County Superior Court PC-13-3212.
Plaintiff: Marisa A. Desautel, Esq. Patrick J. Sullivan, Esq.
Defendant: William M. Dolan, III, Esq. William K. Wray, Jr.,
Esq. Nicholas L. Nybo, Esq.
case is before the Court for decision following a non-jury
trial on a Complaint filed by the Plaintiff, Cranston Police
Retirees Action Committee (CPRAC), against Defendant, the
City of Cranston (City). CPRAC is a non-profit corporation
formed in 2012 whose membership is comprised of seventy-five
retired members of the Cranston Police Department and the
Cranston Fire Department who retained their right to sue the
City by opting out of a class action
settlement. The Court is called upon to decide whether
certain ordinances passed by the City violated the contract
clauses of the Rhode Island and United States
Constitutions.,  In its Complaint, the Plaintiff asserts
that the 3% compounded cost of living adjustment (COLA) was a
vested contractual right for its members, the suspension of
which amounts to a violation of the contract clause. The City
maintains that its actions do not violate the contract
clause, that CPRAC has not met its burden to show that the
City's actions amounted to a substantial impairment, and
that it has presented sufficient credible evidence that the
City's actions were reasonable and necessary to achieve a
significant and legitimate public purpose. In November of
2015, the matter proceeded to a non-jury trial. The Court
exercises jurisdiction pursuant to G.L. 1956 §§
8-2-13 and 9-30-1.
Findings of Fact
Court has reviewed the evidence presented at trial by both
parties and makes the following findings of fact.
City established the Cranston Police Pension fund for
permanent members of the Cranston Police Department and the
Cranston Fire Pension fund for permanent members of the City
Fire Department in 1937. Compl. at ¶¶ 6, 7.
Throughout the years, the International Brotherhood of Police
Officers, Local 301 (IBPO) on behalf of the police, and
International Association of Fire Fighters, Local 1363 (IAFF)
on behalf of the firefighters, engaged in mandatory and
binding collective bargaining with respect to all terms and
conditions of employment. Id. at ¶¶ 9, 10;
see also Municipal Police Arbitration Act, G.L. 1956
§ 28-9.2-1, Municipal Fire Fighters Arbitration Act,
G.L. 1956 § 28-9.1-1. As a result, collective bargaining
agreements (CBAs) were routinely negotiated between the IBPO
and the City and the IAFF and the City. Id. at
¶¶ 9, 10.
health of the City pension fund was examined yearly through
actuarial studies and reports. Trial Tr. 61:19-22, Nov. 10,
2015 (Mayor Traficante). By the early 1990s, the actuarial
reports indicated that the "appropriations [to the
pension] were not keeping up with that growth."
Id. at 60:16-17. As a result, Mayor Traficante
prudently addressed the issue of the expanding unfunded
pension liability. Id. at 61:23-62:14. To achieve
the goal, he sought the assistance of the police and fire
unions. Id. at 62:3-14. The first step was to ask
the unions to reopen their contracts with the potential of
moving the employees from the City pension system into the
state pension system. Id. Initially, this notion was
dismissed by the unions; however, after discussions, an
agreement was reached in 1996. Id. at 62:24-63:11.
agreement transformed the City pension system by creating a
two-tier pension system. Id. at 64:13-15,
70:18-71:1. Members of the police and fire departments hired
after July 1, 1995 would enroll in the state pension system.
Id. at 64:13-15, 70:18-71:1; see also Exs.
88A, Sec. 2-24-23(C)(1); 89A, Sec. 1-10-11(C)(1). Employees
with less than five years of service on July 1, 1995 could
elect to transfer into the state pension system or remain in
the City pension system. Trial Tr. 70:7-11, Nov. 10, 2015;
see also Exs. 88A, Secs. 2-24-23(B)(1),
2-24-23(A)(1); 89A, Secs. 1-10-11(B)(1), 1-10-11(A)(1). The
agreement also provided, for the first time, a minimum 3%
compounded COLA upon retirement with an escalator
clause. Trial Tr. 72:12-23, 88:12-90:6, 101:21-25,
Nov. 10, 2015; see also Exs. 88A, Sec
2-24-23(A)(20); 89A, Sec. 1-10-11(A)(3). The escalator clause
ensured that there would be an increase in the compounded
COLA equivalent to any raise active employees received. Trial
Tr. 72:12-23, 88:12-90:6, 101:21-25, Nov. 10, 2015; see
also Exs. 88A, Sec. 2-24-23(A)(20); 89A, Sec.
