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Chard v. The Board of Trustees of City of Hollywood Firefighters' Pension System

United States District Court, S.D. Florida

September 30, 2019

RUSSELL CHARD, on behalf of himself and similarly situated individuals, and RETIRED FIREFIGHTERS LEGAL DEFENSE FUND, INC., Plaintiffs,
v.
THE BOARD OF TRUSTEES OF THE CITY OF HOLLYWOOD FIREFIGHTERS' PENSION SYSTEM and CITY OF HOLLYWOOD, Defendants.

          ORDER

          ROY K. ALTMAN, UNITED STATES DISTRICT JUDGE

         THIS MATTER comes before the Court upon the Defendants' Motions to Dismiss or Stay [ECF Nos. 20 & 23].[1] Both Motions to Dismiss or Stay are fully briefed, [2] and the Court has carefully considered the parties' arguments, the record, and the applicable law. For the reasons set out below, the Defendants' Motions are GRANTED in part-and, as a result, this matter is hereby STAYED until further Order of the Court.

         THE FACTS

         This case arises from an alleged modification to the calculation of pension payments the City's retired firefighters are owed under the City's Firefighter Pension System (the “Pension”). The Plaintiffs-Russell Chard and the Retired Firefighters Legal Defense Fund, Inc. (the “Association”)-represent a putative class of qualifying, retired City firefighters who, by this litigation, hope “to protect the rights of [r]etired [f]irefighters as beneficiary members” of the Pension. Pl. Compl. ¶¶ 3-4. The Complaint alleges that the City is the Pension's “sponsoring government” and that the Board is an “independent body politic with a fiduciary duty”[3] to provide retirement benefits to, among others, retired firefighters.[4] Id. ¶¶ 5-6. The Pension at issue here was, by the Plaintiffs' telling, created by the Florida Legislature, codified by Florida statute, and “funded by the State of Florida's annual rebate of property insurance premium tax revenues in addition to mandatory contributions from the City and its firefighters.” Id. ¶¶ 7-8. The Pension is also “managed, administered, operated, and funded”-at least in part-by both the Florida Department of Management and the Board. Id. ¶¶ 9-14.

         The parties dispute the propriety and effects of an alleged modification to the “supplemental pension benefit” (“SPB”) that was collectively bargained for in 1999 and which is payable to retired firefighters under the Pension. Id. ¶¶ 23-25; see also MTD at 2.[5] The Plaintiffs contend that, in 2014, the Board held a public meeting at which it voted to modify the algorithm it would thereafter use to calculate the SPB by using an “actuarial smoothed value annual investment return” instead of the “market value” method it had employed before. Pl. Compl. ¶¶ 36-37. The Board also voted to issue the SPB “based on a pool of assets that was substantially less than the retirees' portion of the fund's earnings.” Id. These modifications “substantially reduced the monetary value” of the SPB. Id. ¶ 40. And, the Plaintiffs say, this “contractual impairment” has continued through the filing of the Complaint. Id. ¶¶ 41-55.

         The Complaint levies six causes of action against the Defendants: impairment of the obligation of contract under Article I, § 10 of the U.S. Constitution (Count I); unlawful taking without just compensation under the 5th and 14th Amendments to the U.S. Constitution (Count II); violations of Article 1, §§ 6 & 10 of the Florida Constitution (Count III); violations of Article X, § 6 of the Florida Constitution (Count IV); breach of contract (Count V); and equitable estoppel and waiver (Count VI). The Plaintiffs also petition for declaratory relief under 28 U.S.C. §§ 2201-2202. Specifically, they appeal for a declaration in their favor “with regard to the enforceability of their rights to the [SPB] and the entry of an order . . . enforcing their contractual entitlement to the [SPB] and enjoining Defendants from using their powers to impair these contractual rights.” Id. ¶ 86. In this way, the Complaint seeks “mixed” remedies-a combination of money damages and declaratory relief. See generally Lexington Ins. Co. v. Rolison, 434 F.Supp.2d 1228, 1238 (S.D. Ala. 2006) (explaining the relationship between declaratory relief on the one hand and monetary- or “coercive”-claims on the other). At bottom, then, the Plaintiffs ask the Court to parse the City's municipal code-along with any other applicable bodies of state or federal law-and to declare unlawful the type of “modification” the Board allegedly undertook with respect to the SPB.

