Title: Kentucky Employees Retirement System v. Seven Counties Services, Inc.
Citation: N/A
Docket Number: 2018-SC-000461-CL
State: Kentucky
Issuer: Kentucky Supreme Court
Date: August 29, 2019

RENDERED: AUGUST 29, 2019 TO BE PUBLISHED 2018-SC-000461-CL IN RE: KENTUCKY EMPLOYEES RETIREMENT SYSTEM AND BOARD OF TRUSTEES OF KENTUCKY RETIREMENT SYSTEMS ON CERTIFICATION FROM V. UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT NOS. 16-5569 AND 16-5644 SEVEN COUNTIES SERVICES, INC. OPINION OF THE COURT BY JUSTICE HUGHES CERTIFYING THE LAW By o r d e r e nt e r e d No ve mbe r 1, 2018, t his Co ur t gr ant e d t he Unit e d St at e s Co ur t o f Appe al s f o r t he Sixt h Cir c uit ’s r e que st f o r c e r t if ic at io n o f l aw o n t he f o l l o w ing issue : Whe t he r Se ve n Co unt ie s Se r vic e s, Inc .’s par t ic ipat io n as a d e par t me nt in and it s c o nt r ibut io ns t o t he Ke nt uc ky Empl o ye e s Re t ir e me nt Syst e m ar e base d o n a c o nt r ac t ual o r a st at ut o r y o bl igat io n. Af t e r c ar e f ul c o nsid e r at io n, w e ho l d t hat Se ve n Co unt ie s Se r vic e s, Inc .’s par t ic ipat io n in and it s c o nt r ibut io ns t o t he Ke nt uc ky Empl o ye e s Re t ir e me nt Syst e m (KERS) ar e base d o n a st at ut o r y o bl igat io n. FACTS AND PROCEDURAL HISTORY This c ase ar ise s f r o m t he e f f o r t s o f Se ve n Co unt ie s, a no n-pr o f it pr o vid e r o f me nt al he al t h se r vic e s, t o r e o r ganize and r e habil it at e it s f inanc e s und e r Chapt e r 11 o f t he Bankr upt c y Co d e . At it s r e que st , in 1979 Go ve r no r Jul ian Car r o l l d e signat e d Se ve n Co unt ie s a “d e par t me nt ” f o r pur po se s o f par t ic ipat ing in KERS, a publ ic pe nsio n syst e m. Subse que nt l y Se ve n Co unt ie s paid int o KERS t o se c ur e r e t ir e me nt be ne f it s f o r it s e mpl o ye e s. Be c ause t he r at e o f r e quir e d e mpl o ye r c o nt r ibut io ns has inc r e ase d d r amat ic al l y in r e c e nt ye ar s, Se ve n Co unt ie s init iat e d bankr upt c y pr o c e e d ings in Apr il 2013, pr imar il y t o r e je c t it s r e l at io nship w it h KERS as an e xe c ut o r y c o nt r ac t . Wit h KERS maint aining t hat Se ve n Co unt ie s has st at ut o r y as o ppo se d t o c o nt r ac t ual o bl igat io ns t o KERS, t he nat ur e o f t he par t ie s ’ r e l at io nship is c e nt r al t o a pe nd ing appe al in t he Sixt h Cir c uit . To ad d r e ss ad e quat e l y t he que st io n c e r t if ie d t o t his Co ur t , a br ie f hist o r y o f bo t h Se ve n Co unt ie s and KERS is ne c e ssar y. I. Seven Counties Services, Inc. Hist o r ic al l y, st at e s w e r e r e spo nsibl e f o r t r e at ing t he me nt al l y il l , and t his o f t e n r e sul t e d in t he ir inst it ut io nal izat io n. In 1963 Co ngr e ss passe d t he Co mmunit y Me nt al He al t h Ac t w hic h pr o vid e d f e d e r al f und ing t o e st abl ish Co mmunit y-Base d Me nt al He al t h Ce nt e r s (CMHCs) d e signe d t o be gin t he pr ivat izat io n o f me nt al he al t h se r vic e s. Using t he f e d e r al f und ing, Ke nt uc ky c ho se t o pr o vid e se r vic e s t hr o ugh CMHCs, passing l aw s t hat e nabl e d t he ir c r e at io n and r e gul at io n. To be c o me a CMHC in Ke nt uc ky, an e nt it y f ir st has t o 2 be a no n-pr o f it o r ganizat io n and r e c e ive d e signat io n f r o m t he Ke nt uc ky Cabine t f o r He al t h and Famil y Se r vic e s.1 One o f t he f ir st CMHCs t o inc o r po r at e in t he st at e w as Rive r Re gio n Me nt al He al t h-Me nt al Re t ar d at io n Bo ar d , Inc .2 Mo st Rive r Re gio n e mpl o ye e s w e r e f o r me r e mpl o ye e s o f t he Ke nt uc ky De par t me nt o f Me nt al He al t h, and r e l uc t ant t o l e ave t he st at e syst e m and give up r e t ir e me nt be ne f it s ac c r ue d t hr o ugh KERS. In r e spo nse , Go ve r no r Ed w ar d Br e at hit t issue d an e xe c ut ive o r d e r in 1966 d e c l ar ing t hat CMHCs “ar e pe r mit t e d t o be c o me and ar e par t ic ipat ing age nc ie s ” in KERS.3 Exe c ut ive Or d e r 66-378. This e xpansio n appl ie d t o al l CMHC e mpl o ye e s, no t just t ho se t r ansit io ning f r o m st at e e mpl o yme nt . Rive r Re gio n be c ame a par t ic ipat ing d e par t me nt in KERS by an August 6, 1974 e xe c ut ive o r d e r . Exe c ut ive Or d e r 74-587. In 1978, Rive r Re gio n f il e d a pe t it io n f o r Chapt e r 11 bankr upt c y.4 The Ke nt uc ky De par t me nt o f Human Re so ur c e s int e r ve ne d , ur ging t he Bankr upt c y 1 Pr io r t o t he d e signat io n o f an o r ganizat io n as a CMHC, t he Ke nt uc ky Cabine t f o r He al t h and Famil y Se r vic e s (Cabine t ) r e vie w s an o r ganizat io n’s byl aw s, bo ar d c o mpo sit io n and o pe r at io ns t o d e t e r mine w he t he r t he y me e t minimum st and ar d s. CMHCs ar e r e gul at e d by t he Cabine t pur suant t o Ke nt uc ky Re vise d St at ut e s (KRS) Chapt e r 210. 2 Whe n e st abl ishe d , t his CMHC w as name d Re gio n Eight Me nt al He al t h-Me nt al Re t ar d at io n Bo ar d , Inc ., and w as kno w n as “Re gio n Eight .” It w as l at e r r e name d Rive r Re gio n. 3 At t he t ime t he e xe c ut ive o r d e r w as e nt e r e d , t hr e e CMHCs d e c l ine d t o par t ic ipat e in KERS and inst e ad c r e at e d t he ir o w n r e t ir e me nt pr o gr ams. KERS sue d t he se e nt it ie s, and ul t imat e l y t he st at e ’s high c o ur t d e t e r mine d t hat CMHCs w e r e no t r e quir e d t o par t ic ipat e in KERS. Ky. Region Eight v. Commonwealth, 507 S.W.2d 489 (Ky. 1974). Region Eight is d isc usse d infra. 4 Int e r e st ingl y, as o ut l ine d in t he Bankr upt c y Co ur t o pinio n, an e mpl o ye e gr o up t w ic e c hal l e nge d Rive r Re gio n’s r ight t o be ad jud ic at e d bankr upt and c o nt e nd e d t hat it w as o pe r at e d by t he Co mmo nw e al t h. In a 1980 o pinio n t he Bankr upt c y Co ur t he l d t hat Rive r Re gio n w as no t a st at e age nc y o r inst r ume nt al it y. In re Seven Ctys. Serv., 3 Co ur t no t t o imme d iat e l y d e c l ar e Rive r Re gio n bankr upt , as t e r minat io n o f it s busine ss w o ul d c ut o f f me nt al he al t h se r vic e s in t he r e gio n it se r vic e d . So o n t he r e af t e r , Se ve n Co unt ie s, a ne w l y-f o r me d e nt it y, pur c hase d t he asse t s o f Rive r Re gio n t hr o ugh t he bankr upt c y pr o c e ss and agr e e d t o assume r e spo nsibil it y f o r pr o vid ing se r vic e s in t he ar e as f o r me r l y se r ve d by Rive r Re gio n. Eve n t ho ugh Se ve n Co unt ie s is t he d ir e c t suc c e sso r o f Rive r Re gio n, it w as no t aut o mat ic al l y d r aw n int o KERS. In 1978, Se ve n Co unt ie s so ught an At t o r ne y Ge ne r al Opinio n t hat it c o ul d qual if y as a “d e par t me nt ” c apabl e o f par t ic ipat ing in KERS. The At t o r ne y Ge ne r al ac kno w l e d ge d Se ve n Co unt ie s ’ e l igibil it y pur suant t o KRS 61.510(3): “Any o t he r bo d y, e nt it y o r inst r ume nt al it y d e signat e d by Exe c ut ive Or d e r by t he Go ve r no r , shal l be d e e me d t o be a d e par t me nt [f o r pur po se s o f KERS] no t w it hst and ing w he t he r said bo d y, e nt it y o r inst r ume nt al it y is an int e gr al par t o f st at e go ve r nme nt .” Subse que nt l y, Go ve r no r Car r o l l e nt e r e d Exe c ut ive Or d e r 79-78 al l o w ing Se ve n Co unt ie s t o par t ic ipat e in KERS. To d ay, Se ve n Co unt ie s is a Ke nt uc ky no n-pr o f it o r ganizat io n t hat has pr o vid e d me nt al he al t h se r vic e s in Lo uisvil l e , Ke nt uc ky, and sur r o und ing ar e as f o r o ve r 30 ye ar s. In it s r o l e as a CMHC, Se ve n Co unt ie s pr o vid e s se r vic e s t o appr o ximat e l y 33,000 pe o pl e annual l y, inc l ud ing ad ul t s and c hil d r e n w it h Inc., 511 B.R. 431, 441 (Bankr . W.D. Ky. 2014) (c it ing Greenberg v. River Region Mental Health-Mental Retardation Bd., Inc., (In re River Region Mental Health-Mental Retardation Bd., Inc.) sl ip o p. at *4, Case No . 