The Oregonian Blathers In Their Editorial Today:
"The PERS board and local governments reached a settlement after Lipscomb's decision. The Supreme Court's ruling last Thursday essentially upholds that settlement."
Ask why they inserted the qualifier word "essentially"
[THIS IS BEST VIEWED AS JUST A SNAPSHOT OF A STREAM OF BRAINSTORMING FOR A WEAKNESS IN THE STATE'S ARGUMENT THAT EVERYTHING IS NOW SETTLED.]
Because the settlement merely provided factual context for possible disagreement but nothing relevant legally. None. I repeat, None. Why do I say this?
The SC cited for legal authority the notion of a replacement rate ruling. It is that rate ruling that made the discussion of the preceeding rate ruling moot, not the settlemnt.
The Lipscomb order required the new rate ruling. The folks who were, or are, bantering over the settlement issues had no authority to disregard the order itself.
Neither the legislators nor the employers could undue the order itself through a collateral attack by going soft. The Legislators tried messing with the manner of recovery by modifying the means of recovery via COLA stuff out into the future even though there was already a clear mechanism already in place. The government attorneys tried themselves to claim some authority to pretend as if they could ignore the order and negotiate something new and there after use that contract-type negotiation as a source of authority to compel the PERB to take some prescribed action.
Things are as they were on the date that the Lipscomb order was (cough) tentatively issued. The delayed declaration of finality to the order and all that follows is wrapped up in the single act of the PERB replacement rate ruling and it was itself compelled by the court itself via the Lipscomb order. The issue, as to this new rate rate ruling, is whether the court has the power to issue such a new rate ruling which can be addressed only, I mean only, in a challenge to the validity of this new rate ruling.
Pretend that there had been no settlement and no opinion at all on the Lipscomb order. There is the live controversy of the new rate ruling in the context of compliance with the original Lipscomb order, and it cannot be seen as anything other than as just a step in the sequence of actions taken to comply with the original order.
If the rate selected in the replacement ruling has a legal problem all on its own, one that hinges on the issues addressed in the Lipscomb order, then they are wide open for challenge. The recent court ruling is like little more than an interlocutory appeal of a sub issue in an ongoing case.
The later enacted legislation directing the COLA adjustment process over time as a choice of remedy was a substitute remedy that was not useful (legislature wise, and politics) other than to blunt the impact of recovery. The power to demand immediate recovery existed at the time of the original Lipscomb order, and still does . . . as of the legal rights at the time of the order itself. The COLA adjustment stuff will not cloud recovery. The SC noted this in Strunk, where they found a basis to reject it that was less drastic than telling the legislature to simply butt out of the ongoing judicial proceeding, and by noting the statutory provision allowing for recovery.
But here, if you have followed this far, is where the COLA adjustment stuff is of interest to me. It messes with any potential recalculation of Underfunded Actuarial Liability. The word "liability" is like a buzz word that implies that if the parties all strolled into court over the existence or non existence of "liability" that they could get a court order to compel payment of that 'liability." But what would be the measure of damages for that liability and could a court declare that such liability determination conforms to the requirement that a court resolution be "final?" All those bonds, the pension obligation bonds, were based on a number picked out of a hat that given the new rate ruling is simply incorrect. The COLA adjustment, as an alternative remedy for recovery, would have messed with the calculation of the dollar amount that would lead to the borrowing. The COLA adjustment, as an alternative remedy for recovery, would have complicated . . . get this . . . measuring the "fund" in the event that PERS were terminated and the entire "fund" were somehow delivered to the beneficiaries.
My beef is with the UAL, and the bonds. As such both Struck and the Libscomb order in the City of Eugene case were, are, intertwined. I find nothing in the latest ruling to lend further credibility to the claim for "liability" upon which the bonds were issued, but rather find a vindication for claim that the claims of "liability" are too wishy washy to be part of any final court order other than a complete termination of PERS.
So, do yah, do yah want the Pension Obligation Bond money or don't yah?
Suppose that I isolate out the portion of the UAL that previously was based on the original rate ruling and demand a recalculation of the UALs so as to reflect the replacement rate ruling? That portion surely could not have been part of the "liability" upon which the bonding was undertaken; even if we only discover(ed) this later. I could go on here in fifty different directions but will isolate the notion of the value of a "settlement." What settlement? You mean where a bunch of lawyers had a chat amongst themselves? It is no more relevant to a final judgment in the case of UALs than it is for the City of Eugene case, even where the legislature jumps in to make a mess of the judicial process.
I would lawyer up and claim that the UALs, the corrected UALs, belong to the PERS beneficiaries and that the employers cannot claim any reduction on their employer contributions based on the gains made from their claimed ownership interest (the right to beneficial interest, i.e., profit) in bond-funded investment accounts in their own name. The implication of "liability" is that it belongs to someone other than the liable party, at the time the liability is considered final. So is the "liability" upon which the bonds were issued "final" or not? That is, final in the eyes of a court? Nope, not yet. But the Lipscomb case, when it does finally reach a conclusion after completion of the separate challenge to the replacement rate ruling, would help to at least carve out one segment of the bonded dollars.
Should the participants in the Pension Obligation Bonds be required to recalculate the Underfunded Actuarial Liability upon which those bonds were based so as to reflect the results of the Lipscomb ruling? Not yet, perhaps, not until the challenges to the replacement rate ruling are complete and final. Should a court be mindful of this potential challenge, now? Of course they should; and they are.
OSBA TALKING POINTS (To Martha)
(RE: Yahoo persoregon /message/8571 The OSBA Talking Points.)