         One last point: it is undisputed that an earlier-filed, nearly-identical complaint-brought by separate plaintiffs on behalf of this very same putative class of retired firefighters-is, even now, pending in Florida's 17th Judicial Circuit (the “state court proceeding”).[6]

         ANALYSIS

         Where a federal plaintiff seeks only declaratory relief in a dispute whose merits are already being litigated in state court, the federal court must ask “whether the questions in controversy between the parties to the federal suit, and which are not foreclosed under the applicable substantive law, can better be settled in the proceeding pending in state court.” Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995) (citations omitted); accord Brillhart v. Excess Ins. Co. of America, 316 U.S. 491 (1942). This doctrine-known as Wilton/Brillhart abstention-affords “substantial discretion to [this Court] in deciding whether to exercise jurisdiction over a case when there is a parallel state court case.” Wilton, 515 U.S. at 286; see also W. Coast Life Ins. Co. v. Ruth Secaul 2007-1 Ins. Tr., No. 09-81049-CIV, 2010 WL 11506019, at *2 (S.D. Fla. May 14, 2010) (acknowledging that the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, invests district courts with broad discretion to refuse to exercise jurisdiction where federal and state cases are parallel). For purposes of Wilton/Brillhart abstention, federal and state cases are parallel when they “involve substantially the same parties and substantially the same issues.” Acosta v. Gustino, 478 F. App'x. 620, 621 (11th Cir. 2012).

         Expounding upon the Wilton/Brillhart abstention doctrine, the Eleventh Circuit has made clear that the well-trodden “considerations of federalism, efficiency, and comity that traditionally inform a federal court's discretionary decision whether to abstain from exercising jurisdiction over state-law claims in the face of parallel litigation in the state courts” encompasses at least nine factors-among these: (1) the strength of the state's interest in having the issues raised in the federal declaratory action decided in the state courts; (2) whether the judgment in the federal declaratory action would settle the controversy; (3) whether the federal declaratory action would serve a useful purpose in clarifying the legal relations at issue; (4) whether the declaratory remedy is being used merely for the purpose of “procedural fencing”-that is, to provide an arena for a race to res judicata, or to achieve a federal hearing in a case that is otherwise not removable; (5) whether the use of a declaratory action would increase the friction between our federal and state courts and thus improperly encroach upon state jurisdiction; (6) whether there is an alternative remedy that might be better or more effective; (7) whether the underlying factual issues are important to an informed resolution of the case; (8) whether the state trial court is in a better position than the federal court to evaluate those factual issues; and (9) whether there is a close nexus between the underlying factual and legal issues and state law or public policy, or whether federal common or statutory law dictates a resolution of the declaratory judgment action. See Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328, 1331 (11th Cir. 2005).

         In this case, the Plaintiffs-citing both the City's municipal code and a litany of Florida statutes and constitutional provisions[7]-have petitioned for a declaration that the Defendants were prohibited from modifying the method that is used to calculate the SPB. Pl. Compl. ¶¶ 85-86. If this were the only relief the Plaintiffs were seeking, the application of Wilton/Brillhart abstention would be relatively straightforward. But the Plaintiffs also ask for “coercive” remedies-namely, money damages. See Wilton, 515 U.S. at 282. And, as the parties concede, the Eleventh Circuit has not yet had occasion to tell us which abstention test-either Wilton/Brillhart or the more restrictive doctrine set out in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976)[8]-should apply in cases, like ours, that involve “mixed” legal and equitable claims.

         In Regions Bank v. Commonwealth Land Title Ins. Co., No. 11-23257-CIV, 2012 WL 1135844 (S.D. Fla. Apr. 4, 2012), this court summarized the three approaches that federal courts across the country have employed in resolving precisely this sort of “mixed” relief case:

For example, some circuits hold that the Wilton standard is never applicable where non-declaratory claims are joined with declaratory ones, and that the abstention decision must be reached by reference to Colorado River only . . . [o]ther circuits consider whether the nondeclaratory claims are independent of any claim for purely declaratory relief; if so, then Wilton does not apply. Still other courts follow an “essence of the lawsuit” or “heart of the action” test that looks to whether the outcome of the non-declaratory claims hinges upon the outcome of the declaratory ones; if so, then Wilton's standard governs; if not, then Colorado River applies.

Regions Bank, 2012 WL 1135844 at *3 (citations omitted). For the following two reasons, the Court is persuaded that the third-or “heart of the action”-test should apply where, as here, parallel federal and ...


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