Pineman v. Fallon

• Decision Date: 09 June 1987
• Docket Number: Civ. No. H-77-164(JAC).
• Citation: 662 F. Supp. 1311
• Parties: Karen PINEMAN, et al. v. William J. FALLON, Chairman of the State Retirement Commission, et al.
• Court: U.S. District Court — District of Connecticut

662 F. Supp. 1311

Karen PINEMAN, et al. v. William J. FALLON, Chairman of the State Retirement Commission, et al.

Civ. No. H-77-164(JAC).

United States District Court, D. Connecticut.

June 9, 1987.

Paul W. Orth, Hoppin, Carey & Powell, Hartford, Conn., for plaintiffs.

Peter T. Zarella, Brown, Paindiris & Zarella, Hartford, Conn., for defendants.

RULING ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

JOSÉ A. CABRANES, District Judge:

Introduction

Plaintiffs in this class action are all employees of the State of Connecticut who were employees of the state on June 30, 1975 and remained employees as of April 1, 1977 and who did not reach the retirement age of the pre-existing state retirement system prior to June 30, 1980. The defendants are the Chairman of the Employees State Retirement Commission (originally, in this action, William G. Oechslin and currently William J. Fallon); the Treasurer of the State of Connecticut; and the Comptroller of the State of Connecticut who also serves as Secretary of the State Employees Retirement Commission.

Plaintiffs have brought this action challenging the 1975 Amendments to the Connecticut State Employees Retirement Act. The 1975 legislation established a minimum age of fifty-five for retirement from state employment for both male and female employees with at least twenty-five years of service. Under previous law, female employees with the requisite years of service were eligible to retire with full pension rights at the age of fifty and male employees were eligible for retirement at the age of fifty-five. In 1974, a challenge to the constitutionality of the retirement provisions resulted in a ruling that the disparate treatment of male and female employees was in violation of Title VII of the 1964 Civil Rights Act. This case involves a challenge to the provisions of the retirement system adopted by the legislature in 1975 in response to the 1974 decision.

Plaintiffs argue that the 1975 legislation is unconstitutional. They base this claim on two theories. First, they claim a contractual right against the State of Connecticut to the earlier lower minimum retirement age. Second, plaintiffs assert that the 1975 legislation represents a deprivation of state employees' property interest in pension benefits without due process of the law.

In 1980, this court ruled in favor of the plaintiffs on their contract claim. (Plaintiffs, in their initial suit before this court did not assert a property rights claim.) In 1981, however, the United States Court of Appeals for the Second Circuit remanded the case to the district court for the entry of an order of abstention, to give the judicial system of the State of Connecticut an opportunity to determine certain questions of Connecticut state law. Proceedings in this court were stayed pending consideration of the case by the state courts. In 1985, the Supreme Court of the State of Connecticut held that the State had not entered into a contractual relationship with employees under the minimum retirement age with respect to prospective benefits. Thus, they held that the retirement arrangement provided under the State Employees Retirement Service is not contractual.

Informed by the reasoning of the Connecticut Supreme Court and an independent analysis of the merits of plaintiffs' claim, this court agrees that no legally valid contract exists between the State and its employees which prohibits the legislature's 1975 modification of the retirement system.

Further, in response to plaintiffs' due process claim, this court finds that the 1975 legislative action was neither arbitrary nor irrational. Accordingly, there is no basis for interference by this court with the judgment of the state legislature. Plaintiffs' claims fail on both counts and summary judgment is granted to defendants.

It should be emphasized that the legislature did not undertake to modify the retirement benefits of those who had already left state service by 1975. Indeed, the 1975 enactment provided a "grandfather clause" which permitted all state employees who would become eligible for retirement under the former system within five years of the new legislation to take advantage of the former, more liberal plan. This case and today's ruling have no bearing on the retirement status of these other employees.

