LABARGA, J.
Appellants Governor Rick Scott, Attorney General Pamela Jo Bondi, and Chief Financial Officer Jeff Atwater, in their capacity as the State Board of Administration of Florida, and John Miles, Secretary of the Department of Management Services of Florida, appealed a judgment of the Circuit Court of the Second Judicial Circuit in and for Leon County to the First District Court of Appeal, which certified to this Court that the appeal is one presenting issues of great public importance that require immediate resolution by this Court. We have jurisdiction. See art. V, § 3(b)(5), Fla. Const.
In this case, we consider the constitutionality of certain provisions of chapter 2011-68, Laws of Florida, enacting Senate Bill 2100, which as of July 1, 2011, converted the Florida Retirement System (FRS) from noncontributory by employees to contributory, required all current FRS members to contribute 3% of their salaries to the retirement system, and eliminated the retirement cost-of-living adjustment for creditable service after the effective date of the act.
The appellants and supporting amici (for ease of reference collectively referred to herein as "the State") contend on appeal, as they did in the circuit court, that the laws are facially constitutional.
We begin with an overview of the challenged provisions of chapter 2011-68, Laws of Florida. Since 1975, until the July 1, 2011, effective date of the amendments at issue here, the FRS was noncontributory for most state and local employee members, meaning that the plan was funded entirely by public employer contributions. Further, prior to the 2011 amendments, the FRS plan provided for retired members to receive a cost-of-living adjustment (COLA) equal to 3% of the total monthly benefit, which was calculated once yearly. The plaintiffs and intervenors below challenged two facets of the 2011 pension amendments — the amendments contained in sections 5, 7, 9, 11, 13, 24, 26, 29, 32, 33, 39, and 40 of chapter 2011-68, Laws of Florida, requiring current state and local members of the FRS to pay 3% of their gross compensation into the pension plan, and the amendment contained in section 17 of chapter 2011-68, Laws of Florida, eliminating COLA adjustments for service performed by FRS members after June 30, 2011.
With this factual backdrop, and relying primarily on the language contained in section 121.011(3)(d), Florida Statutes (1974), a provision known as the "preservation of rights" statute, the circuit court held that the rights of the members of the FRS to the noncontributory retirement plan with a COLA, which was in effect prior to the amendments, were contractual in nature, that they were legally enforceable as valid contract rights, and could not be abridged in any way. The preservation of rights section, enacted in 1974 at the same time that the FRS was amended to be noncontributory for most public employees, provided then and continues to provide now as follows:
See § 121.011(3)(d), Fla. Stat. (1974); § 121.011(3)(d), Fla. Stat. (2012); ch. 74-302, § 1, at 937, Laws of Fla. The circuit court held that the Legislature substantially breached the employees' contract rights guaranteed by the preservation of rights statute by requiring employee contributions to the FRS and by elimination of the COLA, and further held that this breach was not justified by the existence of a significant budget shortfall where other,
In so ruling, the circuit court acknowledged this Court's 1981 decision in Florida Sheriffs Ass'n v. Department of Administration, 408 So.2d 1033, 1037 (Fla.1981), in which we held that the preservation of rights statute "vest[ed] all rights and benefits already earned under the present retirement plan" but did not preclude the Legislature from altering benefits prospectively for future state service in the existing noncontributory plan. However, the circuit court concluded that the Florida Sheriffs decision did not allow the Legislature to "completely gut and create a new form of pension plan." Finally, the circuit court concluded that the challenged portions of chapter 2011-68, Laws of Florida, also effected an unconstitutional taking of private property without full compensation and abridged the rights of public employees to bargain collectively over conditions of employment, to wit, retirement benefits.
Thus, this case turns on the question of whether the challenged provisions of chapter 2011-68, Laws of Florida, violate the contracts clause, the takings clause, or the collective bargaining clause of the Florida Constitution. The State also challenges the refund remedy ordered by the trial court. We turn first to the applicable standards of review.
Determination of whether a statute is constitutional is a pure question of law which is reviewed de novo. See Crist v. Ervin, 56 So.3d 745, 747 (Fla.2010). When the question involves both factual and legal issues, the Court will review a trial court's factual findings for competent, substantial evidence, while the legal question is reviewed de novo. See N. Florida Women's Health and Counseling Serv., Inc. v. State, 866 So.2d 612, 626-27 (Fla. 2003). Where there is no genuine issue of material fact, this Court's review of a summary judgment is de novo. See Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla.2000). Thus, this Court's review of whether the challenged provisions of chapter 2011-68, Laws of Florida, when considered in light of the undisputed facts, unconstitutionally impair a contract with members of the Florida Retirement System, effect an unconstitutional taking from the members, or abridge the right of public employees to collectively bargain will be de novo. See also State v. Sigler, 967 So.2d 835, 841 (Fla.2007) (reviewing de novo the application of the statute to facts of the case to determine if the statute is constitutional).
