
USCA1 Opinion

	




                           UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                ____________________          Nos. 96-2225               96-2226               96-2227               96-2228                             RICHARD M. PARKER, ET AL.,                      Plaintiffs, Appellees, Cross-Appellants,                                         v.                              DAVID S. WAKELIN, ET AL.,                      Defendants, Appellants, Cross-Appellees.                                ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                              FOR THE DISTRICT OF MAINE                       [Hon. Gene Carter, U.S. District Judge]                                ____________________                                       Before                               Torruella, Chief Judge,                          Boudin and Lynch, Circuit Judges.                                _____________________               Cabanne Howard, Assistant Attorney General, with whom Andrew          Ketterer, Attorney General, and                                          Thomas D. Warren                                                         , State Solicitor,          were on brief for appellants.               Donald F. Fontaine, with whom Kaighn Smith, Jr. and Fontaine          & Beal, P.A. were on brief for appellees.                                ____________________                                   August 11, 1997                                ____________________                    TORRUELLA, Chief Judge.  The question presented by this          appeal is whether certain legislative amendments to the Maine State          Retirement System ("MSRS") violate the Contract Clause of the          United States Constitution as applied to plaintiffs, a class          comprised of current Maine public school teachers all of whom are          members of the MSRS. Following a bench trial, the district court          held that certain amendments violated the Contract Clause as          applied to those public employees who had satisfied the service          requirements under the MSRS and whose pension rights had thereby          "vested." Finding no unmistakable intent on the part of the Maine          legislature to create private contractual rights against the          reduction of pension benefits prior to the point at which pension          benefits may actually be received, we hold that the Maine          amendments do not violate the Contract Clause with regard to any of          the plaintiffs. Accordingly, we reverse the district court's          holding that the amendments violate the Contract Clause as applied          to "vested" members of the MSRS.                                     BACKGROUND                    None of the relevant facts recited below are in dispute.          I. The Maine State Retirement System (MSRS)                      The MSRS operates as a public pension trust pursuant to          Maine's public employee retirement benefit statute.                                                              See 5 M.R.S.A.          SS 17001-18663 (1989 & Supp. 1996). The MSRS was created in 1942          to encourage "qualified persons to seek public employment and to          continue in public employment in their productive years." 5          M.R.S.A. S 17050 (1989). For all Maine state employees, including                                         -2-          the public school teachers comprising the plaintiff class in the          instant case, membership in the MSRS is mandatory. 5 M.R.S.A.          SS 17001(14), 17651 (1989). All MSRS members make mandatory          contributions into a pension fund. The State of Maine also          contributes annually to maintain the fund's actuarial soundness          with regard to future benefit obligations. 5 M.R.S.A. SS 17701-A,          17701-B, 17153(1-A)(B)(Supp. 1996). The MSRS can be classified as          a "defined benefit system," in that the retirement benefits          provided for teachers are defined upon employment and financed in          part by their fixed contributions into the system.                    The teachers, as members of the system, qualify to          receive retirement benefits upon (1) reaching the statutory          retirement age,                          and (2) satisfying                                             either of the following service          requirements: (a) at least ten years of creditable service; or (b)          at least one year of creditable service prior to reaching the          statutory retirement age while in public service. 5 M.R.S.A.          S 17851 (1989 & Supp. 1996). Alternatively, a member may be          entitled to receive retirement benefits when he or she retires          after performing at least 25 years of creditable service. Id. In          the district court's decision, the term "vesting" was used to          describe the satisfaction of the service requirements. See                                                                      Parker          v.             Wakelin, 937 F. Supp. 46, 49 n.1 (D. Me. 1996). However, as the          district court in fact noted, the term "vesting" does not figure in          the statutory scheme itself, which simply indicates the age and          service requirements that must be met.   See 5 M.R.S.A. S 17851                                         -3-          (1989 & Supp. 1996). Members who terminate their public service          prior to satisfying the pension eligibility requirements are          entitled to a return of their contributions, with interest. 5          M.R.S.A. S 17705(2).                    An eligible retiree earns a pension in the amount of two          percent of his or her "average final compensation" multiplied by          the number of years of total creditable public service (up to 25          years). 5 M.R.S.A. S 17852 (1989). The legislative amendments at          issue on this appeal affect, among other things, the process by          which one computes an employee's "average final compensation" in          such a manner as to reduce the expected pension benefits of many          members.                    