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Mecouch v. Pension Board of Employees' Retirement System of County of Milwaukee

United States District Court, E.D. Wisconsin

April 21, 2016

GEORGE H. MECOUCH, JR., Plaintiff,


LYNN ADELMAN, District Judge.

Plaintiff George Mecouch brings this action against his former employer, Milwaukee County (“the County”), and the entities which administer the County’s employee retirement plan, The Employees’ Retirement System (“ERS”) and the Pension Board (“the Board”), challenging their decision to revoke his pension benefits. Plaintiff brings numerous federal claims under 42 U.S.C. § 1983 as well as a claim for state law certiorari review and a takings claim under the Wisconsin constitution. ERS and the Board bring a motion to dismiss under Fed.R.Civ.P. 12(b)(6). The County joins that motion and brings its own 12(b)(6) motion. I now address both motions to dismiss.

I. Background

Plaintiff worked for the County in various capacities between 1978 and 1990. Between 1978 and 1982, plaintiff had the option to voluntarily enroll in the ERS but did not do so. Because he did not take advantage of the optional enrollment, those four years were not counted toward the number of years he needed for his retirement benefits to vest. In 1982, he obtained a new position, and his enrollment in ERS became mandatory and automatic. In 1990, plaintiff took advantage of a longstanding ERS policy known as the buy-in policy which allowed him purchased service credit for this four-year period in order to fully vest his retirement benefits. Plaintiff submitted his written request to purchase the additional service credit on August 15, 1990, two days before resigning from County employment. On September 21, 1992, the ERS notified plaintiff that his request to purchase service credit had been granted. Plaintiff paid the required amount and was notified that his retirement benefits were fully vested.

In 2011, plaintiff turned sixty and began receiving pension benefit payments from the ERS. However, in April 2014, the ERS informed plaintiff that his service credit purchase was not allowed under County ordinances and that he was not entitled to the vested pension benefits he had been receiving. As of July 1, 2014, the ERS discontinued payments and demanded that plaintiff repay the benefits he had already received, totaling more than $50, 000.

Plaintiff appealed the ERS’s determination to the Board under ERS Rule 1016, an administrative rule which governs the process for appealing an ERS decision. His appeal was heard at a Board meeting on February 18, 2015. At the hearing, plaintiff was represented by counsel, who made a presentation to the Board. On February 27, the Board denied plaintiff’s appeal and informed plaintiff that he was entitled to seek judicial review of the decision.

Plaintiff was one of many County employees who were notified in 2014 that their purchase of service credit, which the ERS had approved, had actually been in violation of County ordinances. This was the result of an inquiry by the Internal Revenue Service (“IRS”) in which the IRS discovered that the ERS was allowing the purchase of service credit in violation of County ordinances and determined that this practice jeopardized the ERS’s tax status. Compl. ¶ 88 (ECF No. 1-2). On February 17, 2015, the County adopted an ordinance which retroactively amended certain ERS rules in order to make many of the previously invalid service credit purchases valid, allowing many employees to keep their benefits. However, the ordinance did not cover 13 former County employees’ service credit purchases, including plaintiff’s, which according to defendants are still invalid under County ordinances.

II. Discussion

To survive a Rule 12(b)(6) motion, plaintiff must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In construing plaintiff’s complaint, I assume all factual allegations to be true and disregard statements that are conclusory. Id.

A. Procedural Due Process Claim

Plaintiff’s first § 1983 claim is that defendants violated his procedural due process rights by (1) failing to give plaintiff an opportunity to be heard on a particular issue, (2) failing to provide a neutral decision maker based on the County attorney’s participation in his hearing, and (3) failing to timely and adequately inform him of the reasons for its decision and his right to appeal.[1] At this point, the parties do not dispute whether plaintiff has a protected property interest; thus, I will assume this and move on to determining what process was due. See Leavell v. Ill. Dep’t of Nat. Res., 600 F.3d 798, 804 (7th Cir. 2010). A procedural due process violation “actionable under § 1983 is not complete when the deprivation [of a protected interest] occurs; it is not complete unless and until the State fails to provide due process.” Zinermon v. Burch, 494 U.S. 113, 126 (1990). Thus, “failing to avail oneself of adequate state court remedies . . . is a substantive failure that defeats the cause of action.” Leavell, 600 F.3d at 807.

In this case, plaintiff has not availed himself of all available state remedies because state certiorari review is still available. Further, he does not allege the inadequacy of certiorari review; in fact, he brings a claim for certiorari review along with his federal claims. Plaintiff argues that state certiorari review should not preclude his procedural due process claim because the standard of review is not de novo but provides no support for the assertion that a discretionary standard of review renders a state procedural remedy inadequate. Additionally, state certiorari review includes review of whether the Board “acted according to the law, ” which means whether it followed “the common-law concepts of due process and fair play.” Marris v. City of Cedarburg, 176 Wis.2d 14, 24 (1993) (internal quotations and citations omitted). Thus, certiorari review will give plaintiff an opportunity to raise his due process arguments, giving the state courts an opportunity to correct any procedural errors and remand the matter for a new hearing. Certiorari review, therefore, is adequate to address plaintiff’s procedural concerns, and thus plaintiff was required to exhaust that state remedy before bringing a federal procedural due process claim. Because he has not done so, he has not adequately alleged that he has been deprived of a property interest without due process of law, and I will dismiss his procedural due process claim.

B. Equal Protection Claim

Plaintiff also brings an equal protection claim against defendants, alleging that they intentionally treated him differently by not including him in the 2015 County ordinance which retroactively made most employees’ previously improper service credit purchases valid. The nature of plaintiff’s claim is unclear; in his brief in opposition, he refers to it as a class-of-one claim, which would require plaintiff to allege that he was intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment. D.B. ex rel. Kurtis v. Kopp, 725 F.3d 681, 685 (7th Cir. 2013). However, his complaint seems to allege a more traditional equal protection claim, that defendants intentionally treated a group of individuals, namely he and the 12 other individuals whose service credit purchases were not retroactively made valid by the 2015 County ordinance, differently with no rational basis. See F.C.C. v. Beach Commc’ns, Inc., 508 U.S. 307, 313 (1993) (discussing the rational basis standard of review for legislative classifications which neither infringe on fundamental constitutional rights nor involve a suspect classification). Regardless ...

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