We are ever mindful that "[w]hile we review decisions striking state statutes de novo, we are obligated to accord legislative acts a presumption of constitutionality and to construe challenged legislation to effect a constitutional outcome whenever possible." Fla. Dep't of Revenue v. Howard, 916 So.2d 640, 642 (Fla.2005). Statutes come to the Court "clothed with a presumption of constitutionality and must be construed whenever possible to effect a constitutional outcome." Crist v. Fla. Ass'n of Criminal Def. Lawyers, Inc., 978 So.2d 134, 139 (Fla.2008). "Absent a constitutional limitation, the Legislature's `discretion reasonably exercised is the sole brake on the enactment of legislation.'" Id. at 141 (quoting Bush v. Holmes, 919 So.2d 392, 406 (Fla.2006) (quoting State v. Bd. of Pub. Instruction for Dade County, 126 Fla. 142, 170 So. 602, 606 (1936))). "[E]very reasonable doubt should be resolved in favor of a law's constitutionality." Franklin v. State, 887 So.2d 1063, 1080 (Fla.2004). We note, however, that "pension statutes are to be
Further, we have long recognized that "[t]he court should not declare a statute to be void or inoperative on the ground that it is opposed to a spirit that is supposed to pervade the Constitution, or because the statute is considered unjust or unwise or impolitic." State ex. rel. Johnson v. Johns, 92 Fla. 187, 109 So. 228, 231 (1926). "The wisdom, policy, or motives which prompt a legislative enactment, so far as they do not contravene some portion of the express or implied limitation upon legislative power found in the Constitution, are not subject to judicial control." State ex rel. Davis v. Rose, 97 Fla. 710, 122 So. 225, 231 (1929). Thus, our ruling today expresses no view as to the wisdom, policy, or motives behind the challenged statutory provisions.
Our decision turns in significant part on determining if the contract rights granted by the preservation of rights statute, section 121.011(3)(d), include the right to a continuing noncontributory retirement plan with a COLA for those employees who were members of the FRS prior to July 1, 2011, and whether those rights, if any, have been impaired in violation of the Florida Constitution by the challenged amendments. In determining the question of unconstitutional contract impairment in Florida, where a contract has been found to exist and to have been impaired by subsequent legislation, this Court in Pomponio v. Claridge of Pompano Condominium, Inc., 378 So.2d 774 (Fla.1979), adopted a balancing approach to determine if a statute unconstitutionally impairs a contract. We recognized in Pomponio that "virtually no degree of impairment" will be tolerated, id. at 780, but "allow[ed] the court to consider the actual effect of the provision on the contract and to balance a party's interest in not having the contract impaired against the State's source of authority and the evil sought to be remedied." Florida Ins. Guar. Ass'n, Inc. v. Devon Neighborhood Ass'n, Inc., 67 So.3d 187, 193 n. 6 (Fla.2011) (citing Pomponio, 378 So.2d at 780).
Where, as here, the contract at issue is with a governmental entity, the Supreme Court in U.S. Trust Co. of New York v. New Jersey, 431 U.S. 1, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977), explained:
Id. at 25-26, 97 S.Ct. 1505 (emphasis added; footnote omitted). "[A] State is not completely free to consider impairing the obligations of its own contracts on a par with other policy alternatives" and "is not free to impose a drastic impairment when an evident and more moderate course would serve its purposes equally well." Id. at 30-31, 97 S.Ct. 1505. The government's significant impairment of its own contract is not justified by necessity if "the State[] could have adopted alternative means" of achieving its goals without altering
With these principles in mind, we turn next to the question of whether the 2011 amendments unconstitutionally impair the contract rights of existing members of the Florida Retirement System. We then discuss whether the amendments effect an unconstitutional taking and whether the amendments impair constitutionally guaranteed rights to collectively bargain concerning pension issues.
