Brief of Appellants FRS and Local 73

8/12/2019 Brief of Appellants FRS and Local 73

1/131

Appeal No. ED100209

IN THE MISSOURI COURT OF APPEALSEASTERN DISTRICT

The Firemens Retirement System of St. Louis, et al.Plaintiffs/Appellants,

vs.

The City of St. LouisDefendant/Respondent

________________________________________________________________________

Appeal from the Circuit Court of City of St. LouisState of Missouri

The Honorable Robert H. DierkerCause No: 1222-CC02916

Consolidated with 1322-CC00006

JOINT BRIEF OF APPPELLANTS

By: /s/ Richard A. BarryRichard A. Barry, Esq., #255921750 South Brentwood Blvd., Suite 295St. Louis, MO 63144(314) 918-8900E-mail: [email protected] FOR APPELLANTS

INTERNATIONAL ASSOCIATION

OF FIRE FIGHTERS LOCAL 73,

et al.

By: /s/ Kara D. Helmuth

DANNA MCKITRICK, P.C.Daniel G. Tobben, #24219Kara D. Helmuth, #621837701 Forsyth Blvd., Suite 800St. Louis, MO 63105-3907(314) 726-1000/(314) 725-6592 faxE-Mail: [email protected]

[email protected] FOR APPELLANTS

THE FIREMENS RETIREMENT

SYSTEM OF ST. LOUIS


2/131

i

TABLE OF CONTENTS

TABLE OF CONTENTS............................................................................................................ iTABLE OF AUTHORITIES..................................................................................................... viiSTATEMENT OF FACTS......................................................................................................... 1I. Firefighter Membership in FRS and Operation of the Plan ............................................ 1II. Citys Ordinances, Creation of FRP, and Procedural History of First Trial................. 4

III. Board Bill 109 and the Dual Plan System .................................................................... 8III. Trial Courts Judgment................................................................................................ 12POINTS RELIED ON............................................................................................................. 19ARGUMENT........................................................................................................................ 24I. The Trial court erred in declaring Board Bill 109 valid andconstitutional, because the Trial Court erroneously concluded that the City

could enact a pension plan for its firefighters, without any statutory

authorization, based upon its home rule powers, in that a) Article VI 25 of

the Missouri Constitution prohibits cities from granting public money to

private individuals, except that the general assembly may authorize; b)

Article VI, 19(a) of the Missouri Constitution does not grant the City the

authority to ignore permissive enabling legislation and enact conflicting

ordinances, and c) the provisions of 87.120 R.S.Mo.et seq.demonstrate an

intent by the state to pre-empt the City from adopting a pension plan


3/131

ii

except in conformance with its provisions..................................................................... 24A. Standard of Review ........................................................................................... 25

B. Article VI, 25 of the Missouri Constitution .................................................... 26C. Home Rule Authority ........................................................................................ 28D. Permissive Nature of Chapter 87.120 R.S.Mo. et seq.and Limitations on theCitys Authority......................................................................................................... 33E. Pre-Emption of the Field by the Missouri General Assembly .......................... 37

II. The Trial Court erred in declaring Board Bill 12 as amended byBoard Bill 109 valid, and that the City had authority to effectively amend

Chapter 4.18 RCC (which established and governs FRS) without the

General Assembly first amending the enabling statutes, 87.120 R.S.Mo. et

seq., because under Article VI 19(a) of the Missouri Constitution the City

may not adopt an ordinance in conflict with state statute on the same

subject matter and the amendments to Chapter 4.18 by Board Bill 109 fail

to conform to the enabling statutes, in that Board Bill 109 a) violates the

exclusivity clause contained in 87.130 R.S.Mo. [4.18.020 RCC] with

respect to years of service and contributions; b) violates 87.250 R.S.Mo.

[4.18.220 RCC], which provides that all firefighters shall receive benefits

as provided by sections 87.120 to 87.370; c) improperly amends the

definition of average final compensation as set forth in 87.120(3) R.S.Mo.

[4.18.010(C) RCC]; d) improperly amends the definition of membership


4/131

iii

service and creditable service to include a cut-off of accrual as of February

1, 2013 contrary to 87.120(8) and (14) R.S.Mo. [4.18.010(G, M) RCC];

and e) the Trial Courts fiction of the Citys reservation of the right to

terminate FRS is not found in Chapter 87.120 R.S.Mo. et seq.at all or

even in Chapter 4.18 RCC, which only reserves the right to repeal or

amend FRS....................................................................................................................... 41A. FRS and the Newly Created FRP.................................................................. 43

B.

Case law is clear that to amend FRS the City must first have enabling legislation

passed by the Missouri General Assembly. ............................................................... 43C. Conflicts Between Chapter 4.18 RCC and Board Bill 109 or ImplicitAmendments of the Same........................................................................................ 46D. The Trial Courts Fiction of Termination is Not Based on Chapter 4.18 RCCor 87.120 R.S.Mo. et seq......................................................................................... 59

III. The Trial Court erred in declaring Board Bill 109 valid andconstitutional because the Trial Courts declaration was based upon the

erroneous conclusion that requiring adoption of enabling statutes as a

pre-requisite to the City amending or terminating FRS would violate

Article VI, 22 of the Missouri Constitution in that: a) such conclusion

misconstrues Article VI, 22 and is contrary to governing precedent; and b)

87.120 R.S.Mo. et seq. does not violate Article VI, 22 of the Missouri

Constitution as the City was not required by 87.120 R.S.Mo. et seq. to


5/131

iv

enact any pension plan for City firefighters.................................................................. 70A. Article VI, 22 is not violated by holding that it authorizes the City to enact only

one pension system. ................................................................................................... 71B. The power of City to be free from state legislative interference is not as great asthe City or Trial Court would like it to be, and the Trial Courts ruling was erroneous

on this point. .............................................................................................................. 73IV. The Trial Court erred in declaring Board Bill 109 valid andconstitutional because Board Bill 109 impairs the contractual rights of all

firefighter members of FRS, including those with over twenty years of

service as of the effective date of Board Bill 109, and beneficiaries, in

contravention of Article I 13 of the Missouri Constitution and Article I

10 of the United States Constitution, in that a) the Trial Courts

conclusion that the Contracts Clauses prohibit only impairment of

contractual rights of firefighters for services rendered by them prior to the

effective date of a change in benefits, such that benefits for all firefighters,

even those who are vested under the terms of the plan, could be reduced on

a prospective basis is incorrect as a matter of law; b) Board Bill 109

removes the Citys ultimate guarantee for the payment of benefits due to

firefighters upon retirement, or to their beneficiaries, as provided under

Chapter 4.18 RCC, and instead limits the Citysliability for the payment of

benefits to the assets in FRP; c) Board Bill 109 requires a 9%


6/131

v

nonrefundable contribution to FRP when a firefighter exits the DROP

program and resumes regular status for accruing service time; and d)

divests firefighters of contractual rights to benefits based upon

compensation paid or service rendered after the effective date of an

amendment that reduces future benefits. ...................................................................... 75A. Contracts Clause Framework ............................................................................ 77B. The terms of Chapter 4.18 constitute a contract between the City and the

Retirees and Members of FRS. .................................................................................. 79

C. Board Bill 109 constitutes a significant impairment of the contractual rights ofFRS Member and Beneficiaries ................................................................................. 85D. Significant and Legitimate Public Purpose and Reasonableness of the

Adjustment................................................................................................................. 90E. The Trial Courts reasoning that the Contracts Clauses only operate in the past

and not the future is erroneous as a matter of law, and ruling that Board Bill 109 is

valid on that basis was in error. ................................................................................. 91V. The Trial Court erred in declaring Board Bill 109 valid and

constitutional because Board Bill 109 impairs the contractual rights of

firefighters with less than twenty years of service, in contravention of

Article I 13 of the Missouri Constitution and Article I 10 of the United

States Constitution, in that these firefighters have already contributed

substantial service to the City at least partially in reliance on the pension


7/131

vi

benefits as provided by Chapter 4.18, and in that Board Bill 109 a) requires

firefighters to contribute 9% of their salary on a non-refundable basis to

FRP instead of 8% of salary on a refundable basis to FRS and b) applies an

actuarial reduction to service rendered after the effective date of Board Bill

109 if the firefighter retires before age 55, as compared to FRS which

provides that a firefighter could retire with 20 years of service, regardless

of age, without a reduction in benefits. .......................................................................... 96A. Vesting and Protection of Benefits for Firefighters with Less than 20 Years ofService ....................................................................................................................... 97B. Trial Courts Reasoning is Erroneous............................................................. 107C. Unreasonable Reduction in Benefits for Those Firefighters with Less than 20