I. Background of the Case

The case before this court began in 1977 when the named plaintiffs brought a class action on behalf of themselves and similarly situated state employees. The suit was brought to challenge the constitutionality of a 1975 Connecticut state law, Public Act 75-531 ("the 1975 Act"), which amended portions of the 1939 Connecticut State Employees Retirement Act, 1939 Conn.Pub. Acts 271 ("the 1939 Act" or "SERA"). The factual background leading to the 1977 litigation and the legislative history of the 1975 Act are set forth in detail in Pineman v. Oechslin, 494 F.Supp. 525 (D.Conn.1980) ("Pineman I"), vacated and remanded on grounds of abstention, 637 F.2d 601 (2d Cir.1981) ("Pineman II"). Therefore, only a summary of the background of this case will be set forth here for purposes of the discussion. The 1975 Act was a response to the 1974 decision in Fitzpatrick v. Bitzer,¹ in which then Chief Judge T. Emmet Clarie held invalid the provisions of SERA requiring male employees of the state to work five years longer than similarly situated female employees in order to earn state pension benefits. Prior to Fitzpatrick, female state employees with twenty-five years of service could retire with full benefits when they reached the age of fifty, while male state employees with twenty-five years of service could not retire with full benefits until they reached the age of fifty-five. In Fitzpatrick, Chief Judge Clarie held that this disparate treatment of men and women violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.

Between the time of the 1974 Fitzpatrick decision and the passage of the 1975 Act, the State of Connecticut permitted both male and female employees to retire with full pension benefits at the ages formerly applicable only to women. Pineman I, 494 F.Supp. at 533.

At the next legislative session, the General Assembly passed the 1975 Act, which established for all employees retirement ages identical to the higher retirement ages applicable only to male employees prior to Fitzpatrick. The 1975 Act also contained a "grandfather clause" which exempted from the new, more stringent age requirements for eligibility those employees who would, before June 30, 1980, reach the lower age threshhold of prior law. See Conn.Gen.Stat. § 5-163(a).

In 1980, this court ruled that the 1975 Act constituted an unconstitutional impairment of the State's contractual obligation and enjoined the enforcement of the 1975 Act "with respect to those state employees who were in state service on June 30, 1975 (the effective date of the 1975 Act), are still in the state's service, and will not be eligible to retire with full pension benefits prior to June 30, 1980." Pineman I, 494 F.Supp. at 528. In granting summary judgment for the plaintiffs, this court analyzed the 1975 Act under the Contract Clause of the United States Constitution² consistent with the examination prescribed by the Supreme Court in United States Trust Co. v. New Jersey, 431 U.S. 1, 22-23, 25-26, 97 S.Ct. 1505, 1517-1518, 1519-1520, 52 L.Ed.2d 92 (1977) ("United States Trust") and Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 241, 98 S.Ct. 2716, 2720, 57 L.Ed.2d 727 (1978).³

Defendants appealed the decision of this court to the United States Court of Appeals for the Second Circuit which, finding abstention appropriate, vacated the judgment and remanded the suit. The court of appeals observed that "no Connecticut Court has yet ruled on the precise question whether the state employees have vested pension rights prior to becoming eligible to receive benefits." Pineman II, 637 F.2d at 604. The court of appeals directed the district court to abstain from ruling on the state law issue, "to afford the state courts an opportunity to adjudicate the contract law aspect of appellees' claim." Id. at 605.⁴ In the instant dispute, although abstention meant the postponement of the exercise of federal jurisdiction, the court of appeals concluded that abstention would be appropriate "even though the federal courts, thereafter resolving the constitutional issue, will not be obliged to give the state court ruling the conclusive deference that abstention normally entails." Id.

Following the procedure established in England v. Louisiana State Board of Medical Examiners, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964) ("England"), the court of appeals directed that this court retain jurisdiction pending the state court determination of the state law question. In accordance with the decision of the court of appeals, this court entered an abstention order on August 4, 1981.

The plaintiffs filed a complaint in Connecticut Superior Court on August 25, 1981, and, invoking the doctrine of England, reserved their right to return to this court. On May 4, 1984, the superior court ruled that no contractual obligation was created by SERA. That decision was affirmed by the Connecticut Supreme Court in a ruling issued on March 12, 1985, holding that SERA created no contractual rights that could have been impaired by the 1975 legislation. Pineman v. Oechslin, 195 Conn. 405, 488 A.2d 803 (1985) ("Pineman III").

In 1985, plaintiffs, having reserved the federal issues, returned to this court, asking it "to consider the contract issue independently, enlightened by the reasoning of the state courts." Pineman II, 637 F.2d at 606 n. 9.

On August 13, 1985, upon defendants' Motion for Determination of the Status of the Proceedings (filed June 17, 1985), this court held that the court of appeals' vacatur of the district court judgment and remand of the case did not render void all pleadings and admissions...