Judge Clarifies Competing San Diego Pension Lawsuits

August 24, 2005 (PLANSPONSOR.com) - A California judge has ruled that lawyers representing the city of San Diego pension system can keep representing the fund, as its leaders try to block City Attorney Michael Aguirre's move to elbow them aside so he can take over as legal counsel.

California Superior Court Judge Jeffrey Barton also decided several issues connected to the pension system’s lawsuit against Aguirre and to his office’s countersuit, including dismissing the pension fund’s request to bar the city attorney from publicly criticizing or threatening pension leaders, the San Diego Union Tribune reported.

Barton also narrowed the focus of the Aguirre suit as he turned aside several of the city attorney’s allegations but agreed to reconsider whether a receiver should be appointed to oversee all or part of the beleaguered scandal-plagued pension system.

Attorney Reginald Vitek, who represents the fund, argued that the city cannot push for a receiver because it is not a party that stands to lose money from the system’s operations. He also said the pension’s billion-dollar-plus deficit is not enough to justify a takeover.

Meanwhile, Andrea Musicant, a private attorney working with Aguirre’s office on the pension case, called it “implausible that you can say the city does not have an interest in a fund it has contributed to.”

Another issue, the targeting of individual pension board members and top administrators in Aguirre’s countersuit, was settled with an agreement to remove their names as defendants. The City Attorney’s Office had argued that the pension fund is a trust that only can be sued through those who administer it.

The battle is among several related to the pension system’s deficit of at least $1.4 billion, attributed to underfunding by the city and to employee benefit increases granted in 1996 and 2002. For more than a year, state and federal investigators have been examining a variety of scandals surrounding the pension fund and decisions city officials made regarding its funding.