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Rhode Island Public Employees' Retiree Coalition v. Chafee

Superior Court of Rhode Island

July 17, 2014

RHODE ISLAND PUBLIC EMPLOYEES' RETIREE COALITION, AFSCME, COUNCIL 94 RETIREE CHAPTER, NEARI-RETIRED, RI AFT/R LOCAL 8037, RHODE ISLAND RETIRED TEACHERS ASSOCIATION, RHODE ISLAND ASSOCIATION OF RETIRED PRINCIPALS, RHODE ISLAND LABORERS' RETIREE COUNCIL, DAVID FLORIO, JAMES GILLIS, CAROL KEISER, MARK KURTZMAN, MARY ANN PARKER, ANTHONY PICCIRILLI
v.
LINCOLN D. CHAFEE, in his capacity as Governor of the State of Rhode Island, GINA RAIMONDO, in her capacity as General Treasurer of the State of Rhode Island, and the EMPLOYEES' RETIREMENT SYSTEM OF RHODE ISLAND, by and through the RETIREMENT BOARD, by and through Gina Raimondo, in her capacity of Chairperson of the Retirement Board, and Frank J. Karpinski, in his capacity as Secretary of the Retirement Board JOSEPH CLIFFORD, EDWARD BALFOUR, WILLIAM BERUBE, WILLIAM BLAIR, ANNMARIE BOLVIN, DENISE BOULE, MARIANN CALLAHAN, JOSEPH CAPALBO, JANE CARLSON-PICKERING, CATHERINE CELEBERTO, MICHAEL CLIFFORD, KATHLEEN CRESCENZO, MONIKA CURNETT, SANDRA CURRAN, PAMELA DELVECCHIO, MARILYN DISTEFANO, BINYAMIN EFREOM, JOANNE FONSECA, MARY GARDINER, PATRICIA GIAMMARCO, KATHLEEN GIRARD, MARGUERITE GIROUX, MARY HOWARD, PATRICIA KELLEY, NANCY LEMME, ELIZABETH MARCELLO, GREGORY MARCELLO, KATHLEEN MARSHALL, JOANNE MATISEWSKI, CAROL MAYHEW, LUCILLE MOTA-COSTA, FRANCIS MULLINS, TIMOTHY MURPHY, JOHN O'BRIEN, PIERRETTE O'BRIEN, WILLIAM O'CONNOR, BARBARA OBERLE, JOHN OBERLE, LEO JUDE PAQUETTE, SANDRA PAQUETTE, SUSAN REMINGTON, ANTHONY RICCI, JANE ROCHE, TERESA ROMANO, CYNTHIA RONDEAU, MICHAEL SENERCHIA, SUSAN SWEET, CHERYL VINCENT, C JUDITH WALLACE and KATHLEEN WINTER
v.
LINCOLN CHAFEE, in his capacity as Governor of the State of Rhode Island, GINA RAIMONDO, in her capacity as General Treasurer of the State of Rhode Island, and the EMPLOYEES' RETIREMENT SYSTEM OF RHODE ISLAND, by and through the RHODE ISLAND RETIREMENT BOARD, by and through GINA RAIMONDO, in her capacity as Chairperson of the Retirement Board, and FRANK KARPINSKI, in his capacity as Executive Director and Secretary of the Retirement Board

Providence County Superior Court Kent County Superior Court

Rhode Island Public Employees’ Retiree Coalition, et al. Carly Beauvais Iafrate, Esq., Jay E. Sushelsky, Esq Bristol/Warren Regional School Employees, Local 581, et al. Thomas R. Landry, Esq. R.I. Council 94, AFSCME, AFL-CIO Locals: Boys & Girls Training School Local 314, AFSCME, Council 94, AFL-CIO, Locals, et al. Lynette Labinger, Esq. Cranston Police Officers, IBPO, Local 301, et al Gary T. Gentile, Esq., Paul V. Sullivan, Esq., Joseph F. Penza, Jr., Esq., Douglas L. Steele, Esq., Megan K. Mechak, Esq, Cranston Fire Fighters, Local 1363, AFL-CIO, Mark B. Gursky, Esq. Joseph Clifford, et al. Sean T. O’Leary, Esq.

