WEBVTT
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SJC 13568, Susan Hartnett,
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the Contributory Retirement Appeal Board et al.
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Okay, Attorney Reynolds.
Thank, your Honor.
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Good morning.
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Assistant Attorney General Maryanne Reynolds
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representing the Contributory Retirement Appeal Board and
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the Public Employee Retirement Administration Commission.
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These agencies, CRAB and PERAC,
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have been entrusted by the legislature
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with the administration and implementation of Chapter 32,
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a notoriously complex statute that applies
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to over 100 retirement systems,
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and we urge the court to reverse the judgment
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of the Superior Court in this case
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and to enter judgment for the defendants.
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The Superior Court erred by starting
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but not ending the analysis under Section 25(5)
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that this court established back in 1973
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with opinion of justices.
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The core of a member's reasonable expectation
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is to be honored and has been,
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but that expectation is subject to reserve police powers,
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and we argue that the Superior Court erred here
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by not completing an analysis
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under the reserve police powers and,
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that had that analysis been conducted,
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as is explained in our briefing,
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that the results should be
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that the reserve police powers come into play here,
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such that what's called the anti-spiking provision
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should be applied to Ms. Hartnett.
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Significantly, Ms. Hartnett does not dispute
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that the 2011 statutory reforms in the wake
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of the 2008 nearly unprecedented financial crisis
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could apply to members; she does not dispute that.
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What her dispute is that she
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does not want this one particular provision to apply to her.
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We say that it should apply to her,
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and as to why it applies to her, we do feel that here,
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the Superior Court got it right, and we commend
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to this court's consideration the Superior Court's decision
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and reasoning with respect to the interpretation
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of the anti-spiking provision at issue here.
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I would just note in particular that,
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while statutory interpretation is the duty
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of the courts where the statute is interpreted
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by the agencies responsible for implementation
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of that statute and their interpretation is reasonable,
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this court will not substitute its judgment.
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So can I ask you why 25(5) applies
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or doesn't prevent the application
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of the other provision to Ms. Hartnett?
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Yes, so-
'Cause it seems
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like all you've said so far
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is that they got the other provision right.
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The 25(5) does not prevent application
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to Ms. Hartnett because we go through the analysis
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and opinion of the justices,
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and we start with something that is favorable to her,
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which is we do not disagree that a core expectation she had
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was that her pension may be based
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on three rather than five years,
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as ultimately was the case here.
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But that is subject to modification
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under the reserve police powers,
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and we would say that the core pieces that come into play
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are the time for a pension benefit, which, of course,
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a pension benefit is a legal determination, right?
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Neither the agencies nor the member
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nor the courts can actually enlarge the benefit
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that the legislature intended for a member to have,
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and there we have three basic factors.
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We have the time served,
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we have the contributions made by the employee,
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and then we have the public funds that are added.
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And so we say that there was a very careful analysis done
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on 25(5)'s application very recently by CRAB,
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and we commend that decision to the court's attention.
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That's a Pereira decision, also, the Stanton decision,
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both of which are in my briefing.
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And when we look at the Pereira decisions,
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we would start with, as I mentioned,
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that her expectation of three years was interfered with
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by it needing to go to five years.
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However, we can't stop there.
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We have to continue, and there we see that,
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in 2008, there was that financial crisis.
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Can you interpret the words for us?
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The last sentence in particular confuses me.
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"Notwithstanding the previous sentence,
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if in the five years
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of credible service immediately preceding retirement,
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the difference in the annual rate of regular compensation
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between any two consecutive years exceeds 100%,
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the normal yearly amount of retirement shall be based
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on the average annual rate of compensation received,"
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and this is the part that really confuses me.
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"Of five consecutive years preceding retirement."
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Was that a drafting error?
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Should that be the five credible years precede?
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Does that make sense?
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It would be-
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Doesn't that have to be five credible years preceding?
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Yes, yes.
So that's an error.
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That's a problem, right?
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We have to try to make sense of something that doesn't work.
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Not necessarily, your Honor,
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because this court has recognized
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as the dollar decision set forth is that,
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sometimes in statutes, different words are used,
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but they are deemed synonymous,
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and there's a nice collection of decisions from this court
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in the joint record appendix at 133.
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I'd mentioned particular the Bulger case
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and the Mullally case where this court has not found it
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to be a problem if different words are used in a statute
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where it's obvious that they're synonyms, and we would-
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But they're not elsewhere, right?
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If you read the sentence before, it's not.
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They draw a distinction between consecutive, so I don't-
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Well, if we may call that the first sentence,
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it's long, but it's the first sentence,
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and then the anti-spiking provision we're talking
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about here= we'll call the second sentence.
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In the first sentence, there are two different ways
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that something is gonna be determined, right?
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It's a solid one period of time
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that's a consecutive period of time,
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or there's periods of time, plural,
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where you're putting together credited service times.
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But let me be more specific though.
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They draw a distinction between consecutive.
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In the previous sentence, they're very clear.
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Consecutive means consecutive in time, right?
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They say whether consecutive or not, you know,
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they're very explicit there, right?
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Yes, and so, I'm sorry.
No, go ahead.
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Help me make sense of it
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'cause maybe my colleagues-
Right,
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so that first sentence pre-existed implementation
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of the anti-spiking provision we have here,
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but that first sentence was also modified
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by the same 2011 act.
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So it went from three years to five years
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through the Section 13 of the 2011 act.
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What I would ask you to say is not to get hung up
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by the first sentence because what the first sentence means,
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I think, is pretty well established.
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The first sentence is clear.
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It's the second sentence that's hard
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because notwithstanding,
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the beginning of the second sentence,
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"If in the five years of credible service immediately,
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the difference in any annual rate of regular
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between any two consecutive years," right?
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The previous sentence describes consecutive years
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as clearly being, you know, sequential in time.
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But then the last part of the thing says,
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"During the period of five consecutive years."
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What if the person doesn't have five consecutive years?
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I mean, so-
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We're arguing for an interpretation
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of that second sentence that makes sense,
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and how it makes sense,
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because I think you're just suggesting one way
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that an alternate interpretation would not make sense.
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So we start with the word notwithstanding.
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So we know notwithstanding is a significant word.
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It's saying we're not necessarily jammed up
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by what happened in the prior,
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so not withstanding the previous sentence.
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And then it talks about, "If in the five years
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of credible service immediately preceding retirement,"
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we know what those five years are because,
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in order to have a benefit,
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you need to have 10 years of credible service.
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So we know what those five years are gonna be
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when we're calculating anyone's benefit,
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and then we say the difference of the annual rate
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of regular compensation between any two consecutive years.
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Well, that two consecutive years,
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well, it has meaning above in a different context
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because of the structure of that first sentence.
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Here, we have to say,
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"Okay, notwithstanding the first sentence,"
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and we are talking about five years of credible service,
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immediate, et cetera.
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So we really have to read two consecutive years
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in light of the language of that particular sentence,
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and then it plainly applies to Ms. Hartnett.
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Can I ask a different question?
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I wanna understand your argument
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about the police powers exception,
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and you said that the Superior Court judge
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didn't do that part of the analysis.
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Correct.
Okay.
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So can you walk us through that?
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Yes.
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I'm not sure how much time I have for that,
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but let me say that-
No.
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You can answer the question.
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You've got time to answer the question for sure.
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Thank you.
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So how I would like to walk you through that,
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I think is the best way is to refer you
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to the Pereira decision, and there,
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we see that there are different reasons
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that you want to think about,
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about whether or not it was a permissible exercise
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of the police powers.
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And we would say first,
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you have to consider that there
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was the global economic downturn that we discussed,
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and that was the setting the stage
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for this particular provision,
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and then we have the second factor is going to be,
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well, and obviously that that has to do
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with preserving the pension system, right?
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Because it's very important
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to have a fiscally sound pension system.
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Let me just stop you 'cause I just
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wanna make sure I understand.
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Doesn't the whole argument that you're making depend
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on how many people this would affect?
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No.
Why?
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We do not know exactly how many people it affects,
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and PERAC has said that we're not sure.
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We're not talking just about fiscally sound just
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as in the impact of this one particular decision.
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We are talking about fiscal impact from the point of view
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of a variety of factors,
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which includes uniform application of Chapter 32
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across all of the systems,
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not knowing exactly how many other people
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are going to come in.
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We're talking about the contributions that are made
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by the member which go to the fiscal, right?
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Everybody makes contributions,
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and that's a core part of the system,
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and we want a system that's free of abuses.
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And so here you have a situation where this legislation
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is aimed at more normalizing what the pension
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is gonna be based upon what the contributions
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from that employee have been together
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with the public perception of the system
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because the taxpayers matter here, too,
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because the taxpayers do need to fund the system
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in addition to the employees.
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Your argument is that those considerations
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should outweigh 25(5), which says there's a contract
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between Ms. Hartnett and the Commonwealth?
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25(5) as interpreted by this court,
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it's not a contract in the way
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that Ms. Hartnett wants it to sound like, you know,
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acceptance, you know, performance acceptance, et cetera.
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It's this quote like in Herrick has called it.