1-10-11(A)(3). The COLA was implemented by the City at the
insistence of the unions to achieve parity with the state
pension system. Trial Tr. 64:8-12, Nov. 10, 2015. This
agreement was ratified by the unions and codified into law by
the passage of two ordinances on November 25, 1996 (1996
Ordinances). Id. at 63:1-11, 68:24-69:22, 72:10-11;
see also Exs. 88A, 89A.
CBAs negotiated between the City
and the IBPO after the 1996 Ordinances incorporated the
provisions of the 1996 Ordinances, including the 3%
compounded COLA with an escalator clause. In addition, CBAs
negotiated between the City and the IAFF subsequent to the
1996 Ordinances specifically included a minimum 3% compounded
COLA with an escalator clause.
to instituting these changes, Mayor Traficante considered
many options such as accessing the rainy day fund. Trial Tr.
102:9-25, 107:24-108:10, Nov. 10, 2015 (Mayor Traficante).
All alternatives were dismissed. Id. at 102:9-25,
107:24-108:10. For instance, the suggestion to secure a
pension obligation bond was dismissed because it would have
increased the debt service of the City. Id. at
104:21-105:7. A supplemental tax was also rejected.
Id. at 108:14-109:14. Mayor Traficante felt that
another tax increase would be harmful to City taxpayers who
had faced no fewer than six tax increases since 1985.
Id. Additionally, the privatization of the
wastewater treatment plant was explored. Id. at
110:1-25. The option was deemed imprudent. Id.
these crucial changes to the City pension system, the
unfunded accrued liability continued to grow. By 1999, the
unfunded accrued liability reached a total of $169 million
for police officers and firefighters. Id. at
100:13-15; see also Ex. 60. One of the biggest
factors that drove the growth of the unfunded accrued
liability was the newly-implemented compounded COLA. Trial
Tr. 100:22-101:4, Nov. 10, 2015. Although the growth of the
unfunded accrued liability was recognized as an issue, this
administration was unable to achieve additional modifications
due to the significant achievements accomplished in 1996.
Id. at 101:11-25.
structural deficit continued to grow in the years following
the Traficante administration. Id. at 116:8-16
(Mayor O'Leary). Mayor John R. O'Leary was elected
and assumed office in 1999. Id. at 115:1-6, 116:1-3.
During his tenure, there remained a structural deficit as
well as challenges with respect to the unfunded pension
liability. Id. at 116:18-117:5. In an effort to meet
the City's obligations to pay retirees' pension and
healthcare obligations, Mayor O'Leary, during his fourth
and final year as mayor, borrowed against the pension fund
which was repaid the following year. Id. at
issue of the expanding unfunded pension liability was
confronted in 2008, when Allan Fung was elected Mayor. Trial
Tr. 2:20-21, 9:19-23, Nov. 12, 2015 (Mayor Fung). As with his
predecessors, Mayor Fung was responsible for overseeing the
City's budget, including the City's pension plan.
Id. at 2:22-4:1. The major sources of revenue for
the City continued to be the tax levy, state aid, and grant
money. Trial Tr. 3:19-23, Nov. 13, 2015 (Mr. Strom). These
sources were substantially reduced because of the negative
economic conditions developing during the initial days of the
Fung administration. Among the many economic challenges
encountered were the Great Recession, rising unemployment,
and the devaluation of the City property assessment. Trial
Tr. 13:9-17, 17:10-20, Nov. 12, 2015 (Mayor Fung). It was
estimated that the property assessments decreased by one
billion dollars between 2008 and 2009. Id. at
13:9-17, 17:10-20; see also Exs. YYY, ZZZ. This
resulted in lower tax revenue for the City. Trial Tr.
