NH Suprme Court Rules on Pension System - Granite Grok

NH Suprme Court Rules on Pension System

The bigger court news (as opposed to my previous post) is today’s decision in every union v. New Hampshire or (2013-0669, Professional Fire Fighters of New Hampshire & a. v. State of New Hampshire & a.) regarding the desire to ask public employees to pay more of their own retirement benefits.

 On appeal, the State argues, among other things, that the trial court erred by ruling that NHRS members have a contractual right to a fixed contribution rate. We agree.

The legislature changed the contribution rates.  The unions argued that the change was unconstitutional.  There are many layers to the case and the arguments on both sides are worth reading (if that’s how you roll),  but according to these justices contractual rights did not exist and constitutions were not violated.

“A party alleging that contractual rights arose from a statutory enactment faces a heavy burden.” Maine Ass’n of Retirees v. Board of Trustees, 758 F.3d 23, 29 (1st Cir. 2014). “[W]here a public contract allegedly arises out of statutory language, the hurdle under the first component of the first part of the test – proving that a contractual relationship exists – is necessarily higher, since normally state statutory enactments do not of their own force create a contract with those whom the statute benefits.” Parella v. R.I. Employees’ Retirement System, 173 F.3d 46, 60 (1st Cir. 1999) (quotation omitted). As the United States Supreme Court has explained:

[T]he principal function of a legislature is not to make contracts, but to make laws that establish the policy of the state. Policies, unlike contracts, are inherently subject to revision and repeal, and to construe laws as contracts when the obligation is not clearly and unequivocally expressed would be to limit drastically the essential powers of a legislative body.

National R. Passenger Corp. v. A. T. & S. F. R. Co., 470 U.S. 451, 466 (1985) (citation omitted). Thus, “absent some clear indication 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.” Id. at 465-66 (quotation omitted).

“This threshold requirement for the recognition of public contracts has been referred to as the ‘unmistakability doctrine.’” Parker, 123 F.3d at 5. The doctrine “serve[s] the dual purposes of limiting contractual incursions on a State’s sovereign powers and of avoiding difficult constitutional questions about the extent of state authority to limit the subsequent exercise of legislative power.” United States v. Winstar Corp., 518 U.S. 839, 875 (1996) (plurality opinion). Because we have consistently held that the proscription contained in Part I, Article

We hold that there is no indication that in enacting RSA 100-A:16 the legislature unmistakably intended to bind itself from prospectively changing the rate of NHRS member contributions to the retirement system. Because the Federal Constitution affords the plaintiffs no greater protection than does theState Constitution in these circumstances, we reach the same conclusion under the Federal Constitution as we do under the State Constitution. See Maine Ass’n of Retirees, 758 F.3d at 29. Accordingly, we reverse the trial court’s ruling that the 2011 amendment to RSA 100-A:16, I(a) violated the Contract Clauses of the State and Federal Constitutions.

Reversed and remanded.
HICKS, CONBOY, LYNN, and BASSETT, JJ., concurred

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