*1 Roy al., Plaintiffs-Appellees, A. MILES et
The TENNESSEE CONSOLIDATED al.,
RETIREMENT SYSTEM et
Defendants-Appellants.
Supreme Court of Tennessee. 13, 1976.
Dec.
Rehearing March Denied *2 States,
Tennessee and the United and the portions of same relied by the respec- parties. This incorporates tive Court into Opinion portions this of the Chancellor’s Opinion Memorandum as follows: “Plaintiffs, as judges, adju- seek an declaring dication unconstitutional and void and 7 Chapter 315 of the Public Acts of 1975 insofar as each Section plaintiffs. to the relates Plaintiffs include active both and retired State judge one inactive State who has accrued eight years more than service. “Defendants are Tennessee Consoli- pow- dated Retirement which has ers, privileges and corpora- immunities of a (See 8-3902), tion T.C.A. its Board of Trus- named, individually Attorney tees and the Tennessee, of the General State of who ais necessary party because the constitutionali- ty of being a State Statute attacked. “In 1955 the State of by the provisions 3 of Title estab- lished Tennessee Sys- Retirement Nаshville, Jr., for Wiseman, A. Thomas tem, which, pursuant provisions defendants-appellants. thereof, plaintiffs each of the became a s-ap- Nashville, Sanford, plaintiff voluntary participant. Val The aforesaid Stat- repealed by utes were pellees.
813, with exceptions set forth in certain sections of said chapter as OPINION follows: GORE, Special Justice. that ‘each and all
“(1) In Section judgment by declaratory will remain in chapters This is а suit said sections defining who are members of the purpose plaintiffs effect for certain full System. preserved Retirement privileges Consolidated rights, Tennessee benefits (4) active of this include retired and subsection under Section vary age office and whose tenure in Act.’ apply will decision hereunder that a so (4) that: subsection “(2) Tennes- In are members of the judges who all any retire- members class wheth- ‘All Retirement see Consolidated mergеd into or abolished system not retired. er retired Sys- Consolidated Chancellor, very in his able ex- shall be enti- their beneficiaries tem opinion, rights, haustive sets forth the nature of of the to all tled action, respective system so abol- positions this provided privileges salary parties plaintiff defendants, merged, the Stat- ished on the to take effect issue, utes of the law prescribed establishment, nothing in Constitutional of the State of date System. Consolidated Retirement restrict, nessee be construed to Act shall present Thus, plaintiff by each virtue of member- any provisions terminate limit superseded system ship in the became a benefits and rights, such providing of the Tennessee member Consolidated systems.’ such former privileges System with the reservations subsection “(3) Also preserving rights, above noted benefits and provi- other ‘Notwithstanding any that: *3 17, Chapter 3 of Title privileges 11, in the no increase section оf this sion alia, of ‘Benefit (See inter a definition Base’ any beneficiary allowance 17-313).1 (3) under T.C.A. Subsection granted system shall be superseded of a of establishment the date on or after plaintiffs alleged (1) “The that as volun- (3) in this subsection except provided as tary contributing members of the Tennes- 5(17) or in act, section of this except that Judges’ see merged into retired members and beneficiaries of su- the Tennessee Consolidated Retirement systems perseded of judges and attor- System they acquired each thus contractual neys-general shall be pro- entitled to the them; rights which the State cannot deny visions of laws with respect 5, 6, (2) passage to bene- that of Sections and fit base to include 315, 1975, current salaries.’ Chapter approval 7 of to become effective June Governor “(4) addition, And in in Section 17 sub- 1975, 30, indicated an intent ‘to State (4) section that: ‘Every provision of this right deрrive a claimed these assert subject be shall to amendment or will;’ rights contractual such plaintiffs repeal by any session of general as- (3) and 7 of Sections sembly, provided that no such amend- 1, Article Section 20 of the violated Consti- repeal ment or shall annul, diminish or in of Tennessee and tution the State any respect, any right acquired by a of the Constitution of the member or beneficiary provi- under the they ‘because constitute ret- United States sions of this Act. impairing obligation laws rospective contract;’ (4) that said sections are un- in “The the above sections are constitutional void because each de- respectively 8-3949, now carried as 8- plaintiffs of their prives 3935(4), 8-3935(d)[(3)(d)] Ten- and 8-3948 process without due property of law con- Although Code Annotated. the pro- nessee 1 of the trary to Article Constitution of the Chapter 3 of Title 17 visions of are re- Tennessee and the 14th Amеnd- the sections thereof are carried in pealed, to the Constitution of the United ment parenthetical with this note: ‘Re- the code States; (5) that said sections purport except that pealed, this section will remain of compensation diminish the amount dur- purpose for the of defining in full effect which ing plaintiffs the time for are elect- privileges rights, preserved benefits un- ed, of Article in violation Section of the (4) of 8-3935.’ der subsection § prohibits which such compensa- increase or diminishment of tion, therefore, “By above, is, the same Act that such cited Sections are void; (6) passage of said Acts Sections General Assem- disregards separation powers bly July established as of government depart- the Tennessee into three distinct Consolidated Retire- ments, executive, legislative, judicial, provi- contained the being judicial latter vested with the sions that members of of this and thus Systеm (a powers fails to superseded rec- system) ognize ‘shall become’ the distinctive role of the members of judiciary the Ten- judge if he continued would receive 17-313(e) a “Benefit Base” means 1. T.C.A. he retired. office from which equal salary the retired annual sum and accordingly respectively August and retired on violates Article 1 and Miles held during and Article office the time Sections 6 7, of were Constitution of enacted and at Tennessee. he retired these two Acts were in full defendants, force and effect Tennessee. while admitting “The stat- and constitutional alleged utes as admitting standing have Leffler, a who was former circuit alleged and are to declaratory as entitled judge and who served for more court than sought, judgment deny conclusions of having resigned eight years, is less as expressed complaint (1) in said years age fifty-four present at the than alleged is an wherein offer very сlearly He stated in time. his testimo- acceptance by each of the plaintiffs an making resign that in a decision to ny “he he made voluntary when contributions to the assurance considered the retirement fund and wherein al- *4 Judges’ the Tennessee Retirement leged a ‘valid contract between State and planning in with his connection es- (3)
plaintiffs’ alleged and wherein is that tate,” and “relied those assurances in General the Assembly the in 1972 Act evi- mаking resign.” his decision to recognition ‘a clear denced of an intent to rights, the preserve benefits and privileges system pension the The of of members of State Ten- plain- these nessee, its days, from earliest was a contrib- (4) alleged and wherein is ‘an intent to tiffs’ utory system, and Judge when disregard rights’ plain- the contractual of they Leffler came to the bench elect- base,’ in the ‘benefit as evidenced
tiffs system within to come the and to ed cоn- May increase beyond the abolition of system. The tribute to the shows that both of record also imposition a ceiling and the of on the very them clearly ex- alleged pected base and wherein the benefit pay to them 7 retrospective and ‘constitute retirement under whatever law inwas force obligations of impairing’ contract or laws the at time of Miles’ retirement and property of and depriving plaintiffs Judge Leffler’s resignation, in the form of a process purporting due of law to without pension, and that this was an inducement to compensation the amount of diminish dur- originally their the seeking office. which plaintiffs time for were elect- ing the ‘disregarding the inde- constitutional
ed or All judges plaintiffs the other in this Department,’ Judicial all pendence of the as case, Doran, namely, Chancellor, Wil V. by the Tennessee protected and United Shelby County; E. Dayton Phillips, Chan- Constitutions.” States cellor, Division; Chancery First Len G. Jr., Chancellor, Broughton, County; Knox plaintiffs The in this case fall into two Jr., Faquín, Arthur C. Criminal Court categories consisting different first of —the Shelby Judge, County; and F. Frank Dro- Judges Miles and eligible Leffler who were wota, III, Judge of the Court Appeals of of pension for benefits but who had retired Tennessee, stated in their testimony that resigned, respectively, and to the they expected clearly the State of Tennes- elections, and the consisting second to pay see them retirement under whatever plaintiffs, five judges namely, Judges other was in force the of their retire- Phillips, Faquín, Broughton, Doran and ment, pension; in the form of a and that Drowota, who were elected hold office was an this inducement their originally August the elections of 1974. seeking office. In addition to their volun- tary plan, judges contributions to the these Judge Miles pension entered the system September were elеcted took office on of the State in year the was thereby commencing re-elected a term of of- rely could would regarding meaning of Article Sec- fice within (T.C.A. pension 17-319). their benefits. of Tennessee.2 the Constitution 7 of tion testimony contains record held follows: Chancellor Overholser, Actuary an Donald plaintiffs that the are holds “The Court Fisher, Attorney State; Gary Staff sought; relief entitled of Tennes- System of the State of retire- offers Publiс Acts on Pensions see; of the Council the minutes were made to ment benefits Retirement; of the House report con- who in reliance thereon (plaintiffs), 378; on House Bill May Debate performance thereby estab- tinued May on in the Senate proceedings relationship; that a contractual lished in the House on proceedings thereto, Chapter addition By agreement par- March 1972, acknowledged the rights, of House Bill ties, simplifiеd explanation retire- privileges superseded also made a Bill 328 was 378 and Senate by prohibiting to be vested systems the record. part of amendments; subsequent Sec- 6, and tions testimony, all of this From from limit, restrict diminish the do placed agreement various exhibits into privileges rights, benefits record, clear Legislature it is and, ac- their beneficiaries plaintiffs and preparing to act of no null void and cordingly, are (being on the 1975 Act as to these and еffect force *5 to T.C.A. 8-3935 and amendments related obliga- impair the provisions said because statutes), spent years more than two very and, of the plaintiffs, of contracts tions reviewing carefully pension the entire sys- 1, 20, of the Section violate Article thus Tennessee, tem the State of of 1, Article Tennessee and of