Moen v. Regents of the Univ. of Cal.
25 Cal. App. 5th 845
Cal. Ct. App. 5th2018Background
- Retirees are former University of California employees who worked at Lawrence Livermore National Laboratory and allege the University promised University‑sponsored group retiree health insurance during their employment.
- From 1952–2007 the University managed Livermore; in 1961 the Regents authorized a group health program covering employees and retirees and the University repeatedly described retiree coverage in benefit booklets and handbooks.
- In 2007 management shifted to LLNS and retirees were moved to LLNS plans, which expressly reserved the right to amend or terminate benefits and said benefits did not "vest."
- Retirees sued the Regents for writ of mandate alleging impairment of an implied contract (Cal. Const., art. I, § 9) and other claims; this Court previously reversed a demurrer, finding the implied‑contract claim sufficiently pled.
- The trial court initially certified a class (~9,000), then adopted a trial plan and later decertified the class, reasoning individualized issues predominated on (a) whether each class member formed the implied contract and (b) whether each suffered economic damages.
- On appeal the Court of Appeal reversed the decertification, holding the trial court applied erroneous legal assumptions about individualized proof of awareness and about the necessity of proving economic damages for impairment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether classwide proof of implied contract formation is barred because each member must show personal awareness of the University’s promises | Implied contract arises from Regents' written booklets and long‑standing practice; class members' assent can be inferred from employment and dissemination of booklets | Individualized inquiries required: not all 9,000 read the booklets or received identical statements, and later disclaimers vary | Reversed: where employer promulgates written policies offered as terms, members' understanding may be inferred; individualized proof of actual receipt is not required for liability/predominance purposes |
| Whether the class can prove impairment without individualized proof of actual economic damages | Loss of a vesting/security (ability to be in University pool; LLNS plans terminable) is a noneconomic impairment that can be proven classwide | Injury is speculative and any termination risk is not actionable; damages are necessarily individualized | Reversed in part: actual economic loss is not required to prove impairment; noneconomic impairment (loss of assurance/security) can be a common issue |
| Whether individualized damages issues (premiums, deductibles, utilization) defeat predominance | Retirees proposed classwide methods to approximate premiums and out‑of‑pocket costs and to adjudicate individual claims for actual costs | University presented substantial evidence (expert declaration) that premiums, benefits, utilization, and employer contributions are interdependent, requiring individualized damage inquiries | Affirmed that individualized economic damages predominate for monetary remedies; but predominance on liability remains because noneconomic impairment suffices for classwide liability |
| Manageability: whether plaintiffs' trial plan improperly relies on a small testimonial sample/statistical model | Plaintiffs say they do not intend to use a statistical sample for liability and will rely on common written promises and LLNS termination | Trial court found plan relied on testimony of ten putative class members as a nonrandom sample and cited Duran | Court held Duran does not preclude classwide liability here given plaintiffs’ representation and the sufficiency of written policies as classwide proof; trial plan may be adjusted at trial |
Key Cases Cited
- Requa v. Regents of University of California, 213 Cal. App. 4th 213 (Cal. Ct. App.) (earlier opinion reversing demurrer; pled implied contract based on Regents' booklets)
- Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (Cal. 2012) (predominance standard for class certification)
- Guz v. Bechtel National Inc., 24 Cal.4th 317 (Cal. 2000) (implied‑in‑fact employment contracts may arise from written personnel policies disseminated to employees)
- Kashmiri v. Regents of University of California, 156 Cal. App. 4th 809 (Cal. Ct. App.) (implied contract from unequivocal university publications without individualized proof of reading)
- Valdes v. Cory, 139 Cal. App. 3d 773 (Cal. Ct. App.) (impairment can be shown absent out‑of‑pocket loss where security/assurance is undermined)
- United States Trust Co. v. New Jersey, 431 U.S. 1 (U.S. 1977) (repeal of statutory security provision constituted substantial impairment of contract)
- Retired Employees Assn. of Orange County v. County of Orange, 52 Cal.4th 1171 (Cal. 2011) (retiree health/pension may be a contractually protected element of compensation)
- Duran v. U.S. Bank National Assn., 59 Cal.4th 1 (Cal. 2014) (requirements for statistical sampling and expert models in class proof)