Federal Judge Throws Out Union Pension Lawsuit

On Monday, a federal judge threw out a lawsuit filed by New Jersey police officers, teachers, firefighters and public workers that challenged the reform law requiring them to pay more for their health benefits and pensions. , challenged the constitutionality of the law and its implications to collective bargaining. 

“While we are disappointed with the decision, our resolve to continue this fight has never been stronger," said New Jersey State PBA President Anthony Wieners via release.

U.S. District Court Judge Anne Thompson issued an opinion that dismissed the suit on jurisdictional grounds. The suit, which was brought by the New Jersey State PBA, FMBA, NJEA, CWA, and various other unions, . The state PBA said Thompson’s decision was "a very narrow decision and did not decide the merits of any of the unions’ claims."

Several aspects of the lawsuit included challenging the elimination of the automatic cost-of-living adjustment (COLA) for retired police, firefighters, teachers, state and local government employees in New Jersey's six pension systems for retirees. The lawsuit also challenged the health contributions into the retirement portion for officers with less than 20 years, as well as the altering of existing collectively bargained health plans.

About 60 percent of the projected $122 billion total pension savings in the reform bills came from the elimination of COLA.  Public employees who paid 1.5 percent of their healthcare premium cost now pay 3 percent for those earning under $25,000, and up to 35 percent of their healthcare premiums for those making up to $100,000, on a sliding scale based on employee compensation.  The rates gradually increase based on an employee’s compensation, at intervals of $5,000. 

The increase to health costs does not affect current retirees, and active employees with at least 20 years of service pay the increased contributions while still active, but aren't affected upon their retirement.

Thompson ruled that the federal court didn't have jurisdiction in the matter because the 11th Amendment of the Constitution prevents federal lawsuits against the state if the remedy for any of the violations that occurred would be a payment from the state.

"While we strongly disagree with the court’s conclusion, we emphasize that the decision was limited only to the 'jurisdictional' question whether this suit can be brought in federal court," Wieners said. "Judge Thompson did not rule on the defendants’ motion to dismiss the suit on the merits of the claims.  The Judge did not make any findings, or reach any decision, on the merits of the case itself.  It just concluded that it cannot be brought in federal court.  Our claims remain very much alive and we intend to pursue them."

The PBA is considering whether to appeal the ruling on jurisdiction to the Third Circuit Court of Appeals or whether to file the suit against all of the original defendants in state court.