Andreyko v. City of Cincinnati
| Decision Date | 30 May 2003 |
| Docket Number | Trial No. A-9902240.,Appeal No. C-020606. |
| Parties | JOHN ANDREYKO, Plaintiff-Appellant, vs. CITY OF CINCINNATI and BOARD OF TRUSTEES OF THE CINCINNATI RETIREMENT SYSTEM, Defendants-Appellees. |
| Court | Ohio Court of Appeals |
Katz, Teller, Brant & Hild and James F. McCarthy, III, for Plaintiff-Appellant.
Julia L. McNeil, Cincinnati Solicitor, and Frank H. Prouty, II, Assistant City Solicitor, for Defendants-Appellees.
Plaintiff-appellant John Andreyko appeals from the trial court's judgment entered in favor of defendants-appellees, the city of Cincinnati and the board of trustees of the Cincinnati Retirement System ("CRS")1, on Andreyko's claims that the creation of two classes of non-uniform employees seeking prior service credit—one purchasing credits at a subsidized cost, and the other bearing the full cost—violated his constitutional right to the equal protection of the laws. See Section 1983, Title 42, U.S.Code. Andreyko argues that there was no rational basis for discriminating against public employees who were not participants in the state's police-and-fire pension fund by imposing additional costs on them for the purchase of service credits. We agree, holding that the stipulated evidence demonstrates that the legislative facts do not justify a valid distinction between the two groups and that no grounds can be conceived to justify the distinction. The trial court's judgment must be reversed.
In the mid-1960s, Andreyko worked for the city of Youngstown, Ohio, for two and one-half years before beginning his employment with the city of Cincinnati. Because Youngstown did not have a separate retirement system, Andreyko participated in the Ohio Public Employees Retirement System ("PERS"). He accepted his new job with Cincinnati and began working without interruption. Andreyko withdrew the contributions that he had made to PERS and, as he was required to do, joined CRS. There was then no provision for receiving credit in CRS for time earned in PERS. Andreyko worked for the city of Cincinnati for thirty years. When he retired from city service, Andreyko was the Deputy Director of Finance.
Ordinarily employees receiving benefits from CRS are entitled to a pension in an amount based upon the employee's time in service. By purchasing credits for time during which the participant was employed in other public service but not eligible for membership in CRS, a participant may enhance his or her retirement benefits, including pension and medical benefits.
Prior to 1997, only non-uniform city employees with prior participation in the state Police and Firemen's Disability and Pension Fund were entitled to purchase prior service credit in CRS. Since 1983, in a measure adopted to "have a considerable effect upon the appointment" of Henry Sandman as Safety Director, CRS has subsidized the purchase of service credit for former police-and-fire-fund participants with uninterrupted public service. Instead of the required deposit of 50% of the amount necessary to fully fund that portion of his pension, a participant can purchase credit for the time he or she participated in the police-and-fire fund at the reduced cost of the employee contribution plus 4% interest compounded annually on those contributions. See Cincinnati Municipal Code 203-7.
This benefit was not available to current Cincinnati police and firefighters; only current non-uniform employees with prior service in the police-and-fire fund could purchase service credit. Employees who had participated in other public retirement systems before their employment with the city were not eligible to purchase the credit.
In response to lobbying by Andreyko and others, CRS and the Cincinnati City Council enacted an ordinance in 1997 permitting employees who had participated in PERS to purchase service credit in CRS. See Cincinnati Municipal Code 203-7A. CRS did not, however, extend the purchase of credits on the same favorable terms offered to former police-and-fire-fund participants. Prior PERS participants, like Andreyko, would be allowed to purchase credits only in a manner that would be cost-neutral to CRS, or, as a CRS actuary had recommended to the city, that would "make the purchase considerably less attractive to participants." The extra costs required among other things that the participant pay an actuary to compute the costs of the credit before the participant was permitted to purchase credit. The participant would then pay 100% of the amount determined to fund his pension. The participant was obligated to pay both the employee's and the employer's contributions.2 See id.
The stipulated evidence in this case indicates that the cost to purchase two and one-half years of service credit for Andreyko was $59,339. The cost to a former police-and-fire-fund participant would have been $3,590. "Thus, any Cincinnati employee who had not participated in the police and fire pension fund, but had participated in another public retirement system such as [PERS], would have to pay more to purchase the same credit and receive the enhanced retirement benefit." Andreyko v. Cincinnati, 145 Ohio App.3d 365, 366, 763 N.E.2d 190 ("Andreyko I").