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It's a special kind of a thing, and so it is not a breach
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of a contract for this section to apply to Ms. Hartnett
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because she really does not have a core expectation
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in receiving a pension benefit in an amount
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that is not commiserate with the amount of contributions.
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I wanna pause, too, to say that we are not arguing
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on this record that there's anything wrong
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with how Ms. Hartnett's structured her public service.
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We're talking about the overall good of the system
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00:14:27.120 --> 00:14:29.550
from the financial perspective as well
267
00:14:29.550 --> 00:14:33.990
as the legislative judgment that was made
268
00:14:33.990 --> 00:14:37.470
in making this particular provision applicable
269
00:14:37.470 --> 00:14:38.943
to her and others.
270
00:14:39.836 --> 00:14:41.477
And there I would turn your attention
271
00:14:41.477 --> 00:14:46.430
to Section 63 of the 2011 statute, right?
272
00:14:46.430 --> 00:14:49.230
There were choices that the legislature made
273
00:14:49.230 --> 00:14:51.000
when it enacted this provision,
274
00:14:51.000 --> 00:14:54.360
those choices being whether or not the provisions
275
00:14:54.360 --> 00:14:56.920
were gonna go into effect under the 90-day rule
276
00:14:57.783 --> 00:14:58.973
that normally applies, right?
277
00:15:00.378 --> 00:15:02.804
Or whether it was under Section 63,
278
00:15:02.804 --> 00:15:05.633
it was only gonna apply to new members after a certain date.
279
00:15:06.475 --> 00:15:08.340
Legislature didn't put this particular provision
280
00:15:08.340 --> 00:15:10.140
in either of those categories.
281
00:15:10.140 --> 00:15:13.870
Instead, it put it in the category under Section 64
282
00:15:14.796 --> 00:15:17.880
of making it effective April 2nd, 2012,
283
00:15:17.880 --> 00:15:22.880
and so it was effective at the time that she retired.
284
00:15:23.250 --> 00:15:26.406
In 2006, I don't wanna go into-
285
00:15:26.406 --> 00:15:30.153
Yeah, okay. So here's my last question.
286
00:15:31.876 --> 00:15:33.068
If we don't agree with you
287
00:15:33.068 --> 00:15:37.111
that the reserve police powers exception applies,
288
00:15:37.111 --> 00:15:41.163
if we don't agree, then we don't agree with you, right?
289
00:15:42.926 --> 00:15:44.573
We would have to rule for Ms. Hartnett.
290
00:15:48.401 --> 00:15:49.234
Yes.
291
00:15:49.234 --> 00:15:50.370
We would ask you to be clear that our interpretation
292
00:15:50.370 --> 00:15:52.410
of the anti-spiking provision is correct
293
00:15:52.410 --> 00:15:55.380
because there is institutional interest in being sure
294
00:15:55.380 --> 00:16:00.150
that that interpretation is nailed down and can be applied
295
00:16:00.150 --> 00:16:02.883
because it is a notoriously complex statute.
296
00:16:03.967 --> 00:16:07.083
And if you were to not agree with us on the 25(5) issue,
297
00:16:09.134 --> 00:16:13.003
we would ask for guidance and real serious consideration
298
00:16:13.003 --> 00:16:14.970
of the Pereira decision and Stanton
299
00:16:14.970 --> 00:16:18.120
but that lays out how CRAB understands
300
00:16:18.120 --> 00:16:20.640
what its role is to be when faced
301
00:16:20.640 --> 00:16:22.749
with these types of questions,
302
00:16:22.749 --> 00:16:25.099
you know, when you have two statutes in tension
303
00:16:26.250 --> 00:16:28.440
where these agencies are charged
304
00:16:28.440 --> 00:16:32.110
with interpreting them and applying them.
305
00:16:32.110 --> 00:16:34.383
Okay. Okay, thank you.
Thank you.
306
00:16:37.097 --> 00:16:38.063
Okay, Attorney Thomas.
307
00:16:51.606 --> 00:16:53.570
Good morning. May it please the court.
308
00:16:53.570 --> 00:16:54.790
My name is Natacha Thomas,
309
00:16:54.790 --> 00:16:57.030
and I'm general counsel for the Boston Retirement Board,
310
00:16:57.030 --> 00:16:59.100
and making the best use of the five minutes
311
00:16:59.100 --> 00:17:00.920
before this court,
312
00:17:00.920 --> 00:17:03.360
I would like to focus my presentation mostly
313
00:17:03.360 --> 00:17:06.990
on Section 25(5), which would be addressing whether
314
00:17:06.990 --> 00:17:10.860
or not the Superior Court incorrectly determined
315
00:17:10.860 --> 00:17:13.877
that the anti-spiking statute as applied
316
00:17:13.877 --> 00:17:15.660
to Hartnett violated her contractual rights
317
00:17:15.660 --> 00:17:17.790
under Section 25(5).
318
00:17:17.790 --> 00:17:20.250
This is not a case of first impression.
319
00:17:20.250 --> 00:17:21.600
This court has dealt with this
320
00:17:21.600 --> 00:17:25.470
in the opinion of the justices in 1973,
321
00:17:25.470 --> 00:17:29.253
and they again dealt with it in Madden versus CRAB,
322
00:17:30.172 --> 00:17:33.270
and in both of those instances, this court has held
323
00:17:33.270 --> 00:17:37.133
that a contract under Section 25(5)
324
00:17:37.133 --> 00:17:39.283
is not a contract in the traditional sense.
325
00:17:42.841 --> 00:17:43.847
We have to view it in more
326
00:17:43.847 --> 00:17:45.825
of a relaxed version of a contract,
327
00:17:45.825 --> 00:17:46.658
and it wouldn't be practical for us
328
00:17:46.658 --> 00:17:48.360
to view it as a traditional contract
329
00:17:48.360 --> 00:17:50.880
because the pension system is complex.
330
00:17:50.880 --> 00:17:53.280
It has various parts.
331
00:17:53.280 --> 00:17:54.425
It's statutory.
So what's the test?
332
00:17:54.425 --> 00:17:57.180
I mean, I get it. It's a contract prime, right?
333
00:17:57.180 --> 00:17:58.110
It's a different kind of contract.
334
00:17:58.110 --> 00:18:00.570
What is the test for when the state
335
00:18:00.570 --> 00:18:02.250
can use its police powers
336
00:18:02.250 --> 00:18:04.830
to upset the reasonable expectations
337
00:18:04.830 --> 00:18:06.423
of somebody who's retired?
338
00:18:07.567 --> 00:18:10.057
Well, the court provided that answer in Madden.
339
00:18:11.693 --> 00:18:12.797
In Madden, the court said-
340
00:18:12.797 --> 00:18:13.973
Can you refresh my recollection?
341
00:18:15.297 --> 00:18:17.160
In Madden, the court said that a member
342
00:18:17.160 --> 00:18:19.710
who has paid their required contributions
343
00:18:19.710 --> 00:18:23.400
cannot be deprived of their benefits,
344
00:18:23.400 --> 00:18:25.914
but they also clarified
345
00:18:25.914 --> 00:18:29.496
that this does not preclude someone's pension
346
00:18:29.496 --> 00:18:31.710
for modification, and it depends on two factors,
347
00:18:31.710 --> 00:18:34.680
one, whether or not it's reasonable,
348
00:18:34.680 --> 00:18:36.573
and secondly, whether or not there's-
349
00:18:38.890 --> 00:18:39.750
The modification is reasonable?
350
00:18:39.750 --> 00:18:42.675
Whether or not the modification is reasonable,
351
00:18:42.675 --> 00:18:44.880
and secondly, whether or not the modification
352
00:18:44.880 --> 00:18:49.880
bears some relationship to the overall theory of the concept
353
00:18:50.610 --> 00:18:54.273
of a pension system and its successful operation.
354
00:18:55.320 --> 00:18:58.560
Does the timing matter when it comes
355
00:18:58.560 --> 00:19:01.067
to a particular employee?
356
00:19:01.067 --> 00:19:03.870
So in other words, specifically with respect
357
00:19:03.870 --> 00:19:06.303
to reasonableness of the modification?
358
00:19:08.549 --> 00:19:12.153
And I'm only talking about Section 25(5) here.
359
00:19:15.084 --> 00:19:17.384
If, for example, the modification had occurred
360
00:19:18.379 --> 00:19:23.379
before Ms. Hartnett had left her city employment,
361
00:19:27.811 --> 00:19:31.358
would that make a difference for purposes of determining
362
00:19:31.358 --> 00:19:35.160
whether the modification was reasonable with respect
363
00:19:35.160 --> 00:19:40.050
to her contract expectation or quasi-contract expectation?
364
00:19:40.050 --> 00:19:42.270
Well, the court, in the opinion of the justices
365
00:19:42.270 --> 00:19:44.550
and as well as Madden said that there
366
00:19:44.550 --> 00:19:47.190
are some justifications that determine
367
00:19:47.190 --> 00:19:48.853
whether or not it's reasonable,
368
00:19:48.853 --> 00:19:51.330
and one of them is the financial ability
369
00:19:51.330 --> 00:19:55.612
to actually pay the pension system, and in 2011,
370
00:19:55.612 --> 00:19:58.440
which is why the board argues that it's reasonable,
371
00:19:58.440 --> 00:20:03.113
it's very clear that we suffered a recession in 2008,
372
00:20:03.113 --> 00:20:03.946
the Great Recession.