The State contends that the 2011 amendments to the FRS operate prospectively only and, thus, the trial court's order finding that the law impairs existing contract rights of current members of the FRS is inconsistent with this Court's interpretation of the preservation of rights statute in Florida Sheriffs. Both parties agree that if an existing member of the FRS retired on June 30, 2011, none of his or her benefits would be diminished. Both parties agree that an employee continuing on in employment will be required to contribute 3% of his or her gross compensation to the FRS in order to receive the same retirement benefit that he or she would have expected to receive, absent the amendments, without making any contribution. Further, the amendments provide that upon retirement, any right to a COLA is limited to a calculation giving credit only for the employee's service performed prior to July 1, 2011. It is for these employees who continue on in employment after June 30, 2011, that the parties' characterization of their rights and benefits diverge.
The State contends that because the 3% contribution requirement and the elimination of the COLA did not take effect until July 1, 2011, and did not diminish any benefits earned as of that date, the amendments were purely prospective. The appellees and supporting amici (referred to hereafter as "the challengers") contend that the employees' contractual right to have their retirement benefits calculated under the law in effect prior to July 1, 2011, vested pursuant to the preservation of rights statute upon commencement of their employment and that those rights are now impaired by the amendments. It is contended, without dispute, that even though the actual changes in the plan occur at a future date, the changes diminish the total expected retirement benefits that could have accrued over the entire projected life of a member's employment for those persons employed prior to the amendments who continue their employment after the amendments. Thus, the challengers contend, the rights to a noncontributory plan and to a continuing COLA were part of the contract established under section 121.011, Florida Statutes (1974), as it has been continually enacted, and are rights to be honored over the life of their employment with the State.
The trial court agreed with the challengers that the rights to a noncontributory plan and a continuing COLA based on all years worked, both pre-amendment and post-amendment, are rights that were contractually guaranteed upon commencement of employment and could not be altered for any portion of the member's employment without impairing that contract. Although the trial court also recognized that this Court's decision in Florida Sheriffs authorized prospective amendments to the retirement plan, the court found that it did so only within the context of the existing noncontributory plan. Therefore, a review of our decision in Florida Sheriffs is necessary for our determination of these issues.
In Florida Sheriffs, special-risk law enforcement members of the FRS filed suit challenging the constitutionality of sections
As noted earlier, the preservation of rights provision contained in section 121.011(3)(d), provides in pertinent part that "[a]s of July 1, 1974, the rights of members of the retirement system established by this chapter are declared to be of a contractual nature, entered into between the member and the state, and such rights shall be legally enforceable as valid contract rights and shall not be abridged in any way." § 121.011(3)(d), Fla. Stat. In deciding Florida Sheriffs, we were required to determine the contractual rights which were created by this preservation of rights statute. In order to ascertain the Legislature's intent in enacting that provision, we examined the case law in effect prior to its enactment. We first noted in Florida Sheriffs that long before the enactment of the preservation of rights statute, this Court had held that Florida's constitutional contracts clause "did not protect a governmental mandatory retirement system and that the legislature could modify or alter benefits provided by such a retirement plan." Id. at 1035 (citing Anders v. Nicholson, 111 Fla. 849, 150 So. 639 (1933)). We also discussed the early case of State ex rel. Holton v. City of Tampa, 119 Fla. 556, 159 So. 292 (1934), in which this Court held that "even where an employee had already retired, the legislature had the authority to reduce the retirement benefits under a mandatory plan." Florida Sheriffs, 408 So.2d at 1036 (citing Holton, 159 So. at 293). The Holton Court stated: "But except in a case admitting of no other construction, a statutory retirement provision will not be construed as a contractual limitation binding on the legislative prerogative to fix the amount of retirement pay from time to time, so long as entire deprivation is not thereby attempted under the guise of regulation of the amount of compensation." Holton, 159 So. at 293.
In our analysis in Florida Sheriffs, we also considered the case of Voorhees v. City of Miami, 145 Fla. 402, 199 So. 313, 315 (1940), where active employees of the City of Miami who were entitled to retirement benefits under the City's mandatory retirement act brought an action challenging an amendatory act that repealed the original retirement plan and substituted a new one in its place, which was binding on all participants in the original pension plan. We stated in Voorhees that the rights of such persons in a pension fund "are not such as will prevent the Legislature from repealing or amending the statute, merely because the officer or employee has contributed to the fund so long as the fund existed and the law stood unrepealed." Voorhees, 199 So. at 315 (quoting Holton, 159 So. at 292-93). Thus, we concluded in Florida Sheriffs, "[u]nder the prior case law, if the retirement system was mandatory as it is now, the legislature could at any time alter the benefits retroactively or prospectively for active employees." 408 So.2d at 1037.