17:10-20, Nov. 12, 2015. To compound matters, the City was
challenged by two natural disasters in March of 2010 that
cost the City in excess of $1.4 million. Id. at
with these events came a substantial decrease in state aid
due to the state budgetary crisis. Id. at
19:25-20:3. State aid decreased from twenty-two million
dollars in fiscal year 2007 to less than six million dollars
in fiscal year 2011. Trial Tr. 11:5-12:7, Nov. 13, 2015 (Mr.
Strom); see also Exs. H, I, J, K, L. The reduction
in aid created a nearly five percent gap in the budget. Trial
Tr. 14:5-12, Nov. 13, 2015. The overall fiscal health of the
City was disabled. Trial Tr. 22:18-23:19, Nov. 12, 2015
(Mayor Fung); see also Ex. R. As a consequence,
Moody's Investors Services downgraded the City's bond
rating. Trial Tr. 23:20-24:14, 27:25-28:25, Nov. 12, 2015;
see also Exs. R, X. There were several reasons
listed to support the downgrade, including the continued
underfunding of the annual required contribution and the
anticipated increase in the unfunded pension liability, among
others. Id.; see also Exs. R, X.
with these financial difficulties, the City undertook
significant expenditure cuts and many attempts to increase
City revenue. Trial Tr. 16:11-17:3, Nov. 13, 2015; see
also Ex. MM. Mayor Fung began to tackle the problem
through the implementation of a series of steps that included
cost cutting measures. Trial Tr. 12:8-19, Nov. 12, 2015
(Mayor Fung). The administration explored cuts that included
a reduction in staff and an increase in the healthcare
co-pays for City employees. Id. A multi-year pay
freeze was instituted to further reduce costs. Id.
at 71:12-72:17; see also Ex. JJ. Public motor
vehicles and buildings were sold for revenue. Trial Tr.
70:20-71:3, 144:7-16, Nov. 12, 2015; see also Ex.
Fung administration also reviewed the City's pension
system. Trial Tr. 29:1-6, Nov. 12, 2015. The City pension
system's large, unfunded liability was a result of
historical underfunding as well as the high cost of the
compounded COLAs. Id. at 31:4-17. By 2011, the
unfunded liability totaled $256 million, with $35 million in
assets. Id. at 30:6-15, 39:5-21; see also
Exs. U, Y. There were approximately 480 participants and
beneficiaries in the City pension system. Trial Tr. 29:7-12,
Nov. 12, 2015. Of those, an estimated fifty-seven were active
employees. Id. at 29:13-18. A 2011 report estimated
that-with demographic and economic assumption changes-the
unfunded and accrued liability actually would increase to
approximately $271 million. Id. at 46:11-21; see
also Ex. Y. Additionally, the City made less than the
100% annual required contribution (ARC) to the pension
for fiscal years 2009, 2010, and 2012. Trial Tr. 41:15-42:16,
Nov. 12, 2015; see also Ex. U. With demographic and
economic assumption changes taken into account, the ARC
increased by several million dollars a year in fiscal year
2010. Trial Tr. 47:13-21, Nov. 12, 2015; see also
decision to act was based on a real fear of bankruptcy. Trial
Tr. 81:11-19, 82:1-15, 121:18-122:2, 126:11-23, Nov. 12, 2015
(Mayor Fung). Mayor Fung had witnessed the Central Falls
bankruptcy in 2011, and he recognized that bankruptcy was
also a possibility for Cranston. Id. Mayor Fung
noted that the Auditor General's report from 2011
detailed Cranston's pension problem and that all three
ratings agencies indicated pension issues in Cranston.