Years of Service....................................................................................................... 110

CONCLUSION.................................................................................................................... 113CERTIFICATE OF COMPLIANCE......................................................................................... 115CERTIFICATE OF SERVICE................................................................................................ 116

ABBREVIATIONS USED THROUGHOUT THIS APPELLANTSBRIEF

A Appendix

LFLegal File

STr Supplemental Transcript

Tr Transcript


8/131

vii

TABLE OF AUTHORITIES

CASES

Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978) .................................... 78, 90

Alumax Foils, Inc. v. City of St. Louis,

959 S.W.2d 836 (Mo.App. E.D. 1998) ................................................. 35, 36, 37, 38

American Federation of State, County and Municipal Employees

v. City of Benton, Arkansas, 513 F.3d 874 (8th Cir. 2008) ............ 77, 78, 79, 90, 91

Atchison v. Retirement Board of the Police Retirement System

of Kansas City, 343 S.W.2d 25 (Mo. 1960) ........................................................... 44

Bakenhus v. City of Seattle,

296 P.2d 536 (Wash. banc 1956) ........................................................... 23, 101, 102

Baker v. Retirement Board of Allegheny County,

97 A.2d 231 (Pa. 1953)......................................................................................... 104

Bender v. Anglin, 60 S.E.2d 756 (Ga. 1950) ................................................................... 103

BHA Group Holding, Inc. v. Pendergast, 173 S.W.3d 373

(Mo.App. W.D. 2005) ...................................................................................... 54, 55

Burlington Fire Fighters Assoc. v. City of Burlington,

543 A.2d 686 (Vt. 1988)................................................................................. 82, 103

Cape Motor Lodge, Inc. v. City of Cape Girardeau,

706 S.W.2d 208 (Mo. banc 1986) ........................................................ 30, 38, 65, 66

Chicago, Rock Island & Pacific Ry. Co. v. Swanger,

157 F. 783 (W.D.Mo. 1908) ................................................................................... 93


9/131

viii

Citizens Bank and Trust Co. v. Director of Revenue, State of Mo.,

639 S.W.2d 833 (Mo. banc 1982) .......................................................................... 55

City of Springfield v. Belt, 307 S.W.3d 649 (Mo. banc 2010) .......................................... 30

City of St. Louis v. State, 382 S.W.3d 905 (Mo. banc 2012) ....................................... 21, 73

Civil Service Commnof City of St. Louis v. Members of Bd. of Aldermen

of the City of St. Louis, 92 S.W.3d 785 (Mo. banc 2003) .......................... 21, 71, 73

Cloutier v. State, 42 A.3d 816 (N.H. 2012) .......................................... 23, 82, 101,102, 103

Denbow v. State, 309 S.W.3d 831 (Mo.App. W.D. 2010) .......................................... 55, 56

Educ. Employees Credit Union v. Mutual Guarantee Corp.,

50 F.3d 1432 (8th Cir. 1995) .................................................................................. 78

Edwards v. City of Ellisville,

2013 WL 5913628 (Mo.App. E.D. 2013) .................................................. 67, 68, 69

Energy Reserves Group, Inc. v. Kansas Power and Light Co.,

459 U.S. 400 (1983) ................................................................................... 77, 78, 90

Ewing v. Miller, 335 S.W.2d 154 (Mo. 1960) ................................................................... 95

Firemens RetirementSystem of St. Louis v. City of St. Louis ,

754 S.W.2d 21 (Mo.App. E.D. 1988) ................................................... 20, 36, 44, 46

Firemens Retirement System v. City of St. Louis, Missouri,

789 S.W.2d 484 (Mo. banc 1990) ................................................. 19, 21, 27, 44, 72

Firemen's Retirement System v. City of St. Louis,

ED86921, 2006 WL 2403955 (Mo. Ct. App. Aug. 22, 2006) .......................... 45, 62


10/131

ix

Fraternal Order of Police v. City of St. Joseph,

8 S.W.3d 257 (Mo.App. W.D. 1999) ................................................... 108, 109, 110

Gates v. City of Springfield, 744 S.W.2d 487 (Mo.App. S.D. 1988) .......................... 66, 67

Gen. Motors Corp. v. Romein, 503 U.S. 181 (1992) ......................................................... 78

George v. Brewer, 62 S.W.3d 106 (Mo.App. S.D. 2001) ................................................. 95

Halpin v. Nebraska State Patrolmens Retirement System,

320 N.W.2d 910 (Neb. 1982) ....................................................................... 101, 103

Hickey v. Pension Bd. of City of Pittsburgh,

106 A.2d 233 (Pa. 1954)....................................................................... 104, 105, 106

Home Builders Association of Greater St. Louis, Inc. v.

City of Wildwood, 32 S.W.3d 612 (Mo.App. E.D. 2000) ...................................... 95

In Interest of L.W.R., 818 S.W.2d 727 (Mo.App. 1991) ................................................... 26

Kansas City v. Brouse, 468 S.W.2d 15 (Mo. banc 1971) ...................................... 12, 31, 32

Kemmerer v. ICI Americas Inc., 70 F.3d 281 (3d. Cir. 1995) ......................................... 108

Klamm v. State ex rel. Carlson, 125 N.E.2d 487 (Ind. 1955) ......................................... 100

Levinson v. City of Kansas City,

43 S.W.3d 312 (Mo.App. W.D. 2001) ......................................... 19, 30, 34, 35, 108

Missouri Prosecuting Attorneys v. Barton County,

311 S.W.3d 737 (Mo. banc 2010) .......................................................................... 70

Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976) ........................................................ 25

Olson v. Cory, 636 P.2d 532 (Cal. 1980) .................................................................. 82, 103


11/131

x

Oregon State Police Officers Assn v. State of Oregon,

918 P.2d 765 (Ore. 1996) ..................................................................... 22, 82, 83, 94

Pearson v. Koster, 367 S.W.3d 36 (Mo. banc 2012) ........................................................ 25

Police Pension & Relief Board of City & County of Denver v. Bills,

366 P.2d 581 (Colo. banc 1961) ................................................................... 103, 106

Pyle v. Webb, 489 S.W.2d 796 (Ark. 1973) .................................................................... 105

Rothschild v. State Tax Commission of Missouri,

762 S.W.2d 35 (Mo. banc 1988) ............................................................................ 55

Sanders v. City of St. Louis, 303 S.W.2d 925 (Mo. 1957) ................................................ 32

Singer v. City of Topeka, 607 P.2d 467 (Kan. 1980) ................................. 82, 101, 103, 104

Snow v. Abernathy, 331 So.2d 626 (Ala.1976) ............................................................... 103

Southgate Bank and Trust Co. v. May,

696 S.W.2d 515 (Mo.App. W.D. 1985) ................................................................. 26

Southwestern Bell Yellow Pages, Inc. v. Director of Revenue,

94 S.W.3d 388 (Mo. banc 2002) ............................................................................ 55

Springfield Ry. Co. v. City of Springfield, 85 Mo. 674 (Mo. 1885) .................................. 93

State ex inf. Hanna ex rel. Christ v. City of St. Charles,

676 S.W.2d 508 (Mo. banc 1984) .......................................................................... 30

State ex rel. Breshears v. Missouri State EmployeesRetirement System,

362 S.W.2d 571 (Mo. banc 1962) .............................................................. 22, 81, 93

State ex rel. Dreer v. Public School Retirement System of the City of St. Louis,

519 S.W.2d 290 (Mo. 1975) ........................................................................... 23, 100


12/131

xi

State ex rel. Kansas City v. Public Service Commn,

524 S.W.2d 855 (Mo. banc 1975) .......................................................................... 79

State ex rel. Phillip v. Public School Ret. Sys. of City of St. Louis,

262 S.W.2d 569 (Mo. banc 1953) ............................................ 22, 23, 78, 79, 80, 81

.................................................................................................... 93, 98, 99, 108, 109

State ex rel. Sunshine Enterprises of Missouri, Inc. v. Bd. of Adjustment

of City of St. Ann, 64 S.W.3d 310 (Mo. banc 2002) ............................................... 25

State v. Miller, 50 Mo. 129 (Mo. 1872) ............................................................................. 93

Sylvestre v. State, 214 N.W.2d 658 (Minn. 1973) ................................................... 103, 106

TDV Transp., Inc. v. Keel, 966 S.W.2d 347 (Mo.App. E.D. 1998) .................................. 95

Teson v. Vasquez, 561 S.W.2d 119 (Mo.App. E.D. 1977) ................................................ 26

Trantina v. Bd. of Trs. of the Firemens Ret. Sys.,

503 S.W.2d 148 (Mo. App. 1973) .......................... 7, 20, 36, 41, 44, 45, 62, 63, 108

Wagoner v. Gainer, 279 S.E.2d 636 (W.Va. 1981) ................................................ 103, 105

