The bill passed during last month's special legislative session that will cut public retirement benefits is set to face a challenge in the Oregon Supreme Court, according to the lawyer for the state's largest public sector union.
Attorney Greg Hartman, who represents Service Employees International Union Local 503 and the PERS Coalition, says he plans to file an appeal of Senate Bill 861 but hasn't set a date.
That bill is similar to Senate Bill 822, which legislators passed last spring and immediately was appealed to the Supreme Court. It contains a clause that allowed it to bypass the typical path through the court system.
SB 861 has the same clause, but it's not going to get its own lawsuit when Hartman appeals it.
Instead, it will be rolled in to the original suit, Department of Justice spokesman Jeff Manning said.
The reason? The bills do the same thing. Both reduce the annual cost-of-living increases retirees receive on their pensions if they're in the Public Employees Retirement System.
The legal question behind both is the same: Does it break the state's contract with retirees to cut these annual increases?
Manning said people have 60 days from Gov. John Kitzhaber's signing of the bill, which happened Oct. 8, to file an appeal. He said the department tentatively expects to be turning in findings by next March and to give oral arguments next October.
When Hartman appeals SB 861, it will join the other three appeals of SB 822 that already are going before the court.
The most prominent of the lawsuits came from the PERS Coalition, a group of current and retired public employees represented by Hartman. Two others were filed on behalf of individuals: Michael Reynolds, a retired Oregon public employee who lives in Washington, and Wayne Stanley Jones, a retiree who lives in Utah.
Hartman made 12 claims for relief in his filing.
He said SB 822 is unconstitutional because it "impairs the contracts" between state workers and their employers, and because it constitutes a "taking" of property rights without compensation.
He also argued that the bill is a breach of contract for anyone who is or was a public employee because they were promised 2 percent COLAs when they were hired, and that can't be changed retroactively.
If the Supreme Court decides it is, in fact, a breach of contract to reduce the COLA, there's no indication the Legislature will try to cut PERS benefits again. Kitzhaber has said PERS is now "off the table" for him, and House Majority Leader Val Hoyle backed him up.
"There is no Plan B" if SB 861 is thrown out in court, she told Democrats at the their biennial summit in Sunriver. She said Kitzhaber told Democrats he would drop the PERS issue even if the court appeals are successful.
"That, to me, was worth (passing the bill)," Hoyle said at the summit. "Getting PERS off the table for the next five years."
hhoffman@Statesman Journal.com, (503) 399-6719 or follow at twitter.com/ HannahKHoffman