Can a judge rule impartially on pension cuts when her mother, her son, her uncle and even she herself all have a stake in preserving the status quo?
Rhode Island, the site of a sweeping pension overhaul last year, has brought in a prominent New York lawyer to litigate the question: David Boies, perhaps best known for representing Al Gore in the fight over the 2000 presidential election and for waging an antitrust battle against Microsoft on behalf of the government in the 1990s.
Rhode Island’s dispute may not reach quite those dramatic heights, but it is being closely watched as a first major test of whether, and how, financially strained states and cities can cut the benefits of their workers and retirees.
Several public employee unions have sued Gov. Lincoln Chafee and other Rhode Island officials, accusing them of acting illegally when they pushed through a package of money-saving pension cuts last year, including suspending annual cost-of-living increases for most retirees. The unions want the richer benefits restored.
Their five pension lawsuits were assigned to Judge Sarah Taft-Carter of the state Superior Court, who has handled public pension cases before and handed a big victory to the unions in one recent case. Mr. Boies, who at $50 an hour is working for a small fraction of his ordinary fee, is seeking a less conflicted judge, and could even ask to move the case into federal court.
The case has raised questions and strong feelings about the overhaul in Rhode Island, a state so small that it seems as if nearly everybody has friends or family in the pension system. Could the judge see beyond the harsh effects on her own family?
When the subject came up in a hearing in October, Judge Taft-Carter acknowledged that her son, a state trooper, was earning a pension, and her mother, the widow of a mayor, was already receiving one. (The uncle’s pension came to light only later.)
She said she had researched the matter, sought advice from a judicial ethics board and concluded that her relatives’ interests “will not reasonably impact my ability to be impartial.”
Her son joined the state patrol just three years ago, she said, so calculating his pension “requires a large degree of speculation and assumption.” Her mother’s pension was too small to be a factor, she said. (Court papers put it at about $22,000 a year.)
And while the overhaul means the judge’s pension will be smaller despite having to contribute more, she said that was true of all judges in the state: “If my financial interest should require disqualification, then all other state judges would be similarly required to recuse themselves.”
Mr. Boies is expected to appear in court on Friday and cite the state’s judicial code of conduct, which requires judges to recuse themselves when their spouses, parents or children have an economic stake in the litigation before them.
The state’s Supreme Court justices, who have been asked for a review, are also members of the state pension system.
In an interview, Mr. Boies said that challenging Judge Taft-Carter’s impartiality was just “the first step,” and the bigger issue was whether any judges in Rhode Island could handle the case, given their personal stakes. Companies routinely have their pension disputes decided by federal courts, which grant more leeway in changing pension plans.
“The plaintiffs brought this case the way they did to try to avoid federal jurisdiction,” Mr. Boies said.
Whatever the outcome of the hearing, Mr. Boies said he would continue to represent Rhode Island until all of the lawsuits and appeals were decided.
Mr. Boies, whose standard fee is $1,250 an hour, said $50 an hour was “the same fee that I charged the United States when I represented the Department of Justice in the Microsoft case.”
Mr. Boies became involved, he said, because he was convinced that Rhode Island’s pension troubles were just the tip of a $5 trillion iceberg of unsecured retirement promises to the nation’s millions of public workers. “This is something that can cripple state and municipal governments at a time when the federal government is, more and more, cutting back on the services it provides,” he said.
Public employee unions, in Rhode Island and elsewhere, argue that people like Mr. Boies are exaggerating the size of America’s total public pension shortfall.
This article has been revised to reflect the following correction:
Correction: December 4, 2012
An earlier version of this article wrongly attributed the following quotation: Rhode Island’s effort is “the clearest example of fundamental pension reform that we have right now,” Ms. Monahan said. “Even though whatever Rhode Island decides doesn’t serve as actual precedent for other states, other states and cities still want to know if it can work.” The quote was from Amy Monahan, not Gina Raimondo.
Rhode Island Judge Has Stake in Pension Case Outcome
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Rhode Island Judge Has Stake in Pension Case Outcome
