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Previous legal settlements involving the city of San Diego will prevent City Attorney Mike Aguirre from pursuing the big-bucks savings he vowed to win for the city in his showcase lawsuit, a judge ruled today.
The ruling dramatically reduces what’s at stake in the much-watched case. Estimated by one consultant to be worth about $900 million if it were wholly successful, Aguirre’s challenge to a decade’s worth of pension deals is now worth a slight fraction after Judge Jeffrey Barton’s ruling.
Aguirre had challenged a wide swath of benefits created in deals in 1996 and 2002. Barton ruled that a prior legal settlement that the city agreed to in 2000 – known as Corbett – affirmed the 1996 benefits, protecting them from any challenge. Also, the judge found that Aguirre, who filed his lawsuit in July 2005, was not challenging the 2002 benefits for active employees.
The judge ruled that the city had its chance to challenge a large share of the 2002 benefits during a legal settlement known as Gleason in July 2004 but didn’t, so pensioners who retired before that settlement are protected from Aguirre’s challenge. Both legal settlements were forged by the City Attorney’s Office under the leadership of Aguirre’s predecessor, Casey Gwinn.
“Despite the creative use of [legal] principles and the excellent presentation of the case at trial by the City, previous inconsistent positions taken by the City before the filing of the cross-complaint raise significant obstacles to the City’s current effort to undo the remaining pension benefits,” Barton wrote.
Aguirre has pushed the case as a way to lessen the city’s pension deficit, which currently runs at $1.4 billion and threatens to chew up significant chunks of the city’s budget in the future. The trial began in late October and the remainder of the pension dispute is expected to resume later this week, if the city chooses to further pursue the case.
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