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Carson v. Lake County Indiana

United States District Court, N.D. Indiana, Hammond Division

September 14, 2016

AARON CARSON, CHARLES COLLINS, JOHN CURTIS, MARY DOBRIJEVICH, DONNIE JONES, CATHERINE KOBY, GWEN LANE, MATTHEW LUBARSKI, JOHN J. MCBRIDE, SR., JANET NICKOVICH, RONALD PAULSIN, CHARLES J. PODGORNY, PATTIE G. PODGORNY, JOHN D. PRUZIN, DANNY SEBBEN, HELEN G. SUTTON, DENNIS TOBIN, CAMILA A. TREVINO, MARIAN VUKAS, and SUSAN WYATT, Plaintiffs,
v.
LAKE COUNTY, INDIANA, Defendant.

          OPINION AND ORDER

          PAUL R. CHERRY, MAGISTRATE JUDGE UNITED STATES DISTRICT COURT

         This matter is before the Court on (1) Defendant's Motion for Summary Judgment [DE 40], filed by Defendant Lake County, Indiana, (“Lake County”) on June 13, 2016; (2) Plaintiffs' Motion for Partial Summary Judgment [DE 42], filed by all Plaintiffs on June 13, 2016; (3) Defendant's Motion to Submit Omitted Exhibit [DE 45], filed by Lake County on July 14, 2016; (4) Plaintiffs' Motion to Strike [DE 49]; and Defendant's Request for Oral Argument [DE 53], filed by Lake County on August 8, 2016. For the reasons set forth below, the Court grants summary judgment in favor of Defendant Lake County, Indiana on all of Plaintiffs' claims.

         PROCEDURAL BACKGROUND

         On April 11, 2014, a Complaint was filed by Plaintiffs Aaron Carson, Charles Collins, John Curtis, Mary Dobrijevich, Donnie Jones, Catherine Koby, Gwen Lane, Matthew Lubarski, John J. McBride, Sr., Janet Nickovich, Charles J. Podgorny, Pattie G. Podgorny, John D. Pruzin, Danny Sebben, Helen G. Sutton, Dennis Tobin, Camila A. Trevino, Marian Vukas, and Susan Wyatt.

         Plaintiffs allege that they were terminated from their employment by Defendant Lake County in violation of their rights under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (ADEA), and in violation of their rights pursuant to the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution, brought under 42 U.S.C. § 1983.

         Lake County filed an Answer on May 28, 2014.

         On October 1, 2014, Ronald Paulsin filed a Motion to Intervene, which was granted on October 2, 2014. Paulsin's Intervenor Complaint was filed on October 2, 2014, bringing the same claims as those brought by the original Plaintiffs.

         On June 13, 2016, Lake County filed a Motion for Summary Judgment on all claims, and Plaintiffs filed a Motion for Partial Summary Judgment on all claims.

         On July 14, 2016, Lake County filed a Motion for Leave to File Omitted Exhibit, asking the Court to allow it to file the Declaration of Larry Blanchard, which Lake County had relied on in its Motion for Summary Judgment but had not attached to the motion. Lake County also filed its response to Plaintiffs' Motion for Partial Summary Judgment.

         The same day, Plaintiffs filed their response to Lake County's Motion for Summary Judgment. Plaintiffs also filed a Motion to Strike, asking the Court to strike Lake County's reference to the Declaration of Larry Blanchard in its Memorandum in Support of its Motion for Summary Judgment because Lake County did not attach the declaration as an exhibit to its motion.

         On July 15, 2016, Plaintiffs filed a response to the Motion for Leave to File Omitted Exhibit. On July 27, 2016, Lake County filed a reply in support of its Motion for Leave to File Omitted Exhibit and in opposition to Plaintiffs' Motion to Strike.

         On August 1, 2016, Plaintiffs filed a reply in support of their Motion for Partial Summary Judgment. Defendants have not filed a reply in support of their Motion for Summary Judgment, and the time to do so has passed.

         The parties filed forms of consent to have this case assigned to a United States Magistrate Judge to conduct all further proceedings and to order the entry of a final judgment in this case. Therefore, this Court has jurisdiction to decide this case pursuant to 28 U.S.C. § 636(c).