Washington Assn of County Officials v. Washington Public

Emp. Ret. Sys. Bd., 575 P.2d 230 (Wash. banc 1978) .......................................... 101

Wehmeier v. Public School Retirement System of Missouri,

631 S.W.2d 893 (Mo.App.E.D. 1982) .............................................................. 22, 81

UNITED STATES CONSTITUTION

Article I, 10 ................................................................................................................ 75, 77

MISSOURI CONSTITUTION

Article I, 13 ................................................................................................................ 75, 77


13/131

xii

Article VI, 19 ............................................................................... 20, 28, 29, 32, 60, 62, 66

Article VI, 22 ................................................................................................. 21, 71, 72, 73

Article VI, 25 ....................................................................................................... 19, 26, 72

REVISED STATUTES OF MISSOURI

71.010 ................................................................................................................................ 30

87.170 to 87.175 .................................................................................................................. 2

87.005 ................................................................................................................................ 59

87.006 ................................................................................................................................ 59

87.120 .................................................................................................................... 32, 57, 58

87.125 ............................................................................................ 19, 24, 26, 33, 64, 65, 68

87.130 .................................................................................. 1, 20, 48, 60, 65, 68, 83, 84, 85

87.135 ................................................................................................................................ 58

87.170 .............................................................................................................. 2, 53, 65, 111

87.175 .......................................................................................................................... 65, 88

87.177 .............................................................................................................................. 104

87.182 .................................................................................................................................. 2

87.195 to 87.220 ................................................................................................................ 58

87.250 .................................................................................................................. 84, 86, 110

87.295 .................................................................................................................... 2, 88, 111

87.360 ...................................................................................................................... 2, 85, 87

95.540 ................................................................................................................................ 39

105.691 ............................................................................................................................ 104


14/131

xiii

169.430 .............................................................................................................................. 80

577.023 .............................................................................................................................. 55

REVISED CITY CODE

4.18.010 ....................................................................................................... 2, 57, 58, 84, 86

4.18.015 ............................................................................................................................... 1

4.18.020 ........................................................................................... 1, 47, 48, 54, 83, 84, 85

4.18.030 ........................................................................................................................... 107

4.18.050 ............................................................................................................................. 58

4.18.055 ............................................................................................................................... 1

4.18.120 ........................................................................................................... 2, 53, 84, 111

4.18.130 ................................................................................................................. 2, 88, 110

4.18.131 ....................................................................................................................... 2, 111

4.18.210 ............................................................................................................................... 2

4.18.220 ................................................................................................... 57, 84, 85, 86, 110

4.18.260 ............................................................................................................. 2, 4, 88, 110

4.18.325 ............................................................................................................. 2, 84, 85, 94

4.18.345 ................................................................................................... 60, 61, 62, 63, 107

4.18.385 ..................................................................................................................... 87, 110

4.18.145 to 4.18.270 .................................................................................................... 58, 86

4.19.010 ............................................................................................................. 9, 12, 29, 52

4.19.020 ..................................................................................................................... 52, 111

4.19.030 ................................................................................................................... 5, 9, 110


15/131

xiv

4.19.040 ............................................................................................................................. 52

4.19.060 ................................................................... 5, 9, 52, 76, 88, 89, 107, 110, 111, 112

4.19.070 ....................................................................................................................... 59, 92

4.19.080 ............................................................................................................................... 9

4.19.120 ....................................................................................................................... 11, 87

4.19.140 ............................................................................................................................. 89

4.19.160 ........................................................................................................... 10, 11, 86, 87

4.19.170 ................................................................................................................. 11, 87, 94

BOARD BILL

Board Bill 109 1 .................................................................................................... 8, 43, 62

Board Bill 109 2 ........................................................................ 8, 9, 52, 53, 57, 58, 59, 85


16/131

1

STATEMENT OF FACTS

In 1959 the Missouri General Assembly adopted 87.120 R.S.Mo. et seq.

authorizing the City of St. Louis (City) to establish a pension system for its firefighters

according to the specific provisions and requirements of that enabling legislation.

4.18.015 RCC(A252) In 1960, the City, by ordinance, created the Firemens Retirement

System (FRS) pursuantto that enabling legislation, which is codified in Chapter 4.18 of

the Revised Code of the City of St. Louis. (RCC) 4.18.015 RCC(A252)

Plaintiffs in this case are the Firemens Retirement System of St. Louis (FRS) and

its duly appointed Board of Trustees. (LF19) The Board of Trustees consists of two

mayoral appointees, the comptroller ex officio, the chief of the fire department ex officio,

three active firefighters elected by the membership, and one retired firefighter elected by

the retired firemen of the City. 4.18.055 (A253) Plaintiff-Intervenors are the

International Association of Fire Fighters Local 73 (IAFF Local 73), three individual

active firefighters and one retired firefighter. (LF538-539) This brief is filed on behalf of

all Plaintiffs and Plaintiff-Intervenors.

I. Firefighter Membership in FRS and Operation of the Plan

Pursuant to the terms of Chapter 4.18 RCC, firefighters must belong to FRS as a

condition of their employment with the City. 4.18.020 RCC; 87.130 R.S.Mo. (A252) As

part of firefighters orientation, which occurs after they are hired but early in their training,

FRS staff or Trustees make presentations to the firefighters, which includes information

concerning FRS and the benefits provided to firefighters under it. (Tr.Vol.I, pg. 252,

258-259, 275-276; STr.73-74) Firefighters are given a copy of the enabling legislation and


17/131

2

the implementing ordinances, and must sign the registry at FRS confirming their

membership and participation in FRS as a condition of their employment. (Ex5, Ex30;

Tr.Vol.I, pg. 18, 252, 385, 394-395; S.Tr. 71, 73-74, 83; STr. 73-74)

St. Louis firefighters have been required to contribute 8% of their salary on a

post-tax basis to FRS throughout their careers as a condition of employment, which helps

fund their retirement from FRS. 4.18.260 RCC; 87.295 R.S.Mo.(A268)

In the absence of disability, a firefighter must work a minimum of 20 years in order

to be vested in the pension benefit provided by FRS. 4.18.120 RCC and 87.170 R.S.Mo.

(A256; STr 71) Firefighters who retire with 20 years or more of service receive a pension

plus a return of contributions without interest. 4.18.120, 4.18.130 RCC (A256-257);

87.170 - 87.175 R.S.Mo. After 20 years, a firefighter may accrue additional benefits in the

DROP plan. 4.18.131 RCC (A257) 87.182 R.S.Mo. Any firefighter who terminates

employment prior to 20 years receives a return of his contributions, plus interest, in lieu of

receiving any type of annuity benefit under FRS. 4.18.010(A) and 4.18.210 RCC (A251,

267). All benefits under FRS are made obligations of the City. Specifically, 4.18.325

RCC provides that the payment of all benefits granted under the provisions of this chapter

are hereby made obligations of the City. 4.18.325 RCC (A270);87.360 R.S.Mo.

Any rights accrued under FRS cannot be transferred to a different retirement plan,

even if the firefighter goes to work for another fire department, or in some other job or

capacity for the City of St. Louis. (STr 21) Firefighters do not pay into or receive benefits

from Social Security for their work for the St. Louis Fire Department. (Ex. 29; Tr. Vol. I,

pg. 21; A39) Thus, the pension benefits are the firefighters safety net. (STr. 72 "So my


18/131

3

whole life my whole retirement plans are based on the pension benefits I have been

promised when I was employed. My contribution return, my multiplier, DROP plan. I

mean that's what's going to make or break me in my retirement.").

As noted by firefighter Jeffrey Glorioso, who had previously worked as an EMT in

the City (and was a member of the Employees Retirement System), he compared the FRS

plan to other municipalitiespension plans, and relied on the FRS plan in accepting a job

with the St. Louis Fire Department. (STr. 70-71) Firefighter Brian Doane testified that

when he first began working at the Department, he was told the pension "was backed by

law" and it was implied that the pension benefits were guaranteed. (Tr.Vol.I 276) The

firefighters relied on these benefits throughout their employment at the St. Louis Fire

Department. (STr. 74-75 "I have considered employment in some of the other surrounding

fire departments that have higher pay, but based on calculations of what pension benefits

would be at those places compared to where I am now, my decisions were that it was in my

best interest to stay with the St. Louis Fire Department in the current pension plan I am in

rather than start over elsewhere."). While the Trial Court did not find that any firefighter

relied on the existence or continuation of FRS in accepting employment with the City,

[t]he Court [did]find that some firefighters have elected to remain in the City service,

instead of seeking other employment, in part due to the pension benefits under FRS.