373
00:20:03.946 --> 00:20:07.470
The state of Massachusetts was facing $20 billion
374
00:20:07.470 --> 00:20:09.600
in unfunded pension liability,
375
00:20:09.600 --> 00:20:14.600
and so the legislature decided to enact pension reform
376
00:20:15.084 --> 00:20:16.260
in order to preserve the system.
377
00:20:16.260 --> 00:20:18.145
Some states didn't,
378
00:20:18.145 --> 00:20:19.749
and they no longer have a pension system,
379
00:20:19.749 --> 00:20:21.690
but our legislature took certain acts,
380
00:20:21.690 --> 00:20:24.090
and one of them being the anti-spiking statute,
381
00:20:24.090 --> 00:20:26.823
in order to reduce pensioned,
382
00:20:28.320 --> 00:20:30.323
the liability because they weren't being funded.
383
00:20:32.008 --> 00:20:33.510
So I take it you're not saying
384
00:20:34.952 --> 00:20:38.990
that Ms. Hartnett did not have an expectation
385
00:20:40.020 --> 00:20:44.880
that qualified for protection under 25(5).
386
00:20:44.880 --> 00:20:48.390
What you're saying is that was then overridden
387
00:20:48.390 --> 00:20:51.540
by these countervailing considerations
388
00:20:51.540 --> 00:20:55.893
that justified making this particular amendment.
389
00:20:56.775 --> 00:20:58.110
Yes, that's exactly what I'm saying.
390
00:20:58.110 --> 00:21:01.050
In Madden, we kind of have a similar situation,
391
00:21:01.050 --> 00:21:05.124
which I think the court can apply the same analysis
392
00:21:05.124 --> 00:21:05.957
and the same reasoning.
393
00:21:05.957 --> 00:21:08.417
In Madden, the Teacher's Retirement Board
394
00:21:08.417 --> 00:21:10.950
did not have any authority or law
395
00:21:10.950 --> 00:21:15.597
or regulation really discussing part-time or full-time work,
396
00:21:15.597 --> 00:21:18.410
and so teachers tended to work part time,
397
00:21:18.410 --> 00:21:19.860
and in the last three years of their employment,
398
00:21:19.860 --> 00:21:21.916
they would work full time.
399
00:21:21.916 --> 00:21:23.820
And so they received full credible service,
400
00:21:23.820 --> 00:21:26.294
although they hadn't worked full time
401
00:21:26.294 --> 00:21:29.769
and hadn't contributed what a full-time employee would pay.
402
00:21:29.769 --> 00:21:32.417
And so Madden was working part time,
403
00:21:32.417 --> 00:21:34.391
and then she subsequently worked full time,
404
00:21:34.391 --> 00:21:37.503
and in 1990, she began working before 1990, in 1990,
405
00:21:38.623 --> 00:21:40.260
the TRB, the Teacher's Retirement Board,
406
00:21:40.260 --> 00:21:42.114
created a regulation
407
00:21:42.114 --> 00:21:46.530
which essentially prorated their part-time work.
408
00:21:46.530 --> 00:21:50.630
And so here, the court said that, as it relates to Madden,
409
00:21:50.630 --> 00:21:54.716
we could apply it prospectively but not retroactively,
410
00:21:54.716 --> 00:21:56.894
and the reason why it was found reasonable
411
00:21:56.894 --> 00:21:58.140
is because TRB had an interest
412
00:21:58.140 --> 00:22:02.061
in protecting the viability of the pension system.
413
00:22:02.061 --> 00:22:05.499
Here we have teachers who were benefiting,
414
00:22:05.499 --> 00:22:06.332
and it didn't matter
415
00:22:06.332 --> 00:22:08.884
if they didn't have any nefarious intent,
416
00:22:08.884 --> 00:22:10.304
but they were benefiting because they
417
00:22:10.304 --> 00:22:12.330
were able to work part time their whole career
418
00:22:12.330 --> 00:22:14.172
in the last three years,
419
00:22:14.172 --> 00:22:15.930
which was full-time work with a higher salary
420
00:22:15.930 --> 00:22:17.460
and then get credible service.
421
00:22:17.460 --> 00:22:18.450
But then you had teachers
422
00:22:18.450 --> 00:22:21.330
who had worked full time their entire careers,
423
00:22:21.330 --> 00:22:25.560
and they had contributed based on that full-time work,
424
00:22:25.560 --> 00:22:27.559
and you had teachers who hadn't,
425
00:22:27.559 --> 00:22:29.109
and they were receiving that same pension.
426
00:22:29.109 --> 00:22:33.825
So in that case, the rule did apply.
427
00:22:33.825 --> 00:22:36.557
The new rule did apply to the member?
428
00:22:36.557 --> 00:22:38.286
It applied prospectively.
429
00:22:38.286 --> 00:22:39.960
So any future work that she did part time,
430
00:22:39.960 --> 00:22:43.490
her part time work from 1990 on,
431
00:22:43.490 --> 00:22:46.442
'cause she was still employed at the time, was prorated,
432
00:22:46.442 --> 00:22:48.870
and anything before there was any rules or laws,
433
00:22:48.870 --> 00:22:52.222
actually a law regulating that part-time work,
434
00:22:52.222 --> 00:22:54.291
she received full-time credit for it.
435
00:22:54.291 --> 00:22:58.233
Now she was given inaccurate advice, right?
436
00:22:59.097 --> 00:23:00.780
Did she retire based on the inaccurate advice,
437
00:23:00.780 --> 00:23:05.043
and does that figure into the 25(5) analysis?
438
00:23:05.973 --> 00:23:06.806
It doesn't.
439
00:23:06.806 --> 00:23:08.430
I don't believe that it figures into the 25(5) analysis
440
00:23:08.430 --> 00:23:10.440
because, under the general laws,
441
00:23:10.440 --> 00:23:13.647
Chapter 32 has a Section, Section 20(5)(c)(2).
442
00:23:16.320 --> 00:23:18.813
Boards are required to correct an error.
443
00:23:19.816 --> 00:23:21.090
So if you find an error and someone
444
00:23:21.090 --> 00:23:24.334
is receiving a greater benefit than they're entitled to,
445
00:23:24.334 --> 00:23:26.363
the board must recoup that, statutorily required to do so.
446
00:23:27.847 --> 00:23:31.653
But does that figure into the expectation analysis?
447
00:23:33.317 --> 00:23:36.570
If you actually talk to the right pension people
448
00:23:36.570 --> 00:23:39.327
and they tell you, "We're gonna do it one way,"
449
00:23:40.427 --> 00:23:41.940
and then you go retire,
450
00:23:41.940 --> 00:23:45.918
doesn't that figure into the 25(5) analysis
451
00:23:45.918 --> 00:23:49.064
that you got the wrong guidance from the agency
452
00:23:49.064 --> 00:23:50.790
that's supposed to give you guidance?
453
00:23:50.790 --> 00:23:53.550
The appeals court addressed this issue in cloister,
454
00:23:53.550 --> 00:23:56.230
and that also was the Teacher's Retirement Board,
455
00:23:56.230 --> 00:23:57.120
and it was a teacher who had actually relied
456
00:23:57.120 --> 00:23:58.680
on incorrect information.
457
00:23:58.680 --> 00:24:01.754
He sold his home, he moved to Florida,
458
00:24:01.754 --> 00:24:03.930
and then the pension system eventually determined
459
00:24:03.930 --> 00:24:05.730
that he was not entitled to time
460
00:24:05.730 --> 00:24:07.410
that he had actually purchased back,
461
00:24:07.410 --> 00:24:10.957
and the court held that, under 20(5)(c)(2),
462
00:24:15.330 --> 00:24:18.843
the board was statutorily required to correct that error.
463
00:24:21.253 --> 00:24:23.815
They had an expectation, but an error occurred,
464
00:24:23.815 --> 00:24:25.053
and that took precedent.
465
00:24:26.370 --> 00:24:28.023
And that was us or that was the appeals court?
466
00:24:28.023 --> 00:24:29.490
That was the appeals court.
Do you think the expectation
467
00:24:29.490 --> 00:24:34.490
is measured at the date when Hartnett decided
468
00:24:35.100 --> 00:24:37.080
to leave her employment,
469
00:24:37.080 --> 00:24:40.450
the date when she decided to apply
470
00:24:40.450 --> 00:24:42.555
for a pension or some other date?
