State Engineers Shafted Again

Article VII used to require--although it didn't say so explicitly--that the state could not contract for private employees to do jobs that civil servants could perform "adequately and competently." However, in 2000, the electorate passed Proposition 35, which added Article XXII. Article XXII provides that the State of California and all other governmental entities “shall be allowed to contract with qualified private entities for architectural and engineering services for all public works of improvement.”

This could have been read as simply removing the constitutional limit imposed on state contracting by the civil service provisions of the state constitution. Instead, it's been read as imposing a limit on the power of the Legislature to require that architectural and engineering work be performed by civil servants. The latest casualties are a series of statutes that required Caltrans employees to perform various tasks relating to the construction by the Los Angeles County Metropolitan Transportation Authority of a high occupancy vehicle lane on a state highway. The Court of Appeal (here) held these statutes unconstitutional, deciding that while "Caltrans may choose to have this work performed by its employees . . . the Legislature cannot mandate that Caltrans do so."

This may be a permissible--or even a faithful--interpretation of Proposition 35. But it does seem odd to say that an administative agency may achieve a result--deciding to do a particular job with state employees--that the Legislature could not compel by statute. After all, in our scheme of government administrative agencies are normally subordinate to statutes enacted by the Legislature. Offhand, I can't think of another example where administrative discretion has been enshrined in the Constitution.

You could almost argue that this would be a revision, rather than an amendment, of the California Constitution, which could not be accomplished by initiative under cases such as Raven v. Deukmejian. It would be interesting to see whether anyone has ever made this argument.

We've Been Noticed!

Our little blog has been noticed by the California Blog of Appeal (here) and the California Punitive Damages blog (here). Thanks to both bloggers (Greg May and Curt Cutting) for your kind words.

Petition for Rehearing Filed in Judges' Compensation Case

The County of Los Angeles has filed a petition for rehearing in the Sturgeon case, which had held the extra compensation given by the County to its Superior Court judges unconstitutional. The petition (available here) accuses the court of having failed to apply the presumption in favor of constitutionality and the rule that the Legislature's construction of constitutional provisions is entitled to deference. Notably, however, the second point ignores the relatively recent California Supreme Court decision in Hotel Employees v. Davis, 21 Cal. 4th 585 (1999), where the Court rejected the express finding in a statutory initiative that the casinos authorized by the measure were the same as those permitted by the governing constitutional provision (which at the time permitted only casinos that were similar to those existing in Nevada and New Jersey in 1984, when the provision was adopted). The petition also argues that the court misapplied the no-delegation doctrine and that its decision will lead to absurd results.

It will be interesting to see what the taxpayers say in response to what is undoubtedly a forceful and well-argued petition. I hope to do a more thorough analysis of the decision then. Stay tuned.

Court Holds That Government Can Spend Money To Create And Promote Future Initiatives

The Court of Appeal has clarified when public agencies can spend tax dollars on proposed measures. In Santa Barbara County Coalition Against Automobile Subsidies v. Santa Barbara County Association of Governments (here), a taxpayer group contended that the use of public funds to create and promote a sales tax extension constituted an unlawful use of public funds. The public agency responded by filing an anti-SLAPP motion, which the trial court granted. The plaintiff appealed and the appellate court affirmed. The court held that the public agency and its representatives had a First Amendment right to "issue reports and take positions on issues of public interest relating to their official duties." The court next held that the plaintiff could not show that the defendant's activities were unlawful. Because all the spending occurred prior to the qualification of the measure for the ballot, the rule prohibiting the use of public money in political campaigns was not violated. Consequently, the court held that a public agency may, in furtherance of its mission, hire a polling firm to determine how a proposed measure should be structured, and issue public reports advocating the proposed measure. "Although a government agency cannot spend public funds in a partisan campaign for the passage or defeat of a ballot measure, we conclude that, in this case, the activity of SBCAG was not electoral advocacy because it was in furtherance of its express statutory duties and occurred before Measure A was qualified for placement on the ballot. "

There is much to be said for this decision. If a governmental agency has the power to put a measure before the electorate, it surely has the right to determine how the measure may best be presented to the voters, and to build a record justifying the need for the measure. Of course, once the measure qualifies for the ballot, it becomes a partisan measure and public funds shouldn't skew the electoral balance. (But even then, of course government agencies have the right to express their support or opposition to a measure on the ballot; they just can't expend public funds to promote a particular electoral outcome.)

