18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 389 they had earned. The trial court awarded more than $30 million in damages to members of the Retired and Retirement-Eligible Subclasses. However, the trial court found no breach of the City’s contract with the Active Subclass, ruling that, as to the Active members, Ordinance 10-306 did not affect vested benefits, but rather made permissible prospective changes to the Plan. On the parties’ cross -appeals, the Maryland Court of Appeals affirmed the trial court’s judgement. The Court of Appeals addressed three issues on appeal, including: (i) whether the trial court properly concluded that the City did not breach its contract with the members of the Plan by "underfunding" the Plan; (ii) whether the City breached its contract with any of the subclasses by adopting Ordinance 10-306; and (iii) whether the trial court erred in its calculation of monetary damages owed to the Retired and Retirement-Eligible Subclasses. First, the Court of Appeals held that the City of Baltimore did not breach its contract with the pension plan members by underfunding the plan because the City did not have an obligation under § 36 of the Baltimore City Code to use excess assets to inflate the value of the pensions fund to maximize the amount of the variable benefit. Second, the Court of Appeals held that the City’s damages model provided the trial court with an accurate assessment of how the members of the Retired and Retirement- Eligible Subclasses would have fared if, hypothetically, the City had retained the variable benefit for them. Finally, the Court of Appeals found that the trial court properly concluded the amount of damages, given that the actual Plan at all times included some members whose rights to benefits had vested and others whose rights to benefits had not yet vested. For these reasons, the Court of Appeals affirmed the judgement of the trial court. (v) New Jersey In Re Layoff Of Battle, et al., 2021 N.J. Super. Unpub. LEXIS 85 (N.J. App. Div. May 10, 2021). Plaintiffs, a group of former employees of the City of Newark, New Jersey, filed a class action after Defendant City of Newark (“the City”) laid them off. In 2010, the City faced an unprecedented fiscal crisis, including a significant budget deficit that affected its credit and bond ratings. Needing to reduce personnel costs and its most significant budget expenditure, the City instituted a hiring freeze, returned employees to lesser job titles, terminated provisional employees, and implemented mandatory furlough days. Realizing it could not avoid layoffs, the City began negotiating with union representatives regarding proposed personnel cuts. In total, the City laid off 983 employees, which included 860 terminations and 123 demotions. The Civil Service Commission (“the CSC”) approved the City’s layoff plans. Plaintiffs filed appeals with the CSC, pursuant to N.J.S.A. 11A:8-4, arguing that their layoffs were not made in good faith. The appeals were then transferred to the Office of Administrative Law (“OAL”), where they were consolidated and scheduled for a hearing before an Administrative Law Judge (“ALJ”). Discovery disputes arose during the pendency of the layoff appeals, with the City contending that it responded to all discovery requests by producing nearly 6,000 pages of documents and interrogatory answers. Plaintiffs disagreed and filed a motion for sanctions, seeking the suppression of the City’s defenses and an award of attorneys’ fees associated with the motion. Rather than merely deciding the pending discovery motion, the ALJ issued a dispositive decision. The ALJ found that the City failed to comply with prior discovery orders generally. Based on this finding, the ALJ struck the City’s answer and defenses, suppressed any testimony to be advanced on behalf of the City, awarded attorneys’ fees, and rendered a determination on the merits that the layoffs in question were not made in good faith. The ALJ’s decision became the CSC’s final decision when the CSC lacked a quorum to undertake a substantive review of the decision. The City appealed the CSC’s decision on the grounds that the ALJ erred by finding that the City failed to provide discovery, imposing unreasonable sanctions, and rendering a decision regarding the layoffs’ propriety as part of the discovery motion, rather than conducting a hearing on the merits. The New Jersey Appellate Division found no basis to disturb the ALJ’s decision regarding discovery issues and the imposition of non-dispositive sanctions. However, the Appellate Division concluded that it was arbitrary, capricious, and unreasonable to enter a dispositive decision in favor of Plaintiffs without holding a merits hearing. Accordingly the Appellate Division reversed the portion of the final decision entering a determination that the layoffs were conducted in bad faith, and remanded for a hearing on the merits of that issue. As a result, the Appellate Division affirmed in part, and reversed and remanded in part the Final Decision. (vi) New York Davies, et al. v. S.A. Dunn & Co., LLC, 2021 N.Y. App. Div. LEXIS 5795 (N.Y. App. Div. Oct. 21, 2021). Plaintiffs, a group of residents of property in the City of Rensselaer, filed a class action asserting causes of action for public nuisance and negligence based upon Defendant’s alleged failure to contain noxious odors