Retirees appeal to high court

Police and fire group's petition asks U.S. Supreme Court to review RI court's ruling in pension case

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After falling short in legal challenges on the state level, a group of Cranston police and fire retirees now hopes to take its fight against local pension changes to the U.S. Supreme Court.

The 69-member Cranston Police and Fire Retirees Action Committee on Oct. 2 announced that it filed a petition for writ of certiorari – the formal term for a request that the high court review a lower court’s decision – with the high court in late August.

David Groenevald, president of CPFRAC, said he is “optimistically hopeful” that the court will take up the issue and ultimately side with the retirees.

“We’re hoping that the members of the U.S. Supreme Court feel would be ripe for a decision that would carry across nationwide … But we can’t predict that,” he said.

To date, the CPFRAC petition has not been taken up by the U.S. Supreme Court. Groenevald said the petition was submitted Aug. 30, and he acknowledged there is no timeframe for a decision from the court regarding whether it will consider the case.

“Sometimes it’s quick, sometimes it might take months … I’m hoping it’s sooner than later,” he said.

Specifically, the petition asks the U.S. Supreme Court to review the Rhode Island Supreme Court’s June ruling that upheld Superior Court Judge Sarah Taft-Carter’s 2016 decision in favor of the city in the case Cranston Police Retirees Action Committee v. the City of Cranston.

In an email Monday, Fung said the city is aware of the CPFRAC petition and that its “legal response is already underway.”

“The United States Supreme Court receives thousands of petitions yearly, and decides to hear a select few,” the mayor wrote. “If it does choose to hear the case, the city feels very confident that the decisions of the Justices of the R.I. Superior and Supreme Courts will be affirmed.”

The case stemmed from the City Council’s 2013 adoption of a pair of ordinance amendments providing for a 10-year freeze on cost-of-living adjustments, or COLAs, for fire and police retirees in the city’s pension system. The freeze was proposed by Mayor Allan Fung to prevent the local pension system from falling into critical status as defined by the state’s 2011 pension reform law.

Police and fire retirees subsequently filed suit against the city, at which point the Fung administration agreed to a settlement. Under the terms of that agreement, COLAs were frozen every other year for the first 10 years, and capped at 1.5 percent in the 11th and 12th years and 3 percent for years 13 through 30.

The settlement received judicial approval in December 2013. But roughly 70 retirees opted out of the pact and formed CPFRAC to continue a legal challenge, arguing that the city had under-funded its pension liabilities for years and that the COLA freeze constituted a breach of contract.

Taft-Carter found that the pension changes were instituted for a “significant and legitimate public purpose” – the need for the city to act in the face of an “unprecedented fiscal emergency” resulting from the Great Recession, the loss of state aid and the requirements of the 2011 Rhode Island Retirement Security Act.

Those circumstances, Taft-Carter found, were “neither created nor anticipated by the city.”

The Rhode Island Supreme Court, in an opinion written by Chief Justice Paul Suttell, agreed that the 2013 ordinances were adopted for a “significant and legitimate public purpose.”

Suttell’s opinion also affirmed Taft-Carter’s finding that the city’s action was “narrowly tailored” to the unique fiscal circumstances and that “the impairment was temporary and prospective in nature because the 2013 ordinances suspended a future benefit for a finite period of time.”

In its appeal to the U.S. Supreme Court, CPFRAC is asserting that the pension changes violated the Contract Clause and Takings Clause of the U.S. Constitution.

The former, which is contained in Article I, bars states from impairing contractual obligations. The latter, contained in the Fifth Amendment, limits the government’s ability to take private property for public use and requires “just compensation” for doing so.

Groenevald said the legal grounds for the U.S. Supreme Court appeal were developed in consultation with CPFRAC’s legal counsel – attorney Patrick J. Sullivan of Sullivan & Sullivan and attorneys Marisa Desautel and Michelle Hawes of Desautel Law.

He also said the group’s board of directors voted to proceed with the appeal to the nation’s high court following the Rhode Island Supreme Court ruling.

Citing the testimony of an actuarial expert, CPFRAC estimates that the COLA freezes resulted in the loss of an average of $210,000 per retiree.

“Police and fire retirees had planned their retirements, based in significant part, on what they had been promised for retirement benefits, by contract, retirements approved by the City at the time they left City service,” a statement from the group reads. “The retirees of CPFRAC consider this a broken promise by the City and are now seeking to have the United States Supreme Court hear their case.”

Fung has previously called the Rhode Island Supreme Court’s ruling in favor of the city in the pension case a “historic day for Cranston” that would help ensure the “long-term solvency of our locally administered police and fire pension plan.” He has also said the pension changes will save taxpayers as much as $6 million annually.

The 2013 pension changes recently drew favorable attention from the publication “American City and County,” which in a Sept. 3 piece titled “Pension tension” highlighted the Cranston case under the subheadline “Crisis averted.” Fung was interviewed for the story, which can be found at americancityandcounty.com.

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