Goldsmith Withdraws Motion for Summary Judgment in UAL Substantially Equal Case

Date: May 28, 2013

 

The San Diego City Employees’ Retirement System (SDCERS) today received a Notice of Withdrawal of Motion for Summary Judgment from City Attorney Jan Goldsmith’s office in the UAL Substantially Equal case, effectively demonstrating SDCERS’ strong position in this matter. The City’s motion was scheduled to be heard before a judge on Monday, April 8th.

During the litigation process, one or both parties involved may attempt to dismiss certain issues from the case through a procedure known as the Motion for Summary Judgment (MSJ). A case decided by summary judgment is not allowed to be presented to a judge or jury at trial. In other words, the MSJ is a method to resolve the case without the need for a trial.

The City Attorney’s Notice of Withdrawal of the MSJ cites the need to focus its resources on the upcoming trial currently scheduled for May 14th, despite the fact that the primary goal of an MSJ is to avoid preparation for and the expenses associated with litigation. The Notice of Withdrawal may signal that the City considers its case too weak to prevail.

Significant legal costs have been incurred by the City and SDCERS since the case was filed in May, 2010. The City is obligated to pay for SDCERS’ legal expenses, so they are effectively paying the legal bills to sue themselves.

The "substantially equal" case calls into question Charter section 143, which states that the "City shall contribute annually an amount substantially equal to that required of the employees for normal retirement allowances, as certified by the actuary, but shall not be required to contribute in excess of that amount." The City contends that the substantially equal requirement applies to actuarial and investment gains and losses in addition to the normal cost of normal retirement allowances.

SDCERS, the City's pension administrator, requires annual contributions from the City and its workers in order to pay current and future retiree benefits. The City's annual payment and the contribution rate for employees are set by the pension board each year based on an actuarial valuation. This valuation determines liabilities associated with active employee current year service (“normal cost”), and liabilities associated with variances to actuarial assumptions (“experience gains and losses”). Experience gains and losses include investment gains and losses relative to the assumed rate of return, currently 7.5%. Historically, the City has paid its half of the normal cost and 100% of the experience gains and losses.

The City’s Notice of Withdrawal is available here. Copies of the moving and opposing papers can be found here.

For additional information about the UAL Substantially Equal case, click here.

"The City Attorney's Big Gamble of Pensions Heads Toward a Climax" by Scott Lewis, Voice of San Diego - here




Document Under Categories: Litigation

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