Six workers filed class action lawsuit against the employees' retirement system
Six individuals employed by Imperial County filed a class action lawsuit against the county, the Imperial County Employees’ Retirement System (ICERS), and the system’s board.
They alleged that the defendants systematically miscalculated employee pension contributions.
Three unions – the Imperial County Sheriff’s Association, the Imperial County Firefighter’s Association, and the Imperial County Probation and Corrections Peace Officers’ Association – represented the six plaintiffs in the case of Imperial County Sheriff's Association et al. v. County of Imperial et al.
The Public Employee Pension Reform Act (PEPRA), which took effect in January 2013, was relevant to this case. Starting in 2019, through written memorandums of understanding that the county ratified, the county agreed to pay the unfunded actuarial accrued liability (UAAL) cost for PEPRA members.
On the other hand, safety members eligible for the “3% at 50” benefit – who were called legacy members – had to keep paying the UAAL cost associated with the benefit.
After attempts at mediation failed, the plaintiffs filed a motion for class certification. They wanted to certify a class consisting of county employees who were members of ICERS within a specified period. They did not specifically request subclasses of legacy and PEPRA members in their motion.
The trial court denied the class certification motion. It made the following findings:
- The plaintiffs failed to meet the requirement to show community of interest among the proposed class members
- The employees hired before the PEPRA took effect were entitled to an enhanced pension benefit, which those hired after the effective date did not have
- The conflicting interests of two groups of employees – those hired before and after the PEPRA’s effectivity – prevented certification of the class
- The proposed class representatives failed to show that they could adequately represent the class
The plaintiffs appealed.
The California Court of Appeal for the Fourth District, First Division reversed the trial court’s decision. The appellate court returned the matter to the trial court and directed it to allow the plaintiffs to submit the proposed class representatives’ supplemental declarations to argue that they were adequate representatives.
If the trial court approved the class representatives, it should certify the class and should create subclasses for legacy and PEPRA safety members of ICERS and legacy and PEPRA retirees, the appellate court said.
Community of interest
The trial court should not have denied class certification based on a lack of community of interest since the evidence did not support this, the Court of Appeal ruled. The trial court, which had to assess whether any individual questions impaired the benefits of proceeding with a group action, failed to conduct this analysis, the appellate court added.
Adequacy of representation
The plaintiffs failed to give declarations from the proposed class representatives to support their ability to fulfill their obligations to the class or subclasses, the Court of Appeal said. The plaintiffs should have an opportunity to submit supplemental declarations where the proposed class representatives could assert that they would be adequate representatives, the appellate court concluded.