Hutto v. South Carolina Retirement System
899 F. Supp. 2d 457
D.S.C.2012Background
- Plaintiffs are retired SC SCRS/PORS members rehired after July 1, 2005 challenging Act 153 as unconstitutional.
- Act 153 requires a retired member rehired by an SCRS/PORS employer to pay employee contributions as if active, with no new service credit.
- SC Supreme Court decisions in Layman and Ahrens ruled Act 153 unconstitutional as applied to TERI retirees and found no binding contract for working retirees, respectively.
- Plaintiffs seek declaratory and injunctive relief, accounting of contributions since July 1, 2005, and return of funds, plus attorney’s fees.
- Defendants move to dismiss under Rule 12(b)(1), (3), (6) arguing Eleventh Amendment sovereign immunity, among other grounds.
- Court ultimately holds the Retirement Systems are an arm of the State, so Eleventh Amendment immunity bars federal suit and grants dismissal.
- (Procedural posture notes supplemental motion to dismiss and a hearing; the court declines to consider merits due to sovereign immunity.)
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Retirement Systems are arms of the State for Eleventh Amendment purposes. | Plaintiffs contend the Retirement Systems are independent bodies, not immune. | Defendants argue the Retirement Systems are arms of the State given control and funding structure. | Yes; Retirement Systems are arms of the State, triggering Eleventh Amendment immunity. |
| Whether the suit is barred in federal court by Eleventh Amendment immunity given potential impact on the State treasury. | Plaintiffs claim monetary relief would not affect treasury or could be funded from non-state sources. | Immunity applies when a judgment could impact the State treasury. | Barred; Eleventh Amendment immunity applies to bar the federal case. |
Key Cases Cited
- State St. Bank & Trust Co. v. State St. Bank & Trust Co., 640 F.3d 821 (8th Cir. 2011) (arm-of-the-state analysis for state retirement systems)
- Hoover Univ. Inc. v. Smith, 535 F.3d 300 (4th Cir. 2008) (non-exhaustive arm-of-the-state factors used to determine immunity)
- Ram Ditta v. Md. Nat’l Capital Park & Planning Comm’n, 822 F.2d 456 (4th Cir. 1987) (provides framework for distinguishing arm-of-the-state entities)
- Almond v. Boyles, 792 F.2d 451 (4th Cir. 1986) (disfavored as controlling here; discussed autonomy and treasury impact in arm-of-state analysis)
- Fitzpatrick v. Bitzer, 519 F.2d 559 (2d Cir. 1975) (example where state funds impact supported immunity analysis)