The State of Maine concedes that the sole purpose for          enacting the changes in the terms and conditions of retirement          benefits ("the 1993 Amendments") was to save money by lowering          budget allocations by the state to the trust funds of the MSRS;          their enactment coincided with other responses to a state fiscal          crisis. The 1993 Amendments may be sorted into two groups: three          changes apply to the pensions of                                          all current teacher-members of the          MSRS, while three others apply only to those who had not satisfied          the service requirements under the MSRS as of the effective date of                                         Other non-pension benefits under the retirement system, such as          life insurance and disability retirement benefits, may be received          without having satisfied any minimum service requirement.           A slightly different method applies to those retirees whose          eligibility is based on having completed 25 or more years of          creditable service.                                         -4-          the amendments. None of the amendments affected retirees earning          pensions as of the effective date. The amendments that affected          all of the plaintiffs were: (1) an increase in the rate of required          member contributions from 6.5 percent of their salary to 7.65          percent; (2) a cap on the salary increase that may be included in          the course of calculating the level of teachers' retirement          benefits; and (3) a six-month delay in the first cost-of-living          adjustment of retirement benefits. See P.L. 1993, ch. 410, pt. L,          SS 28, 13, 31.   The district court held that these three          modifications were unconstitutional as applied to those plaintiffs          who had satisfied the service requirements. The other 1993          amendments, which only applied to those who had not served 10 years          as of the effective date of the amendments, were: (1) an increase          in the regular retirement age from 60 to 62; (2) an increase in the          early retirement penalty from 2.25 percent to 6 percent of the          teachers' retirement benefit for each year preceding age 62; and          (3) the elimination of an inclusion of per diem payment of up to          thirty days of unused sick or vacation pay in the course of          calculating teachers' retirement benefits.                                                     See P.L. 1993, ch. 410,          pt. L, SS 33, 35, 37, 12.   It is not disputed that the 1993          Amendments operate to the disadvantage of MSRS members without          providing substantive offsetting benefits.                                         These provisions are codified as amended at 5 M.R.S.A. SS 17001-          B, 17701(13)(C), 17806(3).           These provisions are codified as amended at 5 M.R.S.A. SS 17851          (1-A) & (2-A), 17852(3-A), 17001(13)(B).                                         -5-                    When the MSRS was first adopted in 1942, the legislature          made no express statement as to its ability to amend or alter the          pension benefit structure. In 1975, the Maine legislature enacted          the following provision:                      No amendment to this chapter shall cause                      any reduction in the amount of benefits                      which would be due to the member based on                      creditable service, compensation, employee                      contributions and the provisions of this                      chapter on the date immediately preceding                      the effective date of such amendment.          P.L. 1975, ch. 622, S 6, codified at 5 M.R.S.A. S 17801 (1989),          under the title "Amendment not to cause reduction in benefit."          II. The Proceedings Below                    Plaintiffs, the Maine Education Association and a class          representing public school teachers throughout the State of Maine,          challenged the constitutionality of the 1993 Amendments under the          Contract Clause, the Due Process Clause, and the Takings Clause,          seeking declaratory and injunctive relief to block implementation.          The district court held that: (1) the 1993 Amendments violated the          Contract Clause only as applied to MSRS members whose benefits had          "vested" under the system; and (2) the 1993 Amendments did not                                         The current version has a few minor changes in language:                    No amendment to this Part may cause any                    reduction in the amount of benefits that would                    be due to a member based on creditable                    service, earnable compensation, employee                    contributions, pick-up contributions and the                    provisions of this Part on the date                    immediately preceding the effective date of                    the amendment.          5 M.R.S.A. S 17801 (1989).                                         -6-          violate any other provision of the constitution. By using the term          "vested" the district court referred to those MSRS members who had          satisfied the service requirements under the system -- a service          requirement is a necessary (but not a sufficient) condition to          being entitled to actually receive a pension.      See Parker v.          Wakelin, 937 F. Supp. at 49 n.1.                    On appeal, the state defendants ask that we hold that the          1993 Amendments do not violate the Contract Clause as applied to          any of the plaintiffs. In their cross-appeal, the plaintiffs argue          that the 1993 Amendments violate the Contract Clause as applied to          all teacher members of the MSRS prior to the effective date of the          amendments, and that the 1993 Amendments also violate substantive          due process.                                     