78-00193-L (Bankr . W.D. Ky. Jan 8, 1980)). On appe al , t he Unit e d St at e s Dist r ic t Co ur t f o r t he We st e r n Dist r ic t o f Ke nt uc ky and t he Co ur t o f Appe al s f o r t he Sixt h Cir c uit af f ir me d t he Bankr upt c y Co ur t ’s d e c isio n. 4 me nt al il l ne sse s, e mo t io nal o r be havio r al d iso r d e r s, d isabil it ie s, and al c o ho l o r d r ug ad d ic t io ns. II. The Kentucky Employees Retirement System (KERS) In 1956, t he Ke nt uc ky Ge ne r al Asse mbl y e st abl ishe d KERS and a bo ar d o f t r ust e e s t o ad minist e r t he syst e m. 1956 Ky. Ac t s c h. 35. To d ay, Ke nt uc ky Re t ir e me nt Syst e ms (Syst e ms)5 is a st at ut o r il y-c r e at e d age nc y o f Ke nt uc ky’s e xe c ut ive br anc h t hat , t hr o ugh it s bo ar d o f t r ust e e s, ad minist e r s t hr e e o f Ke nt uc ky’s r e t ir e me nt syst e ms — t he Co unt y Empl o ye e s Re t ir e me nt Syst e m, t he St at e Po l ic e Re t ir e me nt Syst e m, and KERS. KRS 61.645. The go al o f KERS is t o pr o vid e a se c ur e me ans o f r e t ir e me nt savings f o r t he e mpl o ye e s o f t he Co mmo nw e al t h, it s d e par t me nt s, age nc ie s and inst r ume nt al it ie s. KERS is a c o st -shar ing, mul t ipl e -e mpl o ye r , d e f ine d -be ne f it r e t ir e me nt pl an. Par t ic ipat ing e mpl o ye r s and e mpl o ye e s pay int o KERS at a se t r at e and , upo n r e t ir e me nt , KERS pays o ut t he e mpl o ye e ’s d e f ine d be ne f it base d o n t he numbe r o f ye ar s se r ve d , a “be ne f it f ac t o r ,” and an e mpl o ye e ’s f inal c o mpe nsat io n. See KRS 61.510 et seq. KERS impl e me nt s t w o pl ans: hazar d o us and no n-hazar d o us pl ans t hat ar e be st d e sc r ibe d as d if f e r e nt t ie r s w it hin a singl e d e f ine d be ne f it pl an.6 5 We r e f e r t o t he Ke nt uc ky Re t ir e me nt Syst e ms as “Syst e ms ” t o avo id c o nf usio n w it h t he init ial s c o mmo nl y use d t o d e signat e t he Ke nt uc ky Re vise d St at ut e s (KRS). KERS and Syst e ms ar e r e f e r r e d t o ge ne r al l y as simpl y KERS w he r e appr o pr iat e . 6 In ge ne r al , e mpl o ye e s e l igibl e f o r t he hazar d o us pl an ar e po l ic e o f f ic e r s, f ir e f ight e r s, and c o r r e c t io ns o f f ic e r s. Hazar d o us d ut ie s t hat qual if y f o r t he hazar d o us pl an ar e d e t e r mine d by st at e l aw . See KRS 61.592. 5 Ge ne r al l y, e mpl o ye e s c o nt r ibut e 5% o f t he ir c o mpe nsat io n.7 The e mpl o ye r c o nt r ibut io n c o nsist s o f t he c o st o f f und ing t he be ne f it e ar ne d t hat ye ar , pl us t he amo unt ne e d e d t o f und t he ac t uar ial l y ac c r ue d l iabil it y.8 This ac t uar ial l y r e quir e d c o nt r ibut io n r at e is kno w n as t he ARC and is a payme nt mad e by e mpl o ye r s t o w ar d past unf und e d l iabil it y in o r d e r t o e nsur e KERS has t he r e so ur c e s ne e d e d t o pay be ne f it s. The ARC is impo r t ant be c ause t he so l ve nc y o f KERS t o me e t f ut ur e payme nt o bl igat io ns d e pe nd s o n c o nsist e nt payme nt o f t he ARC. Ky. Emp. Ret. Sys. v. Seven Ctys. Serv., Inc., 550 B.R. 741, 749 (W.D. Ky. 2016). As t he Dist r ic t Co ur t po int e d o ut in it s o pinio n in t his c ase , “[i]t d o e s no t t ake an e xpe r t t o c o nc l ud e t hat KERS’s no n-hazar d o us pl an is in po o r shape .” Id. In t he e ar l y 2000s, KERS be c ame und e r f und e d f o r t hr e e pr imar y r e aso ns: (1) mar ke t l o sse s in 2000-01 and 2008-09 d iminishe d t he f und ’s asse t val ue s by 17%; (2) t he Ge ne r al Asse mbl y appr o ve d inc r e ase d r e t ir e me nt be ne f it s t o ke e p up w it h inf l at io n w it ho ut pr o vid ing ad d it io nal appr o pr iat io ns t o f und t he inc r e ase ; and (3) t he Ge ne r al Asse mbl y c o nsist e nt l y f ail e d t o 7 KRS 61.560(4) r e quir e s e ac h e mpl o ye r t o “pic k up” e mpl o ye e s ’ c o nt r ibut io ns, r e sul t ing in e mpl o ye e s ’ c o nt r ibut io ns be ing w it hhe l d be f o r e t axe s. 8 KRS 61.565(l )(a) st at e s t hat e ac h e mpl o ye r “shal l c o nt r ibut e annual l y t o t he r e spe c t ive r e t ir e me nt syst e m an amo unt d e t e r mine d by t he ac t uar ial val uat io n c o mpl e t e d in ac c o r d anc e w it h KRS 61.670 . . . .” Empl o ye r c o nt r ibut io ns “shal l be e qual t o t he sum o f t he ‘no r mal c o st c o nt r ibut io n’ and t he ‘ac t uar ial l y ac c r ue d l iabil it y c o nt r ibut io n.”’ Id. At t he t ime Se ve n Co unt ie s f il e d f o r bankr upt c y, t he e mpl o ye r c o nt r ibut io n r at e w as 23.61% o f e ac h e mpl o ye e ’s c o mpe nsat io n. 6 r e quir e c o nt r ibut io n r at e s c o mme nsur at e w it h t he ARC.9 Seven Ctys., 550 B.R. at 749-50. The bur d e n o f t his sho r t f al l in f und ing f al l s o n t he e mpl o ye r s par t ic ipat ing in KERS.10 Ke nt uc ky’s Ge ne r al Asse mbl y r e spo nd e d t o t he f und ing c r isis by inc r e asing e mpl o ye r c o nt r ibut io n r at e s in 2008 and in 2013 it r e quir e d e mpl o ye r s par t ic ipat ing in KERS — inc l ud ing t he St at e it se l f — t o c o nt r ibut e at t he f ul l , ac t uar ial l y r e quir e d r at e go ing f o r w ar d . Re c o gnizing t he bur d e n t his pl ac e d o n so me par t ic ipat ing e mpl o ye r s, t he l e gisl at ur e pr o vid e d assist anc e t o CMHCs, ke e ping t he ir r at e s so me w hat l o w e r t han t ho se o f o t he r e mpl o ye r s in KERS and c apping t he c o nt r ibut io n r at e at 24%. Ne ve r t he l e ss, as o f Apr il 2013, Se ve n Co unt ie s ’ c o nt r ibut io n r at e r o se w e l l abo ve it s hist o r ic singl e -d igit r at e . The Bankr upt c y Co ur t no t e d t hat w it h t he r e quir e d c o nt r ibut io n r at e o f 24% o f w age s, Se ve n Co unt ie s c o ul d e it he r pe r f o r m w o r k in f ur t he r anc e o f it s c har it abl e missio n o r pay it s KERS c o nt r ibut io ns and be f o r c e d t o t e r minat e o pe r at io ns.11 KERS e st imat e s t hat if Se ve n Co unt ie s is pe r mit t e d t o w it hd r aw f r o m t he pe nsio n syst e m, it w il l l e ave be hind a sho r t f al l o f o ve r $90 mil l io n, t o 9 In it s o pinio n, t he Dist r ic t Co ur t no t e d t hat t he Ge ne r al Asse mbl y had f ail e d t o se t an e mpl o ye r c o nt r ibut io n r at e me e t ing t he ARC in f if t e e n o f t he pr e vio us t w e nt y- t w o ye ar s. 10 Empl o ye e c o nt r ibut io n r at e s, w hic h pr o vid e KERS’s o t he r so ur c e o f inc o me , ar e c appe d by st at ut e . See KRS 61.560(1). 11 Ot he r e mpl o ye r s ’ r at e s inc r e ase d t o al mo st 27% be ginning in Jul y 2013. The Bankr upt c y Co ur t d e t e r mine d t hat e ve n w it h t he 24% e mpl o ye r c o nt r ibut io n c ap, t he e mpl o ye e e xpe nse w o ul d ac c o unt f o r t w o -t hir d s o f Se ve n Co unt ie s ’ gr o ss r e ve nue s, l e aving it w it h insuf f ic ie nt f und s t o pr o vid e it s se r vic e s. In re Seven Ctys., 511 B.R. at 453. 7 be pic ke d up by o t he r e mpl o ye r s in t he pe nsio n syst e m and , ul t imat e l y, Ke nt uc ky t axpaye r s. III. Procedural History of the Parties* Litigation On Apr il 4, 2013, Se ve n Co unt ie s f il e d a Chapt e r 11 bankr upt c y pe t it io n se e king t o r e je c t it s o bl igat io n t o par t ic ipat e in KERS. As t he Bankr upt c y Co ur t no t e d , t he pr o c e d ur al hist o r y o f t his c ase is “invo l ve d and e xt e nsive ”. In re Seven Ctys., 511 B.R. at 437. KERS o bje c t e d t o t he Chapt e r 11 pe t it io n and o n Apr il 29, 2013, Se ve n Co unt ie s f il e d an ad ve r sar y pr o c e e d ing.12 The ad ve r sar y pr o c e e d ing so ught a d e c l ar at io n t hat Se ve n Co unt ie s w as ine l igibl e t o par t ic ipat e in KERS o r t hat KERS w as no t a go ve r nme nt al pl an, w hic h w o ul d pe r mit Se ve n Co unt ie s t o w it hd r aw und e r t he Empl o ye e Re t ir e me nt Inc o me Se c ur it y Ac t (ERISA).13 KERS f il e d a mo t io n t o d ismiss t he ad ve r sar y pr o c e e d ing, w hic h w as d e nie d . KERS appe al e d t he d e nial , and t hat appe al is c ur r e nt l y st aye d pe nd ing t his Co ur t ’s d e c isio n. KERS al so c o mme nc e d it s o w n ad ve r sar y pr o c e e d ing, c o nt e nd ing t hat Se ve n Co unt ie s is a “go ve r nme nt al unit ,” and t he r e f o r e ine l igibl e t o f il e und e r 12 In bankr upt c y c o ur t , an ad ve r sar y pr o c e e d ing is a “l aw suit t hat is br o ught w it hin a bankr upt c y pr o c e e d ing, go ve r ne d by spe c ial pr o c e d ur al r ul e s, and base d o n c o nf l ic t ing c l aims usual l y be t w e e n t he d e bt o r (o r t he t r ust e e ) and a c r e d it o r o r ano t he r int e r e st e d par t y.” Black’s Law Dictionary (11t h e d . 