Sonoma Cnty. Ass'n of Retired Emp. v. Sonoma Cnty., No. 10-17873 (9th Cir. 2013)
Annotate this CaseThe Association sued the County, alleging that the County had breached its obligation to provide certain vested healthcare benefits in perpetuity. The Association alleged that the County had implicitly promised to provide these benefits. The California Supreme Court's recent decision in Retired Employees Ass'n of Orange County, Inc. v. County of Orange (REAOC II) recognized that a county could form a contract with implied terms under specified circumstances. The court held that the district court did not err in concluding that the amended complaint failed to state a cause of action. Nevertheless, in light of REAOC II, the court could not agree with the district court's decision to deny the Association leave to amend on the ground that such amendment would be futile. Accordingly, the court vacated and remanded for further proceedings consistent with REAOC II.
Court Description: Civil Rights/ Health Care. The panel vacated the district court’s dismissal of a complaint brought by the Sonoma County Association of Retired Employees alleging that the County of Sonoma had breached its obligation to provide certain vested healthcare benefits in perpetuity. The Association alleged that although the County had not expressly promised to provide these benefits, it had implicitly done so. The panel held that in light of the California Supreme Court’s recent decision in Retired Employees Ass’n of Orange County, Inc. v. County of Orange (REAOC II), 266 P.3d 287, 289 (Cal. 2011), which recognized that a county may form a contract with implied terms under specified circumstances, the district court erred in dismissing the Association’s complaint with prejudice. The panel held that although the Association’s amended complaint failed to plausibly allege the County created an implied contract by ordinance or resolution, the district court erred by denying the Association leave to amend on the ground that such amendment would be futile. The panel remanded to the district court for proceedings consistent with REAOC II. Concurring in part and dissenting in part, Judge Rawlinson agreed with the majority that the district court properly dismissed the complaint for failure to state a claim. She disagreed with the majority’s conclusion that the district court abused its discretion in denying further leave to amend.
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