WORCESTER REGIONAL RETIREMENT BOARD & others [Note 1] vs. PUBLIC EMPLOYEE RETIREMENT ADMINISTRATION COMMISSION.

CYPHER, J. In this appeal, we consider the scope of our prior interpretation of the term "regular compensation" defined in G. L.

Page 95

c. 32, § 1, as excluding vacation or sick leave pay used to supplement workers' compensation payments. Public Employee Retirement Admin. Comm'n v. Contributory Retirement Appeal Bd., 478 Mass. 832, 832 (2018) (Vernava). Here, we are asked to determine whether our construction of "regular compensation" narrowly applies only to determinations of an employee's effective retirement date under the provision in G. L. c. 32, § 7, relating to accidental disability retirement, or more broadly applies to any form of retirement, including the ordinary disability or superannuation retirement provisions of G. L. c. 32, §§ 5 and 6. Additionally, we are asked to address the authority of the Public Employee Retirement Administration Commission (PERAC) to issue memoranda that bind retirement boards to PERAC's interpretation of appellate court decisions, and whether the plaintiff retirement boards (boards) may seek judicial review of such memoranda without first exhausting available administrative remedies.

Because our interpretation of "regular compensation" in Vernava did not depend on the specific retirement provision under which the issue arose, we conclude that this construction applies consistently across uses of the term in G. L. c. 32, §§ 5, 6, and 7, thereby applying to superannuation, ordinary disability, and accidental disability retirement, and does so retroactively. Where the existing statutory framework and case-specific application of the exhaustion doctrine have served amply the parties' need to address the statutory construction question raised in this case, no actual controversy is raised by the abstract issue of exhaustion of administrative remedies in hypothetical disputes over future PERAC memoranda interpreting appellate opinions.

Background. In Vernava, 478 Mass. 832, we addressed the intersection of G. L. c. 32, concerning retirement systems, and G. L. c. 152, concerning workers' compensation. [Note 2] We considered "whether the supplemental pay received pursuant to G. L. c. 152, § 69, constitutes 'regular compensation' as defined by G. L. c. 32, § 1, when received in conjunction with workers' compensation." [Note 3] Vernava, supra at 834. In concluding that the two hours of supplemental

Page 96

pay received per week by the employee in Vernava did not constitute "regular compensation" for the purposes of determining the effective date of his accidental disability retirement under G. L. c. 32, § 7, we held that where an employee receives accrued vacation or sick leave pay in conjunction with workers' compensation benefits, such accrued vacation or sick leave used as supplemental pay is not "regular compensation" because the injured "employee has ceased providing services to the employer." Vernava, supra at 838.

Subsequent to our decision in Vernava, PERAC, the regulatory agency overseeing the 104 retirement systems constituted under G. L. c. 32, issued a memorandum advising retirement boards on the scope of that decision. This memorandum alerted members that the Vernava decision "will have no applicability to any member retiring under any section of [G. L. c.] 32 other than [§] 7." Highlighting footnote 3 of our opinion in Vernava, PERAC interpreted our holding to be limited such that the meaning of "regular compensation" applied solely to calculations of an employee's effective date of accidental disability retirement pursuant to § 7 (2). [Note 4]

PERAC emphasized the language of the first sentence of the footnote, including its direct reference to "the purpose of determining an employee's effective date of retirement under G. L. c. 32, § 7." PERAC concluded that

"[t]he limited language of footnote 3 presents a challenge in determining whether or not a supplemental payment is regular compensation at the time it is received, because many members may receive Workers' Compensation at certain times during their careers, but may or may not ultimately retire pursuant to the provisions of [G. L.] c. 32, § 7. Thus, a person who was out on Workers' Compensation mid-career

Page 97

who subsequently retires for superannuation will have those payments counted as regular compensation."

PERAC thereafter issued a second memorandum emphasizing that all Massachusetts retirement boards were bound by its interpretation of the scope of this court's holding in Vernava.

In response to the PERAC memoranda, the boards filed a complaint in the county court pursuant to G. L. c. 231A, § 1. The complaint sought two declarations: first, that the Vernava construction of regular compensation as excluding supplemental pay when paid in conjunction with workers' compensation applies regardless of whether a retirement system member retires for disability under G. L. c. 32, § 6 or 7, or for superannuation under G. L. c. 32, § 5 (count 1); and, second, that PERAC's memoranda interpreting case law are not binding on retirement boards, who have independent authority to interpret retirement statutes and associated case law (count 2). [Note 5]

The case was transferred to the Superior Court by order of a single justice. In the Superior Court, the boards requested that, in the alternative, the judge declare as to count 2 that retirement boards may seek review of PERAC memoranda interpreting appellate court opinions by an action for declaratory judgment without first exhausting administrative remedies. With regard to the first claim, the judge rejected PERAC's interpretation of our holding in Vernava and held that footnote three did not restrict the construction of "regular compensation" to apply only with respect to accidental disability retirement. The judge declined to reach the merits of either version of the boards' second claim, characterizing the declarations sought as akin to an advisory opinion. PERAC appealed from the judge's declaration as to count 1; the boards appealed from the judge's decision to decline to reach the merits of count 2, pressing on appeal their alternative request for a declaration that retirement boards may seek review of PERAC memoranda interpreting appellate court opinions without first exhausting administrative remedies. [Note 6] We granted PERAC's application for direct appellate review.

