City of San Diego v. Haas
| Decision Date | 29 June 2012 |
| Docket Number | No. D058225.,D058225. |
| Citation | 143 Cal.Rptr.3d 438,207 Cal.App.4th 472 |
| Court | California Court of Appeals Court of Appeals |
| Parties | The CITY OF SAN DIEGO, Plaintiff and Respondent, v. Richard HAAS et al., Defendants and Appellants. |
OPINION TEXT STARTS HERE
Background: City brought action against union and a class of employees for declaratory judgment that they were ineligible for certain pension benefits. The Superior Court, San Diego County, No. 37-2007-00077604-CU-MC-CTL, Jeffrey B. Barton, J., certified defense class and granted summary judgment for city. Employees appealed.
Holdings: The Court of Appeal, Nares, J., held that:
(1) memoranda of understanding (MOU) and benefit schedules reducing pension benefits were enforceable;
(2) ordinance reducing pension benefits applied retroactively;
(3) retroactive ordinance did not violate due process or contract clause;
(4) ordinance reducing pension benefits did not require majority vote of pension system members;
(5) union member was adequate class representative for all union member defendants;
(6) city's payment of opposing class counsel's fees did not create disabling conflict of interest; and
(7) class notice was not required to disclose city's payment of opposing class counsel's fees.
Affirmed.
Higgs, Fletcher & Mack, San Diego, John Morris and Victoria E. Fuller for Defendant and Appellant Richard Haas.
Mayer Mangan and Katherine Mayer Mangan for Defendant and Appellant George G. Schaefer.
Glaser, Weil, Fink, Jacobs, Howard, Avchen & Shapiro, Los Angeles, and Joel N. Klevens for Defendant and Appellant Benjamin Vernon.
Law Office of Michael A. Conger, Rancho Santa Fe, and Michael A. Conger for the San Diego Police Officers Association and Mayer Mangan and Katherine Mayer Mangan for the Deputy City Attorneys Association of San Diego as Amici Curiae on behalf of Defendants and Appellants.
Wright & L'Estrange, San Diego, and Joseph T. Ergastolo for Plaintiff and Respondent.
In this pension case the City of San Diego (the City) obtained by summary judgment against defendants San Diego City Employees Retirement System (SDCERS), Richard Haas and Benjamin Vernon (together sometimes defendants), a judicial declaration that defendants are ineligible to receive certain “ancillary” retirement benefits. The ancillary benefits at issue on this appeal are: (1) a “13th retirement check,” payable whenever there are “ excess earnings” available in the retirementsystem at the end of the year; (2) the Deferred Retirement Option Program (DROP), an alternative method of benefit accrual; (3) the right to purchase up to five years of additional service credits (Service Credits); and (4) retiree medical health benefits (collectively, the Four Benefits).
Before they began their employment with the City, defendants or their labor representatives entered into employment contracts or collective bargaining agreements with the City that provided that employees hired on or after July 1, 2005, were ineligible to receive the Four Benefits. However, it was not until January 17, 2007, that the City passed San Diego Ordinance No. 0–19567 (the Ordinance), which amended the San Diego Municipal Code (SDMC) to reflect that employees hired on or after July 1, 2005, were not eligible for the Four Benefits. The Ordinance stated that it was effective 30 days thereafter, i.e., on February 16, 2007.
Defendants Benjamin Vernon and Richard Haas represent a defense class consisting of all City employees hired on or after July 1, 2005, but before February 16, 2007. The defense class is divided into two subclasses. Vernon represents defense subclass A, which consists of employees who were represented in labor negotiations by a recognized bargaining unit. Employees who were not represented by a labor union are represented by Haas in defense subclass B.
Defendants Haas and Vernon assert on appeal 1 that the court erred in granting summary judgment in favor of the City because (1) by its express terms the Ordinance was to apply prospectively; (2) the City did not overcome the presumption that ordinances are to apply prospectively; (3) retroactive application of the Ordinance is unconstitutional because it deprived defendants of vested retirement benefits; and (4) the Ordinance was in violation of article IX, section 143.1 of the San Diego City Charter (City Charter or Charter) which required that it be approved by members of the retirement system.
