good morning please the court my name is steve fester i'm here today on behalf of the appellant's collectively referred to as the teacher's there's two points i'd like to make today number one this action is ripe for a decision on the merits number two there is an unconstitutional taking of interest here with regard to the first point that this action is ripe for a decision on the merits the sole basis the director now asserts it's not ripe is that under williamson county the teachers are barred from bringing their federal taking claim in federal court and they must file their claim in state court to challenge a rule that was in the acted three weeks ago twenty years after the taking williams county does not stand for this schneider that's correct your honor that webster county is in a political too when there's a taking the money when there's a taking the money the proper remedy is to file a federal taking claim in court seek injunctive relief for the return of that money so your theory is that the state has just swept up your client's interests that belong to them under federal law that is you're correct correct your honor the teachers made contributions that were required into retirement accounts that under state law are their property undisputed that the interest rate on that was five point five percent annual interest compound it quarterly and annual interest rate by definition is based on three hundred sixty five days and what happened is when the teacher when the teachers removed their money they did not receive all of the interest that had accrued from the days of deposit to the days of withdrawal because at that time the director had a secret a county practice and under that secret accounting practice there are entire corridors where the teachers did not receive an interest  some of these quarters their money remained in the ik account the entire quarter and this is undisputed and the record and so that trust fund earns there is actually about and eight percent interest but as an accounting matter then each teacher has is accounted for with a different account they have an individual account it comes monthly they have a statement that comes i think monthly or quarterly that talks about the interest but the amounts since they weren't receiving it and there was no statements they didn't know what was happening it wasn't until later until someone in the public employees retirement system who started the first action he worked in the i believe the taxation department and he said what's happening here you know this this is not right so what happened to the money so when when the teacher is transferred over to plan three yes and and since they transferred by statute it must be the employer only because they took their money out so they there's no money left over to pay their define benefits they moved all their money into a defined contribution plan and that's why the amount matters because it forms the basis for their retirement accounts going forward so so we have a state opinion and state court opinion and we have a regulation which says the teachers are not entitled to the interest a accrued in that missing quarter and the president or when that when it was transferred what do we do about that well this is exactly what happened in schneider and i think webb's and phillips there was a statute or regulation that said well this case is even stronger than those cases let me back up in schneider there is a state statute that expressly disavowed the inmates right to the accrued interest on their principle and this court said you cannot disavow a property right protected by the constitution and here the statute that the i r s relies on forty one fifty zero three three gives the director discretion of when the credit interest so that the director has discretion to do it correctly she could fix the account but she has determined by the rule and acted three weeks ago that she's not going to do that she's not going to fix the account so that's why we've asked for an injunction requiring an accounting and to correct the account and what we're asking is just to move the money from the wrong account into the right account this falls right into taylor b wesley  principle and so here the interest was accruing day to day and the director has just decided that in her discretion she's not going to credit it for large amounts of time the court rejected a similar accounting gimmick in trustees be riley that was under the federal a p a but rather than a quarter in method they had a month in method and this court said that's inaccurate it's subject to manipulation it was the federal a p a but the same thing's happening here there's just this unconstitutional taking of order saying that the teachers were seeking damages teachers are not seeking damages the director agreed to class or vacation agreed to injunctive relief there's more than twenty thousand teachers who are affected by this they all have the same claim they all want the money this is the taking of her twenty years ago they've been fighting this for ten years in state court two years before that administrative proceedings this case is ripe for a decision on the merits then i'd like to highlight that the department the director agrees that if you reject the rightness argument you should reach the merits they they say that in the response and in the supplemental brief and we totally agree it's been way too long for this case to be continuing and if the teachers are being denied their money and their retirement they should get that money now so i think i'll reserve the rest of my time for there's anything on that's fine thank you because there is no constitutionally protected property right to daily interest there's no case that says there's a constitutionally protected property right to delia interest is the controversy right now in our eyes your honor it is not right we do agree that there has been a final decision now made by the agency in the manner of the regulation that was recently enacted but there is a second component to rightness considerations and that is whether that there has been an effort to exhaust the opportunity to obtain just compensation if there is a taking perched up to show you had a property right second that it was taken and third that just compensation was denied in order here there is a should williamson county applies in this case yes that is why williamson county applies in all cases except for facial challenges under the law this is an as applied challenge there is no law saying that williamson county doesn't apply for a per se taking versus a regular turret regulatory taking it applies to either in the guggenheim case this court said that if there is a facial challenge to a government regulation then the presidential concerns  entitle to keep the interest of accrued on the teacher's accounts be futile to us and back to determine what the state thinks about whether they're entitled to the why is that because the beef under the state administrators procedure act if a party challenge is an active rule they can challenge it on the grounds that for instance it was arbitrary record for why the agency arrived at that particular methodology for calculating interest can you give me your version of what happens what happened to these teacher accounts bac and twenty years ago certainly and i think there's a fundamental disagreement among the parties as to how the state pension operatives underlies their argument and argument and that is that when an employee and their employer or make monthly contributions to an individual's pension account so does it go into a co mingled investment fund it does ok and then there's an accounting function that attributes to each teacher their own account is at