Houston advises council to settle 'Garner' suit
By LEWIS DELAVAN News editor

Benton should settle a federal lawsuit filed by retirees, city attorney Brent Houston said.

Houston told the Benton City Council Personnel Committee that the city should expect the same outcome it received from the U.S. Eighth Circuit Court of Appeals in a suit filed by American Federation of State, County and Municipal Employees, Local 2957.

The appeals court ruled non-uniformed retirees are entitled to health insurance benefits lost in 2003 and 2004.

Uniformed retirees, including police and firemen, filed the second lawsuit. It's often called the "Garner lawsuit" for the lead plaintiff, Dan Garner, a retired Benton police detective.

Settlement of the uniformed-employees lawsuit would involve paying lump sums for back premiums and taking up premiums for active retirees. Vested employees who haven't retired would be entitled later to payment of health-insurance premiums.

Estimated lump-sum payments weren't available at the meeting. The total cost ultimately will depend on several factors, including how long retirees are covered by health insurance, Houston said.

Aldermen said the total cost could eventually reach millions of dollars, but the cost would be spread over a number of years, as premiums are paid.

In Houston's opinion, vested uniformed and non-uniformed retirees would have the same coverage available to active Benton employees at a given time.

Lump sums already have been paid for three non-uniformed retirees in the first lawsuit, he said. Other non-uniformed employees are vested for benefits upon retirement, but are still working.

The Eighth Circuit Court upheld the ruling of Saline County District Court, Benton Division. Jurists determined that the resolutions "were unconstitutional impairments" of the collective-bargaining agreement.

Houston said the statute of limitations has passed for non-union Benton retirees to sue for payment of health.

The council may choose to pay health-insurance premiums for vested nonunion retirees if the council feels it fair. But Houston said, "I'd be committing legal malpractice" if he didn't advise the city it wasn't legally obligated to pay the health benefits for the non-union employees.

Attorney David Fuqua of Central Arkansas Risk Management Association said he concurred with Houston's opinion. CARMA, a group representing local governments, will bear all legal expenses for the litigation.

While Benton could ask the Eighth Circuit Court to rehear the case, the city would have to cite divergent rulings issued by other U.S. appeals courts, and those verdicts don't exist, Houston said.

The only other appeal could be to the U.S. Supreme Court, and that won't be done, he said.

As well as the city, defendants in the case include Mayor Rick Holland and 2003 aldermen Doug Stracener, Phillip Montalvo, Karla J. Haley, Willie Floyd, Freeman, Leroy Allen, Ann Hall, Robin Berry, Claudine Ramsey and Charles Cunningham. (The ruling misspelled the last names of Stracener and Cunningham).

Two resolutions, and subsequent cuts and end of retiree benefits, led to the lawsuit.

A chronology of events leading to the lawsuit: • Oct. 13, 2003 - Council passes a resolution limiting full-health premiums to employees having 29 or more years service, effective Jan. 1, 2004. The city also ceases paying premiums for employees with less than 10 years' service, and would pay only 3 percent of premiums for each employee with 10 through 28 years' service.

Reduced payments were short-lived.

• March 22, 2004 - The council passes a resolution terminating all insurance payments for retirees. It states a belief that state law requires plaintiffs to pay all health-insurance benefits. The vote comes after state Attorney General's Office issues opinion advising that state law forbids paying insurance for retirees.

• May 17, 2004 - Plaintiffs filed suit in district court seeking to bar Benton from enforcing the March 22 resolution.

• Feb. 17, 2006- The district court certifies the case for appeal.

• Jan. 9, 2007 - District court holds a one-day bench trial to review the plaintiff's remedy. After the trial, each side moved to amend its pleadings to conform to evidence.

Plaintiffs sought to include the council's October 2003 resolution as an additional breach of the collective bargaining agreement.

Defendants opposed the addition, "and moved to include the defense of illegality to its answer," justices wrote.

• Jan. 31, 2007 - District court accepts plaintiff's motion, and denies defendants' motion.

Union-negotiated collective bargaining for non-uniformed employees began in 1976. The agreement at issue became effective June 14, 2002 and expired Dec. 31, 2004. The agreement stated that "[r]etirement coverage is 100 percent paid by the city of Benton."

Benton started paying health insurance premiums for nonuniformed retirees' in 1989.

The Eighth Circuit justices issuing the ruling were W. Duane Benton, David S. Doty and Roger L. Wollman.