(A39)


19/131

4

II. Citys Ordinances, Creation of FRP, and Procedural History of First Trial

On May 8, 2012, the City enacted Ordinance 69143 (Board Bill 270)1, which

purported to conditionally repeal the provisions of all ordinances governing the FRS and to

freeze benefits under FRS, upon the adoption of a successor plan. (A39, 69-70)

On July 21, 2012 the City enacted Ordinance 69183 (Board Bill 11), which

amended 4.18.060 RCC regarding the powers and duties of the FRS Trustees. (A39-40) It

stated, the Board of Trustees [of FRS] shall have no duty or authority to contest or

challenge actions taken by the City with respect to the establishment, design, amendment

or termination of the FRS, or any other action taken by the City in its capacity as settlor of

the FRS or employer of plan members; and shall not authorize the expenditure of any assets

of the FRS to fund any such contests or challenge. (A76) Board Bill 11 also contained an

emergency clause which made it immediately effective upon the signature of the Mayor.

(A77)

On July 29, 2012, the City enacted Ordinance 69245 (Board Bill 12), which created

the Firefighters Retirement Plan (FRP), which purported to be the successor plan

referenced in Board Bill 270, and which adopted a comprehensive substitute pension plan

for City firefighters. (A40) Board Bill 12 transferred all members of FRS into FRP and

required a 9% non-refundable contribution to FRP after the effective date of the ordinance.

1Appellants recognize that all Board Bills were enacted as Ordinances. However, the

ordinances were primarily referenced at trial by their corresponding board bill numbers,

and Appellants will do the same here.


20/131

5

Board Bill 12, 4.19.030(B) 4.19.060(C) (A90, 97) It also applied an actuarial reduction

to benefits for post-effective date service for all firefighters who retired prior to age 55.

Board Bill 12, 4.19.060(D) (A97-98)

Board Bill 12 provided for the merger of the assets of FRS into FRP, with the same

individuals who were trustees of FRS to serve as trustees of FRP. (A40, 84-85) It

contained similar language as contained in Board Bill 11 regarding the duties of the FRP

Trustees, and made the Trustees liable to the City for any damages to, or expense incurred

by, the City as a result of any action by the Board of Trustees in contravention of this

paragraph. (A135) The terms of Board Bill 12 were to be codified as Chapter 4.19 RCC.

(A40)

On June 12, 2012, before Board Bills 11 and 12 were signed into law by the Mayor

of the City and became effective, FRS and its Trustees filed suit against the City under

cause number 1222-CC02916, seeking an injunction to halt enforcement of the ordinances

and a declaration from the Trial Court that Board Bills 270, 11 and 12 were

unconstitutional, as the City does not have authority to repeal Chapter 4.18 and enact

ordinances conflicting with 87.120 R.S.Mo. et seq.; Board Bills 270 and 12 violate the

constitutionally protected contractual rights of firefighters; and Board Bill 11 violated the

City Charter, the federal and Missouri Contracts Clauses, and the open courts provision of

Article I, 14 of the Missouri Constitution. (LF18-53)

On July 6, 2012, the Trial Court granted a preliminary injunction enjoining the

enforcement of Board Bill 11 in part. (A40; LF170-174) Specifically, the Trial Court

found that FRS and its Board of Trustees must have the ability to seek a declaratory


21/131

6

judgment from the court when the duties of the system and its board are altered or

materially affected by the action of the City, and the balance of hardships and the public

interest favored not placing the Trustees in the Hobsons choice of terminating the

litigation or continuing it at their own expense. (A172-173) Therefore, the Trial Court

ordered that the City was preliminarily enjoined from enforcing the provisions of Board

Bill 11 that would prohibit plaintiffs from proceeding with this action at the expense of the

retirement system. (LF174)

A hearing was held on FRS and Plaintiff-Intervenors Motion for Temporary

Restraining Order on August 21, 22, 24, and 27, 2012 with respect to Board Bill 12 and 270.

(Tr.Vol.I) Before Board Bill 12 became effective, a consent temporary restraining order

was entered by the parties on August 24, 2012 enjoining the enforcement of Board Bills 12

and 270 until October 1, 2012. (LF567)

The Trial Court entered a preliminary injunction with respect to Board Bills 12 and

270 on September 28, 2012. (LF586-615) Parts of this preliminary injunction were later

incorporated by reference into the Trial Courts final judgment in this case, and will be

more fully set forth below. (A52) Briefly, the Order prohibited the enforcement of Board

Bill 12 because the Trial Court found that firefighters with over 20 years of service in FRS

on the effective date had a contractual right to their pension benefits, which was

substantially impaired by the merger or transfer of assets from FRS to the new plan,

without a corresponding unqualified obligation of the City to fund accrued and vested

benefits; and the alteration of the deferred retirement option plan (DROP) to the


22/131

7

disadvantage of firefighters with 20 years service who have not attained the age of 55.

(A29)

In the Citys Post Hearing Brief Regarding the Ending of the Current

Firefighters[sic] Pension Plan, the City stated that the reason it did not simply freeze

benefits accrued in FRS and enact a new plan for future accruals (the dual plan option),

was:

The dual plan option, however, would have required the City to only repeal

certain sections of the Current Plan, leaving in place those provisions

necessary for it to meet its obligations to fund the already accrued benefits

and for the plan to be administered with respect to those accrued benefits.

Nothing in Chapter 4.18 suggests the Citys right to effect such a partial

repeal. Nor do any of the opinions of the Supreme Court of Missouri or the

Missouri Court of Appeals construing the Current Plan suggest that partial

repeal is a permissible option. This is especially so because a partial repeal

could be viewed as an amendment to the Current Plan, not permitted by

Chapter 87 R.S.Mo., rather than a repeal of the Current Plan. See, e.g.,

Trantina v. Bd. of Trs. of the Firemens Ret. Sys., 503 S.W.2d 148, 152-53

(Mo. App. 1973) (noting in dicta that amendments to the Current Plan that

change benefits must be in accordance with Chapter 87 R.S.Mo.).

(LF571)


23/131

8

After additional evidence was heard by the Trial Court on October 22, 2012 the

Trial Court closed the evidence in the case, but stated that the City [would] be permitted to

petition to reopen the record if Board Bill 12 [was] amended. (See, STr; LF632)

III. Board Bill 109 and the Dual Plan System

Relying in part on the Trial Courts preliminary injunctionorder, the City enacted

Ordinance 69353 (Board Bill 109) on September 28, 2012, which amended Board Bill 12

in several significant respects. (Hereinafter Board Bill 12 as amended by Board Bill 109

will collectively be referred to as Board Bill 109; A40) Board Bill 109 repealed the

conditional repeal of the FRS ordinances contained in Board Bill 270 and repealed the

provisions of Board Bill 12, which provided for the merger of FRS plan assets into FRP.

(A41)

The City preemptively filed a counterclaim under cause number 1222-CC02916

asking the Trial Court to declare Board Bill 109 valid and constitutional. (LF637-641)

Plaintiffs and Plaintiff-Intervenors also filed suit claiming the invalidity of Board Bill 109

on January 2, 2013 under cause number 1322-CC00006. (LF669) The two cases were then

consolidated on January 3, 2013. (LF938)

Under Board Bill 109, Chapter 4.18 RCC continues in existence, as does FRS.

Board Bill 109, 1-2 (A176-178) Board Bill 109 made FRP into a wrapplan, where

FRS benefits are frozen as of February 1, 2013, and all benefits due to future service and

salary increases will be accrued under FRP. Board Bill 109, 2(A-C) (A176-178) Kim

Nicholl, the Citys expert actuary, explained the dual system this way: [t]he benefits that

have accrued to date, based on service and salary as of the effective date of Board Bill 109,


24/131

9

will be paid from FRS. Any future accruals, including future salary increases on behalf of

service already rendered, will be paid from FRP. (Tr. Vol. III, pg. 41-42) Board Bill 109

states that [t]he benefit accrued under this plan is earned only because of years of service

after the Effective Date (although vesting, eligibility for retirement, and the rate of accrual

for benefits attributable to years of service after the Effective Date is based on total years of

service as a firefighter with the City of St. Louis.) Board Bill 109, 4.19.010(B) (A185)

Firefighters currently in DROP will continue to accrue their DROP benefit under

FRS, and, upon their exit from the DROP program, will become members of FRP. Board

Bill 109, 2(C) (A178) Retirees, beneficiaries, widows, and disabled firefighters (i.e., all

persons in pay status) remain in FRS.Board Bill 109 4.19.010(U) (A42, 188)

Firefighters with at least 20 years of service as of the effective date of Board Bill

109 will contribute 8% of their compensation to FRP, while those firefighters with less

than 20 years of service as of the effective date will contribute 9% to FRP. Board Bill 109,

4.19.030(B) (A191) Any firefighter who retires from the department and receives a

benefit from FRP, shall receive a refund of his contributions to [FRS] made before the

Effective Date without interest; provided that contributions to the Plan made on and after

the Effective Date by a Participant who had fewer than twenty full Years of Service as of

the Effective Date are not refundable. Board Bill 109, 4.19.060(C) (A198-199) There is

no explicit provision in Board Bill 109 that states that contributions made by firefighters

with over 20 years of service to FRP are refundable upon retirement. Board Bill 109,

4.19.060(C) (A198-199) compare4.19.080(B)(5) and 4.19.060(D); Tr.Vol.III, pg.

