Maine Ass'n of Retirees v. Board of Trustees of the Maine Public Employees Retirement System
2014 U.S. App. LEXIS 12164
| 1st Cir. | 2014Background
- Plaintiffs are Maine retirees and union members challenging MePERS amendments reducing pre-2011 COLAs.
- District Court certified a class of retirees receiving service retirement benefits before June 20, 2011.
- Defendants are the MePERS Board and individual trustees, in both official and personal capacities.
- Amendments over time (1999, 2011, and emergency 2009) altered how COLAs are calculated, including a pre-2011 narrowing of contractual protections.
- The core issue is whether retirees have a contractual right to COLAs calculated under pre-2011 law, and whether 2011 amendments impair that right under the Contract Clause.
- The court engages in the unmistakability doctrine to determine if a statutory provision creates contractual rights and applies it to pre- and post-1999 retirees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether pre-1999 COLAs were contractually guaranteed | Parker-based view; former Sec. 17801 creates contract rights to COLAs | COLAs remain non-enumerated; legislature reserved power to alter | Pre-1999 COLAs not unmistakably guaranteed as contractual rights |
| Whether post-1999 retirees have a contractual right to pre-2011 COLAs | Section 17801(1)(B) creates contractual commitment | Only enumerated protections are contractual; non-enumerated rights reserved | No contractual entitlement to pre-2011 COLAs for post-1999 retirees |
| Whether impairment of COLAs is substantial and violates the Contract Clause | Reduction of COLAs impaired contractual rights | Impairment is permissible if reasonable and necessary for public purpose | Court assumed some contractual obligation but found no unmistakable right to COLAs; upheld summary judgment for defendants |
Key Cases Cited
- Parker v. Wakelin, 123 F.3d 1 (1st Cir. 1997) (unmistakability doctrine governs contract rights from statutes)
- U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1 (Supreme Court 1977) (impairment analysis requires substantial impairment and public purpose)
- Nat'l R.R. Passenger Corp. v. Atchison Topeka & Santa Fe Ry. Co., 470 U.S. 451 (Supreme Court 1985) (reservation of right to amend indicates no contract)
- United States v. Winstar Corp., 518 U.S. 839 (Supreme Court 1996) (unmistakability and contractual framework in state actions)
- Parella v. Ret. Bd. of R.I. Emps.' Ret. Sys., 173 F.3d 46 (1st Cir. 1999) (contract rights require unmistakable indicia; facts analyzed under statute)
- Budge v. Town of Millinocket, 55 A.3d 484 (Me. 2012) (Me. contract-like rights depend on express language or clear intent)
- Spiller v. State, 627 A.2d 513 (Me. 1993) (Me. retirement law did not create contractual rights for employeesæª)