how it works yeah there's two separate things the accounting function for each teacher's account means nothing in the end if it's an investment return account that goes into a pool with the state pension council invest both the employee or any employee contributions into that fund and that fun we're hopefully going to generate enough that it will be able to adequately fund all retirees down the road when they retire however if an employee terminates public service or makes a transfer as occurred in this  case then we will give some time value of their money they won't get the employee or contributions they work their employee contributions and because of the investment there in this day and age a relatively generous five point supreme court cases interest follows principal so if interest is being accrued it belongs to the teachers not to to the states oh so very concerned about exactly what's happening and what's in it what what's really happening what's accounting features so can you just walk me through maybe with a little bit more detail because the certainly the documents say there is interest that accrues on these accounts and it's compounded and  state treasury so the state treasury says in foundation case at five twenty four u s one sixty eight page one sixty eight the court explained quote the government has great latitude in regulating the circumstances under which interest may be earned quote and then goes on to say only interests that actually does and that was emphasized in the original actually does accrue attaches as a property right incident to ownership of the underlying principle here what they're saying is that there is a property right to daily interest and that's the fundamental disagreement in this case what we're saying is no you have a property right to interest following principle but that property right is just one aspect of the latitude the government has in determining whether and to what extent interest is served by saying that well we're going to say you get this accrued on this money just went into general the general pool that was used to pay other teachers other members of the pension is that wrong that is wrong because this money is not sitting in an individual like it wasn't schneider accruing interest and then that interest is then transferred to the inmate welfare fund for the general use of people here at the outset contributions both employer and employee are going into this spending investment funding account generally when somebody takes their employee contributions oh that is more disavows that there would be such a constitutional right to say government can choose can't choose when they credit interest they must choose under the constitution to credit interest daily that's their third there's no law to support that and in fact phillips says that would be inac so really what this boils down to is that the plaintiffs are serving that a fiction invalid premise that this money in their individual counts is sitting there much like it sits in a bank account and what i'm driving at though is that they're saying though that it is sitting there collecting interest that the state is taking away from them but yet it's maintaining somewhere that can easily be just transferred back to them that's not what is happening it's going to this pension fund i'm sorry this investment fund and that is where the money automatically comes from is taking it out of that investment fund and putting it to individuals account at a time when we're drawl there are other issues in this case and i see i'm going to short on time here so i would just point out in addition to the jurisdiction over issue one right now as which we've already discussed there is the additional jurisdictional issue based on the record feldman doctrine that in order for this court to essentially  reverse what the state court decided which is that there is no right to daily interest that would be a forbidden appeal to a federal court other than the united states supreme court so of feldman dr controls in this state case the court said as is common protocol we are going to reach the taking ins issue because we can decide this on on constitutional grounds specifically that there is no right in washington state any way for public employees contributing to the government pension fund to have daily interest and that's under state statute so in order for this court to assume jurors fiction over this case and rule to the contrary would in fact be reversing the state court decision that there is no right to daily interest before us here the takings clause whether there's a constitutional taking that component was not but the issue of whether there is a right to daily interest was addressed and that is the underlying theory of their taking in that they have that property right and the court the state courts that no you do not have that property right so therefore you cannot assert that it was taken from you because it's something you didn't have in the first place you didn't have a right to daily interest unless there's further questions and i think thank you no question bed this williamson county argument because even under wellington county the directors wrong under him some county you have to have state procedures for seeking just compensation there's no state procedures for seeking just compensation when the government takes your money there they have cited nothing like ambers condemnation and whims and county and footnote thirteen expressly says this second problem doesn't apply to review procedures you don't have to go see judicial review of the regulation even if this was considered regulatory taking so that argument's wrong so we go on to the merits on the merits the director now says it's not an interest bearing account but the record is that it is an interest bearing account in the undisputed record and this is that you are twenty three thirty seven e r thirty nine the rate of interest on the member accounts is five point five percent annual interest compound it quarterly those words mean something annual interest compound quarterly when you're having interest and an annual interest rate it just means interest day to day if the interest is going to be there on an annual rate you have to pay for every day it's just like a bank and that the notion of philips and that's not earned that's a fiction that's this fiction that it's not credited it's not earned the whole definition of accrued interest is interest earned but not credited not paid so the accrued interest here is the interest that has accrued day to day but has not been paid so in summary this litigation has been going on for twenty years the director agrees that if you reject the ripeness argument you should reach the merits and the merits are this is a taking and unconstitutional taking undisputed facts pure issue of law the teacher's request that you end this litigation and issue a decision on the marriage counselor thought i heard the abilities our counsel argue that if we were to say it was right but there's still other issues like worker feltman that would stop us from getting to the  wrecker stops you from getting the merits that is that an argument that the state court determined this the state court plainly expressly twice said we are not deciding anything with regard to the takings claim so wrecker feldmann collateral estoppel are baseless arguments your honor that they don't prevent the court from deciding this on the merits because i also think that the takings claim is inextricably combined with their rightness argument because the rightness argument is that this is a regulatory taking and not a person a taking so i think that the merits are going to have to be decided in order to decide the rightness argument