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Don’t Read Too Much Into the California Supreme Court’s Decision Not to Review Dailey v. San Diego Regarding Vesting of Retiree Healthcare Benefits

Posted On: May 7, 2014

The anti-pension scribes are already overreaching on the implications of the California Supreme Court's failure to grant review of the appellate court decision in Dailey v. City of San Diego (2013) 223 Cal.App.4th 237. But the reality is there is not much to it. The California Supreme Court only accepts review of about 3-5% of the cases for which review is sought in any given year. Dailey was never a realistic candidate for review, largely because it involved very case-specific facts and was probably rightly decided on them. It never lent itself to establishing statewide precedent as did, say, the Supreme Court’s decision in Retired Employees Association of Orange County v. County of Orange (2011) 52 Cal.4th 1171 (establishing that vested retiree health benefits can be created under an implied contract theory).

Of potentially far greater long-term impact was the decision of the United States Supreme Court to grant review in M&G Polymers USA, LLC v. Tackett, in which it will determine whether specific language in a collective bargaining agreement is required to create a vested right to retiree medical benefits. That is likely to have greater emotional weight notwithstanding it is a federal law issue, and some states, particularly California, have paved their own way on vested retirement rights issues.

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