Change in Pension Contributions Challenged in Alabama

Today’s burning question: Can a city unilaterally increase the amount that firefighters pay each week toward their pension while reducing their own contribution by the same amount?

That is the issue in a case filed Thursday in Federal District Court in Gadsden, Alabama by seven members of the Gadsden Fire Department. On August 23, 2011 the City Council of Gadsden voted to increase the firefighters’ pension contributions from 6% of their salary to 8.25%, and reduce the city’s contribution.

The suit alleges that the city’s action violates the U.S. Constitution and the State of Alabama’s constitution by being an “unlawful impairment of contractual obligations.” The so-called contact clause states:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

With the key language being

No State shall … pass any … Law impairing the Obligation of Contracts

As interpreted, the Contract Clause prohibits a state, or political subdivision of a state, from retroactively changing a contractual right through a legislative act. The firefighters allege that because they were vested members of the state pension system the city’s decision to increase their contribution is unconstitutional.

The plaintiffs- Joe Taylor, Jeff Mayben, Lecil Harrelson, Jeff Morris, John A. Colvert, David Putman and Derrick Sherrill – are seeking class action status and are represented by Birmingham attorney Raymond Fitzpatrick.

Here is a copy of the complaint. Gadsden Complaint

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