What’s next for the pension fight after today’s court ruling

Rhode Island’s leaders say it’s steady as she goes on their pension reform plan despite Tuesday’s landmark ruling that the state’s public employees have a contractual right to their pensions.

Gov. Lincoln Chafee and Treasurer Gina Raimondo will ask the Rhode Island Supreme Court to overturn Superior Court Associate Justice Sarah Taft-Carter’s decision [pdf] in favor of the unions who sued to block pension changes enacted in 2009 and 2010, said John Tarantino, the state’s attorney.

Although the case has not reached a conclusion yet – today’s ruling only denied the state’s request to end the case via a summary judgment – the high court can agree to undertake a “discretionary review” of Taft-Carter’s ruling (as opposed to an appeal).

“We’re going to go ask the Supreme Court to review the matter, and we’re going to ask the Supreme Court to do so expeditiously – as promptly as possible,” Tarantino told WPRI.com. Still, he said it’s “unlikely” the justices will rule before lawmakers meet to craft a pension overhaul next month.

The state will also ask both Taft-Carter and the Supreme Court to put the lower-court case on hold until it issues a judgment on today’s contract-rights ruling.

“I’m disappointed,” Tarantino said, but “I believe that the state’s legal position is the correct position, and ultimately I believe the state’s legal position will be affirmed by the [Supreme] Court.”

Separately, House Speaker Gordon Fox and Senate President M. Teresa Pavia Weed said today’s ruling “has no effect” on the joint finance committee hearings into pension reform scheduled for this month, which will begin Wednesday afternoon, or the special session set for October.

Chafee and Raimondo said they were “disappointed” by Taft-Carter’s ruling but said it is “only the beginning of what could be a long legal process.” They said they “remain committed to submitting comprehensive pension reform legislation for the General Assembly to consider during their October special session.”

The next step on the legal front will be the state’s request for a Supreme Court review and the unions’ response to that request. If the justices agree to review the decision, the high court will likely set a schedule for the sides to file briefs and then set a date for oral arguments.

It’s possible the state could still get the case thrown out altogether if the Supreme Court disagrees with Taft-Carter and rules that the workers don’t actually have a contractual right, and therefore a basis for the suit to move forward. “Then the case is done,” Tarantino said.

Tarantino challenged the characterization of Tuesday’s ruling as a loss for the state and a victory for the unions. It marks the first time a Rhode Island court has agreed that public-sector workers in Rhode Island have a contractual right to their pension benefits, which would make it harder for lawmakers to change them.

“All it means is that Judge Taft-Carter decided on a single issue, and that is she decided that the unions do have some contractual rights,” he said. “She did not decide whether the pension legislation is constitutional or not constitutional, or legal or illegal. She simply decided one issue, that they have contract rights.”

If the case before Taft-Carter proceeds, as the unions hope it will, she will need to decide whether the changes enacted in 2009 and 2010 are a “substantial impairment” of those contract rights and, if so, whether the state had a legitimate reason in the public interest to do so.

The worst-case scenario from state leaders’ perspective would be a judicial ruling that they did not have a legitimate reason to substantially alter pension benefits. That would drastically narrow their range of options for reducing the system’s cost, which is set to rise steeply next July.

Tarantino said he was pleased that Taft-Carter said none of the facts in the case are in dispute and that she emphasized her finding of a contractual right does not prohibit lawmakers from making changes to pension benefits, particularly since she noted that judges must treat the General Assembly’s acts with “great deference.”

“As long as they don’t violate the constitution or some other law, it’s really up to the General Assembly to make policy,” he said.

Earlier: Judge Taft-Carter issues decision in pivotal RI pension case (Sept. 13)

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