Damages sought by former Medford workers

A handful of former Medford city employees are seeking $590,000 in damages from the city, claiming they were forced to pay for high-cost insurance when the city declined to extend their health insurance coverage after they retired early.

Former City Attorney Ron Doyle, who resigned in 2005, and former employees Robert Deuel, Benedict Miller and Charles Steinberg, appeared Tuesday in Jackson County Circuit Court to make their case before a jury.

Their attorney, Steve Brischetto, argued that his clients deserve compensation from the city to cover the cost of their health insurance premiums in the intervening years between their early retirement and age 65.

At age 65 they are eligible for health care under Medicare.

Brischetto also told the jury the men should be awarded a settlement for "emotional" damages due to the stress they suffered while searching for inferior insurance, while at the same time fearing they could lose coverage altogether.

"These individuals should not have had to spend years paying for high-risk, high-priced insurance," Brischetto said.

The Oregon Supreme Court ruled in February that the city must provide health benefits to retired workers, but only under certain circumstances.

The city's hired attorney, Robert Franz, argued Tuesday that even if the city erred by not honoring an obligation to extend the health coverage there were no grounds for the damages sought by the former employees.

Franz tried to show that the insurance plans purchased by the men after they retired, including federally mandated COBRA continuation insurance and Oregon's Public Employees Retirement System insurance, were actually cheaper than what the city would have offered.

"I don't see how you can rule financial damages occurred here," Franz said.

The civil trial continued late into Tuesday evening and was expected to push into today.

The case has bounced around state and federal court since 2006 and has sparked a controversy within City Hall.

After the issue erupted, Doyle publicly accused Medford City Manager Mike Dyal of knowingly breaking state law and a city resolution concerning retiree coverage.

The city of Medford later filed an Oregon State Bar complaint against Doyle for possible ethical violations during his time as city attorney, saying Dyal and the city were his clients at the time Doyle raised his accusations. The Bar determined Doyle committed no violations, but did reprimand him for being unprofessional in his public critiques of Dyal.

The complex case also has produced several rulings in different courts:

  • On Sept. 4, 2009, Jackson County Circuit Court Judge Mark Shiveley authored an opinion saying former city employees should have been covered by a bridge health insurance plan until they reach age 65.
  • In February, the Oregon Supreme Court ruled the city should make health coverage available to workers who have taken early retirement but added the qualifying language of "insofar as and to the extent possible."
  • In May, the U.S. 9th Circuit Court of Appeals ruled that while state law requires cities to make health coverage available "to the extent possible," city employees have no constitutional right to health insurance coverage should they retire early.

Despite the federal ruling, the Oregon Supreme Court ruling stands on its own in addressing whether the city adhered to the state statute.

Reach reporter Chris Conrad at 541-776-4471; or e-mail cconrad@mailtribune.com.

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