANNE SEEFELDT, and PHYLLIS HARRIS, Plaintiffs-Appellants, -against- CHRISTINE J. TIBBETTS, as Superintendent of Schools of the Newfane Central School District, JAMES REINEKE, as President of the Newfane Board of Education, NEWFANE BOARD OF EDUCATION and NEWFANE CENTRAL SCHOOL DISTRICT, Defendants-Respondents. BRIEF AMICUS CURIAE OF THE NEW YORK STATE SCHOOL BOARDS ASSOCIATION, INC. JAY WORONA, ESQ. PILAR SOKOL, ESQ. Attorneys for Amicus Curiae New York State School Boards Association 24 Century Hill Drive, Suite 200 Latham, New York 12110-2125 Tel.: (518) 783-0200 TIMOTHY G. KREMER EXECUTIVE DIRECTOR October 3, 2013 1 TABLE OF CONTENTS Page TABLE OF AUTHORITIES ..................................................................................... 2 INTEREST OF THE AMICUS CURIAE ................................................................... 3 STATEMENT OF THE ISSUE ................................................................................. 6 STATEMENT OF FACTS ........................................................................................ 7 INTRODUCTION ..................................................................................................... 8 ARGUMENT ........................................................................................................... 10 THE SCHOOL DISTRICT’S ACTIONS AT ISSUE HEREIN WERE PERMITTED UNDER STATUTORY PROVISIONS THAT SET OUT THE CONDITIONS PURSUANT TO WHICH SCHOOL DISTRICTS MAY DIMINISH RETIREE HEALTHCARE BENEFITS IN CONFORMITY WITH PUBLIC POLICY. ........................................................................................................ 10 a. The State has chosen to permit school districts to diminish retiree healthcare benefits if they effectuate a corresponding diminution to the healthcare benefits of active employees ............................................. 10 b. The legislative history of Chapter 504 of the Laws of 2009 and its predecessors corroborates the Legislature’s intent to make permissible the School District’s actions at issue herein ......................... 12 CONCLUSION ........................................................................................................ 15 2 TABLE OF AUTHORITIES Statutory Authorities Page L. 2009, Ch. 504 ................................................................................................passim L. 2009, Ch. 504, Pt. B, §14 .................................................................................... 10 L. 1994, Ch. 729 ................................................................................................... 8, 10 L. 1994, Ch. 729, Governor’s Approval Memorandum and Budget Report on Bills .......................... 12 McKinney’s Statutes §74 ......................................................................................... 11 Other Final Report of the Temporary Task Force on Health Insurance for Retired Educational Employees, Dec. 1, 1994 ............................................................... 12, 13 3 INTEREST OF THE AMICUS CURIAE The New York State School Boards Association, Inc. (“NYSSBA”) is a not- for-profit membership organization incorporated under the laws of the State of New York. Its membership consists of approximately six hundred and seventy (670) or ninety-one percent (91%) of all public school districts and boards of cooperative educational services in New York State. Pursuant to Section 1618 of New York’s Education Law, NYSSBA has the responsibility of devising practical ways and means for obtaining greater economy and efficiency in the administration of the affairs and projects of New York’s public school districts, on behalf of school districts and BOCES across the State. Consistent with that charge, NYSSBA often appears as amicus curiae before both federal and state court proceedings involving constitutional and statutory issues affecting public schools, and indeed has done so previously before this Court. Amongst those proceedings are: Matter of the Arbitration between Shenendehowa Cent. School Dist. Bd. of Educ. v. Civil Service Employees Ass’n, Inc., 20 N.Y.3d 1026 (2013); Matter of North Syracuse Cent. School Dist. v. New York State Div. of Human Rights, 19 N.Y.3d 481 (2012); Regional Economic Community Action Program, Inc. v Enlarged City School Dist. of Middletown, 18 N.Y.3d 474 (2012); Baker v. Poughkeepsie City School Dist., 18 N.Y.3d 714 (2012); Meegan v. Brown, 16 N.Y.3d 395 (2011); Consedine v. Portville CSD, 12 N.Y.3d 286 (2009); 4 Campaign for Fiscal Equity v. State of New York, 8 N.Y.3d 14 (2006); Matter of Enlarged City School Dist. of Middletown v. City of Middletown, 95 A.D.3d 840 (2 nd Dep’t 2012); New York State United Teachers Assn. v. Bd. of Regents of Univ. of State of N.Y., Case No. 513191 (3 rd Dep’t 2011, appeal settled); Scro v. Jordan- Elbridge CSD, 87 A.D.3d 1342 (4 th Dep’t 2011); Geneva City School Dist. v. Anonymous, a Tenured Teacher, 77 A.D.3d 1365 (4 th Dep’t 2010); Byram Hills CSD v. Carlson, 72 A.D.3d 815 (2 nd Dep’t 2010); East Meadow UFSD v. New York State Div. of Human Rights, 65 A.D.3d 1342 (2 nd Dep’t 2009); Wilson v. Board of Educ. Harborfields CSD, 65 A.D.3d 1158 (2 nd Dep’t 2009); Consedine v. Portville CSD, 49 A.D.3d 1289 (4 th Dep’t 2008); Putnam Northern Westchester Board of Cooperative Educational Services et. al v. Mills and Galluzzo, 46 A.D.3d 1062 (3 rd Dep’t 2007); Mineola UFSD v. Mineola Teachers Ass’n, 37 A.D.3d 605 (2 nd Dep’t 2007); Baker v. Board of Educ. of Wappingers CSD, 29 A.D.3d 574 (2 nd Dep’t 2006); In re Binghamton City Sch. Dist. v. Peacock, 33 A.D.3d 1074 (3 rd Dep’t 2006); Forest Grove School District v. T.A., 129 S.Ct. 2484 (2009); Board of Educ. of the City School Dist. of the City of New York v. Tom F., 128 S.Ct. 1 (2007); Arlington CSD v. Murphy, 126 S.Ct. 2455 (2006); C.L. v. Scarsdale Union Free School