King v.

• Decision Date: 10 August 2015
• Docket Number: 13-CV-4730
• Court: U.S. District Court — Eastern District of New York
• Parties: DAVID KING, Plaintiff, v. NEW YORK CITY EMPLOYEES RETIREMENT SYSTEM (NYCERS), Defendant.

DAVID KING, Plaintiff, v. NEW YORK CITY EMPLOYEES RETIREMENT SYSTEM (NYCERS), Defendant.

13-CV-4730

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

August 10, 2015

AMENDED MEMORANDUM, ORDER & JUDGMENT

Parties

David King

New York City Employees Retirement

System (NYCERS)

Appearances

John W. Hermina

Hermina Law Group

8327 Cherry Lane

Laurel, MD 20707

(301) 206-3166

law@herminalaw.com

Teresita V Magsino

New York City Law Department

100 Church Street

New York, NY 10007

(212) 356-2216

tmagsino@law.nyc.govJACK B. WEINSTEIN, Senior United States District Judge:

Table of Contents

I. Introduction ............................................................................................................................ 3

II. Plaintiff's Work History ........................................................................................................ 6

III. Context: Public Pensions ...................................................................................................... 6

A. Background ................................................................................................................ 6

B. Protections Afforded .................................................................................................. 7

1. Contractually Protected under State Law ........................................................ 7

2. Constitutionally Protected under State Law .................................................... 7

3. Constitutionally Protected under Federal Law ................................................ 8

IV. New York City's Pension Scheme ......................................................................................... 8

V. Pension History of Plaintiff ................................................................................................. 16

A. Tier 1 Status: 1971-1977 ........................................................................................ 16

B. Tier 4 Status: 1984-2000 ........................................................................................ 16

C. Application for Reinstatement to Tier 1 Status ........................................................ 17

D. Denial of Tier 1 Reinstatement Application ............................................................ 25

E. Tier 4 Pension Benefit Payments ............................................................................. 28

VI. Procedural History ............................................................................................................... 29

A. State Claim ............................................................................................................... 29

B. Federal Claim ........................................................................................................... 30

C. Appeal and Remand ................................................................................................. 31

VII. Motion to Dismiss ................................................................................................................ 33

A. Standard ................................................................................................................... 33

B. Consideration of Matters Extraneous to Complaint ................................................. 34

VIII. Due Process .......................................................................................................................... 34

A. Law .......................................................................................................................... 34

1. Equitable Tolling and Equitable Estoppel ..................................................... 35

2. Procedural Due Process Claim ...................................................................... 38

3. Substantive Due Process Claim ..................................................................... 41

B. Application ............................................................................................................... 43

1. Equitable Tolling and Equitable Estoppel ..................................................... 43

2. Procedural Due Process Claim ...................................................................... 45

3. Substantive Due Process Claim ..................................................................... 45

IX. Breach of Contract ............................................................................................................... 46

A. Law .......................................................................................................................... 46

B. Application ............................................................................................................... 48

X. New York General Business Law Section 349 .................................................................... 50

A. Law .......................................................................................................................... 50

B. Application ............................................................................................................... 53

XI. Conclusion ........................................................................................................................... 53

I. Introduction

The decision by the Court of Appeals for the Second Circuit in this case, requiring the district court to hear a litigation brought by a retiree to an adverse City of New York pension decision—after relevant issues had been raised and rejected in a New York article 78 proceeding—incorporates an undesirable practice. See King v. NYCERS, 595 F. App'x 10 (2d Cir. 2014) (summary order). New York should consider how such cases ought to be processed within the state, modifying, as necessary, state substantive law and procedure to avoid appeals to federal courts from New York City Employees' Retirement System ("NYCERS") decisions respecting city pensions.

What is required is a single state cause of action challenging—at the same time—the accuracy of the administrative decision denying a pension claim, a possible due process claim, a possible breach of contract claim, and any other objection. The gravamen, based on one factual-legal dispute, is the same in all such causes of action. The issues should be adjudicated, where practicable, administratively before a final adverse decision is made by NYCERS.

The opportunity that the plaintiff had to challenge the denial of his pension claim was arguably fully treated in his article 78 state proceeding. See infra Part VI.A; Order of the Supreme Court of the State of New York County of Kings, Jan. 23, 2012, ECF No. 1-3 at 9-11 ("It is no moment that petitioner maintains in his petition that NYCERS breached its contract with him, violated certain fiduciary duties and committed fraud. The Court has considered petitioner's remaining arguments and find[s] them to be without merit."). Plaintiff failed to appeal from the adverse State Supreme Court decision. That should have been the end of the litigation. Nevertheless, plaintiff instituted a separate federal constitutional claim in this court based on the same factual-legal dispute which had been before the article 78 Supreme Court Justice. His claim was dismissed in this court because all of his claims had previouslyapparently been considered and denied by a State Supreme Court Justice. See Hr'g Tr. 15:14-17, Nov. 25, 2013 ("[This federal district court is] barred from reviewing the Article 78 judge's decision. You should have appealed that [decision] in the state court. [This court is] not a reviewing court [for] state actions. [It's] an entirely different court system.") The view of the Court of Appeals for the Second Circuit on remand that there was a federal constitutional independent claim distinct from plaintiff's article 78 claim has revealed an unsatisfactory procedural difficulty in allowing repetitive claims. See infra Part VI.C; King, 595 F. App'x at 11-12.

A second kick down the road at the city administrative error should not be afforded in any efficient modern procedural system—even though there is logic to the federal appellate ruling based on the limitations of the state article 78 proceeding (homogenizing the limited scope of medieval British writs of review). There is a single factual-legal dispute over a claim for an increased pension that should be disposed of in one litigation, in one state court, by one state judge, on the merits. The short four-month statute of limitations, which plaintiff faced in the article 78 proceeding, exacerbates the procedural-substantive problem.

The law of New York City on retirement benefits is arcane. Benefits constantly shift as a result of negotiations for wages and collateral benefits. Pension rights are one of the negotiating vectors. New employees' wages and other benefits are balanced against those of the older workers who are looking forward to higher pensions as opposed to higher wages. The amounts involved are enormous. New York City projects that it will pay direct dollar pensions of $8.582 billion in fiscal year 2015, plus other benefits, such as medical costs. See Office of the New York City Comptroller, Bureau of Fiscal and Budget Studies, Comments on New York City's Preliminary Budget for Fiscal Year 2016 and Financial Plan for Fiscal Years 2015-2019 at 1(2015), http://comptroller.nyc.gov/wp-content/uploads/documents/3-4-15_CommentsPreliminary Budget.pdf (last visited July 30, 2015). Wherever possible and practicable, individual pension decisions should be made by state administrative bodies and state courts without intervention by a federal court.

Plaintiff, David King, a former employee of New York City, claims that he is being cheated out of a portion of his city pension. Defendant, NYCERS, maintains that current payments are proper.

The Court of Appeals for the Second Circuit, in its remand reversing the trial court's dismissal of the complaint, indicated that "the district court may wish to consider a number of [bases for dismissal]"; they...