It was against this backdrop of precedent that allowed both prospective and retroactive changes to retirement benefits
Florida Sheriffs, 408 So.2d at 1037 (emphasis added). It is the import of this last statement, recognizing legislative power to modify prospectively "the mandatory, noncontributory retirement plan," that is at the heart of the challengers' claim. The challengers contend that the reference to "the authority to modify or alter prospectively the mandatory, noncontributory retirement plan" means that the Legislature may alter features of the plan prospectively, but only within the context of it remaining a noncontributory plan.
The trial court in the present case agreed and concluded that Florida Sheriffs did not control the question of contractual impairment in the instant case because the amendments in this case changed the fundamental nature of the plan from noncontributory to contributory. The trial court concluded:
The challengers and the trial court are incorrect in concluding that we intended our decision in Florida Sheriffs to apply only to prospective changes within a noncontributory plan. A reading of the entire decision discloses our conclusion that the preservation of rights statute was enacted to give contractual protection to those retirement benefits already earned as of the date of any amendments to the plan. We recognized the authority of the Legislature
We again hold, as we did in Florida Sheriffs, that the preservation of rights statute was not intended to bind future legislatures from prospectively altering benefits for future service performed by all members of the FRS. We further hold that the 2011 amendments requiring a 3% employee contribution as of July 1, 2011, and continuing thereafter, and the elimination of the COLA for service performed after that date are prospective changes within the authority of the Legislature to make. The preservation of rights statute does not create binding contract rights for existing employees to future retirement benefits based upon the FRS plan that was in place prior to July 1, 2011. As we held in Florida Sheriffs, we again hold that the actions of the Legislature have not impaired any statutorily created contract rights and, thus, we reverse the judgment of the trial court on this ground. Further, because we conclude that no contract between the State and members of the FRS has been breached, we also reverse the trial court's judgment that a breach of contract effected an unconstitutional taking under article X, section 6, of the Florida Constitution.
The challengers contended in the trial court and now on appeal that the amendments requiring a 3% salary contribution and elimination of the COLA for service performed after June 30, 2011, unconstitutionally impair or abridge the right of public employees to bargain collectively on the issue of retirement benefits. The trial court agreed and held that the amendments abridge article I, section 6, of the Florida Constitution by effectively removing the subject of retirement from the collective bargaining process and rendering negotiations after the fact futile. We make clear at the outset that there is no proper claim before the Court in this appeal that the amendments violate any specific collective bargaining agreement; the trial court's order did not address the effect of the amendments on any specific collective bargaining agreement. The issue before that court, and the issue now on appeal, is whether the amendments on their face unconstitutionally impair or abridge collective bargaining rights by precluding effective bargaining on the issue of retirement pensions and benefits. The trial court was correct that retirement pensions and benefits are mandatory subjects of public collective bargaining. See City of Tallahassee v. PERC, 393 So.2d 1147, 1150 (Fla. 1st DCA 1981), aff'd 410 So.2d 487 (Fla.1981). The right to collectively bargain, which is guaranteed to both public and private employees in Florida, is set forth in article I, section 6, of the Florida Constitution, which states in pertinent part:
Art. I, § 6, Fla. Const. The trial court concluded that the amendments at issue violate this provision.
In its initial brief on appeal, the State contends that "the Order was incorrect in stating that the Plan Amendment `effectively remov[ed] the subject of retirement from the collective bargaining process.' The Plan Amendment does not remove the subject of retirement benefits from collective bargaining." (Appellant's Initial Brief at 27-28.) The State reiterated in its brief that "absolutely nothing precludes Plaintiffs from bargaining over FRS" and "the Plan Amendment does not prohibit government employees from engaging in collective bargaining over retirement benefits." (Appellant's Initial Brief at 25). We agree. Nothing in chapter 2011-68, Laws of Florida, prohibits public employees from collectively bargaining on the issue of retirement pensions or benefits. Nor can we conclude on appeal, in a facial challenge to the amendments, that "effective" collective bargaining has been abridged or impaired on those issues, or that the amendments render such bargaining "futile" as contended by the challengers. Because we conclude that the amendments, on their face, do not prohibit collective bargaining on issues of retirement, we do not reach the State's argument that the Legislature may limit the right to collective bargaining on retirement issues based on the principle of separation of powers and the Legislature's exclusive control over public funds. See art. VII, § 1(c), Fla. Const.
Accordingly, based on the foregoing analysis, we reverse the judgment of the trial court in which it held that the challenged amendments impair or abridge collective bargaining rights guaranteed to public employees by article I, section 6, of the Florida Constitution.
