Should County Supervisors Again Appeal Court Pension Decision?




Back in 2001 the Orange County Board of Supervisors and the union representing Deputy Sheriffs – the Association of Orange County Deputy Sheriffs, or AOCDS – negotiated a labor contract that changed the retirement system for Deputy Sheriffs to what is commonly known as 3% at 50. In general terms this means that a Deputy can retire at age 50 or later with 3% of their pay for every year worked. For instance, if a Deputy had worked for 25 years he/she would be entitled to 3 x25 or 75% of their pay in retirement for the rest of their lives. The 3% at 50 was also made available to Sheriff Department management, District Attorney Investigators and some Probation Department officers. The move to 3% at 50 for public agency law enforcement personnel was sweeping the state about this time, though a few government entities successfully resisted.

In 2007 a new Orange County Board of Supervisors launched an effort to search for a way to reverse this 3% at 50 deal, stating the future cost was too much. Several law firms were contacted to explore the possibility of a suit to undo this 3% at 50 labor agreement, and according to media reports some of those lawyers told the County Supervisors that such a suit would not succeed. However, a firm was found to take the case, and a suit was filed in 2008 first in Orange County Superior Court, but then transferred to a Superior Court in Los Angeles.

The defendant in the lawsuit was originally the Orange County Employees Retirement System (OCERS), but the AOCDS was added before it went to trial. After hearing oral arguments the Court ruled against the County in February 2009, rejecting the argument that the pension was retroactive and thus unconstitutional, but giving the County the opportunity to strengthen its argument that the 3% at 50 agreement exceeded the California Constitutional limitations on the incurrence of debt.

The County’s law firm filed a 32 page amendment, with over 70 pages of attachments with the Court in late March seeking, as reported in the press, “to revive” its lawsuit. None the less in July, 2009 the Court ruled against the County, ending that lawsuit.

The Board of Supervisors authorized an appeal, and it was filed with the California Second District Court of Appeals. It sought a reversal of the lower Court’s ruling and a finding that the 3% at 50 agreement violated the State Constitution arguing that (1) it was applied to years of work by deputies prior to the agreement being struck, making it a retroactive payment for work already performed in violation of the Constitution, and (2) the result was the creation of a pension debt and that the California Constitution requires voter approval for the creation of debt by government entities and that did not happen in this case.

Filings with the Appeals Court in support of the County’s position were made by the Fullerton Association of Concerned Taxpayers, the California Foundation for Fiscal Responsibility and the Center for Constitutional Jurisprudence. Filing documents with the Court in support of the OCERS and AOCDS was an organization of state and local public employees and the California Public Employees‘ Retirement System (CalPERS).

The California Second District Court of Appeals heard the case during the week of January 17, 2011, and as reported on this blog on January 26 ruled against the county in a 29 page written decision. If you are a public policy wonk, you can read the entire January 26, 2011 Court of appeals decision by going to the Court’s web site at:

That ruling included an award of legal costs to the OCERS and AOCDS to be paid by the County. The O-Juice blog post of January 26 repored that the county had incurred legal costs of $ 2.264 million and the AOCDS spokesperson was quoted in the press recently as stating they had spent a like amount to that of the County. At this writing we do not have a hint of the costs incurred by OCERS but a grand total so far in excess of $4.5 million for all parties seems likely.

So, the County has incurred $ 2.264 million in legal costs on this case and is likely on the hook for a similar amount, or more, to be paid to AOCDS and OCERS. Unless that is, the County chooses to appeal this decision by filing an appeal with the California Supreme Court and wins. Presumably the County’s own legal costs would rise with such an appeal as there would be legal costs to handle the case before the Supreme Court, but the County would be off the hook for AOCDS and OCERS legal costs if the County won. If however the County lost, then the County would not only incur its own direct and increased legal costs, it would then have to pay all the (increased) legal costs of AOCDS and OCERS.

One Supervisor has reported in his weekly newsletter that the Supervisors will go into Executive (closed) Session on February 8 to decide whether or not to appeal. Supervisor Moorlach has been quoted in the press as favoring an appeal to the State Supreme Court, but the other Supervisors have been quiet on the subject.

So the question before the Supervisors, given this rather colorful history of the sequence of events and the several millions of dollars in legal fees s far, is whether to continue the battle or fold ‘em. Recently Board Chairman Bill Campbell stated his goals for 2011, one of which is “Take appropriate action on the AOCDS/OCERS retroactive pension lawsuit”. Perhaps you have a well reasoned opinion on what “appropriate action” should be at this point in time that you would like to communicate to your Supervisor. Here is a list of them and their office phone number:

Janet Nguyen, Supervisor, First District 714-834-3110
John Moorlach, Supervisor, Second District 714-834-3220
Bill Campbell, Supervisor, Third District 714-834-3330
Shawn Nelson, Supervisor, Fourth District 714-834-3440
Patricia Bates, Supervisor, Fifth District 714-834-3550

About Over But Not Out

A retired Orange County employee, and moderate Republican. The editor seriously does not know OBNO's identity as did not the former editor, but his point of view is obviously interesting and valued.