Rhode Island Brotherhood of Correctional Officers v. State of Rhode Island

United States Court of Appeals
For the First Circuit
No. 03-1913
RHODE ISLAND BROTHERHOOD OF CORRECTIONAL OFFICERS,
Plaintiff, Appellant,
v.
STATE OF RHODE ISLAND; LINCOLN ALMOND, in his capacity
as Chief Executive Officer of the State of Rhode Island;
ROBERT L. CARL, JR., in his capacity as Director of the
Department of Administration of the State of Rhode Island;
PAUL J. TAVARES, in his capacity as General Treasurer of
the State of Rhode Island; and Ashbel T. Wall II, in his
capacity as the Director of the Department of Corrections
of the State of Rhode Island,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Ronald R. Lagueux, U.S. Senior District Judge]
Before
Boudin, Chief Judge,
Selya, Circuit Judge,
and Stahl, Senior Circuit Judge.
Dennis T. Grieco II with whom Gidley, Sarli & Marusak, LLP was
on brief for appellant.
Thomas A. Palombo, Assistant Attorney General, Department of
Attorney General, with whom Claire Richards, Special Counsel to the
Governor, and John L.P. Breguet, Chief Legal Counsel, Department of

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Administration, Office of Labor Relations, were on brief for
appellee State of Rhode Island.
John L.P. Breguet, Chief Legal Counsel, Department of
Administration, Office of Labor Relations, with whom Thomas A.
Palombo, Assistant Attorney General, Department of Attorney
General, and Claire Richards, Special Counsel to the Governor, were
on brief for appellee Robert L. Carl, Jr.
January 28, 2004

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BOUDIN, Chief Judge. This suit involves the claims of
the Rhode Island Brotherhood of Correctional Officers ("the
Brotherhood") against the state of Rhode Island, its governor, and
other officials (collectively, "Rhode Island"). Because the case
was disposed of on a motion to dismiss, Fed. R. Civ. P. 12(b)(6),
we accept for purposes of review the factual allegations (but not
necessarily the characterizations) of the complaint, Rogan v.
Menino, 175 F.3d 75, 77 (1st Cir.), cert. denied, 528 U.S. 1062
(1999), which are briefly as follows.
In 1976 the Rhode Island General Assembly enacted an
incentive pay statute giving extra pay to correctional officers who
acquired specified educational credits, provided that the officers
remained employed by the Department of Corrections for designated
periods (or paid back some of the extra pay if they left early).
1976 R.I. Pub. Laws. ch. 290, § 2 (codified at R.I. Gen. Laws §§
42-56.1-1 to -10 (1976)). The extra pay was fixed as a specified
percentage of the officer's base salary, depending upon the number
of educational credits obtained. R.I. Gen. Laws § 42-56.1-2
(1976).
Over the years after 1976 the state also entered into
collective bargaining agreements with the correctional officers
containing terms that mirrored the statute's provisions on
incentive pay. However, the latest collective bargaining agreement
containing such incentive pay provisions expired on June 30, 1996.

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1See generally Parella v. Ret. Bd. of R.I. Employees' Ret.
Sys., 173 F.3d 46 (1st Cir. 1999); National Educ. Association-R.I.
ex rel. Scigulinsky v. Ret. Bd. of R.I. Employees' Ret. Sys., 172
F.3d 22 (1st Cir.), cert. denied, 528 U.S. 929 (1999); R.I.
Laborers' Dist. Council v. Rhode Island, 145 F.3d 42 (1st Cir.
1998); McGrath v. R.I. Ret. Bd., 88 F.3d 12 (1st Cir. 1996);
Retired Adjunct Professors v. Almond, 690 A.2d 1342 (R.I. 1997).
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The union alleges that the state required union members to sign
individual contracts confirming the state's obligation to provide
incentive pay under the terms of the statute; individual forms
relating to incentive pay were signed, but whether they were
contracts and if so what obligations they imposed and on whom
remains to be discussed.
The Rhode Island legislature has several times enacted
generous pay or pension statutes and later reconsidered them.1 In
1996, the Rhode Island General Assembly amended the 1976 incentive
pay statute, effective as of July 1, 1996, to provide that after
that date incentive pay would no longer be a percentage of base
salary but would be a specified flat sum, 1996 R.I. Pub. Laws. ch.
100, § 1 (codified at R.I. Gen. Laws §§ 42-56.1-2 (1997)).
According to the union this generally results in lower incentive
pay--hardly a surprise since base salaries tend to rise over time.
On October 2, 2003, the Brotherhood brought suit, 42
U.S.C. §§ 1983, 1988 (2000), against Rhode Island, seeking
declaratory and injunctive relief to maintain the percentage
formula and also seeking back payments. The claims were based on
alleged violations of the contract clauses of the federal and Rhode