         MOTION TO STRIKE AND MOTION TO SUPPLEMENT

         Plaintiffs' Motion to Strike and Lake County's Motion to Submit Omitted Exhibit both concern Lake County's failure to attach Exhibit 1, which is the Declaration of Larry Blanchard, to its Motion for Summary Judgment. The Declaration of Larry Blanchard is extensively cited for background information on the financial health of Lake County. However, little of the information is material to the Court's decision on the central legal issues, and the substance of the Declaration is repeated in other evidence offered by both Lake County and Plaintiffs. In addition, as recognized by Plaintiffs, the Declaration of Larry Blanchard is properly considered in response to Plaintiffs' Motion for Partial Summary Judgment, as it was timely submitted. Extensions of time for the filing of dispositive motions were granted, and the trial date is quickly approaching. Thus, because most of the information in Larry Blanchard's Declaration is immaterial, because Plaintiffs would be prejudiced by not having had the benefit of the Declaration in responding to Lake County's Motion for Summary Judgment, and because there is insufficient time for supplemental briefing prior to trial, the Court grants Plaintiffs' Motion to Strike and denies Lake County's Motion to Submit Omitted Exhibit.

         SUMMARY JUDGMENT STANDARD

         The Federal Rules of Civil Procedure require that a motion for summary judgment be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Rule 56 “mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “Summary judgment is appropriate when no material fact is disputed and the moving parties are entitled to judgment as a matter of law, meaning that no reasonable jury could find for the other party based on the evidence in the record.” Carman v. Tinkes, 762 F.3d 565, 566 (7th Cir. 2014).

         A party seeking summary judgment bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, that it believes demonstrate the absence of a genuine issue of material fact. See Celotex, 477 U.S. at 323; Fed.R.Civ.P. 56 (a), (c). The moving party may discharge its initial responsibility by simply “‘showing'-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case.” Celotex, 477 U.S. at 325; see also Spierer v. Rossman, 798 F.3d 502, 508 (7th Cir. 2015). When the nonmoving party would have the burden of proof at trial, the moving party is not required to support its motion with affidavits or other similar materials negating the opponent's claim. Celotex, 477 U.S. at 323, 325; Spierer, 798 F.3d at 507-08; Modrowski v. Pigatto, 712 F.3d 1166, 1168-69 (7th Cir. 2013).

         “Once the moving party puts forth evidence showing the absence of a genuine dispute of material fact, the burden shifts to the non-moving party to provide evidence of specific facts creating a genuine dispute.” Carroll v. Lynch, 698 F.3d 561, 564 (7th Cir. 2012). The non-moving party cannot resist the motion and withstand summary judgment by merely resting on its pleadings. See Fed. R. Civ. P. 56(c)(1), (e); Flint v. City of Belvidere, 791 F.3d 764, 769 (7th Cir. 2015) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The nonmoving party must “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed.R.Civ.P. 56(e) (1986)). Rule 56(e) provides that “[i]f a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by Rule 56(c), the court may . . . consider the fact undisputed for purposes of the motion [or] grant summary judgment if the motion and supporting materials-including the facts considered undisputed-show that the movant is entitled to it . . . .” Fed.R.Civ.P. 56(e); see also Anderson, 477 U.S. at 248-50.

         In viewing the facts presented on a motion for summary judgment, a court must construe all facts in a light most favorable to the non-moving party and draw all legitimate inferences in favor of that party. See Anderson, 477 U.S. at 255; McDowell v. Vill. of Lansing, 763 F.3d 762, 764, 765 (7th Cir. 2014); Srail v. Vill. of Lisle, 588 F.3d 940, 948 (7th Cir. 2009). A court's role is not to evaluate the weight of the evidence, to judge the credibility of witnesses, or to determine the truth of the matter, but instead to determine whether there is a genuine issue of triable fact. See Anderson, 477 U.S. at 249-50.

         On cross motions for summary judgment, a court construes, “all inferences in favor of the party against whom the motion under consideration is made.” Speciale v. Blue Cross & Blue Shield Ass'n, 538 F.3d 615, 621 (7th Cir. 2008). The Court looks to the burden of proof each party would bear on an issue at trial. Diaz v. Prudential Ins. Co. of Am., 499 F.3d 640, 643 (7th Cir. 2007) (quoting Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997)).

