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Buffalo Teachers Federation, Buffalo Educational Support Team-Nea/Ny v. Richard Tobe

February 8, 2012

BUFFALO TEACHERS FEDERATION, BUFFALO EDUCATIONAL SUPPORT TEAM-NEA/NY, TRANSPORTATION AIDES OF BUFFALO, NEA/NY, SUBSTITUTES UNITED/BUFFALO-NEA/NY, BUFFALO COUNCIL OF SUPERVISORS AND ADMINISTRATORS, AFSCME LOCAL 264, PROFESSIONAL, CLERICAL AND TECHNICAL EMPLOYEES' ASSOCIATION AND LOCAL 409 INTERNATIONAL UNION OF OPERATING ENGINEERS, PLAINTIFFS,
v.
RICHARD TOBE, THOMAS E. BAKER, ALAIR TOWNSEND, H. CARL MCCALL, JOHN J. FASO, JOEL A. GIAMBRA, MAYOR ANTHONY MASIELLO, RICHARD A. STENHOUSE AND ROBERT G. WILMERS, IN THEIR OFFICIAL CAPACITIES AS DIRECTORS/ MEMBERS OF THE BUFFALO FISCAL STABILITY AUTHORITY, DEFENDANTS.



The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court

DECISION AND ORDER

I. INTRODUCTION

Plaintiffs in this action seek relief from this Court's previous adverse judgment concerning the much-litigated Wage Freeze Resolution ("Wage Freeze" or "Freeze") enacted by the Buffalo Fiscal Stability Authority ("BFSA").

On July 3, 2003, the New York State Legislature, through the Buffalo Fiscal Stability Authority Act ("Act"), created the Control Board to stabilize and improve the City of Buffalo's failing financial health. One of the powers the legislature vested in the Control Board was the discretion to freeze wages. On April 21, 2004, the Control Board exercised that discretion and enacted the Wage Freeze, which, for purposes of this case, had the effect of eliminating contractual salary increases that Plaintiffs had negotiated with the City of Buffalo.

On June 17, 2004, Plaintiffs, the Buffalo Teachers Federation and others equally affected, brought suit in this Court challenging the Wage Freeze Resolution as violative of the Contract and Takings Clauses of the United States Constitution. See U.S. Const. art. I, § 10, cl. 1; U.S. Const. amend. V. On August 18, 2005, this Court denied Plaintiffs' Motion for Summary Judgment and granted Defendants' Motion, finding that the Wage Freeze was not unconstitutional (Docket No. 52.) Subsequently, on September 21, 2006, the Second Circuit affirmed that decision. (Docket No. 57.) Presently, Plaintiffs seek relief from those decisions under Fed. R. Civ. P. 60(6). (Docket No. 59.) Further, both the City of Buffalo and the Board of Education for the City School District of the City of Buffalo seek to intervene under Fed. R. Civ. P. 24(a). (Docket Nos. 63, 65.) For the following reasons, Plaintiffs' motion is denied and the motions to intervene are denied as moot.

II. BACKGROUND

A. Facts

The Plaintiffs' salary structure is at the center of this litigation. Each Plaintiff employee organization is a party to a collective bargaining agreement with the City of Buffalo school district. (Plaintiffs' Statement, ¶ 2; Defendants' Statement, ¶¶ 1-8; 11, 13, 15, 17, 19, 21, 23, 25.) These agreements provide for periodic step increases to be paid to the covered employees. (Plaintiffs' Statement, ¶¶ 3-4; Defendants' Statement, ¶¶ 27, 29.) On average, the covered employees are contractually entitled to receive salary increases of roughly 2% per year. (Plaintiffs' Statement, ¶ 5.) Those increases were halted by the Wage Freeze.

The history of the Wage Freeze and the reasons for its enactment were well documented in this Court's previous Decision and Order and the Second Circuit's affirmance thereof. See Buffalo Teachers Federation v. Tobe, 446 F. Supp. 2d 134 (W.D.N.Y. 2005); Buffalo Teachers Federation v. Tobe, 464 F.3d 362 (2d Cir. 2006) cert. denied, 550 U.S. 918,127 S. Ct. 2133, 167 L. Ed. 2d 864 (2007). But since those decisions, on July 1, 2007, the BFSA lifted the Wage Freeze. The BFSA's contrasting positions as to the effect this would have on the Plaintiffs' step increases serves as the basis for this motion.

