Walker v. City of Waterbury

Citation601 F.Supp.2d 420
Decision Date06 March 2009
Docket NumberNo. 3:04cv1477 (MRK).,3:04cv1477 (MRK).
CourtU.S. District Court — District of Connecticut
PartiesTimothy D. WALKER et al., Plaintiffs, v. CITY OF WATERBURY, Defendant/Cross Claimant, v. Waterbury Firefighter Association, Local 1339, Cross Defendant.

John R. Williams, New Haven, CT, for Plaintiffs.

Gabriel Joseph Jiran, Gary S. Starr, Shipman & Goodwin, Hartford, CT, for Defendant/Cross Claimant.

USCA, New York, NY, pro se.

Eric Warren Chester, Ferguson, Doyle & Springer, Rocky Hill, CT, for Cross Defendant.

MEMORANDUM OF DECISION

MARK R. KRAVITZ, District Judge.

Pending before the Court are Defendant City of Waterbury's Motion for Summary Judgment [doc. # 163] as to Plaintiffs' claims and its Motion for Summary Judgment [doc. # 165] as to its counterclaim against Cross Defendant Waterbury Firefighters Association, Local 1339 ("the Union"). For the reasons that follow, Defendant's Motion for Summary Judgment [doc. # 163] as to Plaintiffs is GRANTED and Defendant's Motion for Summary Judgment [doc. # 165] as to the Union is DENIED.

I.

The facts relevant to the Motions for Summary Judgment are as follows. In early 2001, the Connecticut legislature declared a financial emergency in the City of Waterbury ("the City"), which was unable to meet even its basic payroll obligations without immediate emergency relief. As part of its plan to restore the City to a position of financial stability, the legislature created an Oversight Board, which was given the power to approve the City's budget, to set aside some existing contracts, and — most relevantly for this case — to act as an arbitration panel with respect to newly negotiated collective bargaining agreements. Under the supervision of the Oversight Board, the Union and City negotiated the terms of a new contract for the City's firefighters, whose previous collective bargaining agreement ("CBA") had expired in 1999. The Union and the City ultimately reached an agreement, which the Union's membership subsequently ratified in a meeting on November 6, 2001. Shortly thereafter, the Union entered into a Memorandum of Understanding with the City and the Oversight Board in which the Union agreed not to challenge the new CBA or its implementation.

The Union and the City then submitted the CBA to the Oversight Board, which approved it on December 14, 2001. The new CBA was in effect from December 14, 2001 to until June 30, 2004.

The Union made some very substantial concessions in the 2001-2004 CBA. First, under the 2001-2004 CBA, the firefighters' pension benefits accrued at 2% instead of 2.5%, as they had under the 1995-1999 CBA. Second, while the 1995-1999 CBA allowed firefighters to retire with full pension benefits after 20 years of service, the 2001-2004 CBA required firefighters to serve for 25 years before receiving full benefits. Third, firefighters who retired after the effective date of the 2001-2004 CBA had to make contributions to their health care premiums, whereas previous CBAs had provided medical to retirees care at no cost. In return for these concessions, the Union received a promise that none of its members would be laid off during the term of the agreement and also procured a $ 4,000 lump sum payment to each firefighter over and above their normal salaries.

Plaintiffs were all active Waterbury firefighters and members of the Union when the 2001-2004 CBA was ratified. They claim that the 2001-2004 CBA deprived them of benefits that had vested under the 1995-1999 CBA, which stated that "[e]ach employee shall have vesting rights in his pension benefits after ten (10) years of service regardless of the reason for termination of employment." All remaining Plaintiffs reached ten years of service either under the 1995-1999 CBA or in the interim between the expiration of that agreement and the ratification of the 2001-2004 CBA. They claim in this lawsuit that the denial of allegedly vested benefits violated the substantive component of the due process clause of the U.S. Constitution.1

In response to this lawsuit, the City of Waterbury brought a counterclaim against the Union, alleging that the Union breached the Memorandum of Understanding ("MOU") and that the City had relied on the promises in the MOU to its detriment. In support of its counterclaim, the City presents evidence that the Union failed to inform its members of the existence of the MOU, hired outside legal counsel to investigate potential challenges to the 2001-2004 CBA, and allowed members of the Executive Board to make personal financial contributions in support of this lawsuit. Both sides agree that the Union has not challenged the 2001-2004 CBA in its own name, although the parties disagree as to what significance should attach to that undisputed fact.

II.

