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Cranston Firefighters, AFL-CIO v. Raimondo

United States Court of Appeals, First Circuit

January 22, 2018

CRANSTON FIREFIGHTERS, IAFF LOCAL 1363, AFL-CIO, on its own behalf and on behalf of its members; INTERNATIONAL BROTHERHOOD OF POLICE OFFICERS, LOCAL 301, AFL-CIO, on its own behalf and on behalf of its members, Plaintiffs, Appellants,
v.
GINA M. RAIMONDO, in her capacity as Governor of the State of Rhode Island; SETH MAGAZINER, in his capacity as General Treasurer of the State of Rhode Island; THE EMPLOYEES' RETIREMENT SYSTEM OF RHODE ISLAND, by and through Seth Magaziner, in his capacity as Chairperson of the Retirement Board, and Frank J. Karpinski, in his capacity as Executive Director of the Retirement Board; CITY OF CRANSTON, by and through its Finance Director, Robert F. Strom, and its Treasurer, David Capuano, Defendants, Appellees.

         APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND [Hon. Mary M. Lisi, U.S. District Judge]

          Elizabeth Wiens, with whom Gursky|Wiens Attorneys at Law, Ltd. was on brief, for appellants.

          Nicole J. Benjamin, with whom John A. Tarantino, Adler Pollock & Sheehan P.C., Rebecca Partington, Rhode Island Department of Attorney General, and Michael Field, Rhode Island Department of Attorney General were on brief, for appellees Gina M. Raimondo, in her capacity as Governor of the State of Rhode Island, Seth Magaziner, in his capacity as the General Treasurer of the State of Rhode Island, and the Employees' Retirement System of Rhode Island.

          Nicholas L. Nybo, with whom William M. Dolan III and Adler Pollock & Sheehan P.C. were on brief, for appellee City of Cranston.

          Before Torruella, Thompson, and Kayatta, Circuit Judges.

          KAYATTA, CIRCUIT JUDGE.

         In 2011, Rhode Island enacted legislation modifying various state-run pension plans for government employees, including a plan that covered municipal firefighters and police officers. Generally speaking, the modifications reduced the value of the benefits payable under the plan in order to ameliorate what the State perceived to be a serious and growing liability that would be difficult to fund. The unions representing the firefighters and police officers employed by the City of Cranston (the "Unions") filed this lawsuit claiming that the modifications unconstitutionally repudiated contractual obligations owed to the Cranston employees.

         We affirm the district court's dismissal of the complaint. In so doing, we find that the complaint fails as a matter of law to allege that the challenged legislation unconstitutionally impaired any contractual rights of the Unions' members. We also find that federal court is not the proper forum within which to litigate the Unions' undeveloped claims that the City of Cranston is failing to live up to the terms of its ordinances or collective bargaining agreements, and we find that this lawsuit provides no opportunity to challenge the terms of a settlement by other parties in another lawsuit. Our reasoning follows.

         I.

         A.

         Since 1936, Rhode Island has maintained a retirement system for state employees, administered by a retirement board. See Nat'l Educ. Ass'n-R.I. ex rel. Scigulinksy v. Ret. Bd. of the R.I. Emps. Ret. Sys. (NEA), 172 F.3d 22, 24 (1st Cir. 1999). In 1951, the State created a retirement system for municipal employees, including firefighters and police officers. See 1951 R.I. Pub. Laws Ch. 2784 (codified as amended at 45 R.I. Gen. Laws § 45-21-1, et seq. (2017)). Seventeen years later, the State created an alternative, dedicated plan for police officers and firefighters (the "Optional Police and Fire Retirement System"). See 1968 R.I. Pub. Laws Ch. 230 (codified as amended at 45 R.I. Gen. Laws § 45-21.2-1, et seq. (2017)).

         At least one municipality, the City of Cranston, also operated its own municipal retirement system. By the mid-1990s, Cranston was experiencing a severe operating deficit and its municipal pension plan was critically underfunded. The Unions and the City came up with a potential solution: all new hires, and perhaps some recent hires, would transfer to the state retirement system. One significant impediment to this rescue plan stood in the way: the state system provided less favorable benefits. Cranston and the Unions overcame this impediment by convincing representatives from the state retirement board to submit special legislation that would provide certain Cranston police officers and firefighters who joined the state system with benefits in excess of those provided to others under that system. The Rhode Island General Assembly passed the special legislation, which became law on August 9, 1996. 1996 R.I. Pub. Laws Ch. 374 ("1996 Special Legislation").

         The 1996 Special Legislation amended state law to allow new members and certain existing members of the Cranston Fire and Police Departments to opt into the state's Optional Police and Fire Retirement System, to provide higher "final compensation" for purposes of calculating their pension benefits, to provide a higher annual cost of living adjustment ("COLA") payment (three percent compounded), and to increase employee contributions from seven percent to ten percent. The statute also provided that Cranston Fire and Police Department enrollees who transferred from the municipal pension plan into the state system would, upon joining, "waive and renounce all accrued rights and benefits of any other [municipal] pension or retirement system." Finally, the statute invited the City to approve the changes: "This act shall take effect upon passage and be applicable to the City of Cranston upon the ...


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