reply brief of appellants frs and local 73

8/12/2019 Reply Brief of Appellants FRS and Local 73

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Appeal No. ED100209

IN THE MISSOURI COURT OF APPEALSEASTERN DISTRICT

The Firemens Retirement System of St. Louis, et al.Plaintiffs/Appellants,

vs.

The City of St. LouisDefendant/Respondent

________________________________________________________________________

Appeal from the Circuit Court of City of St. LouisState of Missouri

The Honorable Robert H. DierkerCause No: 1222-CC02916

Consolidated with 1322-CC00006

JOINT REPLY BRIEF OF APPELLANTS

By: /s/ Richard A. BarryRichard A. Barry, Esq., #255921750 South Brentwood Blvd., Suite 295St. Louis, MO 63144(314) 918-8900E-mail: [email protected] ATTORNEY FOR APPELLANTSINTERNATIONAL ASSOCIATIONOF FIRE FIGHTERS LOCAL 73,et al.

By: /s/ Kara D. HelmuthDANNA MCKITRICK, P.C.Daniel G. Tobben, #24219David R. Bohm, #35166Kara D. Helmuth, #621837701 Forsyth Blvd., Suite 800St. Louis, MO 63105-3907(314) 726-1000/(314) 725-6592 faxE-Mail: [email protected]

[email protected]@dmfirm.com

ATTORNEYS FOR APPELLANTSTHE FIREMENS RETIREMENTSYSTEM OF ST. LOUIS


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i

T ABLE OF C ONTENTS

TABLE OF AUTHORITIES ii

STATEMENT OF FACTS 1

ARGUMENT 2

I. The Trial Court erred in declaring Board Bills 270, 12 and 109 valid because

the Citys home rule authority does not allow it to enact ordinances contrary

to permissive state enabling legislation, and the complex provisions of

87.120 R.S.Mo. et seq. show an intent by the Missouri General Assembly to

pre-empt the field. 2

II. The City enactment of Board Bill 109 was not a repeal of Chapter 4.18 RCC,

which codifies the ordinance provisions governing FRS, but is an

amendment of those ordinances without enabling legislation, which is

invalid. 11

III. Article VI, 22 would not be violated if the permissive legislation found in

87.120 R.S.Mo. et seq. is found to be the exclusive authority allowing the

City to enact a retirement system for firefighters. 18

IV. The ordinances creating FRP violate the contractual rights of all firefighters,

in violation of the provisions of both the U.S. and Missouri Constitutions. 20

CONCLUSION 31

CERTIFICATE OF COMPLIANCE 32

CERTIFICATE OF SERVICE 33


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ii

T ABLE OF AUTHORITIES

Alumax Foils, Inc. v. City of St. Louis, 959 S.W.2d 836

(Mo.App. 1998) ..................................................................................................... 8

Bakenhus v. City of Seattle , 296 P.2d 536 (Wash. banc 1956) ................................. 23, 24

Bender v. Anglin , 60 S.E.2d 756 (Ga. 1950) .................................................................... 23

Cape Motor Lodge, Inc. v. City of Cape Girardeau,

706 S.W.2d 208 (Mo. banc 1986) ......................................................................... 9

City of Springfield v. Belt, 307 S.W.3d 649 (Mo. banc 2010) ......................................... 4

City of St. Louis v. Kellman , 139 S.W. 443 (Mo. 1911) ................................................... 12

Cloutier v. New Hampshire , 42 A.3d 816 (N.H. 2012) .................................................... 22

Cures Without Cloning v. Pund , 259 S.W.3d 76 (Mo.App.

W.D. 2008) ..................................................................................................... 12, 13

Firemens Retirement System of St. Louis v. City of St. Louis,

754 S.W.2d 21 (Mo.App. E.D. 1988) ..................................................................... 6

Firemens Retirement System v. City of St. Louis,

789 S.W.2d 484 (Mo. banc 1990) .............................................................. 4, 18, 24

Fraternal Order of Police Lodge #2 v. City of St. Joseph ,

8 S.W.3d 257 (Mo. App. 1999) ........................................................................... 25

Grant v. Kansas City, 431 S.W.2d 89 (Mo. banc 1968) .................................................. 8

Kansas City v. Brouse, 468 S.W.2d 15 (Mo. banc 1971) ........................................... 3, 4, 8

Kemmerer v. ICI Americas, Inc. , 70 F.3d 281 (3d Cir. 1995) .......................................... 26

Levinson v. City of Kansas City, 43 S.W.3d 312 (Mo.App. 2001) .................................. 8


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iii

Neske v. City of St. Louis , 218 S.W.3d 417 (Mo. 2007) ............................................ 22, 27

Olson v. Cory , 636 P.2d 532 (Cal. 1980) ....................................................................... 22

Police Pension and Relief Bd. of City and County of Denver v.

Bills , 366 P.2d 581 (Colo. banc 1961) ................................................................ 23

Singer v. Topeka , 607 P.2d 467 (Kan. 1980).................................................................. 23

Snow v. Abernathy , 331 So.2d 626 (Ala. 1976) ............................................................. 23

State ex inf. Hannah , 676 S.W.2d 508 (Mo. banc 1984) ................................................ 7

State ex rel. Breshears v. Missouri State Emp. Retirement System ,

362 S.W.2d 571 (Mo. banc 1962) .................................................................. 23, 24

State ex rel. Phillip v. Public School Retirement System of

City of St. Louis , 262 S.W.2d 569 (Mo. banc 1953) ............................... 20, 21, 22

................................................................................................................. 23, 24, 26

Trantina v. Bd. of Trustees of Firemens Ret. Sys. of St. Louis,

503 S.W.2d 148 (Mo.App. 1973) ................................................. 5, 6, 7, 8, 11, 12

...................................................................................................... 13, 17, 18, 26

W. Central Missouri Regional Lodge No. 50 v. Board of Police

Commissioners of Kansas City , 939 S.W.2d 565

(Mo.App. W.D. 1997) ........................................................................................... 25