For all the reasons set forth above, we reverse the judgment of the trial court in its entirety. We hold that the challenged provisions, sections 5, 7, 9, 11, 13, 17, 24, 26, 29, 32, 33, 39, and 40 of chapter 2011-68, Laws of Florida, are facially constitutional.
It is so ordered.
PARIENTE, J., concurs with an opinion, in which CANADY and LABARGA, JJ., concur.
LEWIS, J., dissents with an opinion.
PERRY, J., dissents with an opinion, in which LEWIS and QUINCE, JJ., concur.
PARIENTE, J., concurring.
I fully concur in the majority's opinion but write separately to emphasize several points. First, although I understand the frustration of State employees, who have in effect taken a 3% pay-cut in addition to years without cost-of-living adjustments, this case is not about the wisdom or fairness of the Legislature's decision. Nor is it about the necessity of the Legislature's action or whether the Legislature had reasonable alternatives to accomplish its goal.
Second, the result reached by the majority is dictated both by our precedent in Florida Sheriffs and by a careful reading of the preservation of rights statute. Although Florida Sheriffs does make reference to a "non-contributory" plan in the statements of its holding and does not address a change such as this one, its rationale clearly applies here. Prior to the enactment of the preservation of rights statute in 1974, the Legislature could make both retroactive and prospective changes to a mandatory retirement plan. See Fla. Sheriffs Ass'n v. Dep't of Admin., Div. of Ret., 408 So.2d 1033, 1037 (Fla.1981) ("Under the prior case law, if the retirement system was mandatory as it is now, the legislature could at any time alter the benefits retroactively or prospectively for active employees."). This Court in Florida Sheriffs concluded that this rule was "changed by the `preservation of rights' section which ... vests all rights and benefits already earned under the present retirement plan so that the legislature may now only alter retirement benefits prospectively." Id. The Court stressed that "the rights provision was not intended to bind
In interpreting the effect of the preservation of rights statute in Florida Sheriffs, this Court's reasoning did not involve drawing the distinction advanced by the dissenting opinions with respect to the contributory or noncontributory nature of the plan. Nor did the Court's analysis distinguish the types or nature of changes the Legislature could make prospectively. In fact, the Court referred to the ability to "repeal" the plan prospectively under the preservation of rights statute. Id. This Court's decision in Florida Sheriffs is clearly binding here, and to hold that the Legislature's changes constituted an impairment of contract rights would require us to recede from Florida Sheriffs.
Finally, even if this Court were to recede from Florida Sheriffs, the preservation of rights statute still compels the result reached by the majority. There is nothing in the statute that indicates a legislative intent to bind itself for all time to preclude future legislatures from ever altering the future benefits to be paid to employees as part of the state retirement system. As correctly held in Florida Sheriffs, this interpretation would be contrary to the Legislature's intent as well as the logical meaning of the statute, which is to ensure that the Legislature cannot retroactively alter accrued benefits. This is a critical statutory guarantee that is far different from the conclusion that the Legislature intended to bind itself to never prospectively alter retirement benefits.
If this Court were to read the statute to preclude prospective changes such as the ones at issue here, then the Legislature would in effect be precluded from making any changes to the retirement plan without impairing contracts. Nothing in the statute contains the distinctions urged by the dissents between fundamental and non-fundamental changes or between changes that occur "within" the plan or that alter the "nature of the plan itself." Dissenting op. at 395 (Lewis, J.) (emphasis omitted). Indeed, the Legislature has made numerous prospective changes to the retirement system over the years, including the reduction of the special risk credit at issue in Florida Sheriffs. In short, as recognized by Florida Sheriffs, the preservation of rights statute accomplished something very important and significant for State employees — it precluded the Legislature from making retroactive changes to a mandatory retirement system, which were previously allowed. Certainly such a change is not "wholly illusory" as Justice Lewis's dissent contends. Dissenting op. at 395 (Lewis, J.).
Ultimately, I recognize the frustration of State employees who have in effect experienced a 3% reduction in their net pay as a result of the Legislature's changes to the retirement plan. Indeed, these changes affect judges and all judicial branch employees as well. However, this case is not a referendum on the Legislature's policy decision. It is not this Court's role to express any position on that issue. Instead, as the majority has ably done, it is this Court's task to carefully analyze and determine whether the Legislature has acted within its constitutional limits. Because Florida Sheriffs and the preservation of rights statute necessitate the conclusion that the Legislature is not constitutionally prohibited from making prospective changes to the mandatory state retirement plan, I believe it is
CANADY and LABARGA, JJ., concur.
