The New Hampshire Judicial Retirement Plan and the New Hampshire Retirement System (NHRS) argued that Article 36-a of the state constitution created a constitutional trust and the Sudan Divestment Act forces them to divest from investments in scrutinized companies, which they claim conflicts with their constitutional obligations.
In its opinion, the high court said that relying upon the plain meaning of the language used in the Article as well as statements made in conference when the Article was debated and the clear language of the ballot question presented to voters, it concludes that the amendment requires only that retirement system funds be used for the sole object of providing retirement benefits. The court said the Sudan Divestment Act does not require that the systems’ funds be used for any purpose other than providing retirement benefits, but simply prohibits one possible investment option.
However, the court found an absence of a definitive trial court ruling on whether the Act impermissibly interferes with the trustees’ statutory or common law fiduciary duties, so it remanded the case to the trial court to make this determination.
In January 2008, President Bush signed into law the Sudan Accountability and Divestment Act of 2007 giving State and local governments authorization to divest assets in companies that conduct business operations in Sudan (see Bush Signs Sudan Divestment Bill into Law). In the same year, New Hampshire enacted the Sudan Divestment Act.
Later that year, the retirement systems sought rulings on whether the law was constitutional (see NH Pension Board Opts for Divestment Law Constitutional Challenge and NH Pension Plan for Judges Sues over Divestment Law).
A trial court granted the NHRS’ motion for an injunction on the implementation of the Act, finding that the System had demonstrated a substantial likelihood of success on its argument that Article 36-a rendered the Act unconstitutional.The high court’s opinion is here.