¶ 1. ANN WALSH BRADLEY, J.
Defendants, James R. Klauser, Secretary of the Wisconsin Department of Administration, and Charles P. Smith, State Treasurer, seek review,
¶ 2. At issue is the constitutionality of 1987 Wis. Act 27, §§ 436m, 684r, and 688km,
¶ 3. Chapter 40 of the Wisconsin Statutes creates and governs the Public Employe Trust Fund, a system of benefits designed to protect public employees from the financial hardships of old age, disability, illness, and accidents. Wis. Stat. § 40.01(1). The Department of Employe Trust Funds (DETF) is an executive branch agency administering the Trust Fund "under the direction
¶ 4. Within the Trust Fund, there is a fixed retirement investment trust (FRIT). § 40.04(3). The FRIT receives funds from three sources: (1) contributions from participating employees; (2) contributions from participating employers; and (3) investment earnings on the employee and employer contributions.
¶ 5. There are four accounts within the FRIT. First, there is an employee accumulation reserve account, which holds funds related to employee contributions. § 40.04(4). Second, there is an employer accumulation reserve account, which holds funds related to employer contributions. § 40.04(5). Third, there is an annuity reserve account, which holds funds sufficient to make annuity payments to those retiring public employees who choose to receive their retirement benefits on an installment basis. § 40.04(6). When an employee retires and elects to take an annuity, the employee and employer accumulation reserves transfer to the annuity reserve an amount equal to the present value of the annuity. § 40.04(6). Fourth, there is a transaction amortization account (TAA). § 40.04(3). The TAA is an accounting mechanism which allows the three reserve accounts to spread over time the recognition of gain or loss on investments, thus partially insulating annuitants from the fluctuations of the investment marketplace. Every year, each of the FRIT's three reserve accounts is credited with a proportionate share of the TAA balance. § 40.04(3)(a).
¶ 7. The legislature has frequently changed the formula for calculating a retiring employee's initial annuity benefit. These changes generally increase a retiree's base annuity, and have always been applied prospectively. As a result, state employees retiring prior to statutory increases in base annuities receive no enhancement of their base annuity. See, Retirement Research Committee Staff Report § 76, Review of WRS Annuitant Equity and Adequacy Concerns (1985). Benefits "cliffs" are created between those retiring before and those retiring after beneficial legislation.
¶ 8. The legislature has attempted to blunt the erosive economic effect of these benefits "cliffs" by providing "supplemental benefits" to older annuitants. Since 1974, the legislature has provided supplemental benefits to pre-1974 annuitants in an effort to bring their benefits more into line with those of post-1974 annuitants.
¶ 9. In 1987, the legislature enacted the legislation at issue in this case.
¶ 10. At the time of the SIPD legislation's enactment, GPR supplemental benefits were available to about one-quarter of the 76,763 retirees then receiving annuities out of the fixed annuity reserve. Because SIPD payments were made available only to GPR supplemental benefits recipients, Act 27 rendered about three-quarters of all annuitants ineligible to receive any portion of the SIPD distribution. If all annuitants had shared the SIPD payments on a pro rata basis, each annuitant would have experienced a 2.4-2.6% increase in his or her monthly check.
¶ 11. The annuity reserve already had a surplus of $6.1 million at the time of the enactment of the SIPD legislation. The legislation did not reference the disposition of any pre-existing annuity reserve surplus. Secretary Gates and the ETF Board included the $6.1
¶ 12. The legislation had an effective date of July 1, 1987, but took several months to implement. The GPR supplemental benefits appropriation was continued for the interim. Wis. Stat. § 40.04(3)(e)1.c. However, the Act ordered the DETF to reimburse the State for the interim GPR expenditures. Id. This reimbursement totaled $3.8 million, and was made out of the funds transferred from the TAA to the annuity reserve account. Id.
¶ 13. Before implementing Act 27, the ETF Defendants sought and received an attorney general opinion on the constitutionality of the legislation. 76 Op. Att'y Gen. 299 (1987). The attorney general opined that the statute did not violate the contracts clause of the Wisconsin constitution, Wis. Const. art. I, § 12. In response to a legislator's request, the attorney general also issued a separate opinion that the Act did not violate the extra compensation clause, Wis. Const. art. IV, § 26. 76 Op. Att'y Gen. 224 (1987). After receiving the attorney general's advice, the ETF Defendants implemented the SIPD legislation.