LEWIS, J., dissenting.
I agree with Justice Perry and, in my view, this case turns in large part on the legal effect of section 121.011(3), Florida Statutes (2010). Section 121.011(3), as it existed prior to the amendment that has generated this litigation, provided:
§ 121.011(3)(a), (b) & (d), Fla. Stat. (2010). Subsection (d) was originally enacted in this same form effective October 1, 1974, see ch. 74-302, § 1, at 937, Laws of Fla., and has been continually reenacted each year since. Effective January 1, 1975, the FRS was converted to a noncontributory system. See ch. 74-302, §§ 4, 13, Laws of Fla.; § 121.071(2)(a), Fla. Stat. (1975). Prior to 2011, section 121.071 provided that contributions to the retirement system would be made only by the employers and none by the employees. The statute has meaning and must be given effect. This statutory provision, as with all others, cannot be simply ignored.
It is clear that in 1974, the Legislature changed the FRS to a mandatory, noncontributory pension system for most employees and enacted section 121.011(3)(d), the provision of critical concern. During the thirty-seven years since the adoption of the preservation of rights provision, the FRS has remained noncontributory and has provided retirees a cost-of-living adjustment throughout retirement. The foregoing statutory provisions, of legislative origin, create and establish contractual rights and obligations with regard to the employment relationship of certain workers. We cannot become involved with the wisdom or judgment in establishing these rights just as we do not evaluate the wisdom of subsequently enacting statutory provisions that may be in conflict with
Senate Bill 2100, which was passed in the 2011 legislative session and became effective July 1, 2011, changes the FRS in several pertinent respects, although most of the changes affect employees initially enrolled after the effective date of the new statute and are not challenged in this action. Two changes to the FRS made by the 2011 amendments that affect employees who were members of the FRS prior to the effective date of the enactment were challenged — the mandatory 3% contribution and the elimination of cost-of-living adjustment for service occurring after July 1, 2011, for preexisting employees. The legislation also decreases the amount employers must contribute to the FRS for the benefit of their employees by more than half for nearly every membership class.
The FRS has been operating well above the 80% funding ratio recommended by experts and according to the State Board of Administration, which is responsible for investing funds deposited in the FRS, the FRS is one of the most well-funded and healthiest public pension funds in the United States. Florida faced a serious budget shortfall of approximately $3.6 billion at the start of the 2011 legislative session. The Legislature calculated the savings to be achieved from the challenged portions of Senate Bill 2100 to be approximately $861 million.
The unrebutted expert testimony establishes that the fiscal impact on the plaintiffs ranges from $12,445.81 to $329,683.56 over the span of their working years and retirement if they receive no future raises; and that the elimination of the COLA alone will result in a 4% to 24% reduction in the plaintiffs' total retirement income. Senate Bill 2100 does not provide any increased or improved retirement benefits. There was also record evidence, unrebutted, that the Legislature's appropriations for 2011-2012 left nearly $1.2 billion in general revenue unspent for the year.
The circuit court concluded as a matter of law, and I agree, that it was required to follow the express language of section 121.011(3)(d), which cannot be read as allowing the Legislature to redefine established,
The trial court concluded, and I agree, that under State v. Gadsden County, 229 So.2d 587 (Fla.1969), the Legislature can, as part of its power to contract, authorize a contract which vests rights that a future legislature cannot impair; and the court below concluded that the Legislature did so when it adopted section 121.011(3)(d).
The challenged portions of Senate Bill 2100 impair vested contract rights, and such impairment is substantial, as considered in Pomponio v. Claridge of Pompano Condominium, Inc., 378 So.2d 774, 779-80 (Fla.1979). The facts here show the fiscal impact on individuals ranges from $12,445.81 to $329,683.56.
In Chiles v. United Faculty of Florida, 615 So.2d 671, 673 (Fla.1993), we held that before the Legislature can reduce previously approved appropriations to pay workers' salaries made pursuant to a collective bargaining agreement, there must be no other reasonable alternative means of preserving the contract with the public workers in whole or in part and the Legislature must demonstrate a compelling state interest. The State has failed to meet its burden under this test because facing a budget shortfall is not enough. The undisputed record here indicates that other reasonable alternatives existed to preserve the state's contract to the FRS, and the Legislature preserved $1.2 billion in unspent general revenue funds for the 2011-12 fiscal year. The trial court found that the Florida Legislature chose to effectuate the challenged provisions of Senate Bill 2100 in order to make funds available for other purposes. The trial court also concluded that there is no evidence that the integrity of the FRS was the basis for the Legislature's actions. The retirement benefits protected by contract, as established by the Legislature, were simply taken from our first responders, those who protect us, those who teach and protect our children and others who have provided us services every day, to be used for other purposes.
