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Public Employee Retirement Administration Commission v. Bettencourt

Supreme Judicial Court of Massachusetts

April 6, 2016

Public Employee Retirement Administration Commission
Edward A. Bettencourt

         Argued October 6, 2015

         Corrected April 29, 2016.

          Suffolk. Civil action commenced in the Superior Court Department on December 19, 2012.

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          The case was heard by Garry V. Inge, J., on motions for judgment on the pleadings.

         The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

          Paul T. Hynes ( Michael R. Keefe with him) for the defendant.

          Peter Sacks, State Solicitor ( Judith A. Corrigan, Special Assistant Attorney General, with him) for the plaintiff.

          Ian O. Russell & Patrick N. Bryant for Massachusetts Coalition of Police, amicus curiae, submitted a brief.

         Present (Sitting at New Bedford): Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & Hines, JJ.


          [47 N.E.3d 670] Botsford, J.

          The Commonwealth's law governing public employee retirement systems and pensions requires that a public employee forfeit the retirement and health insurance benefits (retirement allowance or pension) to which the employee would be entitled upon conviction of a crime " involving violation of the laws applicable to [the employee's] office or position." G. L. c. 32, § 15 (4) (§ 15 [4]).[1] We consider here whether this mandatory forfeiture of a public employee's retirement allowance qualifies as a " fine" under the excessive fines clause of the Eighth Amendment to the United States Constitution. We conclude that it does and that, in the circumstances of this case, the mandatory forfeiture of the public employee's retirement allowance is " excessive." [2]

          Background.[3] Edward A. Bettencourt was first appointed as a police officer in the city of Peabody in October, 1980, and became a member of the Peabody retirement system on November 7, 1982.[4] Bettencourt was promoted to the rank of sergeant around 1990, and promoted again to serve as a lieutenant in 2003. In the early morning hours of December 25, 2004, Bettencourt was on duty as a watch commander, and he knowingly accessed, through the Internet and without permission, the Massachusetts human resources division (HRD) computer system, and specifically the HRD Internet site containing individual applicant record information.

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Gaining the unauthorized access, he viewed the civil service promotional examination scores of twenty-one other police officers, including four officers who were his direct competitors for a promotion to the position of captain in the police department. In order to view the examination scores of these other officers, Bettencourt created a distinct user account for each officer, using the Social Security numbers and birth dates of the officers.

         On October 26, 2006, Bettencourt was indicted for unauthorized access to a computer system, in violation of G. L. c. 266, § 120F; the indictment contained twenty-one separate counts. On April 4, 2008, at the conclusion of a jury-waived trial before a judge in the Superior Court (trial judge), Bettencourt was found guilty on all counts.[5] Bettencourt filed an application for voluntary superannuation retirement [47 N.E.3d 671] with the Peabody retirement board (board) on the same day he was found guilty. As of that date, he had served as a Peabody police officer for over twenty-seven years and had been a member of the Peabody retirement system for over twenty-five years. On May 23, 2008, after learning of Bettencourt's convictions, the board held an evidentiary hearing to determine whether, because of these convictions, Bettencourt remained eligible for his retirement allowance. A majority of the board concluded that none of the convictions was a " violation of the laws applicable to his office or position" under § 15 (4), and, thus, his application for superannuation retirement was to be processed, subject to the approval of the public employee retirement administration commission (PERAC). On September 10, 2008, PERAC denied Bettencourt's retirement application because it concluded that Bettencourt's criminal convictions did relate to his office or position, and therefore, under § 15 (4), he was not entitled to receive any retirement allowance.

         Bettencourt sought certiorari review of PERAC's decision in the Peabody Division of the District Court Department, arguing that his convictions did not trigger the forfeiture mandated by § 15 (4) because they were not related to his office or position,

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and, alternatively, that the forfeiture of his pension would constitute an " excessive fine" in violation of the Eighth Amendment. A judge in the District Court concluded that Bettencourt's convictions were not sufficiently related to his office or position as to trigger forfeiture under § 15 (4), and, therefore, the judge did not reach the " excessive fine" argument. PERAC sought certiorari review of the judge's decision in the Superior Court. A Superior Court judge affirmed the District Court decision, and PERAC appealed to the Appeals Court. In a memorandum and order pursuant to its rule 1:28, the Appeals Court, concluding that Bettencourt's convictions were linked directly to his office or position, vacated the judgment and remanded the case to the District Court for consideration of Bettencourt's alternative argument that forfeiture of his pension constituted an excessive fine. Public Employee Retirement Admin. Comm'n v. Bettencourt, 81 Mass.App.Ct. 1113, 961 N.E.2d 620 (2012).

         On remand, the District Court judge concluded that forfeiture of a retirement allowance pursuant to § 15 (4) was a fine under the Eighth Amendment and that the fine in this case, forfeiture of Bettencourt's lifetime retirement allowance, as compared to the harm suffered by the other officers and the public, was excessive and violated the Eighth Amendment. PERAC again sought certiorari review in the Superior Court. In an amended decision dated February 6, 2014, a Superior Court judge reversed, ruling that forfeiture of an employee's pension rights under § 15 (4) does not constitute a fine for purposes of the Eighth Amendment because " the right to a pension is conditioned on not incurring criminal convictions related to public service." Bettencourt filed a timely appeal in the Appeals Court, and we transferred the case to this court on our own motion.