Don't be silly. The tactics to blunt and delay the original order have failed miserably, just as would a lawyer's appeal for an interlocutory order. The track remains the replacement order, and its's validity in the context of complying with the original order.
The PR campaign to highlight the settlement is just PR crap to save face and explain the delay in implimentation of the order. The mootness issue was totally and completely dismissive of the settlement by virtue of the new rate ruling, which was demanded not by the settlement but by the original order itself.
Suppose the employers had simply requested from judge Lipscomb an order to show cause as to why the PERB had NOT issued a replacment rate ruling yet. The precise paramemters of a proposed order are found in the replacement ruling and not found in the blather of lawyers talking about intentions in a proposed settlement.
Think from the perspective of lawyers battling over the reasonableness of claims for attorney fees. Don't let these side battles distract from what really happened, the settlement gamesmanship as well as the legislature were slapped for interfering in the judicial process rather than aiding in the process, which continues as per the original order.
Claims of complete and final victory are premature, but that itself does not excuse the delay in implementation. Only by delay can there be a reason for a court to say boo. They did not need to go boo because the PERB already blinked. The PR folks are freaky. This court refused to issue an advisory opinion about the replacement ruling and whether it complied with the original order. If the employers really wanted finality they would have asked for the proceedings on the replacement ruling be addressed directly, rather than just go blah blah about the settlement.
One Piece At A Time
group/persoregon/message/8633
One piece at a time . . . it is the way of the judicial process.
Recall that in Strunk, the court said that what is done is done, in the interest of finality, as to the earlier rate rulings. The principal could also apply to the 1999 rate ruling with equal force, for employers that were not a party to the Lipscomb case. The time to object has come and gone. If the 1999 rate determination was ultra vires (from the perspective of the PERB relative to the legislature) then so too would be the earlier rate determinations. And we know how those earlier rate rulings where treated; as final. Do you need a stronger cue than that?
Picture the law as it was, for the 1999 ruling. Had the time for the employers to object run out before all this subsequent legislation that seems to needlessly clutter up the inquiry? The rate ruling was final. Period.
(But for . . . all that other stuff that is of interest to me.)
Don't Dispair
persoregon/message/8634
And it won't, as to the parties to the City of Eugene case.
Let me pose a hypothetical, or proposition. If a particular client of a particular lawyer had a defense to liability (or had a claim) and the lawyer up and disregarded that client's interest for some political deal or on behalf of some other client . . . how long would that lawyer continue to practice law?
The lawyers for the employees (and retirees) could not have locked in anyone other than the clients who's interests were at stake as parties in the City of Eugene case. I would not reach out into the zone of despair to seek out reasons to join in the fate of those PERS beneficiaries who lost, or to force others to join sympathetically.
The new rate ruling can be confined to the parties to the City of Eugene case. Note the timing of the settlement. It was AFTER judge Lipscomb had issued his (tentative) ruling against the interests of PERS beneficiaries. It would be the height of absurdity, and against all notions of attorney zealousness, for a representative of PERS beneficiaries to drag in new clients to share in that loss.
In my wild brief I had made a point of asking that the decision in Strunk be confined to the parties that were before the court rather than give it class action affect. (I'll spare the arguments here for they are in my brief.) I did not see anyone else note that issue in their briefs and yet there was dialog on that very point at oral argument; that of disparate results for parties in the same class resulting only from participation in or non-participation in some court action. Review the tape if you must.
Ignore the settlement if you are not a party to the City of Eugene case and get on with the show. Oh yeah, don't hope to get any gains if you are not named as a plaintiff and it is not declared a class action. I don't expect the PERB to issue yet a third rate ruling, much like the first, but one never knows what these clowns will try next.
DIH2
To RoguePundit: The fat lady has not yet sung.
RoguePundit: Reaction to the PERS Decision
Response:
I argue here about the confinement of the City of Eugene case to the parties before the court. The proposition is that all the folks that were not a party will not be subject to the new rate ruling. The 20 percent stands, for folks that were not a party in the case, it will just take a couple years to make its way through the courts.
Take that very same reasoning, that of participation in the court action itself, and apply it to tier one. The tier one formulation was a creation of the legislature. Yet the case that led to the creation of multiple tiers was not a class action but rather just a subset of beneficiaries. The Strunk case recognized particular rights for tier-one folks, based, as per the Balmer exception, only on the basis of stari decisis. The effect of Strunk in rejecting modification of earlier rate rulings could be confined to the tier-one folks who were ALSO actual parties in the 1996 OSPOA case.
Bear in mind that the battle, in my mind, is among the various PERS beneficiaries because the 1999 ORS 238.600(2) provision that will eventually get addressed directly; forcing a pro-rata split of a finite and final fund.
"Compromise" is not something that a local government needs to voluntarily ask of workers. (That is an upside down view of the world.) The local citizens within a particular geographic territory merely offer what they are willing to offer, and no more.
There needs to be just one local government that simply says enough is enough and refuse to pay a single cent to PERB in employer contributions and the house of cards falls down into a single "final" determination of the claims to the fund. The Strunk case overturned the claim by the OSPOA majority that the tail of a few public employees could treat the citizens as if they were the subjects of a king and his band of loyal servants.
Stick in your mind the notion that the legislature fully and completely terminates PERS in its entirety. Every little battle and court opinion, today, must be considered in a light that allocates the finite fund among the various claimants. It is pure fiction and PR to think that the fund itself can step over and reach into the citizens pockets; but for very limited exceptions.
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See also RoguePundit: Successful Income Redistribution