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HEIMBACH v. REGAN

December 21, 1983

LOUIS HEIMBACH as County Executive of Orange County and the County of Orange, Plaintiffs against EDWARD V. REGAN, as Comptroller of the State of New York, Defendant and ORANGE COUNTY EMPLOYEES UNIT, ORANGE COUNTY LOCAL 836, CIVIL SERVICE EMPLOYEES ASSOCIATION, INC., LOCAL 1000, AFSCME, AFL-CIO, Intervenor-Defendant


The opinion of the court was delivered by: POLLACK

OPINION AND ORDER

MILTON POLLACK, Senior United States District Judge

 These are motions of defendant and the intervenor for judgment on the pleadings, pursuant to Fed.R.Civ. P. 12(c). As shall be set forth in greater detail below, this action should be dismissed as plaintiffs lack standing to assert their claims.

 By this action, plaintiffs seek to avoid the consequences of a decision entered against them by the New York Supreme Court, Appellate Division, on a matter essentially involving the interpretation of a New York State statute. Defendants herein have come forward with a motion for judgment on the pleadings, pursuant to Fed.R.Civ.P. 12(c). Intervenors in this action have brought a motion to dismiss plaintiff's complaint, pursuant to Fed.R.Civ. P. 12(b) (6), for failure to state a claim on which relief may be granted as to them.

 Plaintiffs are Orange County, New York, and the County Executive thereof.In 1978 and 1981, the County entered into collective bargaining agreements with the representative of its employees, intervenor herein. In both of those agreements, the County agreed to assume each employee's Federal Insurance Constribution Act (FICA), 26 U.S.C. §§ 3101-3126, contribution obligation.

 Orange County participates in the New York State Employee's Retirement System. Employer contributions to the New York State Retirement Fund are based on the "annual compensation" paid by an employer to its employees. N.Y. Retire. & Soc. Sec. Law § 23(b)(1) (McKinney 1971).

 Defendant Regan, Comptroller of the State of New York, and administrator of the Fund, demanded that Orange County's contributions to the Retirement Fund be based on both the wages/salaries and the employee FICA contributions paid by the County to and on behalf of its employees. When Orange County refused to make Retirement Fund contributions based in part on its payment of its employees' FICA contribution obligations, defendant instituted proceedings against plaintiffs in state court.

 On January 6, 1983, the Appellate Division of the New York State Supreme Court rules that plaintiffs' Retirement Fund contributions are to be calculated by including the amount paid by Orange County to discharge its employees' FICA contribution obligations in the "annual compensation" paid by the County to its employees.Regan v. Heimbach, 91 A.D.2d 71, 458 N.Y.S.2d 286 (1983). That decision was based on an interpretation of N.Y. Retire. & Soc. Sec. Law § 2(2)(a) (McKinney 1971), which defines the term "annual compensation," as it is used in § 23 (b)(1). The New York Court of Appeals denied leave to appeal the case, 58 N.Y.2d 610 (1983), and subsequently refused to reconsider that denial, 59 N.Y.2d 969, 453 N.E.2d 554 (1983).

 Plaintiffs then brought an action in this court under 42 U.S.C. § 1983, claiming that the administration of the Retirement Fund so as to require Orange County to make contributions to that Fund based in part on its assumption of its employees' FICA contribution obligations violates Orange County's rights under the Equal Protection Clause of the Fourteenth Amendment and the Contracts Clause.

 Defendant's motion for judgment on the pleadings asserts that plaintiffs lack standing to raise claims under § 1983; that res judicata principles bar litigation of plaintiffs' claims; and that the plaintiffs have failed to state a claim on which relief can be granted. The intervenor, the collective bargaining representative of plaintiffs' employees has moved to dismiss plaintiffs' action, pursuant to Fed.R.Civ.P. 12(b), on essentially the same grounds.

 PLAINTIFFS" STANDING

 A. Plaintiff Orange County's Standing

 In Williams v. Mayor of Baltimore, 289 U.S. 36, 40, 77 L. Ed. 1015, 53 S. Ct. 431 (1933), the Supreme Court held that a state political subdivision lacks standing to assert that a statute of the state of which it is a subdivision is invalid under the United States Constitution.Language in Coleman v. Miller, 307 U.S. 433, 441, 83 L. Ed. 1385, 59 S. Ct. 972 (1938), appears to extend this rule to preclude any assertion by a state political subdivision that the state of which it is a component has acted toward it in a constitutionally impermissible manner:

 Being but creatures of the State, municipal corporations have no standing to invoke the contract clause or the provisions of the Fourteenth Amendment of the Constitution ...


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