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Dodd v. City of Chattanooga

United States Court of Appeals, Sixth Circuit

January 18, 2017

Bobby Dodd, Plaintiff-Appellant,
v.
City of Chattanooga, Tennessee; Chattanooga Fire and Police Pension Fund, Defendants-Appellees.

          Argued: November 30, 2016

         Appeal from the United States District Court for the Eastern District of Tennessee at Chattanooga. No. 1:14-cv-00358-Harry S. Mattice Jr., District Judge.

         ARGUED:

          William Gerald Tidwell, Jr., TIDWELL, IZELL & RICHARDSON, Chattanooga, Tennessee, for Appellant.

          Zachary H. Greene, MILLER & MARTIN PLLC, Chattanooga, Tennessee, for Appellee City of Chattanooga. Cameron S. Hill, BAKER DONELSON, BEARMAN, CALDWELL & BERKOWITZ, PC, Chattanooga, Tennessee, for Appellee Chattanooga Fire and Police Pension Fund.

         ON BRIEF:

          William Gerald Tidwell, Jr., TIDWELL, IZELL & RICHARDSON, Chattanooga, Tennessee, for Appellant.

          Zachary H. Greene, W. Scott Parrish, MILLER & MARTIN PLLC, Chattanooga, Tennessee, for Appellee City of Chattanooga. Cameron S. Hill, William E. Robinson, BAKER DONELSON, BEARMAN, CALDWELL & BERKOWITZ, PC, Chattanooga, Tennessee, for Appellee Chattanooga Fire and Police Pension Fund.

          Before: NORRIS, GIBBONS, and ROGERS, Circuit Judges.

          OPINION

          ROGERS, Circuit Judge.

         This case arises out of a 2012 amendment to the law governing Chattanooga's Fire and Police Pension Fund. Before 2013, a Fund member's surviving spouse could receive benefits after the member died without incurring a proportional reduction in the member's lifetime benefits. In 2012, the City of Chattanooga removed this "default death benefit" for members who were not eligible to retire as of January 1, 2013. Bobby Dodd was not eligible to retire on that date and therefore opted for a five-percent reduction in current, lifetime benefits so that his wife could receive an additional benefit upon his death. Because Dodd would not have incurred this five-percent reduction prior to the 2012 amendment, he sued the City and the Fund, asserting claims under the federal Contract Clause, Due Process Clause, and Takings Clause, as well as Tennessee's Law of the Land Clause. Dodd also argued that the 2012 amendment was not validly enacted under local law. The district court granted the City's and the Fund's motions for summary judgment on all claims, which Dodd now appeals. Because Dodd does not have a contract or property right to the default death benefit, his constitutional claims fail. Dodd's challenge to the validity of the amendment's enactment is also without merit.

         I.

         Chattanooga's fire and police pension plan is codified in §§ 2-400 to 2-425 of the Chattanooga City Code. Under the plan, a member's interest in future pension benefits vests after ten years of active service. Chattanooga, Tenn., Code § 2-415 [hereinafter Code]. At that point, the member has the right to receive either a full refund of his contributions or a deferred vested retirement benefit upon turning fifty-five. Id. Then, after twenty-five years of active service, the member becomes entitled to an annual Service Retirement Pension under § 2-411. The pension benefit is calculated, pursuant to § 2-411(a), based on the member's years of active service and a percentage of his average pay.

         Typically, a member's retirement benefit takes the form of a single-life annuity paid out in monthly installments. However, a member may elect a "Joint and Survivor Option, " which spreads the annuity out over two lives, as an alternative under § 2-418. There are various alternative options in § 2-418, but only Option D is relevant to this appeal. Under Option D, a member receives "[a] decreased retirement benefit payable . . . for life, " which continues after the member's death to a surviving beneficiary, who receives fifty percent of what the member received during his lifetime. Code § 2-418(1). When a member selects Option D, he ends up receiving the actuarial equivalent of a single-life annuity. Id. ...


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