Orange County will attempt to revive its landmark lawsuit seeking to rescind generous retirement benefits granted to deputy sheriffs in 2001, supervisors decided Tuesday.

The board voted 4 to 1 to appeal a superior court decision against their suit, which could impact pension deals for law enforcement unions across the state.

"Why quit now when you're on the five yard line?" said supervisor John Moorlach, who has led the effort. "If we dropped it, then all those municipalities that are watching and waiting will be left hanging."

Union leaders have been critical of the county's effort, calling it misguided and a waste of taxpayer money. Through June, the county has spent more than $1.9 million on the case.

"I think the board's decision is an insult to ... every county employee being asked to take layoffs and pay cuts," said Wayne Quint, president of the Association of Orange County Deputy Sheriffs. "To spend another penny on this case that they know they cannot win is an insult to every tax payer, and I hope when this is done that supervisors apologize to each and every one of them."

The lawsuit is being watched closely because if the county is successful, the same benefits granted to other law enforcement officers across the state could unravel.

"It's going to be huge," said Marcia Fritz, the vice president of California Foundation for Fiscal Responsibility. "What's going to happen is it will be challenged every other place where conditions are the same as Orange County."

Supervisors sued the county's retirement system in February 2008, arguing that when supervisors retroactively granted a generous pension enhancement to deputies in 2001, it violated the state constitution's limits on debt because they were given extra compensation for work they already had performed. The pension agreement also is illegal, they say, because it awarded future general fund revenue without voter approval.

Known as "3 at 50," the deal allows deputies to retire early while increasing their pension benefits to roughly 90 percent or more of their salary. The pension is guaranteed by the government.

Moorlach has said the increased pension has contributed to the county retirement system's unfunded liability, which has grown from $257 million in 2001 to some $2.7 billion - or 72 percent - by December 2008. That means the county's pension fund has 72 percent of the money it needs to meet its pension promises - a ratio that's widely considered unhealthy.

Superior court Judge Helen Bendix first rejected the county's arguments in February, but challenged the county to amend its case if it could prove that the annual cost of deputy pensions exceed annual county revenues. Instead, supervisors challenged her to look at the case law in a different way. Bendix was not persuaded and in July, finalized her judgment against the county.

Supervisor Janet Nguyen voted against the appeal, saying Bendix's ruling addressed her questions about the deal's legality.

"I don't want to put any more county resources in jeopardy ... in pursuing an appeal," she said.

The cost of fighting the appeal could reach an additional $300,000, Moorlach says. If the county loses, the union also will ask the county to repay its legal fees, which Quint says are close to what the county has spent.

But if the county is successful, Moorlach says he wouldn't be surprised if the lawsuit saves up to $500 million.

"I spend a little bit of money to save a half billion -- how am I throwing money away?" he asks. "To not appeal would have been throwing money away."