¶ 14. Plaintiffs SEA and WRTA commenced separate actions in the circuit court against the ETF Defendants.
¶ 15. The circuit court divided the trial into two phases. In issuing its first phase decision and order, the circuit court concluded that Act 27 amounted to an unconstitutional grant of extra compensation to SIPD payment recipients. Moreover, the circuit court determined that the implementation of the legislation impaired the contract between WRS annuitants and the State, and constituted a breach of the ETF Defendants' fiduciary duties. After its first phase decision, the circuit court certified the action as a class action on behalf of annuitants who would have been eligible to receive an annuity reserve on December 31, 1987.
¶ 18. The court of appeals also reversed the circuit court's "minimalist remedy" determination, concluding that it was constitutionally insufficient. Instead, the court of appeals ordered the Administration Defendants to pay from the State treasury to the annuity reserve an amount equal to the GPR expenditures saved as a result of the distributed SIPD.
II. Constitutionality of Act 27
¶ 19. The first issue we address is whether Act 27 violates Article I, § 13 of the Wisconsin constitution, which provides that: "The property of no person shall be taken for public use without just compensation therefor." Because the plaintiffs challenge the constitutionality of Act 27, a question of law is presented, which
¶ 20. When conducting a takings analysis, we begin by determining whether a property interest exists. Noranda Exploration, Inc. v. Ostrom, 113 Wis.2d 612, 624-25, 335 N.W.2d 596 (1983). The parties do not dispute, and we agree, that WRS annuitants have a property interest in the WRS. The annuitants' interest finds its genesis both in chapter 40 and in prior decisions of this court. Specifically, § 40.19(1) provides:
¶ 21. We also agree with the parties that WRS annuitants have a contract right to have dividends distributed consistent with § 40.27(2). Recently, we reaffirmed the rule that an individual's contractual rights in a public employee retirement system create a property interest in his or her retirement system as a whole. Association of State Prosecutors, 199 Wis. 2d at 558.
State Teachers' Retirement Board v. Giessel, 12 Wis.2d 5, 10, 106 N.W.2d 301 (1960), quoted with approval in Association of State Prosecutors, 199 Wis. 2d at 559. These cases establish the property interest of WRS annuitants in the proper distribution of surplus investment earnings contained in the annuity reserve account.
¶ 22. The Administration Defendants assert that the plaintiffs, as individual annuitants, have no more than a mere unilateral expectation that the Board will grant them a portion of any surplus distribution out of the annuity reserve. While the defendants may be correct in their assertion, they miss the focus of the inquiry. We are concerned not with an annuitant's right to a share of surplus distributions, but instead with the right of every annuitant to have surplus distributions
¶ 23. If a recognizable property interest exists, we then consider whether the right has been taken. Zinn v. State, 112 Wis.2d 417, 424, 334 N.W.2d 67 (1983). Thus, we must determine whether the SIPD legislation "takes" the plaintiff annuitants' property interest in having annuity reserve account surpluses distributed in the manner prescribed by § 40.27(2). To the extent that the legislation violates the plaintiffs' § 40.27(2) rights, it effectively takes those rights.
¶ 24. Section 40.27(2) grants the ETF Board the discretion to vary annuity reserve surplus distributions "as may be determined to be equitable." We read this section to execute an exclusive grant of discretionary authority to the ETF Board, and agree with the Administration Defendants that:
Reply Brief at p. 10. Thus, on the facts of this case, Act 27 violates § 40.27(2) if it eliminates or limits the ETF Board's discretion to equitably vary the distribution of the $84.7 million annuity reserve surplus.
¶ 25. The SIPD legislation transferred funds from the TAA to the annuity reserve account. Because the transfer created a surplus in the annuity reserve account exceeding two percent of the "amount of annuities in force," a distribution was triggered under § 40.27(2). In the absence of Act 27, the ETF Board would then distribute the surplus, with the discretion to increase certain annuities by a greater or lesser percentage than others, as informed by equitable
¶ 26. The legislation required the ETF Board to distribute the annuity reserve's investment earnings only to those annuitants then receiving supplemental benefits, "notwithstanding s. 40.27(2)(b)." See § 40.04(3)(e)1.a. Counsel for the Administration Defendants conceded before this court that Act 27 left the ETF Board with no discretion to grant post-1974 annuitants a share of the annuity reserve surplus created by the TAA transfer. The defendants nevertheless maintain that the legislation preserved the ETF Board's equitable discretion, as it was the Board which developed and approved the formula under which the SIPD was eventually distributed.
