San Diego will appeal costly pension ruling to U.S. Supreme Court, citing former mayor’s free-speech rights

San Diego will make one last legal attempt to keep the city’s 6-year-old pension cuts in place by filing an appeal with the U.S. Supreme Court on 1st Amendment free-speech grounds.

The City Council voted 8 to 1 this week in a session closed to the public to file the federal appeal, which could overturn a state Supreme Court decision in August ruling that the pension cuts were not legally placed on the ballot in 2012.

That ruling could force San Diego to pay millions in compensation to about 4,000 employees hired since voters approved the measure, which replaced guaranteed pensions with 401(k)-style retirement plans for all new hires except police officers.

The city plans to argue that the state ruling ignored the free-speech rights of former Mayor Jerry Sanders, who the court said violated state collective bargaining law by not negotiating with labor unions before pursuing the pension measure, called Proposition B.

The state Supreme Court ruled that Proposition B wasn’t a true citizen initiative because Sanders used his power and influence as mayor to support it, making him also obligated to meet with city union leaders before placing it on the ballot.

Attorneys for the city will argue that Sanders’ support of the measure was protected speech and that it’s a violation of his 1st Amendment rights for the state court to rule that such speech comes with an obligation to negotiate with unions.

That’s what the city argued last month in a 25-page brief asking the state Supreme Court to reopen the case, a request the court denied Wednesday.

“Since the First Amendment fully protects speech by elected officials, the capacity in which Mayor Sanders shared his views on pension reform simply does not matter,” Chief Deputy City Atty. Travis Phelps wrote.

“When elected officials, such as the city’s mayor, assume office they do not relinquish their First Amendment rights to address the merits of pending ballot measures or to even propose and draft them,” Phelps wrote. “The First Amendment protects the speech rights of elected officials and private citizens equally. Therefore, it is irrelevant whether Mayor Sanders was speaking as a private citizen or as the city’s mayor.”

Michael Zucchet, leader of the city’s largest labor union, said in a telephone interview Thursday that San Diego’s legal approach has no chance to succeed and could increase the city’s costs by delaying a resolution of the Proposition B legal mess.

“There is literally nothing in the California Supreme Court ruling that has any impact whatsoever on any elected official’s 1st Amendment rights,” Zucchet said. “This case is based on state bargaining law and Mayor Sanders’ actions back in 2011 and 2012. I don’t know how unequivocally it can be said: The questions presented to the court and the questions the court studied were not about the 1st Amendment.”

Supporters of Proposition B have previously argued that free-speech rights should be part of the case. Zucchet suggested those supporters are reluctant to give up without taking one last stab at that argument.

“It’s sort of all that’s left, so I’m not surprised they are going to throw one more Hail Mary to the United States Supreme Court on a federal constitutional issue in a case that has nothing to do with federal constitutional issues,” he said.

Although some council members expressed opposition to Proposition B before it was approved and have opposed pension cuts in general, the council has consistently tried to defend the pension cuts since they were approved by voters. That includes voting to appeal a 2015 state labor board ruling that overturned the cuts to California’s 4th District Court of Appeal, which in 2017 overturned the state labor board and declared Proposition B legal.

That ruling was overturned in August by the state Supreme Court, which reinstated the labor board ruling from 2015.

That ruling said San Diego must make employees hired since 2012 “whole” by compensating them for the loss of pensions and paying them interest penalties of 7%.

The city last month agreed to pay a consultant $100,000 to analyze the potential costs of doing so, which previous estimates have put somewhere between $20 million and $100 million.

Getting an estimate of its liability makes sense for the city from a financial perspective, but the analysis could also serve as a starting point for negotiations with labor unions over a potential settlement.

Appealing the case to the U.S. Supreme Court could also be an effort by the city to encourage the unions to engage in settlement talks.

Zucchet said the appeal isn’t scaring the unions into rushing into settlement talks because the appeal has no chance to succeed. If anything, he said, the appeal makes it harder to consider a settlement because the city would be simultaneously litigating the case and negotiating a settlement of it.

San Diego is the only city in California to discontinue traditional pensions for new hires. Proposition B was approved by more than 65% of city voters in June 2012.

david.garrick@sduniontribune.com

Garrick writes for the San Diego Union-Tribune.