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Cleven v. Soglin

United States District Court, W.D. Wisconsin

October 13, 2017

GARY CLEVEN, Plaintiff,
v.
PAUL SOGLIN, CITY OF MADISON, and DAVID SCHMIEDICKE, Defendants.

          OPINION AND ORDER

          WILLIAM M. CONLEY, DISTRICT JUDGE.

         Plaintiff Gary Cleven, a former stagehand, sued the City of Madison and two of its employees in their official capacity, claiming that the City's failure to report his back hours and wages to the Wisconsin Retirement System amounted to a constitutional taking and violation of due process. Before the court are the parties' cross-motions for summary judgment.[1] (Dkt. ##20, 24.) Because of its lengthy factual and procedural history, this case presents a variety of constitutional issues, not least being this court's exercise of jurisdiction in light of ongoing state proceedings. For the reasons discussed below, the court will grant summary judgment in part to defendants and dismiss the remainder of this case for a lack of ripeness.

         BACKGROUND[2]

         Plaintiff Gary Cleven worked as a stagehand at various venues operated by defendant City of Madison between 1980 and December 31, 2016. As a municipal corporation, the City is a Wisconsin Retirement System (“WRS”) participating employer. Defendant Paul Soglin is the Mayor of Madison, and defendant David Schmiedicke is the city employee responsible for determining and reporting WRS eligibility.

         During the course of Cleven's employment, he was originally categorized as an independent contractor and then later as an employee of the City. As of January 1, 1983, Cleven would have worked enough hours to be eligible for enrollment in the WRS, but for the City considering him and other stagehands to be independent contractors at the time, making him ineligible to participate. This not only meant that during this period Cleven was unable to set aside his own earnings (his employee contribution) in what has proved to be a very successful retirement fund, but did not receive the contributions by the City (the employer contribution).

         Following a petition by Local 251 for an election whether stagehands wanted to be represented by the union for collective bargaining purposes, the Wisconsin Employment Relations Commission (“WERC”) in 2004 determined that stagehands working at Madison venues were City employees, not independent contractors. After WERC reiterated this determination in January 2007, [3] Local 251 began negotiating with Madison as the stagehands' certified collective bargaining representative in 2007. Those negotiations included whether the stagehands were eligible to participate in the WRS.

         Eventually, the City agreed to report Cleven for enrollment in the WRS on December 27, 2009, designating him as a participant starting on January 1, 2010. However, the hours he worked between 1983 and 2009 were not reported at that time. Between January 1, 1983 and December 31, 2009, Cleven worked 46, 286.49 hours and earned $830, 112.24.

         Cleven appealed to the Department of Employee Trust Funds (“ETF”) on July 26, 2010, seeking an earlier enrollment date in the WRS. The presiding administrative law judge's proposed decision required that Cleven be enrolled as a participant as of January 1, 1983. This decision appears to have been reviewed by the ETF Board, which issued a March 11, 2013, decision that: (1) stagehands, including Cleven, were employees who should have been reported to WRS; (2) Cleven qualified as a City employee as of January 1, 1983, and should be enrolled as of that date; and (3) it did not have the equitable power to force the City to pay into the fund the past due WRS employee contributions.

         The Board's decision was challenged by stagehands on April 9, 2013, through a certiorari action to the Dane County Circuit Court. The parties dispute the extent of Cleven's personal involvement in that lawsuit before it was dismissed for failure to comply with statutory requirements in March 2014.[4] This dismissal was appealed to the Wisconsin Court of Appeals and then to the Wisconsin Supreme Court. The Wisconsin Supreme Court denied the petition for review on May 15, 2015.

         Cleven then brought a mandamus action in the Dane County Circuit Court on June 9, 2015, seeking an order requiring the City and Schmiedieke to report his hours and wages from 1983 through 2009. In April 2016, the circuit court required the City and Schmiedicke to “immediately (with all reasonable dispatch) report Plaintiff[] Gary Cleven's hours of work and wages to the WRS so Cleven can be enrolled as a participating employee as of January 1, 1983.” (Defs.' Resp. to Pl.'s PFOFs (dkt. #43) ¶ 32.) After that court denied the City's request for a stay, the City backdated Cleven's enrollment to January 1, 1983, and reported his hours and earnings to ETF on June 6, 2016. On July 15, 2016, the City was invoiced $377, 438.17 for the employer and employee contributions for plaintiff, including nearly $300, 000 in accrued interest charges. (Id. at ¶ 36.)

