Third Appellate District Upholds Elimination of Pension Pick Ups

In San Joaquin County Correctional Officers' Association v. County of San Joaquin the Court of Appeal upheld a County’s ability to force employees to pay a portion of cost of living (“COLA”) adjustments to their retirement program. This case involved two laws governing public employee retirement, the County Employees Retirement Law of 1937 (“CERL”) and the Public Employees’ Pension Reform Act of 2013 (“PEPRA”).

Prior to PEPRA’s passage, the default retirement program arrangement was that counties and county employees shared the cost of COLA contributions to retirement programs. However, as an option, CERL permitted counties to pay all of the cost of COLA contributions of its employees if it chose to do so. This was known as a “pickup.” This pick up was a common strategy employed by Counties to provide a benefit that was less expensive than a salary adjustment.  In 1975, San Joaquin was one of the counties that agreed to pay the employee share of COLA contributions as part of some of its MOUs.

PEPRA was passed in 2013 to reduce unfunded liabilities in public employee retirement systems. One of PEPRA’s provisions seeks to eliminates the pickups of the employee share of COLA contributions, but does not take effect until 2018.

In 2012, the County negotiated a new MOU with the San Joaquin County Correctional Officers’ Association which eliminated the pickup. The membership voted the MOU down and impasse procedures were engaged. Once impasse was reached, the County unilaterally imposed the elimination of its pick up as part of last best and final offer. The Association challenged the imposition arguing that PEPRA shielded them from such a change until 2018.

Rejecting the Association's challenge, the Court found counties have always had the power to eliminate or reduce pickup under CERL. The CERL permitted the pick up employee costs of COLA contributions, but did not require the pickups nor restrict the employers ability to modify or eliminate them. The court concluded, “In short, the County always has had the power to eliminate the COLA pickup, subject to labor laws, and those laws permitted the county to do so in the event of a bargaining impasse, which occurred. Nothing in PEPRA limited the County’s power in this regard.”

Interestingly, the court cited Marin Assn. of Public Employees v. Marin County Employees’ Retirement Assn. (2016) 2 Cal. App. 5th 674, 681, review granted Nov. 22, 2016, (MAPE) in explaining "the historical backdrop animating recent pension reform legislation in California", but "express[ed] no view" over MAPE's "interpretation of precedent regarding the validity of changes to retirement benefits."

First Appellate District Challenges Vested Rights Doctrine in Upholding Elimination of Airtime Credit

In Cal Fire Local 2881 v. California Public Employees’ Retirement System, the Division Three of the First District Court of Appeal upheld the elimination of the “airtime credit” benefit in Public Employment Retirement Systems (“PERS”). Airtime credit was a benefit available to CalPERS and some other PERS programs that allowed members who had already earned five years of service credit, to purchase another five years of “nonqualified retirement service credit.” The record reflected that PERS had been under charging for the benefit.  In 2013, the Public Employees’ Pension Reform Act of 2013 (“PEPRA”) was passed in what was billed as an effort to reign in unfunded pension liabilities. One of the provisions of PEPRA eliminated the ability to purchase airtime credit.

The court considered whether the ability to purchase airtime credit was a “vested benefit.” The court started its analysis with a general presumption against the granting of a vested benefit, unless its text or legislative history evidence an intent to be bound. Applying the reasoning in Employees Assn. of Orange County, Inc. v. County of Orange (2011) 52 Cal.4th 1171, the court held “there is nothing in either the text of the statute, or its legislative history, that unambiguously states an intent by the Legislature to create a vested pension benefit. This demonstration of intent, as we explained above, is required by California law.” The court found no such intent with respect to airtime.

Further, the court held no right was destroyed, noting PEPRA provided members with a seven month window to purchase the service credit, and that such applications would be honored if they were submitted prior to December 31, 2012. "Thus, nothing in the revised statutory scheme immediately destroyed plaintiffs’ right to purchase the airtime service credit ... To the extent plaintiffs lost out on the opportunity to purchase the airtime service credit, such loss was, accordingly, a product of their own doing."

The court also held that the elimination of airtime did not destroy any benefit because the cost of airtime was always intended to be borne entirely by the employee.  Because the benefit was established as cost neutral to the employer, "the employees, not the state, paid for this benefit" and therefore the court held "this simply is not a case where the state provided a retirement benefit to its employees in exchange for their work performance, and then took the benefit away."

Most significantly, the court endorsed Division Two of the First District's holdings in Marin Association of Public Employees v. Marin County Employees’ Retirement Association (MAPE) regarding the authority of the Legislature to reduce retirement benefits s long as they do not destroy the pension.  This superfluous basis for upholding the elimination of airtime is striking given that the Supreme Court had granted Review of MAPE.