In March of 2005, Dorothy Johnson, the executive director of the BFSA, submitted a declaration to this Court in support of the BFSA's then-pending motion for summary judgment in which she made the following statement regarding the effect the removal of the Wage Freeze would have on Plaintiffs' salaries:

The Wage Freeze Resolution permanently deprives the [Plaintiffs] of any wage increases to which they would be entitled for the period of the freeze; once the freeze is lifted, however, the frozen wage increases will take effect. In other words, if a $1,000 wage increase would have taken effect in April 2004 but for the Resolution and the wage freeze is lifted in April 2005, the affected employees will not be reimbursed for the $1,000 wage increase suspended during the period of the freeze, but their wages or salaries would include such an increase going forward. (Dorothy Johnson Declaration, ¶ 52; Docket No. 26.)

But the BFSA eventually reversed course and instead took the position -- upheld on state law grounds by the New York Court of Appeals -- that the Act should be read to mean that affected employees' wages or salaries would not include increases that would have accrued during the Wage Freeze period. (See Rumore Declaration, ¶ 5;Docket No. 59-2). An example, provided by Plaintiffs and undisputed by Defendants, may help clarify this distinction.

By contract, Plaintiffs move up one step at the beginning of every school year. (Id., ¶¶ 2-4.) Under Defendants' initial explanation, assuming that a Plaintiff was on Step 5 at the time the Wage Freeze took effect in 2004, that Plaintiff would be immediately placed on Step 9 at the beginning of the 2007 school year -- the first year after the Freeze was lifted. So while the plaintiff would lose the money she would have gained from her step increases in the three Wage Freeze years, she would have been restored to her proper step level once the Freeze was lifted. Under its changed and current position, that teacher was instead placed at Step 6 upon the beginning of the 2007 school year. Thus, not only did she lose the wages from the three years that the Freeze was in effect, but she also did not accrue periodic step increases during those years. (See id., ¶ 4.) This change prompted Plaintiffs to file this motion under Rule 60.

As alluded to above, it also prompted Plaintiffs to bring an action in New York State court. There, Plaintiffs contended that under the Act they were entitled to advance the four salary steps that they would have received had the Freeze not been imposed. See Matter of Meegan v. Brown, 16 N.Y.3d 395, 948 N.E.2d 425, 924 N.Y.S.2d 1 (2011). But the New York Court of Appeals reversed two lower court decisions and found that the Act empowered the BFSA to cancel all step increases that would have accrued while the Wage Freeze was in effect. Id.

B. Procedural History

On June 17, 2004, Plaintiffs commenced this action by filing a Complaint in the United States District Court for the Western District of New York. Defendants filed their Answer on July 27, 2004. On February 28, 2005, the parties filed Cross-Motions for Summary Judgment. After full briefing on the motions, this Court held oral argument on May 24, 2005, and reserved decision until August 18, 2005 when it granted Defendants' Motion for Summary Judgment and denied Plaintiffs' Motion. (Docket No. 52.) That decision was affirmed in September of the following year by the Second Circuit. (Docket No. 57.) Plaintiffs, after losing their state-court claims, unsuccessfully sought to recall the Mandate of the Second Circuit. (See Addendum to Plaintiffs' Memorandum of Law; Docket No. 59-1.) In denying the motion on June 6, 2011, the Second Circuit noted that it was not "intimating any views with respect to the viability of either a motion that may be advanced pursuant to Fed. R. Civ. P. 60 or a new complaint." (Id.)

Consequently, Plaintiffs brought this motion on June 30, 2011. (Docket No. 59.) In the immediately ensuing months, the City of Buffalo and the Board of Education for the City School District of the City of Buffalo filed motions seeking to intervene under Fed. R. Civ. P. 24(a), arguing that their financial ...


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