Constitution system judges pension dealing with and 10, United Constitu- of the States Section attorneys general; they recognized a tion. responsibility clear to the as a whole 5, 6, of and 7 taxpayers its and “Enforcement Sections also realized their responsibility of judges deprive and the would their methods Legislature by past used in the property process, to deal without due judges’ compensation with in one form and thus violate Tennessee Unit- another; very there was sharp disa- ed Constitutions.” States greement dealing debates with both pretermitted question The Chancellor Bill 378 and Hоuse Senate Bill 328 as to and 7 of of whether Sections the benefit the judges whether base for 315, 1975 violated the of changed. be should 7, of the Constitution Section of Article Tennessee. It is clear from the record Gener- seasonably below The defendants al Assembly recognized that, by enacting an appeal to the Su- properly perfected Act, of the 1970 which were Tennessee out brought Act, forward in of and set five preme the 1972 a Court commit- However, ment was made to Error3. judges Assignments all which perquisites of Tennes- Section of office not 2. Article hold other office profit judges. trust or Compensation State or under this —The see— Courts, United States. Supreme shall at or Inferior times, compensation Assignments Error. receive a 3. stated law, services, ascertained be their Chancellor below erred in 1. The learned legislation defining holding not increased diminished shall be benefit base purposes they during constituted for which are elected. by the They State of contracts Tennessee. shall not offers of be allowed fees Error, Assignments Judge together, resigned as set Leffler they retired Brief, their Appellants’ presented completed out in two contracts with the State of that, questions effect, for the Tennessee4 so consideration this Court the benefit to be used for Appellants and both the Brief of the base Milеs and pensions as to their Leffler would Appellees Brief of the addressed them- be the base benefit established the Act primarily questions, selves to these two of 1970 brought forward into the Act of namely: equal “a namely sum to the annual salary 1. Whether the judge retired would receive if he relationship contin- between the plaintiffs and the retired”, State of in the office from which ued he act- 8-3901, ing through the et seq. T.C.A. § Retire- and the Tennessee Consolidаt- ed “obliga- involved The Court further that this holds tions of contract” within the meaning of between the contract State of Tennessee Article Section 20 of the Constitution of Miles and Judges Leffler was impaired Tennessee and Article Section 10 of the Constitu Constitution of the States; United tion of Tennessee and Article Section 10 States, of the Constitution the United so, If whether the 1975 which reduced the benefit base Chapter 315 of the Public Acts of 1975 up the Act of calculating set 1970 for impaired obligations such within the mean- may pension. provi State statutes contain ing of those same provisions, constitutional which, when accepted as basis for sions or whether these sections of the 1975 Act individuals, actions become contracts be were a reasonable legislative modification pro tween them and within the of prior legislative grants of retirement of Article tection Unit benefits. Indiana, еd States Constitution. ex rel. An Brand, 58 S.Ct. derson U.S. As to Judges Leffler, (1938). 82 L.Ed. agree we with the learned Chancellor and *6 hold the that State of Tennessee offered to
and did enter into a There no contract with are Tennessee cases Judge deal ing Judge public pensions. However, Leffler with pay to this them a held pension upon creating their Court has that laws the rights retirement in accordance private pensions liberally law to will be time, with the in effect at con that setting Knoxville, v. of City the strued. Collins 180 pеnsion Judge Miles at the time of (1944), 176 his Tenn. S.W.2d 808 Judge retirement and for that Leffler at the by an employer time his the offer to an resignation. employee of of Judge When Miles pellee under the State Federal Constitu- 2. erred in learned Chancellor below The acquired holding appellees that constitution- tions. ally rights specific pro- protected to contract failing erred to learned Chancellor 5.The legislation. of visions retirement Chаpter of of 315 the Public Acts hold that the contin- exercise of was a reasonable erred in 1975 Chancellor below 3. holding learned The modify power legislative uing 7 impaired appellees’ 315 of to amend of that §§ of the 1975 benefit specific Public of retirement base the base to benefit judges. contract legislation state law. long under our been established It has 4. everything is executed when contract that a below erred in Chancellor learned has been done done was to be that nothing the finding 315 of Public Farrington v. to be done. remains any impaired constitutional- violated 1975 24 U.S. L.Ed. 558 95 ly specific legislative State protected rights to (1877). by ap- acquired grants retirement
305
Therefore,
since
1975
was not
pension is an inducement to employment.
a
to
designed
protect some vital
State,
interest of
ex
Thompson City
rel.
v.
of Memphis,
hold
Judge
we
Miles had
(1923).
Tenn.
251
also,
S.W.
See
complеted a contract at the time of his
Board,
v. Electric
Weesner
Power
48 Tenn.
with the State of
Tennessee and
App.
(1961).
WILLIS, Special Chief HARVILL,
WATSON, and WINNING- Justices,
HAM, Special concur. ADAMS, Appellant, Gladys
Hazel MEMORIAL HOSPI- COUNTY
CARTER Frost, Appellees. Dr. W. G.
TAL and of Tennessee.
Supreme Court
March