DISCUSSION                    The essential facts being undisputed, this appeal turns          on questions of law over which we exercise  de                                                          novo review.   See          Villafane-Neriz v. FDIC, 75 F.3d 727, 730 (1st Cir. 1996). This          appeal raises a legal issue of considerable importance, one we          specifically left unresolved in                                          McGrath v.                                                     Rhode Island Retirement          Board, 88 F.3d 12, 19 (1st Cir. 1996). When stated broadly, the          issue is whether a legislative amendment to a state employee          retirement pension plan that is detrimental to employees triggers          further scrutiny under the Contract Clause as applied to state          employees whose pension rights under the plan have "vested" prior          to such amendment. In  McGrath, we did not need to resolve this          issue, because the plaintiff's pension rights had not vested prior                                         -7-          to the legislative amendment at issue, and because the legislature          specifically reserved the power to amend or terminate the plan as          to nonvested members. 88 F.3d at 19-20. We now conclude that a          blanket answer to the issue of Contract Clause protection for          vested employees is not possible, because, as we explain below, a          detailed examination of the particular provisions of a state          pension program will be required prior to determining the nature          and scope of the unmistakable contractual rights, if any, that are          created by a given state legislature.          I. General Contract Clause Principles                    Although the wording of the Contract Clause appears          uncompromising -- "No state shall . . . pass any . . . Law          impairing the Obligation of Contracts . . . "                                                       -- the Supreme Court          does not interpret it as an absolute bar on the impairment of          either governmental or private contractual obligations.                                                                  See                                                                      United          States                  Trust                        Co. v.  New                                    Jersey, 431 U.S. 1, 21 (1977) ("'[T]he          prohibition is not an absolute one and is not to be read with          literal exactness like a mathematical formula.'" (quoting    Home          Bldg.                  &                     Loan                          Ass'n v.  Blaisdell, 290 U.S. 398, 428 (1934))).          Rather, the Supreme Court has elaborated an analysis under which a          court must first ascertain whether a change in state law has          resulted in "'the substantial impairment of a contractual          relationship.'" General Motors Corp. v. Romein, 503 U.S. 181, 186          (1992) (quoting Allied Structural Steel Co. v. Spannaus, 438 U.S.                                         U.S. Const. art. I, S 10, cl. 1.                                         -8-          234, 244 (1978)). Next, the reviewing court must determine whether          the impairment is nevertheless justified as "reasonable and          necessary to serve an important public purpose."   United                                                                      States          Trust                  Co., 431 U.S. at 25-26. Where the contract allegedly          impaired is one created, or entered into, by the state itself, less          deference to a legislative determination of reasonableness and          necessity is required, because "the State's self-interest is at          stake." Id. at 25;                              see also                                                                            McGrath, 88 F.3d at 16 (when the state          itself is a party, it "must do more than mouth the vocabulary of          the public weal in order to reach safe harbor.").                    The first step described above can be further broken down          into "three components: whether there is a contractual          relationship, whether a change in law impairs that contractual          relationship, and whether the impairment is substantial." Romein,          503 U.S. at 186. In the instant case, we need not reach the issue          of impairment or substantiality, because the plaintiffs fail to          demonstrate the existence of a contractual relationship protected          by the Contract Clause. At the same time that less deference is          given to state legislatures when it is the state that wishes to          relieve itself of contractual obligations, a clear showing must be          made that a state law has created a contractual obligation on the          part of the state in the first place. See                                                     Hoffman v.                                                                Warwick, 909          F.2d 608, 614 (1st Cir. 1990) ("The Contract Clause is applicable          to contracts into which the state enters, but normally state          statutory enactments do not of their own force create a contract          with those whom the statute benefits.").                                         -9-          II. The Unmistakability Doctrine                    In order to deem a state legislative enactment a contract          for the purposes of the Contract Clause, there must be a clear          indication that the legislature intends to bind itself in a          contractual manner. See                                   National R.R. Passenger Corp.                                                               v.                                                                   Atchison,          Topeka & Santa Fe Ry. Co., 470 U.S. 451, 465-66 (1985) ("[A]bsent          some clear indication that the legislature intends to bind itself          contractually, the presumption is that 'a law is not intended to          create private contractual or vested rights but merely declares a          policy to be pursued until the legislature shall ordain          otherwise.'" (quoting Dodge v.  