MAPE broke with a half century of precedent holding that any modification of a pension resulting in a detriment must include an offsetting advantage.  On November 22, 2016, the California Supreme Court issued an order granting review of MAPE, holding, "The petition for review is granted. Further action in this matter is deferred pending the decision of the Court of Appeal, First Appellate District, Division Four, in Alameda County Deputy Sheriff's Association et al. v. Alameda County Employees' Retirement Association et al., A141913
 
Although the elimination of airtime is not particularly significant, the court's unnecessary adoption of the MAPE reasoning in the face of Supreme Court review could affect broader legal principles involving the California vested rights doctrine.  Our office currently is representing two law enforcement associations in two separate pension related appeals in the First Appellate District, including the Alameda Deputy Sheriff's Association.  2017 is shaping up to be an important year for determination pension rights.

U.S. Supreme Court Bolsters Qualified Immunity

In White v. Pauly, the Supreme Court issued a unanimous per curiam (unauthored) opinion overturning a lower court's denial of qualified immunity to a police officer in an excessive force case. Law enforcement officers are frequently sued for money damages where they are alleged to have violated a person's constitutional rights in the performance of their duties. Qualified immunity protects officers from such lawsuits where the law they violated isn't "clearly established."

Officer White arrived late to an ongoing police action outside the home of Daniel and Samuel Pauly. Upon approaching the house already surrounded by two other officers, Officer White heard Daniel and Samuel Pauly yelling “we have guns,” followed by shots being fired from the house. Shortly after, Samuel opened the front window and pointed a handgun in Officer White’s direction. After another officer fired several shots at Samuel and missed, Officer White shot and killed Samuel.

Relying on the language of Tennessee v. Garner as clearly establishing the law that officers must give a warning where feasible, the Tenth Circuit denied Officer White qualified immunity reasoning that a reasonable officer in White's position would have known he should have given a warning before shooting despite the seriousness of the threat.   The appellate court  “concluded that a reasonable officer in White’s position would have known that, since the Paulys could not have shot him unless he moved from his position behind a stone wall, he could not have used deadly force without first warning Samuel Pauly to drop his weapon.’

The Supreme Court reversed, finding no no clearly established law in this case. "Clearly established federal law does not prohibit a reasonable officer who arrives late to an ongoing police action in circumstances like this from assuming that proper procedures, such as officer identification, have already been followed. No settled Fourth Amendment principle requires that officer to second-guess the earlier steps already taken by his or her fellow officers in instances like the one White confronted here."  The appellate court failed to identify a case where an officer acting under similar circumstances was held to have violated the Fourth Amendment.

This ruling represents a significant win for law enforcement. In denying qualified immunity to officers, trial courts must consider the particularities of the case rather than relying on general legal principles as providing officers with clear notice their actions are unconstitutional. The Court explained, "[t]oday, it is again necessary to reiterate the longstanding principle that 'clearly established law' should not be defined 'at a high level of generality.'" Otherwise, qualified immunity would be converted "into a rule of virtually unqualified liability simply by alleging violation of extremely abstract rights.”

California Appeals Court Holds That Public Speech Protection Law Cannot Be Used To Stifle Suit Against County

In a victory for public employees, a California court of appeals shut down an attempt by the County to strike a sheriff's deputy's lawsuit against the county alleging that they retaliated against him for asserting his privacy rights in his medical record. While this case is unpublished and therefore not controlling authority, it signals a warning to employees who might attempt to use California's anti-SLAPP rules to strike down lawsuits asserting MMBA and POBR violations.

By way of background, California's "anti-SLAPP" or anti-Strategic Lawsuits Against Public Participation is a civil code section used to punish those who bring lawsuits which are intended to stop or retaliate against speech made during "official proceedings." The idea behind anti-SLAPP is to prevent persons from stifling protected free speech by filing a lawsuit. However, public employers often attempt to classify their disciplinary proceedings as "official proceedings" and their recommendations for discipline as "protected speech." While this is a perversion of the spirit and purpose of the law, that does not stop management from trying to use it.

In Association for Los Angeles Deputy Sheriffs v. County of Los Angeles (2016) Second District Court of Appeal, Case No: B260584, A deputy injured himself at work and became addicted to pain killers for two years. He later entered a drug dependency treatment program and returned to full duty. After a later back surgery he again obtained pain medications from several different physicians. At some point, an unknown person from the Sheriff's Department accessed his record of prescriptions in the database and saw that he had several prescriptions from different doctors. The Deputy then discarded all of his medications.

The Deputy was meeting all of his performance requirements, but shortly after the unauthorized access, as many as six supervisors asked to get consent to access his prescription information in the database. They also asked him to voluntarily submit to a psychological fitness for duty evaluation. The County Occupational Health Department requested that he submit to a fitness for duty examination given his refusal to provide access to his prescription record. When he met with the psychologist, the doctor refused to do an exam unless he provided his medical records. The deputy was then ordered to take a medical leave of absence and was refused the opportunity to return to work. 