Id. at 82:19- 83:11. Although it was conceded that
the Auditor General had sounded the alarm in its 2002 report
on the City's pension system, there was a firm testified
belief that the total context of budgetary crises, inherited
deficits, unanticipated cuts in state aid, and the 2010
natural disasters constituted an unexpected fiscal emergency
in 2009. Trial Tr. 13:3-14:24, Nov. 13, 2015 (Mayor Fung);
see also Exs. HHHH, IIII, 57.
occurring during this timeframe was the state's
undertaking to address the status of locally administered
pension plans. Trial Tr. 33:21-25, Nov. 12, 2015. Mayor Fung
was a member of the Pension Study Commission charged with
analyzing pension issues and formulating recommendations to
the Governor and the General Treasurer. Id. at
the Rhode Island Retirement Security Act (RIRSA) was passed
in 2011. G.L. 1956 §§ 45-65-1 et seq.;
see also Ex. VVV. Under RIRSA, any municipal pension
plan that was less than sixty percent funded was defined to
be in "critical status." Trial Tr. 5:22-6:5, 35:1-
36:19, Nov. 12, 2015 (Mayor Fung); see also Ex. VVV.
A municipality that was deemed to be in critical status was
tasked with two responsibilities: (1) submitting a notice of
critical status to plan participants and beneficiaries and to
the general assembly, governor, general treasurer, director
of revenue, and auditor general within thirty days; and (2)
submitting a reasonable alternative funding improvement plan
to emerge from critical status to the Pension Study
Commission within 180 days of sending the critical status
notice. Trial Tr. 36:7-19, Nov. 12, 2015; see also
Ex. VVV. If a critical status municipality failed to comply,
it faced reductions in state aid. Trial Tr. 36:12-19,
37:6-14, Nov. 12, 2015; see also Ex. VVV. If deemed
to be in critical status, the City had twenty years to
achieve sixty percent funding status-and thus emerge from
critical status-or it would face significant further
reductions in state aid. Trial Tr. 85:16-86:8, 95:4-6,
102:17-25, Nov. 12, 2015.
City met the rubric for critical status. Id. at
48:1-11. As a result, on April 1, 2012, the City's
actuary sent a letter to the Cranston Finance Director
indicating that the City was in critical status as defined in
RIRSA. Id. at 48:6-11; see also Ex. Z. A
notice of critical status designation was sent to all of the
City pension system participants and beneficiaries as well as
to the various state officials required by RIRSA on April 6,
2012. Trial Tr. 48:23-49:19, Nov. 12, 2015; see also
Exs. AA, BB, CC, DD, EE, FF. The City had 180 days to submit
a reasonable alternative funding improvement plan to the
Pension Study Commission. Trial Tr. 87:19-25, Nov. 12, 2015;
see also Ex. VVV. At the time, Cranston's
pension was 16.9% funded and one of the worst in the state.
Trial Tr. 61:16-20, Nov. 12, 2015; see also Ex. GG.
For fiscal year 2012, the City was required to increase its
ARC to pension payments by $14 million to 100% fund the plan.
Trial Tr. 53:15-54:6, Nov. 12, 2015; see also Ex.
GGGG. It was concluded that obtaining $14 million through
spending cuts would decimate city services, eliminate parks
and recreation services, and shutter libraries. Trial Tr.
57:3-20, Nov. 12, 2015; see also Ex. GGGG.
it was decided that the solution involved the suspension of
the 3% compounded COLA. The suspension of the 3% compounded
COLA, however, was not the only option considered by the Fung
administration. Trial Tr. 89:1-11, 94:9-15, 112:6-11, Nov.
12, 2015 (Mayor Fung); see also Trial Tr. 9:19-11:7,
Nov. 13, 2015 (Mayor Fung). Over twenty-five different
alternatives were researched and considered with City
actuaries, and it was only after a long process that the
ten-year suspension of the 3% compounded COLA was chosen.
Trial Tr. 89:1-11, 94:9-15, 112:6-11, Nov. 12, 2015 (Mayor
Fung); see also Trial Tr. 25:25-26:11, Nov. 13, 2015
(Mr. Strom). With the assistance of consultants from Buck
Consulting, the City examined prudent measures to achieve a
more sustainable City pension system. Trial Tr. 25:25- 26:11,
Nov. 13, 2015 (Mr. Strom). Raising the employee contributions
was not seriously considered because of the relatively small
number of current employees and the large size of the
unfunded liability. Trial Tr. 77:25-78:13. Nov. 12, 2015
(Mayor Fung). Funds in the rainy day fund were also not
considered in resolving the pension crisis, as Mayor Fung
thought it unwise to use those funds for a systemic problem.