This case simply applies a line recognized in prior cases. It seems unlikely that the California Supreme Court would grant review.

Court Reaffirms Narrow Reach of Restitution Provision

Who has a right of restitution under Article I, Section 28(b)? In People v. Slattery (here), the defendant injured her mother, who was taken to the hospital and died ten days later. The trial court ordered the defendant pursuant to the restitution statutes to repay the hospital for the cost of treating her mother. The Court of Appeal held that this was impermissible because the restitution statutes provide relief only to "direct victims" of criminal activity, and the hospital was not a direct victim.

The state argued that the restitution statutes had to have a broader reach, because Article I, Section 28(b), which grants the right to restitution to “all persons who suffer losses as a result of criminal activity.” However, the Court of Appeal held that the California Supreme Court had rejected this argument in People v. Birkett, 21 Cal. 4th 226 (1999). There the Court held that the Legislature’s decision to limit the right to restitution to business and governmental entities that are “direct victims” constitutes “a plausible interpretation of th[is] constitutional provision.” Consequently, courts must accept the Legislature's determination.

What Does Article II, Section 4 Mean?

Article II, Section 4 provides that the Legislature "shall prohibit improper practices that affect elections." Apparently, it has never been the subject of litigation. That may change as the result of a lawsuit filed by the Howard Jarvis Taxpayers Association. In their trial brief (available here), the HJTA contends that the ballot label, title and summary that the Legislature prepared for Proposition 1A on this fall's ballot are misleading and not neutral. The HJTA lost in the trial court but is planning to appeal.

Putting aside the issue of whether the HJTA's characterization of the ballot label, title and summary of Proposition 1A are correct, the HJTA has a tough road to hoe. Article II, Section 4 doesn't prohibit the Legislature from doing anything. Instead, it's a grant of legislative authority. While it's possible to read "The Legislature shall do x" as meaning "The Legislature may not do not-x," that would violate the rule that constitutional limits on the Legislature's power have to be clear and explicit. Still, kudos to HJTA for finding a never-litigated provision the Constitution to hang its hat on (and thanks to Tim Bittle for sending me the trial brief).

Separation of Powers Leads Court To Narrow Criminal Conflict of Interest Statute

Government Code Section 1090 forbids state and local legislators and other officials from having a financial interest in a contract approved by them, or by a legislative body of which they are members. Can a legislator be convicted of aiding and abetting a section 1090 violation if he or she votes to approve a contract in which another public official has a financial interest? The Court of Appeal for the Fourth Appellate District, Division Three, has said "no," at least where (a) the legislator himself or herself has no economic interest in the contract; and (b) the alleged criminal activity consists entirely of acts connected to the legislative process--i.e., urging the passage of, or voting on, proposed legislation. The court based its ruling squarely on the separation of powers embodied in Article III, Section 3 of the California Constitution, while simultaneously acknowledging that that provision does not literally apply to local legislators.

The decision in D'Amato v. Superior Court (available here) grew out of the following facts. D'Amato was a member of the Plascentia City Council. In 2000, the council approved the formation of a Joint Powers Authority known as ONTRAC. D'Amato became one of the three ONTRAC board members. Becker was the City's Public Works Director, but he also wanted to be ONTRAC's general manager. The ONTRAC board hired Becker's company to be the general manager. Becker was indicted for violating Section 1090 and D'Amato was indicted for aiding and abetting Becker's Section 1090 violation. The trial court denied a motion to quash the indictment and D'Amato filed a writ petition to overturn that decision.

