Dailey v. City of Phila.
| Decision Date | 02 October 2019 |
| Docket Number | CIVIL ACTION NO. 16-1331 |
| Citation | 417 F.Supp.3d 597 |
| Parties | Deborah DAILEY v. CITY OF PHILADELPHIA, et al. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Nicholas R. Romeu, Karpf, Karpf & Cerutti, P.C., Bensalem, PA, Brian Farrell, Laura Carlin Mattiacci, Susan M. Saint-Antoine, Stephen G. Console, Console Mattiacci Law, LLC, Philadelphia, PA, for Plaintiff.
Ellen Berkowitz, Dimitrios Mavroudis, Eleanor N. Ewing, City of Philadelphia Law Department, Philadelphia, PA, for Defendants.
The Chief Deputy Prothonotary of Philadelphia's court system contributed part of her income into the City's retirement system for over three decades. In Spring 2014, she abused the court's credit card to pay over $73,000 of her son's debts. The court fired her and pressed criminal charges. She plead guilty to a third-degree felony theft and paid back the stolen funds. The City's Pension Board then disqualified her from her pension based on her conviction on two specific grounds in the Retirement Code: theft of funds of the City, or official agency of the City, or agency, engaged in performing any governmental function for the City or the Commonwealth and "malfeasance in office or employment." She immediately sued both here and in state court claiming this language is unconstitutionally vague and the penalty acts an illegal forfeiture or taking of her property interest. We abstained to allow the state court to interpret the terms of the City's legislation. The state appellate court defined the "malfeasance" as including her admitted theft and upheld her pension ineligibility. Finding we may decide the issues under federal law, we hold the "malfeasance" language is not void for vagueness under the Fourteenth Amendment and the loss of the full pension net of her contributions is not an improper forfeiture under the Eighth Amendment, an improper taking under the Fifth Amendment, or an arbitrary deprivation of property and excessive punitive sanction under the Fourteenth Amendment. We grant the City's motion for summary judgment.
Deborah Dailey began working as a stenographer for the First Judicial District of Pennsylvania in 1979.2 For the next thirty-four years she worked for the First Judicial District ultimately becoming the Chief Deputy Prothonotary and Clerk of Courts.3 Ms. Dailey became a member of "Plan J" of the City of Philadelphia Public Employees Retirement System4 upon employment5 and made contributions into the Retirement System.6 The Retirement System contains several plans for retirement, disability, and incidental death benefits for the City's employees and their survivors and beneficiaries.7 The Retirement Code sets the terms of eligibility for retirement benefits and contributions into the Retirement System by the City and members.8 The Retirement Code also sets terms for disqualification from receiving retirement or any other benefits from the Retirement System.9 If a member "separates from service for any cause other than death, disability or retirement," her total contributions made into the Retirement System "shall ... be repaid ... without interest."10
Between February and May 2014, Ms. Dailey admittedly stole over $73,000 from the First Judicial District by using its credit card without authorization to pay bills for her son.11 The First Judicial District terminated Ms. Dailey's employment on May 14, 2014 when it learned of Ms. Dailey's conduct.12 Ms. Dailey repaid the First Judicial District in full before pleading guilty on February 18, 2015 to theft by unlawful taking or disposition – movable property, a third-degree felony under Pennsylvania law.13 A judge sentenced Ms. Dailey to thirty months' probation and payment of court costs.14
Four months after entering her guilty plea, Ms. Dailey applied for optional early retirement benefits under Philadelphia's Retirement System.15 On September 17, 2015, the Pension Board voted to "permanently disqualify [Ms. Dailey's] pension eligibility and suspend [her] pension benefits,"16 notified Ms. Dailey of her disqualification for pension eligibility under Retirement Code Section 22-1302(1)(a)(.4) and (.5) based on her guilty plea to theft of movable property, and advised her of her right to a hearing before a panel of the Pension Board to challenge its decision.17 Under the terms of the Retirement Code, the City will return contributions made by Ms. Dailey into the Retirement System without interest.18
The Pension Board disqualified Ms. Dailey under Sections 22-1302(1)(a) (.4) and (.5) of the Retirement Code:
Ms. Dailey challenges the constitutional validity of subsections (.4) and (.5). She claims Section 22-1302(1)(a) as applied to her violates the Excessive Fines Clause of the Eighth Amendment; as applied to her is an arbitrary deprivation of property and an excessive punitive sanction in violation of the Due Process Clause of the Fourteenth Amendment; subsection (.4), as applied to her, and subsection (.5), both on its face and applied to her, are void for vagueness in violation of the Due Process Clause of the Fourteenth Amendment; and Section 22-1302(1)(a) as applied to her violates the Takings Clause of the Fifth Amendment.20
Ms. Dailey appealed the Pension Board's September 17, 2015 decision. A three-member panel of the Pension Board held a hearing on January 13, 2016. The hearing panel issued findings of fact and conclusions of law in support of its determination.21 The hearing panel found Ms. Dailey, represented by counsel, "offered minimal testimony" to explain her use of the credit card, and did not call any witnesses or introduce documents into evidence.22
The Pension Board concluded Ms. Dailey's disqualification from the Retirement System should be upheld because violations of sections (.4) and (.5) require disqualification, focusing on the language "no employee ... shall be entitled to receive any retirement benefit or other benefit of any kind" upon conviction of an applicable offense while in office.23 The Pension Board concluded to receive a pension "Retirement System members must satisfy multiple conditions precedent: years of service, payment of contributions, vesting, and age" and "is also contingent upon the requirement that the employee not have engaged in certain criminal conduct in office, as set forth in Section 22-1302."24
Determination of pension eligibility in the Retirement System is vested in the Pension Board. The Pension Board determined "commission of an applicable offense in office by a public employee is a breach of the public trust and of the public employment contract, which severs entitlement to pension benefits."25 The Pension Board found Ms. Dailey's guilty plea to theft of movable property from the First Judicial District while in office constituted a breach of the public employment contract, triggered the mandatory provisions of Section 22-1302, and rendered her ineligible to receive pension benefits.26
The Pension Board considered Ms. Dailey's constitutional arguments made at the hearing claiming Section 22-1302(1)(a)(.4) does not apply to the First Judicial District because it is not the "City" or an "agency"; Section 22-1302(1)(a)(.5) does not apply because Ms. Dailey did not plead guilty to "malfeasance"; disqualification constituted an excessive fine in violation of the Eighth Amendment; malfeasance in subsection (.5) is unconstitutionally vague; and the Board failed to provide procedural due process.27 The Pension Board rejected each argument, and, after considering Ms. Dailey's arguments made at the hearing and briefing, the three-member hearing panel recommended the denial of Ms. Dailey's appeal.28
At its regularly scheduled meeting on February 25, 2016, the Pension Board confirmed the recommendation of the hearing panel, denied Ms. Dailey's appeal, and "approved to permanently disqualify [Ms. Dailey] from pension eligibility...."29 On February 26, 2016, the Pension Board advised Ms. Dailey of her right to appeal its decision to the Court of Common Pleas.30
Four weeks later, Ms. Dailey filed her complaint here and, the next day, filed an appeal from the Pension Board's decision to the Court of Common Pleas of Philadelphia County.31 In an amended complaint here, Ms. Dailey challenges Section 22-1302(1)(a) of the Code under 42 U.S.C. Section 198332 alleging it violates the Excessive Fines Clause of the Eighth Amendment (Count I); is an arbitrary deprivation of property and an excessive punitive sanction under the Due Process Clause of the Fourteenth Amendment (Count II); subsection (.4), as applied to her, and subsection (.5) both on its face and as applied to her is void for vagueness and fails to provide sufficient notice under the Due Process Clause of the Fourteenth Amendment (Count III); and Section 22-1302(1)(a), as applied to her, violates the Takings Clause of the Fifth Amendment (Count IV).33 Ms. Dailey asks we find the City violated § 1983 ; award compensatory damages to make her whole for past and future monetary harm with prejudgment interest;...
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