Id. at 120:9-17.
unsuitable to achieve fiscal readiness was raising taxes.
Trial Tr. 18:6-16, Nov. 13, 2015 (Mr. Strom). The City had
recently undergone tax increases and further tax increases
were deemed unsustainable to taxpayers. Id. In
Cranston, the assessed value of real and tangible property
from 2008 to 2015 declined, whereas the net tax levy
increased. Id. at 18:25-21:11, 22:2-12; see
also Exs. YYY, ZZZ, AAAA, BBBB, CCCC, DDDD, EEEE, FFFF.
Indeed, the City was listed by the State as a
"[d]istressed [c]ommunity" for at least two years,
indicating a high tax burden. Trial Tr. 22:13-23:4, Nov. 13,
2015. In fact, between 1985 and 2013, there were at least
fifteen tax increases in the City. Trial Tr. 76:13-16, Nov.
12, 2015 (Mayor Fung); see also Ex. XXX. Cranston
residents were paying high taxes for extremely limited
services. Trial Tr. 59:2-5, Nov. 12, 2015. Any subsequent tax
increases to deal with the crisis were not feasible.
Id. at 76:21-23, 80:11-15. Furthermore, a tax
increase would defy the state property tax cap. Trial Tr.
37:10-23, Nov. 13, 2015 (Mr. Strom). The cap prevents any
municipality from raising the tax levy by more than 4% in any
fiscal year. Id.
clear that to avert disaster the City had to act. The primary
reason that the suspension of the 3% compounded COLA for ten
years appeared fruitful was to rescue the pension plan from
extinction. Trial Tr. 121:20-23, Nov. 12, 2015 (Mayor Fung).
The suspension of the 3% compounded COLA suspension was a
measure of last resort. Trial Tr. 27:15-23, Nov. 13, 2015
(Mayor Fung). In the end, it was concluded that the 3%
compounded COLA suspension would reduce the City's
unfunded pension liability and ultimately reverse the
Moody's Investors Service's negative outlook on the
City's bonds. Trial Tr. 28:14-29:16, Nov. 13, 2015;
see also Exs. X, PPP, QQQ.
Mayor created an alternative funding improvement plan and
presented it to stakeholders through a series of meetings.
Trial Tr. 59:10-15, 81:20-24, Nov. 12, 2015; see
also Exs. HH, KK. The Mayor attempted to openly and
transparently resolve the crisis. Trial Tr. 61:21-62:12, Nov.
12, 2015. Over one hundred police officers, firefighters,
and/or retirees attended a meeting on September 13, 2012 with
Mayor Fung to discuss what could be done. Id. at
63:19-64:13; see also Ex. JJ. At this meeting, Mayor
Fung presented a PowerPoint slideshow that provided
information as to the City's past and present financial
situation, RIRSA's requirements, and a proposed funding
improvement plan. Trial Tr. 64:24-70:13, Nov. 12, 2015; Ex.
JJ. The slideshow attempted to explain to pension plan
participants and beneficiaries why the City needed to act
now, how precarious the City's financial situation was,
and how the compounded COLAs impacted the pension fund. Trial
Tr. 81:5-83:24, Nov. 12, 2015; see also Ex. JJ. The
suspension of the 3% compounded COLA was proposed. Trial Tr.
84:19-85:15, Nov. 12, 2015; see also Ex. JJ. It was
explained by Mayor Fung that the proposal would accomplish
the goal of removing the City pension system from critical
status within twenty years. Trial Tr. 86:9-14, Nov. 12, 2015.