471
00:24:42.555 --> 00:24:44.310
The expectation is actually the date
472
00:24:44.310 --> 00:24:46.301
that they entered the system,
473
00:24:46.301 --> 00:24:49.383
the date they began employment because an analysis,
474
00:24:50.436 --> 00:24:52.311
I believe that Madden also answered that question
475
00:24:52.311 --> 00:24:53.144
and why this is parallel,
476
00:24:53.144 --> 00:24:55.020
because in the case before the court,
477
00:24:55.020 --> 00:24:57.360
Hartnett did enter the system
478
00:24:57.360 --> 00:24:59.280
before the anti-spiking statute,
479
00:24:59.280 --> 00:25:03.060
but the similarity is that there was no section
480
00:25:03.060 --> 00:25:06.060
of Chapter 32 that dealt with an employee
481
00:25:06.060 --> 00:25:10.950
who had doubled their salary before retiring.
482
00:25:10.950 --> 00:25:13.359
So entering the system in this case
483
00:25:13.359 --> 00:25:16.909
is the date she comes and works for the city?
484
00:25:16.909 --> 00:25:19.140
The city because she refunded from the state,
485
00:25:19.140 --> 00:25:19.973
so she no longer has that
486
00:25:19.973 --> 00:25:21.480
as the start of her membership date.
487
00:25:21.480 --> 00:25:25.804
So when she started, there was no section of Chapter 32
488
00:25:25.804 --> 00:25:27.204
that dealt with a huge spike
489
00:25:28.287 --> 00:25:31.440
in your pay right before you retire.
490
00:25:31.440 --> 00:25:35.220
So the statute rule-
Rule is that you have
491
00:25:35.220 --> 00:25:40.220
contractual expectations prime subject
492
00:25:41.280 --> 00:25:44.790
to the economic ability of the state to pay the pension?
493
00:25:44.790 --> 00:25:46.230
Yes, yes, which-
That's the test
494
00:25:46.230 --> 00:25:50.305
for Section 5 or 25(5).
Yes, yes.
495
00:25:50.305 --> 00:25:52.009
Okay, thank you.
Yes, and so-
496
00:25:52.009 --> 00:25:54.912
Make sure I understand, I didn't read Madden,
497
00:25:54.912 --> 00:25:57.390
but are you saying that they're in the same position,
498
00:25:57.390 --> 00:26:01.124
that Madden and Hartnett would be in the same position?
499
00:26:01.124 --> 00:26:02.364
Yes, that's my position,
500
00:26:02.364 --> 00:26:03.449
that they're in the same position
501
00:26:03.449 --> 00:26:04.282
because when she entered the system,
502
00:26:04.282 --> 00:26:07.860
there was no law or legal authority that dictated
503
00:26:07.860 --> 00:26:12.409
what happens if your pension exceeds over 100%, right?
504
00:26:12.409 --> 00:26:13.601
'Cause it's based on your last three.
505
00:26:13.601 --> 00:26:14.434
So if you're making 34
506
00:26:14.434 --> 00:26:19.434
and then you end service with 100,000, what happens?
507
00:26:19.500 --> 00:26:21.480
And so the legislature created this
508
00:26:21.480 --> 00:26:24.330
in order to kind of preserve funding,
509
00:26:24.330 --> 00:26:27.213
preserve the money into the system and lessen-
510
00:26:29.601 --> 00:26:31.908
But it doesn't affect Hartnett
511
00:26:31.908 --> 00:26:33.693
because she had an expectation.
512
00:26:34.809 --> 00:26:37.798
She did have an expectation, but the statute,
513
00:26:37.798 --> 00:26:41.650
because she didn't retire before the effective date,
514
00:26:41.650 --> 00:26:42.771
it would apply to her.
515
00:26:42.771 --> 00:26:45.150
So similar to Madden, the teacher,
516
00:26:45.150 --> 00:26:48.810
her past service was not prorated,
517
00:26:48.810 --> 00:26:51.742
but she stayed in the system and she worked full time.
518
00:26:51.742 --> 00:26:54.240
So any future work, they would prorate her part-time work.
519
00:26:54.240 --> 00:26:55.590
So it's similar here.
520
00:26:55.590 --> 00:26:57.120
Those who had already retired
521
00:26:57.120 --> 00:27:00.450
or who retired before the effective date,
522
00:27:00.450 --> 00:27:03.674
they spiked, they were able to retire,
523
00:27:03.674 --> 00:27:04.591
and we didn't go back and have
524
00:27:04.591 --> 00:27:06.412
to recalculate anyone's pension.
525
00:27:06.412 --> 00:27:09.270
But effective April 2nd, 2012,
526
00:27:09.270 --> 00:27:12.900
anyone who retired at that date or after came
527
00:27:12.900 --> 00:27:15.880
under the umbrella of the anti-spiking statute.
528
00:27:15.880 --> 00:27:17.705
So she had retired in the sense
529
00:27:17.705 --> 00:27:19.391
that she had stopped working.
530
00:27:19.391 --> 00:27:21.565
She had stopped working for the public employer.
531
00:27:21.565 --> 00:27:22.416
Right.
But not-
532
00:27:22.416 --> 00:27:24.993
But she had not made a claim yet for her pension.
533
00:27:25.842 --> 00:27:26.889
Correct.
So is that
534
00:27:26.889 --> 00:27:28.193
what you're calling retirement?
535
00:27:30.126 --> 00:27:33.637
Because she retired before the amendment came into play.
536
00:27:33.637 --> 00:27:35.257
She did not retire before the amendment.
537
00:27:35.257 --> 00:27:37.953
I mean, she left employment in 2006.
538
00:27:38.893 --> 00:27:39.726
She left employment in 2006.
539
00:27:39.726 --> 00:27:43.413
Then the anti-spiking provision was enacted in 2011.
540
00:27:44.323 --> 00:27:45.156
Yes.
And then she
541
00:27:45.156 --> 00:27:49.650
makes her application for retirement benefits in 2016,
542
00:27:51.032 --> 00:27:52.739
if I have the chronology correct.
543
00:27:52.739 --> 00:27:53.711
Yes, that is correct.
544
00:27:53.711 --> 00:27:54.544
So she left her money in the system,
545
00:27:54.544 --> 00:27:57.063
and she deferred her retirement, which you can do.
546
00:27:57.918 --> 00:27:59.355
You can leave your money in the system.
547
00:27:59.355 --> 00:28:02.432
She had the age to retire before the effective date,
548
00:28:02.432 --> 00:28:03.986
but she chose not to.
549
00:28:03.986 --> 00:28:05.853
So that was her mistake.
Yes.
550
00:28:07.220 --> 00:28:08.963
Okay, so if she had taken her money out,
551
00:28:09.885 --> 00:28:12.120
she would've not had to have dealt
552
00:28:12.120 --> 00:28:13.999
with the anti-spiking provision.
553
00:28:13.999 --> 00:28:16.713
Right, if she had retired before the effective date.
554
00:28:18.181 --> 00:28:19.200
Making a claim,
555
00:28:19.200 --> 00:28:21.869
retired meaning making a claim and starting over.
556
00:28:21.869 --> 00:28:24.733
Yes, retired meaning filing an intent to retire
557
00:28:24.733 --> 00:28:26.883
and receiving her superannuation monthly.
558
00:28:28.394 --> 00:28:30.900
Okay.
And so based on Madden
559
00:28:30.900 --> 00:28:34.890
and based on this court's interpretation of the contract
560
00:28:34.890 --> 00:28:38.310
and its position that the contract
561
00:28:38.310 --> 00:28:41.206
is not a contract in the strict sense,
562
00:28:41.206 --> 00:28:43.478
but it protects a member of the core
563
00:28:43.478 --> 00:28:44.311
of their reasonable expectations,
564
00:28:44.311 --> 00:28:47.738
I would also argue that Hartnett has received,
565
00:28:47.738 --> 00:28:50.202
that she hasn't been deprived of the core
566
00:28:50.202 --> 00:28:51.533
of her reasonable expectations.
567
00:28:51.533 --> 00:28:55.110
So she had public service with the state. It was 34,000.
568
00:28:55.110 --> 00:28:58.832
She left with the city, and it was 100,000,
569
00:28:58.832 --> 00:29:02.730
and so the anti-spiking statute did apply to her,
570
00:29:02.730 --> 00:29:06.450
but she still has a large pension base.
571
00:29:06.450 --> 00:29:09.990
That's not reflective of her prior service in the public,
572
00:29:09.990 --> 00:29:12.000
which was the intent of the legislature.
573
00:29:12.000 --> 00:29:13.563
They created this statute,
574
00:29:14.410 --> 00:29:17.281
and the section does not have any exceptions.
575
00:29:17.281 --> 00:29:18.990
It doesn't look into the subjected state
576
00:29:18.990 --> 00:29:20.133
of the person's mind.
577
00:29:21.025 --> 00:29:24.090
It just focuses on the fact that your pension,
578
00:29:24.090 --> 00:29:27.041
that your salary doubled or increased
579
00:29:27.041 --> 00:29:29.000
over 100% before you retired,
580
00:29:29.000 --> 00:29:31.920
and the goal of the legislature was to kind of get rid
581
00:29:31.920 --> 00:29:34.330
of those loopholes and create a structure
582
00:29:35.201 --> 00:29:36.180
where we have people who are contributing
583
00:29:36.180 --> 00:29:40.057
and their pension is reflective of their salary
584
00:29:40.057 --> 00:29:42.307
while they provided that.
