Baltimore City Fire & Police Employees’ Retirement System

Baltimore City is in its worst fiscal crisis ever.  The City plans to improve its financial situation by retroactively modifying the retirement system for its police officers and its fire fighters.  In response, the police officers and fire fighters filed a 57-page law suit in the United States District Court for the District of Maryland, demanding a jury trial, and seeking declaratory and injunctive relief, as well as money damages.

The 11-count law suit alleges, among other things, that the City (1) violated the collective bargaining agreement between the City and the police and fire unions; (2) breached its fiduciary duty; (3)(a) violated art. 22, § 29, of the City Code (Fire & Police Employees’ Retirement System), and (b) violated art. 22, § 37 (Guaranty), which provides that obligations of the Retirement System are obligations of the City of Baltimore; and (4) violated the Contract Clause of the United States Constitution (art. 1, § 10, cl. 1), which prohibits the government from retroactively violating a contract.  The police officers and fire fighters argue that the City, which funded the retirement system at 110% in 1999, knowingly funds only 40% of its liabilities now, and is $28 million underfunded; (2) unlawfully reduced retirement benefits; and (3) published misleading reports.

Under the Retirement System, police officers and fire fighters are eligible to retire at age 50, with 20 years of service.  The City believes that the taxpayers cannot afford such a favorable retirement system.  The police and fire fighters argue that (1) a contract is a contract, and (2) being a police officer or fire fighter in the City is a very tough and dangerous job.

I am a law professor and a “constitutional guy” who understands the issues in this case.  I believe that if the case goes all the way, the police officers and fire fighters have an excellent shot at prevailing.  In my private practice, I have represented law enforcements officers in 35 agencies during my career.  As an attorney, I believe that the law is the law, which may work in favor of the police officers and fire fighters.  As a citizen, I believe our government is not going to be able to pay its obligations, which, in the end, leads to a break down in society.  Various people are going to absorb the cost of a failing government.  But asking the Baltimore Fire and Police to absorb more than a fair share is not reasonable.

A full court litigation press will grind down the police officers and fire fighters before it grinds down the City.  But it will grind down Baltimore City too.  And, of course, in the end it is the taxpayers footing the bill.

Then, the losing side will take an appeal to the United States Court of Appeals for the Fourth Circuit in Richmond.  It doesn’t end at trial.

In my judgment, each side will naturally do its initial posturing.  Then, after that, the parties must hire a tough mediator to help bring them toward an amicable and fair resolution of this law suit.  There are equities for both sides.