Page 98

Discussion. 1. Jurisdiction. Declaratory relief pursuant to G. L. c. 231A, § 1, in the form of "binding declarations of right, duty, status and other legal relations," is limited to cases where "an actual controversy has arisen and is specifically set forth in the pleadings." "An actual controversy arises under our law where there is 'a real dispute caused by the assertion by one party of a legal relation, status or right in which [that party] has a definite interest, and the denial of such assertion by another party also having a definite interest in the subject matter, where the circumstances attending the dispute plainly indicate that unless the matter is [adjudicated] such antagonistic claims will almost immediately and inevitably lead to litigation.'" Libertarian Ass'n of Mass. v. Secretary of the Commonwealth, 462 Mass. 538, 546-547 (2012), quoting School Comm. of Cambridge v. Superintendent of Sch. of Cambridge, 320 Mass. 516, 518 (1946). Where no actual controversy is presented by a claim for declaratory relief, the court lacks subject matter jurisdiction over the matter, and the claim must be dismissed. Hingham v. Department of Hous. & Community Dev., 451 Mass. 501, 502, 505 (2008) (affirming judgment of dismissal for lack of subject matter jurisdiction on ground that "in order for a court to provide declaratory relief, an actual controversy . . . must exist"). "[W]henever a problem of subject matter jurisdiction becomes apparent to a court, the court has both the power and the obligation to resolve it" (quotation omitted). Doherty v. Civil Serv. Comm'n, 486 Mass. 487, 491 (2020), quoting Rental Prop. Mgt. Servs. v. Hatcher, 479 Mass. 542, 547 (2018).

Here, we find no problem of subject matter jurisdiction concerning count 1: there is an actual controversy as to the scope of our holding in Vernava regarding the meaning of "regular compensation." Each party has asserted a specific interest in the scope of our construction of "regular compensation" in Vernava -- PERAC has a specific interest in its duty of "efficient administration of the public employee retirement system," G. L. c. 7, § 50, and the boards have a specific interest in accurate calculations of retirement allowances and creditable service for workers

Page 99

and retirees under G. L. c. 32. Litigation arising from this issue appears inevitable; the boards assert that PERAC's interpretation of Vernava already has been contradicted by the Division of Administrative Law Appeals in several proceedings currently pending before the Contributory Retirement Appeal Board. For that reason, we conclude that this court has subject matter jurisdiction over count 1, and we reach that question on the merits.

However, although not raised by the parties, we conclude that we do not have subject matter jurisdiction as to count 2. No actual controversy is presented by the alternative declaration the boards press on appeal, which would identify a sweeping prospective right to proceed directly, without first exhausting administrative remedies, to judicial review of PERAC memoranda concerning appellate statutory interpretation opinion. "A mere difference of opinion or uncertainty over the meaning to be ascribed a statute does not, without more, rise to the level of a justiciable controversy." Department of Community Affairs v. Massachusetts State College Bldg. Auth., 378 Mass. 418, 422 (1979). Controversy is properly shown where both parties assert a definite interest in the meaning of the statute, in circumstances clearly showing that "such antagonistic claims will almost immediately and inevitably lead to litigation." Libertarian Ass'n of Mass., 462 Mass. at 547, quoting School Comm. of Cambridge, 320 Mass. at 518. The declaration sought on appeal by the boards as to count 2 does not meet such a standard: it addresses an abstract question unmoored from any particular circumstance, and applies to purely hypothetical disputes over future PERAC memoranda in which the boards cannot establish a specific, present interest. Libertarian Ass'n of Mass., supra ("declaratory relief . . . is not a vehicle for resolving abstract . . . [or] hypothetical . . . questions").

The lack of an actual controversy raised by count 2 is demonstrated by the adequacy of the remedy available to the parties under G. L. c. 231A, § 1, for the specific and present controversy that we address in count 1. The doctrine of exhaustion has not precluded this court from reaching the merits of count 1 in the specific circumstances of this case, which raise not only a pure question of law, but also an important public issue that immediately concerns a numerous group of government employees and retirees. See Suburban Health Care, Inc. v. Executive Office of Health & Human Servs., Office of Medicaid, 488 Mass. 347, 352 (2021), quoting Temple Emanuel of Newton v. Massachusetts Comm'n Against Discrimination, 463 Mass. 472, 479-480 (2012)

Page 100

("When considering whether to excuse the failure to exhaust administrative remedies, we look at 'whether resort to the administrative remedy would be futile; whether the case raises important public questions whose resolution will affect people beyond the parties to the case; whether pursuing the administrative remedy will result in irreparable harm to either party; and whether there is a question of law peculiarly within judicial competence'").