Wagoner v. Gainer , 279 S.E.2d 636 (W.Va. 1981) ......................................................... 23

Wehmeier v. Public School Retirement System of Missouri ,

631 S.W.2d 893 (Mo.App. E.D. 1982) ................................................................ 20


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iv

MISSOURI CONSTITUTION

Art. VI, 19 ............................................................................................................. 3, 4, 5, 8

Article VI, 22 ..................................................................................................... 18, 19, 24

Article VI, 25 ................................................................................................................ 4, 5

REVISED STATUTES OF MISSOURI

87.005 and 87.006 R.S.Mo .......................................................................................... 15

87.25 ............................................................................................................................... 5

87.120 .................................................................................................... 2, 3, 4, 5, 6, 7, 8, 9

................................................................................................................. 14, 15, 18, 19, 26

87.125 RSMo. ................................................................................................................. 7

87.130 ....................................................................................................................... 14, 23

87.175 ............................................................................................................................. 12

87.195-87.220 ................................................................................................................. 16

87.295 ............................................................................................................................. 16

87.360 ............................................................................................................................. 22

95.540.2 .......................................................................................................................... 10

REVISED CITY CODE

Chapter 4.18 .............................................................................................. 11, 12, 13, 14, 15

....................................................................................................... 16, 21, 25, 26

4.18.030 .......................................................................................................................... 16

4.18.145-4.18.209 ......................................................................................................... 16

4.18.260 .......................................................................................................................... 16


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STATEMENT OF F ACTS

The Statement of Facts offered by Respondent is argumentative and omits many

facts that favor Appellants position, and therefore, is in violation of Rule 84.04(c) and

should be stricken. See Motion to Strike Respondents Statement of Facts. Appellants rely

on their own Statement of Facts found in Appellants Brief.


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ARGUMENT

I. The Trial Court erred in declaring Board Bills 270, 12 and 109 valid because

the Citys home rule authority does not allow it to enact ordinances contrary to

permissive state enabling legislation, and the complex provisions of 87.120

R.S.Mo. et seq. show an intent by the Missouri General Assembly to pre-empt

the field.

The City implicitly argues that, because it is a charter city, it can create a pension

system not in compliance with enabling legislation, in that it has powers that are

co-extensive with those of the General Assembly, and therefore, can choose when the

statutes do and do not apply. (RB17)

The Citys reasoning for this proposition is that 87.120 R.S.Mo. et seq. (the FRS

statute) must be viewed in historical perspective (RB18); i.e., the City argues the FRS

statute was originally enacted at a time when it was widely believed that cities had no

authority to enact a pension system absent legislative authority, but since then, the home

rule provisions of the constitution have been enacted so that the City may enact a pension

system unless explicitly prohibited from doing so by law. (RB17) (emphasis added)

The City has determined that it is not prohibited by statute from freezing FRS and

creating FRP, because the City asserts it can choose when statutes apply. The City stated,

[t]he FRS Statutes only apply to the extent that there can be no conflict between how the

City funds and pays for benefits accrued under the FRS prior to the Effective Date and the

FRS Statutes Once the City opted out of the state-enabled system insofar as future

benefit accruals are concerned, the FRS Statutes ceased to apply (RB23, n.10)


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(emphasis added) These statements demonstrate that the City believes it can enact

ordinances contrary to permissive legislation, and unilaterally decide that statutes apply to

benefits before the Effective Date, but not after. Although Art. VI, 19(a) may grant the

City powers that the General Assembly has authority to confer upon any city, these powers

must be consistent with the constitution of this state and [not be] limited or denied either

by the charter so adopted or by statute. Mo. Const. Art. VI, 19(a) . Certainly the City

cannot chose when its powers are or are not limited by simply stating that the statutes no

longer apply.

A. Article VI, 25 Prohibits Charter Cities from Enacting Pension Plans

In order to find that the City has the authority to enact Board Bill 109, even though it

conflicts with 87.120 R.S.Mo. et seq. , one must ignore the first half of Article VI, 25 of

the Missouri Constitution, which states, [n]o county, city or other political corporation or

subdivision of the state shall be authorized to lend its credit or grant public money or

property to any private individual, association or corporation except that the general

assembly may authorize (pensions for governmental employees). Mo.Const. Art. VI, 25

(emphasis added) . This is a specific prohibition preventing cities, including charter cities,

from adopting public pensions without authority from the General Assembly.

The City claims that Kansas City v. Brouse, 468 S.W.2d 15 (Mo. banc 1971) is

directly on point and confirms that Article VI, 25 confers upon the City the right to enact

the FRP. (RB27) However, the City ignores the fact that there were no enabling statutes

present in Brouse, whereas here there are very detailed statutes that are being ignored. This


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was the main distinction made in Appellants Brief, not just that the plan in Brouse was

included in Kansas Citys charter unlike FRP, as claimed by City. (RB 27)

The limitation on the Citys ability to enact pension ordinances was addressed as

between these same two parties by the Missouri Supreme Court 24 years ago, 19 years after

Brouse. Contrary to the decision in Brouse , the Court in Firemens Retirement System v.

City of St. Louis, 789 S.W.2d 484, 486 (Mo. banc 1990) (FRS 1990), stated that: Article

VI, 25 of the Missouri Constitution prohibits charter cities generally from granting public

money to any private individual. It went on to state that authorization was needed from

the Missouri General Assembly to grant pensions, and that such authorization was found in

87.120 R.S.Mo. et seq. Id .

B. Article VI, 19(a)

While Article VI, 19 of the Missouri Constitution permits cities to adopt a charter

for their own government, the scope of that authority is limited by Article VI, 19(a),

which states that a citys powers must be consistent with the constitution of this state

and not limited or denied either by the charter so adopted or by statute . (emphasis

added) Consequently, the City is not authorized to enact any ordinance which is

inconsistent with or contravenes the limitations set out in the Constitution, statutes, or the

citys charter. City of Springfield v. Belt, 307 S.W.3d 649, 653 (Mo. banc 2010).