2019). A par t y in int e r e st , inc l ud ing a c r e d it o r , “may r aise and appe ar and be he ar d o n any issue in a c ase und e r ” Chapt e r 11. 11 U.S.C. § 1109. 13 ERISA is a f e d e r al l aw t hat se t s minimum st and ar d s f o r mo st r e t ir e me nt and he al t h pl ans t o pr o t e c t ind ivid ual s w o r king in t he pr ivat e se c t o r . It d o e s no t c o ve r pl ans e st abl ishe d o r maint aine d by t he go ve r nme nt . ERISA r e quir e s r e t ir e me nt and he al t h pl ans t o ke e p me mbe r s inf o r me d abo ut impo r t ant aspe c t s o f t he ir pl ans; se t s st and ar d s f o r be ne f it s and f und ing; and e st abl ishe s a gr ie vanc e and appe al s pr o c e ss t o e nsur e be ne f it s ar e pr o vid e d . See 29 U.S.C. §§ 1001-1461. 8 Chapt e r 11, and t hat Se ve n Co unt ie s sho ul d be r e quir e d t o c o mpl y w it h it s st at ut o r y o bl igat io ns t o c o nt r ibut e t o KERS. Se ve n Co unt ie s c o unt e r e d t hat it is no t a “go ve r nme nt al unit ” and t hat it has an e xe c ut o r y c o nt r ac t w it h KERS t hat may be r e je c t e d pur suant t o 11 U.S.C. § 365.14 The t r ial be gan o n Mar c h 11, 2014, and o n May 30, 2014, t he Bankr upt c y Co ur t f o und in f avo r o f Se ve n Co unt ie s, ho l d ing t hat it is no t a “go ve r nme nt unit ” and is e l igibl e t o f il e f o r Chapt e r 11 bankr upt c y; t hat it is no t c o mpe l l e d t o c o nt inue par t ic ipat io n in KERS; and t hat it is e nt it l e d t o r e je c t t he unw r it t e n e xe c ut o r y c o nt r ac t it has w it h KERS in t he e xe r c ise o f it s so und busine ss jud gme nt . Simpl y put , t he Bankr upt c y Co ur t d e t e r mine d t hat be c ause Se ve n Co unt ie s ’ r e l at io nship w it h KERS w as c o nt r ac t ual , it c o ul d r e je c t t he c o nt r ac t in bankr upt c y and l e ave t he r e t ir e me nt syst e m. KERS appe al e d t he d e c isio n t o t he Unit e d St at e s Dist r ic t Co ur t f o r t he We st e r n Dist r ic t o f Ke nt uc ky and r e que st e d t hat t he Dist r ic t Co ur t c e r t if y a que st io n t o t his Co ur t . On appe al , KERS ar gue d (1) t hat t he r e w as no e vid e nc e o f a c o nt r ac t be t w e e n it and Se ve n Co unt ie s, and t hat , e ve n if t he r e w as a c o nt r ac t , it w as 14 Se ve n Co unt ie s ’ e xe c ut o r y c o nt r ac t ar gume nt r e quir e d t he Bankr upt c y Co ur t t o f ir st d e t e r mine w he t he r Se ve n Co unt ie s and KERS e nt e r e d a c o nt r ac t und e r Ke nt uc ky l aw , and t he n d e t e r mine w he t he r t he c o nt r ac t is e xe c ut o r y und e r f e d e r al l aw . The Bankr upt c y Co ur t f o und al l e l e me nt s o f a val id c o nt r ac t — o f f e r and ac c e pt anc e , f ul l and c o mpl e t e t e r ms, and c o nsid e r at io n — t o be pr e se nt . In re Seven Ctys. Serv., Inc., 511 B.R. at 477. Af t e r d e t e r mining t hat Se ve n Co unt ie s has a c o nt inuing f ut ur e o bl igat io n t o c o nt r ibut e t o KERS, and t hat d o ing so is impo ssibl e and w il l r e sul t in t e r minat io n o f it s o pe r at io ns, t he Bankr upt c y Co ur t c o nc l ud e d t hat t he c o nt r ac t is e xe c ut o r y, and t hus c an be r e je c t e d und e r 11 U.S.C. § 365. 9 no t e xe c ut o r y, i.e., no t subje c t t o r e je c t io n in t he bankr upt c y pr o c e e d ing; (2) t he Bankr upt c y Co ur t e r r e d in d e t e r mining t hat Se ve n Co unt ie s w as no t a “go ve r nme nt al unit ,” and (3) t he Bankr upt c y Co ur t misc har ac t e r ize d t he KERS syst e m. The Dist r ic t Co ur t d e t e r mine d t hat c e r t if ying a que st io n w as unne c e ssar y and l ar ge l y uphe l d t he Bankr upt c y Co ur t ’s d e c isio n, af f ir ming mo st o f t he anal ysis. The Dist r ic t Co ur t r e ve r se d o nl y as t o t he Bankr upt c y Co ur t ’s f ind ing t hat KERS is a “mul t i-e mpl o ye r pl an,” be c ause it is ac t ual l y a “mul t ipl e -e mpl o ye r pl an.” KERS appe al e d t he Dist r ic t Co ur t ’s d e c isio n t o t he Unit e d St at e s Co ur t o f Appe al s f o r t he Sixt h Cir c uit . The Sixt h Cir c uit r e vie w s t he Bankr upt c y Co ur t ’s d e c isio n d ir e c t l y, af f o r d ing no d e f e r e nc e t o t he int e r ve ning Dist r ic t Co ur t o pinio n. Ky. Emp. Ret. Sys. v. Seven Ctys. Serv., Inc., 901 F.3d 718, 724 (6t h Cir . 2018). In a 2-1 d e c isio n, t he Sixt h Cir c uit af f ir me d t he Bankr upt c y and Dist r ic t Co ur t s ’ f ind ing t hat Se ve n Co unt ie s is e l igibl e t o f il e f o r Chapt e r 11 bankr upt c y by ho l d ing t hat it is no t a “go ve r nme nt al unit ” w it hin t he me aning o f t he Bankr upt c y Co d e . The Sixt h Cir c uit al so d e t e r mine d t hat t he issue o f t he l e gal r e l at io nship be t w e e n Se ve n Co unt ie s and KERS is a que st io n o f l aw pr o pe r l y c e r t if ie d t o t his Co ur t . No t ing t he d e t e r minat ive nat ur e o f t he issue , t he Sixt h Cir c uit st at e d t hat t his Co ur t ’s d e c isio n o n t he nat ur e o f t he r e l at io nship be t w e e n t he t w o e nt it ie s w il l inf l ue nc e t he f inal r e so l ut io n o f t he c ase in t he f e d e r al c o ur t s. The Sixt h Cir c uit c e r t if ie d t he que st io n o f w he t he r Se ve n Co unt ie s ’ c o nt r ibut io ns t o KERS w e r e base d o n a st at ut o r y o r c o nt r ac t ual o bl igat io n and he l d t he r e maining f e d e r al l aw issue s in abe yanc e pe nd ing t his Co ur t ’s d e c isio n. 10 Bo t h par t ie s have br ie f e d t he c e r t if ie d que st io n and pr e se nt e d o r al ar gume nt s. KERS insist s t hat Se ve n Co unt ie s ’ par t ic ipat io n in KERS is pur suant t o st at ut e , no t a c o nt r ac t , r e l ying pr imar il y o n t he pl ain l anguage o f t he Ke nt uc ky st at ut e s and t he unmist akabil it y d o c t r ine . Se ve n Co unt ie s c o unt e r s t hat it s r e l at io nship w it h KERS is so l e l y c o nt r ac t ual , t hat KERS c anno t c o mpe l Se ve n Co unt ie s ’ par t ic ipat io n w it ho ut vio l at ing Ke nt uc ky and f e d e r al l aw , and t hat it is no t e ve n e l igibl e t o par t ic ipat e in KERS. ANALYSIS I. Employer Participation in KERS Is Exclusively Statutory KERS, as no t e d , is a c r e at ur e o f st at ut e e st abl ishe d by t he Ke nt uc ky Ge ne r al Asse mbl y in 1956. 1956 Ky. Ac t s c h. 110. Par t ic ipat io n in KERS has al w ays be e n c o nt r o l l e d by st at ut e and has al w ays e nt ail e d t he Go ve r no r issuing an e xe c ut ive o r d e r . In 1956, ne w l y e nac t e d KRS 61.520 pr o vid e d : “Eac h d e par t me nt w il l par t ic ipat e in t he syst e m w he n t he Go ve r no r by appr o pr iat e e xe c ut ive o r d e r , t he aut ho r it y t o issue suc h e xe c ut ive o r d e r be ing he r e by gr ant e d , pe r mit s suc h d e par t me nt t o par t ic ipat e in t he syst e m.” 1956 Ky. Ac t s c h. 110 at § 3. A d e par t me nt w as d e f ine d as “any st at e d e par t me nt , bo ar d o r age nc y par t ic ipat ing in t he syst e m in ac c o r d anc e w it h appr o pr iat e e xe c ut ive o r d e r . . . .” id . at § 1. Thus, f r o m it s inc e pt io n and c o nt inuing t hr o ugh t o 2019, e ve n t r ad it io nal d e par t me nt s o f st at e go ve r nme nt have gaine d e nt r anc e t o t he KERS o nl y by e xe c ut ive o r d e r as mand at e d by st at ut e .15 15 KRS 61.520(1) c ur r e nt l y pr o vid e s in r e l e vant par t : “Eac h d e par t me nt d e t e r mine d by t he bo ar d t o be e l igibl e and qual if ie d f o r par t ic ipat io n shal l par t ic ipat e in t he syst e m w he n t he Go ve r no r by appr o pr iat e e xe c ut ive o r d e r , t he aut ho r it y t o 11 In 1976, just pr io r t o Se ve n Co unt ie s jo ining KERS, KRS 61.520 pr o vid e d in r e l e vant par t : (1) Eac h d e par t me nt shal l par t ic ipat e in t he syst e m w he n t he go ve r no r by appr o pr iat e e xe c ut ive o r d e r , t he aut ho r it y t o issue suc h e xe c ut ive o r d e r be ing gr ant e d , d ir e c t s suc h d e par t me nt t o par t ic ipat e in t he syst e m. The e f f e c t ive d at e o f suc h par t ic ipat io n shal l be f ixe d by t he go ve r no r in his e xe c ut ive o r d e r . ******* (3) Al l e xe c ut ive o r d e r s issue d und e r aut ho r it y o f t his se c t io n sinc e Jul y 1, 1956 ar e he r