Source: http://www.psprs.info/2013/03/latest-update-to-lawsuits-against-psprs.html
Timestamp: 2018-10-15 20:22:53
Document Index: 636009508

Matched Legal Cases: ['§ 25', '§ 1', '§ 1', '§ 33', '§ 1', '§ 1']

PSPRS Pension Watch: Latest update to lawsuits against PSPRS and EORP (March 2013)
Latest update to lawsuits against PSPRS and EORP (March 2013)
Following is the most recent update to the four legals cases challenging SB 1609 reforms to the Public Safety Personnel Retirement System (PSPRS) and the Elected Officials' Retirement Plan (EORP). The memorandum, which shows a modification date of March 7, 2013, is from the PSPRS Adminstrator. It is also available here in PDF format. The previous post, PSPRS lawsuits: Sacrifice is for the other guy goes into more detail about these lawsuits.
Re: The following summarizes the status of the four pending lawsuits challenging reforms to the Public Safety Personnel Retirement System (PSPRS) plans effected by Senate Bill 1609 in 2011.
All four lawsuits were filed in the Superior Court of Arizona in Maricopa County. Two (Fields and Hall) were brought by, respectively, retired and active judges challenging changes to the Elected Officials’ Retirement Plan (EORP); the other two (Rappleyea and Parker) were brought by, respectively, retired and active law-enforcement officers challenging changes to the PSPRS plan.
Fields v. Elected Officials’ Retirement Plan, No. CV 2011-017443
The Fields case was filed on September 12, 2011, by Kenneth Fields, a retired MaricopaCounty Superior Court judge, and Jefferson Lankford, a retired Arizona Court of Appeals judge, on behalf of a putative class of EORP members who were retired as of July 20, 2011, the effectiveness date of SB 1609. The lawsuit challenges only changes made with regard to the amount and funding of annual permanent increases in base benefits, including the elimination of any new flow of excess earnings above the hurdle rate into the reserve for future benefit increases, changes in the hurdle rate, and the tying of maximum annual increases to the plan’s funding ratio. Plaintiffs challenged the amendments under the “contract clauses” of the Arizona and United States Constitutions,1 and well as under the public-retirement clauses of the Arizona Constitution, adopted in 1998, which provide that “[m]embership in a public retirement system is a contractual relationship that is subject to article II, § 25, and public retirement system benefits shall not be diminished or impaired.” Ariz. Const. art. XXIX, § 1(C). The State of Arizona, through the Attorney General’s Office, intervened as a defendant in order to defend the constitutionality of SB 1609.
The superior court (the Honorable John Buttrick presiding) ordered the trial on the merits consolidated with a hearing on Plaintiffs’ motion for a preliminary injunction. The court held a one-day trial, including live testimony, on April 10, 2012. At the hearing, it also certified a class of EORP members who had retired or applied for benefits under the EORP on or before July 20, 2011, their spouses and surviving spouses, and their children who were under the age of 23 or who became disabled before that age and remained a dependent of the member, a surviving spouse, or a guardian. On May 21, 2012, the court issued a minute entry holding that the changes to the benefit-increase mechanism violated Article XXIX, § 1(C) of the Arizona Constitution by reducing or impairing the retired members’ benefits. The court granted only declaratory relief; it did not grant an injunction. In addition, the court expressly did not reach either the Arizona or federal contract clauses.
Plaintiffs then filed a proposed form of judgment that included injunctive relief. They also moved for an award of roughly $80,000 in attorneys’ fees against the EORP Defendants and the State of Arizona, with that amount to be trebled under the “common fund” doctrine and the additional $160,000 in fees to be awarded against the class itself by being paid from the reserve for future benefit increases. The EORP Defendants and the State objected to the form of judgment and the fee request, including the shifting of fees to the defendants and the spreading of fees to the class.
Judge Buttrick was appointed a federal magistrate judge, and his last date on the superior court bench was August 31, 2012. As a result, on August 16, 2012, Plaintiffs moved for entry of an immediately appealable partial final judgment on the merits under Arizona Rule of Civil Procedure 54(b). Judge Buttrick held a hearing on the form of judgment on August 29, 2012, and on the following day entered a form of judgment that included both declaratory relief and an injunction requiring EORP to transfer funds into the reserve for future benefit increases and pay the retirement benefits due as if SB 1609 had never been enacted. This injunction became immediately appealable, with the notice of appeal due within thirty days of the date of that order. However, Judge Buttrick did not enter Rule 54(b) language that would make the declaratory relief immediately appealable.
