Back Pay Set for Federal Judges Denied Raises

     (CN) – Six federal judges who were denied cost-of living salary raises in six different years can each recover about $150,000 from the government, the claims court ruled.
     In 2009, six judges led by Peter Beer filed a class action against the United States for failing to pay certain cost-of-living adjustments in violation of the Ethics Reform Act of 1989 and the compensation clause of the U.S. Constitution.
     The act requires automatic adjustment of judicial salaries each year based on the Employment Cost Index. The raise can be withheld only if severe economic conditions make the salary adjustment “inappropriate.”
     Congress withheld the salary adjustments for federal judges from 1995 to 1999, in 2007, and in 2010, citing a lack of funds, but other federal employees received the cost-of-living adjustment.
     Last year, the en banc Federal Circuit overturned 11-year-old precedent by ruling that Congress illegally withheld cost-of-living salary raises from the judges.
     “The judicial officer should enjoy the freedom to render decisions – sometimes unpopular decisions – without fear that his or her livelihood will be subject to political forces or reprisal from other branches of government,” the opinion stated.
     Though Congress is authorized to set up a new scheme for paying judges and managing cost-of-living increases, those changes cannot affect sitting judges, the court found.
     On remand, the Court of Federal Claims had to calculate the appropriate compensation to which the judges were entitled since January 2003, the statute of limitations limit.
     Judge Eric Bruggink found last week that each judge deserves back pay of between $147,900 and $163,000, for a total damages award of $940,000.
     The judges are not entitled, however, to prejudgment interest on the 2007 and 2010 cost-of-living adjustments because such an award would exceed the circuit court’s mandate, according to the ruling.
     “The Federal Circuit presumably could have found that failure to pay the 2007 and 2010 COLAs [cost-of-living adjustments] amounted to an unconstitutional diminishment of compensation, [but] the court made clear that it was unnecessary to do so,” Bruggink wrote.
     During the years at issue, all the plaintiff judges participated in the federal life insurance program, and chose plans with premiums directly correlated to salary. The government argued that this meant the judges should now have to pay the higher premiums they would have paid if they had earned their proper salary.
     Bruggink nevertheless declined to “time travel into the past to reconstruct a ‘but for’ world in which the correct salaries were received and then model how plaintiffs would have behaved.”
     “The insurance at issue is term coverage, and the relevant term is over,” he added. “None of these plaintiffs have died, so forcing them to pay additional premiums neither reimburses the government (or the private underwriter) for an expense incurred nor extracts from plaintiffs a payment for additional coverage from which they benefitted.” (Parentheses in original.)
     The judge also ordered the government to pay interest on the pre-tax amount of the judgment, rather than impose a uniform 28 percent withholding rate before calculating interest.
     “The court has no way of knowing how much income tax plaintiffs would have paid,” the 22-page opinion concludes. “Defendant offers no proof of its own, despite its admonition that we should put plaintiffs in the same position they would have been in absent the violation. There is therefore even less justification here to apply an arbitrary 28 percent on the fictional rationale that this would recreate an actual ‘but for’ world.”

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