The Montana Supreme Court on Monday reversed a judge's decision that the city of Billings pay $2.7 million to police as part of a contract lawsuit.
In a 5-2 decision, the Supreme Court ruled that language in collective bargaining agreements between Billings Police Department officers and the city of Billings were not as clear as a lower court had determined.
“My initial impression is I'm stunned and very disappointed," said Randy Bishop, an attorney representing the officers.
"We credit this decision to the perseverance and effort of the city's appellate attorneys, Jim Goetz of Goetz, Baldwin and Geddes in Bozeman and Andy Forsythe of Moulton Bellingham in Billings," said Brent Brooks, Billings city attorney.
Writing for the majority opinion, Justice Jim Rice said that District Judge Brenda Gilbert's conclusions failed to consider all available evidence when she ordered the city of Billings to pay, and that the contract language could be interpreted more than one way depending on what evidence is considered.
Twenty-eight Billings officers first filed the lawsuit in 2009 with Ernie Watters as the lead plaintiff. It was later expanded as a class-action suit.
The officers claimed the city underpaid them for years by incorrectly calculating longevity pay, which uses a formula based on the number of years an officer has worked. Longevity pay was negotiated as part of the officers' bargaining agreement, which is the contract with the city.
Interpretations of some contract language were in dispute, including whether longevity pay for the first year of work was awarded during that year or after it was completed. The two sides also disputed whether longevity pay is calculated based on an officer's standard first-year base pay or each officer's individual pay.
Former District Court Judge Nels Swandal ruled in the officers' favor with a partial summary judgment in 2011. Litigation continued until last fall, when Judge Gilbert ordered the $2.7 million judgment against Billings.
Gilbert succeeded Swandal after his retirement.
Attorneys for the city appealed. The city cited multiple reasons in the appeal, but the Supreme Court focused only on whether the contract language was "unambiguous" enough to warrant the district judges' decisions.
The justices determined that both the city and the officers had reasonable interpretations of the contract. Furthermore, the Supreme Court's majority opinion took issue with Swandal's conclusions in his 2011 ruling that favored the officers' position — conclusions that influenced the rest of the case.
The Supreme Court noted that attorneys for the city of Billings argued that other evidence favored their interpretation. The city said in its appeal that the police union representatives who negotiated the contract agreed with the city's interpretation, for example.
Swandal wrote in 2011 that he believed he was interpreting only what was written "within the four corners" of the contract and nothing else.
Bishop, the attorney representing the officers, backed the district court judges' previous rulings.
"We felt that the legal issue was one that was based upon well-established contract law and both Judge Swandal and Judge Gilbert felt that way in multiple rulings,” he said.
The majority of the Supreme Court felt there was enough ambiguity in the contract to warrant reconsideration.
Two justices dissented: Michael Wheat and Chief Justice Mike McGrath.
Wheat wrote the dissenting opinion and backed Swandal's interpretation that the contract should have been interpreted as the officers saw it from the beginning. Thus, the city was always going against the contract language with its interpretation.
Bishop was traveling Monday and said he hadn't yet reviewed options moving forward.
The case will now go back to District Court.
"There will be more work ahead for the District Court, the city and the plaintiffs in this case," Brooks said.
City officials said they will meet with the city's attorneys to discuss the remand issued by the Supreme Court.