1. History of Article VI, 19(a)

The City argues that, for a statute to limit its powers, it must be an express limitation,

as Missouri courts do not infer prohibition of home rule authority from mere statutory

silence. (RB22) However, the history of Article VI, 19(a) belies this argument. The


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original draft of 19(a), which was passed by the House, stated: provided such powers

are consistent with the Constitution of the State and are not expressly limited or denied

by statute of the State of Missouri. Thomas N. Sterchi, Comment, State-Local Conflicts

Under the New Missouri Home Rule Amendment, 37 MO. L. REV . 677, 686 (1972)

(Sterchi). 1 The word expressly was ultimately removed from 19(a), as adopted. This

demonstrates that the express pre-emption that the City argues must be present in statutes

to limit the Citys authority was not the intention of the drafters. The provision of 87.25

R.S.Mo. authorizing the City to enact a pension system subject to 87.120 R.S.Mo. et

seq. was clearly intended to limit the Citys authority to enact pensions for City firefighters,

so that the City cannot exercise its home rule authority to adopt a non-conforming pension

system. Further, Art. VI, 25 also expressly prohibits the City from adopting a pension

plan without authorization from the General Assembly.

Furthermore, Article VI, 19(a) was enacted in 1971, long before Trantina v. Board

of Trustees of the Firemens Retirement System of St. Louis , which held that the Citys

pension ordinances must conform to the enabling statutes, which language has been cited

with approval in subsequent appellate and Supreme Court opinions in cases between FRS

and City. If the City was not bound by 87.120 R.S.Mo. et seq. after 1971, when the home

rule amendment was enacted, then Trantina and its progeny have been decided incorrectly.

1 This article, which the City cites as authority for its interpretation of the home rule

amendment, was written by a then law student, and only one year after the home rule

amendment was enacted.


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If the City is on the same footing as the General Assembly with respect to pensions, and

could ignore 87.120 R.S.Mo. et seq. , then it could have enacted ordinances that in essence

amended the statutory enabling legislation, and its ordinances would not have had to

conform to the statutes at all.

However, this argument was rejected by this Court in 1988 in Firemens Retirement

System of St. Louis v. City of St. Louis, 754 S.W.2d 21, 25 (Mo.App. E.D. 1988), wherein

this Court stated:

[T]he City would have us interpret Trantina as granting the City carte

blanche to amend FRSs ordinances because the enabling statute, now

87.125 RSMo (1986), was found to be permissive. . . and, therefore, the

City ought to have a free hand in legislating for it. We disagree

(emphasis added). It also does not appear that even the City believed it could act contrary

to statute for many years, as the City always sought enabling legislation for changes to

pension benefits for St. Louis firefighters before enacting them through ordinances until

recently.

C. Permissive Legislation is Binding on the City

The Citys brief demonstrates a fundamental misunderstanding of the meaning of

permissive legislation, and seems to view it as suggestions which the City can choose to

follow or not, and views Appellants argument seeking the Citys compliance with such

statutes as an attempt to make them mandatory. ( See RB30-32) Trantina described the

difference between permissive and mandatory legislation. Mandatory legislation would

require the City to pass implementing ordinances. Trantina, 503 S.W.2d at 152. While


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permissive legislation does not require the City to enact implementing ordinances, it does

require that City ordinances conform to the legislation if it chooses to legislate on the topic.

Id .

The City claims that Appellants position is a tortured argument that Chapter 87s

permissive language is in fact mandatory and that the permissive nature of the FRS

Statutes distinguish them from the cases upon which Appellants rely. (RB31, 32) In

support, the City cites to State ex inf. Hannah v. City of St. Charles , 676 S.W.2d 508 (Mo.

banc 1984), where the following statute was at issue:

Should any city, town, or village, not located in any first class county which

has adopted a constitutional charter for its own local government, seek to

annex an area to which objection is made, the following shall be satisfied:

Id . at 510 (emphasis added) (RB31). The City claims that because the statute in Hannah

contained mandatory language, St. Charles was not permitted to exercise its annexation

power in a manner inconsistent with the statutes mandatory requirements. But, as

Trantina recognized, the FRS Statutes are not mandatory, and thus they are very different

from the statute at issue in Hannah. (RB31) However, nowhere in the case is the word

mandatory even mentioned, because the statute is in fact permissive, not mandatory.

The statute did not require St. Charles to annex land, but instead, it prescribed procedures

for annexation that must be followed should any city seek to annex land. Hannah , at 513.

This is very similar to 87.125 R.S.Mo., which does not require the City to enact a pension

plan, but if it chooses to do so, it is subject to the provisions of sections 87.120 to 87.370.


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The City makes a similar argument with respect to Alumax Foils, Inc. v. City of St.

Louis, 959 S.W.2d 836 (Mo.App. 1998) and Levinson v. City of Kansas City, 43 S.W.3d

312 (Mo.App. 2001). Specifically, the City states, [w]hile it is true that in both cases the

cities could have elected not to impose a tax, once they did they were bound by the

exclusive and mandatory manner by which the state statute prescribed the tax that could be

imposed. (RB32) This Court has held that 87.120 R.S.Mo. et seq. operates as an almost

identical limitation. Trantina, 503 S.W.2d at 152 (The City may or may not elect to enact

such an ordinance. If it does, it must comply with the provisions of the enabling statute

which is in effect at the time the ordinance is adopted. Otherwise, the ordinance will be in

conflict with the provisions of the statute and thereby void.)

The City also makes the argument that municipal pensions are a matter of local

concern, and therefore, should not be subject to statutory interference. (RB32-33) In

support, the City cites Grant v. Kansas City, 431 S.W.2d 89 (Mo. banc 1968), which

contrasted matters of state concern with matters of local concern, and Brouse for the

proposition that municipal pensions are a matter of local concern. (RB33) However,

according to the Sterchi law review article relied upon by the City with respect to

interpretation of Article VI, 19(a), the test of whether an activity was of statewide

concern or of local concern, was utilized to determine whether a statute or ordinance

prevailed prior to adoption of 19(a). Sterchi, at 679. This test was rejected with the

revision of Article VI, 19(a) in 1971, because it was generally recognized that both the

state and the municipality have a valid interest in any public affair and a matter cannot be

classified as solely within the province and interest of one entity. Id . at 680. Clearly, the


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City is trying to confuse the issues by relying on a test that is no longer applicable, and that

was confusing and cumbersome according to the authority relied upon by City.