e by r at if ie d by t he Ge ne r al Asse mbl y and e ac h par t ic ipat ing and c o nt r ibut ing d e par t me nt , bo ar d , age nc y, c o r po r at io n, mental health-mental retardation board, o r e nt it y par t ic ipat ing sinc e t hat d at e und e r suc h e xe c ut ive o r d e r is he r e by d e c l ar e d t o be a par t ic ipat ing d e par t me nt und e r t he Ke nt uc ky e mpl o ye s [sic ] r e t ir e me nt syst e m. (4] Onc e a d e par t me nt par t ic ipat e s it shal l t he r e af t e r c o nt inue t o par t ic ipat e . “De par t me nt ” w as d e f ine d in KRS 61.510(3) as any st at e d e par t me nt o r bo ar d o r age nc y par t ic ipat ing in t he syst e m in ac c o r d anc e w it h appr o pr iat e e xe c ut ive o r d e r , as pr o vid e d in KRS 61.520. Fo r pur po se s o f KRS 61.510 t o 61.700, t he me mbe r s, o f f ic e r s, and e mpl o ye s [sic ] o f t he ge ne r al asse mbl y and any o t he r bo d y, e nt it y, o r inst r ume nt al it y d e signat e d by e xe c ut ive o r d e r by t he go ve r no r , shal l be d e e me d t o be a d e par t me nt no t w it hst and ing w he t he r said bo d y, e nt it y o r inst r ume nt al it y is an int e gr al par t o f st at e go ve r nme nt . Against t his st at ut o r y bac kd r o p, Se ve n Co unt ie s, t hr o ugh it s l e gal c o unse l , in t he f al l o f 1978 r e que st e d an o pinio n f r o m t he Ke nt uc ky At t o r ne y issue suc h e xe c ut ive o r d e r be ing gr ant e d , d ir e c t s suc h d e par t me nt t o par t ic ipat e in t he syst e m.” Al t ho ugh sinc e 2003 t he Syst e ms bo ar d has had a r o l e in d e t e r mining e l igibil it y, 2003 Ky. Ac t s c h. 169, an e xe c ut ive o r d e r is st il l r e quir e d in o r d e r f o r a d e par t me nt t o par t ic ipat e in KERS. 12 Ge ne r al 16 “w it h r e gar d t o t he e l igibil it y f o r par t ic ipat io n in [KERS] by Se ve n Co unt ie s ... in t he e ve nt t hat t he Go ve r no r sho ul d d ir e c t t he ir inc l usio n in t he KERS by Exe c ut ive Or d e r .” Ky. OAG 78-685. The At t o r ne y Ge ne r al no t e d t hat Se ve n Co unt ie s w as a ne w l y c r e at e d suc c e sso r t o Rive r Re gio n and t hat it had be e n d e signat e d by t he Se c r e t ar y o f t he De par t me nt f o r Human Re so ur c e s “as t he age nc y t o assist in ad minist e r ing me nt al he al t h-me nt al r e t ar d at io n pr o gr ams and c l inic s pur suant t o appl ic abl e Ke nt uc ky st at ut e s.” Af t e r c it ing t he l anguage f r o m KRS 61.510(3) d e f ining a d e par t me nt f o r KERS pur po se s t o inc l ud e any e nt it y “d e signat e d by Exe c ut ive Or d e r by t he Go ve r no r . . . no t w it hst and ing w he t he r said . . . e nt it y ... is an int e gr al par t o f st at e go ve r nme nt ,” id., t he At t o r ne y Ge ne r al o pine d t hat Se ve n Co unt ie s, l ike Rive r Re gio n be f o r e it , w as e l igibl e t o par t ic ipat e in KERS. Fo l l o w ing t he Oc t o be r 4, 1978 Opinio n o f t he At t o r ne y Ge ne r al , Go ve r no r Jul ian Car r o l l issue d Exe c ut ive Or d e r 79-78 o n Januar y 14, 1979. The e xe c ut ive o r d e r pr o vid e s in it s e nt ir e t y: WHEREAS, t he Ke nt uc ky Ge ne r al Asse mbl y in it s 1974 se ssio n ame nd e d KRS 61.510(3) t o pe r mit any bo d y, e nt it y o r inst r ume nt al it y d e signat e d by Exe c ut ive Or d e r by t he Go ve r no r t o be a d e par t me nt f o r pur po se s o f par t ic ipat ing in t he Ke nt uc ky Empl o ye s [sic ] Re t ir e me nt Syst e m, no t w it hst and ing w he t he r said bo d y, e nt it y o r inst r ume nt al it y is an int e gr al par t o f st at e go ve r nme nt ; and WHEREAS, t he Bo ar d o f Dir e c t o r s o f Se ve n Co unt ie s Se r vic e s, Inc . has r e que st e d t hat an Exe c ut ive Or d e r be issue d t hat w o ul d br ing Se ve n Co unt ie s Se r vic e s, Inc . int o t he Ke nt uc ky Empl o ye s [sic ] Re t ir e me nt Syst e m; and 16 The r e c o r d d o e s no t c o nt ain t he l e t t e r f r o m Se ve n Co unt ie s ’ c o unse l and KERS ind ic at e s t hat it w as “no t f o und in t he c o ur se o f d isc o ve r y.” 13 WHEREAS, t he Of f ic e o f t he At t o r ne y Ge ne r al has issue d an o f f ic ial o pinio n, OAG 78 685, e xpr e ssing t he o pinio n t hat Se ve n Co unt ie s Se r vic e s, Inc . e mpl o ye s [sic ] may be gin t o par t ic ipat e in t he Ke nt uc ky Empl o ye s [sic ] Re t ir e me nt Syst e m upo n t he issuanc e o f an Exe c ut ive Or d e r f r o m t he Go ve r no r t o t hat e f f e c t . NOW, THEREFORE, I, JULIAN M. CARROLL, Go ve r no r o f t he Co mmo nw e al t h o f Ke nt uc ky, pur suant t o t he aut ho r it y ve st e d in me by Chapt e r 128 o f t he 1974 Ke nt uc ky Ac t s ame nd ing Se c t io n 61.510(3) o f t he Ke nt uc ky Re vise d St at ut e s, he r e by d e signat e Se ve n Co unt ie s Se r vic e s, Inc . as a par t ic ipat ing d e par t me nt in t he Ke nt uc ky Empl o ye s [sic ] Re t ir e me nt Syst e m. Al t ho ugh t he e xe c ut ive o r d e r r e f e r s t o a r e que st f r o m Se ve n Co unt ie s ’ Bo ar d o f Dir e c t o r s, t he r e c o r d c o nt ains no c o r r e spo nd e nc e t hat w o ul d c o nst it ut e a r e que st .17 The Bankr upt c y Co ur t r e f e r r e d t o a Fe br uar y 14, 1979 l e t t e r f r o m t he f o r me r e xe c ut ive d ir e c t o r o f Se ve n Co unt ie s, Ho w ar d Br ac c o , Ph.D., t o KERS r e gar d ing par t ic ipat io n but t hat t w o -se nt e nc e l e t t e r o bvio usl y po st d at e s t he e xe c ut ive o r d e r and , in any e ve nt , r e l at e s o nl y t o c r it e r ia f o r e mpl o ye e par t ic ipat io n and t he e mpl o ye e and e mpl o ye r c o nt r ibut io n l e ve l s. Anal yzing t he st at ut o r y f r ame w o r k and t he int e r ac t io n be t w e e n KERS and Se ve n Co unt ie s at t he inc e pt io n o f t he ir r e l at io nship in 1979, as w e must , w e c anno t po ssibl y c o nc l ud e t hat t he t w o par t ie s w e r e ne go t iat ing and e nt e r ing int o a c o nt r ac t . KRS 61.520 o ut l ine d a mand at o r y st at ut o r y r o ut e t o be f o l l o w e d by al l e mpl o ye r s d e sir ing t o be a “d e par t me nt ” par t ic ipat ing in KERS, 17 The minut e s o f Se ve n Co unt ie s ’ No ve mbe r 10, 1978 Bo ar d o f Dir e c t o r s ’ me e t ing r e f e r t o “t he pe t it io ning o f t he Go ve r no r t o sign an Exe c ut ive Or d e r t o al l o w [Se ve n Co unt ie s] t o jo in KERS.” 14 r e gar d l e ss o f w he t he r t he “bo d y, e nt it y, o r inst r ume nt al it y is an int e gr al par t o f st at e go ve r nme nt .” KRS 61.510(3). In e xamining t hat st at ut o r y r o ut e id e nt if ie d by o ur Ge ne r al Asse mbl y, as o f t no t e d , “o ur f o r e mo st o bje c t ive is t o d e t e r mine t he l e gisl at ur e ’s int e nt . . . .” Maze v. Bd. of Dir. for the Comm. Postsecondary Educ. Prepaid Tuition Tr. Fund, 559 S.W.3d 354, 363 (Ky. 2018). We d e t e r mine l e gisl at ive int e nt , “if at al l po ssibl e , f r o m t he l anguage t he Ge ne r al Asse mbl y c ho se , e it he r as d e f ine d by t he Ge ne r al Asse mbl y o r as ge ne r al l y und e r st o o d in t he c o nt e xt o f t he mat t e r und e r c o nsid e r at io n.” Shawnee Telecom Res., Inc. v. Brown, 354 S.W.3d 542, 551 (Ky. 2011). Al w ays, “w e l o o k f ir st t o t he l anguage o f t he st at ut e , giving t he w o r d s t he ir pl ain and o r d inar y me aning.” Richardson v. Louisville/Jefferson Cty. Metro Gov’t, 260 S.W.3d 777, 779 (Ky. 2008). The pl ain l anguage anal ysis o f KRS 61.520 pr e c l ud e s any f ind ing t hat t he Go ve r no r w as aut ho r ize d t o c o nt r ac t w it h any d e par t me nt (inc l ud ing any “bo d y, e nt it y, o r inst r ume nt al it y” t hat is no t an “int e gr al par t o f st at e go ve r nme nt ,” KRS 61.510(3)) f o r par t ic ipat io n in KERS. The st at ut e aut ho r ize d t he Go ve r no r t o issue an e xe c ut ive o r d e r — no t t o ne go t iat e o r e xe c ut e a c o nt r ac t . The w o r d “c o nt r ac t ” and t he c o nc e pt s o f o f f e r , ac c e pt anc e and c o nsid e r at io n ar e ne ve r use d in KRS 61.520. In c o nst r uing st at ut e s, w e ar e “no t at l ibe r t y t o ad d o r subt r ac t f r o m t he l e gisl at ive e nac t me nt o r int e r pr e t it at var ianc e f r o m t he l anguage use d .” Johnson v. Branch Banking & Tr. Co., 313 S.W.3d 557, 559 (Ky. 2010). Re c o gnizing aut ho r it y in t he Go ve