LOS ANGELES — The San Bernardino, Calif., firefighter's union filed two lawsuits, living up to a promise to litigate issues over its contract with the city, which has been in Chapter 9 bankruptcy for three years.
The lawsuits were filed in U.S. Bankruptcy court in Riverside on Thursday and Friday, after Brian Goodrich, the attorney for the San Bernardino City Professional Firefighters, said in hearing last month that lack of progress in mediation with the city would force the issue.
"In five months, we are nowhere," Goodrich said at last month's hearing. "They don't seem to be interested in planning a new agreement. We are going to have to litigate."
The firefighter's union first threatened to sue the city in October, after the city imposed pension changes over firefighters' objections. San Bernardino is the only city in the state that bases its police and firefighter pay on the average of 10 similarly sized cities.
Union President Jeff English said in a prepared statement Friday that the city's decision is a "slap in the face" of residents who voted against changing the section of the city's charter that sets out how the city's firefighters and police are paid. The approved contract also included the closure of a fire station and the elimination of so-called constant staffing.
"We want to stop these violations and ensure that city leaders follow the laws that they have pledged to uphold," English said.
In the suits, the union asks the court to roll back last fall's changes.
In September 2014, U.S. Bankruptcy Judge Meredith Jury ruled that although the city could reject its existing contract with firefighters, she was not granting the city's request that it could impose a contract of its choosing.
At the March 26 hearing, David Dubrow, a partner at Arent Fox LLP who represents Ambac Assurance Corp., said the city's Chapter 9 bankruptcy differs from other municipal bankruptcies because the city's leaders are unable to strike deals with creditors.
Dubrow said city leaders "have a very ineffective approach to resolving issues. Because of this ineffective process, they seem to have an inability to form a consensus and reach agreements with others," at the hearing.
Over a three-year period, San Bernardino has only been able to reach a tentative agreement with the California Public Employees' Retirement System.
Ambac joined with Erste Europaische Pfandbrief- und Kommunalkreditbank AG in a joint complaint filed Jan. 7 seeking equal treatment with the state's largest pension fund. The city has missed millions of dollars in bond payments since it declared bankruptcy in July 2012 on $50 million in pension bonds that EEPK holds and Ambac insures.
Dubrow added that it has been very difficult to get things done and that has made the difference in terms of forging the plan needed to exit bankruptcy.
U.S. Bankruptcy Judge Meredith Jury castigated the city in December for the sparseness of its term sheet, which she thought would be detailed enough to work as somewhat of a rough draft of a plan of adjustment. At that point, Jury ordered the city to draft a more complete plan of adjustment and set a firm deadline of May 30.
Paul Glassman, the city's attorney, assured the judge at last month's hearing that the city is working diligently on its plan of adjustment and will make the May 30 deadline.
