Sekmistrz v. City of Melvindale

District Court, E.D. Michigan·Decided August 26, 2024·No. 2:22-cv-11438·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

ANN SEKMISTRZ,

Plaintiff, Case No. 22-cv-11438

v. HON. MARK A. GOLDSMITH

CITY OF MELVINDALE et al.,

Defendants. __________________________________/

OPINION & ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS (Dkt. 31)

Plaintiff Ann Sekmistrz, a former employee of the City of Melvindale, brought this case against Defendants the City of Melvindale and Richard Ortiz, the City’s Administrator/Finance Director, after Defendants instituted a policy that terminated the health insurance benefits Sekmistrz was receiving as a retiree under her collective bargaining agreement (CBA). Sekmistrz brings claims under the First and Fourteenth Amendments and the Michigan Elliot-Larsen Civil Rights Act, as well as a claim for breach of contract. Before the Court is Defendants’ motion to dismiss (Dkt. 31).1 For the reasons stated below, the Court grants the motion. I. BACKGROUND According to the amended complaint, Sekmistrz was employed by the City from June 1995 until her retirement on July 1, 2016. Am. Compl. ¶ 10 (Dkt. 30). Before her retirement, she was

1 Because oral argument will not aid the Court’s decisional process, the motion will be decided based on the parties’ briefing. See E.D. Mich. LR 7.1(f)(2); Fed. R. Civ. P. 78(b). In addition to the motions, the briefing includes Sekmistrz’s response (Dkt. 33) and Defendants’ reply (Dkt. 34). a member of a union. Id. ¶ 11. The CBA applicable at the time of Sekmistrz’s retirement was effective between January 1, 2015 and December 31, 2018 (CBA #1). Id. ¶ 12. CBA #1 contained the following provision pertaining to health insurance coverage for retirees: For Employees who retire after the effective date of this Agreement, and retired Employees who already have such coverage provided by the City shall continue in the group with coverage for himself and his spouse at the date of retirement, paid by the City, subject to the co-pays and deductibles. Upon federal age eligibility, Employees and spouses eligible for Medicare/Medicaid must enroll therein, and the City insurance will become secondary.

CBA #1 at PageID.901 (Dkt. 31-2).2 Pursuant to this provision, Sekmistrz continued receiving health insurance coverage after her retirement. Am. Compl. ¶¶ 14–15. After CBA #1 expired, the City and the union entered into a second CBA, effective between January 1, 2019 and December 31, 2022 (CBA #2). Am Compl. ¶ 16; CBA #2 (Dkt. 31-3). CBA #2 had an identical provision regarding health insurance coverage for retirees. See CBA #2 at PageID.1005. Pursuant to this provision, Sekmistrz continued receiving health insurance coverage after CBA #1 expired. Am. Compl. ¶¶ 18–19. In November 2021, the City Council adopted a new policy stating that it would no longer provide healthcare benefits to retirees under the age of 65 who were otherwise eligible for health insurance coverage from “another employer as an employee, spouse, or dependent”; “another employer from a retiree sponsored medical coverage as a retiree, spouse, or dependent”;

2 In deciding a Rule 12(b)(6) motion, courts are generally confined to considering the allegations in the complaint, matters of public record, orders, the record of the case, and exhibits attached to the complaint. Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001). Additionally, the Court may consider exhibits attached to a defendant’s motion to dismiss “so long as they are referred to in the complaint and are central to the claims contained therein.” Gavitt v. Born, 835 F.3d 623 (6th Cir. 2016). Because the collective bargaining agreements attached to Defendants’ motion to dismiss are referred to in Sekmistrz’s complaint and are central to her claim, the Court will consider them. “Government Programs such as Medicaid, Tricare, or any similar coverage”; or any other source. Id. ¶ 25. The policy went into effect on January 1, 2022. Id. ¶¶ 25–26. Sekmistrz became aware of the new policy in November 2021 when she received a letter from Ortiz requesting information on whether she was eligible for other healthcare insurance

coverage. Id. ¶¶ 32–33. The letter advised that, due to the City’s financial condition, effective January 1, 2022, “only those who are not eligible for other healthcare may remain with the City’s retiree healthcare plan.” Id. ¶ 35. Sekmistrz’s health insurance coverage was then terminated, pursuant to the policy, as she was eligible for health insurance coverage through her husband’s employment. Id. ¶¶ 36–37. Sekmistrz filed this action in June 2022 (Dkt. 1). In response, Defendants filed a motion to dismiss (Dkt. 28). Because the motion argued, in part, that the complaint did not plead sufficiently detailed or specific factual allegations to articulate a plausible claim, the Court issued an order allowing Sekmistrz the opportunity to file an amended complaint. See 12/15/23 Order (Dkt. 29). Pursuant to that order, Sekmistrz filed an amended complaint on December 20, 2024,

after which Defendants filed a renewed motion to dismiss. II. ANALYSIS3 The Court first addresses Sekmistrz’s federal claims. Because the Court finds that Sekmistrz’s federal claims must be dismissed, it will decline to exercise supplemental jurisdiction over her state-law claims.

3 To survive a motion to dismiss, a plaintiff must allege “facts that state a claim to relief that is plausible on its face and that, if accepted as true, are sufficient to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A. Federal Claims 1. Due Process Clause Sekmistrz claims that the City’s decision to terminate her benefits violated the Fourteenth Amendment’s due process guarantee, as her “property interest under Michigan law in her

continued receipt of the City-provided retiree health insurance benefits coverage was terminated unreasonably, arbitrarily, and/or capriciously. . . .” Am. Compl. ¶ 55. The substantive due process component of the Fourteenth Amendment bars “certain government actions regardless of the fairness of the procedures used to implement them.” Daniels v. Williams, 474 U.S. 327, 331 (1986). Where, as here, no procedural deficiency is alleged, a plaintiff may nonetheless state a due process violation where he or she establishes (i) the existence of a constitutionally protected property interest and (ii) that the state arbitrarily or irrationally undercut that interest. See Williams v. City of Detroit, 54 F.4th 895, 898–899 (6th Cir. 2022). Defendants argue that the due process claim fails because (i) Sekmistrz has failed to plead a property interest and, (ii) even if the Court were to find a property interest, Sekmistrz has failed

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