Board                                                 of                                                    Educ., 302 U.S. 74, 79          (1937))); United States Trust Co., 431 U.S. at 17 n.14 (a statute          may be treated as a binding contract "when the language and the          circumstances evince a legislative intent to create private rights          of a contractual nature enforceable against the state.").                    This threshold requirement for the recognition of public          contracts has been referred to as the "unmistakability doctrine."          See McGrath, 88 F.3d at 19 (citing United                                                     States v. Winstar, 116          S. Ct. 2432 (1996)). In   United                                            States v.  Winstar, the Supreme          Court traced the history of the unmistakability doctrine from          Justice Marshall's opinion in                                        Fletcher v.                                                    Peck, 10 U.S. (6 Cranch)          87 (1810), and explained its purpose. Because legislatures should          not bind future legislatures from employing their sovereign powers          in the absence of the clearest of intent to create vested rights          protected under the Contract Clause, courts developed canons of          construction disfavoring implied governmental contractual                                        -10-          obligations. Thus, "'neither the right of taxation, nor any other          power of sovereignty, will be held . . . to have been surrendered,          unless such surrender has been expressed in terms too plain to be          mistaken.'" Winstar, 116 S. Ct. at 2455 (quoting                                                            Jefferson Branch          Bank v.  Skelly, 68 U.S. (1 Black) 436, 446 (1862)). The          requirement that "the government's obligation unmistakably appear          thus served the dual purposes of limiting contractual incursions on          a State's sovereign powers and of avoiding difficult constitutional          questions about the extent of State authority to limit the          subsequent exercise of legislative power." Winstar, 116 S. Ct. at          2455.                    In its most recent Contract Clause case holding a state          to its obligations under a public contract, the Supreme Court found          ample evidence that a promise on the part of the state had been          made in a contractual setting, in return for a specific bargained-          for benefit, and found that the statutory scheme clearly employed          the language of contract. See                                         United States Trust Co.                                                              , 431 U.S. at          17-18 (involving a legislative covenant between New York and New          Jersey and future bondholders where the very "purpose of the          covenant was to invoke the constitutional protection of the          Contract Clause as security against repeal"). In the instant case,          we must determine whether the MSRS also evinces a clear intent on          the part of the Maine legislature to create contractual rights          against the modification of pension benefits.          III. Pension Plans as Contractual Obligations                                        -11-                    The law governing the rights of members of public          employee retirement plans varies greatly from state to state, and          has not been the subject of federal regulation or harmonization.          There is no modern Supreme Court case that provides guidance as to          the rights public employees have to their pensions.    Pennie v.          Reis, 132 U.S. 464 (1889), stands for the proposition that public          employee pension programs do not create vested rights against          legislative modifications, and thus are gratuities that a state may          freely revoke.     See  Pennie, 132 U.S. at 470-71 (holding          California's adjustment of a pension benefit plan for police          officers did not constitute deprivation of property without due          process). Although this "gratuity" approach has been rejected by          most state courts,                             Pennie has never been explicitly overruled.                                                                         See          generally 60A Am. Jur. 2d, Pensions and Retirement Funds, SS 1620-          29 (discussing the shift away from the gratuity approach toward the          contract approach).    Pennie has, however, been ignored as a          precedent, perhaps because its dicta regarding public pension          benefits arose in the context of a Due Process claim.                    Although only two other circuits have addressed this          question, state courts have generally viewed a public pension plan          as creating implied-in-fact unilateral contracts. See                                                                 McGrath, 88          F.3d at 17 (collecting cases). The Ninth Circuit in     State                                                                          of          Nevada Employees Ass'n v. Keating, 903 F.2d 1223 (9th Cir. 1990),          agreed with the Nevada Supreme Court that the "'better reasoned          view' recognizes that non-vested employees have contractual rights          in pension plans 'subject to reasonable modification in order to                                        -12-          keep the system flexible to meet changing conditions, and to          maintain the actuarial soundness of the system.'" 903 F.2d at 1227          (quoting                   Public Employees' Retirement Board                                                     v.                                                         