On September 12, 2012, Judge Robert Oberbillig, to whom the case was reassigned, heard argument on Plaintiffs’ application for an attorneys’-fee award against the EORP and the State of what was then $96,609.55, with an additional $193,439.96 to be awarded against the class under the “common fund” doctrine. After a nearly two-hour hearing, Judge Oberbillig ruled that he would award the fees against the EORP and the State, although it was a difficult issue under the fee statute as written; this sets up a separate appeal on that ground. He also held that the transfer to the reserve for future benefit increases would create a “common fund” from which additional fees could be paid from individual members’ checks without running afoul of the constitutional and statutory restrictions on use of EORP funds. He has deferred the issue of the amount of fees and whether to award any additional fees to Plaintiffs’ counsel until after notice to the class and an opportunity for class members to object.
On December 17, 2012, the court held a hearing on the form of class notice and resolved the pending issues as to the notice. The notice was mailed to the class members on January 11, 2013. The court will hold a hearing on the fee application on March 4, 2013, at 1:30 p.m. Several submissions by class members were filed, some of whom support and others of whom object to the multiplier sought by Plaintiffs’ counsel.
In light of Judge Buttrick’s entry of an immediately appealable injunction, the parties stipulated at the hearing to entry of a revised judgment with Rule 54(b) language that would allow a single appeal of all of the merits issue, leaving the fee issues to be resolved by the superior court. Judge Oberbillig entered an appealable final judgment on September 13, 2012. The EORP Defendants filed their notice of appeal on September 28, 2012, and the State filed its notice of appeal on October 12, 2012.
Plaintiffs would not agree to a complete stay of the judgment pending the appeal, and insisted at the September 12, 2012, hearing that the EORP should be required to transfer funds into the reserve for future benefit increases as it would have done on June 30, 2011, if SB 1609 had not been enacted. The EORP Defendants moved for a stay of all injunctive relief, and Judge Oberbillig granted the stay on October 30, 2012. The EORP Defendants and the State petitioned to have the appeal transferred from the Arizona Court of Appeals to the Arizona Supreme Court. The transfer petition was supported by briefs from the Governor, the President of the Arizona State Senate and Speaker of the Arizona House of Representatives, and the League of Arizona Cities and Towns as amici curiae.
Plaintiffs opposed the transfer petition. On January 8, 2013, the Arizona Supreme Court granted the petition and accepted the case. The EORP Defendants and the State filed their respective opening briefs on February 13, 2013. Plaintiffs’ answering brief was due April 1, 2013, but Plaintiffs’ counsel stated that Plaintiffs would be seeking an extension of time for that brief. Any amicus briefs are currently due twenty days after the filing of the answering brief, which would be April 22, 2013, if the answering brief is filed on the existing deadline.
Hall v. Elected Officials’ Retirement Plan, No. CV 2011-021234
The Hall case was filed on November 30, 2011, by Philip Hall and Jon Thompson, both active judges of the Arizona Court of Appeals, on behalf of a putative class of judges of the superior court, court of appeals, and Arizona Supreme Court who were active members of the EORP as of July 20, 2011. The lawsuit asserts the same challenges as the Fields case to the benefit-increase reforms. It also asserts challenges to the increase in the employee contribution rates under the contract clauses, the public-retirement clauses in Article XXIX, and the Arizona Constitution’s judicial-salary clause, which provides that the “salary of any justice or judge shall not be reduced during the term of office for which he was elected or appointed.” Ariz. Const. art. VI, § 33.
