Legal Challenge is Delaying Implementation of Pension Improvement Law
Introduction
This document, prepared by WEAC Legal Counsel Tony
Sheehan, describes the legal status of the 1999 state employee pension
improvement law known as Wis Act 11. The introduction is followed by
a Question and Answer section.
On December 23, 1999, the Department of Employee Trust Funds (DETF)
and the Employee Trust Funds Board (ETF Board) filed a petition with
the Wisconsin State Supreme Court requesting it to take original jurisdiction
of a declaratory ruling proceeding in which DETF and the ETF Board challenged
several elements of AB495 (1999 Wis Act 11). The petition named George
Lightbourn, the Secretary of the Department of Administration and Jack
Voight, State Treasurer, as Respondents. At that time DETF and ETF Board
also requested an injunction to prevent any elements of AB495 from being
implemented until the legal issues were resolved.
On the same date that the above documents were filed, Respondents filed
an initial response to the Petition to the Supreme Court and the Request
for Injunctive Relief. Respondents were not opposed to the Supreme court
taking jurisdiction nor were they opposed to the broad injunctive relief.
WEAC Attorneys Tony Sheehan, Lucy Brown and Mike Van Sistine filed
a Motion to Intervene, a brief on the issue of intervention, and an
initial position statement regarding the requested injunction on December
29, 1999. WEAC's position on injunctive relief was much narrower than
that of the other parties. Specifically we argued that several important
elements of AB 495 were not at issue in this litigation and should be
implemented. WEAC believes the various provisions of AB 495 are severable.
On December 30, the Supreme Court issued an order holding WEAC's motion
in abeyance and ordering Respondent to reply to the issues raised in
Petitioners' complaint.
WEAC filed a Motion to Reconsider with the Supreme Court on January
4, 2000. WEAC requested the Court to reconsider its prior decision and
modify its order to allow us to intervene in the case or at the very
least to respond to the Petitioners' complaint.
On January 12 the Court issued another order allowing WEAC as Proposed
Intervenors to file a response to the Petitioners' complaint by January
31. Additionally the Court ordered all parties to file a memorandum
addressing various issues including the legal standing (right) of the
Petitioners to bring this case and whether other parties are necessary
for proper resolution.
WEAC Legal Counsel are continuing to pursue intervention in the case
to defend all portions of AB495. Additionally, WEAC will argue that
even if certain provision are ultimately found unlawful that the various
provisions are severable and the remaining provisions should be implemented.
Q: Who are the parties?
A: The lawsuit was filed by the Department of Employee Trust
Funds (DETF), the Employee Trust Funds Board (ETF Board) and the Secretary
of the DETF. The lawsuit names the Treasurer and the Secretary of the
Department of Administration as representatives of the state as Respondents.
WEAC has filed a motion to intervene as a Respondent so that it may
defend AB495.
Q: What are the legal issues raised in the lawsuit?
A: There are many specific issues raised in the complaint but
the essence of the complaint is a challenge seeking the court's clarification
on who has authority to make changes in the retirement system and under
what circumstances different participant groups can be treated in different
ways.
Q: Why did the petitioners request an injunction, and what are the
other parties' positions on the injunction?
A: The petitioners requested that all provisions contained in
AB 495 be enjoined (stopped from being implemented) until the legal
issues in the lawsuit are resolved. The named respondents did not oppose
the injunction request. WEAC as a proposed intervenor has taken a narrower
position. WEAC has argued to the court that many provisions of AB495,
such as the reopening of the variable fund, are not related to or affected
by the lawsuit and as such should be implemented without delay.
Q: Why has the case been filed in the Supreme Court?
A: Because the proposed changes affect a large number of people
around the state and because the amount of money at issue is so large
and because the last court case relating to retirement benefits took
so long, the petitioners wanted to get a quick resolution to the legal
issues.
In general it is very rare for the Supreme Court to take a case on
original jurisdiction – without it going through the trial and
appeal courts.
Q: Does the Supreme Court have to take the case?
A: No, the decision to grant original jurisdiction is within
the discretion of the Supreme Court. The parties have all agreed that
this is an appropriate case for original jurisdiction and will try to
persuade the court to grant the request.
Q: How long will the case take?
A: It depends on whether the state Supreme Court agrees to take
the case on original jurisdiction. If the Supreme Court takes the case,
it will be scheduled for briefing and oral arguments and a decision
is likely by July. If, on the other hand, the Supreme Court refuses
to take the case at this time, it will have to go through the usual
judicial proceedings starting with the Circuit Court level. In that
event, the case will obviously take much more time.
Q: What is WEAC's position?
A: WEAC lobbied for the various provisions in AB495 and as such
it intends to defend the legislation. WEAC, based upon information from
a variety of sources, believes that the changes to the system are actuarially
sound and provide significant benefits to members. Additionally, WEAC
will argue that the various provisions are separate and distinct and
therefore are severable, so that even if one or more provisions are
found to be inappropriate, the rest will remain in effect.
Q: When will WEAC know if it is allowed to intervene as a party to
the lawsuit?
A: Currently, WEAC and the named parties are required to provide
certain information to the court by January 31. It is anticipated that
the Supreme Court will rule sometime after that date with respect to
WEAC's motion to intervene and the petition for original jurisdiction
filed by DETF and the ETF Board.
Posted January 28, 2000