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Island constitutions, U.S. Const. art. I, § 10, cl. 1; R.I. Const.
art. I, § 2; denial of substantive due process, U.S. Const. amend.
XIV, § 1; R.I. Const. art. I, § 2; taking of property without just
compensation (apparently under U.S. Const. Amend. V); breach of
contract; promissory estoppel; and unjust enrichment/quantum
meruit.
Thereafter, exercising supplemental jurisdiction over the
state law claims, 28 U.S.C. § 1367(a) (2000), the district court
dismissed all of the claims on the merits, save that it dismissed
the claims based on the alleged individual contracts for lack of
standing. R.I. Bhd. of Corr. Officers v. Rhode Island, 264 F.
Supp. 2d 87 (D.R.I. 2003). The union now appeals. Our review of
a decision granting a motion to dismiss on the papers is plenary.
Stein v. Royal Bank of Canada, 239 F.3d 389, 392 (1st Cir. 2001).
The contract clause of the federal constitution limits
the ability of a state to abrogate rights created by pre-existing
contracts, including contractual rights against the state created
by legislation. E.g., Parella v. Ret. Bd. of Rhode Island
Employees' Ret. Sys., 173 F.3d 46, 60 (1st Cir. 1999); Parker v.
Wakelin, 123 F.3d 1, 4-5 (1st Cir. 1997), cert. denied, 522 U.S.
1106 (1998). But recognizing that legislation is ordinarily
subject to change, the Supreme Court requires that the
legislature's intent to create such rights against the state be
unmistakably clear, see United States v. Winstar Corp., 518 U.S.

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2This conclusion also disposes of the counterpart claim under
the Rhode Island Constitution, because Rhode Island case law
construes its contract clause consistently with the federal clause,
Retired Adjunct Professors, 690 A.2d at 1345 n.2.
3Although a litigant seeking to overcome the hurdle of the
unmistakability doctrine may rely on "not only the words used [in
the statute] but also apparent purpose, context, and any pertinent
evidence of actual intent, including legislative history," R.I.
Laborers' Dist. Council, 145 F.3d at 43, the Brotherhood has not
provided any pertinent evidence of this kind.
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839, 872 (1996) (plurality opinion); Dodge v. Bd. of Educ., 302
U.S. 74, 78-79 (1937); Parella, 173 F.3d at 59-60; and even where
contractual rights do exist, the legislature may abrogate them
under certain circumstances. U.S. Trust Co. v. New Jersey, 431
U.S. 1, 25 (1977); Parella, 173 F.3d at 59. Here, inquiry stops
at the first stage since we agree with the district court that the
1976 statute did not unmistakably create contractual rights.2
The 1976 statute merely provides that the incentive pay
specified will be afforded if the educational qualifications are
met by the employee. It does not say that the provisions are a
contractual commitment by the state or will never be changed, nor
is there language authorizing the state to enter into contracts
guaranteeing such benefits forever. See Parella, 173 F.3d at 60.
The framework is similar to other statutes regularly found not to
create private contractual rights. See note 1, above.3
The Brotherhood's main statutory-language argument to the
contrary is that the 1976 provisions make references to writings in
two instances: first, the eligibility provision requires that the

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employee "agree in writing to remain" in the Department of
Corrections for a specified period, R.I. Gen. Laws § 42-56.1-2
(1976); second, the payment provision directs an administrator to
supply the "agreement form" containing the time constraints for
completing educational programs, R.I. Gen. Laws § 42-56.1-6 (1976).
The provisions explain at least one of the forms relied on by the
union as independent contracts.
Whatever the status and meaning of these two documents
(an issue to which we will return), the two references to writings
in the statute do not show that the statutory provisions for
incentive pay were themselves unmistakably intended to create (or
authorize creation of) private contractual rights against the
state. The statute requires a document from the employee
acknowledging the statutory commitment of the employee to remain or
repay a portion of past incentive pay. The only obligations
imposed on the state are to follow the statute–-which has now been
amended.
It would have been child's play for the Rhode Island
legislature to say explicitly in 1976 that educational credits once
earned created private rights or that incentive pay could never be
differently calculated for existing employees who had qualified for
incentive pay. True, civil service jobs commonly create
expectations that holders will likely enjoy no reductions in pay
(but instead get periodic increases); but expectations alone are