D. Pre-Emption of the Field

The only response the City made to the argument that the Missouri General

Assembly pre-empted the field by enacting 87.120 R.S.Mo. is that

the specificity of the FRS Statutes should not be viewed as suggesting the

General Assemblys intent to limit the Citys authority, but rather as

evidence of its desire to clarify the Citys authority under the prior scheme

The specificity found in the FRS Statutes is not evidence of the States intent

to preempt the field, as Appellants suggest. Rather, the specificity is due to

the subject matter of the FRS Statutes a pension system, which is itself

organically complex, and necessitated the use of experts by both Parties to

explain how the FRS and the FRP operate.

(RB38) However, the admission that the statutes are complex is a fact that points toward a

finding of preemption by the Missouri General Assembly. Cape Motor Lodge, Inc. v. City

of Cape Girardeau, 706 S.W.2d 208, 212 (Mo. banc 1986).

The Citys argument that the specificity and complexity of the statutes is

necessitated by the subject matter of pensions is simply not true. The Employees

Retirement System, which governs all non-public safety employees of the City, is enabled

by one statutory provision, which includes the following: [a]ny city of this state that now

has or may hereafter have a population of more than four hundred and fifty thousand

inhabitants is hereby authorized to provide by ordinance or otherwise for the pensioning of


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its employees and officers 95.540.2 R.S.Mo . (AB39) This statute, which applies to

the Citys own non-uniformed employees, could not be simpler. This contrast was

completely ignored by the City, and seems a tacit acknowledgment that the Missouri

General Assembly preempted the field with respect to pensions for St. Louis firefighters.


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II. The City enactment of Board Bill 109 was not a repeal of Chapter 4.18 RCC,

which codifies the ordinance provisions governing FRS, but is an amendment

of those ordinances without enabling legislation, which is invalid.

A. Amendment versus Repeal

The crux of the Citys entire argument with respect to its ability to freeze FRS and

create FRP is that the City is repealing FRS. (RB20) However, absolutely no analysis is

provided, even in light of the fact that Board Bill 109 actually repealed Board Bill 270s

repeal of Chapter 4.18 RCC and FRS, so that FRS and Chapter 4.18 RCC remain in effect,

although amended or frozen. ( See RB20-22) (A69, 146)

The Citys argument is one of necessity, as the City only reserve[d] the right to

amend or repeal [Chapter 4.18] at any time in 4.18.345 RCC. As the City admits in its

own pleadings, any amendments to FRS must first be enabled by the Missouri General

Assembly. (LF571); Trantina, 503 S.W.2d at 152. Given that there is no enabling

legislation for Board Bill 109, the only remaining argument available to the City is that it

constitutes a repeal of FRS. Therefore, the City argues that Board Bill 109 repeals the

FRS but provides for payment of benefits accrued under the FRS prior to the termination

date to ensure that such benefits are paid in full by the FRS. (RB20-21) While the City

asserts that FRS will terminate with no further action by the City when the last benefits

are paid, it is important to remember that this will not be until the last firefighter employed

by the City as of February 1, 2013, or the last of their beneficiaries dies, which will likely

not be for at least another 60 years. How the City can contend that FRS is repealed, while

it continues to operate for another 60 years with Trustee meetings, certification of benefits,


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and annual required City contributions strains credulity. The fiction of termination was

an effort to rationalize this outcome.

A close reading of the available case law reveals that Board Bill 109 amends

Chapter 4.18 RCC. An ordinance is repealed when it is destroyed, abolished, abrogated,

recalled or rescinded by a subsequent legislative act. City of St. Louis v. Kellman , 139

S.W. 443, 445 (Mo. 1911). The repeal is accomplished when the later enactment becomes

effective. See id. 2 There can be no repeal where the text of the original enactment remains

in effect and is merely modified by the subsequent enactment. This is demonstrated by

Cures Without Cloning v. Pund , 259 S.W.3d 76, 81-82 (Mo.App. W.D. 2008), which held

that use of repeal in a ballot initiative summary was an inaccurate description of an

enactment that would leave in place the existing text defining cloning and add a section

further expanding the effect of the constitutional ban on human cloning.

If a statute or ordinance is abolished and replaced in its entirety by a subsequent

enactment, then the original legislation has been both repealed and amended. Trantina ,

503 S.W.2d at 152 (describing an act of the General Assembly that struck out the entire

existing text of 87.175 R.S.Mo. and replaced it with a new statute as a repeal and

amendment). The use of these definitions in Trantina is critical, because the City has

2

This principle about when the repeal is accomplished makes the Citys characterization of

Board Bill 109 as a repeal [of FRS] over time nonsensical. (RB21) As is discussed infra ,

Board Bill 109 leaves the text of Chapter 4.18 RCC intact, so Board Bill 109 can only be

construed to amend Chapter 4.18 RCC.


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admitted that Trantina stands for the proposition that the FRS ordinance can only be

amended in accordance with the enabling legislation. (LF571) As it is used in Trantina ,

the word repeal refers to striking out the text of a statute or ordinance, and the word

amend refers to replacing a statute or ordinance with a new provision that supersedes the

earlier one. See Trantina , 503 S.W.2d at 152.

Under these definitions, it is undeniable that Board Bill 109 is an amendment, not a

repeal, of Chapter 4.18. Nowhere in the merged copies of Board Bills 270, 12, and 109 is

there a repeal of any of the ordinances which comprise Chapter 4.18 RCC. ( See

A176-249) This is to be contrasted with the several times Board Bill 109 specifically

repeals portions of Board Bills 12 and 270. (A145-175)

This reading of Board Bill 109 is also supported by the new function and operation

of FRS and FRP. As the City admitted in its brief, FRS remains in existence and in

operation; it has not been shut down or abolished. It has merely changed from its original

status to a frozen status under which accruals have been halted. (RB35 n.12) A

legislative enactment that leaves a governmental entity intact and in existence, but changes

the rules by which it operates, can only be described as an amendment, not a repeal. See

Pund , 259 S.W.3d at 81-82; Trantina , 503 S.W.2d at 152. The wind down period

discussed in the Citys brief (RB21) is another example of an amendment being obfuscated

under the guise of pension terminology.