Andreyko filed this action against the city and CRS seeking a declaration that the city had created two classes of employees seeking prior service credit—one purchasing credits at a subsidized cost, and the other bearing the full cost—without justification for the cost differences. He sought to purchase credits for his Youngstown PERS contributions under the same favorable terms as those city employees who had previously contributed to the police-and-fire fund. He also asked for attorney fees.
Following a bench trial, the trial court entered judgment in Andreyko's favor. When the city and CRS appealed, this court determined that the trial court had erroneously applied a strict-scrutiny analysis to Cincinnati's classification scheme. See Andreyko I, 145 Ohio App.3d at 368, 763 N.E.2d 190. The case was remanded to the trial court for application of the less stringent rational-basis test to the classification. See id. Upon remand to a new trial judge, the parties filed a jointly prepared, nine-page stipulation of facts. After reviewing the prior trial testimony and the joint stipulation, the new judge entered the judgment now appealed by Andreyko.
The briefs are silent concerning the standard of review to be applied to Andreyko's assignment of error. The trial court purportedly dismissed Andreyko's complaint for declaratory judgment without either party moving for dismissal. As the trial court declared the rights of the parties in its six-page written decision, however, we construe its decision to have entered judgment on the merits in favor of the city and CRS.
See R.C. 2721.03; see, also, Fioresi v. State Farm Mut. Auto. Ins. Co., 26 Ohio App.3d 203, 203-204, 499 N.E.2d 5.
The interpretation of the constitutionality of a statute or municipal ordinance presents a question of law. See, e.g., Klein v. Leis, 146 Ohio App.3d 526, 2002-Ohio-1634, 767 N.E.2d 286, appeal accepted for review, 96 Ohio St.3d 1488, 2002-Ohio-4478, 774 N.E.2d 763. Questions of law are reviewed de novo, independently and without deference to the trial court's decision.3 See Ohio Bell Tel. Co. v. Pub. Util. Comm., 64 Ohio St.3d 145, 147, 593 N.E.2d 286.
The gravamen of Andreyko's single assignment of error is that the city and CRS violated his constitutional right to the equal protection of the law by their arbitrary and unjustified policy of requiring him to purchase service credits in the retirement system at terms far less favorable than the terms extended to another group of employees. See Section 1983, Title 42, U.S.Code; see, also, 1946 St. Clair Corp. v. Cleveland, 49 Ohio St.3d 33, 34, 550 N.E.2d 456, citing Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908. Ohio courts may adjudicate declaratory-judgment claims based upon violations of Section 1983. See Piphus v. Blum, 108 Ohio App.3d 218, 220, 670 N.E.2d 518; see, also, Conley v. Shearer, 64 Ohio St.3d 284, 292-293, 595 N.E.2d 862.
Where neither a fundamental constitutional right nor a suspect classification is at issue, a legislative distinction between two groups need only be created in such a manner as to bear a rational relationship to a legitimate governmental interest. See Andreyko I, 145 Ohio App.3d at 367-368, 763 N.E.2d 190; see, also, State v. Williams, 88 Ohio St.3d 513, 530-531, 2000-Ohio-428, 728 N.E.2d 342. A legislative decision to treat two groups differently is constitutionally infirm only where it is "based solely on reasons totally unrelated to the pursuit of the State's goals and only if no grounds can be conceived to justify them." See Clements v. Fashing, 457 U.S. 957, 963, 102 S.Ct. 2863; see, also, State v. Williams, 88 Ohio St.3d at 530, 2000-Ohio-428, 728 N.E.2d 342. In making this determination, a reviewing court must grant substantial deference to the economic judgment of the legislative entity. See, e.g., Turner Broadcasting Sys. v. Fed. Communications Comm., 520 U.S. 180, 195, 117 S.Ct. 1174.
Under the rational-basis standard, the party challenging the legislative enactment bears the heavy burden of demonstrating that it is irrational. See Harrah Indep. School Dist. v. Martin, 440 U.S. 194, 198, 99 S.Ct. 1062. "[T]he challenger must negative every conceivable basis before an equal protection challenge will be upheld." See Heller v. Doe, 509 U.S. 312, 320, 113 S.Ct. 2637. One means of carrying this burden is where the challenger demonstrates that the legislative facts on which the classification is justified "'could not...
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