California (San Jose) — Increased ...

California (San Jose) — Increased Employee Contribution, Reduced COLAs, Plan Conversion

Posted by Leila Walsh in - -View All States - - on May 20, 2014 with No Comments

Ballot initiative:

Measure B  (June 2012)

Type of reform:

The law raised employee contribution rates to pay for unfunded liabilities, lowered cost-of-living adjustments (COLAs) for retirees, changed the definition of “disability pension,” and created a “voluntary election program” that allows employees to opt-in to a lower level of benefits for a lower contribution rate.

Cases:

City lawsuit: City of San Jose v. San Jose Police Officers’ Association, No. 5:12-CV-02904 (United States District Court for the Northern District of California, Judge Lucy H. Koh) (filed June 5, 2012)

Union lawsuits: (Santa Clara County Superior Court, Judge Patricia M. Lucas)

  1. Sapien v. City of San Jose, No. 112-CV-225928 (filed June 6, 2012)
  2. San Jose Police Officers’ Association v. City of San Jose, No. 112-CV-225926 (filed June 6, 2012)
  3. Mukhar v. City of San Jose, No. 112-CV-226574 (filed June 15, 2012)
  4. Harris v. City of San Jose, No. 112-CV-226570 (filed June 15, 2012)
  5. American Federation of State, County, and Municipal Employees, Local 101 v. City of San Jose, No. 112-CV-227864 (filed July 5, 2012)
  6. International Association of Firefighters (IAFF) Local 230 v. City of San Jose, No. SF-CE-969-M (filed March 8, 2013), California Public Employment Relations Board (PERB)
  7. The People of the State of California ex rel. San Jose Police Officers’ Association v. City of San Jose and City Council of San Jose, Case No. 1-13-CV-245503 (filedApril 29, 2013)

Status of litigation: 

Union lawsuits before Judge Patricia Lucas (state court): Judge Lucas denied summary adjudication on June 21, 2013, holding that (1) the defendants had failed to identify any statutory requirement that employees pay for unfunded liabilities and had not demonstrated that the plaintiffs have no vested contractual rights, and (2) the defendants had not disproved the plaintiffs’ claim that they have vested rights preventing them from being forced to contribute 50 percent to retiree health care. 

The trial proceeded July 22-26, 2013.  On Dec. 19, 2013, Judge Lucas issued a tentative decision that was finalized on Feb. 20, 2014. The decision invalidated certain portions of Measure B including the requirement that employees contribute more to the plans and the suspension of COLAs in the event of a fiscal emergency. Judge Lucas found, however, that the city could reduce public employees’ wages to achieve savings and validated 12 of the 15 provisions of Measure B including the creation of lower-cost pension benefits for new employees, elimination of supplemental “bonus” pension checks, and retiree health care plan changes.

Final judgment was entered April 30, 2014. The plaintiffs filed a notice of appeal on May 1, 2014. The appeal was filed in the Sixth Appellate District as Case No: H040979.

Settlement in 2015:  

On July 15, the city and the police and fire unions reached an agreement that would settle the litigation.  The details of the settlement have not been released, but Mayor Sam Liccardo outlined the basic parameters here. The firefighters’ union ratified the settlement in July. On Aug. 17, the San Jose Police Officers Association voted, by a 90 percent majority, to approve as well. On Aug. 25, the city council approved the agreement.

The judge approved the settlement and modified Measure B accordingly. The measure was approved by San Jose voters in November 2016.

On May 11, 2017, the Sixth Appellate district dismissed the pending appeal for abandonment.

Union lawsuit before Judge Beth McGowen (state court):  The San Jose Police Officers’ Association filed the lawsuit in quo warranto, in the name of the People of California, and alleged various defects in the bargaining process of the pension reform Measure B.

The suit was essentially dormant from its filing in 2013 until March of 2016. The suit became reactivated as a means by which the city council could implement the settlement with the unions reached in 2015.  Superior Court Judge Beth McGowen entered a stipulated judgment and order, holding that the city council failed to implement adequate bargaining procedures in enacting Measure B and finding the measure null and void.  The city council then could overturn the measure and implement an ordinance in accordance with the settlement.

Former city councilman Steve Constant, Steven Haug, and the Silicon Valley Taxpayers’ Association challenged the entry of the settlement order and sought a stay of its implementation.  Judge McGowen denied the stay on the grounds that the movants lacked standing to stay the order because they were not parties to the action.  Constant, Haug, and the Silicon Valley Taxpayers’ Association also moved to intervene, but Judge McGowen denied that motion as well.  Constant and his co-movants contend that the settlement is an end-run around the voters’ mandate and was not properly explained to the voters.