For those reasons, we conclude that count 2 must be dismissed upon our own motion. See Prudential-Bache Sec., Inc. v. Commissioner of Revenue, 412 Mass. 243, 248 (1992), citing Department of Community Affairs, 378 Mass. at 422-423 (issues of subject matter jurisdiction may be raised by appellate court on its own motion).

2. The merits. General Laws c. 32, § 1, defines "regular compensation" as "compensation received exclusively as wages by an employee for services performed in the course of employment for his employer." By the express language of § 1, this definition applies "as used in [§§ 1 to 28], inclusive, unless a different meaning is plainly required by the context." Id. PERAC does not identify any specific uses of the term "regular compensation" within § 5 or § 6 as plainly requiring a different meaning due to context. Instead, PERAC argues that the specific language of the § 7 (2) standard for determining the effective date of accidental disability retirement differs from the provisions setting retirement dates in §§ 5 and 6, and thus our interpretation of "regular compensation" in Vernava was limited solely to the context of § 7. [Note 7] Although we afford deference to an agency's interpretation of a statute that it administers, such deference does not extend to facially unreasonable constructions. Cf. Boston Retirement Bd. v. Contributory Retirement Appeal Bd., 441 Mass. 78, 82 (2004) (deference afforded to PERAC's "reasonable interpretation of the statute on its face"). For the reasons set forth infra, we reject as unreasonable PERAC's interpretation of "regular compensation" as having multiple meanings amongst §§ 5, 6, and 7.

Page 101

Section 6, setting forth the requirements for ordinary disability retirement, contains eight references to "regular compensation," the majority of which relate to the computation of retirement allowances. As in § 7 (2), the effective date of retirement under § 6 is constrained by the last date an employee receives "regular compensation." [Note 8] Section 5, setting forth the requirements for superannuation retirement, contains forty-five references to "regular compensation," largely relating to computation of required deductions or retirement allowances. Unlike §§ 6 and 7, the effective date of retirement under § 5 is not constrained by the date the employee last received "regular compensation." [Note 9]

However, when read as a whole, the context of the various uses of "regular compensation" in §§ 5 and 6 is not distinguishable from the fourteen uses of the same term in § 7. Accordingly, there is no clear basis in G. L. c. 32 to overcome § 1's explicit application of a single, consistent definition of "regular compensation" to §§ 5, 6, and 7, in the absence of context that "plainly require[s]" a different meaning. [Note 10]

To the extent any ambiguity remains in the face of the plain

Page 102

language applying a uniform definition of "regular compensation" throughout the statutory scheme, we resolve it to similar effect. "Where the Legislature uses the same words in several sections which concern the same subject matter, the words must be presumed to have been used with the same meaning in each section." Meyer v. Veolia Energy N. Am., 482 Mass. 208, 214-215 (2019), quoting Insurance Rating Bd. v. Commissioner of Ins., 356 Mass. 184, 188-189 (1969). Sections 5, 6, and 7 concern the same general subject matter: various forms of retirement by public employees. Within each section, the term "regular compensation" is referenced in relation to the calculation of retirement allowances and required contributions. In §§ 6 and 7, the latest date of receipt of regular compensation is used to constrain an employee's retirement date, using nearly identical phrasing. [Note 11] Absent any evidence of contrary legislative intent, this consistent use of the term throughout the c. 32 statutory scheme must be presumed to reflect a uniform meaning, regardless of the specific type of retirement at issue.

Accordingly, we conclude that our construction of "regular compensation" in Vernava to exclude supplemental pay received in conjunction with workers' compensation applies equally whether an employee receiving such pay subsequently retires under superannuation, ordinary disability, or accidental disability, G. L. c. 32, §§ 5-7, and affirm the judge's declaration that PERAC's memorandum is incorrect as a matter of law by limiting our holding in Vernava to accidental disability retirement under G. L. c. 32, § 7.

