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A decade-old police pay lawsuit has been kicked back for further proceedings after a Supreme Court order Tuesday saying the city of Billings has satisfied its bill in one pay category, but leaving the door open for other wage claims.

The ruling is sure to shrink any amount of money the city is ultimately on the hook for.

"The City is pleased that the Montana Supreme Court yesterday confirmed that the city was correct in the way it paid longevity to the Billings Police Force, which was the primary claim in the lawsuit," read an emailed statement from the city's attorneys.  

In a 5-0 opinion by Justice Beth Baker, the state’s high court said a lower court was correct in ruling that officers weren’t entitled to longevity pay until they’d completed a full year on the job.

Because that’s how the city had paid out its officers for the 2000-2009 years in dispute, no extra longevity pay is owed, the court found.

It was a win for the city in the class action case involving roughly 150 active or retired officers of the Billings Police Department.

Another win from the ruling is a provision limiting the period for which officers can claim unpaid wages.

Lower courts had earlier included eight years prior to the lawsuit’s filing, which eventually gave rise to a $2.7 million judgment against the city.

On Tuesday, the Supreme Court specified the so-called “look-back period” should be either two or three years, depending on yet more accounting calculations.

But while the ruling favored the city in some respects, it still leaves the door open for officers to argue they were underpaid.

The Supreme Court ruled the lower court was wrong to dismiss officers’ arguments on pay categories unrelated to longevity, such as overtime.

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The lower court must now re-examine the issue.

A statement from the city said it’s confident it will prevail on the overtime issue, and that it made those calculations under direction from the local Wage and Hour Division of the U.S. Department of Labor.

The Tuesday ruling also instructs the lower court to hear further arguments on penalties and attorney fees.

District Court Judge Olivia Rieger, of the 7th Judicial District in Eastern Montana, handled the case after local judges recused themselves. The lead plaintiff, Ernie Watters, is married to Susan Watters, who was a district court judge at the time he filed suit. Watters now sits on the federal bench.

It’s the second time the Montana Supreme Court has ruled on the case.

In 2017, the court reversed a $2.7 million judgment against the city, saying the contract language was ambiguous and the lower court needed to consider the intent of those negotiating the agreement.

The original judgment, from 2016, broke down into $933,000 in unpaid wages and benefits, roughly $1.03 million in a penalty and $779,000 in attorney fees and costs.

Of the unpaid wages and benefits awarded, slightly more than half fell under the umbrella of longevity pay.

Randy Bishop, one of the attorneys representing the officers, said it was clear the city prevailed on certain arguments, but that “Billings has a better government now” because of the lawsuit.

“The city is now writing its contracts with I think much more care and attention to detail,” he said, adding, “I feel good about that.”

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