         MATERIAL FACTS[1]

         Defendant Lake County, Indiana's health care self-insurance fund liquidated its cash reserve by 2013 from a fund that had a balance of $11 million as of 2007.

         From 2007 through 2013, Lake County offered all of its employees over the age of sixty-five an opportunity for voluntary retirement with the ability to immediately begin receiving Public Employees' Retirement Fund benefits and also maintain health insurance as secondary coverage to Medicare for a period of time. Under the 2010 Early Retirement Options, employees were presented with three options. “Option Two, ” relevant to this litigation, provided that an employee who is age sixty-five and who has at least five years of continuous service on or before a given Dated: (1) will receive five years of health insurance coverage at the same rate as regular full-time employees after which the rate would increase to the rate charged to other retirees; (2) must enroll in the Medicare program with Lake County's health insurance plan serving as secondary coverage to Medicare coverage; and (3) may return to work at Lake County on a part-time basis, not to exceed twenty-four hours per week at their pre-retirement hourly wage. If the employee's employment is terminated (whether voluntarily or through layoff/reduction in force), the employee would remain eligible for the reduced cost of health insurance for the five years. Also, “[t]his option does not guarantee part time employment.” (Def. Br., Ex. 5, p. 2). Lake County offered health insurance coverage to retirees, including part-time employees over the age of sixty-five, through Aetna Insurance (“Aetna”).

         As part-time employees of Lake County, Plaintiffs were not eligible for full-time benefits but received the Medicare supplemental health insurance policy through Aetna that was paid for by Lake County. They received this benefit either as a result of their prior employment with Lake County or through a spouse who was employed by Lake County.

         Sometime in 2013, Lake County learned from Aetna that, under the Patient Protection and Affordable Care Act, commonly called the Affordable Care Act, employees who had retired and been rehired part-time who were receiving the Aetna supplemental coverage either would not be able to remain employed or would have to give up the health insurance supplement. As a result, Lake County hired Larry Grudzien, an employee benefits attorney, and tasked him to look at Aetna's contention that it would no longer allow active, part-time employees to participate in the retiree-only insurance plan as a result of the Affordable Care Act. Attorney Grudzien met with the Lake County Commissioners regarding his opinion on this issue.

         Thomas Dabertin (the Lake County Human Resources Consultant) and Lake County Commissioner Michael Repay presented a PowerPoint presentation to Lake County officials and department heads entitled “The Health Care Reform Act and the Medicare Secondary Rules: How do these affect a retired and then rehired part-time Lake County employee?” (Pls. Mot., Ex. 14, p. 1). The PowerPoint presentation answers the question, “What Employees Does this Affect?”:

         An affected employee meets ALL of the following criteria:

1. Has retired from and then was rehired part-time by Lake County;
2. Is over 65;
3. Has Medicare as Primary Medical Coverage;
4. Is eligible for or currently has Aetna as the Lake County Government Retiree Health Care Plan.

Id. at 3. The PowerPoint presentation further explains: “Under the new requirements of the Health Care Reform Act and the Medicare Secondary Rules individuals who are retired and rehired by their former employer (paid either by W-2 OR 1099) ARE NOT eligible for the Retiree Supplemental Medical Plan.” Id. at 5. The document advises that an affected employee becomes ineligible for the Aetna Retiree Supplemental Coverage the day that the employee is rehired part-time by Lake County. It also asserts that affected employees “must be removed as Lake County employees before October 1, 2013.” Id. at 7. The PowerPoint presentation advises that, going forward, the Lake County Council and Lake County Board of Commissioners need to create a procedure to insure that future Lake County retirees on Medicare are not rehired part-time and that “an affected employee at 65 will need to be released from Lake County employment.” Id. at 12.

         On August 21, 2013, Dabertin wrote a letter to all but one of the Plaintiffs, terminating the employment of each as of September 30, 2013. (Plaintiff Ron Paulsin was terminated in 2014 with an identical letter.) The letter explains that the Affordable Care Act regulates the rehiring of retired employees and the health insurance coverage that those individuals receive. He wrote:

[A]n individual that meets all of the following provisions may not be employed and receive health insurance benefits:
• The individual has retired from, and then was rehired part-time by Lake County;
• The employee is over 65;
• The employee receives Medicare as his/her primary ...

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