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4Justice Souter's opinion describes the history of the
unmistakability doctrine as well-settled law. Winstar Corp., 518
U.S. at 876 & n.21 (Souter J., plurality opinion). Justice
Scalia's concurrence says that the doctrine reflects a
"commonsense" interpretation of contract law in the context of
legislation. Id. at 921 (Scalia, J., concurring in the judgment).
The Chief Justice's opinion opposes any dilution of pre-existing
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not contracts–-contracts are written to protect expectations.
Indeed, legislation constantly creates expectations that are
disappointed by later modifications, repeal or lack of funding.
Of course, the employees in this case assert not only
expectations but reliance. In private ordering (e.g., a corporate
pension plan), courts commonly overlook the lack of an explicit
promise where the employee performs in accordance with a
promulgated plan and the employer then reduces the benefits. Nat'l
Educ. Ass'n-R.I. ex rel. Scigulinsky v. Ret. Bd. of R.I. Employees'
Ret. Sys., 172 F.3d 22, 26 (1st Cir.), cert. denied, 528 U.S. 929
(1999). But for good reason public statutes are not construed in
the same fashion as private contracts. Id. at 27. This is a
disadvantage for public employees (who happen to include judges);
yet no shortage of applicants has ensued.
United States v. Winstar Corp., 518 U.S. 839 (1996),
relied upon in other respects by the Brotherhood, does not support
the union's argument that contractual rights spring from the 1976
statute. Virtually all of the opinions assumed that the
unmistakability doctrine applies to legislation claimed to provide
private contractual rights.4 The core dispute that divided the

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unmistakability law. Id. at 926-27 (Rehnquist, C.J., dissenting).
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Court three ways concerned the ability of Congress to override what
most of the Justices deemed to be promises made in prior agreements
between banks and their regulators.
Thus, Winstar did not alter the traditional presumption
that state legislation does not ordinarily create private
contractual rights. Indeed, since the Winstar decision, this court
has regularly followed that presumption. E.g., R.I. Laborers'
Dist. Council v. Rhode Island, 145 F.3d 42, 44-45 (1st Cir. 1998);
Parker, 123 F.3d at 5-6. Any rule allowing one legislature to bind
its successors by casual implication, Winstar Corp., 518 U.S. at
874 (Souter J., plurality opinion); Parella, 173 F.3d at 60, would
be a far-reaching change in the law endorsed by none of the Winstar
opinions.
As an alternative basis for its contract clause claim,
the union relies on the collective bargaining agreements that
mirrored the percentage pay terms of the 1976 statute. The last
such agreement embodying those terms expired on June 30, 1996, one
day before the statute converting incentive pay to flat stipends
became effective. The union does not say that percentage based
payments required before that date were not paid; its position is
that under state labor law the last collective bargaining agreement
previously in force is continued in force after June 30, 1996,
until a new one is negotiated.

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5Although the union's complaint does not invoke any claims
under state labor laws, the 1996 statute, expressly changing the
basis for computing incentive pay, would arguably modify any state
labor law doctrine that might otherwise independently perpetuate
the old formula.
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Assuming that state labor law maintains the status quo,
the obligation would arise under state labor law and not by
contractual obligation protected against impairment by the
constitutional contract clause doctrine. Providence Teachers Union
v. Providence Sch. Bd., 689 A.2d 388 (R.I. 1997), relied on by the
Brotherhood, states that although under state labor law the "terms
and conditions of employment may be insulated from postexpiration
unilateral change in order to protect the statutory right to
bargain, such terms and conditions no longer have force by reason
of the expired contract." Id. at 393 n.2 (citations omitted). See
also Univ. of Haw. Prof'l Assembly v. Cayetano, 125 F. Supp. 2d
1237, 1243 (D. Haw. 2000); Bricklayers Union Local 21 v. Edgar, 922
F. Supp. 100, 105-06 (N.D. Ill. 1996).5
Finally, as a basis for a contract clause claim, the
Brotherhood points to the forms signed by individual employees.
These forms, required by the 1976 statute as a condition of
receiving incentive pay, appear in at least two versions: one is
labeled "notice" and the other "acknowledgment" and both do no more
than say that the employee receiving incentive pay understands that
the payment requires that he or she continue to work for the

