Judge rules state worker union pension lawsuit can go to trial

Superior Court Judge Sarah Taft-Carter on Wednesday denied a motion by the state of Rhode Island to dismiss the pension lawsuit scheduled to go to trial in September, ruling that “a valid contract exists” between retirees and the state regarding promised pension benefits. More

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pension reform

Judge rules state worker union pension lawsuit can go to trial

COURTESY R.I. JUDICIARY/CRAIG N. BERKE
SUPERIOR COURT JUDGE SARAH TAFT-CARTER has denied the state's motion to dismiss state and municipal workers' lawsuit over pension reform, clearing the way for the case to go to trial in September.
Posted 4/16/14

(Updated, 8:58 a.m.)

PROVIDENCE – Superior Court Judge Sarah Taft-Carter on Wednesday denied a motion by the state of Rhode Island to dismiss the pension lawsuit scheduled to go to trial in September, ruling that “a valid contract exists” between retirees and the state regarding promised pension benefits.

The lawsuit encompasses public employee and retiree challenges to the constitutionality of the state’s overhaul of the pension system, which included changes to retirees’ cost-of-living adjustments. The state filed the petition to dismiss the case after court-ordered mediation between attorneys representing the state and public employee unions broke down last week, ending the possibility of a settlement and sending the dispute to trial.

In denying the dismissal request, Taft-Carter asserted that although the language of the statute governing the Employees’ Retirement System of Rhode Island does not explicitly guarantee that retirees’ pension benefits will never be altered, the context in which the agreement was made – that of an employer-employee relationship – constitutes an “implied” contractual obligation on the part of the state.

“A valid contract exists between Plaintiffs and the State, entitling Plaintiffs to their pension benefits,” Taft-Carter wrote.

The ruling echoes the claims made by a group of 50 retired state employees and public school teachers, who filed their own lawsuit against the state alleging that the state – represented by Gov. Lincoln D. Chafee, General Treasurer Gina M. Raimondo and ERSRI – effectively breached its contract with public employees by altering the benefits public workers received under the ERSRI.

Taft-Carter’s decision on Wednesday aligned with her previous ruling on a separate lawsuit in 2011 in which she stated that benefits the state promised to workers in the retirement system constitute contractual obligations.

“We are pleased the Court has once again recognized the implied contract and ruled that there is sufficient reason for the lawsuit to continue,” said Ray Sullivan, spokesman for the plaintiff groups in a statement. “These retired workers lived up to their end of the deal by dutifully paying into a pension system that was promised to be there when they needed it. The changes made to the state pension system were undeniably an unconstitutional impairment of a contractual right, and we look forward to making that argument as the litigation moves forward.”

Responding to the court’s decision, Chafee and Raimondo’s offices issued the following statement: “Today’s preliminary ruling was expected and is consistent with the Judge’s prior preliminary ruling in a related case. The State continues to believe that the pension changes enacted by our General Assembly are constitutional and that the State has strong legal arguments to support its positions. We are preparing for trial on all of the relevant issues, including whether the General Assembly’s changes were reasonable and necessary.”

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