¶ 27. We cannot agree with the defendants. Section 40.27(2) describes some of the terms of the WRS contract. Among those terms is the guarantee that variations in surplus distributions will be made in the Board's equitable discretion. The SIPD legislation mandated a distribution limited to pre-1974 annuitants, eliminating the ETF Board's equitable authority to grant a portion of the annuity reserve surplus to post-1974 retirees. On this basis, we conclude that Act 27 effected a violation of § 40.27(2).
¶ 28. Section 40.27(2) also prevents the use of annuity reserve surplus distributions to reduce other
According to the plaintiffs, Act 27 violates the "no offset" language in § 40.27(2)(c) by reducing an annuitant's GPR-funded supplemental benefits by the amount of SIPD payments received.
¶ 29. The legislature has not granted pre-1974 WRS annuitants a contract right to the continued receipt of GPR-funded supplemental benefits. Rather, supplemental benefits are subject to continuing legislative appropriation. See § 40.27(1)(a), repealed by 1987 Wis. Act 27, § 688km. However, the reduction of supplemental benefits must be viewed in the context of the legislation's corresponding distribution of SIPD.
¶ 30. Act 27 did not simply repeal pre-1974 annuitants' entitlement to GPR-funded supplemental benefits. The legislation also varied the distribution of investment earnings in order to achieve an upward adjustment of benefits for the same pre-1974 annuitants. The Administration Defendants concede that there is a relationship between the legislation's grant of SIPD payments and the reduction in supplemental benefits. That this "relationship" is an offsetting one is amply demonstrated by the wording of the statute:
¶ 31. The Act also improperly mandated a $3.8 million reimbursement to GPR from the annuity reserve account for supplemental benefits made during the interim period between the effective date of the legislation and its implementation. Section 40.27(2) governs the distribution of investment earnings of the annuity reserve, and it anticipates payments only to annuitants. The section is utterly devoid of any authority for using annuity reserve funds to reimburse a governmental entity for non-trust obligations. We therefore conclude that the Act further violated § 40.27(2) by mandating a reimbursement for interim GPR supplemental benefits, a non-trust obligation.
¶ 32. This court finds unpersuasive the Administration Defendants' undeveloped assertion that the State, as settlor of the FRIT trust fund, is empowered to unilaterally alter the terms of the WRS contract. The system of benefits provided by the Wisconsin Retirement System is no mere legislative gratuity. Rather, benefits are a form of deferred compensation for service provided. When a public employee chooses to take his or her retirement benefits in the form of an annuity, he or she is thereby guaranteed certain rights under the WRS contract. See § 40.19(1). One such right is to have
¶ 33. We have determined that the SIPD legislation violates § 40.27(2) by stripping the ETF Board of its exclusive authority to equitably distribute surplus investment earnings of the annuity reserve. The legislation also reduces an annuitant's supplemental benefits by the amount of SIPD received, in violation of the § 40.27(2)(c) proscription against "offsetting." Finally, the Act violated § 40.27(2) by mandating a wholly unauthorized reimbursement to the State treasury for GPR supplemental benefits made during the period between the Act's effective date and implementation. We therefore conclude that Act 27 takes the plaintiffs' property interest in having distributions of annuity reserve surpluses made consistent with § 40.27(2).
¶ 34. Having concluded that the plaintiffs have a property interest in the WRS, and that it has been taken, we next determine if the taking was: (1) for a public purpose, and (2) without just compensation. All parties agree that the legislature enacted the SIPD legislation for the purpose of reducing GPR outlays. In addition, the Administration Defendants assert that Act 27 was intended to blunt the impact of inflation on the retirement system's oldest annuitants. The asserted purposes are not mutually exclusive. There is no inherent contradiction in attempting to both reduce fiscal outlays and provide for needy retirees. Because both inure to the benefit of the public, there is no dispute that if a taking has occurred, it is for a public purpose.
¶ 36. To summarize our conclusions, under § 40.19(1), Giessel and Association of State Prosecutors, the plaintiff annuitants have a property right in the investment earnings of the annuity reserve account. This property right includes the right to have annuity reserve surpluses distributed in a manner consistent with § 40.27(2). Act 27 violated § 40.27(2) by usurping the Board's authority to equitably distribute annuity reserve surpluses, by reducing annuitants' supplemental benefits in an amount equal to their SIPD payments, and by mandating an unauthorized reimbursement to GPR for interim supplemental benefits. These violations of § 40.27(2) take the plaintiffs' property rights for a public purpose and without just compensation. We therefore determine that Act 27 is unconstitutional beyond a reasonable doubt.
