Arken v. City of Portland
263 P.3d 975
Or.2011Background
- PERS is a public pension system; PERB administers PERF and sets credits, reserves, and rates.
- Window Retirees (Tier One, Money Match) retired 2000–2004 and were overpaid based on 1999 20% earnings credit.
- Legislation in 2003 (HB 2003) codified an 11.33% 1999 credit and imposed a COLA adjustment scheme; it also created Section 14b for recovery of overpayments.
- PERB issued January 27, 2006 Order Adopting Repayment Methods to recover overpayments under ORS 238.715, using lump-sum or actuarial reductions, with COLAs potentially frozen.
- Strunk (2005) invalidated COLA suspension under the 2003 reform as a contract breach, influencing later decisions; City of Eugene cases guided the overpayment recovery framework.
- Arken and Robinson challenge PERB’s methods; the Court resolves whether 238.715 and 14b apply and what remedies are permissible.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ORS 238.715 applies to Window Retirees after 2003 reforms | Arken: 238.715 barred by Strunk/Section 10 | Arken: 14b/10/Section 10 preclude 238.715 | 238.715 applicable to recover overpayments. |
| Whether 2003 reform eliminated PERB's 238.715 authority | Arken: reforms extinguish 238.715 | Arken: authority preserved by omission/history | Legislature did not intend to eliminate 238.715. |
| Whether 14b COLA freeze is a valid remedy | Arken/Robinson: COLA freeze valid under 14b | PERB: 14b COLA freeze necessary | COLA freeze under 14b invalid; not a viable remedy. |
| Whether the 14b remedies are exclusive or can coexist with 238.715 | Robinson/PERB: 14b exclusive | 14b separate, nonredundant | 14b remedies not exclusive; 238.715 remains available. |
Key Cases Cited
- Strunk v. PERB, 338 Or. 145 (2005) (invalidated COLA suspension as contract breach; informs limits on COLA provisions)
- City of Eugene v. PERB, 339 Or. 113 (2005) (addressed overpayment recoupment and reserves; influenced 14b/10)
- City of Eugene v. PERB, 341 Or. 120 (2006) (mootness/settlement; reaffirmed reach of 14b issues)
- Hughes v. State of Oregon, 314 Or. 1 (1992) (promissory contract rights in PERS; trust/contract framework)
- Gaines v. State, 346 Or. 160 (2009) (statutory interpretation; legislature intent governs contracts)