Courts Establish Timeline for Pension Lawsuits

There has been forward movement in the SEA’s three pending lawsuits that question the legality/constitutionality of recent changes made to the NH Retirement System.

Re-cap First Case

You may recall that we jointly filed the first lawsuit in August 2009 as part of a coalition of unions that represent public workers.  This action challenged the pension changes that resulted from HB1645 (2008) and HB653 (2007).  The case focuses on changes to the definition of earnable compensation (specifically the removal of “other compensation” as a pensionable benefit, such as clothing allowances and payments in lieu of taking health insurance) and the changes to the language regarding Cost of Living Adjustments (COLA’s)  and the ‘Special Account’ that funded COLA’s.  The Special Account was subsequently abolished by legislation in 2012.

After getting bogged down in the trial court over class certification issues, our attorneys tried to move the case directly to the NH Supreme Court on an interlocutory basis (without ruling, prior to final judgment. A complete definition follows this article) in order to get the matter resolved more quickly.  However, in September 2012 the Supreme Court denied the request and sent the case back to Judge Smukler, NH Superior Court.

Our attorneys had a status conference (a pre-trial meeting of attorneys before a judge. Full definition follows article)with Judge Smukler last November and all agreed to submit updated briefs to the Court on or before December 14th for final ruling with expected appeals to follow.  In the meantime, Judge Smukler transferred the case back to Judge McNamara.

Updated Information for First Case

The good news is Judge McNamara is poised to apply his general ruling that there is indeed a contract in RSA 100-A between the State and public employees and that the Legislature may not constitutionally alter the terms of that agreement.

The bad news is he is not persuaded that another NH court case, the Cloutier case, changes his conclusion that vesting happens after ten years. He is also poised to again rule that the Union and Association plaintiffs may only proceed as interveners not actual parties.  We had previously named the plaintiffs as a group without names. We will now need to identify individual plaintiffs by name to cover each of the Counts, including those who have over and those who have less than ten years of state service.

Further, the Judge raised a legal question regarding whether we should keep our federal claim (Section 1983) as he believes this will cause more delay due to the complicated issues it raises (immunity etc.).

The timeline established for this case follows:

Feb 1: deadline to add additional plaintiffs

Feb 15: deadline to advise Court on further briefing

Feb 18: (week): further structuring conference

Mar 8: (1:30): oral argument on pending motions

Re-cap Second Case

We filed this challenge in June 2011 after the passage of HB2 (2011) involving the increase in employee NHRS rates and the artificial lowering of the employer rates. In Feb. 2012, Judge McNamara ruled in our favor and held that the increase in employee rate for vested NHRS members is unconstitutional. The Judge also ruled that vesting occurs after ten years of service, a ruling we strongly disagree with (settled NH case law holds that vesting occurs after permanent employment status) and we appealed this ruling to the NH Supreme Court.

The coalition of NH labor unions that represent public workers agreed with counsel’s suggestion that we move this case by ‘parking’ the issue of employer rates (for now) and appealing the case on an interlocutory basis to the NH Supreme Court (especially in light of the very favorable ruling by the Supreme Court in the Cloutier case ).  However, like the AFT case above, the NH Supreme Court, in Sept. 2012, declined to accept the appeal on the suggested expedited basis and sent the case back to Judge McNamara who scheduled a conference in January.  We urged the Court to issue a final ruling to move the case to the NH Supreme Court as soon as possible.

Updated Information for Second Case

Perhaps the most encouraging outcome is that the courts have established a schedule or timeline for completing the legal process.  Prior to this, there had not been a timeline, and the process seemed to be tediously slow and endless.

The Judge approved the schedule our attorneys proposed and we hope for a final order and the case to return to the Supreme Court as soon as possible.   We expect this to happen this spring/early summer.  The State requested the right to name an expert and file a report on the issue of whether the increase in the rates caused a “substantial” impairment for plaintiffs.

The timeline established for this case follows:

March 1: State expert report due

April 1: Plaintiff expert report due

April 30: rebuttal reports due

April 30: cross motions due on all claims

May 31: objections to cross motions due

TBD: oral argument on cross motions

Re-cap Third Case

This case is the most recently filed. It was brought forward in Feb. 2012 following the effective date of the HB2 (2011) changes to NHRS pension benefits.  This suit challenges the changes in earnable compensation (including the averaging of extra and special duty pay); the Group II changes in age and service requirements;  the change from three to five years for calculating the “Average Final Compensation;” the new ‘maximum benefit’ level; and the repeal of the gainful occupation exemption (Group II).

This case was fully briefed and argued before Judge Abramson on August 27, 2012.  The Judge issued a ruling on September 25 opting to seek to have the issues resolved by the NH Supreme Court on an interlocutory appeal basis (like the two other cases).  After this ruling, the NH Supreme Court declined the interlocutory appeals in the previous two cases. Our attorneys then filed a motion to reconsider with Judge Abramson, noting that any further interlocutory request is also likely to fail.

On October 29th the Judge denied the motion to reconsider.  Thereafter, the lawyers have circulated yet another interlocutory appeal statement with the State and NHRS and filed those pleadings.

Updated Information for Third Case

Since the Supreme Court declined the request for an interlocutory appeal, we await either a ruling on the pending motion for summary judgment or the scheduling of a further status conference with the Superior Court.

We will continue to provide information about this important litigation as things progress. Another source for information is our attorneys’ website – www.molanmilner.com.

What Is Interlocutory Action?

Interlocutory actions are taken by courts when a question of law must be answered by an appellate court before a trial may proceed or to prevent irreparable harm from occurring to a person or property during the pendency of a lawsuit or proceeding.  Interlocutory appeals are typically permitted when the trial judge certifies to the appellate court in an interlocutory order that an important question of law is in doubt and that it will substantially affect the final result of the case. If this is the case, the court must resolve the issue rather than subject the parties to a trial that may be reversed on an appeal from a final judgment.

What Is a Status Conference?

A status conference is a pre-trial meeting of attorneys before a judge required under Federal Rules of Procedure and in many states to inform the court as to how the case is proceeding, what discovery has been conducted (depositions, interrogatories, production of documents), any settlement negotiations, probable length of trial, and other matters relevant to moving the case toward trial. Court rules usually require the filing of a status conference statement prior to the conference.

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