Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Houston Firefighters' Relief and Retirement Fund v. City of Houston

Court of Appeals of Texas, Fourteenth District

June 20, 2019

HOUSTON FIREFIGHTERS' RELIEF AND RETIREMENT FUND, Appellant
v.
CITY OF HOUSTON, SYLVESTER TURNER, TANTRI EMO, CHRIS B. BROWN, BRENDA STARDIG, JERRY DAVIS, ELLEN COHEN, DWIGHT BOYKINS, DAVE MARTIN, STEVE LE, GREG TRAVIS, KARLA CISNEROS, ROBERT GALLEGOS, MIKE LASTER, LARRY GREEN, MIKE KNOX, DAVID ROBINSON, MICHAEL KUBOSH, AMANDA EDWARDS, JACK CHRISTIE, AND THE STATE OF TEXAS, Appellees

          On Appeal from the 190th District Court Harris County, Texas Trial Court Cause No. 2017-36216

          Panel consists of Chief Justice Frost and Justices Spain and Poissant.

          OPINION

          Kem Thompson Frost, Chief Justice.

         The Houston Firefighters' Relief and Retirement Fund sued the City of Houston and various individuals alleged to be city officials, to challenge the constitutionality of amendments to the Fund's governing statute. The Fund asserts that the amendments facially violate article XVI, section 67(f) of the Texas Constitution and seeks declaratory, injunctive, and mandamus relief, as well as a money judgment and attorney's fees. Each of the appellees/defendants filed jurisdictional pleas, and the trial court granted them. We affirm.

         I. Factual and Procedural Background

         Appellant/plaintiff Houston Firefighters' Relief and Retirement Fund sued the City of Houston as well as the following individuals in their official capacities: Mayor Sylvester Turner, Finance Department Director Kelly Dowe, [1] City Controller Chris B. Brown, and Council Members Brenda Stardig, Jerry Davis, Ellen Cohen, Dwight Boykins, Dave Martin, Steve Le, Greg Travis, Karla Cisneros, Robert Gallegos, Mike Laster, Larry Green, Mike Knox, David Robinson, Michael Kubosh, Amanda Edwards, and Jack Christie (collectively "City Officials"). The Fund alleges that Senate Bill 2190 ("S.B. 2190")[2] is facially unconstitutional because it impermissibly infringes on the Board's exclusive authority under Article XVI, section 67(f) of the Texas Constitution ("Section 67(f)") to "select . . . an actuary and adopt sound actuarial assumptions to be used by the system or program."[3]

         In its live pleading the Fund makes the following allegations:

(1) Article 6243e.2(1) of the Revised Statutes governs the Fund's and the City's rights, duties, and obligations to and for the Fund. The Board of Trustees of the Fund ("Board") manages and administers the Fund.
(2) Article 6243e.2(1) requires each member of the Fund to contribute a set percentage of the member's salary and requires the City to make contributions based on a "contribution rate certified by the [B]oard," which must be at least twice the amount contributed by Fund members and sufficient to ensure the long-term financial well-being of the Fund.
(3) Article XVI, section 67(a) of the Texas Constitution ("Section 67(a)") expressly authorizes the Texas Legislature to enact general laws establishing non-statewide pension systems for public employees and officers, such as article 6243e.2(1).
(4) Section 67(f) "vests the Board with exclusive authority to 'administer the system or program of benefits,' 'hold the assets of the system or program for the exclusive purposes of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the system or program,' and 'select legal counsel and an actuary and adopt sound actuarial assumptions to be used by the system or program.'"[4]
(4) The version of article 6243e.2(1) in effect up until July 1, 2017 complied with this constitutional provision by leaving to the Board the exclusive authority to appoint an actuary and to determine the actuarial assumptions to be used by the Fund.
(5) In 2017, the Texas Legislature passed and the Governor signed S.B. 2190, which substantively changed article 6243e.2(1) in ways that violate Section 67(f).
(6) By fixing certain actuarial assumptions that must be used by the Fund's actuary, including an initial assumed rate of return of seven percent, S.B. 2190 violates Section 67(f).
(7) S.B. 2190 violates Section 67(f) by imposing a new "Risk Sharing Valuation Study" (hereinafter "Valuation Study") procedure for use in setting the City's contribution rate to the Fund. Under this procedure, the City's contribution rate may be determined by using the average of the Fund's estimate of the City's contribution rate and the City's estimate of that contribution. The Fund asserts that this averaging violates Section 67(f).
(8) S.B. 2190 violates Section 67(f) by allowing the City to use actuarial assumptions different from the Fund actuary's assumptions if an independent actuary recommends the assumptions.
(9) On May 30, 2017, the Board adopted an actuarial valuation report prepared by the Fund's appointed actuaries. Under this report, the City's actuarial contribution rate is 48.5% which equals approximately $148, 255, 000 and anticipates a return on investment on the Fund's assets of 7.25%.
(10) On May 31, 2017, the City Council passed a budget which used S.B. 2190's assumed seven percent rate of return. According to the Fund, because S.B. 2190 is unconstitutional, the City's Budget is statutorily required to employ the 7.25% rate of return certified by the Board under article 6243e.2(1) without any amendment by S.B. 2190, and a City contribution rate of 48.5%.
(11) Nonetheless the City Council passed the Budget allegedly allocating less than half of the amount that should be contributed under article 6243e.2(1) without any amendment by the allegedly unconstitutional S.B. 2190. The Fund claims that this action forced the Fund to file suit.
(12) Mayor Turner and the defendants who are City Council Members engaged in ultra vires and illegal acts or abuses of discretion in passing the budget that failed to allocate the amounts necessary to fund the City's lawful pension obligations, and these acts will irreparably injure the Fund. The act of passing and implementing the budget is causing and will cause irreparable injury to the Fund, the firefighters, and their surviving children and spouses.
In its live pleading the Fund asserts the following claims:
(1) The Fund seeks declarations under Chapter 37 of the Texas Civil Practice and Remedies Code that (a) S.B. 2190 is unconstitutional because it impermissibly infringes on the exclusive authority of the Board to "select . . . an actuary" and determine "sound actuarial assumptions" under Section 67(f); and (b) the City must allocate funding in its budgets in accordance with article 6243e.2(1) without any amendment by the allegedly unconstitutional S.B. 2190, which includes the Board's adopted assumed rate of return, unless and until the Legislature modifies or supersedes the statute in compliance with the Texas Constitution.
(2) The Fund seeks a writ of mandamus compelling the City and the City Officials to allocate funding in accordance with article 6243e.2(1) without any amendment by the allegedly unconstitutional S.B. 2190.
(3) The Fund seeks a temporary and permanent injunction prohibiting the City and the City Officials from acting in reliance on S.B. 2190, an allegedly unconstitutional statute, and requiring all defendants to allocate funding in the City's budgets in accordance with article 6243e.2(1) without any amendment by the allegedly unconstitutional S.B. 2190. The Fund asserts that S.B. 2190 is facially unconstitutional because it impermissibly infringes on the Board's exclusive authority under Section 67(f) to "select . . . an actuary and adopt sound actuarial assumptions to be used by the system or program."
(4) The Fund seeks "retrospective relief in the form of a money judgment for any underpayment of monies owed by the City to the Fund for failing to act in accordance with Section 67(f) and [article 6243e.2(1) without any amendment by the allegedly unconstitutional S.B. 2190] from July 1, 2017 to the date of Final Judgment."
(5) The Fund seeks attorney's fees under section 37.009 of the Civil Practice and Remedies Code.

         The Fund alleges in its live petition that the City is not immune from the Fund's claims because the Fund is bringing a claim under the Declaratory Judgments Act for which immunity from suit and immunity from liability are waived. The Fund also alleges that the Fund is suing the City Officials in their official capacities for carrying out ultra vires, unauthorized, illegal actions, and actions that constituted a failure to perform a ministerial act.

         The State of Texas, by and through its Attorney General, intervened in the case in the trial court for the sole purpose of defending S.B. 2190's constitutionality. The State of Texas argued in the trial court that S.B. 2190 is constitutional.[5]

         The City and the City Officials asserted pleas to the jurisdiction asking the trial court to dismiss all of the Fund's claims for lack of subject-matter jurisdiction, citing various grounds, including that their governmental immunity had not been waived. The trial court heard the Fund's application for a temporary injunction and the pleas to the jurisdiction at the same time. The next day, the trial court signed orders sustaining the pleas to the jurisdiction and dismissing all of the Fund's claims, creating a final judgment. On the same day, the trial court signed another order stating that the court had granted the pleas to the jurisdiction and dismissed all claims and that the trial court believed that it was proper to dismiss these claims based on the pleas. But, the trial court stated that "in the alternative, should the dismissal [be] found to have been granted in error, the Court enters this Order [denying the Fund's application for temporary injunction]."

         II. Issues and Analysis

         In three appellate issues the Fund poses the following questions:

(1) Did the trial court err in granting the City's plea to the jurisdiction when the Fund properly pleaded for a declaratory judgment that S.B. 2190 is unconstitutional?
(2) Did the trial court err in granting the City Officials' pleas to the jurisdiction when the Fund alleged that they engaged in ultra vires conduct by acting pursuant to an unconstitutional ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.