3. Retroactivity. "In general, when we construe a statute, we do not engage in an analysis whether that interpretation is given retroactive or prospective effect; the interpretation we give the statute usually reflects the court's view of its meaning since the statute's enactment." Eaton v. Federal Nat'l Mtge. Ass'n, 462 Mass. 569, 587 (2012), citing McIntire, petitioner, 458 Mass. 257,

Page 103

261 (2010), cert. denied, 563 U.S. 1012 (2011). "There must be good reason 'to disturb the presumptively retroactive application' of a statutory interpretation." Commonwealth v. Ashford, 486 Mass. 450, 453-454 (2020), quoting American Int'l Ins. Co. v. Robert Seuffer GmbH & Co. KG, 468 Mass. 109, 121, cert. denied, 574 U.S. 1061 (2014). "This court traditionally has given prospective effect to its decisions in very limited circumstances," Eaton, supra at 588, and "would have to be satisfied that special circumstances exist to limit our answer here to only prospective application," Payton v. Abbott Labs, 386 Mass. 540, 565 (1982). We have been more willing to apply our decisions prospectively in the property and contract law contexts than other subject areas. See Pinti v. Emigrant Mtge. Co., 472 Mass. 226, 243 (2015) ("in the property law context, we have been more willing to apply our decisions prospectively than in other contexts"); Eaton, supra, quoting Blood v. Edgar's, Inc., 36 Mass. App. Ct. 402, 407 (1994) (applying statutory interpretation decision prospectively in "circumstances where the ruling announces a change that affects property law" and where "prior law is of questionable prognosticative value"); Payton, supra at 565, 570, and cases cited (declining to apply prospective effect to tort law decision, unlike property or contract law). Our exercise of discretion to apply a decision prospectively "is guided by consideration of the novelty of the interpretation, whether retroactivity is consistent with the purposes of the rule announced, and whether 'hardship or inequity would result from retroactive application' (citation omitted)." Ashford, supra at 453.

PERAC urges this court to limit our interpretation of "regular compensation" to prospective application to superannuation and ordinary disability retirement under G. L. c. 32, §§ 5 and 6. PERAC argues that this case presents an exceptional circumstance where our interpretation could require the boards to recalculate retirement allowances for any existing retiree who at one time received supplemental pay along with workers' compensation, and could possibly result in the total loss of benefit eligibility for some retirees who received supplemental pay in conjunction with partial incapacity workers' compensation, if recalculation resulted in a reduction of creditable service below the minimum retirement threshold.

The hardship of reduced retirement allowance amounts for superannuation and ordinary disability retirees is akin to the hardship facing accidental disability retirees due to our decision

Page 104

in Vernava, which we did not limit to prospective effect. However, this case presents a novel question of hardship, where recalculation of creditable service may affect an individual retiree's eligibility for any benefits, and individual employees may have relied upon the boards' prior calculations of creditable service on the basis of PERAC's erroneous interpretation of Vernava when choosing a particular retirement date under § 5 or § 6.

This is an issue that did not arise in Vernava, because existing retirees who received workers' compensation for total incapacity are protected by statute from impacts on the creditable service they otherwise would have accrued during the period of injury. [Note 12] In contrast, existing retirees who received workers' compensation for partial incapacity in conjunction with supplemental pay would lose prorated creditable service for the period workers' compensation benefits were received, where the supplemental vacation or sick pay used along with those benefits no longer constitutes "regular compensation" for the purposes of calculating weeks of creditable service. [Note 13]

Nevertheless, we decline, as we implicitly did in Vernava, to

Page 105

depart from the presumption of retroactivity for our construction of "regular compensation" in this case. See McIntire, petitioner, 458 Mass. at 261. PERAC does not offer a specific estimation of how many existing retirees would be rendered ineligible for superannuation or ordinary disability retirement benefits due to retroactive recalculation to exclude periods of partial incapacity from their creditable service. [Note 14] Nor is it clear that the boards lack existing statutory discretion to waive recalculations that would result in the total loss of retirement benefit eligibility for some existing retirees, and thus that the risk of hardship to those hypothetical retirees truly is imminent. [Note 15]

This absence of specific evidence establishing the likely occurrence of extraordinary hardship weighs in favor of the presumption of retroactive application. Ashford, 486 Mass. at 453. There is little novelty in a uniform application of the meaning of "regular compensation" to all types of retirement under G. L. c. 32, given the explicit application in § 1 of a uniform definition of the term "as used in [§§ 1 to 28], inclusive." See Eaton, 462

Page 106

Mass. at 588, quoting Blood, 36 Mass. App. Ct. at 407 (prospective effect may be appropriate where "prior law is of questionable prognosticative value"). Moreover, just as in Vernava, retroactivity is consistent with the purpose of limiting the meaning of "regular compensation" to that intended by the Legislature, as regular, ordinary compensation for services performed by the employee. For those reasons, our construction of the meaning of "regular compensation," as applied to superannuation, ordinary disability, and accidental disability retirement under G. L. c. 32, §§ 5 to 7, has retroactive effect.

Conclusion. The judgment of the Superior Court as to count 1 of the complaint, declaring that the construction of "regular compensation" set out in Vernava is not limited to accidental disability retirement under G. L. c. 32, § 7, is affirmed. We remand the case to the Superior Court for an order of dismissal of count 2 of the complaint.

So ordered.