Way Down In The Hole

Greg Hartman, attorney for the PERS Coalition, posted an update on the status of five PERS cases on the AFSCME website yesterday.

Hartman notes that after 6 years, there are still 5 cases before the Oregon Court of Appeals in varying states of hearing. First is Arken, which is a case on behalf of "window retirees", arguing that the adjusted benefit they received following the "settlement agreement" in the City of Eugene case is not legal. That case was heard in Multnomah County Circuit Court over an extended period of time and has moved to the Court of Appeals. Briefs have been filed, but there is no date set for oral argument.

The second case is the Robinson case, which asserts that section 14(b) of the 2003 reform legislation prevents PERS from recovering for "overpayments" resulting from the 1999 earnings distribution of 20%. The coalition won this case in Circuit Court, but both parties have appealed to the Oregon Court of Appeals and briefs have not been completed. The hope was that both Arken and Robinson would hit the Court of Appeals at the same time, but they are staged differently and now have a low likelhood of being appealed simultaneously.

The White case challenged the settlement agreement itself. Judge Kantor ruled against the PERS Coalition and a notice of appeal has been filed. Briefing has just begun.

Kay Bell's case is an individual piece of litigation handled by Hartman's associate Aruna Masih. The trial jury ruled in Kay's favor that she was given incorrect information at the time she retired. The case formed the nucleus of the SB 897, which passed in both chambers of the Legislature and was then vetoed by the Governor. Both plaintiff and the defense have appealed the verdict (for different reasons) and parties are in the briefing stage for the Oregon Court of Appeals. The Coalition is also studying whether to pursue a Legislative override of the Governor's veto during the Legislative special session early in 2010.

Finally, there is the Murray case. This is one that has received very little publicity but has already been argued before the Appeals Court. It relates to how PERS is supposed to charge administrative expenses in a year where there are no earnings. PERS apparently thinks that administrative expenses should come from variable accounts, which the PERS Coalition says it is not appropriate to charge the variable account. This case is simply waiting a verdict from the Oregon Court of Appeals.

Five cases, six years, interminable waiting. That's how Oregon thanks its dedicated public employees. Hartman believes that most of these cases will have results from the Court of Appeals by next year sometime. The bad news, still, is that the hole gets deeper and deeper. Even with verdicts from the Court of Appeals, every case is eligible for review by the Oregon Supreme Court, which is virtually assured. We are still facing another 2-4 years before a final outcome in any case. My original estimate of 2012 may be hopelessly optimistic as 2013 or 2014 seems more likely. I hope I'm still around when these verdicts finally come down.

Dope Ball

PERS latest waste of members' money was in the case of English v PERB, just ruled on by the Oregon Court of Appeals. This case involves a matter of policy in domestic partnerships. The plaintiff was in a domestic partnership that got terminated. Under Oregon Statute, a domestic partner *can* be named as a beneficiary on a PERS account. Following the dissolution of the partnership, the plaintiff sought to change beneficiaries. This privilege accords to married persons who divorce, depending on how the divorce decree is structured. PERS ruled that the plaintiff had no legal basis for changing beneficiaries because Oregon statute is silent on the question of domestic partnership dissolution and does not consider domestic partners as having *all* the same rights as married persons. PERS asserted that to allow this would "jeopardize the tax status of the plan". The Plaintiff appealed the case to an Administrative Law Judge, who ruled that PERS did not provide evidence that the plan might be impaired as a result of letting this plaintiff change benefiaries. PERS appealed that verdict and the case went to the Oregon Court of Appeals, wherein PERS lost again for the same reason. The OCA remanded the case back to PERS for resolution.

PERS has made a mockery of the entire judicial process asserting in almost every piece of litigation filed in the past 9 years that either (a) whatever they were being asked to do would "jeopardize the tax-exempt status of the plan", or (b) that it would be too costly to implement the changes. Never once have they every provided an ounce of actual evidence that either was true, but they continue to use our money to assert this as fact without support. Instead of this continuing battle of wills over PERS' assertions, it seems to me that PERS could save a lot of our money to seek a private IRS ruling about exactly what the plan can and can't do in these kinds of cases. Bravo to the judges who had the courage to call PERS' bluff and send them back to their hidey-holes to work out new lame excuses on which to impale members. Litigation against PERS is like a game of rope-a-dope with a dope ball. It is tiresome and time to stop.

Have a safe and sane holiday weekend. Drive carefully and don't become a statistic out on the mean streets of Oregon.