Rains Lucia Stern, PC
Rains Lucia Stern, PC filed a petition for writ of mandate in Contra Costa County Superior Court on Tuesday November 27th on behalf of the Contra Costa County Deputy Sheriffs’ Association (“DSA”) asserting that certain provisions of the California Public Employee Pension Reform Act (“PEPRA”) are unconstitutional and violate the vested pension rights of members of the DSA and other County employees. The legal challenge was led by Rocky Lucia and Peter Hoffmann of RLS along with David Holsberry of Davis, Cowell & Bowe on behalf of his client, United Professional Firefighters of Contra Costa County, Local 1230.
The litigation was commenced to enjoin the Contra Costa County Employees’ Retirement Association (“CCCERA”) from implementing Assembly Bill 197, passed in conjunction with Assembly Bill 340 which together constitute the statewide package of pension reforms known as PEPRA. On Wednesday, November 28th the parties appeared before Judge David Flinn of the Contra Costa County Superior Court to secure a Stay Order from the Court, preventing CCCERA from implementing AB 197 until such time as a full hearing on the vested rights theories could be heard.
The DSA argued that CCCERA’s vote to comply with AB 197 forced thousands of County employees to consider early retirement in order to avoid a catastrophic reduction of their pension benefits after December 31, 2012. The DSA made a showing that permitting the implementation of AB 197 against DSA members and other Contra Costa County employees would lead to dramatic adverse consequences for the affected individuals as well as the County, as thousands of experienced employees were forced to contemplate an early retirement in order to preserve their constitutionally protected benefits.
The judge considered the arguments and positions of the parties and issued a Stay Order which precluded the CCCERA from implementing AB 197 against its members, including the men and women of the DSA. [Click here to read order] In effect, the Stay Order requires CCCERA to maintain the status quo, and to refrain from moving forward with implementation of AB 197 until a full hearing on the merits is held. The parties will appear later next month as part of a status conference.
CCCERA members (mostly County employees) hired prior to January 1, 2011 have a clearly established right to include certain elements of compensation in the calculation of their pension benefits, including vacation, holiday and sick leave accruals. This component of the employees’ final compensation is commonly referred to as “terminal pay.” Subsequent to the California legislature’s passage of AB 197, the CCCERA Retirement Board voted to implement the legislation against current employees, despite the fact that it would unlawfully deprive those affected members of the right to include terminal pay in the calculation of their pension benefits.
The litigation team at Rains Lucia Stern assembled numerous declarations from various County employees, including members of each rank up in the Sheriff’s Department, including the Sheriff, in support of the vested rights claim and the irreparable harm that would result if the injunctive relief was not granted by the Court. While “terminal pay” has been portrayed by various groups and members of the media as a form of “spiking,” the DSA’s filing clearly established that “terminal pay” has been actuarially included in the costs of the members’ pension benefits and has been paid for by contributions from both the County and the employees for many years.
As part of its showing of irreparable harm, the DSA and Local 1230 revealed that there are over 2,000 County employees who could have faced the possibility of losing up to 18% of their pension benefit should AB 197 be upheld and applied to them. All of these members were faced with the unenviable choice of having to retire, perhaps prematurely, on or before December 31, 2012, or face the realistic loss of up to 18% of their pension benefit. As such, the DSA and Local 1230 were able to argue that there would be irreparable harm and injury not only to individual employees, but also to the County itself as each Department was confronted with the possibility of having to provide vital services while experiencing the sudden loss of hundreds (if not thousands) of employees, if the requested relief was not granted.
This case is the first known legal challenge to any provision of PEPRA in the state of California.1 The litigation will ultimately define the ability of veteran employees throughout the County to enjoy a vested benefit earned by many years of service.