Pineman v. Oechslin

Decision Date16 April 1980
Docket NumberCiv. No. H 77-164.
Citation494 F. Supp. 525
PartiesKaren PINEMAN, Alphonse Marotta, Daniel Clifford, Judith Narus, Rose Schewe and Alfred K. Tyll v. Wiliam G. OECHSLIN, Chairman of the State Employees Retirement Commission, Henry E. Parker, Treasurer of the State of Connecticut, and J. Edward Caldwell, Comptroller of the State of Connecticut.
CourtU.S. District Court — District of Connecticut

COPYRIGHT MATERIAL OMITTED

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

J. Sarah Posner, Asst. Attorney General, State of Connecticut, Carl R. Ajello, Attorney General, Hartford, Conn., for defendants.

MEMORANDUM OF DECISION ON PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

JOSÉ A. CABRANES, District Judge.

                                  Contents
                Introduction ....................................  527
                I.     THE PARTIES ..............................  529
                II.    THE FACTUAL BACKGROUND ...................  530
                         A. The Fitzpatrick Litigation ..........  530
                         B. The Plaintiffs' Reliance on Pre-
                            1975 Law ............................  532
                         C. The 1975 Act ........................  533
                         D. The Legislative History of the
                            1975 Act ............................  535
                III.   THE PLAINTIFFS' CLAIMS ...................  536
                IV.    THE CONTRACT CLAUSE OF THE
                       UNITED STATES CONSTITUTION ...............  537
                         A. Introduction ........................  537
                         B. Connecticut's Contractual Obligations
                            to the Plaintiffs ...................  538
                              1. Contractual Obligations in Pension
                                 Plans Under Connecticut
                                 Law ............................  538
                              2. Mere "Gratuities" or Contractual
                                 Rights? ........................  541
                              3. The Content of the Plaintiffs'
                                 Contractual Rights and Connecticut's
                                 Obligations ....................  545
                         C. Connecticut's Impairment of
                            Its Contractual Obligations .........  546
                         D. The Unconstitutionality of
                            Connecticut's Impairment of
                            Its Contractual Obligations .........  547
                              1. The "Reserved Powers"
                                 Doctrine .......................  547
                              2. Judicial Scrutiny Under the
                                 United States Trust Co
                                 Tests ..........................  548
                                 (a) Necessity ..................  549
                                 (b) Reasonableness .............  552
                V.     CONCLUSION ...............................  553
                
Introduction

This action is a sequel to this court's decision in Fitzpatrick v. Bitzer.1 In that case, decided in 1974, Chief Judge Clarie held invalid the provisions of the Connecticut State Employees Retirement Act, Conn. Gen.Stat. § 5-152 et seq., which required male employees of the state to work five years longer to earn pension benefits than similarly situated female employees. Judge Clarie ruled that these provisions discriminated against men on account of their sex, in violation of Title VII of the Civil Rights Act of 1964, as amended ("Title VII").2 The decision in Fitzpatrick was not appealed by the state,3 and Connecticut began to administer its retirement statute in a manner consistent with the court's ruling, permitting both men and women to retire with full pension benefits at the lower ages formerly applicable only to women.4

At the next legislative session, the General Assembly passed Public Act 75-531 ("the 1975 Act"), which amended the portions of the State Employees Retirement Act which this court found to be discriminatory in Fitzpatrick. The 1975 Act established for all employees retirement ages which were identical to the higher retirement ages applicable only to male employees prior to Fitzpatrick.