 
The Association sued alleging, among other things, violation of privacy rights and retaliation for asserting his privacy rights. The County moved to strike all claims on anti-SLAPP grounds arguing that the referral of the plaintiff to Occupational Health was protected speech and the process by which the County required the Plaintiff to submit to a fitness for duty test was an official proceeding for purposes of SLAPP. The trial court agreed and ordered the Plaintiff to pay the defendant’s costs of suit.

The appellate court noted that the meaning of "official proceeding" continues to elude definitive judicial interpretation, but should generally be limited to proceedings of a public nature and that this case was likely an internal matter, not a public proceeding. However, the appellate court did not need to reach that question because the claims in this case did not arise out of that process anyway. SLAPP case law draws a distinction between speech made in connection with an official proceeding, and the decision made because of that proceeding. The thrust of plaintiff’s arguments stemmed from the decisions made by the Department after the proceeding, not from the statements themselves. Thus, SLAPP was inapplicable here.

Third Appellate District Upholds Award of Penalties for Late Advance Disability Pension Payments

In the recently decided Gage v. Workers Compensation Appeals Board, (CA3, Nov. 22, 2016 No. C081618)  the Court upheld the ability for employees to receive penalties for late advance disability pension payments. In this case, a Sacramento County Sheriff’s Deputy, represented by Greg Gomez of Mastagni Holstedt, APC, sustained a job-related injury and applied for an industrial disability retirement. In cases like these involving peace officers, the injured party can also apply for advance disability pension payments in order to cover living expenses while the disability retirement application is being decided.

Here, Gage petitioned for these advance payments and applied for industrial disability retirement on March 6, 2015. When payments did not arrive, Gage petitioned for late payment penalties against the County on June 2. The County claimed not to have received the application until June 11. The County also asserted that the Workers Compensation Appeal Board (WCAB) did not have authority over advance payments of pension because that would fall under another a different law (County Employees Retirement Law of 1937), and thus it could not apply penalties.

While this issue was being decided, the County continued to stall payments due to some additional technicalities (legal joinder). On June 29, it finally approved payment of benefits. Gage filed a petition for penalties because the benefit check wouldn’t arrive until July 2, almost 4 months after her initial request.

A workers compensation judge initially agreed with Gage that disability pension payments were considered compensation, and thus were subject to penalties for late payment. The County appealed arguing that advance pension disability payments were an obligation of the retirement system, and thus not subject to the penalty. On appeal, the WCAB overturned the workers compensation judge’s initial decision.

When the case was finally appealed to the Third Appellate District, the Court explained that the workers compensation law was intended to be liberally construed for the purpose of extending benefits to those injured in the course of employment. This includes making sure that those in law enforcement are given all the rights attendant to the workers compensation law. The advance disability pension payments are specifically provided to help officers who would otherwise have difficulty making the monthly bills if they had no income due to being injured. In fact, the payment of such benefits was made mandatory in 2002.

The Court also discredited the County’s argument that under the applicable code section, the repayment of retirement benefits was outside of WCAB’s jurisdiction. The Court stated that while the repayment of retirement benefits once disability retirement was approved was outside the scope of the WCAB’s jurisdiction, that did not bar it from asserting penalties on late payments, because such payments are considered compensation and therefore fall under WCAB’s jurisdiction. While the court remanded the case to determine if the delay in this case was sufficiently unreasonable such that penalties were required, this case still stands as a big win for employees seeking disability retirement. Mastagni Holstedt, APC is requesting that this case be published so that it has precedential value.

Mastagni Holstedt, APC is privileged to have represented the Sacramento Deputy Sheriffs Association and Ms. Gage in obtaining this important result. Greg Gomez of Mastagni Holstedt, APC represented Ms. Gage in this matter.

Court Allows Officer's Retaliation Lawsuit to Proceed Over Anti-SLAPP Motion

In Armendariz v. City of Burbank, the Second Appellate District held that a Burbank Police Officer’s retaliation lawsuit against his employer could go forward, despite the City’s attempt to strike the complaint on anti-SLAPP grounds. The Burbank Officer sued his employer alleging that they had terminated him due to his outspoken criticism of the Department’s leadership decisions. The City asserted that their internal affairs investigation against the Officer was protected by the first amendment and thus, the Officer’s lawsuit should be stricken.