Okay. Thank you.
585
00:29:48.027 --> 00:29:49.313
All right, Attorney McDonough.
586
00:29:52.857 --> 00:29:54.432
Good morning. Sorry.
587
00:29:54.432 --> 00:29:56.585
Good morning, Madam Chief Justice and members of the court.
588
00:29:56.585 --> 00:29:58.020
May it please the court. I'm Gerald McDonough.
589
00:29:58.020 --> 00:30:02.717
I represent the plaintiff appellee here, Susan Hartnett,
590
00:30:05.036 --> 00:30:07.386
and I'm here with my co-counsel, Thomas Gibson.
591
00:30:08.361 --> 00:30:10.254
I first wanna make clear,
592
00:30:10.254 --> 00:30:11.670
unless there are any questions to start off with based
593
00:30:11.670 --> 00:30:15.630
on the arguments from my sister counsel over here,
594
00:30:15.630 --> 00:30:17.700
I just wanna start off by acknowledging
595
00:30:17.700 --> 00:30:19.110
what this is not about.
596
00:30:19.110 --> 00:30:22.020
This is not a challenge to the legislator's authority
597
00:30:22.020 --> 00:30:26.010
to do any kind of change in the system whatsoever,
598
00:30:26.010 --> 00:30:29.250
and we believe that we do not dispute the claim
599
00:30:29.250 --> 00:30:32.940
that this was a difficult time back in 2010 and '11,
600
00:30:32.940 --> 00:30:36.573
difficult time where there was a financial crisis,
601
00:30:37.464 --> 00:30:38.297
and there was a need
602
00:30:38.297 --> 00:30:42.244
to really address some longstanding abuses,
603
00:30:42.244 --> 00:30:43.590
and I mean abuses in the public pension system.
604
00:30:43.590 --> 00:30:46.994
And when you look at Pereira decision and Stanton,
605
00:30:46.994 --> 00:30:48.930
they were dealing with that year for a day provision
606
00:30:48.930 --> 00:30:50.400
where an elected official
607
00:30:50.400 --> 00:30:52.380
who worked one day in a calendar year
608
00:30:52.380 --> 00:30:54.780
could get credible service for the entire year,
609
00:30:54.780 --> 00:30:59.160
and that had long been characterized
610
00:30:59.160 --> 00:31:01.950
as an egregious abuse of the pension system.
611
00:31:01.950 --> 00:31:05.490
In contrast, with breaks in service,
612
00:31:05.490 --> 00:31:08.340
there's no evidence anywhere that that
613
00:31:08.340 --> 00:31:11.250
was on the mind of anyone at the time.
614
00:31:11.250 --> 00:31:14.470
For example, there was a commission set up in 2009
615
00:31:15.380 --> 00:31:16.213
to look at pension reform,
616
00:31:16.213 --> 00:31:19.410
and they came up with a whole lot of different, you know,
617
00:31:19.410 --> 00:31:23.130
aspects of reforms that could be made in the pension system,
618
00:31:23.130 --> 00:31:27.630
and one of those was expanding the years of credible service
619
00:31:27.630 --> 00:31:30.210
for retirement from three years to five years.
620
00:31:30.210 --> 00:31:34.777
Another one, which was in Section 13 of Chapter 176,
621
00:31:36.035 --> 00:31:37.706
which is the last part of the first sentence
622
00:31:37.706 --> 00:31:38.940
of Section 5(2)(a) now,
623
00:31:38.940 --> 00:31:40.650
the other one that they looked at
624
00:31:40.650 --> 00:31:44.610
was what became Section 18 of Chapter 176,
625
00:31:44.610 --> 00:31:48.749
which is now 5(2)(f) of Chapter 32,
626
00:31:48.749 --> 00:31:50.470
which deals with that 10% increase
627
00:31:52.403 --> 00:31:54.482
between two consecutive years of service,
628
00:31:54.482 --> 00:31:55.410
that anti-spiking provision.
629
00:31:55.410 --> 00:31:57.990
There was nothing in there about breaks in service,
630
00:31:57.990 --> 00:31:59.517
and then we had PERAC-
631
00:32:00.630 --> 00:32:01.620
I just wanna make sure.
632
00:32:01.620 --> 00:32:05.610
You agree with the Superior Court's ruling, right?
633
00:32:05.610 --> 00:32:08.677
I agree with the Superior Court's ruling with regard
634
00:32:08.677 --> 00:32:13.140
to 25(5), your Honor, finding that this statute,
635
00:32:13.140 --> 00:32:16.230
if it's interpreted to cover breaks in service,
636
00:32:16.230 --> 00:32:17.583
which we do not agree with.
637
00:32:20.966 --> 00:32:23.234
That part of the decision we agree with.
638
00:32:23.234 --> 00:32:24.230
Okay, can you give me an example
639
00:32:24.230 --> 00:32:27.306
of prohibited anti-spiking?
Excuse me?
640
00:32:27.306 --> 00:32:28.139
Can you give me an example
641
00:32:28.139 --> 00:32:30.715
of prohibited anti-spiking under your definition?
642
00:32:30.715 --> 00:32:34.976
Well, the anti-spiking in Section 18 of Chapter 176,
643
00:32:34.976 --> 00:32:38.610
which is now Section 5(2)(f) of Chapter 32,
644
00:32:38.610 --> 00:32:40.440
deals with if any of the years
645
00:32:40.440 --> 00:32:42.900
that your retirement is calculated,
646
00:32:42.900 --> 00:32:45.903
you take the average of two years before one of those years,
647
00:32:46.826 --> 00:32:49.800
and if the increase goes up more than 10%,
648
00:32:49.800 --> 00:32:52.710
anything that goes beyond 10% won't be included
649
00:32:52.710 --> 00:32:54.610
in the calculation of your retirement.
650
00:32:57.718 --> 00:33:00.300
That was what the commission in 2009 recommended.
651
00:33:00.300 --> 00:33:02.790
That was one of the elements of pension reform
652
00:33:02.790 --> 00:33:07.790
that Jim Lamenzo, who was the actuary for PERAC at the time,
653
00:33:08.244 --> 00:33:09.510
did a whole report, cost analysis,
654
00:33:09.510 --> 00:33:11.377
and he looked at that and determined,
655
00:33:11.377 --> 00:33:12.840
"Well, it's not gonna be a lot,
656
00:33:12.840 --> 00:33:15.687
but it would be a good idea to do it, so I support it."
657
00:33:16.585 --> 00:33:20.910
And then there was a final report by a pension commission
658
00:33:20.910 --> 00:33:24.120
which came out and, again, only addressed two things,
659
00:33:24.120 --> 00:33:26.896
increasing three years to five years
660
00:33:26.896 --> 00:33:30.780
for the span of time for calculating retirement
661
00:33:30.780 --> 00:33:34.433
and the other provision that's now in (5)(2)(f)
662
00:33:34.433 --> 00:33:35.430
about the 10% increase.
663
00:33:35.430 --> 00:33:40.430
And not only in that next commission report in 2011,
664
00:33:41.580 --> 00:33:45.210
they actually looked at all the other states
665
00:33:45.210 --> 00:33:46.590
and what they were doing in terms
666
00:33:46.590 --> 00:33:48.750
of anti-spiking legislation.
667
00:33:48.750 --> 00:33:53.750
There's not a single mention of an issue like Section 14
668
00:33:55.324 --> 00:33:58.174
is being characterized as dealing with breaks in service.
669
00:33:58.174 --> 00:33:59.527
It's not mentioned in any of those things.
670
00:33:59.527 --> 00:34:01.410
Well, counsel, let let me ask you a question then,
671
00:34:01.410 --> 00:34:03.930
because I'm trying to figure out what the limiting principle
672
00:34:03.930 --> 00:34:06.270
would be if we follow your logic.
673
00:34:06.270 --> 00:34:09.960
So Ms. Hartnett stops working
674
00:34:09.960 --> 00:34:13.410
for the city of Boston in 2006,
675
00:34:13.410 --> 00:34:15.212
and there's no question that,
676
00:34:15.212 --> 00:34:16.410
when she came to work for the city,
677
00:34:16.410 --> 00:34:20.280
she bought back the service that she had from before
678
00:34:20.280 --> 00:34:24.327
when she left the first time around for the state.
679
00:34:24.327 --> 00:34:25.650
That's correct.
So she applies
680
00:34:25.650 --> 00:34:30.650
for retirement benefits in 2011, right?
681
00:34:30.990 --> 00:34:33.696
No, she applied for benefits in 2016.
682
00:34:33.696 --> 00:34:36.616
'16.
683
00:34:36.616 --> 00:34:41.040
If we were looking at the way you're characterizing it,
684
00:34:41.040 --> 00:34:44.170
how would that make sense under our canons
685
00:34:45.299 --> 00:34:47.527
of statutory construction?
686
00:34:47.527 --> 00:34:49.380
Because if it were not read the way
687
00:34:49.380 --> 00:34:52.560
that the Superior Court judge was interpreting it
688
00:34:52.560 --> 00:34:56.640
to read consecutive and not contiguous,
689
00:34:56.640 --> 00:35:00.424
could it necessarily subsume work
690
00:35:00.424 --> 00:35:03.633
that wasn't for a credible employer?