District, currently pending before the Second Circuit Court of Appeals; The Bronx Household of Faith v. Board of Educ. of the City of N.Y., 5 currently pending before the Second Circuit Court of Appeals; Zeno v. Pine Plains CSD, 702 F.3d 655 (2 nd Cir. 2012). At issue before this Court is the ability of school districts and BOCES to effectuate changes to retiree healthcare benefits following the completion of collective bargaining negotiations that result in a corresponding change to the healthcare benefits of active employees. School districts and BOCES bear a statutory responsibility to ensure the fiscal stability of public schools throughout the State of New York. Their ability to succeed in this endeavor depends on their capacity to close budgetary gaps while complying with a myriad of other legal responsibilities, including those related to the provision of retiree healthcare benefits. Accordingly, the resolution of the issues before this Court will have a direct impact on all school districts and BOCES throughout the State. Thus, NYSSBA submits this Brief Amicus Curiae on behalf of Defendants- Respondents Newfane Board of Education and Newfane Central School District (collectively “the School District”) on the grounds that the issues before this Court are of statewide importance to all school districts and BOCES throughout New York. In addition, the amicus curiae brief invites this Court’s attention to law and arguments that might otherwise not be brought to its attention by the parties, and thereby be of special assistance to the Court. 6 STATEMENT OF THE ISSUE Whether the School District’s actions at issue herein were permitted under statutory provisions that set out the conditions pursuant to which school districts may diminish retiree health care benefits in conformity with public policy? The amicus curiae respectfully submit the answer is yes. 7 STATEMENT OF FACTS The amicus curiae will not recite a separate statement of facts, except as hereinafter specifically cited within the text of its brief, but will defer instead to the facts submitted by the School District, and as set forth in the Record before this Court. 8 INTRODUCTION The factual issues before this Court relate to School District actions that applied to Plaintiffs an increase in the amount of prescription co-pays the Plaintiffs are required to make as part of their retiree healthcare benefits. That increase reflects the terms of a collective bargaining agreement negotiated in 2009 between the School District and its active employees. According to the Plaintiffs, the School District lacked authority to apply the negotiated increase to them. The Plaintiffs’ main contention is that prior expired collective bargaining agreements preclude the School District from modifying the amount of their prescription co-pays. On appeal by the School District, a majority of the court below disagreed with the Plaintiffs’ contractual argument. Furthermore, it also determined that the application to Plaintiffs of the co-pay increase negotiated with the School District’s active employees complied with statutory requirements that link reductions in retiree health insurance benefits to corresponding benefit reductions for active employees. Those requirements, discussed in more detail below, were initially adopted as a temporary measure pursuant to Chapter 729 of the Laws of 1994. Following 15 years of extenders, the Legislature made the requirements permanent pursuant to Chapter 504 of the Laws of 2009 (hereinafter “Chapter 504”), with no change except for the elimination of an expiration date. 9 In its brief, the amicus curiae will not address the Plaintiffs’ contractual argument. Although agreeing that the Appellate Division properly determined prior collective bargaining agreements did not restrict the School District’s ability to increase the Plaintiffs’ co-pays, the amicus curiae will defer to the School District’s discussion of that issue. Instead, the amicus curiae will limit its brief to addressing the significance of the School District’s compliance with the requirements of Chapter 504 to the final resolution of the appeal herein and why, consistent with the requirements of that law, this Court should rule in favor of the School District. 10 ARGUMENT THE SCHOOL DISTRICT’S ACTIONS AT ISSUE HEREIN WERE PERMITTED UNDER STATUTORY PROVISIONS THAT SET OUT THE CONDITIONS PURSUANT TO WHICH SCHOOL DISTRICTS MAY DIMINISH RETIREE HEALTHCARE BENEFITS IN CONFORMITY WITH PUBLIC POLICY. a. The State has chosen to permit school districts to diminish retiree healthcare benefits if they effectuate a corresponding diminution to the healthcare benefits of active employees. Protecting the healthcare benefits of retired employees while at the same time affording school districts flexibility to close budgetary gaps through a reduction of retiree healthcare benefits pose seemingly competing interests that the State has endeavored to balance as a matter of public policy. The Legislature has chosen to strike that balance by means of a statutory “prohibition” that precludes school districts, and other specified public educational entities from: …diminishing the health insurance benefits provided to retirees and their dependents or the contributions such board or district makes for such health insurance coverage below the level of such benefits or contributions made on behalf of such retirees and their dependents by such district or board unless a corresponding diminution of benefits or contributions is effected [sic] from the present level…by such district or board from the corresponding group of active employees for such retirees. L. 2009, Ch. 504, Pt. B, §14). 1 1 Permanently enacted into law by Chapter 504 of the Laws of 2009, the prohibition (commonly referred to as the Moratorium Law) first became law as a temporary measure pursuant to Chapter 729 of the Laws of 1994. Between then and its permanent adoption, the prohibition remained in effect pursuant to 15 years of legislative extenders. 