115-116. Paul Payne, City Budget Director and one of the team involved in drafing Board


25/131

10

Bill 109, admitted that there is not an explicit provision regarding post-effective date return

of contributions for firefighters with over 20 years of service, but stated it would a be

good-faith interpretation of the language. (Tr.Vol.III, 106, 115-116)

Board Bill 109 also provides that firefighters coming out of DROP (who have to

have over 20 years of service as a condition of entering DROP) will thereafter contribute to

FRP at the rate of 9%. Board Bill 109, 4.19.060(E) (A201). Paul Payne testified that this

was simply an error in the bill. (Tr. Vol. III, pg. 94-95)

Under the terms of Board Bill 109, FRP will indemnify the Board of Trustees

against all liabilities and claims other than liability for acting outside the scope of the

persons authority, including but not limited to liability for directing payment of

benefits that are not made pursuant to a reasonable, good faith interpretation of the explicit

terms of the Plan. (A239-240) Paul Payne admitted that FRP cannot grant any benefits

that are not explicitly provided for, and if the Board of Trustees of FRP did so it would be at

their own risk because they would not be indemnified. (Tr.Vol.III 114)

An actuarial reduction of benefits for firefighters who retire or enter DROP before

age 55 with less than 20 years of service on the effective date is also to be applied to

post-effective date service under FRP. Board Bill 109, 4.19.060(D) (A199) Board Bill

109 does not explicitly state that the actuarial reduction does not apply to firefighters with

over 20 years of service. 4.19.060(D) (A199) Paul Payne stated that there is no provision

in Board Bill 109 that addresses whether or not there is an actuarial reduction for

firefighters with over 20 years of service. (Tr.Vol.III, 117)


26/131

11

Board Bill 109 also provides, no employee shall have a contractual right to any

benefits relating to, based upon service rendered or compensation paid after the effective

date of an amendment that reduces future benefits. Board Bill 109 4.19.160 (A243)

This provision applies to all firefighters, including those with over 20 years of service.

Board Bill 109 4.19.160(A243)

Two separate sections of Board Bill 12 provided that the Citys liability to pay

benefits under FRS was limited to plan assets. 4.19.120(C) and 4.19.170(B) (A230, 243)

Board Bill 109 revised 4.19.120(C) to provide that [t]he payment of all benefits accrued

under this Plan is hereby made an obligation of the City. (A230) However, it did not

amend 4.19.170(B), which still provides, [a]ll benefits to be paid to a Participant or his

beneficiary under this Plan shall be paid solely out of the Trust Fund, and the City assumes

no liability or responsibility therefor. (A243)

Board Bill 109 created an immediate, unfunded, accrued actuarial liability in the

new FRP plan of over $65 million, according to the calculations of the Citys expert

actuary, Kim Nicholl, although Ms. Nicholl testified it would not need to be paid on day

one of FRP, as it is based on projected salary increases and service. (Ex. 65; Tr.Vol.III, 21)

At the time of trial, no money hadbeen appropriated by the City for FRPs start-up costs.

(Tr.Vol.III, 105)

Board Bill 109 provides that [t]he provision of this Ordinance shall supersede any

other ordinance or part of an ordinance to the extent such other ordinance or part of an

ordinance conflicts herewith. Board Bill 109, 4.19.170(E)(A245) It also states that it

was enacted by the City pursuant to its authority under the home rule charter provisions of


27/131

12

the Constitution of the State of Missouri and the laws of the State of Missouri.

4.19.010(A) (A184)

III. Trial Courts Judgment

A. Order with Respect to Board Bill 12

With respect to the issue of whether or not the City can enact its own pension plan

without enabling legislation, the Trial Court found that Article VI, 19(a) gives

constitutional charter cities all powers which the general assembly has authority to confer

upon any city. (A11) Therefore,

Mo.Const. art. VI, 25 does not operate as a limitation on the authority of a

constitutional charter city to enact pension legislation for its employees. On

the contrary, 25 is a grant of authority to the General Assembly to in turn

authorize cities to create pension systems. Since the General Assembly has

this authority to grant cities that power, the plain terms of 19(a) authorize

constitutional charter cities to enact pension legislation with or without

enabling legislation.

(A14-15)

One of the seminal cases that the Trial Court relied upon for the proposition that a

constitutional charter city can enact its own pension system without enabling legislation

wasKansas City v. Brouse,468 S.W.2d 15 (Mo. banc 1971). (A15) Specifically, the Trial

Court found that Brouseshows that charter cities had the power to adopt pension plans

even before Article VI, 19(a) of the Missouri Constitution was enacted, and that there was

no reason to believe that 19(a) was a restriction on that home rule authority. (A16) On


28/131

13

the contrary, 19(a) and 25 construed together give the City plenary legislative authority

over municipal pensions unless the General Assembly expressly limits or restricts that

authority. (A16)

In analyzing whether or not 87.120 R.S.Mo. et seq.limits the Citys authority to

enact its own pensions system, the Trial Court found that FRS enabling legislation has been

repeatedly held to be permissive. (A16) The Trial Court found that the permissive

character of the enabling legislation leads ineluctably to the conclusion that 87.125 does

not mandate that the City may adopt only one form of a firefighters pension system, i.e.,

that authorized by 87.120 et seq. (A17)

[N]owhere in the FRS enabling legislation is there a legislative command

that if the City chooses to adopt a firefighters pension system, it shall

conform to the enabling legislation. The language subject to in 87.125

does not amount to a mandate that the City can adopt one form of a

firefighters pension system and no other. Rather, that language means only

that if the City chooses to adopt the system contemplated by the enabling

legislation then it must do so subject to the statutory standards. It does not

preclude action under the Citys constitutional charter authority.

(A17)

The Trial Court ultimately found that this was not only consistent with the

permissive character of the FRS enabling statutes, but also required by Article VI 22 of

the Missouri Constitution. (A17) It reasoned that if Chapter 87 R.S.Mo. meant that the

City could adopt only one form of a pension ordinance, such legislation would plainly


29/131

14

intrude on the powers and duties of the Board of Aldermen of the City with respect to a

matter of purely municipal concern. (A18)

As such, the Trial Court concluded that if the City chooses to adopt the pension plan

authorized by the state statutes, it must conform to the enabling legislation. (A19)

However, [i]f the City choosesto adopt its own pension system under authority of article

VI, 19(a), it may do so without reference to 87.120 et seq. (A19)

Even though the Trial Court found that the City had the right to enact its own

pension plan, the Trial Court did not permit the City to merge the assets of FRS into a new

plan, because when the City acts within the context of the FRS, it must conform to the

enabling legislation insofar as that legislation prescribes the manner of action. (A20-21)

In the Courts view, so long as there are vested members of the FRS, the City is not free

simply to transfer those members and the assets of the FRS to another plan. Section 87.125

is explicit that the assets of the FRS are to be managed and controlled by the trustees of the

FRS, not some other entity. Furthermore, the City is not at liberty to impair the vested

rights of the FRS members. (A20)

With respect to the contract claims, the Trial Court found that retirees and those

firefighters with over 20 years of service had a contractual right entitled to protection.