Washoe, 96 Nev. 718          (1980)). Thus the Ninth Circuit in                                             Keating concluded that a Nevada          law penalizing the withdrawal of pension contributions and thereby          altering the previous law that contained no such penalty, violated          the Contract Clause because it did not represent a reasonable          modification of the pension plan. The court in    Keating noted,          however, that the state did not dispute that Nevada's statutes          providing pensions for public employees created contractual          obligations. See                            Keating, 903 F.2d at 1225-26. The Fourth Circuit          also ignored the gratuity approach in the course of holding that          legislative amendments to a North Carolina public employee          disability benefit plan did not violate the Contract Clause          because, under relevant state law interpretations of the statute,          rights to benefits under the plan did not vest until retirement.          See  Kestler v.   Board  of  Trustees  of  North  Carolina  Local          Governmental Employees' Retirement Sys.                                                , 48 F.3d 800, 804 (4th Cir.          1995) (no Contract Clause violation where plaintiff was not vested          at the time of the effective date of the amendment).                    These cases reflect the modern trend among state supreme          courts, which is to protect pension rights on the theory that a          state's promise of pension benefits represents an offer that can be          accepted through the employee's performance -- thus, a unilateral,          implied-in-fact contract is created that is binding on the state.          See generally                       Andrew Mackenzie, "                                          Spiller v.                                                     State: Determining the                                        -13-          Nature of Public Employees' Rights to Their Pensions," 46 Me. L.          Rev. 355, 357-59 (1994); Note, John J. Dwyer, "'Til Death Do Us          Part: Pennsylvania's 'Contract' With Public Employees For Pension          Benefits," 59 Temp. L.Q. 553 (1986). There is much disagreement on          the details, however, under this unilateral contract approach. One          widely held view is that at some point, public employees'          contractual rights to pension benefits vest; after vesting, the          state is contractually bound to honor its obligation to provide a          pension without any further modifications or decreases in overall          benefit levels.    See, e.g.,  Petras v.  State                                                             Bd.                                                                  of                                                                      Pension          Trustees, 464 A.2d 894, 896 (Del. 1983) (rights vest upon          completion of minimum service requirement);   Baker v.   Oklahoma          Firefighters                        Pension                                &                                  Ret.                                       Sys., 718 P.2d 348, 353 (Okla. 1986)          (same);                  Leonard v.                             City of Seattle                                           , 503 P.2d 741, 746 (Wash. 1972)          (en banc) (same);                            Sylvestre v.                                         State, 214 N.W.2d 658, 666-67 (Minn.          1973) (rights vest at start of employment);                                                      Yeazell v.                                                                 Copins, 402          P.2d 541 (Ariz. 1965) (en banc) (same as    Sylvestre). Several          states have provisions in their constitutions declaring that          vesting occurs at the moment of public employment and barring any          legislative modifications that retroactively reduce the accrued          benefits of public employees.  See, e.g., Alaska Const. art. XII,          S 7; Haw. Const. art. XVI, S 2; Ill. Const. art. XIII, S 5; Mich.          Const. art. IX, S 24; N.Y. Const. art. V, S 7. Several states          follow a modified contract approach, which permits some unilateral          legislative modifications of pension plans as long as the          legislature offsets any new disadvantage with comparable new                                        -14-          advantages, as seen from the point of view of the public employee.          See,               e.g.,                     Singer v.                               City of Topeka                                            , 607 P.2d 467, 475 (Kan. 1980);          Betts v.                   Board of Admin. of the Pub. Employees' Ret. Sys.                                                                 , 582 P.2d          614, 617 (Cal. 1978) (en banc);                                         Opinion of the Justices                                                               , 303 N.E.2d          320, 328 (Mass. 1973). At least two state supreme courts,          including Maine's, have declined to use the language of "vesting"          in the course of upholding modifications to pension benefits at any          time during the employment relationship.                                                   See                                                       Spiller v.                                                                  State, 627          A.2d 513, 516 (Me. 1996);                                    Pineman v.                                               Oechslin, 488 A.2d 803 (Conn.          1985). The Connecticut Supreme Court in fact rejected the contract          model altogether and indicated that public employees have a          property interest in pension benefits that may not be arbitrarily          confiscated by the state, under the Due Process Clause.  Pineman,          488 A.2d at 809-810.                     Although we have recognized the diversity of contract          theories adopted by state courts -- in particular the divergence of          approaches with regard to when exactly binding rights to a certain          level of retirement benefits "vest" -- we have never chosen to          adopt a particular approach to                                         public pension rights. See                                                                    McGrath,          88 F.3d at 16-18.                    