Constant, Huag, and the Silicon Valley Taxpayers’ Association filed a notice of appeal on May 2, 2016.  They seek review of the Stipulated Judgment and Order (March 30, 2016), the Writ in Quo Warranto (allowing the suit and filed on March 30, 2016), the Order Denying the Motion to Intervene (April 13, 2016) and the Order Denying a Stay of the Enforcement of the Order (April 27, 2016).

The San Jose City Council passed a resolution on May 10, 2016, overturning Measure B as “null and void” per Judge McGowen’s decision.

However, on May 11, the 6th District Court of Appeal entered a temporary stay of all proceedings (including the city council’s action).  The Court of Appeal has requested briefing of the issues for reconsideration by May 23.

The pending appeal is styled Constant v. Superior Court (Case No. H043540) and is cross referenced with the following cases:

1.     H026759 Silicon Valley Taxpayers Assn. v. Santa Clara County Open Space Authority

2.     H034424 City of San Jose v. Garbett

3.     H038683 Silicon Valley Taxpayers Assn. v Garner, Registrar of Voters

4.     H038729 Silicon Valley Taxpayers Assn. v Superior Court

5.     H038971 Silicon Valley Taxpayers Assn. v Garner, Registrar of Voters

6.     H039498 City of San Jose v. Superior Court

The court ordered that real parties in interest may file oppositions to the petition by May 23. The City of San Jose and the San Jose Police Officers’ Association filed oppositions and supplements to their oppositions on May 11 and May 16.

On May 26, 2016, the petitioners filed a reply to the opposition and, on May 27, the court docketed a notice that the case was fully briefed. The San Diego city attorney filed an amicus letter on May 24, to which the San Jose Police Officers’ Association responded on May 31, 2016.

On July 28, the court entered an order in case numbers H043540 and H043727 granting the request and supplemental request filed by the petitioners for judicial notice; granting the request for judicial notice filed by the real parties in interest (San Jose Police Officers’ Association) but denying their supplemental request for judicial notice; and granting the writ of supersedeas in the appeal People v. Constant , case number, H043727, as follows:

Let the writ of supersedeas issue, staying, pending the appeal in H043727, the superior court’s stipulated judgment and order filed on March 30, 2016, and writ in quo warranto filed on March 30, 2016. This court’s temporary stay order of May 11, 2016, is vacated as moot. The clerk of this court is directed to file this order in both case numbers H043540 and H043727. This order shall be the final order in case number H043540, and any further proceedings concerning the writ of supersedeas shall be filed in the pending appeal H043727.

The cases were to be consolidated under the appeal People v. Constant, case number H043727.

On Nov. 8, 2016, the people of San Jose approved Measure F, which incorporated the settlement among the parties to the litigation.  On November 29, the San Jose Police Officers Association informed the court of the success of Measure F and that the Association will seek to have the appeal dismissed on mootness grounds.

On Jan. 6, 2017, the appellant and the defendants filed a motion to dismiss on mootness grounds.

The respondents filed their response brief on March 24, 2017. Appellants Constant, Huag, and the Silicon Valley Taxpayers’ Association filed reply briefs on April 27. The case is fully briefed.

The case was put on the Court’s conference list on Sept. 6, 2017, and an Oral Argument Waiver Notice was sent on September 21.

Respondents City of San Jose and San Jose Police Officer’s Association filed requests for oral argument on September 27, 2017. On September 28, 2017, Appellants Constant, Haug, and Silicon Valley Taxpayers Association also filed a request for oral argument.

On October 11, 2017, the Court sent a request to counsel for letter briefs within 10 days.  

On October 16, the Court set oral argument for November 30, 2017 at 9:30 a.m. Appellant requested a continuance, which was granted and the Court will set a new date.

Union lawsuit (PERB case): The complaint alleges that the city failed to meet and confer prior to enacting the resolution, engaged in unfair practices, and denied the IAFF its ability to represent the bargaining unit.

City lawsuit (federal court): The city voluntarily dismissed its own lawsuit on Oct. 1, 2012, because a separate federal declaratory judgment would not have precluded the state court from issuing a judgment on state law grounds.

Relevant documents:

I. City lawsuit: 

II. Union lawsuits: 

Additional documents available here

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