Louisiana Voice

The ghost of Bobby Jindal, thought to have faded into history, has reared its ugly head a decade after his leaving office.

The First Circuit Court of Appeal has reversed a lower court ruling that had said the state was immune from a lawsuit by state employees and state retirees over changes to the Office of Group Benefits (OGB) that were implemented without proper input way back in 2014.

On June3 of that year, the Jindal administration announced sweeping changes to its health-car and pharmacy plans, to go into effect August 1. Among those changes were increased out-of-pocket maximums, increased deductibles, increased co-pays, increased out-of-pocket maximums for prescription drugs and the removal of all vision coverage from the health plan options.

On Sept. 23, then-Attorney General Buddy Caldwell’s office issued an opinion that any modifications to existing plans “must be accomplished in accordance with the procedures set forth in the Louisiana Administrative Procedure Act (APA) for rulemaking” and that OGB was required to promulgate rules and regulations “for the implementation, administration,

and management of the new plans proposed by the OGB.”

The opinion concluded by saying, ” If the OGB did not follow the procedures set forth in the APA when it created new health care plans and/or modified the existing health care plans … then the validity of the plans becomes questionable.”

The Jindal administration’s response was to publish a “declaration of emergency” in the Louisiana Register with an effective start of Sept. 30 that it would be adopting emergency rules to codify the proposed changes that took effect in August.

OGB held a public hearing on the proposed plan changes on December 29, 2014, after the enrollment period closed and after the proposed plan changes were implemented and after the enrollment period had ended (emphasis ours).

OGB published a second “Declaration of Emergency” on Feb. 20, 2015, that extended the first declaration and adopted the changes that were the subject of the emergency rules, and OGB re -opened enrollment for its members on or about April 3, 2015.

The plaintiffs, Marilee Cash, Nancy Dickie, Aileen Hendricks, Rebecca McCarter, Dayne Sherman and Debra Thornton, each of whom was either an active state employee or state retiree, filed a Petition for Declaratory and Injunctive Relief on April 21, 2015, naming OGB, the Division of Administration and the State of Louisiana as defendants. The plaintiffs are represented by Baton Rouge attorney J. Arthur Smith, Jr.

In claiming that OGB had violated rulemaking procedures, that the December public hearing was a “sham” and that there had been no legitimate basis for the September 2014 emergency rule. They also asserted that the state violated their fiduciary duties by depleting the OGB fund balance and attempting to saddle state employees and retirees with the costs and burdens

resulting from their own imprudence” during the fiscal crisis that plagued the State at that time.

The plaintiffs filed several amended petitions and a motion for class certification along the way, including a Third Amended Petition to which the state filed a peremptory exception claiming plaintiffs had no cause of action because plaintiffs failed to state a cause of action upon which relief could be granted because they failed to prove damages existed. The state also claimed that OGB’s promulgation and adoption authority was protected under a statute that provided immunity from tort liability.

On Jan. 10, 2025, a full decade after the issue first arose, the 19^th Judicial District Court upheld the state’s objection and dismissed plaintiffs’ claims.

But the First Circuit on Dec. 19 revered the lower court, ruling that the state was not immune from tort liability. The ruling said, “A court

must first determine whether a statute, regulation, or policy requires the government employee to follow a particular course of action. If there is such a requirement, then there is no choice or discretion involved, and the immunity does not apply.”

The appeal court also noted that there indeed were claims of damages by the plaintiffs in the form of financial losses and that the state had failed to follow established procedure in carrying out the changes.

“The matter is remanded for further proceedings,” the three-judge panel of the First Circuit ruled, clearing the way for a lawsuit against the state to proceed.

Costs of the appeal in the amount of $3,330 were assessed equally among OGB, the Division of Administration and the State of Louisiana—another example of the state’s willingness to pay attorneys rather than do the right thing at the beginning.

The wheels of justice turn slowly—far too slowly it seems at times and all because of the stubbornness of bureaucrats.