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B. Conflicts Between Board Bill 109 and 87.120 R.S.Mo. et seq. and

Implicit Amendment of Chapter 4.18 RCC

In analyzing whether or not there is a conflict between Board Bill 109 and 87.120

R.S.Mo. et seq ., the City, like the Trial Court, primarily focused on 87.130 R.S.Mo.,

which contains the exclusivity clause. (RB34-35) The clause prohibits firefighters from

contributing to or receiving retirement benefits from any other pension plan because of the

same years of service. Appellants used several charts to demonstrate that FRS and FRP

will be paying benefits based upon the same years of service as soon as a firefighter

receives a salary increase. (AB49-51)

The City argues this provision is not violated because:

[t]he FRS and the FRP will both consider total years of service for purposes

of vesting which is the point demonstrated by Appellants charts but

benefit payments will be paid only by the plan under which they accrued

based on service recognized by that plan. Vesting relates only to the

forefeitability of the benefits already earned; not to the amount of the

benefit payable.

(RB35) However, as demonstrated by testimony of the Citys expert actuary, this is at best

factually inaccurate, and at worst an attempt to mislead this Court.

The charts have nothing to do with vesting. Instead, they concern the source of

benefits paid and demonstrate that FRP and FRS will be paying benefits based upon the

same years of service due to salary increases after February 1, 2013. This is supported by

the Citys own expert testimony, when Kim Nicholl stated, [t]he benefits that have


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accrued to date, based on service and salary as of the effective date of Board Bill 109, will

be paid from FRS. Any future accruals, including future salary increases on behalf of

service already rendered, will be paid from FRP . (Tr.Vol.III, 41-42) (emphasis added)

While the statement that FRP will only pay benefits based upon service recognized by that

plan may be accurate if one realizes that FRP will be paying a benefit based upon all of the

years of service that a firefighter works, even those while a part of the FRS system, that is

clearly not the import of the Citys statement, and shows a clear violation of the exclusivity

clause found in 87.120 R.S.Mo.

Another conflict with not only the statutes that apply only to FRS, but with statutes

that apply to all pension plans for firefighters, concerns the heart/lung presumption

found in 87.005 and 87.006 R.S.Mo., which mandate that all firefighter heart and lung

related diseases are presumed to have been incurred in the line of duty for disability and

retirement purposes, and that this presumption can only be overcome by competent

evidence. Because this presumption is a statutory provision applicable to all firefighters

in Missouri, it does not appear in Chapter 4.18 RCC. However Board Bill 109,

4.19.070(B)(2) not only lowers the standard to rebut the presumption to any evidence of

habitual smoking, which is much lower than competent evidence, but also does not

provide any presumption for heart disease, which is contrary to Chapter 87 R.S.Mo. (A209)

The City completely ignores this conflict in its brief.

Appellants also argued that the statutes regarding average final compensation,

membership service, and creditable service have all been violated and implicitly amended

in Chapter 4.18, as an end date of February 1, 2013, has been added for purposes of FRS


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benefits which is not present in the statutes or ordinances. (AB57-58) The City makes an

interesting argument that these statutes are not violated because a firefighters average

compensation during his last two years of service and his total years of service will still be

used to calculate his total retirement benefit from both the FRS and the FRP, and thus there

is no conflict. (RB36)

The FRS Statute and Ch. 4.18 RCC require that the full amount of service and the

final two years of compensation be utilized to compute benefits under FRS, not a

combination of FRS and FRP. Also, the change from an 8% refundable contribution to a

now 9% non-refundable contribution for firefighters with less than 20 years of service

[4.18.260 RCC (A268); 87.295 R.S.Mo.; 4.19.060(C) and 4.18.030(B) (A191,

198-199)] clearly fails to follow the language of the enabling statutes; as do the numerous

changes to disability, death and survivor benefits under FRP as compared to the FRS

Statute. ( 4.18.145-4.18.209 RCC A259-266 ; 87.195-87.220 R.S.Mo. ; Board Bill 109

2(A) at A177; 4.19.070-4.19.080 at A207-219)

The Citys only other justification for its violations of the enabling legislation is to

say it had to be done to effectuate the Citys goals. (RB36) (To repeal the FRS, however,

the City had to freeze compensation and years of service for purposes of calculating the

benefit due under the FRS; a plan simply cannot terminate if all factors that determine the

pension benefit continue to be taken into account indefinitely into the future.) This is

similar to the necessary and proper analysis of the Trial Court, after acknowledging that

the dual plan system does affect how FRS will operate in the future. (A56) There is no


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necessary and proper exception to the requirement that ordinances amending FRS must

comply with the enabling statutes as recognized by Trantina .


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III. Article VI, 22 would not be violated if the permissive legislation found in

87.120 R.S.Mo. et seq. is found to be the exclusive authority allowing the City

to enact a retirement system for firefighters.

The City argued that, if 87.120 R.S.Mo. et seq. is found to be the exclusive means

by which it may enact a pension for City firefighters, the statute would violate Article VI,

22 of the Missouri Constitution, which prohibits the state from fixing the compensation of

municipal employees. (RB39) In the FRS 1990 case, the Missouri Supreme Court rejected

this argument, because [t]he establishment of a firemens pension plan is permissive the

statute is directory, not mandatory. FRS 1990 , 789 S.W.2d at 487. The City quotes this

portion of the decision in its brief (RB39), but then states in the very next sentence that

[c]onstruing the FRS Statutes to require the City to choose between providing the pension

prescribed therein or providing no pension would impermissibly limit the authority of the

City to fix the compensation of its firefighters (RB39), an argument that was clearly

rejected in the portion of the FRS 1990 decision cited by the City.