691
00:35:04.936 --> 00:35:06.983
I'm not sure I understand your question, your Honor, but-
692
00:35:07.980 --> 00:35:11.450
You're saying that you can't look at breaks, right?
693
00:35:11.450 --> 00:35:12.570
Yes.
In calculating
694
00:35:12.570 --> 00:35:15.642
whether it's three years or five years.
695
00:35:15.642 --> 00:35:18.093
You're saying it's gotta be contiguous, right?
696
00:35:19.050 --> 00:35:20.589
According to Section 14, yes.
697
00:35:20.589 --> 00:35:22.021
Well, according to your interpretation.
698
00:35:22.021 --> 00:35:23.093
That's what we're here to figure out.
699
00:35:25.604 --> 00:35:29.143
If you don't read it the way the Superior Court judge
700
00:35:29.143 --> 00:35:32.340
interpreted it, couldn't you have a situation
701
00:35:32.340 --> 00:35:36.570
where the three years or the five included work
702
00:35:36.570 --> 00:35:41.010
and salary for an employer that wasn't part
703
00:35:41.010 --> 00:35:43.743
of the state retirement system?
704
00:35:43.743 --> 00:35:44.576
Yes.
705
00:35:44.576 --> 00:35:46.140
So how would that make sense?
706
00:35:46.140 --> 00:35:47.775
Well, your Honor-
707
00:35:47.775 --> 00:35:49.243
Or why would that make sense?
708
00:35:49.243 --> 00:35:50.730
Your Honor, there are a number of instances
709
00:35:50.730 --> 00:35:54.910
where Section 14 would apply and affect employees
710
00:35:55.963 --> 00:35:59.373
that aren't addressed anywhere in the record here so far.
711
00:36:00.269 --> 00:36:02.740
Someone could leave a position with the state
712
00:36:03.771 --> 00:36:06.618
and go work for another entity in the state,
713
00:36:06.618 --> 00:36:09.390
like go work for Mass Development, which does not have a,
714
00:36:09.390 --> 00:36:12.240
not part of the contributory retirement system,
715
00:36:12.240 --> 00:36:14.100
and then go back and move again
716
00:36:14.100 --> 00:36:16.593
to state service in another position.
717
00:36:21.254 --> 00:36:23.504
If you read this thing the way it is written,
718
00:36:24.754 --> 00:36:28.860
someone could leave work for a variety of different,
719
00:36:28.860 --> 00:36:31.223
people leave work for a variety of different reasons.
720
00:36:32.068 --> 00:36:33.090
A lot of people will leave work
721
00:36:33.090 --> 00:36:36.360
because they have childcare responsibilities.
722
00:36:36.360 --> 00:36:40.539
Costs for childcare are prohibitive in terms of, you know,
723
00:36:40.539 --> 00:36:43.320
paying for childcare and getting a job and whatnot,
724
00:36:43.320 --> 00:36:46.588
and or taking care of sick relatives.
725
00:36:46.588 --> 00:36:47.421
There are a whole variety of reasons
726
00:36:47.421 --> 00:36:50.010
why people leave state service and then come back.
727
00:36:50.010 --> 00:36:54.153
The real question is, did the legislature intend,
728
00:36:55.650 --> 00:37:00.053
in addition to other things, did they intend for people
729
00:37:01.140 --> 00:37:04.863
who were taking legitimate breaks like that to be,
730
00:37:06.612 --> 00:37:09.053
were they trying to change the retirement law for that?
731
00:37:10.260 --> 00:37:14.013
Don't we look to what you're asking us to look to,
732
00:37:14.885 --> 00:37:19.590
which is an absence of explicit legislative consideration?
733
00:37:19.590 --> 00:37:21.840
Don't we look to that only
734
00:37:21.840 --> 00:37:26.253
if the language of the statute is ambiguous?
735
00:37:27.200 --> 00:37:29.583
If the language from of the statute is plain,
736
00:37:30.555 --> 00:37:32.430
then we, I believe,
737
00:37:32.430 --> 00:37:37.430
take that as the expressed intention of the legislature.
738
00:37:37.956 --> 00:37:40.803
and we don't go looking beyond it, correct?
739
00:37:41.759 --> 00:37:42.592
Yes.
All right,
740
00:37:42.592 --> 00:37:44.610
so I guess the first step of your argument
741
00:37:44.610 --> 00:37:48.828
is Section 14 is ambiguous, and therefore,
742
00:37:48.828 --> 00:37:53.828
we need to look to other indications of legislative intent,
743
00:37:54.870 --> 00:37:59.163
including the absence of explicit consideration
744
00:37:59.163 --> 00:38:00.966
by the legislature?
Yes.
745
00:38:00.966 --> 00:38:01.839
Okay.
Your Honor,
746
00:38:01.839 --> 00:38:06.170
simply by including four words in Section 14
747
00:38:08.056 --> 00:38:11.520
that appear twice in the language above,
748
00:38:11.520 --> 00:38:14.283
whether or not consistent.
749
00:38:15.596 --> 00:38:18.120
Simply applying that into Section 14
750
00:38:18.120 --> 00:38:20.730
would've made it quite clear that it
751
00:38:20.730 --> 00:38:23.926
was intended to deal with breaks in service,
752
00:38:23.926 --> 00:38:27.510
but that's not what we see in the language at all.
753
00:38:27.510 --> 00:38:30.854
And if you look at the language, consider this, if you will.
754
00:38:30.854 --> 00:38:32.113
If you look at the language it says,
755
00:38:32.113 --> 00:38:34.839
"Notwithstanding the sentence immediately preceding."
756
00:38:34.839 --> 00:38:36.936
If you look at the sentence immediately preceding,
757
00:38:36.936 --> 00:38:38.580
which talks about going from three years to five years,
758
00:38:38.580 --> 00:38:41.760
for anyone who's hired after April of 2012,
759
00:38:41.760 --> 00:38:43.833
if you read that consistently,
760
00:38:44.740 --> 00:38:45.840
you would have a person who would work,
761
00:38:45.840 --> 00:38:50.040
per say, for example, $100,000 salary for 20 years,
762
00:38:50.040 --> 00:38:53.550
then leave state service, try to do some other things,
763
00:38:53.550 --> 00:38:55.940
and one of the things might be,
764
00:38:55.940 --> 00:38:59.370
"Maybe I'll serve on a school committee or city council,"
765
00:38:59.370 --> 00:39:03.330
as was the case in the Julia Hearn case with her husband.
766
00:39:03.330 --> 00:39:07.563
And what if in those five years of work for,
767
00:39:07.563 --> 00:39:09.419
and it's pensionable,
768
00:39:09.419 --> 00:39:12.377
what if in those five years of service in the last year,
769
00:39:12.377 --> 00:39:17.220
the stipend went up from $5,000 a year to $15,000 a year?
770
00:39:17.220 --> 00:39:20.939
You would then have to calculate that person's retirement,
771
00:39:20.939 --> 00:39:23.430
not on their highest years of credible service
772
00:39:23.430 --> 00:39:26.699
but on the last five years of credible service.
773
00:39:26.699 --> 00:39:29.100
It would go from an average of $100,000 a year
774
00:39:29.100 --> 00:39:32.250
to an average of $7,000 a year.
775
00:39:32.250 --> 00:39:35.230
If you wanna read the language in Section 14
776
00:39:36.086 --> 00:39:36.919
and what it would apply to,
777
00:39:36.919 --> 00:39:39.780
that would certainly be one thing it would apply to.
778
00:39:39.780 --> 00:39:43.173
Where is the ambiguity exactly in the sentence,
779
00:39:44.404 --> 00:39:45.237
that last sentence?
780
00:39:45.237 --> 00:39:48.183
Is it in the end of it where they talk
781
00:39:48.183 --> 00:39:50.190
about five consecutive years of preceding retirement?
782
00:39:50.190 --> 00:39:52.750
Where do you see the ambiguity? 'Cause-
783
00:39:52.750 --> 00:39:54.413
I see the ambiguity all through-
784
00:39:56.722 --> 00:39:59.312
But can you be more particular? Which word?
785
00:39:59.312 --> 00:40:01.344
I mean, notwithstanding seems pretty clear.
786
00:40:01.344 --> 00:40:03.477
Well, there's the inclusion of the word consecutive there,
787
00:40:03.477 --> 00:40:06.033
which has to have a meaning, number one.
788
00:40:08.917 --> 00:40:12.630
I thought the last statement of consecutive got confusing
789
00:40:12.630 --> 00:40:14.472
because during the period
790
00:40:14.472 --> 00:40:15.570
of five consecutive years preceding
791
00:40:15.570 --> 00:40:19.231
'cause there might not be five consecutive years, right?
792
00:40:19.231 --> 00:40:22.690
Preceding retirement. That to me seemed ambiguous, and-
793
00:40:22.690 --> 00:40:24.940
As was the case with Susan Hartnett.
