Partner Art Hartinger, along with Senior Associates Ryan McGinley-Stempel and Ian Long, helped deliver two summary judgments for the Counties of San Joaquin and Orange this fall that will save the government entities millions of dollars in retiree pension dues.
“It’s immensely important for public agencies to uphold their core obligations to retirees, and the best way to do so is to ensure that pension financing systems remain sustainable,” said Mr. Hartinger. “In these complex cases, Orange and San Joaquin Counties faced plaintiffs that were dissatisfied with the counties’ inability to continue funding supplemental retirement benefits. While everyone is sympathetic to the retirees’ requests, it is important to remember that these agreements do not require counties to place their pension systems under undue financial stress to continue funding these additional programs.”
Mr. Hartinger, who advises clients on pension reform and is lead council on numerous pension-related cases, represented both counties as council for the defendants in these class-action cases.
In Allum v. SJCERA, Mr. Hartinger and Mr. McGinley-Stempel represented the County of San Joaquin in the Superior Court of the State of California in San Joaquin County this summer. Plaintiffs, a class of county workers that retired between 1982 and 2001, alleged that the San Joaquin County Employees’ Retirement Association (SJCERA) and its Board of Retirement had mismanaged their retirement fund. In August 2001, the County provided all employees who retired during that period with an additional benefit of $10 per month for every year of service as part of an agreement to settle litigation related to the Ventura County Deputy Sheriffs’ Assoc. v. County of Ventura case. Per this agreement, the Board set up a reserve account funded by then-existing and future surplus funds as determined by the actuary. Due to financial stressors, these payments stopped briefly in the leadup to the Great Recession from May 2006 to November 2007 and ended permanently as of March 1, 2017.
Plaintiffs argued that SJCERA and its Board did not properly fund this reserve account. However, the County argued successfully that the plaintiffs waited too long to challenge SJCERA’s alleged failure to make certain transfers dating back to 2000 and acquiesced in the decisions that the Plaintiffs subsequently challenged. Moreover, the County argued successfully that this supplemental benefit was not vested when UER money to fund this reserve account was not available, indicating that SJCERA and the County had not breached the terms of the agreement. On September 11, 2019, the Superior Court granted SJCERA’s and the County’s motions of summary judgment since the plaintiffs did not successfully meet their burden of proof to present evidence that trial-worthy facts existed.
A similar, more protracted case played out in the United States District Court in the Central District of California. Plaintiffs in Harris, et al v. County of Orange challenged the county’s discontinuation of a monthly stipend first paid out in 1993 to help defray health insurance premium expenses. Plaintiffs argued that this payment was an “implied” lifetime benefit. This case is closely related to Retired Employees Ass’n of Orange County v. County of Orange (“REAOC”). Over the past decade, the two cases have been reviewed, appealed, and amended in the District Court and the Ninth Circuit. In 2014, the Ninth Circuit affirmed summary judgment for the County in the REAOC matter.
In Harris, Mr. Hartinger and Mr. Long successfully argued that the original 1993 plan explicitly contained a non-vesting provision and reserved the County’s right to change or end the payments. The court, holding that there was no material fact indicating that the County had intended to create a vested benefit and noting that this was an issue to be resolved by the political process rather than the courts, granted the County’s motion for summary judgment on November 13.
“Art has been working on the Harris case for a decade now, so I was especially glad to help him deliver a summary judgment for the County,” said Mr. Long. “This decision helps protect our counties and the health of our pension systems.”
RPLG practices throughout California, advising and advocating for public agencies, nonprofit entities, individuals and private entities in need of effective, responsive and creative legal solutions