         In August 2016, the City sought to add Cleven and the ETF as third-party defendants in Gersbach et al. v. City of Madison et al., No. 16-cv-1269 (Dane Cty. Cir. Ct.). Cross motions for summary judgment regarding liability for the employee contribution and interest to the WRS remain pending in that case. (See Gersbach Docket (dkt. #54-14) 4-5.)

         Cleven retired on December 31, 2016, and received his first annuity payment in February 2017, the calculation of which included hours and wages from January 1, 1983. However, he now claims that he would have retired from City employment on December 31, 2011, when the City ceased operations at the Overture Center, but was unable to do so because the City had only enrolled him in the WRS on December 27, 2009. As a result, Cleven then had only 1.94 years of recognized service to the City, making him ineligible for monthly retirement benefits. According to the WRS, had the City reported his hours and wages back to January 1, 1983, Cleven would have been entitled to a $1, 678.90 monthly annuity payment under the 180-month guaranteed option if he had retired effective January 1, 2012. Cleven further alleges that if he had been eligible to start receiving retirement benefits at the start of 2012, his wife would have been able to max out allowable contributions to her own deferred compensation plan from 2012 through 2016. The parties dispute whether this latter action would have resulted in at least a $250, 000 gain for the Clevens.

         OPINION

         Summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (“By its very terms, [the summary judgment] standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.”). Consistent with the parties having cross moved for summary judgment, the court has identified no genuine material factual dispute, and will, therefore, proceed to rule on the legal issues before it. See Id. at 249-50.

         I. Takings Claim

         The Takings Clause of the Fifth Amendment prohibits “private property [from] be[ing] taken for public use, without just compensation, ” U.S. Const. Amend. v, and applies equally to personal and real property. Horne v. Dept. of Agric., 135 S.Ct. 2419, 2425 (2015).[5] To establish a takings claim, therefore, a plaintiff “must show that the government, by some specific action, took a private property interest for a public use without just compensation.” Adams v. United States, 391 F.3d 1212, 1218 (Fed. Cir. 2004) (citing Hodel v. Va. Surface Mining & Reclamation Ass'n, 452 U.S. 264, 294 (1981)). Importantly, not every state-caused deprivation constitutes an unconstitutional taking. Compare U.S. Const. Amend. v (“nor shall private property be taken for public use, without just compensation”) with Id. (“nor be deprived of life, liberty, or property, without due process of law”); see Porter v. DiBlasio, 93 F.3d 301 (7th Cir. 1996) (no takings claim because seizure of neglected horses fell within the police power of the state, which was a deprivation not warranting compensation under the Takings Clause).

         Assuming for purposes of summary judgment that plaintiff Cleven's retirement account in the WRS constitutes a vested property right, plaintiff's takings claim fails for a lack of ripeness. Even if his claim were ripe, plaintiff will face significant hurdles on any renewed takings claim, which are also briefly alluded to here, should he wish to pursue such a claim after all state proceedings conclude.

         A. Ripeness

         Because the Takings Clause proscribes takings without just compensation, a claim will not typically accrue until the government refuses to pay. Kolton v. Frerichs, 869 F.3d 532, 533, 535 (7th Cir. 2017) (citing Williamson Cty. Reg'l Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 186 (1985)). A plaintiff must generally seek out compensation under state law before bringing a federal takings suit, but as clarified by the Supreme Court “Williamson County ‘is not, strictly speaking, jurisdictional.'” Id. at 533-34 (quoting Horne v. Dept. of Agric., 133 S.Ct. 2053, 2062 (2013)). As such, it “does not diminish federal courts' adjudicatory competence.” Id. ...


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