(A27-28) Those rights were substantially impaired by combining the assets of FRS with a

new plan which imperiled the ability of the retirees and vested members of FRS to obtain

their full benefits, given that Board Bill 12 expressly limits the Citys obligations to pay

benefits to the assets in the Plan. (A29) However, the Trial Court found that firefighters


30/131

15

with less than twenty years of service had no contractual rights, as the City had reserved the

right to repeal or amend Chapter 4.18. (A28)

B. Judgment on Board Bill 109

After reopening the evidence and having a new trial with respect to Board Bill 109,

the Trial Court rendered its Judgment on June 3, 2013, and adopted by reference many of

the opinions it expressed with respect to Board Bill 12. (A35)

First, the Trial Court recognized that FRS and its Trustees have standing to seek

declaratory and injunctive relief regarding the enforceability of ordinances affecting the

operation of the FRS, including whether ordinances impair the obligation of contract,

given the fiduciary and administrative duties of the FRS trustees owed both to the City of

St. Louis and the members of the FRS. (A51) The Trial Court noted that the standing of

FRS on the issue of impairment of contract is academic, as some of the FRS trustees

themselves and the individual intervenor plaintiffs are subject to the dual plan system and

so unquestionably have standing to claim impairment of contract. (A51-52)

With respect to the Citys power to adopt its own pension plan subject to local

control,the Trial Court adhere[d] to its view that the City has the authority to terminate

the FRS and replace it with the FRP. (A52) While the Trial Court acknowledged that the

City was still bound by 87.125 R.S.Mo. and could not move the FRS funds to FRP, the

Trial Court rejected the argument that once FRS was established under the enabling

legislation, it cannot be terminated by the City without amendment of the enabling

legislation as inconsistent with the overriding authority of Mo.Const. art. VI, 19(a) and

the proper construction of the enabling legislation. (A52-53)


31/131

16

The Trial Court also found that the dual plan system was consistent with 87.130.1

R.S.Mo., because [u]nder the dual plan, City firefighters hired before February 1, 2013,

receive one pension benefit by reason of years of service for which they are entitled to

benefits under the FRS, and another pension benefit for years of service under the FRP.

Before February 1, 2013, firefighters made contributions only to FRS. After February 1,

2013, firefighters make contributions only to the FRP. (A54) It concluded that the dual

plan system does not prohibit what the enabling legislation permits nor permit what is

prohibited. (A55) Instead, the dual plan system supplements the legislation by providing

the means whereby the FRS is terminate and the FRP provides pension benefits in the

future. (A55)

In support of this reasoning, the Trial Court held that pension benefits have been

construed as compensation under Article VI of the Missouri Constitution, and if the City

could not change FRS without enabling legislation, then 87.120 R.S.Mo. et seq.would

violate Article VI 22 of the Missouri Constitution. (A55) As such, the

Citys efforts to meld the continued operations of the FRS and the FRP do

not constitute impermissible amendment of R.C. Ch. 4.18; rather, they

harmonize Ch. 4.19 with Ch. 4.18, and preserve pension benefits for

firefighters whose benefits have not otherwise vested. To be sure, the dual

plan system does affect how the FRS will operate in the future. But the

ordinance provisions that affect the FRS are necessary and proper to secure

the orderly termination of the FRS.

(A56)


32/131

17

The Trial Court adhered to its position that firefighters whose rights had vested

under the terms of FRS have a contractual right entitled to protection under the contracts

clauses. (A57) However, those rights were not impaired by Board Bill 109, in the Trial

Courts view, as theordinances generously preserve benefits which were not vested as of

February 1, 2013, and ensure that benefits vested as of that date are protected and will be

paid by FRS. (A58) The scriveners error in not repealing 4.19.170(B) that limits the

Citys liability to the assets in the plan was immaterial to the Courts analysis. Whether

the City has effectively obligated itself to fund the FRP in the future is not a ripe justiciable

question before the Court. The contracts clauses operate in the past, not the future. Only

the FRS benefits in existence as of February 1, 2013, are subject to constitutional

protection, to the extent they were vested at that time. (A58)

The requirement of a 9% contribution when a firefighter with over 20 years of

service exits DROP, was also not an impairment of contract in the Trial Courts view, as

[t]he Court perceives no impairment of contract insofar as the dual plan system treats

contributions to and benefits of the FRP after February 1, 2013 differently than

contributions to and benefits of the FRS before February 1, 2013. Thus, the Court

perceives no impediment to imposing a 9% contribution rate on all active firefighters for

services from and after February 1, 2013. (A60)

The Trial Court adhered to its prior position that the Citys reservation of the right to

amend or repeal Chapter 4.18 RCC was sufficient to preclude creating a contract with

employees who were or are not vested. (A59) There was one exception in the Trial


33/131

18

Courts view: such firefighters have a right to the refund of contribution to the FRS made

prior to February 1, 2013. (A60-61)

As such, the Trial Court found that Board Bill 109 was valid and dissolved the

preliminary injunction previously granted. (A64) Board Bill 11 was declared invalid and

of no force or effect insofar as the plaintiff trustee act to manage FRS. (A64) The City was

granted judgment against Plaintiffs and Plaintiff-Intervenors on all claims alleged in the

Petitions and Counterclaims in the consolidated cases.

Plaintiffs and Plaintiff-Intervenors both sought an injunction pending appeal, and a

stay of execution pending appeal. (LF1040-1098) However, both motions were denied by

the Trial Court and by this Court. (LF1386-1387) Plaintiffs and Plaintiff-Intervenors both

then filed this appeal. (LF1388-1524)


34/131

19

POINTS RELIED ON

I. The Trial court erred in declaring Board Bill 109 valid and constitutional, because

the Trial Court erroneously concluded that the City could enact a pension plan for

its firefighters, without any statutory authorization, based upon its home rule

powers, in that a) Article VI 25 of the Missouri Constitution prohibits cities from

granting public money to private individuals, except that the general assembly may

authorize; b) Article VI,19(a) of the Missouri Constitution does not grant the

City the authority to ignore permissive enabling legislation and enact conflicting

ordinances, and c) the provisions of 87.120 R.S.Mo. et seq.demonstrate an intent

by the state to pre-empt the City from adopting a pension plan except in

conformance with its provisions.

Firemens Ret. Sys. of St. Louis v. City of St. Louis, 789 S.W.2d 484 (Mo.

banc 1990)

Levinson v. City of Kansas City, 43 S.W.3d 312 (Mo.App. W.D. 2001)

Article VI, 25 Missouri Constitution

87.125 R.S.Mo.

II. The Trial Court erred in declaring Board Bill 12 as amended by Board Bill 109 valid,

and that the City had authority to effectively amend Chapter 4.18 RCC (which

established and governs FRS) without the General Assembly first amending the

enabling statutes, 87.120 R.S.Mo. et seq., because under Article VI 19(a) of the

Missouri Constitution the City may not adopt an ordinance in conflict with state

statute on the same subject matter and the amendments to Chapter 4.18 by Board


35/131

20

Bill 109 fail to conform to the enabling statutes, in that Board Bill 109 a) violates the

exclusivity clause contained in 87.130 R.S.Mo. [4.18.020 RCC] with respect to

years of service and contributions; b) violates 87.250 R.S.Mo. [4.18.220 RCC],

which provides that all firefighters shall receive benefits as provided by sections

87.120 to 87.370; c) improperly amends the definition of average final

compensation as set forth in 87.120(3) R.S.Mo. [4.18.010(C) RCC]; d)

improperly amends the definition of membership service and creditable service to

include a cut-off of accrual as of February 1, 2013 contrary to 87.120(8) and (14)

R.S.Mo. [4.18.010(G, M) RCC]; and e) the Trial Courts fiction of the Citys

reservation of the right to terminate FRS is not found in Chapter 87.120 R.S.Mo.

et seq. at all or even in Chapter 4.18 RCC, which only reserves the right to repeal or

amend FRS.

Trantina v. Bd. of Trustees of the Firemens Ret. Sys. of St. Louis, 503

S.W.2d 148 (Mo.App. 1973)

Firemens Ret. Sys. of St. Louis v. City of St. Louis, 754 S.W.2d 21 (Mo.App.

E.D. 1988)

Article VI, 19(a) Missouri Constitution

87.130(1) R.S.Mo.

III. The Trial Court erred in declaring Board Bill 109 valid and constitutional because

the Trial Courts declaration was based upon the erroneous conclusion that

requiring adoption of enabling statutes as a pre-requisite to the City amending or

terminating FRS would violate Article VI, 22 of the Missouri Constitution in that:


36/131

21

a) such conclusion misconstrues Article VI, 22 and is contrary to governing

precedent; and b) 87.120 R.S.Mo. et seq.does not violate Article VI, 22 of the

Missouri Constitution as the City was not required by 87.120 R.S.Mo. et seq.to

enact any pension plan for City firefighters.

Civil Service Comn of City of St. Louis v. Members of Bd. of Aldermen of the

City of St. Louis, 92 S.W.3d 785, 788 (Mo. banc 2003)

Firemens Ret. Sys. of St. Louis v. City of St. Louis, 789 S.W.2d 484, 487 (Mo.