The court granted the writ. The court based its decisions on separation of powers principles that forbid courts from scrutinizing the motives of individual legislators. No such scrutiny is required for a "direct" Section 1090 violation, because the statute criminalizes the holding of a financial interest in a contract that is approved by the legislative body of which the defendant is a member regardless of whether the individual legislative defendant votes to approve the contract. However, such scrutiny is required for aiding and abetting someone else's violation of the statute. For example, one of the counts in the indictment was based on the fact that D'Amato voted to approve the JPA that created ONTRAC. But that's a quintessentially legislative act. So was approval of the contract between ONTRAC and Becker. In the absence of a showing that the legislator himself had a financial interest in the contract, there could be no aiding and abetting liability. As the court explained, a contrary ruling could place county district attorneys in a supervisorial role over all local legislators--a result the court found untenable: "Given the broad reach of criminal and civil liability under sections 1090 and 1097, applying aider and abettor liability to the financially-interested official’s fellow public servants would turn a powerful tool against financial conflicts of interest into a dangerous weapon enabling a prosecutor to seek removal of an entire legislative body, both duly elected officials and staff members, based on a single official’s financial interest. Equally troubling, a prosecutor could influence a public agency’s future legislative path by picking and choosing which officials and staff members to prosecute, and which to leave alone."

This is a fascinating decision and seems entirely correct. Indeed, the opinion stated that its interpretation of Section 1090 was consistent with all of the 423 cases listed in Shepard's as citing the statute, other than dicta in one opinion dating from 1952. No doubt the prosecutor will file a petition for review, claiming that the decision hampers his ability to safeguard the integrity of local officials. Even if that is untrue, the importance and novelty of the case may well lead the Supreme Court to grant review.

Petition for Review filed in Judicial Reference Case

Not surprisingly, the losing party in Treo@Kettner Homeowners Association v. Superior Court, has filed a petition for review in the California Supreme Court. In the petition (available here), filed by Charles Bird of the Luce Forward firm, the developer claims that the Court of Appeal decision refusing to enforce judicial reference provisions in CC&Rs squarely conflicts with Villa Milano Homeowners Association v. Il Davorge, 84 Cal. App. 4th 819 (2000), where the court enforced an arbitration provision in CC&Rs. (The Court of Appeal decision was discussed in a prior post, available here.) The petition surely seems right in stating that the same rules should govern enforceability of arbitration provisions and agreements for judicial reference; both provide valid methods of waiving a jury trial under Grafton Partners v. Superior Court, 36 Cal. 4th 944 (2005), since both have been approved by the Legislature. It also seems right in contending that the Court of Appeal decision presents an important issue of law--i.e., whether dispute resolution provisions in CC&Rs are valid as against non-signatories. It will be interesting to see what the Answer says in response. Stay tuned. (And thanks to Charles Bird for sending me the petition.)

Court of Appeal Clarifies "Full Text" Rule

When a local governing body approves a plan, but the approving ordinance merely incorporates the plan by reference rather than as an attached exhibit, does the plan have to be attached to a referendum petition seeking to submit the ordinance to the electorate? In a decision clearly foreshadowed by prior cases, the Court of Appeal for the First Appellate District, Division One, has answered this question "yes." In Defend Bayview Hunters Point Committee v. City and County of San Francisco (available here), the court held that the referendum petition failed to comply with the "full text" rule embodied in Elections Code Section 9238. Interestingly, the court expressly stopped short of holding that all documents incorporated by reference must be attached to a referendum petition. Instead, it summarized its holding as follows: "We do not hold here that all documents a local legislative body chooses to incorporate by reference in or attach to an ordinance must be included in a referendum petition. We hold only that when a central purpose of the ordinance is to adopt and enact into law the contents of an incorporated or attached document, a referendum petition on the ordinance does not satisfy Elections Code section 9238 unless it includes a copy of that document." The court also rejected the claim that this interpretation of Section 9238 violated the First Amendment, holding that the full text requirement did not reduce the number of available petition circulators, while serving the important state interest in providing information to potential referendum signers.