794
00:40:24.940 --> 00:40:26.950
She did not have five consecutive years retirement.
795
00:40:26.950 --> 00:40:29.220
Right, so that to me lends support to your view
796
00:40:29.220 --> 00:40:31.440
that it's, you think the Superior Court judge
797
00:40:31.440 --> 00:40:34.470
misinterpreted this, the first part.
798
00:40:34.470 --> 00:40:37.272
You like her second part of her decision.
799
00:40:37.272 --> 00:40:39.009
You don't like her first part of her decision.
800
00:40:39.009 --> 00:40:42.363
That is correct, your Honor.
And CRAB, CRAB,
801
00:40:43.405 --> 00:40:44.238
what, I can't remember.
802
00:40:44.238 --> 00:40:46.160
They're arguing what on the first sentence?
803
00:40:47.308 --> 00:40:48.533
They think she got it right.
804
00:40:49.439 --> 00:40:50.714
I think they think that she got it right.
805
00:40:50.714 --> 00:40:51.547
Your Honor, you know,
806
00:40:51.547 --> 00:40:54.270
CRAB as an agency is entitled to a lot of deference
807
00:40:54.270 --> 00:40:57.630
because of its expertise, knowledge, and competence,
808
00:40:57.630 --> 00:41:02.630
but in this case, if what CRAB did exhibits that,
809
00:41:02.728 --> 00:41:04.080
I don't know what it means anymore.
810
00:41:04.080 --> 00:41:07.440
I mean, CRAB initially when they were forced with this,
811
00:41:07.440 --> 00:41:09.750
when we filed our objections with CRAB,
812
00:41:09.750 --> 00:41:12.530
CRAB came back and said, "Well, you're right about,
813
00:41:12.530 --> 00:41:14.262
you know, the definition of consecutive
814
00:41:14.262 --> 00:41:15.460
in the first sentence of 5(2)(a)."
815
00:41:17.135 --> 00:41:19.182
And it is in the same section of the statute,
816
00:41:19.182 --> 00:41:20.903
but that was enacted at a different time.
817
00:41:21.752 --> 00:41:23.700
So we filed a motion for reconsideration,
818
00:41:23.700 --> 00:41:27.360
and we pointed out to CRAB that, even though it was,
819
00:41:27.360 --> 00:41:29.670
you know, that might be accurate,
820
00:41:29.670 --> 00:41:32.792
there was an immediately preceding sentence,
821
00:41:32.792 --> 00:41:34.410
Section 13 of Chapter 1.
822
00:41:34.410 --> 00:41:36.910
Yeah, they're entitled to change their position.
823
00:41:38.220 --> 00:41:40.503
I guess, you know, my question is,
824
00:41:43.050 --> 00:41:46.203
why do you see the, along Justice Kafker's question,
825
00:41:47.206 --> 00:41:49.623
where is that ambiguity in that last sentence?
826
00:41:51.480 --> 00:41:53.054
Your Honor, I think-
827
00:41:53.054 --> 00:41:55.455
It's in the consecutive years?
828
00:41:55.455 --> 00:41:57.256
I think-
The first time it's used?
829
00:41:57.256 --> 00:41:58.710
The second time it's used? Where is that?
830
00:41:58.710 --> 00:42:00.480
Both times that consecutive is used,
831
00:42:00.480 --> 00:42:03.374
what is the purpose of consecutive there?
832
00:42:03.374 --> 00:42:05.520
Why did they put consecutive in there?
833
00:42:05.520 --> 00:42:06.733
It seems to me it's all-
The other ambiguity-
834
00:42:06.733 --> 00:42:09.660
I'm sorry, I may be misreading this.
835
00:42:09.660 --> 00:42:12.510
I understand there to be a conditional clause
836
00:42:12.510 --> 00:42:14.403
that begins with the word if.
837
00:42:16.320 --> 00:42:18.054
Do you see that?
Yes.
838
00:42:18.054 --> 00:42:19.781
It says, "If in the five years
839
00:42:19.781 --> 00:42:22.868
of credible service immediately preceding retirement,
840
00:42:22.868 --> 00:42:25.489
the difference in the annual rate of regular compensation
841
00:42:25.489 --> 00:42:27.459
between any two consecutive years,"
842
00:42:27.459 --> 00:42:29.610
which I assume to be a reference
843
00:42:29.610 --> 00:42:33.956
to within the five years of credible service exceeds 100%.
844
00:42:33.956 --> 00:42:38.870
That's an initial conditional clause that then is followed
845
00:42:41.864 --> 00:42:44.752
by something that will happen if you're
846
00:42:44.752 --> 00:42:46.950
within that first conditional clause.
847
00:42:46.950 --> 00:42:51.950
I don't understand where the ambiguity could be
848
00:42:54.695 --> 00:42:57.360
except perhaps in the language
849
00:42:57.360 --> 00:43:00.010
that then refers to the period
850
00:43:00.010 --> 00:43:02.760
of five consecutive years preceding retirement.
851
00:43:02.760 --> 00:43:05.100
That is an ambiguity as well as the use
852
00:43:05.100 --> 00:43:08.795
of the word immediately with the first clause there.
853
00:43:08.795 --> 00:43:09.628
It doesn't say in the five years
854
00:43:09.628 --> 00:43:11.640
of credible service preceding retirement.
855
00:43:11.640 --> 00:43:13.605
It says in the five years
856
00:43:13.605 --> 00:43:15.540
of credible service immediately preceding retirement.
857
00:43:15.540 --> 00:43:18.103
Either that word is put in there
858
00:43:18.103 --> 00:43:20.016
to mean something or not mean something.
859
00:43:20.016 --> 00:43:22.897
Why is that ambiguous?
Excuse me?
860
00:43:22.897 --> 00:43:24.840
I don't understand how that is ambiguous.
861
00:43:24.840 --> 00:43:27.490
Well, it is ambiguous.
It's the five years
862
00:43:27.490 --> 00:43:30.323
of credible service right before retirement.
863
00:43:30.323 --> 00:43:32.383
It isn't ambiguous to me, your Honor,
864
00:43:32.383 --> 00:43:33.810
but it's been interpreted a different way
865
00:43:35.465 --> 00:43:37.685
by the appellants in this case,
866
00:43:37.685 --> 00:43:40.275
so I think that creates ambiguity.
867
00:43:40.275 --> 00:43:41.580
Well, just because it's their interpretation?
868
00:43:41.580 --> 00:43:44.130
The words are plain.
Well, the words are plain,
869
00:43:44.130 --> 00:43:45.690
five years of credible service
870
00:43:45.690 --> 00:43:48.300
immediately preceding retirement
871
00:43:48.300 --> 00:43:52.410
would be five years immediately before retirement.
872
00:43:52.410 --> 00:43:54.560
No, of the credible service.
873
00:43:54.560 --> 00:43:55.839
Credible service.
Credible service.
874
00:43:55.839 --> 00:43:57.793
Yeah, immediately preceding retirement.
875
00:43:57.793 --> 00:44:00.252
Right. So that would include the gap.
876
00:44:00.252 --> 00:44:01.713
I don't think it should, your Honor.
877
00:44:01.713 --> 00:44:04.560
Well you don't think it should, but the words say, right?
878
00:44:04.560 --> 00:44:05.497
Yes.
It says,
879
00:44:05.497 --> 00:44:10.109
"credible service immediately preceding retirement."
880
00:44:10.109 --> 00:44:13.837
So it would subsume the three years with the city
881
00:44:13.837 --> 00:44:15.870
and then the gap and then going all the way back
882
00:44:15.870 --> 00:44:19.087
to the state service.
And then it goes on to say,
883
00:44:19.087 --> 00:44:20.633
"received by the member during the period
884
00:44:20.633 --> 00:44:23.037
of five consecutive years preceding retirement."
885
00:44:27.393 --> 00:44:29.964
You like everything up till that last part, right?
886
00:44:29.964 --> 00:44:34.964
Because it would preclude punishing your client
887
00:44:38.190 --> 00:44:41.790
for that increase during that break.
888
00:44:41.790 --> 00:44:44.430
If the last word were five credible years
889
00:44:44.430 --> 00:44:45.663
of preceding retirement,
890
00:44:46.832 --> 00:44:48.390
if the last sentence end with five credible years,
891
00:44:48.390 --> 00:44:51.714
there's no ambiguity whatsoever in this thing, is there?
892
00:44:51.714 --> 00:44:54.233
Or if they had simply added in not with, you know,
893
00:44:55.528 --> 00:44:58.950
notwithstanding, what's that phrase there?
894
00:44:58.950 --> 00:45:02.100
Those four words?
Whether or not consecutive.
895
00:45:02.100 --> 00:45:04.935
Whether consecutive or not, right.
896
00:45:04.935 --> 00:45:06.810
I mean, if that were in there, that would make it clear.
897
00:45:06.810 --> 00:45:07.743
Let me move on to-
898
00:45:09.573 --> 00:45:13.829
And do you agree with the position of the appellants
899
00:45:13.829 --> 00:45:15.960
that retirement for these purposes is the date
900
00:45:15.960 --> 00:45:20.130
on which the participant has applied
901
00:45:20.130 --> 00:45:23.073
for the retirement benefits?
