Hargrove v. Board of Trustees of Maryland Retirement System

Decision Date01 September 1985
Docket NumberNo. 119,119
Citation310 Md. 406,529 A.2d 1372
CourtMaryland Court of Appeals

M. Albert Figinski (Ethan L. Bauman, on brief), Baltimore, for appellant.

Ralph S. Tyler, Asst. Atty. Gen. (Stephen H. Sachs, Atty. Gen., on brief), Baltimore, for appellee.



Maryland Code (1957, 1983 Repl.Vol.), Art. 73B, § 56(c)(1), provides that a retired state judge who accepts employment in which all or part of the compensation comes from governmental funds will have his state pension benefits reduced to the extent that his compensation from the employment plus his judicial pension benefits exceeds the current salary of an active state judge at the same level. This case presents a challenge to the constitutionality of § 56(c)(1) under equal protection and substantive due process principles.


The current Judicial Pension Plan is one of several retirement plans for state officials and employees. 1 A judge becomes vested in this plan upon accession to the bench, and is required to contribute 6% of his annual compensation to the pension fund for a maximum of 16 years. Under the plan, the annual pension payable to a retired judge is "two thirds of the salary payable in that fiscal year to a judge holding the same or same level judicial position as that in which the former judge served at the time of" retirement. Art. 73B, § 57(h).

Section 56(c)(1) of Article 73B contains the provision of the Judicial Pension Plan which is under attack in this case. The subsection provides as follows:

"(c)(1) Except as provided in paragraph (2) of this subsection, a retired judge eligible for benefits under this subtitle may accept employment in which all or part of the compensation for the employment comes from municipal, county, State, or federal funds, if he immediately notifies the board of trustees of the Employees' Retirement System of his intention to accept the employment and specifies the compensation to be received for the employment. The annual retirement allowance receivable by the former judge plus the annual compensation for the position may not exceed in amount the compensation upon which the retirement allowance is based. During any period in which the total of the annual retirement allowance and the annual compensation for the position in fact exceeds the compensation upon which the retirement allowance is based, the retirement allowance shall be reduced by that amount necessary to bring the former judge's total compensation within the limit specified in this subsection. If a retired judge accepts employment in accordance with this subsection and is subsequently awarded retirement benefits as a result of that employment, his retirement benefits under this subtitle shall be reduced in the amount of the retirement benefits resulting from the subsequent employment."

Under this subsection, a retired judge may accept local, state or federal governmental employment. Before his pension benefits are affected, he is entitled to receive from the public employment the difference between his plan benefits and the compensation on which his plan benefits are based. When a retired judge's total income from his public employment and pension benefits exceeds the compensation on which the pension benefits are based, there is a dollar-for-dollar offset of pension benefits for each additional dollar of public employment salary.

Under the pension plans applicable to most other retired state government employees, 2 acceptance of permanent state government employment or certain local government employment results in a complete loss of state pension benefits; there is not simply an offset. See, e.g., Art. 73B, § 11(15)(b) (state employees retirement system); Art. 73B, § 86(9)(b) (teachers' retirement system). Nevertheless, federal government employment does not result in a pension loss or offset for nonjudicial state government retirees. Among retired state employees, it is only retired state judges whose pensions are offset by government employment, including federal government employment. Consequently, as to the effect of government employment on pension benefits, retired state judges are treated better than other retired state employees with regard to local and state government employment (offset as opposed to a complete loss) and are treated worse than other retired state employees with regard to federal government employment (offset as opposed to no effect).


The offset provisions of the Judicial Pension Plan, Art. 73B, § 56(c)(1), are challenged in this case by John Hargrove, a judge of the United States District Court for the District of Maryland. Judge Hargrove's state judicial service began in February 1962 when he was appointed judge of the People's Court of Baltimore City. 3 After a short hiatus from the bench, Judge Hargrove was appointed to the Municipal Court of Baltimore City in March 1968, which was incorporated three years later into the District Court of Maryland. In July 1974, Judge Hargrove was appointed to the Supreme Bench of Baltimore City, redesignated in 1983 the Circuit Court for Baltimore City.

