Committee warned to monitor new federal suit seeking to overturn HB 2034

Senator Conway opened the executive committee and invited legal counsel to report on litigation the committee has been following. "This is a class action suit that's recently been filed that seeks to invalidate the recently passed, gross second substitute house bill 2034," said Kate Adams, presenting the attorney/general report.

Adams said the Dawson complaint is unclear about which state agencies are named: "The Department of Retirement Systems and director letters are expressly named. But otherwise, the complaint just names the state of Washington." She noted the pleadings provide little legal theory on some claims and that it is uncertain whether the pension board or committee will be directly drawn into the litigation.

Adams also updated the committee on two other cases the committee had been watching. She said the Dolan matter (arising from a contractor class action about PERS eligibility and common-fund attorney fees) has been resolved on appeal, with the court of appeals finding a forfeiture can constitute constructive payment toward attorney fees. On the Fowler litigation, Adams said the trial court made oral rulings favorable to plaintiffs on the method for calculating interest and on whether the state must disgorge gains earned on withheld funds — "to the tune of, I think, 130,000,000," she said — but that a written ruling is pending and further appeals are possible.

Why it matters: the Dawson case could prompt discovery and motions that affect agencies the committee oversees; the committee asked staff for monthly updates and indicated it wants to be informed promptly if the committee becomes implicated in litigation.

The committee did not take formal action on the Dawson matter at this meeting; staff said discovery may ramp up in two to three months and that an injunction request from plaintiffs is possible but not yet certain.