24 Cal. App. 5th 740
Cal. Ct. App. 5th2018Background
- Tod Hipsher, a retired Los Angeles County firefighter, pled guilty to a federal felony for running an illegal gambling business after retiring; conviction did not on its face state it was committed in the scope of his duties.
- Under PEPRA § 7522.72, a public employee convicted of a felony arising out of official duties forfeits accrued pension benefits from the earliest date of the offense, with return of contributions for that period.
- The County's Dept. of Human Resources (relying on Homeland Security investigative reports) notified LACERA that Hipsher's conviction was job-related; LACERA then reduced Hipsher's pension and benefits without notifying him of an opportunity to be heard.
- Hipsher sued, alleging (1) unconstitutional impairment of vested contract rights, (2) ex post facto violation, and (3) denial of due process; the trial court rejected the constitutional challenges but granted a writ directing additional due process before benefit reduction.
- On appeal the court upheld § 7522.72 as constitutional (contract clause and ex post facto) but held Hipsher was entitled to procedural due process because his conviction did not conclusively establish it was job-related; the court directed that LACERA—not the County—must afford notice and an opportunity to be heard under its administrative procedures.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 7522.72 unconstitutionally impairs vested pension contract rights | Hipsher: statute unlawfully impairs his vested pension rights; no reduction allowed absent a comparable new advantage | County/LACERA: statute validly conditions forfeiture on a job-related felony; PEPRA serves important public purpose | Held: statute constitutional as applied; a job-related felony is a valid condition subsequent permitting limited forfeiture when reasonably related to pension system integrity |
| Whether § 7522.72 is an ex post facto law when applied to Hipsher | Hipsher: the forfeiture is punitive and retroactive punishment | Defendants: statute is civil/regulatory to protect pension funds and curb abuse | Held: not ex post facto—statute is civil with nonpunitive purpose; Mendoza‑Martinez factors do not overcome legislative intent |
| Whether Hipsher had a due process right before LACERA reduced benefits | Hipsher: yes—vested pension is property and he was entitled to notice and hearing because conviction did not on its face show job-relatedness | LACERA/County: reduction ministerial once employer reported; criminal process sufficient | Held: due process required—notice reasonably calculated and opportunity to contest before impartial decisionmaker because conviction alone was not dispositive |
| Which entity must provide the required process (County or LACERA)? | Hipsher: trial court held County must provide process because it made the initial decision | County: trial court erred; duty lies with LACERA or process not required; LACERA: employer makes ultimate job‑related determination and LACERA only acts ministerially | Held: statutory language ambiguous; construing retirement board authority and practical operation, LACERA must provide the requisite due process under its administrative appeal procedures |
Key Cases Cited
- White v. Davis, 30 Cal.4th 528 (Cal. 2003) (public employee statutory pension rights protected by state contract clause)
- Allen v. Board of Administration, 34 Cal.3d 114 (Cal. 1983) (limitations on impairing public pension benefits and discussion of comparable new advantage)
- Kern v. City of Long Beach, 29 Cal.2d 848 (Cal. 1947) (pension rights can be subject to condition subsequent but complete repeal of vested rights unconstitutional)
- Wallace v. City of Fresno, 42 Cal.2d 180 (Cal. 1954) (ordinance terminating all pension rights after post-retirement felony conviction held an unreasonable modification)
- Danser v. California Public Employees' Retirement System, 240 Cal.App.4th 885 (Cal. Ct. App. 2015) (retirement board has authority to determine member eligibility and interpret retirement law)
- Board of Regents of State Colleges v. Roth, 408 U.S. 564 (U.S. 1972) (pension/benefit interests constitute property protected by due process)