In 2011, as a cure for a severely underfunded pension system, the New Jersey Legislature enacted amendments to N.J.S.A. 43:3C-9.5 which increased both State and employee contributions for a period of seven years in order to restore the pension system to a fiscally sound level. The language of the amendments clearly states that these pension contributions were contractual obligations of the State and contains a waiver of the State’s ability to claim sovereign immunity. The amortized payments were funded for the first two years, but then suspended for two years by the Governor for alleged budget shortfalls. The Petitioners filed suit to restore the contractually mandated funding, and were granted summary judgment at the New Jersey Superior Court in Mercer County, only to be reversed by the New Jersey Supreme Court which granted summary judgment to the Respondents. The Petitioners present the following questions:
- Whether the failure of the New Jersey Supreme Court to perform a federal contracts analysis was in error, and in conflict with this Court’s opinion in United States Trust Co. v New Jersey, 431 U.S. 1 (1977) and several other State Supreme Court decisions.
- Whether the New Jersey Supreme Court erred when it held that a Legislature could not enact contractual legislation that exceeds the term of its representatives, in conflict with this court’s opinion in Indiana ex rel Anderson v Brand, 303 U.S. 95 (1938).
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