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.