Nat. Educ. Ass'n-R.I. v. Ret. Bd., Civ. A. No. 94-0389L (D. R.I. 7/7/1995), Civ. A. No. 94-0389L.
| Decision Date | 07 July 1995 |
| Docket Number | Civ. A. No. 94-0389L. |
| Parties | NATIONAL EDUCATION ASSOCIATION-RHODE ISLAND, BY its Secretary, Tia SCIGULINSKY, Rhode Island Federation of Teachers, by its Secretary, Coleen Bielecki, John Callaci, Diana Casey, Edward Casey, Jr., Robert Casey, Bernard Connerton, Ronald Diorio, Denise Felice, Joseph Grande, Gloria Heisler, Karen Comiskey Jenkins, Robert Joy, Janice Lanik, Charlene Lee, Cornelius McAuliffe, Edward McElroy, Harvey Press, Vincent Santaniello, Joan Silva, Bernard Singleton, Diane Thurber, and Jeannette Wooley, Plaintiffs, v. RETIREMENT BOARD OF the RHODE ISLAND EMPLOYEES' RETIREMENT SYSTEM, Nancy Mayer, Chairperson and Treasurer of the Retirement Board of the Rhode Island Employees' Retirement System in her official capacity, and Joann Flaminio, Executive Director of the Retirement Board of the Rhode Island Employees' Retirement System in her official capacity, Defendants. |
| Court | U.S. District Court — District of Rhode Island |
Robert H. Chanin, Caroline Frederickson, Bredhoff & Kaiser, Washington, DC, Thomas J. Liguori, Jr., Urso, Liguori & Urso, Westerly, RI, and Richard A. Skolnik, Skolnik, McIntyre & Tate, Ltd., Providence, RI, for plaintiffs.
Alan M. Shoer, State of R.I. Atty. General's Dept., Providence, RI, and William S. Eggeling, and Joan McPhee, Ropes & Gray, Providence, RI, for defendants.
This matter is before the Court on two identical motions to dismiss under Rule 12(b)(6). The first motion was filed by Defendant Nancy Mayer ("Mayer"), in her official capacity as Chairperson and Treasurer of the Retirement Board of the Rhode Island Employees' Retirement System ("Retirement Board"). The second motion was filed by Defendants Retirement Board and Joann Flaminio ("Flaminio"), in her official capacity as Executive Director of the Retirement Board. Defendants' motions1 assert that plaintiffs' Complaint, challenging the constitutionality of R.I.Gen.Laws § 36-9.1-2, fails to state any legal claims for relief. For the following reasons, defendants' motions are denied.
On July 3, 1987, the Rhode Island General Assembly enacted a statute that allowed individuals who were or had been "full-time employees of organizations representing employees of the state and/or any political subdivisions thereof for the purposes of collective bargaining" to acquire certain benefits under the Rhode Island Employees' Retirement System ("Retirement System" or "System"). That statute, R.I.Gen.Laws § 36-9-33, stated:
(a) The provisions of chapters 8 through 10 of this title, inclusive, [which establish the terms of the Retirement System,] shall apply to full-time employees or organizations representing employees of the state and/or any political subdivisions thereof for the purposes of collective bargaining; provided, that any such organization must elect to be covered by the provisions of chapters 8 through 10 of this title by forwarding a certified vote of the organization's appropriate authority to the retirement board not later than December 31, 1988; and provided further, that participation shall not begin later than July 1, 1989. The organization's contribution shall be at the same rate as the contribution of a local education agency for certified teachers. All employees in service as of the date of said certified vote shall become members unless they notify the retirement board, in writing, within sixty (60) days from the date of said certified vote, that they do not wish to become members.
(b) Any member of the state employees' retirement system or any full-time employee of an organization representing employees of the state and/or any political subdivision thereof for the purposes of collective bargaining, who has prior hereto been a full-time employee of such an organization or who has been employed by any public school district in-state or out-of-state, may purchase credit for such employment. The cost to purchase said credits shall be ten percent (10%) of the employee's first year's earnings as a full time employee of such an organization multiplied by the number of years, and any fraction thereof, of such employment. Provided further, that any such employee who has an official leave of absence from such organization shall be eligible to purchase credits as hereinbefore provided for the period of such leave of absence.
