Military/Airtime Class Action
Attorney represents a proposed class consisting of disabled fire fighters, police officers, and other safety members who were injured on the job and assert (1) breach of fiduciary duties and (2) rescission of standardized investment contracts against CalPERS. In late 2015, Division Three of Second District Appellate Court remitted the causes of action for rescission and breach of fiduciary duties. Marzec v. California Public Employees Retirement System (2015) 236 Cal.App.4th 889, 915–16.
Plaintiffs assert that CalPERS (i) breached the duty of loyalty when CalPERS secretly structured the airtime military time investments to cause a total or partial loss of investment on many industrial disability (IDR) determinations; (ii ) breached the duty of loyalty when CalPERS clandestinely transferred the private funds of disabled police and fire fighters to their employer after suffering an “on-the-job” disability determination; (iii) breached the duty of good faith and fair dealing when CalPERS failed to provide commensurate increased benefits in accord with the “cost neutral” “present value” promised increases which aligned with the investment requirements in the IRS code, in the authorizing statute, and other law; (iv) breached the duty not to take advantage when retaining Plaintiff’s private money or seizing it without an express seizure statute; (v) breached the duty to fully disclose when it omitted and failed to adequately disclose the risk of loss on IDR; and (iv) CalPERS’ breach of other fiduciary duties.
In March 2017, the Fourth District Court of Appeal published O’Neal that cited favorably to the Marzec opinion about breach of fiduciary duties and then detailed the validity, constitutionality, and history of constitutional amendments imposing fiduciary duties and reciting viable breach of fiduciary duties claims against retirement systems. O’Neal v. Stanislaus County.