The presentation included a suggestion that retirees engage
legal counsel to negotiate; Mayor Fung insisted that,
although he had proposed a solution, he was open to
considering additional alternatives. Id. at
88:21-89:11; see also Ex. JJ. Mayor Fung had a
similar meeting on September 25, 2012. Trial Tr. 90:11-19,
Nov. 12, 2015.
Fung proposed two ordinances at a special meeting of the
Cranston City Council Finance Committee on October 25, 2012.
Trial Tr. 90:14-92:2, Nov. 12, 2015; see also Ex.
NN. The ordinances would implement a ten-year suspension of
the 3% compounded COLA. Trial Tr. 90:14-92:2, Nov. 12, 2015;
see also Ex. NN. During this meeting, Mayor Fung
made a presentation that contained much of the same
information from the slideshow presented on September 13,
2012. Trial Tr. 93:19-94:24, Nov. 12, 2015; see also
Ex. MM. By this time, the City and its actuaries had
considered over twenty-five different alternatives and had
narrowed the alternatives to four options for consideration.
Trial Tr. 93:19-94:24, Nov. 12, 2015; see also Ex.
MM. These options compared the effect of suspending the 3%
compounded COLA with various amortization periods on ARC
contributions to determine the year in which the City was
expected to emerge from critical status. Trial Tr. 94:9-98:5,
Nov. 12, 2015; see also Ex. MM. If the status quo
was to remain, the City would be required to infuse an
additional $100 million over twenty years to emerge from
critical status in a timely fashion. Trial Tr. 95:11-97:7,
Nov. 12, 2015; see also Ex. MM. By suspending the 3%
compounded COLA for ten years, the City would emerge from
critical status by 2032, within the Pension Study
Commission's twenty-year requirement. Trial Tr. 97:8-22,
Nov. 12, 2105; see also Ex. MM.
November 11, 2012, Mayor Fung sent a letter to the Pension
Study Commission containing the four potential scenarios for
emerging from critical status. Trial Tr. 98:9-19, Nov. 12,
2015; see also Ex. QQ. The four options included a
ten-year suspension of the 3% compounded COLA, a fifteen-year
suspension of the 3% compounded COLA, a permanent suspension
of the 3% compounded COLA with large ARC in fiscal years 2013
and 2014, and a permanent suspension of the 3% compounded
COLA with different ARC in fiscal years 2013 and 2014. Trial
Tr. 99:2-100:11, Nov. 12, 2015; see also Ex. QQ.
this timeframe, Mayor Fung was approached by retirees as well
as union representatives from the IBPO and the IAFF seeking
to resolve the crisis. Trial Tr. 103:4-25, Nov. 12, 2015. In
an attempt to negotiate in good faith, Mayor Fung suspended
his efforts to seek passage of the ordinances. Trial Tr.
104:1-12, Nov. 12, 2015. He commenced a dialogue with the
City pension system participants and beneficiaries.
Id. Starting in January of 2013, Mayor Fung met with
Mr. Paul Valletta, president of the IAFF; Mr. Ken Rouleau,
vice president of the IAFF; Mr. Stephen Antonucci, president
of the IBPO; police retiree representatives, and others.
Trial Tr. 106:17-107:20, Nov. 12, 2015. Meetings between
Mayor Fung and interested parties occurred on January 11,
2013; January 29, 2013; February 14, 2013; February 26, 2013;
March 4, 2013; and March 8, 2013. Id. at
108:17-109:11; see also Ex. TT. Mayor Fung testified
that all of these meetings were designed to provide
information to retirees and engage in an open dialogue. Trial
Tr. 109:9-21, 110:4-18, Nov. 12, 2015. At the meetings, over
twenty different scenarios were discussed with retirees,
including alternative compounded COLA suspension scenarios.