This case reaches the summary judgment phase after a lengthy procedural history that bears mention before proceeding to the merits of the case. The City originally moved to dismiss the complaint on the grounds that the Oversight Board was a necessary and indispensable party under Rule 19 of the Federal Rules of Civil Procedure and immune from suit as a state agency. See Memorandum of Decision [doc. # 47] at 2. The Court decided that the Oversight Board was a necessary party, but concluded that it did not have enough information to determine whether it was immune from suit. See id. at 5. The Court instead denied the City's Motion to Dismiss without prejudice to renewal and ordered the Plaintiffs to join the Oversight Board as a party. See id. at 6-7. Plaintiffs filed an Amended Complaint in which they named the Oversight Board, which promptly filed a Motion to Dismiss, alleging that it was immune from suit as a state agency. See Motion to Dismiss Plaintiffs' Second Amended Complaint [doc. # 64]. The Court granted the Oversight Board's Motion to Dismiss, see Memorandum of Decision [doc. # 94], and in a separate opinion, dismissed the action in its entirety for failure to join a necessary and indispensable party, see Ruling and Order [doc. # 101]. Plaintiffs appealed.

In a summary order dated November 1, 2007, the Second Circuit affirmed this Court's decision that the Oversight Board was a state agency and immune from suit. However, the Second Circuit remanded the case to consider whether, in light of the fact that the Oversight Board had since been dissolved, it should still be considered an indispensable party. See Walker v. City of Waterbury, 253 Fed.Appx. 58, 62 (2d Cir.2007). The Court later decided that a party that no longer exists cannot be indispensable. See Ruling and Order [doc. # 140] at 4. Following the close of the discovery period, the City filed the pending Motions for Summary Judgment.

III.

The Court first considers Plaintiffs' substantive due process claim and the City's related Motion for Summary Judgement [doc. # 163]. The substantive component of the due process clause "forbids the government to infringe certain fundamental [rights] at all, no matter what process is provided...." Reno v. Flores, 507 U.S. 292, 302, 113 S.Ct. 1439, 123 L.Ed.2d 1 (1993) (emphasis in original). A fundamental right is one that is "so rooted in the traditions and conscience of our people as to be ranked as fundamental." Id. at 303, 113 S.Ct. 1439 (quotation marks and citation omitted). Unlike in the case of procedural due process, it is not enough to have a property right under state law. "While property interests are protected by procedural due process even though the interest is derived from state law rather than the Constitution, substantive due process rights are created only by the Constitution." Local 342, Long Island Pub. Serv. Employees v. Town Bd., 31 F.3d 1191, 1196 (2d Cir.1994) (citing Regents of Univ. of Michigan v. Ewing, 474 U.S. 214, 229, 106 S.Ct. 507, 88 L.Ed.2d 523 (1985)).

Moreover, "[f]or a state action to be taken in violation of the requirements of substantive due process, the denial must have occurred under circumstances warranting the labels `arbitrary' and `outrageous.'" Natale v. Town of Ridgefield, 170 F.3d 258, 262 (2d Cir.1999).

Substantive due process is an outer limit on the legitimacy of governmental action. It does not forbid governmental actions that might fairly be deemed arbitrary or capricious and for that reason correctable in a state court lawsuit seeking review of administrative action. Substantive due process standards are violated only by conduct that is so outrageously arbitrary as to constitute a gross abuse of governmental authority.

Id. at 263. This requirement has traditionally been articulated as requiring conduct that "shocks the conscience." Schirillo v. Town of Stratford, No. 3:03-cv-674,2005 WL 2225927, at *6 (D.Conn. Sept. 12, 2005) (citing County of Sacramento v. Lewis, 523 U.S. 833, 846, 118 S.Ct. 1708, 140 L.Ed.2d 1043 (1998)); see also Kaluczky v. City of White Plains, 57 F.3d 202, 211 (2d Cir.1995) ("Substantive due process protects against government action that is arbitrary, conscience-shocking, or oppressive in a constitutional sense, but not against government action that is incorrect or ill-advised." (quotation marks omitted)); Velez v. Levy, 401 F.3d 75, 94 (2d Cir.2005) (explaining "shocks the conscious" standard).

Thus, in order to make out a substantive due process claim, a plaintiff must show a fundamental right protected by the Constitution, a deprivation of that right, and "arbitrary" and "outrageous" state conduct that satisfies the "shocks the conscience" standard. The Court is skeptical that Plaintiffs can show a deprivation of a property interest protected by state law.2 However, the Court need not decide that issue because it is clear that Plaintiffs' claim fails on the other two prongs — they have not asserted a fundamental right protected by the Constitution and they have not shown arbitrary and outrageous conduct that shocks the conscious.

On the fundamental right prong, the Second Circuit has stated that "simple state-law contractual...

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