Under the Florida Constitution, the mandatory 3% contribution and the elimination of the cost-of-living adjustment violate article X, section 6, of the Florida Constitution because the requirements
The right of public employees to bargain collectively over wages, hours, and other terms and conditions of employment, which right is also constitutionally protected by article I, section 6, of the Florida Constitution, is abridged by Senate Bill 2100, which effectively removes those issues from the collective bargaining process, thereby rendering those negotiations after the fact futile. Retirement pensions and benefits are mandatory subjects of collective bargaining and include the right to effective bargaining. City of Tallahassee v. Pub. Emp. Relations Comm'n, 410 So.2d 487 (Fla.1981); Hillsborough Cty. Gov't Employees Ass'n v. Hillsborough Cty. Aviation Auth., 522 So.2d 358 (Fla. 1988). There is no legal authority authorizing the Legislature to unilaterally change a mandatory subject of collective bargaining in substantive legislation and there is no compelling state interest shown to support such action.
After the circuit court held the provisions of chapter 2011-68 (enacting Senate Bill 2100) unconstitutional on the foregoing grounds, the court then permanently enjoined the State from implementing the provisions as to individuals such as the plaintiffs, and ordered reimbursement with interest of the funds withheld from the compensation or cost-of-living adjustments of all public employees who were members of FRS prior to July 1, 2011.
No motion for rehearing was filed by the State raising a claim that the remedy was improper or that it failed to provide sufficient flexibility to the State to determine the source and timing of refunds. It might also be noted that when the State appeared at the preliminary injunction hearing early in the litigation, at the time the case was proceeding as a possible class action, the State did not indicate any special problems would arise in determining the source for a refund if a refund was ordered. Instead, the State assured the court that the refund money would be made available.
All public employees including teachers, first responders, deputies, correctional officers, nurses, and social workers who were members of the FRS prior to July 1, 2011 have had their contract rights violated. The qualitative changes to the FRS in Senate Bill 2100 that not only reduce the amount of ultimate benefits but also change the method of calculating them are entirely unlike the changes at issue in Florida Sheriffs upon which the majority relies. Florida Sheriffs simply does not govern the present case. Furthermore, because the changes in Senate Bill 2100 substantially reduce the public employees' lifetime retirement benefits, the changes constitute an impermissible retroactive impairment as a matter of law. This Court should recede from Florida Sheriffs or limit the decision to its facts because it is unsound in principle and there has been no detrimental reliance upon the decision. The Court's interpretation of the statute in Florida Sheriffs is contrary to the plain,
The Legislature asserts a view of the history of the law not argued by the State below. The only relevant legislative history from 1974 cited by the parties is the committee report cited by the public employees. See H.R. Comm. on Retirement, Personnel and Claims, Legislative Program Overview, (June 24, 1974) (available at Fla. Dep't of State, Florida State Archives). In discussing section 121.011(3)(d), the Committee stated that this section was included to "help alleviate the fears of certain members ... that once the system was made non-contributory, the Legislature would feel free to change retirement benefits since the employee was no longer contributing to the system." Regardless, the language in section 121.011(3)(d) is clear and unequivocal. The contract rights in that statute have not been limited to accrued benefits. Section 121.011(3)(d) states that the relationship between the member and the State is "contractual in nature," grants "valid contract rights" which are "legally enforceable," and cannot be "abridged in any way." This statutory language evinces an unmistakable intent to bind the state contractually.
The state action we consider today constitutes a taking of private property without compensation. The constitutional takings clause is to prevent the government from forcing some people alone to bear a burden that should be shared. The state action here constitutes a confiscation of private property of a few for a public use. The State's contention that there is no taking because the contributions "are applied to [the members'] own retirement" reflects a misunderstanding of the nature of the property rights protected under section 121.011(3)(d). This provision grants public employees enforceable rights to a noncontributory retirement plan with a COLA; thus, the taking of those rights without any offsetting benefit constitutes a taking. Even to the extent member contributions are "to be used for the members' own retirement" (which is true for the Investment Plan but not for the Pension Plan or the COLA), they do not constitute additional funds applied to the members' retirement. By eliminating the COLA, the amendments significantly reduce the retirement benefits for members of the Pension Plan. The mandatory deduction of private funds in exchange for a reduced benefit is an unconstitutional taking.