No, I don't, your Honor.
902
00:45:24.337 --> 00:45:26.190
I believe you're able to postpone your retirement
903
00:45:26.190 --> 00:45:27.363
as long as you want.
904
00:45:29.343 --> 00:45:30.429
The court case-
So what would be
905
00:45:30.429 --> 00:45:33.060
the meaning of retirement as used here?
906
00:45:33.060 --> 00:45:36.543
Is there a statutory definition of the word retirement?
907
00:45:37.604 --> 00:45:38.437
Well, you don't retire actually
908
00:45:38.437 --> 00:45:40.700
until you file a retirement application.
909
00:45:40.700 --> 00:45:42.988
That's what they said. Okay.
Yes, yes, yes.
910
00:45:42.988 --> 00:45:45.420
Counsel, can I ask you a slightly different question?
911
00:45:45.420 --> 00:45:49.483
Assume for the sake of argument that, again,
912
00:45:49.483 --> 00:45:52.680
you win on the interpretation,
913
00:45:52.680 --> 00:45:55.680
but let's say that of whether it's consecutive,
914
00:45:55.680 --> 00:45:58.341
credible, that first part.
915
00:45:58.341 --> 00:46:00.660
But on the 25, if we go through the analysis
916
00:46:00.660 --> 00:46:02.403
and do the second part of the,
917
00:46:03.368 --> 00:46:05.250
I think you might agree that Judge Cowin
918
00:46:05.250 --> 00:46:09.150
did not do the second part of the 25 analysis.
919
00:46:09.150 --> 00:46:11.940
Assume we do the second part of the 25 analysis
920
00:46:11.940 --> 00:46:16.440
and whether or not there's a reasonable basis
921
00:46:16.440 --> 00:46:21.440
for the interruption of the claimant's expectation,
922
00:46:22.112 --> 00:46:23.940
retirement expectation.
923
00:46:23.940 --> 00:46:25.113
You could still lose.
924
00:46:26.958 --> 00:46:29.599
I don't think so, your Honor. Let me explain.
925
00:46:29.599 --> 00:46:32.252
First off, Judge Cowin did not do that analysis
926
00:46:32.252 --> 00:46:33.390
because nothing was presented
927
00:46:35.327 --> 00:46:37.463
to the judge by CRAB regarding that.
928
00:46:37.463 --> 00:46:38.880
They decided not to argue that issue at all.
929
00:46:38.880 --> 00:46:42.064
That issue only came up when they drafted a brief
930
00:46:42.064 --> 00:46:43.323
for the appeals court.
931
00:46:43.323 --> 00:46:44.918
So there's a brand new argument
932
00:46:44.918 --> 00:46:46.740
that we're hearing about in terms of the police powers.
933
00:46:46.740 --> 00:46:50.958
Secondly, your Honor, the police powers are-
934
00:46:50.958 --> 00:46:53.706
Isn't the police power issue in the case law?
935
00:46:53.706 --> 00:46:54.539
Yes.
It says that, right?
936
00:46:54.539 --> 00:46:57.849
So that's the test.
Yes.
937
00:46:57.849 --> 00:46:59.460
She only went through one part of the test.
938
00:46:59.460 --> 00:47:01.200
Yes, your Honor, you know,
939
00:47:01.200 --> 00:47:03.390
but I think that the police powers here
940
00:47:03.390 --> 00:47:06.720
is really too extensive to take an issue like this
941
00:47:06.720 --> 00:47:08.220
for which there's no knowledge
942
00:47:08.220 --> 00:47:11.703
about any egregious behavior by anyone,
943
00:47:13.408 --> 00:47:16.350
no cost analysis as to what the cost of this would be,
944
00:47:16.350 --> 00:47:19.143
no evidence as to how many people this would affect.
945
00:47:20.550 --> 00:47:22.533
I mean, it seriously affects my client.
946
00:47:23.491 --> 00:47:25.848
It may seriously affect some other people
947
00:47:25.848 --> 00:47:26.681
who have breaks in service,
948
00:47:26.681 --> 00:47:29.487
but we have no idea what that is,
949
00:47:29.487 --> 00:47:31.470
and the itself is so unclear.
950
00:47:31.470 --> 00:47:33.720
To say that this language,
951
00:47:33.720 --> 00:47:37.750
it was designed to deal expressly with breaks in service
952
00:47:38.606 --> 00:47:41.141
when there are other reasons it could be applied.
953
00:47:41.141 --> 00:47:44.833
Somebody could work for a while, a long career work,
954
00:47:44.833 --> 00:47:46.127
and then the last three years,
955
00:47:46.127 --> 00:47:49.230
they get a big job at an authority or someplace else,
956
00:47:49.230 --> 00:47:50.610
and their salary goes up.
957
00:47:50.610 --> 00:47:53.253
Perfect placement for this Section 14.
958
00:47:54.090 --> 00:47:55.620
So we're not saying Section 14 should go away.
959
00:47:55.620 --> 00:47:57.420
We're saying it doesn't apply to my client.
960
00:47:57.420 --> 00:47:59.287
It doesn't apply to breaks in service.
961
00:47:59.287 --> 00:48:00.830
Before you leave,
962
00:48:00.830 --> 00:48:03.060
I'm concerned about the inequity to your client,
963
00:48:03.060 --> 00:48:05.880
that she was misled by the people
964
00:48:05.880 --> 00:48:08.370
who were advising her on the pension fund.
965
00:48:08.370 --> 00:48:10.860
Do you wanna address this appeals court decision
966
00:48:10.860 --> 00:48:12.993
where supposedly that's okay?
967
00:48:14.070 --> 00:48:16.620
You know, your Honor, I worked in public service.
968
00:48:16.620 --> 00:48:20.831
I understand that people in public service make mistakes
969
00:48:20.831 --> 00:48:22.215
and you can overlook those,
970
00:48:22.215 --> 00:48:23.820
just close to her reasonable expectations.
971
00:48:23.820 --> 00:48:25.470
Just the case.
972
00:48:25.470 --> 00:48:27.444
Is the case distinguishable or not,
973
00:48:27.444 --> 00:48:29.528
or is the case right on all fores?
974
00:48:29.528 --> 00:48:30.420
I think it's distinguishable,
975
00:48:30.420 --> 00:48:31.886
I haven't read the case.
your Honor.
976
00:48:31.886 --> 00:48:34.380
Not only that, your Honor, in this particular case,
977
00:48:34.380 --> 00:48:37.230
she went to work with this understanding
978
00:48:37.230 --> 00:48:40.260
as to what her benefits would be if she lasted two years
979
00:48:40.260 --> 00:48:43.230
'cause you have to last two years when you go back to work.
980
00:48:43.230 --> 00:48:45.870
She believed that during the course of her employment.
981
00:48:45.870 --> 00:48:47.366
She believed that
982
00:48:47.366 --> 00:48:48.930
when she left her employment with the city.
983
00:48:48.930 --> 00:48:51.033
She went for counseling in the city.
984
00:48:51.870 --> 00:48:55.413
City of Boston Retirement Board never mentioned this to her,
985
00:48:56.637 --> 00:48:58.220
and it's not a mistake, your Honor.
986
00:48:58.220 --> 00:48:59.730
City of Boston never mentioned to her
987
00:48:59.730 --> 00:49:01.350
when she went to retire.
988
00:49:01.350 --> 00:49:05.340
They never mentioned it when they calculated her retirement,
989
00:49:05.340 --> 00:49:06.750
and they went back
990
00:49:06.750 --> 00:49:09.780
and calculated her retirement a second time.
991
00:49:09.780 --> 00:49:12.030
A second time, they went and looked at her retirement
992
00:49:12.030 --> 00:49:14.057
to make sure it was right,
993
00:49:14.057 --> 00:49:15.360
and they adjusted it up a little bit.
994
00:49:15.360 --> 00:49:18.951
It was only years later.
995
00:49:18.951 --> 00:49:20.692
It was, well, a year after, you know,
996
00:49:20.692 --> 00:49:21.926
months after her retirement,
997
00:49:21.926 --> 00:49:23.453
but years after the law went into effect,
998
00:49:23.453 --> 00:49:24.286
I get the equation.
Boston board-
999
00:49:24.286 --> 00:49:26.490
Just trying to get you to distinguish the case for us.
1000
00:49:26.490 --> 00:49:29.469
How do we distinguish this appeals court case?
1001
00:49:29.469 --> 00:49:31.980
The Boston Board completely agreed
1002
00:49:31.980 --> 00:49:36.980
with our interpretation of the statute until 2017.
1003
00:49:37.286 --> 00:49:38.850
The law went into effect in 2012,
1004
00:49:38.850 --> 00:49:42.660
and the Boston Board agreed with our position
1005
00:49:42.660 --> 00:49:45.723
up until the time that Ms. Hartnett went to retire.
1006
00:49:50.078 --> 00:49:51.175
[Justice Wendlandt] Okay. Thank you.
1007
00:49:51.175 --> 00:49:52.775
If there no further questions.