Suzanne Stoker & Wis. Fed'n of Nurses & Health Professionals v. Milwaukee Cnty., 2012AP2466.

• Decision Date: 14 November 2013
• Docket Number: No. 2012AP2466.,2012AP2466.
• Parties: Suzanne STOKER and Wisconsin Federation of Nurses and Health Professionals, Local 5001, AFT, AFL–CIO, Plaintiffs–Respondents, v. MILWAUKEE COUNTY, Defendant–Appellant, Milwaukee County Pension Board, Defendant–Co–Appellant.<SUP>†</SUP>
• Court: Wisconsin Court of Appeals

352 Wis.2d 125

841 N.W.2d 532

2013 WI App 144

Suzanne STOKER and Wisconsin Federation of Nurses and Health Professionals, Local 5001, AFT, AFL–CIO, Plaintiffs–Respondents,

v.MILWAUKEE COUNTY, Defendant–Appellant,^†Milwaukee County Pension Board, Defendant–Co–Appellant.^†

No. 2012AP2466.

Court of Appeals of Wisconsin.

Submitted on Briefs May 3, 2013.

Opinion Filed Nov. 14, 2013.

On behalf of the defendant-appellant, the cause was submitted on the briefs of Alan M. Levy of Lindner & Marsack, S.C., Milwaukee.

On behalf of the defendant-co-appellant, the cause was submitted on the briefs of Joseph W. Voiland, David O. Krier, Brittany Lopez, Allison A. Miller and Daniel Kelly of Reinhart Boerner Van Deuren S.C., Milwaukee.

On behalf of the plaintiffs-respondents, the cause was submitted on the brief of Jeffrey P. Sweetland of Hawks Quindel Ehlke & Perry, S.C., Milwaukee.

Before LUNDSTEN, SHERMAN and KLOPPENBURG, JJ.

SHERMAN, J.

¶ 1 This is a class action lawsuit concerning the manner in which the pension of certain members of the Milwaukee County Employees' Retirement System (MCERS) is calculated. Under MCERS, a member's pension is determined by the following formula: the member's final average salary (generally the average of the five highest years' salary) is multiplied by the number of years of credited service. That number is in turn multiplied by a percentage multiplier. The dispute in this appeal concerns only the percentage multiplier portion of the formula.

¶ 2 Milwaukee County and the Milwaukee County Pension Board appeal from summary judgment, granting declaratory and injunctive relief to Suzanne Stoker, on her own behalf and as representative of all county employees situated similarly to her, and the Wisconsin Federation of Nurses and Health Professionals, Local 5001, AFT, AFL–CIO. The circuit court determined that a Milwaukee County Ordinance reducing the multiplier for the calculation of Milwaukee County retirement benefits for service performed after January 1, 2012, was invalid as applied to county employees, like Stoker, who had vested rights in the higher multiplier before that date. The court enjoined Milwaukee County and the Pension Board from reducing for Stoker and those similarly situated, the pension multiplier for service performed after that date without prior consent. For reasons explained below, we affirm.

BACKGROUND

¶ 3 Stoker is an employee of Milwaukee County, having been hired on or about April 13, 1982.¹ As an employee of Milwaukee County, Stoker is a member of the MCERS. Along with all of the members of the class that she represents in this action, Stoker is also a member of Local 5001, which has been the certified collective bargaining representative of certain non-supervisory registered nurses, occupational therapists, music therapists, forensic chemists and other health care professionals.

¶ 4 MCERS was created by 1937 Wis. Laws, ch. 201.² Two amendments to MCERS that are relevant to this action have been enacted by the legislature. 1945 Wis. Laws, ch. 138 provided in relevant part that each member “shall have a similar benefit contract” and a “vested right to such annuities and other benefits” that “shall not be diminished or impaired by subsequent legislation or by any other means” without the member's consent. A member at the effective date of ch. 138 would have such a vested interest in those benefits as they existed on that effective date and all future members would have the same right in the benefits as they existed on the dates that they became members of MCERS.

¶ 5 1965 Wis. Laws, ch. 405, granted Milwaukee County “home rule” authority over MCERS, which allowed the County to thereafter alter MCERS by ordinance without obtaining the authority to do so through additional State legislation. However, ch. 405 limited the County's power to make changes to MCERS by providing that no change “shall operate to diminish or impair the annuities, benefits or other rights of any person who is a member of such retirement system prior to the effective date of any such change.” 1965 Wis. Laws, ch. 405, § 2.

¶ 6 At the time Stoker became a Milwaukee County employee, the multiplier for her pension formula was set at 1.5% under Milwaukee County General Ordinance § 201.24(5.1). The multiplier remained unchanged at that percentage until December 31, 2000.

