Welcome to the website for the
Detroit Police and Fire Fighter Retirees’ Healthcare
Class Action Settlement
(Last updated on August 31, 2009)
State of Michigan
Wayne County Circuit Court
Case No. 06-619737-CK
This website provides information about the proposed settlement of a class action lawsuit filed on behalf of the retirees of the police and fire departments of the City of Detroit. This lawsuit involves retiree healthcare benefits that have been provided by the City of Detroit.
The proposed settlement of this class action lawsuit will provide certain benefits and cash to the retirees and their families who are class members.
The Class Action Lawsuit
In July 2006, the City of Detroit changed healthcare benefits for police and fire fighter retirees. These changes included increased co-payments and deductibles, and higher contributions for monthly healthcare premiums.
On July 12, 2006, Alan Weiler, a retired Detroit police officer, sued the City of Detroit as a Class representative over these changes to the retirees’ healthcare benefits. Mr. Weiler sued on behalf of himself and approximately 8000 retirees, their spouses, surviving spouses, and dependents.
The Wayne County Circuit Court certified this lawsuit as a
class action.
Plaintiff Class’ Claims
In this lawsuit, the Plaintiff Class alleged that retirees’ healthcare benefits are vested, unchangeable contractual rights established, over many years, pursuant to multiple collective bargaining agreements with the City of Detroit. As such, the Plaintiff Class argued, the City of Detroit cannot unilaterally change these contractual benefits. So, the Plaintiff Class claimed, the City's July 2006 changes to these healthcare benefits were improper. As a remedy, the Plaintiff Class asked the Wayne County Circuit Court for an injunction – both an emergency and permanent injunction – against changing the benefits, and for restitution of amounts paid by Class Members as a result of the City's changes in their healthcare benefits.
The City’s Response
The City of Detroit denied and still denies all of the Plaintiff Class’ claims. Instead, the City claimed that it did not violate the terms of any agreement when it changed retiree
healthcare benefits. It maintained that it had the right to change retiree healthcare benefits under all applicable collective bargaining agreements and ordinances. The City asserted that the Plaintiff Class is entitled to no relief in court.
Settlement Negotiations
On March 14, 2007, the Court denied the Plaintiff
Class’ efforts to reverse, on an emergency basis, the City’s changes to healthcare benefits. Later, on March 24, 2008, the Court rejected, in part, Plaintiff Class’ claims that retirees were contractually-entitled to lifetime, unchangeable healthcare benefits as set forth in the collective bargaining agreement under which each retiree retired. The Court also ruled, as to the rest of Plaintiff Class’ contractual claims, that a trial was necessary because the contracts were “ambiguous”.
The Plaintiff Class and the City have now reached a compromise – a settlement of the case. They have asked the Court to approve a proposed Settlement Agreement and enter a Consent Judgment that will resolve the case without further litigation.
This proposed Settlement Agreement, if approved by the Court, will be a full and final settlement of all the Plaintiff Class’ claims against the City that have been asserted or could have been asserted in the Lawsuit.
The Class Representative and the Class attorneys have concluded that settlement of the Lawsuit, on the terms described in the proposed Settlement Agreement, is in the best interest of Class Members.
Quite simply, without the settlement, the litigation could continue for years. During this time, Class Members would not know their rights, if any, regarding City-provided healthcare benefits. And, there is the added risk that, at the end of the lengthy litigation, Plaintiff Class would not prevail.
The Proposed Settlement Agreement
In general terms, the Settlement Agreement includes many of the City’s 2006 changes in retiree healthcare benefits. This includes increases in co-premiums, annual deductibles and co-pays, prescription co-pays, and other cost-sharing mechanisms. But, the proposed Settlement Agreement also includes terms favorable to the Class Members. It provides some restitution to Class Members. It also provides healthcare cost and benefit-level certainty. And, it broadly reduces the overall financial impact of rising heathcare costs on Class Members. Finally, the City also agrees that the terms of the proposed Settlement Agreement, and healthcare benefits promised under it, are “contractual” and “unchangeable”.
To help you understand the proposed Settlement Agreement, it is summarized in the Notice of Class Action Settlement that
was mailed to all Class Members and which is included in this website. In addition, the entire Settlement Agreement is included in this website, along with all incorporated Exhibits. The Settlement Agreement was also mailed to all Class Members, but the Exhibits, which are several thousand pages, were not mailed to the Class Members. Those Exhibits are available on this website in their entirety. Click here for the Index of Exhibits.
You may obtain further information about this Settlement by clicking on the links at left.
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MARTENS, ICE, KLASS, LEGGHIO & ISRAEL, P. C.
ATTORNEYS AND COUNSELORS AT LAW
306 SOUTH WASHINGTON AVENUE, SUITE 600
ROYAL OAK, MI 48067-3837
Tel: 248 398 5900; Fax: 248 398 2662
Email: dpfretireeca@martensice.com
