Maine Ass'n of Retirees v. Board of Trustees
954 F. Supp. 2d 38
D. Me.2013Background
- MePERS is Maine's public retirement system for state employees and teachers; beneficiaries seek COLAs under MePERS law.
- Plaintiffs challenge 2011 Maine amendments (Sec. T-10 and Sec. T-21) affecting cost-of-living adjustments for retirees.
- Former Section 17801 (pre-1999) was repealed and replaced by the current 17801, with some provisions expressly designated as solemn contractual commitments.
- The Court must decide whether a contract exists between MePERS and retirees and whether the 2011 amendments substantially impair that contract.
- Parker v. Wakelin and Parella v. Retirement Bd. guide whether statutory language can create contractual rights to pension benefits.
- The court treats defendants' motion as one for summary judgment and grants it, concluding no contractual right to pre-2011 COLAs exists or was substantially impaired.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Former Section 17801 create a contractual obligation? | Parella supports an unmistakable contract intent via no-amendment language. | Parker held Former 17801 did not create an enforceable contract until benefits are due. | No contractual obligation found from Former 17801. |
| Did the 2011 amendments substantially impair any contract? | 2011 changes impaired pre-existing contractual rights to COLAs. | Amendments do not impair contract rights; floor protections limited and not applicable to post-1999 retirees. | No substantial impairment to any contract. |
| Does Former 17801 apply to retirees retired before 1999 or to current beneficiaries? | Former 17801 creates continued contractual protections for retirees. | Post-repeal, only current 17801 protections apply to those retired after 1999. | Post-1999 retirees are governed by current 17801; former provisions do not bind the class. |
| Do COLAs fall within benefits protected as contractual under Former 17801? | COLAs are benefits due under Former 17801. | COLAs are not explicitly listed as protected benefits under the current statutory framework. | COLAs are not protected as contractual under Former 17801; amendments do not infringe. |
Key Cases Cited
- United States Trust Co. v. New Jersey, 431 U.S. 1 (Supreme Court 1977) (statutory language can create private rights against the State)
- General Motors Corp. v. Romein, 503 U.S. 181 (U.S. 1992) (Contracts Clause analysis involves substantial impairment components)
- Parella v. Retirement Bd. of R.I. Employees, 173 F.3d 46 (1st Cir. 1999) (unmistakable intent to contract may be shown by statutory language)
- Parker v. Wakelin, 123 F.3d 1 (1st Cir. 1997) (Former §17801 did not create enforceable contract until benefits due)
- Spiller v. State, 627 A.2d 513 (Me. 1993) (unmistakable contract obligations require language and circumstances)
- Budge v. Town of Millinocket, 55 A.3d 484 (Me. 2012) (legislative changes are insufficient to substitute judiciary's view on merits)