r no r t o c o nt r ac t 15 o n be hal f o f KERS w o ul d ind ubit abl y r e quir e e it he r ad d ing l anguage t o t he st at ut e o r int e r pr e t ing it in a w ay c o nt r ad ic t o r y t o it s pl ain me aning. In ad d it io n t o vio l at ing o ur pl ain l anguage appr o ac h t o st at ut e s, t hat c o nst r uc t io n w o ul d vio l at e Ke nt uc ky l aw pr o vid ing t hat “[t ]he Go ve r no r has o nl y suc h po w e r s as ar e ve st e d in him by t he Co nst it ut io n and t he st at ut e s e nac t e d pur suant t he r e t o .” Martin v. Chandler, 318 S.W.2d 40, 44 (Ky. 1958). De c ad e s ago , in Royster v. Brock, 79 S.W.2d 707, 709 (Ky. 1935), t his Co ur t no t e d t hat t he o f f ic e o f go ve r no r w as “unkno w n t o c o mmo n l aw ” and c r e at e d so l e l y by o ur st at e c o nst it ut io n. The go ve r no r “has o nl y suc h po w e r s as t he Co nst it ut io n and St at ut e s, e nac t e d pur suant t he r e t o , ve st in him, and those powers must be exercised in the manner and within the limitations therein prescribed.” Id. (e mphasis ad d e d ). Mo r e o ve r , t he l e gisl at ur e pur po se f ul l y use s t he w o r d “c o nt r ac t ” in o t he r par t s o f KRS Chapt e r 61, mo st no t abl y in t he “invio l abl e c o nt r ac t ” pr o visio n c o d if ie d at KRS 61.692. Subse c t io n (1) o f t hat st at ut e st at e s: Fo r me mbe r s w ho be gin par t ic ipat ing in t he Ke nt uc ky Empl o ye e s Re t ir e me nt Syst e m pr io r t o Januar y 1, 2014, it is he r e by d e c l ar e d t hat in c o nsid e r at io n o f t he c o nt r ibut io ns by t he me mbe r s and in f ur t he r c o nsid e r at io n o f be ne f it s r e c e ive d by t he st at e f r o m t he me mbe r ’s e mpl o yme nt , KRS 61.510 t o 61.705 shall constitute an inviolable contract of the Commonwealth, and t he be ne f it s pr o vid e d t he r e in shal l no t be subje c t t o r e d uc t io n o r impair me nt by al t e r at io n, ame nd me nt , o r r e pe al [.]. . . (Emphasis ad d e d ). The r e l at io nship be t w e e n a me mbe r and KERS is c l e ar l y and une quivo c al l y id e nt if ie d as a c o nt r ac t , an “invio l abl e c o nt r ac t ” at t hat .18 In 18 Se ve n Co unt ie s be gins it s “Summar y o f t he Le gal Pr inc ipl e s Ge r mane t o t his mat t e r by st at ing: “St at e st at ut o r y l aw it s e l f ac kno w l e d ge s t he c o nt r ac t ual nat ur e o f 16 ad d it io n, c o nt r ac t s ar e r e f e r r e d t o in se ve r al o t he r pr o visio ns o f KRS Chapt e r 61 inc l ud ing, f o r e xampl e , KRS 61.645(2)(d ) w hic h aut ho r ize s t he Syst e ms bo ar d t o “c o nt r ac t f o r inve st me nt c o unse l ing, ac t uar ial , aud it ing, me d ic al , and o t he r pr o f e ssio nal o r t e c hnic al se r vic e s ” and KRS 61.702(l )(a) 1 w hic h r e quir e s t he bo ar d t o “ar r ange by appr o pr iat e c o nt r ac t ” f o r gr o up ho spit al and me d ic al insur anc e f o r KERS par t ic ipant s. The abse nc e o f any r e f e r e nc e t o a c o nt r ac t o r e ve n c o nt r ac t pr inc ipl e s suc h as o f f e r , ac c e pt anc e and c o nsid e r at io n in KRS 61.520 l e ad s us t o c o nc l ud e t hat o ur Ge ne r al Asse mbl y has d ic t at e d t hat par t ic ipat io n in KERS is o nl y by vir t ue o f t he st at ut o r y me c hanism o ut l ine d in t hat st at ut e , i.e., by e xe c ut ive o r d e r al l o w ing suc h par t ic ipat io n. The o nl y c ase f r o m t his Co ur t t hat t o uc he s o n t he nat ur e o f t he r e l at io nship c r e at e d w he n a d e par t me nt se e ks d e signat io n pur suant t o KRS 61.520 is Kentucky Region Eight v. Commonwealth, 507 S.W.2d 489 (Ky. 1974), invo l ving t hr e e CMHCs, t he n kno w n as me nt al he al t h-me nt al r e t ar d at io n bo ar d s. The pr e vio usl y-no t e d e xe c ut ive o r d e r f r o m Go ve r no r Ed w ar d T. Br e at hit t pr o vid e d t hat suc h bo ar d s “ar e pe r mit t e d t o be c o me and ar e par t ic ipat ing age nc ie s in t he [KERS].” Id. at 490. Thr e e bo ar d s t hat d id no t w ish t o par t ic ipat e in KERS br o ught suit se e king a d e t e r minat io n t hat e nt r y int o KERS w as pe r missive no t mand at o r y. Wit ho ut r e ac hing t hat issue , t he Co ur t he l d t hat t he bo ar d s c o ul d no t be KERS-par t ic ipat ing e mpl o ye r s be c ause t he r e l at io nship be t w e e n KERS and Se ve n Co unt ie s, KRS 61.692 . . .” This is pat e nt l y e r r o ne o us. KRS 61.692 d o e s no t ad d r e ss t he e mpl o ye r ’s r e l at io nship w it h KERS, o nl y t he c o nt r ac t ual r e l at io nship be t w e e n KERS and a me mbe r . 17 t he y d id no t qual if y as “d e par t me nt s ” as t he t e r m w as t he n d e f ine d in KRS 61.510 (“‘any st at e d e par t me nt o r bo ar d o r age nc y’ par t ic ipat ing in t he syst e m”). Id. The Go ve r no r ’s e xe c ut ive o r d e r w as insuf f ic ie nt t o c r e at e a r e l at io nship be t w e e n t he bo ar d s and KERS be c ause t he st at ut e s al o ne go ve r ne d e nt r y and par t ic ipat io n. The 1974 Ge ne r al Asse mbl y r e spo nd e d t o Region Eight by ame nd ing t he d e f init io n o f “d e par t me nt ” t o inc l ud e e nt it ie s “no t w it hst and ing w he t he r [t he y ar e ] an int e gr al par t o f st at e go ve r nme nt ” and by ad d ing subse c t io n (3) t o KRS 61.520, quo t e d supra p. 12, r at if ying e xpr e ssl y t he pr io r e xe c ut ive o r d e r s r e gar d ing “me nt al he al t h-me nt al r e t ar d at io n bo ar d [s].” The Co ur t sc r ut inize d t he Go ve r no r ’s aut ho r it y vis-a-vis KERS by l o o king c ar e f ul l y at t he pr o visio ns o f KRS Chapt e r 61 and o f f e r e d no sugge st io n t hat t he Go ve r no r had so me br o ad e r “c o nt r ac t ing” aut ho r it y. Re so l ut io n o f t he c e r t if ie d issue o bvio usl y t ur ns o n Ke nt uc ky l aw but w e no t e t hat in simil ar c ir c umst anc e s, c o ur t s in o t he r st at e s have l o o ke d f ir st t o t he st at ut e s c r e at ing t he ir r e t ir e me nt syst e m. In New York State Employees’ Ret. Sys. v. Bd. of Sup’rs, 283 N.Y.S. 405 N.Y. (Sup. Ct . 1935), affd, 296 N.Y.S. 286 N.Y. (App. Div. 1937), af f d , 15 N.E.2d 434 N.Y. (1938), t he Ne w Yo r k st at ut e al l o w e d c o unt y o f f ic e r s and e mpl o ye e s t o par t ic ipat e in t he r e t ir e me nt syst e m upo n ad o pt io n o f a r e so l ut io n by t he c o unt y’s bo ar d o f supe r viso r s. Whe n Tio ga Co unt y o pt e d in but l at e r so ught t o w it hd r aw , t he Supr e me Co ur t (l at e r af f ir me d o n appe al by t he Appe l l at e Divisio n and t he Ne w Yo r k Co ur t o f Appe al s) st at e d : 18 But t he r e l at io n be t w e e n t he st at e and t he c o unt y he r e w as no t c r e at e d by c o nt r ac t . It w as c r e at e d by l e gisl at io n. The St at e Le gisl at ur e c r e at e d t he Re t ir e me nt Syst e m. Eac h c o unt y w as pe r mit t e d t o say w he t he r it w o ul d par t ic ipat e . Whe n it e l e c t e d t o d o so , t he l e gisl at io n be c ame e f f e c t ive as t o it . Tr ue , c e r t ain o bl igat io ns gr e w o ut o f it s e l e c t io n, but t he se o bl igat io ns w e r e no t c o nt r ac t ual . 283 N.Y.S. at 409. Simil ar l y Se ve n Co unt ie s e l e c t e d t o par t ic ipat e in KERS and pur sue d t he r o ut e aut ho r ize d by st at ut e , KRS 61.520, c r e at ing a st at ut o r y—no t c o nt r ac t ual —r e l at io nship w it h t he at t e nd ant be ne f it s and o bl igat io ns. By c o nt r ast , Cal if o r nia al l o w s munic ipal it ie s t o par t ic ipat e in it s st at e r e t ir e me nt syst e m, Cal if o r nia Publ ic Empl o ye e s Re t ir e me nt Syst e m (Cal PERS) by c o nt r ac t . See In re City of Stockton, Cal . 526 B.R. 35, 40 n.5 (Bankr . E.D. Cal 2015) (“In ad d it io n t o ac t ing as t he pe nsio n syst e m f o r e mpl o ye e s o f t he St at e o f Cal if o r nia, Cal PERS c o nt r ac t s w it h Cal if o r nia munic ipal it ie s in c o mpe t it io n w it h o t he r pe nsio n ad minist r at o r s t o ad minist e r l o c al pe nsio ns f o r munic ipal it ie s.”) Simil ar l y, Pe nnsyl vania st at ut e s al l o w munic ipal it ie s t o “ne go t iat e a c o nt r ac t ” w it h t he r e t ir e me nt syst e m bo ar d . 