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6Two versions of the documents exist, and are entitled,
respectively, "Correctional Officer's Education Incentive Pay
Notification of Enrollment" and "Acknowledgment of the Provisions
of Title 42 Chapter 56.1-1 through 56.1-10 of the General Laws of
Rhode Island and in particular Chapter 42-56.1-2."
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Department of Corrections for a specified period or return part of
the extra compensation.6
The district court held that under Rhode Island law the
Brotherhood had no authority to sue to enforce individual contracts
made by its members. R.I. Bhd. of Corr. Officers, 264 F. Supp. 2d
at 100-01. The court conceded that section 1983 claims are
governed by federal standing rules, which allow an association to
sue on behalf of its members where the members would have standing
to sue themselves, the interests are germane to the association's
purpose, and "neither the claim asserted nor the relief requested
requires the participation of individual members in the lawsuit."
Hunt v. Wa. State Apple Advertising Comm'n, 432 U.S. 333, 343
(1977). But the district court found that the last of these three
conditions had not been met.
The district court's main concern was that any
determination as to amounts owed to individual employees as back
pay since July 1996 would require individual calculations and the
participation of those members in the lawsuit. Yet in this case
the union sought for its members a declaration under the contract
clause that percentage pay has to be provided in the future for
members who had secured their educational credits. Surely such a

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declaration would benefit members even if they had to file separate
lawsuits to determine individual back pay.
Int'l Union, United Auto., Aerospace & Agric. Implement
Workers v. Brock, 477 U.S. 274 (1986), is directly in point. There
a union challenged the Secretary of Labor's interpretation of a
trade statute in a manner that meant less unemployment benefits for
union members. The Supreme Court concluded that the third
requirement under Hunt for associational standing was met:
[T]hough the unique facts of each UAW member's
claim will have to be considered by the proper
state authorities before any member will be
able to receive the benefits allegedly due
him, the UAW can litigate this case without
the participation of those individual
claimants and still ensure that "the remedy,
if granted, will inure to the benefit of those
members of the association actually injured."
Id. at 288 (quoting Warth v. Seldin, 422 U.S. 490, 515 (1975)); see
also Playboy Enters., Inc. v. Pub. Serv. Comm'n, 906 F.2d 25, 35-36
(1st Cir.), cert. denied, 498 U.S. 959 (1990).
It follows that federal standing rules permit the union
to seek a declaration on behalf of its members as to whether the
contract clause protects continuing rights to percentage pay under
the alleged individual contracts. And embedded in this federal
claim is the question whether the forms do constitute contracts
committing the state to continue to pay percentage-based
compensation to those who earned their educational credits before

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the statute was amended. We thus turn to the contract question not
reached by the district court.
Whether or not the forms constitute contracts--and
neither is expressly a contract--they do not purport to create any
obligations on the part of the state. Rather, the signing employee
merely acknowledges that by accepting incentive pay, he or she
"understands" that the educational program must be completed to
qualify and that if the employee leaves in less than four years, a
portion of the payment must be returned as provided in the 1976
statute. The time period for completing the educational
requirements and the duration of required employment for each level
of incentive compensation are specified in the two forms. Not a
single phrase commits the state to do anything.
The purpose of the forms is patent. Although the
employees' obligations are spelled out in the statute, a prudent
legislature might be concerned that employees receiving incentive
pay who did not complete their educational program, or resigned
early from employment, would balk at paying back anything. Were
the state ever to sue to recapture benefits as provided by the
statute, the signed forms would block the employee from denying
that he or she understood from the outset the conditions imposed on
the receipt of such pay.
Our discussion thus far also disposes of three more of
the claims advanced in the complaint. Because the union has not

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established a violation of any contractual rights, there is no
cognizable claim for taking of property without just compensation.
Parella, 173 F.3d at 58-59. The lack of any property interest also
disposes of the substantive due process claim. R.I. Laborers'
Dist. Council, 145 F.3d at 44 n.1. Similarly, absent an extant
contract obligating the state to do anything, the Brotherhood's
common law breach of contract claims fail.
The complaint's two remaining claims invoke the doctrines
of promissory estoppel and quantum meruit/unjust enrichment, but
the Brotherhood's brief on appeal addresses these claims in only
three sentences, effectively abandoning them. Mass. Sch. of Law at
Andover, Inc. v. Am. Bar Ass'n, 142 F.3d 26, 43 (1st Cir. 1998).
For completeness, we note that the district court's opinion
explains why neither claim can succeed under Rhode Island law.
R.I. Bhd. of Corr. Officers, 264 F. Supp. 2d at 104-06.
We have been brief in our treatment because the central
contract clause claim has been turned back several times in past
cases coming out of Rhode Island. Nor is the result remarkable:
save in the area of pensions–-and not always there–-governments
rarely guarantee that compensation will never be changed. If the
Rhode Island legislature wants to promise never to reduce pay for
existing workers, it will have to say so unmistakably–-and accept
openly the responsibility for its decision.
Affirmed.

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