Retired Public Employees' Assn. v. Board of Administration

• Decision Date: 12 August 1986
• Citation: 184 Cal.App.3d 378,229 Cal.Rptr. 69
• Parties: , 52 Fair Empl.Prac.Cas. (BNA) 775 RETIRED PUBLIC EMPLOYEES' ASSOCIATION OF CALIFORNIA et al., Plaintiffs and Appellants, v. BOARD OF ADMINISTRATION OF the PUBLIC EMPLOYEES' RETIREMENT SYSTEMS, Defendants and Respondents. Civ. 23812.
• Court: California Court of Appeals

Page 69

229 Cal.Rptr. 69

184 Cal.App.3d 378, 52 Fair Empl.Prac.Cas. (BNA) 775

RETIRED PUBLIC EMPLOYEES' ASSOCIATION OF CALIFORNIA et al., Plaintiffs and Appellants, v. BOARD OF ADMINISTRATION OF the PUBLIC EMPLOYEES' RETIREMENT SYSTEMS, Defendants and Respondents.

Civ. 23812.

Court of Appeal, Third District, California.

Aug. 12, 1986.

Certified for Partial Publication. ¹

Charles A. Zeller, Stockton, and N. Deane Moore, Sacramento, for appellants.

John K. Van de Kamp, Atty. Gen., N. Eugene Hill, Asst. Atty. Gen., Faith J. Geoghegan, Deputy Atty. Gen., for respondents.

Bernard L. Allamano, Sacramento, and Philip E. Callis as amicus curiae on behalf of appellants.

BLEASE, Associate Justice.

Retired Public Employees' Association of California and N. Deane Moore, plaintiffs below, appeal from a judgment granting defendant Board of Administration, Public Employees' Retirement System's (Board) motion for judgment on the pleadings. In the published portion of this opinion we consider the plaintiffs' claim that the Board's use of sex-based actuarial tables to compute optional retirement benefits violates Title VII of the Civil Rights Act of 1964, 42 United States Code section 2000e et seq. ² The trial court concluded that relief is precluded by the United States Supreme Court's decision in Arizona Governing Committee v. Norris (1983) 463 U.S. 1073, 103 S.Ct. 3492, 77 L.Ed.2d 1236. We agree with that conclusion on the separate ground that the state courts lack jurisdiction to entertain a claim predicated upon title 42 United States Code section 2000e-2. In the unpublished portion of the opinion we reject the plaintiffs' equal protection claims. Accordingly, we will affirm the judgment.

FACTS

Government Code sections 20000 et seq. comprise the Public Employees' Retirement Law. Section 20600.1 prohibits the use of sex-based tables for the determination of employees' retirement contributions or benefits. ³ However, in lieu of a retirement allowance for his life alone, a member may elect an optional plan whereby his retirement allowance is lessened and an allowance is paid to his beneficiary after his death. (See Gov. Code, §§ 21330-21339.) The prohibition on sex-based tables does not apply to "the computation of the actuarial equivalents required under this part for the determination of optional payments." ( § 20600.1)

Until July 1, 1982, the Board used actuarial tables which differentiated on the basis of sex to compute the optional benefits. Because of a concern that use of such tables was a prohibited discrimination, ⁴ the Board adopted by resolution "single, best-factor" tables in lieu thereof. These tables are "effective for all retirements on or after July 1, 1982, of individuals who were members of the System prior to July 1, 1982...." ⁵

Plaintiff N. Deane Moore elected an optional settlement plan at the time of his retirement, inferably prior to July 1, 1982. Plaintiffs filed this action labeled as a complaint for declaratory relief but sought to certify a class of "all persons who have received and/or are presently receiving monthly retirement or survivor allowances from the PUBLIC EMPLOYEES' RETIREMENT SYSTEM which are different in amount from those received by retired members of similar age and circumstances and their beneficiaries on account of the use of sex-based tables in calculating an optional settlement." The complaint alleges: the Board has used sex-based tables to compute optional retirement settlements since January 1, 1977; retirees with female beneficiaries receive a lower monthly retirement allowance than do retirees with male beneficiaries; different benefit allowances result from the use of sex-based tables; the Board took formal action to cease the use of sex-based tables for members retiring on or after July 1, 1982, who choose an optional plan; the Board adopted a "best-benefit factor" plan for those retirees; the Board failed to recognize the right of plaintiffs to the same or better treatment. Plaintiffs further allege that all members of the class have been denied equal protection of the law and have been discriminated against solely on the basis of sex in violation of Title VII of the Civil Rights Act of 1964, 42 United States Code section 2000e et seq.

The plaintiffs sought a declaration of the rights and duties of the parties pursuant to Title VII and a judgment recalculating plaintiff class members' optional benefits. The Board was granted a judgment on the pleadings on the ground that the relief requested cannot be granted as a matter of law, relying upon Arizona Governing Committee v. Norris, supra. This appeal followed.