53 Pa. Co ns. St at . § 881.402 (2004). The Bankr upt c y Co ur t c it e d c ase l aw f r o m t he se st at e s as r e c o gnizing a c o nt r ac t ual r e l at io nship be t w e e n t he r e t ir e me nt syst e m and a par t ic ipat ing e mpl o ye r , but t hat is t r ue o nl y be c ause t he c o nt r o l l ing st at ut e e xpr e ssl y aut ho r ize d c o nt r ac t s w it h c e r t ain e mpl o ye r s. Ke nt uc ky st at ut e s c o nt ain no suc h aut ho r izat io n. II. Neither the Facts Nor Kentucky Law Supports the Contract Theory Just as t he st at ut e s pr o vid e no suppo r t f o r t he pr o po sit io n t hat t he Se ve n Co unt ie s/KERS r e l at io nship w as c o nt r ac t ual , t he c o nt r o l l ing d o c ume nt s 19 l ike w ise give no ind ic at io n w hat so e ve r t hat in 1979 t he par t ie s int e nd e d t o e nt e r int o a c o nt r ac t o r pe r c e ive d t he mse l ve s as c r e at ing c o nt r ac t ual o bl igat io ns. As me nt io ne d , t he r e c o r d d o e s no t c o nt ain any c o r r e spo nd e nc e f r o m Se ve n Co unt ie s pur po r t e d l y r e l e vant t o t he “c o nt r ac t f o r mat io n” t he o r y be yo nd a Fe br uar y 14, 1979 l e t t e r f r o m Dr . Br ac c o , a l e t t e r w r it t e n t hr e e w e e ks af t e r Go ve r no r Car r o l l ’s e xe c ut ive o r d e r d e signat ing Se ve n Co unt ie s a d e par t me nt f o r pur po se s o f KERS.19 The l e t t e r no t o nl y po st -d at e s t he e xe c ut ive o r d e r , but simpl y c o nt ains t w o se nt e nc e s abo ut e mpl o ye e par t ic ipat io n and c o nt r ibut io n l e ve l s, no t hing abo ut an impe nd ing o r r e c e nt l y c o nc l ud e d c o nt r ac t o r any o f f e r o r ac c e pt anc e . As f o r d o c ume nt at io n o n t he KERS sid e o f t he al l e ge d c o nt r ac t , t he r e c o r d c o nsist s o f (1) At t o r ne y Ge ne r al Opinio n 78-685 issue d Oc t o be r 4, 1978, r e c o gnizing Se ve n Co unt ie s ’ e l igibil it y t o se e k d e signat io n f o r KERS par t ic ipat io n f r o m t he Go ve r no r via e xe c ut ive o r d e r and (2) Exe c ut ive Or d e r 79-78 issue d Januar y 24, 1979, quo t e d in it s e nt ir e t y supra, gr ant ing t he r e que st o f t he Se ve n Co unt ie s ’ Bo ar d o f Dir e c t o r s f o r an “Exe c ut ive Or d e r . . . t hat w o ul d br ing Se ve n Co unt ie s . . . int o t he Ke nt uc ky Empl o ye s (sic ) Re t ir e me nt Syst e m.” Again, t he l anguage use d pr o vid e s no basis f o r c o nc l ud ing t hat anyo ne invo l ve d in 1979 t ho ught a c o nt r ac t w as be ing f o r me d . Se ve n Co unt ie s so ught a d e signat io n r e c o gnize d by Ke nt uc ky st at ut e as t he me ans o f e nt r y int o KERS, t he At t o r ne y Ge ne r al 19 The l e t t e r st at e s in it s e nt ir e t y: “Empl o ye e s w ho w o r k 100 ho ur s pe r mo nt h o r mo r e w ho have c o mpl e t e d six mo nt hs t e mpo r ar y st at us must par t ic ipat e in t he Ke nt uc ky Empl o ye e s Re t ir e me nt Syst e m. Empl o ye e s c o nt r ibut e 4% o f gr o ss e ar nings and Se ve n Co unt ie s Se r vic e s c o nt r ibut e s 71/4% o f gr o ss e ar nings.” 20 o pine d t hat Se ve n Co unt ie s w as e l igibl e f o r t hat d e signat io n and Go ve r no r Car r o l l gr ant e d t hat d e signat io n by e xe c ut ive o r d e r , br inging Se ve n Co unt ie s and it s e mpl o ye e s int o t he r e t ir e me nt syst e m pur suant t o KRS 61.520. The c o nt r ac t anal ysis ad o pt e d by t he Bankr upt c y and Dist r ic t Co ur t s and ad vo c at e d by Se ve n Co unt ie s d isr e gar d s t he c o nt r o l l ing st at ut o r y l anguage r e gar d ing KERS par t ic ipat io n and at t r ibut e s t o t he c o nt e mpo r ane o us d o c ume nt s and int e r ac t io n o f t he par t ie s t he c har ac t e r ist ic s o f o f f e r and ac c e pt anc e , w e ight t he y c anno t be ar . As al l par t ie s ac kno w l e d ge , and t he f e d e r al c o ur t s have r e c o gnize d , w he t he r a c o nt r ac t e xist s be t w e e n Se ve n Co unt ie s and KERS is a mat t e r o f st at e l aw . See Butner v. United. States, 440 U.S. 48, 54 (1979). The f und ame nt al e l e me nt s o f a c o nt r ac t in Ke nt uc ky (as in o t he r jur isd ic t io ns) ar e ‘“o f f e r and ac c e pt anc e , f ul l and c o mpl e t e t e r ms, and c o nsid e r at io n.’” Energy Home, Div. ofS. Energy Homes, Inc. v. Peay, 406 S.W.3d 828 (Ky. 2013). Se ve n Co unt ie s ar t ic ul at e s t he al l e ge d o f f e r and ac c e pt anc e as f o l l o w s: In t his mat t e r , Se ve n Co unt ie s be c ame a par t ic ipant in KERS t hr o ugh a vo l unt ar y ar r ange me nt t hat be gan w it h an inquir y by Se ve n Co unt ie s int o w he t he r it w as e l igibl e t o jo in KERS. The St at e r e spo nd e d t hat Se ve n Co unt ie s w as e l igibl e . Se ve n Co unt ie s t he n vo l unt ar il y inf o r me d KERS o f it s d e sir e t o be c o me a par t ic ipant . This manif e st at io n o f int e nt c o nst it ut e d an o f f e r t o pr o vid e o ngo ing payme nt s (c o nt r ibut io ns) t o KERS in e xc hange f o r pe nsio n be ne f it s t hat w o ul d ac c r ue t o Se ve n Co unt ie s ’ e mpl o ye e s. This o f f e r w as t he n ac c e pt e d by KERS w he n t he Ke nt uc ky Go ve r no r issue d an e xe c ut ive o r d e r f o r mal l y al l o w ing Se ve n Co unt ie s t o par t ic ipat e in KERS. The Go ve r no r ’s e xe c ut ive o r d e r d id no t al t e r o r mo d if y t he t e r ms o f Se ve n Co unt ie s ’ o f f e r . Inst e ad , t he par t ie s und e r st o o d t hat t he t e r ms w e r e c o nt aine d and d e sc r ibe d in t he st at ut o r y and r e gul at o r y f r ame w o r k t hat go ve r ns KERS and it s par t ic ipant s. 21 The “vo l unt ar y ar r ange me nt ” id e nt if ie d al l e ge d l y be c ame a c o nt r ac t (subje c t t o e st abl ishing c o nt r ac t t e r ms and c o nsid e r at io n) w he n Se ve n Co unt ie s ’ “o f f e r ”20 w as ac c e pt e d by t he Go ve r no r via e xe c ut ive o r d e r . This anal ysis, ho w e ve r , r uns pe l l -me l l int o t he l anguage o f KRS 61.520 w hic h, as d isc usse d , r e f l e c t s no aut ho r it y o n t he par t o f t he Go ve r no r t o c o nt r ac t f o r e nt r y int o KERS; his aut ho r it y is l imit e d t o d e signat io n at w hic h po int t he st at ut o r y pr o visio ns suppl y t he t e r ms o f Se ve n Co unt ie s ’ and it s e mpl o ye e s ’ par t ic ipat io n. Eve n if t he Go ve r no r had aut ho r it y t o c o nt r ac t , t he “f ul l and c o mpl e t e t e r ms ” e l e me nt is pr o bl e mat ic . Se ve n Co unt ie s maint ains t hat “w hil e t he par t ie s signe d a w r it t e n ‘o f f e r ’ and a w r it t e n ‘ac c e pt anc e ,’ in t he f o r m o f Se ve n Co unt ie s ’ l e t t e r r e que st ing t o jo in KERS and t he Go ve r no r ’s e xe c ut ive o r d e r r e spe c t ive l y, t he o t he r t e r ms o f t he ir agr e e me nt ar e se t f o r t h in t he r e l e vant st at ut e s and r e gul at io ns . . . .” In sho r t , t he c o nt r ac t anal ysis r e quir e s c o nve r t ing st at e st at ut e s and r e gul at io ns r e gar d ing KERS int o t he t e r ms o f a bind ing c o nt r ac t . That pr o po sit io n is a br id ge t o o f ar . Al t ho ugh t his Co ur t has ne ve r had o c c asio n t o c o nsid e r t he unmist akabil it y d o c t r ine , it is a nat ur al c o r o l l ar y o f o ur pl ain l anguage appr o ac h t o st at ut o r y c o nst r uc t io n. The Unit e d St at e s Co ur t o f Appe al s f o r t he Sixt h Cir c uit c o ge nt l y ar t ic ul at e d t he d o c t r ine in Puckett v. Lexington-Fayette 20 We no t e again t hat t he r e c o r d c o nt ains no d o c ume nt t hat c an be c o nst r ue d as an o f f e r . The c o r r e spo nd e nc e f r o m Se ve n Co unt ie s t o t he At t o r ne y Ge ne r al and l at e r t he Go ve r no r ’s o f f ic e w as ne ve r pr o d uc e d . 22 Urban County Government, 833 F.3d 590, 600-01 (6t h Cir . 2016), f r o m w hic h w e quo t e at l e ngt h: In o r d e r f o r a l e gisl at ive e nac t me nt t o be d e e me d a c o nt r ac t f o r t he pur po se s o f t he Co nt r ac t Cl ause , t he r e must be a c l e ar ind ic at io n t hat t he l e gisl at ur e int e nd s t o bind it se l f in a c o nt r ac t ual manne r . See Nat’l R.R. Passenger Corp. v. Atchison Topeka & Santa Fe Ry. Co., 470 U.S. 451, 465-66, 105 S.Ct . 1441, 84 L.Ed .2d 432 (1985) (“[A]bse nt so me c l e ar ind ic at io n t hat t he l e gisl at ur e int e nd s t o bind it se l f c o nt r ac t ual l y, t he pr e sumpt io n is t hat ‘a l aw is no t int e nd e d t o c r e at e pr ivat e c o nt r ac t ual o r ve st e d r ight s but me r e l y d e c l ar e s a po l ic y t o be pur sue d unt il t he l e gisl at ur e shal l o r d ain o t he r w ise .”’ (quo t ing Dodge v. Bd. of Educ., 302 U.S. 74, 79, 58 S.Ct . 98, 82 L.Ed . 57 (1937))); ******* The pr e sumpt io n t hat a l aw is no t int e nd e d t o c r e at e pr ivat e c o nt r ac t ual r ight s is kno w n as t he “unmist akabil it y d o c t r ine .” United States v. Winstar Corp., 518 U.S. 839, 871, 116 S.Ct . 2432, 135 L.Ed .2d 964 (1996). In Winstar, t he Supr e me Co ur t e xpl aine d t hat t he pur po se o f t he d o c t r ine is t o avo id unne c e ssar il y inf r inging o n a st at e l e gisl at ur e ’s abil it y t o l e gisl at e r e gar d ing st at e so ve r e ign r ight s unl e ss it is c l e ar be yo nd any d o ubt t hat t he l e gisl at ur e me ant t o give up t hat r ight . Id. at 873-76, 116 S.Ct . 2432. ******* To d e t e r mine w he t he r a l e gisl at ur e int e nd e d t o bind it se l f c o nt r ac t ual l y, c o ur t s e xamine bo t h t he l anguage o f t he st at ut e it se l f and t he c ir c umst anc e s sur r o und ing it s e nac t me nt o r ame nd me nt —suc h as it s appar e nt pur po se , c o nt e xt , l e gisl at ive hist o r y, o r any o t he r pe r t ine nt e vid e nc e o f ac t ual int e nt . U. S. Trust Co., 431 U.S. at 17-18 n.14, 97 S.Ct . 1505; see, e.g., Me. Ass’n of Retirees v. Bd. ofTrs. of Me. Pub. Ret. Sys., 758 F.3d 23, 29-30 (1st Cir . 2014). Our r o l e , t he r e f o r e , is t o d e t e r mine w he t he r t he Ac t e vinc e s a c l e ar int e nt o n t he par t o f t he Ke nt uc ky l e gisl at ur e t o c r e at e c o nt r ac t ual r ight s against t he mo d if ic at io n o f a spe c if ic COLA f o r mul a. It is t he bur d e n o f t he par t y asse r t ing t he c o nt r ac t t o o ve r c o me t he pr e sumpt io n t hat a l aw is no t int e nd e d t o c r e at e pr ivat e c o nt r ac t ual o r ve st e d 23 r ight s. Nat’l R.R. Passenger Corp., 470 U.S. at 466, 105 S.Ct . 1441. Give n o ur pr imar y e mphasis o n d isc e r ning and impl e me nt ing t he int e nt o f t he l e gisl at ur e , Maze, 559 S.W.3d at 363, and f o c us o n t he pl ain l anguage o f st at ut e s, Shawnee Telecom, 354 S.W.3d at 551, t he unmist akabil it y d o c t r ine f it s nat ur al l y int o o ur jur ispr ud e nc e . If t he Ge ne r al Asse mbl y “int e nd s t o bind it se l f in a c o nt r ac t ual manne r ,” Puckett, 833 F.3d at 600, it must c l e ar l y say so The o nl y inst anc e in KRS Chapt e r 61 w he r e t he l e gisl at ur e has c l e ar l y ind ic at e d an int e nt t o c o nt r ac t is KRS 61.692, quo t e d supra, w he r e it e xpl ic it l y st at e s t hat f o r me mbe r s par t ic ipat ing in KERS pr io r t o Januar y 1, 2014, “KRS 61.510 t o 61.705 shall constitute an inviolable contract of the Commonwealth . . . .” (Emphasis ad d e d ). No t hing abo ut KRS 61.520 ind ic at e s a c l e ar int e nt t o c o nt r ac t w it h par t ic ipat ing e mpl o ye r s no r d o t he st at ut e s go ve r ning an e mpl o ye r ’s r e l at io nship w it h KERS and t he Syst e ms bo ar d e ve r ind ic at e suc h int e nt . Se ve n Co unt ie s d o e s no t ad d r e ss t he unmist akabil it y d o c t r ine but sugge st s t hat it misse s t he po int , po sit ing t hat t he issue is w he t he r t he par t ie s ’ r e l at io nship is c o nt r ac t ual in nat ur e , “no t w he t he r any par t ic ul ar st at ut e t hat r e gul at e s t hat ar r ange me nt is it se l f a c o nt r ac t .” In t his manne r , t he f o c us is c hange d f r o m t he init ial ar gume nt t hat t he st at ut e s and r e gul at io ns suppl y t he t e r ms o f t he c o nt r ac t , t o t he pr o po sit io n t hat t he y me r e l y r e gul at e t he c o nt r ac t . But , in f ac t , t he c o nt r ac t t he o r y r e l ie s o n an o f f e r f r o m Se ve n Co unt ie s (no t c o nt aine d in t he r e c o r d ) and an e xe c ut ive o r d e r making a st at ut o r y d e signat io n 24 f o r KERS par t ic ipat io n as an “ac c e pt anc e ” o f t hat o f f e r c r e at ing a c o nt r ac t t he t e r ms o f w hic h ar e se t f o r t h in t he st at ut e s. Whil e Se ve n Co unt ie s l ike ns t he sit uat io n t o t he Unif o r m Co mme r c ial Co d e , w hic h inter alia st at ut o r il y r e gul at e s c o nt r ac t s f o r t he sal e o f go o d s and c an suppl y so me c o nt r ac t t e r ms, see KRS Chapt e r 355, he r e t he st at ut e s ar e o f f e r e d up as t he ac t ual c o nt r ac t it se l f , i.e., t he t e r ms o f t he c o nt r ac t be t w e e n Se ve n Co unt ie s and KERS ar e in t he st at ut e bo o ks and t he ad minist r at ive r e gul at io ns. Our l o ngst and ing pl ain l anguage appr o ac h t o st at ut o r y c o nst r uc t io n and t he unmist akabil it y d o c t r ine pr e c l ud e t hat r e sul t .21 Final l y, t he e l e me nt o f c o nsid e r at io n is, at be st , d e bat abl e . The Bankr upt c y Co ur t c o nc l ud e d “The par t ie s vo l unt ar il y e nt e r e d int o a bar gain t hat se e me d be ne f ic ial t o e ac h: [Se ve n Co unt ie s] c o ul d at t r ac t and r e t ain e mpl o ye e s by o f f e r ing t he m a KERS pe nsio n, and KERS c o ul d o bt ain c o nt r ibut io ns t hat impr o ve d t he ac t uar ial po sit io n o f t he st at e pe nsio n f und as a w ho l e .” 511 B.R. at 477. As KERS e mphasize s, t he Co ur t c it e d no e vid e nc e t hat KERS’s st at us impr o ve d ac t uar ial l y as a r e sul t o f Se ve n Co unt ie s ’ par t ic ipat io n. Whil e t he e mpl o ye r and e mpl o ye e c o nt r ibut io ns w e r e f l o w ing in, 21 Fur t he r c o mpl ic at ing t he c o nt r ac t t he o r y is t he f ac t t hat al l “d e par t me nt s ” e nt e r KERS in an id e nt ic al manne r , via t he d e signat io n pr o c e ss in KRS 61.520. If Se ve n Co unt ie s had a c o nt r ac t w it h KERS t he n e ve r y o t he r d e par t me nt w o ul d ar guabl y al so have a c o nt r ac t . To t he e xt e nt Se ve n Co unt ie s sugge st s t hat d e par t me nt s o f st at e go ve r nme nt und e r c o nt r o l o f t he e xe c ut ive , l e gisl at ive o r jud ic ial br anc he s f al l in a d if f e r e nt c at e go r y, z.e ., have a st at ut o r y ar r ange me nt , t he n t he pr o visio ns o f KRS Chapt e r 61 ar e c o nt r ac t pr o visio ns f o r so me but no t f o r o t he r s, an unsust ainabl e r e sul t . 25 KERS w as al so und e r t aking o bl igat io ns t o Se ve n Co unt ie s ’ e mpl o ye e s so t he ac t uar ial impr o ve me nt assumpt io n is no t ne c e ssar il y val id . In any e ve nt , publ ic r e t ir e me nt syst e ms ar e ac t ual l y t r ust s c r e at e d by st at ut e . See Restatement (Third) of Trusts, §§ 4 and 10.22 As o ne c o ur t has o bse r ve d , “[t ]he st at ut o r y pr o visio ns c r e at ing t he Fund . . . ar e , in e f f e c t , t he ‘t e r ms o f t he t r ust .”’ Caruso v. N.Y. City Police Dept. Pension Funds, 72 N.Y.2d 568, 574 (1988). KRS 61.515(2) c r e at e s a “Ke nt uc ky Empl o ye e s Re t ir e me nt Fund ” and pr o vid e s t hat “[a]l l asse t s r e c e ive d in t he f und shal l be d e e me d t r ust f und s t o be he l d and appl ie d so l e l y as pr o vid e d in KRS 61.510 t o 61.705.” KRS 61.650 e st abl ishe s t he Syst e ms bo ar d as “t r ust e e ” o f KERS f und s and impo se s f id uc iar y d ut ie s o n t he t r ust e e s and e mpl o ye e s t o ac t “[s]o l e l y in t he int e r e st o f t he me mbe r s and be ne f ic iar ie s.” KRS 61.650(l )(a); (l )(c ) 1. By vir t ue o f Ke nt uc ky st at ut e s, t he r ight t o par t ic ipat e in KERS w as e xt e nd e d t o e nt it ie s and o r ganizat io ns suc h as Se ve n Co unt ie s upo n issuanc e o f an appr o pr iat e e xe c ut ive o r d e r and t he mo nie s subse que nt l y se nt t o KERS by Se ve n Co unt ie s w e r e t he c o nt r ibut io ns r e quir e d o f al l e mpl o ye r s par t ic ipat ing in t he r e t ir e me nt syst e m, no t c o nsid e r at io n f o r a c o nt r ac t ne go t iat e d by Go ve r no r Car r o l l . 22 * * * 26 22 “So me f o r ms o f t r ust s t hat ar e c r e at e d by st at ut e , e spe c ial l y publ ic r e t ir e me nt syst e ms o r pe nsio n f und s, . . . ar e ad minist e r e d as e xpr e ss t r ust s, t he t e r ms o f w hic h ar e e it he r se t f o r t h in t he st at ut e o r ar e suppl ie d by t he d e f aul t r ul e s o f ge ne r al t r ust l aw .” Restatement (Third) Of Trusts § 4, Co mme nt (g). “Publ ic r e t ir e me nt syst e ms o r pe nsio n f und s ar e invar iabl y c r e at e d by st at ut e w it h no o t he r t r ust inst r ume nt d e l ine at ing t he po w e r s and d ut ie s o f t he bo ar d s o f t r ust e e s t hat ad minist e r t he m, o r t he r ight s o f t he me mbe r s as be ne f ic iar ie s.” Id. at § 10, Re po r t e r ’s No t e s, Co mme nt (b). 