11 Although phrased as a prohibition, the amicus curiae respectfully submits that the legislative decree embedded within the express language of the statute is that school districts can diminish the healthcare benefits of retirees, provided that when exercising that authority they also effectuate a corresponding diminution to the healthcare benefits of active employees. This is further evidenced by the statute’s prolonged legislative history, discussed below. The court below acknowledged as much when it properly found that the School District had complied with statutory requirements linking a reduction in retiree healthcare benefits to a corresponding reduction for active employees. The increase in Plaintiffs’ prescription co-pays at issue herein corresponds to a negotiated increase in prescription co-pays for active employees. The School District’s compliance with the restrictions statutorily imposed on its authority to modify retiree healthcare benefits rendered its actions permissible. With respect to the Plaintiffs’ contention in their Reply Brief that the provisions of Chapter 504 do not apply to reductions involving negotiated retiree benefits, the amicus curiae respectfully submits that such an argument is without merit. The clear language of the statute contains no such restriction. Consistent with well-established principles of statutory interpretation, “the failure of the Legislature to include the matter within the scope of its act indicates that its exclusion was intended…” (McKinney’s Statutes §74). Moreover, the legislative 12 history of Chapter 504 and its predecessors, discussed below, provides evidence that the Legislature did not intend to impose such a restriction. For all the foregoing reasons, the amicus curiae respectfully requests that this Court rule in favor of the School District. b. The legislative history of Chapter 504 of the Laws of 2009 and its predecessors corroborates the Legislature’s intent to make permissible the School District’s actions at issue herein. In the beginning, the Legislature enacted the statute as a temporary measure (see L. 1994, Ch. 729) to protect both the healthcare benefits of retired school employees and the need of school districts to be able to close budgetary gaps through a reduction of retiree healthcare benefits, while the State waited for the final recommendations of a Temporary Task Force created to study the subject of health insurance for retired educational employees (L. 1994, Ch. 729, Governor’s Approval Memorandum and Budget Report on Bills). Thereafter, however, the Temporary Task was unable to adopt a final recommendation, proposing instead a framework of alternatives for further discussion (Final Report of the Temporary Task Force on Health Insurance for Retired Educational Employees, Dec. 1, 1994). Among the alternatives proposed by the Temporary Task Force was the option to extend the initial statute to allow time for continued consideration, which 13 culminated in a series of extenders throughout a 15 year period until the Legislature determined to adopt it on a permanent basis. As set out in the Final Report issued by the Temporary Task Force, the primary obstacle to preventing the crafting of a final recommendation involved the ability of active employees to negotiate benefits that potentially could never be altered. The Temporary Task Force believed that a school district “should at the minimum be able to vary health insurance benefits for its retirees on the same basis as it did so for similarly situated employees” (Id. at p. 2) However, it was unable to come up with a process to change a negotiated health insurance benefit (Id. at p. 5). In the end, it was the Legislature itself which provided the solution to that problem - first through each successive extender of the initial statute that linked reductions in retiree healthcare benefits to corresponding diminutions in healthcare benefits for active employees, and finally through the permanent adoption of that statute. For in accepting the alternative recommendation of the Task Force to extend the initial statute, the Legislature effectively demarcated the parameters of the otherwise missing process for changing negotiated health care benefits that had troubled the Temporary Task Force. This legislative history indeed corroborates that the Legislature intended to make permissible a school district’s reduction of negotiated retiree healthcare 14 benefits so long as it is accompanied by a corresponding reduction in the healthcare benefits of active employees. Accordingly, unless it disagrees with the findings of the court below that the School District’s actions complied with the statutory requirements, this Court should rule in favor of the School District. Not only did the School District undertake the actions at issue herein in accordance with the process decreed by statute for changing negotiated retiree healthcare benefits, but those actions also are in conformity with the public policy embedded within that process. For all the foregoing reasons, the amicus curiae respectfully requests that this Court resolve the issues presently before it in favor of the School District. 15 CONCLUSION For all the foregoing reasons, the amicus curiae respectfully requests that this Court affirm the decision of the court below in favor of the School District, and grant any such other relief as the court might deem appropriate. Dated: October 3, 2013 Latham, New York Respectfully Submitted by: __________________________ JAY WORONA, ESQ. PILAR SOKOL, ESQ. Attorneys for Amicus Curiae New York State School Boards Assn., Inc. 24 Century Hill Drive, Suite 200 Latham, New York 12110-2125 Telephone: (518) 783-0200