The decision is not particularly novel, inasmuch as prior cases such as Nelson v. Carlson, 17 Cal. App. 4th 732 (1993), had applied the full text rule and invalidated referendum petitions that did not contain exhibits to the challenged ordinances. However this was the first case that expressly considered the effect on the full text rule of incorporating by reference rather than by attachment. As such, its an important clarification of referendum law and one that referendum campaigns must heed at their peril

Court of Appeal Reaffirms That Initiative Can't Be Used To Compel Legislative Action

In Widders v. Furchtenicht, the Court of Appeal, Second Appellate District, Division Six, has reaffirmed that initiatives can only be used to enact statutes, not to compel future legislative action. In this decision (available here), the Court also held that the City Attorney had acted properly in seeking a judicial declaration that he had no duty to prepare ballot titles and summaries for two proposed (and clearly invalid) measures.

The two measures were clearly beyond the initiative power as construed in AFL-CIO v. Eu, 36 Cal. 3d 687 (1984), and Marblehead v. City of San Clemente, 226 Cal. App. 3d 1504 (1991). Of the two measures, one directed the local city council to “urgently consider and take measures” to deter or prohibit national chains or franchise operations within the city while the other ordered the city council to “urgently consider and take measures” to address affordable housing. However, neither measure enacted a statute. Accordingly, both were outside the initiative power which, under Article II, §8(a) of the California Constitution is limited to the adoption of “statutes.”

This decision breaks no new ground in its interpretation of the California Constitution. Indeed, the most mysterious thing about it is why the ACLU Foundation of Southern California decided to represent the proponent of the plainly invalid measures.

Court Holds That Domestic Violence Programs Can't Exclude Men

In an important decision, the Court of Appeal for the Third Appellate District has held in Woods v. Shewry (available here) that the State cannot constitutionally exclude men from domestic violence programs. The court held that the Equal Protection Clause of the California Constitution subjects gender-based classifications to strict scrutiny under Sail'er Inn, Inc. v. Kirby, 5 Cal. 3d 1 (1971), and that the State could not prove that excluding men from certain domestic violence programs was necessary to further a compelling state interest. However, the court expressly refrained from holding that men and women had to be provided equal services. Instead, acknowledging that women were more often victims of domestic violence than men, and suffered greater injuriies than men when they were, the court said that "it may be appropriate to provide more and different services to battered women and their children. For example, a program might offer shelter for women, but only hotel vouchers for a smaller number of men."

Many things are interesting about this case, both doctrinally and factually. As a factual matter, the record seems very thin. While there was evidence in the record about the state programs that plaintiffs were attacking, which were programs that provided grants to individual service providers, the court made no reference to evidence that might have been adduced from individual providers or recipients of services. For example, the record apparently showed that all the grantees of one state program offered gender-neutral services, as did 85% of the grantees of the other program. From this the court deduced that the state had no compelling interest in funding grantees who were not gender neutral. But it would have been interesting to know whether the 15% of grantees that provided services only to women were providing different services than the other grantees, services that might have benefitted from a female-only clientele.

Moreover, while the court "reformed" the domestic violence definitions to make them gender-neutral, it did not specifically require that all grantees serve both men and women. To take the example given by the court, a shelter could be reserved for women as long as men got something, too, such as a hotel voucher. Does this mean that an organization that only operated a shelter for battered women could not get state funding? Or is the Equal Protection Clause satisfied as long as another grantee in the same area provided hotel vouchers?

Doctrinally, too, the case raises more questions than it answers. For one thing, the opinion's equal protection analysis starts out by saying that no equal protection scrutiny is required unless the two groups disparately affected by a challenged statute "are sufficiently similar with respect to the purpose of the law in question that some level of scrutiny is required in order to determine whether the distinction is justified.” But then the court says, quite inconsistently, that because equal protection rights are individual, the fact that women experience violence more than men, and suffer greater injuries when violence occurs, is irrelevant to equal protection analysis. So strict scrutiny is required even though men and women are not similarly situated as victims of violence.