1990)

City of St. Louis v. State, 382 S.W.3d 905 (Mo. banc 2012)

Article VI, 22, Missouri Constitution

IV. The Trial Court erred in declaring Board Bill 109 valid and constitutional because

Board Bill 109 impairs the contractual rights of all firefighter members of FRS,

including those with over twenty years of service as of the effective date of Board

Bill 109, and beneficiaries, in contravention of Article I 13 of the Missouri

Constitution and Article I 10 of the United States Constitution; in that a) the Trial

Courts conclusion that the Contracts Clauses prohibit only impairment of

contractual rights of firefighters for services rendered by them prior to the effective

date of a change in benefits, such that benefits for all firefighters, even those who

are vested under the terms of the plan, could be reduced on a prospective basis is

incorrect as a matter of law; b) Board Bill 109 removes the Citys ultimate

guarantee for the payment of benefits due to firefighters upon retirement, or to their

beneficiaries, as provided under Chapter 4.18 RCC, and instead limits the Citys


37/131

22

liability for the payment of benefits to the assets in FRP; c) Board Bill 109 requires

a 9% nonrefundable contribution to FRP when a firefighter exits the DROP

program and resumes regular status for accruing service time; and d) divests

firefighters of contractual rights to benefits based upon compensation paid or

service rendered after the effective date of an amendment that reduces future

benefits.

State ex rel. Phillip v. Public School Ret. Sys. of City of St. Louis, 262 S.W.2d

569 (Mo. banc 1953)

State ex re. Breshears v. Missouri State Employees Ret. Sys., 362 S.W.2d

571 (Mo. banc 1962)

Wehmeier v. Public School Ret. Sys. of Missouri, 631 S.W.2d 893 (Mo.App.

E.D. 1982)

Oregon State Police Officers Assn v. State of Oregon, 918 P.2d 765 (Ore.

1996)

V. The Trial Court erred in declaring Board Bill 109 valid and constitutional because

Board Bill 109 impairs the contractual rights of firefighters with less than twenty

years of service, in contravention of Article I 13 of the Missouri Constitution and

Article I 10 of the United States Constitution; in that these firefighters have already

contributed substantial service to the City at least partially in reliance on the pension

benefits as provided by Chapter 4.18, and in that Board Bill 109 a) requires

firefighters to contribute 9% of their salary on a non-refundable basis to FRP instead

of 8% of salary on a refundable basis to FRS and b) applies an actuarial reduction to


38/131

23

service rendered after the effective date of Board Bill 109 if the firefighter retires

before age 55, as compared to FRS which provides that a firefighter could retire

with 20 years of service, regardless of age, without a reduction in benefits.

State ex rel. Phillip v. Public School Ret. Sys. of City of St. Louis, 262 S.W.2d

569 (Mo. banc 1953)

State ex rel. Dreer v. Public School Ret. Sys. of the City of St. Louis, 519

S.W.2d 290 (Mo. 1971)

Bakenhus v. City of Seattle, 296 P.2d 536 (Wash. banc 1956)

Cloutier v. State, 42 A.3d 816 (N.H. 2012)


39/131

24

ARGUMENT

I. The Trial court erred in declaring Board Bill 109 valid and constitutional,

because the Trial Court erroneously concluded that the City could enact a

pension plan for its firefighters, without any statutory authorization, based

upon its home rule powers, in that a) Article VI 25 of the Missouri

Constitution prohibits cities from granting public money to private individuals,

except that the general assembly may authorize; b) Article VI, 19(a) of the

Missouri Constitution does not grant the City the authority to ignore

permissive enabling legislation and enact conflicting ordinances, and c) the

provisions of 87.120 R.S.Mo. et seq. demonstrate an intent by the state to

pre-empt the City from adopting a pension plan except in conformance with its

provisions.

Section 87.120 R.S.Mo. et seq.is the enabling legislation authorizing the creation of

FRS, which has been in operation in its present form for over fifty years. These statutes

require that every firefighter employed by the City be a member of FRS as a condition of

their employment, and sets forth very detailed provisions regarding specific benefits that

they are to earn as a result. Section 87.125 R.S.Mo. authorizes the City to enact these

provisions through ordinances, and states the City is hereby authorized, subject to the

provisions of sections 87.120 to 87.370, to provide by ordinance for the pensioning of

members of any such fire department (emphasis added)

The Trial Court found this language authorizing the City to take action subject to

the statutory provision does not amount to a mandate that the City can adopt one form of a


40/131

25

firefighters pension system and no other. Rather, the Trial Court that language means

only that if the City chooses to adopt the system contemplated by the enabling legislation

then it must do so subject to the statutory standards. (A17; emphasis added) In enacting

Board Bill 109, the City completely ignored Chapter 87 R.S.Mo. The Trial Court found

the creation of FRP was permissible based upon the Citys status as a constitutional charter

city. In effect, the Trial Court held that the City can create a pension system for St. Louis

City firefighters, the very topic 87.120 R.S.Mo. et seq.addresses, but that it is completely

free from the terms, restrictions, and conditions laid out therein by the General Assembly.

Essentially, the Trial Courts ruling has converted Chapter 87 R.S.Mo., and any other

permissive enabling legislation that the Missouri General Assembly may adopt, into mere

suggestions or guidelines for constitutional charter cities such as the City. The Missouri

General Assembly does not waste its time enacting statutes that are merely suggestions. To

hold otherwise is a perversion of the meaning of permissive legislation and is contrary to

the Missouri Constitution and case law interpreting it.

A. Standard of Review

The judgment in a court-tried case will be reversed if there is no substantial

evidence to support it or it is against the weight of the evidence, or if the trial court

erroneously declared or applied the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc

1976). Questions of law are reviewed de novo, and no deference is given to the trial

courts conclusions on such questions. Pearson v. Koster, 367 S.W.3d 36, 43-44 (Mo.

banc 2012). Once the contents of a municipal ordinance have been established, the

interpretation of that ordinance is a pure question of law. State ex rel. Sunshine Enterprises


41/131

26

of Missouri, Inc. v. Board of Adjustment of City of St. Ann, 64 S.W.3d 310, 312 (Mo. banc

2002). Although an appellate court should give due recognition to the trial courts opinions

as to the credibility of witnesses, Teson v. Vasquez, 561 S.W.2d 119, 128 (Mo.App. E.D.

1977), this rule of deference does not apply where the credibility of witnesses is not at

issue. In Interest of L.W.R., 818 S.W.2d 727, 732 (Mo.App. 1991). The courts

conclusions as to the legal effect of the facts are entitled to no deference. Southgate Bank

and Trust Co. v. May, 696 S.W.2d 515, 519 (Mo.App. W.D. 1985).

This standard of review is applicable to all points.

B. Article VI, 25 of the Missouri Constitution

Article VI, 25 of the Missouri Constitution is the starting point for any analysis on

municipal authority to enact a public pension system. It states in part that:

No county, city or other political corporation or subdivision of the state shall

be authorized to lend its credit or grant public money or property to any

private individual, association or corporation except that the general

assemblymay authorize any county, city or other political corporation or

subdivision to provide for the retirement or pensioning of its officers and

employees. (emphasis added)

This constitutional provision makes clear that no city may enact a public retirement or

pension system without authorization from the Missouri General Assembly. With respect

to the City, that authorization has been given in 87.125 R.S.Mo., which states:

Any city in this state that now has or may hereafter have seven hundred

thousand inhabitants or more and that has an organized fire department is


42/131

27

hereby authorized, subject to the provisions of sections 87.120 to 87.370, to

provide by ordinance for the pensioning of members of any such organized

fire department

(emphasis added) As such, the City is permitted to enact a pension system for its

firefighters, but only subject to the provisions of 87.120 R.S.Mo. et seq.

This principle was confirmed and addressed by the Missouri Supreme Court

twenty-three years ago in litigation between FRS and the City, Firemens Retirement

System v. City of St. Louis, Missouri,789 S.W.2d 484 (Mo. banc 1990) (FRS 1990). In

that decision the Court stated:

Article VI, 25, of the Missouri Constitution prohibits charter cities

generally from granting public money to any private individual, association

or corporation, but specifically provides that the General Assembly may

authorize cities to provide for the pensioning of its officers and employees.

Section 87.125, enacted pursuant to article VI, 25, of the Missouri

Constitution, authorizes cities to provide by ordinance for the pensioning of

firemen. The City created FRS under authority of 87.120, et seq., by

enacting chapter 4.18 of the City code. St. Louis, Mo., Rev.Code 4.18.015.

Id. at 486 (emphasis added). Thus, even though it is a constitutional charter city, the City is

subject to the confines of 87.120 R.S.Mo. et seq.

Given that Board Bill 109 was enacted without any enabling authority from the

Missouri General Assembly, and contradicts 87.120 R.S.Mo. et seq. in many respects, it


43/131

28

violates this Missouri constitutional provision. As such, the Trial Court erred in finding

that Board Bill 109 was valid and constitutional.