Pursuant to § 36-9-33(a), plaintiffs National Education Association-Rhode Island ("NEA-RI") and Rhode Island Federation of Teachers ("RIFT") elected to be covered by the Retirement System. After this election, certain union employees, now the individual plaintiffs in this action, filed applications with the Retirement Board. The Retirement Board is the administrative body that operates the Retirement System.
On June 6, 1988, while the individual plaintiffs' applications were pending before the Retirement Board, the Rhode Island General Assembly repealed § 36-9-33. Pub.L. 1988, ch. 486 (hereinafter "Repeal Statute"). After passage of the Repeal Statute, the Retirement Board refused to allow the individual plaintiffs to become members of, to accrue future service credits in, or to purchase additional service credits from the Retirement System. Their option to join the system had been rescinded.
On October 20, 1988, NEA-RI, RIFT and other organizational and individual plaintiffs brought suit against the Retirement System and the Executive Director of the Retirement Board in Rhode Island Superior Court. The plaintiffs in that case sought an order directing the defendants to "grant the applications [of the individual plaintiffs] . . . and comply with the provisions of Section 36-9-33 []." The question before the Superior Court was one of statutory interpretation, i.e., whether the Repeal Statute had a retroactive, as well as prospective, effect. If the Repeal Statute operated both prospectively and retroactively, then plaintiffs could not become part of the Retirement System.
On December 11, 1989, a judge of the Rhode Island Superior Court issued an order granting the relief requested by the plaintiffs. He found that the individual plaintiffs, who had filed their applications with the Retirement Board during the approximately 11-month period in which § 36-9-33 was in effect, had satisfied the eligibility requirements of § 36-9-33 and were, therefore, entitled to participate in the Retirement System. He also concluded that the repeal of § 36-9-33 operated prospectively only, and that the plaintiffs were unaffected by its repeal.
On April 23, 1990, the same Superior Court judge issued a further opinion in the same case, in response to a Petition for Clarification and/or Instructions by both sides. He held that the individual plaintiffs "shall be treated as becoming members of the Retirement System as of . . . January 1, 1990." For reasons unknown, neither of these decisions of the Superior Court was appealed to the Rhode Island Supreme Court.
Since the orders of the Superior Court became final because of a failure to appeal, the Retirement Board granted the applications that had been filed by the individual plaintiffs. Per the order of the Superior Court, the individual plaintiffs became members of the Retirement System on January 1, 1990. On that date, the individual plaintiffs began accruing future service credits in and/or received additional service credits in the Retirement System. In addition, the individual plaintiffs either began or continued to contribute 7.5% of their salaries to the Retirement System.
Also on January 1, 1990, NEA-RI and RIFT and its affiliates became employers in the Retirement System. They, too, were required from that day forward to contribute to the Retirement System on behalf of the individual plaintiffs at the same rate as did the local school committees on behalf of their certified teachers. See R.I.Gen.Laws § 36-9-33(a). In addition, some of the plaintiffs purchased past service credits in the system by paying the amount prescribed in the statute. See R.I.Gen.Laws § 36-9-33(b).
Plaintiffs allege in their Complaint that many of them relied on their entry into the Retirement System and future receipt of state pension benefits in making important decisions in their lives. For example, many based employment choices and decisions about savings for their retirement years on their participation in the System. Specifically, plaintiffs contend that: (1) certain individual plaintiffs who had taken temporary leaves of absence from their employment with public school districts to work as full-time employees of NEA-RI or RIFT decided not to return to their school districts, thereby relinquishing their right to continue to participate in the Retirement System as teachers; (2) some individual plaintiffs decided to remain in the employ of NEA-RI or RIFT, and not pursue other employment opportunities; and (3) seven of the individual plaintiffs elected to retire in order to receive the retirement benefits to which they became entitled under the Retirement System, including the benefits acquired pursuant to Section 36-9-33, and others have made plans and commitments in anticipation of receiving such retirement benefits. Complaint, ¶ 18.
During the 1994 Session of the Rhode Island General Assembly, two identical bills, entitled "An Act Relating to Public Officers and Employees — Evicting Non-Employee and Non-Teacher Members from the Retirement System," were introduced into the Rhode Island Senate and House at the request of defendant Mayer, who is General Treasurer of the State of Rhode Island. As indicated in explanatory language that accompanied the bills themselves, their purpose was to retroactively extinguish or reduce retirement benefits of the individual plaintiffs by "evict[ing] . . . from the retirement systems . . . individuals who were permitted to join or purchase credits, through special pension legislation passed in 1987 [i.e., ...
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