This lawsuit, which was reassigned by stipulation to Judge Buttrick, remained inactive during the trial proceedings in the Fields case. On August 9, 2012, the State of Arizona, by the Attorney General’s Office, gave notice of its intention to intervene, and the court ordered in a minute entry filed August 14, 2012, that intervention was granted upon the State’s filing of a notice of appearance. Following the decision in Fields, the parties (including the State) began negotiating a stipulation of facts and a schedule for resolution of the action through cross motions for summary judgment. The parties submitted a joint stipulation as to certain facts and the admissibility of documents on September 14, 2012. Plaintiffs filed their motion for summary judgment on September 21, 2012. The EORP Defendants and the State filed their respective responses and cross-motions for summary judgment on November 7, 2012. Plaintiffs’ combined reply and response was filed on December 31, 2012. The EORP Defendants filed their reply in support of their cross-motion on February 7, 2013, and the State filed a joinder in that reply. Judge Douglas Rayes, to whom the case has been reassigned, held a hearing on the summary judgment motions on February 11, 2013. The court indicated that it will try to rule quickly, and the parties have agreed that they will seek to pursue an immediate appeal and transfer to the Arizona Supreme Court, in the hope that the case can be decided at the same time as the Fields case.
Rappleyea v. Public Safety Personnel Retirement System, No. CV 2012-000404
The Rappleyea case was filed on January 11, 2012, by two retired law-enforcement officers, and it challenges SB 1609’s amendments to the benefit-increase mechanism for PSPRS. It asserts the same causes of action asserted in the Fields action. The case is assigned to the Honorable George H. Foster, Jr. By stipulation filed October 11, 2012, the State of Arizona, through the Attorney General’s Office, intervened as a defendant. The case remained dormant while the Fields case proceeded.
On August 7, 2012, Plaintiffs filed a brief motion for summary judgment based on the Arizona and federal contract clauses and the Arizona retirement-benefits clauses. The motion also argues that the distribution to government employers’ accounts of excess investment earnings would violate Article XXIX, § 1(B) and compromise PSPRS’s tax qualification under the Internal Revenue Code, but this appears to reflect Plaintiffs’ misunderstanding of the nature of the employer accounts, i.e., that money is being returned to the employers themselves, as opposed to the main plan.
On August 13, 2012, Plaintiffs filed a request for a Rule 16 scheduling conference. By an ordered dated August 14, 2012, the Court ordered the parties to file a joint proposed scheduling order by September 13, 2012, and the parties did so. On October 30, 2012, Judge George Foster, Jr. conducted the Rule 16 scheduling conference. He announced that he would recuse himself from the case because of his prior professional relationship with Assistant Attorney General Charles Grube, his own wife’s position in the Attorney General’s office, and Mr. Grube’s current representation of him and other members of the Commission on Judicial Conduct in a Ninth Circuit appeal challenging certain Commission rules. The case has been reassigned to Judge Randall H. Warner.
Plaintiffs moved for summary judgment on August 7, 2012. The PSPRS Defendants and the State filed their respective responses to Plaintiffs’ motion for summary judgment on October 25, 2012, and Plaintiffs filed a reply on December 20, 2012. On February 15, 2013, the parties filed a stipulation to stay further proceedings in Rappleyea pending the Arizona Supreme Court’s decision in Fields.
Parker v. Public Safety Personnel Retirement System, No. CV 2012-000456
The Parker case was filed on January 12, 2012, by the Rappleyea plaintiffs’ counsel on behalf of four active law-enforcement officers, who purport to represent a putative class of all active law-enforcement PSPRS members as of July 20, 2011. The lawsuit parallels the Hall suit and challenges SB 1609’s amendments to the benefit-increase mechanism and employee contribution rates on the ground that they violate the Arizona and federal contract clauses and Article XXIX, § 1(C). This case is assigned to the Honorable John Rae. The State of Arizona has indicated its intention to intervene in this action but has not yet done so.
The plaintiffs’ lawyers who filed this action are also counsel to the Arizona Fraternal Order of Police (FOP). On March 23, 2012, the Phoenix Law Enforcement Association (PLEA) moved to intervene as a plaintiff; FOP’s counsel strenuously opposed the motion, and the PSPRS Defendants remained neutral. By a minute entry dated June 11, 2012, the court granted the motion to intervene. PLEA’s counsel filed their complaint on September 17, 2012.
On August 14, 2012, the original Plaintiffs filed a request for a Rule 16(b) pretrial conference. The parties submitted a joint pretrial memorandum on September 17, 2012, and the court conducted a telephonic status conference on September 19, 2012. PLEA had moved for a three-month continuance of proceedings because of its counsel’s medical condition. In its September 19, 2012, minute entry, the court extended the date for Plaintiffs to file a motion for summary judgment until January 21, 2012. The court also set a hearing on any summary judgment motions for April 26, 2013.
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