Much of the twenty years of litigation in this case is summarized in the appellate opinions:

Probst v. DRS, 167 Wn. App. 180 (2012); 
Probst v. DRS, 185 Wn. App. 1015, 2014 WL 7462567 (unpublished), review denied, 182 Wn.2d 1027 (2015); 
Fowler v. Guerin, 899 F.3d 1112 (9th Cir. 2018), rehearing and rehearing en banc denied, 918 F.3d 644 (9th Cir. 2019), certiorari denied.

This class action lawsuit was brought in January 2005 when Jeffrey Probst, a member of the Public Employees' Retirement System (PERS), claimed that the Department of Retirement Systems (DRS or the Department) failed to correctly calculate the amount payable to class members when they transferred from a Plan 2 to a Plan 3 account.  In particular, the lawsuit claimed that the Department should have used the daily interest method for calculating interest on class members funds (rather than the Department's quarterly interest method) and that the proper calculation would have resulted in increased interest for members.  DRS argued that its quarterly method for calculating interest was proper and within its discretionary authority.

In 2009, the parties settled the claims brought by class members who transferred from PERS Plan 2 to Plan 3.  The settlement expressly did not resolve the claims brought by class members who transferred from TRS Plan 2 to TRS Plan 3 before January 20, 2002. 

Following the partial settlement, Thurston County Superior Court certified a class of public school teachers who transferred from TRS Plan 2 to TRS Plan 3 prior to January 20, 2002.  The Superior Court rejected DRS's argument that the TRS claims prior to January 20, 2002 were barred by the statute of limitations, but it also ruled for DRS on the merits.  The class appealed.

In March 2012, the Washington Court of Appeals ruled in favor of the teacher class.  The Court of Appeals held that DRS acted arbitrarily and capriciously by not paying members daily interest on their retirement accounts.  A copy of that decision can be found in the Court Documents section above.

The Ninth Circuit then ruled in 2018 that the Director and DRS violated the Takings Clause because daily interest is required by the constitution.  The Ninth Circuit held that the Director had "skimmed" this interest and used it to pay benefits for others.

On remand from the Ninth Circuit, the Director raised various procedural defenses and the federal district court actually dismissed plaintiffs' claims as time-barred.  The Ninth Circuit reversed the dismissal, clarifying that the only remaining issue for the court to decide is the appropriate relief for remaining class members so that the teachers may finally receive the funds that the Director and DRS took from them.

On June 25, 2026, Thurston County Superior Court Judge Christine Schaller ruled that the class members are entitled to a return of their funds, including DRS's investment earnings made on those funds over the last 25 years.  The total amount owed to the over 26,000 class members is about $120 million.

DRS says it will appeal.

Stobaugh & Strong, P.C. is proud to have advocated for the rights of Washington public school teachers through this twenty-three-year long battle across all levels of state and federal courts.

This webpage will be updated with new information as the appeal progresses.  Please check back periodically for updates.