Defendant George F. Schaefer has filed an appeal, individually, and in propria persona, asserting that the court erred in certifying the defense class.
We conclude that although the Ordinance operates retroactively, it is not invalid because it only amends the SDMC to reflect the City's existing agreements with defendants. Further, no vote was required under City Charter article IX, section 143.1 for the Ordinance to become effective because defendants never accrued rights to the Four Benefits. We also conclude that Schaefer's individual appeal lacks merit. Accordingly, we affirm the judgment.
Article III, section 11.2 of the City Charter permits the San Diego City Council (City Council) to enter into multiple-year memoranda of understandings (MOUs) with any recognized City employee organization concerning wages, hours and other terms and conditions of employment. The Charter also authorizes the City to maintain a pension system for its employees through SDCERS. (City Charter, art. IX, § 141.) SDCERS is empowered to issue rules and regulations to administer the pension system and is a separate legal entity from the City. (City Charter, art. IX, § 144.) The City Council, however, possesses the exclusive authority in granting and modifying retirement benefits. (City Charter, art. IX, §§ 141, 146.)
The City has recognized five employee bargaining units: the San Diego Municipal Employees Association (MEA); the San Diego City Firefighters Local 145, IAAF, AFL–CIO (Firefighters); Local 127, American Federation of State, County and Municipal Employees, AFL–CIO (AFSCME); the Deputy City Attorneys Association of San Diego (DCAA); and the San Diego Police Officers Association (POA).
The City negotiated benefit modifications for prospective employees in its summer 2005 collective bargaining efforts with the five bargaining units under the Meyers–Milias–Brown Act (MMBA). Effective July 1, 2005, the City entered into MOUs with the MEA, Firefighters, AFSCME, and the DCAA. The City also negotiated with the POA, but upon reaching an impasse, the City Council imposed the terms of its last, best, final offer (LBFO) on the POA.
In exchange for receiving a fixed retirement allowance formula and other benefits, the MOUs and LBFO provided that City employees hired on or after July 1, 2005 (New Employees) would not be eligible for the Four Benefits. Neither the MOUs nor the LBFO changed any retirement benefits for City employees hired before July 1, 2005.
The AFSCME, Firefighters and MEA MOUs contained implementation provisions. Article 2, section 2 of the MEA MOU states: “The City shall, in a timely manner, complete necessary changes in ordinances, resolutions, rules, policies and procedures to conform to this agreement, using September 30, 2005, as a target date for such completion.” Article 3 of the MEA MOU states that its term is from July 1, 2005 to June 30, 2008. Article 22, section 1, states that the MOU “reflects the parties' agreement regarding retirement contribution and benefit changes resulting from meet and confer in 2005.” MEA members ratified the MOU shortly after negotiations.
Article 5 of the AFSCME MOU contains a similar implementation provision. Article 2 states that the term of the MOU shall be from July 1, 2005 to June 30, 2008. Article 43, section 1.A, further states that the MOU “reflects the parties' agreement regarding retirement contribution and benefit changes resulting from meet and confer in 2005.” AFCSME members ratified the MOU shortly after negotiations.
Article 26 of the Firefighters MOU states, in pertinent part: Article 27 of the Firefighters MOU states that its term is from July 1, 2005 to June 30, 2006. Article 23, section 1, states that the MOU “reflects the parties' agreement regarding retirement contribution and benefit changes resulting from meet and confer in 2005.” Firefighters ratified the MOU shortly after negotiations.
The DCAA MOU does not contain an implementation provision. DCAA members ratified the 2005 MOU.
On June 27, 2005, the City Council passed and adopted Resolution No. R–300600, approving the LBFO and ratifying the MOUs entered into by and between the City and its representative bargaining units, to be effective as of July 1, 2005. Resolution R–300600's legislative history states that the parties or their representatives ratified their respective agreements, with the express understanding that New Employees would not be eligible for the Four Benefits.
The parties stipulated that at all relevant times, it was the City's custom and practice to provide employees who were not members of the bargaining units (Unrepresented Employees) with the same benefits as members of the MEA. Haas was an Unrepresented Employee. Haas was offered the position of deputy chief of public works with the City in a letter dated December 9, 2005. Attached to his offer letter was a...
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