California Supreme Court Grants Review of First Post-Alameda Decision on Compensation Earnable Restrictions — Amicus Curiae Briefs Due August 2024

Nossaman eAlert

In surprising news for the California county retirement system community, on April 17, 2024, the California Supreme Court granted review of Ventura County Employees’ Retirement Ass’n v. Criminal Justice Attorney’s Ass’n of Ventura County (2024) 98 Cal.App.5th 1119 (the VCERA decision).

As described in our recent eAlerts (see here), the VCERA decision is the first published California court of appeal decision applying the state Supreme Court’s guidance in Alameda County Deputy Sheriff’s Ass’n v. Alameda County Employees’ Retirement Assn. (2020) 9 Cal.5th 1032 (the Alameda decision), as to legislative restrictions on compensation earnable addressed in that decision. The topic of the VCERA decision is the “stradding” issue — that is, the statutory restriction, applicable since January 1, 2013 to “legacy” or “classic” members of systems governed by the County Employees Retirement Law of 1937 (CERL), on pensionability of leave cashouts. Gov. Code sections 31461(b)(2) & (4) of CERL limit the leave that may be included in “compensation earnable” to the maximum that those members are permitted to earn and receive in cash (i.e., “earned and payable”) “each 12 months” under applicable labor agreements, thus excluding from retirement allowance calculations any excess amounts that members may cash out over “straddled” calendar or fiscal years.

The VCERA decision was unanimous, it upheld the trial court’s conclusions, it expressly implemented language from the Supreme Court’s own Alameda decision, and it did not conflict with any other California court of appeal on the “straddling” topic it addresses, which is typically why the Supreme Court grants review (i.e., “to secure uniformity of decision” under Cal. Rule of Court 8.500(b)(1)). Thus, Supreme Court grant of review of this ruling seemed unlikely.

Another basis for Supreme Court review under Rule 8.500(b)(1) is, however, “to settle an important question of law,” and it may be that the Court viewed the implementation of its Alameda decision as falling into that category.

(For background on the Alameda decision, which upheld the constitutionality of changes to CERL that were adopted in connection with enactment of the California Public Employees Pension Reform Act of 2013, see here: California Courts Continue to Address Vested Rights Lawsuits.)

In any event, for those public retirement systems, public agencies, and others with an interest in obtaining clarity and finality on the important question of law regarding the correct interpretation of the California Legislature’s compensation earnable definition as applicable to CERL retirement systems – now is the time to speak up.

Given the current briefing schedule, amicus curiae briefs are currently due in early August 2024. The case is Ventura County Employees’ Retirement Association v. Criminal Justice Attorneys’ Association of Ventura County, Case: S283978, Supreme Court of California.

Nossaman represented VCERA through the superior and appellate court proceedings. Ashley Dunning, co-chair of the Pensions, Benefits & Investments (PB&I) Group, was lead trial and appellate counsel.

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