Cranston Police Retirees Action Committee v. City of Cranston, Rhode Island

When members of the Cranston Police and Fire Retirees Action Committee (hereinafter, “Petitioner retirees” and/or “CPRAC”) retired, they were contractually promised by the City of Cranston a yearly minimum 3% compounding cost-of-living adjustment (hereinafter, “COLA”). Petitioner retirees were policemen and firemen, who paid into a retirement plan under contract with the City of Cranston, served and eventually retired. However, in 2013 the City of Cranston enacted ordinances retroactively altering the benefits earned, on members already retired, imposing a suspension of the COLA for ten years. In the decision below, the Rhode Island Supreme Court acknowledged that the “suspension” amounted to a sizable diminishment of contractual retirement benefits. However, the City claimed that the unilateral breach of contract was justified as an exercise of its police power to address the City’s financial issues. The Rhode Island Supreme Court relied on Circuit precedent that they noted “liberally” construed the meaning of a public purpose to justify impairing a contract pursuant to the Contracts Clause jurisprudence, failing to address contrary Circuit precedent. The question presented is: Whether the City’s self-interested impairment of the retirees’ contractually vested COLA benefits is a violation of the Contracts Clause of the United States Constitution or a taking under the Takings Clause of the United States Constitution.