26 III. The Payments to KERS Are Statutorily Mandated Assessments The Bankr upt c y Co ur t al so bac ke d int o it s c o nt r ac t c o nc l usio n by d e c id ing t hat t he payme nt s f r o m Se ve n Co unt ie s t o KERS w e r e no t “r e gul at o r y f e e s, asse ssme nt s, o r t axat io n” and t he r e f o r e “[t ]o r e so l ve t he ano mal y” t he o bl igat io n “must be c o nt r ac t ual in nat ur e .” 511 B.R. at 475. KERS ne ve r sugge st e d t hat t he e mpl o ye r c o nt r ibut io ns t hat Se ve n Co unt ie s mad e w e r e in f ac t t axe s and , ind e e d , no t hing r e mo t e l y sugge st s t hat t he y w e r e . In Klein v. Flanery, 439 S.W.3d 107, 114 n.6 (Ky. 2014), w e d isc usse d t he d ist inc t io n be t w e e n t axe s and “par t ic ul ar ize d e xac t io ns”: In a br o ad se nse , pe r haps, any mo ne t ar y e xac t io n by a go ve r nme nt al e nt it y c o ul d be t ho ught a t ax, but a “t ax” in t he st r ic t se nse o f mo nie s l e vie d t o me e t t he ge ne r al e xpe nse s o f go ve r nme nt has be e n d ist inguishe d in a var ie t y o f c o nt e xt s f r o m mo r e par t ic ul ar ize d e xac t io ns, suc h as f ine s, use r f e e s— t o l l s, f o r e xampl e —inf r ast r uc t ur e asse ssme nt s, o r r e gul at o r y f e e s, suc h as t ho se at issue he r e . In making t he d ist inc t io n, c o ur t s o f t e n ske t c h “a spe c t r um w it h a par ad igmat ic t ax at o ne e nd and a par ad igmat ic [f ine o r ] f e e [o r asse ssme nt ] at t he o t he r .” San Juan Cellular Tel. Co. v. Pub. Serv. Comm'n of Puerto Rico, 967 F.2d 683, 685 (1st . Cir . 1992) (c it at io ns o mit t e d ). The y t he n at t e mpt t o l o c at e t he e xac t io n at issue al o ng t he spe c t r um. The c l assic “t ax” is “impo se d by a l e gisl at ur e upo n many, o r al l , c it ize ns. It r aise s mo ne y, c o nt r ibut e d t o a ge ne r al f und , and spe nt f o r t he be ne f it o f t he e nt ir e c o mmunit y .... The c l assic ‘r e gul at o r y f e e ’ is impo se d by an age nc y upo n t ho se subje c t t o it s r e gul at io n . . . .” This passage quic kl y il l ust r at e s t hat t he mo nie s r e mit t e d t o KERS ar e ne it he r t axe s no r r e gul at o r y f e e s, t he l at t e r be ing impo ssibl e be c ause Se ve n Co unt ie s is no t r e gul at e d by KERS.23 The mo nie s ar e , ho w e ve r , “par t ic ul ar ize d e xac t io ns ” 23 By c o nt r ast , Klein d e al t w it h c l assic r e gul at o r y f e e s paid by buil d ing c o nt r ac t o r s t o t he Ke nt uc ky De par t me nt o f Ho using, Buil d ings and Co nst r uc t io n and 27 t hat may pr o pe r l y be d e sc r ibe d as asse ssme nt s (as KERS pr o po se s) w it ho ut r unning af o ul o f any Ke nt uc ky l aw . “Asse ssme nt ” simpl y d e no t e s “impo sit io n o f so me t hing, suc h as a t ax o r f ine , ac c o r d ing t o an e st abl ishe d r at e .” Black’s Law Dictionary (11t h e d . 2019). See, e.g., Scalise v. Sewell-Scheuermann, 566 S.W.3d 539 (Ky. 2018) (ad d r e ssing “sanit at io n asse ssme nt ” impo se d mo nt hl y pe r ho use ho l d by a f o r me r f if t h-c l ass c it y). Al t ho ugh asse ssme nt s ar e o f t e n asso c iat e d w it h t he c o nst r uc t io n o f se w e r s and st o r m w at e r d r ainage , Long Run Baptist Ass’n v. Louisville & Jefferson Co. Metro. Sewer Dist., 775 S.W.2d 520, 522-23 (Ky. App. 1989), no t hing in Ke nt uc ky l aw d ic t at e s t hat an asse ssme nt must be e xac t e d t o “impr o ve t he ge ne r al c o nd it io ns o f he al t h and c o mf o r t ,” as sugge st e d by t he Bankr upt c y Co ur t . 511 B.R. at 473-74. Se ve n Co unt ie s ’ payme nt s t o KERS w e r e st at ut o r il y-base d asse ssme nt s, but mo r e pr e c ise l y, t he y w e r e “e mpl o ye r c o nt r ibut io ns ” t o t he KERS t r ust f und f r o m w hic h Se ve n Co unt ie s ’ e mpl o ye e s w o ul d r e c e ive t he ir r e t ir e me nt be ne f it s, w it h t he c o nt r ibut io ns c o nst it ut ing st at ut o r y o bl igat io ns Se ve n Co unt ie s vo l unt ar il y assume d in o r d e r t o o bt ain t ho se pe nsio n be ne f it s. In ano t he r f o r m o f r e aso ning bac kw ar d s, Se ve n Co unt ie s po sit s t hat t he par t ie s ’ r e l at io nship must be c o nt r ac t ual be c ause al l o w ing Ke nt uc ky st at ut e s t o “c o mpe l ” Se ve n Co unt ie s ’ par t ic ipat io n in KERS vio l at e s f e d e r al l aw . t he c o nso l id at e d mat t e r , Louisville Soccer Alliance, Inc. v. Beshear, d e al t w it h f e e s paid by no n-pr o f it o r ganizat io ns t o t he De par t me nt o f Char it abl e Gaming. See 439 S.W.3d at 109. 28 Init ial l y, w e no t e t hat par t ic ipat io n w as no t c o mpe l l e d but r at he r a vo l unt ar y ac t in 1979, i.e., a r e que st by Se ve n Co unt ie s t o be d e signat e d by e xe c ut ive o r d e r f o r par t ic ipat io n in a st at ut o r il y-c r e at e d pe nsio n syst e m. As f o r ERISA r e quir e me nt s, suc h as 29 U.S.C. § 1002(32), and t he f e d e r al l aw c o nse que nc e s t o KERS f r o m t his answ e r t o t he c e r t if ie d que st io n, t ho se issue s ar e be yo nd t he sc o pe o f t his Opinio n. Mo r e pe r t ine nt l y, t ho se issue s c anno t d ic t at e t he nat ur e o f t he Se ve n Co unt ie s/KERS r e l at io nship w hic h simpl y is w hat it is, bo t h in f ac t and in l aw . CONCLUSION The Ke nt uc ky Ge ne r al Asse mbl y in unmist akabl e l anguage id e nt if ie d t he r e l at io nship be t w e e n KERS and it s me mbe r s as an “invio l abl e c o nt r ac t .” The st at ut e by w hic h e mpl o ye r s jo in KERS c o nt ains no suc h c o nt r ac t l anguage and impl ying it w o ul d vio l at e bo t h o ur pl ain l anguage appr o ac h t o st at ut o r y c o nst r uc t io n and Ke nt uc ky l aw r e gar d ing t he l imit at io ns o n a go ve r no r ’s po w e r . As f o r t he c o nt r ac t t he o r y, t he par t ie s ’ c o nt e mpo r ane o us d o c ume nt at io n c o nt ains no t a hint o f an int e nt t o c o nt r ac t , l e aving t he t he o r y w it h no suppo r t in e it he r t he f ac t s o r t he l aw . Payme nt s by an e mpl o ye r t o KERS pur suant t o KRS Chapt e r 61 ar e e sse nt ial l y asse ssme nt s, st at ut o r il y-impo se d c o nt r ibut io ns t o t he KERS t r ust f und r e quir e d o f t he e mpl o ye r in o r d e r f o r it s e mpl o ye e s t o be me mbe r s o f KERS. The r e l at io nship be t w e e n KERS and Se ve n Co unt ie s is and al w ays has be e n pur e l y st at ut o r y. Al l sit t ing. Al l c o nc ur . 29 COUNSEL FOR KENTUCKY EMPLOYEES RETIREMENT SYSTEM AND BOARD OF TRUSTEES OF KENTUCKY RETIREMENT SYSTEMS: Mar k C. Bl ac kw e l l Kat he r ine I. Rupine n Jo se ph Pat r ic k Bo w man KENTUCKY RETIREMENT SYSTEMS Danie l R. Sw e t nam Vic t o r ia E. Po w e r s Tyso n A. Cr ist ICE MILLER LLP COUNSEL FOR SEVEN COUNTIES SERVICES, INC.: David Mar c us Cant o r SEILLER WATERMAN LLC Paul Jo se ph He r shbe r g PAUL HERSHBERG LAW, PLLC G. Er ic Br unst ad , Jr . DECHERT LLP COUNSEL FOR AMICUS CURIAE, COMMUNITY CARE AND DEVELOPMENT MANAGEMENT, INC.: Do ugl as L. Mc Sw ain Co ur t ne y Ro ss Samf o r d Tho mas Tr avis WYATT, TARRANT & COMBS, LLP 30 COUNSEL FOR AMICUS CURIAE, THE COMMONWEALTH OF KENTUCKY, EX REL. MATTHEW G. BEVIN, GOVERNOR: Mar k St e phe n Pit t St e phe n Chad Me r e d it h Mat t he w Kuhn OFFICE OF THE GOVERNOR COUNSEL FOR AMICUS CURIAE, ROBERT STIVERS, PRESIDENT OF THE SENATE; DAVID OSBORNE, SPEAKER PRO TEMPORE OF THE HOUSE OF REPRESENTATIVES; MORGAN MCGARVEY, SENATE MINORITY FLOOR LEADER; AND ROCKY ADKINS, HOUSE OF REPRESENTATIVES MINORITY FLOOR LEADER: David E. Fl e e no r Ge ne r al Co unse l OFFICE OF THE SENATE PRESIDENT R. Vaughn Mur phy De put y Ge ne r al Co unse l OFFICE OF THE SENATE PRESIDENT Re be c c a Rud d Bar ne s OFFICE OF THE SENATE MINORITY FLOOR LEADER Jo anna Po o l e De c ke r OFFICE OF THE HOUSE MINORITY FLOOR LEADER Tyl e r Pe avl e r OFFICE OF THE SPEAKER OF THE HOUSE OF REPRESENTATIVES De bo r ah S. Hunt Cl e r k o f Co ur t UNITED STATES COURT OF APPEALS SIXTH CIRCUIT 31