Lincoln D. Chafee and Gina Raimondo, James Lee, Esq., Rebecca T. Partington, Esq., John A. Tarantino, Esq., Patricia K. Rocha, Esq., Nicole J. Benjamin, Esq., Julia C. Hamilton, Esq., David Boies, Esq. .

DECISION

TAFT-CARTER, J.

Before this Court is Defendants' Motion to Join Retirees as Indispensable Parties and/or Parties Whose Rights May Be Affected by the Declarations Sought. Plaintiffs are associations of retired state and municipal employees and public school teachers, and individual retired state employees and public school teachers. This Motion raises common issues of fact and law. For the purposes of judicial economy, this Court issues one Decision applying to each of the two separate actions. Jurisdiction is pursuant to Super. R. Civ. P. 19 (Rule 19) and G.L. 1956 § 9-30-11.

I

Facts and Travel

These actions concern constitutional challenges to the enactment of the Rhode Island Retirement Security Act of 2011 (RIRSA). The Employees' Retirement System of Rhode Island (ERSRI), established in 1936, is a retirement system for state employees, school teachers, and employees of cities and towns that choose to participate. See G.L. 1956 §§ 36-8-1, et seq. The purpose of the retirement system is to provide retirement allowances to employees of the State of Rhode Island. ERSRI is administered by the Retirement Board (Board), which oversees the Employees' Retirement System (ERS) and the Municipal Employees' Retirement System (MERS). Sec. 36-10-1; G.L. 1956 §§ 45-21-1, et seq. ERSRI provides a mandatory, contributory defined benefit plan under which participants contribute a statutorily set percentage of their annual salary in exchange for a fixed retirement allowance. The retirement allowance becomes payable to participants in equal monthly installments after retirement. In addition to the retirement allowance, participants' pension benefits are compounded by a Cost of Living Adjustment (COLA). The intent of the COLA is to maintain the real value of a retiree's pension in light of changes to the cost of living occurring over the life of retirement.

As a consequence of the underfunding of Rhode Island's public pension system, the General Assembly enacted RIRSA in November 2011. RIRSA altered the standards for retirement for employees in the retirement system, changing the structure of the program from a traditional defined benefit plan to a "hybrid plan" with smaller defined benefits and a supplemental defined contribution plan. RIRSA also permanently reduced all COLAs to apply only to the first $25, 000 of a person's retirement allowance and suspended all COLAs until they are funded to eighty percent, which is estimated to take at least sixteen years.

On June 22, 2012, Plaintiffs in C.A. No. PC-12-3166 filed suit on behalf of individual retired state and municipal employees and retired public school teachers who were current beneficiaries of the ERSRI at the time the RIRSA became effective. Plaintiffs allege violations of the Contracts Clause, Takings Clause, and Due Process Clause of the Rhode Island Constitution and ask this Court to declare RIRSA unconstitutional. Plaintiffs also seek equitable relief, including a temporary restraining order, preliminary injunction, and permanent injunction "prohibiting the State . . . from relying upon or applying the provisions of [RIRSA]" to the Plaintiffs and "to restore and make whole all retirement benefits diminished by application thereof." On April 3, 2014, fifty retired state employees filed a separate lawsuit, Clifford v. Chafee, KC-14-0345 (the Clifford case), seeking similar relief and demanding a jury trial with respect to all aspects of their causes of action.

On May 29, 2014, Defendants filed the instant Motion pursuant to § 9-30-11 and Rule 19. The caption of that Motion only indicated case number PC-12-3166. On July 1, 2014, Defendants made an oral motion to add Plaintiffs in the Clifford case to Defendants' original Motion. The Motion was granted. The Court heard oral arguments and now issues its Decision.

II

Standard of Review

A

Rule 19

Joinder of parties is governed by Rule 19, which "advocates joining a party if in his or her absence complete relief cannot be accorded to those already made parties or if disposition of the matter would impair or impede the party's ability to protect his or her interest in the subject matter of the suit." Abbatematteo v. State, 694 A.2d 738, 740 ...


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