Id. at 112:6-11; see also Exs. XX, ZZ, AAA,
DDD, III. Ironically, one goal of holding these meetings was
to avoid a court challenge. Trial Tr. 110:11-18, Nov. 12,
2015. Ultimately, the stakeholders reached an agreement.
Id. at 115:11-14.
agreement resulted in the passage of two ordinances by the
Cranston City Council on April 23, 2013 amending the Cranston
City Code that governed police and firefighter retiree
pensions to suspend the 3% compounded COLA for a period of
ten years (2013 Ordinances). Id. at 101:1-7,
116:17-117:1, Nov. 12, 2015; see also Exs. HHHH,
IIII. In year eleven, the COLA is reinstated at a fixed 3%
compounded amount. Trial Tr. 22:12-16, Nov. 13, 2015 (Mayor
Fung); see also Exs. HHHH, IIII.
implementation of these changes led the Cranston Police
Department Retirees Association, Inc. and the Local 1363
Retirees Association to bring suit in April 2013 against the
City, alleging that the 2013 Ordinances violated, inter
alia, the contract clauses of the Rhode Island and
United States Constitutions. See Joint Statement of
Undisputed Facts at ¶ 31; see also Local 1363
Retirees Ass'n v. City of Cranston, PC-2013-1899.
The parties negotiated and reached an agreement in the summer
of 2013 (Settlement Agreement). Id. at ¶ 32.
Paul Valletta Jr., President of the local IAFF, was the lead
negotiator for the union. Trial Tr. 2:10-3:2, Nov. 17, 2015
(Mr. Valletta). Mr. Valletta was gravely concerned with the
passage of RIRSA in 2011. Id. at 6:12-21. The
purpose of the Settlement Agreement was to save the pension.
Id. at 12:12- 17. Prior to the Settlement Agreement,
other options were explored, including increasing taxes,
lay-offs, reductions in pay, and selling City assets.
Id. at 13:4-15:17. It was concluded that these were
not feasible or reasonable. Id.
terms of the Settlement Agreement included a suspension of
the 3% compounded COLA on alternating years for a period of
ten years; in years eleven and twelve a compounded COLA is
set at one and a half percent; and for years thirteen and
forward the COLA returns to 3% compounded. See Trial
Tr. 115:15-116:3, Nov. 12, 2015 (Mayor Fung); Trial Tr.
23:11-19, Nov. 13, 2015 (Mayor Fung); see also Ex.
JJJJ. During a fairness hearing, the Court found the
Settlement Agreement fair and reasonable and approved it on
December 13, 2013. Joint Statement of Undisputed Facts at
dissatisfied with the Settlement Agreement were afforded the
opportunity to elect to exclude themselves from the
Settlement Agreement. Id. at ¶¶ 36, 40.
Those individuals retained the right to sue the City.
Id. CPRAC is comprised of those individuals who
opted out of the Settlement Agreement. Trial Tr. 51:17-52:22,
Nov. 9, 2015 (Mr. Gilkenson).
non-jury trial was held over the course of six days, during
which sixteen witnesses testified. At the close of
CPRAC's evidence, the City moved for judgment as a matter
of law pursuant to Super. R. Civ. P. 52(c). Trial Tr.
117:25-122:24, Nov. 17, 2015. The Court reserved on the
City's motion. Id. at 127:19.
Standard of Review
52(a) of the Superior Court Rules of Civil Procedure (Rule
52(a)) provides that "[i]n all actions tried upon the
facts without a jury . . . the court shall find the facts
specially and state separately its conclusions of law . . .
." Super. R. Civ. P. 52(a). Accordingly, in a non-jury
trial, "'[t]he trial justice sits as a trier of fact
as well as of law.'" Parella v. Montalbano,
899 A.2d 1226, 1239 (R.I. 2006) (quoting Hood v.
Hawkins, 478 A.2d 181, 184 (R.I. 1984)). In so doing,
she "'weighs and considers the evidence, passes upon
the credibility of the witnesses, and draws proper
inferences.'" Id. (quoting Hood,
478 A.2d at 184). Additionally, "it is permissible for
the trial justice to 'draw inferences from the testimony
of witnesses, and such inferences, if reasonable, are
entitled on review to the same weight as other factual
determinations.'" Cahill v. Morrow, 11 A.3d
82, 86 (R.I. 2011) (quoting DeSimone Elec., Inc. v. CMG,
Inc., 901 A.2d 613, 621 (R.I. 2006)) .