III. Fiduciary Breach
¶ 37. The circuit court determined that the ETF Defendants violated their fiduciary duties as WRS trustees when they implemented Act 27. The court reasoned that the ETF Defendants' duty to administer the trust for the benefit of all annuitants required them to seek court guidance prior to implementing legislation of doubtful constitutionality. See State ex rel. Morse v. Christianson, 262 Wis. 262, 266, 55 N.W.2d 20 (1952).
¶ 38. The court of appeals reversed, concluding that the ETF Defendants did not breach their fiduciary duties. We agree, and adopt the court of appeals' reasoning as our own. When the ETF Defendants perceived a potential conflict between the Act 27 provisions and the existing trust instrument, they sought and received the opinion of the attorney general. They then fully implemented the Act in good-faith reliance on the attorney general's opinion that the legislation was constitutional. By implementing the SIPD legislation, the trustees were complying with the statute as written. Retired Teachers Ass'n, 195 Wis. 2d at 1041.
¶ 39. In addition, the court of appeals noted that Morse "does not require resort to a court where the attorney general has already rendered an opinion." Id. at 1043. The Morse court stated that before making expenditures, trustees must seek judicial interpretation of unclear laws. 262 Wis. at 266. However, the court provided no further analysis or support for the proposition. We take this opportunity to supplement the Morse decision, concluding that on these facts, the trustees upheld their fiduciary duties by implementing Act 27 in good-faith reliance on the opinion of constitutionality rendered by the attorney general. Accordingly, we determine that the ETF Defendants
IV. Remedy for an Unconstitutional Taking
¶ 40. We next determine the remedy for the taking of the plaintiffs' property rights. Initially, we address sovereign immunity and the plaintiffs' failure to file a Wis. Stat. § 893.82 notice of injury,
¶ 41. Sovereign immunity exists in this State by virtue of Article IV, § 27 of the Wisconsin constitution,
¶ 42. The Administration Defendants concede, and we agree, that the plaintiffs' request for just compensation under Wis. Const. art. I, § 13 is not barred by
Petitioners' Reply Brief at 21, n. 5 (emphasis added).
¶ 43. This court has previously held that when the legislature has not provided specific procedures for the recovery of just compensation following a taking, an aggrieved property owner may proceed directly under Article I, § 13. Zinn, 112 Wis. 2d at 437-38; see also, Kallembach v. State, 129 Wis.2d 402, 409, 385 N.W.2d 215 (Ct. App. 1986). Section § 893.82 does not set out specific procedures for the recovery of just compensation. Indeed, the section's recovery limitation of $250,000 indicates that the statute was not intended to apply in the takings context. § 893.82(6). A taking may result in the State's obligation to pay far more than $250,000, and the constitutional mandate of just compensation cannot be limited in amount by statute. Zinn, 112 Wis. 2d at 437, citing Luber, 47 Wis. 2d at 283.
¶ 44. Well-settled law supports the Administration Defendants' concession that § 893.82 does not
¶ 45. As noted, just compensation is the constitutionally prescribed remedy for a taking of the plaintiffs' property interest in the earnings of the annuity reserve account. What remains for our consideration is the appropriate method of valuing that property right.
¶ 46. Just compensation is measured by the loss incurred by the property owner as a result of the taking. See Luber, 47 Wis. 2d at 279, citing Volbrecht v. State Highway Comm., 31 Wis.2d 640, 647, 143 N.W.2d 429 (1966). Applying that principle to this case, we determine that just compensation is required to the extent of any diminishment of the balance of the annuity reserve caused by Act 27.
¶ 47. We agree with the court of appeals that the circuit court erred in exercising its equitable powers to order a "minimalist remedy." Inherent in the concept of just compensation is an equitable principle: if just compensation is warranted in a particular instance, it is because a property owner should not be required to bear alone an expense that in all fairness must be borne by the public. Noranda, 113 Wis. 2d at 624. Thus, to the extent that a court awards less than just compensation
¶ 48. However, the court of appeals erred when it limited just compensation to the portion of SIPD payments that replaced GPR expenditures.