Not only does FRS 1990 state [t]he enabling statute does not violate article VI 22

of the Missouri Constitution, but it cites to Trantina wherein the Court specifically stated,

[t]he City may or may not elect to enact such an ordinance [creating a pension plan]. If it

does, it must comply with the provisions of the enabling statute which is in effect at the

time the ordinance is adopted. Otherwise, the ordinance will be in conflict with the

provisions of the statute and thereby void. Id.; Trantina, 503 S.W.2d at 152. Therefore,

the Supreme Court directly held that, because the City had the choice to enact a pension

plan for firefighters consistent with 87.l20 R.S.Mo. et seq., or no pension plan at all, the


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enabling statutes do not violate Article VI, 22. This Court is bound to follow this

precedent from the Supreme Court, deciding this identical issue between these same parties,

under the doctrines of res judicata and stare decisis .


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IV. The ordinances creating FRP violate the contractual rights of all firefighters,

in violation of the provisions of both the U.S. and Missouri Constitutions.

A. St. Louis firefighters have contractual rights to FRS pension benefits.

Appellants position in this case is based on the now widely recognized principle

that statutes creating pensions for public employees are a part of the contract of

employment as much as if written therein. State ex rel. Phillip v. Public School

Retirement System of City of St. Louis , 262 S.W.2d 569, 575 (Mo. banc 1953); Wehmeier v.

Public School Retirement System of Missouri , 631 S.W.2d 893, 896 (Mo.App. E.D. 1982).

A public employees pension benefits do not remain constitutionally unprotected until the

employees retirement date or date of vesting.

The Supreme Court in Phillip could have resolved the employees challenge to the

statute in at least three ways. First, the court could have upheld the amendment, holding

that the employees had no contractual rights to benefits not yet payable. Second, the court

could have held that the employees had no contractual right to any benefits not yet accrued,

striking down the amendment only with respect to benefits already earned. Third, the court

could have ruled that the pension legislation in existence as of the beginning of the

employment relationship became part of the employment contract, even with respect to

future benefits, and that the statutory amendment was invalid for that reason.

Even the City admits that the first position is incorrect as a matter of law. (RB49)

The City asks this Court to adopt the second position. (RB43) But the position advocated

by Appellants, the third position, is the position the court in Phillip utilized. See id. at

577-78. Instead of recognizing a constitutional difference between benefits already


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accrued and those to be accrued in the future, as the City suggests, Phillip holds that the

pension legislation did provide for the creation of specific contractual rights in the

members of the Retirement System to obtain specific benefits upon compliance with the

terms, and refused to enforce the amendment. Id. Under the logic of Phillip , firefighters

have contractual rights to future pension benefits, and these rights vest upon acceptance of

employment with the City under the provision of Chapter 4.18 RCC. Therefore, the Citys

attempt to impair these contractual rights violates the Contracts Clauses of the federal and

state constitutions. The seriousness of the impairment is also greater than sustained by

relators in Phillip , since City firefighters do not receive Social Security and are subject to

20 year cliff vesting.

1. The Citys attempts to distinguish cases from other jurisdictions fails,

as the City obscures and misstates the facts and legal conclusions of

many of these cases.

The Citys brief attempts to sidestep the growing body of law holding that a

government employee has contractual rights to pension benefits as provided upon

employment, or sometime well before retirement, by pigeonholing the precedential cases

into four categories, and then distinguishing each category separately. (RB59-62)

However, the Citys analysis misinterprets the rationale and misstates or obscures the

actual facts of these cases. The City also ignores critical language of the FRS legislation

evidencing an intent to grant FRS members contractual rights.

Specifically, the City argues that contractual rights to pension benefits have only

been recognized based on (1) explicit language in the statute at issue, (2) the voluntary


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nature of employees participation in the pension system, (3) the supposedly

non-refundable nature of employee contributions, or (4) the pension systems treatment of

benefits as compensation. (RB59-62) On the first of these four points, the City cites to

Cloutier v. New Hampshire , 42 A.3d 816 (N.H. 2012), and Olson v. Cory , 636 P.2d 532

(Cal. 1980). However, both cases support Appellants position in this appeal. (AB82)

Cloutier held that the pension statutes created an implied contract between the state and its

employees, with the employees rights in the pension vesting upon their accepting

employment. 42 A.3d at 823. Similarly, the court held in Olson that the plan members had

contractual rights to future salary increases that vested upon their acceptance of

employment. 636 P.2d at 535-37. The City attempts to distinguish these cases based on

the unremarkable fact that both cases referred to the applicable statutory language. (RB59)

Yet the FRS enabling legislation and ordinances contain similar language, which states that

maintaining the FRS investments and paying out benefits are hereby made obligations of

the City. 4.18.325 RCC (A270) (emphasis added); 87.360 R.S.Mo. (emphasis added)

See Neske v. City of St. Louis , 218 S.W.3d 417, 425-26 (Mo. 2007). This shows the Citys

intent to bind itself to pay the benefits promised to St. Louis firefighters.

The City also argues that there are no contractual rights because participation in

FRS is required for all City firefighters. (RB59-60) However, Missouri courts have

repeatedly recognized the contractual nature of public pension benefits, even in cases

where all employees were required to be members of the pension system as a condition of

employment. The Court in Phillip held that, even though new employees were required to

join the retirement system there at issue as a condition of employment, participation was


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voluntary, because the employee had a choice whether to participate. 262 S.W.2d at 575,

577; see also State ex rel. Breshears v. Missouri State Emp. Retirement System , 362

S.W.2d 571, 575 (Mo. banc 1962). Merely because membership in FRS is a condition of

firefighters employment with the City (as is the ban on firefighters participating in any

other state or local public pension system), 87.130.1 R.S.Mo ., this does not prevent

firefighters from possessing contractual rights in FRS benefits.

Next, the City argues that cases from other jurisdictions have found contractual

rights only when employees contributions to the pension fund are non-refundable.

