Cloutier v. State
42 A.3d 816
| N.H. | 2012Background
- Cloutier, a retired probate judge, challenged the Judicial Retirement Plan under RSA chapter 100-C as impairing vested rights.
- Prior retirement statutes (repealed 2003) tied benefits to 3/4 of the currently effective salary of the office; the old scheme was impliedly contractual.
- RSA chapter 100-C, effective January 1, 2005, fixes benefits at 75% of final year salary with board discretion to grant COLAs within statutory limits.
- A joint stipulation compared projected benefits under the old and new plans; issues included whether 2003/2005 salary increases should be counted for old-plan calculations.
- The trial court granted summary judgment for petitioners on impairment but held that 2003/2005 raises should not be included in old-plan calculations; case appealed and cross-appealed.
- The state argued no contract existed or impairment was not substantial; the court engaged in contract-clause analysis and whether impairment was offset by compensating benefits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does RSA 100-C violate Article 23 by impairing vested rights? | Cloutier contends a contractual right to retirement benefits vested under prior statutes. | State contends no vested contract or impairment is not substantial. | Contract exists; impairment due to 100-C; remand on substantiality/offset. |
| Is the impairment of the contract substantial? | Impairment is substantial because retirement benefits no longer track salaries of sitting judges. | Impairment may be non-substantial given flexibility and varying salary practices. | Majority remands to determine offsetting compensating benefits; substantiality not finally decided here. |
| Should 2003/2005 salary increases be counted in old-plan calculations? | These increases should be included as ‘currently effective annual salary’ under old statutes. | Increases were adjustments to fund new plan contributions and not part of old-plan base. | Ten percent 2003 increase and 1% 2005 correction are not included in old-plan calculations. |
| If impairment is substantial, is the burden and public purpose analysis satisfied? | Impairment should be balanced, with some justification for retroactive changes. | Legislative changes must be reasonable and necessary; retroactive application to judges was not justified. | Remand to assess reasonableness/necessity for retroactive impairment; dissent argues for affirmance of substantial impairment. |
Key Cases Cited
- Fournier, State v., 158 N.H. 214 (2009) (contractual protections mirrored to US Const. contract clause)
- Kern v. City of Long Beach, 179 P.2d 799 (Cal. 1947) (pension rights may vest but can be modified for system integrity)
- Bakenhus v. City of Seattle, 296 P.2d 536 (Wash. 1956) (pension rights may be modified pre-retirement with compensation balance)
- Miles v. Tenn. Consol. Retirement System, 548 S.W.2d 299 (Tenn. 1976) (offsets/compensation balance in pension plan changes)
- Sylvestre v. State, 214 N.W.2d 664 (Minn. 1973) (impairment permitted if compensated by advantages)
- Tuttle v. N.H. Med Malpractice Joint Underwriting Assoc., 159 N.H. 627 (2010) (contract impairment substantiality framework; reliance factors considered)
- Opinion of the Justices (Furlough), 135 N.H. 625 (1992) (exists framework for whether impairment is substantial when pay/benefits are involved)
- State v. N. of the Border Tobacco, 162 N.H. 206 (2011) (contract/constitution interplay in state law challenges)