"'extensive analysis'" is not required of
the trial justice. Wilby v. Savoie, 86 A.3d 362, 372
(R.I. 2014) (quoting Connor v. Schlemmer, 996 A.2d
98, 109 (R.I. 2010)). Indeed, the "'trial
justice's analysis of the evidence and findings in the
bench trial context need not be exhaustive . . . if the
decision reasonably indicates that [he or she] exercised [his
or her] independent judgment in passing on the weight of the
testimony and credibility of the witnesses . . . .'"
Id. (quoting Notarantonio v. Notarantonio,
941 A.2d 138, 144-45 (R.I. 2008)). Brief findings of fact and
conclusions of law are sufficient as long as they squarely
address and resolve controlling factual and legal
issues. See Broadley v. State, 939 A.2d
1016, 1021 (R.I. 2008).
Court, sitting without a jury, also possesses discretion
"to grant or deny declaratory relief pursuant to the
[Uniform Declaratory Judgments Act]" as well as
discretion "to grant or deny injunctive relief as a
court of general equitable jurisdiction." R.I.
Republican Party v. Daluz, 961 A.2d 287, 295 (R.I.
2008); see also §§ 9-30-1 to 9-30-16;
see also § 8-2-13. The Uniform Declaratory
Judgments Act grants the Superior Court "power to
declare rights, status, and other legal relations whether or
not further relief is or could be claimed . . . and such
declarations shall have the force and effect of a final
judgment or decree." Sec. 9-30-1. Furthermore, "[a]
decision to grant or deny declaratory or injunctive relief is
addressed to the sound discretion of the trial justice . . .
." Foster Glocester Reg'l Sch. Bldg. Comm. v.
Sette, 996 A.2d 1120, 1124 (R.I. 2010).
contract clause of the United States Constitution as well as
the Rhode Island Constitution serves to limit the power of
the state to modify and regulate contracts. See Brennan
v. Kirby, 529 A.2d 633, 638 n.7 (R.I. 1987) (holding
that Rhode Island courts "will rely on federal case
authority in this area"); R.I. Const. art. I, § 12;
U.S. Const. art. I, § 10. Although the contract clause
appears to be an absolute bar to impairment of public and
private contracts, the United States Supreme Court has not
interpreted it as such. U.S. Trust Co. of N.Y. v.
N.J., 431 U.S. 1, 20 (1977) (holding that the contract
clause "'is not to be read with literal exactness
like a mathematical formula.'") (quoting Home
Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398,
428 (1934)); see also Energy Reserves Grp., Inc. v. Kan.
Power and Light Co., 459 U.S. 400, 410 (1983).
apparent absolute prohibition of the contract clause has been
"accommodated to the inherent police power of the State
'to safeguard the vital interests of its
people.'" Energy Reserves Grp., Inc., 459
U.S. at 410 (quoting Blaisdell, 290 U.S. at 434).
Central to the interpretation of the contract clause is the
careful balance struck between retaining "any meaning at
all" from the words of the text and "the exercise
of [a state's] otherwise legitimate police power."
Allied Structural Steel Co. v. Spannaus, 438 U.S.
234, 242 (1978); see also Patrick J. Rohan, 1
Zoning and Land Use Controls § 5.05 (1997)
(noting the tension from the "conflict between the
contracts clause of the United States Constitution and the
necessary powers inherent in a sovereign state"). This
balance furthers the "principle of harmonizing the
constitutional prohibition with the necessary residuum of
state power . . . ." City of El Paso v.
Simmons, 379 U.S. 497, 508 (1965). Therefore,
"state laws that impair an obligation under a contract
do not necessarily give rise to a viable Contracts Clause
claim." Buffalo Teachers Fed'n v. Tobe, 464
F.3d 362, 368 (2d Cir. 2006) (citing U.S. Trust Co.,
431 U.S. at 16).
whether a state law unconstitutionally impairs the
obligations of contract requires this Court to conduct a
three-prong analysis. See Energy Reserves Grp., 459
U.S. at 411-13; see also In re Advisory Op. to the