¶ 7 Effective January 1, 2001, Milwaukee County General Ordinance § 201.24(5.15)(1)(a) implemented a “recruitment and retention incentive” under which employees hired after January 1, 1982, would acquire an additional 0.5% multiplier for each year of employment after January 1, 2001, and the increased multiplier would apply to prior years of each such employee's service at the rate of eight previous years of employment for each year served after January 1, 2001. As a result, by 2006, well before December 31, 2011, a multiplier of 2.0% (being the original 1.5% plus the additional 0.5%) applied to all of Stoker's creditable service prior to that date.

¶ 8 In 2011, Local 5001 and Milwaukee County entered into a memorandum of agreement.³ Under the terms of this agreement, the multiplier was set at 1.6% for all creditable service on or after January 1, 2012. Amounts accrued prior to that date under MCERS were unaffected by this change.

¶ 9 Neither Stoker, nor any member of the class that she represents has personally consented to the reduction of his or her pension multiplier from 2% to 1.6% for amounts accrued after January 1, 2012.

¶ 10 In December 2011, Stoker and Local 5001 brought this action seeking a declaratory judgment that Milwaukee County General Ordinance § 201.24(5.1)(2)(f) was invalid and an injunction prohibiting Milwaukee County and the Pension Board from reducing the multiplier for her MCERS account, and the MCERS accounts of those similarly situated, from 2%. Motions for summary judgment were filed by Stoker, Milwaukee County and the Pension Board. The circuit court determined that Stoker and the members of the class had vested rights to the 2% multiplier which could not be reduced through collective bargaining.⁴ The court entered summary judgment in favor of Stoker and the class members, wherein the court declared that Milwaukee County General Ordinance § 201.24(5.1)(2)(f) is invalid and prohibited Milwaukee County and the Pension Board from reducing any class member's multiplier from 2% for service performed after January 1, 2012. Milwaukee County and the Pension Board separately appeal.⁵

DISCUSSION

¶ 11 This case comes before us following summary judgment granted upon stipulated facts. Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2) (2011–12).⁶ We review summary judgment de novo, using the same methodology as the circuit court. Hardy v. Hoefferle, 2007 WI App 264, ¶ 6, 306 Wis.2d 513, 743 N.W.2d 843. The summary judgment methodology is well established and need not be repeated here. See, e.g., Lambrecht v. Estate of Kaczmarczyk, 2001 WI 25, ¶ 20–24, 241 Wis.2d 804, 623 N.W.2d 751.

¶ 12 The sole issue on appeal raised by Milwaukee County is whether it may modify an element of the benefit formula prospectively, while making no change in the formula for service previously rendered and credited. Milwaukee County asserts that it may, contrary to the ruling of the circuit court. The Pension Board raises the same issue, and also questions whether individual consent is required for Milwaukee County to modify future, unaccrued pension benefits for current participants. We address these issues in turn below.

¶ 13 But first, we dispose of a preliminary issue raised by the Pension Board. The Pension Board contends that the court may enjoin the implementation of an ordinance only if the ordinance is determined to be unconstitutional. The Pension Board relies on State ex rel. Cannon v. Moran, 111 Wis.2d 544, 553, 331 N.W.2d 369 (1983); however, Cannon addressed a challenge to the constitutionality of a statute, whereas here we address an ordinance. See id. The supreme court stated in Cannon that “[a]ll laws are presumed to be constitutional. In order to overcome this presumption, the plaintiffs must prove that [the statute at issue] is unconstitutional beyond a reasonable doubt.” Id. at 552–53. Cannon does not support the Pension Board's claim that the validity of an ordinance can be challenged only on the grounds of unconstitutionality.⁷

¶ 14 While acts of the State legislature are clothed with constitutional authority, seeWis. Const. art. IV, § 32, county ordinances have no such constitutional underpinning. County powers are established by statute and counties are “bod[ies] corporate.” Wis. Stat. § 59.01. Counties, therefore, have only those powers granted by legislation. While the legislature has granted counties a measure of home rule, that home rule is strictly a legislative creation. SeeWis. Stat. § 59.03.⁸

¶ 15 The issues in this case concern whether the County exercised authority specifically granted to it by 1965 Wis. Laws, ch. 405, in accordance with the limitations imposed upon it by that law. Although there was a constitutional challenge before the circuit court, that issue was withdrawn and is not before us. Therefore, the constitutionality of the county ordinance held invalid by the circuit court is not an issue before us and will not be discussed further.

a. The Multiplier may not be Reduced Prospectively for this Class

¶ 16 The primary issue in this appeal is whether Milwaukee County may alter the formula multiplier in a manner that is entirely prospective and has no effect whatsoever upon the pension benefits accrued prior to such change. In order to resolve this issue, we interpret the legislative enactments that created MCERS and under which MCERS operates.⁹

¶ 17 On appeal, statutory construction is a question of law subject to de novo review. State v. Cole, 2000 WI App 52, ¶ 3, 233 Wis.2d...