Retired Teachers Ass'n, 195 Wis. 2d at 1033. Just compensation is not measured by the economic benefit to the State resulting from the taking. Luber, 47 Wis. 2d at 279. It is the property owner's loss that Wis. Const. art. I, § 13 compensates.
¶ 49. Because all SIPD payments were made in derogation of the plaintiffs' right to have annuity reserve payments made consistent with § 40.27(2), just compensation requires that all such payments be returned to the annuity reserve. Similarly, because the reimbursement to GPR also violated § 40.27(2), the amount reimbursed must also be returned to the annuity reserve.
¶ 50. This court rejects the Administration Defendants' argument that a recovery of all payments made under Act 27 would overcompensate the plaintiffs for the taking effected by the Act. The defendants base their assertion on the fact that SIPD recipients could have received a similar distribution had the ETF
¶ 51. We decline the defendants' invitation because it is impossible to know how the ETF Board would have equitably distributed the $84.7 million annuity reserve surplus. The Board might have distributed the surplus in precisely the manner mandated by Act 27, or it might have given no portion of the surplus to any SIPD recipient. The point is, it is for the Board alone to equitably distribute any surplus in the annuity reserve. This court has neither the inclination nor the expertise to substitute its estimate of an equitable distribution for that of the ETF Board.
¶ 52. We therefore conclude that just compensation requires the following: 1) the Administration Defendants shall pay from the State treasury to the annuity reserve account an amount equal to all SIPD payments made out of the annuity reserve; 2) any undistributed portion of the SIPD remaining in the annuity reserve shall be unencumbered by the provisions of Act 27; 3) the ETF Board shall distribute the amount recovered and any undistributed SIPD in its equitable discretion.
¶ 53. Subsumed within the concept of just compensation is the principle that interest must be awarded on the value of property from the date of the taking. "Just compensation is for property presently taken and necessarily means the property's present value, presently paid—not its present value to be paid at some future time without interest." W.H. Pugh Coal Co. v. State, 157 Wis.2d 620, 633, 460 N.W.2d 787 (Ct. App. 1990), quoting Grant v. Cronin, 12 Wis.2d 352, 355, 107 N.W.2d 153, 155 (1961). Thus, we conclude that the plaintiffs are owed the investment returns that would have been earned on funds from the time that they were removed from the annuity reserve.
¶ 54. We are confronted with the task of setting the appropriate interest rate. The circuit court concluded that a five percent investment earnings rate was appropriate, based upon the "assumed benefit rate." § 40.02(6). In declining to award earnings based upon the returns actually experienced by the trust fund, the circuit court reasoned that such an award would work a serious hardship on the taxpaying public. In contrast, the court of appeals determined that the trust should be reimbursed for lost investment earnings "at the average rate of earnings of the trust fund assets from the date of the first distribution of the SIPD to the date the amount taken is returned to the trust fund." Retired Teachers Ass'n, 195 Wis. 2d at 1033.
¶ 55. This court concludes that the plaintiffs are entitled to interest at the effective rate, as defined in § 40.02(23).
¶ 56. We decline to adopt either the circuit court's or court of appeals' lost earnings formulation, because neither describes the lost annuity reserve investment returns as accurately as the effective rate. The circuit court's five percent earnings rate is insufficient because it does not measure the amount of investment returns that would have been earned had the funds remained in the annuity reserve.
¶ 57. Finally, we note that Act 27 did not cause all surplus funds in the annuity reserve to leave in a single lump-sum payment. Rather, the funds were paid out over time. Thus, an interest award should reflect the fact that the annuity reserve has enjoyed the benefit of investment earnings on a declining sum of money. We therefore conclude that the Administration Defendants must pay, from the state treasury, interest at the effective rate on SIPD payments and the $3.8 million reimbursement from the date that those funds actually left the annuity reserve.
¶ 58. The circuit court awarded attorney fees to the plaintiffs based upon its finding that the ETF Defendants breached their fiduciary duties, and that such breach rose to the level of mismanagement under Wis. Stat. § 814.14. The court of appeals reversed the finding of fiduciary breach, and instead awarded attorney fees under the "common fund" doctrine. Presently, the plaintiffs request attorney fees under either § 814.14, the common fund doctrine, or the private attorney general doctrine.
