Mediation is not correct legal path for pension reform

Like many Rhode Islanders, we are confused by the recent decision of Superior Court to require “mediation” of the Rhode Island Retirement Security Act of 2011.
After months of research, hearings and debate, the General Assembly overwhelming enacted and Gov. Lincoln D. Chafee signed the act into law. RIRSA secured the retirement of thousands of Rhode Islanders and stabilized our state retirement system in a process that was transparent and fair for employees, retirees and taxpayers. This law has saved the state more than $300 million and our municipalities more than $100 million in the first year alone.
In June 2012 several parties, principally the unions that represent public employees, brought five lawsuits alleging that RIRSA was unconstitutional because it breached the contractual rights of the retirees. One of those lawsuits is now before the judge who issued the recent ruling requiring mediation.
Based upon our research of both federal and state court rulings, we believe that RIRSA clearly is constitutional.
We base this belief on a significant body of law that holds that a statute does not provide contractual rights to those whom it benefits unless it expressly states that the formation of a contract was intended (termed by jurists the “unmistakability doctrine”). Both the United States and Rhode Island Supreme Courts have adopted the doctrine.
Citing the unmistakability doctrine, several courts applying Rhode Island law, including the R.I. Supreme Court, have already found that the state statute that provides retirement benefits to those that retire from state employment is not a contract. Even in the unlikely event that the R.I. Supreme Court overturns prior precedent and finds that the pension statute is a contract, this still would not mean that RIRSA was unconstitutional: It would still be constitutional if it reasonably carried out a legitimate public purpose. The state, in defending the constitutionality of RIRSA, has quite rightly asked that the lawsuit be dismissed based on this past precedent.
Consequently, we were surprised and confused by the recent call of many to “negotiate” the Rhode Island Retirement Security Act of 2011. While we recognize that negotiation is appropriate in many instances, this is not one such instance.
The simple and unavoidable fact is that RIRSA is part of the Rhode Island general laws and its application cannot be negotiated by the governor, the general treasurer or anyone else.
The statute could be amended or repealed if legislation were passed by the General Assembly and enacted by the governor. No legislation to repeal or reform the RIRSA has been introduced or considered.
Because the answer to an allegation that a statute is unconstitutional is either “yes” or “no,” we view negotiation as unnecessary and a waste of resources.
Perhaps more importantly, the simple fact is that no one who will be at the court-ordered mediation table has the authority to alter the application of RIRSA. Even if the opponents of reform and the governor and general treasurer now agreed to provide public-sector retirees with more generous benefits than would be provided under RIRSA, how would that get implemented?
As we all know, every state faces fiscal hardship. Yet Rhode Island in particular is without resources to squander. We hope the advocates of negotiation or a learned jurist can explain why mediation is not the waste of time and resources we fear. •


Paul Choquette is vice chairman of Gilbane Inc. and served as counsel to Gov. John H. Chafee; Ted Long practices corporate law in Rhode Island and served as counsel to U.S. Sen. Jack Reed; and George Shuster is an attorney and chairman of Cranston Print Works. All serve on the board of directors of EngageRI.

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