DISCUSSION

I

A judgment on the pleadings has the same purpose and effect as a general demurrer. (See Colberg, Inc. v. State of California (1967) 67 Cal.2d 408, 411-412, 62 Cal.Rptr. 401, 432 P.2d 3; 4 Witkin, Cal. Procedure (2d ed.1971) Proceedings Without Trial, § 164, p. 2819.) It is appropriate if the complaint fails to "state facts sufficient to constitute a cause of action." (Code Civ.Proc., § 430.10, subd. (e).) The trial court concluded that Norris, supra, 463 U.S. 1073, 103 S.Ct. 3492, 77 L.Ed.2d 1236 was dispositive of plaintiffs' Title VII claim because it is "applicable only prospectively to future benefits derived from contributions collected after the effective date of the judgment [1983]." As we shall show Norris is predicated upon judicial remedies provided in Title VII which lie exclusively in the federal district courts.

In Norris, supra, the Supreme Court addressed the question whether Title VII of the Civil Rights Act of 1964 prohibits an employer from offering optional retirement plans through insurance companies selected by the employer which pay women lower monthly benefits than men who have made the same contributions. It relied on its earlier decision in Los Angeles Dept. of Water & Power v. Manhart (1978) 435 U.S. 702, 98 S.Ct. 1370, 55 L.Ed.2d 657, which held that Title VII prohibits an employer from requiring women to make larger contributions in order to obtain the same retirement benefits as men.

Manhart distinguished between the rights conferred by Title VII and remedies provided by Title VII for invasion of the rights. As to rights, Manhart held that the practice of requiring greater contributions from women "does not pass the simple test of whether the evidence shows 'treatment of a person in a manner which but for that person's sex would be different.' " (435 U.S. at p. 711, 98 S.Ct. at p. 1377, 55 L.Ed.2d at p. 667; fn. omitted.) That principle, of course, applies as much to retirement benefits as to retirement contributions. Neither can be predicated upon a distinction based upon sex.

However, a different question is posed with respect to the remedy provided by Title VII. On this point Manhart says that "Title VII does not require a district court to grant any retroactive relief. A court that finds unlawful discrimination 'may enjoin [the discrimination] ... and order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement ... with or without back pay ... or any other equitable relief as the court deems appropriate.' 42 USC § 2000e-5(g) (1970 ed Supp V)." (Manhart, supra, 435 U.S. at p. 718, 98 S.Ct. at p. 1380, 55 L.Ed.2d at p. 671; emphasis added.) ⁶ Manhart did stress that under Albemarle Paper Co. v. Moody (1975), 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280, there is a "presumption in favor of retroactive liability [which] can seldom be overcome...." (Id., 435 U.S. at p. 719, 98 S.Ct. at p. 1381, 55 L.Ed.2d at p. 672.) Similarly, Norris made a distinction between Title VII rights and remedies. It noted that "Manhart squarely rejected the notion that, because women as a class live longer than men, an employer may adopt a retirement plan that treats every individual woman less favorably than every individual man. [Citations.]" (Id., 463 U.S. at p. 1083, 103 S.Ct. at p. 3498, 77 L.Ed.2d at p. 1248.) Although Manhart involved unequal contributions and Norris involved unequal benefits, the Norris court had "no hesitation in holding ... that the classification of employees on the basis of sex is no more permissible at the pay-out stage of a retirement plan than at the pay-in stage." (Id., at p. 1081, 103 S.Ct. at p. 3498, 77 L.Ed.2d at pp. 1246-1247; fn. omitted.) The court then proceeded to consider whether the statute applied when the state delegated the method of calculation of retirement benefits to third parties, ⁷ i.e., private insurance companies chosen by the state. ⁸ The court concluded the state was legally responsible for the discriminatory terms on which the annuities were offered by the companies. ⁹

Liability was deemed to be prospective only, however. The court noted that Manhart "put all employer-operated pension funds on notice that they could not 'requir[e] that men and women make unequal contributions to [the] fund,' [citation]...." (Norris, supra, 463 U.S. at p. 1106, 103 S.Ct. at p. 3510, 77 L.Ed.2d at p. 1262.) However, the court expressed concern that ambiguous language in Manhart may have led an employer to reasonably assume that it could lawfully make available to its employees annuities offered by insurance companies on the open market, even though such companies used sex-based tables. The court asserted that to hold employers liable retroactively would have devastating results. (Id., at p. 1106, 103 S.Ct. at p. 3510, 77 L.Ed.2d at p. 1263].) "[I]n view of the question left open in Manhart," the court refused "to impose this magnitude of burden retroactively on the public." (Id., at p. 1107, 103 S.Ct. at p. 3511, 77 L.Ed.2d at p. 1263.) Therefore, it held that although "retroactive relief is normally appropriate in the typical Title VII case," liability would be prospective only. "[O]nly benefits derived from contributions collected after the effective date of the judgment need be calculated without regard to the sex of the employee." (...