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Old 05-05-2006, 06:19   #1 (permalink)
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US:Judge's recusal may slow Ford retiree health care deal

Judge's recusal may slow Ford retiree health care deal

Jurist discloses ties to hospital system, throws wrench into plan to save carmaker $850M a year.

David Shepardson / Detroit News Washington Bureau

WASHINGTON -- A second federal judge has opted not to hear the Ford-UAW health care agreement, raising questions about whether the deal to reduce the automaker's health care costs by $850 million annually will be delayed.

Thursday, U.S. District Judge Anna Diggs Taylor in Detroit recused herself from deciding whether to approve the Ford-UAW health care agreement -- approved by just 51 percent of voting union members in December -- after she oversaw the case for six weeks.

The deal would cut Ford's health care costs by instituting deductibles and monthly premiums for hourly retirees. If approved, retired hourly workers would begin paying monthly premiums, deductibles and co-payments for medical services up to a maximum of $370 a year for individuals and $752 for a family. They don't pay such fees now.

Since the union can't negotiate on behalf of hourly retirees, Ford and UAW officials are seeking to have the deal approved by a court to prevent any legal challenges.

Ford says the deal is essential to its fiscal health. Ford spokeswoman Kathleen Volkes said the company would like quick approval of the deal. "We'll support whatever the court decides," Volkes said.

Taylor disclosed she is a member of the Board of Trustees of the Henry Ford Health System, which owns Health Alliance Plan, a health maintenance organization that covers many Ford retirees.

Mark Baumkel, a lawyer for retirees who oppose the deal, asked Taylor to step aside. "Henry Ford Health System, via HAP … has an existing prominent financial relationship (with Ford)," he argued.

Taylor's decision came after the first judge assigned the case withdrew from the case for unknown reasons.

On Feb. 24, U.S. District Judge Arthur J. Tarnow tentatively approved the Ford-UAW union deal to impose new fees on retirees to reduce soaring health care costs. He also certified it as a class-action suit. On March 22 Tarnow withdrew without explanation and has declined to elaborate.

Ford and the UAW have sent notices detailing the deal and invited about 170,000 retirees and dependents to attend a fairness hearing May 31.

Tarnow gave the retirees until April 28 to file objections; about 800 have objected.

On Thursday the case was randomly reassigned to U.S. District Judge Paul Borman, who must decide whether to keep the fairness hearing on track for May 31 or reconsider earlier court rulings. Ford and UAW officials asked Taylor not to disturb the earlier ruling, saying it would "cause significant expense, confusion and delay," and she agreed.

The Ford deal is patterned after a similar deal at General Motors Corp., which will see its annual health care costs fall by $1 billion. It received final court approval March 31.
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