On February 17, 1984, Judge Hargrove retired from the Circuit Court for Baltimore City to accept an appointment as judge of the United States District Court for the District of Maryland. Judge Hargrove's tenure on the federal bench commenced February 18, 1984, and presently continues.

There is no dispute that on the date of his retirement from the Circuit Court for Baltimore City, Judge Hargrove had accrued sufficient years of membership service and contribution, and had attained the requisite age, to qualify immediately upon retirement for an annual pension equal to two-thirds of the annual salary of an active circuit court judge. 4 The Board of Trustees of the Maryland Retirement System, however, has refused to pay Judge Hargrove any pension benefits, as his federal salary ($78,700) plus his pension benefits ($42,000) exceed the compensation on which his pension benefits are based ($65,900). 5 Therefore, application of the formula in § 56(c)(1) results in a complete offset so that Judge Hargrove receives no state pension benefits.

Consequently, on behalf of Judge Hargrove, the Maryland Administrative Office of the Courts sought an opinion from the Maryland Attorney General concerning Judge Hargrove's rights under the Judicial Pension Plan. Specifically, the Attorney General was asked to address whether Art. 73B, § 56(c)(1), applies to a retired state judge who becomes a federal judge, and if so, whether § 56(c)(1) deprives a retired judge of equal protection of the laws. The Attorney General responded with an opinion concluding that "the language of § 56(c)(1) unambiguously applies to any form of public employment, including federal judgeships." Opinion No. 84-025 at 151 (Oct. 3, 1984). Analyzing the equal protection issue, the Attorney General applied the "rational basis test" and determined that the reduction in pension benefits was rationally related to the goal of avoiding "double dipping" into public funds. Id. at 156. 6 The Attorney General further stated that there was a rational basis for the distinction between retired state judges who accept federal employment and other state retirees who accept federal employment. The Attorney General noted that the Judicial Pension Plan significantly differed from other state retirement plans. The Attorney General was of the view that "the General Assembly could rationally have concluded that the differences between the 'double dipping' provisions applicable to State judges and those applicable to other State employees are appropriate to the two groups' different situations, given especially the substantial differences in their underlying benefits." Id. at 157.

Subsequently, Judge Hargrove filed a complaint for declaratory judgment in the Circuit Court for Baltimore City. Judge Hargrove contended that § 56(c)(1) "significantly interferes with and infringes upon the right of retired state judges to engage in their chosen calling, by causing retired state judges to lose certain vested pension benefits if they accept employment compensated by municipal, county, state or federal funds." Judge Hargrove also alleged that the Judicial Pension Plan, as the only state pension plan providing for a reduction of benefits when the retiree accepts employment compensated by federal funds, "discriminates ... between the class of state retirees made up of persons who served as judges during their period of state employment and the class of state retirees who did not serve as judges during their period of state employment." Judge Hargrove asserted that the Board's failure to pay him any of his vested pension benefits violated his rights to equal protection of the laws and due process of the law. He relied on both Article 24 of the Maryland Declaration of Rights and the Fourteenth Amendment to the federal constitution. 7

Both Judge Hargrove and the Board filed motions for summary judgment. In a written opinion and order, the Circuit Court for Baltimore City (DeWaters, J., specially assigned) granted the Board's motion for summary judgment. The court stated that the purpose of § 56(c)(1) was to protect "against double dipping while allowing public employment." The court concluded that the formula in § 56(c)(1), "based on the amount of pension, the amount of compensation from public employment and the salary of an active state judge," was a reasonable balance between the prevention of double dipping and the "utilization in the public sector of competent retired state judges." The court, relying on Clark v. Tawes, 187 Md. 195, 49 A.2d 463 (1946), rejected a requirement "that all state employees be treated alike by the legislature when pension bills are...

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