Injunction blocking changes to city retiree benefits reversed.

 
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Byline: Eric T. Berkman

A preliminary injunction blocking the city of Woonsocket from changing the terms of retired police officers' health benefits was improperly issued, the Rhode Island Supreme Court has ruled.

A series of collective bargaining agreements entitled the plaintiff retirees and their beneficiaries to free lifetime health benefits. The defendant city and the co-defendant Woonsocket Budget Commission, established by the state to stabilize the cash-strapped city's finances, sought to change the contract to implement a 20-percent co-pay.

Superior Court Judge Jeffrey A. Lanphear enjoined the defendants from implementing the changes, finding that because the city was not on the verge of bankruptcy or under receivership, the changes violated the Contract Clause of the Rhode Island Constitution.

The Supreme Court reversed.

"[T]he trial justice erred applied the wrong standard and gave no deference to the City," Justice Francis X. Flaherty wrote for the court.

Consistent with the court's 2019 opinion in Cranston Police Retirees Action Committee v. City of Cranston, "this matter must be remanded to the lower court for the trial justice to implement a 'less deference' standard where the City is required to prove that the substantial impairment to plaintiffs' contractual rights was reasonable and necessary to fulfill an important public purpose," Flaherty added.

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"This has ramifications throughout the state. What the court did goes a long way toward establishing a sense of normalcy in terms of what public employee retirees can expect."

Edward C. Roy Jr., North Kingstown

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The court also ruled that while Lanphear properly found that the retirees' benefits had vested, he erred in finding that the Woonsocket Budget Commission lacked statutory authority to make the changes.

The 28-page decision is Hebert, et al. v. The City of Woonsocket, et al., Lawyers Weekly No. 60-085-19. The full text of the ruling can be found here.

'Important message'

The defendants were represented by Providence lawyers Sara A. Rapport, Michael J. Marcello, Matthew H. Parker, Timothy K. Baldwin and John J. DeSimone. In issuing both Hebert and Cranston Police, Rapport said, the Supreme Court has recognized that the Contract Clause permits impairment of contracts by municipalities in situations of fiscal distress.

"That is an important message for cities and towns in attempting to avert bankruptcy," Rapport said.

Edward C. Roy Jr. of North Kingstown...

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