Hawai‘i AG prevails in class-action lawsuit involving state retiree health benefits

After nearly 18 years in court, the Hawai‘i Department of the Attorney General has prevailed in a class-action lawsuit in which retired government employees sought to recover hundreds of millions of dollars in claims relating to retiree health benefits provided by the Hawai‘i Employer-Union Health Benefits Trust Fund.

Following a lengthy trial, 1st Circuit Court Judge Jeffrey P. Crabtree on Tuesday ruled in favor of the defendants — the state, Hawai‘i Employer-Union Health Benefits Trust Fund Board of Trustees and all four of Hawai‘i’s counties — on all claims and that the class will recover no money in damages.

“I am thrilled with the result at trial in this important case,” said Hawai‘i Attorney General Anne Lopez. “This ruling shows that the [Employer-Union Health Benefits Trust Fund] and the state have provided and continue to provide world-class health benefits to loyal and valuable government retirees in accord with the mandate of the Hawai‘i Constitution.”

The plaintiffs filed their complaint June 30, 2006. After two appeals to the Hawai‘i Supreme Court, the plaintiffs on Dec. 28, 2017, filed a third amended complaint contending that the Employer-Union Health Benefits Trust Fund had unconstitutionally diminished accrued retiree health benefits under Article XVI, Section 2 of the Hawai‘i Constitution.

On June 21, 2019, Crabtree certified a damages subclass that included all employees, and their dependent-beneficiaries, who began working for the territory of Hawai‘i, the state of Hawai‘i or any counties before July 1, 2003, and have used accrued post-retirement health benefits, along with their estates and heirs.

There were about 50,000 to 60,000 class members.

Trial was conducted throughout three years from 2021 to 2023 and proceeded in two phases. Crabtree on Tuesday issued his amended and final findings of fact and conclusions of law, which denied all of the plaintiffs’ claims, and final judgment in the case.

“This case is remarkable in its scope and depth,” said Crabtree. “It is by far the most complex case this judge ever tried.”

The Department of the Attorney General will seek to recover its reasonable attorney fees and costs incurred in defending this action.

“This is an important victory for the state of Hawai‘i, the counties and the [Employer-Union Health Benefits Trust Fund],” said former Hawai’i Attorney General David Louie. “The [Employer-Union Health Benefits Trust Fund] was created to ensure the future viability and sustainability of the retiree health system, it has done a remarkable job in providing great health benefits to retirees and it will continue to do so. ”

A copy of the amended and final findings of fact and conclusions of law in the case, Dannenberg v. State of Hawai‘i, can be found here. A copy of the final judgment can be found here.