Summary
The Louisiana First Circuit Court of Appeal reversed a district court judgment sustaining an exception of no cause of action and dismissing claims by state employees and retirees concerning changes to Office of Group Benefits health plans. The court held that the plaintiffs sufficiently alleged financial loss and damages and that discretionary immunity could not be resolved on the face of the petition. The matter was remanded for further proceedings.
Topics
Practice areas
Questions Presented
- Whether the Third Amended Petition sufficiently alleged damages to state a cause of action.
- Whether the defendants' alleged entitlement to discretionary immunity under La. R.S. 9:2798.1 appeared on the face of the petition and warranted dismissal through an exception of no cause of action.
- Whether the district court erred by sustaining the exception of no cause of action and dismissing the Third Amended Petition.
Holdings
- The petition sufficiently alleged damages because plaintiffs pleaded financial loss in the form of increased costs and decreased health-care benefits resulting from the defendants' allegedly unlawful changes to the health-care plans.
- The defendants were not entitled to dismissal based on discretionary immunity under La. R.S. 9:2798.1 because the powers and duties relied on by defendants were stated in mandatory terms and did not provide the discretion necessary for the defense to apply on the pleaded facts.
Key quotations
“The purpose of the objection of no cause of action is not to determine whether the plaintiff will ultimately prevail at trial, but to only ascertain if a cause of action exists.” (at 8)
“Although OGB has discretion in the changes that are ultimately made to the LAC regulations concerning State health care and benefits plans, all of the duties and powers set forth in La. R.S. 42:802(B) are couched in mandatory terms and do not provide for any discretion.” (at 12)
Factual background
The Office of Group Benefits modified state employee and retiree health-care plans in 2014 and 2015, including deductibles, copayments, out-of-pocket maximums, prescription-drug benefits, vision coverage, and premiums. Plaintiffs alleged that OGB made these changes without complying with Louisiana Administrative Procedure Act rulemaking requirements, including notice and hearing requirements, and that the changes caused increased costs and reduced benefits. They also alleged due-process, Contracts Clause, and fiduciary-duty violations and sought declaratory, injunctive, and monetary relief.
Procedural history
Plaintiffs filed a petition in the Nineteenth Judicial District Court seeking declaratory and injunctive relief concerning changes to state employee and retiree health-care plans administered by the Office of Group Benefits. After several amendments, plaintiffs filed a Third Amended Petition asserting Administrative Procedure Act, due-process, Contracts Clause, fiduciary-duty, damages, and class allegations. The district court sustained defendants' no-cause-of-action exception and dismissed the petition; plaintiffs timely appealed.
Remand instructions
The matter was remanded for further proceedings. Costs of the appeal, stated as $3,220.00, were assessed equally among the defendants.