¶ 59. Initially, we acknowledge that Wisconsin has consistently adhered to the "American Rule" requiring litigants to pay their own attorney fees. Generally, a court may require a losing litigant to reimburse the prevailing party's attorney fees only when expressly authorized by statute or contract. DeChant v. Monarch Life Ins. Co., 200 Wis.2d 559, 571, 547 N.W.2d 592 (1996).
¶ 60. We first consider the common fund doctrine, under which the court of appeals awarded attorney fees to the plaintiffs. This court has not previously adopted the common fund doctrine. However, the doctrine has been widely used to deal with the "free rider" problem inherent in class actions. As the United States Supreme Court has recognized, it would be unfair to allow a class to share in the benefits of an action, while forcing the litigating plaintiffs to shoulder all of the costs of the lawsuit.
Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980) (citations omitted). The common fund doctrine is rooted in "the historic power of equity to permit the trustee of a fund or property, or a party preserving or recovering a fund for the benefit of others in addition to himself, to recover his costs, including his attorney's fees, from the fund or property itself or directly from the other parties
¶ 61. In Alyeska, the Court set out three factors that should be present before a court adopts the common fund approach. First, those benefiting from the litigation should be small in number and easily identifiable. Second, the benefits should be traceable with some accuracy. Third, the attorney fees should be capable of being "shifted with some exactitude to those benefiting." Id. at 265, n. 39.
¶ 62. With these principles in mind, this court concludes that the common fund doctrine is appropriately applied in this case. By recovering funds paid from the annuity reserve under Act 27, the attorneys for SEA, WEAC, and WRTA are vindicating the property rights of all annuitants, not just those of the members of the three groups. Also, once the ETF Board equitably distributes the recovery, the benefiting annuitants may be identified with certainty and ease. Furthermore, the benefits and costs of litigation are easily apportioned among the recipient annuitants. Because the attorney fees are "taken off the top," a recipient annuitant will pay litigation costs in exact proportion to the distribution that he or she receives.
¶ 63. We reject the defendants' undeveloped assertion that an award of attorney fees under the common fund doctrine would jeopardize the tax-exempt status of the retirement system. The United States Supreme Court long ago recognized the propriety of applying the common fund doctrine in the public trust fund context:
Trustees v. Greenough, 105 U.S. 527, 532-33 (1881). More recently, the Court cited with approval its several decisions reaffirming the Greenough holding. Alyeska, 421 U.S. at 257-58. Against this backdrop of federal law endorsing the application of the common fund doctrine to trust fund asset recoveries, the defendants' unsupported assertion of impropriety is unpersuasive. We conclude instead that, as in Greenough, the attorney fees awarded in this case are part of the cost of administering the trust, and are therefore properly borne by the trust under the common fund doctrine.
¶ 64. We further observe that the common fund doctrine is consistent with the American Rule. A losing litigant does not pay attorney fees in addition to the amount of recovery. Rather, attorney fees are deducted from the recovery. Thus, a losing litigant is no better or worse off as a result of the doctrine's application.
¶ 65. In calculating reasonable attorney fees, the circuit court shall have discretion to base its award on either a percentage of the fund recovered or the lodestar method of a reasonable hourly rate multiplied by a reasonable number of hours. Florin v. Nationsbank of Georgia, N.A., 34 F.3d 560, 565 (7th Cir. 1994); In re Washington Pub. Power Supply Sys. Litig., 19 F.3d 1291, 1296 (9th Cir. 1994); Gottlieb v. Barry, 43 F.3d 474, 483 (10th Cir. 1994). Furthermore, in formulating
Gottlieb, 43 F.3d at 482, n. 4, citing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). After deducting the reasonable attorney fees from the recovery, the circuit court shall order the balance deposited in the FRIT's annuity reserve account.
¶ 66. In summary, this court concludes that Act 27 takes without just compensation the plaintiffs' property interest in the proper distribution of investment earnings of the annuity reserve account. It is therefore unconstitutional beyond a reasonable doubt. We also conclude that the ETF Defendants did not breach their fiduciary duties as trustees of the WRS. Because our measure of just compensation is different from that of the court of appeals, we modify the decision of that court, and affirm that decision as modified. In addition, we remand to the circuit court with directions.
¶ 67. On remand, the circuit court is directed to enter judgment declaring that Act 27 and its implementation
By the Court.—The decision of the court of appeals is modified, and as modified, affirmed, and the cause is remanded to the circuit court with directions.
Article I, § 12 of the Wisconsin constitution provides in part: