After spurring more than a year of vociferous exchanges in the press and public, the landmark struggle over more than a decade’s worth of city of San Diego employee pension benefits hit the courtroom this morning.
In oral arguments, City Attorney Mike Aguirre referred to the two pension deals in question as “cancers” sickening the public employees’ pension fund and urged a judge to carve them away in order to save the solvency of the fund and the city as a whole.
The city attorney spent two hours this morning arguing that pension deals in 1996 and 2002 are illegal, saying that hundreds of millions of dollars in employee benefit boosts should be repealed. The deals, Aguirre argued, violated the state statute that guards against self-dealing and local and state laws that forbid municipalities from taking on debt without a vote of the public.
The court can’t be asked to enforce illegal contracts, Aguirre said.
Michael Leone, attorney for the San Diego City Employees’ Retirement System, sought immediately to make Aguirre’s point moot, saying the deals in question were in fact legislation and not contracts. Legal precedence says the court cannot be asked to judge influence and motivation in the making of legislation, he said. Doing so would in effect have the court legislating, Leone argued.
Aguirre had asked the judge for a summary judgment on the legality of the benefits, a move that set up today’s hearing and would allow the city to forgo a lengthy court trial. However, Leone argued, there are a number of disagreements of fact that deserve a full trial. The pension system attorney said simple fact that the city has made contrary arguments in a previous case is cause alone for a full trial.
And, Leone said, the pension system can’t be sued for violating debt-limitation laws because those laws only apply to the city. If that were the issue, he said the city would be in court today suing itself.
Ann Smith, an attorney for the city’s largest employee union, Municipal Employees Association, also argued that not all the parties who would be impacted by a voiding of the benefits are being represented in the case, an issue that would preclude the judge from ruling on the benefits as a whole. Attorneys for the police and deputy city attorney unions, as well as retirees, aren’t involved in the litigation, she said.
Judge Jeffrey Barton had raised that question in a tentative ruling issued Friday. In the courtroom today, Barton appeared interested in that argument. (Click here for an article about Barton’s ruling.) He also said it would be “extraordinary” for him to issue a summary judgment based on one of the city attorney’s arguments. He also wondered if the conflict of interest cited by Aguirre would only void the benefits of those who had specific conflict, not the entire package of employee benefits.
The court broke for lunch recess at noon and returned for further arguments at 1:30 p.m.
The city attorney also repeatedly invoked the city’s fiscal crisis in his arguments. He said no one has a plan to deal with a pension deficit that’s predicted to continuing growing, and said the benefits challenge was the only way for the city to stave off filing for bankruptcy.
“With the stroke of your pen, your honor can restore fiscal stability to the city of San Diego,” Aguirre said to Barton.
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