Fire district officials encouraged by federal ruling on union suit
November 30, 2005 - Mehlville Fire Protection District officials are optimistic that a federal judge's decision to remand back to state court a lawsuit filed by union employees ultimately will allow the board to proceed with proposed changes to the district's disability plan.
click to see advertisement
Board of Directors Chairman Aaron Hil-mer and Treasurer Bonnie Stegman voted in October to authorize the district's legal counsel to file a notice of removal that sought to move the lawsuit to U.S. District Court, Eastern District of Missouri, from St. Louis County Circuit Court. Secretary Dan Ottoline Sr. was absent from the Oct. 14 closed session.
St. Louis County Circuit Judge Barbara Crancer granted a preliminary injunction in early August prohibiting enactment of the proposed changes to the district's disability plan. Crancer ruled that the Board of Directors did not follow the proper procedures to change retirement benefits under state law and the federal Employee Retire-ment Income Security Act, or ERISA. She also ruled that the Board of Directors did not violate the state's Meet and Confer Law or the Open Meetings and Records Law, also called the Sunshine Law.
The district's motion to move the case to federal court stated, "If the disability plan that is the subject of this dispute is subject to ERISA, as the plaintiffs urge and the state court judge found in issuing the preliminary injunction, then this court has exclusive jurisdiction of the subject matter of this cause of action under section 502 of ERISA, 29 USC (United States Code) section 1132 and 28 USC section 1331.''
But U.S. District Judge Rodney W. Sip-pel ruled Nov. 22, "Plaintiffs allege that the retirement plan at issue is a 'government plan' as defined by ERISA, 29 USC section 1002(32). Under 29 USC section 1003(b)(1), 'governmental plans' are ex-empt from Subchapter One of ERISA. De-fendants have not challenged plaintiff's allegation that the plan is a 'government plan' under section 1002(32).
"Defendants claim that ERISA grants exclusive jurisdiction to the federal courts over this plan at 29 USC section 1132. However, section 1132 is included in Sub-chapter One of ERISA, so that section does not apply to the plan at issue. As a re-sult, defendants' argument for exclusive fed-eral jurisdiction fails.''
Of Sippel's ruling remanding the case back to St. Louis County Court, Hilmer said, "It's great news for the district.''
Attorney Mathew Hoffman, who represents the Mehlville Fire Protection Dis-trict, said, "At this point, it is our intent to file a dispositive motion that will hopefully bring this matter to a conclusion.''
If Crancer grants the dispositive motion, the injunction would be lifted, he said.
"It's our hope that the state court judge will resolve this matter and again empower the board after the injunction is lifted,'' Hoffman said.
When Hoffman filed the motion for removal in October, John Goffstein, an attorney representing Mehlville Local 1889 of the International Association of Fire Fighters, told the Call that the case was not removable and did not belong in federal court. Noting that Crancer's preliminary injunction was still in place, Goffstein said in October, "We will file a motion to re-mand, and it will be sent back.''
On Monday, Goffstein reiterated his previous comments, adding, "The court correctly saw it right away. Basically they just didn't raise a federal question ...''
The state court is entitled to base its opinion on both state and federal decisions, he said, adding, "Now that's perfectly permissible, at least in our opinion. In fact, we had given those (federal) cases to the court ...''
Local 1889 filed the lawsuit against the district's three board members in late June, asking the court to prohibit the board from implementing a disability benefit contract with Standard Insurance and eliminating current disability benefits from the district's existing pension plan.
In early June, the board unanimously approved a disability plan through Stan-dard Insurance. District employees then were covered by two disability plans — the Standard Insurance plan and the original self-funded disability benefits that were part of the district's pension plan.
On June 20, the board voted 2-1, with Ottoline opposed, to approve an amendment to remove the original disability benefits from the pension plan for injuries that oc-curred after July 1. Employees then would be covered by the Standard Insurance plan, which extended around-the-clock coverage to employees, but reduced the maximum benefit payments by 15 percent.
At the Sept. 26 meeting of the district's Pension Committee, the Board of Directors selected a financial company that will study the district's pension plan and offer options for change, including switching from a de-fined benefit plan to a defined contribution plan. However, as long as the preliminary injunction is in place, the district will not be able to make changes to the pension plan.
Now that the issue has been sent back to Crancer, Goffstein said he anticipates re-ceiving a pretrial order in the near future "for us to get the case ready for trial.''
Union leaders are anxious to meet with the board to resolve this issue, he added.
"It would be very much in the public's best interest for the parties to resolve this themselves and we are going to give them every opportunity to do so ...,'' Goffstein said.
Sippel's ruling also stated, "Plaintiffs appended an affidavit of Daniel Ottoline, a defendant represented by defense counsel, to their reply brief. The substance of the affidavit goes to whether Ottoline consented to the removal. I have already decided that the case should be remanded, so the issue of Ottoline's consent is moot. How-ever, the affidavit raises the troubling issue of whether plaintiffs' counsel violated the Rules of Professional Conduct.''
"That's really a non-issue as far as I'm concerned,'' Goffstein told the Call when asked about Sippel's comments. Goffstein said that to remove an action, all of the defendants have to consent to removal.
Some citizens had questioned Ottoline about the removal and Ottoline told them he did not consent and, in fact, was op-posed to the removal, Goffstein said, adding that he spoke with the fire district's legal counsel about the issue.
"Some of those citizens gave Mr. Otto-line an affidavit to sign, and they called it to our attention,'' Goffstein said.
"We had a duty to bring that issue to the court's attention and the court really didn't want to get into it,'' he said, noting he cited to the court a rule that stated an elected official "is allowed to pretty much talk to anybody about your position ...''
In his ruling, Sippel cited the rule, stating, "It is unclear in this case, however, whether Ottoline is the type of 'governmental official' that falls within this ex-ception.''
But Sippel stated he would remand the issue to state court to resolve.