Retirement is also a mandatory subject of collective bargaining. The trial court below correctly held that article I, section 6, of the Florida Constitution requires that the Legislature not completely ignore the right to collectively bargain when passing legislation affecting retirement, an established mandatory subject of bargaining. The State's claim that the Legislature's appropriations power supersedes public employees' rights under article I, section 6, is without merit. The State's reliance on
This Court's decisions hold that legislative enactments, including those involving appropriations, are limited by article I, section 6. Article I, section 6, guarantees the right to effective collective bargaining. The trial court correctly recognized that there can be no effective bargaining only after the fact where, as here, the Legislature has unilaterally predetermined the term or condition through statute, rendering any subsequent negotiations futile. The Legislature has the power to make policy affecting subjects of negotiations, but it does not have the power to unilaterally amend the law that effectively excuses negotiation altogether.
PERRY, J., dissenting.
I respectfully dissent. In my view, the challenged provisions of chapter 2011-68, Laws of Florida, amount to an insufferable and unconstitutional "bait and switch" at the expense of public employees who were members of the Florida Retirement System (FRS) prior to July 1, 2011.
The preservation of rights statute has provided since its inception that
See § 121.011(3)(d), Fla. Stat. (1974); § 121.011(3)(d), Fla. Stat. (2012); ch. 74-302, § 1, at 937, Laws of Fla. The Legislature could not have been more clear. The statute's plain meaning is that state employees have a contractual right to a noncontributory retirement system that cannot be abridged. See art. 1, § 10, Fla. Const. ("No ... law impairing the obligation of contracts shall be passed.").
"[W]hen the language of the statute is clear and unambiguous and conveys a clear
After improperly considering that case law, the Court in Florida Sheriffs held that the preservation of rights statute "vests all rights and benefits already earned under the present retirement plan so that the legislature may now only alter retirement benefits prospectively," and that the statute "was not intended to bind future legislatures from prospectively altering benefits which accrue for future state service." Id. at 1037 (emphasis in original). In so doing, the Court violated the plain meaning rule and read into the preservation of rights statute words and concepts that simply are not there. The present majority repeats and compounds this error.
The Court in Florida Sheriffs erroneously buttressed its flawed holding by stating that "[t]o hold otherwise would mean that no future legislature could in any way alter future benefits of active employees for future services, except in a manner favorable to the employee. This view would, in effect, impose on the state the permanent responsibility for maintaining a retirement plan which could never be amended or repealed irrespective of the fiscal condition of this state." 408 So.2d at 1037. That is a misstatement of the law. As recognized by the present majority, where, as here, the contract at issue is with a governmental entity, "an impairment may be constitutional if it is reasonable and necessary to serve an important public purpose." Majority op. at 385 (quoting U.S. Trust Co. of New York v. New Jersey, 431 U.S. 1, 25, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977)).
This is the test that the Court in Florida Sheriffs should have applied, but it failed to do so. By way of contrast, this Court properly applied this test in Chiles v. United Faculty of Florida, 615 So.2d 671, 673 (Fla.1993), recognizing that, while severely limited, the Legislature has the "authority to change the law to eliminate a contractual obligation it has itself created" and "must be given some leeway to deal with bona fide emergencies." Citing U.S. Trust, this Court held that,
Id. Properly applying this test in Florida Sheriffs would have surely led this Court to conclude that the statute at issue in that case unconstitutionally impaired state employees'
In short, the Court in Florida Sheriffs applied the wrong tenets of statutory construction and the wrong legal test to reach the wrong result. I would therefore recede from Florida Sheriffs.
Alternatively, and at the very least, I would find Florida Sheriffs to be distinguishable and limited to its facts. In that vein, I agree with Circuit Court Judge Jackie L. Fulford's ruling on this issue, which I find to be correct and deserving of recitation here:
Williams v. Scott, 19 Fla. L. Weekly Supp. 475b, 477, 2012 WL 1379453 (Fla.2d Cir. Ct. Mar. 6, 2012) (emphasis in original). I further agree with Judge Fulford's conclusion that the proper remedy is for the State "to reimburse with interest the funds deducted or withheld, pursuant to the challenged provisions ... from the compensation or cost-of-living adjustments [of] employees who were members of the FRS prior to July 1, 2011." Id. at 478.
LEWIS and QUINCE, JJ., concur.