Cranston Firefighters, IAFF Local 1363, AFL-CIO et al v. Raimondo et al

Filing 23

ORDER AND MEMORANDUM GRANTING 7 Motion to Dismiss and GRANTING 13 Motion to Dismiss. Counts I, II, and III of the Complaint are DISMISSED without prejudice. Count IV is DISMISSED with prejudice. So Ordered by Senior Judge Mary M. Lisi on 3/7/2017. (Feeley, Susan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
CRANSTON FIREFIGHTERS, IAFF
LOCAL 1363, AFL-CIO, on its own behalf
and on behalf of its members, and
INTERNATIONAL BROTHERHOOD OF
POLICE OFFICERS, LOCAL 301,
AFL-CIO, on its own behalf and on behalf
of its members
Plaintiffs,

v.

C.A. No. 16-130-ML

GINA RAIMONDO, in her capacity as
Governor of the State of Rhode Island,
SETH MAGAZINER, in his capacity as
the General Treasurer of the State of Rhode
Island, the EMPLOYEES’ RETIREMENT
SYSTEM OF RHODE ISLAND, by and
through Seth Magaziner, in his capacity
as Chairperson of the Retirement Board,
and Frank J. Karpinski, in his capacity as
Executive Director of the Retirement Board,
and
CITY OF CRANSTON, by and through its
Finance Director, Robert F. Strom, and its
Treasurer, David Capuano,
Defendants.

ORDER AND MEMORANDUM
The plaintiffs in this action, Cranston Firefighters, IAFF
Local

1363,

Brotherhood
Officers,”

AFL-CIO
of

(the

Police

together

“Firefighters”)

Officers,

with

the

Local

and

301-CIO

Firefighters,

the

International
(the

“Police

“Unions”

or

“Plaintiffs”), have brought claims (the “Complaint”) against the
1

State of Rhode Island (the “State”), the Employees’ Retirement
System of Rhode Island (“ERSRI”), and the City of Cranston, (the
“City,” together with the State and ERSRI, “Defendants”), related
to the implementation of the Rhode Island Retirement Security Act
of 2011 (“RIRSA”), as amended by Rhode Island Public Laws Chapter
141, Article 21, “Relating to Pensions” (the “2015 Amendments”).
The matters before the Court are two separate motions to dismiss
the Complaint filed by the State (ECF No. 7) and by the City (ECF
No. 13). After considering the parties’ pleadings and conducting
a hearing on the motions on October 6, 2016, the Court issues the
following order and memorandum.
I.

Factual Background
A. Collective Bargaining Agreements
As set forth in the Complaint, the City and Local 1363 are

parties to a collective bargaining agreement1 (“CBA”), pursuant
to which “employees hired after July 1, 1995 will be enrolled in
the ‘State of Rhode Island Optional Twenty (20) Year Retirement
Service Allowance,’ R.I.G.L. 45-21.2-22.” Complaint ¶18. The CBA
provides, inter alia, that employees enrolled in the pension plan

1

At the time the Complaint was filed, the then current CBA
governed the period July 1, 2013 through June 30, 2016. Complaint
¶16. According to the Complaint, during the period from July 1,
2008 through June 30, 2011, the City and the Union agreed to
provide for a new CBA governing the period from July 1, 2011
through June 30, 2013. Complaint ¶17.
2

will accrue 2.5% per credited year of service, up to 75% for
thirty years of credited service; that the pension payment will
be based on the employee’s weekly salary, longevity pay, and
holiday pay, based on the employee’s highest year of earnings;
and

that

all

retired

employees’

pension

payments

will

automatically escalate by 3%, compounded each year following the
year

of

retirement.

Complaint

¶¶19-21.

Similarly,

Section

2.28.050 of the City of Cranston’s Code of Ordinances provides
for an accrual of 2.5% per credited year of service up to a
maximum of 75%. Complaint ¶25.
The City is also party to a CBA with Cranston Police, which
governs

employment

Cranston police

terms

officers

and
(up

conditions
to,

for

all

and including,

full-time

the

rank

of

Captain). Complaint ¶31. The Police CBA for the period from July
1, 2014 through June 30, 2017 provides for, inter alia, fixed
annual COLAs of 3% for all employees retiring after execution of
the Police CBA. Complaint ¶32. The Police CBA requires that no
changes

may

agreement

be

made

between

to

the

current
City

and

benefits
the

without
IBPO

a

written

[International

Brotherhood of Police Officers]. Id. According to the Complaint,
the Plaintiff Unions have filed grievances against the City for
allegedly violating provisions of the respective CBAs. Complaint
¶¶24,34. Those grievances are either pending or held in abeyance
3

pending the outcome of the instant case. Id.
B. The Cranston Ordinances
The Plaintiffs in this case claim contractual rights to
retirement

benefits

under

two

provisions

of

the

City

of

Cranston’s Code of Ordinances (the “City Ordinances”), Sections
2.28.050 and Section 2.20.05, respectively, which have remained
“substantially the same since 1995”, Complaint ¶¶27, 33. With
respect to retirement benefits, Section 2.20.050 provides, inter
alia, that police officers enrolled in the Rhode Island pension
plan will accrue 2.5% per credited year of service (up to 75%);
the Section also includes a 3% annual COLA. Pension benefits are
calculated on weekly salary, longevity pay, and holiday pay.
Complaint

¶¶35-36.

Similar

provisions

in

Section

2.28.050

(related to the Firefighters) include, inter alia, a 2.5% accrual
per

credited

year

of

service

up

to

75%.

Complaint

¶¶25-26.

Plaintiffs allege that the City is currently in violation of both
City Ordinances. Complaint ¶¶28, 38.
C. The 1996 Special Legislation
According to the Complaint, in 1993, employees of the City’s
Fire

and

Police

Departments

were

participants

in

the

City’s

municipal pension plan. Complaint ¶49. At that time, the City was
suffering from “a severe operating deficit” and the municipal
pension

plan

was

“critically

underfunded.”
4

Complaint

¶50.

In

1995, after
permit

new

negotiating
hires

and

with

the

employees

City, the Unions

with

five

or

agreed

fewer

to

years

of

service to transfer into the State Retirement System (“SRS”).
Complaint ¶¶54, 55. Because the SRS did not provide the same
benefits

as

the

CBAs,

the

Unions,

the

City,

and

SRS

representatives negotiated certain changes that became law by
special legislation in 1996. As a result, Section 45-21.2-14 of
the Rhode Island General Laws was amended to increase employee
contributions
Departments

for
from

members
7%

to

of

the

10%;

Cranston
to

Fire

provide

and

higher

Police
“final

compensation” when calculating their pension benefits; and to
provide them a 3% COLA. Complaint ¶63.
The Cranston City Council also adopted the provisions of
R.I.

Gen.

Laws

§

45-21.2-22,

which

permitted

public

safety

employees to retire after twenty years of service (regardless of
age)

and

included

a

retirement

allowance

of

2.5%

of

final

compensation multiplied by years of service, up to 75% of final
compensation. Complaint ¶¶62, 64. Pursuant to Sections 45-21.217.2 and 45-21.2-17.3, Cranston Firefighters and Police offices
becoming members under the State retirement system waived and
renounced all accrued rights and benefits of any other pension or
retirement system supported wholly or in part by a municipality
if the pension or retirement system was in existence prior to
5

July 1, 1995. Complaint ¶65. The Plaintiffs now take the position
that Section 45-21.2-1 et seq., as amended in 1996, "creates a
contract between the State and Plaintiffs." Complaint ¶66.
D. Rhode Island Retirement Security Act of 2011 (“RIRSA”)
RIRSA was enacted by the Rhode Island General Assembly in
2011

to

address

the

issue

of

unfunded

municipal

pension

liabilities. Id. at ¶¶67, 68. Some of the changes impacting fire
fighters

and

police

officers

within

the

Municipal

Employees’

Retirement System (“MERS”) include the following: it reduced the
factor to calculate an employee’s benefit from 2.5% per year of
service to 2% per year of service after July 1, 2012; it changed
the Final Average Compensation (“FAC”) from the highest year to
the highest five consecutive annual salaries; it increased the
twenty-year minimum service requirement to twenty-five; it added
a

minimum

reduced

or

retirement
delayed

age
the

of

fifty-five;

amount

of

and

COLAs

it

permanently

[cost-of-living

adjustments]. Complaint ¶69 a-j. In sum, RIRSA reduced, on a
prospective basis, the value of benefit plans for certain safety
employees, including Cranston fire fighters and police officers.
As set forth in the statute, in enacting RIRSA, the State
sought to address the "fiscal peril related to the growing and
substantial unfunded pension liabilities," that might lead Rhode
Island communities to file for bankruptcy protection which, in
6

turn,

had

already

been

shown

pensions. Complaint ¶68.

to

jeopardize

public

service

On their part, the Plaintiffs assert,

without further factual support, that "the City of Cranston MERS
[Municipal
police

Employees

officers

Retirement

was,

at

all

System]
relevant

for

firefighters

times,

and

well-funded."

Complaint ¶77. The Plaintiffs now claim that they have suffered
irreparable

injuries

as

a

direct

result

of

RIRSA

and

its

amendments. Complaint ¶1.
E. Litigation Arising from Pension Reform
1. The CPRAC Case
In early 2012, the Plaintiffs, together with several other
municipal employee unions, filed lawsuits2 in Rhode Island state
court against the State and ERSRI [Employees’ Retirement System
of Rhode Island], alleging that RIRSA violates the Contracts
Clause, Takings

Clause,

and

Due

Process

Clause

of

the

Rhode

Island Constitution by reducing the Plaintiffs’ pension benefits
and by substantially impairing their contracts. Complaint ¶78.
In

April

2013,

the

Cranston

Police

Department

Retirees

Association, Inc. and the Local 1363 Retirees Association brought
suit against the City, alleging that 2013 changes to certain
ordinances (the “2013 Ordinances”) of the Cranston City Code —
2

Woonsocket Fire Fighters IAFF Local 732, et al. v. Chafee,
C.A. No. PC-12- __ (ECF No. 7-1) and City of Cranston Police
Officer, et al. v. Chafee, C.A.No. PC-12-3169 (ECF No. 7-2).
7

which, inter alia, suspended the prior 3% compounded COLA for a
period of ten years — violated the Contract Clause of the United
States Constitution and the Rhode Island Constitution. Cranston
Police Retirees Action Committee v. City of Cranston, C.A. No.
KC-13-1059 (ECF No. 17-2) (“CPRAC”). Eventually, the case was
settled,

affording

those

plaintiffs

who

elected

to

exclude

themselves from the settlement agreement an opportunity to sue
the City of Cranston.
CPRAC promptly filed suit against the City, which, after a
thorough
trial.

discovery

Id.

On

period,

July

22,

culminated

2016,

the

in

Rhode

a

six-day

Island

non-jury

state

court

rendered a decision in favor of the City and concluded that (1)
in accordance with the respective CBAs under which they retired,
members of CPRAC had a vested right to 3% compounded COLAs and
that “the 3% compounded COLAs are contractual obligations, the
impairment of which is subject to contract clause scrutiny,”
CPRAC at

24;

(2)

the

2013

Cranston

Ordinances

constituted a

substantial impairment of the contract between members of CPRAC
and the City, id. at 29; (3) the 2013 Ordinances were passed for
a significant and legitimate public purpose, id. at 35; and (4)
the 2013 Ordinances were “reasonable and necessary,” id. at 45.
Accordingly, the state court concluded that the 2013 Ordinances
did not violate the contract clauses of either the Rhode Island
8

or the United States Constitutions. Id. The court also dismissed
CPRAC’s breach of contract claim for lack of standing and denied
CPRAC’s request for injunctive relief. The state court’s decision
is currently on appeal before the Supreme Court of Rhode Island.
2. The Class Action Settlement
In 2014, Plaintiffs filed separate lawsuits3 in Rhode Island
state court against the State and the City of Cranston, again
asserting that RIRSA violates the Rhode Island Constitution’s
Contracts

Clause,

Takings

Clause,

and

Due

Process

Clause.

Plaintiffs' 2014 lawsuits were consolidated with several other
lawsuits challenging RIRSA and/or other changes to retirement
benefits made in 2010 and 2011. After a settlement was reached in
most of the cases, the settling parties filed a class action
complaint for settlement purposes. Rhode Island Public Employees’
Retiree Coalition v. Raimondo, PC-2015-1468.
On April 13, 2015, the State and counsel for several unions
and retiree groups involved in the state court litigation filed a
joint

motion

for

settlement,

in

which

Cranston

Police

and

Cranston Fire did not join. Complaint ¶85. The terms of the
settlement agreement (the "Settlement Agreement") were "nearly

3

Cranston Firefighters, IAFF Local 1363, AFL-CIO v. Chafee and
City of Cranston, C.A. No. PC 14-4343 (ECF No. 7-3); International
Brotherhood of Police Officers, Local 301, AFL-CIO v. Chafee and
City of Cranston, C.A. No. PC 14-4768 (ECF No. 7-4).
9

identical
itself

to

was

the

2015

contingent

Amendments;”
on

the

the

General

amendment to RIRSA. Complaint ¶86.

Settlement
Assembly's

Agreement
passing

an

Pursuant to the Settlement

Agreement, the parties agreed to be bound by the judgment entered
by the state court and to be foreclosed from mounting any further
challenges to RIRSA and/or certain other legislative retirement
changes. Complaint ¶87. In addition, the parties agreed not to
“directly

or

indirectly,

propose,

support,

encourage

and/or

advocate that any other person, firm or entity do anything or
refrain from doing something that a party to this Settlement
Agreement would be prohibited from doing or refraining from doing
hereunder.” The parties also agreed not to “support (financially
or otherwise)” any challenges to RIRSA and related legislative
amendments “pursued by any non-settling party.” Complaint ¶87.
The plaintiff class was defined as
“[a]ll persons (and/or their beneficiaries who, on or
before July 1, 2015, are receiving benefits or are
participating in the State Employees, Teachers or
Municipal Employees’ retirement plans administered by
ERSRI [Employees' Retirement System of Rhode Island]
and
all
future
employees,
excepting
only
those
individuals who on July 1, 2015 are participating in a
municipal retirement system administered by ERSRI for
municipal police officers in any municipality and/or
for fire personnel of the City of Cranston.”
The Plaintiff Subclasses included
“[a]ll retired members and beneficiaries of retired
members who retired on or before June 30, 2015, who are
receiving a retirement benefit under ERS or any MERS
10

unit.” State’s Exhibit G at 1-2 (ECF No.7-7 p. 2).
The plaintiffs’ motion for class certification and notice
was granted and a fairness hearing was held over a five-day
period in May 2015. It is undisputed that retired Cranston police
officers and firefighters elected not to testify at the related
fairness hearing.

Complaint

¶89.

On

June

9,

2015,

the

Rhode

Island state court issued a decision in which it confirmed the
certification

of

the

plaintiff

classes

and

overruled

any

objections to the Settlement Agreement (including an objection to
the

lack

of

an

opportunity

to

opt

out

of

the

settlement).

Complaint ¶95.
On July 8, 2015, after the 2015 Amendment had passed, the
state court issued a final judgment, which became binding on all
class

members.

Complaint

¶97.

Although

Cranston

Fire

and

Cranston Police retirees did not participate in the settlement,
they were included in the plaintiff class and subject to the
benefits of the 2015 Amendments. Subsequently, various retirees4
took an appeal from the judgment, which is currently pending in
the Rhode Island Supreme Court.

4

It appears that, although certain retirees filed an appeal
from the judgment, retired Cranston firefighters and police
officers (who were members of the class and benefitted from the
Settlement Agreement) did not.
11

F. The 2015 RIRSA Amendments
The

2015

Amendments

to

RIRSA,

enacted

by

the

General

Assembly on June 30, 2015, provide, inter alia, a one-time COLA
for certain retirees, a one-time stipend of $500 for retirees, a
more nuanced system of calculating COLAs for pension plans less
than 80% funded, and full retirement benefits for police and
firefighters at age 50 with 25 years of service, or at any age
with 27 years of service. Complaint ¶81. On July 17, 2015, in
light of the 2015 Amendments, which increased pension benefits
for the state court plaintiffs from those originally provided in
RIRSA, the State filed a motion to dismiss the Plaintiffs’ 2014
law

suits

as

moot.

The

Plaintiffs

did

not

object,

having

previously acknowledged that RIRSA no longer existed by virtue of
the 2015 Amendments. The case was dismissed as moot5 on August
21, 2015. Complaint ¶¶82, 83, 84.
II. Procedural History
On March 16, 2016, the Unions filed a four-count complaint
(the “Complaint”), alleging (Count I) that RIRSA and the 2015
Amendments

“substantially

impair

Plaintiffs’

contract

rights”

under the Contracts Clause of the United States Constitution;
(Count II) that RIRSA and the 2015 Amendments deprive them of
their constitutionally protected property and liberty interests
5

As Plaintiffs note, the case was dismissed without prejudice.
12

under the Due Process Clause of the Fourteenth Amendment; and
(Count

III)

that

RIRSA

and

the

2015

Amendment

constitute

a

regulatory taking of the Plaintiffs’ property rights without just
compensation under the Takings Clause of the Fifth Amendment. In
addition, the Plaintiffs seek a declaration from this Court that
RIRSA and the 2015 Amendments are unconstitutional, void, and
unenforceable as applied to Plaintiffs; and (Count IV) that the
2015 Settlement Agreement cannot prohibit or prevent “Retired
Cranston Public Safety Officers from joining active public safety
offers as Plaintiffs, or interested parties, in this action.”
According to the Complaint, “[t]he Unions file this complaint on
behalf of, and with the express permission of, their bargaining
unit members.” Complaint ¶8.
On June 7, 2016, the State filed a motion to dismiss the
Complaint pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the
Federal Rules of Civil Procedure (ECF No. 7).
The City filed its motion to dismiss the Complaint on June
27, 2016 (ECF No. 13), relying on the doctrine of abstention as
stated

in

Texas

v.

Pullman

Co.6

and

Colorado

River

Water

6

Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 61
S.Ct. 643, 85 L.Ed. 971 (1941).
13

Conservation District v. United States.7 The City requested that
this

Court

either

dismiss

the

Complaint

or

stay

further

proceedings until final adjudication of the ongoing Rhode Island
Superior

Court

litigation

in

Cranston

Police

Retirees

Action

Committee v. City of Cranston, KC-13-1059.
On July 22, 2016, the Plaintiffs filed objections to both
motions to dismiss the Complaint (ECF Nos. 15 and 16), to which
the City responded with a reply on September 2, 2016 (ECF No. 17)
and the State filed a reply on September 2, 2016 (ECF No. 18).
On October 6, 2016, this Court conducted a hearing on the
Defendants’ motions to dismiss the Complaint at which the parties
had an opportunity to make their arguments and answer the Court’s
questions.
III. Standard of Review
A motion to dismiss for lack of subject matter jurisdiction
is governed by Fed. R. Civ. P. 12(b)(1). A motion to dismiss for
failure to state a claim upon which relief may be granted is
governed by Fed. R. Civ. P. 12(b)(6). If a motion is brought
under both 12(b)(1) and 12(b)(6), “a district court, absent good
reason to do otherwise, should ordinarily decide the 12(b)(1)
motion first.” De La Cruz v. Irizarry, 946 F.Supp.2d 244, 249

7

Colorado River Water Conservation District v. United States,
424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976).
14

(D.P.R. April 13, 2013)(quoting Northeast Erectors Ass'n of BTEA
v. Secretary of Labor, Occupational Safety & Health Admin., 62
F.3d 37, 39 (1st Cir.1995) (citing 5A Charles Wright & Arthur
Miller, Federal Practice and Procedure § 1350, at 210 (1990)).
The standard of review accorded a dismissal under either
Rule 12(b)(1) or 12(b)(6) is “similar.” Murphy v. United States,
45 F.3d 520, 522 , the Court must construe the complaint in the
light most favorable to the plaintiff, taking all well-pleaded
facts

as

true,

and

giving

the

plaintiff

the

benefit

of

all

reasonable inferences. Arruda v. Sears, Roebuck & Co., 310 F.3d
18 (1st Cir. 2002). In order to withstand a motion to dismiss, a
claim “must contain sufficient factual matter ... to state a
claim to relief that is plausible on its face.” Katz v. Pershing,
LLC, 672 F.3d 64, 72-73 (1st Cir. 2012)(citations omitted). The
complaining party must include “factual content that allows the
court to draw a reasonable inference” in the pleader’s favor. Id.
“If, under any theory, the allegations are sufficient to state a
cause

of

action

in

accordance

with

the

law,”

the

motion

to

dismiss must be denied. Vartanian v. Monsanto Co., 14 F.3d 697,
700 (1st Cir.1994). The Court ignores, however, “statements in
the complaint that simply offer legal labels and conclusions or
merely

rehash

cause-of-action-elements.”

Schatz

v.

Republican

State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012). In
15

addition, “the party invoking the jurisdiction of a federal court
carries the burden of proving its existence.” Johansen v. United
States, 506 F.3d 65, 68 (1st Cir.2007).
Although

the

Court

generally

may

not

consider

documents

outside of the complaint unless it converts the motion to dismiss
pursuant to Rule 12(b)(6) into one for summary judgment, it may
make an exception “for documents the authenticity of which are
not disputed by the parties; for official public records; for
documents central to the plaintiffs’ claim; or for documents
sufficiently referred to in the complaint.” Watterson v. Page,
987 F.2d 1, 3 (1st Cir. 1993). The Court may also consider
materials

outside

the

pleadings

on

a

Rule

12(b)(1)

motion.

Gonzalez v. United States, 284 F.3d 281, 288 (1st Cir. 2002).
IV.

The Parties’ Contentions
A.

The State’s Position

With respect to Count IV, the State asserts that (1) the
Union Plaintiffs lack standing to assert the rights of retirees
who are not members of their respective associations; and (2) the
Plaintiffs’
because

the

claim
issue

is

barred

raised

in

by

the

this

doctrine
litigation

of

res

was

judicata

previously

considered and decided by the Rhode Island state court in the
underlying class action (resulting in a settlement to which the
retirees were parties). In addition, the State argues that Counts
16

I-III

should

establish

be

any

dismissed

contractual

because

right

to

the

“Plaintiffs

pension

benefits

cannot
as

they

existed prior to the enactment of RIRSA.” State’s Mem. at 3 (ECF
No. 7).
B.

The City’s Position

The

City

notes

that

Plaintiffs’

constitutional

claims

against the City are based on the contention that the Plaintiffs
have contractual and otherwise constitutionally protected rights
to certain retirement benefits pursuant to various CBAs, sections
of the Cranston Code of Ordinances, and/or R.I. Gen. Laws §4521.2-1. According to the City, at the time the instant motions to
dismiss the

Complaint

were briefed

by

the

parties,

the same

claims under the same Ordinances and identical CBAs were being
litigated

in

Rhode

Island

state

court.

City’s

Mem.

at

2,

referencing Cranston Police Retirees Action Committee v. City of
Cranston [“CPRAC”], KC-13-1059. (ECF No. 13-1). The Court notes
that on July 22, 2016, the Rhode Island state court issued a
decision in

which

it

determined

that

the

2013

Cranston City

Ordinances at issue in both cases did not violate the Contract
Clauses

of

either

the

Rhode

Island

or

United

States

Constitutions. The Rhode Island state court further determined
that CPRAC lacked standing to bring a breach of contract claim
against the City and it entered judgment in favor of the City on
17

all counts of the complaint. (Previously, the court had granted
summary judgment to the City as to CPRAC’s claims under the
Takings Clause of the U.S. Constitution and of the Rhode Island
Constitution, respectively.) CPRAC appealed the decision, which
is currently pending before the Rhode Island Supreme Court.
C. The Unions’ Position
Plaintiffs acknowledge that “this action also involves the
unconstitutionality
approved

by

the

of

Rhode

a

Class

Island

Action

Superior

Settlement
Court

in

Agreement,
2015,

which

prospectively prohibits bound class members from assisting any
party in bringing future legal challenges to RIRSA and its 2015
Amendments.” Pltfs.’ Mem. at 4 (ECF No. 15). With respect to
Count IV, Plaintiffs maintain that they will be unable to obtain
complete relief because the Cranston retirees are subject to
sanctions if they assist Plaintiffs in prosecuting this action.
Id.

Plaintiffs further assert that Plaintiffs’ claims are not

barred by res judicata because the proceedings in state court
“involve

completely

different

parties

and

separate

causes

of

action.” Id. 5.
With

respect

to

Counts

I

through

III,

the

Plaintiffs

maintain that they have alleged sufficient facts to establish (1)
a contractual right the receipt of pension benefits under the
Contracts Clause, (2) protected property and liberty interests
18

under the Due Process Clause of the Fourteenth Amendment, and (3)
protected rights and privileges under the Takings Clause. Id.
V.

Discussion
A. Count IV.
The threshold question in every case before this Court is

the determination whether the Court has the power to entertain
the suit. Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45
L.Ed.2d 343 (1975). To establish standing, the Plaintiffs bear
the burden to allege “such a personal stake in the outcome of the
controversy”

as

to

justify

this

jurisdiction

and

the

determination

Court’s
of

an

exercise
actual

of

its

controversy.

Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703,7 L.Ed.2d 663
(1962). Warth v. Seldin, 422 U.S. at 499 (noting that federal
jurisdiction “exists only to redress or otherwise to protect
against injury to the complaining party, even though the court's
judgment may benefit others collaterally” and jurisdiction “can
be invoked only when the plaintiff himself has suffered ‘some
threatened or actual injury resulting from the putatively illegal
action’”.)
Furthermore, it is well established law that “an association
has standing to bring suit on behalf of its members when: (a) its
members would otherwise have standing to sue in their own right;
(b)

the

interests

it

seeks

to
19

protect

are

germane

to

the

organization's purpose; and (c) neither the claim asserted nor
the relief requested requires the participation of individual
members

in

the

lawsuit.”

Hunt

v.

Washington

State

Apple

Advertising Com'n, 432 U.S. 333, 343 97 S.Ct. 2434, 2441, 53
L.Ed.2d

383

Plaintiffs

(1977).

must

In

order

establish

to

that

establish

they

or

their

standing,

the

members

have

suffered an “‘injury in fact’—an invasion of a legally protected
interest

which

is

(a)

concrete

and

particularized...and

(b)

‘actual or imminent, not conjectural or ‘hypothetical.’”•Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 2136,
119 L.Ed.2d
requires

351

more

requires that

(1992).

than
the

an

However,
injury

party

“the ‘injury

to

seeking

a

cognizable

review

in

fact’

test

interest.

be himself

among

It
the

injured.” 504 U.S at 563, 112 S.Ct. at 2137.
As

stated

explicitly

by

the

Union

Plaintiffs

in

their

Complaint, they commenced this action "on behalf of, and with the
express permission of, their bargaining members." Complaint ¶8.
Upon questioning by the Court at the October 6, 2016 hearing,
Plaintiffs'

counsel

clarified

that

by

bringing

Count

IV,

Plaintiffs sought to establish that Cranston police and fire
fighter

retirees

Although
Plaintiffs

not
now

could

expressly
appear

assist

Plaintiffs

stated
to

in

assert
20

a

the

in

this

litigation.

Complaint,

First

Amendment

the

Union

right

to

associate with the retirees in order to support their members’
claims before this Court. TR 33:14-25. Counsel also candidly
acknowledged
retirees'
through

that

own

III

Plaintiffs

First

were

to

have

Amendment
fail,

no

rights

Count

IV

standing
and
would

to

argue

the

that,

if

Counts

fail

as

well.

I
TR

35:11-16.
Notwithstanding Plaintiffs’ insistence that they only seek
to assert their own rights to associate with the retirees, the
Complaint seeks a declaration from this Court on whether the
"Settlement
Officers

Agreement

from

prevents

joining

Retired Cranston

active

public

safety

Public Safety
officers

as

Plaintiffs, or interested parties, in this action," noting that
under the Settlement Agreement, those retirees could be subject
to sanctions. Complaint ¶¶125, 127. In addition, the Complaint
contains

numerous

allegations

related

only

to

the

retirees,

including that the retirees were not given an opportunity to
remove themselves from the class or opt out of the Settlement
Agreement, as required by due process, Complaint ¶¶112-113. The
Complaint further asserts that the retirees “have a claim for
monetary damages against Defendants resulting from the illegal
and

unconstitutional

changes

to

their

pension

benefits.”

Complaint ¶116.
In addressing the issue of standing, the opposing parties’
21

arguments suffer from a disconnect. The Unions assert standing on
behalf of their active members, based on the contention that
those members have “suffered legal prejudice as a result of the
Settlement Agreement.” Pltfs.’ Mem at 22. The State takes the
position that the Unions, although they may have standing to sue
on

behalf

of

their

active

members,

lack

standing

to

advance

claims on behalf of retirees (a contention which has not been
refuted by the Plaintiffs, who carry the burden of establishing
jurisdiction). The Complaint itself indicates that the Unions are
challenging the validity of the Settlement Agreement to spare the
retirees from possible sanctions, should the retirees decide to
become involved in this litigation (a hypothetical proposition
which has been neither asserted nor established).
The

proper

procedure

to

challenge

the

validity

of

the

Settlement Agreement on part of the retirees would have been to
file a timely appeal in state court. To the extent the Cranston
police and

firefighter

retirees

joined

in

the

appeal

of

the

Settlement Agreement, their challenge is still pending in, and
will be determined by, the Rhode Island Supreme Court. To the
extent

the

retirees

elected

not

to

file

an

appeal

to

the

provisions of the Settlement Agreement, the state court’s final
judgment is binding and this Court has no jurisdiction to conduct
a further review.
22

The Plaintiff Unions, who elected not to participate in the
Class Action, have offered no credible basis on which this Court
could

invalidate

the

provisions

of

a

resulting

Settlement

Agreement to which the Plaintiffs are not parties, and which, as
the

Plaintiffs

acknowledge,

does

not

preclude

the

Plaintiffs

themselves from challenging RIRSA in this or any other court.
Accordingly,

the

standing

seek

to

Court
a

concludes

declaration

that
on

the

Plaintiffs

whether

the

lack

Settlement

Agreement, specifically the possibility of sanctions against the
retirees

under

certain

circumstances,

is

valid.

Count

IV,

therefore, is DISMISSED with prejudice.
B. Counts I through III
1. Plaintiffs’ Claims against the City
The

City

contends

that

this

Court

should

abstain

under

Pullman and/or Colorado River and dismiss the Complaint or stay
further

proceedings

until

the

CPRAC

case

has

been

finally

adjudicated by the Rhode Island Supreme Court. Cranston Mem. at 8
(ECF No. 13-1). As the First Circuit has instructed, “Pullman
abstention

serves

to

state-law

questions

‘avoid

federal-court

antecedent

to

error

federal

in

deciding

constitutional

issues.’”•Casiano-Montanez v. State Ins. Fund Corp., 707 F.3d
124, 128 (1st Cir. 2013)(citing Arizonans for Official English v.
Arizona, 520 U.S. 43, 76, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997);
23

see R.R. Comm'n of Tex. v. Pullman Co., 312 U.S. 496, 501, 61
S.Ct. 643, 85 L.Ed. 971 (1941)). Federal courts should abstain
under Pullman when “(1) substantial uncertainty exists over the
meaning

of

the

state

law

in

question,

and

(2)

settling

question of state law will or may well obviate
resolve

a

significant

federal

the

the need to

constitutional

question.”

Casiano-Montanez v. State Ins. Fund Corp., 707 F.3d at 128-129
(citing Batterman v. Leahy, 544 F.3d 370, 373 (1st Cir.2008)).
Moreover, if a state proceeding is actually pending, the case for
a

Pullman

abstention

is

strengthened.

Id.

(citing

Rivera–Feliciano v. Acevedo–Vilá, 438 F.3d 50, 61 (1st Cir.2006);
Harris Cnty. Comm'rs Court v. Moore, 420 U.S. 77, 83, 95 S.Ct.
870, 43 L.Ed.2d 32 (1975) (“Where there is an action pending in
state court that will likely resolve the state-law questions
underlying the federal claim, [the Supreme court has] regularly
ordered abstention.”).
With

respect

to

their

claims

against

the

City,

the

Plaintiffs allege that the City is in violation of the CBAs
between the Plaintiff Unions and the City8, as well as two City
Ordinances. Complaint ¶¶24, 28, 34, 38. The Complaint itself
avers that the Defendants have violated the Plaintiffs’ rights
8

As noted by the Plaintiffs, the provisions in the current CBAs
are “substantially the same” as those for the period of 1995
through 2013. Complaint ¶¶23, 33.
24

under

the

Process

Contracts

Clause,

Clause,

based

on

the

the

Takings

Plaintiffs’

Clause

and

asserted

the

Due

rights

to

certain retirement benefits (including 3% COLAs) under the CBAs
at issue as well as under Sections 2.20.050 and 2.28.050 of the
City Ordinance.9
In the CPRAC case currently pending in the Rhode Island
Supreme Court, certain retired Cranston firefighters and police
officers (who had excluded themselves from a settlement agreement
with the City) have asserted that various CBAs, agreements, and
the same sections of the Cranston City Code at issue in this case
have substantially impaired their contractual and constitutional
rights. CPRAC Complaint (ECF 13-2).
Initially, the state court dismissed CPRAC’s claims made
under

42

U.S.C.§

1983

and

as

to

breach

of

fiduciary

duty.

Subsequently, the court dismissed all remaining claims except
CPRAC’s Contract Clause claim in its ruling on the City’s summary
judgment

Motion.

(ECF

No.

13-5).

Following

a

trial

on

the

remaining Contract Clause claim, the state court determined that
Sections

2.20.05

clauses

of

and

either

2.28.05
the

did

Rhode

not

“violate

Island

or

the

United

contract
States

9

At the October 6, 2016 hearing, counsel for the Plaintiffs
clarified the position that the CBAs and City Ordinance are binding
on the City only and that the Plaintiffs’ claims against the State
were based on the contention that RIRSA and the 2015 Amendments
violate the Contracts Clause. TR 53:4-11.
25

Constitutions.”
Although the Plaintiffs now argue that the CPRAC plaintiffs
were

challenging

primarily

the

discontinuation,

delay,

or

reduction of their 3% COLA under the locally administered pension
plan, not the state pension plan, and that the instant case also
involves a number of other challenged provisions, both cases
depend on the respective plaintiffs’ asserted contractual rights
to retirement benefits under the CBAs and the City Ordinances.
And,

although

CPRAC

is

comprised

of

retirees

only

and

the

Plaintiffs in this case are active bargaining unit members, a
final

determination

on

that

question

impacts

both

sets

of

plaintiffs.
In the state court’s final decision, the court did make a
determination that the 1996 City Ordinances confer a contractual
right on the CPRAC plaintiffs and that the 2013 City Ordinances
constitute a substantial impairment on the contract between the
plaintiffs and the City. Those determinations, as well as the
state court’s ultimate conclusion that the 2013 City Ordinances
do

not

violate

the

Contract

Clauses

of

the

United

States

Constitution and that of the Rhode Island Constitution, are now
awaiting

a

final

review

in

the

Rhode

Island

Supreme

Court.

Plaintiffs’ instant claims under the Takings Clause and the Due
Process Clause, although not asserted in the CPRAC case, also
26

depend on a determination of alleged constitutionally protected
property rights, which is the pivotal issue in the CPRAC case as
well. Under those circumstances, the Court is of the opinion that
abstention is warranted and that the Rhode Island Supreme Court
should decide

what,

if

any,

contractual rights

the

CBAs and

Cranston City Ordinances confer on the Plaintiffs. Accordingly,
Counts I through III, as they relate to the City, are DISMISSED
without prejudice.
2. Plaintiffs’ Claims against the State
The Plaintiffs allege that the State’s enactment of RIRSA
and

the

2015

Amendments

deprive

the

Plaintiffs

of

their

contractual rights to retirement benefits as they existed prior
to

RIRSA’s

enactment

and

that

of

the

2015

Amendments10,

in

violation of the United States Constitution.
The Contract Clause provides that “[n]o State shall ... pass
any ... Law impairing the Obligation of Contracts.”• U.S. Const.
art. I, § 10, cl. 1. It is well established that “[a]lthough the
10

The Court notes that, in light of the 2015 Amendments, a
challenge to the constitutionality of RIRSA may be moot, a
determination which the Plaintiffs have previously acknowledged in
the related state court litigation. See, e.g., Boyer v. Bedrosian,
57 A.3d 259, 272 (R.I.2012)(noting that “the passage of a new law
or an amendment to an existing law may moot a case.”)(citing
Midwest Media Property, L.L.C. v. Symmes Township, Ohio, 503 F.3d
456, 460 (6th Cir.2007) (citing Hall v. Beals, 396 U.S. 45, 48, 90
S.Ct. 200, 24 L.Ed.2d 214 (1969)).

27

original intent of this language was to bar retroactive laws
(particularly

debtor

relief

laws)

that

would

impair

private

contractual rights, the clause has long been interpreted to apply
to public contracts as well.” Parella v. Retirement Bd. of Rhode
Island

Employees'

Retirement

System,

173

F.3d

46,

59

(1st

Cir.1999) (citing Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 13739, 3 L.Ed. 162 (1810)).
In

order

to

state a

plausible

claim

under

the

Contract

Clause, the Plaintiffs must assert the “substantial impairment of
a contractual relationship.” General Motors Corp. v. Romein, 503
U.S. 181, 186, 112 S.Ct. 1105, 117 L.Ed.2d 328 (1992) (quoting
Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 244, 98
S.Ct. 2716, 57 L.Ed.2d 727 (1978)). To establish whether a state
law has resulted in the substantial impairment of a contractual
relationship,
contractual

a

court

must determine

relationship;

(2)

a

whether

change

in

(1)

law

there
impairs

is

a

that

contractual relationship; and (3) the impairment is substantial.
Romein, 503 U.S. at 196, 112 S.Ct. 1105. Only if each of these
questions is answered in the affirmative, does the court proceed
to determine whether “the impairment is nonetheless justified as
‘reasonable and necessary to serve an important public purpose.’”
Parella, 173 F.3d at 59 (citing

United States Trust Co. v. New

Jersey, 431 U.S. 1, 25, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977)).
28

As already stated herein, the determination of whether the
CBAs

and/or

the

City

Ordinances

confer

contractual

property

rights to certain retirement benefits on the Plaintiffs is a
question that is currently being challenged in the Rhode Island
Supreme

Court.

Although

the

state

trial

court

in

CPRAC

did

conclude that such rights exist and that they were substantially
impaired by the state statute, the court ultimately concluded
that the impairment was justified. All those determinations are
now the subject of the retired Cranston safety officers’ appeal
to the Rhode Island Supreme Court, which may or may not uphold
the state court’s determinations. Because this Court has resolved
to

abstain

from

ruling

on

the

Plaintiffs’

assertion

of

contractual rights under the CBAs and/or the City Ordinances,
Plaintiffs’ Contract Clause claims, as well as those brought
under the

Due

Process

Clause

and

the

Takings

Clause,

cannot

proceed until the Rhode Island Supreme Court makes its ruling.
As

to

the

Plaintiffs’

suggestion

that

their

contractual

rights were created by Rhode Island’s pension statutes, that
contention has previously been rejected by this Court in a case
challenging the state’s statutory retiree health benefit scheme.
Rhode Island Council 94, A.F.S.C.M.E., AFL-CIO v. Rhode Island,
705 F.Supp.2d 165 (D.R.I. April 13, 2010)(holding that change in
Rhode Island statutory retiree health benefit scheme did not
29

create a contractual obligation on part of the state). In order
to establish that a state statute creates a contract, a plaintiff
must

overcome

“the

strong

presumption

against

interpreting

statutes as contractual agreements. Id. at 178 (citing Nat'l
Educ. Ass'n-R.I. v. Ret. Bd. of R.I. Employees' Ret. Sys., 890
F.Supp. 1143, 1153 (D.R.I.1995)).
The First Circuit has concluded that Rhode Island’s general
pension statute does not “‘clearly and unequivocally’•contract[]
for future benefits either by language or—in the circumstances of
this case — through the nature of the relationship.” Nat’l Educ.
Ass’n-Rhode
Island

Island

ex

Employees’

Cir.1999)(noting

that

rel. Scigulinsky

Ret.

Sys.,

“absent

v.

172

some

Ret.

F.3d

clear

Bd.
22,

indication

of Rhode
28

(1st

that

the

legislature intends to bind itself contractually, the presumption
is that ‘a law is not intended to create private contractual or
vested rights but merely declares a policy to be pursued until
the legislature shall ordain otherwise.’ Dodge v. Board of Educ.,
302 U.S. 74, 79, 58 S.Ct. 98, 82 L.Ed. 57 (1937)”). Accordingly,
“[t]he party asserting the creation of a statutory contract must
prove

that

the

legislation

is

‘intended

to

create

private

contractual or vested rights' and not merely declaratory of a
policy to be pursued until the legislature ... ordains otherwise.
Rhode Island Council 94 v. Rhode Island, 705 F.Supp.2d at 178
30

(quoting Nat'l Educ. Ass'n–Rhode Island ex rel. v. Ret. Bd. of
the Rhode Island Employees' Ret. Sys., 172 F.3d 22, 28 (1st
Cir.1999)

quoting Nat'l R.R. Passenger Corp. v. Atchison Topeka

& Santa Fe Ry. Co., 470 U.S. 451, 466, 105 S.Ct. 1441, 84 L.Ed.2d
432 (1985)). Put another way, the statute must be “unmistakably
clear on this point” and “there must be no ambiguity in what the
legislature intends.” Id. at 178.
The Plaintiffs have not pointed to any provisions in the
Rhode

Island

retirement

statutes

that

would

demonstrate

an

unmistakable intent on part of the legislature to establish a
contractual right to pension benefits. Rather, the Plaintiffs
suggest that they may possess implied unilateral contract rights
arising from an implied-in-fact contract between the Plaintiffs
and the State. TR 43:13-44:24. However, as noted by this Court at
the October 6, 2016 hearing, a ruling to that effect by a Rhode
Island

state

argument,

court,

did

therefore,

not

it

Accordingly,
constitutional

has

the

on

which

constitute
no

Court

claims,

the
a

Plaintiffs

ruling

precedential
is

of

insofar

the
as

on

rely

the

in

merits

their
and,

value.

Id.

44:25-45:7.

opinion

that

Plaintiffs’

based

on

they

are

alleged

contractual rights conferred by state statute, are insufficient
to withstand Defendants’ motion to dismiss the Complaint.
IV. Summary
31

After

discovering

that

the

City’s

pension

fund

was

endangered by an ever expanding unfunded pension liability, the
City engaged in a number of steps to address the problem.11 One
of the solutions conceived by the City was to enroll its public
safety employees in the state pension system (or permit employees
with

fewer

than

five

years

of

service

to

transfer

into

the

system). Since the enactment of RIRSA in 2011, the Plaintiffs,
along with other unions and retiree associations, have mounted
several challenges to RIRSA under the Rhode Island Constitution
in state courts. For the most part, that litigation was settled,
although the Plaintiff Unions have continued to challenge the
loss

of

their

members’

benefits

under

RIRSA

and

its

2015

Amendments.
In 2013, the City implemented two City Code ordinances which
have since been challenged in state court and which are also at
issue in the instant case. Although two of the state court cases
resulted in settlements, litigation is being continued by a group
of retired City fire fighters and police officers.
The Plaintiffs, understandably disappointed at the reduction
of generous retirement benefits provided for in various CBAs

11

For a detailed description and analysis of the City’s
budgetary woes, see Cranston Police Retirees Action Committee v.
City of Cranston, No. KC10131059, 2016 WL 4059309 (R.I. Super.,
July 22, 2016).
32

preceding implementation of RIRSA, are now seeking to invalidate
RIRSA and its 2015 Amendments by bringing a case in this Court.
Although the Plaintiffs in this case are not identical to those
participating in previous legal challenges to RIRSA and the legal
arguments vary, the essential claims aim to restore benefits on
behalf of municipal safety officers and/or retirees that were
reduced in order to address a growing shortfall in municipal
pension funds. Currently, a group or retirees is continuing to
challenge the reduction of such benefits, specifically the loss
of a 3% COLA, in state court, see CPRAC. A final determination in
that case would be instructive in the instant case: whether CBAs
and City Ordinances confer constitutionally protected property
rights on Plaintiffs and, if that were to be answered in the
affirmative, whether such rights have been violated by RIRSA, as
amended.
Another

group

of

retirees12

currently

receives

benefits

under a separate Settlement Agreement, from which they do not
appear to have taken an appeal, thus barred by both the terms of
the agreement and by res judicata. Plaintiffs in the instant case
now seek to involve these retirees in the instant litigation
through what amounts to a collateral challenge of the final state

12

It is unstated whether there is any overlap of plaintiffs in
the two cases currently before the Rhode Island Supreme Court.
33

court judgment.
As set forth herein, the Court is of the opinion that, as to
Counts I, II, and III of the Complaint, abstention is warranted
to await the Rhode Island Supreme Court’s final word in CPRAC to
the extent the Plaintiffs rely on the CBAs and/or City Ordinances
to establish a constitutionally protected property right. Insofar
as the Plaintiffs rely on Rhode Island pension statutes to create
such contractual rights, the Court holds that such reliance is
misplaced.

Furthermore,

the

Plaintiffs’

lack

of

standing

to

challenge the provisions of a final Settlement Agreement in state
court, to which only the retiree class members were parties,
warrants the dismissal of Count IV.
Conclusion
For the reasons stated herein, the Defendants’ Motions to
dismiss the Complaint are GRANTED as follows: Counts I, II, and
III of the Complaint are DISMISSED without prejudice. Count IV is
DISMISSED with prejudice.
SO ORDERED.
/s/ Mary M. Lisi
Senior United States District Judge
March 7 , 2017

34