Administration December 28, 2006

San Diego City Lawyer Challenges Pension Ruling

December 28, 2006 (PLANSPONSOR.com) - San Diego City Attorney Michael Aguirre has asked a California judge to rethink his order severely constricting Aguirre's ability to recover improperly granted pension benefits from city workers.
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Aguirre on Wednesday filed the formal reconsideration request with Superior Court Judge Jeffrey Barton, citing three issues on which Aguirre contended Barton made an error in the December 14 ruling (See  Judge Rebuffs Aguirre’s Arguments in SDCERS Pension Case ), according to a San Diego Union-Tribune news report.

Aguirre said he will appeal  Barton’s ruling if it remains intact.

The restrictions placed on Aguirre’s legal efforts would mean the difference between recovering up to $50 million and the roughly $900 million the city originally sought, according to the lawyer.

The Union-Tribune said the three Barton errors Aguirre pinpointed were:

  • The decision took a narrow and technical view of contract law, but failed to look at the overall issue of the conduct of public officials, as called for in a precedent-setting case;
  • The judge failed to apply a rule that forces government officials to surrender benefits given in a contract in which they have a financial interest; and
  • The judge misstated the city’s position in its dispute with the San Diego City Employees Retirement System (SDCERS) over whether the state liability limit law was violated.

In his ruling, Barton agreed with four labor groups that argued a 2000 agreement effectively barred the city from now going after 1996 benefits, according to the news report. The 2000 agreement led to an increase in benefits for thousands of retirees because of a lawsuit claiming the city had not taken all forms of compensation into account when calculating employees’ pension amounts.

The judge also barred Aguirre from filing a lawsuit contesting pension benefits awarded in 2002 because of a 2004 agreement. That latter pact combined three lawsuits, bringing retirees, the city and the pension fund into court to address the fact that the city had been shorting the retirement system for years.

Finally, Barton barred the city from pursuing a remedy against the SDCERS for violation of Constitutional or Charter debt limitations.

There is an estimated $1.43 billion shortfall in the city employee pension fund.

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