City of Annapolis v. Bowen, Jr. et al

Filing 136

MEMORANDUM. Signed by Judge William M Nickerson on 12/23/2014. (nd2s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

CITY OF ANNAPOLIS

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v.
EDGAR A. BOWEN, JR. et al

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Civil Action No. WMN-14-2558

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MEMORANDUM
Before the Court are motions to dismiss filed by most of
the Defendants in this action.

ECF Nos. 7, 9, 10, 17-19, 23,

24, 31–36, 40-49, 51, 52, 54, 56, 57, 59, 62, 67-69, 74-76, 78,
80-82, 84, 86, 94-98, 100-104, 117, 119, 129, and 133.
Plaintiff has filed several consolidated oppositions to the
motions and some Defendants have filed replies.

The Court finds

that the motions are ripe for resolution, that no hearing is
necessary, Local Rule 105.6, and that the motions should be
granted and this case dismissed.
I. FACTUAL AND PROCEDURAL BACKGROUND
Unquestionably, the above-captioned case is directly
related to litigation that has been pending in the Maryland
State court system for over ten years and is still pending
before the Circuit Court for Anne Arundel County.

Plaintiff

here is the City of Annapolis (the City) and the defendants are
a group of retired members (or surviving family members of a

retired member) of the City’s Police or Fire Departments (the
Retirees).

At issue here and in the State litigation is the

amount of the pension benefit to which these Retirees are
entitled.

A brief history of this long dispute follows.

The Retirees are all participants in a pension program that
provided, in pertinent part, that “[e]ach retired member’s
pension shall be increased by the same percentage as any
increase in the pay scale for members of the same rank and years
of service who are on active duty.”

See Bowen v. City of

Annapolis, 937 A.2d 242, 247 (Md. 2007) (quoting City Code of
Annapolis § 3.36.150A1, as it read at the time of decision).
After the City adopted an interpretation of this language which
would limit its application to discretionary cost-of-living
adjustments granted by the City Council but not to other pay
raises received by the active members, the Retirees1 filed a
complaint for injunctive relief in the Circuit Court for Anne
Arundel County on October 1, 2002.
Civ. No. 02-C-04-95442.

Bowen v. City of Annapolis,

After a detour to exhaust

administrative remedies, a decision favorable to the Retirees
issued by Judge Ronald Silkworth in the trial court, and a

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Defendants in this proceeding are not completely identical to
plaintiffs in the State proceedings. Among other reasons for
the difference, some of the former retirees have since passed
away. For purposes of this opinion, however, the Court will
treat the two classes of litigants as identical and will refer
to them collectively as the “Retirees.”
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reversal by the Maryland Court of Special Appeals, the case
reached the Maryland Court of Appeals in 2007.
The Court of Appeals found that the plain text of §
3.36.150A1 was “clear and unambiguous,” and “means just what it
says — retired police officers and fire fighters are entitled to
receive increases in their pensions in tandem to any increases
in salaries that active police officers and firefighters of the
same rank and same number of years of service receive from the
City.

We can read no other plausible meaning in this sentence.”

Bowen, 937 A.2d at 258.

The Court of Appeals then remanded the

case with directions for the Circuit Court to issue a
declaratory judgment consistent with that conclusion.

On July

16, 2008, Judge Silkworth issued a declaratory judgment
incorporating the statutory interpretation of the Court of
Appeals and stating that the payment of those pensions increases
“is a continuing statutory obligation of the City of Annapolis.”
ECF No. 32-1 ¶ B (the 2008 Declaratory Judgment).
Due in large part to what has come to be known as the
“Great Recession,” the active duty members of the City’s Police
and Fire Departments did not receive any pay increases between
July 2009 and July 2013.

Therefore, the Retirees received no

pension increases during those years.

In October of 2013,

however, the City entered into Memoranda of Agreement (MOAs)
with the unions representing the active police and fire fighters
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under which the active members would be granted an aggregate 10%
increase in pay, phased in through July 1, 2016.

As part of the

negotiations that led to the MOAs, the City determined that the
Retirees would be granted a fixed two percent annual cost-ofliving adjustment (COLA) for this same three year period.

Thus,

the Retirees would receive only a 6% pension increase while the
active members would receive a 10% increase in pay.
In response, on February 28, 2014, counsel for the Retirees
sent a letter to the City’s Director of Human Resources calling
out the City’s actions as unlawful both procedurally and
substantively.

ECF No. 1-15.

Procedurally, counsel noted that

the negotiations that led to this decision did not include any
representative of the Retirees but was an agreement just between
the City and the unions representing the active members.
Substantively, counsel noted that the City’s actions violated §
3.36.150A of the City Code as construed in the Court of Appeals’
Bowen decision and in Judge Silkworth’s 2008 Declaratory
Judgment.

Counsel cautioned that unless the City effected a

prompt “make whole” remedy for the Retirees which includes
“paying retroactive COLA increases which match those provided to
the active Police and Fire members,” the Retirees “will seek
judicial injunctive enforcement of the Declaratory Judgment.”
Id. at 5.

On June 6, 2014, the Retirees did just that and filed

a “Motion for Enforcement of Declaratory Judgment” in the Bowen
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case, in the Circuit Court for Anne Arundel County.
132-1.

ECF No.

On July 24, 2014, the Retirees filed a reply brief in

further support of their Motion for Enforcement of Declaratory
Judgment.

ECF No. 93-1.

The Retirees argued in that reply

brief, apparently for the first time, that, in addition to
violating the controlling City Code provision and the 2008
Declaratory Judgment, the City’s action also “violates the
Contract Clause of the U.S. Constitution.”

Id. at 6.

A few days later, on July 28, 2014, the City Council passed
Ordinance 24-14 which amended § 3.36.150 to now read,
“[e]ffective July 1, 2013 and EACH July 1st thereafter, each
Retired Member or survivor of any such Retired Member, entitled
to receive a retirement benefit as of June 30th of any year,
shall receive a fixed annual two-percent (2%) increase above the
amount the Retired Member or survivor had received on June 30th
of the same year.”

See ECF No. 1-14.

The ordinance further

stated that it would take effect on that same date.
Two weeks after that, on August 12, 2014, the City filed
this action seeking “a declaratory judgment affirming the
constitutionality, under federal and state law,” of its justpassed Ordinance 24-14.

ECF No. 1 at 7.

In Count One of the

Complaint, the City seeks a declaration pursuant to the
Declaratory Judgment Act, 28 U.S.C. § 2001, that Ordinance 24-14
does not violate the Contract Clause of the U.S. Constitution.
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In Count Two, the City seeks a declaration that Ordinance 24-14
does not violate Maryland law.

The City suggests that, pursuant

to 28 U.S.C. § 1331, this Court’s jurisdiction is proper over
Count One because it presents a federal question and that,
pursuant to 28 U.S.C § 1367(a), this Court has supplemental
jurisdiction over Count Two.

Id. ¶¶ 67, 68.

Defendants have

moved to dismiss this action for a variety of reasons, the most
obvious being that, given the history recited above, this action
is a transparent attempt to do an end run around the pending
state court proceeding.
Under the Declaratory Judgment Act, federal courts have
discretion in deciding whether to hear a declaratory action.

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U.S.C. § 2201 (“In a case of actual controversy within its
jurisdiction, ... any court of the United States, upon the
filing of an appropriate pleading, may declare the rights and
other legal relations of any interested party seeking such
declaration, whether or not further relief is or could be
sought.” (emphasis added)); see also Mitcheson v. Harris, 955
F.2d 235, 238 (4th Cir. 1992).

In the exercise of that

discretion by the courts, one concern supporting dismissal of
declaratory actions is the desirability of having state courts
interpret questions of state law.

Mitcheson, 955 F.2d at 238

(citing United Mine Workers v. Gibbs, 383 U.S. 715 (1966)).
Another concern that can favor dismissal is the preference to
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“resolve all litigation stemming from a single controversy in a
single court system.”

Id. at 239.

“For the federal court to

charge headlong into the middle of a controversy already the
subject of state court litigation risks ‘[g]ratuitous
interference with the orderly and comprehensive disposition of
[the] state court litigation.’”

Id. (quoting Brillhart v.

Excess Ins. Co., 316 U.S. 491, 495 (1942))(alterations in
original); see also, New Wellington Fin. Corp. v. Flagship
Resort Dev. Corp., 416 F.3d 290, 297-98 (4th Cir. 2005)
(affirming dismissal of declaratory judgment action and opining
that the court’s discretion is “especially crucial when [] a
parallel or related proceeding is pending in state court”).
Here, the dispute is clearly a matter of state and local law and
has been the subject of longstanding and ongoing proceedings in
the state court.
To avoid dismissal, the City makes a rather remarkable
argument that the state court proceeding in Bowen “concerns
different legal issues and facts than this lawsuit.”
134 at 1.

ECF No.

The City posits that “[t]his lawsuit concerns one

issue: whether changes to the COLA [under Ordinance 24-14] for
retired police and firefighters participating in the City’s
police and fire pension plan (the “Plan”) are lawful.”

Id.

The

City then characterizes the state action as addressing the “sole
issue” of “whether or not the City violated the 2008 Declaratory
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Judgment and the prior version of the City Code when it entered
into Memoranda of Agreement with its Unions in October 2013.”
Id. at 2 .

What the City also clearly acknowledges, but then

attempts to ignore, is that the “Plan changes” brought about by
Ordinance 24-14 are the exact same Plan changes that were
“initially embodied” in the Memoranda of Agreement that are the
focus of the state action.

Thus, it borders on sophistry to

argue that this action and the state court action somehow
concern different issues and facts.
For these reasons and consistent with the discretion it
possesses under the Declaratory Judgment Act, the Court will
dismiss this action.

A separate order will issue.

_______________/s/________________
William M. Nickerson
Senior United States District Judge

DATED: December 23, 2014

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