Specifically the Officer asserted in his complaint that he complained to his department about unlawful arrest and citation quotas being imposed on officers. He also complained repeatedly and publicly about the Chief of Police’s management of the department and new disciplinary guidelines while acting in leadership positions with the Police Officer’s Association. He also complained about the Department's decision to fill senior positions within the Department with outside officers and without complying with civil service protocols. These statements were also made to the press. Not long after these statements and complaints, the Department initiated a series of internal affairs investigations into the Officer.

The general purpose of California’s anti-SLAPP (Strategic Lawsuit Against Public Participation) statute is to protect against lawsuits which are aimed at preventing or punishing protected first amendment speech. Part of this protection extends to statements made in connection with an “official proceeding authorized by law.” In recent years, cities and counties have been asserting that their internal affairs investigations are such protected proceedings. When employees sue their employers after being terminated due to an internal affairs investigation, employers often try to use anti-SLAPP to shut the lawsuit down.

In order to strike claims in a lawsuit using anti-SLAPP, a defendant must show that the claims of the plaintiff arise out of protected activity. Once demonstrated, the plaintiff may only continue its case if it can establish that its claims have minimal merit. In Armendariz, the court made clear that anti-SLAPP can only be used to strike the individual claims to which the protection applies; it does not destroy the entire complaint if it contains other claims.

In this case, the court decided that the Officer’s claims of retaliation did contain allegations relating to protected activity (the internal affairs investigation). Thus, statements or writings generated in connection with the investigation were protected activity within the meaning of the anti-SLAPP statute. However, the Officer was able to establish that his claims had at least minimal merit and likelihood of success. This was due partly to the City’s almost complete failure on appeal to address the Officer’s arguments and evidence submitted, offering only a single paragraph of bare argument in response to over 220 pages of evidence.

The City offered several other token defenses such as failure to exhaust administrative remedies, governmental immunity, and litigation privilege, all of which were denied. Governmental immunity did not apply because while a government entity is protected from vicarious liability from its employee's actions, this protection does not apply when the Officer is seeking to hold the City directly responsible for its violations of the law. Litigation privilege, which precludes liability arising from a publication made in a judicial proceeding, did not apply because the Officer’s claims arose out of the City’s actions of termination, and not necessarily from its statements during the IA process. 

Accordingly, the court allowed the Officer’s lawsuit to go forward and permitted him to recover his costs on appeal.  Although the officer's suit survived the anti-SLAPP motion, this case also illustrates the difficulties presented by the anti-SLAPP statute when challenging adverse employment actions arising from internal affairs investigations.

Court Extends Pitchess Motions to Officers Who Did Not Witness or Engage in Misconduct

In Riske v. Superior Court (City of Los Angeles), the Second District Court of Appeal held that Evidence Code sections 1043 and 1045 (“the Pitchess motion statutes”), governing the discovery of peace officer personnel records, are not limited to cases involving officers who either witnessed or committed misconduct.  The Court extended the use of Pitchess motions to obtain discovery of disparate treatment evidence.

Robert Riske, a retired police officer, filed a discovery motion to obtain certain personnel records of officers selected for positions to which Riske had applied in action against city. Riske’s complaint alleged that the city police department had retaliated against him for protecting whistleblower activity by failing to assign or promote him to several positions and selecting less qualified candidates instead. The superior court denied the motion. Riske filed petition for writ of mandate, challenging denial of discovery motion.

The Appellate court held that the initial threshold determination for a Pitchess motion is materiality, which, in this context, means the evidence sought is admissible or may lead to discovery of admissible evidence. The court held that if a plaintiff can show the confidential personnel records of officers who were not involved in the suit are nonetheless material to the litigation, he or she has demonstrated the good cause necessary to obtain in camera review of the peace officers personnel records and determine whether and to what extent relevant information may be disclosed without intruding too significantly on a peace officer’s privacy.

The court held that information in the TEAMS report and performance evaluations of the successful candidates could very well be material to Riske’s claim that the City’s stated business reason was a pretext for unlawful retaliation.

This decision will likely be cited to support discovery requests to challenge the level of penalty in disciplinary appeals by obtaining evidence that other officers who committed similar acts of misconduct did not receive as sever a punishment.  This case will likely also provide access to disparate treatment evidence in promotional challenges.

Mastagni Holstedt joins PORAC in Prop 66 Supreme Court Challenge

PORAC files application/amicus brief in support of the constitutionality of Prop 66, which provides for expedited appeal of death penalty sentences and time limitations within which appeals must be complete.  The Death Penalty Reform and Savings Act of 2016 is being constitutionality challenged, notwithstanding the fact that Prop 61, repealing the death penalty, failed and Prop 66 passed. 

Mastagni Holstedt, APC is honored to have filed the brief on behalf of PORAC and its members. The brief can be viewed by clicking this link:
https://drive.google.com/file/d/0B6J7feM1WcX3Q1BBVkYyb2JQYkE/view?usp=sharing