The Challenge:
When constitutional challenges threatened Rhode Island’s pension reforms, AP&S represented the Governor, General Treasurer, and Employees’ Retirement System of Rhode Island in state and federal litigation. The firm helped secure a court-approved resolution preserving approximately 92 percent of the savings generated by the challenged legislation, then successfully defended the resolution and related dismissals through multiple appeals.
An AP&S team led by John A. Tarantino and Nicole J. Benjamin represented Rhode Island’s Governor, General Treasurer and Employees’ Retirement System in litigation challenging amendments to the State’s pension statutes.
Unions, associations, and retirees brought nine cases in state court, a class action lawsuit, and a separate case in federal court, all challenging the constitutionality of pension changes made by the Rhode Island General Assembly in 2009, 2010 and 2011. Those changes reduced retirement benefits for employees of the state—Rhode Island’s largest employer—and of certain cities and towns.
The litigation created substantial exposure to restored benefits and threatened the fiscal stability the reforms were enacted to secure.
The Solution:
After a year-long effort to resolve the state court cases through mediation, the parties engaged in extensive motion practice on complex threshold issues.
AP&S successfully argued that all Rhode Island cities and towns participating in the Municipal Employees Retirement System should be joined as parties, and that the nine state court cases should be consolidated and tried to a jury.
The firm also prevailed on a critical issue concerning the burden of proof. Ruling on motions in limine, the Superior Court held that the plaintiffs—not AP&S’s clients—bore the burden of proving the unconstitutionality of the statutes at issue beyond a reasonable doubt, the highest burden available in a civil case. As to the primary claim under the Contract Clause of Rhode Island’s Constitution, the Court ruled that the plaintiffs bore the burden of proving, beyond a reasonable doubt, that the legislation substantially impaired a contract.
The Court further ruled that, after the state defendants made a sufficient showing of the reforms’ reasonableness and necessity, plaintiffs retained the burden to prove otherwise beyond a reasonable doubt.
As trial approached, the AP&S team coordinated the collection and production of more than 4 million pages of electronically stored documents, utilizing computer-assisted search and review technology. AP&S’s team also noticed and took numerous depositions and briefed and argued a series of discovery motions.
The Result:
In the months before trial, the parties filed cross motions for summary judgment. The Superior Court ruled on only one of those motions and granted summary judgment in favor of AP&S’s clients on one claim brought by a number of retirees.
Before decisions were issued on the remaining motions—but after the Superior Court had issued the decision on the burden of proof—renewed settlement efforts produced a proposed resolution covering most of the lawsuits. The settlement preserved approximately 92 percent of the pension savings the state had obtained in the challenged legislation. Following a five-day class action fairness hearing, the Superior Court found the settlement fair, reasonable and adequate. Rhode Island Public Employees Retiree Coalition v. Raimondo, No. PC 2015-1468, 2015 WL 3648161 (R.I. Super. June 9, 2015).
Because the settlement required implementing legislation, AP&S attorneys appeared before the Rhode Island Senate and the Rhode Island House finance committees and testified concerning the terms of proposed legislation and the corresponding cost to the state.
Thereafter, objectors filed appeals in the Rhode Island Supreme Court. After briefing and argument by AP&S, the Rhode Island Supreme Court affirmed, concluding that the hearing justice had not overlooked any of the concerns raised by the various objectors to the settlement and had conducted an exhaustive review of the factors necessary to determine whether the settlement was fair, reasonable and adequate. Clifford v. Raimondo, 184 A.3d 673 (R.I. 2018) [full text].
The settlement resolved six of the state court lawsuits. The Superior Court dismissed the three remaining cases because the claims advanced had been rendered moot by the passage of the legislation.
Two of the unions in those cases later commenced a new lawsuit in the United States District Court for the District of Rhode Island. AP&S filed a motion to dismiss the federal court lawsuit, which was granted. The unions appealed the dismissal of their claims to the United States Court of Appeals for the First Circuit.
Shareholder Nicole J. Benjamin, who chairs the firm’s appellate practice group, briefed and argued the appeal, and the First Circuit affirmed the district court’s dismissal in all respects. Cranston Firefighters, IAFF Local 1363 v. Raimondo, 880 F.3d 44 (1st Cir. 2018) [full text]. Applying the unmistakability doctrine, the court concluded that the pension statute did not clearly create the contractual rights asserted by the unions.