Another Nail in the Coffin for Moorlach’s Pension Lawsuit Folly

OC Supervisor John Moorlach - Photo: Chris Prevatt

I’m not really sure how many nails this coffin needs but Supervisor John Moorlach and the Orange County Board of Supervisors were on the receiving end of another coffin nail from the California 2nd District Court of Appeals. The Court ruled Wednesday in a 3-0 decision that the lawsuit brought by the County of Orange in an effort to overturn pension benefits negotiated by a previous Board and awarded to the Association of Orange County Deputy Sheriffs (AOCDS) almost ten years ago was not illegal.

The 29 page opinion states “the County emphasizes its current difficult financial situation and the ruinous fiscal irresponsibility of the prior board of supervisors.  Imprudence, however, is not unconstitutional.”The court refused to accept the County’s argument that unfunded actuarial liabilities created by ‘past service liabilities’ and ‘unfunded liabilities’ based upon actuarial projections create a municipal debt that would be subject to municipal debt limitations. 

The Court determined that the 2005 Attorney General opinion cited by the county did not address the municipal debt limitation and is not inconsistent with the earlier 1982 Attorney General opinion that said [T]he past service liability and the unfunded liability are a function of the actuarial methods and assumptions used to fund a pension plan. [T]he liabilities are not owed by the plan.  They are primarily a function of the methods and assumptions used by the actuary to fund the plan.

To Court rejected the County’s argument that the retroactive pension benefits awarded to the deputy sheriffs amounted to constitutionally prohibited extra compensation stating “No court, however, has found that changes to pension benefits awarded for past service to employees with already vested pension rights are unconstitutional extra compensation.” The Court further concluded “that the past service portion of the 3% at 50 enhanced pension benefit formula for AOCDS members is not unconstitutional extra compensation.”

In conclusion their opinion states:

“The County exercised its discretion, as authorized by the statute, when after collective bargaining the board of supervisors approved the resolution authorizing 3% at 50 for all years of service for AOCDS members employed on June 28, 2002.”

The judgement of the trial court was affirmed and the respondents (AOCDS) were awarded their costs on appeal.

The decision marks the third time in 2 years the County of Orange has been rejected by the courts in their legal effort to overturn 3% at 50 pension benefits for Orange County Deputy Sheriffs. They were quickly tossed out of Los Angeles Superior Court last February 26 and again on May 22, before even being set for a formal hearing.

Bottom line, the County is now on the hook for not only the County’s $2.5 million in legal costs for this frivolous abuse of the legal system by Supervisor Moorlach and his co-conspirator’s on the Board of Supervisors, but also the costs incurred by the defendants. Those costs have yet to be determined but will likely amount to several million dollars.

Jennifer Muir, Communications Director for the Orange County Employees Association said of the decision:

“The courts have consistently said that the county case lacks the merit to even go to trial. Hopefully, this time the County will listen.”

The Association of Orange County Deputy Sheriffs released the following statement:

After three strikes, the County is out, said Wayne Quint, President of the Association of Orange County Deputy Sheriffs (AOCDS). We hope the Orange County Board of Supervisors now come to their senses and realize what we, and their attorneys, told them four years ago — they are wrong on the facts and wrong on the law on this one. They can’t win. They have been told this by three different law firms and four judges in two different courts. If they don’t realize it at this point, they are in major denial. How much more apparent can it be that they have no legal argument?

One of the guiding principles that new Board Chairman Bill Campbell referenced this week upon taking up his leadership role is “living within your means.” While the Board considers whether or not to appeal to the State Supreme Court, this principle should probably be at the top of their minds during their discussions.

At a time when we are facing more and more budget reductions, the taxpayers of Orange County can ill afford the gamble of another ill advised, and legally flawed, appeal of a frivolous lawsuit that had no chance of success from its beginning.

Time to bury John Moorlach’s Folly.

  6 comments for “Another Nail in the Coffin for Moorlach’s Pension Lawsuit Folly

  1. kepdapeace
    January 27, 2011 at 8:14 am

    On point and accurate. Tthe critical observation is that the court sees through the folly of the “unfunded liability” myth. This smoke and mirrors trick of accountants does not take into account ANY future funding or anticipation of proceeds from the participants yet unduly burdens them with assumed costs. Unfortunately, the offensive posture of the Gang of Five is likely to continue to the supreme court. And, unlike the mythical unfunded liability, the defendant’s court costs are very real.

  2. January 27, 2011 at 10:15 am

    Waitin’ on the wooden stake?

  3. Cook
    January 27, 2011 at 5:24 pm

    The joke is on everyone.

    Egypt is not the only place that has pyramids, there are plenty of them on Wall Street.

    Within the next ten years or so, I expect every major pension, including the big government ones like CalPers etc to fail.

    Only a fool would believe those fancy pieces of paper with the gold leaf letter heads are proof that there are cash or assets behind the balance sheets. Wall Street spent the money, it was spent on prior retirees and what ever was left was spent on insider bonuses. And they have gotten away with this sham so far because of the dollars spent on weak minded goofs called politicians.

    The best retirement protection you can provide for yourself and you family is the knowledge of how to feed yourself without supermarkets.

  4. January 27, 2011 at 7:03 pm

    It’s a big coffin.

    Everyone, every pension fund public or private, every state, county and city will eventually be in a coffin.
    The U.S. economy is collapsing.

    “Angelides Report Vindicates LaRouche” http://www.larouchepac.com/home (Right column).

    Angelides Report Vindicates LaRouche (12 minute video)

    The Angelides Report, released today by the Financial Crisis Inquiry Commission, is a full vindication of economist Lyndon LaRouche, and should be seen as a critical turning point in our war today to reassert our republic’s anti-British credit system in the form of a re-implementation of Glass Steagall. View with the LPAC-TV feature film “The Takedown of Glass-Steagall”.

  5. toaster
    January 28, 2011 at 8:46 pm

    wow there are alot of glen beck bubble burst buy gold whack jobs out here today !

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