Houten, Jr. v. City of Fort Worth, No. 15-10416 (5th Cir. 2016)Annotate this Case
Plaintiffs filed suit against the City, arguing that the City's pension reforms violate the Texas Constitution, Tex. Const. art. XVI 66(d). Two district courts ruled in favor of the City. In these consolidated appeals, the court concluded that Section 66 permits prospective changes to the pension plans of the public employees within its reach. In this case, the Pension Reform complies with Section 66 where Section 66 did not turn plaintiffs’ variable-rate cost-of-living adjustment into a one-way ratchet capable only of upward movement. The court rejected claims raised by plaintiffs of Case No. 15-10416, that only the Texas legislature has the City of Dallas v. Trammel "reserved power" to amend pension plans and thus abrogate contractual rights. The court concluded that this argument is foreclosed by Klumb v. Houston Mun. Employees Pension Sys. Finally, the court concluded that the Pension Reform does not violate the United States Constitution’s contracts clause and takings clause where neither clause create property rights and the right to public pension benefits in Texas is subject to legislative power. Accordingly, the court affirmed the district court's judgments.