In this class action, certain male and female employees of the State of Connecticut challenge the constitutionality of the 1975 Act. The state concedes that the effect of the 1975 Act was to require the plaintiffs, who had become state employees and remained in the state's service in reliance upon the terms of pre-1975 law (as modified by Judge Clarie's order), to work up to five years longer than that law had required in order to qualify for retirement with full pension benefits. The plaintiffs claim that the 1975 Act therefore impaired the state's pre-existing contractual obligations to them, in violation of the contract clause of the United States Constitution.5

The defendants, who are the Connecticut officials ultimately responsible for administering the State Employees Retirement Act, deny that pre-1975 law gave rise to any contractual obligations. They assert that "a pension is not a matter of contract," but "a gratuity `springing from the appreciation and graciousness of the sovereign.'"6 Accordingly, they argue, the plaintiffs have no rights which fall within the scope of the contract clause, even though (as they admit) the state required the plaintiffs to become members of the State Employees Retirement System and to contribute substantially to the fund out of which benefits are paid, and the plaintiffs joined and remained in the state's employ in reliance upon the terms of pre-1975 law.

With due respect, the court declines to follow the defendants' reasoning. Rather, on the basis of the uncontested facts before the court on the plaintiffs' motion for summary judgment, the court finds that the state entered into a contractual relationship with the plaintiffs, pursuant to which the state bound itself to permit the members of the plaintiff class to retire from state service on the terms provided by the law which was in effect immediately prior to the adoption of the 1975 Act. The court further finds that the 1975 Act severely impaired the state's contractual obligations to this class of its employees, and that this impairment is unconstitutional under the criteria set forth by the Supreme Court, for the state has not argued, much less established, that the abrogation of its contractual obligations was either necessary for the achievement of the state's purposes or reasonable in light of the circumstances.

Because the 1975 Act, as applied to the plaintiffs, violates the contract clause of the United States Constitution, the plaintiffs' motion for summary judgment is granted. An injunction shall be issued against 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, 1980.7

Among the plaintiffs to whom the court grants relief from the challenged statutory provisions are female state employees who entered state service prior to the enactment of the 1975 Act. The state has admitted that all of these class members relied on the promise of pension benefits set forth in the pre-1975 version of the State Employees Retirement Act, both before and after it was modified by the decision in Fitzpatrick. The court also grants similar relief to male employees who entered state service prior to the adoption of the 1975 Act. It may be suggested that this decision grants a "windfall" to those male class members who entered state service before this court's decision in Fitzpatrick by permitting them to retire on terms more favorable than the ones upon which they relied under prior law. However, the court is bound by the state's admission that these class members either expected to become eligible for pension benefits on terms as favorable as those extended to female employees under pre-Fitzpatrick law, or remained in state service after the Fitzpatrick decision in reliance upon the promise of benefits identical to those of female employees which was held out to them by the state following that decision. Moreover, even apart from the question of the expectations of this group of class members, all males who were in the state's employ at the time of the Fitzpatrick decision became entitled, under the terms of Judge Clarie's order, to retire on the terms applicable to similarly situated female employees under the former law. The court cannot deny any males in the plaintiff class the right to retire on the terms to which similarly situated female class members are entitled without in effect undoing Judge Clarie's decision in Fitzpatrick.

Nothing in this ruling affects the application of the 1975 Act, on a prospective basis, to employees who were not in the state's service on June 30, 1975, and who therefore had no contractual rights to retire on the more advantageous terms afforded by prior law. The court holds only that the retroactive application of the more stringent requirements for pension eligibility contained in the 1975 Act to the discrete class of state employees who brought this action is unconstitutional.

The rules on retirement ages enforced by this decision are those embodied in contractual arrangements between the state and its employees prior to June 30, 1975. In holding the 1975 Act unconstitutional to the extent that it changed those rules retroactively as applied to the plaintiffs, the court makes no judgment concerning the wisdom of the pension policies which the state enforced prior to the enactment of the 1975 Act, or, indeed, concerning the policies embodied in the 1975 Act. Any harm to the state treasury which may be caused by the court's enforcement of the state's contractual obligations — and the state has neither shown nor suggested the existence of such harm — is the direct result of obligations assumed by the state itself and of prior judicial determinations, binding on the state, which required that Connecticut's male employees be accorded the same rights as female employees under the state's retirement system.

I. THE PARTIES

The plaintiff class, as certified in this court's order of February 20, 1979, consists of "all existing...

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