(RB60-61) However, five of the six cases cited by the City provide absolutely no support

to this argument in that they do not even state that the employees contributions were

non-refundable. (RB60-61); see Wagoner v. Gainer , 279 S.E.2d 636 (W.Va. 1981); Snow

v. Abernathy , 331 So.2d 626 (Ala. 1976); Police Pension and Relief Bd. of City and County

of Denver v. Bills , 366 P.2d 581 (Colo. banc 1961); Bender v. Anglin , 60 S.E.2d 756 (Ga.

1950); Singer v. Topeka , 607 P.2d 467 (Kan. 1980).

The one remaining case cited by the City is Bakenhus v. City of Seattle , which, does

actually state that the employee contributions were non-refundable. 296 P.2d 536, 537

(Wash. banc 1956) ( see RB60). Yet the majority opinion, which did find that the employee

had a contractual right to his retirement benefits, simply mentioned the non-refundable

nature of the contributions in passing and did not expressly assign any particular

significance to this fact. See id. at 537. Only the dissenting justice believed that the

distinction between refundable and non-refundable contributions had any impact on the

Contracts Clause analysis. Id. at 543 (Hill, J., dissenting). Moreover, the majority opinion


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espouses the same theory of pension rights as did the courts in Phillip , Breshears and the

many other cases cited in Appellants initial brief. (AB100-107) Much like the court in

Phillip , the Court had an opportunity to draw the distinction between past and future

accruals, which is so strongly urged by the City. ( See RB43) But the Bakenhus court

refused to do so, holding that the plaintiff had a right to rely on the continuance of benefit

accruals that were promised to him in the statute as it existed as of his hiring date. Id. at

539.

The City also attempts to distinguish cases in which pension benefits were

characterized as compensation (RB61-62), but this argument is mistaken for two

reasons. First, the Citys reliance on Article VI, 22 of the Missouri Constitution is

misplaced. The Missouri Supreme Court decided over 20 years ago that FRS does not

violate the Constitution. FRS 1990 , 789 S.W.2d at 487. That decision expressed no view

as to FRS benefits being part of compensation, either in its holding or dicta. Second, the

Citys discussion of what it calls the compensation rationale (RB61) ignores the essential

difference between salary and pension benefits. Pension benefits raise a unique set of

constitutional issues because pension plans are designed to reward long-term commitment

by the employee. (AB83-84) The special nature of pensions is the very reason that so

many courts now recognize constitutionally protected contract rights in future pension

benefits. (AB100-107)


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2. The Citys reliance upon Fraternal Order of Police Lodge #2 and W.

Central Missouri Regional Lodge #50 is misplaced.

In Fraternal Order of Police Lodge #2 v. City of St. Joseph , the pension board began

treating lump sum payments for unpaid overtime and vacation pay as part of an officers

salary for the purpose of calculating benefits. 8 S.W.3d 257, 260-61 (Mo. App. 1999).

The critical fact of the case which the City glosses over in its brief was that the board

began using this calculation method unilaterally, without any direction or prompting by

statutes or ordinances. See id. Since this practice was administrative, the plaintiffs had no

vested right in this calculation method. Id. at 264. In contrast, the benefits due to FRS

members are stated in great detail in both enabling statutes and implementing ordinances.

The case of W. Central Missouri Regional Lodge No. 50 v. Board of Police

Commissioners of Kansas City , 939 S.W.2d 565 (Mo.App. W.D. 1997), is also not on

point. The benefits in which the plaintiffs asserted a contractual right were not found in

any legislation; only being mentioned in an employee handbook. Id. at 566. There is no

comparison between a statute and an employee handbook, as handbooks by themselves do

not create contractual rights, as Missouri courts have repeatedly held. Id. at 567-68.

3. The reservation of rights clause does not make the pension rights of

firefighters modifiable.

The reservation of rights clause, found at 4.18.345 RCC, does not nullify the Citys

clearly manifested intent to bind itself to a contract with FRS members. Notably, the City

assumes the clause is valid. (RB64-66) The reservation of rights clause is not authorized

by the enabling legislation. See Chapter 87 R.S.Mo. The City admits that Chapter 4.18


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RCC was enacted under the authority granted by 87.120 R.S.Mo., et seq . (RB1)

Therefore, all FRS ordinances must conform to the enabling legislation. Trantina , 503

S.W.2d at 152. Nothing in Chapter 87 R.S.Mo. authorizes the City to enact a reservation of

rights clause, and there is certainly no authorization for the City to impair the contractual

rights of FRS members through subsequent ordinance amendments. ( See AB, Point

II(D)(4)) Thus, 4.18.345 RCC is invalid, as not authorized by the FRS Statute. Nor can

the City impair rights of firefighters extended by contract by reserving such power to itself,

in that the right of the legislature to alter, amend or repeal legislation is subject to

constitutional restrictions and inhibitions, including the Contracts Clauses. Phillip, 262

S.W.2d at 579, Kemmerer v. ICI Americas, Inc. , 70 F.3d 281, 287-88 (3d Cir. 1995).

B. Board Bill 109 materially and substantially impairs the rights of all

firefighters

Although the City occasionally invokes the discredited gratuity theory of pensions,

its main arguments are based upon a contract theory, with limitations. (RB43) The City

argues that it can change contributions, benefits, and conditions of retirement on a

prospective basis for current firefighters with less than twenty years of service, so long as

past accruals are not reduced. (RB43) Yet the City, through enactment of Board Bill 109,

accepts that it cannot alter the rights of vested firefighters or those in pay status. (RB43,

54) Thus, the City Board Bill 109 concedes that at least some firefighters have contractual

right to future accruals of their pension benefits as provided in the FRS ordinances.


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1. Board Bill 109 substantially impairs the rights of all firefighters by

relieving the City of its ultimate obligation to make benefit payments.

