2007-07-23_George_Kahoohanohano_et_al_v._State_of_Hawaii_et_al_-_Opinion_of_the_court_by_Justice_Acoba

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Kaho'ohanohano v. State Page 12 of 46 XIV. Plaintiffs rely on the testimony of their actuarial expert as evidence of an injury to all Plaintiffs. However, Plaintiffs' expert, Mark Johnson (Johnson), although fully explaining how the diversion of$346.9 million impaired the retirement system itself, does not show how each individual Plaintiff faces an "actual or threatened injury." Plaintiffs argue that diminishing ERS assets "postponed the day when employee contributions could be decreased or suspended; increased the risk of nonpayment, partial payment, or delayed payment of benefits; and made it more likely that there would be further deferrals or diversions of employer contributions in the future[.]" Johnson stated that, "[b]y diverting $346.9 million from the ERS, the legislature lessened the possibility of members receiving benefit enhancements in the future." He further explained that some examples of"benefit enhancements" from other states include the provision of additional benefits after 30 years of service, credit in pension formula for unused sick leave, increased minimum benefit for current retirees, and automatic cost of living increases. Because Plaintiffs have not put forth any evidence they would have received, or were entitled to, these benefits, the alleged injury is speculative. Johnson further recounted that in some other states, where a retirement system is "fully funded," the retirement system suspends employee and employer contributions. Thus he argued that "the diversion of$346.9 million from the ERS postpones the day when employee contributions could be decreased or suspended." However, like enhanced benefits, there is no evidence presented of when and if the ERS would become fully funded and suspend employee contributions. To conclude that Plaintiffs face a threatened injury because "Act 100 postpones the day" when their contributions "could be decreased or suspended" does not rise to the level of an "actual or threatened" injury. Akinaka, 91 Hawaii at 55, 979 P.2d at 1081 (citation omitted). Finally, Johnson stated that "[t]he diversion of$346.9 million from the ERS increased the system's unfunded liability"; thus, he contended that "Act 100 and other history involving the State's funding of the ERS mark a disturbing trend that could lead, in the not unforeseeable future, to a delay or reduction in the payment of pension checks to some or all of the members." Once again, while this trend is disturbing, a prediction that Act 100 "could lead, in the not unforeseeable future, to a delay or reduction" in retirement payments is not sufficient to rise to the level of a threatened injury as to an individual Plaintiff on this record. XV. In connection with their first argument, regarding the plain language of article XVI, section 2, while both "diminishment" and "impairment" describe different adverse consequences, Plaintiffs have nonetheless been unable to show sufficient, distinct, and personal injury here. As was explained previously, this court cannot ascribe standing simply because "we are cognizant of the concerns raised by [Plaintiffs.]" Sierra Club, 100 Hawaii at 250, 59 P.3d at 885. Plaintiffs must be able to show that they have "suffered an actual or threatened injury as a result of[the State's] conduct[,]" and for the foregoing reasons, that has not been demonstrated here. XVI. In regard to Plaintiffs' argument(2), Plaintiffs argue that "[t]he law explicitly provides that membership in the ERS commences as of the date of hire, [HRS § 88-42,] . . . [a]rticle XVI, section 2 provides that membership in the system is a 'contractual relationship[,]"' and "[s]tanding to enforce the 'contractual relationship' recognized by the [Hawai'i] Constitution was decided under New York law before Hawaii statehood." (Citing Birnbaum v. New York State Teachers' Ret. Sys., 152 N.E.2d 241 (N.Y. 1958).). In Birnbaum, the plaintiffs brought an action for a declaratory judgment "on behalf of themselves and all other school teachers in the State of New York similarly situated." Id. at 243. The plaintiffs challenged the validity of adopting a particular actuarial table for computing the annuity benefits of the members. Id. They argued that the new table constituted "a breach of the contractual relationship established by [the New York constitutional pension provision] as to members of the retirement system[.]" Id. New York's highest court rejected the defendants' argument that the plaintiffs did not have standing. Neither of the plaintiffs has resigned or applied for retirement. Also recognized,is the possibility as urged by the defendant,that one or both of the plaintiffs may cease their employment as teachers in the public school prior to attaining retirement status,in which event http://vvww.state.hi.us/jud/opinions/sct/2007/26178.htm 8/12/2008