Judge sets deadline for payments on $142M firefighter judgment, says ‘writing is on the wall’

Mayor Mitch Landrieu and the New Orleans City Council have until Aug. 21 to begin paying firefighters a judgment worth a potential $142 million, or they will be held in contempt, a Civil District Court judge told officials Thursday (Aug. 6).

The council is scheduled to meet the day before the deadline, Judge Kern Reese said. “If there is going to be any resolution, it needs to be presented at the meeting and resolved once and for all, or I will make a contempt finding,” he told Landrieu’s Chief Administrative Officer Andy Kopplin.

Reese turned his back on the courtroom to scribble with his index finger across the stone panel behind him.

“You got me, Mr. Kopplin? You know what that means?” Reese said. “The handwriting is on the wall.”

The judgement stems from a lawsuit that his been meandering its way, in one form or another, through the courts since as far back as 1979. It’s been on Reese’s docket since 2004.

The crux of the latest version of the suit is the city’s failure to institute state-mandated pay raises for firefighters over a decade and a half, starting in the mid-1990s. Finally, after repeated losses in court, the city in 2013 agreed to pay a $75 million judgment. With interest, calculated from when the lawsuit was first filed, the city owes a total of $142 million, roughly a quarter of the city’s operating budget.

After agreeing to the settlement, called a consent judgment, the city paid a token amount, and the remaining total became tied up in negotiations with the firefightersover payments to their pension fund, which, it was revealed last spring, is essentially broke.

Landrieu set up a working group aimed at negotiating a global settlement that would resolve the backpay judgment and keep the Fire Fighters Pension and Relief Fund solvent. Those negotiations failed, but the two sides eventually returned to the mediation table.

Both sides have been mum since the talks began, but Thursday’s hearing made clear that the second round has been no more successful than the first.

Firefighters rejected an 11th hour proposal sent by the Business Council of New Orleans, which has been involved in talks since Landrieu made them apart of his working group. Similar to a proposal made during the first round of talks, the plan would have called for the city to pay the firefighters $45 million over 12 years to satisfy the consent judgment.

Louis Robein, the firefighters’ lawyer, scoffed at the offer, saying that the lead plaintiff in the case would be 80 years old by the time he was paid in full the $100,000 he had been shorted in missed raises.

The Business Council has said in previous interviews that a lesser payment is fair because the firefighters, though they may not have been given raises in the required 2 percent annual increments, had received periodic raises. The firefighter-controlled pension board also granted cost of living raises far in excess of the actual inflation rate, helping to doom the fund so some firefighters could get more money in retirement, according to the Business Council.

The firefighters sent a proposal of their own. They want the city make a downpayment of $20 million using money from its oil-spill settlement with BP, roughly half the amount the city is due from the company after lawyers fees.

The remainder of the judgment — Robein hinted that the total bill due is open to negotiation — would be paid in installments.

The city did not respond to the offer.

Kopplin said that the entire city is at risk from subsidence and rising sea levels. The oil spill settlement money should be used to protect the city from future disasters, he said.

Kopplin vowed to continue working with firefighters to find an equitable solution, but he offered no specifics on what a deal would look like.

Reese stated no preference for how the judgment got paid, but made clear that a concrete plan was required or the city would face real consequences. “There was a consent judgment issued. Once a judgement is made, once an agreement is struck, it’s a deal,” he said. “I come from the neighborhoods of New Orleans … One thing I learned is that if you wanted to get along, a deal is a deal.”