More broadly, the case assumes without much analysis that strict scrutiny applies to a grant program that provides government benefits rather than a statute that disadvantages a disfavored class. It's very much like saying that affirmative action should be treated the same as invidious racial discrimination. There are certainly federal cases in the area of race that approach this position, but does it accurately state California law? Stay tuned.

This case seems like a great candidate for Supreme Court review. I would be suprised if the decision doesn't stir up a big storm and if the California Supreme Court doesn't take it.

Court of Appeal Invalidates Extra Compensation for Los Angeles Judges

In a decision sure to raise at least a few judicial hackles, the Court of Appeal, Fourth Appellate District, Division One, has held that the County of Los Angeles may not give Superior Court judges in that county additional compensation over and above that provided by the Legislature. The decision in Sturgeon v. County of Los Angeles (available here) is based on Article VI, Section 19, which provides that the Legislature shall "prescribe compensation for judges of courts of record." Government Code Section 53200.3 authorized each county to provide to judges the same or similar benefits that it provides "to employees." Given the wide variety among county employees and their compensation, the Court held that this statute enbodied the sort of standardless discretion that violated the rule against delegation of authority set forth in cases like Kugler v. Yocum, 69 Cal. 2d 371 (1969). In reaching this conclusion, the court relied heavily on two prior attorney general opinions, the second of which had opined that the current version of Section 53200.3 was unconstitutional, as well as Martin v. County of Contra Costa, 8 Cal. App. 3d 856 (1971), which approved legislation that tied judicial compensation to that of "comparable" county employees.

This seems like an important issue that might well get reviewed by the California Supreme Court. On the other hand, it would be easy for the Legislature to fix the problem identified by the court--it need only pass a statute similar to the one upheld in Martin. Even if the statute were retroactive, it would not be a gift of public funds, for the reasons identified in the Sturgeon opinion.

Court of Appeal Upholds Taking Claim Under Californa Constitution

In Monk v. City of Rancho Palos Verdes (here), the Court of Appeal forthe Second Appellate District, Division One, has upheld a landowner's taking claim under the California Constitution. In doing so, the court reminded us that the Takings Clause of the California Constitution has a broader scope than its federal counterpart. Article I, Section 19 of the California Constitution provides: “Private property may be taken or damaged for public use only when just compensation . . . has first been paid to, or into the court for, the owner." In comparison, the Fifth Amendment of the federal Constitution states: “[N]or shall private property be taken for public use, without just compensation.”

Because the California Constitution requires compensation for damage as well as a taking, the court held that the California clause "protects a somewhat broader range of property values” than does the corresponding federal provision." However, aside from that difference, California courts have construed the clauses congruently. The Monk case did not involve the "damaged property" portion of the California Takings Clause, so the court relied on both federal and California authority.

On the merits the court held that plaintiff's property had been "taken" by a moratorium on development in a landslide area because it deprived the plaintiff of all economic use of his property. As a result the City had to show that developing plaintiff's property would cause "a reasonable probability of significant harm" that would justify that moratorium under nuisance law. The court held that the City had failed to make this showing where the record indicated merely that the stability of plaintiff's property was uncertain and there was no risk that development of plaintiff's property would cause harm to others.

Court of Appeal Holds Ban on Publishing Witness Testimony Unconstitutional

Who would have thought that a trial court could prohibit the publication of witness testimony by a single newspaper? An Orange County Superior Court thought so, but the Court of Appeal swiftly reversed the trial court's ruling, holding it an unconstitutional prior restraint, in Freedom Newspapers v. Superior Court (here). The Court's ruling reaffirms the important principle that the California Constitution gives more protection to free speech than the federal constitution. But since the trial court's order was plainly unconstitutional under both the federal and state constitutions, the court didn't have to spend much time on the provisions of the state's fundamental charter.