          Discussion. General Laws c. 32, § 15 (4), provides:

" Forfeiture of pension upon misconduct. -- In no event shall any member [of [47 N.E.3d 672] a retirement system] after final conviction of a criminal offense involving violation of the laws applicable to his office or position, be entitled to receive a retirement allowance under the provisions of [G. L. c. 32, § § 1 through 28], inclusive, nor shall any beneficiary be entitled to receive any benefits under such provisions on account of such member. The said member or his beneficiary shall receive, unless otherwise prohibited by law, a return of his accumulated total deductions; provided, however, that the

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rate of regular interest for the purpose of calculating accumulated total deductions shall be zero."

         At this juncture, Bettencourt does not challenge the Appeals Court's conclusion that his convictions under G. L. c. 266, § 120F, involved violations of a law " applicable to his office or position" within the meaning of § 15 (4), and, thus, triggered imposition of the section's forfeiture provisions.[6] Rather, he focuses solely on his Eighth Amendment claim.[7] That claim has two parts: (1) the forfeiture of his pension under § 15 (4) by its terms qualifies as a fine; and (2) the fine is excessive. This court has considered the claim's second part, excessiveness, in two previous cases, MacLean v. State Bd. of Retirement, 432 Mass. 339, 347-350, 733 N.E.2d 1053 (2000), and Maher v. Retirement Bd. of Quincy, 452 Mass. 517, 523-525, 895 N.E.2d 1284 (2008), cert. denied, 556 U.S. 1166, 129 S.Ct. 1909, 173 L.Ed.2d 1058 (2009).[8] We have never addressed the threshold question whether the forfeiture of a public employee's pension under § 15 (4) is a " fine" under the Eighth Amendment. We consider that question first.

         1. Is the forfeiture required by § 15 (4) a fine ? a. Property requirement. As it noted in United States v. Bajakajian, 524 U.S. 321, 327, 118 S.Ct. 2028, 141 L.Ed.2d 314 (1998),

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the United States Supreme Court has had " little occasion" to interpret the Eighth Amendment's excessive fines clause. In that case, following the lead of [47 N.E.3d 673] two earlier decisions, the Court explained that " at the time the Constitution was adopted, 'the word " fine" was understood to mean a payment to a sovereign as punishment for some offense.'" Id. at 327, quoting Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 265, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989).[9] A fine may involve the payment of money to the government, but as Bajakajian makes clear, the forfeiture of property also may qualify as a fine.[10] Moreover, the Supreme Court has held that the excessive fines clause does not apply solely to criminal cases, such as Bajakajian ; a civil forfeiture proceeding in which the government seeks the forfeiture of particular property on account of its owner's conviction of a crime also implicates the clause. See Austin v. United States, 509 U.S. 602, 608-610, 618, 621-622, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993) (civil proceeding initiated by government seeking to forfeit auto body shop and mobile home as instrumentalities of drug offense to which property owner pleaded guilty; forfeiture sought by government qualified as fine under Eighth Amendment). " The Excessive Fines Clause thus 'limits the government's power to extract payments, whether in cash or in kind, " as punishment for some offense." ' ... Forfeitures -- payments in kind -- are thus 'fines' if they constitute punishment for an offense." Bajakajian, supra at 328, quoting Austin, supra at 609-610.

         To decide whether the forfeiture of Bettencourt's pension qualifies as a fine under the Supreme Court's definition, the first question to be answered is whether the forfeiture operates to " extract payments" from him -- that is, requires the transfer of

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money or some other form of property of Bettencourt's to the government. See Hopkins v. Oklahoma Pub. Employees Retirement Sys., 150 F.3d 1155, 1162 (10th Cir. 1998) (considering forfeiture of retired State employee's pension as result of criminal bribery conviction: " Implicit in [the Supreme Court's] interpretation of the Excessive Fines Clause is the notion that it applies only when the payment to the government involves turning over 'property' of some kind that once belonged to [the employee]" ).[11]

         In response to this first question, Bettencourt contends that the mandatory forfeiture under § 15 (4) has required him to transfer or turn over property -- his right to receive his retirement allowance -- to the Commonwealth. PERAC, on the other [47 N.E.3d 674] hand, argues that Bettencourt had no property interest in the retirement allowance being forfeited. Rather, in PERAC's view, Bettencourt, as a member of the Peabody retirement system, had only a future interest in receiving retirement allowance payments, one that was wholly contingent on his not being convicted of a crime involving misconduct in office, and " contingent, future interests are not property."

         We do not share PERAC's view. Under the Commonwealth's contributory retirement system, the relationship between a member and the system is contractual. See G. L. c. 32, § 25 (5).[12] However, we previously have noted that in this context, the term

" '[c]ontract' (and related terms such as rights, benefits, protection) should be understood ... in a special, somewhat relaxed sense. ... It is not really feasible -- nor would it be desirable -- to fit so complex and dynamic a set of arrangements as a statutory retirement scheme into ordinary contract

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law which posits as its model a joining of the wills of mutually assenting individuals to form a specific bargain. ... When, therefore, the characterization 'contract' is used, it is best understood as meaning that the retirement scheme has generated material expectations on the part of employees and those ...

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