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CFJ Helps UC Retirees Who Worked at Lawrence Livermore Lab Reach $84 Million Settlement with University of California Over Termination of UC Medical Benefits

Kathy Fisher, Rodney Jacob, Maya Maravilla and Alex Freeman of Calvo Fisher & Jacob were part of the legal team for the University of California retirees from Lawrence Livermore Labs who announced the settlement of their case against University of California in December 2019.  The retiree's press release is set out below.

Livermore, California – December 12, 2019 – After ten years of hard fought litigation and two victories at the California Court of Appeal, University of California retirees who worked at the Lawrence Livermore National Laboratory (LLNL) have reached an $84.5 million settlement with The Regents of the University of California over the termination of their University-sponsored health care benefits.

In October 2007, the U.S. Department of Energy awarded the contract to manage the Lawrence Livermore National Laboratory (LLNL) to a private sector LLC, Lawrence Livermore National Security (LLNS).  The Regents then terminated University-sponsored retiree health care benefits for all retirees who had worked at LLNL.  This triggered the lawsuit.

The lawsuit was filed on August 11, 2010.  According to the suit, the new benefits provided by LLNS cost more, covered less, and were less secure than UC benefits. The lawsuit was dismissed and plaintiffs appealed.  In 2012, the Court of Appeal ruled in their favor.  The case then proceeded as a class action.  There are approximately 9,080 retirees, spouses and dependents in the class.  The average age of the class is 78.  Approximately 2,000 class members have passed away since October 2007. 

“The main thing we wanted was reinstatement of UC medical benefits, but we had to make a decision based on the choices we had,” said Wendell Moen, an 80-year-old plaintiff who worked as a mechanical engineer and group leader and retired from the Livermore Lab in 2000 after 37 years.   “The choice was to take a good settlement now that provides benefits very close to what we would get under UC, or to continue the lawsuit for several years in hopes of getting a little more.  In the end, this was not a hard decision.”     

The settlement restores the security for retiree health care benefits by requiring The Regents to restore University-sponsored benefits if LLNS terminates the benefits it is providing or materially alters those benefits. 

The Regents will also pay $80 million to provide an increased stipend going forward as well as past damages.  The Regents will also pay $4 million for benefits counselors and contribute $500,000 toward the cost of administering the settlement. 

One-fourth of the settlement ($20 million) will be used to compensate class members who suffered financial losses.  Three-quarters of the settlement ($60 million) will be used to establish a trust to pay for enhanced benefits for class members over the next 20 years.  (A more detailed summary of settlement terms is provided as an appendix to this release.)

“We would have preferred for UC benefits to be restored, but this would have required winning at trial and then winning on appeal, which would have taken several more years,” said Alan Hindmarsh, who is 77 and retired in 2002 after working 34 years as a mathematician at the Lab.  “The settlement is a reasonable compromise, especially with 25 class members dying every month.”

“I am very pleased that after ten long years of struggle UC has worked with us to craft this settlement and in doing so has recognized the tremendous contribution that the UC retirees from the Livermore Lab made – not only to the University, but to ensuring the security of the United States during the darkest years of the Cold War,” said 77-year-old plaintiff Jay Davis, a former associate director at the Lab who retired in 2002.   “We were proud to be UC employees for 50 years and we’re proud to be part of the University now.  We would have preferred to receive our medical benefits through UC, but the settlement takes us most of the way to what UC promised us.”

“I’m no different than the vast majority of UC employees and retirees – the promise of affordable lifetime medical benefits was a big part of my decision to stay at the University my entire career,” said 73-year-old Donna Ventura, another plaintiff, who worked in human resources and health services at the Lab for 32 years.  “In spite of the fact that this process has taken ten years, I’m pleased that we have finally come to a solution that will benefit the retirees and their families for years to come.”

The plaintiffs have filed a motion asking the Alameda Superior Court for preliminary approval of the settlement.  A hearing is scheduled for December 20, 2019.  If the court gives preliminary approval, notice will be sent to all members of the class, who will have a chance to express their views of the settlement at a hearing that will be scheduled by the court.  The court will then be asked to give final approval to the settlement.

The class is represented by Andrew Thomas Sinclair of Sinclair Law Office in Oakland; Dov Grunschlag of Carter Carter Fries & Grunschlag in San Francisco; and Kathleen Fisher, Rodney Jacob, Maya Maravilla and Alex Freeman of Calvo Fisher & Jacob in San Francisco.

The case is Moen, et al., v. Regents of University of California, et al., Case No. RG10530492, Superior Court, County of Alameda, California.