San Diego City Firefighters v. Board of Administration of San Diego City Employees' Retirement System
141 Cal. Rptr. 3d 860
Cal. Ct. App.2012Background
- SDCERS was retroactively repealed after IRS Voluntary Correction Program identified 401(a) noncompliance.
- Incumbent President Program and Annual Leave Conversion Program were the two challenged SDCERS components.
- Resolution No. R-297212 (2002) created the Incumbent President Program; Saathoff had been Local 145 president.
- Saathoff Agreement (2003) purported to implement benefits based on combined City and union salary, capped by City base salary.
- IRS Compliance Statement (Dec 2007) required retroactive removal of noncompliant provisions; City enacted Ordinance No. 0-19740 (Apr 2008) to implement corrections.
- 2002 MOU included a Savings Clause stating inconsistencies would be suspended and superseded; City Charter required amendments by ordinance and SDCERS member vote.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Incumbent President Program create a contract? | Saathoff/Local 145 rely on R-297212 and Saathoff Agreement. | Resolution lacked Charter-ordered form; no contractual basis. | No enforceable contract; Incumbent President Program not binding. |
| Does MMBA-based understanding create a binding contract? | Agreement recitals show negotiated understanding with Local 145. | MMBA requires a jointly prepared memorandum; none shown and conflicting with charter. | MMBA not applicable to create enforceable contract here. |
| Does the Savings Clause defeat contract claims for Annual Leave Conversion Program? | Savings Clause preserves contract rights; program remained valid. | Savings Clause suspended conflicting provisions under 401(a). | Savings Clause suspended and superseded the Annual Leave Conversion Program; contract claims fail. |
| Was Ordinance No. 0-19126 validly approved by the SDCERS, creating contractual rights? | Ordinance was part of the 2002 transaction; arguably approved by majority of voting members. | Charter requirement of majority vote of all SDCERS members not satisfied. | Court deferred to majority-vote interpretation; the Savings Clause analysis governs; ordinance validity treated under majority-vote framework. |
Key Cases Cited
- Betts v. Board of Administration, 21 Cal.3d 859 (Cal. 1978) (pension rights are contractual and modification must be reasonable)
- Miller v. State of California, 18 Cal.3d 808 (Cal. 1977) (pension rights constitute deferred compensation)
- Allen v. City of Long Beach, 45 Cal.2d 128 (Cal. 1955) (pension rights as contractual obligations)
- Domar Electric, Inc. v. City of Los Angeles, 9 Cal.4th 161 (Cal. 1994) (charter supremacy; acts violating charter are void)
- Glendale City Employees’ Assn., Inc. v. City of Glendale, 15 Cal.3d 328 (Cal. 1975) (MMBA memo of understanding binding when adopted by governing body)
- City of San Diego v. San Diego City Employees’ Retirement System, 186 Cal.App.4th 69 (Cal. App. 2010) (SDCERS powers and City authority over benefits)