Plaintiffs will not appeal Colorado Supreme Court Decision

January 20, 2015

Gary R. Justus, et al. v. The State of Colorado, et al.

The four plaintiffs in the case to overturn Senate Bill 10-001 concerning reductions in promised annual benefit increases (ABI, aka COLA) have decided to not appeal the case to the U.S. Supreme Court. Such an appeal is termed a writ of certiorari.

Plaintiffs’ attorney William T. Payne released to Save PERA COLA the following rationale for not appealing the issue:

“…the court’s opinion was based on Colorado state law. An article from a law firm which has a robust Supreme Court practice notes:

A sure-fire way to guarantee rapid denial of certiorari is to file a petition disputing findings of fact rather than determinations of law; presenting questions of state rather than federal law; or asking for review of a decision that rested on adequate and independent state law grounds even if the court below also addressed a federal issue. http://www.appellate.net/includes/print.asp?dir=articles&file=petit799.asp&contentarea=yes

We also noted if plaintiffs ultimately lose this case, plaintiffs may be liable for “costs” such as court reporter fees for transcripts. While “costs” are small in this case, they would still run into the thousands of dollars (according to Defendants), because there were a couple of conferences or hearings before courts.

We have obtained a tentative agreement from the Defendants that they will not seek “costs,” as long as we do not file a petition for review in the U.S. Supreme Court. While Defendants are quite confident that the U.S. Supreme Court would not grant us any relief were we to file a petition for review, they would prefer if all parties could avoid the additional time and expense necessary to brief any such petition. We strongly recommend confirming this agreement with the Defendants, and would like you to accept our recommendation.

Please call if you have any questions.

Sincerely,

William T. Payne”

That tentative agreement has now been finalized and we thus can release this outcome to you. We are most disappointed in the Colorado Supreme Court’s ruling and what it means for PERA retirees. The mid- to long-term damage to retirees’ financial stability is significant. Moreover, the legal precedent that passage of Senate Bill 1 has set will enable the legislature to again cut our annual benefit increases below 2%. When inflation returns to historical levels, retirees and their pensions will not be protected from it. PERA’s well documented promises of a “guaranteed 3.5% annual increase” were simply lies that finally came to light when PERA reconciled their many past mistakes into the Senate Bill 1 “fix.” PERA attorneys then successfully argued in court against PERA’s previous pronouncements that the 3.5% increases were part of the pension contract with those who had already completed their part of the deal. They also argued that previous legislative changes in annual increases (all positive) created precedent for doing so again, but this time they were negative changes. We do not believe that the PERA Board has upheld its fiduciary duty to protect the interests of its active or retired members. Nor do we believe that the unions that lobbied in favor of SB1 fairly supported their members who willingly paid annual dues over their careers.

Nonetheless, the Supreme Court has spoken and we must respect their right to do so. It’s time to move forward. We are now investigating how we can better hold PERA accountable in the future to demand full funding of the existing benefits structure from the legislature, protect what we have left, and educate current and future employees about the risks of choosing to work in Colorado PERA covered employment. We’ll let you know more in the future.

We thank our attorneys Bill Payne and Richard Rosenblatt for their incredible efforts to win this case. We could not have wished for better representation.

Gary R. Justus, plaintiff and Rich Allen, President of Save PERA COLA


Supreme Court Rules Against Retirees

October 20, 2014

Earlier this morning the Colorado Supreme Court issued its opinion in the case Gary R. Justus v. PERA and the State of Colorado, filed in February 2010 soon after Governor Bill Ritter signed Senate Bill 10-001 into law. You may view the court’s 32 page decision here. http://www.courts.state.co.us/Courts/Supreme_Court/Case_Announcements/Index.cfm?year=2014&month=10&Submit=Go

Rich Allen, President of Save PERA COLA, a Colorado non-profit corporation, has issued the following statement warning public employees of the problem that this decision has for them.

 

“The Supreme Court has spoken. Needless to say we are disappointed in the decision. It seems to us to be a major departure from the rule of law to allow a public entity to unilaterally abrogate an agreement to which they willingly and legally entered merely because they don’t feel like paying the costs anymore. But there are other issues here that directly affect the financial security of public retirees and employees.

PERA throughout the legal process adopted a scorched earth policy by denying that there ever was any contract regarding the annual benefit increases (aka cost-of-living adjustments or COLA) even though they had previously and often stated there was a contractual agreement in both their verbal and written messages. This victory for PERA leaves it in the legal position of being able in the future to reduce the remaining COLA of 2% (maximum) to zero, assuming the legislature’s permission. There is little reason to think that creative minds could not come up with further reductions as well. This does not bode well for Colorado public employees, or for public employers who use PERA benefits to attract the best applicants to their employ.

We believe that the many employee organizations that supported SB1 will regret that decision in the future. Colorado no longer has a defined benefit plan (DB). It instead has a gratuity plan where the benefits for all members, even for the already retired, are entirely defined by the whim of the legislature. Further, incentives have been created for the legislature to continue to underfund the pension system which will lead to future PERA Trust Fund fiscal crises and further cuts. Based on past behavior, it is hard to understand how PERA will demand adequate funding to support even the severely reduced funding benefit levels that SB1 has set. They have bought into the false notion that we are just “greedy geezers.” We are in fact simply asking for what we have earned and were promised.

While we cannot predict the timing of any of this, we would urge all retirees to have a “Plan B” to support themselves. For current and future employees, we recommend looking closely at total compensation and the actual security of it in making career decisions.”

 

Article 2, Section 11. Ex post facto laws. No ex post facto law, nor law impairing the obligation

of contracts, or retrospective in its operation, or making any irrevocable grant of special

privileges, franchises or immunities, shall be passed by the general assembly.