Although the City claims a scriveners error (RB70), the City has walked away from

its ultimate obligation to make sure benefits are fully paid. As the Trial Court recognized

in its September 28, 2012 Memorandum and Order, the language that the City assumes no

liability or responsibility for FRP benefits unconstitutionally impairs firefighters

contractual rights to their full retirement benefits, and was found in both 4.19.170(B) and

4.19.020(C). (AB87) While the City did amend 4.19.020(C) to state that the payment

of all benefits accrued under this Plan is hereby made an obligation of the City, it left the

limitation of liability language in 4.19.170(B). Leaving in this language that had been

specifically criticized by Judge Dierker in a prior order cannot reasonably be viewed as a

matter of oversight.

The Citys argument that the change in 4.19.020(C) solves the problem of the

limitation language in 4.19.170(B) does not hold true. Although the issue is not before

the Court at this time, the ultimate resolution of these two sections may well be that the

City has agreed to fully pay its actuarially required contribution to FRP each year (see

Neske ), but that if there are insufficient funds in the plan to pay benefits if the plan is one

day terminated, retirees, firefighters and beneficiaries would only be entitled to receive

benefit payments to the extent of assets in that Plan. That is a very significant impairment

of rights. Section 4.19.170(B) RCC is more than just boilerplate language (RB74); it is a

significant impairment.


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2. The increase in contribution rate upon exit from the DROP program

and denial of return of contributions impair the rights of firefighters

with over 20 years of service.

The City then makes two arguments relating to the contractual rights of firefighters

with over 20 years of service that directly contradict its main arguments about the

Contracts Clause. First, although Board Bill 109 contains no provision explicitly

providing that firefighters with over 20 years of service are entitled to a return of their

contributions under FRP upon retirement, the City suggests that it is implied from the text

of Board Bill 109. ( See RB69) In order for this conclusion to be reasonably inferable, it

must be assumed that: (a) firefighters with over 20 years of service have contractual rights

which cannot be impaired; and (b) in enacting Board Bill 109, the City intended to

recognize and respect those contractual rights as non-modifiable.

Second, the City asks this Court to reform the section requiring firefighters to make

contributions to FRP at the rate of 9% after they exit the DROP program. (RB70) At the

same time, the City argues that the 9% contribution rate is perfectly enforceable even

against firefighters with 20 years of service, because the rights of any firefighters even

those who are vested under FRS can be impaired on a prospective basis. (RB69-70) If

the City truly believed that the right to continuing accruals can be impaired for vested FRS

members, then there would be no basis whatsoever for claiming that the 9% contribution

rate in Board Bill 109 is an obvious scriveners error. The Citys admission that it is a

scriveners error implicitly concedes that the rights of firefighters with over 20 years of

service cannot be modified, even on a prospective basis.


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The Citys request that the Court change 9% to 8% is also an unjustifiable

misapplication of the scriveners error doctrine. (RB70) Even the one source cited by the

City a law review article that focuses on the personal opinions of Justice Scalia, as

opposed to actual Missouri law argues that this proposed application of the scriveners

error doctrine would be wildly inappropriate. (RB70) David M. Sollors, The War on

Error: The Scrivener's Error Doctrine and Textual Criticism: Confronting Errors in

Statutes and Literary Texts , 49 S ANTA CLARA L. REV. 459, 488 (2009). ([I]nterpreting

the word 7 to mean 5 would certainly be unheard-of and beyond the limits of the

scrivener's error doctrine given by Scalia in the above quote).

3. The increased contribution rate, while eliminating the return of

contributions, and the actuarial reduction of benefits significantly

impairs the contractual rights of firefighters with less than twenty

years of service on the Effective Date, as does the actuarial reduction

of benefits based on age at retirement.

Despite the Citys attempts to minimize the impairment inflicted on firefighters

with less than 20 years of service (RB72), Board Bill 109 substantially impairs these

firefighters contractual rights in several ways. Board Bill 109 increases the contribution

rate from 8% to 9%, which by itself is an impairment, but it also makes these contributions

non-refundable. 4.19.030(B); 4.19.060(C) . In essence, it is requiring a 9% increase in

contributions to FRP as compared to FRS, which certainly is a significant impairment of

contract. (AB92-94) Another impairment is the application of an actuarial reduction

factor to any service after the Effective Date if the firefighter retires before age 55,


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regardless of years of service. 4.19.060(D) (A199) As set forth more fully in Appellants

Brief this would amount in a reduction of several hundred dollars per year in a firefighters

pension benefit for the rest of a firefighters life, and the actuarial reduction applied to the

DROP benefit coupled with the lack of return of contributions, would result in a lump sum

difference of $11,910 to $24,656 to Mr. Washington depending upon when he retired.

(AB111-112; Ex59)

The City would have the Court uphold Board Bill 109 itself, even if it is found to be

unconstitutional as applied to one or more firefighters, based solely upon a single

citation to a decision by a federal trial court in Pennsylvania. (RB72) However, these

impairments can be readily discerned from the legislative text itself without resorting to

any facts detailing the circumstances of any one named firefighter. Board Bill 109 is

unconstitutional on its face, and it should be stricken down in its entirety.


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C ONCLUSION

For all the reasons set forth in this brief and the initial Appellants Joint Brief, the

Trial Courts Judgment should be reversed, and this Court should enter such additional

orders as are necessary to effect the decision reversing the Trial Court.


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C ERTIFICATE OF C OMPLIANCE

By submitting this Brief, the undersigned counsel for Appellants hereby certifies thefollowing:

1. This brief conforms with Missouri Rule of Civil Procedure 55.03;

2. This brief conforms with this Courts Order of January 30, 2013 grantingAppellants 7,650 words for their brief;

3. The number of words used in this brief is 7,573.

/s/ Kara D. Helmuth


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C ERTIFICATE OF SERVICE

The undersigned certifies that a copy of the foregoing was sent, through theelectronic filing system to all attorneys of record this 21 st day of February, 2014, with acopy being sent via e-mail only to:

Honorable Chris Koster, Attorney Generalc/o Joan Gummels, Legislative DirectorMissouri Attorney General's OfficeConsumer Protection Division815 Olive Street, Suite 200St. Louis, MO 63101E-mail: [email protected]

/s/ Kara D. Helmuth

907765.docx

reply brief of appellants frs and local 73

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