In                       McGrath, we noted that, as a general matter, pensions          are viewed as "a species of unilateral contracts," although there          is considerable disagreement as to when rights in public pension          plans vest, if at all. Id. at 17. But in the course of analyzing          a Contract Clause challenge to certain amendments to the Rhode          Island public employee retirement system, we eschewed participating                                        -15-          in abstract contract theory in favor of performing a close analysis          of the statutory provision at issue. Such an approach is wise,          because the unmistakability doctrine mandates that we determine          whether the challenged legislative enactment evinces the clear          intent of the state to be bound to particular contractual          obligations. It may well be that the variety of approaches adopted          by state supreme courts reflect, in part, differences in the          structure of the various state pension programs, and of the          intention of the different state legislatures that created them.          There is a danger, however, in adopting a theory of pension rights          and subsequently forcing a given program to fit under it. Any          given theoretical approach will make assumptions regarding the          intent of legislatures to be bound, as well as the time at which          vesting should occur, which may be contradicted by particular          statutory provisions such as, for example, an express reservation          of the right to revoke pension benefits.     When reviewing a          particular enactment, therefore, we must suspend judgment and          "proceed cautiously both in identifying a contract within the          language of a regulatory statute and in defining the contours of          any contractual obligation." Atchison, Topeka & Santa Fe Ry. Co.                                                                          ,          470 U.S. at 466. The district court's decision protects Maine          public employees from benefit reduction once employees' rights are          "vested." Unfortunately, the line it drew between teachers who had                                         In  McGrath, we specifically reserved judgment on the question of          whether such express reservations are valid after the point at          which pension rights are "vested." 88 F.3d at 19.                                        -16-          and had not completed a minimum service requirement, cannot be          justified on the basis of the Maine statute, which nowhere speaks          of "vesting" as understood by the district court.                                        -17-          IV. Contractual Rights Under the MSRS                    Turning to the MSRS, we ask whether the Maine Legislature          has unmistakably evinced the intention to create binding          contractual rights.   See Hoffman, 909 F.2d at 614 (determining          whether "language and circumstances" of Rhode Island benefits          statute reveal "a legislative intent to create private contractual          rights"). Specifically, in light of the plaintiffs' claims, we          must ask whether Maine has bound itself not to modify or alter, at          any time before the employee's retirement, the level of pension          benefits an employee would expect to receive. The statutory          language is the primary focus of the inquiry.  Atchison, Topeka &          Santa Fe Ry. Co., 470 U.S. at 466.                    Under the terms of the MSRS, public employees who have          met certain service and age requirements are entitled to receive          pensions. At the heart of this case is 5 M.R.S.A. S 17801, which          reflects the state's intent to reserve the power to amend the          amount of pension benefits, as well as, arguably, the state's          intent to create private contractual rights. That is, the State's          self-imposed limitations on its legislative power through section          17801 may reasonably serve as an indication of its intent to          guarantee pension benefits once they are "due," as well as an          obvious reservation of amendment powers with regard to the amount          of benefits that are not "due." The parties disagree as to the          unmistakable intentions section 17801 represents.                     Section 17801 states that "no amendment . . . may cause          any reduction in the amount of benefits which would be due a member                                        -18-          . . . on the date immediately preceding the effective date of the          amendment." Much turns on the meaning of "due." The plaintiff          public school teachers argue that benefits are "due" from the          moment of employment, and that this section merely confirms the          applicability of a strict implied-in-fact, unilateral contract          approach. The State contends that section 17801 is a reservation          of the power to alter benefits until the retirement benefits are          literally due to be received. The third alternative, not the basic          position of either party, is that benefits are "due" if a teacher          has completed the statute's initial service requirements, although          pension benefits are not yet currently payable.                    The Maine Supreme Judicial Court's   Spiller decision,          which deserves our "'respectful consideration and great weight,'"          Romein, 503 U.S. at 187 (quoting                                          Indiana ex rel. Anderson                                                                  v.                                                                      