C. Home Rule Authority

The Trial Court rationalized its opinion by analyzing Article VI, 25 in conjunction

with Article VI, 19 of the Missouri Constitution. Specifically the Trial Court found that

Article VI, 19(a) gives constitutional charter cities all powers which the general

assembly has authority to confer upon any city. (A11) Therefore, the Trial Court

concluded,

Mo.Const. art. VI, 25 does not operate as a limitation on the authority of a

constitutional charter city to enact pension legislation for its employees. On

the contrary, 25 is a grant of authority to the General Assembly to in turn

authorize cities to create pension systems. Since the General Assembly has

this authority to grant cities that power, the plain terms of 19(a) authorize

constitutional charter cities to enact pension legislation with or without

enabling legislation.

(A14-15)

However, the Trial Court and the City take this grant of authority beyond

permissible bounds. Article VI, 19(a) still states that the Citys authority is limited by city

charter and statute. As set forth more fully below, Board Bill 109 conflicts with state

statute in numerous respects, specifically Chapter 87.120 R.S.Mo. et seq. Therefore,

Board Bill 109 is beyond the power of the City to enact under its constitutional charter

authority and is invalid and unconstitutional.


44/131

29

1. Home Rule Charter Authority under Missouri Constitution Art VI, 19

Board Bill 109 explicitly states that the City is establishing the New Plan pursuant

to its authority under the home rule charter provisions of the Constitution of the State of

Missouri and the laws of the State of Missouri.4.19.010(A)(A184). However, the City

chose those provisions of the Missouri Constitution and statutes that it wanted to follow

and those that it wanted to ignore, and its rationale was adopted by the Trial Court.

All constitutional charter cities derive their power from Article VI, 19 of the

Missouri Constitution, which provides in part that [a]ny city having more than five

thousand inhabitants or any other incorporated city as may be provided by law may frame

and adopt a charter for its own government. The scope of the Citys charter authority is

set forth in Article VI, 19(a), which provides:

Limitations on the Powers of Charter Cities: Any city which adopts or has

adopted a charter for its own government, shall have all powers which the

general assembly of the state of Missouri has authority to confer upon any

city, provided such powers are consistent with the constitution of this state

and are not limited or denied either by the charter so adopted or by statute.

Such a city shall, in addition to its home rule powers, have all powers

conferred by law.

Mo. Const. Art. VI, 19(a)(emphasis added). These limitations have been further codified

in state law, which provides:

Any municipal corporation in this state, whether under general or special

charter, and having authority to pass ordinances regulating subjects, matters


45/131

30

and things upon which there is a general law of the state, shall confine and

restrict its jurisdiction and the passage of its ordinances to and in conformity

with the state law upon the same subject.

71.010 R.S.Mo.(emphasis added).

Consequently, the City is not authorized to enact any ordinance which is

inconsistent with or contravenes the limitations set out in the Constitution, statute, or the

citys charter itself. City of Springfield v. Belt,307 S.W.3d 649, 653 (Mo. banc 2010).

Under 19(a) a constitutional charter city is prohibited from exercising its home rule

power in a manner that is inconsistent with a state statute. State ex inf. Hanna ex rel.

Christ v. City of St. Charles, 676 S.W.2d 508, 513 (Mo. banc 1984). Thus, any exercise of

power by the City which is inconsistent with state statute, including 87.120 R.S.Mo. et

seq., exceeds the powers of the City, and, therefore, is unconstitutional and void.

The test for determining if an ordinance conflicts with state law is whether the

ordinance permits what the statute prohibits or prohibits what the statute permits. Cape

Motor Lodge v. City of Cape Girardeau,706 S.W.2d 208, 211 (Mo. banc 1986). This rule

applies even to permissive enabling legislation. Levinson v. City of Kansas City,43

S.W.3d 312, 319-320 (Mo.App. W.D. 2001).

Even though Chapter 87.120 R.S.Mo. et seq.is permissive state enabling legislation,

as will be discussed in Point II, infra, Board Bill 109 conflicts with Chapter 87 in numerous

respects and prohibits what is permitted and permits what is prohibited. As such, it is

byeond the Citys home rule charter authority and is invalid.


46/131

31

2. Kansas City v. Brouse, 468 S.W.2d 15 (Mo. banc 1971) Distinguished

The principal case the Trial Court relied upon for the proposition that a

constitutional charter city can enact its own pension system without enabling legislation

was Kansas City v. Brouse,468 S.W.2d 15 (Mo. banc 1971). (A15) The Trial Court

determined thatBrouseheld that charter cities had the power to adopt pension plans even

before Article VI, 19(a) of the Missouri Constitution was enacted, and that there was no

reason to believe that 19(a) was a restriction on that home rule authority. (A16) While

the Court inBrouse did allow a city to enact a pension system where there is a total lack of

state legislation relating to pensions for municipal judges, it does not stand for the

proposition that enabling legislation from the Missouri General Assembly is a mere

suggestion, which can be cavalierly ignored.

In Brouse the Kansas City charter had provided since 1925 that the city had the

authority to exercise all powers relating to pensions which may be permitted by the

constitution and the laws of Missouri. Brouse,468 S.W.2d at 16. In 1945 the Missouri

Constitution was amended to include Art. VI 25, discussed above. Id. On November 8,

1966, the electorateof Kansas City approved an amendment to the city charter, which

provided for a system of retirement benefits for the citys municipal judges. Id.at 17. The

city, through the director of finance, subsequently refused to make the retirement payments

to individual judges at retirement, contending that there was no enabling legislation from

the General Assembly for Kansas City to pay retirement benefits. Id. The court

determined that such enabling legislation was not necessary in that circumstance. Id. In so

holding the court reasoned that [w]hen matters of this nature are adopted in a charter as


47/131

32

prescribed by a Constitution, such charter provisions have the force and effect of a statute

of the Legislature and can only be declared invalid for the same reason, namely, if they

violate constitutional limitations or prohibitions. Id. (emphasis added).

In this case, Board Bill 109 is an ordinance, not a part of the St. Louis City Charter.

Therefore, Board Bill 109 does not carry the same weight as the judicial pension system

involved inBrouse. Sanders v. City of St. Louis, 303 S.W.2d 925, 928 (Mo. 1957) (The

charter is the citys organic law and bears the same relation to its ordinances that the

constitution of a state bears to its statutory enactments) The Trial Court failed to

recognize this distinction and merely stated that the pension plan at issue in Brousewas

created by city ordinance. (A15)

More important, however, is the fact that there was no enabling legislation present

inBrouse, whereas here there is not only enabling legislation, but legislation that is very

specific as to the benefits that are to be provided to St. Louis firefighters. See, 87.120

R.S.Mo. et seq. The Court inBrousenoted that the charter of Kansas City, which is where

the amendment adopting the judicial pension was found, had to be consistent with and

subject to the laws of the state. 468 S.W.2d at 18 (citing, Mo. Const. Art. VI, 19).

However, because there was no enabling legislation, it was not out of harmony with the

policy of the state as declared by its laws, was consistent with the constitution, and

therefore, the pension system was valid. Id.

Even thoughBrousepermitted Kansas City to adopt a judicial pension through its

city charter without state enabling legislation, it recognized that a pension system must be

in accordance with state legislation to the extent that it exists. It does not lend support to


48/131

33

the proposition that the City can simply ignore the policy established by the Missouri

General Assembly in 87.120 R.S.Mo. et seq.and enact an entirely new and inconsistent

system under the guise of local control.The Trial Court ignored this difference.

D. Permissive Nature of Chapter 87.120 R.S.Mo. et seq.and Limitations on the

Citys Authority

While the Trial Court erred in first concluding that 19(a) and 25 construed

together give the City plenary legislative authority over municipal pensions unless the

General Assembly expressly limits or restricts that authority (A16), it also erred in

concluding that Chapter 87 R.S.Mo. does not act as a limitation on the Citys authority to

enact its own pensions system for City firefighters.

In analyzing the issue, the Trial Court first noted that the simplest form of limitation

on a constitutional charter citys authority is that created by express statutory language,

such as an express mandate that any municipal legislation must conform to the enabling

statute by stating that the statute shall be satisfied. (A14) Section 87.125 R.S.Mo. states,

that any qualifying city is hereby authorized, subject tothe provisions of sections 87.120

to 87.370, to provide by ordinance for the pensioning of members of any such organized

fire department (emphasis added) The Trial Court found that this language

authorizing the City to take action subject to the statutory provision does not amount to

a mandate that the City can adopt one form of a firefighters pension system and no other.

Rather, that la

Documents

Brief of Appellants FRS and Local 73