Brand,          303 U.S. 95, 100 (1938)), clearly rejects the alternative pressed          by the teachers. The court was "unpersuaded by the reasoning of          those jurisdictions that have discerned in the statutory language          the creation at the time of employment of binding contractual          rights."  Spiller, 627 A.2d at 516. It held that, as to the          Spiller plaintiffs, none of whom had satisfied the statute's          service requirements at the time of the statutory amendment          challenged in Spiller, "[n]one of the benefits at issue here were          due . . . on the effective date of [the] legislation."  Id.                    The question remains, however, whether section 17801          should be read to protect a teacher -- and possibly to create          contract rights -- whenever a teacher satisfies the service                                        -19-          requirements even though the teacher is still in active service and          no pension is currently payable. Section 17801 does not clearly          compel such a reading, since "due" could easily be read to mean          currently payable. And such a reading would also arguably conflict          with some of the language in                                      Spiller (although not its holding) and          with the dissent's reading of the majority. See                                                           Spiller, 627 A.2d          at 516 ("By implication, the [statutory] language reserves to          future legislatures the power to modify prospective service          retirement benefits for employees to whom benefits are not then          due"); id. at 519 ("Although the Court does not reach the issue          today, its interpretation of section 17801 also undermines the          pension benefits of those employees who have met the eligibility          conditions for pension benefits but [have not yet retired].")          (Wathen, C.J., dissenting).                    Even if we treat the statute as unclear and conclude that          Spiller leaves the issue open, we think that the principle of          unmistakability would defeat the teachers' claim that the contract          rights are created when service requirements are satisfied. We          need not decide whether the statute ever gives rise to a          contractual relationship; it is enough to say that it does not          clearly do so before a teacher retires, and thus gains an immediate          right to the payment of pension benefits. Because there is no          attempt here to take away retirees' benefits, there can be no          plausible contract clause claim in this case.                    The district court reasoned that "due" should be          construed as referring to the point at which a member qualifies for                                        -20-          retirement benefits. But even if this is a possible reading, we do          not think this language could be said to reflect the unmistakable          intent of the Maine Legislature, particularly when the legislature          could very well have indicated as much. In fact, the MSRS makes no          reference to "vesting." As the district court points out, and as          the plaintiffs have vigorously argued, there is some evidence          indicating that certain legislators wanted to protect vested          rights; and that the Maine Legislature, in enacting section 17801,          responded to a report that recommended the protection of employees'          accrued retirement benefits from retroactive reductions. But the          language of section 17801 remains at best ambiguous, and we cannot          find that the legislature as a whole unmistakably intended to          create contract rights at the time that service requirements were          satisfied -- especially where, as here, it would have been easy to          make any such intention crystal clear.                     We do not decide today whether, in order to satisfy the          unmistakability doctrine, a public pension statute must explicitly          employ the language of contract. Nor need we decide whether          Contract Clause principles would apply if Maine sought to reduce          pension benefits already "due" to present retirees, a step that          would in any case appear to require revision of the present section          17801. To resolve this appeal, we need only conclude that there is          no unmistakable intent by the Maine Legislature to create an          enforceable private contract right against the modification of the          plaintiffs' retirement benefits until they are actually receivable.                                        -21-                    As we indicated in McGrath, public employment contracts          operate in a "special employment environment" requiring recognition          of "the states' flexibility vis-a-vis the retirement benefits that          it offers public employees." 88 F.3d at 19. Whether the          amendments here are wise or justified as a matter of political          philosophy is not our concern. As Contract Clause challenges          arise, we must look to the language of the pension statutes to          determine, as a threshold matter, whether the unmistakability          doctrine is satisfied. Here, as it relates to Maine's purported          obligation not to alter the benefits of its public teacher          employees, it is not. Thus, no violation of the Contract Clause          may be found.                    With regard to the teacher-plaintiffs' due process claim          on cross-appeal, we affirm the decision of the district court,          finding no due process violation, for the reasons given in its          opinion, extending that reasoning to all plaintiffs.  See 937 F.          Supp. at 58.                                      CONCLUSION                    For the reasons stated in this opinion, the decision of          the district court, to the extent that it found the Maine          legislative amendments violative of the Contract Clause, is          reversed in part, and to the extent that it found no constitutional          violations, is affirmed in part.                                        -22-
